Coronavirus and the Macro Consequences

Published on
March 27th, 2020
60 minutes

Coronavirus and the Macro Consequences

The Interview ·
Featuring Eric Peters and Michael Green

Published on: March 27th, 2020 • Duration: 60 minutes

Eric Peters, CIO of One River Asset Management, joins Mike Green of Logica Capital to discuss the broader economic and financial conditions markets are experiencing amid coronavirus' chaos. The pair discuss the current macro environment, volatility, government policy responses - both monetary and fiscal. Through their breakdown of a broad array of topics, Peters and Green tackle topics ranging from global supply chains to the merger of human and machine intelligence.



  • JE
    James E.
    28 March 2020 @ 01:09
    Really, climate change. That dog is dead. RIP.
    • AJ
      Aaron J.
      16 April 2020 @ 19:04
      That’s exactly the type of myopic thinking that has a few parallels with some country’s responses to the Covid-19 pandemic. The longer you ignore the issue, the more severe and damaging are the impacts.
  • TS
    Theodoros S.
    29 March 2020 @ 14:05
    May someone explain why to be long on credit or equities means to short vol and vice versa. thank you.
    • JR
      Jay R.
      29 March 2020 @ 18:53
      I will try to explain though others are a lot more knowledgeable on this forum. When you are long credit or equities that essentially means that you expect the underlying asset price to increase. In the option space that is taking a long position or buying calls. The other side of the equation requires someone to sell or write the calls to your position which would drive the volatility down therefore they would be short vol. Vol is related to the futures market and now days the algos have taken over using their probabilistic models to influence market moves based on volatility. Look up Chris Cole of Artemis Capital, he is a genius in explaining it a lot more in detail and he has been interviewed on RV in the last 2 years. Read his free paper on Volatility and the Allegory of the Prisoner's Dilemma which explains these subjects in a lot more detail.
    • kk
      karan k.
      11 April 2020 @ 01:03
      Being short volatility is synonymous with being long stability. Someone who buys equities, property, etc. anticipates that the forward returns on these assets will continue to be favorable. This is what Green, Cole and other frequent contributors to Real Vision refer to as being "implicitly short volatility". An explicit short vol. position would involve writing an option contract.
  • TS
    Tim S.
    3 April 2020 @ 21:52
    Love reading his weekly publishment. Always.
  • RM
    Ryan M.
    28 March 2020 @ 20:17
    I'm a student based in Africa & I've sadly been priced out of Real Vision with the new format. When my current subscription runs out in about 2 weeks that'll be it for me. I've learnt a tremendous amount from RV and it's episodes like this that I will miss the most!! Thanks Eric & Mike..this was awesome!
    • VS
      Varvara S.
      29 March 2020 @ 08:59
      Same here! I am a student from Russia and I've been in love with Real Vision since the first Grant's interview that I watched. But definitely no regrets. RV well deserves the money it asks for! Keep up with great content and thanks for the invaluable education!
    • MG
      Michael G. | Contributor
      2 April 2020 @ 04:52
      Ryan and Varvara, please reach out to regarding your subscriptions.
  • PC
    Philip C.
    27 March 2020 @ 09:19
    @MG: Time to get Zoltan on RV?
    • MW
      Max W. | Real Vision
      27 March 2020 @ 12:29
      We've been trying. Credit Suisse compliance is a tough one.
    • PC
      Philip C.
      27 March 2020 @ 13:07
      Looking fwd to it. Not sure if JP is any easier but Kolanovic would be great too. Thks RV.
    • GS
      Gordon S.
      30 March 2020 @ 23:14
      In the meantime, you may want to check out his podcast on Odd Lots:
    • GS
      Gordon S.
      30 March 2020 @ 23:16
      Ha, link may look unsafe to some (it's not). But anyways, title of the podcast is: "Zoltan Pozsar and Perry Mehrling On The Historic Crisis Of Financial Market Plumbing". (again on Odd Lots.)
  • JH
    Jesse H.
