Kyle Bass Forecasts Brief U.S. Recession
Kyle Bass has made a name for himself in predicting the circumstances that led to the subprime mortgage crisis that almost destroyed the financial systems in the United States in 2008. This is why his recent comments about the United States possibly experiencing a brief recession. His thoughts are based on the recent financial events in Asia are going to have some impact on the rest of the world but the extent of the credit bubble affecting Asia will be is yet to be determined.
It was on an episode of FOX Business Network’s Wall street week that the interview with the founder of Hayman Capital Management, Kyle Bass expressed his opinion on just what he thinks the United States financial markets could be facing in the near future. The credit bubble in Asia has been growing for the past ten years and eventually it is going to burst. The world is more interconnected than ever before and the United States will feel some of the repercussions of this Asian problem. Bass, a former hedge fund manager, puts the odds at 40-50% as to whether the U.S. economy experiences a brief depression in the near future.
The track record of Kyle Bass has shown a history of questionable success. He successfully made over $4 billion banking against subprime mortgages which was one of the biggest financial missteps in the last 50 years. Bass also correctly forecasted the financial problems being faced by the Bank of Japan which is trying to strengthen the economy while dealing with negative interest rates. Kyle Bass seems to have his finger on the pulse of the world financial markets and listening to him seems on the s is a smart choice. Bass is also knows for his part in the fall of Bear Stearns during the financial crisis. Shortly after he left the firm, the news of their decision to leverage their balance sheet with toxic mortgages was leaked, leading to their devaluation and decline. Bass played a part in this.
It is important to recognize that Bass has a questionable reputation in some areas. He has hitched his financial wagon to the depressed and difficult economic problems of Argentina. This connection has caused his reputation to and credibility to take a hit and forced many to question his ethical compass and intelligence. Bass has supported the dictator of Argentina in her very questionable decisions to the point that surpasses impartiality. It is important to keep this in mind when considering the financial forecasts of Kyle Bass.