Joining me now is JDI Research founder Juliette Declercq. Juliette is perhaps best known for her fantastic macro charts. In the past we’ve been very restricted in our ability to share these charts with our listeners, because Juliette’s institutional client base expects exclusive access. But we have an early Christmas present for you this week: Juliette put together a fantastic book of charts and graphs you won’t see anywhere else, and sent them to her institutional subscribers first to assure they keep the leg up on the market they’re paying for. This means we can now share them with MacroVoices listeners. Registered users will find the download link in your Research Roundup e-mail. If you’re not yet registered just go to MacroVoices.com and look for registration and download instructions on our home page.
Erik: Just to set the scene, how have you looked at the macro landscape in the US in 2017?
Juliette: That’s a very good question because one thing I would like to reiterate before I delve into my 2018 outlook in broad lines … is that the low US growth potential is not going away however loud Trump will be in stating the contrary … Let’s start on Chart 1 in my 2018 chart pack.
Irrespective of other considerations, the ONE reason to call the US economy “late” in the cycle is the fact that it is nearing full employment. Of course, Full employment is a blessing at the moment but it will soon become a curse. Needless to say and it is well understood that an economy does not die of old age but one thing that can also be taken for granted is that old age does not promote good health either… An economy’s growth potential is employment growth + productivity, which on the income side can be translated as employment growth + wage growth. The issue is that employment growth will naturally collapse to population growth around 0.5%. The bottom line is that Trump’s only chance of boosting growth durably is via increased productivity. Unfortunately, the cyclical component of productivity relies on increased end demand… But the fixes envisaged (of which the republican tax reform is a main one) focuses chiefly on the supply side… basically pumping up equity prices and hope that the trickling down will work its magic on wages and offset the dampening effect on aggregate demand from lower employment growth. As you can see on chart 1 though (green lines), it is NOT happening. In fact, policymakers have achieved nothing else in the US in this cycle than inviting speculative rather than productive investment and the result is that Keynes may turn in his grave! … But there is very little left of the economic link that used to tie profits with workers’ wages. Afford to buy assets or die is the name of the game.
Erik: Last time you came to visit Macrovoices, you linked US growth to China in a report entitled: “Red string of fate ties the US to China” That was a really fantastic report, and it’s still available to registered users at MacroVoices.com in our Research Library., do you still see links from China to the US?
Juliette: As you can see on Chart 2 and the orange line showing the social financing impulse in China in 2017, the absolute bum-saviour this year was the pre-Congress-driven credit impulse in the country that was engineered to spur buoyant growth at a key transition time. It did have a rippling impact on the rest of the world through price effects and producer price revival, which more than volume … affects directly global EPS growth.
The key thing to be aware of though … is that the post Congress China may feel very different to the rest of the world. We have started talking about China’s reforms and conversion from an investment-based economy to a consumption-based economy as soon as Xi came to power in 2012. But hope for reforms quickly dissipated and Xi spent most of his first term consolidating the Party’s credibility via a clamp down on corruption and also …his own authority inside the Party. But this has now been a success and in his 2nd term, Xi Jinping is now expected to use his greatly increased political capital to focus on long-term growth sustainability. THIS IS to achieve his ultimate goal … China becoming the first economic superpower worldwide. The crux of the matter though is that long-term growth sustainability means deleveraging. In the past, every Congress has led to a moderation in the credit impulse, the risk is that it is sharper this time … with the likely impact on Chinese imports causing global growth to decelerate. The main impact will be on Emerging Markets and metals, on which I have taken a negative view since Summer.
Erik: A topic we’re hearing from more and more guests about is inflation. For a long time, everyone said “no sign of inflation anywhere”. But suddenly we’re hearing more guests predict its return. Something else I’ve noticed is that different analysts use different definitions of inflation. So, let’s start there – how do you define inflation to start with, and what do you see on the horizon?
Juliette: A naïve inflation definition is that demand-pull inflation raises when aggregate demand in an economy outpaces aggregate supply. The economy slides along the so-called Phillips curve… employment and wage growth shoot up and eventually we get to a point where “too much money is spent chasing too few goods”. In fact, decades of data show that the changes in core CPI correlate very well with a lag of a bit more than 12months with phases of acceleration and deceleration in demand. This can be observed on Chart 12 in my presentation.