    27 March 2020 @ 21:58
    Love listening to Eric Peters. Smart, thoughtful and humble guy. Wish we could see Grant interview him, but alas no longer on RV. Thank you.
    • LM
      Lawrence M.
      30 March 2020 @ 20:42
      Love Mike, so.. I don't wish Grant was interviewing. Still, I reeeally miss Grant and would love to hear/see more of him going forward (at least for an occasional visit!)
  • KG
    Kurt G.
    29 March 2020 @ 14:52
    I had a hard time sitting through this interview. Mr. Peters is obviously very invested in the rent-seeking financialization of the US economy, and it really shows when he pushes ideas like climate-change as one of the two most important issues along with infrastructure. Talk about tone deaf. Dude, we've had chronic under-reported unemployment for a decade, corporates and governments have continued leveraging in the US (as compared to 2007), half of Americans don't have $400 in savings, and we're in the middle of a medical emergency that's been apparent for at least two months now. No wonder debt isn't meaningfully discussed in this interview. I find it hard to believe that ignoring debt gives way to a meaningful investment framework, although if you're rent-seeking on fiscal stimulus I'd agree it probably isn't particularly important in the short-term. The thread I'm picking up on from RV interviews, along with Twitter and the MSM, is you should never seek advice on the system from someone whose livelihood is dependent on its perpetuation. In other words, many of these asset gatherer interviews tell you more about the gatherer than the system.
    • JD
      John D.
      30 March 2020 @ 02:35
      Thank you Kurt for writing this and saving me the trouble. I've read some of Eric's writings here and there over recent years and I guess it wasn't until his clients were at risk of losing some of their yachts and beach houses (AUM) that his true colors really shined through. He's obviously an insightful and contemplative guy, but I would have really enjoyed if Mike pushed back a little on the 'bring on the central planners to save the day' claptrap.
    • JF
      Jarrod F.
      30 March 2020 @ 12:08
      Climate change isn't an important issue?
    • PC
      Peter C.
      30 March 2020 @ 15:07
      I actually think this a really good interview. I love to learn how they operate or adapt to the system we have had. We all know CBs are creating problems. But what's the use of hearing that everyday?
    • BP
      Brian P.
      30 March 2020 @ 19:11
      Yeah, I had a hard time sitting through it too. But, mainly because there were a few cringy moments where you knew that Mr. Green couldn't say exactly what he was thinking in the interest of his clients. I totally understand and still appreciate his attempt as giving me a glimpse of how the thought process works. He said it outright when he mentions that you'll get more honest/robust discussions and insight when the person being interviewed remains anonymous. But again, I totally understand that he can't undermine his client's interests. What he says may upend the plans they've put into motion (however futile). The biggest thing I got, was that some of these huge funds are very limited to what they can do, (their size probably limits them tremendously) and they have to fake it till they get it through to government that they require a bailout.
  • PC
    Peter C.
    30 March 2020 @ 15:04
    Actually think if you just interview Green it would be the same good. Or better. Not sure if he is interested though. Content is super this week. App still a crap.
  • RM
    Russell M.
    29 March 2020 @ 11:57
    You can’t eat money. Government printing and spending more money won’t help with the supply chains disrupted when the remaining inventory is used up.
  • RB
    Rahul B.
    28 March 2020 @ 16:43
    I think Mike Green is just too (brilliantly) enlightened/advanced in his thinking that this guest seems out of his depth.
    • SH
      Stefan H.
      29 March 2020 @ 04:17
  • CC
    Charlie C.
    27 March 2020 @ 22:48
    One rare bad interview from Mike :(
    • MC
      Mario C.
      28 March 2020 @ 02:38
      agreed, fell pretty empty abstract, with lack of concrete points. Coming from the interviewee part as well, who fell short to be more concrete (he couldnt due to his professional position?)
    • DS
      David S.
      28 March 2020 @ 06:55
      It is funny. I think it is one of the more insightful interviews. It was truly macro. I am not smart or experienced enough to trade on it, but that does not mean that this was not an exceptional discussion. DLS
    • dm
      dude m.
