Transcripts
Erik: Joining me now is Tian Yang, Head of Research for Variant Perception.
As the Variant Perception guys always do for us, Tian has put together a fantastic slide deck to accompany today’s interview. So I strongly recommend that you download it. Registered users will find the download link in your Research Roundup email. If you’re not yet registered, just go to our home page at MacroVoices.com and look for the red button that says Looking for the Downloads? next to Tian’s picture.
Tian, in past interviews, we’ve gone into depth on the process that you guys use at Variant Perception and it’s absolutely fascinating content. So, for the benefit of any new listeners that may not be familiar with what you do at Variant Perception and the way that you use leading indicators and so forth to approach markets, I want to encourage them to go back to some of Jonathan Tepper’s previous interviews on prior dates on MacroVoices where we do this in detail.
But for the benefit of anyone who hasn’t already had the indoctrination, could you give us a quick review of the process that you use and how it flows into the current market environment?
Erik: Joining me now is One River Asset Management Chief Investment Officer, Eric Peters. Eric is known for his weekend reading notes (wkndnotes) and I’ve been particularly enjoying reading a couple of them this week that I want to talk about.
We have secured permission to share those with our listeners, so you’ll find the download links in your Research Roundup email. If you’re not registered yet just go to our home page at macrovoices.com. Look for the red button that says Looking for the Downloads? next to Eric’s picture on the home page.
Eric, It’s great to have you back on the show. I want to talk about some of your weekend reading notes because they resonate very much with a number of themes that I’ve been thinking about.
I wanted to start with monetary policy and how long the monetary paradigm, if you will, can last. It seems to me like, really for the last 10 years, we’ve been propping up asset markets with what I think is easy money policy, with quantitative easing and very accommodative monetary policy.
But a number of people have said, look, there is only so far monetary policy can take you. Feels to me like we’re coming to the end of that path.
Are we at the end of the path? And if so what comes next?
Erik: Joining me now is Harley Bassman, operator of Convexity Maven, a macroeconomic website. And of course Harley is very widely credited as the inventor of the MOVE Index, which is essentially the volatility index, or VIX, for the bond market.
Harley, I want to start with that point, actually, not just to credit you as the inventor. But I interviewed Danielle DiMartino Booth earlier this week and her comment was so many people are like, oh my gosh, is the economy about to fall over into recession? Let’s keep an eye on the stock market and watch for signals.
Her comment was, forget the stock market. Watch the MOVE Index. She thinks that what’s about to happen, if something is about to happen, it’s going to happen in the bond market.
Now, since you are the guy who invented the MOVE index, how useful is it as far as a leading indicator or a predictive signal that might tell us that something is wrong?
Erik: Joining me now is Gluskin Sheff’s chief economist David Rosenberg. David prepared an excellent slide deck.
I’m sure many of you are familiar with “Breakfast with Dave,” perhaps the longest-standing and one of the best-known paid subscription newsletters in the industry. Most of the slides in the deck come from “Breakfast with Dave” and it’s a really excellent deck, so I recommend that you download it.
Registered users will find the download link in your Research Roundup email. If you’re not registered yet, just go to our home page and look for the red button that says Looking for the Downloads? next to David’s picture.
David, it’s great to have you back on the program. Last time that we had you on, you told us a story of an ending or late-stage economic cycle and deteriorating economic conditions. As I perused your slide deck, it looks like those conditions are maybe even getting worse.
So give us an update on what some of the major things are that people will find in the slide deck and what you’re watching in terms of economic signals.
Erik: Joining me now are Alhambra Investments CIO Jeffrey Snider and Forest for the Trees founder Luke Gromen.
As MacroVoices addicts already know, Luke and Jeff have both been outspoken in their MacroVoices All-Stars appearances about a global US dollar liquidity shortage.
But while Jeff and Luke clearly agree that there is a problem, they see that problem differently, sometimes leaving our listeners struggling to understand precisely where they agree and where they disagree.
But Jeff and Luke told me off the air that they both respect one another’s views and neither one of them wanted to be part of any sort of debate intended to prove the other guy wrong. And I applaud both of them for their professionalism in that regard.
But, since so many of you have asked for clarity on where Jeff and Luke agree and where they disagree, they’ve agreed to talk through their views in today’s feature interview.
So let’s jump right in.
Luke and Jeff, you’ve both spoken in the past about a US dollar global liquidity problem. Please help our listeners understand how each one of you understands this problem.
What exactly is the problem? Why is it so important? What caused it? And what adverse effects are being caused by it?
Jeff, why don’t we start with you?
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