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Kyle Bass Tells 'Nominal' Stock Market Cheerleaders: Remember Zimbabwe
Amid the euphoria of today's crossing of the Dow's Maginot Line at 14,000, Kyle Bass provided a few minutes of sanity this morning in an interview with CNBC's Gary Kaminsky. Bass starts by reflecting on the ongoing (and escalating) money-printing (or balance sheet expansion as we noted here) as the driver of stock movements currently and would not be surprised to see them move higher still (given the ongoing printing expected). However, he caveats that nominally bullish statement with a critical point, "Zimbabwe's stock market was the best performer this decade - but your entire portfolio now buys you 3 eggs" as purchasing power is crushed. Investors, he says, are "too focused on nominal prices" as the rate of growth of the monetary base is destroying true wealth. Bass is convinced that cost-push inflation is coming (as the velocity of money will move once psychology shifts) and investors must not take their eye off the insidious nature of underlying inflation - no matter what we are told by the government (as they will always lie when its critical). Own 'productive assets', finance them at low fixed rates (thank you Ben), and finally, on HLF, don't bet against Dan Loeb.
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The assumption above is that a rental property is a productive asset. How productive is a home if the occupants are either poor or have been decimated due to inflation?
Because they arent paying you, the government is. This really only requires them to make sure these "productive" assets and most equities appreciate more quickly than commodities (something theyre accomplishing quite well now) and that M2 is strictly controlled by the banking cartel.
The problem with that owner-of-section-8-housing model is, rents eventually freeze because at the end of the day, if the government says inflation is 2% then that's all you can expect as an increase.
So, the real estate 3 cardinal rules of LOCATION, LOCATION, LOCATION still applies. There is no difference in the two blunt statements, "buy real estate" and "buy stocks".
Dude who cares about 2% inflation? Ive already locked in a long term loan on this building at next to nothing, so 2% is just fine.
Besides- helllooo! Ive already leveraged the building 10x over and used the money to buy moar stawks!
Comrades, really. Everyone knows no private property is allowed under our Fundamentally Changed System!
Remember, Dear Leader says we exist to serve the Glorious State!
Only Party Members have the special ability to hold property and wealth!
Forward, Soviet!
No Hope but Lots of Change.
where do the criminals close the market for the weekend?
i cant wait for the final hour, they will prob bring it up 200 pts plus today,
They'll close it above 14,000 so that it will be talked about all weekend. They have to pull retail in so they can dump their craop paper.
Totally on the money doc,
God the thrill of being so close to getting retail back must be such a rush for them. I guess it also means extra coke and hookers for everyone this weekend. Tell em whiteshadow sent ya
I know they can just smell it...people are getting itchy because they are missing it.
I know right! As I was saying to fonz yesterday, can you imagine they get retail in over a nice modest rally this year and the ramp it say 18% over 2014? It will be "morning again in America" all over again!
@Dr. Engali
Will CNBS have a 30-second market update during the SuperBowl?
@thismarketisrigged
We're up ~13 SPX points since a negative GDP print and miss on NFP. Just when I didn't think the sell AAPL earnings beat / buy AMZN earnings miss and lower guidance could get any weirder....
Yes if you had invested $1000 when the zim index was around 2500 , around 2 years later when the index was over 4 000 000 your $ 1000 was worth da da da...$1 000 priceless.
dont worry guys, if u want to get back into market, a MAJOR SELLOFF IS COMING NEXT WEEK. THE DOW WILL DROP 10 PTS AND S&P WILL DROP 4 PTS. THAT WILL BE FOLLOWED BY A 500 PT SURGE IN THE DOW WITH THE S&P RALLING 60 PTS, ALL DUE TO ABSOLUTELY NOTHING
A 10 pt drop in the dow?! Lets try to contain that doom and gloom...
"Zimbabwe was the best equity market in the past ten years but your entire portfolio will now buy you three eggs."
"Junker said 'When it becomes serious you just have to lie' so...c'mon."
ROFLMAO!
