Kyle Bass On The Federal Budget: "I Don't Know How To Fix This"

Tyler Durden's picture

Hayman Capital's Kyle Bass is back and cutting through the caustic bullshit that surrounds every waking moment in this kick-the-can world. Dispelling the myth of our 'deleveraging' virtue, with global debt having grown from $80tn to over $200tn in the last ten years alone (a 10.7% CAGR) and the frightening reality of central bank balance sheet growth of 16% per annum, Bass concludes (rightly) that "you can't do this for very long" as governments infinitely leverage and central banks have begun the endgame of open-ended money-printing. Addressing the question of timing, Bass notes that while Europe and Japan are 'perceived' to be 'staying together' there are in fact devastating losses occurring (ask Greek bond-holders) and he firmly believes that "Germany will never go joint-and-several with the rest of Europe." The world sits at a place it has never been before in peace-time - as far as global debt balances and deficits - and that is why the global investing playbook is so hard. He goes on to address the US fiscal debacle, Japan, hyper-levered economies, delayed inflationary outcomes, and worries that the cost-push (lower GDP, higher CPI) prints are just beginning in Europe. Must watch.


As a fiduciary, and something all investors should consider - "Given what we see coming, our job is not to lose money!"


On Fiscal Cliff: Won't happen - politicians won't fix anything.

On the CBO Budget crisis: As a non-partisan third-party 'accountant', "I can't fix it!"

On Inflation: "It takes time - but it's coming"

On Housing - he doesn't believe housing will go up but has stabilized. "Everyone who ever thought of buying a house, has bought a house" and we need to flush the inventory - which wil take a few years.

On Trading The End of the World: Use Convexity - which is grossly concentrated in Japan

Own anything that is nailed down - productive assets!


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tsx500's picture

damn it's been a long time since i've seen anything from KB .....   keep it coming  !!!

markmotive's picture

Time for fixin' was decades ago.


icanhasbailout's picture

Can't fix what's not broken. The system is working precisely as intended - to screw you.

Pladizow's picture

Oh where have thou been, my long missed man crush!

economics9698's picture

1971 Nixon Bretton Woods, the last time we are at 1.5 to 1 debt to GDP ratio.

redpill's picture

I can't decide which fish I love more, Kyle Bass or Mike Trout.

HoofHearted's picture

I would vote for a Kyle Bass- Sean Egan ticket over anything else out there. Can we draft Bass and force him to be Pres?

Half_A_Billion_Hollow_Points's picture

There should be a vid of Kyle Bass from Americatalyst at any moment now.  He just spoke there at their keynote address, if I remember correctly that schedule.  


Anyone gotta link to the presentation?

icanhasbailout's picture

Somewhere in the triangle defined by my favorite nap spot, the food bowl, and the litterbox

Peter Pan's picture

The first step to fixing it is to let it blow up.

Go Tribe's picture

We CAN fix it. Send all the Olds a obamaphone and then axe their medicare. Oh, we already did that? Okay, then send them a second obamaphone and tell them it's a healthcare hotline. They can't figure out how to use them anyway.

max2205's picture

Rocket Romney wants to put a 15K cap on my deductions....fuck him...douche...I guess I'll vote for the Phone guy

LMAOLORI's picture



It's not rocket science stop spending more then your making there I fixed the budget. No one wants to hear that but that is the simple truth.

Bogdog's picture

Logic???!!! How dare you?

Sir, you have seriously offended me.

LMAOLORI's picture



lol sorry about that to make it up to you here's a tip Kyle Bass owns a million dollars in nickles they will be soon be worth more then five cents now you too can get in on the action. 


ATM's picture

Not "soon will be worth more than a nickle". They are worth more than a nickle.

The current melt value of a US nickle is $0.0543312  or 108.66% of face.

Nice move for Mr. Bass.

Whiner's picture

Aren't we at that point when the guy with 24 credit cards is told by his CPA and lawyer that he's bankrupt. He then goes on a credit card financed vacation binge maxing out each card. Then he files bankruptcy. The Bernanke can see bad things inside the PDs that we can't see, so he's maxing out our credit card pumping holiday money into them for their inviolate bonus pools. The guy can do this for about two months before the credit card computer terminates his privileges. Bernanke in concert with ECU and Japan can keep a binge like this one going for a couple of years before EU implodes and blows up PDs. That's why all eyes are on The Fatherland. Auchtung! Enjoy the ride.

slaughterer's picture

Repeat after me: "BASS KICKS ASS!"

derek_vineyard's picture

as stated in the video----historically war solves this

to the winner goes the spoils and the defeat = default

is there a peaceful solution to this debt is the real question------i fear not

economics9698's picture





Pick one.

