Capital Flight From Hong Kong

Published on
June 5th, 2019
Duration
9 minutes

Capital Flight From Hong Kong

Future Fears ·
Featuring Kyle Bass

Published on: June 5th, 2019 • Duration: 9 minutes

Kyle Bass, CIO of Hayman Capital, discusses the dire geopolitical situation in which Hong Kong finds itself. Bass talks with Raoul Pal about how the threat of Chinese political interference could lead to financial crisis caused by capital flight. This video is excerpted from a piece published on Real Vision on May 3, 2019 entitled “The Asymmetric Opportunity Revealed.”

Comments

Transcript

  • MN
    MICHIKO N.
    14 August 2019 @ 11:24
    Good convo. Question. He is saying 300% credit to GDP for HK, but World Bank and other stats seem to suggest 200%. I am still learning all this and it is a bit hard to catch up. Where is his data? Would like breakdown and data sources notated? https://data.worldbank.org/indicator/FS.AST.PRVT.GD.ZS
  • CB
    C B.
    5 August 2019 @ 14:51
    I just listened to an interview with Mark Cudmore, Macro Strategist at Bloomberg Markets. He made a few relevant points that present another perspective: * The HKMA has $450B in reserves, and the PBoC has $3T. Their combined ability to defend the HK dollar peg is substantial. * The PBoC controls the rules of the game. They can close the nostro accounts of short sellers in an emergency. * The HKMA has defended the peg since the 1980s. They are experienced and time-tested. Cudmore also makes the point that there is no sign of a top in the HK dollar. HKMA reserves hit a new high recently. Even if you believe the peg will be broken, you will get advance notice in the form of sharply declining HKMA reserves. There will be time to place a short.
  • CL
    Chris L.
    8 June 2019 @ 07:49
    There's too @#$%#@$ much recycling content, and free stuff on YouTube. Almost ironic considering their issues of growing subscribers.
  • SB
    Stephen B.
    5 June 2019 @ 13:20
    Fascinating. Twenty + years ago, prior to the hand over, many Hong Kong residents applied for Canadian residency (and subsequent citizenship), fearing the take over. In the years following the 1997 take over, many families moved back to Hong Kong, having concluded that the "two systems" approach was going to work, so much so that there are now several hundred thousand dual citizens living in Hong Kong. If the "two systems" approach and/or the economy is going to break down, that suggests a mass migration back to Canada.
    • DR
      David R.
      5 June 2019 @ 17:08
      Maybe but probably not. Why would anyone wealthy enough to own multiple international homes and move among them relocate from a 0% investment tax regime like Hong Kong to a 60% income tax regime like Canada? In fact, West Vancouver house prices have recently crashed 40+% and continue to collapse today as the wealthy Asians continue to flee Vancouver and North America for various Asian tax-free Asian destinations, such as where I've moved. Erik Townsend (founder of MacroVoices, his own s/w company and family office hedge fund) just became a permanent resident of Hong Kong in late 2018. The wealthy are voting with their feet. Hong Kong is currently home to more billionaires than any other city in the world. These people are not fools, at least not when it comes to money! They shouldn't keep all their money in Hong Kong, but they and numerous top money managers - particularly from Europe - find it a highly attractive place in which to live for the long run, if you can afford it. And retain that 0% tax rate on their international investments.
    • SP
      Stephane P.
      6 June 2019 @ 23:10
      Impossible, it's freezing cold in Canada.... :-)
    • DR
      David R.
      7 June 2019 @ 16:01
      Stephane P, yeahbut it's hellishly hot & humid in Asian tax havens.