Navigating Europe’s Capital Crisis

Published on
December 10th, 2018
34 minutes

Navigating Europe’s Capital Crisis

The Expert View ·
Featuring Bernd Ondruch

Published on: December 10th, 2018 • Duration: 34 minutes

Bernd Ondruch, founding partner and CIO of Astellon Capital, joins Real Vision to sort through Europe's political and economic challenges. Ondruch explains the causes of the secular slump in European equities, which has caused returns to stall and liquidity to evaporate. Filmed on November 19, 2018 in London.


  • MT
    Mike T.
    11 December 2018 @ 10:16
    This guy is spot on with the number one issue with European Markets there is no Liquidity, and the importance there of certainly resonates with me. We're all different but personally I have absolutely no interest in putting capital to work in any idea or thesis unless it can be expressed in an instrument with very high liquidity i.e. spreads less than $0.10 cents wide. For optimal liquidity all roads lead to the US made possible by multiple HFT Market Makers/Counter-parties competing for order flow from Brokerages i.e. they pay Brokerages to access their order flow in effect subsidising trading commissions paid by 'retail clients' .
    • MT
      Mike T.
      11 December 2018 @ 10:24
      ... and to add one more point if I may. Like many people actively trying to make their capital work, I read a lot, but one trick I use if looking at 'XYZ' Research I start by fast forwarding to the 'conclusion', and if I can't find a way of expressing the idea within through a highly liquid instrument I move on. Saves hours upon hours of reading pointless research.
    • DS
      David S.
      4 January 2019 @ 05:36
      Thumbs up, but there are always counter-party risks if markets lock up. DLS
  • IO
    Indi O.
    31 December 2018 @ 03:35
    This was the interview I joined RV for. Excellent.
  • DS
    David S.
    13 December 2018 @ 19:56
    What would the price to book for BNP (not picking on BNP) be if the present value of non-performing loans were written off? It would also be interesting to see the same number for JPM. Of course, the discount rates would be different. DLS
  • SD
    Stephen D. | Contributor
    11 December 2018 @ 02:15
    A very succint and enlightning analysis of the European landscape. The liquidity numbers are especially startling but I am increasingly concerned about cited liquidity in US stocks. Every Bank, Prime Broker, leveraged ETF and alternative lender seems increasingly focused on daily liquidity as the major benchmark for lending or trading limits. In essence everyone seems to be relying on everyone elses liquidity. But 80%+ of this massive liquidity (As Mr Ondruch observes FAANG stocks trade more than all the stockmarkets of Europe where 500m people live) are just algos swapping stock. If anything were to hapen to withdraw that activity the 'real' liquiity would be massively less. The chances of this causing a disorderly unwind seem to me to be higher than zero. But a great summary of the multiple challenges facing Europe and the European investor, thanks Bernd Ondruch and RV.
    • DS
      David S.
      11 December 2018 @ 09:36
      Stephen D. - Always good to see your comments. Mr. Ondruch is also happy with German real estate. If you have time it would be great to see you in a new RVTV interview. DLS
    • SD
      Stephen D. | Contributor
      12 December 2018 @ 06:30
      Thanks David. German Real Estate remains on very solid ground. These European troubles have pushed German Bunds back up to high prices, crazy low yields; which is very constructive to real estate whilst employment remains robust, as it does in Germany, for now at least. As it happens you will see me on RVTV in the new year,
    • DS
      David S.
      13 December 2018 @ 16:36
      Stephen D. Looking forward to seeing you next year. Thanks for the OXB.L. DLS
  • TW
    Tim W.
    12 December 2018 @ 19:29
    Bernd, a great wrap, thank you
  • AR
    Abishek R.
    10 December 2018 @ 14:29
    Published 21 days after filming.
    • DK
      Daniel K.
      10 December 2018 @ 18:19
      This isn't for day traders....
    • CM
      Christopher M.
      10 December 2018 @ 22:22
      I think there is some content recycling from Macro Insider.
    • AG
      Adam G.
      11 December 2018 @ 03:16
      Yes, why the wait ?
    • DS
      David S.
      11 December 2018 @ 21:10
      Maybe RVTV staff wanted to have a break for the holidays while still supplying the normal number of shows per week. - some non-time sensitive videos in the can. RVTV can only produce so many shows at a time. Would you prefer RVTV to publish all shows ASAP and have weeks with fewer number or no shows? DLS
  • AC
    Andrew C.
    11 December 2018 @ 11:20
    Really really really solid A+
  • MB
    Matthias B.
    11 December 2018 @ 10:05
    I thought this to be a very concise summary of the investment case. I found it interesting to hear his rather constructive view on Santander (not sure that he would buy it but on relative terms to others) while Raoul - if not mistaken - is pretty bearish on the inherent NPL risks there? It is very true that the few invested money in Europe is concentrated in only a handful stocks thus those quality names are even after last week's sell off still very expensive on p/e, p/book or EV/EBITDA basis. It would need another 20% market decline before the risk / return would become more compelling. Question: liquidity is apparently the key theme these days: are there any comprehensive sources which are easy accessible for private investors (eg flows about CTAs, risk / parity strategies etc etc). Pls bring Bernd back next year and complement him maybe with a speaker with an inherently bullish view on Europe (if someone still had one....)? tks.
  • JB
    Jack B.
    11 December 2018 @ 08:40
    Excellent summary of Europe! What a value trap indeed!
  • AG
    Adam G.
    11 December 2018 @ 03:18
    Yikes, Im afraid he is correct.
  • FB
    Floyd B.
    11 December 2018 @ 00:24
    An extremely frank and comprehensive view of Europe in a reasonable interview time frame. Would have enjoyed seeing it sooner as this was filmed almost a month ago. Please bring Mr. Ondruch back!
  • VK
    Viresh K.
    10 December 2018 @ 23:50
    Excellent interview. Bernd articulated many of things I've been seeing in European markets this year, especially around liquidity.
  • JS
    John S.
    10 December 2018 @ 23:39
    The quality of RV interview participants never ceases to amaze.
  • BK
    Bruce K.
    10 December 2018 @ 22:54
    KUDOS! Fabulous insights, crisply presented. Valuable "inside baseball" from a knowledgeable expert.
  • TS
    Tor S.
    10 December 2018 @ 21:31
    Thanks. Clean analysis that made sense to me anyway. I'd love to hear more about EU banking, and maybe the German in special. DB's derivatives book? how big, and how big a problem? How can EU banks possibly clean out the NPF's? NPF's - a Mediterranean problem, or German as well? How bad will it hurt? It seems that the potential DB/CB merge, add to that consolidation and further merges? Outcome could be a strong and solvent(?) German bank. Something that could come out of a near crisis?
  • DS
    David S.
    10 December 2018 @ 16:25
    Excellent analysis. It would be very interesting to hear Mr. Ondruch's analysis of the US from an European viewpoint. He is smart and practical. A rare combination. DLS