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 Return.
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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