Kyle Bass Destroys The Ponzi-Prone Debt Sustainability Arguments Of The Status Quo...And Why Germany Can't Save The World

Tyler Durden's picture

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.

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Smithovsky's picture

Gold, guns and nickels, mom. 

nope-1004's picture

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.


aleph0's picture


This interview is even better :

Kyle Bass on the greek euro financial crisis


25 minutes, but worth every one of them !


Great guy BTW !

dlmaniac's picture

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.

A Man without Qualities's picture

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.

LeBalance's picture

Fukushima + Your Proposal = No Revolt? ??????

Japan is dying financially, but it is dying much faster due to the radioactive disaster.

eureka's picture

Anyone know the comparable numbers and dire straits for the US...???

Marco's picture

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.

Harlequin001's picture

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...

Going Loco's picture

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.

Vlad Tepid's picture

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.

jeff montanye's picture

different time frames?  i'd rather financial markets disasters than the long term runoff of uncontrolled nuclear fission.

Vlad Tepid's picture

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.

CuriousPasserby's picture

Inflation would do the same thing without instantly infuriating people like a 50% wealth tax would.

unununium's picture

She really deserved it when he admonished "Don't hate the mirror because you're ugly!"

Snidley Whipsnae's picture

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.

Reese Bobby's picture

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.


Michael's picture

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.

WestVillageIdiot's picture

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. 

stirners_ghost's picture

You brainwashed fool; bankers don't hold the guns.

jeff montanye's picture

their hirelings do.  (and michael seemed to be being metaphorical -- financial wmd)

citrine's picture

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. 

Reese Bobby's picture

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.

citrine's picture

 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". 

DeeDeeTwo's picture

The idea that Bernanke (and his billionaire cronies)... don't know 10 times what Bass knows... (and days or weeks sooner)... is crazy, baby.

Imminent Crucible's picture

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.

PiranhaEatingGoldfish's picture

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!!!!

azusgm's picture

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.

Freddie's picture

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.

azusgm's picture

"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.

DosZap's picture


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.

augie's picture

guess your not a fan of oedipus. 

DarkestPhoenix's picture

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.

LasVegasDave's picture

Beucoup thank yous for the article on Argentina

It really is must reading.

Lord Koos's picture

It's a great read -- I notice he doesn't recommend livling in the sticks.

1000pips's picture

K Bass sounds great until the market goes up another 2000 points.  Euro to 1.40 in a week...

LeBalance's picture

squid just got stopped out on that bet. sore sphincter?

Terragram's picture

"The market" doesn't reflect macro economic reality right now, so whatever it does is unrelated to what he is saying.  

jeaton's picture

Not to worry...

The flea bags in the park will save us!

junkyardjack's picture

Well of course Germany can't but China can right???  Baaaa

apberusdisvet's picture

I don't if anyone saw his interview with the BBC bitch, but I'll wager her elite puppet masters were not too happy.

Oracle of Kypseli's picture

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



Temporalist's picture

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.

Mike2756's picture

Yep, what about corporations that take out policies on their employees?

AndrewCostello's picture

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.



LMAO's picture

You Sir are mistaken,

"15 minutes, yes 15 is all it takes to turn the tide"

Ben Shalom B.

Polymath and Saoshyant