The “Everything Bubble”: An ECB Insider’s View

Published on
January 30th, 2020
58 minutes

The “Everything Bubble”: An ECB Insider’s View

The Interview ·
Featuring Etienne de Marsac

Published on: January 30th, 2020 • Duration: 58 minutes

Etienne de Marsac, Head of Absolute Return at Sunny Asset Management, joins Real Vision's Roger Hirst to argue why he believes that central banks have created an "everything bubble." With risks rising in all corners of the market, central banks have made a fragile web that they cannot help but continue spinning. De Marsac provides his insights on what factors could catalyze a market breakdown, how central banks could begin correcting the global imbalances they have created, and what trades he is making in this risk-on environment. Filmed on January 22, 2020, in London.



  • JA
    Jesse A.
    6 February 2020 @ 21:53
    I like how this guy just told us what he was buying. It seems like most people in the interviews don't want to admit many specifics.
    • ED
      Etienne D.
      22 February 2020 @ 14:31
      Thank you Jesse I just shared two new trades on my LinkedIn account : • a short Thai THB as Thailand is particularly sensitive to value chain disruptions and tourism. • a short HK USD as I thing the Peg can break. Indeed, as markets are now taking seriously Covid 2019, I think the focus should now turn OUTSIDE China : Japan, South Korea, Thailand already look vulnerable to an external shock. Meanwhile, my main focus right now continues to be KING dollar Gold and Fed cuts as the US will inevitably import RoW deflation, in a negative feedback loop. Déjà vu.. Happy to discuss!
  • LV
    Luís V.
    19 February 2020 @ 13:19
    I´ll ask: what is the nation (or pol. block) that has more shadows over his institutions? US? France (social unrest for years!)? EU (see Brexit surprise)? One needs to see and read what *really* is happening through Europe and check how wrong is the conclusion presented by EMarsac. If the distorted political, econ. and financial circumstances make some proposition work (as per Bernanke), that does not make it correct, fair or justifiable ethically. Other than that, EMarsac knows a lot, obviously, because he has access. For that is good to hear the interview.
  • RA
    Robert A.
    2 February 2020 @ 23:23
    A really excellent interview covering a wide range of current monetary issues complete with an honest portrait of his current “book” by a VERY well connected knowledgeable guest!....umm, Euro dollars—where have I heard that bit before recently....maybe somewhere down on Little Cayman?
    • ED
      Etienne D.
      17 February 2020 @ 16:17
      Thank you Robert
  • NR
    Nathan R.
    30 January 2020 @ 14:55
    The conundrum of forced sovereign buying by banks due to carry costs being lower than breaching Regs is vastly under appreciated by a large percentage of market participants. Second, the competitive devaluation argument is always and everywhere complicated by the Reserve status of the dollar. It seems nearly impossible for the US to export deflation given the scramble for UST collateral in the balance sheet driven Eurodollar world. I would disagree on the fragility or institutional “challenge” in the US. The system is functioning precisely as the Founders intended. This relative to France where cops and firefighters are beating the crap out of each other in the streets.
    • ED
      Etienne D.
      17 February 2020 @ 15:35
      Thank you Nathan for your interesting comments ! Indeed, Regulation is a key causality factor in our sophisticated financial environment. On your third point, i did not intend to under estimate the resilience of US institutions indeed ;)
  • AT
    Andrea T.
    2 February 2020 @ 13:58
    So wait, did he say that ECB's last QE was made for *social reasons*? What are those social reasons? To save a government which is their ally, while Italian politicians don't let the people to vote because they would be thrown out of office instantaneously? So I'm wondering, is the ECB a political institution? I would shocked to hear that. SHOCKED!
    • wj
      wiktor j.
      4 February 2020 @ 13:02
      What did Madam Lagarde say: Be happy you have a job instead of worrying about your savings. And Iphones have doubled in price! I know because I purchase phones in my company.
    • DS
      David S.
      11 February 2020 @ 18:12
      He was talking about value and not just price. In 1972, I think, I purchased an HP financial calculator - state of the art - for about $400. It can be replaced now for almost nothing. As mentioned in another RVTV presentation at 73 with no mortgage my CPI is much different than young family trying to buy a home. We look at CPI, but it is really not reflective of reality. It is important, however as some payments are tied to the index. DLS
  • DS
    David S.
    10 February 2020 @ 17:47
    The President may feel comfortable in using the market as a reference for his success as the Treasury Department may do it's own QE regardless of what the Fed does to add liquidity to the market. DLS
  • SP
    Simon P.
    31 January 2020 @ 09:51
    Enjoyed that and this interview hits the nail on the head in what to follow this year. The ECB review recently announced by Lagarde at least offers some chance for some retrospection from the central bank community in 2020. Its hard to imagine it coming from anywhere else. I look forward to hearing more from Etienne as the year goes on as he seems well situated to comment on this. An interesting addition to RV!
