Daily Briefing – July 22, 2020

Published on
July 22nd, 2020
Duration
31 minutes


Daily Briefing – July 22, 2020

Daily Briefing ·
Featuring Nick Correa, Ed Harrison, and James Bianco

Published on: July 22nd, 2020 • Duration: 31 minutes

Managing editor, Ed Harrison, hosts Jim Bianco of Bianco Research to discuss the Fed and Judy Shelton’s recent nomination, the significance of flows, and his forward look on markets and the economy. Bianco and Harrison first analyze the extreme opposition of Shelton’s nomination as a Fed Governor and consider how the Fed has been a domineering force in supporting markets for the past few months. Bianco then breaks down the types of retail investors and why their influence can prove to be powerful in driving market movements. They end their discussion by talking about the recent rally in gold and silver, and Bianco’s perspective on the bifurcation of markets and the economy, whether stimulus can be effective forever, and the damaged psyche of consumers. In the intro, Nick Correa gives an overview of the status of the US’s new relief bill and how the Federal Pandemic Unemployment Compensation program will end sooner than most Americans believe.

Comments

Transcript

  • JC
    John C.
    25 July 2020 @ 12:19
    Really enjoyed this. Need to have Jim back on for sure. Ed does a great job of moderating and asking some good questions. Good stuff guys
  • HJ
    Harang J.
    24 July 2020 @ 01:53
    Go millennials!
  • DM
    Dominic M.
    23 July 2020 @ 21:02
    Really appreciate the discussion—thank you both.
  • EC
    Earl C.
    23 July 2020 @ 20:39
    More JB on RV please!
  • sh
    steve h.
    23 July 2020 @ 20:09
    yea i believe EVERYTHINIG china tells us...
  • RS
    Rob S.
    23 July 2020 @ 16:45
    I like Jim Bianco. Good choice. I think it may be worth considering having Mike "Mish" Shedlock on RV. He seems to have a solid understanding of gold. A good read: https://www.thestreet.com/mishtalk/economics/how-does-gold-react-to-interest-rate-policy
  • mf
    massimo f.
    23 July 2020 @ 16:31
    I thought the problem with shelton was that she lied about her past views while being interviewed for the position. Either way whataboutery is not a great strategy.
  • rm
    ryan m.
    23 July 2020 @ 04:28
    As a Retail Investor, $300k across 4 accounts, (not a Robinhood or a millennial, but right around there) that's being buying Silver since March and Gold for the last 2 years, I can tell you the reason being is History. I read what happened in the past and made these moves accordingly. Up 45% on SLV for example. Bought on the Market, not coins or jewelry. This last month and currently, buying the Juniors. I don't own any Blue chips anymore, have sold as the market has gone up. Next move..... wait! an inevitable dip will come, and then back into Bluechips. Pretty simple really? lol My point is, perhaps some of you look to far into it? I think history and momentum is our friend when investing (I am now learning more about the Bond Market, thank you for that). History tends to repeat itself, Annnnd seems to smash old records? Soo is Gold and Silver going to break its all time highs? My thought is Yes, but what the F do I know...
    • ES
      Edward S.
      23 July 2020 @ 11:24
      Thanks for posting that Ryan. I find it useful to hear about how other retail investors are getting on and how your portfolio is looking. I have a smaller amount of capital (£75k GBP) that I have been trading since the beginning of the year. I'd say I'm long-term trading (swing trading) really rather than buy-and-hold investing. I take positions with entry & stops based on technical analysis but the reasons for the trade based on the macro viewpoints I've learned on here. It's working really nicely so far. For example gold I recently took a $10k position with stops at $1660 and it's doing very well. Same for Silver. Previously I would just use technical analysis but with all the fundamental factors at play it was killing my once-profitable strategy so I have had to change approach completely. I found RV at the start of lock down and got a bit too drawn into the narrative on long dollar etc but I have good positions on Gold and Silver and overall am around 20% up so far. If I'd found Davey Day Trader instead I guess I'd be doing better but overall I'm pleased and have learned a huge amount. I'm still very new to macro so can be a overwhelmed with all the variables that make a trade viable. It's good to look at the past as you say but some of today's situation is unique. RV has been great at educating me on variables that can add/reduce probabilty of a trade being viable. Not sure how or when to make my next move in the markets. Where are you learning about bonds? I would like to take a possible long position on treasuries but don't know how or where to start. Thanks Real Vision for the content.
