{"id":25772,"date":"2017-09-17T19:35:30","date_gmt":"2017-09-18T00:35:30","guid":{"rendered":"http:\/\/olduvai.ca\/?p=25772"},"modified":"2017-09-17T19:48:32","modified_gmt":"2017-09-18T00:48:32","slug":"kyle-bass-chinas-40-trillion-banking-system-has-largest-imbalances-ive-ever-seen","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=25772","title":{"rendered":"Kyle Bass: China’s $40 Trillion Banking System Has “Largest Imbalances I’ve Ever Seen”"},"content":{"rendered":"

Kyle Bass: China’s $40 Trillion Banking System Has “Largest Imbalances I’ve Ever Seen”<\/a><\/h3>\n
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Kyle Bass\u2019s Hayman Capital has been having a rough year thanks to its widely publicized bet against China\u2019s currency, which has more than reversed its 2016 decline \u2013 its largest annual drop since 1994 – as the People\u2019s Bank of China has cracked down on potentially destabilizing capital outflows.<\/p>\n

However, Bass \u2013 unlike a handful of other former China bears who\u2019ve been forced to scale back, or even reverse, their positions \u2013 has said that he is standing by his belief that China\u2019s corporate sector is massively overleveraged, and overdue for a collapse that could destabilize the global economy. Chinese banks, according to Bass, have more than $40 trillion in assets held against $2 trillion in equity.<\/p>\n

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The dollar\u2019s bull run against the yuan last year helped spark capital outflows as wealthy Chinese worried about the depreciation of their currency. In response, the PBOC tightened restrictions on foreign-exchange transactions for individuals, local companies \u2013 quashing a roaring international M&A boom \u2013 and even foreign companies, which in some cases have struggled to pull their money out of the world\u2019s second-largest economy.<\/p>\n

\u201cSo what’s going on right now? Let’s get the elephant out of the room. Let’s talk about China.<\/p>\n

Kyle Bass: OK, how much time do we have?<\/p>\n

RP: As long as you need. Where are we? What the hell’s going on?<\/p>\n

KB: We’re in the such late stages of a game that is the largest global imbalance I’ve ever seen in my life.<\/strong>When you look at on balance sheet and off balance sheets, you look at on balance sheet in the banks, you look in the shadow banks. The number of total credit in the system, China is right at $40 trillion. Think about the number I just said. $40 trillion. <\/strong>And that’s using an exchange rate of call it 6.7 to the dollar, right? So it’s grown 1,000% in a decade. And we’re on a $40 trillion credit system on $2 trillion of equity on maybe $1 trillion of liquid reserves.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/section>\n","protected":false},"excerpt":{"rendered":"

Kyle Bass: China’s $40 Trillion Banking System Has “Largest Imbalances I’ve Ever Seen” Kyle Bass\u2019s Hayman Capital has been having a rough year thanks to its widely publicized bet against China\u2019s currency, which has more than reversed its 2016 decline \u2013 its largest annual drop since 1994 – as the People\u2019s Bank of China has […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[2229,63,130,6614,13128,8695,2914,2615,4318],"class_list":["post-25772","post","type-post","status-publish","format-standard","hentry","category-economics","tag-banking-system","tag-banks","tag-china","tag-equity","tag-hayman-capital","tag-kyle-bass","tag-pboc","tag-peoples-bank-of-china","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/25772","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=25772"}],"version-history":[{"count":3,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/25772\/revisions"}],"predecessor-version":[{"id":25775,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/25772\/revisions\/25775"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=25772"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=25772"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=25772"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}