BassmanCudmoreSniderErik Townsend and Patrick Ceresna welcome Harley Bassman, Mark Cudmore and Jeffrey Snider to the show. Discussed this week:

Harley Bassman: 

  • How will we know when the real bear market is on?
  • The implicit and explicit VOL trade and how long will it take to play out?
  • How will a bond sell off impact inflation?
  • The USD over then next few years

Mark Cudmore: 

  • Is this a correction or something much bigger?
  • The USD and the recent sideways consolidation, what does it mean?
  • Outlook for the bond market
  • Commodities, China, Europe and EM
  • Current stress on the Hong Kong Dollar

Jeffrey Snider:

  • Where are the equity markets headed?
  • What is going on with the Hong Kong Dollar?
  • Principles of a “Dollar Short”

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Harley S. Bassman

Harley Bassman created, marketed and traded a wide variety of derivative and structured products during his twenty-six-year career at Merrill Lynch.  In 1985 he created the OPOSSMS mortgage options product that facilitated risk transmission between MBS originators and financial institutions.  In 1988, he assumed responsibility for trading and marketing IO/PO and other levered prepayment securities.  Soon after this, he started purchasing RTC auctioned MBS Servicing rights and repackaged them for the securities market as BIGS - Beneficial Interests in GNMA Servicing.  Later, he started a GNMA servicing conduit becoming one of the Top 20 originators in 1992.  As managing and hedging prepayment risk became a priority focus for the financial markets, Mr. Bassman created PRESERV, Merrill's trademarked Prepayment Cap product. Merrill was a leader in this product category writing protection that covered the risk on tens of billions of notional mortgage servicing rights.  Later, Mr. Bassman managed Merrill's initial venture into off-balance sheet mortgage trading.

In 1994, Mr. Bassman assumed responsibility for OTC bond options. 

Within a year, Merrill was the leader in this product sector.  A wide variety of products were offered including vanilla and complex options on MBS spreads and the Treasury yield curve.

To help clients more fully appreciate Volatility as a primary risk vector, he created the MOVE Index.  Similar in form to the VIX Index, it is now the recognized standard measure of Interest Rate Volatility.

From 1995 to 2000 he focused on creating hedge strategies for MBS servicers and portfolio optimization techniques for Total Return and Index investors.

Mr. Bassman became the manager of North American MBS and Structured Finance trading in 2001.  During his tenure, he created SURF, (Specialty Underwriting and Residential Finance), a self-contained Sub-Prime mortgage conduit.  He supervised the issuance of Merrill’s first Sub-Prime securities. He also transitioned the structuring business to a new technology platform.

In 2006 he built the RateLab, a full spectrum US Rates Trading Desk Strategy Group.  Here he worked with investors to advise and optimize their risk exposure.  As a key member of the client trading business, he facilitated activity by providing liquidity to both the firm’s clients and market makers.

After a (too) brief sabbatical, in 2011 Mr. Bassman joined Credit Suisse's Global Rates business where he identified and integrated investment and hedging opportunities for sophisticated investors.

Most recently, Mr. Bassman was an Executive Vice President and Portfolio Manager at PIMCO - a leading global investment management firm.  Here he managed investments for the Liquid Alternative products group as well as advised on portfolio strategy across asset classes for the firm's franchise businesses.

Mr. Bassman splits his time between Laguna Beach, California and New York City. He has a B.A. in management science from the University of California, San Diego and an MBA in finance and marketing from the University of Chicago.

Mark Cudmore

Mark Cudmore is a macro strategist who runs the Markets Live blogging team in Asia for Bloomberg News. He joined Bloomberg in 2014 after more than a decade's experience of trading FX and rates, with a focus on emerging markets, at sell-side institutions including Lehman Brothers, Standard Chartered Bank and Nomura as well as on the buy-side.

Jeffrey Snider

Mr. Snider is Chief Investment Strategist and Head of Global Research at Alhambra Investment Partners.  Through detailed and comprehensive investigation of the global monetary and banking system, he was one of the few analysts to sound the alarm during the run-up to the panic of 2008 and then to predict the rebound in 2009.  His current commentary focuses on the global implications of the ongoing monetary deconstruction including the failure of Federal Reserve and central bank policy.  Mr. Snider is published nationally at RealClearMarkets, NewsMax, David Stockman's Contra Corner, and other places.