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An Hour In The Company Of Kyle Bass

Tyler Durden's picture


Last year's AmeriCatalyst interview with Kyle Bass provided much more color than the normal 30-second soundbites that we are subjected to when serious hedge fund managers are exposed to mainstream media. This year, Bass was the keynote speaker and in the following speech (followed by Q&A), the fund manager provides 60 minutes of eloquence on the end of the grand experiment and its consequences. From Money Printing and Central Bank Balance sheets to Japan and the psychology of the current situation - which in many cases trumps the quantitative data - the question remains, "when will this unravel" as opposed to "if?"; Bass provides his fact-based heresy against the orthodoxy of economic thought "On The Financial Nature Of Things" extending well beyond his recent note. Must watch (there's no football or X-Factor on tonight).

Make sure to stay tuned to the last 2 minutes when Kyle succinctly sums up our society...

Clip not embeddable - click image for jump to YouTube.


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Wed, 12/19/2012 - 22:28 | 3081324 Stoploss
Stoploss's picture


Wed, 12/19/2012 - 22:36 | 3081344 boogerbently
boogerbently's picture

How come ALL the experts in money and finance know the problem with our course, except the experts that decide the course of our money and finance?

Thu, 12/20/2012 - 00:09 | 3081511 vast-dom
vast-dom's picture

i believe he is grossly underestimating US housing "recovery" and shadow inventories. his error lies in his attempt to extrapolate 7 year housing peak trough cycles (35%ish correction to date) in context more at out of context with historically never before seen printing, twisting and ZIRP and as such he is missing amplitude of immanent correction here in states.

i agree with KB on Japan 100%. and that is precisely why i am surprised he is not looking at US as also completely unsustainable and due for severe correction -> at some point.

Thu, 12/20/2012 - 00:15 | 3081596 kliguy38
kliguy38's picture

He opened with a vague prediction of major wars coming and everyone crashing but then painted his book with the prediction the US housing was "OK" and probably closse to bottoming and MBS was numero uno but gold was just OK.........hmmmmmmmm seems Kyle has rose colored glasses trying to combine all of his predictions into one pool

Thu, 12/20/2012 - 00:40 | 3081626 Caviar Emptor
Caviar Emptor's picture

He's got a lot riding on tha RMBS bet. Where his bullish prediction falls flat is if his bearish prediction is right: interconnected economies tend to implode together

Thu, 12/20/2012 - 00:54 | 3081653 kliguy38
kliguy38's picture

Yes......just what I was thinking.....Kyle is talking his book AND you are exactly right.

Tue, 12/25/2012 - 09:31 | 3094420 GetZeeGold
GetZeeGold's picture



Make sure to stay tuned to the last 2 minutes when Kyle succinctly sums up our society


Did Kyle really use the F word and totally get away with it?

Tue, 12/25/2012 - 09:57 | 3094462 francis_sawyer
francis_sawyer's picture

My boy is wicked smaaaht!...

Tue, 12/25/2012 - 10:42 | 3094547 UNCOMPROMISED

+1000. Still trying to figure out which one of the Tylers he is...

Tue, 12/25/2012 - 11:06 | 3094592 economics9698
economics9698's picture

This guy is Kevin Spacey's little brother.

Tue, 12/25/2012 - 12:03 | 3094661 urwright
urwright's picture

Everyone here has got be a gambler at heart - gotta be.

Bass reminds me of all the gays who regular the gay bar next to my gallery. He has a large compound with tons of weapons and more than one bunker. He has something to do with Texas - just not sure what. He speaks outta both sides of his mouth (at least in regards to the country I live in and he says he is from). And...  he probably has more than one suit.  And you guys trust him just cause he is like you - or - you wanna be like him?

Watching you guys pine for this guy is like watching the gay boys next door pine over a straight guy.

I bet no one here knows why this is being posted more than once here on the main page of ZH (on xmas day) but i am sure there is a reason...

Tue, 12/25/2012 - 13:52 | 3094846 UNCOMPROMISED

Teehehe. Loaded up on MTG when it dipped sub-$1. I'm gay for Kyles research dry humping it all the way to the bank bitchez. Trade those profits in for some of the shiney metals then dry hump that shiz too. Oh I know. Kyles making me gay.

Tue, 12/25/2012 - 11:10 | 3094594 economics9698
economics9698's picture

Bass is smart but anyone in finance is.  Bass does his homework!!!!!!!

That is what separates winners from losers.

Unless you are in the tribe and can print money.


Tue, 12/25/2012 - 13:11 | 3094762 CPL
CPL's picture

Exactly.  He's got as much to lose as any of us in the disorganised gambit happening.  

He thinks in lateral paths and is stuck in American patterns of business thinking which is not the rule book anymore if it ever will be again.  His estimation on housing prices leading to a housing recovery is only if inflation hits around 1200% and minimum wage finds it's way to match 1/4 of housing prices.

By that time though I doubt he will be living in the US or remotely associated with the US investment community.  I see most of these guys attempting to bunker themselves when they should be focusing their attention on removing themselves from the current system to protect themselves and their investors.  Sometimes the best way to play is not to play and wait for the signal.

The signals right now are neither bull or bear but symptomatic of system wide collapse.

Thu, 12/20/2012 - 01:35 | 3081707 Bananamerican
Bananamerican's picture

I noticed that too...

"u.s. already restructured its banks, energy and food formation, pop growth and FED/.gov policies to take out the remainder of 6M housing overhang..."

...on the other hand: Euro/Jap/China doom, Fiscal Cliffsterity (Bass says jobs aren't coming back), WAR?? 

I guess we'll be bathing in shale, corn cobs and helocs when the whip comes down

Maybe he thinks we have a Japan-like number of years to trod the QE path before WE come apart

Thu, 12/20/2012 - 02:45 | 3081785 Freddie
Freddie's picture

This is not unlike what Hugh Hendry said a few months ago. He said the US nat gas/sahel was a big plus for the US.

The question is did the Saudis install you know who because they want to control that?  I think so.

Thu, 12/20/2012 - 14:29 | 3083466 Not Too Important
Not Too Important's picture

"The Saudi Arabia of food production."

"The Saudi Arabia of natural gas."

