Muddy Waters’ Block Says Chinese Consumer Theme Is ‘Overblown’

Carson Block, the short seller who runs research firm Muddy Waters LLC, said U.S. investors are too eager to put their money into China where consumer demand is overstated.

“The idea of the Chinese consumer has always been somewhat overblown,” Block said yesterday on a panel at a Bloomberg Link Conference in New York. “Part of the reason for that is that you have luxury-goods manufacturers such as Louis Vuitton that report outstanding sales in China.” Muddy Waters research alleging Sino-Forest Corp. had overstated timber holdings prompted a 67 percent slump in the company’s shares. Sino-Forest has denied the allegations.