Appreciate the lens

He's been reading Hayek! That is awesome for a central banker.

Great to have Dr Hoenig on, thanks Pedro. Hard for him to be truly candid since he is still a Fed insider. Pretty clear though that between the lines he admits the Fed can't fix a solvency crisis and in that event the Fed balance sheet wont really matter. $10tr balance sheet very realisitc and grateful he admitted that.

Thank you for this great interview. I would love to hear from an interviewee that is coming from the opposite viewpoint. I'd like to see yall debate/interview someone with the view that MMT will pull us out of the economic rut and that markets are going back up. Obviously, I know that the mainstream media does this already but if yall see someone that yall believe is a respectable influencer in finance with an opposing view I think there would be value in that conversation.

Pedro, where are the hard questions that should have been asked of Hoenig/FED?

Please no more Fed people that paper over global central banks role in boom bust cycles and all the alleged anguish they feel in implementing bailout programs to socialize risk and destroy true price discovery.

Dr. Hoenig, Thank you for your candid discussion. If I helps, I think you have a little President Truman in you. He would have liked the direct way you answered many questions - recovery length, difference with a pandemic recession, etc. I particularly like your comment on QE. From a lay person's point of view, I feel that QE1 was necessary. After that the QEs just inflated the stock market and hard assets making the divide between the rich and poor even greater. Human nature is interesting in that everyone who made a lot of money thinks that it was all their brilliance without luck. Thanks for your time and thoughts. Best of luck. DLS

I thought his was a very interesting interview because it provided an insiders view of how the Fed behaves in a crisis and what we can expect in the future - political pressure driven QE infinity. He also has the same fear we do about the effect of this on our ability to climb out of a deep recession this $20 trillion of government debt. The Fed will be forced to continue to suppress interest rates or Treasury debt servicing costs will swallow up the Federal budget. In other words the Fed will be forced to inflate away government and private debt. Design your investment strategy accordingly!

The interviewer did a good job.

What a hack puff piece! Never one challenge to any of his blow dried answers. I can get this stuff watching Steve Liesman on CNBC. His answer was pretty rich when asked could the country have been better prepared going into this crisis. According to Hoenig this entire crisis is all about the virus. If it had not been for the virus everything would have been fine. Yeah, maybe Pedro could have asked a few questions about the FED's panic response to the repo emergency starting last September. As in why they needed to falsify market interest rates in the first place. And I thought the FED promised it would be temporary . If everything was so great why were they pouring in hundreds of billions overnight by February. Pedro you are no journalist, you are just a cog in the disinformation campaign. And RealVision I am disappointed in allowing this disinformation campaign to be propagated on your network. At least Raoul is speaking the truth.

Also Pedro, it never occurred to you when he said the FEDs balance sheet would likely go to $10T that the obvious follow-up question would have been what the FEDs plan was to bring it back to pre-GFC levels ($400m)? The answer at least would been good for a guffaw!

The Fed has not been able to withdraw its accommodation for the last 12 years. I wonder why Pedro didn't challenge him more on Dr. Hoenig's assertion that the Fed needs to find a way out of this "extra ordinary" easing soon otherwise it could become "entrenched" Is it not already?

I am surprised at the constant Pavlovian response by RV commenters with the word Fed. The following quote shows that Dr. Hoenig was opposed to QE1, QE2 ad nauseum. “Dr. HOENIG: Well, let me begin by saying in the last crisis, I was supportive of the immediate relief programs in 2008. I became very strongly in disagreement with the majority of the FOMC when they initiated QE1 and 2 and so forth in a recovering economy. They were putting massive amounts of reserves into the system in a recovery, keeping interest rates low and I was concerned then that it was going to create the next excess with increased leverage, misallocation of resources that would follow from that and that was very controversial at the time inside the Fed. I still feel very comfortable with my position.” Yet he is validified merely by association with the Fed. These knee-jerk reactions make it more difficult to get quality guests to speak to us. RVTV’s subscribers want to hear from the best. Let’s help by being more respectful of our guests and actually listen to what they say. DLS