The natural gas comes from fracking. Fracking destroys the acquifers, which is destroying the crops. Expanding as fast as the government can issue permits.

Soon we will be the Saudi Arabia of poisonous food, with a poisoned population.

And none of this includes the petabecquerels of radiation from Japan blowing across our land. Very interesting that Kyle never touched on this, when it would absolutely prove his thesis regarding Japan's immenent collapse.

Tue, 12/25/2012 - 09:37 | 3094430 GetZeeGold
GetZeeGold's picture



If fracking doesn't kill warming will.


Unless we can find a way to tax it. Perhaps we should just start with donations....until the science is settled.


Soon we will be the Saudi Arabia of poisonous food, with a poisoned population.


We'll take your word for it. Meanwhile please donate some gas....that crap is wicked expensive.

Tue, 12/25/2012 - 12:13 | 3094676 Bacon
Bacon's picture

"Fracking destroys the acquifer . . ."

Read this all the time. Never read any proof, however. Live in an area that has had fracking for over 60 years and don't know of a single acquifer polluted by it. Most acquifers are a few hundred feet down. Most fracking occurs thousands of feet down. When did we become such Luddites?

Thu, 12/20/2012 - 11:34 | 3082638 Panafrican Funk...
Panafrican Funktron Robot's picture

It's a bet that's pretty well calculated, remember, there are two things the Fed wants to own:  

1.  U.S. government (through UST buys)

2.  U.S. land rights (through MBS buys)

Non-agency debt is relatively cheap and less levered than agency debt.  Prime target for QE.   

Thu, 12/20/2012 - 05:18 | 3081888 Lore
Lore's picture

Kliguy38: "seems Kyle has rose colored glasses trying to combine all of his predictions into one pool"

I wouldn't presume to match Mr. Bass' quality of analysis, but submit that he finds himself in the same position that we do, trying to outline the picture to a mainstream audience blinded by "normalcy bias" aka tunnel vision.  Joe Sixpack is so out of touch and short of attention that complex premises and bleak conclusions elicit spontaneous denial and loss of interest.  Typical dismissive comments include epithets like "conspiracy theorist."  So one feels obliged to soften one's message and offer glimmers of hope so as to introduce fear without panic and loss of credibility.  Waking people up is hard! You don't accomplish it in an hour.

Tue, 12/25/2012 - 13:32 | 3094806 in4mayshun
in4mayshun's picture

Just goes to show that if your income depends on willing investors in our current system, you have to at least sip some kool aid.

Thu, 12/20/2012 - 00:56 | 3081656 luna_man
luna_man's picture



"i believe he is grossly underestimaing US housing "recovery" and shadow inventories."...I think you are on to something "vast-dom"!


not even close to the bottom...soon to be, squatters paradise

Thu, 12/20/2012 - 01:09 | 3081679 ZeroAvatar
ZeroAvatar's picture

.............squatters paradise"


Yep, come into the country illegally, crash the economy (California) then benefit by buying up the cheap houses.  AMERICA!

Tue, 12/25/2012 - 10:48 | 3094555 UNCOMPROMISED

'A friend' is currently renting 3 foreclosures that 'he' has NO ownership interest in. The owner moved out and the bank never followed through on the legal foreclosure. ~ $4000/mo Nice.

Thu, 12/20/2012 - 01:20 | 3081702 Snidley Whipsnae
Snidley Whipsnae's picture

Correct vast-dom. Bass clearly states that 'we don't believe jobs are coming back' and then states that housing is going to recover or at least stop declining.

How does he reconcile these two contradictory views? Where is the driver for a recovery in housing if jobs are not coming back?

Thu, 12/20/2012 - 01:41 | 3081726 Seer
Seer's picture

Shh!  We're not supposed to question the premise!

Talking heads need to talk, that is what they are good at doing.  Really, if someone is successful then why the hell the need to go talking-about?  Unless, it's because it's a sales pitch or it's a matter of one's ego.

These things always bother me... They are all "made" via the System.  What's the saying? "Never trust a man with more than one suit"

Tue, 12/25/2012 - 10:42 | 3094545 CuriousPasserby
CuriousPasserby's picture

Just because someone made one brillliant call doesn't mean he knows any more than you. Every year 1000 financial advisors make 1000 calls and some are exactly right. Next year they are wrong and someone else is right. It's like a lottery.


No one knows.

Thu, 12/27/2012 - 16:22 | 3099729 Bob Sacamano
Bob Sacamano's picture

So the only conclusion you can make is that listening to the KB video and being on this site is futile (or no better than buying lottery tickets -- really really close to futile).

Thu, 12/20/2012 - 02:46 | 3081787 Freddie
Freddie's picture

EBT cards.  People said the Chinese could eventually move their populace into all those ghost cities.   Well it is happening in O land.  His cronies are getting homes.

Tue, 12/25/2012 - 09:41 | 3094433 GetZeeGold
GetZeeGold's picture



I plan on buying North Dakota with all my EBT's. I'm aware that's not the orginal intent....but it turns out they'll take them.

Tue, 12/25/2012 - 11:43 | 3094636 Ignorance is bliss
Ignorance is bliss's picture

I think the Chinese were planning on populating the ghost cities after WWIII. They will be for the survivors of the upcoming Holocaust.

Thu, 12/20/2012 - 11:12 | 3082552 MachoMan
MachoMan's picture

Unless he's talking about jobs on a worldwide basis, the two aren't necessarily mutually exclusive...  and even then, I suppose there could be a dollar reserves/foreign money on the sidelines argument to be made, but I think he kind of shot that one down and, even if he didn't, it would have a clear ceiling on traction...

Thu, 12/20/2012 - 11:39 | 3082664 Panafrican Funk...
Panafrican Funktron Robot's picture

"How does he reconcile these two contradictory views?"

Consider who is buying MBS.  Housing, like stocks, can recover if backstopped.

Thu, 12/20/2012 - 21:07 | 3084918 Ookspay
Ookspay's picture

New population "absorption" at 1.5 million per year.

Tue, 12/25/2012 - 11:52 | 3094653 Tommy Gunner
Tommy Gunner's picture

He probably thinks Bernanke will keep printing and buying up inventory - don't fight the fed?

