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

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zen0's picture

You have been at war with Islam for 1400 years. Or, more precisely, Islam has been at war with the rest of the world that long.


History is easy. It is written down. Read it.

ArrestBobRubin's picture

Now who's history would that be?

zen0's picture

that was supposed to be a reply to a particular post and somehow ended up in general bad.

Remington IV's picture

I agree wholeheartedly ... short everything but Gold

Frank Owen's picture

Tyler, I want to Profit With Cramer but the adsense link does not work...

akak's picture

That's because you have inadvertently shortened the true name of the link, which should read: "Profligate Lying and Losing With Cramer".

Thunder Dome's picture

Ten bucks says Kyle Bass shows up dead in a few weeks under suspicious circumstances.

akak's picture

Or suddenly finds himself subject of a full-bore, body cavity-probing IRS audit.

Terra-Firma's picture

He reminds me of Rosenberg. Calm, collected with evidence to support reasoned arguments to support positions. He has a more global outlook however.  I sense Rosi keeps his eggs closer to home in golden baskets.

JackES's picture

CNBC even allowed this?

Terra-Firma's picture

One last point. Not having traded bonds I am curious what happens when a bond issuer is unable to repay the loan (bond purchasers).

I also don't understand why Greece is getting money so inexpensively. For example, if my money was on the line and I was lending to a firm in Greece, I would need at least a 10%-14% return annually backed by an asset of equal value before I considered buying the firms bond. Plus, with deflation happening don't we have less credit in the system thereby increasing the present value of money?

I don't get it.

Goldenballs's picture

German Savings via the ECB,how long can this madness go on,be selling the Parthenon next ... 

Madhouse's picture

Comical but this is the list of all country debt to GDP and this is where Faber, or some summer intern likely, got the US figure of 53% "public" debt to GDP..


1) It shows Zimbabwe, then Japan. I recently bought a 100 trillion dollar Zimbabwe note on e-bay. Bass is short $200 million JGY. I'm long number one, he's short number two ... I'm right there with you baby..

2. This is from a CIA report. Still cranking out that world class propaganda Don Draper style. The US is 47th out of 129. It should be 12th.

3. Bass nearly patted Faber on the head and told him to PSTFU when Faber brought out the 53% figure. Depends on the method but most websites with the all in US figure are 80-90% right now, not 53%.

4. The difference is Social Security mainly. Why include Social Security in that number, daddy ? Because, doesn't everyone recall the promise from the President of the Martian Intergalactic Society that when we needed that money they'll send it down to us in a golden flying saucer...

5. High yield feeding on strange meat right now as spreads artificially wide and new issuance means simply that those who can are building a cash stash. But it is sort of similar to being at a beach just before the Tsunami, the tide goes way out.... and many wonder in to pick up shells...

6. Japan will be just the first domino... but where will investors go ?  Gold, silver, Swiss will be the only longs. Everything else will be a short. The idiot insurance firm actuaries cannot compute that. Does not compute, does not compute...

7. Or, the top debtor nations say No Paga to those on the second half of the list like China and Venezuela and Saudi. The ultimate cram down... Yeah baby.




agrotera's picture

I thought the 53% spoken as truth by Faber, then the added nonesense about the Fed's independence (INSTEAD OF THE FACT THAT OUR ELECTED OFFICIALS ARE OWNED AND RUN ENTIRELY BY THE OWNERS OF THE PRIVATELY HELD FEDERAL RESERVE CORPORATION) is just the kind of propaganda that drives CNBC and what will secure Mr. Faber a renewed contract....

qussl3's picture

What I am most interested to know is whether Mr Bass owns any gold.

Temporalist's picture

Kyle Bass?  I thought it was Kyle Gass:

"We only came to kick some ass."

HEHEHE's picture

I am surprised they let him on CNBC.  I was even more surprised they didn't edit his comments or try to have Faber or the other guy interrupt him more with false stats and figures.


eroc66's picture

past peak oil is peak debt......

covert's picture

look at investor's business daily's top 100 pick, then it's easy. for example, look at netflix.

bigfootmm's picture

Methinks the most important thing Kyle said was that we are in for a secular change, one that occurs every one-hundred years or so. Continually rising incomes and standards of living? Nope. Cushy government jobs and pensions? Down the drain. Retirement living? Not on your life. Cheap food and gas relative to income? Time for gardens and bicycles. Travel to foreign lands, cruise ship sailing, visits to far-flung relatives at Christmas and Thanksgiving? Too hard to barter for the costs. The USA as the center of the Universe? Banana time. On the other hand there should be some nice new wars to fight. Paul Krugman and the rest of 'em like him will hang down their heads and cry for the death of Keynesianism and maybe they'll swing in the wind themselves under some big oak tree. And probably some more differences will crop up as the dollar goes to its intrinsic value while gold and silver will be rediscovered as having certain Aristotelian attributes.

akak's picture

And probably some more differences will crop up as the dollar goes to its intrinsic value while gold and silver will be rediscovered as having certain Aristotelian attributes.

Pure poetry!

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