Demand, in fact that used to correlate very strongly with a short lag with ISM. The issue there …. As I touched in your first question …is the growing disconnect between Main Street and Wall Street. Money is accumulated on corporates balance sheet with little incentive to invest in the real economy and that’s because of moribund demand trends … The bottom line is that the money is spent chasing too few assets instead of too few goods and that means very little real inflation (as an aside I’d like to add that I see Bitcoin as a symptom of this dynamic where a long cycle necessarily means lower “value”, spread compression across the whole spectrum of asset class and the urge to move towards new perceived value and volatility).
But to come back to inflation, on the wage side we have
- small businesses that are actually not doing terribly well see on chart 10 Russell’s EPS growth (I am using Russel earnings that are less affected by the weakening USD trend in 2017) and
- 2) earnings growth does not really need to be reflected into real income gains for the masses.
That’s because of new technologies (the last I was reading on this in your area of expertise Erik is the advent of the iron roughneck robot in the oil and gas industry: where 20 people were previously needed to do one task, it now requires 5). This is not even accounting for the fact that those jobs lost to automation get replaced by lower paid “service to people” jobs.
Add to this, the fact that internet and globalisation have allowed a strong “winner take all” dynamic to emerge whereby only the strongest and biggest multinationals survive and wipe down the smaller / local competition. You literally HAVE to be at the top of the skills pyramid to make it in this cycle and that’s partly where growing inequalities and the divide between Wall Street and Main Street comes from. Irrespective of political concerns, this is in the macro space a BIG issue. Ford was prescient when he realized at the beginning of the 20th century that mass production can only work in tandem with mass consumption and it is a true conundrum to see this “forgotten” today. In fact, it may cause the fall of capitalism as we know it and is surely a great threat to Trump’s re-election as the truth comes unveiled before 2020.
For now, though, the bottom line is that inflation is unlikely to surprise positively. The last CPI number was completely in-line with my thinking.
Erik: So how did you extrapolate a strategy from this Macro landscape?
Juliette: Well, setting the real economy aside, the so-called goldilocks scenario of stable growth and low inflation has been a blessing for the stock market and I have only started to recommend caution on equities this month: Main Street’s low real income gains allowed low demand and low inflation to keep Central banks at bay. In 2017, meanwhile, the strong EXTERNAL backdrop in Asia and Europe and the weaker USD allowed US companies (especially multinationals) to thrive. The perfect receipt for an equity melt-up and the reason I have been calling for equity earnings yield to converge to bond yields this year (rather than the opposite)… See chart 14.
The issue – as a recent BIS research noted – is that the earnings yield based valuation accounts for the permanently lower cost of capital but NOT for the shrinking demand that is its corollary. But this was not a problem in 2017 because Trump did bring hope and with it the sharply increased leverage that allows the US to currently live above income. See chart 3 to 7.
Erik: Please elaborate on exactly what you mean by “caution on equities”. Are you saying it’s time to raise cash? Time to hedge downside risk? Something else? Also, a related question – usually really big equity moves like we’ve seen end in a parabolic rise to a blow-off top. But we really haven’t seen parabolic acceleration of the move higher yet. Do you think it makes sense to watch for that, or do you see reasons this equity bull market might end without such an event?
Juliette: Going forward what I see is higher real rates but still a growth purgatory.
The issue today is that the hope magnet (as I like to call the tax reform) is virtually gone as the bill will imminently be passed into law. However, the positive direct effect of the tax cuts has already largely been pre-empted. In my opinion, the tax package (and positive repercussions from European health and China’s stimulus) is responsible for the increased leverage and growth upswing in the 2nd half of 2017 (chart 7). But the lack of real demand I described earlier (due to the lack of wage growth and generally growing inequality gap) has only been temporarily trumped by increased leverage (you can see the extent of the leverage boost through the credit impulse chart 5).
This was basically the raise of the animal spirit in the US in 2017.
The issue: the acceleration phase is already behind us. In fact, 2018’s focus is likely to move to the impact that HIGHER real interest rates may have on the aforementioned increased leverage and my bet is that the tax boon will eventually be saved.
On chart 8 you can see that the corporate leverage (as expressed by the non-financial corporate debt to GDP ratio) has now overtaken 2008 levels.
On chart 9 you can see that savings are back to post crisis low.
