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 msnbc.com 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.


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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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ValueWalk

Goldman Raking in Billions As Workers Face Looming Aid Cut

By Anna Peel. Originally published at ValueWalk.

WASHINGTON, D.C. – Amid a global pandemic and economic crisis hurting small businesses and workers across the country, Goldman Sachs reported “blowout second-quarter earnings” today, raking in a whopping $2.42 billion in profit — a boon CNBC is calling the mega bank’s “biggest earnings outperformance in nearly a decade.” Goldman Sachs was able to capitalize on the trillions of dollars the Federal Reserve and the Trump administration inje...



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Kimble Charting Solutions

Junior Gold Miners Working On 7-Year Breakout!

Courtesy of Chris Kimble

Its been a long 7-years if you happened to buy Junior miners ETF (GDXJ) back in 2013, as it has traded sideways since those highs.

This chart comes from Marketsmith.com, which reflects that GDXJ is trading above long-term moving averages and its relative strength continues to push higher.

GDXJ has spent the majority of the past 7-years inside of the trading range (1).

The rally off the bottom of the range in March, has GDXJ working on an upside breakout of this trading range at (2).

A...



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Zero Hedge

Gary Shilling: The Social Security's Funding Crisis Has Arrived

Courtesy of ZeroHedge View original post here.

Authored by A. Gary Shilling, originally published in Bloomberg Opinion

The Social Security Trust Fund has done quite well in recent years, due to the postwar babies’ surge into the labor force in the last decades of the 20th century while retirees from the low-birth rate Great Depression years were drawing relatively few benefits. The combination of these two forces pushed the Social Security Trust Fund balance from about zero in ...



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The Technical Traders

Second Phase Real Estate Collapse Pending

Courtesy of Technical Traders

Real estate, especially commercial real estate, is likely to be the first segment of the real estate market to enter the second phase of an extended collapse.  The COVID-19 virus has created an atmosphere where continuing operations for retail, restaurants, and many other business segments is virtually impossible to maintain.  Without the ability to earn sufficient income, thousands of restaurants and other retail businesses have already closed or are in the process of closing.  This has pushed the commercial real estate market into turmoil.  We believe the residential real estate market will follow the commercial market because consumers are going to suffer as commercial real estate collapses....



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Phil's Favorites

The Future Of Remote Work, According To Startups

Courtesy of Visual Capitalist's Theresa A.G. Wood

No matter where in the world you log in from—Silicon Valley, London, and beyond—COVID-19 has triggered a mass exodus from traditional office life. Now that the lucky among us have settled into remote work, many are left wondering if this massive, inadvertent work-from-home experiment will change work for good.

In the following charts, we feature data from a comprehensive survey conducted by UK-based startup network Founders Forum, in which hundreds of founders and their teams revealed their experiences of remote work and their plans for a ...



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Biotech/COVID-19

While coronavirus cases spike in the South, the Northeast seems to have it under control - here's what changed

 

While coronavirus cases spike in the South, the Northeast seems to have it under control - here's what changed

Face masks and social distancing have become the norm in New York City. Noam Galai/Getty Images

Courtesy of Taison Bell, University of Virginia

Hospital Capacity Crosses Tipping Point in U.S. Coronavirus Hot Spots” – Wall Street Journal

This is a head...



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Digital Currencies

Chainlink Crypto Surges To A New All-Time High - Here's Why...

Courtesy of ZeroHedge View original post here.

Authored by Joseph Young via CoinTelegraph.com,

Surging volume, price discovery, and new partnerships pushed Chainlink price to a new all-time high at $8.48...

image courtesy of CoinTelegraph

...

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Chart School

Dow 2020 Crash Watch - Update

Courtesy of Read the Ticker

Like 1929 the markets have bounced. This time it is on the back of the FED $6.5T money printing.

Previous Post: Dow 2020 Crash Watch 

But can the FED blow $6T every time the market rolls down to test support.

Yes, maybe before the US 2020 elections the FED will do 'what it takes'. But post elections not so much, the year 2021 is a long way from the next election (presidential or congress) and defense of the markets may not be so supportive at $6T or $10T per market smash. The FED may hesitate, and that will be window for stocks to break lower.

The 36 month simple moving a...

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Lee's Free Thinking

These Charts Show COVID 19 Is Spreading in the US and Will Kill the Economy

 

These Charts Show COVID 19 Is Spreading in the US and Will Kill the Economy

Courtesy of  

The COVID 19 pandemic is, predictably, worsening again in much of the US. Only the Northeast, and to a lesser extent some Midwestern states, have been consistently improving. And that trend could also reverse as those states fully reopen.

The problem in the US seems to be widespread public resistance to recommended practices of social distancing and mask wearing. In countries where these practices have been practi...



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Members' Corner

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

 

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

No matter the details of the plot, conspiracy theories follow common patterns of thought. Ranta Images/iStock/Getty Images Plus

Courtesy of John Cook, George Mason University; Sander van der Linden, University of Cambridge; Stephan Lewandowsky...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

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