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Kyle Bass: "The Next 18 Months Will Redefine Economic Orthodoxy For The West"

Tyler Durden's picture




 

Kyle Bass covers three critical topics in this excellent in-depth interview before turning to a very wide-ranging and interesting Q&A session. The topics he focuses on are Central bank expansion (with a mind-numbing array of awe-full numbers to explain just where the $10 trillion of freshly created money has gone), Japan's near-term outlook ("the next 18 months in Japan will redefine the economic orthodoxy of the West"), and most importantly since, as he notes, "we are investing in things that are propped up and somewhat made up," the psychology of negative outcomes. The latter, Bass explains, is one of the most frequently discussed topics at his firm, as he points out that "denial" is extremely popular in the financial markets.

Simply put, Bass explains, we do not want to admit that there is this serious (potentially perilous) outcome that disallows the world to continue on the way it has, and that is why so many people, whether self-preserving or self-dealing, miss all the warning signs and get this wrong - "it's really important to understand that people do not want to come to the [quantitatively correct but potentially catastrophic] conclusion; and that's why things are priced the way they are in the marketplace."

2:40 Bass begins

3:15 Central Bank Expansion

"We've essentially printed $10 trillion in the last few years"
"The first $5 trillion replaced the lost equity in the leveraged financial system and the second $5 trillion is making its way into deposits and expanding the monetary base"
"This is unprecedented... and it's not going to change."

The numbers that Bass reels off are incredible...

"What we've seen is a massive credit-led boom (+11% CAGR) and that can't last forever"

11:00 "The next 18 months in Japan will redefine the economic orthodoxy of the West"

"Japan is so far off the bell-curve that no one wants to talk about it"

"if you repeat things enough, everyone will believe them."

There are three key myths about Japan that Bass shows are simply false but remain repeated for the comfort of the cognitively biased investment community:

  1. The current account allows the country to self-finance its deficit
  2. The Bank of Japan is not monetizing debt
  3. Retail investors will always support the JGB marketplace

From the nation's own largest institutions forced to sell assets to the crushing demographics, Bass explains - in greater clarity than the soundbite-idiocy we get each night from Abe/Kuroda/Aso etc...

The smartest money is leaving Japan in a hurry already - Q4 2012 was the largest M&A quarter ever for Japanese firms buying foreign entities - Western productive assets - (just as was seen in Mexico before their crisis) as they try to get out of JPY

25:00 The Psychology of negative outcomes

"as an investor and a fiduciary, I get paid not to be an optimist or a pessimist; I get paid to be a realist"

"Denial" is extremely popular in the financial markets.

Simply put, Bass explains, we do not want to admit that there is this serious (potentially perilous) outcome that disallows the world to continue on the way it has. and that is whay so many people, whether self-preserving or self-dealing, miss all the warning signs and get this wrong.

"no one is ever going to tell you something is wrong"

"we have blind faith in the people running our institutions...that they can figure things out. They are a mental crutch to insure and placate depositors and investors that everything is going to be ok"

"we are running a huge economic experiment," and you can't control it all since there are too many variables

Once you understand the psychology of the participants, the key is to understand their actions based on that.

"It is the qualitative shift in the market participants' belief systems that literally flips a switch overnight"

Bass reminds us of Taleb's work on central planning: "if you suppress volatility long enough, then when the 'event' happens it is greater than the sum total of all the suppressed vol over time."

He warns - these shifts happen so fast that you will never get hedged or out of the way in time...

32:00 Q & A begins

First he discusses the naysayers on a Japanese bear thesis

"I would like to live in a world where it's all rainbows and unicorns and we can make Krugman the President - but intellectually it's simply dishonest"

"If you were advising Abe, what would you say?" - "Quit!"

41:00 General China discussion (in the context of the Japanese-China rhetoric)

43:30 Iceland - not as great as some would suggest

"China is building an embassy in Iceland that can fit 500 people in it. Iceland only has a population of 300,000!"

"You have a roach motel of a country; the New York Times and Krugman saying it's "The Model"; but they still haven't addressed the problem of their debt."

46:35 Do you worry about the US?

"I quit worrying about them because it's just a waste of time - I always leave DC demoralized"

"The central bank is the great enabler of congressional profligacy"

48:00 How does the small investor play the Japanese market - Bass responds that they can't and shouldn't. Shorting JGB futures means high carry costs and negative convexity

And our favorites question!!

49:00 Why can't the Central Bank just buy all the JGBs and then forgive them?

A speechless Bass responds...

52:00 Bank VaR and under-capitalization

 

Well worth an hour of your time before the FOMC tomorrow...

(h/t David)

 

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Tue, 06/18/2013 - 21:36 | 3670093 mickeyman
mickeyman's picture

The next 18 months will reacquaint the West with grinding poverty

Tue, 06/18/2013 - 21:46 | 3670113 TwoShortPlanks
TwoShortPlanks's picture

I’ll go you one better; since Fast Food is now cheaper than Fruit & Veg, it seems “grinding poverty” may well go hand-in-hand with grinding illness.

On a lighter note: https://www.youtube.com/watch?v=2-BtquTKw78

 

Tue, 06/18/2013 - 22:09 | 3670185 Chupacabra-322
Chupacabra-322's picture

Can you say, IMF SDR?

Tue, 06/18/2013 - 22:23 | 3670217 fuckitall
fuckitall's picture

Criminal is now just "intellectually dishonest"?

Tue, 06/18/2013 - 22:32 | 3670248 Chupacabra-322
Chupacabra-322's picture

It's a criminal system, run by criminals for criminals. The new norm.

Tue, 06/18/2013 - 22:54 | 3670288 Skateboarder
Skateboarder's picture

Somewhere along the way, ahem 1913, some people decided to lead us on a road of exponential debt. The exponential part wasn't seen until the final 15-20 years, but even as it was seen and pointed out, the people at large chose not to acknowledge, understand, care, or address the issue and the people behind it. Now there is no turning back.

