Simon WhiteErik:     Joining me next on the program is Variant Perception’s managing director, Simon White. Simon’s got a fantastic slide deck for us, as Variant Perception always does. You can find the download link in your Research Roundup email. If you’re not registered yet, just go to our home page at and look for the red button that says Looking for the Downloads.

Simon, before we dive into the equity market, I know you guys at Variant Perception have a slightly different way of approaching markets. So let’s start by doing just a quick summary of the process that you use at Variant Perception to approach and analyze markets.

Simon: Thanks, Erik. And thanks for having me on the show again. So, as you say, I think what we’re trying to emphasize is it’s not so much what you think it’s how you think is very important. The slide deck you mentioned, there’s a very quick diagram there that I think really covers it.

We really try to focus on leading economic indicators because they tell us where things are going, not where things have been. And we use these to forecast turning points. And through these turning points, we basically look at markets.

But we look at markets through the prism of valuation, sentiment, and momentum. And then we try and look at the biggest mispricings to try and find the best trade ideas. So that’s the really succinct version. The aim is to really come up with actionable ideas and using leading economic data to try and find those ideas.

Charles Mcelligott Headshot 250xErik:     Joining me now is Charlie McElligott who heads up the global cross-asset macro strategy group for Nomura and is extremely well known for the CTA model which predicts when algorithmic traders will change their positioning.

Charlie put together a fantastic slide deck in support of today’s interview. Registered listeners can find the download link in your Research Roundup email. If you’re not yet registered, just go to our home page at and look for the red button that says Looking for the Downloads? next to Charlie’s picture.

Charlie, it’s really great to have you back on the program, especially this week. There is so much to talk about that’s going on tactically, with moves in the market and fears about what might or might not happen with this trade deal and so forth.

But why don’t we start at a high level and begin with the big picture?

Last time we had you on the program, you told us to watch carefully as to what the market did in March. You said around the beginning or middle of March there was a risk that we might see a big selloff if we hit certain trigger levels. We started to see that start to come true.

But you also told us if we managed to get through the end of March and we still hadn’t gotten closing prints below those trigger levels, that it was a setup for a melt-up. And, of course, that’s exactly what has happened.

So, in terms of the big picture, late-cycle dynamics, and so forth, why don’t you give us an update on big picture macro landscape? And from there we can start to go deeper into this week’s tactical issues.

LacyHuntBio2017Erik:     Joining me next on the program is Dr. Lacy Hunt, chief economist at Hoisington Investment Management.

Dr. Hunt, before we get started I just want to credit you and make sure our audience is aware, the last time that you were on the program, everybody and his brother was screaming at the top of their lungs, okay, look, that’s it. It’s clear, the bond bull market is clearly over. We’re headed to much higher yields.

The big number that everybody was watching was 3.10% on the 10-year yield. And so many people said, boy, if we get past that there’s no turning back, it’s the end of the world, the sky is falling, that’s it for the bond market.

And just as that was happening, we had you on the program. I believe it was the same week that we first broke 3.10%. And you were very confident and very assured and just saying, look, it’s lonely sometimes. But I’m sticking to my story. My fundamental view has not changed. It is very much opposite consensus and this is a buying opportunity for bonds, not a reason to panic.

That was so out of consensus at the time and, needless to say, you have been proven spot-on correct ever since then.

And I also want to just make our listeners aware this is not the first time that you’ve been out of consensus and correct. You’ve caught all of the major bull and bear markets in the bond market since the late 1970s. So congratulations for the excellent track record. And thanks so much for joining us again on the program.

JeffreySniderErik:     Joining me now is Alhambra Investments Chief Investment Officer, Jeff Snider.

Jeff, thanks so much for joining us on the program, it’s great to have you back.

Jeff:     Thanks, Erik, always a pleasure to be back with you.

Erik:     Listeners, we’ve got a real treat for you. As many of you know, Jeff and I did a series called Eurodollar University, which was a chronological introduction to the Eurodollar system. We got from our most astute listeners who really dug into the material a lot of really positive feedback that it was some of the best content that we’d ever done. But we also got a bit of feedback from people who just said, look, I can tell that Jeff is a really smart guy, but this is a little over my head and I’m not really sure what the heck he’s talking about.

So what we’ve been trying to do – Jeff approached me about this in Vancouver, and we’ve been working together to try to recraft Eurodollar university, not from a chronological standpoint but more from a topological organization perspective.

So, Jeff, I want to start with what I think are some of your biggest and most bold contentions and ask you to address them in today’s interview.

We’ve been taught that the way the international monetary system works is the US dollar is the center of the whole thing. It’s the world’s reserve currency. And that means the US dollar is used for international trade settlement, and central bank reserve assets are denominated primarily in US dollars. And that puts the dollar at the center of the whole system.

PROFESSOR STEVE KEEN headshotErik:     Joining me next is Professor Steve Keen who is both the author of Debunking Economics as well as the crowdfunded professor of economics on Patreon. Later on in this interview we’ll come back and tell you a little bit more about that.

Steve, after our last interview I was left with my head spinning, as I always am, because you are just a firehose of fantastic information about economics, including those aspects of economics that deviate from the neoclassical school which all the big universities teach.

And I realized that it’s so unusual for me to disagree with you, but I left the last interview saying, wow, Steve is on the other side of a major argument which is, I’ve always felt that the US dollar, having the world’s reserve currency, although it may not benefit the entire world, certainly benefits the ability of the United States to fund its deficits. And there’s another argument which I think that you tend to favor, which is that it would actually be to the benefit of the United States if it would lose its reserve currency status of the US dollar.

So why don’t we start by you making that argument. How could losing reserve currency status possibly be to the benefit of the United States?

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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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