Thu, 12/20/2012 - 01:26 | 3081709 Cyclerider
Cyclerider's picture

Optimism bias!

Thu, 12/20/2012 - 02:28 | 3081769 reTARD
reTARD's picture

Regarding US housing, aside from the lack of jobs hence "tax revenue" (yes, oxymoron), Kyle really misses the great political risk of whatever the hell central planning could do. State/local governments are desperate for money and since they can only raise income and corporate taxes so much until people vote with their feet, it's not so easy to move once one "owns" a home. I can definitely see increased property taxes coming in the near future.

Tue, 12/25/2012 - 12:33 | 3094706 BurningFuld
BurningFuld's picture

That is exactly what killed land owners in the 30' taxes and no body could afford to pay you rent. Be careful. Advise is free..and is always worth what you pay for it.

Thu, 12/20/2012 - 09:29 | 3082024 e.blair
e.blair's picture

Yeah, I was really surprised that he was going to start out with a cyclical argument about housing given the singular nature of what is going on now.  As for his second absorption argument, I find it hard to believe that a generation that saw their parents forclosed on is going to have much interest in buying houses or that all the students who have defaulted on their student loans are going to be able to buy. 

More generally, when he talks about war, it is really quite glib.  It's really not very profound.  He seems to do it for shock value, but there is no detail whatsoever.  Nobody needs Kyle Bass to worry about war.

Lastly, at the end of the day, Kyle Bass is a very smart guy.   But he is obviously quite full of himself, probably flies in private jets, and is out of touch with ordinary people.  He needs the TSA to stick their hands down his and his family's pants a few times.  Then he might finally be able to grasp the full picture.

Thu, 12/20/2012 - 10:58 | 3082518 dmger14
dmger14's picture

He also did not address the issue of the debt bubble bursting, and the resulting increase in interest rates on housing prices.  I think David Wiedemar's vision of what will happen with housing is credible.  Also, real estate taxes will be increased and student debt will keep people from affording them as boomers downsize for money.  All of these bode poorly for housing going forward.

Tue, 12/25/2012 - 13:43 | 3094814 HermesHiccups
HermesHiccups's picture

I would love to do a survey and ask all the folks who got it and bet correctly about the bust if 2007 to 2009 fit their projections of how they thought things were going to play out. I thought the world was built on pile of shit back then but the force of what happened surprised me. If I had to guess I think most people underestimated what happended and especially what would have happened if the fed did not flood the world with money.

The point these guys all have their own normalcy bias they are just titled more negatively than joe six-pack.

I believe the next time is going to go faster and be worse than I think now because it was faster and worse than I thought last time.

Tue, 12/25/2012 - 14:22 | 3094910 Dick Buttkiss
Dick Buttkiss's picture

Sucumbing to the very "optimism bias" that he so aptly describes, as if to say, "See, it can't be avoided!"

Thu, 12/20/2012 - 00:08 | 3081584 Silver Bug
Silver Bug's picture

Another Great interview by Kyle Bass. I think he is over confident about the U.S although.

Thu, 12/20/2012 - 09:50 | 3082200 Cap Matifou
Cap Matifou's picture

They know it exactly, and warn each other better not to talk about it, to avoid end up as a non-person in this ponzi economy.

Thu, 12/20/2012 - 10:17 | 3082365 e.blair
e.blair's picture


Tue, 12/25/2012 - 10:55 | 3094514 GetZeeGold
GetZeeGold's picture



“You have meddled with the primal forces of nature Mr. Beale and I won’t have it!

Is that clear?

Do you think you’ve merely stopped a business deal? That is not the case. The Arabs have taken millions of dollars out of this country and now they must put it back. It is ebb and flow, tidal gravity, it is ecological balance.

You are an old man who thinks in terms of nations and peoples. There are no nations, there are no peoples, there are no Russians, there are no Arabs, there are no third worlds, there is no west. There is only one holistic system of systems. One vast and immane, interwoven, interacting, multivariate, multinational dominion of dollars. Petrol dollars, electro dollars, multi dollars, reichmarks, ren, roubles, pounds and shekles.

It is the international system of currency which determines the totality of life, on this planet. That is the natural order of things today. That is the atomic…and sub atomic …and galactic structure of things today. And you have meddled with the primal forces of nature and you will atone. Am I getting through to you Mr Beale?

You get up on, your little 21? screen…and howl…about America and democracy. There is no America, there is no democracy. There is only, IBM and ITT, and AT&T…and DuPont, Dow, Union Carbide…and Exxon. Those are the missions of the world today.

What do you think the Russians talk about in their councils of state, Karl Marx? They get out their linear programming charts, statistical decision theories, minimax solutions and compute the price cost probabilities of their transactions and investments just like we do. We no longer live in a world of nations and ideologies Mr Beale. The world is a college of corporations, inexorably determined by the, immutable bylaws of business.

The world is a business Mr Beale. It has been since man crawled out of the slime…and our children will live Mr Beale, to see that…perfect, world…in which there’s no war or famine, oppression or brutality. One vast and ecumenical holding company, for whom all men will work to serve a common profit. In which all men will share of stock. All necessities, provided…all anxieties tranquilised…all boredom, amused.”

Thu, 12/20/2012 - 01:14 | 3081693 LongBalls
LongBalls's picture

It's hard not to have a man crush on Kyle Bass. He breaks down reality in a way your children can understand. Which, given the state of public education it's a must.

Thu, 12/20/2012 - 07:04 | 3081991 Pegasus Muse
Pegasus Muse's picture

More blasphemy.  GATA's Bill Murphy & Chris Powell call out Gold and Silver Market Manipulation on RT Capital Account this week: 

They discuss the 'smoking gun' IMF Report GATA released earlier this month that proves central bankster conspire to manipulate gold and other financial markets. 

Thu, 12/20/2012 - 22:41 | 3085287 Dick Fitz
Dick Fitz's picture

I would love to spend one night in bed with him. He is so fucking hot!

Wed, 12/19/2012 - 22:29 | 3081326 DoChenRollingBearing
DoChenRollingBearing's picture

Must see, I saw it the other night.  It's worth it.

+ 1, Tyler!