    • DS
      David S.
      8 February 2020 @ 16:01
      With Ms. Lagarde's experience I am surprised that she does not already know what she wants to do. The review may give her time to convince others. In addition, it is a public reason not to bother her until she gets her way. DLS
  • JG
    James G.
    7 February 2020 @ 23:27
    Yo, Frog. Bernake and Yellin were not the big heroes you're trying to paint them as.
  • SU
    SADIK U.
    30 January 2020 @ 14:40
    This is probably my first comment and I must say the announcer asked very good and well thought questions. Thanks a lot.
    • RA
      Robert A.
      2 February 2020 @ 23:19
      Ed Harrison has been steadily improving an already excellent interviewing technique! He is clearly highly prepared for these interviews and asks probing questions in a genteel manner. Ed is making it look easy, but believe me it is more difficult that we might imagine to set the tone, flow and tempo just right. I’m glad you noticed the effective nuance in this and other recent interviews!
  • AT
    Andrea T.
    2 February 2020 @ 14:28
    Blockchain is efficient and is to be used for helicopter money? He doesn't have a clue of what he's talking about.
  • TS
    Theodoros S.
    31 January 2020 @ 20:05
    I guess Robert is really trying to filter in his ears the French accent of his guest 😜.
  • TS
    Taranvir S.
    31 January 2020 @ 13:15
    43:00 onwards...the govt simply wont "allow" the rating to just go all the way down and see the system collapse
  • RI
    R I.
    31 January 2020 @ 01:44
    The succinct trade ideas were conclusive and to the point at the end.
  • PU
    Peter U.
    30 January 2020 @ 17:19
  • CO
    Christophe O. | Contributor
    30 January 2020 @ 11:50
    This was an excellent interview as Etienne is reminding everyone what matters since GFC: we are in a Central Banks' regime therefore we have to be focused on the policymakers' rhetoric in order to pick up any, even subtle, shift in their communication. There is little doubt, as highlighted by Etienne, that they have fueled the current "Let's buy anything at any price". I think that the ECB is more concerned by asset valuations than the FED. At least for now. Or let me rephrase it: there are more Hawks at the ECB desperate to be vocal than at the FED. When asked about financial asset prices yesterday during the Press Conference, Powell answered “somewhat elevated”, but “not extreme”. A re-focus from the central banks' community on asset valuations will be a massive game changer. The key question is: which central banker will be brave enough to kill the monster they have created? Thank you for your insights Etienne, definitely bringing back the discussion to THE only stage that matters.
    • DS
      David S.
      30 January 2020 @ 15:31
      Christophe O. - Thank you for your comments. As you are an excellent CB watcher also, could you please make a short list of the possible options that you think the ECB is currently reviewing under Ms. Lagarde. I hope you will be on RVTV soon to update your views. Thanks. DLS
  • AP
    A P.
    30 January 2020 @ 08:50
    Excellent interview in my opinion. US as the hottest EM is definitely not mainstream thinking, especially won't be pleasant for a US-mainly audience. Apart from loss of Fed independance, debt levels and all the impeachment stuff, some points that are very EM-ish could have been added there, namely: - Upcoming EM-style political risk with upcoming elections. Argentina-style shock in the US? - Rising protectionism as an early-development strategy. And we still have a LOT OF ROOM for this to come back (see here =>, especially if Trump gets re-elected he'll go ALL IN - Polarizing wealth inequality, a central piece to the 2020 US elections debate, the hard left's favourite angle - More and more revenue coming from the oil market. When should we expect the "Bad billionaires" (Rushir Sharma's term) to emerge? Questions to Etienne: - Could the 2019-NcOv be the trigger? - What would it take for the ECB to change their inflation target? Could you please expand on the "tool revamping" points you mentioned? - Any view on the 2020 US elections? - You guys wrote a publication on private capital, WeWork, IPOs etc. a few months back, what's your update on that? Good follow on Twitter @etiennedemarsac ! Would be good to hear from Etienne when we get more information about the ECB toolkit review.  
    • js
      john s.
      30 January 2020 @ 12:02
      "Polarizing wealth inequality" I wonder where that inequality is coming from !!!!
  • js
    john s.
    30 January 2020 @ 11:56
    The people at the ECB are disconnected from reality and live in their world of innacurate models. Inflation targeting does not work, you are destroying the economy of the eurozone and paving the way for future social crisis.
  • js
    john s.
    30 January 2020 @ 11:47
    "the US dollar is the loser and the Euro is the winner" LOL... look at the economic facts !!!! Your policies dont work
  • mm
    martin m.
    30 January 2020 @ 10:38
    A very good honest interview from someone who clearly has some “inside” knowledge. Hopefully Etienne you will be able give us some advanced warning when you think CBs will eventually react and slowly let out some of the hot air and deflate these bubbles. If they ever will of course.
  • HK
    H K.
    30 January 2020 @ 10:21
    hah - "the US is the hottest emerging market for 2020" clearly, politics and economics point that way