Adapting to New Market Nuances and the Golden Age of Macro

Published on
February 15th, 2021
Duration
39 minutes

Is Everything a Bubble? Why That’s the Wrong Question


Adapting to New Market Nuances and the Golden Age of Macro

The Expert View ·
Featuring Julian Brigden

Published on: February 15th, 2021 • Duration: 39 minutes

Julian Brigden, founder of MI2 Partners, updates his view on the current macro and market landscape, arguing that although navigating the current market requires nuanced perspective and strategies, he remains bearish on the dollar and bullish on risk assets. He cautions that rate of change of yields and monetary and fiscal support are key to this view, but adds that he thinks policymakers will be reactive and that any hiccups will be entry points—not the end of times. He also says he is looking out for a generational entry point in commodities and emerging markets and admits that some “bubbles” exist in assets like Tesla and perhaps even narratives close to his own heart like short-dollar and reflation. Filmed on February 8, 2021.

Comments

Transcript

  • IC
    Ibrahim C.
    15 February 2021 @ 10:58
    The 80% of this interview's content was already run at Macro Voices podcast last week!
    • PC
      Petros C.
      15 February 2021 @ 13:34
      Are you referring to > MacroVoices #258 Julian Brigden: As Good As It Gets? I have notice as well that most notable RV guests discuss issues presented here in their own YouTube channel or as guests in financial channels
    • IC
      Ibrahim C.
      15 February 2021 @ 14:39
      Yes, #258.
    • MK
      Michael K.
      16 February 2021 @ 00:21
      Whichever venue, getting someone of Julian’s caliber to lay out themes regularly is a gift. This nitpicking about realvision when essential is so ridiculously cheap is silly.
    • PB
      PHILLIP B.
      16 February 2021 @ 00:35
      Pretty much all the macro thinkers have similar content to themselves when they are listened to in such a short time horizon? Am I the first to notice this? It's a feature, not a bug.
    • AT
      Alun T.
      16 February 2021 @ 15:13
      And is a virtual re-run of Macro Insiders for the last 2 months (less the trade recommendation specifics)
    • NB
      Nicholas B.
      20 February 2021 @ 09:32
      Had to stop and exit after the tight stop on Bitcoin advice
  • AA
    ALI A.
    18 February 2021 @ 11:33
    Ride BTC with a really tight stop? Are you kidding? what is your trigger to get back in after its many 25% pullbacks?
    • NB
      Nicholas B.
      20 February 2021 @ 09:31
      Totes, just saw this after I commented, shit advise for the asset class
  • NB
    Nicholas B.
    20 February 2021 @ 09:30
    Get a bit skepy when anyone says to ride the Bitcoin wave with a really close stop. Guess it depends on your country's tax laws and personal factors. But if your stop gets taken out on a heavily bought 10% drawdown, your stop just cost you your position, your tax deferment, and the gains on the gap. Shit advice.
  • JK
    James K.
    16 February 2021 @ 21:21
    Julian never gave a buy signal for the stock market to the Macro Insider guys ... Never happened ....
    • AK
      Andrew K.
      17 February 2021 @ 00:35
      All of these macro guys are revisionists of their own advice
    • LM
      Lawrence M.
      19 February 2021 @ 07:02
      In regards to the US equity market - I recall that at a point, not long after the march correction, he told members to do research and dabble into getting long (via video). He referenced an article to get an idea of some names, I don't remember what it was, but it wasn't something on RV. It would have been nice to get the specifics of the names he was looking at.
  • WM
    Will M.
    17 February 2021 @ 17:46
    Thanks Julian. Good update as usual.
  • FH
    Frederic H.
    17 February 2021 @ 05:28
    A lot of pieces have been taken off the board this millennium. YCC x B, R....Q?
  • JC
    Jon C.
    16 February 2021 @ 20:19
