Transcripts
Erik: Welcome to Part 7 of MacroVoices Eurodollar University with Alhambra Investments CIO, Jeffrey Snider. I’m your host, Erik Townsend. There is a slide deck to accompany this podcast and we recommend that you download it before listening, as we’ll be referring to the charts and graphs it contains throughout this program. You’ll find the download link, along with the other parts of this series at https://www.macrovoices.com/edu (for Eurodollar University).
At the end of the last episode, Jeff explained in detail how the system had broken down to the point where collapse was accelerating and starting to get out of control. Now let’s jump back in right where we left off as Jeff starts to explain the Fed’s efforts to intervene. We’re on Slide 93 on the PowerPoint deck.
Erik: Okay, Jeff, given that description of the problem, moving on to Slide 93, where and how does the Fed try to intervene, and how successful are they?
Erik: Welcome to Part 6 of MacroVoices Eurodollar University with Alhambra Investments CIO Jeffrey Snider. I’m your host, Erik Townsend. There is a slide deck to accompany this podcast and we recommend that you download it before listening, as we’ll be referring to the charts and graphs it contains throughout this program. You’ll find the download link, along with the other parts of the series at https://www.macrovoices.com/edu (for Eurodollar University).
As you know, it was a challenge to decide in the editing room where to break Parts 5 and 6 apart, because Jeff Snider was really on a roll, talking about how the sheer panic across the industry associated with the subprime mortgage crisis was creating a liquidity crisis, even in cases where the underlying credit itself was actually sound. We cut off just before Jeff began to explain how gold would come into the story as the collateral of last resort.
Just to refresh your memory, we’re going to rewind by a couple of minutes and replay the final two minutes or so of Part 5, just to keep the continuity of thought going as Jeff brings gold into the story.
Be sure to download the slide deck that accompanies this conversation. You’ll find the download link at https://www.macrovoices.com/edu (for Eurodollar University).
We left off at Slide 45 in the deck. Now here is Alhambra Investments CIO, Jeffrey Snider.
Erik: Welcome to Part 5 of MacroVoices Eurodollar University with Alhambra Investments CIO Jeffrey Snider. I’m your host, Erik Townsend. There is a slide deck to accompany this podcast and we recommend that you download it before listening, as we’ll be referring to the charts and graphs it contains throughout this program. You’ll find the download link, along with other parts of the series at https://www.macrovoices.com/edu (for Eurodollar University).
Now, you might be wondering how this could be Part 5 in what we’ve described in the past as a four-part series. The original four-part series, produced in 2017, focused on the history of the Eurodollar system before the great financial crisis. In Season 2 of Eurodollar University, produced in 2018, we’re going to analyze how and why the system broke down, beginning on August 9 of 2007, and hasn’t been the same since. Season 2 adds Parts 5, 6, and 7 to what has now become a seven-part series overall.
So, without further ado, let’s bring back Alhambra Investments CIO, Jeffrey Snider.
Erik: Jeff Snider, thanks so much for joining us again for Eurodollar University, Season 2. This is Part 5 in what was originally conceived to be a four-part series. And the reason for that is the original series really was focused on the history of the Eurodollar system up until it broke down in 2007. In Season 2, we’re going to talk about what’s happened since 2007. Thanks so much for being with us and doing this again with us, Jeff.
Erik: Joining me next is Jesse Felder, editor and publisher of The Felder Report, one of the most popular newsletters, as well as the occasional Felder Report podcast, which is also extremely popular with listeners.
Jesse, thanks so much for joining us. I’ve got a lot I want to cover. First of all, listeners, Jesse put a great slide deck together for us. The download link is in your Research Roundup email. We’re going to start with that. Then there is also a blog post to discuss, also linked in your Research Roundup email.
Jesse, let’s start with this chart deck. As I go to Chart 2, I notice that you’re talking about some popular concepts: dot com bubble, housing bubble, and then everything bubble. I love the metaphor. It feels good.
But I want you to be really specific with me. What are you talking about, “everything bubble?” Exactly what do you mean? Because dot-com bubble and housing bubble – everybody knew exactly what that meant.
Why is it an everything bubble? And what is causing there to be a price inflation bubble in so many different asset classes all at once?
Erik: Joining me next on the program is Martin Armstrong, founder of Armstrong Economics.
Martin, I’ve really got to hand it to you. Last time we had you on the program, a little more than a year ago, the S&P was at 2,385.
And, to summarize approximately what you said: You could easily make the argument that we’re already way overvalued on a fundamental basis. But it doesn’t matter. The market could easily double from here.
And, of course, as much as everybody was calling for a crash at that point, your words were proven quite prescient. It was all uphill from there.
Now we’ve had a few hiccups. Are we finally at the point where, maybe, we’re running out of steam? Or do you think that we’re going to get past this correction and continue to move higher?
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.