So yes, Kyle Bass just called all Central Bankers inveterate liars.
Think the FED will lend me a couple million$s to buy an apartment complex?
Inveterate, invertebrate, whatever.
Yep, caught this in real time. The only problem I have with this is the oil well. I don't have enough cash to buy an oil well!!
Zimbabwe does not have drones and a massive military to back up its currency.
Nor do they have a Nobel prize winning leader to authorize wars, drone attacks on civilians, unlimited spying on citizens and severe punishment of whistleblowers.
Your currency has to be backed by cruelty and corruption and compliant media and lots of bombs for unlimited printing to work.
When is Kyle going to get Stolper'd out on his Japanese play? This has to be underwater.
When is Kyle going to get Stolper'd out on his Japanese play? This has to be underwater.
Oh no - he's going to win that one. It's not even a gamble, just patience. Ten year JGB's yeild less than 1% and the inflation target is 2%. Now that the Japanese are net importers, of energy no less, they will hit their inflation target.
I don't think he is short anything, isn't he buying swaptions?
Kyle Bass - a pine tree air freshener in a landfill sized pile of hot stinking fucking shit.
Fuck you Bernanke, Congress, regulators and Obama. Fuckers.
Non-stop relentless parade of market pumpers on the MSM talking up the markets and how good the "recovery" is, and "the crisis is behind us" and "all is well".
Ignoring, of course, that employment is in the shitter and the national debt is increasing at $10,000 per second.
http://www.usdebtclock.org/
They are going to pump this dead whale up until the retail crowd buys back into equities at the top, then rates will go up and inflation will ensue, markets will crash, and the bailouts will start all over again.
Yet another cavalcade of privatized gains with socialized losses.
PONZI!
Anybody not paying attention to Shadowstats.com may not really comprehend how bad things have gotten. In real terms, we have had negative GDP since 2006, which means were are already in a depression and $1 Trillion+ per year is not even enough to pull to us out of this nose dive (thanks be to John Williams @ shadowstats.)
http://www.shadowstats.com/alternate_data
Exactly, if interest rates are below the level of inflation, then investing 100% borrowed money in the stock market becomes a no-brainer. Your gains may be nominal, but at least they are gains
The problem is that you cannot predict which morning you will awake to find the ES limit down and how many mornings it will take for your sell order to be hit. You can predict however that your order will mysteriously keep slipping down.
Kyle is correct as usual, and I would expect nothing less from a fellow TCU alumnus.
I always find myself agreeing with Kyle Bass. He's the best at macro analysis and seems to have a great team. I'd never bet against him either.
ooooh kyyyyle. i love it when you talk inflation.
This is WAR. A good analogy is the men in the trenches in France (World War I) taking leave in Great Britain and being disgusted at the disconnect with the reality that they were experiencing at the front. And then they began to hate the public and their own government for the overarching, all pervasive propaganda that was churned out by the government and swallowed by the public so as to prop up the abomination and the players profiting from it.
We who look behind the facade in depth are the men in the trenches. And the government increasingly deems us to be expendable.
Guess who is is not going to be invited back in front of a CNBC microphone...
It’s very simple; if this continues much longer the anarchy takes over and everybody’s going to lose because the America system is going to break.
You don’t steal like this from the people and get away with it. This is different from the bankers taking a commission all these decades. They now are running this country and the world and they don‘t have a way to get out of the explosion that’s coming.
Bernanke’s answer to this banker-created chaos is to seize more from the lessers to benefit the financial oligarchy. He and the bankers and those lucky enough to be riding along on their coat tails are benefiting by a redistribution of the wealth from taxpayers, students, wage earners, insurance beneficiaries and savers via inflation and direct QE into the markets and pockets of the too-big-to-jail.
“The first and fundamental principle, therefore, if one would undertake to alleviate the condition of the masses, would be the inviolability of private property." –Pope Leo XIII
Just as Soviet power was concentrated over the years in the secret police – the CHEKA, GPU, NKVD, MGD, and KGB – the power of America’s financial feudal aristocracy is exercised by the NDAA detention provisions and pending gun confiscation.
