Kyle Bass Sums It All Up: "Proceed With Caution"

Tyler Durden's picture

From fears of Argentinian devaluations (and a 26-year-old running policy) to Japan's structural collapse; from Europe's false hope to China's bubbles; and from the Fed taper to the US hydrocarbon revolution, Hayman Capital's Kyle Bass provides a broad-based presentation of global risks and opportunities in the clip below. The Q&A is where Bass comes alive and is well worth the price of admission for a hedge fund manager unafraid to discuss the possibility that the status quo is unsustainable. Bass sums it all up perfectly succinctly, "proceed with caution."


Kyle Bass Presentation clip here (embed unavailable - click image for video) - make sure to watch through the Q&A...

As Bass recently noted, there is no safe-haven in Japan...

"The interesting thing in this selloff in the marketplace and in tech ... and this huge selloff in Japanese equities, is that the Japanese bond market hasn't gone anywhere," Bass said.


"Yields haven't collapsed, which is fascinating. So their bonds are acting pretty terribly in the environment of their equity market. So we'll see what happens."

Full Hayman Capital Presentation:



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TammanyBrawl's picture

Hey, Kyle. Good to see you out of the bunker. Can I boorow some gold?

DoChenRollingBearing's picture

Mmm, gold.  Yes, if the world is headed for "Argentina" gold is a good idea.  Argentina has also become a hotbed of Bitcoin use because of their .gov irresponsability.  Bitcoin is very useful when there are capital controls (as there are in Argentina, BTC sells at a very high premium there)

Info from a transaction I captured at for over $1,000,000 is at my article as well as how to use two different BTC mixing services (gives you more anonymity when using BTC).

YMMV when using mixing services!

Fun With Bitcoin for Beginners: Part Seven"

Tao 4 the Show's picture

"Proceed with caution".

Kurzweil was right that the singularity is near, he just didn't recognize which singularity. The one we are nearing is the discontinuity between "Proceed with caution", quasi-normal, life and markets as usual, and total unknowable break down.

That breakdown could be war, economic collapse, currency belly up, solar-flare-grid-goes-down, etc, etc, etc.

Life on the edge of a singularity. Wild times. Making people and societies crazy, which only feeds back to the tension of the transition.

kaiserhoff's picture

Look at the risk/reward. If everything comes up sunnyside, you only lose 3-4 percent each year in negative real interest rates.

If something bad happens, you can lose everything in a few micro seconds.

So the reward is...?   and the caution is...?

Tao 4 the Show's picture

Excellent point, and spoken from the "sweet spot" of a balanced mind. On either side are first the wealthy with unbridled greed for moar, and on the other those who are desperately trying the multiply "not enough". Let go the greed and fear, and one comes rather easily to your point.

kaiserhoff's picture

I like Bass, but he isn't really analyzing the market, but what the Fed will do to the market, which is so wrong on so many levels.  What we should look at is what the Fed will be forced to do eventually, which is raise rates to defend the currency..., but I've been saying that for four years, so consider the source;)

maskone909's picture

The dollar is eaither putting in a giant floor at 79 or we are about to waterfall like a motherfucker. Has kyle ever plugged in ww3 as a variable? Yes he has. And he has placed his bets on USD's and usa domestic energy superiority. I just dont see the USA walking away unscathed in this. Especially if japan has a bond crisis/currency crisis

Tao 4 the Show's picture

Some very interesting questions arise: 1. With war or without, it appears that one or more alternative payment systems will appear. How does that affect valuations? 2. Do 1's and 0's in virtual moneydom continue to have meaning in wartime? etc

rocker's picture

First, let me say Thank You to Zero for the terrific Speech with Kyle. He had much more content than the PDF overview exposed.

Second, let's all hope Bambi doesn't push Putin into a altercation with us, (the U.S.), for it will be at our loss. All pain, no gain.

That beiing said, I think Yellen will Blink. The Dollar will get stronger, as everybody will want it, the FED will cross over the meaningful taper effect.

The part which will be strang is CPI will continue higher because it lags the devaluation of the dollar that continues as long

as we still do have some form of tapering. Then look out above, rates will climb. That's the part the FED can not stop. Good Luck All. 

VAD's picture

Why do rates need to climb?  The Fed can just keep printing moar! and keep yields low forever.  I know eventually the shit hits the fan, but the catalyst for it will be whatever the banksters want it to be.

marathonman's picture

The Fed will do either of two things - they will keep buying US government bonds out of created money or they will stop.  If they keep going they will eventually devalue the currency so that the US government can meet all its promises by paying them all back in worthless FRN's.  If they stop buying bonds then they'll precipitate a big recession/depression that will crater the economy and destroy government income.  There's an outside chance of the economy actually growing without the bond market supports but I don't know of any cases where the strategy has worked.

