According to Wikipedia Kyle Bass is the head of the Dallas-based hedge fund known as Hayman Capital Management, and recently Fortune magazine caught up with him at the Ira Sohn investment conference to hear his case on the statements he’s made about the impending Chinese economic hard landing. According to Kyle Bass, the Chinese hard landing is due to the Chinese economy being undercapitalized. Fortune asked Kyle Bass about the foreign reserves China holds and the belief that China can weather the economic storm with it. He doesn’t seem to believe the $3.5 trillion foreign reserve fund will be enough to save China because they have $31 trillion worth of assets in their banking system and their economy is a $10 trillion economy.
Kyle Bass goes on to say his belief is China is an emerging market and an emerging market should never be greater in bank assets to gross domestic product than a developed market like the United States. According to him, the United States should only suffer a slight amount of growth in gross domestic product due to the Chinese hard landing, which isn’t a good thing, but the United States should be fine due to having the banking system under control. So, in his opinion, despite the hard landing being projected to slash the global economic growth by half, the United States should only have a slight increase in gross domestic product, and it should suffer no recession whatsoever.
At one time, Kyle Bass seemed to know what he was talking about. He started Hayman Capital Management in 2006, and he predicted the 2008 sub-prime mortgage crises. Predicting the crises got him money, fame and media attention. Since the prediction in 2008, Kyle Bass has gotten it wrong almost every single time. Because of his one-time accurate prediction, he became a media superstar, and the media has gone to him for advice and analysis quite frequently, and he has not only gets everything wrong, but he gets it all wrong in the direct view of the public. As his hedge fund continues to perform more and more poorly, Kyle Bass inversely makes more and more appearances in the media to give his analysis on whatever it is the media asks him about.
Kyle Bass is also loved by the autocrats in Argentina, especially the president of Argentina, Cristina Fernandez de Kirchner. In 2014, she defaulted on Argentina’s sovereign debt, which was the second time the country defaulted in 13 years. Kyle Bass was there to defend her and rationalize away the poor decision. In fact, Kyle Bass is always there to defend and tout the poor economic policies that she makes. There is no reason why he continuously makes the poor decisions he does in the media or in Argentina.