Kyle Bass – “Investors should prepare for a U.S. “economic depression,””… Stanley Druckenmiller – “The consensus seems to be don’t worry, the Fed has your back. There’s one problem with that, our analysis says it’s not true.”

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Investors should prepare for a U.S. “economic depression,” warns Kyle Bass, but China’s fate could be even worse

Hedge-fund manager predicts U.S. economy could contract upwards of 10%

Kyle Bass made his name betting against the U.S. housing market more than a decade ago and now he is predicting an economic contraction that could be more than three times as severe as that suffered during the Great Financial Crisis.

“For the year I think you’re going to see U.S. GDP down somewhere between 7% to 10% in real terms,” as a result of the COVID-19 pandemic and the government’s efforts to contain the spread of the virus with business shut downs. “10% is an economic depression,” said the founder of hedge fund Hayman Capital Management in an interview.

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Indeed, the last time the U.S. economy contracted on an annual basis was during the financial crisis in 2009, when it shrank by 2.5%. The last time it shrank by more than 10% was in 1946 at the end of World War Two. Prior to that the U.S. economy shrank by 12.9% in 1932, the height of the Great Depression.

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