Comments
Transcript
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MBReally like Ed and Jack. Better macro analysts than most traders.
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TCNot sure I agree with the liquidity commentary vis-a-vis the Fed. This is where I think the K shaped recovery effects are misunderstood. The market seems like it will be dystopian. It's $62B of money that purchased OTR treasuries. It's not liquidity "sucked out of the market" per se. It is pristine collateral being purchased that can be put to use (or not). During May/June the Treasury issued something like $2T mostly bills and the Fed didn't gobble all that up and no one batted an eye. I'd like to hear an explanation as to why that giant sucking of liquidity had no impact... I think the correct question is where the balance or inflection point is, what factors influence that, and what the knock on or deleterious effects are. It's an ecosystem after all... On COVID, I totally agree with Ed on the hospital front. If hospitals get overloaded, we have major issues. I don't think people understand this. For example, one of the side-effects patients have are clotting issues. There are a plurality of ways to treat clotting, all with various risks, the application of which is based on historical understanding of patient conditions. The associated meds are complicated for various reasons. Imagine the hospital staff having 4x the number of patients on such meds... I'm skeptical of the rotation trade, but I could be wrong. It conflicts with the K-shaped narrative. Not disputing it is happening, but I'm not biting...
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PCRV team AUDIO is missing
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DSIMO we are entering a scorched earth monetary era. The Treasury had a lot of funds saved to be release when President Trump was reelected. These funds would have been a lifeboat for small business and/or personal pandemic relief. If President Trump would have won, IMO there would be moves underway for pandemic relief before the inauguration. Since it seems that President Trump will not win reelection, nothing can happen until after inauguration. IMO the Republicans will win the senate seats in Georgia giving them control of the Senate. IMO Senator McConnell will follow in his former footsteps with stopping as many Democratic programs as possible. I am already hearing Republican Senators talking about fiscal conservatism - stop the money presses. This translate to me as stopping additional pandemic relief. This will lay the groundwork for a poor performance of the Democratic administration and set up positive motivations for a Republican victory in two years. This will not be good for the country, but if it is good for the future of the Republican Party it will be done. It worked before. I am not saying this as a partisan, just trying to figure out what to do with my money. Any ideas how one should invest with a deadlocked Congress. DLS
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RDNeed Audio file to download.
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JFHi all, I hope you enjoy this latest installment of RVDB. If you're interested in the liquidity dynamics that Ed and I mentioned, stay tuned for my interview with Teddy Vallee, which airs first thing tomorrow. Also - if you have any ideas of questions you think I should ask James Litinksy, the CEO of MP Materials, please let me know, either as a comment or in the Exchange: https://exchange.realvision.com/post/need-your-help-5fc5813dc8e33407eecbc72b Thanks! JSF
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NITextbook perfect answer from Ed on the real rates question; however, my question is how does the Fed raise rates without rendering the Federal government incapable of servicing their debt? Normally I would be selling PMs right now, but I think selling gold, silver, bitcoin, etc. is a bad idea because it's a nothing but a pipe dream for the Fed to raise rates. Powell got one hike before he crapped his drawers and reversed course and that was pre-pandemic. Quite the opposite, they will suppress rates. I'm buying hard assets (gold, silver, btc, ...) into the weakness.
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BHAn awkward question... would a doctor ever prescribe an unnecessary or undesirable medication, procedure or even a hospitalization? Perhaps out of vested $ interest or maybe because of cya legal concerns? Not denying that covid is bad, just pointing out that so is our medical system. Wrong incentives abound.
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NBI think, perhaps, Teddy Vallee's point may be that, in the short term, the inflation rate falls (this occurring due to "liquidity reversal") much more than the interest rate, thus leading to an increase in real rates.