Mises was right.  There's no way to keep the boom going from credit expansion.  Eventually you have the hangover or the currency destruction.  Welcome to tomorrow.

SAT 800's picture

Oh, I'm sure your opinion is much more fact based than his; and your team of full time professional data analysts is better than his. On the other hand, maybe you're just another ignorant citizen with a keyboard.

TheReplacement's picture

It is wrong that doing just that is the only way to do it nowadays.  Kyle Bass is just doing his job and he's doing it honestly.  The Fed is the market.

SAT 800's picture

Well you better write to him right away and explain to him what all the mistakes are that he's making. You people are literally insane. Where did you get the idea that your completely useless opinion is worth typing? Where does this amazing egotism come from?

Mi Naem's picture

Q: "Where does this amazing egotism come from?"

A: The example that you provide. 

VAD's picture

I don't think the Fed would defend the dollar.  They have no particular allegiance to it beyond their ability to manipulate it for their own purposes.  When it's no longer useful to them, they'll hyperinflate it and move on the the next phony currency...SDR's or Ameros or unicorn farts.   Currency is nothing more than a wealth transfer tool to them.  In the meantime, they most likely want to keep the proletariat fat, dumb, and distracted so no real rebellion can ever take place. 

TruthTalker's picture

Considering the government can turn off internet access whenever they choose it is not the place I would ever choose to put my money.  I believe if you do not hold it in your hand you do not own it - whether it is paper stocks or bitcoin - after Mt. Gox people would be insane to put their money in bitcoin - maybe a very small portion but to put significant wealth in bitcoin is crazy - Gold/Silver have been around for 5000 years - bitcoin is aroung for 5 - really people - I get wanting to store your money out of fiat currency and central bankers control - but bitcoin is not where you want to be.

DoChenRollingBearing's picture

I have a lot more of my money in gold than BTC.  If I lose all the BTC from various wallets, it really does not matter.  And for that to happen, losing some BTC would be the least of our problems...

SAT 800's picture

getting desperate to feed the page click god; are we?

So Close's picture

Love me some Kyle Bass.  Straight talk.

Escrava Isaura's picture

So Close,


Stop the propaganda. Kyle doesn't talk straight. He’s a policy/insider propagandist.

But, still fooling all of you.

By the way, the comments are pretty weak. Back to Ukraine… or something else.

fonzannoon's picture

He certainly has started to talk like an insider. We have flung shit at everyone on here the last few years and now even the zh golden boy is suspect.

fonestar's picture

There's always fonestar.

DoChenRollingBearing's picture

Far as I am concerned, fonestar, you are a valuable PAL here at ZH.

"Non illegitimi carborundum"

dirtscratcher's picture

fonestar, you are a dweeb of the highest magnitude but for some reason that I can't figure out , I occasionally enjoy your pitiful contributions. Between fonestar induced eyerolls, you sometimes make me smile.

fonestar's picture

Thank-you for choosing fonestar.

XitSam's picture

You say that like it's a good thing.

SAT 800's picture

Now that you've proved that even the terminally ignorant and marginally retarded can "fling shit"; what are you going to do for an encore?

fonzannoon's picture

I'm really sorry about this whole thing with the SAT's. I could understand that by getting an 800 you spend most of your life being called a retard. I willl choose a different word going forward so as not to offend you.

Greenskeeper_Carl's picture

I'm not gonna fling any shit on him. Every now and then we gotta take off the tin foil hat for a little while. EVERYONE can't be in on it. EVERYONE cant be out to get us. So he may be sounding more mainstream, so what. Every time him or Nigel farange talk half the people on here seem to post just to call them sellouts. I think Kyle has earned a little bit of leeway.

tarsubil's picture

First, the university trust that he was a board member of sold physical gold. Then he talked about how smart Icahn is and refused to say Herbalife is a ponzi. Maybe he got upgraded to a five namer or something and has gone along to not get wiped out. What's the point anyway? They can make anyone's life miserable and there is no reward for talking to the little people.

SAT 800's picture

You're a professional international investor with a terrific track record who can explain things in simple language ? Don't be shy tell us what the straight talk is. As if you knew anything but how to type. What a joke.

SAT 800's picture

Now this is a good reason to check on Zero Hedge; every once in awhile they have an article by someone who actually knows what they're talking about. This is a particularly good presentation.

Caracalla's picture

According to one analyst, all is well with the U.S. economy.  Here is what he said:

Much of the optimism stems from the lousy winter and how it affected big-ticket purchases. While not all of that will be recovered in the following quarters, companies are predicting a fair amount will, said Randy Frederick, managing director of trading and derivatives at Charles Schwab.

