April 17, 2012

Kyle Bass: Buy after Big Debt Crisis – Japan, Europe, UK …

Kyle Bass: "Plan B is, to the extent that I'm right, and you start to see sovereign dominoes falling and the focus ends up on Japan very quickly, what do you do with your money? Well, if we go to +4 in GDP to -3 or 4 in global GDP, and we have an equity market contraction of 40 or 50 percent, you're going to need some money to buy. That's going to be the greatest time in the world to buy once these restructurings happen."

We see now why Kyle doesn’t own much stocks and he is mostly short stocks or owns only a few special situations. He has also pointed out that the USD is the best currency in an environment like this. If he is right, investors will need US dollars to buy cheap assets in few years. According to him the world cannot growth until debts disappear and there is only one way for it to happen.

Kyle Bass, an American hedge fund manager, is the Founder of Hayman Capital. He received extensive coverage in the financial press for profiting $590 million by short selling the sub-prime mortgage bond market, before that market crashed. In 2011, Bass initiated a huge position in Greek sovereign debt through CDSs. Media reports were that he could profit up to 650 times his investment should Greece default on its debt obligations.