Kyle Bass Thinks The Idea Of A 'Solution' To Eurozone Problems Is Ridiculous

Kyle Bass practically cracks up when an interviewer asks him about Germany "resolving the problems within Europe."

"The only way to quote resolve any problems in Europe is to have massive debt restructuring...

One of the things we've said in our office recently is you know how screwed up Europe is when you have a German pope and an Italian central banker. We have a scenario today in which debt has grown globally in the last nine years from $80 trillion to $210 trillion. Global credit market debt has grown at 12% a year for the last nine years, while global GDP has grown at 4. We're in a scenario where the PIIGS have sailed into a zone of insolvency. When you sail into the zone of insolvency there is no quote solution for you. The bill is due and you have to pay the pill. What has to happen is it is of our opinion that these debts have to be written down, it's that simple

Basically you're saying if Germany goes joint and severally liable with the profligate idiots of southern Europe will that quote solve the scenario? Think about this. Let's assume Germany goes to doing a eurobond and Germany takes on these... first of all German constitutional court has already ruled that that's illegal in Germany, but let's assume that they get over that and they go ahead and issue this bond. What would that do for the profligate members including Greece when Greece says, "OK we're all in, we're good, you're lending us more money, we have a big debt problem and you're lending us some more and now we can borrow a little cheaper," and then Greece keeps spending, and they go back to Germany and say, "OK Germany I need some more money." Germany says, "No, we're going to impose this real austerity on you now." Greece says, "Fine, we'll default." Every single time from now on Germany is in the exact situation it's in today. We call it in Texas a Mexican Standoff, meaning there's no winner. The profligate members will always have Germany by the short hairs every time this scenario comes up. So I disagree. I don't think that Germany will end up going all in. It would not be to the benefit of Germany to do so in the long run. Let me ask you this question: How many of your relatives would you go joint and severally liable with?

Really a hilarious interview. The question about Germany comes at 10:28 (via Credit Writedowns). Bass also thinks Japan is at the end of its rope.

Watch the Video Here:

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

I had a liberal poli-sci professor talk about how great the EU structure was and how America needs to do the same with Canada and Mexico in order to keep up. He wasn't a bad guy, his liberal bias was tolerable and wrapped in good humor. However, I can safely say that was the biggest “EPIC FAIL” comments I heard. Sure, I heard a lot more nastier left wing crap. But that one is just so laughably easy to disprove.

No apologies for length necessary, but it would have been more interesting if the interviewer were not so much like Jane Curtin’s SNL character (”Jane, you ignorant slut.”)

The interviewer seemed more interested in castigating Bass than listening to what he had to say, which was infinitely more intelligent and insightful than anything his interrogator had to offer.

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