Daily Briefing – April 17, 2020

Published on
April 17th, 2020
Duration
38 minutes


Daily Briefing – April 17, 2020

Daily Briefing ·
Featuring Jack Farley, Ash Bennington, and Ed Harrison

Published on: April 17th, 2020 • Duration: 38 minutes

Ash Bennington hosts Ed Harrison, Real Vision's Managing Editor, to break down the week’s events. The pair cover the U.S. banking sector, risks to the commercial real estate market, Russian central bank policy action, and compare and contrast the timing and trajectory of the COVID Crisis to the GFC. Bennington and Harrison end on a discussion of the changing role of China in the global political and financial system in the wake of the current crisis. In the opening section, Jack Farley looks at finance stories that you might have missed, scrutinizing the extreme price action in a small cap stock, and exploring the significance of gold's recent trend towards backwardation.

Comments

Transcript

  • OC
    O C.
    20 April 2020 @ 13:52
    Can we get this video captioned please? Also, can we also get future Daily Briefing videos released on Fridays captioned next day as well please? I would prefer to watch these videos roughly the same time everyone else is watching them since they provide timely information. Thank you for all that you do.
    • GH
      Gabrielle H. | Real Vision
      20 April 2020 @ 18:38
      Hi there! Captions and transcripts are now available for you to use. Thank you for your patience!
  • DS
    David S.
    17 April 2020 @ 23:12
    As an aside from grooming advice. The stock markets have been, are and always will be the net of money flows. The money flows are the net investors’ perceptions of greed and fear. The current market reflects trillions of dollars the Fed is pumping in. Buying the Fed has worked in the past; why not now? The market will turn when investors realize that the Fed cannot print enough money to cover the damage to the economy, pension funds, high grade bonds, bailouts of cities, counties, states and the federal government. The Fed is trying to save the economy, but it cannot BE the economy. I do not fault the Fed. I fault investors who think that the Fed is the economy even for a short time. It is possible that the “buy the Fed” will support the market until it is replaced by hyperinflation. Stock will certainly continue to go up in hyperinflation. DLS
    • RS
      Roger S.
      18 April 2020 @ 22:00
      Well it wasn't hyperinflation but look at the 1070s. Inflation was 6-10% per year and stocks were mostly flat for the whole decade.
    • DS
      David S.
      20 April 2020 @ 06:25
      Roger S. - Check the German stock market during hyperinflation. DLS
  • AB
    Ash B. | Real Vision
    17 April 2020 @ 22:56
    “I really enjoyed Jack’s Intro segment today . I hadn’t seen either of those stories, actually, before the show aired. What do you guys think?”
    • AB
      Ash B. | Real Vision
      17 April 2020 @ 23:02
      I’m really not sure why that post shows up “in quotations.” http://www.juvalamu.com/qmarks/
    • SS
      Steven S.
      17 April 2020 @ 23:06
      Agree!
    • MT
      Mark T.
      17 April 2020 @ 23:08
      Yup, I like the market recaps and the introduction of some talking points (whether it's Jack or someone else) that are perhaps integrated into the subsequent discussion. Don't know who Gabrielle is, but she was feeding good talking points.
    • JF
      Jack F. | Real Vision
      17 April 2020 @ 23:31
      Thanks Ash!
    • TW
      Thomas W.
      17 April 2020 @ 23:50
      S&P / NASDAQ futures were moving independently to their regular index counterpart today. Not wildly different but it caught my attention.
    • JP
      Jordan P.
      18 April 2020 @ 01:29
      I liked it. Also, you guys really do pay attention to the comments - thank you!
    • PC
      Peter C.
      18 April 2020 @ 04:25
      I really liked Jack's brief recap of the day on the equity Markets. Good alternative to Closing Bell.
    • HD
      Hem D.
      18 April 2020 @ 12:04
      Glad the technical correlation between gold & S&P highlighted. That's actionable and insightful for a non-trader (but long term investor). Would love to see such insights! Hem
    • Ev
      Emiel v.
      18 April 2020 @ 15:51
      Totally Agree, Jack is sharp and his intros are sometimes more valuable then the videos itself. I like his crisp and clear stance without all the further a do. Our time is our most valuable asset!
    • MC
      Michael C.
      20 April 2020 @ 00:20
      Backwardation correlation pricked my radar......really liked it. Feel free to dig a little deeper on this topic.