This is the worst interview I've ever seen on Realvision. No issues with Dr. Hoenig, but Pedro da Costa was beyond incompetent. How about the interviewer ask some actually relevant questions, like: 1) What does Dr. Hoenig think about how far the Fed balance sheet can potentially run before systemic issues (hyper inflation, monetary debasement, etc.) become a major issue, and not just stop at "oh I think the Fed Reserve will run up to 10 trillion due to this crisis". An insight into whether he thinks 10 trillion is the limit, or 20 trillion is the limit, or 500 trillion is the limit, could actually be insightful to infer how far the Fed may actually be prepared to go. 2) Do the Fed ever think about or discuss internally, the ramifications of their monetary policy on exacerbating income and wealth inequality, given that pumping liquidity disproportionately favors asset-owners. 3) How do the debates actually work on the inside of the FOMC when weighing the pros of bailing out the economic system in the short term, vs the moral hazard with bailing out financially irresponsible banks / hedge funds / corporations 4) Does Dr. Hoenig and those at the Fed see a pathway on how the Fed Reserve can EVER reduce their balance sheet and increase interest rates back to a normalized level given current (and ever increasing) debt levels in the economy. Would like to see Dr. Hoenig back on the show with a different interviewer next time.

I thought it was very revealing when he said: "even after the pandemic, you have to get through the recovery. That will put enormous pressure on the Federal Reserve to make sure that interest rates remain low, both for the government to borrow and for the economy itself to recover. It's going to be under a lot of pressure to increase its printing the money, its creation of reserves, and I could see it being $10 trillion, fairly easily see that coming our way." He was acknowledging what common sense tells us, i.e., that the Fed knows it cannot allow interest rates to rise because of the adverse effects on the debt service burden on the Federal government. The effect on the rest of the economy is a secondary consideration. They can't do what is best for the rest of the economy, allow market interest rates, because it will cause debt servicing costs to the government to swallow the entire budget and then some or the government will continually have to issue more bonds to cover current servicing costs which the Fed will have to buy, just like today's interventions in the Repo, commercial paper and other credit markets, because no one else will. They're not stupid, they know this is bad for long term economic health and stability but they have not choice because of short term political pressures. The are afraid of social chaos. It's a legitimate fear. They are between a rock and a hard place.

Good interview. Different style than what you're used to seeing. Nice work!

He said "banks are unable to provide liquidity". Its always what the Cbankers don't say. BANKS ARE UNWILLING TO PROVIDE LIQUIDITY! Can you say "Repo Market"!

Sorry, but it is being too "politically correct", or should I put it the guest was with no info. We have it too much on tv, this was like press conference from FED officials than insider's peek. I have to say that Pedro was perfect (it was the only way to interview guest), and as someone mentioned, he, with his warm smile and elegantly packed question, make this conversation meaningful. Only information we get from his questions, not from former executive and I would rather to hear Pedro's views than Mr. Hoenig's.

Wrong audio uploaded. Can we have this fixed?

Bailing out subprime and companies that wasted capital buying back stocks to line their pockets is a real travesty and heads should roll in the Fed and in Congress.

End the Fed!! they ARE the cause of the massive market dislocations and ultimately will make thing much worse. They are only there to protect the rich and this phony economy.

Disappointed. Smart, but very dumb folks are the reason why we are in the situation we are in. All they know is how to press the "print" button.

How many folks work at the Fed?12000 to 15000???? Just what do they do all day? Powell and his predecessors should be hauled up in front of the International Court in The Hague. Rant over, I feel better now

A number of points: Hoenig seems to talk about the present crisis as if it was only precipitated by the Coronavirus. The fact is that the Repo market signaled a financial crisis back in September and the “temporary” repo support became effectively permanent by year end. This alone shows that financial crisis was brewing before the civid impact. I would remind viewers that Bernanke had previously said that QE was a temporary measure and yet we went on to have multiple bouts of it over several years. I was also remind viewers that Yellen is on record saying that it was unlikely we would see another financial crisis yet the black swan of this virus and the ensuing lockdown has brought upon us a crisis which is going to be worse than the GFC by possibly an order of magnitude. The FED is now simply an arm of the treasury, is no longer independent and is now engaging in outright monetization of the debt. The FED got us here through its mismanagement of interest rates and establishment of moral hazard back in Greenspan’s time. His actions directly led to the Mortgage crisis as the GFC. The Fed is only here to support private equity and big business and big backs. The middle class in the US are about to be wiped out saving the Tesla’s and other companies who can only survive with cheap debt. I do not dispute that the FED are the only thing between us and the next depression, but any assumption that the “people” support the FED will soon evaporate once financial chaos reigns, as it will. Even if the economy gets restarted in May, things are not going to be the same ever again. This is going to get much worse and the divisions in the US and especially in Europe will tear us apart. I found Mr Koenig to have a slightly “smarmy” attitude and just couldn’t watch all of this video.

