Tipping Point for China – Kyle Bass

Published on
September 12th, 2017
Topic
Global Outlook, Macro, China
Duration
56 minutes
Asset class
Crypto-currencies, Commodities, Currencies

Tipping Point for China – Kyle Bass

The Interview ·
Featuring Kyle Bass

Published on: September 12th, 2017 • Duration: 56 minutes • Asset Class: Crypto-currencies, Commodities, Currencies • Topic: Global Outlook, Macro, China

Investing legend Kyle Bass sits down with Raoul Pal for one of Real Vision’s most requested interviews to date, to discuss China’s unsustainable debt, along with his latest views on the economy and currency markets. Kyle also sets out what he sees as the Best Trade in the World right now, exploiting market volatility going forward, as well some perspectives on the future for cryptocurrencies. Filmed on August 30, 2017, in Miami.

Comments

  • ls
    lucas s.
    31 December 2018 @ 19:46
    What would be great is to go over this interview with Kyle and discuss what he got right and what he got wrong, lessons learned. This was a great discussion, lots of rights, lots of wrongs... nonetheless was very insightful, a review of it would be worthwhile.
  • LK
    Lyle K.
    22 November 2017 @ 05:35
    I think Kyle is wrong on China. The momentum of their market and the strength of US and China leadership is going to keep pushing up global markets. I understand his argument on their leverage in the system and the shadow banking but it is different than the 2008 Crisis because the Chinese government realizes that they are overheating and are very swift to dampen it as the American mortgage crisis caught the fed and most banks by surprise.
  • GB
    Gerardo B.
    2 November 2017 @ 08:10
    At minute 30, I don't quite understand why as Raoul says, in Asia, with higher rates people will spend more and inject money into the economy and on the other hand, when you cut rates people will stop spending. Shouldn't it be the opposite? Really appreciate if someone can clarify.
    • SI
      Sundar I.
      20 May 2018 @ 00:11
      If I am not wrong, the basic Asia mentality is Asians are net savers. Which means higher interest rates means, higher return on their deposits which would reduce the spending more and vice versa. Its happening in China and Japan and mildly in India. I think this is what hes trying to mention - the Asian mentality, someone please point out if I am wrong.
  • JW
    Jason W.
    17 October 2017 @ 23:46
    China is not a command economy, it's a state-capitalism economy that worked just like Singapore.
  • VS
    Vasil S.
    16 October 2017 @ 10:10
    Can one of you more learned fellows advise what Kyle and Raoul mean by the 'currency trade'? Because the Chinese banks will need recapitalisation the trade is sell RMB? Thanks in advance.
  • BS
    Brandon S.
    27 September 2017 @ 01:03
    Buy 3 month out puts on UVXY and roll them every 1.5 months, use the proceeds to buy calls = limited risk and a lower cost to carry.
    • BS
      Brandon S.
      27 September 2017 @ 13:54
      Although the puts have been working, so keep doing that until it doesn't, limited risk, or maybe ratio it.
  • UB
    USMAN B.
    25 September 2017 @ 11:50
    'It requires you to pin me down' - Kyle 'When the fuck is this going to happen' - Raoul Brilliant! Usman
  • MM
    Michael M.
    25 September 2017 @ 01:44
    Great interview
  • BW
    B. W.
    24 September 2017 @ 17:39
    Good interview. One point: the speculative short position on the dollar is not large at all. In fact, according to CFTC data, taking into account large and small speculators, as well as asset managers and leveraged funds, the bet is actually slightly smaller than average over the past 5 years. In addition, he doesn't address the impact of the Chinese approval of FX hedging tools for foreign capital in late February, which really changed this story. But for a guy blatantly talking his book, it's about as interesting an interview as one might ever hope for. Thanks
  • TO
    Timothy O.
    22 September 2017 @ 14:33
    A unique vision that expands the mind. Great interview with Kyle.
  • JH
    Joseph H.
    20 September 2017 @ 15:35
    Getting 'blow up trades' right is extraordinarily tricky. Every asset class seems spring loaded to disappoint, if not become a disaster. Yet, here we are. I think the attribution goes to Peter Lynch 'more money is lost preparing for the next bear market than in the bear market' Great interview.
  • JG
    John G.
    20 September 2017 @ 05:52
    Great interview Raoul! Interesting dialogue between you and Kyle.
