Looking Beyond the U.S. and a Few Crumbs from the Fed Meeting

Published on
December 16th, 2020
Duration
28 minutes


Looking Beyond the U.S. and a Few Crumbs from the Fed Meeting

Daily Briefing ·
Featuring Ed Harrison and Max Wiethe

Published on: December 16th, 2020 • Duration: 28 minutes

Real Vision Managing Editor Ed Harrison and Editor Max Wiethe discuss the next turn of the rotation trade and the few crumbs of information served up from today's Fed meeting. Ed and Max begin by briefly addressing today’s Fed FOMC meeting where, almost no major changes were announced and focus on the updated summary of economic projections. They then examine the bull case for the next leg of the rotation trade and the argument that its geography could be much different than the prior leg. They also discuss a few recent market anomalies surrounding algorithmic trading, as well as the recent onslaught of IPOs.

Comments

Transcript

  • JG
    James G.
    19 December 2020 @ 23:17
    The fed is saying that they don't know what to Flock they are doing.
  • KN
    Krypton N.
    18 December 2020 @ 19:26
    OK - I've got an idea! Clearly, dumbing down these discussions is a bad idea. How about... a follow on video, which you can get to using a link, which explains all the sentences. A clean description of the background behind a phrase like "the country rotation has a lot more to it than the sector rotation" would just sort out all the newbies.
  • KN
    Krypton N.
    18 December 2020 @ 19:15
    Guys, no offence, but is there any chance that we can use simpler language in these discussions? Words like "disaggregating" don't always add value for people who are new to it.
  • MF
    Michael F.
    17 December 2020 @ 06:07
    I fear Ed is getting ahead of the whole Covid-19 vaccine reality. Yes, they are shipping vaccines and have plans to vaccinate certain groups of very high risk people however after that there are no plans to get the vaccine out to the masses. I'm a member of the group that have "bad outcomes" if they get Covid-19 and have been talking with providers and pharmacist in large and modern clinics and none, and I mean 0, have any idea how they will vaccinate folks like me when they get to that phase of the process. Right now I'm pretty sure I won't be able to get vaccinated till mid to late March if then with a booster 3 or 4 weeks later. So, I won't be "protected" till sometime late in April or early May. Now if a 60+ over weight guy with Type II Diabetes who knows how to work the system, has insurance and can and will pay to be vaccinated is expecting his initial shot to be 3 - 5 months from now how is the rest of the population going to be all vaccinated, foot loose and fancy free by June? It just ain't gonna happen - this summer is already toast, I'm seeing normality starting to return in the Fall. I hope I am wrong but the lack of planning for mass vaccination is pretty evident if you start asking people who should know simple questions.
    • JL
      J L.
      17 December 2020 @ 10:28
      To which the market can reply, get ready for the Jay and Janet Show (Jay Powell and Janet Yellen)... Meaning, any perceived weakness or bumps in the road between here and a full vaccine-powered recovery could arguably be motive and political cover for the Federal Reserve and U.S. Treasury to "smooth the path" as much as possible -- which means pumping more liquidity into the system in event of any hiccups. The operative thing to keep in mind is that, as they attempt to help or save the bottom half of the economy, the excess monetary and fiscal support that comes in lets the top half continue to party...
    • GP
      Gregory P.
      18 December 2020 @ 01:00
      The spring weather will fix the situation far more than any vaccine will. I'm fairly confident we're out of the woods by March / April. Once numbers drop in the spring this will all be in the rearview for most people and the focus will be on the damage caused by the lockdowns. I think the largest effects of vaccine news are lower self induced panic and hyping markets.
  • VS
    Ville S.
    17 December 2020 @ 17:36
    Where's Raul....? I need him to hold my hand in this btc bull market
  • JL
    J L.
    17 December 2020 @ 02:14
    Meanwhile, in two other minor bits of news (?!?!), a UK-based asset manager with +$27 billion in AUM announced they own $750 MILLION (!!) worth of Bitcoin as an inflation hedge -- having reduced their exposure to gold -- even as the Chief Investment Officer of Guggenheim, an asset manager running $230 billion, said on Bloomberg Television that Bitcoin should be worth $400,000 (!!) But yeah, pay no attention to Godzilla (BTC) smashing through resistance to new all-time highs...