Remember the Alamo!
Exactly right JR! When the serfs can't afford to feed themselves, the SWTF. Look at the fights you read about in SNAP card lines every week, and the Unions looking for government handouts to subsidize their OBAMAcare that they voted for.
Getting free food via a plastic card is one thing. Not being able to buy a loaf of bread with said card via inflation is yet another.
Is the government going to inflation adjust SNAP doleouts? I think not. We have a lazy self entitled society, that will leach evey last drop out of the system, and then burn it down like a bunch of neanderthals.
OK so here's a little bit of cultural anthropology. We can observe a society that has people like this, who act like this. And we can ask whether that society has any chance in hell of surviving or thriving. I don't care if these people are black, white, or green, they are not productive in any way, they do not give a shit about themselves, their community, their lives, or their country:
http://www.liveleak.com/view?i=e06_1359380173
Yes but by design - they are driving formerly productive people into unproductive and jobless people. No jobs and it is only getting worse but this is by design. They planned all this.
Hope & Change + Clowen/Pivard or whatever those commie professors are called. They will gain total control by destroying everything and the middle class. They are close.
ALL CITIZENS will report to your local POD for food.
Each serf will receive an injectible ID CHIP to receive food.
Each serf will sign a Loyalty Oath to the Premier and First Secretary.
There will be NO exceptions.
With all do respect - I think the evil scum in Washington will adjust SNAP/EBT handouts to inflation. Mugabe would have in Zimbabwe and Ob-MAO is following the same playbook.
They want to givve illegals endless benefits including all the Dems plus Marco RUbio, McCain, Graham-nesty and even Rand Paul and Rush Limbaugh like a douche is on the amnesty train.
It is going to blow up.
Thanks, Yen. When the Zimbawe-class inflation sets in anarchy follows; Keynesian economics won't feed the people. You have to have product. Missed your input these past few days. Welcome back!
Been trading the "Yen Crosses"... Thanks for the kind remarks J.R. :-)
Food Stamp Benefits Mysteriously Cut Off:
http://www.youtube.com/watch?v=4dinIGlzlwY
Well I'm glad everything is fixed and that the FED is doing a great job. I'm headed off to college and grateful to whoever is paying.
How can he not mention gold for protection against inflation?
What happened to the gold bar on his desk?
That's my understanding that he is short JGBs (or equivalent). In the end, this seems like a winner, but it's easy to go broke waiting around. I've heard him state he thinks this may play out over a few yrs, but I'd be interested in seeing his current P&L.
His thesis is supportive of gold, but what was his issue with the gold miners? I thought it was location risk, but that can be avoided? Can the miners really keep this low valuation if inflation comes a calling?
I've seen the 5 year returns from his hedge fund. It is quite impressive. Another reason I like Bass is he tries to give the average investor something to invest in although he is sometimes subtle about it. He is very long non-agency MBS...which killed it over the last year. He has been telling people to short the yen and tells people to eventually short Euro banks. There are a lot of risks with gold miners and the weakness has been apparent for about 14 months after quite a run up. It's just a very unpredictable space.
Let's be honest, with the DOW at 14,000 it feels like planting a flag on Mt Everest. All Mr Bernanke hasto do now is figure out how to climb down his Everest of junk that he has accumulated on the FED balance sheet.
My feeling is that he cannot descend and that he will instead choose to go to greater heights until it topples.
Peter Schiff is ripping em up on CNBS. Gotta love that guy. I hope Tyler plays the clip later.
That was pure annihilation eh Yen? Wow!
Even the worthless asshats at CNBS admit this ponzi market is based on Fed. printing. Inflation is already bad. I can't even imagine what it's going to look like at the end of 2013. The above vid clip was excellent.
http://video.cnbc.com/gallery/?play=1&video=3000143993
Peter Schiff
Cheers but didn't load in my neck of the woods. "This video is unavailable in your area" or some crap like that.