I thought this was very useful because it was like hearing from the horse's mouth (a Fed high level insider) that despite the suboptimal QE effect on stability and growth, the Fed is trapped spewing ever more $Trillions of QE debt and helicopter money into the system to prop up every aspect of an economy make more fragile by prior bouts of QE. The debt will likely (based on past experience) never be able to withdraw because politics will not allow it to absorb the pain necessary to achieve this. If we don't go back to work, printing money loans and helicopter money won't save the economy. The economy needs to generate goods and services. Absent a restarting economy, trillion dollar QE will just make what is left to buy more expensive. The QE crushing debt will burden the recovery that takes place when the Covid threat goes away. This debt burden will have to be inflated away. Buy some gold insurance.

Echoing Iain's comment: The wrong audio file was uploaded for this show. It is a daily briefing. Can someone please upload the correct audio? Thanks.

The wrong audio file was uploaded for this show. It is a daily briefing. Can someone please upload the correct audio? Thanks.

I loved Pedro's style with its mix of silk boxing gloves, warm smile and hidden dagger. His approach was so disarming as he unleashed his zinger questions. Dr. Hoenig couldn't help but smile as he "politically correctly" signaled his belief that the world is totally screwed. If you read behind the smiles and niceties, it's clear that Dr. H knows the pandemic will continue, the recovery will be slow as molasses (or non-existent) and that there is no way the fed can exit the scene.

Over three decades working at the Fed, thank you for bringing us these interview guests wow!

II find it difficult to tell, are these people from the FED stupid, out of touch with reality or just your run of the mill bureaucrat who just use political spin to cover their tracks?

Hi RV team. The Audio option for this interview is downloading the Monday, April 13th Daily Briefing...

Softballs

Sorry ... but I see a wolf in sheeps clothing.

Ed Harrison should be doing interviews of government of monetary policy officials. The commentary would be the same. But it would have been fun to see the terror in Hoenig's face as he worried whether Ed would call out the inherent BS in dynamic stochastic models, econometrics and everything else he and central banks stand for.

The “Audio” file for “The Fed Opens the Flood Gates” is the wrong audio file....it links to Monday’s Daily Briefing.

The Android app is so hard to use the film date is not a problem comparing to the UI design.

This is fascinating solely for the insight it provides into the absolute vapidity of central bankers.

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David S. - The problem is not the Fed. The problems is any congress and any administration spending money. Who elected those representatives anyway? We did. .The Feds only major action is to add to or withdraw liquidity. Dr. Hoenig did a excellent job of discussing the possible length and depth of this crisis and the possible future Fed balance sheet totals. He did not gloss anything over. What we need to do somehow is insert fear of survival into our big corporations. Japan is not in great shape, but many of their corporation paid down their debt over ten years. US corporations borrowed money, issued options to the executive suites to drive up the price of their stocks. Those executives on average are probably gone now. In addition, all the passive investment has inflated the market, which I think is still inflated. Blaming the Fed is not productive. It is like blaming the weatherman for not controlling the rain. DLS

ED: "If you could point me to any company that releases "filmed on" dates other than RV in their original publication, I'd be interested to see it." Actually, in the first sentence of every interview, Macrovoices with Erik Townsend & Patrick Ceresna, they clearly state the precise date the episode was recorded. The turnaround times for RV and Macrovoices are similar and both are excellent. On occasion, MV airs episodes recorded weeks or even months earlier, such as during Xmas holidays or for a topic that's not time-sensitive (eg., a deep-dive discussion on the design of the Euroldollar market). I agree with many above that the recording date sometimes adds useful info or context. Accordingly, that tends to now be the SOP for lengthy, quality interviews in much of Eurasia today (for eg., Macrovoices' Erik Townsend is a permanent resident of HK now, having moved from the US, and he now follows this Eurasian norm for its 5.3-billion people and his global audience). I agree with others above; to heck with those few who we've seen abuse the recording date info to criticize RV; the majority aren't so petty or childish as most of us can differentiate time-sensitive from time-insensitive information. PS. You're an exceptionally talented financial journalist and interviewer. I mean broadly, not just in this episode. Big fan.

