Kyle Bass on France and Japan

Kyle Bass Hayman Capital’s founder Kyle Bass has recently spoken at the AC2012 The Entanglement KB being the key speaker of the event. He emphasized on central banks’ bloated balance sheets. Moreover, he talked about Japan and Europe but he did not mention anything about his investments in non agency debt.

Bass said that as banks are still run in many poorer European countries, the LTRO has not accomplished anything significant. He also noted that Europe trades with itself with flows which go from Southern to Northern Europe. The situation in many countries is grim even without having a look at the balance sheet revenue. Bass also added that Iceland and Ireland had banking assets with 10x assets as a contrast to their GDP. Kyle believes that France is next and that if the European Union splits up they won’t let France stay.

Kyle Bass stated that he had had a conversation with Kennth Rogoff, a famous author, about the debt problems in the world. Bass feared as he noticed that none of the regulators had paid attention to this particular problem. Inflating out of the station will not work because the revenue won’t grow as fast as revenue. Japan owns 24x its tax revenue and according to the hedge fund manager if it goes to inflationary levels this will be end of it. According to Bass, this is a Keynesian endpoint case, giving an example with Russia.Then he continued discussing confirmation bias.

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