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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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Thu, 12/20/2012 - 05:08 | 3081881 Pretorian
Pretorian's picture

Same old stuff he is cycling. 

Thu, 12/20/2012 - 08:53 | 3081931 Floodmaster
Floodmaster's picture

What is a fair value for an empty house in an empty neighborhood ?? Banks are still asking 300k for 100k homes.

Thu, 12/20/2012 - 12:36 | 3082968 hazek
hazek's picture

Talk about cognitive dissonance. He perfectly outlines optimism bias and then in the same breath as he says he is not influenced by it he says he thinks the US will be ok, that the housing is almost solved, that the economy will do better than elsewhere going through all this shit that he outlined. And he says this despite at the end saying that the FED policy will certainly lead to hyperinflation.


Just lol.


Of course he was spot on about the rest..

Thu, 12/20/2012 - 13:24 | 3083208 khotel
khotel's picture

His mention of The Swerve makes me wonder what his daily routine is as a money manager.  The interviews I've seen with Hendry also reveal that he reads a lot as part of his regimen.   I'd like to see both in a roundtable discussion of how various books have influenced their analytical approaches.

Thu, 12/20/2012 - 21:53 | 3085127 Aurora Ex Machina
Aurora Ex Machina's picture

Information and novel ideas are the key to everything.

~ I suspect most players at this level are digesting a good 2-4 serious books a week when in the air between meetings. [See here]

"McCaskill's isn't the only letter the FAA has received of late urging action on e-readers. FCC Chairman Julius Genachowski wrote the FAA earlier this month, pointing out that mobile devices are "increasingly interwoven in our daily lives," that they are helping drive economic growth and boost U.S. competitiveness."


Or, if you're obsessive, one a night.

Thu, 12/20/2012 - 14:12 | 3083403 dadichris
dadichris's picture

unless i misunderstood, he specifically said that when facing sovereign debt 20 times revenue there are only 2 choices : default or inflate (and then default)

Thu, 12/20/2012 - 16:27 | 3083989 citrine
citrine's picture

Where is his wedding ring?

Tue, 12/25/2012 - 10:59 | 3094574 urwright
urwright's picture

He's not gay?

Wed, 12/26/2012 - 11:58 | 3096248 citrine
citrine's picture

Sorry to disappoint you, but no. He is married (unless, that has recently changed), and has a couple of kids.

Thu, 12/20/2012 - 21:32 | 3084941 Radical Marijuana
Radical Marijuana's picture

After what was stated between 4:30 and 5:30 minute marks of that video, the rest is all thrown into that whirlwind.

Kyle Bass correctly stated that "war is economic entropy played to its logical conclusion."

We have a global system of electronic fiat money frauds, backed by weapons of mass destruction. The fiat money-as-debt system has driven almost everyone impossibly far beyond debt slavery into debt insanity. Therefore, as Kyle Bass correctly states, there are entropic processes underway which are RUNAWAYS. Those have already been amplified to ASTRONOMICAL SIZES. The financial numbers are NUTS, because they ARE the result of triumphant frauds, forcing people through debt slavery into debt insanity. It is NOT possible to repay debts when they are astronomically amplified to that size!  "$200 TRILLION" ... which was ALL the result of money made out of nothing, as debts, because the biggest gangsters, the banksters, were able to covertly take control of all the biggest governments. All the biggest governments are now the best organized crime gangs, and behind them are the supreme organized criminal group, the international bankers. Those banksters are consolidating their global system, which is a hegemony over controlling the world's money supply, by being able to control governments to legalize the privatized counterfeiting of the money supplies, and to have governments force themselves, and everyone else, to operate within that system of FRAUD, BACKED BY FORCE. The international bankers are using the countries and international organizations that they already control to systematically destroy those few countries that are not yet totally controlled and integrated into the international banksters' systems. However, those systems are simply the runaway triumphs of frauds, backed by force, which have ALREADY driven the world into a state of debt insanity: and therefore, war ARE headed towards "economic entropy played to its logical conclusion."

