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Kyle Bass Warns "There Is No Way To Protect Yourself If US Treasuries Default"
"If the politicians lead us into a 'prioritization of payments' situation for Treasury Secretary Lew or an actual missed payment, there is nothing you can do to protect yourself from that!" are the ominous words that Kyle Bass uses to describe the farce that is rapidly approaching (and for now being ignored by stocks). Bass went on to pull no punches in his "disappointment" in JCPenney's performance (and dilution) coming as close as he can to saying "sell." But his piece de resistance was a dismal destruction of any silver lining for Puerto Rico and the significant implications that will have on Muni bonds in general.
On Default risk and "Un-hedgeable" implications:
On JCPenney - "Disappointed" - "didn't belive they needed to raise the capital... and now they have diluted us over 30%"
On Puerto Rico and the threat to the entire Muni market - "you look at their finances and you can only say - I have no clue how this can exist for very much longer"
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Socratic,
New fangled things like hot houses, irrigation,, air conditioning are wants, not needs. If you are so concerned about your future, start turning off lights, and travel less. Stay home. Get to know your neighbor. More options, but you get the drift.
Don't be like the person who doesn't like getting wet when it rains, but refuses to buy an umbrella or go indoors.
Or do as the ancient Greek philosophers: kill a chicken for rejoice shortly before you are executed as an enemy of the state, a heretic.
I prefer eating chickens, and staying home.
I am into free range farming and the numbers needed aren't anywhere near there in the near future.
Yes what you saying is true, AFTER 100 million or so die off between the time needed to the first output of the expanded crops and ranges.
The scales are massive, There WILL be a Massive die off.
Just drive anywhere from Virginia to Boston and just think how many people you are passing by in suburb after suburb all serviced with CHEMLAWN or some such. Yards Cannot be turned into gardens that fast. People are dreaming.
Then, You are on your own.
People voted for CONgress en masse, and refuse to change their ways. Their choice.
On a long enough timeline...
The time line is gonna be shorter than many many millions realize.
And about that voting thing, The results would be the same I swear if NOBODY voted.
Romey vs Obama, Bush vs Kerry, Gore vs Bush
Those are CHOICES?
Except for The Best President America Never Had, Ron Paul. And the people just like the people of yor were herded to say "Give Us Barabas"
13...2013...unlucky for some. Good news: the worst offenders in any sense will get the biggest punishment, by their own choices.
Choice is what you choose to do in your own family and community. Politics is showbiz for ugly people. The government is NOT the people. It is a thing, supposed to be a representative. When it is not, so what? Keep calm and carry on.
.gov only has the power you choose to give it or not.
I prefer the 10th Amendment, the sovereignty of states.
If .gov blew up tomorrow, we the people would find ways to live happily ever after, as we have always done.
Reminds me of an old Chinese saying: the people survived in spite of their government.
This CONgress is bankrupt, financially and morally. The people know this,, and resourceful ones plan accordingly instead of begging Big Brother for alms.
While you are debating future based on the merits of one form of Gov from another using a Political view point .
I was saying that those choices will have little bering on the agricultural and distribution realities that I was talking about.
Lotsa lame asses gone within a month.
They voted for it.
Well, you know, when everything is leveraged on un-payable debt it's all a can of worms.
Puerto Rico and J.C. Penney are poster children for the U.S. in general; overextended, un-payable debt, and a very doubtful future.
Of course the biggest house of cards is the last to fall, and the value of the U.S. Dollar and it's unending debt are the biggest house of cards in the world at the moment.
Go ahead; pass a continuing resolution and put a tourniquet on the femoral artery of the once great Republic called the U.S.A. - we are bleeding out and our Wagon Train companions have left the Women and Children abandoned to the mercy of vultures and the desert of forgotten morality and ethics.
When you sell out your Children and Women you know you have crossed the Rubicon for good.
R.I.P. U.S.A.
The U.S. won't end. It will just be different. A good kind of different. Back to the future...