  • RD
    Rick D.
    19 April 2020 @ 21:40
    Get Raoul Zoom
  • EB
    ELLIOT B.
    18 April 2020 @ 01:19
    Are these being made public? This daily briefing in on Zerohedge: https://www.zerohedge.com/markets/daily-briefing-april-17-2020
    • DP
      Duane P.
      19 April 2020 @ 18:15
      Zerohedge is infamous for posting top quality proprietary content, particularly bank analyses. They've been riding on the back of this since day one. It's a large part of why they are so popular. Tyler must be a subscriber. Take it as a compliment. :D
  • CK
    Cristina K.
    19 April 2020 @ 18:00
    btw i love the brief music bit at the beginning, always.
  • FA
    Fisseha A.
    18 April 2020 @ 15:50
    Thanks guys for another daily briefing. Just a suggestion based on personal preference: I am a part of your audience that is and has been wholly convinced of an eventual breakdown in globalization centered on US dollar domination for a while now. While I do learn lots of information that supports that view during these briefings and other Real Vision videos, I feel as though I am falling victim, in many ways, to confirmation bias. I am a person that thirsts to hear opposing opinions because it allows me to further scrutinize my own. So if I had a request, it would be to bring on credible people onto Real Vision who are optimistic of a bounce back economy and have them explain why. For example, can the Fed simply inflate the US dollar out of a debt crisis and we go on as normal? Is a debt jubilee even a slight possibility? Those are the arguments I’d like to see dissected aside from what you all are already doing.
    • SL
      Sean L.
      18 April 2020 @ 16:39
      I think Real vision as a whole is doing a decent job of trying to express opposing views on the rest of the platform. The daily briefings have a bias towards these views but I think they offer appropriate caveats (the fact that no one really knows what's going to happen). All they can do is honestly report what they're seeing. It's hard to make arguments you don't actually believe in - I can see they're remaining open minded and they're seeking out evidence but the truth is there just doesn't seem to be a lot to support those opposing views. Keep at it guys.
    • JB
      John B.
      18 April 2020 @ 16:39
      Agree, hearing the other side of the argument is always the highest value.
    • RA
      Robert A.
      18 April 2020 @ 16:40
      Suggest you watch the Kevin Muir 4-17-2020 “Plus” video.
    • WW
      Will W.
      19 April 2020 @ 13:03
      Would love to see you guys have a healthy debate with say a Tom Lee, who is saying we are back in a bull market. At times like this I too, love to hear smart people put forward the opposite few.
  • RN
    Raphael N.
    19 April 2020 @ 11:37
    Ash you are paid to speculate, don't always say you don't know.
    • RN
      Raphael N.
      19 April 2020 @ 11:50
      Don't get me wrong, you ask good questions and make good points. It just sometimes seems like you would know enough to give us some of your thoughts when you don't.
  • HJ
    Harang J.
    19 April 2020 @ 02:54
    Thanks for the great briefing, Ash and Ed! Ash’s point about the decline of retail shopping reminded me of the same point made by Andrew Yang during his campaign. There are likely many other consumer behaviors and technologies that were already shifting and require the economy and policy to adapt. The coronavirus is only accelerating many of these changes. In that light, the Fed propping up those businesses seem like an even bigger misallocation of capital, but it seems difficult to distinguish the would-have-been-ok business versus the would-have-failed-anyway business in the middle of this “natural disaster”.
  • PB
    Paul B.
    18 April 2020 @ 23:33
    The expansion of the FED's Balance sheet has no theoretical limit...Right up to the point it where it does. You can expand with little to no damage if you have a positive GDP...Without a -VE GDP and no difference in yield across major FX markets, expect a decline in the USD and a balancing dance of other currency's, particularly the Nations with +VE Credit like Japan, China, Germany etc. The US stock Market won't decline much from a Nominal stand point in my World....The rest of the world is no quite as stupid as the USA...Take a look at the USD over the last 50 years or so and tell me its' going to Spike higher....Not a chance..As soon as it does you watch China and others sell off T Bills...Slow decline in the USD and all currency's with the USD taking the lead....The only way out of this mess to to have a weaker Dollar and have inflation at the same time. This is how it's going to play out from here, there simply is no other option unless you want most Country's to declare Insolvency and carve up the Assets...That's WW3 right there!
    • LS
      Lemony S.
