Kyle Bass Joins The Circus

If a clown U.S. president is what it takes to pop the Chinese bubble, so be it.
By SteeleatHaymanCapitalManagementLP (Own work) [CC BY-SA 4.0], via Wikimedia Commons

By SteeleatHaymanCapitalManagementLP (Own work) [CC BY-SA 4.0], via Wikimedia Commons

That Kyle Bass is a big fan of President Trump’s trade war with everyone is no surprise: The chief target of that trade war is China, which the Hayman Capital Management founder has been not-so-patiently waiting to crash for two-and-a-half long years now. In other words, he can use all the help he can get, even if it is from a man he once called a “circus clown.”

Given the dogged refusal of what he sees as the Chinese credit bubble to burst, the sort of stubborn, erratic absurdity he despaired of in Trump when he declared Hillary Clinton “the only thing we got” is suddenly looking like a tremendous boon to Bass.

"The Trump administration's lack of predictability is an asset to the U.S. in two areas, I think," he said. "In our trade negotiations with China and in our, let's say, other negotiations with North Korea. I think that the fact that we only export about $100 billion or $130 billion worth of goods to China while we import almost $500 billion from China – we've got the leverage to really work through this tariff and trade war."

Now, that’s not to say you’ll be seeing Bass don a MAGA hat any time soon; even a circus clown clock is right twice a day, even if said clock’s reasoning is seriously faulty.

"President Trump is kind of whining about devaluation of the Chinese currency and saying that that's – worrying that will bring higher prices and it doesn't," Bass added. "All a devalued Chinese currency does is broaden the cost across the Chinese population. The dollar cost of goods to U.S. consumers stays the same. China has to either take the hit in price or in quantity; in the U.S., the dollar cost literally stays the same of anything that we put tariffs on in China. I think those pundits that argue to the contrary — there's no evidence to suggest that's true."

Hayman Capital’s Kyle Bass says US has the leverage to fight Trump’s trade war [CNBC]