Does anyone have any idea what 20 million nickels look like?
J. Kyle Bass of Hayman Capital does. The coins are wrapped and stacked on pallets at a Brink’s vault, and when his bank asked him why so many damn nickels, he simply responded, “I just like nickels.”
Truth be told, Kyle Bass likes making money, stupid amounts of money. Since his bet on the housing market and Europe’s sovereign debt crisis paid off, Hayman Capital has claims to have a ROI of 65,000%. Now, that number may be exaggerated just a tad, but at least we know who was on the other end of MF Global’s stick...
To WSO the man might be an anomaly. His hedge fund is in Dallas. He became Bear Stearns' youngest MD without an MBA, or degree from a target university, mind you. And besides a thorough understanding of the derivatives market, he interconnects it almost too brilliantly with global economics. Now isn’t that a novelty.
Many have already heard of his next short on Japan. With a grossly aging population and interest payments closing in on the amount of tax collections, Japan’s population-owned-debt model may cease to function. In fact, Bass is so sure that he reportedly financed his 40,000 sq ft Dallas abode in Yen in order to later pay back in dollars.
But the Japanese are certainly praying that one man cannot always be so right. Foreteller Peter Schiff has somewhat died out after his media rampage on the dollar’s impending collapse. Similarly, Meredith Whitney’s call on full out chaos in the municipal bond market proved false, even with the city of Harrisburg defaulting on its trash fueled debt. But let me ask you: Can golden boy Kyle Bass be right about Japan as the next big domino to fall?
he simply answered back, “I just like nickels.”
Not a good enough answer for me. Really..why $1M in nickels? There has to be a reason.
The metals in the nickels are worth more than 5¢ or something to that affect. Read it in an interview with him recently.
Kyle Bass is an absolute baller. Don't think he's made 65,000% on Europe yet, but apparently he stands to if it all goes to shit (http://www.dailymail.co.uk/news/article-2044363/Kyle-Bass-Meet-Texan-in…). He's also the main character in the intro to Michael Lewis's new book Boomerang.
He personally made $500mm on subprime: http://www.dmagazine.com/Home/2008/03/13/Cashing_in_on_Subprime.aspx
One of the best interviews ever:
I'm not entirely sure what to think about this guy. The nickel play is silly considering that when you factor in the costs of lobbying for the right to melt nickels, there's no value at all unless you do this in huge (read impossible) size. The fact that his background actually is equities in Dallas is pretty funny/awesome but something does seem a little off about him. From the Gumball 3000 stories to the 40,000sqft mansion in Dallas, there's something a little douchey/flashy about this guy you don't see with the really big macro players (PTJ's video was made 1986, can't blame the guy). I wouldn't be surprised he ends up being another Thiel/Falcone/Paulson.
Maybe the government will try to buy his nickels from him >5 cents but less than what it costs them to make it.
Right... I really wonder what will happen to all the die-hard gold-bugs and perma-bears out there when the "d-process" (thanks Dalio) is over. Some will be rich but a lot more will have gotten crushed due to poor timing/risk management.
Bass has balls and this whole CDS being circumvented thing wasn't an issue many could have foreseen back when sovereign debt CDS were cheap. But that's the problem, you can't build an entire career focused solely on the big moves, because you're bound to catch one the wrong way eventually. For all I know, this guy may be incredible at running a position. But the vibe I get is that he's an analyst who's made two great calls and had the rocks to go all in.
go Frogs!
now that the ISDA declared a 50% haircut not a credit event, will he get paid on his CDS?
Maybe he bought CDS on foreign corporates as well? Just a thought...
Alright sorry, i've been holding out.... as mentioned, Bass pretty much is betting on the collapse of the developed worlds balance sheet (massive transfer of private debt to public debt). The nickels play is because he believes the metal worth in the nickel is 6.4 cents. Put the prior two points together and i think he plans to profit off nickels if there is an all out armageddon-esq fall out of the US/ developed world.
Keep in mind, Michael Lewis reported that this guy has an arsenal of sniper rifles and more or less has fortified his mansion in dallas (own water supply etc). But maybe thats the standard of texans, idk?
Gentlemen, wake up! The dollar and US is on its way out. When the dollar dies and the world is in complete chaos this guy will melt down the nickles and trade.
Bass explains the Nickel buy: Courtesy of ZH. http://www.zerohedge.com/news/true-value-money-literally
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