Wed, 06/19/2013 - 00:02 | 3670408 markmotive
markmotive's picture

When this all reverses (or simply expands at a slower pace) there could be riots in the streets. Turkey...over a park. Brazil...a $0.10 hike in transport fees. How will people react when prices double over night...or unemployment triples?

Here's something to remember when the SHTF.

Turkish protesters have turned the tables with the use of tear gas:

http://www.planbeconomics.com/2013/06/turkish-protesters-have-figured-ou...

Wed, 06/19/2013 - 02:10 | 3670541 r3phl0x
r3phl0x's picture

I doubt we'll see prices double overnight, but they may double over 1-2 years in countries such as Japan. The CB Chairsatans are smart enough to prefer a massive, but relatively slow, CTRL-P that keeps up appearances & keeps them firmly in power. A true hyperinflation would be highly disruptive & not in their self-interest and they certainly have the motive and ability to stop it.

Wed, 06/19/2013 - 09:17 | 3670965 I am more equal...
I am more equal than others's picture

Serious man crush. 

Wed, 06/19/2013 - 00:05 | 3670417 SRSrocco
SRSrocco's picture

Kyle Bass is big in Gold & Nickels.  Here is an interestiing video called Drutter's Divergence about American Gold & Silver Eagles:

Amazing Silver Data Came From Citizen Journalist

 

http://srsroccoreport.com/amazing-silver-data-came-from-citizen-journali...

Wed, 06/19/2013 - 08:09 | 3670792 123dobryden
123dobryden's picture

its a very very old norm my friend...first this norm, then big bang

Wed, 06/19/2013 - 08:10 | 3670795 123dobryden
123dobryden's picture

God was dead gay criminal

Wed, 06/19/2013 - 00:38 | 3670391 Alexandre Stavisky
Alexandre Stavisky's picture

Exponential criminal money means even the glorious events of air travel, petroleum, mass production, digital and computer and information revolutions, China's enmasse labour pool, global coordination in rule, fusions of so many new and old industries, medical breakthroughs, refrigeration, continental transport highways, innovation of every kind--it is all consumed and more is wanted.  Without jubilee or letting too big to fail (which it is known these babel towers always become), it morphs into Must All Fail.  Masking with counterfeit (Keynes and Krugman) or by printing more markers from an already defunct and bankrupt entity lolls innocent passengers to ignoring the ultimate outcomes, but it also prevents them from making any preparations against the horrible folly.  Just another cycle, just another recession.

That is why a gov't chartered on expansive human freedom and inalienable rights, begins chewing away at human dignitiy in other's nations and then brings it home.  Torture, Spying, biased application of law, extortion, intimidation.  The fruits of the labours of those who choose to defer judgement and dilate times of execution.

The axe is laid at the root of every tree, and that plant which brings forth not good (or even poisonous) fruit, must be hewn down and cast into the fire.  And the husbandman and ever gardener never grieves the loss.  Rottenness contaminates the entire organic structure.  The death throes are horrific to witness as every wicked contrivance is exhausted.

Nothing new under the sun...and all is man's vanity. Balance sheets so out of balance must be reconciled.  This system devours all and is never quenched.  Which we will soon all witness.

A great and disparate herd of humanoids (who knows maybe they really are the smartest in the room) and their acquisition of the endowments of their planet and the manufactures due to their opposable digit and 2lb brain stem/helmet cap, this is the determinant of all future lives and quality thereof.  Greedy donut-like vacuuming pustules of greed which deny their own highest research and seek to defy gravity, make the ocean their slave, impose will upon nature ambivalent to their existence.

Nothing like a 2X4 in the teeth which will be nature's kindest kiss, but probably will deliver much worse.

Wed, 06/19/2013 - 07:20 | 3670693 Optimusprime
Optimusprime's picture

Nicely put.

Wed, 06/19/2013 - 08:17 | 3670809 LawsofPhysics
LawsofPhysics's picture

Exactly, species come and go, and apparently, humans will not be any different, at least we are trying to make it so, sad, such great potential.  Oh well, for me another field is under fucking water...

Tue, 06/18/2013 - 22:24 | 3670224 kliguy38
kliguy38's picture

no but I can say counterfeiting, ponzi, motherfuckers........

Wed, 06/19/2013 - 07:45 | 3670736 Quinvarius
Quinvarius's picture

Do you even know what an SDR is?  The history of the SDR? Or why they have existed for decades and no one uses them?  An SDR can never be the solution to globally failing currency because an SDR is made up of globally failing currencies.  That is all it is.  It is just a basket of national currencies. 

The one solution is and always has been a new currency kickstarted with gold backing.  That is the only thing that has ever worked.  All the dumbasses on the planet just want to keep playing the stupid game of "I can create a better system without gold" and always just need a little more time to fix their growing messes.  There is no fix without self stable money.  There is no self stable money without asset backing.  These monetary fantasylands everyone keeps creating can only exist at the point of a gun, but they never actually work.

Wed, 06/19/2013 - 02:53 | 3670562 _ConanTheLibert...
_ConanTheLibertarian_'s picture

All the fat in the Fast Food should give enough lubrication to fix the grinding problem.....oh wait

Thu, 06/20/2013 - 11:50 | 3675475 thestarl
thestarl's picture

Hmmmm... current world population >7billion on current trends by 2045 >9billion with this broken system go figure?

Tue, 06/18/2013 - 21:46 | 3670118 seek
seek's picture

No, that's months #19-300.

The scary part? The final transition to grinding poverty happens over the course of a few weeks.

Tue, 06/18/2013 - 21:47 | 3670120 fonzannoon
fonzannoon's picture

He keeps saying the U.S have recapped their banks. So we are all good?

