The Next Waves of the Financial Crisis

Published on
March 27th, 2020
Duration
51 minutes


The Next Waves of the Financial Crisis

The Interview ·
Featuring Steen Jakobsen

Published on: March 27th, 2020 • Duration: 51 minutes

In the past few years, nobody could have predicted that a pandemic would be the catalyst sending shock waves through the entire global economy, plunging us into a bear market in record time. Some voices though have been screaming from the rooftops about the macroeconomic and structural weaknesses that left markets vulnerable to any potential disruption. One of those voices was Steen Jakobsen, CIO of Saxo Bank. In this interview with Roger Hirst, Jakobsen examines the weaknesses of a buyback-driven and debt-ridden market that have been quickly exposed by coronavirus. They also look into the future at how the crisis will affect real assets, the dollar, the banking system, and why, when all is said and done, we could see both inflation and deflation.

Comments

Transcript

  • js
    j s.
    29 March 2020 @ 18:13
    Long Vol is one of the dumbest recommendations ever.
    • DZ
      Dongbin Z.
      8 April 2020 @ 01:39
      Long vol on Mar 23 is obviously dumb. But at any other time, why is long vol dumb?
  • MM
    Maksym M.
    4 April 2020 @ 10:25
    Could you please specify source of the chart on 18:55?
    • MW
      Max W. | Real Vision
      6 April 2020 @ 00:33
      That is the percent change for the calendar year of 2019 of the rolling front month of coffee, wheat, soybeans, and corn futures from Bloomberg.
  • JE
    James E.
    28 March 2020 @ 21:15
    Not climate again, please let scientists and researchers deal with this through capitalism working on renewables, not socialism. At present technology is totally inadequate, fossil fuels especially natural gas will be needed until technology catches up. Politics is not helping, and blaming carbon dioxide is also not helping. Everyone knows fossil fuels will not be around forever, don't rush this. We need to deal with the things that matter, to talk about climate at a time like this needs to stop.
    • CG
      Christine G.
      31 March 2020 @ 04:32
      It is the scientists who are sounding the alarm and saying that we have a small window at best to deal with this. Capitalism will not solve this if not regulated heavily. The cigarette industry was never going to tell the truth about cancer and lied about it. The gas companies were never going to tell the truth about global warming, even though they had the data, and lied about it. The chemical companies were never and are not solving problems of pollution of the environment and of the people and animals dependent on the environment, and lie about it. This is an existential issue and perhaps the major economic issue of this century. RV should be talking about it all the time.
  • CG
    Christine G.
    31 March 2020 @ 04:16
    With regard to the world financial system, as it is constructed, I do not see the dollar dropping because it is still the reserve currency. This is a systemic problem and would require a systemic reset. One proposal is to use the IMF Special Drawing Right as a world currency and incorporating gold in it along with the major currencies. Thoughts?
  • CG
    Christine G.
    31 March 2020 @ 04:13
    Excellent talk. I agree that we need a financial reset that includes people without significant assets. I agree that it will take a new social consciousness and sense of everyone being in this; this change may be helped if we can recognize that the climate crisis is a crisis and it will take social mobilization comparable to war. Despite their cultural differences, I have more hope for the Europeans: they are further along in this discussion; they tend to think more in terms of broad universal ideas as opposed to the often myopic nuts-and-bolts focus of the English and Americans; they are facing existential issues with the Russians at their door. The US is more individualistic which can work with a more even playing field which has not existed for a long time. The US has three major hurdles in my opinion. The first is the influence of the less conscious values of the founding fathers; while we tend to emphasize ideas of liberty and justice, remember the founding fathers were creating a more just society for themselves; their underlying values included sexism, racism and elitism. Those values are still very much present and they are all about power and division. The second hurdle are our super wealthy (as a group, individuals may differ of course) who will fight for their elitist position and have little concern for others or society as a whole. If you look at the policies of the Koch brothers, Mercer, Sinclair, DeVos, Menuchin, Cheney, certainly Trump, among others, they are mean, self-aggrandizing and anti-democratic. Truth and a collective concern are absent from their psychologies. They will fight against change with every resource they have. The final hurdle is education. We have been cutting education for thirty just as the world become more complex. Most of our people don't read and cannot participate well in the national discussion and moral push we need.