Thu, 12/20/2012 - 00:06 | 3081571 sitenine
sitenine's picture

DoChen or Tylers or anyone please, would you happen to know where to lay hands on his slide deck? Still an absolutely amazing presentation without them though.

Thu, 12/20/2012 - 00:16 | 3081599 seek
seek's picture

Yeah, that's the only issue, he keeps refering to the slides and they never pan to them!

Thu, 12/20/2012 - 02:06 | 3081754 DoChenRollingBearing
DoChenRollingBearing's picture

I THINK I saw this at Ann Barnhardt's site (, no slides there either, sorry.

Tue, 12/25/2012 - 11:17 | 3094605 GetZeeGold
GetZeeGold's picture



Ann just needs to break out of her shell a tad. She's such a timid girl.

Wed, 12/19/2012 - 22:29 | 3081328 Anne Ominous
Anne Ominous's picture

I like how he says 'shit' and 'fuck'.

Wed, 12/19/2012 - 22:36 | 3081343 JackT
JackT's picture

Bass doesn't pull any punches

Thu, 12/20/2012 - 00:19 | 3081600 Freddie
Freddie's picture

When Bob Pisani interviewed Kyle at his office in Texas - Kyle has a cammo'ed sniper rifle on his wall or mantle.

I think it was am M-24 or maybe a better sniper rifle.  I never saw that on any office mantle.

Guns and gold - bitchez!

F Hollywood, F TV, F Tarantino and all the media scum who want to disarm you!  Boycott their sh*t.

Thu, 12/20/2012 - 00:30 | 3081612 Max in St Moritz
Max in St Moritz's picture



another barnyard libertarian

guns, trucks, knives, big foot and drop top camaros - bitchezzz!

f 'n A !!!

Thu, 12/20/2012 - 06:20 | 3081921 Rick Blaine
Rick Blaine's picture

Yes...he is.

A damn rich one too.

He also probably knows that "Bigfoot" is one word.


Thu, 12/20/2012 - 01:11 | 3081690 ZeroAvatar
ZeroAvatar's picture


Tue, 12/25/2012 - 11:21 | 3094554 GetZeeGold
GetZeeGold's picture



The Fed is watching him like a hawk....if he melts even one of those suckers....he's gone.

Tue, 12/25/2012 - 12:17 | 3094674 Haole
Haole's picture

So the U of Texas bought over a billion in gold and as a fuduciary Kyle feels secure that all that gold, sitting in the fucking "COMEX system" of all places according to him, is not only theirs but there in the first place?  Holy fuck... As long as it's all IOUs to the university and not his own personal counterparty risk, it's all good?  Wow, thanks for the video Freddie.

Tue, 12/25/2012 - 12:24 | 3094693 edb5s
edb5s's picture

I am not sure where you got this from, but in another interview of Bass (it may have been Americatalyst last year) he spoke about taking delivery of the gold he buys.


Edit: here it is -

Tue, 12/25/2012 - 14:01 | 3094860 Haole
Haole's picture

He says it in the video clip Freddie posted.

He may take delivery of his own but he expressly says that the U of T gold is stored and insured in the COMEX system through a "deal" with HSBC only "it's just ours".  Uh...k

I don't know about what Kyle does with his personal finances/gold/etc. but am I the only one who sees a problem with the U of T actually holding over a billion in gold, particularly from a "fuduciary's" standpoint?

Tue, 12/25/2012 - 12:16 | 3094680 edb5s
edb5s's picture

I would love to see the full view of the "dollar" behind him.  Looks to have a picture of Lenin on it with Hank Paulson's signature.

Wed, 12/19/2012 - 22:38 | 3081356 fonzannoon
fonzannoon's picture

How can Europe's banks be overlevered and undercapitalized and not have blown up yet?

Thu, 12/20/2012 - 01:13 | 3081691 ZeroAvatar
ZeroAvatar's picture

Ever hear of 'outright monetary transactions'?

Wed, 12/19/2012 - 22:43 | 3081365 eigenvalue
eigenvalue's picture

2 problems with Kyle's thesis

1. He mentioned few people want to assume the debt of their extended families. Ergo, Germany won't assume the debt of the PIIGS. 

But when somebody assumes the debt of his extended families, he spends his own money. When Merkel assumes the debt of the PIIGS, she spends other people's (German taxpapers') money.

2. He mentioned Japan's current account is gonna see continous deficit. Japan will need external financing to absorb new JGB issuances. Therefore JGB yields will rise.

But what if the BOJ prints to absorb all the new issuances. The Fed did it in the 1940s. Inflation was rampant but the treasury yield didn't go up. 

Wed, 12/19/2012 - 22:51 | 3081391 EARLPEARL
EARLPEARL's picture


Wed, 12/19/2012 - 23:01 | 3081411 eigenvalue
eigenvalue's picture

Yeah, "when" is all that matters. By and by, I think it makes perfect sense to short bunds and oats. But Paulson shorted bunds this year and got burnt.

Thu, 12/20/2012 - 01:24 | 3081708 Snidley Whipsnae
Snidley Whipsnae's picture

It's not only Paulson that got burned shorting soverign bonds... there are mountains of bodies that thought they had the timing down... but didn't.

Thu, 12/20/2012 - 12:53 | 3083075 dmger14
dmger14's picture

I think Merkel will have problems staying in power if she spend German taxpayers' money much longer.  On the Japan situation, nobody but the BOJ would buy bonds if they are printing.  I could see velocity and inflation through loss of confidence if the BOJ was the only player.

Wed, 12/19/2012 - 22:45 | 3081371 bobthecat
bobthecat's picture

A Hour in the company of Kyle Bass*

Wed, 12/19/2012 - 22:57 | 3081401 fonzannoon
fonzannoon's picture

It's funny how Kyle talks about optomism bias and pattern recognition. His example of things that are repetitive..."Japan is self funding". He seems to miss his own optomism bias. You could use the same example for "don't fight the fed". He is a little too self assured that Japan and Europe are the real problems and the US is not. He might be missing his own point.

Wed, 12/19/2012 - 23:00 | 3081410 chump666
chump666's picture

He is a safe haven DXY bull.

Same with Hendry...I think.

