Jonathan TepperPlease note: this was transcribed to best of the ability of the transcriber and may have minor errors. Please refer to the podcast itself to clarify anything.

Download the Full transcript: pdf 2017-03-16 - Transcript of the Podcast Interview between Erik Townsend and Jonathan Tepper (543 KB)

Erik:                Joining me next on the program is Jonathan Tepper founder of Variant Perception. Jonathan for years now my thinking has been that this massive rally we've seen since 2009 is attributable primarily to excess liquidity that's generated by central bank policy.

You've done a huge amount of work on this subject and your conclusion has been that that excess liquidity may soon dry up and of course that would present a serious headwind for markets. So, please give us the whole back story here, where has all this liquidity been coming from for the last few years, why is it there and why do you think that that picture is about to change?

Jonathan:       Sure, thank you, so basically, we've done quite a lot of work at Variant Perception. We build traditional leading economic indicators but we spend an enormous amount of time focusing on global liquidity indicators and economic indicators tend to lead things like industrial production for example and retail sales, whereas liquidity interestingly tends to lead acid prices a lot more than it leads the overall economy.

You were just mentioning excess liquidity which we would distinguish from a straightforward liquidity so for example if you think about liquidity a lot of that can drive the real economy so if money is growing you could end up with more industrial activity, retail sales and then you can end up with inflation and an increase in the C.P.I. level.

If you're pumping in more money than the economy actually needs or that in fact inflation is generated then all that excess liquidity sort of above and beyond needs of the economy tends to go into financial assets and that could be commodities, stocks and real estate.

So, one of the things that we do at Variant Perception to help our clients who are primarily hedge funds, family offices and endowments is to track these ups and downs of not only excess liquidity we look at the global shape of the yield curve.

Grant WilliamsPlease note: this was transcribed to best of the ability of the transcriber and may have minor errors. Please refer to the podcast itself to clarify anything.

Download the Full transcript: pdf 2017-03-02 - Transcript of the Podcast Interview between Erik Townsend and Grant Williams (574 KB)   

Erik:                Joining me next on the program is Grant Williams, Real Vision co-founder and of course author of the extremely popular, Things That Make You Go Hmmm newsletter.

Grant, your views on the global rise in populism have been among the most prescient of any guest who's appeared on this program. You predicted the Brexit outcome and you've described the rise of Donald Trump, Bernie Sanders and various European politicians including Marine Le Pen, as all being part of a connected global trend.

Since our last interview many of your predictions have come true. So, bring us up to date on your outlook, what is driving the global rise in populism, what does it mean and what's coming next for Europe, the United States and the rest of the world?

Grant:             Hi Eric, it’s great to be back on and good to speak to you again. The populism thing is so interesting and I think it's so important right now and I think, me predicting Brexit and Trump does not make me a great market seer, I think the beauty I had during those election campaigns was that I was in neither place so I could sit back from a distance and look at it objectively which I think both of those – the Brexit situation and the U.S. elections – was so just electrified with high feelings on both sides and it was really difficult if you were in the middle of that to be able to be objective about it.

Louis 201211Please note: this was transcribed to best of the ability of the transcriber and may have minor errors. Please refer to the podcast itself to clarify anything.

Download the Full transcript: pdf 2017-16-21 - Transcript of the Podcast Interview between Erik Townsend and Louis-Vincent Gave (700 KB)     

Erik:              Joining me next on the program is Louis Vincent Gave of course from a very famous institutional advisor firm Gavekal headquartered in Hong Kong. Louis thanks so much for joining us.

I want to start by talking about you being headquartered in Hong Kong there. This whole China reflation trade, a year ago, the buzz was, “hey 2016 is going to be the year where China is forced to devalue markedly and that will send a massive deflationary shockwave around the world.” Well it didn't happen in 2016, how do you see this, is that really a risk, is that the right story, what's going on with China?

Louis:            To be honest, you're absolutely right, that’s been one of the biggest surprises of 2016. I think if you look back at the past year most people – and you talk about the surprises – most people talk about Trump and they talk about Brexit because this is what makes newspaper headlines. But you're absolutely right that a year ago, everyone thought China was going to implode.

Instead of imploding the government obviously re-stimulated the economy. You saw big spending from state owned enterprises, you saw oil imports go up 24% year on year in the first quarter, iron ore imports, copper imports everything goes through the roof in the first half of 2016 and instead of imploding China turned out to be reflationary force for the rest of the world to the point where actually today everybody talks about the Trump-flation and how the U.S. election has triggered a big reflationary trade for the world, for me it's not as much Trump and what's happening in the U.S. really as what occurred in China we had another round of fiscal stimulus just like we had in 2009,2010 and this led to rebound in commodities, rebound in Baltic Dry Index, rebound in steel prices.

Now interestingly I think if you project yourself forward to this summer – China basically stopped stimulating around the summer of 2016 and in fact starting in November, they started to tighten monetary policy, started to raise interest rates, started to lean on the banks to lend less – so if you project yourself to this summer the big risk for me is that perhaps – now there's reasons to think that reflation trade will continue and we can maybe go into that – but one of the risk is that as Chinese growth rolls over as the year on year comparisons for China get tougher what you will see in China is weaker growth starting this summer and that might start to curtail the reflation trade you're seeing on the markets today.

DSC06699 2Please note this was transcribed to best of the ability of the transcriber and may have minor errors. Please refer to the podcast itself to clarify anything.

