Comments
Transcript
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HDThese two are the best...outside of Raoul!
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ADWhilst I love the macro focused conversations, it would be interesting if there was a segment showing some technical analysis and which confounding factors the RV team look at to determine the current direction of a stock/ETF as well.
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DMGreat conversation, guys - thanks as always.
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PJAsh / Ed Surely with the level of insanity going on in the equity markets i.e. bankrupts that will be $0 soon being bid up, TSLA $1000 and rising; this is the blow off top preceding the bear market fall?
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TSSomething that seems to have been forgotten when comparing the 2000 excess and subsequent bust is how the Fed pumped and subsequently dumped liquidity. Greenspan bought into the “Y2K” theory whereby then current IBM desktop computers’ clocks being incapable of rolling over to the new century would seriously impact commerce. In what was almost a frenzy he goosed liquidity all the way up to start of 2001, then when the world didn’t go to h in a basket, in a knee-jerk reaction he rapidly pulled that liquidity off the table, and previously supported mal investments tanked. This simple observation gave me comfort as Ed described Michael Howell’s take.
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SBAsh makes a good point, but not a new point. This type of madness can go on much longer than anyone expects. I can't see the US gov, Fed or foreign central banks stopping any time soon. In fact I am expecting it to continue for years. Eg, even if we get inflation, they will adjust it out in the statistics. Eg if flights become twice as expensive, state statisticians will say that this is not inflation at all as you are paying for twice the seating room. Same with bars and restaurants. I have flashbacks to Janet Yellen keeping QE and ZIRP despite being 5 years into the expansion phase. I hope I'm wrong, but I suspect this will continue much longer than we expect.
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IPThe Fed has interest of making the system surviving, by trying to avoid mass defaults, ok. But does it realize that they are punishing the whole fiduciary finance industry? The put money managers in the situation where they are punished if they evaluate and manage risk, what's the point, to make the whole market become one massive ETF? I really don't get it. Or are they simply doing "try and see? Let's throw some money and see what happens, if it's too much we'll reduce"?
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SBIt is also worth mentioning that many Real Vision guests, and Raoul, have been discussing liquidity vs insolvency. It is important to realise that companies can skirt insolvency by issuing more equity. As long as the market is hungry, and you have a hyperactive central bank and government, companies will be able to raise new capital. This is a subtle point but an important one.
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PBIf the bond market money (after a decades bull run) flows into stocks, we can easily go up 50% from here in the next 12 months!
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RCBrilliant as always gentlemen. Regarding "multiple expansion", is the traditional average PE ratio of 15-17 a law of nature, like pi or e, or is it possible with years of central bank shenanigans (nowhere to go but the stock market), technological deflation and whatnot, there could be a secular move to a higher "average" PE?
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MHNew thumbnail cracks me up for some reason. Good work.
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mBWe really need to start monitoring global liquidity. The charts I see on Twitter is that markets follow liquidity. It’s almost exact. I just saw a chart of 85 trillion in global liquidity. I don’t know where to find this but rv probably does. It’s insane.
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WMUnlike the Internet Bubble, where the Fed was repeatedly raising rates to counteract it, this Bubble is being consciously blow bigger and bigger by the Fed. But the higher we go, the harder we'll fall - at some indeterminate point in the future which we can all guess at. I think Ed's guesses on the timing are as good as anyone's...
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jRwhat happens when all the ‘no earnings’ companies can’t pay bond holders, dividends, or rent? i would think that eventuality is soon in coming regardless of their stock prices.
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IPwhats going on is that guy Davey day trader seems like he has loads of followers
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OCThe Nasdaq is the BIG SHORT and it will make the 1929 drop seem like a small dip in history.
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OCShort-sellers using options get paid regardless of bankrupcy.
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OCNikola ( NKLA ) should return the stimulus money they took from people who really needed it.
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TBThanks for the talk and briefing, gents. Let's do some math shall we, on market liquidity. 21 million (call it 20m) unemployed getting $600/wk (call it $2000/mo make math easy) = $40 Billion over the past month. Call it $80 Billion over 2 months. ----- Compare that with $75.900 Billion TODAY ALONE in repo liquidity. ----- Yeah the retail Robinhooders are certainly helping the melt-up, but the numbers point to a much more influential source. If you trade in dollars, you'd better understand where they come from! Ash - your photo is too much touch up lol your head is much more shapely in video (i know thats not on you). Looking forward to more from Real Vision.
