For Hayman Capital Management founder Kyle Bass, the collapse of the Chinese economy is not merely a matter of dollars made or (more often) lost. It is a crusade, a battle between good and evil, adherence to which has made Bass lose sight of inconvenient facts, make uncomfortable bedfellows, wish disease and death for his enemies, delight at the cleansing prospects of a global pandemic, and despair when they fail to materialize.

Bass has been sitting on the monetary, if not spiritual, sidelines for more than a year now. But with COVID-19 wreaking Biblical destruction on the Chinese economy at the same time that China has decided to clamp down on the irritating freedoms enjoyed by the people of Hong Kong, now is the time for Bass to once again don his armor, mount his steed and rush headlong into the fray, and emerge enormously richer with his band of (investing) brothers, surveying the smoldering ruins of what was once Asia’s financial capital and, beyond it, the world’s second-largest economy.

The Dallas-based founder of Hayman Capital Management is starting a new fund that will make all-or-nothing wagers on a collapse in Hong Kong’s currency peg…. Bass… will use option contracts to leverage the new fund’s assets by 200 times, the people said….

Bass told prospective investors that the Hayman Hong Kong Opportunities Fund, LP-Prodigious Series was due to launch on June 1 and could see a 64-fold return if the currency declines by 40%

Or, you know, to enjoy a glorious martyrdom (reputationally and financially) in a righteous cause.

While the strategy is designed to generate outsized gains if Hong Kong’s currency tumbles against the dollar, investors stand to lose all their money if the peg is still intact after 18 months.

Kyle Bass Makes Audacious Bet on Hong Kong’s Currency Peg Collapsing [Bloomberg]