      18 April 2020 @ 23:52
      Paul, if you had to guess, what's your time frame? Even bailing out domestic/municipal bonds doesn't change the confidence profile of the FED sheet (or however that's done) in your view? I agree, the USD denominated debt problem is one that only really matters if the US is willing to go to war over it ...
  • EH
    Eric H.
    18 April 2020 @ 17:01
    Seems like the rally is purely on the backs of big tech. Retail (other than amazon), travel/hospitality, service industry, recreation, oil, financials all getting killed by stay at home measures. The only industry that can thrive is tech and some pharma, mostly on speculation, but those have a limit to how high they can go. Once those are overbought and start to sell off that might be the jenga block that starts another big move downwards. Scary that at the moment it seems the national pensions are dependent on FAANG and what implications that could bring.
    • CP
      Curt P.
      18 April 2020 @ 22:53
      yes, big tech is the jenga block that will start the whole collapse b/c index funds are extremely overweight big tech. I think Mike Green has talked about this alot. Index funds are fine when they are small part of the market, but they are the dominant part of the market now, and they create massive herd in one direction of the biggest cap stocks. When sentiment turns, the big caps fall the most b/c it's a 'crowded trade'.
  • MK
    Matthew K.
    18 April 2020 @ 20:14
    Great episode! The interesting geopolitical topics discussed make me hungry for a Peter Zehan interview.
    • CP
      Curt P.
      18 April 2020 @ 22:50
      Zeihan, while a good presenter and correct on many details, has created a set of half-truths about post-1945 and about the current situation with China-USA. This is because his geostrategic mindset is sort of 1900. You should read Macaes, Mahan, Mackinder, Spykman, and Haushofer.
  • HC
    Hahns C.
    18 April 2020 @ 21:33
    I believe if there is a real estate bailout or bail-in will come to first time home buyers. My idea is Congress will do a fiscal package for the Millennial voter so they can reduce their college debts and purchase housing. This has trickle down impacts to increase employment, increase real estate taxes for localities and it will redistribute wealth to a younger spenders. I am a RE developer of the first time home buyer homes in a modest market, the industry is in multi-year inventory lows. Regarding the EM markets - read this article. Zambia is stealing a copper mine from a London based company and going to give it over the China for $6B in debt forgiveness. https://www.wsj.com/articles/as-africa-groans-under-debt-it-casts-wary-eye-at-china-11587115804?mod=searchresults&page=1&pos=2
    • CP
      Curt P.
      18 April 2020 @ 22:47
      Glencore Zambia CIO held by Gambia. what's UK going to do to stop Gambia seizure of assets? Not much. Them's the breaks when you put your assets in jurisdictions that are not under your physical control.
  • OC
    Otto C.
    18 April 2020 @ 04:56
    "...people don't understand banks....". People are well aware of the numerous bailout of banks with our tax money. Banks' CEO should have been put in jail during the 2008 crisis instead of being rewarded by bailouts and huge bonuses. Now we are bailing out airlines and possibly real estate companies while people are getting pennies from the so called stimulus. What happened to all the money they made during the bull market? Now they need bailouts? I am sure I am not the only one PO here.
    • OC
      Otto C.
      18 April 2020 @ 05:04
      Obviously, I am only ranting while I drink my wine. I really enjoy Real Vision. Keep up the good work.
    • AB
      Ash B. | Real Vision
      18 April 2020 @ 05:15
      Hehe. It's Friday night and we've all be locked up too long.
    • AB
      Ash B. | Real Vision
      18 April 2020 @ 05:19
      *been
    • WM
      Will M.
      18 April 2020 @ 13:33
      Fully agree Otto. Not sure why this comment has a "Hotly Debated" flag against it. I see no debate. I have noticed before this flag seems to be inappropriately used?
    • AM
      Ajay M.
      18 April 2020 @ 19:42
      We don't understand banks because Banks do a GREAT job at HIDING what they are all about. Banks are the yeast to double up the pizza dough. Central banks use them for Fractional Reserve based multiplication. Now all is good if everyone gets a slice of the pizza pie. But if people don't then they should REVOLT. My friend and his wife who got laid off in Canada got 8,000 dollars already credited to their bank account by the Government. It's 2000 per person per month is the Canadian issuance to her people. While the wealthiest nation in the world has thrown 6 trillion to billionaires and bankers while promising 1200 dollars only as one time payment to it's people by July. WHAT A SHAME AND PIECE OF SHIT GOVERNMENT.
