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Kyle Bass Loss of Magic

April 7, 2016 - Author: steph - No Comments

Kyle Bass was born in 1969 in Miami, FL. His father was a manager of the Fontainebleau Hotel prior to moving to Dallas. Bass attended the Texas Christian University on a scholarship that he won from his diving skills and academic achievement. He graduated with a Bachelors of BA in real estate finance and finance. Bass started working at the office of Bear Stearns as a senior Managing Director. He left the office and became a Managing Director in the office of Legg Mason in Dallas.  Source:

In 2005, Legg Mason decided to sell the part of the office where Bass worked at. This made Bass to leave Legg Mason and start Hayman Capital Management where he served as an investment manager to international special circumstances hedge fund, which he had planned to launch. Within no time after launching the hedge fund in 2006, Bass was convinced that a residential real-estate bubble existed in the US. This made him one of the few investors to make successful prediction and he was able to profit from the sub-prime mortgage crisis. This consequently brought him unsavory reputation in financial services industry.

Bass has admitted that he got tipped off by New York’s investment banker while they were in Spain. Upon returning to US, Bass hired some private investigators to find out the ease of getting a mortgage. He spent quite some time studying about residential mortgage market. He performed a research to ascertain the type of residential mortgage backed securities that are composed of mortgages that are of low-quality securities were more likely to default. The investment thesis was expressed through purchase of credit default swaps against securitizations that he deemed as most unstable. After buying the positions for the flagship fund, Bass raised extra capital for a special type of fund that was dedicated exclusively to capitalizing existing opportunities in market place.

In late 2007, after US was swept by a wave of foreclosures, Bass was featured making a fortune betting against subprime securities. D Magazine, in April 2008, profiled Bass through an article claiming that Kyle Bass had correctly predicted financial recession and made about $0.5 billion from it.

Sinking Deeper

The magic touch of Kyle Bass in predicting the financial recession faded soon as it had begun. In addition to the bad calls that he often makes, he has formed unsavory alliances. Bass keeps sugar coating Cristina Kirchner ideas despite everyone in the business believing that she is economically illiterate and the worst thing to have ever happened in the economy of Argentina. Bass has been consistently championing her irresponsible economic policies and has shunned the cartoonish level at which she and her amoral cronies have looted from their own people.

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