  • KN
    Karl N.
    17 September 2017 @ 22:22
    Kyle Bass - best presenter of a thesis there is....great work RV team...
    • AO
      Arthur O.
      13 August 2018 @ 23:45
      Agreed... too bad he's never right. Check out Hayman's returns over the last 8 yrs, feel sorry for his investors.
  • MB
    Michael B.
    17 September 2017 @ 17:45
    It would be nice Raoul when you are giving the high points at the end of interview if you mentioned one or two ways to take positions one way or another on these major points. Great interview though
  • PS
    PD S.
    17 September 2017 @ 01:58
    great interview as always by kyle bass. good job raoul! :)
  • gh
    g h.
    16 September 2017 @ 18:32
  • BS
    Bryan S.
    16 September 2017 @ 16:38
    So through trade is....? Short RMB?
    • gh
      g h.
      16 September 2017 @ 18:28
      It appears so. Starting at minute 21 to 22:20 Bass affirms that it is a currency play and expect it to play out sometime between Nov 2017 and June 2018.
  • JN
    Jill N.
    16 September 2017 @ 11:52
    Superb Kyle & Raoul, thank you both very much
    • gh
      g h.
      16 September 2017 @ 18:33
      Amen.....
  • CG
    Cat G.
    16 September 2017 @ 10:02
    I really wish Raul would start acting more like an interviewer and cut off less the people he's talking too, sometimes just to expand on what the other person is saying. I know he has a lot of knowledge and smarts but that's now the person we came to watch! Thanks!
    • CG
      Cat G.
      16 September 2017 @ 10:02
      now=not
  • SS
    Steven S.
    15 September 2017 @ 22:22
    Economic history is one thing - but this is a truly complex system never seen before. Central Banks have slaughtered open and fair price discovery -ask Hugh...unsound FIAT money and controlled markets touch all things -from environmental degradation to uncontrolled credit expansion/speculation, the prick of the bubble could come from anywhere in this connected market but with Central Bank meddling it will be allowed to grow MUCH MUCH LARGER then it needs to be. I agree with Mr. Hendry - true macro hedge fund management is dead....until it's not, and that will be too late maybe for everyone. My thoughts.
  • gh
    g h.
    15 September 2017 @ 22:11
    If Bass is correct and China's liquidity is their US Treasury holdings then we have appeared to threaten war on Sept. 12 when the Treasury Sec. said- “If China doesn’t follow these sanctions, we will put additional sanctions on them and prevent them from accessing the U.S. and international dollar system -- and that’s quite meaningful,” Mnuchin said during an event at CNBC’s Delivering Alpha conference in New York on Tuesday. Battle stations everyone.....
  • ml
    michael l.
    15 September 2017 @ 19:49
    Great piece - timely and engaging. The China debt data eventually matters and matters big - the plates can't keep spinning forever.
  • JS
    John S.
    15 September 2017 @ 16:59
    Kyle, eat much more quality fruit. Exponential return on health bro!
  • NS
    Nicholas S.
    15 September 2017 @ 06:06
    This is the Realvision I love. Timely doesn't cut it. I mean you guys are nailing it here - like in real time. I have rewatched Mr. Bass's previous interviews and this is another instant classic. Thank you Raoul, Grant, and team for producing such refreshing content in this space.
  • MB
    Martin B.
    15 September 2017 @ 02:36
    How could China manage this debt using the significant* gold we all know thaey have? 16 - 20,000 tonnes.
  • CB
    Clinton B.
    15 September 2017 @ 00:13
    KB returns! Clean cut and elegantly put as ever.
  • CB
    CHRISTOPHER B.
    14 September 2017 @ 21:37
    Thank you.
  • RA
    Robert A.
    14 September 2017 @ 21:36
    Always love a Kyle interview. During the interview I had a flashback Hugh Hendry thought re Kyle's Yuan short trade. Wonder about the P & L to date, whether he has indeed been "timed out" and how he's holding up emotionally. Hugh Hendry made some great comments in passing about a high conviction position that hasn't been sized right (way too large) that is going hard against you-----"when you start talking to your position".....come on baby, you know you want to turn my way....your long over due, come on baby you can do it...you know you want to.....come on honey, etc. I've, unfortunately gotten myself into a few of these spots myself---say a Tesla short.
  • SD
    S D.