Tue, 06/18/2013 - 21:56 | 3670129 AssFire
AssFire's picture

I can't  believe it continues...

Let it end.. All the made up shit around me is fatiguing

Tue, 06/18/2013 - 22:11 | 3670186 Go Tribe
Go Tribe's picture

"So you’re starting to see cracks in the façade of the qualitative belief system of the participants."

At 31.10, great quote. So true in the markets and so true about obama and the federal government. The cracks are growing quickly.

 

Wed, 06/19/2013 - 00:56 | 3670470 Uchtdorf
Wed, 06/19/2013 - 08:37 | 3670846 ZeroPoint
ZeroPoint's picture

I have said this many times. Let the SHTF already. I don't have all decade.

 

Tue, 06/18/2013 - 22:01 | 3670163 seek
seek's picture

Yup, we're good. The first $5T recapped a leveraged financial system. That worked so well they upped the leverage, maybe they can break it mo better this time.

There are days now I just can't do it, and don't come here or read the news.

I used to think when this unwinds, as horrible as it would be, watching it would be awe-inspiring. Now I'm convinced the collapse won't be televised, or on the internet, because if there is an internet (and there probably won't be within a few days of the start of the fireworks due to a secret kill switch being flipped) you won't be allowed to talk about it.

 

Tue, 06/18/2013 - 22:03 | 3670171 fonzannoon
fonzannoon's picture

agree completely. There is a small poart of me that hopes to see Bob Pisani get stampeded over by traders running for their rooftop helicopters. But I won't get the satisfaction.

Tue, 06/18/2013 - 22:09 | 3670184 otto skorzeny
otto skorzeny's picture

it'll look like the fall of Saigon with all of the rats hanging onto the skids of Paulsen's Sikorsky.

Tue, 06/18/2013 - 22:17 | 3670205 fonzannoon
fonzannoon's picture

"don't confuse people's love for their country with their love for their government"

Goddamn I wish he was not talking about Japan.

Tue, 06/18/2013 - 22:21 | 3670212 seek
seek's picture

My guess is that airports on the east coast are going to see 50% of their corporate jet fleet leave in a week or less. A handful of stalwarts will stay hoping to game the last dregs or the reboot, and the rest will bail out to islands and south america.

It would be pretty classic to see them using bulldozers to push gulfstream V's into the carribean to clear space on the runway at Grand Cayman like the way 'copters were during the fall of Saigon, though.

Tue, 06/18/2013 - 22:24 | 3670226 otto skorzeny
otto skorzeny's picture

That is when all of those dual US/Israel citizenships come in handy

Wed, 06/19/2013 - 00:46 | 3670460 Herd Redirectio...
Herd Redirection Committee's picture

Geez, Otto, you would think being Hitlers bodyguard and outing George Scherff to the world would get you more respect (and less downvotes).  Don't worry, it happens to the best of us.

Wed, 06/19/2013 - 08:39 | 3670848 ZeroPoint
ZeroPoint's picture

Israel will be one of the most dangerous places to be once the fiat collapse happens.

Wed, 06/19/2013 - 05:26 | 3670619 Steverino
Steverino's picture

I'd pay good money to watch Santelli pissing on Liesman as the market curbs kick in..

Wed, 06/19/2013 - 08:19 | 3670813 Croesus
Croesus's picture

I'd pay good money to watch Santelli pissing on Liesman as the market "curb kicks" him...

There, fixed it for ya!

Wed, 06/19/2013 - 08:13 | 3670799 I need Another Beer
I need Another Beer's picture

Right there with U, thought it would be interesting to watch history unfold. Truth is I hope it does not collapse, I like civilization and cold beer.

Tue, 06/18/2013 - 22:07 | 3670179 otto skorzeny
otto skorzeny's picture

sure they are- that's why the Bernank will have to double down to $170B a month.

Tue, 06/18/2013 - 22:11 | 3670188 kito
kito's picture

Bass is a numbers guy.....we are fine...he says just raise a little here and cut a little there....no worries......we are all wasting our time worrying about u.s. problems....bass says buy temperpedic stock (his number one holding) because we will all need to catch up on our sleep from wasteful worrying........

Tue, 06/18/2013 - 22:13 | 3670194 fonzannoon
fonzannoon's picture

Listen between 25 and 30 mins. That is not what he says.

Tue, 06/18/2013 - 22:21 | 3670210 kito
kito's picture

I'm bassed out...ive listened to him many times.....very clearly said just some numbers adjustment is needed for the u.s.....I'm not going to listen again.....has he changed his tune???

Tue, 06/18/2013 - 22:25 | 3670225 fonzannoon
fonzannoon's picture

They seem to purposefully avoid talking about America. He talks about Japan the way Schiff yells about America.

Tue, 06/18/2013 - 22:29 | 3670242 kito
kito's picture

Maybe Kyle's grandpappy was in a Japanese POW camp......

Tue, 06/18/2013 - 22:34 | 3670250 fonzannoon
fonzannoon's picture

Go to 46 mins in for U.S. He admits that we are fucked but just punts the whole thing. 

Tue, 06/18/2013 - 22:43 | 3670264 Bay of Pigs
Bay of Pigs's picture

He said he has "given up" on the US (at 47).

Tue, 06/18/2013 - 22:48 | 3670275 xtop23
xtop23's picture

He's still a connected guy and not a moron. He's not going to burn bridges he might need at some point in the future.

He positions himself in the manner required to make himself, and his investors, money. I don't begrudge him that.

If you listen closely though, he pretty much gives you the story. 

Thanks for posting this Tyler. Bass is always a strong speaker.

Wed, 06/19/2013 - 02:54 | 3670563 Treason Season
Treason Season's picture

Cosidering how corrupt and sinister the Japanese elite is, Bass is pretty brave saying what he says. It's a wonder the Yakuzi hasn't already taken him out.

