Tectonic Shifts on the Macro Horizon

Featuring Eric Peters

Eric Peters, CEO & CIO of One River Asset Management, joins Real Vision to discuss major changes he sees coming to the global macro landscape. He thinks U.S. equity markets are in the process of topping, and says both inflation and volatility will make a comeback. Peters also analyzes the problems with risk management and portfolio construction, and how they will likely be challenged during the next recession. Filmed on May 29, 2018 in Greenwich, Connecticut.

Published on
25 June, 2018
Topic
Recession, Macro, US Economy
Duration
33 minutes
Asset class
Equities, Bonds/Rates/Credit
Rating
39

Comments

  • FC

    Fran C.

    8 7 2018 12:22

    1       0

    Interesting analysis - especially on vol

  • JH

    Jesse H.

    4 7 2018 22:02

    0       0

    Should read “far better received.” Thanks for your consideration.

  • JH

    Jesse H.

    4 7 2018 22:00

    0       0

    ...audience.

  • JH

    Jesse H.

    4 7 2018 22:00

    0       0

    ...that if you had aired this or something like it back in the earlier days of RV, we would have a more educated and thoughtful viewership and this video would have been dar better received by that au

  • JH

    Jesse H.

    4 7 2018 21:58

    0       0

    ...quality of thinking and character of the viewers. Sorry to be blunt, but that’s how we end up with 33 thumbs down on Eric Peters’ interview. I would be willing to bet...

  • JH

    Jesse H.

    4 7 2018 21:57

    0       0

    ...you have at this stage. Perhaps a spin-off of RV to a mass market audience would be more suitable. It is not just the products that make the market in the internet age; it is the quality of thinkin

  • JH

    Jesse H.

    4 7 2018 21:54

    1       0

    I am baffled by the fact that this interview has 33 thumbs down. How is that even possible?! Note to Raoul and RV management team: PLEASE reconsider the $180 per year mass media market vision uou have

  • DS

    David S.

    1 7 2018 02:30

    0       0

    IMO Mr. Peters is talking about CPI inflation. The huge increase in money supplies benefited mostly investors and not consumers. The inflation from QEs can be seen in higher P/Es, lower bond rates (especially in Europe), property etc. For some reason, which I do not know, the inflation did not find its way into Gold. DLS

  • JH

    Jesse H.

    30 6 2018 00:06

    0       0

    After carefully listening to Mr. Peters, some kind of stagflationary dynamic moving forward in US over next 7-10 years makes a hell of a lot of sense. But of course nobody has a crystal ball.

  • JH

    Jesse H.

    30 6 2018 00:03

    3       0

    Would suggest 60-minute interview / exchange with Raoul, Mike Green and Eric Peters. That would be gold!

  • JH

    Jesse H.

    30 6 2018 00:02

    1       0

    ...to get Mr. Peters on with Raoul to discuss / debate inflation vs. deflation moving forwards. After listening to MacroVoices interview, I am firmly in inflationary camp for US...

  • JH

    Jesse H.

    30 6 2018 00:00

    0       0

    Just listened to this a second time, as well as MacroVoices in-depth interview with Eric Peters. Really superb and would be great...

  • JV

    John V.

    29 6 2018 02:13

    2       0

    Big picture brilliant!

  • PD

    Pat D.

    29 6 2018 01:45

    1       1

    Felt the presentation kind of stopped abruptly, or perhaps it was just me wanting more. Hope to see Peters back soon. Preferably interviewed by Grant Williams, Michael Green, or Tim Grant.
    Regardless, thanks RV, and thank you Eric Peters.

  • DS

    David S.

    28 6 2018 20:12

    0       0

    The industrial revolution is a rare time in which labor could add a great deal to the bottom line through productivity. This is not true prior to the industrial revolution back thousands of years. The internet, robotics and automation does not benefit the employment of more labor at higher wages. In the developed world populations are angry, but incomes for labor will continue to fall regardless of governments. In addition, income for professionals will continue to fall. The social problems that this is generating need to be addressed from a realistic starting point. No one knows the answers, but we need to start with the facts. In developing countries, the people are more optimistic as millions see their lives improving as they started from low incomes. Increases in the standard of living are enjoyable, decreases in the standard of living are not. DLS

  • DS

    David S.

