Overcooking The Goose

Featuring Julian Brigden

Julian Brigden’s compelling summer 2016 presentation, Overcooking the Goose, quickly became a viewers’ favorite as he combines his razor sharp analysis with some illuminating charts to portray the reflationary effects of the pause in the US dollar rally.

Published on
19 July, 2016
Topic
US Dollar, Credit Market, Monetary policy
Duration
30 minutes
Asset class
Equities, Bonds/Rates/Credit, Currencies
Rating
13

Comments

  • MS

    Matt S.

    11 2 2017 23:04

    0       0

    I wish I understood these concepts better.

  • T~

    Tshort63 ~.

    26 12 2016 23:17

    1       0

    *monkey even smarter. Even if they can't teach it to type....

  • T~

    Tshort63 ~.

    26 12 2016 23:17

    1       0

    Wow, amazing piece. Watched it in July and went over my head, and now I understand. Proving that @realvision can make a mon

  • DM

    Daniel M.

    18 12 2016 22:38

    0       0

    Fantastic!!!

  • ML

    Michael L.

    5 11 2016 03:55

    2       0

    falling bank stocks leads to lower capital ratios? is this right? I'm pretty sure these capital /regulatory ratios are based on book value, not market values right?

    Also I couldnt find anything on Fed selling VIX. that's a serious claim that need serious backups.

  • GT

    Graham T.

    27 7 2016 15:41

    1       0

    And if I have the bottle I hope to use the profits to buy LYG on the day ze Germans bail in (out?) DB.

  • GT

    Graham T.

    27 7 2016 15:34

    1       0

    It was your reflationary presentation Julian that persuaded me to buy STAN.L @ 438p. Still got it . Gawd bless yer guv'nor.

  • SG

    Steve G.

    26 7 2016 17:42

    0       1

    6% nominal GDP...lol

  • cd

    christine d.

    25 7 2016 22:10

    0       0

    Great. though I worry I think so because I'm in such agreement!

  • sp

    shashwat p.

    25 7 2016 02:33

    2       0

    He is always f$!&ing brilliant! always ! Always food for thought! always ! hats off!!

  • PO

    Phillip O.

    22 7 2016 23:44

    4       0

    Could someone please provide a link backing up the claim that the FED sold the VIX in Jan/Feb 2016??? The zerohedge link below, although providing good background on the tail waging the dog effects, is from 2015 and provides no direct evidence that the seller in VIX etfs was the FED.

  • TJ

    Terry J.

    22 7 2016 16:45

    2       0

    Wow! Another excellent update and invaluable analysis from Julien. They don't come much better! All I have to do now is work out whether Julien or Lacy Hunt is more likely to be correct on Treasurys.

  • PJ

    Peter J.

    22 7 2016 16:27

    7       0

    Great presentation had to watch it twice to fully get the detail. Julien is quite welcome to waste my time by talking through his thoughts on the dollar, pity we have to wait a couple of weeks, but hey-ho something to look forward to.

  • CZ

    Catherine Z.

    21 7 2016 18:38

    7       0

    For what it's worth, on the subject of the FED selling the VIX see: http://www.zerohedge.com/news/2015-09-19/conspiracy-fact-vix-manipulation-runs-entire-market

  • GG

    Georgi G.

    20 7 2016 22:39

    4       0

    Most compelling macro story out there at the moment. It stands out against a chorus of opposing views.
    If rates start going up, EM will end up in the blender...

  • BL

    Bruce L.

    20 7 2016 19:29

    8       0

    I was in bond pit in 86/87 and things got very exciting. People are definitely not prepared for anything like that.

  • BS

    Blair S.

    20 7 2016 17:31

    11       1

    Has been mentioned by others, but pls provide some proof of claim that FED sold VIX. That's an extraordinarily incendiary claim to make w/o substantiation.

  • AH

    Andrew H.

    20 7 2016 16:36

    2       0

    It would be really interesting to compare and contrast Julians work vs Lacy Hunt. They seem to be directly opposing views. Also, I am curious if Julians thesis would be arrested if rates were to go up due to a rapid decline in consumption, credit creation, equity mkt decline, etc... I think we would likely see stagflation or recession vs any maintained real GDP acceleration until we reduce unproductive debts.

  • WB

    Wes B.

    20 7 2016 13:37

    1       0

    What exactly does he mean by break even inflation hedges?

  • MN

    Mike N.