    • AB
      Ash B. | Real Vision
      18 April 2020 @ 22:29
      @Will. I think the "hotly debated" tag is added programmatically by the backend based on the interaction count. I'm going to check into that. Thanks for pointing out.
  • JB
    John B.
    18 April 2020 @ 16:40
    Ash, please let us know your shirt size and we will pool together some funds and buy you some different colored shirts! : )
    • EH
      Edward H. | Real Vision
      18 April 2020 @ 17:53
      John, that’s good!
    • AB
      Ash B. | Real Vision
      18 April 2020 @ 22:27
      Ha. I think the bottleneck is more finding a dry cleaners that's open in NYC...
  • RL
    Ryan L.
    18 April 2020 @ 20:36
    The effects of QE in 2008-2010. The liquidity never got to the real economy. Tons of dry powder. It’s now in full effect. The 2nd best way to lose your job or not raise your next fund? Don’t deploy. First best way? Make bad investments.
  • DR
    Derrick R.
    18 April 2020 @ 13:18
    Great intro, Jack is fired up!! Another interesting update, thanks guys.
    • JF
      Jack F. | Real Vision
      18 April 2020 @ 20:06
      Thanks Derrick! So much to cover, so little time.
  • DS
    David S.
    18 April 2020 @ 19:50
    It would be a very interesting to hear a presentation considering the possibility of the dissolution of the Euro. How would it happen? I know that this is speculative, but Italy is already issuing Italian government IOUs to pay some vendors. Effectively Euro countries will have to give up their sovereignty to Brussels, dissolve the Euro, or some other option. DLS
  • AT
    Alez T.
    18 April 2020 @ 11:46
    If only you guys would cut the Intellectual jargon bs out, this would be great. Seems to me you’re more interested in impressing each other, than getting the point across to your viewers.
    • WM
      Will M.
      18 April 2020 @ 13:36
      Yaz, you are clearly in an ultra small minority with that view.
    • LH
      Leigh H.
      18 April 2020 @ 17:23
      double ultra
  • JO
    Johnny O.
    18 April 2020 @ 07:40
    These updates are great. But, yes, it was "a relatively quiet Friday". Therefore, it would be ideal to make these updates shorter and tighter. At least RV has speed and jump and volume buttons. So much info comes to us on video now from all sources, sometimes I have them playing simultaneously! When someone sends me a briefing(/marketing) with one of those videos that have no progress bar (so no position, speed or volume control or even a way to guess how long it is), they can burn in hell. Doug Casey for example. Is the financial economy (i.e. markets) disconnected from the real economy? You are too polite. The main factor in support of Mike Green's proposition isn't that things can bounce back; it's that we know from the last 10 years that Fed stimulus does nothing for the real economy and all ends up in the stock market.
    • Ev
      Emiel v.
      18 April 2020 @ 15:40
      On Doug Casey, Why is'nt he on RV??
  • MP
    Matthew P.
    18 April 2020 @ 14:51
    Interesting gold backwardation correlation... something else to build on the dead cat bounce. Agree, Jack fired up! Thanks guys, good show.
  • EK
    Edward K.
    18 April 2020 @ 14:47
    Maybe a future topic but this issue of malls/stores closings is not new albeit greatly accelerated now. Some re-purposing of B malls will occur (and have already occurred) but bigger issue is the large holdings by pension funds. The best malls won't disappear but large changes with social and financial implications real possibility.
  • CP
    Curt P.
    17 April 2020 @ 23:51
    The China-US rivalry is the most important issue. All other economic and market issues flow from it, even if it seems not. China is an export economy, that needs to sell its wares in order to pay for its imports. Those cashflows are used to grow its technological and strategic strength with goal of becoming free of US leverage. USA is an imperial state that has all the food/energy it needs, and takes imperial tribute (trade deficits) from its vassals. Vassals which exist b/c the US controls the SLOCs on which they depend. COVID disrupted Chinese manufacturing and Chinese export market demand - massively. The US game is to cut off China's cashflows enough that it faces internal social unrest (food and energy scarcity) and fractures into multiple states. So, we are in for a very long ride, b/c China has many options and deep strategic depth, and will not cave easily. If they have to kill 500mm people to ensure stability of the state, they will do it. Can the US keep the global economy shut down long enough without setting off massive internal disruptions inside itself? Is Europe able to bring itself back online and stay online? Will Northeast Asia stay online, or will something else bring it down? We are only three months in....and most of the globe is not on the side of the US in this matter. If the USA is unable to break China, the USA will lose the commanding heights of the global value chain, and its Imperial position reduced to its hemisphere. In otherwords, the standard of living Americans enjoy will drastically fall - something that is vastly outside the imagination of most Americans. Do not underestimate the lengths the US will go to in order to avoid this outcome. It is the single greatest existential threat the US has faced in its entire existence.
