Kyle Bass let's it slip

[james03]

Great interview, but just fast forward to around 32:15 and you'll see what I mean.  He's going to get hit on this one.

[yt]https://www.youtube.com/watch?v=DOFwxcb0Bjc[/yt]

[Maximilian]

The "Epoch Times" -- that's Falun Gong.

I'm not saying it as a criticism, but it's important to know. When I was in D.C. there were Falun Gong people passing out copies of the Epoch Times. I actually really enjoyed the newspaper.

[james03]

They hate the commie chinese, so I'll drink a beer with them.  The Epoch Times does some nice interviews with interesting people.  Their aussie news girl is smoking hot, so there's that also.  But check out the 32:15 mark, you'll laugh your butt off.  You can tell Kyle knows he slipped up, but he covers it up well.

[Gardener]

Shekel comment?

[Michael Wilson]

James,
I was listening very closely, but I didn't get what you are referring to.
I also suscribe to the Epoch Times, its a pretty good newspaper; very anti-Communist especially anti Chinese Communists.

[Tales]

I have followed Kyle Bass for about 8 years and noticed that he changed his speech from cold financial analysis to rhetoric after being burned by the Chinese government on his RMB put speculation.  I followed that very closely.

First I will note that he is correct that this is about a clash of cultures.  This is a major overarching theme that the West ignores.  Each culture has its own systems which dictate how society operates, these come in the forms of religion, morality, law, tradition, and historical background.  Culture A might believe that it is always immoral to lie.  Culture B might believe it is always immoral to throw your kin under the bus.  When Culture A and Culture B begin to interact, they are destined for conflict.  Culture A values truth in speech and action above all, whereas Culture B values protecting kin above all.  The conflicts that will brew from this are obvious.  The result is that both sides will view each other as immoral, then evil, and eventually go to war with each other unless one culture comes to dominate the other.

This is a fundamental problem with interaction between cultures.  It is either conflict or domination (or if you wish, the friendlier term assimilation which still implies the death of the previous culture).

All of the talk about how evil China is economically (I am not discussing their morality here, as he is a financier and so we shall stick to financial matters) boils down to the clash of cultures and the West's failure to dominate China.  He states it plainly several times and thinks nothing of it, as if it is as good as breathing air is good, that the West set out to liberalize and democratize China (but failed).  The West embarked on a multi-decade attempt to bribe China into becoming just like us, and it did not work, and now we are angry about it.

Just to recap some brief history, it was not the Chinese whom came to the West looking to interact between these two cultures, but us whom sailed to them.  And with each sailing the Chinese told the West to get lost, that they do not want to interact with us.  But the West found this intolerable and pushed its way in.  Portuguese traders were rather tame about it, but the British were not.  The British showed up and wanted to trade with the Chinese, but the Chinese informed the Brits that they owned nothing the Chinese wanted, and told them kindly to get lost.  But the British very much so coveted Chinese tea, silk and porcelain and continued on their quest to obtain it.  The final deal agreed upon was for the one thing Chinese (and to this day) want - money (silver, at that time).  And so ravenous was the British appetite for Chinese goods that soon the empire found itself running out of silver.  More requests were made to the Chinese for them to purchase British inventions, but the Chinese continued to have no desire in any interaction with the West, other than the acceptance of British silver.

In short, the British did not control their desire for Chinese goods, they did not get their spending under control, they did not accept the continuous multi-generations refusal of China to do trade with them, and so they did what the West always does - bring out the gunboats.  And bring them we did, taking Hong Kong, Shanghai, Qingdao (Tsingtao), Tianjin, Xiamen, Guangzhou (Canton), and many other lesser known Chinese cities all during the 1800s.  The West also burned down the Summer Palace in Beijing (the Emperor's residence).  [I visited it several times and it is an exquisitely beautiful gardens, too bad the West burned it down.]

This would be the equivalence of China taking control of New York, San Fran, San Diego, Houston, Miami, and burning down the White House.  (and then coming back generations later and wagging their fingers at us)

Then after having stolen and occupying all of these critical coastal Chinese port cities, the Western traders became druglords by smuggling enormous amounts of opium into China in order to reverse the trade imbalance and get their silver back.  And so this is the general history of economic interactions between the West and the Chinese, the West demands trade from China, China says get lost, the West cannot tolerate not being able to trade as it wishes, and then it brings the army out to seize what it wants.  It is not hard at all to see the exact same thing playing out all over again today - the West wants trade with China, China is merely interested in selling us things and taking our money, the imbalances become insane, the West won't stop demanding Chinese goods, and then it gets angry that China won't do what it wants.  Where this would go is not hard to see, except that this time the Chinese have an army that can easily stop the West from doing anything.  And so rather than conquering China again as we'd prefer, we'll try to undermine them.

