Kyle Bass is in even deeper shit, all of that money he lost from trying to short Hong Kong?
yeah, it was illegally raised:
And from Steve bannon no less!!!
“Voice of Guo”, I can see why FLG and him are fighting for followers, he is trying to make himself out to be a Messianic figure. Appealing to the same people.
Some quick analysis and questions:
In June 2020, GTV’s parent company -- Saraca Media Group -- transferred $100 million of the proceeds to an unnamed hedge fund that takes positions in the Hong Kong dollar and other Asian currencies, the regulator said. The fund went on to lose more than 95% of the $30 million it invested, according to the SEC. That hedge fund is managed by Bass’s Hayman Capital Management, said two people with direct knowledge of the matter.
If it only invested 30 out of 100 million, where did the other $70 million go? Right into Bass's pockets?
“The issuer of the securities shouldn’t be taking the proceeds of the offering and turning them over to a hedge fund,” Painter said. “How was that approved? Who approved that? Did they tell the investors that that’s what’s going to happen to their money?”
Among the SEC’s claims were that some “unaccredited investors” bought shares in GTV, meaning they likely weren’t eligible to have their money put in a hedge fund. Several investors who participated in the GTV stock offering have filed lawsuits against Guo and the companies named in the SEC’s case.
This is a really good question actually. It should naturally lead into "Who's money is it?".
For this I would refer people to these articles:
“It’s a trade that surfaces every couple of years,” said Paul McNamara, a London-based money manager at GAM UK who helps oversee $9.4 billion. “People who actually expect the peg to break don’t make money, and I doubt they will this time.”
So trying to break the peg is not a popular bet. As the article notes, even Soros failed.
Bass has told prospective investors that the idea for the fund came from Hayman Capital’s largest client, without saying who it was.
We now know this is Bannon or Guo. However it's important to note that he did not say the MONEY came from this client, only the idea.
Traders including Hayman Capital Management’s Kyle Bass, Crescat Capital’s Kevin Smith and Trium Capital’s Thomas Roderick are betting the unrest will spur capital flight...
Now here's the meat of it. How can capital flight happen?
1. You have a big name like Soros pushing this idea. This would prompt others to make the same bet. IMO, Kyle Bass does not command that same reverence.
2. Sustained instability of the economy. However...
...the city’s currency shows little sign of imminent collapse. In fact it’s been so strong in recent months that the city’s de-facto central bank has sold more than HK$40 billion ($5.2 billion) since April to prevent the currency from appreciating outside its trading band.
I am not a currency trader or options trader, so correct me if I'm wrong here.
The amount of money is a drop in the bucket compared to the monetary reserves of HK Gov't alone, let alone the Central Gov't who stated in no uncertain terms that they will STAND WITH HK. If we take the leverage of 200:1 for 30 million, that is 6 billion worth of contracts. A sneeze for HK government on it's own. If we leverage the full 100 million, then you have a more significant 20 billion (vs. 400), but basically nothing if the Central Government is behind it as well.
Basically it was a really tough sell even with the protests happening. Who wants to wager large amounts of money on such a longshot? In fact, the typical way to bet on a longshot is to wager small amounts because the potential payout should be many multiples. I don't think any smart investors would put big money into his fund. Maybe "F-around money" at best.
So coming to the short version...
Knowing that this was hard sell at best, this looks like another influence operation that failed. The amount of money is not nearly enough to move the needle, so at best you have "a big name" (in some circles) trying to sell the idea. With so much to lose, it inevitably must be bankrolled by foreign agencies because a smart investor would not want to throw so much money after a bad bet. Maybe the 70 million is pocketed by Bass as payment for basically throwing away his reputation.
While we like to point fingers at the US all the time, I would not be surprised if the UK had a significant role in this.
UK Politicians were already known to be involved in a scheme to promote unrest in HK (
)
Furthermore, UK has been the most eager to try to benefit from HK Capital flight.
1. Capital injection from BNOs has routinely been a highlight of parliamentary reports
2. Obvious Brexit issues
3. UK was hurt by HK Government's stop to retirement fund withdrawals by BNO's.
Should have invested some of that money in his hairline...
