Buying Gold Is Just Buying A Put Against The Idiocy Of The Political Cycle.

[Twisted Titan]

If the abridged summary from BBC's Hardtalk interview with Kyle Bass that we published yesterday was not enough for those seeking sense, truth, and direction, then (as promised) the full 24'30" interview will quench that desire. Reflecting on the similarities of his subprime perspective, he provides a crucial context for the debt-laden world of sovereign debt that he is now hedging. Shrugging off the somewhat snarky 'nefarious short-sellers' angle of questioning (and insuring the uninsured prod), he simply and elegantly points out how massively asymmetric the bet was, how the asymmetry in Europe has disappeared now, and all the asymmetry lies in Japan. From the 14-minute mark, describes the demographic disaster, destroys the savings myth of the land of the rising sun, and brings into focus how Italy's rapid demise should be a forewarning for the debt-servicing of Japan.


Ending up on the Fed's printing and the need for guns and gold, there's a little here for everyone! "


http://www.zerohedge.com/news/kyle-bass-un-edited-buying-gold-just-buying-put-against-idiocy-political-cycle-its-simple

[Twisted Titan]

http://www.youtube.com/watch?v=K-F_QF1XTXI&feature=youtube_gdata_player

[Neuro]

Great interview. Japan is going down! Europe already went down. Guns and Gold is Good!

[Neuro]

Imagine when the $ 15 Trillion held by the xenophobic Japanese public, in panic will look for a safe haven that is NOT Japanese government bonds.

$10 k gold is really a possibility!

[gunDriller]

Imagine when the $ 15 Trillion held by the xenophobic Japanese public, in panic will look for a safe haven that is NOT Japanese government bonds.

$10 k gold is really a possibility!

10K gold means about $321 a gram. old Pentium Pro CPU's have about a gram of gold on them. i always liked that CPU.

[joboo]

Kyle Bass is one cool headed MF'er.

I wish I knew 1/3rd of what he knows regarding financial matters.

Can anyone give insight on how the $1000 to $700,000 return plays out with regards to Greece?


http://www.youtube.com/watch?v=K-F_QF1XTXI

[Twisted Titan]

He made the interviewer look like a complete idiot ......that dosent even have a basic grasp or finacial matters.

I will wager Three Mercury Dimes he got a sheeet load of new clients since that segment.

[joboo]

He made the interviewer look like a complete idiot ......that dosent even have a basic grasp or finacial matters.

I will wager Three Mercury Dimes he got a sheeet load of new clients since that segment.

Damn straight he did. He's like the cooler, younger, smarter version of Peter Schiff. Same receding hairstyle though just less grey. :)

[Neuro]

Kyle Bass is one cool headed MF'er.

I wish I knew 1/3rd of what he knows regarding financial matters.

Can anyone give insight on how the $1000 to $700,000 return plays out with regards to Greece?

Not quite sure, but back in 2007-8, you could buy insurance on a Greek debt default, that costed maybe a 1/10th of a percent of the debt you wanted insured, now that would cost you about 70% of the nominal debt amount. Thus if you have that insurance you could sell it for 700x your investment...

[osoab]

I need more puts.

[solid]

Not quite sure, but back in 2007-8, you could buy insurance on a Greek debt default, that costed maybe a 1/10th of a percent of the debt you wanted insured, now that would cost you about 70% of the nominal debt amount. Thus if you have that insurance you could sell it for 700x your investment...

So, the real question is how do we buy this insurance on Japanese debt? That seems to be what Kyle is hinting to.

BTW, I third the statement where he owned that interview. This guy is sharp, he destroyed any argument the interviewer had..and she was coming at him like a bulldog. Way to go. Great interview, thanks for posting it.

[joboo]

EU set to ban insurance on sovereign bonds

European legislators have agreed a ban for sovereign default insurance in a move investors warn threatens to derail the European bond market.

http://i.telegraph.co.uk/multimedia/archive/02030/EU_2030683c.jpg
Investors would no longer be able to offset the risk of a default by a European country.

http://i.telegraph.co.uk/multimedia/archive/01768/Ebrahimi_60_1768731j.jpg (http://www.telegraph.co.uk/journalists/helia-ebrahimi/)

By Helia Ebrahimi (http://www.telegraph.co.uk/journalists/helia-ebrahimi/)
8:30PM BST 18 Oct 2011

The ban will stop the purchase of so-called "naked" credit defaults swaps (CDS), meaning investors will no longer be able to offset the risk of a default by a European country.

Andrew Baker, chief executive of hedge fund trade body AIMA, said: "We have previously expressed our concerns about the impact of a ban on uncovered sovereign CDS. It could not only reduce liquidity and increase volatility in debt markets, but also increase government borrowing costs and reduce real economy investments in EU member states."

The CDS restrictions will be brought in alongside a ban on naked short-selling of bonds and shares as well as other rules that force investors to give more information about their short positions. But the last-minute addition of sovereign CDS will be seen as a huge blow to the UK, which has been campaigning against their inclusion in the rules.

Italy – the world's third biggest issuer of bonds – had also been trying to oppose the new laws from including sovereign CDS, along with Spain and the UK.

There will be an opt out option for countries that will have to get regulatory approval if they can prove the cost of their debt was increasing or becoming illiquid.

[joboo]

(http://www.marketwatch.com/Search?mp=91&rs=true)
March 14, 2011, 5:44 a.m. EDT

Japan default-insurance costs see further rise

http://www.marketwatch.com/story/japan-default-insurance-costs-see-further-rise-2011-03-14

William L. Watts, LONDON (MarketWatch)

-- The cost of insuring Japanese sovereign and corporate debt against default continued to rise Monday as markets assessed the devastation caused by Friday's powerful earthquake.

The spread on five-year Japanese sovereign credit default swaps, or CDS, widened to 90 basis points from 79 basis points on Friday, according to data provider Markit.

That means it would cost $90,000 a year to insure $10 million of Japanese debt against default for five years, up from $79,000.

The Markit iTraxx Japan index, which tracks a basket of corporate and sovereign debt, rose 15 basis points to 113.

[Neuro]

I think the thing is with a Japanese government debt default, if it were to happen, or rather when it happens, you could forget about the credit default swaps paying out anything. It is a financial armageddon bet, but you could buy them now and pass them on later to someone else before Japan collapses. But with a Japanese default, you'ld be better of holding gold and guns. Nothing in the financial world will be left standing, especially not an issuer of Japanese debt default insurance. Hell they can't even handle little Greece defaulting... Those papers are just worth the ink they are not printed with, and the only purpose they have served is to give the buyer a false sense of security, and the issuer an income based on lies of security...

[vacuum]

Kyle Bass is one cool headed MF'er.

I wish I knew 1/3rd of what he knows regarding financial matters.

Can anyone give insight on how the $1000 to $700,000 return plays out with regards to Greece?


http://www.youtube.com/watch?v=K-F_QF1XTXI
wow! worth the watch