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mBThis was one of the better rvdb.
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BKI appreciate Ed's assessment. I'm genuinely baffled be the recent moves; thanks for the perspective and sanity check.
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CROne of the best Daily Briefings. Maybe because Market has gotten carried away and we all wonder how much longer this first rally can go -- Ash & Ed have their game faces on big time here. May I suggest that when you do interview the professional investors, they give us an idea of time-frame their stock picks. Thanks a lot.
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DSThe American savings rate is higher, so hopefully all the $600 per month may not be going into the stock market. The stimulus checks were issued to keep the regular economy going. It is ironic that stimulus checks end up in the stock market just like tax reductions. Do not forget that a lot of rents and mortgages are also not being paid. This adds more fuel to the current market. It will pour cold water on the market when it turns. We will see a lot of bankruptcies in the corporate market. We will see more regular people ready to file for bankruptcy when they must pay rents or walk away for a mortgage. Many are trying to figure out how to get a free lunch. Every twenty years the public needs to learn about market crashes and insolvency. DLS.
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CNThe discussion today about the long times during which markets will be irrational was memorable. To me, because I came to work in the securities business in 1967. That was the tail end of the great bull market of the '60's. At that time, I recall an Old Hand (he'd been a trader since before the 1929 crash) telling me that, at that time, the market was getting a bit carried away with itself. For the next year or two, the 'gunslingers' as they were known then, were in their glory days. The gunslingers were traders and some mutual fund managers who threw their money at anything that had a pulse...and like today, some that didn't. More than a few people in the Wall Street saloons said you could throw a dart at the financial page quotes and make money on any stock that was hit. The other quote that may still be around, "Never confuse brains with a bull market" has been surfaced frequently over the years. But by the time the internet mania hit, I had to constantly close my mouth so the flies wouldn't keep flying in and laying eggs...the duration and height of the hype and mania was so remarkable. In the '60s and for much of the '70s computers were only a myth. By the '90s...the PC had appeared and then the internet. I believe that both the financialization of our economy and the belief that 'risk' is easily controlled/managed can be laid off to the proliferation of modern communication and computing power without a commensurate effort in understanding the implications. How much of the current spike in stories of disbelief is due to technology or hubris or psychology is beyond this guy's pay grade, yet I continue to marvel at those who mock the Warren Buffet's of the world...or even me as the local handyman told me the other day that his wife was making enough on Robinhood so that they could retire soon. He is in his mid-30s. I think that Ed and Ash (and John Maynard Keynes) are correct in underlining the obvious fact that markets can stay irrational longer than we expect. If I were a betting man, I'd say that September/October might be timeframes to expect the irrationality to end. But I might change my mind tomorrow. Mr. Market will always have the last word. Good Luck to Us All.
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DSSince Mr.Lacy Hunt did not think any significant part of QE could possibly get into the stock market, maybe the rest of the Fed believes the same thing. IMO banks and hedge funds must be using QE to day-trade the markets. If the Fed wanted to stop this cozy arrangement, they could put covenants in the QE programs. It is therefore reasonable for me to conclude that the Fed supports the ballooning of the stock market This is the Fed's new self-imposed mandate to protect the wealthy, pension funds and the administration._ regardless if it keeps the market in balloon mode and not in a valuation mode. The Fed promoting economic instability “is the most unkindest cut of all” – paraphrasing WS. DLS
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GCExcellent job Peter! You got right to the core of what’s driving the market higher. The traders out there I don’t care about anyone’s macro view. Looking forward to your next update on the data. Many thanks.
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DLEverybody is piling into the market with novice retail investors being one of the main driving forces. Can someone tell me why this is not a mania?
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DCNice to hear you finally talking about getting some balance back on RV. Listening to Raul constantly talking his book is getting a bit tedious.
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XMGreat as always. A bit of sanity in this most unsavoury environment. Please do challenge Mr. Pawlowski and Mr. Conner when they appear. The views these gentlemen hold are far from those that I and I dare say most RV viewers hold. Cheers.
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TBExcellent work guys !
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EPThe only thing more massive than the liquidity Michael Howell speaks of is the pile of books behind his head.
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DGDip back into a recession. I would be shocked if we were already out of one. So much noise out there when most people can't see the forest for the trees.
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jgThanks Ash, Ed, and Peter!