“Probably half the things people didn’t do was because of the weather, so there’s a lot of pent up demand,” Frederick said.

How's them apples!  I say, sell in May and go away is the smart play

TammanyBrawl's picture

And probably the other half of the things people didn't do is because they spent all their money on food due to inflation, didn't have anything left for fuel to heat their homes (currently in foreclosure) and froze to death.

Contrarian bullish!

kaiserhoff's picture

Or their jobs have been cut to 25 hours thanks to Obozo.

kaiserhoff's picture

Bass thinks QE is working, and we can never "afford", his term, to end it.

I've been drunk, but I've never been that drunk.

Lmo Mutton's picture

Bass is managing the money of the 1%.

Trust me, QE is working.

mrpxsytin's picture

Move to Western Australia before things gets really bad and your own governments stop you from travelling. Due to its immense abundance of natural resources, Australia weathered the previous Great Depression in much better shape than Europe and the USA. Hope to see you soon!

kaiserhoff's picture

Why not Eastern Australia where the Sheilas are?

Serious question.  Few of us know your country.  What are the regional differences?

TammanyBrawl's picture

Got more action in Perth than I ever did in Brisbane. No kidding- they're total whores. (No offense. I mean that in the most respectful way.)

kaiserhoff's picture

Thanks.  I'll have to study my Foster's;)

SAT 800's picture

Surfers' Paradise; just south of Brisbane. plenty of whores. Also mind-bendingly beautiful Beach; also, also, also; just go there.

mrpxsytin's picture

There are plenty of women in Western Australia. We are currently experiencing a baby boom over here. Once you know what makes women (particularly western women) feel secure enough to have babies you know that this place has a lot going for it. 

Eastern Australia is good too, but it runs along socialist lines. The Eastern states place heavy taxes on Western Australia because it is where most of Australia's mining exports come from. So you could move to the East and live the socialist dream, or you could come to the west and make a life for yourself through hard work. Just don't go to South Australia. I am there right now on business and I have soon realised it was a waste of time because there is no business here. 

The Chinese have seen the potential here, and are coming in droves. I'm not racist so I think this is great. I just want to see hard working people sharing in this abundance and developing the country. The local populace has become incredibly complacent and are wasting this massive potential. 

james.connolly's picture

This is really funny, you go to SE-ASIA and almost all the guy's hunting for whores that they later make into wives are AUSSIES, ... if women were so plentiful in AUSTRAILIA, then why are the vast majority of AUSSIE men hunting for whores in BANGKOK? or PI, Bali, ... ... Indonesia?

I too spent a lot of time in AUSSIE, .. and let me tell you down there the women have the power and pick the men, but the PROBLEM and here is the BIG problem, outside of Melbourne and SYDNEY, and Brisbane they're COYOTE-UGLY, this has to do with the fact that AUSSIE women were never told about sunscreen or brushing their teeth, .. after all its a fucking penal colony like the USA.


So the 'miners' and all the guys with money and holiday go to SE-ASIA and pick up a woman who knows how to take a bath, who brushes her teeth, and stays out of the sun so her skin is beautiful, .. once an AUSSIE man has had a taste of a SE-ASIAN woman they never go back.

Yep, back in the day when they're young and we were young sure at the BIG DARWIN MIL bases during VIETNAM war, sure there were lots of cute horny AUSSIE women, trouble is when they get to be 22 years old they look 80 years old.


Flux's picture

Hm ...

I was in Australia back in ... oh ... early 1990s. I didn't know better, and got stuck in the touristy areas, and I think I spent most of my time in "Surfer's Paradise".

I remember then the girls were out of this world. Just amazing. Lithe, tanned sun goddesses. I have nice memories of that time. I remember going to California shortly thereafter, and was appalled by the fat, fake bleach blonde, silicon-injected look.

Flash forward 20 years...

A friend decided to go to med school in Australia (yes, I found it odd as well), and before he left I told him he was in for a treat. The girls were bombshells there.

He recently emailed me. Said they were all fat and snotty.

It really brought me down. I can confirm, however, that when I was travelling Asia, there were a lot of Aussie guys in the whore houses. Friendly guys, but as a whole, somewhat akin to your stereotypical redneck in Wonderland.

Go figure.

Flux's picture

You know what's odd though?

I returned to Canada about ... eh ... seven years ago. I think at that time Obama was running for president. And there was this chick "Obama Girl" always on youtube. And I remember looking at her and saying:


That was the first response. She just seemed large and chunky, and all the fake tanning and gloss wasn't going to change that.

I looked at the exact same clip now:

And she actually seemed kind of hot.

Fuck me.

The question:

As you age, do your standards slip? Or is this just a result of being stuck in the West for too many years?