“Can the Fed Salvage a Soft Landing?”

Published on
February 6th, 2020
Duration
37 minutes

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“Can the Fed Salvage a Soft Landing?”

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Featuring Danielle DiMartino Booth and George Goncalves

Published on: February 6th, 2020 • Duration: 37 minutes

Since last time Danielle DiMartino Booth sat down with her friend and confidante George Goncalves in September, repo mania raged, and their prescient predictions for how the Fed would react to unforeseen stresses to the monetary system have seemed to come true one-by-one. Today, they resurvey the monetary landscape and debate the potential endgame scenarios for Fed policy. Will "not QE" give way to a standing repo facility or a truer form of QE that central bankers will not be able to deny? The insiders lay out three distinct scenarios for Fed policy, the soft landing, that Powell and the Fed desperately want, the base case — which is perhaps the most likely, and a worst-case scenario where factors like coronavirus could trigger recession in Germany and the US. Filmed on January 29, 2020 in New York. Danielle and George have also co-authored a report to accompany this interview which can be found here: https://www.realvision.com/paving-the-path-of-most-resistance.

Comments

Transcript

  • SB
    Scott B.
    26 February 2020 @ 02:07
    0 0
    Is there a way to hide the overlay or fade it out when pausing the video? The overlay makes it difficult to read charts etc.
  • FG
    Flavio G.
    16 February 2020 @ 22:11
    3 0
    I don't like interview styles in which the interviewer is funneling drama-infused opinions and adjectivizing comments made by interview. Job number one of the interviewer is to let the interviewee shine. More a criticism on style rather than a content one.
  • BJ
    Barbara J.
    6 February 2020 @ 22:30
    22 0
    Danielle interrupts the guest too much and it became annoying. Pleas suggest that Danielle watch Raoul Pal do an interview. He is the best.
    • DT
      Douglas T.
      7 February 2020 @ 05:53
      7 2
      She should do what suites her style, which seems to be more covnersational than a formal interview.
    • DS
      David S.
      13 February 2020 @ 00:23
      1 0
      Is it conversation or self promotion? Nothing wrong with a little self promotion, but a balance works best. DLS
  • IO
    Indi O.
    11 February 2020 @ 20:37
    2 0
    I keep thinking of this as "When the government stops governing and the Fed tries to run the entire national economy."
    • DS
      David S.
      13 February 2020 @ 00:19
      2 0
      The reverse may happen with populist on either side. The treasury will take over the Fed and the administration will be in charge of money printing. DLS
  • BH
    Bin H.
    12 February 2020 @ 18:34
    2 2
    The flow is superb!
  • rc
    richard c.
    7 February 2020 @ 07:48
    2 0
    Why does no-one come out and say the Fed is doing repo to fund the budget deficit.
    • DS
      David S.
      10 February 2020 @ 00:35
      0 0
      If the treasury kicks into QE mode to keep the market up for the election, the Fed may need to do QT to keep a balance. DLS
  • VP
    Vincent P.
    9 February 2020 @ 20:52
    4 0
    Welcome to the team Danielle. We see how hard you work at Quill (..and Twitter of course) and love your work. Great interview management and terrific content by both. Bring it on!!
  • VP
    Vincent P.
    9 February 2020 @ 20:46
    2 0
    I have a question. On the notion of a zero bound Fed Funds Rate and likely gargantuan QE, what is the LAUNCH PRICE for the S&P500 and DJIA? The first time this happened markets were priced about 68% cheaper. Never mind, no answer necessary (see below). To be clear, this is launch price.....where it goes afterwards, well chuckle chuckle. Launch Benchmark Prices: S&P500 =>4,000 DJIA =>36,000
  • JG
    James G.
    9 February 2020 @ 18:28
    13 0
    Danielle, quit cutting off your guest!!!
  • WM
    Will M.
    8 February 2020 @ 22:50
    17 0
    Love Danielle's material but she was leading the witness here. A little too strong negative personal commentary by Danielle for an interviewing style. As mentioned by many below Danielle should let the guest provide the input.
  • MT
    Mike T.
    7 February 2020 @ 10:46
    5 1
    this interview is fine up to a point, but whilst having seen other vids and read mumerous articles on the subject, I was always left with the feeling do I really, really understand, answer probably not. Then it all became much clearer when I watched this https://www.youtube.com/watch?v=9lTFXl9LR3w&feature=youtu.be
    • LP
