Daily Briefing – April 2, 2020

Published on
April 2nd, 2020
Duration
27 minutes


Daily Briefing – April 2, 2020

Daily Briefing ·
Featuring Ash Bennington, Ed Harrison, and Roger Hirst

Published on: April 2nd, 2020 • Duration: 27 minutes

Real Vision's Ed Harrison and Roger Hirst discuss a number of topics including high yield market and how the rise of the dollar against emerging market currencies would impact those economies. The overall context of the conversation came from an understanding that markets need time to digest the horrible U.S. jobs claim number and the economic pain to come it suggests.

Comments

Transcript

  • wj
    wiktor j.
    3 April 2020 @ 15:45
    I understand the dollar strength but any have a bid on whats going on with USD/HKD ? It looks to me a perfect Long but where are they getting the dollars from to keep this down?
    • SB
      Stephen B.
      3 April 2020 @ 16:23
      You should be able to find a RV interview with Kyle Bass, recorded a few months ago, who talked at length about this subject. He said then that HK had burnt through a large portion of its reserves, defending the currency, and argued (then) that it was only a matter of time.
    • wj
      wiktor j.
      4 April 2020 @ 22:03
      Yes I saw it. At the time of recording the dollar was getting stronger. Now it got down again. Where did hong kong get the dollars from to keep defending it?
  • JW
    JW2 W.
    3 April 2020 @ 10:19
    Putting aside the social consequences of what's happening at the moment (which sounds terrible), I always wonder about the 'buy the dip' comments that one is encountering here and there. This is both a financial and a real economy crisis. How on earth can it be that the stock market goes up after such bad news... Surely this displays that there are major disconnects between finance and business cycles. The delayed domino effect will play out in ways that are difficult to predict but I like what you guys (you, Ed, Ash) have been saying recently to gauge what will be happening; "just look out of the window".
    • JW
      JW2 W.
      3 April 2020 @ 10:28
      ..and one more thing; I do not understand why the 'bail out' does not contain grants to small business. Forget loans! Why would you accept a loan to tie you over a period with near zero revenue? The consequence is that you exit this period in the same of worse shape than before. Plus, like you guys observed, these loans needs processing and everything is slowed down tremendously. It might be too little, too late for many businesses. This is not good.
    • DZ
      Dongbin Z.
      3 April 2020 @ 12:02
      If you look at the timing of the crash, it doesn't coincide with anything except various sentiment metric reporting high fear. The public lags way behind what academics know of the pandemic. (By public, I especially include US/Canadian politicians and business leaders.) People still haven't caught up to the latest scientific analysis on how long this is going to last and therefore the economic ramification. Will fear go back up again as people realize how bad it is (therefore causing a second crash) or will people get accustomed to the bad situation and be content with govt stimulus packages (therefore allowing a gradual recovery with Feds' blessing)? Who knows.
    • DZ
      Dongbin Z.
      3 April 2020 @ 12:03
      As for your loan comment, what's the alternative? Give up all your existing capital investment and close down for good while eating that loss?
    • JW
      JW2 W.
      3 April 2020 @ 13:19
      Yeah, you're right...stuck between a rock and a hard place. One can only hope that this crisis will pass soon and that entrepreneurs somehow can finetune their business to access different revenue streams or find other ways to stretch out the available finances to keep going. In the end you might have to accept the loan to tie you over, but then I think there should be a program to either entirely or partially forgive it or at a min. create favorable payment conditions. My brother has a small business and he is trying to navigate a path through the current crisis. Not easy. At some point it needs money, no matter how creative one gets.
    • JW
      JW2 W.
      4 April 2020 @ 18:18
      Rock - Hard Place - also in the UK : https://www.bbc.com/news/business-52158029
  • AG
    Alexandre G.
    3 April 2020 @ 20:37
    Video doesn’t work unfortunately !
  • jK
    jack K.
    3 April 2020 @ 17:33
    Hello, new to this site. Yes agree that dollar may be a great play as many here do. This may not be the place to talk about how, but not sure the best way to do this, UUP or something else? Again not sure if this is the place if not please let me know.
  • OM
    Owen M.
    3 April 2020 @ 15:50
    My routine every evening has been to make an old fashion cocktail and catch up on the Daily Briefing. Keep it up! Thanks you all for making it happen.
  • RM
    Robert M.
    2 April 2020 @ 22:46
    China under reporting has been known for 6 weeks, the US administration chose to ignore this.
    • DZ
      Dongbin Z.
