Lynn Parramore interviews Chanos over at INET:
LP: Much has been made of the tech companies, the celebrated “disrupters,” as drivers of American prosperity. What’s your view of these firms, the Facebooks and Ubers and Netflixes?
JC: With the exception of Facebook, the disrupters — Netflix, Uber, etc.— don’t seem to be scaling. The Harvard Business Review has a great story out which concludes that unlike dotcom 1.0 when Amazon and Facebook were inventing whole new markets and were relatively cash-flow positive right away, companies like Uber and Tesla are more personal fiefdoms of their CEOs.
Uber is going to be an interesting story. We’ve heard a lot about how they have manipulated workers and consumers, and the governance disasters. Lost in the story of corporate governance is the story of an unprofitable model. They haven’t figured out how to operate a sustainable business.
LP: What about Trump’s infrastructure proposals? Could they help the economy?
JC: That’s just another sort of fake fiscal news, if you will. It’s going to be public-private partnerships. I have a long experience with those: I was short Macquarie Bank, which was the originator of these sorts of things in ’05-’06.
Macquarie started the idea of infrastructure as an asset class idea. But it always revolved around things like parking structures and toll roads — anything where you can have clearly definable cash flow and where you can get an immediate cash payment for use. It’s not water culverts or county service roads. Macquarie did a famous deal on the Indiana toll road (which filed for bankruptcy in 2014, collapsing in debt). It’s things like that.
Because private investors need high rates of return, these deals generally haven’t been good deals for anybody. They haven’t generated the cash investors anticipated.