Wed, 06/19/2013 - 03:39 | 3670579 zhandax
zhandax's picture

I'm bassed out...ive listened to him many times

I am hearing you have ignored what he says many times.

Wed, 06/19/2013 - 06:40 | 3670651 Go Tribe
Go Tribe's picture

Government's got ears, ya know?

Tue, 06/18/2013 - 23:16 | 3670325 Vint Slugs
Vint Slugs's picture

@kito

 

"I'm bassed out".  Well LOL.  You sound like so many bullshitters here at ZH – just run down anybody who is successful because you aren't.  You talk but it sounds that you don't have any money on the line.  "I'm not going to listen again"  -- because you can't make the commitment to risk money for the potential that Bass talks about? Listening to Bass and reading the free (that I hear may be ending) technical stuff at eideticresearch.com, I turned $2750 margin per contract into $17500 between December and February - and I missed the start and finish!

Tue, 06/18/2013 - 23:41 | 3670376 kito
kito's picture

Gosh I wish I was you.......earning all that money here in the zh comments section.....

Wed, 06/19/2013 - 00:59 | 3670474 Lore
Lore's picture

Please do not feed the troll

Wed, 06/19/2013 - 05:03 | 3670613 Sudden Debt
Sudden Debt's picture

Cool! My mom also made 17500 dollar on that free site!

Is there still time for me to get in? :)

Don't you think you should change the little marketing text? It's getting so old...

Wed, 06/19/2013 - 05:32 | 3670621 SAT 800
SAT 800's picture

I think of you as "our man in Brussels"; I just look at your avatar and it reminds me that very wise and stable people are in charge of the European  Congress; not to mention the ECB. How are the waffle sales holding up?

Wed, 06/19/2013 - 08:54 | 3670893 Eireann go Brach
Eireann go Brach's picture

Let me see...take my advice from Kito some online dude who no one knows and hides behind an avatar, or Kyle Bass a worldwide well known dude who called the last housing crash before most? That's a tough call!

Tue, 06/18/2013 - 22:25 | 3670229 A Lunatic
A Lunatic's picture

Better get a jump on 'I'd Rather be Grinding Corn Than Grinding Poverty' t-shirts..........

Tue, 06/18/2013 - 23:17 | 3670329 fuckitall
fuckitall's picture

"The final transition to grinding poverty happens over the course of a few weeks."

Yep, all kinds of "dollar crash" vids on youtube saying the same thing, when it goes it goes fast, and the trigger is announcement by some big buyer of  treasuries they'll stop buying (and it's always china).

Amazing how thin the ice is now, and everyone ignores it.

Wed, 06/19/2013 - 05:24 | 3670617 SAT 800
SAT 800's picture

That seems to be what the history of modern nations suggests; or modern nations and their fiat currency schemes, I should say.

Tue, 06/18/2013 - 23:30 | 3670356 Poor Grogman
Poor Grogman's picture

If one is going to undergo grinding poverty

Much better to do it as a free man, rather than a serf.

Going long, personal responsibility...

Wed, 06/19/2013 - 01:41 | 3670526 Yamaha
Yamaha's picture

Thanks Tyler - my only moment of sanity for the day - week - month! Bass is the only sober one in the room with the punch bowl....

Wed, 06/19/2013 - 12:28 | 3671778 overbet
overbet's picture

Kyle, you are dark enough lay off the tanning bed.

Tue, 06/18/2013 - 21:39 | 3670094 francis_sawyer
francis_sawyer's picture

So which 'Institute of Higher Indoctrination' in this country teaches 'Battle of the money printing central banks' in it's core economics curriculum?... [or is that just shit you learn from homeschooling?]...

Tue, 06/18/2013 - 21:39 | 3670102 IridiumRebel
IridiumRebel's picture

Columbia!

Tue, 06/18/2013 - 21:52 | 3670133 francis_sawyer
francis_sawyer's picture

I thought it was 'Occidental'... I'm not sure if 'Columbia' students ever go to class or appear in public...

Tue, 06/18/2013 - 21:56 | 3670151 fonzannoon
fonzannoon's picture

who the fuck junks that? 

that was funny.

Wed, 06/19/2013 - 00:49 | 3670463 Herd Redirectio...
Herd Redirection Committee's picture

autojunkers

There used to be a day a downvote on ZH meant something.  Now that too has been endlessly watered down and debased.

Wed, 06/19/2013 - 04:04 | 3670585 zhandax
zhandax's picture

So which 'Institute of Higher Indoctrination' in this country teaches 'Battle of the money printing central banks' in it's core economics curriculum?

That's shit you only gonna lean on a trading desk.  Somewhere.  Any left?

Tue, 06/18/2013 - 22:09 | 3670183 MedTechEntrepreneur
MedTechEntrepreneur's picture

Who indoctrinated you Francis?  www.stormfront.org?

Tue, 06/18/2013 - 22:11 | 3670189 otto skorzeny
otto skorzeny's picture

Used to be a good site before mossad infiltrated it.

Tue, 06/18/2013 - 22:52 | 3670283 kito
kito's picture

You know Otto, 10 years ago.... if somebody told me id be sharing the comments section, co-existing if you will, with an avowed white supremacist.....on a blog that rants about the dying monetary system of the united states, I would've had their head examined.........

Tue, 06/18/2013 - 23:04 | 3670305 Skateboarder
Skateboarder's picture

The interesting times haven't even begun my friend.

