Macro Voices All-Stars

All-Star Professor Steve Keen and Erik discuss:

• Why Steve doesn’t expect a U.S. recession
• Steve’s economic outlook for the rest of the world
• Why Steve is concerned about the financial sector
• Will the secular bond bull market reverse or just plateau at sustained near-zero interest rates?

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All-Star Jeff Snider and Erik discuss:

• Anomalous behavior of EFF relative to IOER in 2018/19
• Why the Fed describes IOER as a floor or double-floor BELOW EFF
• Why it doesn’t work that way in the real world
• Contrasting Jeff’s views with Luke Gromen’s “balance sheet capacity” argument
• Why treasuries and other sovereign credits are really balance sheet instruments, not investments
• Japanese vs. U.S. over-indebtedness and implications

Jeff Snider Chartbook July 30 2019 

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All-Star Danielle DiMartino Booth and Erik discuss:

• What to expect from this week’s FOMC
• Will we get a 50bps cut or just 25?
• Is there a risk that a 25bps cut would disappoint markets and still lead to a big correction?
• How will the ECB and other central banks react?
• What’s in store when Christine Lagarde eventually takes the helm of the ECB in November?

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All-Star Pippa Malmgren and Erik discuss:

• Iran geopolitical situation – what’s at risk and what comes next?
• Update to Pippa’s prediction Donald Trump has aspirations of a major media empire after the White House
• Personal data monetization trends and Facebook’s record $5bn fine for privacy violations

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All-Star Julian Brigden and Erik discuss:

• If central banks are powerless to contain deflationary pressures, what are the implications for Pensions?
• Is it possible to enter recession without first seeing a 2s10s curve inversion?
• Longer-term outlook for bond yields, esp. U.S. 10yr

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All-Star Luke Gromen and Erik discuss:

• Luke says the real reason for the coming rate cut is to enable US private sector financing of government deficits
• Luke elaborates on his views about balance sheet capacity driving FF>IOER
• Luke’s expectations for market moves when a debt ceiling increase is confirmed

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All-Star Danielle DiMartino-Booth and Erik discuss:

• As Danielle explained in her prior interview, the U.S. economy isn’t immune to the global growth slowdown.
• But what about Brent Johnson’s view that a global safety trade could keep the stock market party going a while longer?
• Danielle’s take on the possibility of President Trump bypassing the Fed and intervening to weaken the dollar through executive action
• Why we should be thinking about the possibility of #DoubleEasing – both QE and rate cuts at the same time

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All-Star Prof. Steve Keen and Erik discuss:

• How the field of economics lost its way and lost touch with how the real world actually works
• Several examples of clear disconnects between widely accepted economic theory and real-world actuality
• Prof. Steve’s book recommendations for those who want an interpretation of Economics that’s a little closer to reality than the mainstream

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All-Star Jeff Snider and Erik discuss: 

• Review of Fed Funds rate and Interest on Excess Reserves (IOER) – what do they mean and why are they important
• The theorydescribing how the Fed believed that IOER would effectively cap the Fed Funds rate within their target range
• Hard data shows the theory doesn’t match actual reality
• Jeff’s explanation of what’s really going on, and why a shortage of USD liquidity in the global offshore Eurodollar market is what’s really driving the observed behavior of Fed Funds and IOER

 All-Stars Jeff Snider Chartbook July 15 2019 

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All-Star Julian Brigden and Erik discuss:

• What should we make of crypto currencies suddenly making a come-back? And what about Facebook’s Libra project?
• Why Julian remains bullish Gold, and his outlook for Silver
• Why Julian is turning bearish on the USD

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All-Star Luke Gromen and Erik discuss:

• Everyone was so focused on the Jobs number that they missed the re-widening of Fed Funds over IOER, which is more important according to Luke
• Luke explains the significance of FF > IOER, what it means, and what the consequences are
• Luke’s take on the global dollar squeeze thesis we’ve discussed extensively on MacroVoices
• Why the dollar squeeze doesn’t deter Luke from being bearish on the USD and bullish on risk assets, gold, and Bitcoin
• Luke’s outlook for how things will play out from here in markets

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All-Star Brent Johnson and Erik discuss:

• Brent says he was caught by surprise by the Gold breakout, but he’s still not chasing it
• Ultimately, Brent thinks Gold will move much higher, but still questions whether this is really the time
• Brent’s conviction that the USD is headed higher has never been stronger
• But he also points out that he las long predicted Gold and the Dollar would eventually move higher together, and this may have begun
• Brent says 4,000+ on the S&P 500 is entirely possible in the next year or two, not because of strong fundamentals but because Brent believes the U.S. Stock market will become the global safety trade benefactor

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All-Star Louis-Vincent Gave and Erik discuss:

• U.S. Stock Market at all-time highs, but bond markets are also very high. Is this about foreign capital using U.S. markets as a “safety trade?”
• Is Deutche Bank’s current distress the new “Lehman Moment” that could indicate coming distress for the entire financial sector?
• Will Hong Kong real estate crash as a result of China’s aggressive policy moves and Carrie Lam’s Extradition Bill debacle?

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All-Star Dr.Pippa Malmgren and Erik discuss:

• How Trump's "photo ops" have been making waves in the markets
• Why Facebook's Libra raises fundamental questions about our roles as consumers, investors, and private citizens
• Why privacy will be "the governance issue of our time"

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All-Star Juliette Declercq and Erik discuss:

• Does Christine Lagarde’s appointment to head the ECB change the Financial Repression outlook?
• Macron is still the chief architect of who has power in Europe
• Outlook for ECB policy leading up to the U.S. Election
• Effect on asset prices
• Conclusion: Giving power over the ECB to someone with strong relationships with EU leaders AND a strong fiscal background has to be a good thing

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Today's All-Star Danielle DiMartino Booth and Erik discuss: 

• Economic conditions are deteriorating globally. We’re in a global recession.
• The U.S. Can’t stay de-coupled from global economic slowdown indefinitely!
• Danielle’s take on the feud between the Fed and the Trump Administration
• Why monetary policy must remain independent from political influence

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All-Star Prof. Steve Keen and Erik discuss:

• Why economists don’t consider Credit in their Aggregate Demand models
• Why they’re wrong, and why credit matters
• Detailed review of credit’s role in aggregate demand

Prof.Steve Keen - Credit Bubbles 

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All-Star Jeff Snider and Erik discuss:

• Treasury and Eurodollar LIBOR yield curve inversions
• Fed Funds Money Equivalents
• Interest Rate Swaps
• Eurodollar Futures Curve

Jeff Snider Chartbook July 1, 2019

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Today's All-Star Luke Gromen and Erik discuss: 

• Policy developments since Luke’s May 28 All-Stars Appearance
• Gold and Bitcoin are starting new bull moves; the Dollar is starting a new bear trend
• Lael Brainard’s speech and why it’s so important to markets
• Luke’s “bottom line” call for markets

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All-Star Julian Brigden and Erik discuss: 

• Can Trump pull off a trade deal with China setting us up for a run into the election?
• What do Middle Eastern tensions mean for markets?

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