Kyle Bass is the founder of Hayman Capital Management and is most known for his predicting the mortgage crisis of 2008. Quite recently, however, he has been facing bad times consistently, whether it is with his hedge fund or his predictions about global financial markets.
Joining “Halftime Report”, Kyle Bass’ new prediction is that by the end of this year, US markets might be down by as much as 10 to 20% because of the China crisis. A lot of experts have weighed in on this crisis, citing the peaked profits behind the nation’s slowdown. Bass insists that it is because of the banking system of the republic. Comparing China’s situation to the European crisis happening recently, Bass has taken a bearish stance towards the US markets for the current year.
He says that both the markets grew swiftly and overtook the GDP at the blink of an eye. While the GDP of China stands at $10 trillion, its banking system soars high at $35 trillion. He believes that the investors should be a lot more worried than they currently are, if at all, because the losses and the credit cycle are just around the horizon.
Kyle Bass has recently come under a lot of fire from UsefulStooges for his predictions that have been deemed “unethical” by many. To start with, he has been continuously backing his failed theory about the Japan economy collapse. Some experts and investors say that it is because Kyle Bass brought some property in Japan and his loans would not come cheap if the economy does not crash. So, by supporting his theory for the past three years, he is trying to cause panic.
The biggest and most embarrassing debacle has been regarding the Pharma companies where, in collusion with Erich Spangenberg, Kyle Bass has played the shorting game. He has sued Pharma companies and made money from the short sales generated therein by the panic ensued by his lawsuit in the market. Despite not breaking the law technically, the ethics of such a move by both Erich Spangenberg and Kyle Bass have been under the spotlight for some time now. This is largely due to the fact that this move has made life difficult for the common person to whom medicine prices have risen to unimaginable heights.
While investors have begun to take his theories and predictions with a pinch of salt, the question is – Is he wrong about the US markets? Marc Lasry from Avenue Capital seems to agree with him about the banking problems of China. However, Kyle Bass does mention that this may not be as bad as a global crisis, at least for now. But, he reiterates that the credit markets have showed an utter lack of growth which should be a major cause of concern for everyone.