Clenow Futures Intelligence Report

Clenow Futures Intelligence Report

April 24, 2014

Kyle Bass: Hayman Global Outlook Video And Presentation

Kyle Bass gave a presentation at the CFA SOCIETY DALLAS-FORT WORTH ANNUAL FORECAST DINNER on February 14th. Below readers can find the full video of Kyle Bass speaking as well as the 20 pages, the theme of which was titled, ‘Hayman Global Outlook Pitfalls and Opportunities for 2014 ‘ United States Fed Tapering & Improving Trade Balance 
• On December 18, 2013, the Federal Reserve announced it would ‘taper’ its monthly asset purchases by $10bn to only $75bn a month; subsequently, on January 29, 2014, the Federal Reserve announced it would ‘taper’ another $10bn to $65bn a month. 
• A continuation of the policy would see additional asset purchases cease by end of 2014 and stabilize the size of the Federal Reserve’s balance sheet. 
• The revolution in unconventional oil and gas projects that has emerged via fracking of shale have radically increased the hydrocarbon production occurring within the U.S. Revolution of Hydrocarbons in U.S As U.S. crude oil production has increased dramatically led by the shale oil revolution while U.S. consumption of petroleum and other liquid fuels has reduced off its peak in 2005, U.S. net imports have declined dramatically, a trend likely to continue. Unconventional Hydrocarbons Are Changing U.S. Trade 
• U.S. crude oil production has returned to levels not seen since the late 1980s. 
• It is one of a series of factors that has narrowed the U.S. current account deficit to the lowest point since the late 1990s 
• That period coincided with the largest USD rally since Paul Volcker slayed the inflation dragon in the 1980s. Japan Abenomics & Quantitative Easing Real Yield Divergence – U.S. vs. Japan 
• Japanese CPI has picked up while nominal yields remain close to all time lows forcing Japanese real yields into negative territory, part of the Bank of Japan’s attempt to force a reallocation of capital from JGBs further out on the risk curve. 
• At the same time, US inflation remains anchored while growth and the Federal Reserve’s tapering of its QE program has led to nominal yields creeping upwards; this has created a long term rising trend of US real yields. 
• The real yield differential has a strong correlation to the value of USD/Yen over time 
• Hayman expects the current divergence to continue and to force further Yen weakening.
Full presentation video and PDF below Presentation provided by: http://www.valuewalk.com/2014/04/kyle-bass-hayman-global-outlook-pitfalls-opportunities-2014/

Kyle Bass, an American hedge fund manager, is the Founder of Hayman Capital. He received extensive coverage in the financial press for profiting $590 million by short selling the sub-prime mortgage bond market, before that market crashed. In 2011, Bass initiated a huge position in Greek sovereign debt through CDSs. Media reports were that he could profit up to 650 times his investment should Greece default on its debt obligations.

April 15, 2014

Why Japanese bonds look 'terrible': Kyle Bass



Hayman Capital's Kyle Bass believes Wall Street's recent declines in the biotech and social media sector, which spread to global stock markets last week, shows cracks in the Japanese economy. The Japanese Nikkei saw a huge drop last Friday, but the country's benchmark 10-year government bonds did not see yields change as investors fled stocks. Bass, one of the biggest critics of the Japanese economy, has made a big bet on Japan's economy devolving into a debt crisis. During an interview on CNBC's "Squawk on the Street" on Tuesday, the hedge fund manager said questions remain whether Japan will lose control of interest rates or whether the yen can serve as an "escape valve." Bass sees inflation quickly surpassing Japaneses bond yields, he said. "The interesting thing in this selloff in the marketplace and in tech ... and this huge selloff in Japanese equities, is that the Japanese bond market hasn't gone anywhere," Bass said. "Yields haven't collapsed, which is fascinating. So their bonds are acting pretty terribly in the environment of their equity market. So we'll see what happens."

Kyle Bass, an American hedge fund manager, is the Founder of Hayman Capital. He received extensive coverage in the financial press for profiting $590 million by short selling the sub-prime mortgage bond market, before that market crashed. In 2011, Bass initiated a huge position in Greek sovereign debt through CDSs. Media reports were that he could profit up to 650 times his investment should Greece default on its debt obligations.

April 07, 2014

Kyle Bass: General Motors shares could touch $50, despite probe



Bass, founder of Hayman Capital and owner of a big position in GM, said he believes the automaker's stock could trade in the high $40s or even touch $50 a share in 12 to 18 months, more than $15 higher than current prices. Bass told "Squawk on the Street" that GM is one of the cheapest stocks in the market. He also said the government could find itself liable for claims related to faulty ignitions because it took over the company when GM filed for bankruptcy in 2009. His bullish stance on GM came as a vehicle safety group attributed 303 deaths to faulty air bags in GM vehicles. "When I look at this, this was not a bankruptcy," Bass said. "It was a government takeover of GM. It may very well be that the government is liable for the claims that the government is looking into. A lot of these claims were discharged in bankruptcy and the government ran the company for a while. I find it kind of silly." During his interview with CNBC, Bass also explained why his hedge fund increased its stake in nonbank mortgage servicer Nationstar Mortgage Holdings, a company under scrutiny from New York state banking regulators. Earlier this month, New York State Financial Services Superintendent Benjamin Lawsky demanded information from Nationstar about its portfolio and practices as his office looks at whether smaller, nonbank servicers can handle large numbers of mortgages.



Bass added that nonbank servicers such as Nationstar don't generate large numbers of complaints compared to the number of delinquent mortgages they handle. "The banks are almost three times worse at doing this and yet the regulatory inquiry is in the nonbank sector?" Bass said. "Ben Lawsky should focus on who the worst players are and not who the best are."

Kyle Bass, an American hedge fund manager, is the Founder of Hayman Capital. He received extensive coverage in the financial press for profiting $590 million by short selling the sub-prime mortgage bond market, before that market crashed. In 2011, Bass initiated a huge position in Greek sovereign debt through CDSs. Media reports were that he could profit up to 650 times his investment should Greece default on its debt obligations.