This is a lot of hope already expressed in real leverage for a reform that was initially promising (that is … at the same period last year) when Trump promised to cater for the Middle Class. After all, the untapped growth reserve lies in fixing inequalities and unleashing spending power there. Again, I won’t risk getting into politics on air here but I think we can all agree it is not what happened…
For a married couple with two kids making $59,000 it looks like the 2018 $1000 tax cut will become a $450 tax hike by 2027 under the House’s plan and a $100 tax cut under the Senate’s one.
Add to this budget cuts for Medicare/Medicaid. It will soon become evident even to the “non-expert” eye that resources are being transferred from those with the highest propensity to consume to those already cash rich.
So, I would conclude on this question by saying that 2017 was the year were real rates were low and the tax cut an animal spirits’ magnet. 2018 is likely to be the year when the tax reform’s main effect is higher real rates applied on increased leverage. In fact, as GDP growth fails to step up meaningfully, what will pop as a concern is the growing fiscal deficit and public debt implications, the risk is that private savings offset government spending in expectation of more (shall I say) “taxing” times. We will see later that together with a Fed’s reaction function that needs to be tested as the Fed slowly gets revamped, this should be worth a 3-5% dip in US equities from January but that would be a dip to buy (unless a few of my radar screens start flashing red for a turn I am still not looking for THE top) … I think the previous blow off phase were driven by managers / traders’ emotion - in 2 words - animal spirit … Today’s markets are dominated by robots (which as far as I know have no emotions… Hence the possibility of a rounded top).
Erik: In your last interview in March, you had a strong out-of-consensus view that 10yr US had to be bought, what happens next?
Juliette: At the beginning of the year and against a consensus strongly geared to higher yields, I warned, as discussed during a previous question that inflation was likely to disappoint. Chart 12 is the one I used to assert this view.
Some of Macrovoices listeners will already know but JDI likes to promote clarity of mind and so I will reiterate it today:
Treasury yields can be decomposed between two components; the Risk-Neutral yield and the Term Premium:
- The Risk-Neutral yield is the expected return from rolling over short maturity T-Bills rates over the life of a longer-term bond.
- The term premium is the residual and basically reflects a fear factor.
The million-dollar question is what moves term premia?
Many believe in a powerful supply/demand component and therefore they also expect substantially higher yields in 2018 on lower official demand stemming from a shrinkage of the Fed’s balance sheet first and the ECB’s balance sheet, most likely second.
But my framework focuses mainly on the change in perceived riskiness of long-term securities as a driver for the Term premium. This is because a bond yield should mathematically be the bootstrap of the expected official interest rate path over the maturity of a specific bond, supply/demand concerns are only secondary.
The term premium effectively reflects the fear factor around a central scenario.
This unique framework, has allowed me to largely ignore in 2017 the positive effect on the term premium stemming from lower government purchases as global QE programs slowly fade away in 2018… to focus on the likely deflationary effect of the shrinking global balance sheet (you will see on chart 13 in my chart package that inflation has not only become global but also a function of global liquidity). The bottom line is that the supply/demand effect on the term premium is potentially negligible compared to the deflationary impact of a shrinking global balance sheet. This has rightly been reflected through a stable nominal 10yr yield, an increase in the risk neutral yield as the Fed tone turned substantially more hawkish and a collapsing risk premium due to a clouded inflation outlook. The bi-product of this dynamic has been a much flatter US curve in a move that many have characterized as scary when it was in fact friendly.
Erik: Juliette, we have seen a 60bps flattening in the US yield curve this year and you do not characterize this as scary? When do you believe it will become scary then?
Juliette: Very good question and I think it should be on any respectable macro trader’s radar in 2018. The US yield curve is considered a reliable indicator of future economic prospects. In fact, an inversion of the curve has preceded every post-war US recession.
The yield curve is not only a gauge of markets’ verdict on the US economy, it also has a direct effect on banks’ profitability and lending. A flat curve has a clear transmission mechanism to lending conditions especially, as the Fed balance sheet starts shrinking. This is because it de-incentivizes holding securities over cash. Deteriorating lending standards at a time when higher yields start being a constraint to highly levered capital structures and the growth momentum falters could be the kiss of death for the cycle. Especially, as I said earlier because the current US upswing relies entirely on increased leverage. Hence, what currently appears to be a US strength will, in due time, turn out to be a crucial weakness.