    14 September 2017 @ 21:30
    This guy's views on China are really interesting. In general a really high value interview. Could somebody there please identify the press conference in which China confirmed 15% NPLs? Also how can Bass's comments that major US corporates are having difficulty repatriating funds be confirmed (without approaching the corporates directly and they'll refuse to talk)?
  • PG
    Pavel G.
    14 September 2017 @ 20:05
    Great arguments and great delivery but all his key views are very consensus. Everyone got carried out in greek banks and rmb shorts.
  • JR
    Joe R.
    14 September 2017 @ 16:58
    The problem with Kyle's short China thesis is that he treats it as if it were a company rather than a sovereign state. If China were a company then yes, it would be bankrupt, but given that it is actually a highly top down sovereign state the analysis breaks down. Leverage is only a problem when 1) there is a forced unwind 2) if it isn't closely backed by assets 3) if its in a currency that you do not control. Working from the 3rd point first, most of foreign debt was unwound by the end of 2015. Whats left is internal. On point 2, the remaining leverage has been redistributed from the corporate side to the household and government sides of the economy. So the debt has been moved to the same place to the assets. On the 1st point, unlike in the US financial crisis the government will subvert market pricing rather than force a Minsky moment on the system. And profitability has gone up with inflation and commodity prices. So sorry, but I just don't get it.
    • DC
      D C.
      14 September 2017 @ 18:19
      Good points. But even with the transfer of debt to consumer and govt, they are holding arguably weak assets- Overinflated real estate property, and govt infrastructure of ghost towns etc. How will it unwind is a good question though. Perhaps, until the balance of payment rewinds, and China becomes more of an importer, and the RMB is considered much weaker, and they have to use significantly more of their USD reserves to be accepted globally. That accompanied by the low ROI assets spent by the government could topple everything. But will that happen by Nov of 2017 to June of 2018? Not going to bet the farm on it.
    • PN
      Paul N.
      15 September 2017 @ 02:40
      I thought the bet is that the yuan will devalue BECAUSE they control it. They'll print a bunch to save their banks after this country wide construction and lending bubble.
  • AK
    Anton K.
    14 September 2017 @ 16:34
    The Bassmeister General strikes again!
    • MS
      Matt S.
      15 September 2017 @ 16:00
      I know who you are lol.... ;)
  • TL
    Tianyun L.
    14 September 2017 @ 15:04
    I love Kyle but I think he is wrong on the timing. He thinks the CCP will do the right thing and thus will have to deflate the banking system. I think they will push it as far as they can because their legitimacy post tiannamen has been to pay off the middle class through housing appreciations. This isn't a Taiwan/Japan style boom bust, the CCP's grip on power is at risk here, so it is very possible you could see a even bigger bubble than Japan.
    • NS
      Nicholas S.
      16 September 2017 @ 04:28
      It's not really about choice if they are forced to bring in dollars to combat devaluation (China announced $2b U.S. bond sale this week).
  • LV
    Luís V.
    14 September 2017 @ 14:14
    A lot has been (well) said on the content of this brilliant conversation in this comment section. But a texan saying that command economies have positives! Esp. when authorities want to build infraestructure??? They do it fast!??? But that´s because there is no respect for property rights (and China seems not to). That was a huge surprise to me.
    • PN
      Paul N.
      15 September 2017 @ 02:43
      That's the trade off. Most political systems have positives and negatives even when we don't agree with them.
  • SL
    Seth L.
    14 September 2017 @ 14:03
    Extremely logical thesis. Anyone have any recommendations as to how a retail investor can short RMB directly (i.e. not just shorting a stock index)?
  • VS
    Victor S. | Contributor
    14 September 2017 @ 12:25
    Thinkers are always interesting people. However all his risk suggestions go out the window when he says GOLD is a currency? Gold is money -paper (only is based on confidence ) is a currency ...where he is with gold is in never never land? When the end game comes and the banks close bitcoin will been virtually worthless to suggest it is an asset class implies blackjack and craps should be in your portfolio! Gov'ts print money to solve problems and hyperinflation -after the depression -is the consequence. This is where the hedge is -in gold -almost little else.
  • V!
    Volatimothy !.
    14 September 2017 @ 12:13
    Raoul said "bleeding cash" when refering to holding vol. Good one, thats exactly how it feels. When it hits though its like riding lightning.
