On Friday, November 25 Izabella Kaminska mentioned Bill Ackman's bet against the Hong Kong dollar's peg to the USD. So I was primed in that Baader-Meinhoff Phenomenon sort of way when this piece from Asia Times dropped out of one of the feed readers:
Bill Ackman’s HK dollar play a certain losing bet
Prominent American hedge fund manager says the HK-US dollar peg is doomed but like Soros and Bass before him he’s likely wrong
And here is The Blind Spot, Izabella Kaminska, proprietor:
In the Blind Spot (HKD, Semafor, Elon)
....Bill Ackman reveals short position against Hong Kong dollar.
As one of the largest managed currency board systems in the world, the Hong Kong dollar — whose value is linked to the dollar at a range of 7.75-7.85 — is arguably to traditional finance what the Tether stablecoin is to crypto.
How so? Well, historically, much of the allure of holding the Hong Kong dollar has been its ability to operate as an on and off ramp for foreign capital seeking exposure to Hong Kong or related Chinese assets. Unlike the Chinese yuan, the HKD is not constrained by capital controls. Over time, this open but banded status has seen the HKMA absorb a large volume of US dollars into its reserves....
....MUCH MORE
And me, I don't know nothin'.
Maybe one thing: The Chinese will play smash-mouth FX if it suits their plan.
Anything from crushing the peg themselves to squeezing Mr. Ackman in 14 different ways including many he hasn't even thought of.
The three largest reported positions in Pershing Square's 13F (62% of the portfolio) are Lowe's Companies, Chipotle Mexican Grill, and Restaurant Brands.
In such a concentrated portfolio, an attack on any of those could do some real harm to Ackman's master plan for world domination.
