Shorting Japanese bonds is known as the widowmaker trade, because it seems like an obvious conclusion to many traders, but it never bears itself out.)

Naturally, Bass is also bearish on the yen. If the Bank of Japan lost control of the bond market, it would presumably be bad news for the country's currency. So, he's been doing well in recent months as the yen has quickly declined against the dollar.

Betting against the yen has become one of the hottest trades in the world. A natural extension of that trade for many has been to buy Japanese stocks. After all, a weaker yen usually means higher stocks, as Citi strategist Steven Englander pointed out yesterday.

Bass doesn't think the "buy stocks" part of the trade is such a great idea.