To be sure though, at 35bps the curve is not inverted - yet - and curve flattening itself is a natural symptom of policy normalization rather than an indicator of an imminent downturn. Inversion is actually the trigger for the credit tap to run dry and for now the credit tap as described in the Senior Loan officer survey is very healthy. Having said this, the lack of inflation pressure means that a Fed on a continued autopilot and attempting 4 hikes next year (as opposed to the 2 already discounted) could invert the yield curve as early as 2018. At which point, the Fed would have to relent or face pushing the US into a recession in 2019.
Erik: A lot of people focus on that statistic that a yield curve inversion has preceded every post-war recession. But I can’t help but notice that the Fed didn’t own a sizable piece of the outstanding issue and was not engaged in managing treasury yields actively in all the prior post-war recessions. So I tend to fade the “yield curve arguments” because it seems to me like an apples-to-oranges comparison when you consider that the Fed is engaged in unprecedented management of the yield curve, which some would even call manipulation. Do you think these factors change the significance of the yield curve as a forecasting tool?
Juliette: Well, I don’t think the Fed owns enough treasuries to change the fact that treasuries are mathematically priced on the expectations of future Fed hikes, that’s why supply demand only has a marginal impact on yields or the yield curve in my framework. Also, the Fed owning a sizable piece of the outstanding treasuries does not change the incentive or de-incentive for banks to lend. Hence, I do think that a flat or inverted curve remains a constraint for the Fed (even if Fed chairs have historically loved to pretend it is not).
Erik: Juliette, your report last week (in which I had peek) was entitled How much is too much? Can you tell us more about this? How will you decide that the Fed has gone too far?
Juliette: Well, the yield decomposition I discussed in a previous question also allows us to observe on chart 15 that the US yield curve flattening has mostly been a function of a lower Term Premium – a risk-friendly dynamic – rather than an actual collapse in the Risk-Neutral yield – a risk-averse dynamic, whereby markets start pricing that the Fed’s stance has become too restrictive. In a way, the fear of something happening is benign as it loosens financial conditions at a time when the actual risk remains remote, it is when the risk materializes that the risk of much tighter financial conditions become more acute. At that point the risk-neutral yield will stabilize or even start falling and this is when you want to start selling high yields and equities.
For example, chart 17 shows the level of Fed accommodation (in blue) as the distance between the current real Fed Funds (deflated CPIX ex shelter) and R* as estimated by Laubach & Williams model. You will see that in its quest to normalise interest rates despite softening inflation, the Fed has taken an aggressive stance in 2017 (mostly due to the lack of inflation). Yet, Risk-Neutral front-end yields (in green) have continued climbing showing no concerns – to this date – over the much more restrictive stance taken by the Fed in 2017.
The most recent communication from the FOMC indicates that its leadership considers the forward level of accommodation: if inflation is assumed to be moving back to target in the time horizon considered … then the Fed’s stance does not appear overly restrictive and gradual hikes are justified:
On 29th November Fed Chair Yellen said that “the recent lower readings on inflation likely reflected transitory factors. As these transitory factors fade, she anticipates that inflation will stabilize around 2 percent over the medium term”.
The future Fed Chair may be slightly more hesitant:
Future Fed Chair Powell, 28th November 2017: “To my surprise, to all of our surprise, inflation readings started to come in weak. There’s question of whether recent inflation developments are transitory or are there more fundamental things at work here?”
The bottom line is that the Fed is responsible for the flattening of the yield curve and it appears that it will proceed with its interest rates normalisation program into a low r* environment, hence continued low inflation means that long-end yields will remain capped.
The conclusion is that bouts of curve steepening should continue to be faded… the US yield curve will flatten up to the point where it starts being a strong headwind to a continuation of the cycle in the face of increased leverage and tighter lending standards.
Erik: So how do I know when the Fed has gone too far?
Juliette: In a nutshell, a simple answer to the question of how much is too much necessitates to be on a constant front-end curve alert:
The Fed has overdone its hand when the flattening of the yield curve reaches the point where it causes the Risk-Neutral yield to stall or reverse (historically this has been concomitant with a 2s5s inversion)…
This would be the bad omen we have been looking for to start considering more than a healthy correction in equities or high yields see and on this see charts 17 and 18.
