VIX vs. Vax: Path Dependency and COVID-19 — Live with Naufal Sanaullah

Published on
November 17th, 2020
Duration
58 minutes

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VIX vs. Vax: Path Dependency and COVID-19 — Live with Naufal Sanaullah

Live ·
Featuring Naufal Sanaullah

Published on: November 17th, 2020 • Duration: 58 minutes

Recent announcements of effective COVID-19 vaccines may have been positive for equities in the short term, but the question remains – how path dependent will markets be to a less than speedy rollout of these vaccines if the current trajectory of rising cases continues? In this interview with Max Wiethe, Naufal Sanaullah, chief macro strategist at EIA All Weather Alpha Partners, outlines his framework for understanding this path dependency, explains how end of year dynamics relating to options traders have and will continue to drive equity markets, and assuming bullish technical patterns are confirmed by price from now until year end, why the Russell 2000 and Nikkei could be the best trades for the rest of 2020. As well, they will discuss why Sanaullah thinks the bond market bottom may be in and take questions from the audience.

Comments

Transcript

  • DB
    Donna B.
    4 December 2020 @ 01:26
    Liked the interview but what was that slapping-like sound in Naufal's room that occurred throughout the video?
  • DA
    David A.
    29 November 2020 @ 15:52
    A very good, wide ranging interview from someone who really seems to leave his ego and opinions at the door. The same can't be said for some of the Real Vision crowd pleasers. This deserves a wider audience. His hedge fund, although tiny, looks interesting.
  • BP
    Bakulesh P.
    21 November 2020 @ 20:33
    Sound recording is of very poor quality. It echoes when the guest is speaking. Please do not waste our time with this type of poor quality
    • DG
      David G.
      25 November 2020 @ 05:11
      Don't be a mitch
  • BH
    Bin H.
    23 November 2020 @ 01:39
    I like his candidness to handle tough questions, unlike many others
  • DS
    David S.
    19 November 2020 @ 08:47
    The digital fiat currency will have the same defined liability as non-fiat digital currency - hacking. This can be done by stealing money from individual accounts to breaking the encryption of the fiat digital currency. Breaking the encryption is considered impossible for now. What about the future? DLS
    • JL
      J L.
      21 November 2020 @ 05:59
      To hack the BTC blockchain you would need a quantum computer. The proof-of-concept experiments run by Google etc on quantum computing are still massively far away from functional viability. Quantum computing as an actual thing is like strong AI. As with strong / general AI, we have no idea how far away it is -- it might be 10 years away or it might be 100 years away. Meanwhile, there are efforts to build quantum cryptography protection into the blockchain. And the whole world will need quantum cryptography protection anyway, because without it all of the world's e-commerce and financial transactions, and top secret government and corporate databases, would be vulnerable. Ultimately, the quantum cryptography threat is on par with the molecular nano-assembly threat. It is theoretically possible that, at some point in future, molecular nano-assemblers will be able to turn sand or some other worthless element into gold by reconfiguring the molecular structure. This means no asset is 100% foolproof with respect to far-future developments, and a quantum computing achilles' heel is not substantially different from the risks of owning a physical element that could be one day assembled at will.
  • JL
    J L.
    21 November 2020 @ 03:00
    I like his analysis generally, but the Bitcoin views are just nonsense. It's not even a matter of disagreement here, so much as a misrepresentation of what the core Bitcoin case is. First of all, the idea that "nobody knows what Bitcoin is yet" is false. The dominant Bitcoin use case is clear, even if a lot of people at the margins don't grasp that. Bitcoin is digital gold. It is an abstract store of value for the information age. It has the same store of value properties as physical gold, but in dematerialized form. It is more scarce than physical gold, and easier to store and transport for that reason. That is it. That IS the use case: Bitcoin as digital gold and a dematerialized store of value. That use case, all by itself, is so powerful and useful that, when you connect it to a digital asset, you get an entity that can have a multi-trillion market cap once it reaches global distribution levels across individual investors, corporate entities, and even central banks holding a portion of BTC in their reserve mix. This use case also explains why Bitcoin will not face any competition from Central Bank Digital Currencies (CBDCs). They aren't even competing in the same space! Bitcoin is a store of value with global consensus, a kind of sovereign asset independent of a sovereign state. The fact that Bitcoin has absolute scarcity is it key trait with respect to this use case, along with the immutability of the ledger. CBDCs, meanwhile, are simply fiat currencies in digital form. Every CBDC has the potential to have infinite supply at the touch of a button, because the quantity is determined by government policy. You hold Bitcoin as a store of value because you know it will never be debased and the stock-to-flow ratio will eventually be zero. That has nothing to do with CBDCs, which will always have a theoretically infinite supply capacity. The store of value component of a CBDC will depend on output factors of the national economy and the management capability of central banks and politicians, just as it has always been with fiat, and there will never be a CBDC with fixed supply, ever. The thing about Bitcoin being a black market transaction vehicle is also ridiculously out of date. Look at Paypal. PayPal is a top 25 S&P 500 company and they are rolling out cryptocurrency payments in 2021 that will connect the ability to use crypto for transactions with 346 million users with 26 million merchants in their network. Meanwhile Square and MicroStrategy, two publicly traded companies with multi-billion marekt caps, are using BTC as a treasury asset. And this is just the beginning, as the head of the OCC wants to clear banks for an ability to hold cryptocurrencies, and other intermediary payment layer processors are going to offer cryptocurrency payment transaction capability if only to stay in competition with firms like PayPal and Square (market caps in the $225B and $85B range respectively). Bitcoin will become a transaction vehicle by getting hooked into the intermediary payments layer, which is separate from the store of value function. This is already happening. Once PayPal gets the trading desk functionality hooked up you will be able to buy whatever you want on PayPal via BTC and they will convert into dollars, euros, whatever on the other side of the transaction. Then beyond PayPal, all kinds of payment processors will do this. The BTC store of value function will remain separate and intact because the key thing is, when you have your savings in BTC, you are owning an asset with global consensus that can never get debased. And it won't get copied either, because you can't copy a global network and a transaction history with a ten-year head start. So the black market thing is shown false because there are already major corporate entities who are rolling out an intermediary payments layer. And the CBDC competition thing is silly because BTC's use case is being the ultimate store of value, whereas CBDCs as advanced fiat have no store of value function at all. And then, last but not least, Bitcoin will not have competitors on the store of value front because it has already achieved global consensus and has way too far of a headstart. It's all well and good to disagree on the future of the asset, but at least understand what the actual case is. The use case is very well defined, the corporate commitment is real and substantial, and CBDCs are not actual competition at all.
    • JL
      J L.
      21 November 2020 @ 03:12
      p.s. Wrote the comment before the circa 28 minute mark when he basically acknowledges the digital gold argument is credible because CBDCs will never have a fixed supply. Well okay then, LOL. Everything that came before that was weak sauce if he acknowledges the digital gold case. The fact that an asset can actually go head to head with gold on its main use case front, while staying digital, is not just a neat business model or an interesting development. It is a world-historic paradigm shift. There have basically only been 2.5 global consensus store of value assets in all of recorded history: Gold, Silver (kind of -- hence the 0.5), and Bitcoin. If you acknowledge that Bitcoin will not be hacked (it hasn't yet, not the blockchain directly) and you understand that the global network and the 10-year transaction headstart means it will not be supplanted, this is not just a "yeah maybe" type development.
  • AP
    Adam P.
    19 November 2020 @ 21:02
    I really liked Naufal. I wish I was able to catch this live.
  • AP
    Adam P.
    19 November 2020 @ 21:02
    I really liked Naufal. I wish I was able to catch this live.