    While I understand all the reasons bond yields need to rise, lord knows they have been artificially held down since Yellen moved the goal posts with 6.5% UER back in 2014. However, we currently have the largest GDP output gap ever.. it took 3.5 years to reclaim the $ level of GDP after the GFC. This one will take a lot longer despite the stimulus, as you know until we get an infrastructure bill we aren't creating any productivity with what we have done, just pull forward of demand. So I don't see the Fed backing off it all in the face what's likely to be base effect increases in inflation. In fact I think they will implement YCC if things start to move sharply. While I am a seller of new variants taking over in the US (not clear they are truly more contagious just a bunch of modeled out assumptions) I am concerned the markets are discounting too large of a reopening trade. I don't think it will be quick to reverse the psychological effects this has had on many Americans on both coasts. Further, I think the rest of the states have already reopened and while there may be a bump in service spending as we move forward some of the reopening has already happened. Anyway wouldn't play rates long here for all the reasons you mentioned however I feel most of the easy money has been made in the back up already.
  • AH
    Andreas H.
    16 February 2021 @ 18:41
    Yep: GDP and Inflation up (in rate of change terms), Fed easy as hell, monster Fiscal spending --> big Opps in the markets!
  • JS
    John S.
    15 February 2021 @ 13:27
    Julian what about something further for plus members not so further like pro but we plus would love to have you there at least one time a year :)
    • AT
      Alun T.
      16 February 2021 @ 15:11
      TBH, what you've just heard is an excellent summary of everything he has discussed on RV Pro / Macro Insiders over the last two months (minus trade recommendations and Raoul saying 'you don't own enough bitcoin, but I guess you knew that anyway).
  • JB
    James B.
    16 February 2021 @ 14:45
    Great interview. Answered exactly the question ive been wrestling with r.e. the FED acting proactively vs. reactively with respect to YCC. Had also come to the same conclusion that they would need an equity correction to justify it.
  • CW
    Chase W.
    16 February 2021 @ 04:27
    Interesting and good. Still, I don't understand the optimism/bullishness. I'm really keen on someone explaining why the negative P/E Russel is trading 30 percent above pre-pandemic levels with many companies in debt and so much uncertainty.
    • MT
      Mark T.
      16 February 2021 @ 04:36
      Money.
    • AP
      A P.
      16 February 2021 @ 11:17
      Paging Dr. Green?
  • MR
    Marco R.
    16 February 2021 @ 09:58
    Julian, one of the best!!
  • SG
    Sashi G.
    16 February 2021 @ 09:35
    A very "nuanced" presentation. ;-))
  • CD
    Christopher D.
    15 February 2021 @ 21:55
    Julian - thank you. Given that you see the growing potential for a generational trade into EM with a potential massive run for the next decade....wouldn't it be wise to start buying into EM now? Maybe the train has already left the station and it is too risky to sit around waiting for the opportunity where there is going to be a big sell off in EM. It might not be that great of a sell off and there is a lot at stake to be positioned for this massive shift in growth/investment from the US markets into Asian EM going forward.
    • PC
      Peter C.
      16 February 2021 @ 06:55
      I agree it should never be all or nothing when you have a clear bullish view
  • VA
    Victor A.
    15 February 2021 @ 23:42
    Great stuff! Would love to hear anyone's thoughts on how to approach EM in particular, maybe RV could do a educational piece on this...
    • PC
      Peter C.
      16 February 2021 @ 06:53
      I like to use a long call spread funded by short put and create a credit or at worse a break even start. eg EEM Mar19 56/59 Calls & 54 Put. Like to go out 2 months & out a year and rinse & repeat. I also own shares in IEMG straight up. This Index is mostly around China, HK , Taiwan and includes South Korea + some India, Brazil, south Africa,.... What do you think?
  • JT
    John T.
    15 February 2021 @ 20:13
    I dont understand how you can mention the effect of LBJ's Greater Society spending on inflation without mentioning the elephant in the room - the draft and enormous ramp up in the Vietnam War.