      Lynn P.
      7 February 2020 @ 22:57
      2 0
      Watched it. Appreciated the H/T to Jeff Snider and the critical role of collateral. Like you, I don't think I fully grasped the circular nature of what the Fed is doing (i.e., QE reduces collateral --> Fed subsequently provides liquidity via a Repo facility). The video offers a more complete explanation, and it's a lot to process (for me anyway). But thanks, Mike T. for the reference. One more reason I subscribe to RealVision - the quality of other subscribers who share useful information. Not that i doubt you, but I wonder if you, like me, would like to have Danielle have George as a guest. I find Mr. Goncalves a bit hard to follow.
  • MM
    Mike M.
    6 February 2020 @ 16:45
    37 4
    Sarcasm kills the interview. We get your Fed Up. But let your guest answer the questions
    • JL
      Jack L.
      7 February 2020 @ 21:32
      9 2
      Concur. Please dial back the snark in-fills a bit. Doesn't have to disappear entirely, just slide the parametric equalizer bar down a bit on that channel, maybe from "7" down to "3."
  • GH
    Garrett H.
    7 February 2020 @ 19:11
    3 0
    Great view from insiders. Luke Gromen has been calling that the Fed with implement curve control for a long time now.
  • MN
    Michael N.
    7 February 2020 @ 19:01
    3 1
    this is why real vision rocks. you cant have a typical interviewer discuss these things with a subject matter expert. But as a SME herself, she is able to take the discussion to another level. thank you
  • JG
    Jeff G.
    7 February 2020 @ 15:28
    2 0
    Let's have an entire discussion about the activities of the Plunge Protection Team. Vol suppression along with Gold and Silver and oil. Save failing fiat at all costs!
  • JA
    Jordan A.
    7 February 2020 @ 03:05
    3 3
    Danielle does a great job. Looking forward to more of these.
  • TR
    Thomas R.
    6 February 2020 @ 20:03
    9 5
    So Great that Danielle will be hosting a series!
  • FA
    Frank A.
    6 February 2020 @ 15:20
    0 1
    Amazing........confirmation that in fact the FED "has" killed capitalism......none of these FED behaviors or options lead to a dynamic and robust economy with opportunity for it's citizens......Convinced the FED needs to go.......a whole new framework needs to be researched and investigated.
    • DS
      David S.
      6 February 2020 @ 19:29
      0 0
      Capitalism is the best economic system, but needs guardrails to keep in line. We weakened capitalism by taking the restraints off government spending by going off the gold standard. We finished the job in 2008 with the Wall Street meltdown. The Fed was dealt a losing hand which they played poorly. There is plenty of blame to go around. If theyraise rates which would establish a reasonable investment hurdle rate, the market will tank. We are all out of options, but is not just the Fed that caused this. DLS
  • OC
    Otto C.
    6 February 2020 @ 16:29
    26 1
    Danielle is great when being interviewed. However, interviewing she is very distracting because she interrupts the guest too much.
    • DG
      Dave G.
      6 February 2020 @ 19:07
      9 0
      I agree I'm not sure if Danielle is ready to be on the other side of the conversation. I'm bad for interrupting also but she needs to let the guest finish his thought.
  • HO
    H2 O.
    6 February 2020 @ 16:02
    1 0
    Can't listen to this even at 1.5x.
    • GG
      George G. | Contributor
      6 February 2020 @ 17:33
      3 0
      Good point - I tend to operate at 1.5x already (haha). I will slow it down next time (just so much to cover)!
  • KM
    Kyler M.
    6 February 2020 @ 15:44
    9 0
    Great Interview. Would love to see a gameblazer06 interview by the way
  • HS
    Hubert S.
    6 February 2020 @ 13:33
    1 0
    Subtitles in the picture are distracting - is there a way to put them off ?
    • KO
      Kevin O.
      6 February 2020 @ 14:11
      2 0
      Hover over the video and click "CC" on the bottom right.
  • BF
    Bret F.
    6 February 2020 @ 09:04
    1 0
    Wow lots to process. Next few months will be interesting (hopefully not devastating) the trade hard to figure yet... Long bonds maybe, oh my. Charts don't go up forever. So when the buy every 1% dip. Becomes the sell the 1% gain. 30,40% out of the market could happen before the Fed can blink

Chapters

  1. 00:06:00
    Can the Fed salvage a soft landing?
  2. 00:12:59
    Standing Repo Facility or QE?
  3. 00:15:16
    Best Case Scenario
  4. 00:18:56
    Base Case Scenario
  5. 00:24:45
    Worst Case Scenario
  6. 00:26:56
    Commercial & Industrial Lending
  7. 00:30:29
    The Great Moderation 2.0