Demographics, Illiquidity Risk, and the Marginal Buyer

Published on
August 21st, 2019
12 minutes

Demographics, Illiquidity Risk, and the Marginal Buyer

Future Fears ·
Featuring Josh Wolfe and Raoul Pal

Published on: August 21st, 2019 • Duration: 12 minutes

Josh Wolfe, co-founder of Lux Capital, joins Real Vision co-founder Raoul Pal to discuss liquidity risk in the equity and venture capital markets. Wolfe talks about the giant structural risks facing the credit markets in general - fingering the inevitable downgrade of investment grade debt as the major reason a liquidity event might shock markets into recession. This clip is excerpted from a video published on Real Vision on July 24, 2019 entitled, "What Will a Recession do to Venture Capital?"



  • EK
    Edward K.
    21 August 2019 @ 15:09
    Was ready to dismiss this as too esoteric but notion that BBB companies a la GE, ATT are dinosaurs with structural issues at risk of disruption from the next (or future) wave was a pretty salient point. Mutual orbit of liquidity crisis vis-a-vis junk downgrade possibility systemically or per company. Haven't seen it yet but that canary just might sing sometime.
    • MW
      Marcus W.
      28 August 2019 @ 12:55
      Regarding those dinosaurs I gleaned that no one would want to buy their VC funded projects since they are run by dinosaurs. So if push came to shove and they had to unload. No one would want it anyway. The best GE etc can do is carve of SBU's and offload. The way those large corporates mentioned and the way in which they are structured doesn't serve them going forward where those margins will get eaten away yet they have those costs to carry such as pensions etc. They seem screwed basically.
  • MW
    Marcus W.
    28 August 2019 @ 12:50
    That. Was. Absolutely. Epic! Well done guys that was just brilliant. I'm still in awe of Raoul and his interview styles. Just extracts great information without getting in the way. Like a detective trying to uncover a mystery. Brilliant. Well done to Josh Wolfe, guy knows his stuff.
  • CS
    Craig S.
    27 August 2019 @ 21:19
    I wish my brain understood everything I justheard
  • DF
    Daniel F.
    27 August 2019 @ 20:19
    "money going into illiquid stuff" sounds bad, but the cash --- the liquidity --- goes somewhere... right? Or are we saying that the newly minted cash is newly offset by the creation of new illiquid securities?
  • NI
    Nate I.
    26 August 2019 @ 03:21
    It would be fascinating to get someone from a ratings agency on RV. Ask them what would cause a debt downgrade of GE, AT&T, and the like.