Hayman Advisor’s CEO Kyle Bass Thinks The Energy Sector Is Where The Money Is Over The Next Three To Five Years

 

People that follow the high-profile people in the investment market are very familiar with the name Kyle Bass. Bass is the boy wonder that predicted the fall of the subprime mortgage industry in 2008. He also predicted that Greece would default on its debt. Kyle Bass made a fortune on both of those bets. But the last two years have not been as fruitful. His partners in the Hayman Advisors hedge fund haven’t been thrilled over the returns Bass has produced recently. But Kyle keeps talking, and the press keeps writing about his predictions. One of his 2016 predictions is, the energy sector is the place to make big money over the next three to five years. Bass wasn’t sure what segment of the energy sector was best. When he was asked whether pipelines, infrastructure, or the producers were going to pay off equally over that time frame, he didn’t have an exact answer. But he did say all of those areas have cap structures where money can be placed and get substantial returns.

 

 

Bass does have the money, mind, and mouth to make people listen to him as UsefulStooges dutifully points out. But his advice isn’t always good advice. He won a spot at the top of the investment industry in 2008, but some people in the industry think he has abused that spot. What most people know now is, Kyle Bass is for Bass moneymaking, and that may come at the expense of others. Bass proved that when he sided with General Motors over the faulty steering mechanism disaster. Hayman Advisors, the Bass hedge fund, was GM’s largest stockholder at the time. Kyle gave more proof when Argentina defaulted on their debt bonds and left four hedge funds holding South American worthless paper. Bass had no business talking about the situation, but he did. He sided with Argentina and against his investment colleagues.

 

 

The list of inappropriate decisions made by Bass keeps growing. He is betting against drug companies using questionable and privileged information, and he is betting against China, and the Chinese government isn’t happy with him. Bass is a ticking bomb that could go off at any time, and no one is sure how much more damage he will cause.

 

Big Banks Lose Half a Trillion

This hasn’t been a good year for investors in the banking sector. So far this year, twenty of the biggest banks lost 25% of their market values, that’s nearly half a trillion dollars, MarketWatch reports.

Multiple factors have led to that: concerns about China’s economy, oil prices, outlook for interest rates, and now Brexit. These losses make it harder for banks to raise capital as their balance sheets have shrunk. This has also affected employees’ stock options.

Among the biggest losers is Unicredit. This bank has seen its share price decline by 64%. Meanwhile, Royal Bank of Scotland is down by 56%. Some other foreign banks have also seen steep losses. UBS, for example, is down by 38%.

When it comes to American banks, the losses aren’t as steep, but still substantial. Citigroup’s stock has declined by 21%, while Morgan Stanley’s by 20%.

The current outlook for banks is uncertain. In Europe, the UK-based banks could lose more value if Brexit negotiations don’t go as well for the Brits as expected. The big issue is access to EU’s markets when it comes to financial services. At the same time, Italian banks are sitting on hundreds of billions of bad debts, while similar problems are developing in China.

This may directly impact American investors as financial crises can easily spread across nations. Many foreign banks have their shares traded on the United States exchanges, and are in portfolios of many investment funds that focus on the financial sector.