Kyle Bass’ Japan Macro Fund Down 29% for April

Weird. I heard Kyle Bass speak at a II/AR event a couple of years ago, and I thought his big point on Japan was that it was very easy to purchase instruments with a lot of optionality/convexity embedded in them. (Like, for example, CDS.)

Not sure how you manage to lose -32% in a month when you have a lot of optionality.
 
Just another example of a fund manager who talks the talk but doesn't walk the walk. He totally missed the ball on the China slowdown and how it affects Japan. Japan is a huge exporter of high end machinery to China.
 
Quote from MarketOwl:

Just another example of a fund manager who talks the talk but doesn't walk the walk. He totally missed the ball on the China slowdown and how it affects Japan. Japan is a huge exporter of high end machinery to China.
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I don't think he missed it. I think he was too early.

http://youtu.be/VBWiQlS5Qg0
 
Quote from ogarbitrage:

I don't think he missed it. I think he was too early.

http://youtu.be/VBWiQlS5Qg0
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John Taylor of FX Concepts thinks Japan can last for many more years without a sovereign debt problem because of the nation's current overall trade surplus, domestic ownership of JGBs, and corporate investment.

I think the market perception of governments that can print their own currency cannot default will allow countries like Japan to continue for many more years. Bass may continue to lose money on Japan for years before his scenario plays out.
 
Quote from flipside21:

John Taylor of FX Concepts thinks Japan can last for many more years without a sovereign debt problem because of the nation's current overall trade surplus, domestic ownership of JGBs, and corporate investment.

I think the market perception of governments that can print their own currency cannot default will allow countries like Japan to continue for many more years. Bass may continue to lose money on Japan for years before his scenario plays out.
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I agree with John Taylor. The U.S. will have a sovereign debt crisis before Japan does. Trade deficit, exploding budget deficit, a disaster waiting to happen with a heavy reliance on monetization to keep the Ponzi scheme going.
 
Quote from heech:

Weird. I heard Kyle Bass speak at a II/AR event a couple of years ago, and I thought his big point on Japan was that it was very easy to purchase instruments with a lot of optionality/convexity embedded in them. (Like, for example, CDS.)

Not sure how you manage to lose -32% in a month when you have a lot of optionality.
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He obviously wasn't long it (the convexity).
 
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