:O

Tue, 06/18/2013 - 23:58 | 3670402 francis_sawyer
francis_sawyer's picture

Will: Of course that's your contention. You're a first-year grad student; you just got finished reading some Marxian historian, Pete Garrison probably. You're gonna be convinced of that 'till next month when you get to James Lemon. Then you're going to be talking about how the economies of Virginia and Pennsylvania were entrepreneurial and capitalist way back in 1740. That's gonna last until next year; you're gonna be in here regurgitating Gordon Wood, talkin' about, you know, the pre-revolutionary utopia and the capital-forming effects of military mobilization.

Clark: Well, as a matter of fact, I won't, because Wood drastically underestimates the impact of social -

Will: "Wood drastically underestimates the impact of social distinctions predicated upon wealth, especially inherited wealth"? You got that from Vickers' "Work in Essex County," page 98, right? Yeah, I read that too. Were you gonna plagiarize the whole thing for us? Do you have any thoughts of your own on this matter? Or do you, is that your thing, you come into a bar, read some obscure passage and then pretend - you pawn it off as your own, as your own idea just to impress some girls, embarrass my friend?

Clark: [looks down in shame]

Will: See, the sad thing about a guy like you is, in 50 years you're gonna start doin' some thinkin' on your own and you're going to come up with the fact that there are two certainties in life: one, don't do that, and two, you dropped 150 grand on a f***in' education you could have got for a dollar fifty in late charges at the public library!

Clark: Yeah, but I will have a degree. And you'll be servin' my kids fries at a drive-thru on our way to a skiing trip.

Will: That may be, but at least I won't be unoriginal...

Wed, 06/19/2013 - 00:43 | 3670456 Anusocracy
Anusocracy's picture

When you get down to it, morality is just behaviors that you believe best promote your survival.

'Racism' is believing that your survival is best promoted by being with those who share a culture and its morality with you. There is no more wrong with that than believing its opposite, in fact, it's better than its opposite, because it's true. If you mix two cultures, both are changed, the more successful is diminished, the less successful is improved. The 'racist' can only be from the cultured that is diminished because using the term 'racist' is intended to obscure the harm inflicted.

America's emphasis on (moral) beliefs of self-reliance, individualism, and freedom has been diluted almost to extinction by constantly importing cultures and morality that are nearly the opposite of those in early America. The contrast between America then and America now could hardly be worse - from abundant freedom to smothering tyranny.

So America can never go back, just like Egypt, Greece, Rome, etc. can never go back. Its fate was sealed, its history written, shortly after it was created.

Wed, 06/19/2013 - 06:50 | 3670662 Go Tribe
Go Tribe's picture

"America's emphasis on (moral) beliefs of self-reliance, individualism, and freedom has been diluted almost to extinction by constantly importing cultures and morality that are nearly the opposite of those in early America."

The fuck???

Which early American culture would you like to mimic? The Puritans? The Baptists? The Dutch? The Irish?

So the hard-working, self-reliant, individualistic immigrants to this country dilute our culture? Really???????????????? Every time we interact with one of those immigrants I make it a point to tell my teenage son how their values and hard work are building up this country.

 

Wed, 06/19/2013 - 09:32 | 3671036 Moe Howard
Moe Howard's picture

"Every time we interact with one of those immigrants I make it a point to tell my teenage son how their values and hard work are building up this country."

Immigrants? Or illegal aliens? If the latter, do you interact with them at the hospital emergency room, where they are getting health care funded by someone other than themselves, or at the grocery store, where they are buying food [including flavored sugar water] using taxpayer funded SNAP or EBT card, or could it be at the gas station, where the illegal alien is buying a Hunts Brothers Pizza [instructions, take the pizza into your hand after paying, then return it, we will bake YOUR pizza for you for free] using his or her EBT? Or is the "immigrant" your nanny or gardener or roofer, who works for so little because I am paying the taxes that pay for his or her health care, food subsities, children's education, section 8 housing etc?

What a moron you seem to be.

Wed, 06/19/2013 - 14:38 | 3672405 Anusocracy
Anusocracy's picture

The "hard working, self-reliant, individualistic immigrants" that are voting en masse for installing the former Soviet government into power in America.

" I make it a point to tell my teenage son how their values and hard work are building up this country."

In case you haven't noticed, America has almost been destroyed.

Wed, 06/19/2013 - 07:33 | 3670720 Optimusprime
Optimusprime's picture

Concern for the future and welfare of one's own people does not make one a "supremacist", pal.  You are a troll.

Tue, 06/18/2013 - 23:14 | 3670317 MedTechEntrepreneur
MedTechEntrepreneur's picture

 

Tue, 06/18/2013 - 23:15 | 3670318 MedTechEntrepreneur
MedTechEntrepreneur's picture

 

Tue, 06/18/2013 - 21:40 | 3670106 Yen Cross
Yen Cross's picture

 FUK me naked

Tue, 06/18/2013 - 21:42 | 3670111 IridiumRebel
IridiumRebel's picture

Placing market order for FUK as we speak.....

Tue, 06/18/2013 - 21:47 | 3670109 km4
km4's picture

excellent first paragraph summary especially ""we are investing in things that are propped up and somewhat made up"

what possibly could go wrong ;-)

Tue, 06/18/2013 - 21:46 | 3670117 disabledvet
disabledvet's picture

the Government can pay down the debt and deficit to zero by simply re-issuing "nickels with real nickel" and charge 50 bucks for each one. that might make Kyle Bass a wealthy man...although what is the nickel content again? obviously the same can be done with pennies and with dimes and quarters. But again...they would have to be RE-valued. http://seekingalpha.com/symbol/tuc

Tue, 06/18/2013 - 21:50 | 3670119 Cognitive Dissonance
Cognitive Dissonance's picture

The universe can stay in denial far longer than you can remain sane.

<Not to mention what it can do to your pocketbook in the interim.>

Tue, 06/18/2013 - 22:04 | 3670173 chump666
chump666's picture

We are getting laughed at by the universe. 