    • ns
      niall s.
      14 September 2017 @ 16:14
      I have yet to hear from anyone on RVTV what is the most efficient way to hold a long Vol position without being eaten alive by the contango in the Vix futures curve shown here : www.vixcentral.com , otherwise know as Seth Golden's ATM.
    • RM
      Robert M.
      14 September 2017 @ 19:50
      Nancy Davis 8 Jun 17: The best portfolio insurance rather than SPX puts is Long Gold and Short AUDUSD, all done via going long using 6-9mth options.
  • AG
    Alexander G.
    14 September 2017 @ 09:20
    Just reading the IMF report Kyle mentioned (another reader kindly posted the link). "High savings are at the heart of China's external and internal imbalances". The report seems to suggest that a high positive current account (or trade balance) is the consequence of a high savings ratio. But isn't it the other way around? Chinese didn't begin with enormous savings; they accumulated over time via positive trade balance. And while you can blame China and the savings ratio all day long for global imbalances - what about the other side of the coin? Household savings ratio in the US is probably negative once you exclude the few lucky ones in the 0.1%. The government has accumulated 'negative savings" thanks to the "exorbitant privilege" of USD reserve currency status. Would it be outrageous to blame those who over-consume and spend above their means instead of those who under-consume and save?
    • MG
      Michael G. | Contributor
      14 September 2017 @ 20:33
      Savings in this context doesn't mean "savings" at the household level in the way we typically think of it, it simply is a plug for GDP consumption vs production. An economy that runs an export surplus and uses the proceeds to build "bridges to nowhere" will show "high savings" even though the bridges are worthless. In China this is exacerbated as they don't report "consumption" of housing in the way we do in the US.
  • JV
    Jens V.
    14 September 2017 @ 07:36
    awesome interview. thanks kyle and raoul. Some good quotes: "If you have an economy of 11.5 tn dollars and you have 40 tn dollars worth of credit, you can bet that you’ve extended credit to places that you’re not going to see it come back from." "We only had 17 tn on balance sheet in the banks maybe another 5 off balance sheet in an economy of 17.5 tn. And we detonated our banking system."
  • CS
    C S.
    14 September 2017 @ 04:41
    It seems, listening to Raoul and Julians last chat, and now this, gold is the (pick your favoruite politically incorrect term) 'tranny' of investable assets. 'Good for them but you're just not into it personally' (an aversion, lest you be labelled a 'Bug'). With so many currency systems around - fiat currencies; digits in machines; and now crypto's; who really needs or thinks of gold as a currency? A little disconcerting too that a fiduciary could potentially abscond with $100m or any number of a billions in his rectum. There's a reason why real things have value and imaginary things may/may not, depending on how whims change. The bubble is in promises and the representations thereof.
    • CS
      C S.
      14 September 2017 @ 05:43
      'Politically sensntive' was the phrase I was looking for, not 'politically incorrect'. In a rush. Cheers
  • DW
    David W.
    14 September 2017 @ 01:28
    I keep hearing about this "long volatility" trade. How exactly does one trade volatility?
    • JV
      Jens V.
      14 September 2017 @ 07:35
      buy options. read Options Futures & Other Derivatives by John Hull
  • GC
    Gary C.
    14 September 2017 @ 00:37
    Contrasting Bitcoin/internet opinions,KB views BTC as major invest asset; RP not so much. With internet you could not own TCP/IP, but BTC you buy the plumbing:blockchain: 🔧
    • JV
      Jens V.
      14 September 2017 @ 07:36
      but what will you do with the plumbing? what will you use your bitcoins for?
    • PN
      Paul N.
      15 September 2017 @ 02:45
      As a global liquid currency and gold-like store of value. Also, you can pay a small amount of btc to register data on the bitcoin blockchain which is by far the most secure.
  • JM
    John M.
    14 September 2017 @ 00:31
  • JM
    John M.
    14 September 2017 @ 00:20
  • DB
    Darko B.