Enter Hong Kong.  The recent "protests" in Hong Kong are nothing more than violent riots.  They began as earnest protests but starting on July 1st with the sacking of the government office (think Capitol Hill for Hong Kong) and besieging of the Wan Chai police station they morphed into violent riots and have remained a continuous riot ever since.  The West is fanning the flames of it by perpetuating the myth of this being a righteous battle against an oppressive government (Hong Kong) and indirectly pulling the strings of it.  I say the latter because the Hong Kong Civil Human Rights Front is just a conglomerate of Western NGOs with a few local HKers as their spokesmen.  This is the organization which at first operated the million+ people protests and then, after July 1st, just began organizing the continuous riots.  Also we see the tool Joshua Wong (mentioned by Bass) flying around America and Germany and meeting with Mike Pence, speaking to Congress, and lobbying for America to intervene in China's internal matters (again, this would be like AOC flying to Sweden and pleading with their government to intervene in American governance).  We also see the Hong Kong PanDems leaders (the HK version of American leftists) flying to America and meeting with top US government officials.  Most disgusting of all is Jimmy Lai, billionaire media tycoon, convicted criminal fugitive escaped from Macau (where he should be rotting in prison), flying to meet with Mike Pence.  Jimmy Lai controls Hong Kong media (think NYTimes, LA Times, CNN, MSNBC all rolled into one controlled by this man) and he is a fugitive from Macau and, no surprise(!), he is very much so against the extradition law which would send his criminal butt to Macanese prison where he belongs.  And so, not surprisingly, his control over the media reports nothing but the most insanely distorted version of what is going on here.

We also see multiple other HK rioters and criminals whom have escaped rightful prosecution for their crimes here in Hong Kong and have run off to the West to receive amnesty.  One such person was the unmasked man whom participated in the sacking of the HK LegCo building (think Capitol Hill)  [and this was not a mere sacking of a building, it also involved attacks on the police inside protecting it, including throwing acid powder on them].  And now we have the US Congress trying to pass laws that would again try to manipulate China into doing what it wants (all the more absurd given that China has almost zero to do with the ongoing riots in Hong Kong which are a locally [and historically British] caused problem).  Mr. Bass even mentions the 1992 US law which requires the US every year to analyze the degree of autonomy of Hong Kong.  What business is it of the US to analyze the governance of foreign cities and nations?  Americans think this is totally normal and good, but imagine if Iran every year analyzed American governance and threatened to take actions if it found it not to be up to Iranian standards?

Mr. Bass amusingly thinks that the HK riots are the mainland's worst nightmare.  I read the situation precisely opposite, this is a great gift in the eyes of Beijing.  Firstly the Chinese mainlanders are overwhelmingly incensed by the betrayal of HKers.  Beijing has been gifted an enormous boost in national pride just in time for their October 1st 70th anniversary.  But looking beyond their own borders, we see that for the past decade China has been going around the world trying to round up allies in Africa, Asia, and South America.  This is in direct conflict to America which has historically done the exact same thing.  China offers to these places infrastructure, money, and hands-off governance.  By contrast America offers loans (sink you into debt to us) and heavy-handed control of your government (become a liberal democracy just like us, or else the CIA will overthrow you).  And now add on top of that they can fly all these leaders to Shenzhen and show them how great Shenzhen is.  Then they'll walk them to the border with Hong Kong and say "look at how great our cities are.  You see that city in flames a stone's throw away from us?  That's HK, that's the West with its Western capitalism, Western law, Western democracy, Western human rights, look at it burning itself down, look at it tearing itself apart.  Do you want that for your country?"  And then they'll show them videos of the HKers brutally beating HK police, sacking the HK LegCo, smearing the good names of HK bureaucrats, brutally assaulting and gang beating any citizen whom voices disagreement with their riots.  They'll show them videos of the black masked HK rioters flying American flags, carrying signs begging for Mike Pompeo to come help them, all the while throwing molotov cocktails at police cars and catapulting bricks into police stations.  Maybe afterwards they'll show them dragqueens reading to children in California libraries, tell them about the sodomy classes being taught in Western elementary schools, or pictures of sodomites parading around in Western streets.

