Kyle Bass Destroys The Ponzi-Prone Debt Sustainability Arguments Of The Status Quo...And Why Germany Can't Save The World
Another noteworthy Kyle Bass moment as he discusses debt sustainability among major global sovereign nations. Simply and proficiently, the hedge fund manager describes how a dwindling current account surplus in Japan, US welfare economics, and the peripheral-to-core European stressors are all Madoff-like and unsustainable. Switching from broad-brush terms to the idiosyncratic complexities of each region, Bass offers his inimitable take - in a mere six minutes - on how the status quo is quivering under its own self-deception. His rightful conclusions remain extremely worrisome and should be required reading/watching for every central banker and politician trying to keep the dream alive.
(34 votes)
»
- Login or register to post comments
- 33903 reads
- Printer-friendly version
- Send to friend
Similar Articles You Might Enjoy:
- Presenting The "Kyle Bass" Harvard Business School Case Study
- The Endgame: Japan Makes Another Move
- Has Japan Run Out Of Cans To Kick?
- Kyle Bass Best Summarizes The "Profligate Idiots" In Europe: "They Have A German Pope And An Italian Central Banker"
- The "Neutron Bomb Of Capital Calculations" And A Kyle Bass Refresher
Gold, guns and nickels, mom.
Kyle Bass is coherent, precise, intelligent, and correct.
Too bad politics is for the idiots of the world..... we could use a leader like Bass.
This interview is even better :
Kyle Bass on the greek euro financial crisis
http://www.youtube.com/watch?v=rsCGI7s1SBg
25 minutes, but worth every one of them !
Great guy BTW !
Japan's end game is either default or hyperinflation, just like the rest of the West. There's really no other possibility to handle that massive debt.
There is an alternative - something similar happened before. The Japanese government announces a one off asset tax of say 50%. Given the precentage of debt held domestically by old people who just sit on it, not really spending it, but dreaming of passing it down to their children (who will be about 60 by the time their parents die anyway), this would reduce the debt by about 40%. Add to that, Japan is one of the few countries where they could get away with it without creating a revolution. However, the net result is the same - investors in JGBs are not going to get back what they thought, whether a consequence of an asset tax, inflation or default.
Fukushima + Your Proposal = No Revolt? ??????
Japan is dying financially, but it is dying much faster due to the radioactive disaster.
Anyone know the comparable numbers and dire straits for the US...???
The US is coasting along on reserve currency status and Saudi Arabia's support for it to buy US military protection from Iran ... the EU and Japan don't have that luxury, so the numbers wouldn't mean much.
Where were all these people years ago when it first became clear that failure was an inevitability?
This work-in-progress has been ongoing for long enough now for anyone with any sense to be well positioned for it, or they should be...
Easier said than done. Very hard to be well positioned for a future event which cannot be timed because while you are waiting you look like a twit compared with all the momo-chasers. You have to work out what is going to happen (and be right), position for it, and take the flak from your investors (or your family) while your positions are chewed up during the period before the event actually occurs. Even Michael Burry couldn't stand that pressure which is why he closed his firm.
And the body count is what again, LeBalance?
More Japanese have died from choking on mochi this year than from your radioactive apocalypse. Fukushima is seriously serious, but Japan's financial problems loom much larger.
different time frames? i'd rather financial markets disasters than the long term runoff of uncontrolled nuclear fission.
Japan's financial implosion is in it's 20th anniversary. If things are worse in Fukushima 20 years from now, I'll eat my hat.
Even one death is a tragedy there, but this article back up my opinion that cancers from Fukushima may end up being a statistical zero.
http://news.yahoo.com/future-cancers-fukushima-plant-may-hidden-155437834.html
Inflation would do the same thing without instantly infuriating people like a 50% wealth tax would.
She really deserved it when he admonished "Don't hate the mirror because you're ugly!"
aleph0... excellent interview catch.
Interesting to see the money honey interviewer attempt to 'stay on the message'... The message was obviously to demonize K Bass for 'capitalizing on the misery of others' which was a false dichotomy since Bass continually pointed out that he was carrying out his fiduciary responsibility to his investors.
Also, when the interviewer pointed out that Bass was using derivatives to place bets on soverign defaults, Bass pointed out that the biggest derivatives holders of Greek Soverign default were Greek banks.
Typical of money honey and money male interviewers on US MSMedia. Bass took this interviewer into deep water and turned her loose.
What's with all the man love for Kyle Bass? "We could use a leader like Bass."?
Bass is a clear thinking hedge fund manager who likes to manage money for other hedge fund managers he respects. He is not looking to solve the world's problems but rather profit from them. And there is nothing wrong with that in my mind. However there is nothing particularly noble about it either.
However I always look forward to his insights when he is on a "talking-his-book" tour.
