Eric Peters, CIO of One River Asset Management, joins Mike Green of Logica Capital to discuss the broader economic and financial conditions markets are experiencing amid coronavirus’ chaos. The pair discuss the current macro environment, volatility, government policy responses - both monetary and fiscal. Through their breakdown of a broad array of topics, Peters and Green tackle topics ranging from global supply chains to the merger of human and machine intelligence.
In the past few years, nobody could have predicted that a pandemic would be the catalyst sending shock waves through the entire global economy, plunging us into a bear market in record time. Some voices though have been screaming from the rooftops about the macroeconomic and structural weaknesses that left markets vulnerable to any potential disruption. One of those voices was Steen Jakobsen, CIO of Saxo Bank. In this interview with Roger Hirst, Jakobsen examines the weaknesses of a buyback-driven and debt-ridden market that have been quickly exposed by coronavirus. They also look into the future at how the crisis will affect real assets, the dollar, the banking system, and why, when all is said and done, we could see both inflation and deflation.
Kiril Sokoloff, chairman and founder of 13D Global Strategy and Research, joins Raoul Pal, CEO and co-founder of Real Vision, to discuss the ongoing coronavirus pandemic and its long-term consequences on monetary policy, investing, and geopolitics. Pal and Sokoloff analyze how a protracted quarantine might slow economic activity to such a degree that central banks become more active than they ever have before, either by monetizing debt or by purchasing risk assets outright. The pair also explore how the crisis might affect the 2020 election, the practice of stock buybacks, and specific assets like oil, gold, and the Japanese Yen. Released March 26, 2020.
Are stock market rallies a sign that the bear market might be over? To Julian Brigden of MI2 Partners and of Macro Insiders, the answer to this question is a resounding no. He argues that in such times of extreme volatility, melt-ups are to be expected – but these brief flashes of upward momentum offer nothing more than false hope. Surveying the latest macroeconomic data, Brigden concludes that a significant contraction in GDP growth is imminent and that a sustained recovery in stocks and bonds is unlikely because consumer spending is extremely vulnerable to social distancing. Brigden also comments on central banks’ responses to the ongoing crisis and notes that their liquidity injections reduce the risk-reward of shorting traditional assets. Filmed on March 18, 2020, over Skype.
Keith McCullough, founder and CEO of Hedgeye Risk Management, joins Raoul Pal, CEO and co-founder of Real Vision, to explore what happens when a biological crisis turns into a financial crisis. They explain why they both think this liquidity crisis is far from over and why, as the deleveraging continues, the dollar will continue to reign supreme. They also examine whether shorting equities is worth the risk, how much juice is left in the bond trade, and if it’s too early to go into gold. Filmed on March 20, 2020, over Skype.
What happens when leveraged companies that have little tolerance for risk encounter one of the greatest exogenous shocks in macroeconomic history? This is the question that Mike Green, chief strategist and portfolio manager at Logica Capital Advisors, and Srinivas Thiruvadanthai, director of research at the Jerome Levy Forecasting Center, attempt to answer in a wide-ranging conversation about the long-term consequences of the COVID-19 pandemic. They argue that the knock-on effects of this crisis are made worse by very high debt levels and that, while the coronavirus will sweep away thousands of overindebted entities, resilient market actors will nevertheless be able to emerge from this chaos stronger than ever. Filmed on March 11, 2020, in New York.
Coronavirus & Zombie Ideas: How Policymakers Respond to Crisis
Paul Krugman, Nobel laureate, PhD economist, and political commenter, joins Vincent Catalano of Stuyvesant Capital Management to discuss how coronavirus mayhem has plunged financial markets, global economies, and geopolitics into chaos. Through the lens of his new book, “Arguing with Zombies: Economics, Politics, and the Fight for a Better Future,” Krugman argues that in response to coronavirus’ economic impact, the Federal government should give financial aid to state governments, local governments, and even citizens directly. Krugman and Catalano examine the role that fiscal and monetary policy play together, the importance of leadership in crises, and the potential for the enaction of seemingly extreme policy responses to the COVID-19 outbreak. Filmed on March 17, 2020 in New York.
Gold and Coronavirus: The Party is Just Getting Started
After this week’s massive exhale in the gold price, investors are left wondering whether this was the famed effect of margin call selling that could continue if equities move lower, or an unexplained opportunity to pile in at levels not seen since January. Regardless, with central banks cutting interest rates, the return of QE, and the potential for continued woes in equity markets, the medium-term outlook for gold has seldom looked better. That’s why we are bringing back George Milling-Stanley, chief gold strategist at State Street, to assess gold in a world ravaged by coronavirus. He endeavors to answer the questions of whether we will see gold continue to sell-off due to margin call selling, if the speculative interests that drove the price of gold higher after the last crisis have finally returned to the market, and how gold will perform relative to other precious metals and miners that people often see as levered play on the spot price. Filmed on March 11, 2020 in New York.
What’s the impact on the ground from coronavirus in Italy right now? Giovanni Pozzi, managing director at a family office in Italy, joins Real Vision’s Raoul Pal to discuss his first-hand experience during the national shutdown in Italy. Pozzi details the effect he’s witnessed on the health system, the economy, and people’s behavior during the ongoing crisis. Pozzi and Pal break down the knock-on effects that coronavirus and the government’s response will have on the economy, fiscal and monetary policy, and financial markets. Filmed on March 13, 2020 via Skype in the Cayman Islands and Italy.
Konstantin Boehmer, portfolio manager of global fixed income at McKinsey Investments, joins Ed Harrison to present his long-term macro thesis, based on emerging trends in ESG investing. Boehmer explains that his investment thesis is not about the ESG movement within the investment industry specifically, but rather it is about generational changes and lifestyle choices people are already making. Identifying patterns in business and technology cycles over the last 250 to 300 years, he argues that mankind is on the brink of another technological golden age. Along with the evolution in technology adoption he predicts, he also foresees cultural changes that will lead to actionable investment opportunities based on new priorities in how people choose to live their lives. Filmed on February 13, 2020 in Toronto.
As the coronavirus continues to wreak havoc on the markets – or so it seems – the price-action has been particularly dramatic in the energy sector. The carnage in equities has been on display to anyone paying attention, but today we’re focusing on the more opaque, but much larger, market of fixed income. Dan Zwirn, CEO and CIO of Arena Investors, is a major player in the credit space. Back by popular demand, he returns to discuss the ongoing rout in high-yield energy bonds. Zwirn analyzes the risks and opportunities he sees in leveraged loans, CLOs, private lending, and other assets within the credit universe. He also shares how he generates put optionality to hedge downside risk, while still getting paid. This interview was filmed on March 9, 2020 in New York, during one of the largest selloffs in history. To learn more about Dan Zwirn's thinking on the credit markets, check out his research report here: https://rvtv.io/2IFeX7n
Rashique Rahman is a global macro specialist on the front lines of emerging market investing. He speaks to Real Vision’s Ed Harrison about the structural obstacles that emerging market economies face. Rahman discusses the compounding trade deficits that could trigger a liquidity crisis in countries like Argentina and Turkey, the enormous commodity risks that lumbering giants like Russia must overcome, and how stagnating income-per-capita is pushing countries like South Africa and Chile to the brink of societal collapse. Overhanging all of that is the U.S. dollar, which has appreciated greatly over the past half-decade and is a chain around the neck of all countries with liabilities denominated in dollars. Rahman argues that at the end of the day, emerging markets are not just a sector to which investors can allocate capital, but rather a world in and of itself. He reveals why investing in winners and avoiding losers will provide returns that taking secular bets will not. Filmed on January 28, 2020.