A blue wave would've been a disaster scenario for US markets because of Biden's corporate tax plans, hedge fund manager Kyle Bass says
blue waveSenate would've been a "disaster" for American marketslargely due to Democratic nominee Joe Biden's plans for higher corporate taxes, Kyle Basstold CNBC.
- "We're talking upper brackets north of 60... that would've been terrible for our markets," the famed hedge fund manager said.
- Democrats had hoped for a blue wave sweep this election, but the US Senate is beginning to look like it might remain in Republican hands.
- Biden can also be expected to be "a lot softer" on China than President Donald Trump was, Bass said.
The Democratic Party's chances of taking back the US Senate, which has been in Republican hands since 2015, is increasingly looking slim. Republicans have currently won 48 seats and Democrats have 47, putting the latter further away from the 51-seat majority required for a blue wave victory.
But if Democrats were to lead, it wouldn't have been very good for US markets because that would induce one of the highest corporate tax rates in the world, Bass said in a CNBC interview.
"We're talking upper brackets north of 60... that would've been terrible for our markets," the founder of
Bass, who rose to fame for calling the housing market crash during the financial crisis, said investors were being led to believe that a blue wave would be good, but he feels it would have been a "disaster scenario" for American markets.
"Whether it's Biden or Trump, and a split house and Senate, I think that keeps propelling us higher, because both parties realize that we have to have a stimulus going forward," the hedge fund manager said.
Separately, Asian equities have seen a robust gain as
Bass said that's because Biden is expected to be "a lot softer" on China than Trump was.
The Trump administration has been fighting various economic, cyber, propaganda, and data wars with China for the past four years. Trump was even willing to go easy on human rights abuses in Xinjiang, Mongolia, Tibet, and other regions in China in favor of a trade deal, Bass pointed out.
It remains to be seen whether the Democrats and Biden follow through on their priorities of basic human rights, compared to economic engagement, he said.
Read More: A Wall Street veteran who has helped launch over 400 ETFs breaks down how the election could be a 'death knell' for massive investor inflows — and explains why it could have mutual-fund managers licking their chops
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