The financial innovations from the Harvard whiz kids don't necessarily mean their products are beneficial to society. On the contrary, they are detrimental to society on a macro level and should be determined as such by the House banking comity and the legislature and banned from implementation and use. In other words they ar weapons of mass financial destruction and should be outlawed.
The goal was not to make them beneficial. The goal was to make them complicated and destructive. They had to interweave all of these bombs so that if one blew up it would blow up the entire world. This way there would be no way to dismantle a single entity without blowing up everything. Simplicity was the enemy and still is.
You brainwashed fool; bankers don't hold the guns.
their hirelings do. (and michael seemed to be being metaphorical -- financial wmd)
Reese Bobby:
I cannot speak for men, but as a woman I find it difficult not to admire this brilliant man. He appears to be very sincere, kind and confident without being cocky. He has class, which has nothing to do with money (or profit). His job is to find investment opportunities, and he is obvioulsy exceptionally good at it. He is not creating the problems, he is only identifying them clearly. And speaking about them openly, he does offer a chance for the problems to be resolved by those who have control over it.
I know Kyle and he is not a bad guy, (and by the way he has one of the hotter female marketers I have met). If you want to imagine him a certain way far be it from me to interfere. I even forgive you for entirely missing my points.
That is very kind of you. Obviously, you are a wise person and agree with Antoine de Saint-Exupery that "words are a source of misunderstanding".
You are correct sir.
The idea that Bernanke (and his billionaire cronies)... don't know 10 times what Bass knows... (and days or weeks sooner)... is crazy, baby.
The problem with Bernanke is not that he knows too little. It's that most of what he knows is wrong.
There's no advantage to having bad intelligence ahead of everyone else, and there's no strength in believing that you can make water run uphill or substitute credit for capital. Bernanke is a very highly educated fool.
Among many.
Crucible, I think you are wrong but that is just my opinion.
So get ready for the conspiracy nut rant:
I think Bernanke has a great deal of very correct information. I believe he could get us out of debt and back on track in a few months with a lot of pain, but it can be done.
The REAL PROBLEM is that he doesn't WANT to. He and his friends are getting richer by the second and it is no accident. And it's not ALL through theft. The correct info is being used by those who are "chosen" and they are intentionally leading the masses down the path of destruction like St. Patty leading the snakes out of Ireland and into the sea to drown.
The bigger picture, in my opinion, is one where there is looting an rioting in the streets and the "chosen" are safely tucked away from danger while they wait for the cretins to kill themselves off to a managable number. Then they will emerge as the lords of their new world and rule with ease and plenty of everything to go around.
Now I know that sounds a bit on the nutjob side (I warned you at the beginning) but I think if you look at the way this whole thing is structured and how everyone is now handcuffed to each other in a way that is detrimental to nearly everyone else, I feel there are only 2 possible conclusions.
1. This whole thing is a coincidence of astronomical proportions AND everyone that should have seen it coming was asleep at that wheel AT THE SAME TIME.
2. This has been constructed and designed in a way that has taken decades to get into place in the most perfect manner so as to be completely effective with just the slightest of pushes.
Now, I think there is a way to save the ship before it is completely under. It won't be pretty but it will work and save things for the future. A massive all encompassing Egyptian/Tunisian style revolt that takes place in nearly every major city in the EU & US. Then, we just might have a chance.
I really hope I am wrong and there is another way and it doesn't go down like this. I hope!!!!
It is great to have someone show up prepared as Kyle Bass. It is hard to fool someone who checks the facts rather than falling for the common assumptions that are bandied about.
He boils it down in less than 6 minutes where even the average Joe can just about understand. Morons who watch TV might not get it.
"Kyle Bass is coherent, precise, intelligent, and correct.
Too bad politics is for the idiots of the world..... we could use a leader like Bass."
Too bad neither Harvard B School nor MIT could produce what Texas Christian University did with Kyle Bass.
azusgm
Kyle has what we call COMMON SENSE.
The idiots destroying the country, are book smart, with NO Common sense.
Just a misplaced,socialist agenda,that's screwed the world, and us.
you forgot beavers!
guess your not a fan of oedipus.
Also forgot silencers.
http://www.youtube.com/watch?v=kx8EJpL1Uhk
Learn from Argentinians:
http://www.survival-spot.com/survival-blog/argentina-collapse
The most sought after items were silencers.
Fucking Iowa. I thought I was a genius when I realized, "Hey, I need one of these!" Then I found out Iowa is of the 13 states that outlawed them. Thanks to a tip from a friend of mine who is a policeman, he said (correctly) that an empty 2 liter bottle taped to the end of a 9 mm does almost the exact same job for the first shot, and seriously muffles consecutive shots. Looks ghetto as hell, but something tells me that in a post-apocalypse world, a lot of things will.