      29 March 2020 @ 00:31
      I disagree. This interview was a broad view and perspective piece. Sorry you didn't get a stock pic out of it.
  • JD
    James D.
    28 March 2020 @ 16:10
    Great interview covering giant issues. It was interesting to see Mr. Peters taking deep breaths after hearing some the questions. It was also interesting to hear his comment on Europe (France & Germany) might need to create a green deal to stimulate the European economy. I would have liked to heard a Milton Friedman idea or two. Finally, with the California Retirement System recently losing $69 Billion in a single month, they had to be discussing CalPers. It's a bad time to use passive investing while having unrealistic return objectives. Thank you all!
  • PB
    Patrick B.
    28 March 2020 @ 04:11
    Lame, winding, unfocused and useless!
    • SK
      Shiu K.
      28 March 2020 @ 15:32
      I am glad I read the transcript and didn't sit the hour
  • wj
    wiktor j.
    27 March 2020 @ 21:48
    I am more in the Peter Zeihan camp. I see Europe in a destabilized camp. There will be no future for EU in Europe. Poland is on the brink of leaving EU. This virus will teach us to move ALL production home and I think people will be disgusted by Chinese goods. There was always a saying. If your poor you cant afford to buy cheap. And here we are paying for cheap goods from china and globalization. Energy in Europe is another problem. If USA wont provide the security in the middle east then Europe will have to go back to coal. (Soon the Germans will learn what doing business with Russia means and this will cease). So there is where Europe can build and use money. Building atomic power plants. Wasting more money as the Germans did with green energy is not sustainable especially not now with the financial crisis.
    • LS
      Lemony S.
      27 March 2020 @ 22:43
      Good stuff, wiktor
    • RM
      Robert M.
      28 March 2020 @ 00:24
      Unfortunately, all production will not come back. Textile manufacturing will not come back in force like the 1960s. Cell phone manufacturing will not move back as another example. US labor will not do the work required for the rate of pay needed to keep the products affordable for many Americans.
    • DW
      Dean W.
      28 March 2020 @ 12:03
      Just finished The Accidental Superpower and halfway through Disunited Nations. Brilliant stuff. Expect to see a lot more manufacturing Of products for US consumption in Mexico and potentially a few places in Central and South America.
  • WM
    William M.
    28 March 2020 @ 06:16
    I found this quite useful in thinking about what lies ahead in the next year and beyond. Thank you Eric and Mike!
  • DS
    David S.
    28 March 2020 @ 06:08
    I do not think the German are as worried about hyperinflation as they are about always bailing out EU member nations. The same nations have been in trouble before and will probably be in trouble again. It is natural for the Germans to believe that Germany went from the sick man of Europe to the strongest economy in Europe with hard work. This is partially true, but the low value of the Euro and zero interest rates also allowed it to happen. If the German mark were still in place, Germany would lose a large competitive advantage in trade. Ms. Lagarde's mission is to bind the European monetary and fiscal system together. - the original mission of the EU. This require each individual country to give up monetary and fiscal sovereignty to Brussels. I agree with Mr. Peters that this is an existential crisis for Europe. Will all the European countries kowtow to Brussels happily? Will Germany et al really want to bail out any country that is run into the ground? We will leave it up to the Europeans. It is their union and there are many benefits. DLS
  • JA
    Jerram A.
    28 March 2020 @ 00:07
    I think America's pride will be humiliated by this virus. They project themselves as the pinnacle of civilisation, but this virus is highlighting how fractured the US system has become. We are in the midst of the Corona Olympics. Those countries that respond well will be looked to as a model in the future. South Korea, Singapore etc. are successfully using technology to flatten the curve. Western democracies not so much. Dalio predicted this. I think mass unemployment will ultimately crystallise mass protests about the inequality that has been raging for the last decade or so. Occupy Wall St will be next level once people are let out of quarantine. The end of the long term debt cycle is here. Gold to Andromeda.
