Forward Guidance

Latest Episodes:

How the Dollar Will Be Gradually Eroded by Emerging Market Currencies | Eric Fine & Natalia Gurushina (VanEck Fireside Chat) Aug 22, 2024

Show notes

This interview with Eric Fine & Natalia Gurushina delves into the potential of emerging markets, how they are affected by developed market weakness, and contrasting central bank strategies. We also discuss investing in China, emerging market reserve strategies, and de-dollarization. This interview is paid sponsorship on behalf of the VanEck corporation. Recorded on August 7, 2024.

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Timestamps:

(00:00) Introduction

(00:40) How Eric Got Interested In Emerging Markets

(03:38) Natalia's Introduction To Economics

(05:55) How Big Is The EM Bond Market?

(11:07) Why EM Bonds Have Outperformed

(14:40) Weakness From Developed Markets

(17:35) The Yen's Impact On EMs

(26:24) BOJ Vs Brazilian Central Bank

(29:16) Mexico's Fiscal Orthodoxy

(30:58) Benefits Of Floating Currencies

(34:32) Making Money In EM FX

(36:53) Signal For EMs To Cut Rates

(38:38) Role Of Hedge Funds In EM FX

(41:25) Diversification In EMs

(46:24) Sub-Saharan Africa

(51:48) Importance Of India

(59:40) Investing In China

(01:04:49) China's Growth Model

(01:17:10) Emerging Market Reserves

(01:25:01) De-Dollarization

Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets

The Strategies & Risks In Quant Trading | Mike Harris Aug 19, 2024

Show notes

This interview with Mike Harris explores the strategies and challenges of the Quest Hedge Fund, from CTA trend-following and AI trading models to the overcrowded quant equity space. We also dive into statistical arbitrage, multi-strat funds, the macro outlook, and the advantages & risks of using AI.

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Timestamps:

(00:00) Introduction

(00:20) Mike Harris Background As a Quant

(03:07) Quest Hedge Fund

(04:30) CTA Trend Following Strategy

(11:50) Trend Following Examples

(16:47) Permissionless Ad

(17:44) Interview Continues

(19:33) Quant Equity Trading Getting Crowded

(22:52) Statistical Arbitrage

(27:17) Risks to Statistical Arbitrage

(32:11) Multi-Strat Hedge Funds

(33:32) Lack of New Fund Launches

(39:04) Sharpe Ratio In Strategies

(41:34) Private Market Investing

(48:29) Volatility Strategies

(54:17) Macro And Stock Market Outlook

(01:02:26) Risks To Quest

(01:06:02) Risks To Training Models With AI

Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market Aug 12, 2024

Show notes

Forward Guidance is sponsored by VanEck. Learn more about the VanEck Morningstar Wide MOAT ETF (MOAT) at https://vaneck.com/MOATFG.

This interview with George Robertson and Mel Mattison explores why deficit spending will send stocks and risky assets higher. We also discuss the true risk-free rate and the Federal Reserve’s control over the Treasury Market, nominal GDP’s relationship to interest rates, and stock market valuations that could lead to a collapse in 2027.

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Timestamps:

00:00 Introduction

01:26 Why George Robertson Is Bullish

04:12 Are Fiscal Deficits Juicing the Economy?

05:43 Impact Of Passive Fund Flows On The Market

09:33 Unemployment And The Labor Market

13:22 Government Spending And The Economy

20:16 GDP Is Booming

21:13 VanEck Ad

26:40 The Fed Is Looking For A Reason To Cut Rates

30:47 Are Higher Rates Stimulating The Economy?

35:46 Nominal GDP And Interest Rates

52:18 How The Fed Controls The Yield Curve

56:47 Rates Are Artificially Low

01:18:05 How The Fed Manipulates Treasury Rates

01:29:15 Market Distortions Pushing Risk Assets Higher

01:34:09 Stock Market Boom, Earnings & Valuations

01:59:54 Market Bubble Will Eventually Collapse

02:03:26 Reforming Entitlement Spending

02:08:36 The US Will Solve All Problems

02:15:34 The Ticking Time Bomb Of US Debt

02:24:07 How The 2024 Election Impacts The Economy

02:30:26 Learn More About George And Mel's Work

02:32:15 Thoughts On Small Caps

The Rug Pull on Global Liquidity | Brent Johnson on Unwind of the Yen Carry Trade, and the Exaggerated Rumors of the Dollar’s Demise Aug 08, 2024

Show notes

Forward Guidance is sponsored by VanEck. Learn more about the VanEck Morningstar Wide MOAT ETF (MOAT) at https://vaneck.com/MOATFG.

This interview was recorded on Friday, August 2, during Friday's sell-off but before the vicious sell-off on Monday. he did talk about the potential for an unwind of the yen carry trade before the crash in Japanese equities and the yen carry trade was widely blamed for Monday's steep decline. But Brent doesn't really care about being "right" he is an investor first and foremost. On that point, I think people perceive that a majority of his portfolio is based on the surging of the U.S. dollar but as he says it's a very small percentage and he recommends using this "cheap hedge" (for example buying calls on USDHKD) as a way to comfortably go long risk assets. He is also (and has been) a bull on gold and he remains *not* a bull on Treasurys (which he thinks some incorrectly think he is).

