Must Watch Kyle Bass Interview: "I Don't Know How I Can Be Long Stocks"

Tyler Durden's picture

The one must watch interview of the week (if not of the year) features Hayman Capital's Kyle Bass. Bass, who correctly called the subprime implosion (and profited handsomely from it) as a iconoclast contrarian to conventional wisdom, tells David Faber that "given my outlook on the world, I don't know how I can be long stocks." Frequent readers of Zero Hedge will notice many comparable themes touched upon in Bass' interview with issues covered on Zero Hedge: the inevitable restructuring of untenable sovereign debt, the nearly $5 trillion in new global debt that needs to be issued just to plug near-term deficits, the joke that was the European stress test and the ongoing insolvency of the European banking system which is times bigger than its US equivalent, the imminent downward revision of Q2 GDP to sub 1%, the Fed's conflicted position as a political authority whose sole purpose now is not to keep inflation and unemployment low, but merely to keep interest rates as low as possible, as even the slightest shift to higher short-end rates will be seen as a black swan, indicative the Fed is losing control over the economy, and ultimately the futility of Keynesian theory band-aiding of a world caught in a toxic debt death spiral. In short, Bass sees no way the world can get out of its current state absent a huge reset. We agree completely, and needless to say, we are confident Bass will be proven 100% correct, to the chagrin of all the permabullish lemmings who day after day refuse to accept the unpleasant reality. The only caveat: when Bass is eventually proven right, all bets on profiting from this realistic worldview will be off, as the existing financial system will no longer exist.

Part 1

Part 2

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taraxias's picture

We need a Leo vs. Kyle debate. Now THAT would be something......PMSL

Alexandre Stavisky's picture

Global contraction due to debt saturation mandates long-term contraction.  Demographic change will pressure pensions and insurance.  Since contraction suggests losses on principal instead of actuarial expected growth, capital will decline in purchasing value.  Business model for finance, insurance, real estate, gov't will be long term decline....unless revolution (the abrubt repricing of liberty which is the inevitable outcome of all these events) change the structure of society.  Don't fear financial restructuring (an absolute must) so much as coup d'etat restructure.  Some say we've already passed through its first stage.

Organic investment of savings in equities and bonds will eventually terminate.  Hedge funds and prime movers have too much of a view of small traders actions.  They are plucking them in a rigged game.  No fundamentals back investment moves any more.  For instance, why now, when the supply of US treasuries is at an unbelievable high, and indeed, exceeds all the surpluses of creditor nations and their constituencies, are bonds pricing at lowest yield in a half generation?

Stealth money printing and central global bank collusion.  Purchasing power is evaporating.  TPTB will try to mask the effect by preserving nominal figures on promised entitlements but they can only do so by dilution. 

As expressed before, the global reserve currency has exceeded all possibilities within its parameters of the time continuum and all the resource and labour inputs.  It has moved from an asset backed collateralized instrument (past works), to a debt backed claim upon futurative tax receipts garnered from production (present and future), to exceeding in interest demands the carrying capacity of the globe's population.  Henceforth its debt issuance is merely open printing obscured by promissory notes and IOUs with no potential of ever being repaid.

All of the former 20 years' trappings of wealth shall become an albatross upon every marriner's neck.  Bondage will be any consumptive possession as its will spawn class warfare and varying degrees of state confiscation to feed the usury monster.

Someone invoked a powerful milieu who worships some demon.  It has been conjectured that perhaps this is the ancient Molech, an ammonite deity.  If so, usury would be the superlative means by which to sacrifice one's children, casting their future claim on any abundance of life upon an altar for fiery consumption.  It will exterminate them root and stock.

papaswamp's picture


You nailed it...demographics. Easily ignored short term....unless you are near the time period when the demographic shift is occurring...which we seem to be.

cat2's picture

Weren't bond holders wiped out in the Great Depression?

ED's picture

Could somebody flesh out what Kyle was about the say at the end of the first part when he said this is a secular change?

DavidC's picture

A simplistic reply, but basically we've had a 50 to 60 year bull market with concomitant growth of credit (and, thus, debt). In the cycle it's been growth. We're now entering the part of the (grand? Super?) cycle where this debt is going to paid down and we'll be in a state of contraction.

Ben, Timmy et al either don't see it, don't acknowledge it or are trying to stop it.

King Canute (Cnut), apparently, when he supposedly tried to hold the waves back, was NOT trying to show that he COULD, he was trying to show his (fawning) courtiers that he COULDN'T and there were powers greater than he, the King.


sureseam's picture

Good points well made.

Mostly when folk refer to Canute on the web, they are 180 degrees wrong.  So it is a delight to encounter someone who gets what the wise man was about - thank you.