Who do you think the Africans, South Americans, Asians and Eastern Europeans are going to sign up with?  Being bossed around by America and eventually likely violently expelled by CIA operatives, or money & goodies from the Chinese?  I read a translation of a speech Macron gave a few days ago which basically boils down to "Europe was great, the French enlightenment was great, the British industrial revolution was great, but the Americans wrecked it all, we need to do something new now."  Belt & Road, what seemed silly at first, is a play at dragging Europe away from America and into cooperation with China (and Russia).  Hence why enemy #1 in America is magically Russia and China.

Again, none of this is to say anything about Chinese morality issues - I am sticking to business (and geopolitics) since that is what Kyle Bass discussed.  One can dislike moral problems in China and recognize the reality of what is going on in the world economically and geopolitically.

Finally I'll note I think his analysis of China's need for dollars as being our ace in the hole as being completely bass-ackwards.  The West is the one addicted to Chinese goods.  The West is the one whom sold out its factory workers and closed its factories down and shipped it all off to China.  We are the ones lacking the ability to produce the things we want to purchase, not China.  They have such over abundance of stuff that they ship it all around the world, taking mere digits on bank harddrives in return.  If push came to shove and trade ceased between America and the Chinese, whose shoes would you rather be in?  The men whom have the capability to produce all things but lack digits on bank harddrives, or have all the digits on bank harddrives your heart can desire, but empty store shelves to spend them on?

The problems that exist now between the West and China boil down to the same thing centuries ago - the West does not control its appetite for Chinese goods and gets really upset about the consequences of it.  It also gets really upset when other cultures do not want to become just like it.  It becomes very obnoxious when it is then paraded around as if the foreign culture is attacking us and we were innocent victims of it.  Oh no Huawei is spying on us, oh no the Chinese scam companies are taking our pension funds, oh woe is innocent America.  Meanwhile we have hundreds of foreign military bases manipulating world governments, we constantly threaten any country that disagrees with us (or we just kill our former allies like we did with Gadaffi or Hussein), we use our NGOs to spread homosexuality across the planet, our banks are used to sink nations into the debt quagmire that we sank ourselves into, our CIA is spying on everyone and operating in probably every country on the planet, we regularly sail our warships near all countries just to remind them that we are always around, we setup missile systems to surround Russia / China, and our politics half the time are about discussing how we should destroy ____________ (insert disliked country of the week).

And we can go further back than that.  Who invented the communist ideology that we so hate?  The West.  Who educated the revolutionaries that overthrew the traditional Chinese governance and opened up a power vacuum for Mao to take over?  The West (Sun Yatsen educated in Hawaii and HK).  Who conquered the major cities of China, greatly destabilizing it and opening it up for deeper invasion by Japan which opened the road for Mao?  The West.  Who forced their way into Japan and spurred their industrial revolution which was then used against China and the atrocities that brought about?  The West.  Who ran HK as an autocratic colonial state for 157 years, 150 years of which had zero, zero(!) democracy only to plant the time bomb of universal suffrage 7 years before getting booted out?  The West (Britain).  Who flew to China in 1972 to try to change the Chinese economy?  The West (Nixon).  Who brought China into the WTO with purposes of changing its methods of governance (as per Mr. Bass' description)?  The West.  Who sold out their local economy and threw their citizens under the bus in the pursuit of cheaper plastic goods?  The West.

But somehow the West is always innocent of everything and we're a perpetual victim of evil Russians, Iranians and Chinese.

My beef is with the distorted view of what is going on here.  It is always played as evil Chinese commies are hurting us purely innocent Westerners.  If its not the Chinese then its the Russians or the Iranians.  When discussing finance or geopolitics my interest is in discussing reality as it is, not in how I wish it were.  One need not like the Chinese to recognize things for how they are.  People often get things too mixed up.  "I really hate ____ about China (lack of free speech, perhaps).  Huawei spies on us.  But we have free speech so we are great and innocent victims of those evil commie spies."  This is the general connection people make and it makes no sense.  They get emotional about something and then it colors their analysis of everything else.  One could, for example, dislike Chinese abortion, and recognize that America has an abortion problem too, and recognize that America spies all over the world, and that Huawei is spying too.  One could then discuss matters of degree and things like that.  But usually discussions about China / Russia / Iran rarely are like that.  It is usually the West is great, the other people are evil, they are trying to hurt us so we gotta kill them right now.

