Speaking at the Ira Sohn conference in London, Chanos reiterated that Brazil-based Vale and the country’s state-run oil producer, Petrobras, are two of his favorite shorts. He also said Brazil is “resource rich” but “not rich.”

Petrobras appears worthy of the bear call by Chanos. The company reported a second-quarter loss, its first loss since 1999, and its third-quarter results missed estimates. Although reserves at Brazil’s pre-salt oil fields have been placed as high as 55 billion barrels, Petrobras has disappointed investors with declining production in recent quarters.

Chanos told attendees at Ira Sohn that “every dollar Petrobras brings in is flowing back out, but that production is declining.”

In an interview with Bloomberg earlier this month, Chanos called the recent Petrobras “horrible.”

“Prices are kept low for the consumers. That is a political decision that is hurting the company’s shareholders,” Chanos said in the Bloomberg interview.

As for Vale, the shares have tumbled 19.5 percent this year. The shares have been hammered by slack demand from China, another market Chanos is famously bearish on, and fears about government interference.


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