    14 September 2017 @ 00:20
    I like Kyle, really enjoy listening to him. However I think he is too text book. His views on Japan were correct except nothing has happened, and Japan might be able to stumble along for a while, and then just print more money. As for China, 2 issues. 1- is't not a true communist rule is it. So you can't compare it to Russia. China has embraced parts of capitalism, and is a hybrid of sorts. No one can really be sure of what will happen. 2- If economic gravity should apply to then then by his own estimates it should have already applied. They are obviously over leveraged and have been so for some time......yet nothing. They obviously have an extraordinary amount of NPL's and yet nothing. The US tipped over with a fraction of the numbers China has now, and yet China has somehow managed to keep the party going. They are either smarter than the west or have a way of handling this that's not in the text books.
    • ek
      eric k.
      14 September 2017 @ 06:27
      Great points. I also wonder how many times Kyle Bass has actually visited China? I went in 1990 and even then, I could tell that China was no longer Communist and something big was about to happen.
    • JM
      John M.
      19 September 2017 @ 05:14
      Great point. I think one would want to know how is the China situation similar to and yet different from Japan? 4+ years ago Kyle predicted an economic crisis in Japan. He made a very compelling case but it hasn't happened, not yet anyway. I am not sure I understand why China's problems are more acute and must be resolved in a much shorter timeline.
    • ek
      eric k.
      11 October 2017 @ 03:08
      There's a reason why firms like Gavekal and Jim Rogers moved to Asia years ago so they could get a better hands-on understanding of what was going on. Kyle Bass sitting in Texas (like most Americans who have never traveled to Asia) and trying to do armchair quarterbacking doesn't me the comfort level that he gets Asia.
  • NT
    Nicholas T.
    13 September 2017 @ 21:44
    This is a softee interview. First three questions should have been (1) What's your RMB trade PnL inception to date? (2) What did you get wrong so far? (3) When do you admit the trade is wrong? Trades are not open-ended academic arguments. Kyle is very smart, but no smarter than the next guy when it comes to China. The bear play was Q2 2012-Q1 2016 in commodities and it's likely over. What is the obsession with CNY?! Clearly the currency trade of the year was short USD!! The fact that Raoul, Julian and others are still bullish the USD and believe it will reverse higher on positioning and a tight Eurodollar situation should embolden the bears to sell rallies. Short term is anyones guess but USD is ultimately going lower, and when it does, Kyle's short RMB trade will be proven wrong. The PBOC will have to sterilize again to prevent it from appreciating too much.
    • CB
      CHRISTOPHER B.
      14 September 2017 @ 21:32
      What happens if Europe slows? Will the ECB remain hawkish and if not, how will that effect $US?
  • SP
    Sat P.
    13 September 2017 @ 20:38
    This is the kind of content that I signed up to get with Real Vision. It has been lacking lately, but this interview taught me a lot about why China is a house of cards yet why it hasn't burst. I couldn't understand this from mainstream media.
  • CY
    C Y.
    13 September 2017 @ 17:18
    I've a very recently converted dollar bull. How the heck have we gone from a raging bull market to the largest short position by traders in 6 MONTHS! Disconcerting if you're a dollar bear.
  • EH
    Edwin H.
    13 September 2017 @ 15:28
    Kyle and Raoul for President and Vice President. Mic drop......
  • RD
    Ryan D.
    13 September 2017 @ 15:23
    Great Interview. Nice to see them revisit some of Kyle's themes. Always great to have him on and check out the Podcast for more of Mr. Bass's thinking.
  • RP
    Roberto P.
    13 September 2017 @ 15:08
    I' ve been listening Kyle for a long time. Very interesting facts he describe about imbalances in China but timing is everything in investment and seem that to play China macro stories where the time frame for a payoff is reasonable doesn't exist. When he says that the credit growth like it took place in China has always end in crises (IMF story), it would be interesting to take in account the size of China and the power the authorities have over the economy. Conclusion, great analysis about China, no time frame to invest.
  • SS
    Suresh S.
    13 September 2017 @ 14:54
    Here is the supplementary IMF report that Kyle Bass is talking about. If anyone is interested in reading it, I personally found it very interesting and insightful https://www.imf.org/en/Publications/CR/Issues/2017/08/15/People-s-Republic-of-China-Selected-Issues-45171
  • JV
    JACK V.
    13 September 2017 @ 14:02
    Great interview. Regarding crypto currencies, watch out if a large B2B, C2C and B2C platform like Amazon or Alibaba issue their own (or supports another) crypto currency. Such a move would instantly attract millions of business and consumer users and eliminate the need for central bank issued fiat. Think about it....buy eggs at Wholefoods with with the currency, Amazon pays the egg farmer with same currency and the farmer buys grain, tractors etc. via the same currency and ecommerce delivery system.....its robust, independent and endless. Of course the main reason this probably won't happen is because government overlords won't allow it.