  • KF
    Kevin F.
    31 March 2020 @ 02:55
    Is it just me or is Steen looking pretty relaxed (too relaxed?) for European bank CEO thats recommending a banking re-set - debt jubilee and hyper-inflation? Super chill - seems at odds with whats at stake…
  • JM
    James M.
    30 March 2020 @ 13:32
    I think the Hirst guy is really good and I think he explains a lot well , however this whole narrative of 'I don't think the CBs can fix the economy' is such a false narrative. The FED the Treasury the US admin like ones before them and other CBs globally objective is not to FIX anything its to MAINTAIN corporate criminal dominance lead by off course the bankers. It has always been that way its just more grotesque and acute now. Its literally us watching the collapse of the latest and largest empire the human race has ever seen and there vassals. Rome, Constantinople on steroids. The pigs (No offence to pigs) at the trough taking there last or knowing our luck there latest backdoor smash and grab, Never let a good crisis go to waste as the say and have done for decades centuries.Nothing more ! Cant we at least mention this if RV is to maintain or even earn any credibility? 'Now we will have Price discovery'???? Really !!!
  • ST
    Simon T.
    30 March 2020 @ 05:33
    STAGFLATION is the word - be prepared - this ain’t going away but lots of unfinished business thanks to Greenspan, Bernanke and Yellen will be finished in 2-3 years
  • DP
    David P.
    30 March 2020 @ 02:39
    real vision staff please button your shirts.
  • JH
    Joseph H.
    29 March 2020 @ 20:37
    Good interview. Everyone was/is swimming naked and quite frankly they all look like crap. The tide has gone out after the Covid-19 tsunami and all the liquidity in the world will not cover up for our largesse. Stay well RV friends.
  • SM
    Shivani M.
    28 March 2020 @ 16:35
    What does Steen mean when he says that housing will be "in a range of 85-100"?
    • WM
      Will M.
      28 March 2020 @ 19:13
      I thought he meant 85% of current value...... maybe he is referring to an index.
    • MY
      Madjid Y.
      29 March 2020 @ 19:06
      He said 85 to 105 % ---> -15% to +5%, house prices don't go up the value of money goes down. unless you bought in an area like Shoreditch, and it became trendy...
  • JL
    John L.
    29 March 2020 @ 13:56
    what really bothers me is virtually every interview I've watched both on RV and on other platforms is the lack of discussion of the earnings growth of the SP500 for the 4 QTR slowing to 0....before the Virus. How is that NOT part of every discussion and how there was economic contraction even before the virus was prevalent here in the US?
  • JG
    Johan G.
    29 March 2020 @ 10:51
    Great interview! We are going from the 'everything bubble' to the 'everything volatility' which will destroy financial capital like a wildfire! Where will the S&P be if P/E normalizes to 10-12 and earnings go down by 50%? 25-30% of peak? If there is price discovery....
  • CE
    Ch E.
    28 March 2020 @ 18:57
    Lol!! Steve saying he wanted to commit “hara kiri” in January. Emphasize with him and yes thank goodness the “FIRE” (Finance, Insurance, Real E”) industrial complex may be finally dented. Stagflation coming is what they meant - great interview!!
  • AP
    Ash P.
    28 March 2020 @ 17:51
    A well-articulated and hopeful view of the world on the other side of this virus. I agree with Steen - the virus no doubt painful has nevertheless forced the needed reset; we'll never go back a world so leveraged as the one we're seeing off.
  • is
    irving s.
    27 March 2020 @ 06:35
    horrid video quality. horrid sync.
    • MR
      Milton R. | Founder
      27 March 2020 @ 08:46
      The quality of the connection is up to a lot of factors that are out of our hand. While we're in this together, we want to bring you timely information. We just have to work with what we have and what the guests have.
    • ag
      alan g.
      27 March 2020 @ 13:45
      Connection is fine, anyhow the content is what matters
    • TZ
      Tibor Z.
      28 March 2020 @ 06:47
      Homemade. What do you expect?
    • HL
      Henrik L.
      28 March 2020 @ 09:20
      Short time to publish > video/audio quality I would say
    • ly
      lena y.
      28 March 2020 @ 17:25
      this is like war time! we are lucky to be able get info from the pros!
  • SM
    Shivani M.
    28 March 2020 @ 16:45
    Milton - Re: video / audio quality. We understand broadband providers are throttling a bit to make sure everyone has access at the same time, so you don't have total control over quality of video chats. Can you manually edit the transcription to make sure all words are included and accurate?