The comments that I made regarding the previous Zero Hedge article about Kyle Bass continue to apply:

The days of merely being inside of debt slavery are already over. We are deep, deep, deep into DEBT INSANITY. Therefore, it is only a question of time until the established systems MUST go through some kind of series of psychotic breakdowns. Everything they are doing is based on huge legalized lies, backed by lots of legalized violence. That system is automatically and inherently a runaway entropic process, whose own "success" necessarily drives itself mad, and therefore, eventually destroys itself. HOWEVER, after Kyle Bass correctly predicts that this will lead to some kind of wars, all the rest of the possible discussions get wiped off the map of intelligibility! The REALITY is already debt insanity, with the threat of INSANE weapons of mass destruction backing up INSANE runaway financial frauds. The "corrections" of that magnitude of INSANITY are psychotic breakdowns and social storms that go off the scale of everything else. Those "corrections" have nothing in previous human history to compare them to!

Any future wars that become big enough could rapidly go out of control, and then, wipe out the frame of reference within which we are now operating. A big enough war, that causes any significant number of weapons of mass destruction to actually be used will destroy everything else that we currently take for granted. None of the rest of Kyle Bass' discussion will still be relevant, IF or WHEN a big enough war goes out of control ...

It is important to understand that it is IMPOSSIBLE for the international banksters to finally be successful in creating a completely globalized and privatized system of fraud backed by force. The innate problems with respect to the controlling civilization through triumphant frauds, automatically getting bigger and bigger, MUST drive that system mad, and drive it into self-destruction. It IS an insane system, which HAS produced debt insanity, backed by an equal or greater insanity of the threat of violence from weapons of mass destruction to protect and advance itself.

There is nothing remotely close to a sane public debate possible regarding any of these topics. There IS a combined money/murder system. The debt controls depend on the death controls. However, none of those basic social facts are allowed into proper perspective presentations through the mass media. The world is ACTUALLY preparing for totally INSANE genocidal wars, along with democidal martial law.

The basic problem is that our "economics" deliberately ignores our ecology, because our "economics" is based on runaway triumphant frauds, which were only possible to develop inside of a human ecology dominated by the history of militarism. What happened was that the history that made War King then made Fraud King. However, precisely BECAUSE civilization is controlled by the Fraud Kings, who took control of the political processes, and the mass media, and most of the educational and research activities, by dominating the funding of all of those things, that there is not the slightest shred of social sanity anywhere, since EVERYTHING is dominated by runaway triumphant FRAUDS, BACKED BY FORCE.

There is NO way to fix the monetary system without fixing the murder system. BOTH take profound paradigm shifts, that reconcile basic human, industrial, and natural ecologies with the economic and monetary system. However, none of the major players within those systems will admit any of the fundamental facts, which they should admit and address. As Kyle Bass stated around about the 25 minute mark, all of the major governmental and central bank players are ALWAYS lying about everything they are doing!!! How is it possible to resolve any real problems in that situation, other than by those problems finally causing psychotic breakdowns and social storms?  Furthermore, how can any of those events enable anything to get any better when the SAME basic problems of deliberately being deceitful, and deliberately ignoring basic ecological concepts, will still continue to be the ways that human beings deal with those problems?



The basic energy laws and systems theory which theoretically should be the basis for understanding what we are doing are deliberately excluded by the FACT that the actual systems are based on runaway triumphant frauds, backed by force, which will NOT admit that truth about themselves! Therefore, the extraordinary situation we are in is that everything we do is based on deliberately not understanding what we are doing in any consistently scientific ways, since everything that actually has gotten done was based on triumphant systems of fraud, backed by force. Everyone who plays any major role in running the established systems are professional liars, and immaculate hypocrites, whose entire lives were based upon them learning how to operate within the parameters of systems based on frauds, backed by force. Therefore, the only apparent actual ways forward are for MORE frauds, backed by MORE force, heading towards unpredictably insane psychotic breakdowns, and social storms, during which time one can only expect that MORE radical truth about any that will continue to be banished from any overt public debates ...

The only possible saner debates would have to be based on basic energy laws, and general systems theory, which admitted that the established systems ARE runaway frauds, backed by force. Since that appears to be practically impossible, therefore, those insanities must continue to runaway, and get even more astronomically amplified in size ... until ??? Well, until that wipes out the frame of reference that we used to take for granted regarding what was "normal" ... This talk by Kyle Bass states all that, but then, of course, returns to talking about everything else as if that is not going to happen. For example, his view that housing in America is finally going to recover is based on presuming nothing else in the greater world system will wipe that out ... which he already more or less predicted will happen ... (As the comment by hazek, a few above this one here, just also pointed out!)