I did find it on youtube though (at least I hope it's the right one): https://www.youtube.com/watch?v=GFDYPiLdS5s
And yeah was a good watch.
Don't remember the guest who popped a gasket in response to Schiff telling it like it is but it was funny; would love to see it here on ZH when and if CNBC posts it.
Another hilarious take on the fucked up times we live in by Limerick King and WB7 keep them coming
His premise about cost-push inflation, that's rising prices is wrong. very wrong.
Think there's no inflation??? think again...
http://www.fao.org/worldfoodsituation/wfs-home/foodpricesindex/en/
and
http://www.indexmundi.com/commodities/?commodity=energy-price-index&mont...
fucking moron
He means calling it "cost push" is wrong, and he is entirely correct about that being wrong. Think aggregate demand/aggregate supply. Pumping up money supply does nothing to the long run aggregate supply curve, but it does wonders to the nominal spending power showing up in aggregate demand. So it is demand side, not supply side.
The term "cost-push inflation" in the late 70s was used most often to refer to workers increasing their wage demands as their expectations of future inflation went up. In other words, the first mover was workers seeing inflation and then responding with demands for higher wages. With unemployment what it is today, I doubt that is the issue on Kyle Bass's mind, and so he should skip the term "cost push."
He probably picked it up from reading Jim Sinclair calling it "currency-induced cost-push inflation." JS should likewise drop the cost-push term and just stick with currency-induced inflation to keep from redefining the vocabulary. Cost-push inflation would occur, but only as a follow-on to the currency-induced shift in aggregate demand and foreign tastes and preferences for U.S. dollars, the latter being something that would affect both AD and AS in the U.S.
Kyle Frontrunner Bass boasts the sophistication of finance, but is now no different from any other frontrunner benefiting from flawed policy. Rationalizing the plundering of a nation's monetary value and reputation. Everyone's entitled to whatever the fuck they want to do, but when it's piling upon an untenable situation that will affect everyone-- no respect and especially when you're defending these fucks at the fed.
I wondered about that and his other comments before. He hedges on the USA because telling the truth is "risky." He does not want to be Breitbarted or Aaron Swartz-ed-ed.
If I were him - I would stay off CNBC and try to ignore most of the media scum.
Good point; and, furthermore, in the sound and fury that is the seemingly endless false propaganda it's often easy to forget that actual ethics and morality still count for some of us.
I was just jumping on here to post about the nausea making "success" of Uncle Bens Patented instant market; when I see good ole boy, Kyle, beat me to it. Watch out now; because this is exactly the kind of propaganda, ( 14,000 Dow !), that goes down like honey down a bear with Mr. and Mrs. Muppet. Could be rally on, for awhile; and it's possible; I don't know; but it's possible; that if it does keep rallying it could start a movement amongst some of the big hedge funds who have been buying all the SLV and GLD ETF's to bail out. These are the 800lb. gorilla's in our little alternate currency world; we could see a real sicky making downwave in the metals later this spring. ONce again; I don;t know. But it occurs to me that the ankle bone is connected to the shin bone, and etc. and this kind of reaction is possible. It's also probably what Uncle Ben and the acolytes at the Fed pray for every night; to Beezlebub, of course. Don't be dismayed if this occurs; the handwritting is on the wall. Remember what the original handwritting on the wall said? "You have been weighed in the balance and found wanting"; this was for the king, and it meant; you're fucked buddy.
He didn't say anything about nickles! Can I dump my 20 million nickles? I want to go back into my den again!
Dog
What a bunch of crap, what a bunch of lies in the MSM.
No doubt the delusional market pumpers believe Kyle Bass to be a tin-foil hat wearing bear or some other label they can apply to ignore the reality of what he is saying.
CNBC gang standing there watching the 14,000 number, like watching the countdown to the fiscal cliff, or the election, or smoke rings.
Meaningless, no relation to the economy, ZERO meaning for Main Street because that money is locked away and will be stolen (if they happen to have anything in the markets).
Grandma and Grandpa being starved and punished, kids and grand-kids having their future decimated.
Insanity.
