Take an hour and listen to this talk/conversation/interview with Kyle Bass of Hayman Capital, who successfully shorted subprime a few years back. My favorite nuggets:
-"Zero interest rate policy is a trap. I don't think you can ever leave it until you restructure. Right, if you layer on double-digit deficits and debt on a zero interest rate policy, then you're spring-loading your expenses. Your expenses get to be many multiples of your revenues."
-"The one question you have to ask yourself if you're investing capital today is does debt matter. Because if it doesn't, go buy stocks, go buy houses, go buy bonds, lever up, because everything's going to be fine if debt doesn't matter. But if it does matter, like it has for the last 3000 years every time, well then you better think a little harder about what...how you're allocating your assets and why."
Elsewhere he walks through why the Keynesian experiment is destined to fail and why the historical "widow-maker" (shorting JGBs) stands ready to make some people gawd-awful rich in the next couple of years. Overall, really good stuff.
