Kyle Bass turns critical eye toward China
By Rob Copeland
Tue Jul 2, 2013
Japan bear sees likely "full-scale recession" in China. Hayman flagship up big this year.
Kyle Bass of Hayman Capital Management is
well known as a Japan bear, but it is the risk of a
full-scale recession in China that is pushing him to
aggressively take down risk across his portfolio, according to
a June investor letter obtained by Absolute
China troubles could result in "very bad news for asset
prices around the world," he wrote.
"The scale and pace of credit expansion in China over the
last 5 years is truly staggering. The compounded annual growth
of bank assets as measured by the China Banking Regulatory
Commission has been 30.8%," Bass wrote. "To give some
perspective, a 30.8% compounded annual growth of credit in the
U.S. equivalent over 5 years would be an expansion of $33
trillion. This rate of credit growth is three times the total
credit system growth experienced...
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