Kyle Bass

Having Killed Their Equity Market, China Unleashes "Tobin Tax" For FX Market

In September last year, Chinese regulators stepped on the throat of a 'fair' market in equity futures trading and for all intent and purpose killed the Chinese equity market. Tonight - after 2 days of Yuan weakness - having warned everyon from Soros to Kyle Bass that "betting against the Yuan can't possibly work," The PBOC just unleashed plans for so-called "Tobin Tax" on FX transactions (which implicitly taxes each transaction, reducing liquidity, raising margins and reducing leverage).

China: A 5-Year Plan And 50 Million Jobs Lost

China never had an actual economic model or growth model. It simply printed an obscene amount of money, especially after 2008, and used it to build factories, 30-storey see-through apartment blocks and highways into nowhere cities, without giving much if any thought to where this would lead when their formerly rich western customers had less to spend on its ever increasing amount of ever more useless products. It was "to infinity and beyond" from the start, but that’s a line from a kids’ fantasy story, not a 5-year plan or an economic model.

Japan Braces For A "Turbulent, Volatile" 10-Year Auction With First Ever Negative Yield On Deck

"We expect the10y JGB auction on the 1st to be a new issue with a 0.1% coupon, but auction yields are likely to go into negative territory. We do not expect the bank sector to buy, and demand from dealers and foreign investors is unlikely to provide sufficient support. We expect the auction to be turbulent given investors are also unlikely to short futures and the possibility of a tail. "

China May Have Found A "Solution" To Its Massive Bad Debt Problem

Last April, China had an idea about how to boost the country’s dying credit impulse. One idea was to supercharge the country’s nascent ABS market which was barely producing $50 billion in supply per year. That effort failed in large part due to banks' unwillingness to offload their good assets in a time when NPLs are rising. So you can probably guess what Beijing's "solution" is.

Albert Edwards Is In Love With This Asset That Hasn't Had A Losing Year Since 2007

"Name me a major asset that has not seen one single yoy decline since the start of 2007? Clearly not equities or commodities. What about bonds? Again clearly not corporate bonds. What about 10y government bonds? I?ll give you a clue. It?s not the US, UK or Germany, all which saw negative yoy returns, most notably in 2013."

The Selling Is Back: S&P Futures Tumble Below 1,900; Sterling Crashes, Gold Soars

On Monday, everyone was giddy that the rally is back on. Less than two days later, the dour fatalism of some HFT algo stop hunting price action and a few comments by the Saudi oil minister, and the markets have remember than nothing has changed and that nothing has been fixed. But at least the biggest shorts squeeze in 5 years is finally over.

The Silver Age Of The Central Banker (Ends Badly)

The Golden Age, per the original Greek myth, was an era of unblemished cooperation and great deeds. The Silver Age, on the other hand, was a pretty miserable time to be alive. Not as warlike as the Bronze Age, and not the war of all against all as in the Iron Age, but the spirit of the age was one of strife and competition. It ends badly. What’s required is seeing the world for what it is, not what we might wish it to be. That’s not easy, whether you’re a central banker or a small investor, but it’s never been more important.

China Fires Stock Regulator, Scrambles To Regain Narrative As Economy, Stock Market Implode

Amid plunging exports and volatile equity markets, China is rushing to reassure the world that Beijing hasn't lost control. Despite promises to curb excess capacity and efforts to convince the world that a much sharper yuan devaluation isn't in the cards, the market is rapidly losing faith. What, we wonder, happens if the engine of global growth and trade isn't able to shore up confidence?

Weekend Reading: The Bull Is Back?

That didn’t take much. After a three-day rally, the media is back into “bullish” mode suggesting the bottom is likely in and by the end of this year, it’s all going to be just fine. Unfortunately, history suggests that after such a long unabated expansion risks are substantially higher than it has been previously. Furthermore, as I have repeated often in these missives, in an economy that is driven primarily based on consumption, and such consumption is already weak, it doesn’t take much to “flip the switch.”

Company Flagged By Kyle Bass As A Ponzi Scheme Was Just Raided By The FBI

After making a strong case over the past 3 months that Texas-based REIT United Development Funding IV is nothing but a Ponzi scheme - a name he has been short -  the stock tumbled, jumped, and then tumbled again. However, after its most recent plunge moments ago which led to its being halted, we doubt it will rebound again. The reason for today's most recent, and surely final crash: an FBI raid of UDF's Texas office.

Kyle Bass Is Dead Wrong About Chinese Banks Says Chinese Bank

As the eyes of the financial world shift towards what may be some very serious problems in China's mammoth banking system, one analysts says fears about an imminent meltdown are overblown. Meanwhile, NPLs just hit their highest level since Q3 of 2006. 

Too Many... Convenient Beliefs

People come to believe whatever they need to believe when they need to believe it. Recent studies of voting patterns confirm the obvious. Zombies vote for higher taxes. Cronies vote for lower taxes. All believe they are voting for matters of principle.