Posts Tagged ‘Kyle Bass’

Kyle Bass With David Faber: Bernanke’s ZIRP Is An ‘Inescapable Trap;’ Muni Bond Bloodbath Beckons But “States Will NOT Default”

Courtesy of The Daily Bail  

CNBC Video – Kyle Bass with David Faber – Feb. 16, 2011 

Visit for breaking news, world news, and news about the economy

Video – Part 2

Source – CNBC

Municipal bond defaults on the local level are likely and investors would be better off avoiding them, according to Kyle Bass, managing director of Hayman Capital.

Bass said he generally agrees with the call by famed banking analyst Meredith Whitney, who said as many as 100 defaults are likely that will cost more than $100 billion in damage.

Though Whitney’s call has prompted substantial backlash from her colleagues in the industry, Bass said the question is more a matter of degree.

"There are going to be a number of muni defaults, but it’s where you draw the line.  Will states be allowed to default?  Will legislation be introduced to allow states to restructure?  I don’t believe that’s the case.  I believe states will not default." 

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Kyle Bass: Be Warned…

Courtesy of Karl Denninger, The Market Ticker

He sees this the way I do, and note carefully: He was right about the subprime and housing in general too. 

Two parts:


Note that when he presented his views years ago to the big banks, he was told "I hope to God you’re wrong."

He wasn’t.


No Way Out For Japan

No Way Out For Japan

Courtesy of Mish

The Business Insider has a fantastic Interview With Hayman Capital Founder Kyle Bass. Bass testified at the crisis hearings in Washington, about Fannie Mae, Freddie Mac, bank capital, bank leverage and derivatives. He discussed those issues with CNBC’s David Faber along with his forecast for Japan.

Here is a partial transcript.

Kyle Bass: …. China and Japan own a lot of Fannie and Freddie Debt. I think we are more sensitive to them losing money than we are to the US taxpayer losing money and I think that has to change. … Fannie and Freddie have paid $200 million into campaigns of 354 politicians over the last 10 years. This is an organization created by the lawmakers. Why are they paying the lawmakers? Let’s get rid of this structure and just have the government make mortgage loans. …

David Faber: Let’s talk briefly about some other things you are doing at Hayman. … We saw the mini-blowup in Dubai, we have heard a lot about Greece, when you look at the totality of sovereign risk, where are you focused?

Kyle Bass: I think the big canary in the coalmine is Japan. When you see how Japan has lost 20 years of their prosperity from 1990 to today, you see what happens when a government steps in and runs giant deficits to make up for the private market place pulling back and attempting to deleverage.

So what we’ve seen around the globe in the developed world, bad private assets are moving onto public balance sheets. Sovereign balance sheets have expanded 86% from pre-crisis levels of debt. If you extrapolate that from the beginning levels of debt, many of these countries around the world won’t be able to service their debt. So I think in the next 2-3-4 years you start to see
significant defaults.

David Faber: Do you believe Japan is in a position where it might default and/or devalue its currency as well, in the next 3-4 years?

Kyle Bass: I do not think Japan has a way out of this.

David Faber: Why Not?

Kyle Bass: You have a secular decline in population, and you have a huge funding structure at below market rates. So Japan’s weighted cost of capital is only 1.4% and their sovereign balance sheet is much worse

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Former Fannie Chief Credit Officer Says FHA Is $54 Billion Underwater

Former Fannie Chief Credit Officer Says FHA Is $54 Billion Underwater

Courtesy of Tyler Durden

In keeping with the warnings presented by Kyle Bass warned that the entire housing bubble is now being ported over to the taxpayer’s balance sheet, Edward Pinto, a former chief credit officer for Fannie Mae claims that the Federal Housing Administration will likely require a major taxpayer bailout "in the next 24 to 36 months" as it is likely to incur $56 billion more in losses than it can withstand.

