Kyle Bass and The Media
Kyle Bass, leader of Dallas-based hedge-fund business Hayman Capital Management, grew to power in 2007 after taking charge of the handful of investors to look our for and predict the U.S. financial crisis results before hand, and to gain revenue from it by betting against the expected mortgage outcome. He actually guessed right predicting Japan’s banking problems and financial problems after a short period of time, and now he’s predicting China is next to have a similar outcome.
Bass has shared some explanations as to what the result of China’s impending banking crisis ends up as, however far worse problems than the U.S. crisis in terms of amount of assets sent out as risk, will create a smaller impact on the worldwide economic status. He also shared why the hedge fund business is feeling less remorse than it has in the past. Times are tough and you have to learn how to move on and forget past mistakes. The economy won’t just wait around.
Kyle Bass claims that foreign monetary reserves aren’t China’s only storage space and access point for capital. Additionally they can sell their bonds and they can always just print more money. When you actually stop for a second and consider their reserve pile, and investor solace that they control so much money under their procession such as $3.5 trillion fund for bad weather that they protect from any bad storm. The whole idea is that their banking system used to be 41 trillion RMB just eight years ago and now the growth is at 184 trillion RMB. They have just over $30 trillion of assets just laying around in their banking system waiting to be used. Their overall economic status sits at $10 million.
Now during the process of the United States entering the financial crisis, the US banking system sat at 100% of GDP, holding just over $15 trillion of assets recorded on the balance sheet. As a country we had $1 trillion of equity, meaning lots of leverage options. Loan losses were at a low 7%. Compared to the United States, China has three times its GDP in bank assets.
Bass who funded the Hayman Capital Fund Management organization made his early fame and fortune on predicting headline mortgage crises. For a while he was considered a genius with a magic touch. It seemed like there was no way that he could be wrong about anything.
Then time went went on… and the desperate gambler was exposed…it certainly was not good to him. All of his magic went down the drain and his headline popularity was dropping. Bass has in some cases ripped of his own people. The event that really killed his was the uncalled for confrontation with general motors. He decided to go on TV and shift the blame for deaths related to seat belts on the passengers. He claimed there were all drunk or just decided to not wear seat belts.