    • MS
      Matt S.
      15 September 2017 @ 12:02
      Jeff Bezos is totslly in bed with the CIA who are obviously in bed with gvnt and bankers - they will work a scheme together, to benefit each other. It won't be AMZN vs the Fed.
  • BK
    Brian K.
    13 September 2017 @ 13:54
    There was a Chinese PHD who said China is fine since all debt is in yuan. Just print more yuan with zero rates. If that's the case, whats the debt to GDP level that they cant exceed? Japan is at 250% with no issue.
    • NC
      Nicola C.
      2 October 2017 @ 02:36
      Well, as Kyle says, China's outstanding credit is at $40TN on $11.5TN of GDP, implying 350% debt to GDP ratio, far higher than Japan's
    • BK
      Brian K.
      9 October 2017 @ 19:02
      @Nicola C. yeah so keep pumping SOE's with more capital, there is no limit.
  • DY
    Damian Y.
    13 September 2017 @ 12:21
    Thanks RV for bringing that interview, it was one of the best RV has done this year. Totally agree with Kyle on China, that it's just one big debt ticking time bomb. China is a country that used more concrete from 2011 to 2013 than the US did in the whole of the 20th century. When you actually see the cities that they built, all you see is concrete as far as the eye can see, that are very poorly thought out, and very poorly built, not to mention the haze of pollution that hangs over them. Personally I feel that China has done way too much building, in such a short time, which has caused a major environmental problem for the people. Companies are already going into Vietnam and Cambodia. The Japanese are already building the new underground railway in Saigon and pumping a lot of money into the country. Personally I think Vietnam is one of the most exciting countries in Asia at the moment, and unlike the Chinese, are one of the most friendly and hospitable people you will ever find. Well done RV for a great interview. My only complaint is that the interview only went for one hour, I could listen to Kyle talk for a day, the man is a star.
    • SB
      S. B.
      14 September 2017 @ 08:41
      What's the best way to invest in Vietnam as a consumer investor? The Vietnam ETF has horrible performance. Finding other managed funds is quite difficult (performance/costs/...)
  • CD
    Chris D.
    13 September 2017 @ 11:37
    Kyle is always good. But I'm not impressed with this one - nothing new in my world. - "China will blow-up" - How many times have I heard that? Now it's "just months away" -> "But I don't like gold", well that makes no sense - "Japan will blow-up" - Well, that is new (cough) - "The US economy is solid and can manage higher rates" - Really? Even with the fudged number from BLSBS and Fed you can clearly see that the US is in no position to handle higher rates -> total credit +70 T$ and National debt over 20T$ - "Europe is fraglie" - Well yeah, like many other countries - "Greece is cheap" - Okey, that one we can agree on - "EM vol lower than Nasdaq" - Given good growth prospects, changes in the petrodollar, etc, perhaps this is logical "Buy vol" - Well, I rather own indirect plays on rising vol
  • AM
    Alexander M.
    13 September 2017 @ 11:03
    for those interested in the article Kyle referred to re: $15billion in non performing loans. http://www.china.org.cn/business/2017-07/12/content_41199013.htm
    • CB
      CHRISTOPHER B.
      14 September 2017 @ 21:37
      Thank you
  • dj
    daniel j.
    13 September 2017 @ 10:52
    Great interview. More like this please
  • JV
    Jason V.
    13 September 2017 @ 10:25
    That was a true masterclass. RVTV at its very best. We eagerly await Kyle's next interview with Raoul. A real privilege to watch.
  • PB
    Pieter B.
    13 September 2017 @ 09:17
    Kyle is a true legend! Fantastic interview!
  • IC
    Ibrahim C.
    13 September 2017 @ 09:02
    Awesome Interview and some part of its essence have also been carried over to the RV Podcast ("Adventures in Finance), which started its Season Premier with Kyle Bass!!! I strongly recommend !
  • PM
    Paul M.
    13 September 2017 @ 08:57
    Great interview as always, it is a pleasure listening to Mr. Bass. However, one statement astounded me: "... I think that to your point, the dollar at this speculative short position on the US dollar has never been larger in the history of the dollar." This is simply not true.
