Senior editor Ash Bennington hosts Ed Harrison for a conversation about life and markets during coronavirus. Using Tesla as a jumping off point, they take an existentialist turn and explore what might bring people to speculate on a stock that, by all traditional metrics, is extremely overvalued. Ed proffers that people who take a gamble on Tesla and other retail favorites do so out of a sense of desperation in order to feel a sense of control, at a time when they feel powerless. Ash provides additional color on Ed’s theory by analyzing the impact of fiscal stimulus. Ed and Ash also they frame their thinking through today's interview with Mark Blyth and Eric Lonergan. In the intro, Jack Farley explores the coming "fiscal cliff" in the U.S., and puts Tesla's extreme price action in context.
The neoliberal model of free trade, open borders, and liberalized capital flows is under assault. Traditional economic models with rational agents and efficient markets don’t accord with reality, and people are starting to notice. Even recent advances in behavioral economics have failed to capture this disconnect. Mark Blyth, William R. Rhodes Professor of International Economics at Brown University, and Eric Lonergan, macro hedge fund manager at M&G Investments, explore and seek to resolve these conflicts in their new book, “Angrynomics.” Blyth and Lonergan examine how the outsourcing of economic management to grey-suited bureaucrats is fomenting a populist backlash that is redrawing political battle lines and molding the destiny of different asset classes in ways few fully grasp. They analyze the recent largesse of central banks as a sort of asymmetric put-option which rewards those who hold assets and punishes those who don’t. Blyth and Lonergan also explore potential solutions, which include dual interest rates, citizens’ wealth fund, and - yes - even helicopter money. Filmed on July 8, 2020.
Dr. Kayvon Modjarrad, director of the Emerging Infectious Diseases Program at Walter Reed Army Institute of Research, joins Ash Bennington to explain what the Department of Defense's coronavirus vaccine research project is doing to combat the pandemic. Dr. Modjarrad breaks down the different factors that have culminated to increase the difficulty of creating a vaccine. He shares details on the vaccine that his research group is creating with nanoparticles that bind to the virus itself. Finally, he answers questions like, "how long will vaccine deployment take?", "what effects do mutations have on the success of vaccines?", and "how does one protect themself from COVID-19?" from the perspective of an infectious disease doctor on the inside of the scientific effort to mitigate this deadly pandemic. Filmed on July 8, 2020.
COVID-19 is providing both risks and opportunities to medical equipment providers. Today, INK takes look at Protech Home Medical (PTQ) which has some catching up to do in terms of share price performance compared to 2017 spin-out Viemed (VMD) which has been flying.
In many ways, China is at the center of the public health and economic crisis that has gripped the entire world for most of 2020, but recently more focus has been placed on the U.S. and Europe. George Magnus, research associate for the China Centre at Oxford University, helps viewers revert their gaze back towards the global superpower sized elephant in the room. Together with Real Vision’s Ed Harrison, Magnus examines the current state of affairs for China from the perspective of the western countries left with a bad taste in their mouths after China’s handling of the COVID-19 outbreak, but also from the internal perspective of a country looking to restart its growth engine and position itself for a world with fewer allies and a new economy with less reliance on traditional global trade partners. In addition, they examine the health of the Chinese banking system, the return of credit growth in China, and the potential for western sanctions and the outright weaponization of the U.S. dollar. Filmed on July 6, 2020.
By both surprise and necessity, Modern Monetary Theory is here at our doorstep. And with neither major party remaining as the party of ‘fiscal responsibility’, it seems there is little standing in the way of MMT becoming the premise for US government spending initiatives. That’s why it is more important than ever to understand the thinking behind MMT and the common misconceptions surrounding it -- and to prepare your portfolio for its increased acceptance by politicians who view it as an invitation to spend. In this interview with Marshall Auerback of the Levy Economics Institute, Stephanie Kelton breaks down the arguments put forward in her new book, “The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy”. Together they discuss why MMT does not give governments carte blanche to spend indiscriminately. Kelton also articulates why comparing government debts to private debts is flawed. She explores the varying gradations of monetary sovereignty as it relates to constraints on countries potentially using MMT as an economic framework. Finally, Kelton touches on the ‘job guarantee vs. UBI’ debate and much more in this interview that is sure to be a learning experience for MMT skeptics and believers alike. Filmed on July 2, 2020.
