Kyle Bass is placing a big bet on China’s economy, and if he is right, the hedge fund manager could rake in billions of dollars. Bass believes that China’s economy is not out of the woods, and he is proving his notion by placing 85 percent of his Hayman Capital portfolio in profitable trades if the Hong Kong dollar and the Chinese yuan depreciate over the next three years. Bass and his fund have all its focus on Asian currencies and sold off most of its commodities, stocks and bonds.
Bass and his hedge fund have faced some rough times over the past several years. Now, Bass is facing heavy criticism from speculators who believe the Chinese economy is in far better shape than Bass’s contentions. However, Bass earned millions by correctly predicting the subprime mortgage meltdown of 2008 and it is his belief that China will face the same sort of crisis.
Bass believes that China’s willingness to lend money over the past several years will trigger losses in excess of $3 trillion causing the country to expand Bank of China’s balance sheet and cutting the deposit rate to zero. This notion has not paid off for Bass for much of this year, but as the U.S. dollar continues to strengthen, Bass believes that the yuan and Hong Kong dollar will fall in a big way.
Bass and his trades since the mortgage meltdown have been the source of much criticism, but he is taking even more heat by forming questionable alliances to strengthen his own bottom line. His alliance with Argentina’s Cristina Fernandez de Kirchner raised many questions about Bass and his motives. When Argentina defaulted on its debt, Bass defended Kirchner causing many to wonder if he was out of touch with financial reality. Read more about what Kyle Bass has really done throughout his career in UsefulStooges very informative article here: https://usefulstooges.com/2015/08/24/kyle-bass-the-frantic-investments-of-a-desperate-gambler/