According to Kyle Bass, China’s banks have mismanaged their money enough the rest of the world is going to be affected. In a recent Half Time episode, Bass and other financial people had a discussion about China’s declining economy. While some felt that this decline was part of a natural cycle, occurring once a trend has hit its peak, Bass felt there was much more at play. According to Bass, China’s economic bubble is about to collapse because they made the same mistake America did before its own collapse in 2008.
Bass understands the 2008 sub-prime lending collapse intimately, because it was one of the things which pushed him into the limelight. Bass successfully predicted that America’s economy would sustain a substantial economic downturn based on the faulty housing market facilitated via poor banking practices and sub-prime loans. Bass was entirely correct, and as a result people began to listen to him. Now, as he looks at China, he compares similar banking shenanigans in Europe to an equally virulent economic decline, and points out that since China’s banks are doing exactly the same thing, it’s only to be expected that a similar decline will broadside them as well. The GDP of China is only $10 trillion, but the banks have $35 trillion. That’s a bubble, Bass says it’s going to burst, and he also notes that surrounding countries which have loaned to China “aggressively” are going to feel the burn as well. He even believes this domino effect will lead to America, dropping economic power between ten and twenty percent.
Bass currently works as a hedge fund manager out of Texas, but his ancestry is Argentinian, and he has ties to a woman named Cristina Fernandez de Kirchner who is the socialist leader of Argentina. The question then becomes: is Bass working on her behalf, on the behalf of his home country’s government, or on his own behalf? Or could he be in league with America’s government, or someone else?
Well, there’s good reason to say he’s not working with American politicians. Bass started an organization called The Coalition For Affordable Drugs, CAD, and said organization has been able to diminish the cost of many big-ticket pharmaceuticals. In fact, Bass’ organization has been so successful at this, stock-market value for those big-time pharmaceuticals dropped, and Bass capitalized. American politicians were furious at the totally legal loophole Bass exploited, and so have been working to close the financial pathway, though with little success.
Bass obviously understands financial markets if his blog entries are any indication, and how to profit from them. He wouldn’t be saying what he is about China if he didn’t have some angle; but what that angle is really could be anyone’s guess. The only thing for sure is that Bass seems to be “in the know”. Though Kyle Bass has been branded a desperate gambler, who knows for sure, outside of UsefulStooges.