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Timestamps:

(00:00) Introduction

(01:34) Brent's Market Views

(06:56) Brent's Dollar View

(13:44) VanEck Ad

(14:26) Interview Continues

(17:57) Potential For A "Fiscal Doom Loop"

(19:41) People Have Been Calling For The End Of The Dollar For Longer Than Most People Have Been Alive, And It Hasn't Happened. Brent Is Betting That Those People Will Continue To Be Wrong For At Least A Little While Longer

(20:20) People Have Been Calling For The End Of The Dollar For Longer Than Most People Have Been Alive, And It Hasn't Happened. Brent Is Betting That Those People Will Continue To Be Wrong For At Least A Little While Longer

(26:07) Hedging For The Dollar Milkshake In A Responsible, Risk-Defined Way

(36:46) Permissionless Ad

(37:53) Connection Between Dollar and U.S. Stock Market

(43:19) Potential For A Global Dollar Squeeze

(48:37) Why The Rest of The World Suffers From A Stronger Dollar

(01:02:00) Would Trump And Vance Ticket Succeed In Weakening The U.S. Dollar To Promote Exports?

(01:04:51) Michael Pettis' Frameworks That U.S. Fiscal Deficit Is Large Because U.S. Trade Deficit Is Large

(01:13:03) Does Weaponization of The U.S. Dollar Force De-Dollarization?

(01:16:17) Brent's Views On Economy And Stock Market: He Doesn't Think U.S. Is Headed For A Recession

The Global Margin Call | Volatility Veteran Noel Smith on Dispersion, Vol of Vol, and How He’s Trading VIX Spike & Stock Market Crash Aug 05, 2024

Show notes

Forward Guidance is sponsored by VanEck. Learn more about the VanEck Morningstar Wide MOAT ETF (MOAT) at https://vaneck.com/MOATFG.

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Mike Green: Passive Stock Market Edifice Put To The Test As Recession A Near Certainty Aug 02, 2024

Show notes

Forward Guidance is sponsored by VanEck. Learn more about the VanEck Morningstar Wide MOAT ETF (MOAT) at https://vaneck.com/MOATFG.

This interview was recorded at 10am ET on Friday, August 2. The jobs report, which was released 90 minutes prior at 8:30am ET, showed the unemployment rate move non-linearly up from 4.1% to 4.3%, and the stock market fell sharply and short-term interest rate futures market priced in a high likelihood of the Federal Reserve doing a DOUBLE (50 bps) cut by its September meeting. The Fed Funds pricing changed throughout our interview and Jack references that in the conversation.

___

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YouTube video on Canadian market bubble and Nortel Networks: https://www.youtube.com/watch?v=I6xwMIUPHss&t=2219s&ab_channel=BobbyBroccoli

Timestamps:

(00:00) Introduction

(00:13) Stock Market Pukes In Reaction To Horrible Jobs Report

(05:45) Is The U.S. In A Recession Now?

(06:01) How Passive Investing Has Driven The Stock Market Higher

(28:35) VanEck Ad

(29:15) Passive Flows In The Context Of Other Market Forces

(32:25) Has Passive Investing Boosted Valuations of The Biggest Companies?

(42:25) Will The Same Passive Forces That Boosted The Market Higher Work In Reverse Now That The Market Is Declining?

(48:40) Permissionless Ad

(49:39) If Passive Is A Bubble, It Can Get A Whole Lot Bigger

(53:16) SPAC Flows Are No More

(01:16:52) Soros-like Reflexivity of High Stock Prices

(01:18:49) Mike's Views On Ongoing "Market Hiccup"

(01:34:00) Mike's Closing Thoughts on Private Credit

Following The "Fed Breadcrumbs" | Nick Timiraos on “Not Hot At All” Labor Market, Interest Rate Cuts, and Fed’s Collision Course With 2024 Election Aug 01, 2024

Show notes

Forward Guidance is sponsored by VanEck. Learn more about the VanEck Morningstar Wide MOAT ETF (MOAT) at https://vaneck.com/MOATFG.

Follow Nick Timiraos on Twitter https://x.com/NickTimiraos

Nick’s work at WSJ: https://www.wsj.com/news/author/nick-timiraos

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Nick’s book https://www.amazon.com/Trillion-Dollar-Triage-President-Pandemic/dp/0316272817

Nick’s article on Fed and 2024 election: https://www.wsj.com/economy/central-banking/fed-interest-rate-cut-inflation-politics-a6e527de

Timestamps:

(00:00) Introduction

(12:35) VanEck Ad

(13:14) Interview Continues

(19:35) What Would It Take For The Fed To NOT Cut In September?

(24:17) Is The Federal Reserve Worried About A Weakening Labor Market?