    • PB
      PHILLIP B.
      16 February 2021 @ 00:25
      We've had the elephant in the room, I believe, and no one has talked about it, as you suggest. The elephant is the trillions of USD spent on ground wars in Asia the last 20 years.
    • DB
      Douglas B.
      16 February 2021 @ 03:05
      Not only that, Julián forgets to mention the massive inflationary force of the baby boomer generation entering the workforce at that time.
  • KA
    Koka A.
    15 February 2021 @ 19:09
    Confirmation bias is doing its thing, but still great! Lays everything to its correct place.
    • PB
      PHILLIP B.
      16 February 2021 @ 00:31
      Have you seen his trade history the last 12 months? It's been rather successful. So, yes, it does look like confirmation bias. But, there is a continuation of the narrative that is happening. We are just in the early phases. I follow about seven or so macro thinkers. There is becoming a rare kind of alignment that we are at an inflection in the macro landscape. This is the confirmation bias I think about when listening to Julian and others.
  • PB
    PHILLIP B.
    16 February 2021 @ 00:22
    Thank you, Julian.
  • TM
    Tommy M.
    15 February 2021 @ 23:07
    Can we get the transcript, please?
  • EH
    Eric H.
    15 February 2021 @ 20:50
    Question on position sizing - when holding off some capital for potential risk of buying opportunity is there a % you would suggest leaving on the sidelines? Currently not trading any margin + ~20% cash
    • EH
      Eric H.
      15 February 2021 @ 20:50
      Risk off not risk of*
  • GG
    Gary G.
    15 February 2021 @ 20:44
    Brilliant!
  • LC
    Louis C.
    15 February 2021 @ 19:31
    It was ok, nothing new or groundbreaking just same same but different
  • Hv
    Hannah v.
    15 February 2021 @ 19:26
    My favourite and I haven’t even listened yet! I see Julian and I “like!”
  • mf
    massimo f.
    15 February 2021 @ 19:02
    Don’t agree with you but great video nonetheless!
  • JB
    Jeff B.
    15 February 2021 @ 18:44
    Julian, you make the data clear. Thank you. Glad you mentioned real estate. I believe that is one area that is in a bubble. Building new homes, even for high earners is becoming impossible where we live. I was a GC until 2018 and material prices are 3 to 4 times what they were then.
  • OC
    O C.
    15 February 2021 @ 18:15
    When can this be captioned please? Thanks.
  • AW
    Angela W.
    15 February 2021 @ 10:03
    Julian, you mention in your thesis that the US dollar could potentially loose another 30% in value. Does it concern you that the US net International Investment position is -60% of GDP? In other words foreigners own $12T more of US investment assets than the US own of offshore assets. If the US dollar tanks then foreigners will sell to repatriate their money. Thus the $ could crash precipitously further. According to Luke Gromen this is the Fed’s worst nightmare. Then the only way to stop it doing that is to raise rates and blow up the debt.
    • PU
      Peter U.
      15 February 2021 @ 15:28
      Tango Charlie Down!
  • MG
    Michael G.
    15 February 2021 @ 14:00
    Thanks for the update Julian. Would love to hear a similar run down that is more European based. The news out of Europe seems to be little to far between of late. It's a bit like when you realise the kids have been playing upstairs for a long period but you can't hear any noise it's time to worry.
  • AP
    Adam P.
    15 February 2021 @ 13:36
    I love these expert views. A little shorter, to the point, but still a nuanced look.
  • AL
    Aaron L.
    15 February 2021 @ 11:28
    Thankyou Julian, what level of confidence do you have that the Fed can accommodate and the keep the dollar decline at a gradual pace rather than a sharp sell down. Cheers
  • AW
    Alexander W.
    15 February 2021 @ 11:25
    Excellent content thank you.
  • MW
    Mark W.
    15 February 2021 @ 07:38
    Thank you for your perspectives.
  • MK
    Martin K.
    15 February 2021 @ 07:25
    Awesome as usual! Thank you very much Julian for your informative view!