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Hedge Fund Manager Mark Hart Bets On China As The Next 'enormous Credit Bubble' To Burst

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Mr Hart, who runs Corriente Advisors from Fort Worth Texas, has told potential investors in a presentation that China is in the "late stages of an enormous credit bubble".

When this bursts, the financier said he expects an "economic fall-out" that will be as "extraordinary as China's economic out-performance over the last decade".

Asking for a minimum $1m (£640,000) stake, Corriente said it will use sovereign and corporate credit default swaps, interest rate and foreign exchange options to cash-in on the collapse.

Mr Hart, who launched a record performing sub-prime fund as early as 2006 and, in 2007, a fund that bet on a European debt crisis, told investors: "Complacency among market participants regarding China is eerily similar to the complacency exhibited prior to the United States sub-prime crisis and European sovereign debt crisis."

In the presentation, which amounts to a devastating attack on the prevailing belief that China is an engine for growth, the financier argues that "inappropriately low interest rates and an artificially suppressed exchange rate" have created dangerous bubbles in sectors including:

Hmmm didn't the subprime crisis start to kick off in 2005, it just took a few years for the idiots in charge to realise what was happening?

However as a bet this seems reasonable however I'm unable to raise the minimum stake, I could perhaps offer £10.

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By my calculations, and not giving too much away, China should drop into a 5-7 year depression which has a much more profound effect on its people and economy than subprime had on the US.

Then, a "catastrophic event" should be the catalyst to help bring them out of it.

Edited by AvidFan
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