September 15, 2012

Kyle Bass: Japan will follow Europe's debt crisis nightmare

Japan is about to follow Europe's deep debt crisis, said Kyle Bass, a hedge fund manager and founder of Heyman Capital, said on CNBC.
Although investors are focused on the situation in Greece and other European countries, Japan will soon reminded himself stated Bass.
"Things in Greece will get out of control in the next 30 to 60 days," said the investor, who became known for his large short positions in subprime mortgage-backed securities before the collapse of the sector in 2007-2008.
"Japan is a market crossroad ... I've never seen a more understated option throughout their lives, "he says.
Bank of Japan effectively monetized the country's debt by buying Japanese government 50 trillion. yen, says Bass.
There are many dangers associated with strategies of central banks trying to print his escape from the debt crisis. These are inflation and loss of confidence in the stability of the debt, says Bass.
In his impending crisis is obvious. "The simple fact is that we are not talking about an exercise in quantitative easing. The question is when, not whether the system will collapse. "
Japan's aging population and the burden of system benefits, are the main factors giving rise to the debt problems.
Bass words as illustrated cites convicted of financial fraud Bernie Madoff fund manager. "He taught us anything," said Bass. "Can not promise anything, as long as you do not have to do them."
As for Europe, Bass rejects the idea that Greece can adhere to contractual agreements. "The bankruptcy will be controlled and eventually they will have to abandon his promises to the Troika," he said, referring to the European Union (EU), International Monetary Fund (IMF) and European Central Bank (ECB).

Kyle Bass, an American hedge fund manager, is the Founder of Hayman Capital. He received extensive coverage in the financial press for profiting $590 million by short selling the sub-prime mortgage bond market, before that market crashed. In 2011, Bass initiated a huge position in Greek sovereign debt through CDSs. Media reports were that he could profit up to 650 times his investment should Greece default on its debt obligations.