For those that think the NINJA loans are a thing of the past, think again – the Fed is now actively encouraging just those same reckless standards that brought America to the brink:

The FHA program’s volumes have quadrupled since 2006 as private lenders and insurers pulled back amid the U.S. housing slump, Pinto said. The trend has left the agency backing risky loans and exposed to fraud in a “market where prices have yet to stabilize,” he said. The program insures loans with down payments as low as 3.5 percent and has no formal credit-score requirements.

The FHA Commissioner, David Stevens, is keeping to his side of the story, which is that everything is being properly accounted for, and there is no risk in the future of the Administration. Don’t expect this story to change until the next time the handout hat startrs getting tossed around legislators. In the meantime, the deterioration in loan standards keeps accelerating:

About 14.4 percent of FHA loans were delinquent as of June 30 and 2.98 percent were already being foreclosed upon, according to the Mortgage Bankers Association. The combined percentage for all mortgages was a record 13.16 percent, according to data from the Washington-based trade group, which said in releasing the figures the share of FHA loans past due is being suppressed by the large amount new debt.

So there you have it: housing bubble 2.0, now openly sponsored by the Administration. The more things change (insert appropriate slogan reference here)…

Mr. Pinto’s 94 page testimony and presentations and provided below, which are a must read for those who care to see what a reflating bubble looks like.


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Zero Hedge

Life After 11/9 - Governing The Ungovernable

Courtesy of ZeroHedge. View original post here.

Submitted by Raul Ilargi Meijer via The Automatic Earth blog,

Over the summer I introduced a two-fold assertion: 1) global economic growth is over (and has been for years and won’t come back for many more years) and 2) the end of growth marks the end of all centralization, including globalization. You can read all about these themes in “Globalization Is Dead, But The Idea Is Not” and ...

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Chart School

More of the Same: Small Bearish Wedges

Courtesy of Declan.

Friday had bears rubbing their hands in glee as it finally looked like momentum was shifting their way, but bulls again stepped in to take markets back to their open price, and in some cases, higher. Volume did climb to count as distribution, but with the small price changes for these indices

The S&P remains tightly bound to the rising wedge. Swing traders have the best chance to profit; market coiling action often leads to a directional trend - either a continuation down or a counter break higher, stop on the flip side. Technicals suggest a move lower.


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Courtesy of The Automatic Earth.

Inge Morath Street Corner at World’s End London 1954

Over the summer I introduced a two-fold assertion: 1) global economic growth is over (and has been for years and won’t come back for many more years) and 2) the end of growth marks the end of all centralization, including globalization. You can read all about these themes in “Globalization Is Dead, But The Idea Is Not” and “Why There is Trump” There are also extensive quotes of the second essay in wicked former UK MI6 spymaster Alastai...

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Misconceptions about the Nordic Economies

By The Foundation for Economic Education. Originally published at ValueWalk.

Nordic Economies

Photo by sebilden

Misconceptions about the Nordic Economies

The Nordic countries are usually mentioned in the Spanish political debate as examples of well-functioning and efficient Welfare States where the government provides citizens with a large range of social benefits. (The terms “Nordic” and “Scandinavian” will be employed interchangeably to refer to Sweden, Finland and Denmark. Norway and Iceland are excluded from my analysis.) Politicians, especially on the left side of the political spectrum, look at Sweden, Denmark, or Finland as successful social democratic experiments in which social entitlements are guaranteed by the ben...

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Market News

New You Can Use From Phil's Stock World


Financial Markets and Economy

Trillion-Dollar Payout May Mean Peak Largesse for U.S. Investors (Bloomberg)

A total $600 billion in share repurchases and $400 billion in dividends will be doled out by S&P 500 Index members by the end of the year, the biggest combined payout in history, according to strategists at Barclays Plc. Gravy like that is getting tougher to sustain as corporate profits suffer a six-quarter slump and cash levels begin to dwindle.