I do note his "slip" is amusing.  He names the casino Jews lobbying for China, he names Hollywood and Wall St. as lobbying for China, he even slips and says Shekel, but he cannot come to discuss what all of those have in common.

[dellery]

You must write for the Global Times or something.
After killing hundreds of millions of their own people in the name of social progress; killing, imprisoning, and harvesting organs from Falun Gong practitioners; the rounding up and imprisoning and brainwashing millions of Muslims for not having the correct worldview, the CCP and its enablers still pretend they dont understand why people have a problem with them.

[james03]

Shekel comment?

Yep.

[james03]

Finally I'll note I think his analysis of China's need for dollars as being our ace in the hole as being completely bass-ackwards.

Did you watch the interview?  China is in deep trouble due to their debt load.  And Trump is squeezing them more.

Now I don't support "free trade" and the destruction of US jobs, but China is not some traditional virtuous society.  They are commie scum who persecute the Church.  And "free trade" is dead as long as Trump is in.

I also see that you fail to mention the need of the Portuguese to convert the Chinese heathens.  I don't think the Portuguese were involved in the opium trade (might be wrong), but I know for certain the Brits ran it from India.

As far as the fall of China to the commies, that was done by Russian commies (NKVD) infiltrating their (((agents))) into the US State Department.  Study the history of Trad Catholic Joseph McCarthy.

[Tales]

You must write for the Global Times or something.
After killing hundreds of millions of their own people in the name of social progress; killing, imprisoning, and harvesting organs from Falun Gong practitioners; the rounding up and imprisoning and brainwashing millions of Muslims for not having the correct worldview, the CCP and its enablers still pretend they dont understand why people have a problem with them.

No, Dellery.  People all too often let one opinion drive the analytical bus when conflated with another disparate concept.  I hate the immoral acts of the Chinese government, so we are innocent victims as they manipulate their currency.  This is the general analysis people make and it is muddled.

Mr. Bass is a financier whom has drifted into geopolitics.  I kept my comments to these matters.

A man can dislike the Chinese for all the moral reasons you mentioned and still at the same time not view them as victimizing us innocent Westerners economically.  One can dislike them and at the same time recognize the historical role the West played in bringing it forth.  I note that the millions dead, one-child-policy, and treating people as beasts is related to the import of Western ideas from Malthus and Darwin.  Darwin is taught in China at an early age.

One of the interesting (but sad) things about the USSR and Mao China is that they are lived-out experiments of failed Western ideas.  Communism, socialism, atheism, social Darwinism, malthusianism and the overthrow of traditional governance.  All of it stems from deviations from Church teaching and the ill effects brought forth from that.

[dellery]

No, Dellery.  People all too often let one opinion drive the analytical bus when conflated with another disparate concept.  I hate the immoral acts of the Chinese government, so we are innocent victims as they manipulate their currency.  This is the general analysis people make and it is muddled.

Mr. Bass is a financier whom has drifted into geopolitics.  I kept my comments to these matters.

A man can dislike the Chinese for all the moral reasons you mentioned and still at the same time not view them as victimizing us innocent Westerners economically.  One can dislike them and at the same time recognize the historical role the West played in bringing it forth.  I note that the millions dead, one-child-policy, and treating people as beasts is related to the import of Western ideas from Malthus and Darwin.  Darwin is taught in China at an early age.

One of the interesting (but sad) things about the USSR and Mao China is that they are lived-out experiments of failed Western ideas.  Communism, socialism, atheism, social Darwinism, malthusianism and the overthrow of traditional governance.  All of it stems from deviations from Church teaching and the ill effects brought forth from that.

My apologies. I agree with what you've written here. Furthermore, by playing the innocent victim we create a certain expectation in the public's eye --to be a spotless lamb. We aren't spotless, however, and when the public eventually sees this contradiction, they will become unsettled by it, and possibly even demand it to be reconciled.
Discourse between nations is not a pleasant or nice thing, in fact, playing nice is a good way to get your people subjugated by a foreign power.

[Tales]

James,

Yes, I watched the full interview.  As I also mentioned I've followed Mr. Bass for about 8 years now, and watched the development of his speech regarding China change from cold analysis to rhetoric.  I assume it results from his being burned by the PBOC on his RMB puts and his need to sell something new to keep his clients.  In this case he is now conflating his financial analysis with playing the innocent victim rhetoric.