COVID-19 and Financial Markets in a Post-Stimulus World
Dr. Z. Barton Wang of Barton Research joins Real Vision CEO, Raoul Pal, for a conversation about the lasting impact of COVID-19 on financial markets. Wang breaks down the institutional response from the Treasury Department and the Fed to the pandemic and considers that response's effect on financial markets. He points out several abnormal market drivers in order to explain how markets have behaved over the last few weeks and months. Wang also shares his view on the biggest risks to the market right now, including the roll-off of the CARES act and other stimulus packages, as well as provide his perspective on what could happen in the markets over the next few weeks, months, and years. Filmed on July 1, 2020.
The Highest Quality Macro Trades and the Impending End of U.S. Outperformance
Ben Melkman, CEO and founder of Light Sky Macro, returns to discuss the biggest macro themes and trades on the horizon with Real Vision CEO and co-founder, Raoul Pal. In this wide-ranging discussion, they examine everything from COVID and the effects of its handling by the U.S. and Europe to the probability of fiscal union in Europe as well as the potential outcomes of the U.S. election. Melkman and Pal agree that the combination of unprecedented fiscal and monetary policy has to have unwanted consequences somewhere and that this likely will play out in FX markets. Conversely, Melkman pushes back on Raoul’s dollar shortage thesis, arguing that the dollar is in store for a rough 2020 and makes the case for the end of U.S. equity outperformance sooner rather than later. Filmed on Wednesday July 1, 2020.
Market Irrationality, Monetary Confidence, and Systemic Change
Peter Atwater, president of Financial Insyghts LLC, joins Dee Smith of the Strategic Insights Group to break down Atwater's perspective on systemic fragmentation and how that will impact financial markets. Atwater breaks down the end of cycle phenomena of overconfidence, fraud, and an eventual recovery. He and Smith also discuss where market sentiment is headed from here. Atwater and Smith explain how markets act like the world's most expansive social network and the role of money, markets, and faith in making that network work. Finally, Atwater breaks down the relationship between inflation and narrative and why markets have not seen the level of inflation that many have predicted. Filmed June 30, 2020.
Editor Max Wiethe joins senior editor Ash Bennington to debrief Real Vision's Crypto Gathering conference. Ash shares his insights from some of the panels he participated in and his recommended pieces of content for viewers if they didn’t have an opportunity to participate. Max and Ash also tee up the case for bitcoin and debate why and how the crypto space will have enduring relevance for years to come. In the intro, Nick Correa discusses the Fed's Main Street Lending Program and its chilly reception by both lenders and borrowers.
Emerging markets have come back to the forefront of investor outlooks recently as many market participants and commentators argue that years of US outperformance are coming to an end sooner rather than later. Of those arguments, many rely on a handful of macro or valuation factors that lead them to a specific country or sector that is poised to pounce. Tassos Stassopoulos, managing partner and CIO of Trinetra Investment Management, takes a completely different approach and in this interview with Max Wiethe, he argues that the tailwind of emerging market consumer demand growth is strong enough to overpower any macro headwind. Here, Stassopolous lays out his ethnographic research framework where he gets face to face with the EM consumers driving trends. He explains how focusing on those consumers and their cultures over companies and their talking points can help investors identify trends long before other market participants. He also explores a few of the biggest consumer trends and companies he is focused on right now and discusses how COVID-19 is accelerating trends and affecting his ability to do the boots on the ground research that is so critical to his unique process. Filmed on June 25, 2020.
The Wirecard Debacle: Shades of Enron and WorldCom
Individual market cycles, and particularly their crescendos and finales, have unique characteristics that we use to categorize and differentiate them from other past cycles – the dotcom bubble, the housing crisis, and now, potentially the COVID crisis. One thing that they all have in common, though, is the failure of major companies from either mismanagement or fraud. In this interview, Roddy Boyd of the Foundation for Financial Journalism and Real Vision’s Ed Harrison examine financial impropriety through the lens of Wirecard, the German mobile payments company that has transitioned from a source of German pride to an embarrassment, exposing shoddy work by the lawyers, auditors and regulators tasked with investigating potential frauds and protecting the public. Whether Wirecard is in fact a fraud seems to be clearer with every passing day, but many questions still remain – will the bad actors both inside and outside the company be held accountable, will the company go belly up or be saved by governments increasingly willing to protect companies that are “too big to fail”, and will Wirecard be another shining example of the malfeasance and mismanagement that always seems to be exposed at the end of a market cycle? Filmed on June 24, 2020.