    • JL
      J L.
      17 December 2020 @ 02:30
      p.s. I love that someone would downvote this. It's the trade of the decade, people, it's supposed to get outsized attention in proportion to the upside skew... for those who still don't get it RV is doing you a favor (or trying to anyway) by pounding the table...
    • TW
      Troy W.
      17 December 2020 @ 04:00
      I'd like to see that fund manager try get out of his position anywhere near spot price.
    • JL
      J L.
      17 December 2020 @ 05:00
      The increasing willingness of institutional managers to take positions in the hundreds of millions at a clip, even as retail investors buy hundreds of millions to billions via intermediary mass-market gateways like PayPal and Square, help explain why the spot price has gotten where it is in the first place...
    • CB
      Clifford B.
      17 December 2020 @ 11:55
      @troy w. Yup. Trading volumes right now on BTC are actually less than they were at the 2017 bull market.
    • JL
      J L.
      17 December 2020 @ 15:20
      Good thing they are planning to sit on their positions for years then (if not a decade or more).
  • TW
    Troy W.
    17 December 2020 @ 03:58
    I disagree with the whole "pent up demand' argument. I think it's more delayed demand. Money that would have been spent this year will be spent next year but that 2020 money is lost forever IMHO. People who would have bought electronic goods this year aren't going to buy 2 of the same item at Christmas or in 2021. People who didn't go out and buy a meal this year aren't going to order 2 mains every time they go out next year. There may be some small sectors who see pent up demand upside but I don't believe it will have a macro affect.
    • JL
      J L.
      17 December 2020 @ 10:25
      The counter to this view is that the top 30% of U.S. consumers -- who spend most of the money anyway -- were not significantly impacted by Covid, especially when you add in home price gains and the fact that the personal saving rate for the country actually went up substantially. What that implies is that, as the government takes steps to help out the bottom 70% of U.S. consumers, including the 30-40% who are truly suffering economically, a lot of that funding is going to go in the pockets of the top 30%, and wind up as excess corporate profit, and further fuel a boom. The simplest concrete example of this is what happened with the first $1200 stimulus check: Millions of recipients who didn't really need the money decided to YOLO the cash into their favorite stocks...
  • PB
    Paul B.
    16 December 2020 @ 23:45
    TIME TO FOLLOW THOSE FREEMASON FREAKS AND GET OUT OF THE COASTAL ZONES. THE EARTH IS GOING TO HAVE A SERIOUS MAGNETIC EVENT EARLY 2024. I'M AN AIRCRAFT ENGINEER NOT SOME NUTJOB AND YOU ALL NEED TO TAKE THIS SERIOUSLY. THEY ARE MOVING AWAY NOW AND RELOCATING TO GEOSAFE AREAS. TAKE A LOOK AT LUMBER PRICES AND FOLLOW THE PROPERTY MARKET! THE MAGNETIC FIELD INTENSITY HAS DROPPED A MASSIVE 15% IN THE LAST DECADE AND ITS FALLING FASTER AND FASTER AS WE SPEAK. 3 YEARS TOPS AND THE BEST CASE SCENARIO IS WE LOSE THE HVT'S FROM A CME IN THIS SOLAR CYCLE. WORST CASE IS A FULL POLE REVERSION LIKE HAPPENED TO JUPITERS MOON RECENTLY. WE MOVE THROUGH A MAGNETIC SHEET IT THE UNIVERSE AND THIS IS WHAT CAUSES THE 25920 PRECESSION CYCLE. TAKE A GUESS WHERE WE ARE NOW. WHAT THEY DONT WANT YOU TO KNOW IS THE EARTH CHANGES DIRECTION TWICE IN THIS CYCLE. ITS OHMS LAW, NEWTONS LAW NOT MINE OK. WHAT HAPPENS WHEN YOU REVERSE THE POLARITY IN A DC MOTOR OR PHASE SHIFT AN AC MOTOR IT CHANGES DIRECTION. THEY HAVE KNOW ABOUT THIS FOR 1000'S OF YEARS. TALE A LOOK ON GOOGLE EARTH AT THE WASHINGTON DC MONUMENT. IT'S A VERY WELL CALIBRATED OBELISK PRECESSION MEASURING DEVICE. THEY CAN'T FIGURE OUT WHY THE PRECESSION RATE IS INCREASING AT THE SAME TIME AS THE MAGNETIC POLES AND FIELD INTENSITY IS DROPPING OFF. HENCE THE MOON SAMPLES RECENTLY FROM CHINA THE JAPAN MISSION TO THE ASTEROID. WAKE UP PEOPLE THEY ARE GETTING REAL TIME PRECESSION DATA AND COMPOSITION FROM THESE AND MARS TO GET A CORRELATION. THESE OBELISK CLOCK ARE ALL OVER THE PLANET AND ALL OWNED BY THE FREEMASONS. CHECK OUT MY TWITTER FEED FOR MUCH MUCH MORE INFORMATION
    • ZD
      Zach D.
      16 December 2020 @ 23:49
      I don't think I would have taken this seriously had it not been in all caps.
    • MR
      Michael R.
      17 December 2020 @ 00:09
      I always have a hard time with magnetic events.
    • DS
      David S.
      17 December 2020 @ 00:11
      I know that you are concerned. Someday it will happen. When it will happen is still unknowable with any accuracy according to the top people in the field. Also when it happens my ocean front estates will not be my only concern. DLS