The last thing I would like to add on the Fed’s subject and that I covered in a November report entitled: “A dangerous time to be complacent about the Fed’s shakeout” is that 2018 will see a complete shakeout of the Fed’s leadership with a move away from holders of PHD in Economics towards businessmen, more likely to be pragmatic. My humble opinion is that the curve inversion will be resisted or pre-empted through a pause in the cycle (using the lack of inflation as justification). The fact that the US is the most advanced Developed Country in its business and monetary cycles also means that it has the most manoeuvring space on monetary policy and a potential pause in the cycle will remain a strong headwind for the Greenback. However, if the Fed remains attached to Phillips’s inflation framework, the risk of a policy error will grow over 2018 and the front-end of the curve will invert, possibly sending risk assets into a tailspin and forcing the Fed to relent. Those are both scenario in which the USD will very much struggle to benefit from a widening interest rate differential with the rest of the world eg. the period preceding recession.
In short, whichever the ultimate Fed answer (pre-emptive or reactive), it is unlikely to support a greenback already struggling under the weight of future increased external deficits (from the tax reform) and the necessity for those to be financed at a relatively attractive USD level. The consequence may also be that volatility is back!
Erik: I want to come back to something you said just a minute ago. You think that 2018 will be the year where they stop putting people who have never worked a single day in a real job in their whole life in charge of the global economy – and by that I mean the academic Ph.D. community. You think that instead they’re going to start putting people who actually have solid business experience in charge of such matters. Ok, I’ll bite… They’ve never made that much sense before. Why would they start now and what causes you to think 2018 is the year when real-world experience will start to matter when it comes to choosing Fed governors?
Juliette: Is it good or bad for the Fed to be ran by businessmen rather than economic PHDs… hmmmm
Well this is another interesting question Erick and one that I will thrive to try and nail down in 2018.
My first line of thoughts there … is that pragmatism is a good thing, as I explained during this interview there are many well-documented reasons why the disconnect between workers and profits has happened and therefore why the Phillips curve is broken - possibly for good. Today, using myself as a pragmatic, I am thinking that a faster balance sheet unwind and less hikes would achieve a good policy mix of injecting volatility into assets and prevent the formation of bubbles (via a much steeper curve) whilst still supporting the real economy.
What could the Fed have done better?
Let’s think of what a pragmatic Fed would have done in this cycle: it should have left the ECONOMY rather than ASSET prices run hot … shrink liquidity and the balance sheet more aggressively rather than hike rates. The trickling down theory that uses financial asset prices to incentivise economic agents to re-leverage in order to soothe the symptoms of the end of the debt super cycle is clearly an error and one that the Fed will struggle to blame on the government for much longer. In fact, the asset price pump should really only be used in emergency phases, not after QE1.
But let us look at the reasons it happened: fear of seeing inflation-expectations collapse in a Japan-like deflation debt trap. The Fed has given itself a clear 2% inflation mandate (I should say that I have written a report on this in July and it is interesting to realise that the sacrosanct 2% target actually came out of nowhere … on a whim). Today’s Central Bank’s big issues is trying to achieve an explicit inflation mandate and an implicit growth mandate that are actually not achievable in the mid or long term because of the end of the debt super cycle, demographics but also and more importantly Capitalism’s fault that continuous growth has its own limit. The bottom line is that R* is probably still negative and that monetary policy making at the lower bound is difficult to navigate.
Not printing so much money would have meant a healthier macro environment but also a lower growth path that has to be accepted politically and has grave consequences in terms of future pension affordability and debt profile. In a way, whether you have a PHD in economics or not, it is easier to bury your head in the sand … focus on short-term gains and pretend that the preset mandate is still relevant and achievable. Everyone in the spotlight has interest in continuing to believe that a capitalist model is sustainable.
So will a businessman be more courageous and willing to wean the economy off its asset price addiction? Nothing is less sure and the real danger is a Fed that is politicised and starts manoeuvring the economy following the election cycle. You know … I actually had some forms of hope that someone like Trump would see the opportunity of fixing inequalities to unleash spending power and spur productivity but what actually got delivered is a narcissist reform package focused on pumping up assets until the next election … I mean its mind blowing to see that the tax reform delivers tax cuts now at full employment that are taken away after Trump is hypothetically re-elected. A Fed that is pragmatic and willing to question models, YES and especially if the longer-term good can prevail at the expense of some short-term pain (which you will have to agree Erik has become a rare species even in the corporate world). But a Fed politicised would be a disaster for the United States (although probably a blessing for macro traders as policy errors would abound!).