Wed, 06/19/2013 - 06:52 | 3670664 Go Tribe
Go Tribe's picture

And the Oscar for Best Comedy goes to....

Wed, 06/19/2013 - 08:16 | 3670783 francis_sawyer
francis_sawyer's picture

Let's see... which cheesepope has our panel of cheesepopes decided it needs to help their career & seem relevant, so we can continue our Hollywood bloodline & continue to serve our role in the MK Ultra program?...

~~~

Note: This goes as far back as Hollywood has existed...

'Sunset Boulevard' [Brackett] lost to 'All About Eve' [Zanuck]... Nuff said

'Best Years of our Lives' [Goldwyn] beats 'It's A Wonderful Life' [Capra]

'How Green Was My Valley' [Zanuck] beats 'Citizen Kane' [Orson Welles] [for fucks sake]

Tue, 06/18/2013 - 22:05 | 3670175 HardAssets
HardAssets's picture

"The universe can stay in denial far longer than you can remain sane."

Who cares about 'sane' ?  'Solvent' is good enough.

Wed, 06/19/2013 - 03:17 | 3670572 Kirk2NCC1701
Kirk2NCC1701's picture

It's everyone's right to rage against the elements, to blow against the wind or pee into it, but it won't be the elements or the wind that will be worse off for it. Plan accordingly.

The 'insanity' of the markets and the Greater Fool model of stocks may still have longer legs than Contrarians think & hope for.

Life teaches us to be open to life and surprises. Cheers.

Tue, 06/18/2013 - 22:02 | 3670136 DormRoom
DormRoom's picture

A major problem of QE is how it flows into investments (financialization), and not productive labor.  The major disconnect in the West is how the use-value of money is disproportinatley masked by the exchange value of money.  This is leading to the social structure of a minority rentier class that controls nearly 80% of all assets,  similar to a feudal system.  New agents are unable to own the means of production, instead they are forced to rent, so a larger percent of surplus value is allocated to Rentiers, instead of back into the business.  The high cost of a university education is a form of rent-knowledge, if you amortize it.  Rental periods are being stretched out because of ZIRP, favoring Rentiers, over the rest.

We all know how innovative the feudal dark ages were.  The standard of living didn't change much for a millenia!

Tue, 06/18/2013 - 23:55 | 3670394 prains
prains's picture

What you've explained is exactly what the last 40 years of american economic reality has been working towards, first quite slowly and now at an exponential rate towards eventual implosion. This is why the USofNSA has come out and declared their take over thorugh Snowden. They're telling all americans we have you by the balls and know what you're up to before you do. It may not be real or the truth but to 97% of the population the seed has been planted and they will be of no use to anyone during a reset. Their compliance is assured and all seekers of truth and justice will be controlled. The .gov looks to be the fool but the few smart ones that call the shots are way out in front of this decline. It's on purpose that the politicians are the buffoons, the strawmen always are. It keeps the populace from looking in the correct direction. Look over there......

Wed, 06/19/2013 - 00:55 | 3670469 Herd Redirectio...
Herd Redirection Committee's picture

Feudalism is the goal.  I contend that wealth inequality in the present day is even greater than it was in feudal times (because there were no billionaires or their equivalent in that era). 

We have replaced slavery with debt slavery.

Wed, 06/19/2013 - 06:45 | 3670655 Hobbleknee
Hobbleknee's picture

We already have feudalism. You do not own property because you always pay tribute (property taxes) to our feudal lords. 

Slavery is their goal.

Wed, 06/19/2013 - 09:36 | 3671053 Moe Howard
Moe Howard's picture

Serf's UP!!

Wed, 06/19/2013 - 07:25 | 3670699 Ricky Bobby
Ricky Bobby's picture

Debtor's prison is coming to a jurisdiction near you.

Wed, 06/19/2013 - 00:38 | 3670454 thereisonlyonelaw
thereisonlyonelaw's picture

Labor is not productive. It is not actually possible for a class of people to live "off of wealth". They live off -the management- of wealth. This includes the political class. It's not enough to own a slave, it's not even enough to coerce a slave, you have to know how to manage it. If you don't, you get ruined. The slave revolts, rapes your wife, burns down your house and kills you. Or the house you own decays until it burns down and the combination of taxes and capital depreciation means you are making no income at all by owning the house, even though you are charging rent, and you are just using it as a place to park capital while you slowly eat away at it. In that sense the "proletariat" is not different, they just live off the management of a different kind of wealth, namely, the health of their body and mind.

Wed, 06/19/2013 - 01:00 | 3670472 thereisonlyonelaw
thereisonlyonelaw's picture

I would add a key point here. If you don't know how to protect your wealth, by definition you don't know how to manage it. Yes, that includes your body. If you can't protect your liberty, you can't manage it. Serfdom is a consequence of this. So is outright slavery. Those that could protect the liberty and body of others, whatever you may think of their means, in effect owned that liberty. This is a natural dynamic. It is inevitable that those that cannot defend themselves be owned by those that can, the only difference is that some owners are nicer than others. Whatever you may say of the Soviet Union, or of any other supposedly evil institution, the reality is that they were possible because there wasn't a better manager available to prevent them. You think you are smarter and better than your overlords but the simple fact that they are your overlords and you are their serf means you are not. There is no point bitching about the nature of reality. There is no problem with QE, there are consequences.