ATM's picture

Those aren't to choose between. Those are outcomes which will all occur.

derek_vineyard's picture

as stated in the video----historically war solves this

to the winner goes the spoils and the defeated = default

is there a peaceful solution to this debt is the real question------i fear not

Harbanger's picture

Maybe there's an unspoken currency war with the West racing to devalue thru QE.

Silver Bug's picture

Kyle bass is a smart man. He is basically saying were screwed.

dbTX's picture

I like Kyle Bass, but didn't need him to explain that to me.

vato poco's picture

Could somebody PLEASE give me $5 million, so I can have Bass run it for me? Help a brother out! Yo! Obama! Lil' HEPP!!

dmger14's picture

I have been looking for his views for a while myself.  He's probably my top pick for who I listen to on what is going on and where we are headed.

ATM's picture

He has his own blog -

Not updated very often but when he does it's usually something good.

I would also recommend Scott Minerd -

Alexandre Stavisky's picture

Utopia is removing $4 trillion in 10 years from US gov't spending?  That wouldn't offset QE3.

That contraction alone would ensure a greater depression than the Great Depression.

What dominoes would it set in motion?

Cascades, and slippery slopes.  Didn't Kashkari oversee some gov't redistribution prior to moving to PIMCO?  Didn't ZH have pics of him building a primitive cabin alone?  Didn't he go a little Viggo Mortenson?

That was many trillions of QE earlier.  Obviously money printing has improved outlook and the financial system is saved and robust.

Bass, Sprott, Dalio, Gross are all still making money high near the Ponzi capstone.  But what outcome will enrich, vindicate, and preserve them in their lifestyle?

Too Far Gone.

What if you had been the smartest guy in the room or in the city (of Dresden) and worked very hard securing "anything nailed down" between 1933 to 1945?  Or Nagasaki in the same time frame.  The smartest, most manuoevrable, nimble, and strategically positioned superman woke up to either a Fat Boy or a sky dark with incendiary delivering bombers.

How smart are we now?

Beam Me Up Scotty's picture

That was 4 trillion over 10 years, not annually.  And don't worry, it won't happen.  It wasn't long ago and we had 400-500 billion annual deficits.  Now we have to not only provide a safety net but a hammock for people.  Wonder how long it will be before the Obamaphone types get their Obamacar (not Obamacare--they got that too).

Shizzmoney's picture
Kyle Bass On The Federal Budget: "I Don't Know How To Fix This"

Hey, something he has in common with Congress!

Harbanger's picture

If any politician is basically "unelectable" if they propose or make the hard decisions to Cut spending, who's to blame? 

ATM's picture

Human Nature is to blame. We all want free beer and will never vote against it.

AnAnonymous's picture

Human nature is to blame. And we are all american.

Signed: an American.

akak's picture

Roadside crapping is to blame.  And we Chinese Shitizenism citizens are all roadside crappers.

Signed: a squatting Chinese Shitizenism citizen

Harbanger's picture

Human nature is to keep repeating history.

In the Carboniferous Epoch we were promised abundance for all,
By robbing selected Peter to pay for collective Paul;
But, though we had plenty of money, there was nothing our money could buy,
And the Gods of the Copybook Headings said: "If you don't work you die."

Alcoholic Native American's picture

Like my student loans, oh it's fixable.  I just have to work hard and tighten the old belt to get em payed off.

Let's get to work people. 

Red Heeler's picture

"This is past fixing."

Yes, but the ride has never been smoother.

PUD's picture


hedgeless_horseman's picture



As a fiduciary, and something all investors should consider - "Given what we see coming, our job is not to lose money!"

"Then you should have deposited my money with the bankers, and on my return I would have received my money back with interest!", said Jesus.

rbg81's picture

Well, duh.  Not only should you not lose $$, its good if you occasionally make some.  When you hear such lame advice from a smart guy like Kyle Bass, you know that he too is clueless--which should scare the living shit out of everyone.  We all know the System is ripe for collapse--the real question is how long will the farce go on?  The thing keeping it going is that, aside from massive social unrest, our leaders have no idea what lies on the other side of the Fiscal cliff.

Monetary Lapse of Reason's picture

Don't be stupid... you are confusing the nominal with the real... Kyle means he does not want to lose any real buying power of the money he manages... no doubt he will make money nominally.  

Raymond Reason's picture

Ah, but that was real money.  The funny thing is gold did bear interest, once upon a time, in the form of more gold. 

Thisson's picture

It still does.  Gold hasn't changed. 

youngman's picture

I kind of thought he was throwing in the towel......he is into mortgages heavily now.....but it was obvious he thinks we are in uncharted waters...

Apocalicious's picture

that's cuz we are in unchartered waters. no one at the helm has a map for this, and their vision is pretty myopic.