Hayman Capital Management founder and President Kyle Bass was among the few traders who joined the 2016 market outlook about what volatility in China means to the United States. Many traders consider peaked profits in China to be the reason behind the country’s slowdown. However, Bass thinks that the main problem lies with the Chinese banking system. His comparison to what China is currently experiencing is the recent European crisis. In both instances, the banking systems managed to outgrow their countries GDP at a staggering pace.
Currently, China’s banking system is worth not less than $35 trillion dollars against a GDP of $10 trillion. Bass thinks that the credit cycle and losses are coming and he sees danger in the fact that investors are not a worried lot when they are supposed to be. The move was seen by many traders as bearish on the US markets and many believe that a downward trend of 10-20% will be experienced. Though the situation will not be as bad as the global financial crisis, the lack of credit growth in markets that are emerging is a big problem according to his analysis.
Kyle Bass is not a new name in the hedge fund arena business. He first came into the limelight when he correctly predicted the 2008 prime mortgage crisis. He was among the very few hedge fund managers who managed to make a killing when others were losing. At that time, many saw him as a genius who could do nothing wrong because prior to joining the hedge fund industry, he was a respected man in the hedge fund industry.
However, time has not been very kind to him. His magic touch withered and in the very recent past, he has made bad call after bad call. The worst thing with him is the fact that he does it in the full glare of the public. Bass does not worry about what the public will view him. He is also not a media shy person and he never turns down any offer to appear on any media station.
On top of making bad calls, he has made very wrong alliances for his public image. He managed to make Argentinian despot Cristina Kirchner his bosom friend. He has been defending her moves on any television station he appears to knowing very well that she has made her people suffer greatly because of her stupid financial mistakes.
Bass is also known to love quick money, or at least his CNBC interviews give that impression. He has in the recent past been involved in shorting pharmaceutical companies and then suing them. Together with his partner in crime, they also go to the extent of challenging the pharmaceutical patents of the drug companies. In short, they were in a mission to make money out of drug companies without taking into consideration the suffering they would cause to those that depend on them.