Tue, 06/18/2013 - 21:52 | 3670140 A Lunatic
A Lunatic's picture

The end is nigh.........

Tue, 06/18/2013 - 22:14 | 3670198 Yen Cross
Yen Cross's picture

  A Lunatic, In a good way.

Tue, 06/18/2013 - 21:58 | 3670157 Bay of Pigs
Bay of Pigs's picture

Japan is dead meat

Tue, 06/18/2013 - 22:25 | 3670228 Cognitive Dissonance
Cognitive Dissonance's picture

Meat radiated from Fukushima no less so Japan's shelf life extends well beyond those 100 year mortgages that are so popular over there.

Tue, 06/18/2013 - 23:13 | 3670316 Skateboarder
Skateboarder's picture

Soon presenting the 1000 year mortgage. Pledge your grandchildren's grandchildren's.... grandchildren's lives for a sweet two room shack with a lovely outdoor craphole today! Mutant-free community, with ultra low HOA and 24/7 surveillance. Now offering at the low low price of 10x10^22 Imperial Zarzoks! Get yours now!

Wed, 06/19/2013 - 06:51 | 3670658 Hobbleknee
Hobbleknee's picture

There are already infinity mrotagaes in Sweden.

The average mortgage in Sweden is 200 years.  Many have infinity mortgages, where they never pay of any principal, but eternally pay interest instead. How come nobody writes about that?

Wed, 06/19/2013 - 09:37 | 3671066 Moe Howard
Moe Howard's picture

Socialism is a grrrrrrrrreat system! Just look at Sweden!

Wed, 06/19/2013 - 10:44 | 3671300 SmackDaddy
SmackDaddy's picture

Classic. hahaha. 

Tue, 06/18/2013 - 22:00 | 3670160 news printer
news printer's picture

What the Fuck happened to his face?

My first thought was: Obama speaking

 

Tue, 06/18/2013 - 22:03 | 3670168 chump666
chump666's picture

Just saw footage of Brazil protests.  

The market has nothing to do with anything anymore except a last gasp for crony capos ride into oblivion.  If Obama dares do any bailouts thereafter...

 

Tue, 06/18/2013 - 22:32 | 3670247 BoNeSxxx
BoNeSxxx's picture

Link?

Tue, 06/18/2013 - 23:19 | 3670331 Yen Cross
Yen Cross's picture

douche?

Tue, 06/18/2013 - 23:47 | 3670387 chump666
chump666's picture

http://www.cbc.ca/news/world/story/2013/06/18/brazil-protests-tuesday.html

I don't think we will last 18mths.  When the 'cashed up darlings' of the econ world of falling apart like Brazil.  No one is coming to save us.

We had this coming. 

Tue, 06/18/2013 - 23:59 | 3670406 Yen Cross
Yen Cross's picture

     Everyone on Z/H knows I trade every day. "Sock Puppets", that think they know better need to talk the walk!

  I expressed my thoughts regarding risk trades last Friday. The muppet protection "goldmanites" are out this evening.

Wed, 06/19/2013 - 01:03 | 3670479 chump666
chump666's picture

I know. 

So what are your thoughts on gold, do you think we will see it plunge to 1200?

Wed, 06/19/2013 - 01:41 | 3670528 Yen Cross
Yen Cross's picture

    Nope. Gold is ready for a resurgence.

Tue, 06/18/2013 - 22:03 | 3670170 otto skorzeny
otto skorzeny's picture

KB is sportin' a bitchin' tan.

Wed, 06/19/2013 - 09:40 | 3671073 Moe Howard
Moe Howard's picture

The Decepti-con John Boner Special. White people get taxed to get those tans. Where is the tax on jerri curls or wigs?

Tue, 06/18/2013 - 22:04 | 3670172 kito
kito's picture

Bass talks just to get his mug on zh........

Tue, 06/18/2013 - 22:12 | 3670193 fonzannoon
fonzannoon's picture

kito I think you would like what he says between 27 mins and 30 mins. 

Tue, 06/18/2013 - 22:40 | 3670260 Yen Cross
Yen Cross's picture

 Bass long term is correct. I think I understand where kito is coming from.

Tue, 06/18/2013 - 22:14 | 3670196 Strut
Strut's picture

Kito talks just to get his mug on zh........

I bet that avitar is actually you... Piss off

Tue, 06/18/2013 - 22:30 | 3670246 The Shootist
The Shootist's picture

Everyone's getting upset over the tyranny at present, even ZH web traffic is down.

Tue, 06/18/2013 - 22:56 | 3670292 BoNeSxxx
BoNeSxxx's picture

With an average attention span of 45 seconds, I think even the unraveling shitshow is losing audience...

Oh look, a piece of candy!............ Where was I?  Is that a spider on my wall?

Tue, 06/18/2013 - 23:07 | 3670308 Yen Cross
Yen Cross's picture

 Is that you "snowball777"?

  Lets... Hyperventilate...

Wed, 06/19/2013 - 00:14 | 3670425 tickhound
tickhound's picture

Dang Yen, a year or so later and you still can't deduce who snowball is?

Gonna hafta question your police work once again.  Although I do admire the determination.

I will not tell you.  He changed handles for a reason only he knows, and I'll respect that.  If he wanted to come out, he would.

I'll give you a hint though... he frequents zh more than I do.  Almost a 'regular' I'd say.

Wed, 06/19/2013 - 00:23 | 3670439 Yen Cross
Yen Cross's picture

    I'm well aware of the Z/H heirarchy, and I could give two shits less.

Wed, 06/19/2013 - 00:47 | 3670461 tickhound
tickhound's picture

Heirarchy??  WTF?  You drunk?  And for someone who can give two shits less... well, you bring him up.  Repeatedly.

Wed, 06/19/2013 - 01:46 | 3670531 Yen Cross
Yen Cross's picture

     Your name suits you! A fucking tick on the ass of nothing!  Go pound sand you menial piece of shit!

 Take your reverse 'psychobabble' somewhere else.

Tue, 06/18/2013 - 22:58 | 3670296 Manipuflation
Manipuflation's picture

It is him.

Tue, 06/18/2013 - 23:08 | 3670310 Yen Cross