    20 7 2016 11:56

    12       0

    Another very good presentation. Would be nice to get something to back up the claim that the Fed was selling Vix

  • NS

    Nathan S.

    20 7 2016 10:33

    4       0

    I doubt any market will be "allowed to correct" until everything does simultaneously. Hard to fathom why the CBs would allow a controlled demolition of the bond markets but not the stock markets... butwho knows anything in this world we find ourselves in in 2016?!

  • AE

    Alex E.

    20 7 2016 08:28

    6       2

    I'm at a loss to understand how markets are going to go up when Businesses are in a profits recession, inventories are up, sales are slowing down, transportation in faltering, the latest jobs number was a one off in the context of the last 6 prints, etc., etc., etc. All signs seem to be pointing to recession, not growth!! So, what am I missing?

  • CK

    Chris K.

    20 7 2016 07:40

    2       0

    He said Black Friday - I think he meant Black Monday, right?

  • PG

    Phillip G.

    20 7 2016 05:04

    1       1

    Big thank you to Julian Brigden for providing some pretty incredible insight! So what would a "bond meltdown" look like today? Isn't it still likely that the max % change of a bond meltdown would continue to be less than that of a "stock meltdown" (which not coincidentally may be precipitated by said bond meltdown as yields rise and risk premia compress)?

    Below I show the bond mutual fund, Fidelity® Investment Grade Bond (M:FBNDX), and I run summary statistics based on its monthly total return data going back to Sept.1971 - which thoroughly covers the dates where both interest rates and the rate of change of interest rates were at their highest in the early 80's. And thanks to RealVisionTV!

    Annualized Return 0.0706
    Annualized Std Dev 0.0563
    Annualized Sharpe (Rf=0%) 1.2545

    Drawdowns:
    From Trough To Depth Length To Trough Recovery
    1 1979-09-30 1980-02-29 1980-05-31 -0.1228 9 6 3
    2 1980-07-31 1981-09-30 1981-11-30 -0.1136 17 15 2
    3 1974-03-31 1974-08-31 1975-02-28 -0.1082 12 6 6
    4 2008-02-29 2008-11-30 2009-07-31 -0.1080 18 10 8
    5 1994-02-28 1994-06-30 1995-05-31 -0.0711 16 5 11

    Semi Deviation 0.0112
    Gain Deviation 0.0121
    Loss Deviation 0.0110
    Downside Deviation (MAR=10%) 0.0126
    Downside Deviation (Rf=3%) 0.0096
    Downside Deviation (0%) 0.0086
    Maximum Drawdown 0.1228
    Historical VaR (95%) -0.0183
    Historical ES (95%) -0.0318
    Modified VaR (95%) -0.0169
    Modified ES (95%) -0.0195

  • SN

    Sean N.

    20 7 2016 03:49

    4       0

    Great synthesis of information! Best macro case I've come across for a decent near-term upside rally in equities, and makes sense that it could lead to potential bond blow off... markets are unbalanced due to CB interference...

    But tell me, how did the FED sell the VIX in January? ? ? ? ? I'll take any offered clues...

  • JS

    Jon S.

    20 7 2016 02:13

    1       16

    That right maxillary central incisor though.....

  • RO

    Riskis O.

    19 7 2016 23:44

    5       0

    this presentation is so much more logic and informative than certain self-flattering interviews.

  • SP

    Steve P.

    19 7 2016 23:16

    16       0

    Julian's VERY forceful delivery speaks volumes about the frustration that has obviously built among money managers re the deluded monetary policies being implemented globally by central banks. Small investors attempting to manage their own portfolios in an environment of suppressed price discovery are very badly served by current Keynesian based CB policy. Thank you RV for added a ton of light to what will in future prove to undoubtedly be a period of gross mismanagement of global financial affairs.

  • sm

    sayit m.

    19 7 2016 23:09

    5       0

    I wish he made quick recap at the end.

  • JN

    Jason N.

    19 7 2016 20:54

    8       0

    "Plenty of stuff to smoke" - GOLD Comment right there for the central bankers!

  • MH

    Manuel H.

    19 7 2016 20:28

    9       0

    Transcript, please!!

  • DH

    Domingo H.

    19 7 2016 20:17

    10       0

    Given how levered we are and the valuations equities are trading on, it would take a big jump in growth / eps perception to offset the negative impact of rising risk free rates to equities. Markets are hyper sensitive to rises in the cost of capital. Equally rising risk free rates and the ensuing tighening of financial conditions would seriously impinge upon growth. Bond market meltdown is a possibility, not sure about the equity market rally continuing for another 10-15% as he mentions. Great presentation though.

  • RA

    Robert A.

    19 7 2016 19:51

    2       0

    Well done, AGAIN! Curious when he pulls the trigger whether he uses TBT----DB counter party risk? Also, the CB's success in controlling the EQ markets certainly may not translate into the ability to control the Bond market.....although I'm sure they will make a Herculean effort in that regard. Bill Fleck has been all over them eventually losing control of the Bond market.

  • db

    don b.

    19 7 2016 19:30

    8       0

    "I believe that the public wants to be led, to be instructed, to be told what to do. They want reassurance. They will always move en masse, a mob, a herd, a group, because people want the safety of human company. They are afraid to stand alone because they want to be safely included within the herd, not to be the lone calf standing on the desolate, dangerous, wolf-patrolled prairie of contrary opinion." -Jesse Livermore

  • JM

    Justin M.

    19 7 2016 19:28

    16       0

    Is there any proof that the Fed sold Vix? Its obvious that "somebody" did, but where can I find proof that it was the Fed? Thanks.

  • EB

    ELIZABETH B.

    19 7 2016 18:50

    10       0

    So good that I would like a transcript. Excellent.

  • CB

    C B.

    19 7 2016 18:27

    4       0

    Absolutely agree that the bond market will be the trigger for a meltdown - watch the PPI and CPI releases! Historically they moved the market just as much as the monthly employment figures but in recent years we've been lulled to sleep by the low vol.

  • DM

    Dom M.

    19 7 2016 17:59

    4       8

    Time to buy US banks

  • EF

    E F.

    19 7 2016 17:51

    2       0

    more of the man

  • ZJ

    Zach J.

    19 7 2016 15:07

    54       0

    Great stuff here per usual. One of the things I would have liked him to address based on his framework outlined would be policy makers intervening in the bond market. Policy makers are well aware of the potential impact on risk assets associated with higher treasury yields.... So if they are intervening like madman in equities and selling VIX why would they not step in and hold down rates?

    I have a hard time believing that policy makers would allow a material increase in US treasury rates to occur due to obvious impact it would have on riskier debt. If I'm missing something here would love to hear it.

    Also, maybe a little naive asking but why could there not be a class action lawsuit against the FED for selling VIX and manipulating markets without disclosure to market participants?

  • CC

    Christopher C.

    19 7 2016 15:05

    7       1

    It is no secret the banking establishment prefers a Hillary presidency. What are her chances of winning if the stock market is crashing and the US economy enters a full blown recession. I submit to you it rhymes with, "Hero." As Robert Redford said in his excellent portrayal of Bob Woodward in all the President's men... "Follow the money." Food for thought.

  • LA

    Linda A.

    19 7 2016 14:44

    29       0

    Waiting for this all week. Love this man & his charts! One of the best series ever. He knows how to re-link current events to the past. Thank you RV and Julien!

  • KC

    Klendathu C.

    19 7 2016 14:42

    39       0

    Great stuff as always. Easily in my top 3 people on this site. I wish he could have got to the dollar ($), which I think is key to any macro thesis. There's a major difference between now and the 85-87 era. The $ peaked in 85 ala Plaza Accord (scary parallels!), and fell like a rock all the way through 87 (and perpendiculars). Let us assume that today the $ has most likely paused in a bull market. Any inflationary upside due to a resurgent US economy and low oil prices would probably be capped by the equally resurgent $ that would put tremendous pressure on commodities, and China. In short. the resulting deflationary credit impulse from the bursting of China's credit bubble would overpower the inflationary pulse from oil prices and a stalled dollar rally. Perhaps my time horizons are a little off, and it seems like we are getting the inflationary rally right now, but the upside, for me, is much more limited than historical precedents.

    CHEERS!

  • MK

    Matthew K.

    19 7 2016 13:53

    16       0

    Best on RealVision bar none.

  • GT

    Graham T.

    19 7 2016 13:50

    2       5

    Join me and the Directors in STAN.L the train is about to leave the station. How come it's always us Brits that can figure this stuff out ?

  • GR

    Gregory R.

    19 7 2016 13:47

    11       1

    Stellar analytics and insight but sketchy on the reasons for a possible surge in GDP.