Opalesque Roundtable Series - Texas 2010
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Flying into Dallas from Sao Paulo (where I produced the Opalesque Brazil Roundtable available in our archive: www.opalesque.com/index.php?act=archiveRT), the contrast struck me hard and unexpectedly. When jogging around Dallas, I saw that every second shop on Commerce, Main, or Elm Street was closed and empty – Dallas seems to have that feel of a hard recession. There were even empty parking spaces on all streets at all hours - unthinkable in buzzing Brazil, which is cranking to be the fifth largest economy in ten or fifteen years.
Enter Kyle Bass, who basically says this is just the beginning. Bass is one of the handful money managers on the planet, who correctly identified the subprime meltdown, who set up the right trades and made a fortune for himself and his investors. (For a splendid recount on this feat, follow this link: www.opalesque.com/fullarticle/40904/Background_How_shorted239.html.)
In this Roundtable, Bass adds a lot of scary details and color to his current investment thesis of a the Keynesian end that awaits Greece, Japan and the “Club Med” (Italy, Spain), with the U.S. not be far behind. Bass says he is “not contrarian for contrarian sake” and he “can't wait to be long” - after this secular crisis has been overcome through debt restructures.
Bass says politicians have front row seats to observe and reflect on Japan, which is “the best opportunity I have ever seen in my life. It is the most convex opportunity I have ever seen. If you take the time to look at the numbers, you realize why they have had seven finance ministers in three years, five in the last year-and-a-half. The whole scenario is playing out exactly as you would expect it to play out, right under everyone's nose, and no one says a word about it....”
This Roundtable is a thrilling discussion between (global) macro scenarios and equities-centric investment approaches that may leave countless investors with bloodless net returns, deceived by “attractive valuations” while real assets could end up ruling supreme.
But what is a real asset? How safe is your Gold ETF or futures and futures options on precious metals really, when you compare open interest against the registered and eligible inventories behind those instruments?
This Roundtable further covers:
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