Long G-Gono!
If and when this gos down it's going to be an all time doosy. Insane doesn't give it a bad enough description.
in the ongoing morph of US society into a corpo oligachy, that manipulates and cheats at home as it does abroad; now home and abroad are on the same global page; legacy of Reaganomics/NWO, the road leads straight to a narrower and narrower command and control structure of central planned Oligarchy, à la Rome of post Optimates/Populares civil war.
So follow that oracle called Cassandra, fallen image of people's democracy, crossing into house of Atreus as captured slave, and you'll see where this always leads to.
As for the markets; sorry to say they be totally Caesar's playthings. Avé ...when you're ready its all yours...Princeps!
The whole shooting match. Unless it blows up in your own corrupt face!
Maybe history will puke up its entrails instead of rhyming. But I doubt it.
Motor! Start the filming!
Kyle and Japan, two ancient heroes fighting it out like Hollywood's celluloidian puppets on electronic money strings in front of TRoy's cardboard-fiat walls; our current capitalism of financialista fantasy world.
I like this film 'cos it has a bad ending and the bad guy is just unforgettable, thats what always made Hollywood movies successful!
the bad guy. "Frankly my dear I couldn't give a damn!"
Tyler, BOA's online banking is down...reports are that debit cards's are down as well. No problem accepting cash and wires, just no access to your cash or deposits. lol
http://www.silverdoctors.com/bank-of-america-system-crashes-online-banki...
Hmmm, let's see if any more TBTF's crash.
It's that evil internets attack Butch has been warning us about!
Time to shut off the interne--------------------------------------------------------
Gave up BOA two years ago.....smartest thing I've done.
He's got some interesting choices
http://whalewisdom.com/filer/hayman-advisors-lp
Government-sponsored pyramid-schemes bad, publicly traded pyramid schemes good, especially when invested and endorsed by a buddy that you've known for a long time.
What happens when your entire portfolio equals a chef salad? I went to a store today, and the prepackaged and washed salad greens went from 12 oz in size to 9 oz in size. Price tag had not changed at $1.98, but the effective price went up by 25% because they cut package size by 3 oz.
Inflation. Sometimes it sneaks up on your salad.
This is undeniable, and what we have to look forward to. Your entire portfolio worth 3 eggs, or one salad.
Fuck you Bernake, and all the economics Ph.D. types that support the status quo. This will end very, very, very badly.
Good post. When I shop for food I always ask myself "is everybody really that stupid or do the stores just believe everyone is?"
I mean the generic rice krispies are now 1.99 box for 12 oz at Kroger but you can go to a competitor store and when on sale get 24oz of the Kellog brand for $3.33. Now they have these tiny boxes of cereal that are 1.99 as they believe anyone will buy cereal at 1.99 no matter what the size. And what is the deal with the convoluted promotions? There is 10 for $10.....but that's different than buy 10 items on a promotion and get $5 off. And what if you get 11 items? On first promotion the 11th item would be a $1 but on the 2nd promotion the 11th item is regular price until it is part of at least 10 more.
I decided they don't think people are stupid at all but they KNOW that most people go to the store when they are in a hurry and the overwhelming majority of the shoppers are not very good at math......and they take that to the bank. You could say buyer beware I guess but doing anything close to that would get the most honest financial advisor thrown in jail (assuming he didn't work for a large investment bank). Finally, in many towns the consumer doesn't have the luxury that I have in that I can go to the 2 biggest chain grocery stores or Costco in less than 15 minutes drive from my house.
What's the take from this:
- Middle class is slowly being destroyed...in many ways; the government promotes monopolies and not competition; go long grocery stores
I really like Kyle Bass but does he have to take endless showers after being around this CNBC vermin and some of the hedge fund scum? It was sickening listening to CNBC talk about Herbalife when the USA is going the same track as Zimbabwe.
F CNBC, TV and Hollywood who are enabling all of this.
Got confused and posted this in a different thread -
Dow - Jones 14000 = SIGNAL OF THE DECEASING VALUE OF THE DOLLAR!!
