“What killed most people in ’08 was that they couldn’t believe that a Lehman could go, or a Bear Stearns could go, or that anything could change, nor in today’s world can they ever believe that China can be anything other than totemic and strong,” he said. As he sees it, China’s reliance on an export-driven business model and large current account surpluses to underwrite development can’t continue much longer.“What happened in 2008 was they got to a size, when the world stopped growing, they stopped growing, so their export markets basically seized up, and they should have seized up on the infrastructure,” he said. “But in fact, what they did was redoubled, and redoubled again, the infrastructure spending.”He is now only 20 percent net long, reflecting his cautious position. “Despite the fact the world is recovering, you should be a little bit more scared than you’ve been and keep a little bit more cash,” he said...." (read more at link above)
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