Jim Chanos says the pain isn’t close to over for oil giants, and he still hates SolarCity too
Published: Dec 18, 2015
By Victor Reklaitis
Markets writer
Marketwatch.com
If you’re upset about crude — that one-direction wonder — apparently ruining yesterday’s rally attempt, then you won’t like what Jim Chanos is saying right now.
The storied short seller predicts more hurt ahead for oil stocks — specifically “all of the major leveraged oil companies.” Chanos, who’s been having a good year, also told CNBC late Thursday that’s he bearish on crude prices. That’s even with WTI and Brent losing about two-thirds of their value in the last year and a half.
So bet on solar instead? Not exactly, as Chanos growls that he’s still shorting one of Elon Musk’s babies, SolarCity. More from the founder of hedge fund Kynikos Associates in our call of the day.
U.S. stocks look on track for another drop, with the Nikkei’s 1.9% slide providing a downbeat backdrop. That sizable fall by Japanese stocks came after a surprise easing move by the Bank of Japan, which sent the dollar surging, then plunging, against the yen, as shown in our chart of the day.
Is Chanos still betting against Chevron and other oil majors, as he has been for a while? “You can be pretty much sure we’re short all of the major leveraged oil companies” the hedge-fund manager told CNBC, adding that there are some oil players that aren’t in debt. He said these oil stocks have held up better than crude prices as companies commit to paying cash dividends, “but in effect, they’re borrowing to pay their dividend.”
Chanos sounded quite bearish on oil, even as he declined to make a specific near-term call on that hard-hit commodity. “I think if you were to look out five or 10 years, if I was a member of OPEC, I’d be pumping as much as I could today, while it’s worth something, because it might not be worth a whole lot by 2030,” he said.
Chanos, who named his hedge fund after the Greek word for cynic, reiterated his bearish views on Cheniere Energy and SolarCity. “We’re not bearish on solar. We’re bearish on the guys who are knocking on doors, trying to put solar panels on your house,” he said. He didn’t sound fazed about SolarCity’s big gains this week on tax-break news, saying he wished he “could borrow more” of that company’s shares for shorting. Go here for the full video of Chanos on CNBC.
S&P 500 and Dow futures are pointing lower, with the S&P still up for the week, but in the red for the month and year. Asia closed mostly lower, led by the Nikkei’s drop. WTI and Brent are both lower as early gains faded, and that’s after the U.S. oil benchmark yesterday settled at $34.95 a barrel, its lowest level since February 2009. European stocks and a key dollar index are down, while gold gains.
http://www.marketwatch.com/story/jim-chanos-says-the-pain-isnt-close-to-over-for-oil-giants-and-he-still-hates-solarcity-too-2015-12-18?mod=NTKfeed&link=mw_fb_ntk
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
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