Hayman Capital's Kyle Bass discusses China at Sohn San Francisco:
*HAYMAN'S BASS SAYS CHINA 7% GDP GROWTH IS A 'FARCE'
*HAYMAN'S BASS SAYS HE'S ASSUMING CHINA CREDIT CYCLE HAS BEGUN
*HAYMAN'S BASS: CHINA WILL FACE NPL CYCLE, CREDIT CONTRACTING
*HAYMAN'S BASS: ASSUMES 8.5%-10% CHINA LOANS NON-PERFORMING
*HAYMAN'S BASS SEES EMERGING ASIA BANKING CRISIS AHEAD
Confirming our previous detailed analysis on China's Banking System's Neutron Bomb.
Bass tells Fortune he expects a ‘hard landing’ for China and the global economy, but that it won’t be as bad as the 2007-09 financial crisis.
Kyle Bass, head of Dallas-based hedge-fund Hayman Capital Management, rose to prominence in 2007 for being one of the few investors to spot the U.S. financial crisis early, and to profit from it by betting against subprime mortgages. He successfully called Japan’s banking problems (and bold monetary stimulus) a few years later, and now he’s saying China will be next.
In an interview with Fortune prior to his appearance at this week’s Ira Sohn investing conference in San Francisco, Bass offered reasons why China’s impending banking crisis, though far bigger than the U.S. crisis in terms of the assets at risk, will have a smaller impact on the global economy. He also explained why the hedge fund business is less forgiving than it has ever been. Edited excerpts of the conversation follow.
Fortune: You have said the banking system in China is under-capitalized, and the country could blow through foreign reserves quickly. What does China’s banking system look like?
Kyle Bass: It’s not a mono-variable equation. Foreign reserves aren’t China’s only access to capital – they can sell bonds and they can actually print more money. But when you are thinking about their...
Read The Full Interview at Fortune: Fortune
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.