Anyone know if I could still get them with an FFL Class 3? May be worth looking into. Well, that and the fact you could own almost anything.....grenades, machine guns, et cetera.
Beucoup thank yous for the article on Argentina
It really is must reading.
It's a great read -- I notice he doesn't recommend livling in the sticks.
K Bass sounds great until the market goes up another 2000 points. Euro to 1.40 in a week...
squid just got stopped out on that bet. sore sphincter?
"The market" doesn't reflect macro economic reality right now, so whatever it does is unrelated to what he is saying.
Not to worry...
The flea bags in the park will save us!
Well of course Germany can't but China can right??? Baaaa
I don't if anyone saw his interview with the BBC bitch, but I'll wager her elite puppet masters were not too happy.
He blew her doors away. She used the analogy of buying insurance on your neighbor's house as if the neighbor's house is trading in the markets. What a dope! Limouzine liberal bail out the world 'cause of fiscal irresponsibility of nanny states
Right! I would buy insurance on my neighbors home if it was owned by investors, traded on the markets and the CEO was a suicidal pyromaniac.
Yep, what about corporations that take out policies on their employees?
Neither was her mirror.
This guy is right. Nobody can pull all this back from the edge, because people and governments continue to spend more money than they earn - that is the reality of the worlds false wealth.
Read:
http://www.amazon.com/Simple-Wealth-Mr-Andrew-Costello/dp/1463523017/ref
You Sir are mistaken,
"15 minutes, yes 15 is all it takes to turn the tide"
Ben Shalom B.
Polymath and Saoshyant
Somebody owns the debt and that somebody is going to be pissed off when all of it is repudiated or repaid in debased paper or electronic currency. There is no other way out of it. Congress just shot down a balanced budget amendment
Those who are owed, also owe!
The bigger irony is that we have to continue spend more than we earn just to be able to pay the interest on all the debt-based fiat currently in the system.
what happened to that guy who kept saying "Oh so boring, it'll get fixed, merry xmas"...Amazing something? I miss him as we head for the rapids. Oh so boring as the financial world melts!
Yes, Germany can save the world. By NOT LETTING ECB PRINT. By letting Eurozone default 70-80%, cut wages and restructure, euro would survive as a hard currency. As a bonus putting Goldman Sachs and NY based criminals out of business and finally putting the Greenspan paradigm in the dustbin of history.
And then you woke up?
Seriously though, Germany will have to usher a new ideal for 'core' Europe.
You mean by joining the Swiss Confederation?
;-)
Japan,Germany,the beaver dam......blow it up
I love this phrase: "Recap the banks".
Such a loaded expression. When a whole world of assumptions are squeezed into one phrase, it's time to ask questions. Was this the 2008 move by Paulson-recapping the banks? Who says citizens owe "recapping" to the banks?
There are dirty secrets hidden here. The money expansion that The Merk and others are worried about already happened when the loans were made. So much is not what it seems. The loaned money can not be paid back at this point.
Total agreement - Why recap the banks? Why is Goldman Sachs & Morgan Stanley still considered banks? They have no retail banking or depositor footprint? The best part is 98% of all Americans do not meet the minimum account requirement to have an account at Goldman Sachs? And here is the best part - I know Lloyd Blankfein would rather sacrifice his family than lose acces to the Federal Reserve Discount Window! How much longer does this hypocrisy endure?
And even with practically FREE money that the Federal Reserve provides the banking system their stocks are at all time lows...no one has any confidence in the financial sector however no one in Washington DC will do anything but throw more money at it as Bankers & Politicians are one in the same - both know it is a Ponzi - both trying to hang on long enough awaiting for the next crisis in order to exploit the American people one more time.
I for one am SICK TO DEATH with this nonsense & pray that the truth be made public & the guilty removed from their positions so perhaps in some way we can resolve to bring honest & integrity back to the American financial sector as well as to Washington DC
"How much longer does this hypocrisy endure?"
Please define the time when it did not.
You do know that those whores at Goldman Sachs and Morgan Stanley went out and bought smaller banks back in 2009 (or so) to get TARP money. True.
It should be on the web useless the Muslim's Administration and Google SkyNet erased it from history.
Hehe. Guess you don't see what they did by recapitalizing failed banks plus an entire rotted food-chain that feeds off the Fed. They made it law that debt owed to TPTB must be repaid, if not directly out your own pocket then indirectly through your taxes. Even extended through taxes your kids and grand kids will have to pay. PLUS you will repay through the burden of government austerity (defaulting on promises made for health and retirement benefits) and finally through a reduction in your standard of living through Zero interest rate policy, deflating real estate, declining real wages and under-the-radar inflation in the cost of everything you need to live or work.