  • JG
    James G.
    27 March 2020 @ 22:22
    Flock the climate. Lets take care of the crisis and the climate will take care of itself.
    • SM
      Shivani M.
      28 March 2020 @ 16:40
      If we had taken care of the climate by investing in renewables instead of shale, Russia and Saudi Arabia would not have been able to jump-start the credit crisis.
  • AA
    Alberto A.
    28 March 2020 @ 16:02
    Great interview by Roger as usual with sharp comments. I really like Steen thoughts on passing through a shock on the whole system in order to come back to what really matters: good business and productivity anchored in good values! Kudos!
  • MY
    Madjid Y.
    28 March 2020 @ 15:31
    I have always said that real vision will get a vision once they invite Steen. My pension flourished in the last 5 years by just following his mid-term guidance. A broker who truly looks after his clients.
  • TR
    Theodore R.
    28 March 2020 @ 14:17
    Simply GREAT. Well done both of you.
  • ns
    niall s.
    28 March 2020 @ 14:01
    Best time ever the forties , what are these guys smoking ?
  • db
    david b.
    28 March 2020 @ 13:49
    Great interview...as a means of taking advantage of the increase in volatility wouldn't a portfolio of (long dated) covered call options against a basket of high quality equities combined with a long gold, long dollar position offer a potentially lower risk positioning with considerable upside potential over the next 6-12 months? We can figure out what comes next as more data is realized....(ie the central bank/fiscal policy response vs. the "on the ground" economic recovery in consumption, supply and demand)
  • TA
    Tom A.
    28 March 2020 @ 13:47
    Very positive interview
  • BP
    Ben P.
    27 March 2020 @ 14:22
    There was a lot going on in this for me late on a Fri. These concepts laid out on a timeline would help.. Cheers.
    • HL
      Henrik L.
      28 March 2020 @ 09:19
      I agree. Also, given how quickly things are moving day-to-day some post-production timestamp on exactly which stimulus they are referring to would be helpful. I am guessing this was taped on Wednesday or so. Still, the long-term and fundamental analysis are the key takeaways I am sure.
  • HL
    Henrik L.
    28 March 2020 @ 09:15
    Great interview! Very interesting. Real opinions.
  • BB
    Byte B.
    27 March 2020 @ 19:34
    What's with all the creepy puppets in the intros and background? WHAT"S WITH THE PUPPET???
    • MR
      Milton R. | Founder
      27 March 2020 @ 19:51
      Hello to you too, that would be me 😜
    • IO
      Igor O.
      28 March 2020 @ 07:28
      Don't be mean to our Milton.
  • TZ
    Tibor Z.
    28 March 2020 @ 06:54
    I think it would be time to make an interview with Michael Burry and Steve Eisman! Loved the movie!
  • JT
    Jack T.
    27 March 2020 @ 17:54
    Does BTC count as a tangible asset? I personally never liked it. Have been wrong for a long time....
    • JW
      J W.
      27 March 2020 @ 22:04
      May I recommend you read this book....https://saifedean.com/
    • FF
      Farouk F.
      28 March 2020 @ 00:56
      It's a great way for the rich to hide their wealth over fears of it being taxed or confiscated away. It is not as beneficial for the common person who do not have a disposable lump sum of cash collecting dust.
    • JW
      J W.
      28 March 2020 @ 06:52
      Bitcoin does not have to be for the rich only. You can set up automatic transfers from your bank account into your bitcoin wallet and save on a monthly basis. There is no minimum amount as far as I know Of course, this assumes you like the asset and you believe in its future. More and more companies are offering this service on both sides of the pond.
  • TZ
    Tibor Z.
    28 March 2020 @ 06:45
    Please, show us data and charts regarding the margin and leverage in the system left. How many liquidated already?
  • DS
    David S.
    28 March 2020 @ 01:24
    The banks were over levered in 2008 and the taxpayers bailed them out. The shadow banking system was over levered in 2020 and the taxpayers had to bail them out through the Fed again. It is apparent that the free market, which I agree in, will normally over leverage given greed and time. I, of course do not know how to fix it, but the taxpayers are bailing out everyone including the taxpayer. This is not sustainable. The Coronavirus was the major black swan, but others could have done the same thing. One major flaw in my opinion is the lack of a reasonable interest rate to value investment cash flows. Cash flows do not work at the zero bound. One of the remedies may be a permanent minimum interest rate and let the market adapt when the interest rate drops to say 3%. This would eliminate the dual mandate of the Fed vis-a-vis unemployment. I for one would rather bail out the unemployed rather than everyone. This may not work, but need to think outside the box. DLS
    • DS