    • AG
      Amol G.
      23 July 2020 @ 13:26
      Edward, you can look into Vanguard Long-Term Government Bond ETF (VGLT) these are notes issued by the U.S. Treasury and U.S. government agencies with maturities greater than 10 years.
    • ES
      Edward S.
      23 July 2020 @ 14:56
      Thanks Amol, I've got a Vanguard account so that's lucky. Appreciate you taking the time to read and reply; thanks a lot!
  • PG
    Philippe G.
    23 July 2020 @ 14:24
    Fantastic! The seashells & balloons bulls versus the Peter Schiff bears comment got a chuckle out of me!!
  • TB
    Tobin B.
    23 July 2020 @ 03:40
    Meh, this guy's voice has too much anxiety in it for me to take him seriously.
    • TB
      Tobin B.
      23 July 2020 @ 13:34
      Yeah, my paper Silver and Gold Miners positions are looking quite nice right now, but the real way to avoid being taken for a ride by the fed (the elites) is to teach yourself how money works, and hold physical hard assets. Mr Bianco glossed over this, discounting it as he waved his arms about, as I suspect he wants to be one himself; he did apply for the spot, after all. Thanks for the input on this topic; we all need to continue our own self-education because in the end, it is us who make our decisions for ourselves and our children. Tobin Retail Trader 39 years old
  • RL
    Ron L.
    23 July 2020 @ 02:05
    Shout out to the Jim’s cat in the background chilling like an seasoned investor, unfazed; we should all be more like him/her.
    • AG
      Amol G.
      23 July 2020 @ 13:28
      I typically don't trust cat people but I trust Jim. He's one of the real ones.
  • SZ
    Sarjan Z.
    23 July 2020 @ 13:03
    Hi All! No RV live events this week at all?
  • BK
    Brian K.
    23 July 2020 @ 12:15
    Enjoyed Mr. Bianco and, especially, his discussion of the Shelton nomination.
  • PP
    Patrick P.
    23 July 2020 @ 01:21
    What's funny is that Peter Schiff has been early for sure ... BUT at this point he hasn't been wrong..... I have never met a true investor who hasn't committed that sin.
    • PP
      Patrick P.
      23 July 2020 @ 01:22
      Being EARLY !!
    • SW
      Stephen W.
      23 July 2020 @ 09:54
      Schiff is a broken record who was destined to be right. He missed a 5x S&P hike though while in his goldmine of cognitive dissonance. Also, when he argues against the crypto crowd he is obtuse to say the least - to the extent that he contradicts himself repeatedly.
  • nN
    nigel N.
    23 July 2020 @ 09:42
    loving the James Bond like cat in the background Jim :)
  • JH
    Jason H.
    23 July 2020 @ 02:26
    Gold isn't an inflation hedge. Look at history, it is a poor correlation.
    • NI
      Nate I.
      23 July 2020 @ 05:34
      I agree that the gold price correlates best to real rates. At the same time, a hot dog still costs exactly the same amount today as it did in 1920 when priced in gold. Strictly speaking, gold isn't an "inflation hedge" but, it has been the ultimate protector of purchasing power over a significant length of time. I would call it a hedge against negative real rates which you can be highly confident governments will subject you to.
    • NI
      Nate I.
      23 July 2020 @ 05:43
      PS I would add that the S&P 500 is the same price today (in ounces of gold) as it was in 1963 when John Kennedy was assassinated. The only real gains you received over the past 57 years was the dividend. I'm going to write this up in an article entitled "the lost century" if this holds and I'm still alive 43 years from now :-) http://pricedingold.com/sp-500/
    • KB
      Keith B.
      23 July 2020 @ 07:12
      A fine set of clothes for a man cost an ounce of gold in the Roman Empire, and costs an ounce of gold today. That’s a pretty strong correlation
  • TL
    Tom L.
    23 July 2020 @ 06:29
    "If your bearish you have to go full Peter Schiff and talk about the end of humanity" 🤣 Love it!
  • TZ
    Tibor Z.
    22 July 2020 @ 23:04
    I hate, I can't get notifications regarding my comments on the videos I watched! And I can't find them either because I have to scroll to find it! Please fix it!
    • PB
      PHILLIP B.
      23 July 2020 @ 01:30
      @RV, I don't care to receive notifications about my comments. I would prefer that resources be dedicated to other areas of the site.
    • DS
      David S.
      23 July 2020 @ 05:18
      Use control A. Then find with control F. May be different on different systems. DLS
  • NP
    Nicholas P.
    23 July 2020 @ 02:40