This is the New Social Contract, making the post world-war 2 contract obsolete with you and future generations liable for the deficit
CE you get it! No doubt the issues involve funding current expenses on the backs of future taxes and/or inflation to repay the debts. It is a clear form of slavery. The shackles are every bit as real and hard as if they were made of steel. The IRS will collect the interest due and there isn't anything you, your children or your grandchildren can do about it. We won't deal with living within our means. We've created a culture of dependency and folks are scared out of their minds that their benefits might stop. "We can't throw Granny out in the snow" as if we would ever do that but the emotional impact of that image freezes us and the bonds grow tighter.
"Recap the banks"
Ahhh, damage control
Like in, PUT THE LID BACK ON TO CONTAIN THE TOXIC WASTE!
I prefer "make investors whole and fuck the banks".
Re-pop a "recap" in they're re-ass!
Did Japan think they could carry on forever spending the way that they do. I mean over 200% debt to GDP, that is just ridiculous. It is just like like close your eyes and wishing all the debt away and pray no one ever talks about it.
Watching the way they deny the reality of Fukushima, you can understand how the Kamakazi mentality is a Japanese creation.
Damn! Where were you when they were at 130% ?? ;-)
Japan has 200% of GDP, a population with a median age of 44.8, and just south of a Trillion is UST and USD. Do you think that Trillion will ever make back to the US?
Japan could clear a lot off their books by dropping that right fast. If I were them, I'd ask for Idaho silver mines, phosphate deposits and stacks of non-tungstenated gold.
Ahh but put yourself in the shoes of greedy self-interested leaders getting rich from the elite paymasters and you can easily see it was no accident. It was criminally negligent. And as long as they're riding a gravy train that still moves, they'll keep right on doing it till it reaches the cliff-edge and jump off just in time
Triple A
Twenty years ago, Japan, and the US, should have instituted a program of married couples having MORE children, and rewarding them for doing so.
This is how you RE CAP,a country.Roe v.s.Wade, we have allowed over 50 Million potential American taxpayers to be murdered.(vast majority).
The 40+million we have now paying taxes have absolutely no help coming.(and what has is not productive enough, and doesn't have the skills necessary to PULL Us up.
Why do you think the Illegal immigrant situation has not been stopped?.We know we do not have new worker bees.
So we must import them.
The generations of boomers that get so hammered here have carrried this country by producing,not using.Well, not enough were born to replace those worker bees.(save the ones we allowed to be killed).
They live on an island, though.
Mike2756
Mike, people die, retire, stop working.............you MUST have at least an equal maount coming in, as going out.
Exactly what Kyle said.Media age for Japanese is around 45yrs old.
To keep it going. In the long run, this is better for them. Have we reached peak population?
You social engineering scum bags. People shouldn't be encouraged to do anything, i want a free society, not one where you use the levers of the state to enable your economic nirvana.
The system is the problem, not the people.
Yet the yen and JGBs keep grinding higher in Kyle's face. Maybe Kyle is missing part of the equation?
Think of it as one of those cigarette/matchbook ignition devices, not exactly precise. If i read him right, it's burned down to the matches.
Maybe Kyle is missing part of the equation?
The only missing item is the 'reversal' event moment. That's when escape velocity is not reached and gravity takes more and more effect.
It's is grinding higher in Japan's face, actually. The more valuable your currency is against other major trading partners' currencies, the more difficult is to service the debt. Hence why all central banks love to print (and Japanese central bank actually intervenes in FX markets directly to bring down yen, even if their actions are futile). So, Kyle is spot on.
Love GFK, btw
90% of JGBs are held by the japanese people...your point doesnt really matter that much. The fx appreciation does stress their exports though.
And the Japanese people are getting older and not earning a yield on their JGBs so will have to go into spend-down mode. The elderly Japanese will not be able to continue to buy and hold JGBs.
Does anyone have any comments to offer on how the carry trade has influenced the credit market in Europe or visa versa?
Grinding higher against what? Gold? Other fiat currencies don't count. In case you didn't know, they make that shit from paper and ink.
Paper and ink have too much intrinsic value. Nowadays they make it from 1's and 0's. Mostly zeros. In fact, ontologically, it's zeros all the way down.
He does not really explain WHY Germany should be separated from the other Targets For Speculation, even though he explains that it's position is only marginally better...
Uppss... Did I give it away?
please correct me if i'm wrong (seriously), but isn't the prospect of the German economy recovering from a default a little more likely than any of the peripherial states by sheer virture of their manufacturing base?
I understand if no one wants to buy their kitchen knives or leederhosen they are as herbed as everyone else, but with the world still humping the consumerist model like it's 07' how likely is that?
well at least their arab and turkish workers produce things .....which is more than i can say for us...........
I think we still lead the world in printing...