Kyle Bass USD/HKD Hong Kong dollar trade
Tik Tok the clock is ticking for the special administrative region of Hong Kong located on the Kowloon peninsula with China and may GOD HELP THEM! The CCP has gone insane with their policies and honestly, they are not even true communists anymore, but rather some bizarro totalitarian fascist state like Ingsoc of Oceania from George Orwell's book “1984”
Kyle Bass chief investment officer and founder of Hayman Capital Management has long stated what has been going on with China and the western world is now seeing the evils of the Chinese Communist Party and all the damage they are doing with Hong Kong, Uyghurs of Xinjiang, the south china sea and next to come when they go after Taiwan.
China is a beautiful country of very intelligent, pragmatic, proud, hardworking people, and they deserve a place on the world stage. China has the ability to help create a better world for us all. Unfortunately, they suffer from a fatal Achilles heel of which will likely disconnect them for a good many years to come from the western world and they don't even see it coming.
It is amazing the stupidity of the CCP that they are going to destroy all they have worked so hard for, even if a good amount of it was with fake it till you make it falsehoods. China is going to PAY! But first HONG KONG is going to PAY, and this is where it gets interesting.
The coming HONG KONG CRASH!
Right now Hong Kong is in SHOCK, pure and simple the people are ZOMBIES now in total fear as they watch the total collapse of the freedoms and Hong Kong's long democratic history about to be ERASED by the sweeping unforgiving red hand of the Chinese communist party. Honestly, there is nothing left for them to do but “GET THE F*CK OUT ASAP!”
The Hong Kong dollar peg is DEAD as a doornail and is floating around in ZOMBIE mode waiting for the collapse to hit, Kyle is betting that China with its tremendous reserves will not want to support the Hong Kong dollar peg, just look at their property values in Hong Kong which have been in Bubble mode for a very long time.
China may indeed let it all go just to crush the freedom-loving democratic people of Hong Kong as punishment for all the trouble they have caused them. This would be an attempt to get them more inline to become good red citizens of the state. There is way way too much political intrigue here to get involved in this Kyle Bass trade, it technically fantastic trade. –> CHINA <– The CCP will not want to lose any more face over Hong Kong and if it goes their whole economic system will likely be deeply affected across the board.
Hong Kong dollar trade is a bad idea and here is why
Kyle Bass has been pushing this idea for a long time and it has not paid off, there are some very good reasons why. We have a member of staff who has over 30 years of trading experience who told me a very important lesson about markets “Just because you are right does not mean you will win.” What this long time trader who ironically has more experience than Kyle here means is markets don't care about how right or wrong you are, because numbers don't give a flying f*ck about right or wrong, they just are.
The PBOC which is the People's Bank of China will want to keep Hong Kong as stable as possible as they will see it now as a possible crown jewel in their future plans, why not take this western banking hub and turn it into a CCP banking hub?
Poor J. Kyle Bass has a great trade idea that is just too risky, if he was really smart he would have joined on the JP Morgan Silver trade with 200x leverage he would have had his profits and then some in a much shorter period of time btw. Read about the –> Jp Morgan Silver Trade Here <– He married his Hong Kong trade for better or for worse and old traders will tell you never become overexposed and never marry a trade unless you wish for retirement.
He has stated the fund where he has made this all or nothing bet on the Hong Kong currency peg going bust, the problem is he has stated this trade for about 2 years now so when is his 18-month trade window come to an end?
Why Kyle Bass's Trade is a good idea
On the flip side, you have the U.S. and the West now going after China's many, many complete and absolutely horrible human rights violations across the board. As powerful as China is they are only one country vs many and as a % economically don't add up to beans. If the U.S. totally decoupled from them there would be a 3-5% disruption and if this was done globally to punish China for all the evil things they have done well so be it.
The west has become sick of the China games of stealing our intellectual property, not opening their markets, the extreme trade imbalances that only they benefit from, attacks on the Uighur people of Xinjiang, trying to claim all of the South China Sea s their own, forced human organ harvesting, promotion of Fentanyl exporting to the west, the censoring globally of free speech, the facial recognition software and social credit system that even George Orwell would scream bloody murder over! The list goes on and on and it is only getting worse.
Simply put the west has had it with the CCP and now they are going to start to make them pay and this will hurt all of China across the board and that is where Kyle Bass might just win this crazy trade he has. If the west decides to punish China for being a bad world citizen well Hong Kong will be the least of their problems lol, but it will be a very very GREEN day for Kyle and Hyman Capital.
Kyles Trade played correctly
Funny how this rhymes “The Kyle Bass Hong Kong Crash” I think Kyle has gone into TRUE BELIEVER mode on this trade. The correct way to trade this currency trade is to #1 not over leverage it as China and the PBOC will likely put up a fight one way or another, I would scale the likely volatility of this and not become overexposed, also allow more time for it to work out a bit longer. With Their new national security law they crushed the pro-democracy movement in Hong Kong, you think they won't crush any wall street trader trying to oppose them?
We will watch the events of Kyles trade and write updates on how it plays out in the future on SmartOptions as it is likely going to be a good trade to learn from. Kyle is stated to be over 200x leverage looking for an over 50x-60x return, of course, these numbers are theoretical what he decides to do in the future will be very interesting and we will be watching. Also below a few words for China from some very pissed off people in the west.
People of Hong Kong RUN FOR YOUR LIVES!
One country two systems my @$$! One thing the financial crisis in the past has taught us all too well is politicians are liars by trade. Countries around the west have made available a pathway to citizenship for Hong Kong citizens, but the communist party is working hard to subvert that and trap the people of Hong Kong, and let me make it clear they wish to trap those wishing to leave and keeping them imprisoned in a society they do not believe in or wish to be a part of, much like the poor Uighur people of Xinjiang.
Will they too erect concentration camps for millions of Hong Kong Citizens as they have done for the Uighur people of Xinjiang? The CCP just might. If you live in Hong Kong, do yourself a favor and get the f*ck out ASAP!
Chinese Communist Racists
I have seen repeatedly how the Chinese communists are against not only religion, freedom but also my fellow African brother and sisters and that is not ok by me at all! The commercial below is considered funny and normal in China, SAY WTF YO!
My Nigerian friends were sick when they saw the videos I showed them with one showing fellow Nigerians on the streets like dogs in the freezing cold of Guangzhou as they were kicked out by the authorities from their hotel with no notice or thought of their safety and well being.
Final thoughts on the Hong Kong trade idea
I am not a fan because of all the political intrigue on this trade, Kyle Bass is not wrong though and in a normal world I would be in 100% with him, the problem is the world we live in now is far far from normal and it is just not worth the risk of China and the PBOC fighting back, but if the signs turn more and the U.S. and its allies push to punish China it makes great sense the Hong Kong dollar peg will collapse because of the crisis in Hong Kong. At some point, the currency will break and the honky tonk kong island will sink into the red sea of communism.
With a full-fledged banking crisis in Hong Kong to come, what will China's communist puppet Carrie Lam do as many wall street traders like J. Kyle Bass have shorted the currency of Hong Kong, as many a hedge fund manager await the collapse.
On the Hong Kong island, you can't help but feel J. Kyle Bass of Hayman Capital Management is in a bad trade. We ourselves can't enter this trade even if it turns out to be a winner though as it is a “BLOOD TRADE” If this trade works out, a lot of people in Hong Kong will suffer and that is just not cool IMO. We are going to watch but the upside is the destruction of the once-great Hong Kong bright shining star of capitalism in the east which will be no more. The suffering to come for those who have lived all their lives there is plain to see and I want no financial gain from such 🙁