Unless our 'friends' the zionists decide to set off nuclear plants nationwide, as Moshe Dyan wanted to nuke his rivals when Israel was losing its Yom Kippur war. They are batshit crazy. Even today, an Israeli, son of a rabbi, Mordechai Vanunu is a prisoner of the state in Israel for revealing its illegal nuclear weapons program...while the Fed prints more money to gift Congress the right to give Israel military supremacy. Batshit crazy zionists, the American ones and the frontline IDF.
I suppose the thumbs down are for not supporting Jon Corzine and the FED Ponzi scheme?
C'mon, we have SOLD OUT completely; if you can't see it you are DELUSIONAL.
Ol booker T jon, always one step away from his reward.
no way to hedge??? So why did Kyle buy all those nickels, dammit??? I've been stacking nickels because of him...I thought that was the magic hedge??? ;-)
He's right about the nickels; the content metal is worth more than 5 cents. Meanwhile, the new $100 costs 60% more to make than other paper.
'Crush the bourgeoisie between the millstones of inflation and taxation,' said Lenin, the darling beloved of socialists, communists, zionists and the Fed.
PS Lenin's chief internal rival Trotsky was ice-picked in his Mexican hide-away. These rootless cosmopolitans are sociopaths, psychopaths and assassins ... masked with a smiley face 'democracy', 'hope', 'change', a 'new deal'.
My stack is well over 400 now. I am invincible.
I hope you have genuine family and friends with you too. Some things are priceless. G'luck :-D
If Obama allows an unconstitutional default on the small sum of $5.9 billion dollars that’s due on debt services such as as interest and principal payments on Treasury securities on October 31, then he just wants a default. After all, Miss Janet like Uncle Ben will be giving him an extra allowance every month of $85 billion and up.
No direct connection between U.S. debt limit, default: Moody's | 10/9/13
(Xinhua) -- There is no direct connection between the debt limit and a default by the U.S. government, said ratings agency Moody's Investors Services on Monday.
"The U.S. government would continue to pay interest and principal on its debt even in the event that the debt limit is not raised, leaving its credit worthiness intact," Moody's said in a report…
Moody's explained that the debt limit restricts government expenditures to the amount of its incoming revenues, and it does not prohibit the government from servicing its debt.
If the borrowing limit is not raised before Oct. 17, the government will have to prioritize among its expenditures.8 "In our view, the government is very likely to prioritize interest payments because of the potentially serious effects a default would have on financial markets in the U.S. and globally," Moody's said in the report.
The ratings agency noted that interest payments on Treasury bonds and notes are due twice a month, on the 15th and the last day of every month. After Oct. 17, the first interest payment date is Oct. 31, when a relatively small 5.9 billion dollars is due.
"Thus, a Treasury bond default is not technically possible until that date (Oct. 31)," Moody's said. "Moreover, given that the amount that needs to be paid is relatively small, a default is also extremely unlikely."
Regarding the lingering government shutdown, Moody's said, "The shutdown prohibits discretionary spending, but not mandatory spending or debt services, such as interest and principal on Treasury securities, which the U.S. government will continue to be able to pay."
http://news.xinhuanet.com/english/business/2013-10/09/c_132781975.htm
By default, he could enact a pre-prepared executive order. Invoke martial law. Suspend the Constitution. For the sake of my fellow Americans, I wish they had paid more attention to these tricks played out in other countries before they arrived here.
The Communist Party of the USA disbanded when it decided that the Democrat Party had adopted its mission. That is easily verified by doubters.
The Repugnants? Well, they were easily captured due to the personal weaknesses of their hierarchy.
Marxists wage cultural war, financial war, economic war. They would trample over a thousand poor people in order to throw one stone at one political rival, rich or poor.
So you also have studied Machiavelli?
No man could be so incompetent as to destroy an economy by ignorance, if ignorance is taken off the table that leaves deliberate action.
The ends justify the means. Has any action taken by this man shown love of country, or love of his fellow countryman? A man is to be judged by his actions. His leave no doubt.
Fundimental transformation only comes after destruction of our foundations.
Mass death has never seemed to bother the meglomaniacs of our world.
To not see this as a possible outcome to our current path is to close your eyes while standing on a train track in the misguided belief that you cannot be smashed by that you cannot see.
Sad, but true. Plan accordingly. Anyone interested in what you write can easily research on the internet: Machiavelli, Prince.
