Daily Briefing – May 27, 2020

Published on
May 27th, 2020
37 minutes

Daily Briefing – May 27, 2020

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

Published on: May 27th, 2020 • Duration: 37 minutes

Senior editor, Ash Bennington, joins managing editor, Roger Hirst, to discuss the latest developments in macro, markets, and coronavirus. Bennington and Hirst analyze what’s happening in Europe, including the recently proposed EU stimulus package, ballooning European debt, and the underlying structure of the eurozone. They also discuss recent moves in equity prices and the current landscape of currency markets. In the intro, Real Vision's Nick Correa shares the details of both the EU's and Japan's proposed stimulus bills for economic relief.



  • TM
    Tom M.
    28 May 2020 @ 04:35
    "People whose grandfathers were not sharing pints in pubs" Very diplomatic of you Ash
    • AP
      Ash P.
      28 May 2020 @ 23:39
      But they were brothers nevertheless and stopped hostilities briefly to famously play football between the trenches (until threatened with court martial by their 'superiors').
  • HJ
    Hollis J.
    28 May 2020 @ 15:32
    Requesting to add a: Listen Only button. Love the content. Listen everyday. Is it possible to get a "listen only" button added so those of us who listen to the show in the car. Currently the "audio" button requires a download, then switching to the player, and then deleting after listening. Just a request. Thanks so much for the content! Keep up the good work!
    • DP
      Dan P.
      28 May 2020 @ 19:06
      i believe there is an option for 'audio' under the video where the transcript option is
  • BB
    Benjamin B.
    28 May 2020 @ 16:35
    Thanks ash and roger. Top quality. Getting your insights on Eurozone developments is so valuable.
  • JC
    Juan C.
    28 May 2020 @ 16:35
    Loved Roger's comment about people from London being cockneys, if they are from the right part :)
  • hw
    harry w.
    28 May 2020 @ 15:39
    Nick's production quality is next level
  • wj
    wiktor j.
    28 May 2020 @ 14:26
    Spot on except that I do not agree that chancellor Merkel is pro Europe. She is Pro EU. And that is not the same. The politicians that make the law for Europe are Not chosen politicians by Europe. I am pro Europe but I am not for the EU.
  • CB
    Carlos B.
    27 May 2020 @ 23:02
    You are not getting write what the capital key limits for ECB purchases are
    • CB
      Carlos B.
      27 May 2020 @ 23:03
      Right not write
    • RH
      Roger H. | Real Vision
      28 May 2020 @ 08:49
      Hi Carlos - I am using a broad simplification. Here's a bit more detail, but the boundaries are constantly changing! The capital key determines how much capital each country should contribute towards the ECB, which is then used to work out how much of each country’s bonds should be purchased. For Germany, the capital key is about 25% of ECB capital when non eurozone countries are excluded. Malta and Cyprus have a tiny contribution. Capital keys are worked out based on GDP and population. Monthly bond purchases should be proportional to the capital key constraint. Bond buying is also then subject to restriction on maturity, yield and credit rating (Greek bonds were excluded for a long time). Movements in yield have made calculations particularly tricky (moving deep into negative territory in some cases). In addition, there are position limits of 33% of the value of each individual bond issue and of all bonds in circulation issued by any one member state. Given that there are so many moving parts, the capital key is really a rough guide for bond purchase volumes and the 33% position limit is a slightly more serious constraint. The package announced early in this crisis was not subject to all these constraints, but is considered to be finite (whereas the current QE program is theoretically infinite, but subject to numerous constraints).
    • RM
      Richard M.
      28 May 2020 @ 12:20
      Roger, thanks for the excellent description of the capital keys issue!
  • IP
    IDA P.
    28 May 2020 @ 12:17
    so we must expect lateral sideways market for years? when it goes down, Fed steps, when the market goes up Fed backs off
  • BB
    Bob B.
    28 May 2020 @ 12:13
    Excuse me scale matters. Using a term like "Financial Engineering" is pacification of profiteering without contributing to the economy. The scale today is larger and broader than most periods in the last couple hundred years. Naked shorting, stock buy backs, off balance sheet items - all have been illegal in the past. "Too Big To Fail" has broadened financial engineering beyond previously ever imagined! Q - Has all this financial engineering grown so large, broad and complex to be fixed without a destructive crisis?
  • RL
    Roo L.
