Why Kyle Bass Thinks China is “Just a Paper Tiger”

This week on “What'd You Miss This Week”, Scarlet Fu, Joe Weisenthal, Caroline Hyde, and Romaine Bostick, spoke with Kyle Bass, founder and Chief Investment Officer at Hayman Capital Management. The hedge fund manager said he is sticking with his call for a recession in 2020 as the tax cut bump fades. "Economic activity will begin to wane in the back half of 2019, and by the middle of 2020, we're most likely going to be in a recession," he said. Bass said the Federal Reserve would not be much help --giving them an "F" score for raising interest rates too late in the cycle. “When we get into even a small recession I don’t think we have the arrows in the quiver.”

Bass also discussed his recent piece for Bloomberg Opinion arguing that President Trump should not "take the easy way out" when it comes to trade negotiations with Beijing. "There is speculation that Trump has told his negotiators to 'get a deal done' in order to put an end to recent market volatility," he wrote. "But that would mean foregoing a historic opportunity to come to a major restructuring of America’s relationship with China at a moment when China is most inclined to agree to concessions." Bass said there was an 80-to-85 percent chance that the U.S. and China would reach a deal.