    • JD
      Jimmy D.
      17 December 2020 @ 00:34
      based and redpilled
    • WT
      William T.
      17 December 2020 @ 01:17
      Somebody get him a white jacket
    • PB
      PHILLIP B.
      17 December 2020 @ 01:37
      Without reading the comment, and just glancing, my default, bodily response was "post this on ZH."
    • AI
      Andras I.
      17 December 2020 @ 03:41
      No problem as I just finjished printing out the Bitcoin blockchain on my matrix printer, buried my (non-magnetic) gold in the backyard and finished folding my tinfoil hat. Ps: Your Twitter was removed from your post by the Freemasons (aka "they")!
    • TW
      Troy W.
      17 December 2020 @ 04:03
      The event will be like an EMP and will wipe all bit coin wallets....maybe lol
    • OA
      Oliver A.
      17 December 2020 @ 05:34
      I think you meant to post this on the KER message board
  • mf
    massimo f.
    17 December 2020 @ 02:44
    Where is Raoul with his insolvency commentary? Quite topical with foreclosure and eviction moratoriums ending on the 31st, 29-43% of renters are at risk of eviction. On the mortgage side, FHA loans are nearly 16% delinquent and 10% seriously delinquent! Crazy stuff.
  • SW
    Serge W.
    17 December 2020 @ 02:39
    Getting specific, any thoughts on how ABNB price is sustainable and justifiable as an IPO? It seems the air will or should be let of the ballon, and yet I know the same could said of TSLA. I have short term bearish outlook on ABNB, given the increasing lock downs, and just the limited travel outlook through the next few months, until the vaccines come into more broad use.
  • TC
    Tim C.
    17 December 2020 @ 02:08
    Good discussion. Ed is always thoughtful in his commentary. Not sure I totally agree with the Fed MBS comments: 1. MBS is high quality collateral, but the Fed buying it up basically takes it out of circulation and creates reserves. So it actually sequesters collateral from the market, which in the absence of other factors (ceteris paribus) wouldn't be good. 2. It is more likely that the Fed buying MBS is propping up the MBS market and in turn keeping mortgage rates lower than they would be. There was about $4T is mortgage issuance in the last year ($2.6T alone in MBS YTD, 3Q20 MBS was up 84% Y/Y). That's about 28% of mortgage $$ turning over, of which, ~86% is Agency MBS, all yielding lower rates and canibalizing existing MBS. 3. Agencies have been relaxing their lending standards (especially appraisals) adding risk to the MBS market. 4. That makes Fed MBS buying both a form of mortgage YCC and a prop to supply a buyer for the MBS market. Let's push up RE asset prices, increase risk, but hey, the payment for the more expensive asset is the same... Hmm... Retail sales numbers: Good commentary by Ed. One thing he didn't touch on is the seasonally adjusted numbers are still distorted.
  • JG
    Jason G.
    17 December 2020 @ 01:46
    In other news, Bitcoin smashes all time highs.
  • BH
    Bradley H.
    17 December 2020 @ 00:07
    Great show, but really... no mention of BTC on today 🚀 of all days??? Real Vision had real blinders on today! Where’s Ash when we need him 😉
    • PB
      PHILLIP B.
      17 December 2020 @ 01:39
      haha. Take it you are a bitcoin non-participant? Ok if so. I haven't watched the video yet. For bitcoin non-participants, maybe put put 0.10% of NAV into it and let it ride.
  • LC
    Louis C.
    17 December 2020 @ 00:26
    Wasn’t there a partnership announcement with CWH & RIDE where RIDE will leverage CWH infrastructure for servicing?
    • MW
      Max W. | Real Vision
      17 December 2020 @ 00:47
      Yes Louis, thanks for pointing that out. It just popped into my head as we were closing and my characterization was not perfect. I would argue though that Lordstown is a car company with no vehicles on the road, much less an RV and even as a shareholder of $CWH I think it is a bit of stunt and the subsequent run up and dump off today still holds true. Reminds me of Tesla semi and roadster. I’ll believe it when I see it.
  • CC
    Christopher C.
    17 December 2020 @ 00:17
    Great show guys.
  • PB
    Philip B.
    17 December 2020 @ 00:13
    Raul, I’m going to do this for you...... Guys Bitcoin breaks out to new all time high and you don’t even mention or discuss it at all.....what the hell were you thinking!!
  • JS
    Jon S.
    16 December 2020 @ 23:09
    Max is the future diamond of RV along with Jack! Keep it up guys!
    • Md
      Matthew d.
      16 December 2020 @ 23:54
      Agreed - Max is fantastic