    • RM
      Robert M.
      28 March 2020 @ 00:21
      As we overpopulate the world, you have to figure another pandemic will hit in the next 10 to 30 years. Will be interesting to see if we change our approach on the next one. With the financial markets, betting we will let this get way out of hand before we do a national lock down. As John Hussman shared in his April newsletter: "With over 68,000 U.S. cases already, even if present containment efforts were to immediately crush the growth rate to just 10% per day (from 29%), the U.S. will exceed one million cases during April. Needless to say, that’s a narrow window to boost equipment, personnel and capacity. Reducing case growth to a 15% rate would put U.S. cases over 4.5 million in 30 days, potentially with hundreds of thousands of fatalities."
    • km
      kenneth m.
      28 March 2020 @ 05:29
      I will take the other side of that bet on America. Especially now that the Imperial College data is proving to either have been a sham or to have misused for headlines (their prediction of 500K dead in UK, 2 million in USA). I spend most of the year in Asia and have regularly done business in both countries you mentioned. I would say sound, reasonable measures - but what they have been doing is consistently overstated in the West. Currently in Taiwan (which had some of first CV cases outside of China and has suffered much less than anyone expected). Taiwan never did a massive shutdown, schools are currently in session, restaurants etc about 60-75%, despite having CV cases well before Europe or USA noticed. I am a facts/not opinion guy. I will wait to see what the facts ultimately say - but there seems to be a major disconnect somewhere. Either Taiwan, Singapore, etc. are much sicker than they know or there is a major bloom coming to those regions or there is something wrong with Western data and mindset.
  • SS
    Simeon S.
    27 March 2020 @ 20:43
    Someone needs to tell Mike that interviewing means more listening than talking. ;)
    • TC
      Thomas C.
      27 March 2020 @ 22:13
      Very true - he's a great guy just needs to update his skills in this area. Other RV interviewers stay silent because they don't know what to say - wonder which is worse. I think Ed Harrison has it nailed - learn from him
    • se
      steve e.
      28 March 2020 @ 01:33
      Personally think Mike Green is great, so knowledgeable.
    • DS
      David S.
      28 March 2020 @ 03:40
      Get a grip. Mike is one of the best and most knowledgeable people in the business. This is a discussion not an interview. A dialog between two smart people is more productive than a simple interview. If you would like to get more from this dialog listen to Mr. Peters' earlier interview on RVTV. DLS
  • LS
    Lemony S.
    27 March 2020 @ 22:47
    I've seen a lot of comments regarding the time stamping (or lack thereof now). Just put the text (filmed xx/xx/xxxx) there for 3 seconds to start the video and done. I can't see a reason why that is hard, problematic, or unwanted. It successfully captures the video for posterity and gives everyone what they want. Curious.
  • JC
    Juan C.
    27 March 2020 @ 08:28
    Given the speed of developments in today's markets, it would be good to disclose the recording date in all interviews
    • MR
      Milton R. | Founder
      27 March 2020 @ 08:44
      Hey Juan, this was filmed around 10 days ago before we went into remote mode.
    • SM
      Stephane M.
      27 March 2020 @ 10:54
      Milton, Milton, Milton... Why do we have to ask you when was it filmed?? What are you trying to hide?? Come on, your competitor are giving the date AND the HOUR of their videos. JUST BE HONEST RV! The bigger you get, the farther you get from your initial commitment. I'm here since day 1 and on my way out...
    • ns
      niall s.
      27 March 2020 @ 10:59
      Agreed knowing when it was recorded is vital information to get the best out of the interview. Milton.........YOUR FIRED
    • PG
      P G.
      27 March 2020 @ 14:32
      It sounds creepy to me whats going on. Very interesting, when Grant was still part of Real Vision things were more human. Raoul is very smart but is more of a tuffy I guess.
    • PG
      P G.
      27 March 2020 @ 15:58
      Stephane M. you mention RVs competitor. can you elaborate on who it is?
