Kyle Bass Warns “All Hell Is About To Break Loose” In China

China is the Ultimate Crony Capitalist State. Its banks, its energy companies, its construction companies, all the big stuff is dominated by an entrenched post-Mao aristocracy. Prices are obfuscated and graft is widespread – particularly the legal kind. Such a situation is fundamentally unstable.

(From Zerohedge)

Timing the drop is hard, Bass notes, reminding Bloomberg’s Erik Schatzker that “in the US, the first bumps in the road hit in early 2007, and we didn’t start to really accelerate until mid 2008… even a large unraveling takes a while.

Bass has been sounding the alarm for some time that debt-burdened Chinese banks need to be restructured…

“What you see when the liquidity dries up is people start going down… and this is the beginning of the Chinese credit crisis.”

And judging by the collapse in both Chinese stocks and bonds, the deleveraging is accelerating…

Click here for the article.