We are all stuck inside of the established runaway systems of fraud, backed by force, and everything and everyone now depends on those systems to continue living the ways that we are accustomed to live! More deeply, human reality MUST always be some systems of organized lies, operating organized robbery, and therefore, it is natural that the established systems ARE frauds, backed by force. However, the runaway triumph of those systems have driven themselves from debt slavery into debt insanity, and that is backed up by the threat of wars going from insane threats of using weapons of mass destruction, to risk the insane realities of weapons of mass destruction actually being used!

We have already an astronomically amplified debt insanity, e.g. $200 trillion of debt due to making that much "money" out of nothing, as debts. That exists because sovereign powers backed that up. In turn, that exists because the best organized gangs of criminals covertly took control of the governments, to direct the use of public sovereign powers to benefit those private gangs of criminals. Therefore, when Kyle Bass talks about the likelihood of sovereign debt restructuring, we are talking about the restructuring of the fundamental system of fraud, backed by force, that dominates the world today, in ways that have become debt insanities, backed by much more insane threats of death insanities.

The runaway triumph of fraud backed by force is a global pyramid system, which can not keep on growing exponentially bigger forever. However, given that it already exists, and continues to operate the way that it was designed and built to operate automatically, that whole system appears to be committed to overshooting, and then collapsing into crazy chaos. At this point in time, it is obviously impossible for any saner public debate to admit or address any of the basic human, industrial and natural ecology situations, since all of those are wound up in tightly tangled balls of frauds, backed by force, in which those who benefit most from running those systems are also the best at lying about those systems to everyone, including themselves!

Thu, 12/20/2012 - 22:16 | 3085206 neutrinoman
neutrinoman's picture

Mr Bass's honesty and clarity are refreshing, even his colorful language. This is so clearheaded, it's painful to go back to the happy talk you hear, even on sophisticated outlets like Bloomberg.

We're already on the path of the 1970s, when demand-driven inflation changed over to supply-restriction inflation, invalidating all those fallacious models of output gaps and Phillips curves. It's amazing to watch the so-called experts, with their bad theories and wishful thinking, fall back into antique, discredited nonsense. It is perfectly possible to have high unemployment and inflation, as capital formation declines and supply goes off line. The one thing that's saving us now, compared to the 1970s, is that nominal demand growth is very weak. But it pick up, driving inflation.

Tue, 12/25/2012 - 09:28 | 3094425 zilverreiger
zilverreiger's picture

repeat much?

Tue, 12/25/2012 - 09:37 | 3094432 R_J
R_J's picture


 "Keith Weiner plagiarizes"

 "The Internet site has been publishing plagiarized intellectual work. Doubtless, its owner Tyler Durden is unaware of this situation. We publish this in order that he may be aware of the true authorship of materials he has been putting up on his influential website." --- Hugo Salinas Price


-and thx for the Bass vid.

Tue, 12/25/2012 - 10:18 | 3094497 negative rates
negative rates's picture

Intellectual work can be interpreted many different ways, especially when the IQ hovers around 61! Which at the hedge, it does.

Tue, 12/25/2012 - 10:17 | 3094493 LouisDega
LouisDega's picture

The least he could of done is give a shout out for Jack Klugman

Tue, 12/25/2012 - 10:57 | 3094567 Hannibal
Hannibal's picture

Hm,..not a word about our (unfunded) 1Trillion $+ a year US military.(unlike soc.securty which is fully funded).

Tue, 12/25/2012 - 11:17 | 3094603 liszt
liszt's picture

The question is, if one own 100$ and put something back for the long time, then there is no adequation between the value produced on the market and the remaining demand produced hereby. Keynes "preference for liquidity" means that a certain part of owned money, put on banking accounts, doesn't return to economy.

Anyway, the system is only sustainable if from 100 earned bucks, all is spent. And then, the growth is still Zero ! 

This is why the system only works within the realm of credit, there is no payback on the debts ! So, once someone have the nasty idea to payback debts, then the game is OVER !

1) There are no cycles in economy, because technology evolve, hence the state is never the same as before.

2) History doesn't repeat.

3) The system will collapse since J.B Say laws are unsustainable, this is all i say.





