The Biggest Risks to Financial Markets: Jim Chanos Full Interview

Legendary short seller Jim Chanos says no one can see the biggest risks facing US markets over the next six to 12 months — because the challenges are going to be unpredictable events, like last month’s DeepSeek collapse that wiped out roughly $1 trillion in market value from US stocks.  “The real risks will be something like DeepSeek that comes out of left field that changes people’s thinking,” Chanos said in an interview with Bloomberg. “By definition, we do not know what that is.”  Chanos said he’s seeing signs of speculative froth in the stock market, but added that it hasn’t reached levels seen in the 2021 boom when the S&P 500 soared 27%. But investors need to be able to spot the companies that deserve their rich valuations, and those that don’t, he said.  Chanos is probably best known for his extremely prescient bets against Enron Corp. in late 2000 and early 2001, well before the firm’s accounting fraud came to light. He converted his hedge fund into a family office in 2023, after a nearly four-decade run. He has complained that it’s difficult for bearish money managers to raise capital, even though he sees this as a “golden age of fraud.” Political Theater Beyond concerns of another DeepSeek-live event, Chanos sees markets responding most to political theater these days. Indeed, he thinks that will become even more intense. He’s closely watching how President Donald Trump’s proposed tariffs unfold, in particular the 10% levy against China.  “I think 10% is not going to do it,” Chanos said, referring to the size of tariffs needed for the government to generate significant revenues. “You would have to raise them substantially on both China and, the EU, and we haven’t seen that yet. We’ll have to see what exactly comes within 30 days, 60 days. Does it escalate, or does it cool off?”  Chanos spoke with Bloomberg's Scarlet Fu and Romaine Bostick. -------- Watch Bloomberg Radio LIVE on YouTube Weekdays 7am-6pm ET WATCH HERE: http://bit.ly/3vTiACF Follow us on X: https://twitter.com/BloombergRadio Subscribe to our Podcasts: Bloomberg Daybreak: http://bit.ly/3DWYoAN Bloomberg Surveillance: http://bit.ly/3OPtReI Bloomberg Intelligence: http://bit.ly/3YrBfOi Balance of Power: http://bit.ly/3OO8eLC Bloomberg Businessweek: http://bit.ly/3IPl60i Listen on Apple CarPlay and Android Auto with the Bloomberg Business app: Apple CarPlay: https://apple.co/486mghI Android Auto: https://bit.ly/49benZy Visit our YouTube channels: Bloomberg Podcasts: https://www.youtube.com/bloombergpodcasts Bloomberg Television: https://www.youtube.com/@markets Bloomberg Originals: https://www.youtube.com/bloomberg Quicktake: https://www.youtube.com/@BloombergQuicktake