Bass has some dire predicitons for Europe's future, and he's been right every step of the way, so it's worth paying attention to his thesis presented below.
We have heard from fund manager Kyle Bass twice in the past 3 weeks on the Euro crisis:
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Yesterday Bass stopped by CNBC, (but did not appear on the network) and provided the following update to producers:
"I believe that Germany and the balance of the Eurocrats will attempt to default Greece within the euro zone first. The frictions associated with such an event will prove to be problematic and the usual benefits of a substantially weakening currency that would historically accrue to the country in default will not be available to Greece. Greece will therefore be forced to go back to the drachma at some point in the near future.
"In the end, it is most likely that after Greece and the next peripheral country begin to hard default, Germany will exit the [European Monetary Union] and recapitalize their own banks.
After recently conducting a population study on the German people, we have determined that the overwhelming majority of the people of Germany think that they would be better off never having formed the euro in the first place. Two thirds of the people do not think that they have any obligation to bail out profligate members of the EMU. The market's hopes rest upon Germany and the [European Central Bank] going 'all-in' at some point in the future. I don't think that is likely at all.
"There is no playbook for how the world will most likely deal with a cluster of sovereign defaults...I believe it will all read like fiction from here. The organizers and members of the EMU are desperate and have nowhere to turn. The circular references of the optical backstops [International Monetary Fund and European Union] are showing in broad daylight."