Deutsche Bank Could Be The “Lehman Moment” Of 2016 (Value Walk)


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Insider Scoop

Rockwell Collins to Acquire B/E Aerospace for $8.3B

Courtesy of Benzinga.

Rockwell Collins (NYSE: COL) and B/E Aerospace (NASDAQ: BEAV)  today announced that they have entered into a definitive agreement under which Rockwell Collins will acquire B/E Aerospace for approximately $6.4 billion in cash and stock, plus the assumption of $1.9 billion in net debt.

Under the terms of the agreement, each B/E Aerospace shareowner will receive total consideration of $62.00 per share, comprised of $34.10 per share in cash and $27.90 in shares of Rockwell Collins common stock, subject to a 7.5% collar. This represents a premium of 22.5% to the closing price of B/E Aerospace common stock on Friday, Octob... more from Insider

Kimble Charting Solutions

Bio-Tech; In more trouble if this fails, says Joe Friday

Courtesy of Chris Kimble.

At one point in time, actually for years, Bio-Tech (IBB) was a market leader. From the 2009 lows to 2015, IBB out gained the S&P by more than 250%. Since the summer of 2015, Bio Tech has remained a leader, a “downside leader!” IBB has lagged the S&P by over 35% in the past 15-months.

Is the downside leadership over for IBB? Below updates the pattern on IBB


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Members' Corner

The Orlando Massacre Part 3

Courtesy of Nattering Naybob.

A continuation of a Naybob of IT's Natterings from Part 1 and Part 2...

While many Christian churches expressed grief and offered free funeral services for the victims of the Orlando shooting, the fundamentalist Westboro Baptist Church held an anti-gay protest during the funeral of the victims.

But the Westboro Baptist Church's protest rally was blocked by about 200 people who formed a human barricade on the main street in downtown Orlando, ...

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Swing trading portfolio - week of October 17th, 2016

Reminder: OpTrader is available to chat with Members, comments are found below each post.


This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...

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Mapping The Market

The Most Overlooked Trait of Investing Success

Via Jean-Luc

Good article on investing success:

The Most Overlooked Trait of Investing Success

By Morgan Housel

There is a reason no Berkshire Hathaway investor chides Buffett when the company has a bad quarter. It’s because Buffett has so thoroughly convinced his investors that it’s pointless to try to navigate around 90-day intervals. He’s done that by writing incredibly lucid letters to investors for the last 50 years, communicating in easy-to-understand language at annual meetings, and speaking on TV in ways that someone with no investing experience can grasp.

Yes, Buffett runs an amazing investment company. But he also runs an amazing investor company. One of the most underappreciated part of his s...

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Digital Currencies

Gold, Silver and Blockchain - Fintech Solutions To Negative Rates, Bail-ins, Currency Debasement and Cashless

Courtesy of ZeroHedge. View original post here.

By Jan Skoyles

I was so pleased yesterday by the announcement that I have joined the Research team at GoldCore as it meant that I could finally start talking about it and was back in a role that lets me indulge in my passion by researching and geeking out on all things gold, silver and money.


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Epizyme - A Waiting Game

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

Epizyme was founded in 2007, and trying to create drugs to treat patient's cancer by focusing on genetically-linked differences between normal and cancer cells. Cancer areas of focus include leukemia, Non-Hodgkin's lymphoma and breast cancer.  One of the Epizme cofounders, H. Robert Horvitz, won the Nobel Prize in Medicine in 2002 for "discoveries concerning genetic regulation of organ development and programmed cell death."

Before discussing the drug targets of Epizyme, understanding epigenetics is crucial to comprehend the company's goals.  

Genetic components are the DNA sequences that are 'inherited.'  Some of these genes are stronger than others in their expression (e.g., eye color).  Yet, some genes turn on or off due to external factors (environmental), and it is und...

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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.

To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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We know you love coming here for our Stocks & Options education, strategy and trade ideas, and for Phil's daily commentary which you can't live without, but there's more! features the most important and most interesting news items from around the web, all day, every day!

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