Sunday, May 4, 2014

Kyle Bass discusses global risks and opportunities - presentation and video- great Q & A session ) .......proceed with caution !

China data a good lead in ......

China Manufacturing PMI Misses 6th Month In A Row As Home Sales Collapse 47% YoY

Tyler Durden's picture

For the 6th month in a row, China HSBC Manufacturing PMI missed expectations. With a 48.1 print for April (vs 48.3 flash) this is a very modest rise from March's 48.0 but is the 4th month in a row of contraction for the broader-based HSBC-version of the PMI (as opposed to the official more-SOE-biased version which remains in modest expansion). This is the longest streak of contraction since Oct 2012 (and the 3rd consecutive month of new order contraction) as employment drops for the 6th month in a row. Most worrying new export orders dropped further showing no signs of a US-driven pick-up post-weather. As if that was not enough to upset the 'recovery is around the corner' crew, home sales in China in the most recent (most frenetic typically) period, collapsed 47% year-over-year (and a stunning 65% in tier-2 cities)But apart from that - everything's great in the newly appointed largest economy on earth...

The gap between the official and HSBC/Markit PMI is at almost its widest in 2 years...

with the 6th miss in a row and 4th month of contraction...

  • 1st-tier cities sales falls 40% y/y
  • 2nd-tier cities sales drops 65% y/y
  • 3rd-tier and 4th-tier cities sales declines 32% y/y
  • • Mkt sentiment “not optimistic;” developers prioritizing on sales volume due to cash flow pressure, the report cites
Perhaps HSBC/Markit sums it up best:
"These indicate that the manufacturing sector, and the broader economy as a whole, continues to lose momentum."

Kyle Bass Sums It All Up: "Proceed With Caution"

Tyler Durden's picture

From fears of Argentinian devaluations (and a 26-year-old running policy) to Japan's structural collapse; from Europe's false hope to China's bubbles; and from the Fed taper to the US hydrocarbon revolution, Hayman Capital's Kyle Bass provides a broad-based presentation of global risks and opportunities in the clip below. The Q&A is where Bass comes alive and is well worth the price of admission for a hedge fund manager unafraid to discuss the possibility that the status quo is unsustainable. Bass sums it all up perfectly succinctly, "proceed with caution."

Kyle Bass Presentation clip here (embed unavailable - click image for video) - make sure to watch through the Q&A...
As Bass recently noted, there is no safe-haven in Japan...
"The interesting thing in this selloff in the marketplace and in tech ... and this huge selloff in Japanese equities, is that the Japanese bond market hasn't gone anywhere," Bass said.

"Yields haven't collapsed, which is fascinating. So their bonds are acting pretty terribly in the environment of their equity market. So we'll see what happens."
Full Hayman Capital Presentation: