Theater of the Absurd

Published on
April 22nd, 2019
Duration
31 minutes

Theater of the Absurd

The Expert View ·
Featuring Sven Henrich

Published on: April 22nd, 2019 • Duration: 31 minutes

Global equity markets look poised to break higher, according to Sven Henrich of the NorthmanTrader. These markets have been continually juiced by central banks, but each rally is becoming increasingly fragile. Policy normalization has reached its limits, leaving little ammunition to prevent the next panic from turning into a crisis. Filmed on April 12, 2019 in London.

Comments

Transcript

  • JM
    John M.
    15 May 2019 @ 17:20
    @David S "Many investors do not realize they are picking up dimes in front of the steamroller." Great line David S ! #LTCM were picking up dimes in front of steamrollers too in the late 1990s. They were the Ph.D mathematicians who said it couldn't go wrong. Well it did..
  • MS
    Michael S.
    28 April 2019 @ 12:13
    Empty calories.
  • JM
    Justin M.
    25 April 2019 @ 19:08
    Sven is absolutely brilliant. I have disagreed with him in the past, but the quality of his work is undeniable. Sven is an excellent guest; I would like to hear from him more often if it's possible.
  • AK
    Anthony K.
    23 April 2019 @ 22:27
    Always a great job, Sven!
  • GH
    Gary H.
    23 April 2019 @ 17:59
    Clear statement of the facts. Maybe the inflation narrative changes as this plays out. Thanks
  • RA
    Robert A.
    23 April 2019 @ 17:52
    This is the best singular well articulated synopsis of exactly where we are now. Excellent and timely 30 minute piece. I think any potential new RV subscriber could easily be persuaded to pull the subscription trigger if he or she viewed this presentation.
  • MB
    Michael B.
    23 April 2019 @ 15:53
    The only thing that matters is this: At what point do these interventions cease and more importantly, why should they? Until then, just buy the SPY with tight stops and enjoy the ride! "Don't fight the Fed and don't fight the tape." (Martin Zweig)...
  • CT
    Christopher T.
    23 April 2019 @ 13:45
    whats his performance and P/L? Seems to lack skin in the game
  • VK
    Viresh K.
    23 April 2019 @ 11:40
    So what did people actually gain from this? He could have given this interview in 2016, 2015, 2014, 2013, 2012
    • BD
      Bruce D.
      23 April 2019 @ 12:36
      It’s called market knowledge.....and how we are all living in a dream world with manipulated markets forever.....until they snap. If you are not prepared, you will be steamrolled....that’s all.
    • VK
      Viresh K.
      23 April 2019 @ 17:38
      Bruce, you realise the Fed are still doing QT right?
    • VK
      Viresh K.
      23 April 2019 @ 17:45
      Bruce, that market knowledge would have kept you from being long for 6-7 years lol. Also you know the Fed is still doing QT right
    • JM
      Justin M.
      25 April 2019 @ 19:31
      Viresh, Yes QT continues, although the Fed announced recently that they intend to cut the amount of QT in half beginning this May and end QT in September 2019.....leaving the balance sheet at ~$4T. Are you of the opinion that the Fed will restart QT or somehow completely unwind QT before the next recession? Is it reasonable to assume that the Fed would continue balance sheet expansion in a future recession? Assuming the Fed does restart QE in a future recession, then what does the (thus far) insignificant amount of QT matter? The Fed balance sheet is likely to hit new all time highs in the next recession, so why place so much faith in QT? I'm genuinely curious, trying to learn the mindset of the opposing trade. Thanks for any input.
    • TM
      The-First-James M.
      25 April 2019 @ 19:32
      Not for much longer I suspect, Viresh.
  • JW
    Joe W.
    23 April 2019 @ 04:20
    Nothing new or learned from this. CB juicing the market is old and I bet most of people on RV know about this. Wish he provide more specific insights into the market and not just talk about the surface level stuff.
  • km
    kenneth m.
    23 April 2019 @ 02:36
    I don't think that snark is very fair or helpful right now. Problem is that you get killed for being short right now but being long is worrisome, as well - for reasons we are all weary of discussing. This is the market we are living with, today and this is a good account of where things are. What exactly can we expect him to tell us when he clearly says that he is very cautious (probably the right thing) right now? You might check his twitter account, he is more specific there.
  • MM
    Mike M.
    23 April 2019 @ 02:33
    Wow...Talk about hitting the proverbial nail on the head.....With a Sledgehammer.
  • ra
    rehan a.
    23 April 2019 @ 00:07
    standard fare. Maybe bring on some alts guys next ?
  • NG
    Nick G.
    22 April 2019 @ 23:03
    A summary: "The market will go down someday. Don't know when, don't know why. I said the same every year since 2009. Still waiting. But I will be right. Loads of excuses why I have not been right for a decade." There, saved you 31 minutes of your life. PS: how much did he pay for the interview?
    • GH
      Gary H.
      23 April 2019 @ 18:02
      If you followed him for a while you would find he is neutral. Sure the facts are bearish but he recommends longs and shorts depending on the technicals
    • NG
      Nick G.
      24 April 2019 @ 13:21
      Of course he is neutral. He wants your sub money. I have better things to do with my life than follow someone who has bust every account he has actually traded for real.
    • TM
      The-First-James M.
      25 April 2019 @ 19:33
      Nick G - Got any evidence of this?
  • DR
    David R.
    22 April 2019 @ 21:41
    We can observe from the likes of SentimenTrader that one FACT is the retail and small traders are massively long (even leveraged long) while the commercial and professionals are overwhelmingly short in US stocks. Different story in numerous international markets which IMO will handily beat the US in 2019 as some began for 2018. Also the metals can outperform equities with better risk:reward ratios to boot. If you gottal long US, the best play is a straddle. Insane to be holding US equity long outright, never mind leveraged, as it could/should retest 2300 possibly in a flash A-B-C. (you're now at B).
    • DS
      David S.
      23 April 2019 @ 00:01
      It is interesting to me that markets react to news as if yesterday's market were efficiently price. If sales are up a stock goes up. No matter that it might be twice the classic valuation. This will stop, but no telling when. I am not leveraged and not smart enough to deal with options. I am long US stocks for 25% of the portfolio. My only protection is short-term US treasuries that I can get out of in one day. No market mover here. Each downdraft I trade around the stocks I like. I am glad I am retired, not advising anyone and have enough capital - IF I do not lose it. Best of luck to all of us. DLS
    • DR
      David R.
      23 April 2019 @ 16:42
      VIX is low, so protection is relatively cheap. Another volatility event beckons and could (will?) be likely more volatile than last year. Everyone is wondering about the next financial or economic black swan, but what if it's political and comes out of the blue. OTOH, with no black swan, volatility can rise even as markets rise. As the market rise isn't lifting all boats, it's concentrated in a smaller number of stocks. A possible contributing factor for a vol event? As of the end of last week, the Chinese surprise surge stood at 31% year-to-date, plus a rising currency that boosts it over 35% in USD terms. But their policymakers over the weekend reversed course on their stimulus and slashed it. Who's to say the fed won't reverse again, because we know that the one thing that keeps Powell awake at night is a bubble melt-up which always leads to a systemic crash unlike if there was no melt up. The incomparable Juliette DeClerque is back on this talking about a hawkish Fed turn instead of more dovishness. Grants reports credit is the loosest ever and out of control. Powell and the Fed see this too and watch the tape and bankrupt companies binging on new cheap credit used for nothing other than stock buybacks. It's their job to take away the punchbowl lest it be another 1929 as it's certainly looking like currently.
  • DS
    David S.
    22 April 2019 @ 20:39
    Good interview. I understand that most of us want answers and trades, but we are in uncharted waters. If there were any easy answers Mr. Henrich would love to tell us. That is why the title is the Theater of the Absurd. All our history shows us we are in quicksand; yet the mark does not rebalance. Maybe by normalizing the CBs now mean printing money forever to maintain asset prices. That is the theater of the absurd combined with the "Waiting for Godot" market. Very frustrating for all of us. DLS
  • DP
    David P.
    22 April 2019 @ 19:12
    Great perspective and overview of current state of equities...
  • RS
    Ranjit S.
    22 April 2019 @ 17:51
    Little ammunition argument to too generic to be useful. A more useful analysis will focusing on micro distortions caused by this interventionist macro policy and what may be the limiting cases of these micro distortions.
  • JA
    James A.
    22 April 2019 @ 13:37
    Rather too general for my preferences
    • SC
      Sau C.
      22 April 2019 @ 16:55
      I agree. His viewpoints could have been summarized in an 8-10 minute video. He does not like long side here, volatility is compressed, FED/Buybacks supporting markets, pain is coming but timing is uncertain (which seems to be the bear mantra going on 5-10 years now).
  • SS
    Steve S.
    22 April 2019 @ 12:16
    This week's corporate earnings is key. Will show where the market is heading in the short term i.e. next 3 months.
  • MM
    Mike M.
    22 April 2019 @ 11:46
    Nothing new here....just more of the same Central Bank Intervention......
  • TJ
    Terry J.
    22 April 2019 @ 11:31
    Excellent analysis from Sven, that perfectly sums up the dilemma facing policymakers who appear almost out of monetary options for the next liquidity and or credit crisis. Meanwhile how big a stock melt up or blow off do we get before investors get too scared to continue picking up dimes in front of the steamroller bear and head for the exits en-masse!
    • DS
      David S.
      23 April 2019 @ 00:07
      I agree. The major problem is that many investors do not realize they are picking up dimes in front of the steamroller. The ones that do know, think they are so smart as to get out before everyone else. History does not show that this is a good tactic. Reminds me of some very old cartoons. DLS