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.”
Sources:
“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