The gist: power keeps power, by whatever means necessary. Now, where have we heard that recently? 'Whatever it takes.' The modern versions are paper tigers, and they will be dumped by the money masters. Good. Then jail them for their incompetence and insolence, quite apart from being traitors to their own lands.
Obama’s approval rating is tanking, down to 37 percent. This info is buried in an AP story touted today by all the media under the headline: Government Shutdown Blamed on Republicans. When a Republican president’s approval rating drops that low, the Regime Media parrots it for weeks, nay,for months. When one of their own hits bottom, they put a lid on it.
Obama has added $6 trillion to the national debt – in four years. We have a purposeful destruction of America's capitalistic economy underway in Washington, D.C. supported by Leftists; it’s scaring people to death.
People are extremely angry - a force is building against this entrenched Establishment. They’ve taken our country away. The good news is, there aren’t enough of them to hold it.
oh no you don't understand that is money we already spent, we must pay for what we already bought (not that i did a damn thing to stop two wars, and expensive foreign entanglements) obama could run for a hundred years increasing a defiict on money they spent
That 37% poll is an outlier, just as the recent poll that has Obama at 48/48. If you go by the RCP average, Obama's rating is 44.6 -- unchanged for weeks. Obama's absolute floor is about 40% and his RCP average will never reach that level.
http://www.realclearpolitics.com/epolls/other/president_obama_job_approv...
His real number is probably 34% maybe lower. You believe RCP or any poll or the newspapers or TV? Poll are designed for disinformation. They get the answer whomever is paying for the poll wants.
I bet you watch TV. LOL! I can tell. If you believe anything from AP, Reuters, Bloomberg, any news organization, any TV or newspaper then you are a fool. The only thing close to reality is RT and Investors Business Daily plus maybe a little from UK Telegraph. The Asian paper that employs reporter Pepe Escobar is decent too.
S&P downgraded the US debt rating. The FBI started an investigation into S&P. S&P is owned by McGraw Hill who makes school books filled with propaganda but bought by the education system. S&P will never make that mistake again. Fitch was worned and Moodys is Buffett. Something that would and did happen in Argentina.
Gallup came out with a poll the regime did not like and The "justice" Dept started an investigation.
If he is going to do as you suggest, he had better start moving troops into DC by this weekend. Setting up for Martial Rule (As the Supreme Court once said, there is no such thing as Martial Law) takes time, and Obozo had better start moving if he wants to be successful.
His auto signature decrees it if he wishes, just like the NDAA.
JC, can we stop with this "default" bullshit? Even Kyle mentions the prioritization of payments to pay the $30 billion monthly interest payment out of the $250 billion in monthly fedgov receipts.
The only way that the US could default is if the idiots stupidly choose to, not due to any lack of ability to pay. And they'd never choose to as it has no advantage and would be political suicide for anyone who directed it once the absolute stupidity of any such move was found out and broadcast by the mainstream media.
So stop with this "default" crap. It's only for the stupid to believe.
Big Brother demands absolute obedience. No negotiation. This is a test case.
And then there's this: http://www.orwelltoday.com/julia.shtml
You see, Winston, nothing is as it seems, but it all serves Big Brother.
The internet spews out porn to .gov workers and others. All for the Party. Confuse, and conquer.
Great link about Orwell. I've bookmarked it. 1984 ever prescient along with Brave New World.
Glad you liked it, friend. Samuel Adams forewarned about these forces exposed much later in fiction, NineteenEightyFour and Brave New World, but he spoke the language of defiance, not acquiescence, as you know.
Keep well. We shall overcome, and regain our Republic,, I have no doubt about that.
You are exactly right. Perhaps we will, it's going to take a lot of men and women like minded to us to do so.
It only took 3% in combat the last time we took up this fight, with others assisting supply lines, covertly or overtly.
'To thine ownself be true, then as night follows day, thou canst not be false to another.' (Shakespeare).
I don't think this will be a shooting war among our kith and kin. I think the parasite globalist central bank cartel will ruin the USD, and take up residence with its next host in the East, and bleed them dry for the next 100 years.
We have all we need, and I am glad they are leaving, the sooner the better.
