It’s been a torrid three years for most people since the world economy began to go into meltdown. But not everyone has suffered.
Investor Kyle Bass has already made millions from the credit crunch and he is set to increase his money by almost 650 times from a Greek default.
He founded hedge fund Hayman Capital in Dallas, Texas, in 2006 in his late 30s after saving $10million from selling bonds for Wall Street firms.
He made millions gambling against the sub-prime mortgage bond market – and now he’s betting on the collapse of whole countries in Europe.
Mr Bass’s story so far has been documented in Michael Lewis’s new book Boomerang: The Meltdown Tour – serialised in The Sunday Times.
Mr Lewis charts how Mr Bass was one of only 15 people who placed ‘enormous bets that vast tracts of American finance would go up in flames’.
Mr Bass believed as the sub-prime market collapsed that the financial crisis was being hidden by rich western governments.
He said these nations had taken on ‘dodgy securities worth trillions’, as worldwide debts doubled over just a few years to $195trillion.
A big issue he identified was large banks being treated as ‘extensions of their governments, sure to be bailed out in a crisis’.
Mr Bass spoke to Harvard economics expert Kenneth Rogoff about sovereign balance sheets and finally realised the scale of the problem when he presented him with some research.
Professor Rogoff told Mr Bass: ‘I can hardly believe it is this bad’ after he had looked at their figures.
Mr Bass replied: ‘If you don’t know this, who does?’ and thought: ‘Holy s**t, who is paying attention?’
