The Jim Grant Series: James Aitken

Featuring James Aitken, Jim Grant

The esteemed Australian hedge fund advisor James Aitken sits down with legendary financial writer Jim Grant for an insightful conversation about central bank stimulus, the European financial system, China’s future, short selling, and more. Aitken, the founder of Aitken Advisors, compares recent European crises to the current state of the European economy and markets. He also shares his philosophy about how to properly navigate fully valued markets. Filmed on May 30, 2018 in New York.

Published on
15 June, 2018
Topic
Monetary policy, Europe, China, Valuation
Duration
61 minutes
Asset class
Equities
Rating
62

Comments

  • ML

    M L.

    1 7 2018 23:49

    0       0

    Great interview, with some interesting insights.

    LOIS is not going up, but down. And XCCY basis swap spreads are also trending lower into benign territory, so the USD rollover risk is diminishing, not increasing. Yes DXY is highish, but it was higher a year ago, and before that. On discussion of the US yield curve, no mention of the impact on the cycle of the US trade spat, or the fact that the fed is tightening. Fiscal loosening is offset by fed tightening and with trade tensions, the net is for lower, not higher rates in the ST - and lower still in the LT.

    Secular stagnation is a choice? Really? Tell that to the BOJ, who are now purchasing less JGBs and seem to have given up on its QE programme, having not really accomplished anything near what they intended to on inflation - despite professions to the contrary from Kuroda.

  • VC

    Vince C.

    27 6 2018 14:16

    2       0

    Great discussion. Agree with everything except for the China comment. David S. below made pretty good comments regarding it. There is a very simple, "macro" answer: you can't look at China through a western lens. You need to zoom out - really zoom out:
    1) Understand China is a 5000 year old civilisation masquerading as a country. China historically, over 2000 years has hovered at 25-35% world GDP output. What's happening in China is a REVERSION TO THE MEAN.
    2) Look around the world at all the Chinese diaspora and their relative economic success. A "China Town" exists in almost any city of note.
    3) Understand China's history. Drop the western lens. Zoom out. The answer was provided by Jim Rogers back in the late 1980s: "The 21st Century belongs to China."

    • BK

      Brian K.

      30 6 2018 13:54

      1       0

      Regarding Pt 1, my thoughts exactly. Well said.

  • NH

    Nigel H.

    26 6 2018 16:59

    1       0

    Brilliant! 1.5hrs more James Aitken here: http://capitalallocatorspodcast.com/2018/06/24/aitken/

  • DS

    Darryl S.

    25 6 2018 09:51

    0       0

    Great interview. Take out was the uncertainty of China and that no one can call it - but where there is certainty it is that China is playing the long game. This is antithetical to Western thinking. That's why we are flummoxed. The Buy/Sell/ Hold and (short) is a wonderful capture. As is the 'less wrong' mentality. Like previous comments I have made, I will praise the set and the filming techniques. Information plus presentation makes for a good watch. Thanks.

  • CR

    Cristian R.

    24 6 2018 09:27

    3       0

    This is absolutely fantastic. I eagerly await the rest of this series!

  • PD

    Pat D.

    24 6 2018 03:23

    0       0

    Maestros!

  • IM

    Istvan M.

    20 6 2018 18:58

    0       0

    been a while since I've heard james speak - thanks

  • IH

    Iain H.

    19 6 2018 22:26

    4       0

    Fantastic, interviews like this one make Real Vision unique. Thanks very much.

  • PJ

    Peter J.

    19 6 2018 11:20

    2       0

    Very interesting and informative views on China, excellent interview!

  • DR

    Dan R.

    19 6 2018 03:42

    1       0

    Phenomenal. These guys think straight. I rather think the US is in an Indian summer economically. Global cooling is real especially from an economic standpoint over the long term.

  • F

    Floyd .

    18 6 2018 22:34

    4       0

    pure and simple...value added. Specific ideas,specific opinions, and great historical perspectives and analogies!

  • JN

    Jill N.

