You don’t own a chinese stock, you own a tracking stock – Kyle Bass

Kyle Bass talks China, markets, and the Fed from CNBC.

You heard that the world index will massively increase the amount of chinese stocks in it?

This morning, Kyle Bass was on CNBC saying that the Chinese government controls its public companies, that when you buy a chinese stocks here, really, you own no part of the company. You own some kind of tracker. In the event of a bankrupcy, westerners would be left with nothing.

I own a position in the world index through a Vangard ETF and so, this affects me and I dont’t feel one bit comfortable with the re-weighting. I don’t want a good part of my savings go to stocks that are not really stocks.

I also certainly don’t like how the chinese government is engineering their economy. What if like Kyle Bass says, their 10% GDP money printing catches up to them in 2 years and their stock market goes down hard? Sure it may go up in the short term but they are slowing down. If you look at the long term chart of chinese market, it looks terrible.

Here is the interview: