Daily Briefing – April 8, 2020

Published on
April 8th, 2020
Duration
31 minutes


Daily Briefing – April 8, 2020

Daily Briefing ·
Featuring Nick Correa, Ash Bennington, and Roger Hirst

Published on: April 8th, 2020 • Duration: 31 minutes

Real Vision's Ash Bennington hosts Roger Hirst to discuss the rally in US equities against the backdrop of coronavirus. Hirst and Bennington discuss the rally from both a technical and fundamental perspective, weaving in the narrative of the breakdown in the real economy. The pair also discuss the monetary and fiscal response to the crisis, challenges in the real estate business, and the ultimate path forward to reopening the economy.

Comments

Transcript

  • MT
    Mark T.
    10 April 2020 @ 19:25
    I like the discussion, very well explained. What I am wondering, especially as you adessed the decoupling of markets through the FED intervention, if the "normal" investor really finds a market that rflects the econonmy, Because in my view that is long gone. I agree that the COVID crisis will be bad for small companies, the working people and the whole economy. But when Central Banks bail out the Hedgefunds across all nations and buy everything with printed money, I would nt be surprised to have ten million unemplyed people in the US and still see the S&P500 alt all time highs. The hedgefunds get bails out if they lose money, Central banks are pushing money into the system, governments understand stock indices as an indicator for health of the economy (even if half of their population is starving in poverty). The risk and why I am addressing it is that then traders that try to short the market because they still expect the real economy to be reflected in the stock market and retail investors that do not buy stocks now because of the same reason will never succeed. There is no stock market refecting the real economy any more, so comparisons to 1929 (when the majority of market was based on human interaction, greed and fear and risking your money as an istitution meant you could actually lose it) do not help imo.
  • IP
    IDA P.
    10 April 2020 @ 06:21
    best daily wrap ever thank you
  • AP
    Alfonso P.
    9 April 2020 @ 13:56
    Ash and Roger just nailed it at the last part, when talking about pure economics and the real world, models ( caeteris paribus ) , and praxis, it was just fascinating.
    • AB
      Ash B. | Real Vision
      10 April 2020 @ 01:01
      Thanks, Alfonso. Appreciate you saying so.
  • SM
    Shivani M.
    10 April 2020 @ 00:15
    The government should set up a website where you can use an API to log on to your mortgage servicer and authorize the government to pay your mortgage. Then let the money flow as it normally would. $ are never going to get to individuals in time.
  • JS
    John S.
    9 April 2020 @ 15:13
    I would love if you could address in daily update why the massive stimulus can't/won't keep the plates spinning for longer. That's been the narrative for many years now and is back in vogue. What is the tipping point or the consequences that'll change that narrative? If price insensitive buyer is stepping in and buying anything that sneezes and has unlimited balance sheet, what ends that? Is it economic malaise immune to fiscal/monetary? Still, stocks soared in weakest recovery in history. Is the economic and corporate profit going to be so severe that animal spirits are dampened? Thanks.
    • GF
      Gordon F.
      9 April 2020 @ 18:08
      As I understand it, having more money doesn't help if the stuff we need to buy is not being produced or delivered when and where we need it. The Fed can create all the money they want and transfer it to our accounts, but if there's no food in the supermarkets, things get ugly.
  • CH
    Cameron H.
    9 April 2020 @ 16:34
    To clarify the NMHC stat, a third of renters didn't pay they're rent on-time (by April 5th). This doesn't mean they aren't paying their rent. Many apartment owners have setup payment plans for tenants not able to pay on-time to pay later in the month. I think by the end of April, apartment owners will see 90%+ of April rent collected. However, May and June rental collections could be a different story.
  • JM
    James M.
    9 April 2020 @ 14:44
    'The death of free market capitalism'....... Seriously ???? When have we had that?
  • MD
    Mark D.
    9 April 2020 @ 12:00
    I find these Daily Briefings informative and a reality check on my interpretation of market events. Thanks for adding these to the Real Vision product offering.
  • SL
    Stephen L.
    9 April 2020 @ 07:34
    How can the UK need 25k beds and the US only need 19k. I think the UK figures are incorrect.
    • SL
      Stephen L.
      9 April 2020 @ 07:35
      Great updates otherwise though, thanks!
    • RW
      Richard W.
      9 April 2020 @ 11:21
      Plus we have just opened a 4000bed unit in London and 0,000s being built quickly around the country. Real vision please stop Britain bashing!
  • MC
    Melvin C.
    9 April 2020 @ 11:11
    Great Duo, thanks RV. It is so useful to go through the process of listening to these insightful interviews, to develop our own thoughts and our own plans of action. Well done.
  • DL
    Doug L.
    9 April 2020 @ 10:29
    Testing to enter work or other organized gatherings is going to be ubiquitous. Abbot Labs and their fast test will be everywhere.
  • PB
    Patrick B.
    9 April 2020 @ 08:09
    Roger - absolute gun!
  • AW
    Abigail W.
    9 April 2020 @ 05:50
    Pledge let Roger talk more in the interview.
  • SN
    Simeon N.
    9 April 2020 @ 05:45
    This "show" is extremely helpful, insightful and informative. Not sure if you get so much value anywhere else on the web for such a short period of time. Thank you!
  • DS
    David S.
    9 April 2020 @ 05:15
    When there is no price discovery, we are in a hall of mirrors. DLS
  • BS
    Brian S.
    9 April 2020 @ 04:48
    Bubbles have have been studied and they have typical characteristics. If the US markets were in bubble territory and Corvid-19 popped them, then they should be predictable. If true this bounce will fail and the next crash will confirm this. The bottom is two or three years away and will be close to where these bubbles started. This is not about just a virus-the virus was the catalyst, it’s about the end of a cycle and ultimately the cycle will win.
  • AH
    Ali H.
    9 April 2020 @ 04:00
    Thank you both very informative ..... stay safe
  • MR
    Michael R.
    9 April 2020 @ 03:31
    Roger is the best. Great insight in a very murky time.
  • AP
    Andrew P.
    9 April 2020 @ 03:15
    Roger nailed it with the bazaar conclusion.
  • IL
    ISAAC L.
    9 April 2020 @ 01:17
    The audio becomes intermittent at higher playback speeds. Please fix. Thanks!
    • PB
      Paul B.
      9 April 2020 @ 01:24
      I don't think it can be fixed...All Servers Worldwide have been scaled
    • MG
      Mac G.
      9 April 2020 @ 03:08
      No problem for me. 2x. iPadOS app.
  • JL
    Joel L.
    9 April 2020 @ 02:41
    Does Roger live in a hot yoga studio?
  • PG
    Paco G.
    9 April 2020 @ 02:33
    Roger is such profound thinker. Ash did a wonderful job with Roger.. Notable to me was when Ash slowed Roger down to ask him to expand on Fibonacci sequence. I think Fibbos are so important for people who aren’t technical to try to understand. They occur naturally in life as they do in markets. I think they are so damn simple to understand everybody looks at them who have studied markets. Bravo Real Vision for this duo. Throughly enjoyed it. Maybe it’s is just my confirmation bias.
  • DS
    David S.
    9 April 2020 @ 02:17
    Taxpayers bailed out the banks in 2008. Now the Fed’s liquidity injections bailed out the hedge funds by providing massive liquidity injections. This follows Dr. Roubini observation “privatize the profits and socialize the losses.” Will we continue to do this forever and just change the names? DLS
  • PB
    Paul B.
    9 April 2020 @ 01:23
    Unfunded Pension was at 125 Trillion a few months ago...It s 137 Trillion now!
  • MH
    Matthew H.
    9 April 2020 @ 00:44
    I'm wondering now if Risk Parity is dead due to UST rates being near zero how long does it take before those funds start to redesign, restructure and redeploy? I guess they will hold out till after the bulk of the health crisis and they have a clearer picture of the future outlook.
  • JF
    John F.
    9 April 2020 @ 00:40
    Glad to hear John Hussman's work mentioned by Roger. Would love to see a RV interview of Hussman.
  • TS
    Tamim S.
    9 April 2020 @ 00:20
    Roger is awesome. I love how he gives specific numbers and suggestions to go along with them.
  • RD
    Riki D.
    9 April 2020 @ 00:18
    A great article in the NYT offering some hope for those who end up in ICU. https://www.nytimes.com/2020/04/08/health/coronavirus-vaccines.html ------------------- Dr. Silviu Itescu, chief executive of Mesoblast, said the company decided to test its treatment in these Covid-19 patients because its product had shown good results in children who developed a similar deadly immune reaction called acute graph versus host disease, in which the body’s immune cells can attack healthy cells after receiving a bone-marrow transplant. Their treatment is currently being reviewed by the Food and Drug Administration for use in that disease. “We put two and two together and said, ‘We think we’ve got something that is safe and could have benefit,’” Dr. Itescu said. Another stem cell company, Athersys, has said it is also planning a study of stem cells in coronavirus patients with advanced respiratory distress syndrome, but is not as far along. Nine coronavirus patients at Mount Sinai Hospital in New York have received the Mesoblast treatment on an emergency basis, and doctors there said the initial response was promising. Six patients were removed from ventilation and others were being weaned off or had remained stable — a welcome development when most patients who need ventilator support do not survive. But Dr. Itescu said that even though the treatment was promising, it was still not clear whether it would work, or whether the early promise was merely anecdotal. Although many drugs are being tried outside of a formal study, he said, “We do think this is the right way, and a randomized, controlled trial is the only way you are going to know whether an approach works.” -------------------
  • SL
    Sean L.
    9 April 2020 @ 00:17
    Great point re: philosophy. People hate on liberal arts degrees - all of the smartest entrepreneurs I know have them. More than anything, it develops the capacity for critical thinking. One of the hallmarks of this era has been an over reliance on 'data-driven decision making'. Nothing against data - it was underused beforehand - but the pendulum swung so far that we placed it above rational, strategic foresight informed by data... a perpetual state of reactivity.
  • JK
    Jim K.
    8 April 2020 @ 23:44
    Great conversation Roger & Ash. I hope you are right about the individual being allowed to rise and problem solve from the bottom-up, however I thought that the upside to the GFC was that all of that massive brain power that went to Wall Street to devise products that devised models to strip cash flows and create CDOs , Subprime Non-Agency MBS, CMBS and ABS would go back to value-added areas of the productive economy. Instead this cycle they went to private equity, venture capital and Silicon Valley to create algorithms that are designed to manipulate consumer behavior. Maybe this time will be different, but I am not holding my breadth. Great stuff and stay safe gents!
  • JS
    James S.
    8 April 2020 @ 23:36
    More Roger please!
  • TW
    Thomas W.
    8 April 2020 @ 23:34
    Excellent as always. I was considering this point of money velocity in a deflationary environment. If UBI was adopted but rather than depositing money into your bank account you had (essentially) a credit card that was paid by the govt at the end of each month. So you had to spend the money because it wouldn't carry forward. Perhaps there are intelligent ways to mitigate deflationary behaviour? (Also the money wouldn't primarily be going to people with the best accountants through complex govt. schemes).
  • AS
    Ananth S.
    8 April 2020 @ 23:30
    MMT is being brought in magnificently. If you think of MMT and FED's and other Central Bank's acceptance in their own understanding of this concept you'll draw different and probably some not so bad conclusions. I wonder if Fibonacci series can still fit in into an economy driven by MMT
  • DS
    David S.
    8 April 2020 @ 23:23
    Expected future corporate cash flows going down from the COVID-19 coupled with the market going up, the rational explanation is passive investment. Much of passive investment is automatic with payroll deductions each month. As the economy slows the amount of passive investments especially from small to mid-size businesses and individuals will also slow down. They will need the cash just for day to day expenses. In addition, current 401 K holders may have to make withdrawals to pay current expenses. The amount of money the US government is putting in the economy can not make up for normal economic activity. - although they will try. I agree that we have not seen the pandemic effects on the market yet. I also see major international corporations winning in the foreseeable market conditions. If the passive investments funds flows go from positive to negative, without corporation buybacks; the markets should realize the bear is here. It is not because the investors will stop their love for passive investment strategy, but because they will not have enough to extra money to invest. I certainly cannot figure out how and when these flows will change, or even if they will. Until then I will follow $US cash first and gold second as my only way to survive until I see value in the market. DLS
  • TC
    Thomas C.
    8 April 2020 @ 23:14
    Fibos mean nothing but are followed in some FX markets by tech guys.
  • HK
    Hari K. | Contributor
    8 April 2020 @ 22:47
    Ash & Roger: two of the hardest working men in the business & the results are worth the effort.
    • AB
      Ash B. | Real Vision
      8 April 2020 @ 22:57
      Thanks, Hari!
  • OT
    Omar T.
    8 April 2020 @ 22:54
    Can you speak about the size of the "stimulus", because it seems to me that it is mostly liquidity which puts American businesses further in debt. The amount of "free" money seems to be a small fraction of the loss resulting from everybody in America not working. So is it really stimulative?
  • JW
    Jon W.
    8 April 2020 @ 22:53
    Roger, you mention that one of the positives to come out of this may be a move to active management. However, in the Mike Green interview it was mentioned that the active managers got killed and the passive funds did a lot better. I'm not sure how to square that. Can you clarify?
  • GB
    GIRISH B.
    8 April 2020 @ 21:54
    I am not getting audio
    • MS
      Matthew S.
      8 April 2020 @ 22:53
      No problem for me!
  • OT
    Omar T.
    8 April 2020 @ 22:40
    Mike Green said that 401K money still coming in just fine I think.