    • WM
      Will M.
      18 April 2020 @ 13:46
      Some good geopolitical points here Curt that the vast majority don't think about.....
  • WM
    Will M.
    18 April 2020 @ 13:39
    You deal with American airlines by taking control of the company for the public purse and penalizing the stock holders....AND firing the executive leadership.
  • MC
    Melvin C.
    18 April 2020 @ 12:21
    Great update guys as always. Somebody commented it was to long: I don't agree. The updates get us thinking, and we need that thinking material so we can form our own opinions and make our investment choices. You two make that task so much easier and enjoyable. I'll join you on the wine, cheers! Mel
  • PJ
    Peter J.
    18 April 2020 @ 11:34
    Ash, I'm glad you see a disconnect, because I am totally bemused. How long can financial levitation go on? Roadrunner goes off a cliff and stays up for so long, but eventually falls. The markets are well of the edge of the cliff IMO, the second fall is surely coming soon. Great updates keep them coming :)
  • TT
    Tokyo T.
    18 April 2020 @ 10:42
    I appreciate these daily briefings. I'm in the Asian time zone, so it's a useful update of what happened overnight.
  • II
    IDA I.
    18 April 2020 @ 10:12
    thank you for these dailies, Ed do you think we are getting closer to a CNY devaluation? I think that in order for China to stimulate their economy and even write off the EM debts as you mentioned, they will pass to a flexible currency and that will mark the new high in the dollar, and the new low in stocks, ending the bear market. I hope you can affront this theme and let us know what you think.
  • WM
    William M.
    18 April 2020 @ 10:03
    Another great update! Do the central bankers ultimately have the ability to backstop everything including the stock market for more than a few months? I really doubt it. It's hard to imagine that this bear market won't be at least as long and hard as the last two i.e. over 50% down from the peak vs. a mere 15% right now. And how much upside is left at this point?
  • TC
    Thomas C.
    18 April 2020 @ 09:01
    Good conversation Ash and Ed. Some good points on commercial real estate.
  • JO
    Jayden O.
    18 April 2020 @ 08:41
    Can you share the link to the report that Ash mentioned regarding how the 07-08 crisis unfolded?
  • BB
    Bob B.
    18 April 2020 @ 01:01
    You should be ASHAMED - "buybacks par for the course" - maybe you are just to young - buybacks were illegal for these exact reasons! Temptation was not supposed to happen in Greenspan's rose colored world! How the hell do you think we wound up with the 1%?
    • JO
      Johnny O.
      18 April 2020 @ 07:56
      It's scandalous what's gone on. Ttoubled monoliths like GE have championed buybacks while leaving their pensions underfunded. Ed describes banks by themselves accounting for $109 bullion of buybacks. People say this is not like the 2008 crisis because banks have better balance sheets. But that's only a mirage made possible because the starting point of the current crisis is Chinese Virus rather than bank credit. There is still a problem with debt (auto loans, student loans, bankrupt municipalities), and that will be exposed by a cascade starting with small business failures and unpaid mortgages. Now Neil Kashkari is encouraging banks to issue shares while they still can, in advance of the debt chickens coming home to roost. But they won't. They hoarded the buybacks and will ask for bailouts when their loan books crash.
  • UJ
    Ulf J.
    18 April 2020 @ 05:48
    Deutsche Bank’s 2019 balance sheet gives us an excellent example of how they are accounted for in commercial banks. It conceals derivative exposure under the headings “Trading assets” and “Trading liabilities” on the balance sheet. You have to go into the notes to discover that under Trading assets, derivative financial instruments total €80.848bn, and under Trading liabilities, derivative financial instruments total €81.910bn, a difference of €1.062bn This is relatively trivial for a bank with a balance sheet of €777bn. But wait, there is another table that breaks derivative exposure down even further into categories, and it turns out the earlier figures are consolidated totals. The true total of OTC derivatives and exchange traded derivatives to which the bank is exposed is €37.121 trillion. That is nearly thirty-five thousand times the €1.062bn netted difference in the balance sheet. And when you bear in mind that valuing OTC derivatives is somewhat subjective, or as the cynics say, mark to myth, it invalidates the valuation exercise. Clearly, by taking the mildest of a positive approach to derivatives held as assets, and a slightly more conservative approach to valuing derivatives on the liabilities side, that 35,000:1 leverage at the balance sheet level can make an enormous difference. https://www.goldmoney.com/research/goldmoney-insights/the-looming-derivative-crisis
  • UJ
    Ulf J.
