The Fort

#378 - Kyle Bass - Founder/CIO @ Hayman Capital Management, L.P. - Invest In America

Feb 18, 2025

Kyle Bass, Founder and CIO of Hayman Capital Management, shares insights on predicting the 2008 financial crisis and the risks posed by global powers like China, Russia, and Iran. He discusses Texas as a burgeoning economic powerhouse, driven by innovation and favorable policies. Bass emphasizes the revival of American manufacturing, particularly in defense tech, and the importance of connecting innovators with military needs. He critiques U.S. foreign policy and highlights the pressing need for legislative measures to protect national interests amid foreign investments.

01:12:51

Episode guests

Kyle Bass

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Episode notes

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Quick takeaways

Kyle Bass emphasizes the importance of acknowledging economic risks, citing the unheeded warnings about the 2006 financial collapse as a cautionary tale.

Investors should recognize geographical economic dynamics when strategizing, especially in areas affected by globalization and job losses.

Texas is emerging as a vital growth center in the U.S. economy, driven by corporate investments, innovation, and favorable business conditions.

Deep dives

Warning Signs Ignored Before the Financial Crisis

In 2006, a significant warning was given regarding the impending financial collapse, particularly concerning mortgage-backed securities. Despite the compelling evidence presented to financial leaders, many were dismissive, clinging to the illusion that the booming market would continue indefinitely. This reluctance to acknowledge the potential for failure illustrates a common psychological phenomenon where individuals resist unpleasant truths that could disrupt their comfort. As a result, critical warnings went unheeded, contributing to the chaotic collapse of major financial institutions like Bear Stearns.

Intro

4min

Diving into Finance: A Journey of Risks and Insights

25min

Navigating U.S.-China Relations and Global Geopolitics

23min

Texas: The Epicenter of Economic Growth

4min

Reviving American Manufacturing & Defense Tech

9min

The Texas Influence: Attracting Talent and Addressing Challenges

3min

Navigating Political Realities and Personal Legacies

4min

Kyle Bass is the Founder/CIO of Hayman Capital Management, L.P., an investment manager of private funds focused on global event-driven opportunities, and the Co-Founder and Chief Executive Officer of Conservation Equity Management, an impact and natural capital private equity firm.

Kyle is also the Co-Chief Executive Officer of the newly formed Rochefort Management, a private credit firm focused on the Critical Technology Initiative – a joint effort between the Small Business Administration and the Department of Defense to attract private investment into technology areas deemed critical to national and economic security.

Mr. Bass is a Life Member of the Council on Foreign Relations and the recipient of the 2019 Foreign Policy Association Medal for his responsible internationalism. Mr. Bass has lectured on global economics, national security, geopolitics, and the architecture of the Chinese financial system at various universities. Mr. Bass is the former Chair of the Risk Committee of the Board of Directors of the University of Texas Investment Management Company (UTIMCO), which manages approximately $75 billion.

We discuss:

- Predicting the GFC and attempting to warn Bear Stearns and the SEC of the coming collapse

- The global state of affairs: China, Taiwan, Russia, Iran and BRICS

- How the U.S. and Trump should combat China

- The rise of the U.S. Defense-Tech industry

- Why Texas is the Growth Engine for the world

(00:00:00) - Intro

(00:04:03) - Introducing Kyle

(00:05:58) - Short-Selling Thesis

(00:11:45) - Predicting the GFC

(00:19:50) - Trying to warn Bear Stearns & the SEC

(00:25:39) - How to hire a contrarian