Kyle Bass, the chief of Hayman Capital management, predicts that China is heading towards a financial crisis with it’s impending banking crisis and it will take about 3-4 years for it to reach the peak. Although the impending banking crisis of China has more assets at risk than the previous U.S crisis, it will have a lesser impact on the world economy than the U.S crisis did. Chinese banks are undercapitalized thus in the event that they undergo a non-performing loan crisis, will take a longer time to recapitalize. Nonetheless, they have the capacity to get through the crisis by printing bonds as they have the resources to do so and hence get through the crisis.
Though China’s crisis has a lesser impact globally, it will have a direct implication on the countries that carry out trade with it as it will lead to devaluation of their currency. The currency will be devalued and the overall Asian GDP will be hit hard as Asian markets are interconnected. U.S banks will not be as adversely affected though its GDP growth will be slowed down.
Kyle Bass rose to the limelight after correctly predicting the 2008 Subprime Mortgage crisis. This right prediction led to observers viewing Bass as a genius who could not go wrong in his predictions. As time went by, the observers realized how wrong they had been as Bass made wrong decisions one after the other.He always opts to go on T.V and shamelessly make wrong analysis over and over again.
In addition to making wrong decisions, he has gone ahead to make different and poor alliances. While everyone in the business views Argentinian Cristina Fernandez as an inept economist, Bass praises her unsavory principles. Kyle has unceasingly championed Cristina Fernandez’s illiterate economic policies while inherently ignoring the way she and her cronies have ripped the Argentinians.
Moreover in order to make good on the investments he has in General Motors, he went on T.V to blame the passengers for the fatalities caused the faulty steering system and the non-deploying airbags of General Motors vehicles. Although the renown motor company knew of the fault in their vehicles, it made no attempt to compensate the victims and Bass went ahead to shamelessly defend the company.
A year ago , what started on his blog, Bass came up with a ploy which led the congress to work on an overtime basis to seal up the perceived loophole. Bass, together with Erich Spangenberg pick out specific pharmaceutical firms , sells short their stocks and then challenges the firm’s patents using a company that he specifically founded to carry out his nefarious scheme. Consequently, the stocks go down with a subsequent increase in Pharmaceuticals prices and Bass gets some quick millions. Bass’s motive for funding medical research decreases, consequently causing harm to a lot of people who are dependent on the Pharmaceuticals firm’s products to alleviate their suffering.