Prominent short-seller Kyle Bass says an economic stimulus package will be needed to avoid a U.S. recession in 2020 and at the top of the spending list should be an infrastructure program focused on building out 5G wireless technology.
Short-Seller Kyle Bass Wants U.S. To Bet Big On 5G
Alkeon expects data growth to surpass 5G’s capabilities by 2028 [Q4 Letter]
Alkeon Growth Partners wrote at length on tech stocks and why they are defensive in their recent letter to investors, which was reviewed by ValueWalk. The fund also highlighted 5G and other advanced technologies and the investment opportunities they offer. Q4 2020 hedge fund letters, conferences and more Artificial intelligence and machine learning The Alkeon Read More
This is the Reuters Investment Outlook Summit for 2019. I'm joined by Kyle Bass. He's the founder of Hayman Capital Management. Let's start first with the U.S. You said if we don't do something to stimulate the economy we're going to have a recession by 2020. So what should that stimulation look like.
Yeah well let me let me clarify so I think our our fiscal impulse going into 2019 is actually pretty positive. It's an increase of roughly 150 200 billion from this year. And so stimulating and full employment going into 2019 means that our economic rise isn't finished yet. Barring of course something else happening around the world that's a negative for the world. But going into 2020 if you look at the current plan the fiscal impulse declines by about 250 billion going to 2020. So I believe the U.S. has got to come up with some plan going forward to further stimulate the economy so to avoid a minor recession.
And for you that plan has two syllables five g.
That's part of it for sure. So I think infrastructure is a great plan. The U.S. needs an infrastructure plan. I think a public private partnership in all of the infrastructure builds is a very positive thing between the U.S. government and called private capital in the U.S. But 5G is a is something that I think is misunderstood globally. I think 5G is the race for global data supremacy between the U.S. and China. And I think that 5G is going to cost about 100 billion dollars and I think that the U.S. government should lead the way with the carriers and in quickly developing and building a 5G network in the U.S.
So how can this work and for those who may not know what 5G is the next generation wireless technology how would it work if you know a rise in AT&T already laying the pipes for 5G. How could a government involvement influence the process in terms of it being the infrastructure plan to get the U.S. economy. Keep it going. Well
twofold. One is national security for the U.S. going forward and I know that might be lost on some of the viewers but so one's national security one's economics and the way that the U.S. could. First of all you think about its kind of Manhattan Project style meaning that the United States could could organize a group and make it a government led effort. They could actually commandeer or take back spectrum that were leasing out to call the fixed satellite guys. We need about 500 megahertz of contiguous spectrum from the FCC. We could simply eminent domain that spectrum for national security move those players to another place on the spectrum and then tell the wireless carriers again this is my idea. And again I'm not an expert in this in this space. I've done a fair amount of reading but I think that we could say to all of the carriers if you want to participate ratably in this plan you'll have to invest. The U.S. government is going to invest and set up the structure for the plan and you guys will run the network. You guys will invest and build it. The U.S. government is going to organize the structure of the network and we're going to secure that network. And I think both of those again those those handle those handle NASA's national security implication of this project and they also is a very positive economic development for the U.S.
Now you also said that that is a way to kind of leapfrog the U.S. over China when it comes to 5G. Right. Talk about that.
I think that when you understand what 5G means it's about a hundred times faster than 4G LTE. So it's not an order of magnitude linearly faster it's exponentially faster. And those are gigabit speeds you know mobile. And so basically if you can if you can put super-computing a gigabit speeds you can actually control the data.