Download the Full transcript: pdf 2017-16-09 - Transcript of the Podcast Interview between Erik Townsend and Jeffrey Snider (557 KB)     

Erik:                Jeffrey Snider from Alhambra Partners joins me now as this week's featured interview guest. Jeff put together a fantastic book of charts and graphs to support this interview and I strongly encourage you to download it so that you can refer to it while you're listening.

Registered users at will find the download link in your research roundup email. If you're not yet registered Patrick told you earlier in the show how to get registered and get the download.

Jeff your last interview back in August was one of our most popular shows ever. But we also lost a few people because we dove straight into the intricacies of the Eurodollar futures market without stopping to first define what a Eurodollar is and why that's important.

So, to set the stage for this interview the term Eurodollar refers to time deposits at banks outside the United States which are denominated in U.S. dollars so in other words U.S. dollars on deposit outside of the United States. The term Eurodollar originally referred to bank deposits in Europe but in today's usage it really refers to any place in the world that U.S. dollars are on deposit in banks other than U.S. banks.

Now at first glance it might seem that the Eurodollar market would only be of interest to international corporations who need to hold dollar denominated deposits around the world. So, it's tempting to question why an investor located in the United States would even care about Eurodollars.

So, Jeff let's start by answering that question what signals can the Eurodollar market give us about the global economy. Why is it so important for an investor who seeks to understand the global economy to understand the Eurodollar market and the messages that it’s sending us?

Jeffrey:            Well first of all Erik I want to thank you for having me back here I really appreciate the opportunity. I think you guys do a fantastic job with your podcast and I'm a big fan of it too. To answer your question, the Eurodollar is as you describe it. It's an offshore currency market of various forms and as it evolved in the last half century or so it's taken on far more proportions than just deposit accounts or vanilla currency transactions. In fact, it's become sort of ubiquitous. What I mean by that is that there's Eurodollars pretty much behind every facet of global finance and economy.

If you look back at 2008 for example, the panic in 2008 was actually a Eurodollar panic not specifically one of Wall Street but one of Lombard Street and you were correct to point out that the main Eurodollar is sort of a misnomer because it denotes any offshore currency transactions that happen all over the world. It just so happened that the earliest markets of these offshore dollar areas happen to be in Europe, London, Zurich, Frankfurt but there was Eurodollar markets all over the world. Montreal was one, Tokyo was another big one.

So, there's a global system that is a currency system, a reserve currency system, that really isn't currency though and it functions in a lot of ways that are to our first brush, kind of strange and unusual and maybe a little bit too unfamiliar to allow comfortable interpretation.

Jim Rogers largePlease note this was transcribed to best of the ability of the transcriber and may have minor errors. Please refer to the podcast itself to clarify anything.

Download the Full transcript: pdf 2017-02-09 - Transcript of the Podcast Interview between Erik Townsend and Jim Rogers (682 KB)

Erik: Joining me next is a man who needs no introduction, investing legend, Jim Rogers. Jim when you appeared on this program one year ago, Macro Voices was brand new. We had no name, no reputation and no following yet despite having no regular audience following at that time, that one interview remains our most popular show ever with more than half again as many listener downloads as our next most popular interview with fund manager Hugh Hendry much more recently.

So congratulations on your top billing status and I have no doubt that you'll set a new record today.

Jim: Eric I think I should hang up now, while I’m ahead, are you kidding. With a record like that and an introduction like that I want to stop while I'm ahead.

Erik: Well before we let you go let's start with equity markets then because when we spoke a year ago you and I were both very concerned about markets being overvalued. You went out of your way to say that you didn't know whether it would happen in 2016 or 2017or 2018 but you felt that significant downside was ahead for the markets eventually.

And if I look back just six months ago a lot of industry luminaries, whether we think about guys like Ray Dalio, Stan Druckenmiller, Carl Icahn, these guys were all casting bearish views for a lot of the same reasons that you and I were.

Then Donald Trump was elected president and suddenly all of these guys turned super bullish. Ray Dalio seems to be backing away from that enthusiasm in the last week or two but the fact remains that some super talented people all turned bullish, super bullish after the election. Forgive me Jim, I'm just not seeing the logic to this are you?

Jim: Well yes and no. Mr. Trump said he's going to do some wonderful things. He's going to cut taxes which is always great for any society, any country. He said he's going to rebuild the infrastructure which America desperately needs and is good for America. He says he's going to bring home the three trillion dollars, U.S. dollars which American companies have overseas.

All of these things are wonderful, wonderful things and if he can do it Eric, wow things are going to be great.

But Mr. Trump has also said he's going to have trade war with China, Mexico, Japan, Korea a few other people that he has named. He swore that on his first day in office he would impose 45% tariffs against China. He's been there three weeks, two or three weeks and he hasn't done it yet but he still got it in his head I'm sure or maybe he's just another politician like all the rest of them. He says one thing and he doesn't mean it at all but he does have at least three people in high levels in his group who are very, very keen to have trade wars with China and other people.

If he does that Eric, it's all over. I mean history is very clear that trade wars always lead to problems, often to disaster, sometimes even to real war, a shooting war. So I don't know, I'm not sure Mr. Trump knows. He said so many things and many of the things are contradictory. Now if he's not going to have trade wars with various people then chances are for a while happy days are here.

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MACRO VOICES is presented for informational and entertainment purposes only. The information presented in MACRO VOICES should NOT be construed as investment advice. Always consult a licensed investment professional before making important investment decisions. The opinions expressed on MACRO VOICES are those of the participants. MACRO VOICES, its producers, and hosts Erik Townsend and Patrick Ceresna shall NOT be liable for losses resulting from investment decisions based on information or viewpoints presented on MACRO VOICES.

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