(25:44) Immigration's Impact On U.S. Labor Market

(31:41) The Housing Market

(36:41) Permissionless Ad

(37:40) Politics And The Fed: "September Rate Cut Would Thrust Fed Into Brutal Election Campaign"

(47:24) It's Simply A Fact: Former President Donald Trump Likes Low Interest Rates

(50:37) Could Donald Trump Fire Fed Chair Jay Powell If Re-Elected President?

(54:49) Economic Forecasting Is Very Difficult, And There Is Always A Point of Data That Confirms One View Or Another

(57:47) What If High Interest Rates Are Actually Stimulative? Nick Doesn't Buy It (And Neither Does The Fed)

(01:02:44) The Way The Fed Thinks About Financial Conditions

Why Credit Conditions Have Actually Eased Over Past Year | Oaktree’s Wayne Dahl on High-Yield Bonds, Leveraged Loans, Private Credit, and the Recession Yet To Arrive Jul 29, 2024

Show notes

Forward Guidance is sponsored by VanEck. Learn more about the VanEck Morningstar Wide MOAT ETF (MOAT) at https://vaneck.com/MOATFG.

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Timestamps:

(00:00) Introduction

(01:36) The High-Yield Bond Market

(10:08) VanEck Ad

(10:48) Putting Money To Work When Credit Is Priced Optimistically

(19:27) The Bank Loan Market (i.e. Leveraged Loans)

(25:04) How Are Loan Borrowers Handling 500 Basis Points Of Increased Debt Costs?

(28:59) Permissionless Ad

(29:58) The Rise of Private Credit: Are We In The Golden Age?

(41:34) Is Private Credit An Untested Asset Class In A Potential Recession?

(46:53) What Is The Private Credit Money Used For?

(52:57) Why Do Active Managers Manage To Outperform The Index In Credit, When In Equities So Many Underperform?

(58:51) Loan Refinancings Are Occurring At A Record Pace

(01:03:02) Structured Credit And Non-Agency RMBS (Residential Mortgage-Backed Securities)

(01:04:40) Specialty Retail and Emerging Markets

(01:07:02) Commercial Real Estate (CRE)

Tommy Thornton: Tech Stocks Are In A Bubble Jul 28, 2024

Show notes

Forward Guidance is sponsored by VanEck. Learn more about the VanEck Morningstar Wide MOAT ETF (MOAT) at https://vaneck.com/MOATFG.

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Timestamps:

(00:00) Introduction

(01:52) Tech Stocks Are In A "Bubble," Argues Tommy

(15:29) Earnings Season So Far: Tesla and Google

(20:51) VanEck Ad

(21:32) Interview Continues

(25:33) Nvidia and Apple

(37:03) What Tom Is Short

(39:39) What Tom Is Long

(51:49) Permissionless Ad

(52:51) Interview Continues

(01:00:26) National Debt and Recession Odds

(01:03:48) What Would It Take For Tommy To Turn Bullish?

(01:14:28) Tom's Story About Charlie Munger

How U.S. Treasury Is Fighting The Fed | Nouriel Roubini & Stephen Miran on Treasury’s $800 Billion of “Stealth QE” via “Activist Treasury Issuance” (ATI) Jul 23, 2024

Show notes

Forward Guidance is sponsored by VanEck. Learn more about the VanEck Morningstar Wide MOAT ETF (MOAT) at https://vaneck.com/MOATFG.

New paper published by Hudson Bay Capital, written by Nouriel Roubini & Stephen Miran, “ATI: Activist Treasury Issuance and the Tug-of-War Over Monetary Policy”:

https://www.hudsonbaycapital.com/documents/FG/hudsonbay/research/635102_Activist_Treasury_Issuance_-_Hudson_Bay_Capital_Research.pdf

Nouriel Roubini’s book discussed in the interview, “Political Cycles and the Macroeconomy”: https://www.amazon.com/Political-Cycles-Macroeconomy-Alberto-Alesina/dp/0262510944

Nouriel Roubini’s latest book, “Megathreats”: https://www.hachettebookgroup.com/titles/nouriel-roubini/megathreats/9780316284059/?lens=little-brown

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Timestamps:

(00:00) Introduction

(01:18) What Is "Activist Treasury Issuance" (ATI)?

(08:00) The Mechanics Of How The U.S. Treasury Has Altered Engaged In "Activist Treasury Issuance"

(20:52) VanEck Ad

(24:21) Activist Treasury Issuance Played A Role In Boosting Asset Values, And In Avoiding A Recession (And Might Have Caused A "No Landing" Instead of a "Soft Landing")

(29:53) History of Treasury's "Bill Share": GFC, Money Market Reform, March 2020 Panic

(33:44) How Much Does Current Treasury Issuance Differ From Historical Issuance Patterns?

(45:43) Permissionless Ad

(46:46) Does Government Borrowing "Crowd Out" Private Investment?

(59:09) Will ATI Continue In The Next Presidential Administration?

(01:07:20) Long-Term Interest Rates Could Rise and Force a "Meaningful Repricing of Risk Assets"

(01:10:49) It's Not Just The Fed - U.S. Treasury Has "Forward Guidance" Now Too

(01:13:02) Nouriel Roubini's Closing Thoughts