Bass: Hong Kong Real Estate Collapse Worse Than 1997

For those of you who were either too drunk or stupid in 1997 to understand what happened to the Hong Kong real estate market in 1997, just know that it ravaged the economy and led to a 70% drop in prices over a 6 year period. It wasn’t until G. Bush II sold out America to foreign interests, buoying China to first world status, that the Hong Kong market was able to enjoy a rebound and eventual bubble.

Kyle Bass, from Hayman Capital, said during today’s SALT conference circle jerk of industry assholes that Hong Kong was going to face a worse fate than 1997. Perhaps 70% is too light for Kyle. Maybe he’s looking for a 100% drop in re prices?

“Hong Kong’s in a worse position than it was in prior to the ’97 crisis today,” Bass said at the SkyBridge Alternatives Conference in Las Vegas on Wednesday. He said credit in Asian emerging markets has grown “recklessly,” citing Malaysia and Thailand.

“China may be able to not tell the truth about specific output levels, or GDP figures — they might be able to fudge those numbers for a while,” Bass said at Wednesday’s conference. “But their trading partners kind of tell the truth, and you’re already seeing what’s happening in their primary trading partners.”

The Chinese credit system, according to Bass, is “one of the biggest macro imbalances the world has ever seen.” The fund manager said China is already experiencing a “hard landing as we speak.” He said he isn’t a “permanent bear” on China, instead describing himself as a pragmatist.

Bass, who’s widely known for his hardcore bearish views on Japan, and other places in the orient, was especially morgue-like in his demeanor today, saying ‘I feel like we’re in March/April 2007 in terms of equity and credit markets.’

Time will tell.