It’s hard to tell, with financial practices, what is and is not underhanded. Sometimes a loan is really a debt extension, while sometimes it’s a lifeline. Context defines everything, and when exploring the context of Kyle Bass’ rather controversial investment decisions, ethical underhandedness is almost always present; even from the very beginning.
Before Kyle Bass was the media personality with the reputation he has today, he worked for Bear-Stearns, one of the top five investment banks on Wall Street prior the 2008 financial collapse. When his employment with Bear-Stearns dissolved, Bass let drop a tip which hit financial news outlets and caused Stearns to go under by the end of the week, being bought out by J.P. Morgan-Chase. Later in 2008, the Great Recession hit, from which Bass substantially capitalized by short-selling sub-prime loans at the right time. No wonder he made it big, he was part of the downfall itself!
Then there’s CAD. The Coalition for Affordable Drugs truly plays the part of a cad, forcing big-ticket pharmaceutical companies to lower drug prices for the ostensible purpose of aiding the poor and infirm in a humanitarian way. The real purpose is subsequent Wall Street stock declination which Bass capitalizes on via the short-sell, making millions. Meanwhile, the drug companies can’t research or develop anything that year–or for a while afterward, usually–with such a funding loss, meaning new developments are indefinitely suspended, and the infirm are no closer to health.
Finally, Cristina Fernandez de Kirchner, a woman so bad with money that she has cast Argentina into default twice over the last thirteen years, is a regularly supported person by Bass. He is always quick to sing her praises.
With all these things in mind, when Bass says things like China’s economy will face an implosion like 2008’s, but not quite so bad, and that it will happen in two to three years with a forty to fifty percent likelihood of hitting by the end of 2016, understand that he’s not really saying anything. He’s just prodding under-experienced financiers into withdrawing investiture, making his remarks somewhat self-fulfilling. To qualify that, Bass has been predicting China’s downfall since October 2015, and yet as of July, he’s now saying that should China “Materially” devalue their currency, it could be the most historically exciting time to invest in Asian markets. It looks like Bass’ manipulation tactic isn’t working, and he’s got to backpedal fast. Either way, his methodology is decidedly underhanded.