    18 April 2020 @ 04:50
    Ed is right about the cold war, and the leaders in countries will choose the country that has treated them with respect and not by blackmailing. Bitcoin surfaced after the 2008 crisis what will come to the surface this time. Reality and the stock market is out of sync my guess is SPX will go to 1600.
  • CP
    Christopher P.
    18 April 2020 @ 03:46
    How about some comments about the future effects on the world market from economies like Africa, India and Indonesia to name a few as the Covid crisis gradually moves through these countries.
  • SS
    Sean S.
    18 April 2020 @ 03:31
    "that is is that" - An Ed Harrisonism
  • WB
    William B.
    18 April 2020 @ 03:17
    Interesting Ed mentioned the Kobe earthquake. I was living in Japan during the Fukushima nuclear disaster in 2011. This pandemic reminds me more of that crisis more than GFC or 9-11. It was also a health and economic crisis in addition too mass physical destruction. Much more dire and existential threat to Japan than any country is experiencing now.
  • JG
    John G.
    18 April 2020 @ 01:21
    How does "greater digitization" lead to structurally "frightening implications" for savers?
    • Hv
      Hannah v.
      18 April 2020 @ 01:36
      Maybe something to do with “hoarding” money? (Saving is what we used to call money hoarding.)
    • AB
      Ash B. | Real Vision
      18 April 2020 @ 02:24
      John, I intended it rather generally. (Not sure if I said 'savers' there; I meant 'workers.') The broader point I was making is that digitization creates efficiency, reduces costs, and is massively labor saving in the aggregate. The benefits of those efficiencies accrue to the folks who write the code, which is as it should be. The risk is that as our lives become increasingly digitized, lots of well-paying analog jobs disappear — and labor markets don't adapt to high-tech high-skill jobs quickly enough. (I'm a bit of a pessimist about the effectiveness and competitiveness of the U.S. education system...)
  • ns
    niall s.
    17 April 2020 @ 23:21
    You guys might want to consider what effect warmer weather might have on the virus numbers also , I don't see any southern hemisphere countries with any numbers even close to Italy , Spain , USA , or UK , in terms of deaths per million inhabitants . If you find one let me know .
    • GF
      Gordon F.
      18 April 2020 @ 01:38
      Niall, I live in Ecuador, and by far the hardest hit part of the country is Guayaquil, the coastal port city of some 3 million people. The official deaths are only around 300, but I read a report today that whereas they normally have about 2000 people per month that die, from March 15-April 15 it was a little over 8000. The cemeteries have hundreds of bodies awaiting burial and the odors are horrible. Temperatures in Guayaquil are in the mid 30s C and the humidity is high, but it hasn't seemed to slow down the virus. Compliance with the stay-at-home orders has not been good, but when you consider that there are often 5-10 people living in a 2-3 room apartment with no air-conditioning, staying at home 24/7 would be hell. The city is now under martial law, the army is patrolling the streets, and all exits from the city are blocked. Drivers must have a government-issued safe-conduct document in order to leave. The government seems to take the position that since these deaths were not tested and confirmed as Covid-19 infections, they should not be counted in the statistics, but the situation is grim, and it is very hot and humid. I really hope that warmer weather does help, but I wouldn't count on it.
  • RC
    Robert C.
    18 April 2020 @ 01:34
    Ash & Ed enjoyed it! Yah compressed time frames. +++
  • LA
    Linda A.
    18 April 2020 @ 01:04
    Sales on red wine & liquor going to go thru the roof. This shutdown is going to teach us to be more self reliant & save more for a rainy day. One thing I know is that if u short, close your positions quickly due to volatility & take your profits. U guys are great! Ed. I am looking forward to your new hair do on Monday. Be well my friends!
  • MT
    Mark T.
    17 April 2020 @ 22:51
    Real Estate markets are so localized, it's got to be hard to talk about it in a general sense other than the macro/mortgage market.