Wed, 12/19/2012 - 23:11 | 3081424 fonzannoon
fonzannoon's picture

His own math, logic and facts makes the dollar anything but a safe haven. I think it is the boyscout in him that makes him a DXY bull.

He is talking about Japan and money printing and buying their own bonds and denouncing monetizing defecits at the same time......THATS NOT THE FED?

Wed, 12/19/2012 - 23:37 | 3081498 MachoMan
MachoMan's picture

He will be judged on his trades, not his lectures...  for anyone that has the ability to talk their book, you can presume he or she is always doing so...  He, like everyone else, tends to speak in generalities...  the devil is in the details.

Thu, 12/20/2012 - 00:35 | 3081621 chump666
chump666's picture

Hence you can still bet against Japan if they continue on that path, through the JPY short.  Overall the 'safe haven' of Japan status could collapse before the US.  They are in a worst shape at this point in time.  It's a strange paradox, as I mentioned on here about safe haven trades a day of or so back, the DYX could be bid as the last gasp trade before the reset.

Thu, 12/20/2012 - 01:19 | 3081701 ZeroAvatar
ZeroAvatar's picture

It could be, but, with China so anxious to take over Reserve Currency status, I have a feeling they will exploit the current economic chaos in some as of yet unknown fashion.


Black Swan, Chinese style.  The hammer's gonna drop somewhere, soon.  I can just feel it.


Probably when US invades Iran, that'll be the trigger for China. 

Tue, 12/25/2012 - 12:22 | 3094691 kentmills
kentmills's picture

+ 1

Wed, 12/19/2012 - 23:07 | 3081425 fonzannoon
fonzannoon's picture

dupe sorry

Thu, 12/20/2012 - 00:02 | 3081565 eatthebanksters
eatthebanksters's picture

Hendry and Bass are two of the best...hard to argue with those boys.

Wed, 12/19/2012 - 23:09 | 3081434 eigenvalue
eigenvalue's picture

And he mentioned the average house price slump was about 6 years if I remember correctly. Therefore, he believed that the housing market had bit the bottom. This sounds very much like Bernanke's "We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit."

Wed, 12/19/2012 - 23:46 | 3081515 kito
kito's picture

Big +1 are absolutely right....he is BLIND TO THE SEVERITY OF THIS COUNTRY'S PROBLEMS........

Wed, 12/19/2012 - 23:51 | 3081520 fonzannoon
fonzannoon's picture

@Kito and Vast-dom, in the last 2 mins he calmly seems to say the US will QE itself into hyperinflation at some point. I can buy his food and shale argument to a point. He looses me with his housing thesis.

who knows anymore. Crazy.

Thu, 12/20/2012 - 00:21 | 3081559 vast-dom
vast-dom's picture

fonz: he waffled a bit, and was vague on conclusions for US and i believe is not appreciating some vital variables. but i like KB a lot, which doesn't mean he won't be potentially extremely wrong. 


i do not agree with his shale outlook either. adjusted for price over time factoring in global supplies, it will not be the godsend that too many people believe it'll be...

Thu, 12/20/2012 - 01:45 | 3081728 infinity8
infinity8's picture

Well, he can't give it ALL away, can he? I think he "appreciates" plenty. And I like him.

*edit: I don't agree on shale either.

Thu, 12/20/2012 - 00:25 | 3081610 Freddie
Freddie's picture

Maybe he does not want to be "heart attacked" by Dear mullah and his NWO goons.  Yeah Kyle is in Texas but no one is safe from our beloved Islamic.  

Maybe it is not too safe to talk about the U.S..  The guy has a mega bug out compound in Texas with lots of land, bunkers, food, precious metals, water and guns.  Lots of guns.

Thu, 12/20/2012 - 02:33 | 3081774 resurger
resurger's picture

He's saying that US will be ranked 3rd, thats after Japan and Europe

They should run for a gold medal imho.

Thu, 12/20/2012 - 06:19 | 3081913 falak pema
falak pema's picture

rich's man analysis in the race to the bottom.

What I hear in this presentation is that the great structural reset, according to his number crunching, is imminent (2/3 years). That the root cause is the Banking sector imbalance added to the sovereign debt pile and the runaway ratio between debt interest payment and government tax earnings; especially if thru past banks non restructuring that debt gets MORE socialised in coming years (French example) and that interest rates on bonds go up as the rates are too low and this is unsustainable. 

Which means ALL of first world, irrespective of ORDER, aka Jap/Euro/UK/USA will lose big as their debts are unsustainable. Lots of pain. (Not that this is NEWS to us who read TD/ZH!)

But guess what? Those who are NOT in debt, will come out on top, unless there is social unrest and War in their lands.

So who are the winners in this race: stable non first world countries with current account surpluses : Brazil, Venezuela, CHile, some arab nations if their political structures allow it, Turkey, Russia (?), CHina (?), India (?). And amongst the first world : Germany, USa, Canada, Australia.

Now we know. Where to invest; if we have anything left! 

Crazy world drowning in debt and now entering red zone of BIG social unrest. 

What this analysis does not address, as part of this structural reset, is a move in IMF, and thru bilateral deals amongst major players, to move away from USD reserve currency status and the IMPACT of that on financial markets...(unless I missed something).

Now that may reflect his home grown optimism biais. But it is an element that would/could be major game changer in the financial restructuring of the sovereign nations of tomorrow's world. 


Thu, 12/20/2012 - 13:44 | 3083295 ajax
ajax's picture




Great post but you forgot to mention: Kyle Bass has a television in his clothes closet !!

Wed, 12/19/2012 - 22:58 | 3081403 chump666
chump666's picture

He is so right.

The big issues are civil unrest/strife, his points about Greece and the 'big' riots is correct, the media and market blow off another predictable reminder that the market is just underwritten by the QE environment. And now we are at the denial Rome-is-falling-to-sh*t stage, and so the markets have NOT priced in major civil unrest throughout the world.

Wed, 12/19/2012 - 23:15 | 3081449 icanhasbailout
icanhasbailout's picture

I personally would prefer 30 minutes with Lauren Lyster

Wed, 12/19/2012 - 23:46 | 3081517 ImReady
ImReady's picture

I doubt you could last that long. 