    • KA
      Kevin A.
      13 September 2017 @ 23:22
      What numbers are you getting now, and when was the position higher?
  • PR
    Peter R.
    13 September 2017 @ 04:41
    Great interview. Would love to see Raoul Pal and Kyle Bass talk to Michael Pettis. Pettis is an expert on the Chinese economy and is also skeptical of their imbalances, but has slightly different views to Kyle. It'd make for a great discussion.
  • ek
    eric k.
    13 September 2017 @ 04:37
    he said look up those $15 trillion bad loans on china.org...I just went there and it said "domain for sale"--???
    • AM
      Alexander M.
      13 September 2017 @ 10:58
      It's china.org.cn http://www.china.org.cn/business/2017-07/12/content_41199013.htm
    • IJ
      Ian J.
      13 September 2017 @ 15:33
      Looks like the article was edited. No mention of 15T of NPLs.
    • AM
      Alexander M.
      13 September 2017 @ 21:56
      Unless I misread the article the first time I think you may be right Ian.
    • TT
      Trenton T.
      21 September 2017 @ 02:52
      Article states outstanding agricultural debt is 29.6t, up 40% from 2012. No way in hell Chinese farmers prudently invested that amount of capital . . . must be counting ABC lending in aggregate, although most of that is retail and commercial. As usual, Chinese data is murkier than the Huangpu in front of the Bund.
  • AD
    Anthony D.
    13 September 2017 @ 04:24
    A few years ago Kyle Bass was interviewed in the aftermath of the GFC, and he was asked, if he had to make one trade for 10 years what would it be. I believe he responded to short yen and go long gold, then maybe just buy gold and go spearfishing. I'm wondering if he still feels that way. Great session, thank you RV
  • ek
    eric k.
    13 September 2017 @ 04:11
    how can a multinational just move to Cambodia and Vietnam so casually as he says if they can't get their money out...that's kind of naive
  • CA
    Courage A.
    13 September 2017 @ 02:58
    Does anyone know what the yield trade they were discussing means ? And how we could get some exposure to it ?
  • JH
    Joe H.
    13 September 2017 @ 00:32
    .....being short vol and not even realizing it.
  • JH
    Joe H.
    13 September 2017 @ 00:30
    The best way to be long vol is to hire an expert like Chris Cole. If not, start by not beimg short too much vol. Refer to previous interviews with Mike Green and Chris Cole about people being short vo
  • sp
    shashwat p.
    13 September 2017 @ 00:17
    It is amazing how casually these sensible men discussed starting a war with China. Strengthens my view that we will sleepwalk into economic war. Weaponizing the USD is something Chinese have been discussing endlessly since 2006.Obviously China will respond and de-dollarization would accelerate, Not very strategic from long term perspective
  • TM
    Todd M.
    13 September 2017 @ 00:15
    Solid all around. Places the Chinese moves on Bitcoin exchanges in context. Restrictions are just another stopgap on capital flight not really a move against BTC.
  • YA
    Yuuji A.
    13 September 2017 @ 00:09
    Raoul, I'm surprised that a potential foreign cash repatriation was not mentioned as a catalyst for the USD/CNY trade. Understand that its part of "comprehensive tax reform" but I don't think the potential legislative package needs to be a homerun.
  • CD
    Cheryl D.
    12 September 2017 @ 23:50
    Thoroughly enjoyed that interview, a real pleasure to see two great minds at work.
  • JH
    Jesse H.
    12 September 2017 @ 23:13
    Certainly didn't disappoint. Fantastic interview. Would be good to get specific trade recommendations from Kyle with respect to Chinese currency and long Vol trades.
  • KB
    Kreso B.
    12 September 2017 @ 22:42
    Long vol, short yuan, short JGB, long oil... The man will lose shirt. In the last 5 years he only got Argentian bonds right. But it's always nice to hear a Texan gentleman Mr. Bass. Best of luck.
    • DC
      D C.
      13 September 2017 @ 00:03
      Yeah, especially if the USD down cycle takes effect, the Short JGB position will get whacked.
  • RD
    Ryan D.
    12 September 2017 @ 22:00
    Great interview. These two guys are smart enough to make the most complex puzzle in the world seem simple; truly impressive.
  • LJ
    Lucille J.
    12 September 2017 @ 21:55
    fantastic
  • PM
    Plan M.
