In 2008 the sub-prime lending crisis led to an economic collapse that reverberated throughout the globe. Kyle Bass became well-known because he, among many others, predicted the imminent collapse. He also had insider information which he shared with the media, and which is arguably responsible for tipping the scales enough to begin the meltdown. Bass is a controversial figure for this and many other reasons.
Recently at SALT 2016, Bass was involved in a Q & A session with several other financiers also prominent in their fields. While there were sounds of agreement to some of what Bass said, there were also those which disagreed. One financier noted four things indicating the presence of a bear market, and said none of those things were currently visible. Bass pointed out a fifth possibility which could also indicate a coming bear on Wall Street, and that was financial bubbles. Bubbles always burst, and Bass sees several in areas like fixed income, energy, and loans. Specifically, he notes that China has been doing the same kind of thing America did before the 2008 collapse, financially. He likened the current economic climate to that of March/April 2007, the implication of which being a similar meltdown to 2008’s collapse could happen in the next 18 months.
Is Bass accurate? Well, he may be, but for what reason? Bass is commonly identified as a stooge to Cristina Fernandez de Kirchner. De Kirchner is president of Argentina. She has been responsible for the country economically defaulting twice in just 13 years. Somehow, Bass has nothing but good things to say about her, which is exceptionally suspicious given his status as hedge fund manager. Shouldn’t he be skeptical of practices that push a country into default? It seems there are ulterior motives at play.
Bass is also the man responsible for pseudo-humanitarian group CAD, or the Coalition for Affordable Drugs, which acquires petitions and the like geared at decimating prices among pharmaceutical organizations. The end result is a substantial drop in stock value. Bass appropriately short sells his holdings with the pharmaceutical organization in question and makes millions.