    27 6 2018 23:44

    0       0

    If the politicians are taking over for the central banks, there is little hope. In the USA especially where Congress and maybe the president can trade the market legally with insider information. DLS

  • FC

    FRED C.

    27 6 2018 15:29

    7       1

    hey milt......
    is it just me or would we be better off if the comments were reversed.....i.e. the first on the top and subsequent below so we would not have to go back and forth and it would lead to a better flow........tks

  • FC

    Fractal C.

    27 6 2018 03:15

    4       0

    Who are these 28 people who did not like this presentation? Lol!

  • jd

    james d.

    27 6 2018 00:37

    0       15

    32 minutes of jargoned equivocation

  • VP

    Vincent P.

    26 6 2018 13:08

    7       0

    Awesome delivery of views for anyone to understand.

  • JH

    Jesse H.

    26 6 2018 07:23

    10       0

    Clear, concise, articulate analysis. Would love to see an interview with Raoul, Grant or Mike Green. Please bring him back again soon!

  • PN

    Philip N.

    26 6 2018 05:39

    1       0

    I really enjoyed this. One situation where I could see rates rising significantly is if the Fed has decided it needs to defend the dollar. If that is the case they will raise until they have crushed the people they view as the dollar's economic competitors.

  • JM

    John M.

    26 6 2018 05:39

    3       0

    Not sure I follow his critique of the inflation forecasts of the 08-09 period anticipating much higher inflation due to aggressive monetary policy. True that CPI has remained muted but lots of asset inflation has surfaced in financial assets, real estate and collectibles? Debt certainly has inflated. If there is a problem in our understanding of inflation then there is likely a problem in our measurement of it too.

  • NI

    Nate I.

    26 6 2018 04:48

    7       0

    Great interview overall, but the so called tight labor market narrative is such a load of corporate claptrap. Everyone in the US, please spend some time on John Williams’ Shadow Government Statistics site and learn about how the U3 number has been rigged over the years to make both Democratic and Republican administrations look good, regardless of the true employment picture. US labor participation is at a 35 year low - even by the BLS figures. True US unemployment - if you properly accounted for discouraged workers - is probably north of 20%. There is a standing army of Americans ready to work if anyone wanted to hire (and heaven forbid - possibly train) them. Labor shortage my eye. Sure, maybe in a few select job classifications, but not overall. No way. Mostly there is a shortage of employers willing to hire or pay more than minimum wage for part-time work with no benefits. Hiring, continuing ed, and R&D would divert cash flow from long-term shareholder value creation like borrowing money for stock buybacks (more like short-term executive bonus value creation via financial shenanigans which are tantamount to fraud).

  • WP

    William P.

    26 6 2018 04:40

    6       0

    Bring him back!

  • MS

    Mark S.

    26 6 2018 04:28

    21       0

    Mr. Peters deserves a full hour Grant interview. Where is Grant these days anyway? We want him back doing Grant style deep dive interviews, please.

  • CB

    C B.

    26 6 2018 03:29

    2       0

    My favorite part was when Eric described private equity as levered stocks. Eric stitched a lot of dots together for us viewers. And that’s the best part of RV is this creative thinking and story telling that helps us imagine how things could play out.

  • MM

    Mike M.

    26 6 2018 03:08

    5       0

    Very Good. please make Mr. Peters a regular.

  • JH

    Joe H.

    26 6 2018 01:41

    16       0

    Very good but wish it was longer. RV should have Eric on again later this year for a 60 min Friday slot being interviewed by either Grant or Michael Green. That would be great and could be one of the highest rated videos of the year.

  • RM

    Russell M.

    26 6 2018 00:03

    3       0

    I would like someone, a government policy type person, to talk about whether the debt jubilee idea, the writting off of bonds held by the fed, is a possibility or not.

  • F

    Floyd .

    25 6 2018 23:31

    4       0

    Well described scenario of what the next chapter looks like from his perspective. Would have liked him to discuss which assets classes /inflation hedges might work in the market environment he described. Other than that, the macro investing climate he described could be tough to navigate if its a political manifestation!

  • SP

    Steve P.

    25 6 2018 23:22

    3       0

    Great interview RV. Thank you.
    Erics' observation re possible VAR effects in an unwind are the first time I have heard any commentary along that line. The VAR concept of reinforcing 'Risk on' in a low vol. environment thus lowering perceived risk even further is an interesting revelation. If the reverse is true in unraveling markets, then in conjunction with algo selling by ETF's in full redemption mode, the next downturn could well prompt the ultimate stock market bloodbath. Hhhmmm!!!