    • AB
      Ash B. | Real Vision
      17 April 2020 @ 22:55
      Yes. Absolutely. I was also about to joke with Ed that it’s easier to talk about equity markets because we have microsecond level tick data, and the RE time series are much lower frequency.
    • WW
      Will W.
      18 April 2020 @ 00:33
      Very true, but the potential impact on NYC real estate with We Work teetering on the brink probably has more far reaching effects, and there is probably a trade in the real estate market (homebuilders?) with exposure to more suburban markets, especially if the post Corona fall out is repatriating much of the supply chain the U.S. outsourced.
  • RA
    Robert A.
    18 April 2020 @ 00:30
    What a great one today you guys. The intro with nuggets was just ala the stuff Jim Grant Comes up with—tidbits that are food for thought and are either overlooked or not as yet picked up upon by other Media outlets. Nice to see Commercial RE getting a bit more attention and who better than Chris Whalen to give us some insight. I do think there is going to be a big impact from the loss of wealth of the Equity investors as well as the Credit extenders—there is a whole netherworld of “Country Club” General Partner Syndicators and their investors that derive much of their income from small to medium RE syndications (think 55-70 year old Doctors, Dentists, Lawyers and other successful small businessmen that have a significant portion of their portfolios and retirements tied up in these plain vanilla off the radar Apartment buildings, Strip malls, warehouses and small industrial buildings). Ed via Gabrielle’s China EM debtor response was REALLY interesting....One Belt One Road could kind of be that old RE lender canard “loan to own”! China, playing the long game, might be in a great position to gain control of many desired assets via having extended more credit to some strategic debtors than they could handle. This won’t be the last we hear about China’s “Hub and Spoke” 😏
  • JS
    James S.
    17 April 2020 @ 23:24
    Massive tail risk in commercial real estate. Not even close to price discovery. By definition it lags and moves slowly.
    • CP
      Curt P.
      18 April 2020 @ 00:03
      Real Estate very local of course, but it is always a function of cashflow and discount factor. Big cities will see big reduction in cashflows. NYC will be hollowed out b/c the critical system that makes its density possible is also the primary COVID vector - the metro transit system. Car-centric places will do fine. High density locations, in order to not be destroyed, have to stamp out COVID and ensure no COVID carriers ever enter. Possible in East Asia. NYC nowhere near possible for near future.
  • BL
    Bart L.
    17 April 2020 @ 22:48
    Nice discussion, would be interesting fleshing out more on China response to EM debt and implications to defaults and land/ asset grabs by China and how US and other major powers respond. Thanks
    • CP
      Curt P.
      17 April 2020 @ 23:57
      Most of the countries which are indebt to China, are already highly economically colonized by China. Unless other state is able to provide them with better economics, they will remain with China even if it means being even more of a vassal. The US will talk tough, but it has more than its hands full dealing with China head on right now to worry about some irrelevant country's debt.
  • JH
    Jacqueline H.
    17 April 2020 @ 23:31
    Ugg. If China starts a collateral repossession land grab when some are already viewing them as the source of COVID-19, that could turn into a shitshow in short order. "Bad optics" doesn't quite go far enough.
    • CP
      Curt P.
      17 April 2020 @ 23:52
      China, just as the US does, don't take land grabs outright. It is done by turning a country into a vassal technologically.
  • MR
    Michael R.
    17 April 2020 @ 22:16
    Get a shave Jack. :)
    • VW
      Vernon W.
      17 April 2020 @ 23:23
      Ash time to get a Harry’s razor subscription!
    • AB
      Ash B. | Real Vision
      17 April 2020 @ 23:34
      Vernon, I just did! They're fantastic. Best angle I've ever gotten on a blade: Totally vertical and ideal for shaving against the grain. No time to shave today: Had to fill in for Raoul on the fly.
  • CL
    Cameron L.
    17 April 2020 @ 23:14
    Great discussion. You guys are fantastic and I always appreciate hearing your thoughts and analysis.
  • JS
    Jon S.
    17 April 2020 @ 22:53
    Really, really good. Thanks guys.
  • MR
    Michael R.
    17 April 2020 @ 22:18
    I am about to go for the FMJ haircut like Ash.
    • AB
      Ash B. | Real Vision
      17 April 2020 @ 22:47
      Michael, It’s such a massive time saver: I don’t think I’m ever going back.