On his blog Kyle Bass writes that he is of the strong opinion that the current Chinese banking crisis can play a very integral role in affecting the United States economy but at the same time have a very small impact on the global economy. He also said that a big economy like China can easily burn trillions very in a short period. Speaking at the Soho Investing Conference, Bass argued that China is an emerging market and therefore, it should not give anyone sleepless nights.
He said that the last time the country had a loan crisis it made losses of not less than 30% in its entire banking system. Now that the country has been able to have a 400% growth in an eight year period, it is going to have some huge loan losses if the same happens. Bass also reiterated that emerging markets should never be considered higher than developed markets in the sense that their ratios of bank assets to GDP are lower.
He, however, noted that in the event that China makes a hard landing, he does not see the Chinese banks representing any systematic risk to their US counterparts. He went ahead to say that in that unfortunate case scenario, they can easily print bonds and get through it just like the US did.
Kyle Bass is not a stranger when matters related to giving his opinions on matters related to the global financial markets are concerned. However, most of the times, and especially in the recent past, he has been giving completely misdirected opinions. When he entered the hedge fund arena in the year 2006 by founding Hayman Capital Management in and correctly predicting the subprime mortgage crisis of 2008, many considered him a superstar and a genius.
However, that perception changed when he started making all sorts of opinions in the full glare of the media that were very different with his professional image as a successful hedge fund manager. He never turned down an offer to a television media interview where he did himself no justice. On top of that, he also made friends with the wrong people. In particular, he has been very defensive of Cristina Kirchner, a lady who is considered by many in the financial circles as economically illiterate and who has made her country suffer as a result of her wrong choices when making decisions.
Not only has Bass been involved in the above-mentioned mistakes, he has also been accused of making patients and drug companies suffer by challenging pharmaceutical patents and forcing the companies to short-sell their stocks. What comes out as a result is the drug prices going up thus causing a lot of bodily and painful harm to patients who depend on them while he laughs all the way to the bank.