I've never suggested that China was a traditional virtuous society, then or now.  All I noted was the historical record which is that the West constantly initiated and forced the clash of cultures which Mr. Bass warns of.  His interview on the finances of China is peppered throughout with rhetoric about America as the victim - absent from that is any context of how things got to the way they are.  I provided that in my post.  If we don't understand how we got to where we are then we are destined to make foolish decisions going forward.

Regarding the great commission, that is an obvious necessity.  I did not mention it as it is not pertinent to financial analysis, but I did ever so slightly tip my hat to the Portuguese in my post.  I also did not mention the need to convert the American Protestant heretics either, as that was irrelevant to the topics discussed by Mr. Bass.

Regarding the Chinese debt bubble, as Mr. Bass noted they are most likely well capable of managing their internal bubble, even as colossal as it is.  His conjecture is that they will be done in by their need for dollars to purchase oil and tourism.  That I think is nonsense.  The US is in the desperate and intractable position.  It needs what China produces for it sold out its manufacturing capital (buildings, equipment, skills, supply chains, factory work ethic, reliability) to China.  Now it retains digits on bank harddrives and thinks it holds all the cards because it controls the SWIFT system.  SWIFT is powerful indeed, as is the petrodollar, but it will not hold.  The ultimate power of the petrodollar or SWIFT is not in the cold mechanics of it but in the underlying credibility and perceived power of the nation - its a matter of geopolitics.

Russia and China are making overtures to the world that they can protect and provide for them.  This is a role the US had played.  Russia showed the world that with minimal effort it can ward off the most powerful army from invading Syria and Venezuela.  Iran shooting down our drone without response shows that the US does not have the bark it claims to have.  Whatever happened with Saudi last week shows again the US is not up to the task of defense of critical assets nor the avenging of it (since it claims Iran did it, where is the response?).  China is going around the world offering trains, buildings, ports, housing to all the nations no one thinks anything of.

In 5 years the only serious president the US has had for a century will be gone and replaced with a puppet of the oligarchs.  If you want to know what the oligarchs want just look at what they obtained the past 50 years.  More debt, more consumerism, more kicking the can down the road.

I am not saying any of this is desirable, I am merely stating things how they are.  America is and has been losing geopolitical power for about two decades now.  It is picking up steam with the new Russian missile systems which nullify our entire army.  It is picking up steam as China collects allies in Africa & South America.  This is what matters - not some cold mechanistic analysis of China's dollar use.

China will go through a major restructuring because its debts are so absurd.  It did it before in the 90s when their SOEs went bust - solution was to give the SOE owned housing to the employees.  The new solution will perhaps be a debt jubilee (forgiving mortgages, its the same play as before).  It will likely time it with a global financial crisis so it can blame the restructuring on the West.

Maybe its my bias as I live here, but all eyes should be on HK.  As Mr. Bass notes it is a major and grossly levered financial hub.  The ongoing riots will not cease, the hatred is so huge now, there is no going back.  China I think is going to let the city burn itself down, which means a collapse of the financial system here.  These are Western banks (HSBC) and they have colossal exposure to the most insanely overpriced property market.  Many of these homes are owned by mainlanders whom are incensed by HK's betrayal and will be likely to precipitate a property collapse by selling.  When HK goes, HSBC goes, so goes London and the UK.  When the UK goes Europe goes and finally America.  Somewhere along the line China will restructure itself and blame it on the West.

This is my prediction for the upcoming 2 years.  I am guessing HK is the epicenter, but I do grant that might be my personal bias.

[Tales]

by playing the innocent victim we create a certain expectation in the public's eye --to be a spotless lamb. We aren't spotless, however, and when the public eventually sees this contradiction, they will become unsettled by it, and possibly even demand it to be reconciled.

Yes, thank you.  That is what I wanted to get across but could not come up with the words.  The usual analysis is that so-and-so is evil, (and implicitly) we are perfect, period.  Such a faulty analysis only further contributes to the demise of both sides and perpetuates unreality (unreality being the reign of the prince of lies, reality being that of Christ).

Reality need not be pleasant.  The reality of hell certainly is not.  But we must accept reality as it is, not as we want it to be.

[Philip G.]

I think him singling out "wall street/USA investors" as the political problem in this regard is the slip.   

[Gardener]

I think him singling out "wall street/USA investors" as the political problem in this regard is the slip.   

If so, it's a slip of a cat long out of the bag. His shekel comment was thinly veiled, and along the lines of the Holy Name for the modern Protisees.

He might as well have said, Before Roman Abramovich was, I AM.