    28 May 2020 @ 11:27
    Thanks gents. I just downloaded the book from Amazon for some light reading :> For some reason it was free.
  • MB
    Martin B.
    28 May 2020 @ 07:03
    @RogerHirst Italy has high public debts but low private debt. Switzerland is the opposite. Most economists blame Italy for the high debt but only a few economists talk about the total debt level which was the reason for the lower credit spread of Italy (in the past) compared to what most economist said would be justified. Why do you think is that? Is there a homepage where total debt of a country is compared to GDP?
    • RL
      Ruben L.
      28 May 2020 @ 10:38
      It is not only "total debt to GDP". The difference between Italy and Swiss is the corruption level. Investors instinctively perceive this. hence real capital leaves Italy
  • RL
    Remmelt L.
    27 May 2020 @ 22:45
    Thank you for your update. Roger, you did not mention how the eu can finance the 750 million. In the news papers they mention eu tax for big companies. So for example big tech companies as Google will pay for it. The Dutch newspaper and even the former Dutch minister and head Eurozone Dijsselbloem thinks it is a good idea. This would be a structurel game and would put pressure on big companies
    • LK
      Lauri K.
      28 May 2020 @ 06:11
      That's a genius idea! That will certainly get the public on board, but essentially means moving towards fascism. The inbreeding landscape in Europe going forward seems to be very political and agenda driven. The rise of "green" investment vehicles is astounding and seems the fundamentals really won't matter as much in the future.
    • LK
      Lauri K.
      28 May 2020 @ 06:12
      I meant investing, not inbreeding!
    • RH
      Roger H. | Real Vision
      28 May 2020 @ 09:55
      Hi Remmelt - this avenue will be pursued - cash rich tech companies will be viewed with envious eyes by many governments, not just in Europe. The Frugal Four will also want to see some structural reforms included in any EU wide deal, especially if they are disbursed as grants.
  • MA
    Michael A.
    28 May 2020 @ 09:55
    Always good, but today one of your best.
  • RR
    Richard R.
    28 May 2020 @ 07:47
    These briefings talk way too much about Europe. It's high time to focus on the rest of the world.
    • RK
      Roger K.
      28 May 2020 @ 09:31
      and limit to 20 min max, please?
  • MC
    Michael C.
    28 May 2020 @ 02:43
    Who is paying for the EUR550bn grant? If its actually debt issued at an EU level then the idea that its a grant is rubbish. Who funds the EU? Its members. So are the grants actually just debt mutalisation?
    • RH
      Roger H. | Real Vision
      28 May 2020 @ 08:57
      Hi Michael. This is the sticking point. The idea unveiled by Merkel and Macron is that these are non refundable grants (i.e. debt mutualization) and this is why it was a shock that Merkel agreed, having resisted for so many years. The Frugal Four have rejected this - they want loans. This is the debate to watch and the potential Rubicon to be crossed
  • CS
    Charles S.
    27 May 2020 @ 22:59
    Amazon pricing of the Roger-referenced "Financial Market History: Reflections on the Past for Investors Today" echoes some of the themes discussed here: $38.95 paperback, $0.00 Kindle version
    • CS
      Charles S.
      27 May 2020 @ 23:01
      seems Roger paid up ;). though much to be said for paper in hand
    • SL
      Shawn L.
      28 May 2020 @ 04:08
      It is downloadable here for free: https://www.google.com/books/edition/Financial_Market_History_Reflections_on/RC0dDgAAQBAJ?hl=en&gbpv=1&printsec=frontcover
  • SL
    Shawn L.
    28 May 2020 @ 04:06
    The book mentioned within can be found here for free download: https://www.google.com/books/edition/Financial_Market_History_Reflections_on/RC0dDgAAQBAJ?hl=en&gbpv=1&printsec=frontcover
  • JS
    Jon S.
    28 May 2020 @ 01:52
    No disrespect gents, you are doing a great job. Unfortunately, all of this is such a joke. Bailouts, bailouts, and more bailouts. It's just a big joke. Up is down, down is up, day is night, night is day. Sorry for the diatribe.
  • NL
    Nikola L.
    28 May 2020 @ 01:02
    Thank you boys.
  • JW
    Jeff W.
    28 May 2020 @ 00:52
    You guys make the nearly inexplicable, explicable. Well done, great interview.
  • SF
    Stephen F.
    28 May 2020 @ 00:42
    Roger might be favorite analyst on real vision. Bravo Roger bravo.
  • DR
    Derrick R.
    27 May 2020 @ 23:41
    Did they manage to get through the entire update without discussing the euro’s recent strong gain on the dollar? Is it just likely to be the us stock market moving to risk on?
  • MT
    Mark T.
    27 May 2020 @ 22:56
    The Roger days are always good days. Thanks to the both of you, and Nick too.