Kyle Bass on Europe, Japan and 2012

JulieW

JulieW

Well-Known Member
Silver Stacker
A fairly long and dry discussion but the sort of information one rarely finds in such a digestible form. Kyle Bass is one very clever man.

A major concern for Australia is Japan - our second largest trading partner; 30 minutes on if that's all that interests you.

"Return OF capital is much more important than return ON capital over the next few years"
Kyle Bass says the US dollar will be safe short term (up to 3 years)

Gold is discussed at 42 minutes and his interaction with comex and an audit of his billion of gold held by comex.
"comex is a fractional reserve exchange and they think price will solve everything".

Bass asks a senior Obama economist figure 'how will you grow exports without wage deflation?'
Answer: we'll kill the dollar.

1.03 for his summary - 'the fact is the governments must lie'

[youtube]http://www.youtube.com/watch?v=5V3kpKzd-Yw[/youtube]
 
Yep i watched this when it came out on youtube. If you really like economics i think its actually really interesting. Kyle bass is the man that started to bet against the eurozone just after 08-09, saw this disaster right from the begininning and had the nuts to bet against it ... :cool: LEGEND !
 
The amount of research his team puts into potential investments is amazing. Polling the German people regarding the Euro bailouts. I have never heard of Hedge Fund guys doing this level of analysis.
 
dccpa said:
The amount of research his team puts into potential investments is amazing. Polling the German people regarding the Euro bailouts. I have never heard of Hedge Fund guys doing this level of analysis.
Click to expand...

i know, he also talks about discussing issues with the fed, going to capital hill and rubbing shoulders with the big boys, i wonder how he can actually get that kind of access. A hedge fund is simply in the game to make money, (they aren't like banks who have ties to the government) i just wonder how he can get that kind of access to the real heavy weights who drive the bus. If i had a few million to spare i wouldn't mind giving some of it to Bass :lol: :D
 
If only i could trade long dated swaptions on japanese bonds / interest rates. have been wanting to do this for nearly six months and after much research, is just too hard / expensive to get any real exposure.

The life of a retail client hey.
 
mind my ignorance, but can someone explain what interest rate bets are? in his 2010 talk, at the end he says he takes enormous interest bets - someone sold him 5billion USD of japanese interest rate risk for less then 1 basis point

also, what does 'betting on a collapse' actually mean... in regards to video posted by metalmajix - is that CDS?
 
nowaydude said:
mind my ignorance, but can someone explain what interest rate bets are? in his 2010 talk, at the end he says he takes enormous interest bets - someone sold him 5billion USD of japanese interest rate risk for less then 1 basis point

also, what does 'betting on a collapse' actually mean... in regards to video posted by metalmajix - is that CDS?
Click to expand...

Hi mate,

Here is my understanding but please no one rely on this - DYOR.

Interest rate bets are like any other bet, effectively you bet that interest rates are going to be higher or lower in the future. For example Japans current interest rates are say 1%. If you think that they will go higher (say 5%) you would want to "buy" the current interest rates at 1% and "sell" them when they get to 5%. Although not exactly how you put the trade on, i use "buy" and "sell" as this is effectively what you are doing. It is very had for retail individuals to put these bets on, unless you are a high net wealth individual.

Making an interest rate bet is the inverse of making a bet on the bond itself, i.e. in the above example you are effectively shorting the bond because as interest rates rise, the value of the bond decreases.

In terms of "betting on a collapse" i don't think he is necessarily referring to CDS. I think what he probably means is that he's putting trades or bets on where they will pay off should there be a collapse. This might partially be through CDS, but i think would also be through other trades (e.g. the interest rate bets).

Cheers
 
Zerohedge.com have reported on the latest missive from Kyle Bass. Amongst other excellent points is this one:
Trillions of dollars of debts will be restructured and millions of financially prudent savers will lose large percentages of their real purchasing power at exactly the wrong time in their lives. Again, the world will not end, but the social fabric of the profligate nations will be stretched and in some cases torn. Sadly, looking back through economic history, all too often war is the manifestation of simple economic entropy played to its logical conclusion. We believe that war is an inevitable consequence of the current global economic situation.

Read more: http://www.zerohedge.com/news/2012-...-sheep-slaughter-and-we-believe-war-inevitabl
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pmstacker said:
Yep i watched this when it came out on youtube. If you really like economics i think its actually really interesting. Kyle bass is the man that started to bet against the eurozone just after 08-09, saw this disaster right from the begininning and had the nuts to bet against it ... :cool: LEGEND !
Click to expand...

Or on SS:
15 March
http://forums.silverstackers.com/topic-23915-australian-gold-confiscation.html

15 June
http://forums.silverstackers.com/topic-27695-kyle-bass.html

It's still a good video though, I took a lot from it, particularly that Japan is turtled.

I like Kyle, until he says something I disagree with, then my confirmation bias kicks in ;)
 
Here he is discussing his expectations for Japan in a recent interview.

[youtube]http://www.youtube.com/watch?v=t7Si3XTl6zQ[/youtube]

Picked up from zerohedge.com
 
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