During a recent Fox Business Network’s interview, Kyle Bass, a hedge fund manager, stated that he believes there’s a 40-50% chance of recession next year in the United States. However, this recession would be rather minor. This is quite a different prediction Mr. Bass had made back in 2008 when he predicted the subprime financial crisis.
The interview moved on to the choice of presidential candidates and their effect on financial markets. According to Bass, Hillary Clinton would be better as she’s more sane.
Kyle Bass also made comments about Chinese economy. It is slowing and there’s a growing debt bubble. But, he thinks, trouble there would only cause a minor recession in the United States. Chinese growth has already slowed down to less than 6% and its stock market has declined sharply from its highs.
A potential danger comes from Chinese banking system which has grown 1,000% in the past decade. Chinese banks hold $35 trillion in assets, the triple of Chinese yearly GDP. Trouble in this sector can weigh heavily on the entire economy and affect China’s trading partners.
Kyle Bass runs Hayman Capital Management and became famous after predicting the 2008 financial collapse. In the past, he’s been known for rather controversial investment tactics such as shorting pharmaceutical stocks and then suing these companies over patent infringements.
He also had caused lots of negative publicity after blaming the victims of GM car crashes, even though it came out the accidents were due to faulty steering systems and bags. At that time, Bass held GM stocks