    • SS
      Steven S.
      27 March 2020 @ 18:07
      Don't mean to hijack the conversation around the interview, because I found it great and thought-provoking, but I believe RV needs to re-focus on its core customers. A lot of once-loved features are gone. For instance, why have the "+My videos" button when RV has *removed the watch list feature*? All my previously saved videos that I've been waiting to watch are gone now. (And if you haven't removed that feature, please add it back to where users can find them intuitively).
    • MR
      Milton R. | Founder
      27 March 2020 @ 19:53 and it will be back on the platform soon
    • TC
      Thomas C.
      27 March 2020 @ 22:19
      Just publish the record date, the publish date is meaningless. Enough talking about this and requests from subscribers - just do it. Display Record Date on each video - in this case 10 days ago is too long (although this interviewee is a smart, accomplished guy)
  • js
    john s.
    27 March 2020 @ 22:11
    very boring and useless
  • JN
    Jeffrey N.
    27 March 2020 @ 21:34
    Eric’s concept of triangulating a range of expert opinions into one can be a powerful trading strategy. I have found RV plus selected newsletters and twitter all together is a good way to do this, especially for someone without the Rolodex he has.
  • GC
    George C.
    27 March 2020 @ 20:48
    Smart, thoughtful guy, but not the best use of time. Had the impression there may have been more that a different interviewer could have pulled out.
  • AM
    Alexander M.
    27 March 2020 @ 19:50
  • SL
    Sean L.
    27 March 2020 @ 18:53
    Eric brushes over the idea of military spending pretty quickly. To what the were saying before, I think it could be helpful for him to have a respectful conversation about the benefits of military stimulus. The military is the pinnacle of competitive landscapes and while military spending is very far from a panacea, there's significantly more upside than has become 'politically correct' to highlight in polite conversation. Eric, if you see this, seek out a conversation about this. Especially with the future of military spending, a significant chuck of this could go to energy infrastructure, cyber warfare, space tech, etc... tons of opportunity to spark innovation and spin off productive businesses.
  • OC
    O C.
    27 March 2020 @ 18:36
    Really great discussion here. I like the sheer humbleness Eric displays in his thinking and approach to macro outlook and research. I am very new to all this stuff and finance, macro, etc. is definitely not my expertise. However, on the discussion of monetary v. fiscal policy and the implications of switching to a fiscal regime on markets - I have to wonder, what are potential realities of market responses to this switch? What happens if markets reject fiscal responses? Are markets bigger than governments? Great discussion. Looking forward to hearing from you two again in six months. Stay safe out there.
  • DL
    Doug L.
    27 March 2020 @ 17:34
    With advent of an approved 45 minute test it seems possible to screen flights, conferences, etc..
  • TE
    Tito E.
    27 March 2020 @ 16:44
    ..comments about how out of date vids are a little tedious. I agree RV should add recorded date to vids, but all this talk of 'this is such old info'. What? Which concepts discussed in this interview are different between this being filmed today, last week, 3 weeks ago? If you want to-the-minute hand-holding there are other places.
  • jd
    james d.
    27 March 2020 @ 15:53
    57 minutes to say nothing, and find no fault with anything or anybody.
  • EA
    Emma A.
    27 March 2020 @ 15:46
    This is soooooo out of date now.
  • JS
    J S.
    27 March 2020 @ 15:23
    when was this recorded? ty
  • NR
    Nathan R.
    27 March 2020 @ 14:55
    Given the global logistic constraints RV is doing a fine job. If time stamps are paramount, desire for 50 min deep dives seem a bit counterproductive. RV is not a HFT trading service. 10-14 day lags on macro pieces is perfectly acceptable. The Pro Flashes are considerably more speedy and priced accordingly.
  • PB
    Pieter B.
    27 March 2020 @ 08:28
    Brilliant conversation! Thanks a lot!
  • ST
    Simon T.
    27 March 2020 @ 08:13
    Interesting anecdotes - I m sure he is doing well during these turbulent times