Texas-based hedge fund manager J. Kyle Bass, the founder and chief investment officer of Hayman Capital Management and founder of private equity firm Conservation Equity Management, joins Julia La Roche for a wide-ranging discussion on macroeconomics, geopolitics, and investment opportunities.
Regarding macroeconomics, Europe is facing one of the worst winters of high power prices ever due to its overreliance on Russia and policies pushed by shareholders, NGOs, and teenagers. As a result, Bass expects Europe to see a meaningful recession. What's more, he believes the solution to the mess in the short-to-intermediate term is more hydrocarbons and embracing nuclear energy in the long term.
Elsewhere, Bass, a long-time critic of China, discusses why he thinks China will invade Taiwan. He also highlights how the Chinese economy is "circling the drain," and the banking system is hyper-levered, especially in real estate. He notes that investors should probably sell Chinese equities to limit the "risk to a genocidal regime that's likely to become militaristically belligerent."
The U.S. is still in the best position globally, according to Bass. His macro take is to expect a sharp recession, and depending on how aggressive the Federal Reserve is with its rate hikes; they could make it worse. Bass expects the U.S. to come out of that recession, and the Fed will cut rates by the end of next year or early 2024 and expand its balance sheet again. As a result, Bass is interested in hard, productive assets like rural land that can can generate superior returns that outpace inflation.
Watch the interview on YouTube: https://youtu.be/p0_euL0QnnE
Follow Kyle on Twitter: https://twitter.com/Jkylebass
Follow Julia on Twitter: https://twitter.com/julialaroche