    18 6 2018 22:23

    1       1

    Excellent 👏 Can we please hear James again in 6 months time ?
    Brains , deep thought & common sense wisdom run in the family with brother Charlie brilliant as well

  • BO

    Bryan O.

    18 6 2018 22:08

    0       1

    Excellent

  • SS

    Steven S.

    18 6 2018 19:49

    0       0

    HERO(s).
    more need the courage to speak these truths in less careful language...

  • DS

    David S.

    18 6 2018 03:00

    1       0

    Mr. Grant looks at China without his American values. President Xi looks at America and has seen freedoms gone wild, as many other people in the world have seen. Mr. Aitken believes that President Xi is basically a Marxist. President Xi may be a classic socialist that believes in state control of " necessities" -broadly defined, but supportive of capitalism to provide the funds for the social contract. The Chinese have always been excellent in business where ever they live. I would be totally lost in China, but it may work well for 1.5 billion Chinese. DLS

  • DS

    David S.

    18 6 2018 01:59

    1       1

    Great perspective on China. Thanks. DLS

  • DV

    Dimitri V.

    18 6 2018 00:17

    1       0

    This was awesome. Need to rewatch and go over notes.

  • DS

    David S.

    17 6 2018 23:24

    0       0

    Dr, Wolfgang Schäuble did not cause the European sovereign debt crisis in 2008. He inadvertently exposed the default risk that already exited. DLS

  • JH

    Jonathon H.

    17 6 2018 12:10

    5       1

    Best line novel I have heard for a while

    "We have late cycle asset valuations with mid cycle economy"

    • BM

      Beth M.

      17 6 2018 18:55

      1       0

      So someone please define what is a "mid cycle economy" and why we are in a "mid cycle economy" ?? PLEASE

    • NG

      Nick G.

      18 6 2018 17:15

      1       0

      An economy which is half way in the cycle between expansion and contraction. His argument is that we have valuations which are high (late cycle) but potentially justified by the fact that the economy will still expand for many years (mid cycle).

  • GF

    Guillaume F.

    17 6 2018 11:00

    1       0

    Fantastic!

  • JB

    Jason B.

    17 6 2018 04:11

    2       0

    Awesome...Thanks Grant, James and RV...
    Always enjoy Grants take on humour.
    Very enjoyable and great to hear an Aussie on the show....

  • NI

    Nate I.

    17 6 2018 04:08

    17       1

    This is why I subscribe to RV. Jim Grant has great interview questions, but please Jim, be more careful not to interrupt your guests when they are in the middle of answering your questions. This is long form. If the interview goes 1.5 or 2 hours, all the better.

    • SP

      Steve P.

      17 6 2018 06:35

      4       0

      Agree Nate - doesn't happen often but detracts from the interview as often the info. coming out is really note worthy, agreeable or not (thus usually the reason for the interruption in the first place)

  • SS

    Steven S.

    17 6 2018 03:26

    1       0

    Extremely well-done. Financial insight precious metal.

  • MU

    Maurici U.

    17 6 2018 02:56

    13       3

    Good interview, but it would be nice if Jim Grant didn´t interrupt so frequently

    • WC

      William C.

      19 6 2018 09:28

      1       0

      I barely noticed Grant interrupting, but am used to people like Neil Cavuto to on Fox business who drive me nuts with their interruptions.

  • ss

    sid s.

    17 6 2018 01:47

    3       0

    this is what RVT is all about . for me at least. great conversation..

  • B

    Bob .

    16 6 2018 21:27

    3       0

    Excellent guest that I wouldn't mind hearing updates from every six months.

    JG as always asks insightful questions.

  • DS

    David S.

    16 6 2018 20:15

    0       1

    Excellent interview. Must watch a couple more times. Re: Long-term US Bonds: Part of the low bond yield is QEs from all the CBs added so much money to the savers and not to the spenders. Just as P/Es are inflated, there is too much money chasing bonds, thereby keeping long-term rates lower. DLS

  • tw

    thomas w.

    16 6 2018 18:45

    1       1

    Dear Jim and James

    sorry for asking but if
    Buy = Long
    Sell = Short
    what do you mean by hold?
    No Position?

    regards,
    Thomas

    • bm

      brian m.