Nothing to be learned from this interview frankly. FED economists speak like politicians: general statements, no insights. We need an open discussion on FED actions and have the courage to ask the tough questions about policy effectiveness (and proof of that!). No more fluff! Maybe focusing on few specific issues would've gotten a better result or have a non-fed expert alongside, but I doubt any (ex) FED official dares to go there...

The Fed needs to provide risk while saving by saving some of the strategic national interest fallen angels. Supporting everyone is eliminating the risk of being foolish with your balance sheet . DLS dls

this was disappointing and glossed over what could have been insightful into the misteps of how the fed has orchestrated an economy that can only survive with their constant intervention. I'm sorry if you wasted your time and money.

better spend your 30 minutes on something else..

FED people should tell the truth that they'll keep up the "money from air wizardry" until the S&P500 (not the economy) makes news highs again and again and again and.... well you know.

Yet another FED guy that believes his own bullsh*t. History will not treat people like this kindly. They will wonder “what we’re they thinking?”

This brings to mind Nassim Taleb's often-quoted statement "Intellectual, but idiot." Mr Hoenig seems confused as to why certain things have happened, noteably when he said "leverage wasn't the cause of the crisis" -- yet he fails to connect the dots that ZIRP incentivized banks and others to chase yield at any cost, with leverage being their only recourse. I also can't shake the chesire cat grin he gave when discussing the ramping Fed balance sheet, as if it was the most normal thing in the world. Perhaps he's very happy and isolated in his ivory tower, but this balance sheet expansion will have real effects upon millions of lives. I would have preferred the interviewer knuckle-down with a former FOMC member and get some answers as to why the Fed is necessary to begin with. With this track record, I'd say the Fed's credibility is near zero -- just like their interest rates.

Totally softball interview.....why bother.

Ed Harrison here. We have noticed a torrent of comments regarding the film date. Our apologies for not communicating this earlier. But, we removed the film date because we now release interviews in three business days or less, with only a few notable exceptions. At Real Vision, we have always prided ourselves on the timelessness of our interview product. With these interviews, ideas are the focus, not specific time-constrained trade ideas. Therefore, in the past, Real Vision often released interview content well after the film date. And, as a courtesy to our guests (and members), we included the film date in order to provide a degree of context for the guests’ more timely ideas. In today’s coronavirus world, we felt we could no longer adhere to that model. Things move much faster. So, we now have a mandate that 95% of material will publish within three business days of filming. We will continue to iterate processes to make our content as timely and informative as possible. Thank you all for being Real Vision members. Ed

Interesting

Guys. I have seen a thread on Twitter that must be shared with the world. It shows some of the companies which are included in HYG and hence is being propped up by the FED. Some names include Tesla, Netflix and Uber. This is criminal: https://twitter.com/agnostoxxx/status/1249365743105445888

His controversial view, not controversial at all. The FED's decision to continue with low interest rates and QE is controversial.

Whether or not interviews are conducted within 3 business days, I still want to know the date it was filmed. Why? Because what if a few months down the line I want to watch an old video and would like to know when it was filmed? RV stop this BS. The customer is always right. Give the audience what they want and stop being so damn stubborn. It's not about you, its about the audience. Thank you.

I think audio points to a daily briefing, if I am not mistaken?

Good interview all around. I hope that Dr. Thomas Hoenig makes another appearance on Real Vision in the future to share his knowledge and experiences as President of Kansas Fed. It would be tough but I'm sure there would be a lot of interest in seeing an interview between Danielle Dimartino Booth and Dr. Hoenig focused on substance, policy creation and their effects.

Great to get a former FED member. He think the FED can stop printing. That went well in 2018.. What a clueless idi-t ..