Tue, 12/25/2012 - 11:21 | 3094609 Herdee
Herdee's picture

I don't think the so-called "housing recovery" is anything to write home to mom about.Roubini sums it up if you listen to him.Concerning the size of this blip compared to the most recent U.S. GDP data,it's pretty clear that it's basically nothing.The industrial production base,the falling tax revenue and the demographics of the baby-boomers all make the situation very clear.The war machine is broke and will be beating it's swords into plow-shares.You could bulldoze half of the garbage slums and highways throughout most American cities and create more jobs in agriculture than depending on a bunch of corrupt bankers and their political hacks.And guess what,the truth is that a bunch of red chinese communists won't even touch the American debt any more and simply don't trust stupid U.S. politicians.Compare it to the fall of the Roman Empire.You can't go around the world in an outdated WW2 method being the worlds' policeman.Follow the story up on,even heroin and opium trafficking money can't save America.

Tue, 12/25/2012 - 11:47 | 3094645 Tommy Gunner
Tommy Gunner's picture

So let me get this right Kyle - Japan is definitely collapsing - the EU is a disaster - major wars are on the way.  But US houisng is going to recover

Tue, 12/25/2012 - 12:10 | 3094670 zilverreiger
zilverreiger's picture

Yeah his optimism about the usa is BULLSHIT. USD is going down.

Tue, 12/25/2012 - 12:09 | 3094669 mcl2177
mcl2177's picture

How can someone who predicts WWIII in the beginning then be so bullish on America at the end.

Tue, 12/25/2012 - 12:29 | 3094700 blunderdog
blunderdog's picture

Seems obvious, really: the USA has the planet's most powerful military. 

Tue, 12/25/2012 - 12:15 | 3094679 lemosbrasil
lemosbrasil's picture

If we see VIX and insane bullish divergences and long downtrend line to be broken , 2013 will be to bears the same to Indiana Jones at that historic scene

See here:

Tue, 12/25/2012 - 12:32 | 3094704 tooriskytoinvest
tooriskytoinvest's picture

Follow The Money While The Monetary Skies Already Red: Investors Buying 50 Times More Physical Silver Than Gold, Massive Amounts Of Physical Gold And Silver Have Been Flowing To Asia, And A Failure Is Likely And Imminent On Comex And In The Silver Market Due To Shortage

Tue, 12/25/2012 - 12:41 | 3094723 slimething
slimething's picture


I've heard that argument before. Does it hold water?


Tue, 12/25/2012 - 13:54 | 3094852 Theos
Theos's picture

"Printing money is OK becuase we've been doing it for a while and the markets havnt trashed our rates yet!"


Gee what could go wrong.

Tue, 12/25/2012 - 13:15 | 3094768 Platinum_Investor
Platinum_Investor's picture


Tue, 12/25/2012 - 13:27 | 3094794 liszt
liszt's picture


Tue, 12/25/2012 - 14:10 | 3094887 cranky-old-geezer
cranky-old-geezer's picture



Prices falling from demamd collapse isn't deflation dumbass, it's depression.

"inflation" and "deflation" are monetary terms, not economic terms.

What we're seeing now is called "inflationary depression".

Why two words?

"inflationary" is the monetary aspect. Massive printing causing massive inflation, tending to push prices up.

"depression" is the economic aspect, prices trending downward from dropoff of demand.

In highly elastic merkets (luxury items, home buying) dropoff of demand wins, and prices fall.

In non-elastic markets (food, fuel) demand stays constant and inflation wins, pushing prices up.

"But gas is down around $3/gal now."

Yes, gasoline demand has dropped significantly, but look at diesel where demand is more constant, it's still over $4/gal, $4.27 last time I bought some.


Tue, 12/25/2012 - 13:24 | 3094790 liszt
liszt's picture

Never the less, this guy thinks houses will be a little better ! this is the "silver line" of the speech, industrial and houses is the way to go !


This guy understands a lot about japan but doesn't draw the conclusion that the whole world is doomed.


Tue, 12/25/2012 - 13:33 | 3094810 ekm
ekm's picture

Are you guys going to believe me, or not?

All sovereign debt can be paid only by land claims or slavery, that's history.

It'a called war.

Tue, 12/25/2012 - 13:56 | 3094853 q99x2
q99x2's picture

Like all greedy banksters he's part of the parasitic monetary system that pushes money around skimming the benefits of the productive.

But it was a really good presentation.

Dalio, Singer, Bass, Hendry all looking to make money from other peoples work. Arrest them and re-distribute their wealth and their client's stolen wealth.

Rat's on a sinking ship. Vultures

Still like Hendry the best.

Tue, 12/25/2012 - 14:20 | 3094905 ekm
ekm's picture

No doubt he's looking for preys.

Finance is a predatorial environment.

The fascinating thing with Bass is that he applies predatorship in a crudely realistic way.

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