The more I read, the more I want to know. Just about finished Michael Lewis’ “Boomerang” (see link below), which begins with a memorable interview with Bass. As one of the dozen or so investors that bet big on the subprime crisis, he’s been worth following over the past several years, but Lewis’ description has piqued my interest all over again. – HT
Here’s a bit of a preview. You can also track the latest news about Bass via this blog link.
The latest, via Zero Hedge, along with a few additional tidbits and links:
Hayman Capital’s Kyle Bass is back and cutting through the caustic *BS* that surrounds every waking moment in this kick-the-can world. Dispelling the myth of our ‘deleveraging’ virtue, with global debt having grown from $80tn to over $200tn in the last ten years alone (a 10.7% CAGR) and the frightening reality of central bank balance sheet growth of 16% per annum, Bass concludes (rightly) that “you can’t do this for very long” as governments infinitely leverage and central banks have begun the endgame of open-ended money-printing. Addressing the question of timing, Bass notes that while Europe and Japan are ‘perceived’ to be ‘staying together’ there are in fact devastating losses occurring (ask Greek bond-holders) and he firmly believes that “Germany will never go joint-and-several with the rest of Europe.” The world sits at a place it has never been before in peace-time – as far as global debt balances and deficits – and that is why the global investing playbook is so hard. He goes on to address the US fiscal debacle, Japan, hyper-levered economies, delayed inflationary outcomes, and worries that the cost-push (lower GDP, higher CPI) prints are just beginning in Europe. Must watch.
As a fiduciary, and something all investors should consider – “Given what we see coming, our job is not to lose money!”
On Fiscal Cliff: Won’t happen – politicians won’t fix anything.
On the CBO Budget crisis: As a non-partisan third-party ‘accountant’, “I can’t fix it!”
On Inflation: “It takes time – but it’s coming”
On Housing – he doesn’t believe housing will go up but has stabilized. “Everyone who ever thought of buying a house, has bought a house” and we need to flush the inventory – which wil take a few years.
On Trading The End of the World: Use Convexity – which is grossly concentrated in Japan
Own anything that is nailed down – productive assets!
Older Article: Kyle Bass on the Fate of the World at Financial Sense.
One Memorable Quote:
“Capitalism without Bankruptcy is like Christianity without Hell-it does not work” – Kyle Bass