    I could be wrong but I feel like a distinction that needs to be made here is the cultural differences between countries. My view could be skewed here because I happen to live in Florida but the majority of people I see out right now aren't wearing masks or socially distancing regardless of age. Therefore, my take is that the American consumer would act very different than consumers in other countries in terms of their fears (or lack thereof) towards the virus.
    • DS
      David S.
      23 July 2020 @ 05:09
      If they have money to spend. DLS
  • TB
    Thomas B.
    23 July 2020 @ 03:17
    Good interview. It might be a stretch to believe Shelton is being nominated to the Fed to work on a move to harder asset backed money. Commodities are cheap compared to fiat and other assets. Keep printing pieces of paper with people's faces on it!
    • AF
      Andre F.
      23 July 2020 @ 04:27
      What point were you trying to make?
  • MC
    Michael C.
    22 July 2020 @ 23:11
    Ed, Have you put the US10yr yield and the gold price on the same chart? They move together. The break out in gold coincides with the 10yr yield breaking below 60bps. Since early June global bond yields are gradually inching lower without the need for help from central banks. 5y5y forwards are going nowhere. So the bond market does not believe we are experiencing anything more than a supply side induced CPI spike that will be re-balanced as production turns back on. The mild rise in inflation is not changing long term inflation expectations. So perhaps gold is confirming what the bond market is saying - Deflation is still the dominant economic concern and that stimulating collateral (i.e. expanding bank reserves) is not (CPI) inflationary and the fiscal response (so far) has not yet been enough to plug the demand gap.
    • CL
      Christopher L.
      22 July 2020 @ 23:38
      I believe this is Jeffrey Snider's point in his recent post.
    • MC
      Michael C.
      23 July 2020 @ 00:23
      Yes it is. Plot inverse of 10yr TIPS over gold (Macquarie Bank covered this in some commodity research a few days ago). It says a lot. 10yr TIPS at -0.87bps at 10yr yield at 60bps implies long term inflation expectations of 1.47% pa. This is not agreeing with the inflation narrative. If the 10yr yield went to zero and TIPS to -150bps, gold would be through the roof but long term inflation expectations would still be a measly 1.50% pa.
    • SG
      Skyler G.
      23 July 2020 @ 02:16
      Gold moves based off of Real yields. So that makes sense
    • CR
      Cory R.
      23 July 2020 @ 03:07
      Does gold only respond to US 10 year bond yields? It would seem in large part yes, because negative rates in Europe since 2014 but gold didn't start rising then. Right? Further.. gold is an international market right? Is there no meaning ascribed to the positive rates of a lot of other global players? Countries that still have healthy bond yields: Brazil 6.32 India 5.81 Mexico 5.74 China 2.61 Russia 5.05 Indonesia 6.23 South Africa 7.4 Perhaps the weighting given to these other countries is what kept gold from rising sooner?
  • BB
    Bob B.
    23 July 2020 @ 03:07
    There is lots of talk about how Chinese don't trust their government's news. Might the 2.3 recovery be partly the result?
  • FA
    Frank A.
    22 July 2020 @ 23:52
    Lose all credibility when you start believing what the CCP says is fact. The probability that they are lying their a** off is above 90%
    • CH
      Charlie H.
      23 July 2020 @ 02:25
      Try 99.999999999999999999999999999999999999999999%
  • KV
    Konstantinos V.
    23 July 2020 @ 02:00
    Excellent conversation
  • SS
    Sheldon S.
    23 July 2020 @ 01:38
    More programming like this please.
  • PP
    Patrick P.
    23 July 2020 @ 01:37
    What do you mean we are not going back to Jan 2020? Do you really think that the Fed can't unwind the 3.5 Trillion they created? Come on now!
  • RD
    Riki D.
    22 July 2020 @ 23:53
    Good to see Thump finally come to his senses and suggest social distancing and mask wearing might help stem the tide of the viral spread. I wonder where and when I've heard those suggestions before? Thats right, just a few months ago from the non-political experts who know a thing or two about pandemics, the bright minds. Talk about an alternative reality!
    • MP
      Michael P.
      23 July 2020 @ 00:59
      I just saw a clip from the 60 minutes interview with Dr. Fauchi from March 8th where he told the nation not to wear a mask. Its not necessary. Should be used by medical professionals and very ill patients exclusively. Did Trump 'finally come to his senses" ? Just saying.
    • BP
      Brijesh P.
      23 July 2020 @ 01:15
      Trump saw his poll numbers and acted accordingly. Nothing more, nothing less.
    • RD
      Riki D.
      23 July 2020 @ 01:30
