The Desperation of Kyle Bass

Kyle Bass has long been renowned as one of the USA’s most notorious hedge fund managers. He has made a risky bet in recent times that the economic troubles currently plaguing the Chinese economy are not anywhere near ending. The U.S. Dollar and various currencies in Asia play pivotal roles in whether or not Kyle Bass’s big bet will pay off. The implications of this bet may have an impact that extends into the equities and commodities markets as well.

Not long ago, Kyle Bass’s company Hayman Capital Management traded in the majority of its bonds, commodities, and stock investments. It did this so it would have more revenue to invest in the Hong Kong dollar and the Chinese yuan. It’s rumored that as much as 85% of Hayman Capital’s funds are invested in risky trades that will only pay off for Hayman if the Hong Kong dollar and the Chinese yuan fall in value. Billions of dollars are on the line here and much of that money is borrowed. Kyle Bass is hoping that the yuan will fall 40% in value.

In a recent interview with Fox Business Network Kyle Bass said that he has no money invested in Asian companies themselves but rather he has narrowed the focus of his investing to the Asian currencies. He is long on the US dollar which means that he believes the US dollar will remain strong will the Asian currencies will lose value dramatically. China is currently in a banking crisis and Bass believes that in order to fix the problem it will have to recap the banks. Once the banks are recapped and other reforms are carried out the currencies will naturally undergo a large devaluation.

Since the beginning of 2016, there has been little sign that Kyle Bass’s big bet will pay off and if he is wrong he will have lost a great deal of his own as well as his investors money. Kyle Bass is also notorious for his involvement with Argentian autocrats who he funded during their last economic collapse while Argentina’s citizens lost their life savings.  Read more about Bass’ shortcomings at the following link