      David S.
      28 March 2020 @ 05:02
      Sorry. Net Present Values of cash flows do not work at the zero bound. DLS
  • RB
    Robert B.
    27 March 2020 @ 20:20
    Any thoughts on the types of tangible assets that would likely protect wealth going forward (beyond gold, silver, natural resource interests, and potentially property)?
    • RM
      Roberto M.
      28 March 2020 @ 03:03
      Oil tankers
  • JA
    Jerram A.
    27 March 2020 @ 22:57
    Great video. Thanks for all the quality content RV.
  • HK
    Himali K.
    27 March 2020 @ 20:00
    This was one of the best interviews of RV of all time. Well done guys!
  • DP
    Duane P.
    27 March 2020 @ 15:59
    Date recorded? This is vital.
    • JG
      Jesse G.
      27 March 2020 @ 19:58
      ~24 hours after QE infinity announced it seems. Likely this past Tuesday.
  • IM
    Ilias M.
    27 March 2020 @ 18:30
    Amazing interview, I have watched probably 50 and this one sits comfortably at the top. Please please RV team bring Mr. Jakobsen more often and repeat this wonderful exchange among professionals! Worth paying for this stuff! Cograts!
  • NF
    N. F.
    27 March 2020 @ 17:17
    I really appreciate that RV is putting definitions on the screen during videos. Please, more of this!
  • VH
    Victor H.
    27 March 2020 @ 16:43
    Steen is probably one of the most straightforward guests I've ever watched on RV. Love his straight-to-the-point style. Truly enjoyed it. Please come back on RV more often.
  • DZ
    Dan Z.
    27 March 2020 @ 16:42
    Why is it that the solutions being discussed all have to do with creating more debt? Debt is the foundation of all this mess and creating more of it logically will only push us further into it and create more problems.
  • DS
    David S.
    27 March 2020 @ 15:42
    The "real" economy died in '71. Ever since, its been an act of violence by the hegemony.
  • DS
    David S.
    27 March 2020 @ 15:26
    Great interview. Mr. Jakobsen is very pragmatic in his market analysis. The markets have not factored in the fourth or fifth wave. The Bear is just coming out of its cave. As a non-European, I feel his hopes for the success of the EU may not be as realistic. DLS
  • CR
    Chiel R.
    27 March 2020 @ 11:03
    Roger, can Real Vision spend some time on the concept that the (US) bond markets become less attractive or even uninvestable for retail and asset management as the curve flattens to the zero bound and what the impact is on equity markets if/when that capital and/or those savings are redirected towards equities or alternative assets.
    • JW
      J W.
      27 March 2020 @ 14:59
      This would be great - Preston Pysh has been very vocal about the fact that - if I understand correctly - helicopter money will be inflationary and ultimately hurting the Treasury / Bond markets to the point of destruction. He and Pomp did a podcast about it recently.
  • NR
    Nathan R.
    27 March 2020 @ 14:47
    Really great fundamental discussion. Thank you
  • AM
    Alastair M.
    27 March 2020 @ 14:30
    Outstanding interview from Roger and refreshing perspective from Steen. Unlike most of his peers across the pond he gets the massive societal issues and can articulate a way out.
  • hb
    hilde b.
    27 March 2020 @ 14:10
    You are realy doing a great work here, congrats and more on all that and many many thanks. Very nice conversation, here, money and society all equally important to make it working and functioning. Great , high level. !!!
  • MS
    Matthew S.
    27 March 2020 @ 13:10
    Quality chat. Thanks
  • RY
    Roy Y.
    27 March 2020 @ 12:24
    Thank you for a very informative, and a much needed, European perspective ... Would love to see Roger doing more of these out of Ipswich, London ...
  • JL
    Johnny L.
    27 March 2020 @ 11:50
    Very good opening statement about long vol. Long vol was not been a part most portfolios (pro or retail investors). It must become a factor going forward, at least for a long time ahead.
  • MD
    M D.
    27 March 2020 @ 11:31
    This was an excellent interview. Well done Steen
  • JW
    J W.
    27 March 2020 @ 10:44
    This was excellent and a discussion covering a wide range of topics. The part about the risk to the Small & Medium Sized businesses especially was good. The 'rescue' packages that are being prepared are not going to rescue anything if they are not modified to grants of some sort imo. And a quick internet search shows that SMB's are 40-50% of all economic activity in the US and about 60-70% of the workforce in Europe ! This is not a disaster waiting to happen, this is a disaster that is playing out now !
  • DS
    David S.
    27 March 2020 @ 10:06
    Excellent presentation. Must watch again. A lot to think about. DLS
  • CC
    Cornelius C.
    27 March 2020 @ 08:48
    D you guys wear pants during these interviews?
  • JM
    Joe M.
    27 March 2020 @ 07:35
    Thank you. Very informational and timely.