The East is fully aware of their historical habits. They will not let them in.
Yes...no default, but without CR they can't sell treasuries and/or print money out of thinair to run the non entitlement portion of govt...which is entire govt except debt interest. Unless they cut entitlements. And to use Bass' own words "that's likely to happen in 2000 and never"
Are you so confident that the current occupant of the Spite House would not choose to default if he thought he could score some petty political points and harm the plebs of the USSA in the proccess?
There shouldn't be a default. We currently take in about 10 times the amount needed, through taxation, to pay the interest on the debt.
True, but automatic payments for entitlements (non-discretional) takes the rest of the tax receipts. Everything else the govt does...ie everything discretionary is deficit spending. And both interest on debt and entitlement continue to go higher. Why do you think people like politicians and banks were so worried about interest rates rising so fast? It wasn't just the housing recovery, it was how would we continue to pay interest on debt and inflation triggers ties to treasuries without blowing out the budget back to 2011 levels (1.2-1.4 T). The banks were worried about interest rate deriviatives. That is why there will be no default and no taper....and why they will continue to adjust and manipulate inflation data to show very low inflation no matter what the reality is.
But they may need that money to pay for park rangers and barricades,
Always great to see a serial down voter in the room. Good sign that the truth is being spoken here.
I think they work in eight hour shifts on different forums.
Like a periodic mine sweeper
It's a volunteer cuz .gov is .shutdown cuz they .suck
I'll downvote myself so you can stay lazy.
The red arrow strikes again! Oh no, oh my. Lions, and tigers and bears, oh my! Run for cover :-)
Yeah, you're right centerline. It's a sign of desperation. I think the red arrow is the hallmark of the .gov apparatchik. I'd rather it filed a writ, but that would require evidence to prove the facts and figures, and it cannot.
Dear Janet is going to fck .gov left, right and Chelsea, so the red arrow had best get his flying monkey order affairs in order.
I know something that at least would make everyone in Upstate New York happy.
Auction Off New York City to pay for the Debt.
If we "defaulted" it would not be because we do not have the tax receipts to make the payment, it would be on purpose or by choosing to fund anything other then our obligations and SS, medicare, medicaid, SNAP, and the rest are not obligations, they are political promises, BIG FUCKING DIFFERENCE and if you are confused look at your next SS statement where is says "IF CONGRESS MAKES NO CHANGES", got it, it's a TAX?. If it were not for the fact that every Department is staffed with political hacks the choice would be obvious. Congress does not have to vote to pay our obligations, the President would have to choose not to do so by ordering Lew to do so. All this debt ceiling bullshit is about spending your childrens future, so if you are ok with it that's cool, just leave my children out of it but you can't IF you want it raised "so we can just move on".......so fuck off and die in a fire or die in a war you support, your choice, we're broke, get over it. Fuck you Obama.
If the USA defaults, it is because Obama wants a hard default so he can break the Republican opposition. Period.
Obama has this one chance - this year - to break the Republicans for once and for all. He has nothing to lose and everything to gain. If he does not succeed, he might as well spend the next 3 years on the golf course 24/7. He has to succeed. He has no choice. Otherwise, he better plan to be competing against Tiger Woods in the Masters, and Obama isn't that good.
If we had already experienced a default, which (like sequestration) probably wouldn't have been as catastrophic as billed, then there would be real negotiation going on as we type. Having never had a default (there's a first time for everything), "They wouldn't dare to force a default!" has become one side's negotiation strategy. If both sides knew without question the other would take us to default, there'd be a lot less wasted time and words over the threat.
There are persons who became quite wealthy in a corrupt environment, and some of them still play with such things as JCP...
Playing with JCP and Puerto Rico at the same time is an indicator of how far gone we are, and also how we got here.
There are persons such as the above who don't necessarily have a clue what to do, when the lies run their course.
i once worked at a public institution which was not making enough money to meet its (bloated) salaries. the public union said agree to a 50% pay cut or be privatized. what do you think those people thought, NO. within a year they were privatized, but they still all went home with a golden parachute. its amazing how greedy we all become when the invisible hand has our ass.
That's an example why morals matter, and the modern fixation on politics and greed leads to bankruptcy in every sense. The money masters know that people are easily distracted, amused, and bribed, coerced or cajoled.