Thu, 12/20/2012 - 00:01 | 3081564 Assetman
Assetman's picture

I'm sure he is willing to die trying...

Thu, 12/20/2012 - 01:05 | 3081673 chump666
chump666's picture


Thu, 12/20/2012 - 01:04 | 3081672 chump666
chump666's picture


that was gold...


Thu, 12/20/2012 - 02:03 | 3081752 FoeHammer
FoeHammer's picture

@ImReady...Oh man. Too funny +1

Thu, 12/20/2012 - 03:18 | 3081815 IridiumRebel
IridiumRebel's picture

Think of baseball....ooh!....or Ben Bernanke! That'll get ya to 30 minutes....probably 60!

Wed, 12/19/2012 - 23:29 | 3081474 fonzannoon
fonzannoon's picture

I can't reconcile his pessimism about the US debt and jobs not coming back and his optomism about the US housing, food and shale gas. Where the hell does that leave us?

Wed, 12/19/2012 - 23:45 | 3081514 ssp2s
ssp2s's picture

He thinks much of the world will be starving and short of energy.

Wed, 12/19/2012 - 23:52 | 3081530 kito
kito's picture

He has clearly said its a numbers issue for the u.s.... A little slice here...a little tax there....he is f-cking clueless to the very deep structural problems that face the u.s.......

Wed, 12/19/2012 - 23:53 | 3081538 fonzannoon
fonzannoon's picture

Exactly! How does someone that smart whiff on that? I wonder if he just realizes what's the point of telling everyone they are fked....don't want to spoil the mood in the room.

Thu, 12/20/2012 - 00:07 | 3081576 kito
kito's picture

I'm telling you fonz....all the gloom and doomers have been getting late night visits by the Men In Black......tow the line or feel the wrath....

Thu, 12/20/2012 - 00:13 | 3081593 fonzannoon
fonzannoon's picture

bucks county looks better every day.

Thu, 12/20/2012 - 00:39 | 3081627 kito
kito's picture

Wherever you go fonz, just make sure its away from the island...bad news...not many ways in or out

Thu, 12/20/2012 - 02:02 | 3081750 Ham-bone
Ham-bone's picture

Kito - to "sell" something your clients must believe they will be able to enjoy the investment will do no good for KB to say just how dark things may be, only makes him sound like he's nuts.  Call out bad here and there but don't go full retard on how bad it may get...just judge from KB's full on defensible ranch, massive weapons cache, long term food supplies.  He's prepping but keeping the day job just in case.

Thu, 12/20/2012 - 02:05 | 3081756 FoeHammer
FoeHammer's picture

He's prepping but keeping the day job just in case.

Interesting point Ham-bone

Thu, 12/20/2012 - 00:26 | 3081614 Schmuck Raker
Schmuck Raker's picture

I think he would say the US is fucked, but Japan will be fucked sooner, so he's relatively long US assets and relatively short Japanese assets. Timing is everything, right?

That's just my take, I could be wrong.

Thu, 12/20/2012 - 00:57 | 3081659 kliguy38
kliguy38's picture

he didn't whiff........he's talking his book.......think about it ......he has NO where to go He was given a billion of his gold to hold.......supposedly......but he is NOT gonna be given anymore and more than likely he's been told to cool it

Thu, 12/20/2012 - 00:44 | 3081634 epwpixieq-1
epwpixieq-1's picture

He is smart, but he is a (virtual) numbers person, he looks only at the numbers in their face value, so if you look at them from the top US looks good. But if look inside, for example, 70% of GDP is consumption, compared with 35% in Europe, the picture starts to change and this is a very simple example. Not to mention 18% of GDP in US is healthcare (whatever that means). 

And do not take him seriously on his mentioning about the energy and fracking, at the end, he looks at the numbers and not at the dynamics of the resources and EIOER factors, as only an financial analyst do, ignorant to the physical reality.

In addition, he has to invest money for his clients, so it is just natural that he sees a good place for the GROWTH of that money.

Wed, 12/19/2012 - 23:52 | 3081497 Lore
Lore's picture

Bass: "I'm not gonna go into Consumption Tax. That would bore you."  AAAAUGH!  Is he kidding?!  Global consumption tax power is a long-time goal of the nation-breakers. That's what's missing from Mr. Bass' analysis: elitist psychopolitical policy drivers, even / especially in time of crisis.  One hesitates to walk where angels fear to tread.

Great presentation. Thanks ZH!

Wed, 12/19/2012 - 23:37 | 3081500 MachoMan
MachoMan's picture

@ 10:00 - cost push inflation...  fucking thank you.  Can we please end this bi-flation nonsense?

Thu, 12/20/2012 - 00:46 | 3081637 Caviar Emptor
Caviar Emptor's picture

He's sweet on Bi. Cost push up, demand down

Thu, 12/20/2012 - 00:09 | 3081580 Schmuck Raker
Schmuck Raker's picture

@0:50:00 - on China briefly: "that illusory pile of money"(FX reserves)


Thu, 12/20/2012 - 00:20 | 3081603 Vlad Tepid
Vlad Tepid's picture

I wish I made enough to give it to Mr. Bass to invest for me.  That would be SWEEEEEEET.

Thu, 12/20/2012 - 00:25 | 3081611 Budd aka Sidewinder
Budd aka Sidewinder's picture

Tyler, get your shit together.

X-Factor WAS on tonight.



Thu, 12/20/2012 - 00:50 | 3081642 seek
seek's picture

Man, I was just googling on Bass after watching the full out.

Back in March he made $700K off an $1100 investment. Insane. (And apparently made about $3 billion from $15 million as well.)

When he says we're fucked, I tend to believe him. He's saying Japan in 2 years, that syncs up with 2015 being the start of hell.

Thu, 12/20/2012 - 21:49 | 3085097 Aurora Ex Machina
Aurora Ex Machina's picture

At a lunch over the weekend, there was general consensus that the markets implode in 2014; certainly, a lot of movement is being based on this.

I argued 2013, but then again, merchant bankers rarely pay attention to the noosphere.

