Correction: an earlier version of this post stated Paul Singer was "shorting Argentina". In fact, he had no comments on Argentina at the Ira Sohn conference.
Today's star-studded Ira Sohn conference was led by two behemoths - Elliott's Paulk Singer and Hayman's Kyle Bass. We recently discussed in detail Paul Singer's perspective on the "most dangerous" investing environment [8] but today he summarized and added to those comments at the Ira Sohn conference. "There is no safe haven in today's markets," he explained, "those holding long-term bonds in US, UK, and Japan own assets that are trading at the wrong price," and went on with more brutal honesty, QE causes a distorted recovery - financiers doing well, ordinary person not experiencing recovery. Kyle Bass also stuck to the script [9] noting that in Japan "mindsets are changing - the beginning of the end has begun," and exclaiming in his subtle and forthright manner, "you have to be shitting me, you're adding a ponzi scheme to a ponzi scheme." We leave the summation up to Singer, "the ultimate question for a fiat money regime is at what point does confidence in money disappear?"
Elliott's Paul Singer:
- What we have in "legacy countries" is "long-term insolvency"
- World central banks have "reveled in the role" of being the only stimulators of growth
- The ultimate question for a fiat money regime is at what point does confidence in money disappear?
- We now have a "poisonous atmosphere" in which to "rely on the private sector" to create growth
- The world needs growth through innovation and entrepreneurship that's not zero-sum
- Ordinary person not experiencing Dow at 15000
Hayman Capital's Kyle Bass:
- On Japan: "You have to be shitting me, you're adding a ponzi scheme to a ponzi scheme."
- Country is "on tilt"
- BOJ: What they're doing is about 70% of what the Fed is doing for an economy 1/3
- Yen will get in to the 120s the next couple of years.
- Mindsets are changing - "The beginning of the end has begun.""
- Dex Media (DXM) debt will be worth par, equity will trade at 5x today’s price in 3 years.
DXM is now +25% (and it seems it never took a 300 page powerpoint presentation to achieve that?)...
[10]