Jim Chanos and Bill Gross comment on the S&P downgrade

In an appearance on Bloomberg TV yesterday (8/7/11), legendary hedge fund manager Jim Chanos shared thoughts about the S&P downgrade of U.S. debt. After discussion of the timing of the downgrade – and who was informed of it ahead of time – Chanos posits that “real market players look at the CDS [credit default swaps] market, not ratings.”

PIMCO’s Bill Gross also made a Bloomberg TV appearance yesterday (8/7). The bond king took the unpopular position of praising the downgrade: “S&P finally got it right. They spoke to a dysfunctional political system and deficits as far as the eye can see. They are enforcing some discipline. My hat is off to them.”

“Jim Chanos talks to Bloomberg TV’s Adam Johnson on the ratings agencies” YouTube, uploaded by BloombergTV 8/7/11 https://www.youtube.com/watch?v=uAvujP0Pl7M&feature=youtube_gdata
“PIMCO’s Bill Gross speaks to Tom Keene on U.S. credit downgrade” YouTube, uploaded by BloombergTV 8/7/11 https://www.youtube.com/watch?v=yxXWUf0xYqQ&feature=player_embedded