Thu, 12/20/2012 - 00:50 | 3081643 Freddie
Freddie's picture

He nailed it as far as 80 year cycles. I have had the same thought as well.  USA 2012 - 80 = 1932. 

Europe rebooted during WW2. I wonder if they can kick the can longer than we can.   Japan's road to kcik the can is getting close to running out.

Thu, 12/20/2012 - 01:11 | 3081688 Freddie
Freddie's picture

What is more interesting is the normalcy bias most of us probably suffer from. 

Well grandma or great grandma went through the Depression and FDR taking her gold.  Thank goodness we will never have that in our liftime.

I wonder how many of us 10 years ago never thought the USA would have another Depression.  This "reboot" shit happens every 80 years or so.  Often due to the bankster elites.

Back to 80 years plus or minus a few years.  Big reboots.

2012 - 80= 1932 ( Depression and Hitler runs against von Hindenberg)

1932 - 80 = 1852 (need a civil war to fleece the sheep and to enrich a certain european banking family)

1852 - 80 = 1772  (Revolutionary War coming) 

Thu, 12/20/2012 - 02:37 | 3081779 Seer
Seer's picture

But... don't ya think that at some point, as the reboots tend to get bigger and bigger, there will be a LAST reboot in which, well, there isn't a reboot because there's nothing left to bootstrap any with?

It's possible that it could be the end of one big super-cycle.

40 years though, that's an interesting number.  I believe that this also covers discovery-to-peak for oil fields if I'm not mistaken.  It's all eerily close to "42" :-)

BTW - Good job of late on providing info.

Thu, 12/20/2012 - 09:51 | 3082213 Freddie
Freddie's picture

Thanks.  This reboot for the USA may mean some breakup and China gets a lot more control.  Another site talked about during the depression that all the good scrap metal went to Japan in 1935 or so.  Now it is all going to China including grandma's gold (we buy gold).

The other one is dear leader's Saudi Arabia.  The question is what happens when Japan becomes insolvent which could be before the end of 2013 or maybe 2014.  The USA is not far behind.

Thu, 12/20/2012 - 14:46 | 3082528 MachoMan
MachoMan's picture

I don't believe that the reboots get larger and larger...  in general, I think a reboot is a reboot.  At present, because we believe we have mastered the universe, we have been able to prolong this cycle for a bit through some papering over and political meandering (and a whole bunch of other stuff). 

Further, I'm not even sure that partaking in these cycles (as mako/land of the free or whatever his new name is would say, the "equation") is necessarily a bad thing.  The backwardness of countries and locales that refuse to partake is decent evidence that it is to be avoided. 

The real question is one of strategy and I'm not sure that it's even a question we have any way of providing a scientific/quantitative answer to...  which is, do the technology gains and research/development during credit boom cycles (demand drawn forward) benefit us more than the alternative, a much more muted advancement, albeit more fundamentally sound?  [presuming the latter is even possible, I think it too is probably prone to similar cycles].  Effectively, each time we have a bust, the bust is not so large as to completely destroy all of our previous technological gains and other advancements...  we may then begin the next boom cycle with a residual capital induced starting point, thereby stairstepping upwards over time.  However, there comes a few notable risks...  first, along our stairstep to the heavens, we develop world killing technologies (biological, chemical, nuclear, environmental, etc.) that may be difficult, if not impossible to maintain during a bust period.  second, there is also the risk of a super cycle bust whereby a very material portion of the residual gained throughout all the inner-cyclical booms gets destroyed (e.g. dark ages). 

I think though, at the very least, it's time the world collectively had a conversation about how to proceed...  this conversation has been historically dictated to the people...  and I think people are becoming aware of the proposition...  albeit from more practical/direct avenues.

Thu, 12/20/2012 - 15:30 | 3083742 Lore
Lore's picture

MachoMan: "I think though, at the very least, it's time the world collectively had a conversation about how to proceed..."

Problem --> Reaction --> Solution. 

You will be assimilated.

Tue, 12/25/2012 - 12:13 | 3094677 Ignorance is bliss
Ignorance is bliss's picture

Thanks for putting the 80 year cycle in perspective. I wonder who the new great evil leader will be?


Hu Jintoa?

Kim Jong-un?

other suggestions?

Thu, 12/20/2012 - 00:53 | 3081652 game theory
game theory's picture

Bass is very cogent in his arguments.  If you have an hour and care about the gobal economy, this video is worthwhile.  Also, it took over a decade before war broke out after the crisis in the late 20s. 

Thu, 12/20/2012 - 00:58 | 3081662 CheapBastard
CheapBastard's picture

I like Bass. Here is also an excerpt from an informative speech by Jamie Galbraith taken from Jesse's Cafe in part:


This is the great illusion of the last generation, and it fostered a form of economic growth that was intrinsically unstable and unsustainable. Why? Because it was based on declining standards for loans and on lax accounting of the proceeds of those loans. Or to put it in simple terms, it was based upon financial fraud, on the most massive wave of financial fraud that the world has ever seen.

And the world has seen a lot of financial fraud. It was known to be such to the lenders at the time. This was true of housing loans in the United States made by the tens of millions that were known to the lenders as “liar’s loans,” as “ninja loans,” no income, no job, no assets; as “neutron loans” destined to explode leaving the building intact but destroying the people. This was known at the time. These were loans that had to be refinanced or they would default..."


Here is a link to the entire speech thanks to the link by Jesse:

Thu, 12/20/2012 - 01:11 | 3081683 tooriskytoinvest
tooriskytoinvest's picture

Watching Your Money Disappear: There Is No Exit Strategy. There Is No End To Quantitative Easing. Central Banks Will Print As Much As Necessary To Save Their Ponzi-Scheme Of Credit And Debt. You Need To Take Immediate Steps To Protect Your Wealth...NOW!

Thu, 12/20/2012 - 02:13 | 3081711 infinity8
infinity8's picture

So many critics. I thought it was Great ZH, thanks. He just kept warming up as far as delivery. The only other thing I can reccomend right now is "Antics Roadshow" by Banksy that I watched on Netflix the other night (documentary).

Thu, 12/20/2012 - 02:03 | 3081749 q99x2
q99x2's picture

Pattern recognition - Things that are repetitive in your mind become axiomatic through induction, if you hear it enough times everyone believes it because that's the case. He is saying that economists don't read ZH often enough and that they actually believe in the BS. Huh, I thought they were planning a conspiracy to take over the world and kill us.

