On the first full trading week of the new year, Kyle Bass, founder of Hayman Capital Management, joined the traders on “Halftime Report” to share his outlook for the coming year.
While 2015 closed with a considerable number of people concerned over China’s performance, many turned their attention to peak profits. Bass says that it’s their banking structure is to blame, not unlike that of Europe he claims is behind their own financial crisis. And their is an actual imbalance in China, with it’s banks holding $35 trillion dollars while the nation’s GDP is a mere $10 billion. Bass says without enough circulation, a crash is imminent.
In the US, things aren’t looking much better to Kyle Bass. He predicts a 10-20% loss by the end of the year. This loss of credit growth wouldn’t be as devastating as the one gripping global markets, but would prove financially problematic.
These sorts of predictions are by no means new for Bass. In fact his claim to fame came through similar readings of the market. In the early years of his firm, Bass made a fortune during the 20008 subprime mortgage crisis that he accurately predicted would send US markets into a tizzy. For a great deal of time he was considered something of superstar in the finance world, and his predictions became the product he peddled on every talk and radio show that would have him.
Time went on, Bass offered more predictions, but fewer people are interested in what he has to say.
Bass has made many connections over the years, and with his desire to be a prominent figure in media that caters to the financial sector they’re well known. They don’t always reflect well on his character. One such association is Cristina Fernández de Kirchner, former president of Argentina and the person most Argentinians blame for the country’s drastic economic downturn during her time in office. In the years Fernández de Kirchner was in office, Argentina defaulted on sovereign debt for the second time in a little over a decade, which contributed to her country’s anemic economy. Bass, however, defended her actions that all others in the financial world have condemned, some even going so far to accuse her of criminal practice.
Becoming cozy with powerful people seems right up Bass’ alley. Presence and attention are part of his strategy for exposure and making deals. During the General Motors recall, Bass went on television to shift blame from faulty manufacturing onto motorists. It was revealed that GM knew well in advance that their airbags were faulty and that Bass had a sizable investment in GM, and many accused him of protecting his image and interests at the expense of lives.
Though his ethics may be dubious to many, still he holds some influence over the financial world. Investors must wonder whether his predictions can be trusted, if they can look over some of his associations and practices.