Japan Is Never Going To Default, And The Kyle Bass Trade Will Be A Disaster - Business Insider

Kyle Bass’s Most Famous Trade Is A Disaster, And It Is Never Going To Work Out Joe Weisenthal | May 20, 2012, 6:42 AM | 23,775 |

Kyle Bass was one of the handful of hedge funders who made a fortune betting against housing during the subprime bust, and since then hes been stalking his next big “career trade.”For years now, his big target has been Japan, a country with a debt-to-GDP ratio of over 200% and a shrinking/aging population. Hes convinced that its only a matter of time before the country implodes in a massive sovereign debt crisis that sends bond yields soaring, while the yen becomes worth less than confetti.

via Japan Is Never Going To Default, And The Kyle Bass Trade Will Be A Disaster – Business Insider.

I thought this was interesting since Bass has legions of fans.  It’s not so much that the trade is wrong as that what he advocated owning are puts on the JGB and their is a finite life to them.  He called it an asymmetrical trade where you could make 100 times your money or potentially lose all of it.  If this article is correct, it looks likely investors will lose all of it.