Yen Cross's picture

 You;re full of shite, and i like KITO on Sundays!

Tue, 06/18/2013 - 23:20 | 3670335 kito
kito's picture

Strut go suck a........oh wait.......

Tue, 06/18/2013 - 23:27 | 3670344 Strut
Strut's picture

Wow, what a fucking come back...

... like I said... piss off.

Tue, 06/18/2013 - 23:31 | 3670358 kito
kito's picture

Strut....did I insult your hero??? Why such anguish over my comments about bass???....

Wed, 06/19/2013 - 00:07 | 3670371 Strut
Strut's picture

Edit*

My appologies to everyone, I just realised I was feeding the trolls.  My bad.

 

Tue, 06/18/2013 - 23:30 | 3670354 Yen Cross
Yen Cross's picture

 Kito, that moronic idiot  rides the "short bus". Little douchebags that pop in and out are like my toilet bowl on Sunday morning.

   FULL OF SHIT!

Tue, 06/18/2013 - 22:12 | 3670192 Cabreado
Cabreado's picture

When the intelligence and voice finally converge (which they will) and warn the masses that there are indeed greater things in play than economies-and-how-they-behave, we'll be getting somewhere.

Bass is great, but the real world is moving on without him.

Tue, 06/18/2013 - 22:26 | 3670233 Bay of Pigs
Bay of Pigs's picture

The real world is moving on? Seriously? Where?

Tue, 06/18/2013 - 22:36 | 3670255 Cabreado
Cabreado's picture

To a brand of chaos that leaves traditional/shallow/too-encrusted views of "economies" in the dust.

Don't be too quick to decide that "moving on" meant moving up, or even sideways.

Tue, 06/18/2013 - 22:45 | 3670267 Bay of Pigs
Bay of Pigs's picture

Got you. Moving on down the road, so to speak.

BTW, I didn't junk you for saying that. I was just curious.

Tue, 06/18/2013 - 22:22 | 3670214 Atomizer
Atomizer's picture

Thank you Kyle Bass. Many already know, so many are clueless. Keep up your good work. Little coverage was given below. This IRS, NSA scam is directly involved….

 

SR 76 Wall Street

Jeffrey Sachs of Columbia University speaking at the "Fixing the Banking System for Good" conference on April 17, 2013.

Tue, 06/18/2013 - 22:34 | 3670251 q99x2
q99x2's picture

Thanks for the posting. Enjoyed it.

Tue, 06/18/2013 - 22:36 | 3670256 Monedas
Monedas's picture

At the McDonald's drive thru .... I ordered my usual .... three of the $1 cheeseburgers .... when I paid with my debit card .... I told the girl .... that I was buying lunch for three dis-advantaged children .... could I have three separate bags .... with extra napkins and condiments .... they gave me three cute little white bags .... they were like .... poor man's Happy Meals .... the cheeseburgers are good to eat while driving .... back home .... I put the extra condiments in the jar where I save them for my Mexican girlfriend .... the extra napkins are for me !   The bill was $3.24 out the door .... I didn't order the kids any water .... that would be ten cents a cup ..... they can drink from a garden hose !  I love resourceful people .... they are more reliable for building economic models !

Tue, 06/18/2013 - 22:42 | 3670261 Yen Cross
Yen Cross's picture

 And good ole modenas is here to stir the pot.

Tue, 06/18/2013 - 22:43 | 3670263 pauhana
pauhana's picture

Just finished the whole hour.  Thank you, Kyle.  Won't sleep tonight but at least I'm well informed about the future.

Wed, 06/19/2013 - 00:05 | 3670418 seek
seek's picture

Got you on the sleep thing. Melatonin and L-theanine help. A cold, hard, lumpy pillow stuffed with Au doesn't hurt either, but offers small comfort for the in-between phase of the "transition."

 

Tue, 06/18/2013 - 22:53 | 3670285 Catullus
Catullus's picture

I think he's wrong. Unless there's a real soul crushing event in the next 18 months, the arrogance of the current economic orthodoxy is pretty resilient. After 2008, there was no "come to Jesus moment". They printed. It quelled the bank run in the US. They've continued to print to prevent a further liquidation. Inflation has been tame all things considering.

To take the real taleb analogy, the turkeys are still being fed well. Nothing to see here. So bass is basically putting his reputation on the line by signaling a timeline. He may or may not be right.

In short, don't underestimate the consistency of the harlots to cling to bad ideas.

Tue, 06/18/2013 - 22:59 | 3670299 lolmao500
lolmao500's picture

I would have sex with Kyle Bass and Ron Paul minds if I could.

Tue, 06/18/2013 - 23:10 | 3670313 Yen Cross
Yen Cross's picture

 The assclown  'basement babies' ARE OUT TONIGHT!

Tue, 06/18/2013 - 23:13 | 3670320 tok1
tok1's picture

what he might be missing is possible BOJ and FED will manufacture an equity decline to get liquidity back into JGB/Tres

ie just out (China 7-day repo rate rises by nearly 125bps to 8.05%, the highest level since Jan 2012 - financial press**Note: Earlier during the sesison , China 1-yr rate swap rises by approx 10 bps to just under 4.1% (21-month high; 13th consecutive rise) - 

 

maybe China blows first (maybe Japan/US are facilitating by reducing liquidity there) ie isnt Japan the biggest investor in China..

Tue, 06/18/2013 - 23:18 | 3670328 Yen Cross
Yen Cross's picture

 Pussies with white helmets are welcome...<

Tue, 06/18/2013 - 23:29 | 3670349 Nue
Nue's picture

Don't worry the IMF will save us all like they did Greece.....ok run for the hills and hide.

Wed, 06/19/2013 - 07:50 | 3670759 desirdavenir
desirdavenir's picture

Don't worry, the imf will stand by you (starting at 13:14) :

http://www.lepetitjournalreplay.com/888594/le-petit-journal-18-06-13-la-...

Do NOT follow this link or you will be banned from the site!