Bernanke and Geithner are tinkering at the edges but have less chance of stopping the oncoming depression than they do of stopping the next hurricance rolling over Gulf of Mexico.'s picture

hey, im finally am seeing and getting how wise teacher's, teach. thanks, davidC.

illyia's picture

Again, this can be simplified, albeit with ugly rigor:

First we eat our children

Then we eat each other

Then we eat ourselves


Thomas's picture

That was the spookiest ten minutes of doom that I've ever watched (and thanks for the easy math problem!)

jpk's picture

Agree, thanks for posting that video.  It was fantastic.  Kyle Bass is my new hero.

akak's picture

We need a Leo vs. Kyle debate. Now THAT would be something......

There simply would not and could not be any such debate, as Mr. Bass would wipe the floor with Leo within the first two minutes, as Leo invariably resorted to his usual methods and fell back on the only tactics the fervent, desperate and intellectually bankrupt establishment defender can fall back on: bluster, obfuscation, appeals to authority and ad hominen attacks.  We've seen it all endlessly already. 

For those pathetically blinkered and morally withered souls such as Leo, whose minds are closed and whose thoughts cannot escape the narrow limits set for them by the power elite, no amount of evidence or argument, no matter how compelling, is going to sway them from their hysterical support for the political and financial status-quo from which they derive their livelihoods, their values and their very self-identities.

Leo Kolivakis's picture

So sad to see someone obsess so much over me.

akak's picture

"Leo", if you honestly believe that I give you any more thought than the minimum necessary to respond to your sad and amoral pro-establishment blather and kneejerk defenses of systemic financial corruption, then you are even more egotistical and deluded than I gave you credit for.

dark pools of soros's picture

haha - yes i agree with all this EXCEPT that China Solars will stay strong and provide modest gains amist the chaos..  lol

merehuman's picture

"Buy the dip Leo" you brought this on yourself.

merehuman's picture

"Buy the dip Leo" you brought this on yourself.'s picture

"Buy the dip Leo"

bet she is pretty cheap this time of night, oh i mean her P/E.

merehuman's picture

Thank you. Third time is the charm. Needed the laugh

BoeingSpaceliner797's picture

"Buy the dip Leo."  Leo is purchasing himself?

akak's picture

What is the current market value for "Leo the dip"?

I'm guessing that is one market that has NEVER seen a bubble!'s picture

takes one to know one.

but leo the dip, it started out, buy the dip.

oh the dip market, H U G E , not sure if much value.

BlackBeard's picture

So... you wanna see the wings of a butterfly being pulled off?

perchprism's picture

Jubilee, bitchez!!

william the bastard's picture

Israel has 3 days to hit Iran nuke site. That's good news. I'll buy some too.

Pamela Anderson's picture

Kyle Bass, Meredith Whitney, John "Mr. FX" Taylor, Daniel Niles..... what a group of hot souls!!!!

Talking business.... I hope AUD/USD goes back to $92-$93 range to short the shit again out of this friend

SayTabserb's picture



Day after day, nobody says it better.  Keep punching.

Conrad Murray's picture

Not bad CNBC, not bad.  It's nice when someone has the time to explain and defend their position in an interview.  Beats the pants off those ridiculous hydra-boxes.

akak's picture

It's nice when someone has the time to explain and defend their position in an interview.  Beats the pants off those ridiculous hydra-boxes.

Where's a Herakles when you really need one?

Übermensch's picture

We don't have free markets anymore; only manipulations.

Segestan's picture

Nice insight.. but clearly the topic was scripted. The dollar crowd controlling the news in a positive dollar spin. the commentator is a Moron-prick.

GreenTrader's picture

Oh, please.  Scripted my ass.

Rainman's picture

The discussion points are scripted, of course. Bass' comment about not being able to find a reason to go long equities was not scripted.

Immelt call to Faber after the show: " What da fux a mattah wit you...?? I thought I told you no more bears. This guy's worse than that Whitney chick."

Segestan's picture

I believe that. Not saying the quest wasn't honest.

Dburn's picture

+1 for the



What da fux a mattah wit you...?? I thought I told you no more bears. This guy's worse than that Whitney chick.">


I think one key moment is when he asked if they had loaded the Charts that he had sent them and there was nothing but crickets.


Not that he needed them, but for the word challenged, pictures are always useful. If MSFT spun off PowerPoint software as a Company  and held on to enough of it to put it's earnings on it's financials, they would be considered a growth company again.


Yes MSFT's main earnings were , well terrific as usual but the reason the stock is up 47% is PowerPoint Inc's top of the line came in 131% over expectations." "Yeah but Charlie were talking 281 Million dollars here."

"Yeah, so? They're back!"


GoldmanSux's picture

"When you kick your problems down the road, how many times have they gotten better?"

Windemup's picture

Sometimes, if I ignore my problems, they go away.

Cojones's picture

Like when you piss your pants and it's a nice wam day?