Choose the Constitution, and Bill of Rights. It is the only thing that stands between Americans and tyranny.
It's not a matter of moral, IMO. The guy worked for a public institution - irresponsibility was designed into the system from day one.
In great majority of situations the market is moral.
JCPenney, hmm, I remember couple of us got heavily junked when we commented how Kyle is going to lose on his investment in this one. Unpossible, said the critics.
New JCP Slogan= WINNING
Kyle is betting on sovereign default somewhere. It's a good bet, and when it does happen it may very well start a cascade of defaults elsewhere. A ripple on one side of the financial ocean may turn into a tsunami on the other side. In 2007 it was just subprime and "contained". Shortly thereafter the whole house of cards came down.
You can forget about any default in the debt ceiling crisis.
Former Assistant Treasury Secretary Dr. Paul Craig Roberts says, “The debt ceiling will be raised. No government wants to lose its power or lose its ability to borrow. So, if they don’t raise the debt ceiling, it is just a way of Washington committing hari-kari. It simply removes the United States as a super power.”
Dr. Roberts goes on to say, “If they don’t make a deal, one of two things will happen. . . . The Federal Reserve, on its own authority, lends the Treasury the money. . . . The other alternative, Obama . . . can simply declare a national emergency and raise the debt ceiling on his own initiative. He could govern as a dictator.”
What would happen if the U.S. did default? Dr. Roberts says, “The danger of default is the rest of the world dumps dollars. If they dump dollars, the Fed loses control, the whole system blows up. The banks fail. The bond market collapses. The stock market won’t go down 1,500 points; it would be cut in half. ” No matter what happens, there is still an enormous and growing debt.
Dr. Roberts contends, “The situation is unsustainable.” It will blow up at some point, and Dr. Roberts predicts, “It will be worse than the Great Depression because in the Great Depression, prices fell along with employment. Now, prices will be rising and employment would be falling. . . . Gold and silver prices will explode in dollar terms.”
http://usawatchdog.com/paul-craig-roberts-obama-could-govern-as-a-dictat...
Bullshit. Obama will blame it on the Repubs. Treasury market says default coming.
If the world dumps dollars, where do they go? They'll go where dollars are welcome - US equities and real estate. That would be a boon to those markets for as long as dollars flow in, but will also set them up for a crash when the flow dries up. Ultimately, Trillions in Bennie Bucks will come home to die, blowing up then popping asset bubbles when they arrive. It's just a matter of when and under what circumstance. Default would speed up their destruction.
But default means people expecting payment in dollars get less dollars. Is that not deflationary? If so, why dump a stronger dollar, one that can't be diluted as in the past since the US can't borrow nearly as much (that is, have the Fed print Billions to buy our debt) as in the past.
When the US markets crashed in 2000 and 2008, and trillions of dollars evaporated each time, did the world dump dollars? No. In fact, it looks like the world is waiting for the US equity markets to loose the training wheels (QE and trillion-dollar deficit spending), watch the crash, then buy stocks with both hands with much stronger dollars.
So here's the quandry: If default leads to the federal government being unable to borrow a Trillion bucks each year, then that money will not be borrowed into existence, which is also deflationary. QE would end because it would be pointless, not to mention the Treasurys held by the Fed will lose value, wrecking its balance sheet. So a world that's pissed off that we missed a few payments and refuses to buy our debt will no longer have that Trillion spent into it, which would be much worse than a few missed payments.
Obama said yesterday that the fate of the World Economy rests on our raising the debt ceiling. I don't know about the rest of you ZHer's, but I'm pretty damned tired of having another $10,000 of debt racked up each year by the federal government in my name (for my kids to pay off) just to keep the world spinning.
Is there any other way to get the government to stop growing by leaps and bound other than cripple its power to borrow? Apparently not.
I always look on the bright side.
Now I'm not looking.
Who the Fuck is Kyle Bass?
but Kyle, Japan is supposed to default, not the USA
Bass's famous and influential Ira Sohn call on DXM seems to have been a loser.
...Unless you just traded the news in and out.
Land and metal. Oh, and a brain.