He seems to have read Stephen Greenblatt's "The Swerve."

Thu, 12/20/2012 - 02:38 | 3081780 Freddie
Freddie's picture

Things that are repetitive in your mind become axiomatic through induction, if you hear it enough times everyone believes it...

Oh like the lying media including Bloomberg web news talking about the Bushmaster AR 15 used in Conn by the sick kid?

The kid who supposedly really had 2 pistols then 4 pistols in the school and no AR 15.

The AR15 which may have been a Saiga .223 or shotgun that was in the trunk of his car.

So if you say it was an AR 15 enough times - the public believes it?  That axiomatic?

F TV, F Hollywood and their ilk who want to disarm you.

TV is for sheep.

Thu, 12/20/2012 - 09:53 | 3082211 darteaus
darteaus's picture

You'll like this then:


BTW, Love your movies Mr. Kruger.

Thu, 12/20/2012 - 02:19 | 3081760 muppet_master
muppet_master's picture

kyle bass

is a smart man....i only listened to him speak for like 5-7 minutes.....bc i'm too busy watching the Science Channel:  Dark matters, twisted by true......

anyways seems like mr. bass is a gold bull....he'll be right eventually when gold @ $10k, but that doesn't mean that gold won't first see $300, yes three-hundered, like in 2000.

bass says that it will end in war...i agree..he says he doesn't know, which players...i think he doesn't want to get in trouble, but the obvious players are...well who do we owe $$$$$$$$$$ ???

US vs China + Russia (we don't owe much to Russia, but they won't want to "LET A CRISIS GO TO WASTE"

other players also, but those are the main players.

by the way, one of the recommended videos -linked to kyle bass youtube video, was alex jones:  odummer caught fake crying..!!!

OMG !!! that's exactly what I said on ZH in real time on 12/14/12 !!! odummer was fake crying...STUPID HEDIUS BAD ACTOR!!


Thu, 12/20/2012 - 02:30 | 3081773 resurger
resurger's picture

Learn how to calculate the "Short Free Price" before you say that gold will be at 300!

Tue, 12/25/2012 - 10:53 | 3094560 GetZeeGold
GetZeeGold's picture



Dude, forget it....he's rolling.


Thu, 12/20/2012 - 02:36 | 3081776 steveo77
steveo77's picture

This worked well last year....bought a wicked good telescope, hope people will check out some of the pictures and klik some adz.

See the end of the world, close up, LOL

Thu, 12/20/2012 - 10:24 | 3082393 Toolshed
Toolshed's picture

That is a nice C-8 my friend. That IS a pretty nice scope for Hawaii. The biggest privately owned scope I ever saw there was a C-11. Have you taken it up on Mauna Kea yet? The views at the higher altitudes are absolutely mind blowing. I used a 6" to photograph Haley's Comet from Mauna Kea and was astonished at the difference being at 9,000 feet made. It was too hard to breathe at the 13,000 ft summit so I set up near the astronomers quarters. There was snow even at that elevation and it was quite cold, but what an awesome experience.

Thu, 12/20/2012 - 03:00 | 3081790 q99x2
q99x2's picture

I agree with him except on two points.

I don't think the housing market has hit bottom. I believe that the US will be ok once the globalists, crooked politicians, banksters and in general middle men/con men are either locked up or exiled. The country cannot continue with crimminals in position of power and without fraud being prosecuted. The politicians and banksters are like pedophiles they can't stop what they are doing. They have to be stopped.

Just my opinion.

Thu, 12/20/2012 - 05:05 | 3081878 CheapBastard
CheapBastard's picture

My realtor said housing hit bottom when my hood was at $800 per foot.

She said it again at $60 pf....and again at $55 pf.


Now, too-many-to-count houses are sitting on the market for less then $48 pf and foreclosures are rising.


Honestly, I don't see a bottom in the near futre.

Thu, 12/20/2012 - 09:45 | 3082183 darteaus
darteaus's picture

You must have meant $80/foot, or you live in Palo Alto.

Thu, 12/20/2012 - 03:05 | 3081804 Temporalist
Temporalist's picture

I don't like missing the graphs during the speech so here are a some related to the topics:


Ned Davis - Total Credit Market Debt to GDP (until 2007 but quite clear)


European Economy Guide (good quick graphs)

Current Account Surpluses in the EU - European Commission

The Eurozone's giant sucking sound (very small graph of zero current account balance)


Japan interactive Charts


Japanese Interest Expense as a percentage of Tax Revenue


Adult diaper fashion show


Thu, 12/20/2012 - 03:26 | 3081819 Cthonic
Cthonic's picture

Thanks for those.  Watched the vid after a commenter posted it here yesterday; was worth the time.

Thu, 12/20/2012 - 03:47 | 3081826 Bicycles and Beer
Bicycles and Beer's picture

maybe next year we'll get this years vid. =/

who needs a time machine when you have the interwebz?


edit: link to bestest paper of 2 years bass mentioned 


Thu, 12/20/2012 - 09:43 | 3082176 darteaus
darteaus's picture

Busted Link!

Tue, 12/25/2012 - 14:25 | 3094906 UNCOMPROMISED

This one is not busted.

Not really worth reading. More simplistic Taleb black swan observations.



Thu, 12/20/2012 - 04:16 | 3081839 needfiatforBBB
needfiatforBBB's picture

here's the dilema.  in order to extract a new dollar out of the system you have to first satisfy existing stakeholders in the status quo.  You help to perpetuate the system and we'll let you graft a little yourself.  All the new college grads are expecting their slice of the "good life".  It's build into our species, greed, for resources and power (and then the woman).  petri dish.  comopund interest. math.  At this pint its all a forgone conclusion.  long popcorn.

Thu, 12/20/2012 - 04:17 | 3081840 needfiatforBBB
needfiatforBBB's picture

and another six-pack

Thu, 12/20/2012 - 04:29 | 3081844 CheapBastard
CheapBastard's picture

"House prices will never fall."


Good Bass example of the 'optimism bias' 2008.



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