Erik: You’ve already expressed a bearish view on the USD, but since I know your institutional advisory service is geared primarily toward actionable trading advice, I’d like to better understand the timeframe of your view on the dollar. And to expand the question, perhaps, I’d like to get your reaction to a very long-term view we’ve begun to hear from other guests, who think that the Petrodollar system is failing before our eyes, and that the final top is in for the US dollar against other currencies. And by final top, I really do mean final. Some people are saying that the dollar has seen its peak relative to other currencies and that the petrodollar demise and de-dollarization efforts of China, Russia, Iran and others are going to cause the Dollar to slowly and gradually lose its current hegemony over the global financial system, much in the way that the Pound Sterling lost that status in the early 20th century. Do you think there’s any credibility to such views?
Juliette: Well Erik, to elaborate on the USD please check the first chart in my USD section (I believe it is chart number 18) … To put it simply the 2017 USD weaker trend was a catch down on the 2014/15 overshoot and I framed the recommendation all year as a convergence trade: monetary convergence as the ECB started talking of its own QE exit and the BoJ effectively ran down the amount of JGB purchase using yield curve targeting as the excuse… and also macro-convergence as the US cycle matured and the rest of the world (especially Europe) caught up.
This convergence trade has temporarily been put on ice due to the imminence of the tax package being passed and the extra hike it may afford the Fed but it has not gone away.
Cyclically, you will see on chart 19 that the late cycle dynamic I described, are historically negative for the USD and this is the part of the cycle where we will end up in 2018 eg. either the Fed is reactive and forced to put its foot off the brake to defend the risk-neutral yield or it will pre-emptively call a pause to blow some wind in the inflation sails. The first proposition is risk negative and will favour EUR, JPY and GOLD whilst the 2nd one will be a broader USD negative.
Some will argue that the onset of recession has in the past been a positive for the USD as global capital flows retrench but this is forgetting one main characteristic of this cycle …. that the US net international investment position has sharply deteriorated (see on chart 20 it has moved from being almost balanced, pre GFC to more than 40% negative currently, in the 60s the US was the biggest creditor to the world, now it is the biggest debtor) … Flows have been chasing USD carry in the most advanced economy in the global business cycle, but opportunities have largely been harvested and are now melting. The upshot is that the China, Russia and Iran de-dollarization efforts are happening at exactly the right time to keep the Greenback on its knees: capital flows to the US have been one way for most of the cycle and are already showing signs of fatigue … the deteriorating debt dynamic will require a weaker FX for the deficit to be financed and last but not least the GOP’s efforts to counter the natural end of the cycle have long-lived already … first and are likely to be dealt a blow by the 1 seat majority in Senate following the Dems victory in Alabama.
Erik: Finally, I’d like to talk about your institutional advisory service, JDI Research. You’re a boutique firm with only a small number of institutional advisors, whom you strive to provide with actionable macro trading ideas. For the benefit of our institutional audience, please describe what your service entails and how they can contact you to find out more about it.
Juliette: Erik, indeed … JDI research is distributed to a limited circle of professional investors committed to dedicate the necessary time to read the reports and digest them. It is a 2 way street: JDI research provides in-depth thought and analysis; and subscribers ensure they understand it so they are able to benefit from future markets opportunities. The reports aim at giving you tradable ideas at the time of release but also seek to give you the means to react profitably on future events (expected or unexpected). The premium service is even more hands on as it involves daily updates on Bloomberg with specific trade advises and analysis on macro game changers.
I am dedicated to allowing my clients to achieve superior profits and that is the reason why my reports emphasize charts and showing evidence of what I am seeing in the number crunching analysis. It is much easier for traders to get the narrative this way and use it in their investment framework successfully.
In practise, this means that we answer subscribers’ questions via email in a timely manner and that the reports will never be blasted out to entire institutions. The limited scope of readership ensures maximum tradability to subscribers.
Erik: Your service is definitely one of the best in the industry, and is institutionally priced accordingly. So unfortunately, there’s no $500 newsletter our retail audience can subscribe to. But I believe you’ve been flexible enough to afford a discount on the institutional service to high net worth individuals. We’re still talking about thousands of dollars per year, not hundreds, but for our high net worth audience who can consider such services, please tell us more. And of course, my job is always to look for a bargain for MacroVoices subscribers, so is there any possibility of a further discount this holiday season?
Juliette: Indeed, I charge per portfolio manager, which in practise means that anyone taking their investment process seriously should be able deliver largely enough returns to justify the investment in a JDI partnership.
Erik: For people who aren’t quite ready to step up to the table yet, is there any way they can get a sample report to get a sense of what you offer to your subscribers?