      There only one metric that matters and that is the death rate. Then lets ask who was best positioned to lead from the front and temper this metric, but more importantly the save those families that have suffered an unfortunate fate. I'm reminded that one of the first principles of the President of USA is to care for his people, before all else. With such a large death rate and counting, how successful do you think he has been. Or should we blame this on Fauci? In comparison with other western countries and the asian countries you can trust to provide accurate numbers, the outcome is mind numbingly disastrous! It was suppose to miraclously disspear, but someone in the administration forgot to have a conversation with the virus. If thats not bad enough, the sycophant DeSantis thinks, despite the dire ICU bed situation in the state, is not so bad and on the improve - more of the uneducated alternative view of world. Please don't suggest the injection of disinfectant and sunshine treatment ideas were part of a Fauci brainstorming session. If it wasnt such a serious issue, I'd only expect to see such suggestions in the form of aged whimisical satire and yet this from the mouth of POTUS. Apologists put it down to being a joke - not sure about his comical timing, but I wouldn't think that during a pandemic with 10's of thousands of people losing their life could be called good timing - how others might entertain an alternative view is incredulous. Great to see the 'true' Republicans taking a stand against this admininstration and its enablers. Has there every been a time in the republics history where the left, moderates and right (not ultra) have banned together to attempt to sink what from the outside is a swing toward autocratic rule?? Historical! So the new plan is: - Hold press interviews as the sole expert on the progress. Despite such a abysmal record. - Remove data cleansing from the CDC and allow it to be politicised by the WH. Deerrrr! - Remove a few Inspector Generals in case they contradict the narrative. - Name call everyone who might have an alternative view - lets drop intelligent argument. - Pivot to warn the masses (as if there wasn't sufficent historical evidence) this could get bad! - More golfing to improve the handicap!
  • DR
    Derrick R.
    23 July 2020 @ 01:26
    Yes, ppl in China are acting like there’s no vaccine because wait for it... there’s no vaccine! 🤦‍♂️🤦‍♀️
  • HD
    Henock D.
    23 July 2020 @ 01:19
    Was I the only one who lost focus by staring at the cat ..?
  • HD
    Henock D.
    23 July 2020 @ 01:19
    Was I the only one who lost focus by staring at the cat ..?
  • DT
    Devin T.
    23 July 2020 @ 01:16
    LOL!!!! I'm loving the white cat over to the left!!
  • DC
    D C.
    23 July 2020 @ 01:16
    1.4 billion people... I highly doubt they have 0 cases per day. Of course the WHO would regurgitate anything the CPC says.
  • DC
    D C.
    23 July 2020 @ 01:14
    Ed, the FED statements show that FED yield curve purchases are in decline.. meaning that they have not had to deploy as much stimulus as the the bill allows for. Why is that? Why is the FED tapering off, yet the overall market has this illusion that the FED is aggressively bidding up bonds to keep yields low.
  • GB
    Germain B.
    23 July 2020 @ 01:03
    Does anyone in their right mind believe that China has 0 cases? Ludicrous
  • AC
    Adam C.
    23 July 2020 @ 00:36
    Great interview. Thanks, Jim. I disagree with you on the damaged psyche if you mean that people will hesitate to return normal from some underlying uneasiness. To me that uneasiness is precisely that people don't believe what they are told about the virus and that it still presents a danger. If we say that some vaccine or eradication of the virus is reasonably believable then the natural inclination will be to enjoy more, earn more and do more. Is that cat real? He/she didn't move a muscle during that whole interview.
  • MD
    Matt D.
    22 July 2020 @ 23:30
    Great interview Ed and James. Thanks for having him on. Really solid ideas and insights - the China example/analogy was great. Hard to believe zero cases but your point still holds. Cat has a nice little Zen going on there. I reckon it would be pretty smart sitting there listening watching all day... Thanks again. Cheers.
  • RC
    Randolph C.
    22 July 2020 @ 23:20
    Great insights from Jim!
  • TZ
    Tibor Z.
    22 July 2020 @ 23:09
    These Millenials piling up on stocks just feels like a suckers rally! They have no experience! FOMO all over the place!
  • rL
    remmelt L.
    22 July 2020 @ 23:08
    Thank you for the talk mister Bianco. You talked about figures from China like restaurants booking. Do you have graphs or links to the source of your comments China free will demand instead of government forced to go to work?
  • HR
    Humberto R.
    22 July 2020 @ 23:05
    Great interview Ed!
  • MT
    Mark T.
    22 July 2020 @ 22:41
    I like Mr. Bianco, thanks for having him on.