  • DS

    David S.

    25 6 2018 20:54

    2       0

    If the GMO (Boston Company) forecast is even near the mark for an annual negative 4.5% real return per year in the S&P 500, it will be hard for macro funds to do well also. Of course some will do great. I wish Mr. Peters the best. Pension funds are certainly in deep kimchi. DLS

  • Sv

    Sid v.

    25 6 2018 19:51

    4       0

    one of the best presentations R V has provided. Thank you

  • LT

    Lucas T.

    25 6 2018 19:40

    2       0

    Great interview. Very clear and well articulated.

  • DR

    Daniel R.

    25 6 2018 18:55

    10       0

    Quite simply a 10. Please make Eric a regular RV contributor. Do it.

  • PG

    Petter G.

    25 6 2018 18:41

    1       0

    Loved it. Bring him back.

  • bm

    brian m.

    25 6 2018 18:22

    14       2

    I wish RV would separate the finance channel from the music channel

  • RA

    Robert A.

    25 6 2018 17:38

    4       0

    Having watched almost every RV video since inception—this Gentleman just succinctly articulated a synopsis of where the long line of RV guests have taken we viewers, IMO. I’ve followed GMO’s work for many years and keep their seven year Asset class prediction in the back of my mind when making ANY Portfolio allocation. If I have this right....their only predicted positive return Asset class (other than Timber) is Emerging markets. For those who are willing to pay the cost I highly recommend subscribing to Macro Insiders with two great Macro investors (Raoul and Julian) at the helm.

  • TH

    Timo H.

    25 6 2018 17:30

    2       0

    Difficult to disagree with anything he said...

  • MC

    Minum C.

    25 6 2018 16:46

    0       0

    Thorough, coherent, and enjoyable.

  • YB

    Yuriy B.

    25 6 2018 15:00

    2       0

    Phenomenal interview - thank you Real Vision!

  • BD

    Bruce D.

    25 6 2018 14:23

    15       0

    A Fantastic explanation of where we stand in this very manipulated market. The best global macro thinkers are all making similar comments.....NONE of what we have today is sustainable. The best idea is that if it worked over the last 10years, it will not work moving forward. It’s time to rethink your portfolios and prepare for no returns in bonds or stocks over the next 5-10years. It’s impossible for a rational thinker to believe that the US is so special, that we’re the only country that will not return to normal long term profit margins....and reversion to the mean. The pendulum is swinging away from capital, and more towards labor across the developed world.....time to regroup and evaluate new tactics to make money, like using commodities, that are at lifetime cheap valuations vs the S&P 500 index. Thank you for this awesome sober outlook.

  • PU

    Peter U.

    25 6 2018 13:00

    0       0

    great interview

  • RK

    Robert K.

    25 6 2018 12:51

    2       0

    Amazing stuff. Thanks.

  • AL

    Andrew L.

    25 6 2018 12:35

    6       0

    I keep coming back to if everyone sees it (recession) coming what are the knock on effects of their actions in prep for it? Do these delay or blunt the coming recession?

  • NG

    Nick G.

    25 6 2018 12:03

    8       0

    Very thoughtful. A long term trend of redistribution of wealth towards labour from capital is indeed what is needed. However, technology makes it constantly harder to achieve. It will indeed be an interesting decade ahead. Overall, an excellent interview.
    As Eric says, there are so many cross currents at work that vol is unlikely to remain suppressed forever.

  • MM

    Mike M.

    25 6 2018 11:17

    7       0

    Hopefully what is coming takes the Plunge Protection Team with it.

  • DS

    David S.

    25 6 2018 10:06

    10       0

    If everyone is using VAR, then we are in trouble. The risk of the portfolio is based on stopping out at a certain price. If there are no bids at the stop, do they chase the stock price down? The risk is a lot higher than current calculations. In addition, they will have to sell their winners to cover the cash flow for losers. If you add in the ETF risk of redemption and algorithm trading, the market can go down dramatically before any recession appears. I feel for the professionals who must invest in this market. DLS

  • JE

    Jos E.

    25 6 2018 09:42

    13       0

    Absolutely loved this video - particularly the VAR comments. So simple yet so important