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US default unhedgeable; P.R. debt 'complete junk': Kyle Bass

Kyle Bass of Hayman Capital Management says he's not hedged for the event of a U.S. default, because there's nothing much you can do about it.

"All the money you're gonna have is under your pillow, and it probably won't be worth as much as it is today," he said. "But I don't think we're going to get to that apoplectic point in the U.S.," Bass told CNBC's "Squawk on the Street"

Bass suggested that those who are highly leveraged are most at risk and may want to take precautions.

"But policymakers have to realize the catastrophe that would ensue if they actually missed a payment," he said.

(Read more: No, people won't buy bonds on a default: BlackRock)

"I think their advisors are giving them proper advice," he said. "They can use brinksmanship up to a point, then someone's got to blink."

Bass also weighed in on Puerto Rico, which has a debt crisis of its own that has it on the financial brink.

"You look at their finances and you say, 'I have no clue how this can continue to exist for very much longer.'"

Despite other municipal bond investors' faith in the commonwealth's debt and Moody's reaffirmation of a rating just above investment grade, "Clearly they're completely junk," he said.

"When Puerto Rico has its crisis, which it looks like we're on the precipice of, the write-downs have to be 80-90 percent on these bonds," he said.

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