      3 April 2020 @ 12:13
      Known by whom? You? Chinese reported death rate isn't particularly low.
  • GC
    Garo C.
    2 April 2020 @ 23:31
    I'm curious to hear thoughts on the bearish argument on the $. Lyn Alden has a great twitter thread on this and I tend to agree with her that the amount of USD reserves held by foreign nations seems to largely be ignored by the USD bulls. $7T in Treasury holdings seems like an awful large chunk of USD denominated assets that these foreign countries could start selling off that would put downward pressure on the $
    • PW
      Pattie W.
      3 April 2020 @ 02:16
      Those foreign countries hold those Treasury’s to back there currencies with, so selling them in order to get dollars at best will be net neutral at worst net negative.
    • RH
      Roger H. | Real Vision
      3 April 2020 @ 06:02
      Hi Garo - many of these dollars are held as a result of trade in USD: e.g. sell oil (or manufactured goods) in dollars and recycle excess dollars into Treasuries. Many countries will want to hold these dollars for future international transactions. The Fed has also opened up a repo operation specifically to help foreign and international monetary authorities (FIMA) swap TSY for dollars and there have been some very significant liquidations already. Despite this, plus dollar swap lines in place with global central banks and the Fed's balance sheet expansion of $1.65 trillion since the beginning of March, the dollar index (58% euro, 14% Yen and 12% GBP) is relatively unchanged and JP Morgan's EMFX index nudged a new all time low yesterday (USD strength), which indicates the size of the problem/dollar shortage when global transactions (in which the dollar dominates) suddenly dry up.
    • DZ
      Dongbin Z.
      3 April 2020 @ 12:11
      Hi guys, re FIMA repo, the interest rate is pretty high (always 0.25% over IOER) for swapping us-T for dollar using that facility. Why would countries not sell their us-T holdings instead of swapping?
  • PJ
    Peter J.
    3 April 2020 @ 10:00
    Ed and Roger, the best thing on RVTV at the moment, excellent
  • yc
    yu c.
    3 April 2020 @ 07:08
    Great discussion. Think I’ll join you Roger🍺
  • DS
    David S.
    3 April 2020 @ 06:51
    Well done. Thanks. The stock market is trying its best to play a game of chicken with the Fed. It is time to let zombie companies and high yield debt companies sink or swim as led by their own management. This recession is going to be protracted. Save people not zombie companies. DLS
  • SK
    Shiu K.
    3 April 2020 @ 02:56
    Don’t fight the Fed
  • TS
    Thomas S.
    3 April 2020 @ 02:29
    Great interaction between Roger and Ed. Great insight as well. I look forward to these every eveningl
  • SF
    Scott F.
    3 April 2020 @ 01:48
    Great information ... keep it coming!
  • RA
    Robert A.
    3 April 2020 @ 01:07
    Excellent guys as usual. I have to say that ending on “any” kind of positive note, tongue in cheek or humor or a nice anecdote keeps it “real”. We can all use ANY updraft you all can come up with......cheers, Syrah tonight for us.
  • RT
    Rob T.
    3 April 2020 @ 00:47
    With all the media layoffs, social distancing, government survey stats that will start to lose their meaning, decreased disclosures from companies: should we be anticipating overall market volatility to spike just from information asymmetry alone? For financial sector insiders, how effective is their "alternative data" in this environment? Are there any issues or improvements of data availability?
  • je
    james e.
    3 April 2020 @ 00:17
    I love Ed. Great interviewer, very knowledgeable. This daily segment is terrific. I must ask, Ed, the name of the book on your mantle. The Book Of Common Prayer? Thanks, RVTV.
    • EH
      Edward H. | Real Vision
      3 April 2020 @ 00:28
      Yes. It’s the Book of Common Prayer.
  • AK
    Adam K.
    2 April 2020 @ 23:23
    Drink up brother hahaha :D
  • PB
    Paul B.
    2 April 2020 @ 23:08
    This thing is like an Oceanliner...It takes a long time to change direction..The Real Economy is going to be an unthinkable place for most people
  • TS
    Tamim S.
    2 April 2020 @ 22:57
    The daily briefing is my favorite feature on this sit.
  • JK
    Jim K.
    2 April 2020 @ 22:37
    Roger, you mentioned NOK, which was the worst performing currency vs. the USD before the Fed came out with the swap lines and other facilities to assist foreign central banks and since 3/30 NOK has ripped higher and has outperformed dramatically. Any thoughts as to what was driving NOK to underperformed so much until the Fed came out with the swap lines and what you think will drive the NOK from here? Ed, please feel free to respond as well is you have a view. Thanks gents very helpful.
    • J
      Jim .
      2 April 2020 @ 22:39
      Apologies for the typo but it should have been 3/20 rather than 3/30.
  • SH
    Sean H.
    2 April 2020 @ 22:35
    I like what you are trying to do here thanks
  • SS
    Steven S.
    2 April 2020 @ 22:33
    FILMED ON?? Just kidding. :)