    12 September 2017 @ 21:22
    Outstanding to experience people who recognize the importance of communication skills. The ability to take the ideas in your head no matter how sophisticated or esoteric and articulate them clearly to a wide-ranging audience is a slowly diminishing art form. Michael Green is another example. I did find myself wondering why it took Kyle 4 weeks to open an account on a BTC exchange only to finally give up. What's up with that? I'm no Kyle Bass but I opened mine (Coinbase) and bought Bitcoin within a few days and that was last year. Puzzling.
    • as
      andrew s.
      12 September 2017 @ 22:29
      All the exchanges were overwhelmed with people trying to open accounts at that time.
    • RD
      RP D.
      12 September 2017 @ 23:53
      #KyleGreen = #Edge ht yusko
    • AV
      Alex V.
      13 September 2017 @ 11:29
      Jake, Kraken takes that amount of time when you request limits of USD 500k deposits/withdrawals, KYC/AML due dilligence process etc.
    • PM
      Plan M.
      13 September 2017 @ 14:42
      Good point Alex...I misplaced the notion that a "nominal" investment in BTC by Bass is not likely the same as my definition of nominal :)
  • RG
    Richard G.
    12 September 2017 @ 20:59
    Excellent interview, thank you! Question...When they talk about getting long volatility, what's best way to do it? VIX calls seem to always have huge IVs. Calls on other VIX products or just long index puts, perhaps? Appreciate anybody's feedback
    • PM
      Plan M.
      12 September 2017 @ 21:24
      Your likely reading many of our minds with this one Richard. Actionable trade ideas...retail investors...lets be mindful of that guys.
  • HJ
    Harry J.
    12 September 2017 @ 20:57
    Try to get Kyle to discuss bond ETFs
  • HJ
    Harry J.
    12 September 2017 @ 20:51
    Rvtv subscription is better than long vol. Thank you for your great work. Both Raual and Kyle are the best!!! How can a retail investor buy long vol and maintain book value?
  • MB
    Max B.
    12 September 2017 @ 20:49
    Excellent interview...loved it. I keep asking myself 1 question. Does China care.......
  • WS
    William S.
    12 September 2017 @ 20:39
    Great interview (as expected). As I'm listening to Kyle speak, it's very hard for me to envision how his China thesis could be flawed in some fashion -- other than possibly being early. That said, there are many others whom I regard highly who are just as convinced that China is somehow going to be able to bring their bloated debt dirigible down to a soft-landing. Mark Yusko is one of them. Now I see that Kyle and Mark are going to treat us all to a public debate on these questions on October 13th in Dallas. I can't imagine a more timely and compelling debate than what we will see then. #BassYuskoDebateChina I can't wait ...
    • RD
      RP D.
      12 September 2017 @ 22:21
      Woule love to hear an audio recording of this @Realvision.
    • CJ
      Connor J.
      13 September 2017 @ 04:11
      What is the name of this event in Dallas? I am interested in attending
  • RM
    Robert M.
    12 September 2017 @ 20:24
    QE caused bonds to sell off every time. Given the same logic, this transition to net issuance will see a bond rally. The greater mechanism than gov supply/ demand appears to be the inflation expectations of investors in existing treasurys.
    • VK
      Viresh K.
      12 September 2017 @ 21:34
      Possibly, but what happens if inflation rises during QT?
    • RD
      RP D.
      12 September 2017 @ 22:22
      Greenspan has been warning about stagflation.
  • RM
    Richard M.
    12 September 2017 @ 20:22
    Absolutely fantastic!!! Whenever Kyle and Raoul get in a room and start to talk it feels like my brain gets electrified! So much to think about and try and understand. Thank you so much Raoul and Kyle.
  • TJ
    Terry J.
    12 September 2017 @ 20:11
    Awesome discussion. In the three years I have been subscribing to Real Vision, I have been priviliged to listen to the insights of some of the greatest investors and strategists, but watching this has reminded me that it doesn't come any better than Kyle and Raoul talking macro! Thanks for the invaluable RVTV service Grant and Raoul.
  • JH
    Joe H.
    12 September 2017 @ 20:08
    Outstanding!
  • SH
    Stu H.
    12 September 2017 @ 19:42
    That interview alone was worth the membership fee. Simply superb..Thanks guys.

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