Yes I said deceasing - they are killing the value of the dollar, just like they said was their plan all along.
Value and price are not the same. The price of an item is the translation of the value of an item into a mutually acceptable quantity of some other item that both parties feel is an equal or equitable trade. This is barter. We use paper money to barter. Sellers set a value for their goods based on their belief on the value on paper currency and name the price in terms of dollars, yen, euro, etc.
If the number or paper bills required to buy the same quantity of an item within a pool of a relatively fixed amount/supply of that item class (e.g. oil, gas, bread, stocks, precious metals) increases noticeably in a relatively short amount of time, BE ON GUARD.
Also:
If your gov't (US Congress) eliminates the debt ceiling...
If your Central Bank (the FED) is flooding the market with new dollars from debt (thin air)
If your stock market (Dow Jones) shoots way up for no good reason...
If taxes on your population have risen dramatically....
If your military is practicing urban warfare on home soil...
If your gov't has purchased 1.6 billion hollow point bullets...
If your gov't ordered 7000 fully automatic weapons...
If your gov't just built a massive internet screening facility...
If your gov't has 25,000 drones ready for domestic deployment...
If your gov't is building a surveillance network with facial recognition...
If your gov't is infringing on rights that the law says they cannot infringe...
If your leaders are invading foreign countries to exploit resources...
If your leaders are not following the law or making more un-Constitutional law...
If your leaders allow a law to be broken by some while prosecuting others...
If your leaders can kill it's own citizens with impunity...
If your gov't has a history of genocide or mass interment...
If your local police forces are getting military grade hardware...
If your gov't does not provide details or intentionally covers up scandals...
If your gov't is complicit with the media in spinning stories to hide the truth...
If your gov't seems to ignore it's people and give favor to big business...
Then it might be time to turn off the TV, get off the couch and get ready for hard times.
Its amazing the media and general public believes the dow reflects the condition of the economy and job creation. The stock and bond markets are easily controlled by a few billion from the FED in the futures market and does not reflect a free market as in the past. Its not a recovery stupid, except for the 1%. In a few years you will lose nearly every freedom and your assets as the Govt expands its taxing and regulations into every part of your life. We have sold our souls to the devil and the young and middle class will pay a heavy price.
Kyle Bass is the man!
Oh, and buy lots of physical silver and take delivery!
Sure when they double the money supply your Uncle Phil gets twice as much for his stocks but they are twice as many of something worth half as much. On average you do keep up with inflation...
until some of the very people creating the inflation cut themselves in on your stuff with capital gains taxes...
on the illusion of a gain.
BlackBerry N7100 Android 2.3 have largely been defined by physical, QWERTY keyboards, bar a few exceptionally poor efforts (we're looking at you, Storm and Storm 2) that used a touchscreen.
Something similar happened in Weimar's Germany during the hyperinflation. Stocks went soared but in real terms, the USD and gold greatly outperformed stocks. However, in Germany a stock portfolio, while underperforming, could buy something more than some eggs.
In any instance, the market is going up and the primary bullish trend is not to be ignored, much less be shorted aggressively. The investor should bear in mind that 70% of primary bull market signals (as defined per the Dow theory) end up in profits. The average duration of primary bull markets is ca. two years. So we are talking of something meaningful, not just a tradable rally. Here you have the details of this primary bull market and the key figures:
http://www.dowtheoryinvestment.com/2013/01/dow-theory-update-for-jan-18-...
http://www.dowtheoryinvestment.com/2013/01/dow-theory-special-issue-asse...
lets all celebrate and kick back with some 40s shoot some skeet and watch the super bowl.
micronutrient- a teeny tiny nutrient that herb life discovered and harry reid finaced
This is why the short sellers are going to be annihilated unless they are offset with something that will inflate in USD prices faster than equities.
Good grief, all the welfare zombies and socialists are going to be trillionaires while the shrinking working class feeds them its production and Benny prints until all the fake wealth is in the hands of the fascist elite and their army of slaves and serfs.