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...

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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?

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.

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

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

kliguy38's picture

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

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?

francis_sawyer's picture

My boy is wicked smaaaht!...


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

economics9698's picture

This guy is Kevin Spacey's little brother.

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...


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.

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.


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.

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

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.

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.

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.

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?

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.   

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.

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.

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

ZeroAvatar's picture

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


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


'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.

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?

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"

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.

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).

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.

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.

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.

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...

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.

Ookspay's picture

New population "absorption" at 1.5 million per year.

Tommy Gunner's picture

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

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.

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.

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.

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.

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.

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!"

Silver Bug's picture

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

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.

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.”

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.

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. 

Dick Fitz's picture

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