Kyle Bass Predicts Financial Crisis in China

Kyle Bass, a hedge fund manager, the founder of Hayman Capital Management, and a onetime investment genius spoke to Wall Street Week’s Maria Bartiromo on his views on the upcoming presidential election and the general economy in 2016. According to Kyle, there’s a 40 to 50 percent chance of there being a minor recession next year.

Kyle says that Hillary Clinton will be the best president for the markets since she appears to be the sanest. He says that though he agrees with Donald Trump’s recession prediction but does not agree with the reasons Trump gives for the recession. The credit problem in Asia and slow global growth cannot cause a persistent recession in the United States.

According to Kyle Bass, the United States, negative interest rates should not worry people since it will be a matter of time and the problem will end. If banks continue to tax their client’s deposits, gold will take off since people will prefer investing their money in that form than keeping in the costly banks.

Speaking about Chinese markets slow down, Kyle says that China is experiencing some hard time. The 5.8 percent nominal GDP recorded in the fourth quarter of 2015 is the lowest GDP growth in 41 years. There has been a high rate of urban to rural migration with 5.8 million Chinese migrating, the largest reverse migration in 30 years.

Everything that predated the US financial crisis is currently happening in China and they are going to experience a similar crisis. However, this will not be the end of the world for China. The crisis will be something the country can get out of if necessary steps are taken early enough.

Kyle first came to the limelight and international headlines in 2006 when he correctly predicted the 2008 subprime mortgage crisis. He became famous for a while but has since lost his magic touch making bad investments and bad career alliances from time to time. There have been reports that Bass’ funds lost around 30 percent in 2014

Kyle’s alliance with Cristina Fernandez de Kirchner of Argentina has seen him defend Argentina’s default on its sovereign debt. His shady ties with Erich Spangenberg saw them sue Pharmaceutical Companies leading to thousands of deaths but making profits for themselves.