      16 6 2018 19:45

      0       0

      Don't sell and don't buy yet

    • GP

      Gero P.

      16 6 2018 23:44

      3       0

      Hi Thomas.

      A hold recommendation means to hold the asset that you have already bought.

      So a Hold recommendation is only for people who bought the asset already and currently own it.

      You cannot "hold" what you don't own.

      Hope this helps

    • MC

      Minum C.

      18 6 2018 18:12

      1       0

      Hold is one of the most ambiguous terms out there. When managing other people's money, it is problematic to use Gero's definition below. One could argue you buy your portfolio every day, so if you already own something it should be defined as a buy. This becomes apparent when you try to manage other people's money. If you're not willing to buy a security for a new account that your model portfolio already holds, then why does the model portfolio still hold it? It is a rather grey area.

    • tw

      thomas w.

      19 6 2018 13:15

      0       0

      Mimum C, thanks you rephrased my question in a better way. Besides you can also hold a short position in your portfolio.... Best, Thomas

    • PD

      Peter D.

      20 6 2018 15:13

      1       0

      The other aspect of a "Hold' position is that there are tax consequences to trading.

      Investors are thus often in a position in which either "buying" or "selling" may normally the correct course....however the tax consequences (triggering a tax gain or loss) change the calculus.

      That is why Warren Buffet (for example) almost never sells a stock ...once he has bought in.

  • MM

    Mark M.

    16 6 2018 17:08

    10       3

    James was world class, but why does JG keep interrupting.. So annoying

    • GW

      Greg W.

      16 6 2018 17:33

      33       5

      I don't think these guys are doing these interviews for the money or just to pander to an audience giving the same basic information monologues you can see on other venues. They want to have fun, and have a conversation. Why criticize Jim Grant for his interviewing technique? He's a legend in his industry which is investing and bonds right?. He gets these guests, and interviews because people want to meet him, and talk with him, unlike for example someone from CNBC. I've seen a few comments like this. Personally I feel privileged and appreciate being able to listen in on conversations like this. I'm disappointed to see comments section, peanut galleries, for complaining. If you're not "on the field in the game" don't criticize that's my opinion.

  • BK

    Brian K.

    16 6 2018 13:11

    3       0

    Late cycle asset valuations in a mid cycle economy and he'd short the S&P 500. Downturn for the rest of 2018?

    • GW

      Greg W.

      16 6 2018 17:19

      0       0

      I don't think this is necessarily a contradiction, saying the SP equities are "fully priced" or whatever, expensive, wanting to be short. Even though the economy is mid cycle. If the economy can keep growing or be flat for a long time still, maybe stay out of recession, maybe even another 3 years or longer who knows? And yet the risk reward for owning S&P broadly may still not be worthwhile.

      I liked the trade tip program for consumer staples, Walmart down 20% or so, proctor and gamble, and you have the 4% yield. While waiting and seeing what's going to happen.

    • BK

      Brian K.

      16 6 2018 19:06

      1       0

      Agreed I don't think it was necessarily a contradiction. I'm curious if he thinks we will reach January highs this year.. I guess not.. Yeah I bought GIS at the 56 wk low. I pretty much buy the sector thats in hell. Macy's last year when the world declared Amazon has taken over retail worked well.

  • SH

    Steve H.

    16 6 2018 12:53

    1       0

    Outstanding.

  • CA

    Craig A.

    16 6 2018 10:50

    3       0

    Grant Is a very cool nerd.Excellent interview

    • CA

      Craig A.

      16 6 2018 10:51

      0       1

      Or Desperate

  • vt

    vadim t.

    16 6 2018 10:43

    2       17

    It would be great if JG just stop interrupting and let the guy speak. The guy is brilliant but It's a failure interview.

    • CA

      Craig A.

      16 6 2018 10:48

      0       2

      Sounds like you are greedy

    • CA

      Craig A.

      16 6 2018 10:52

      0       3

      Are desperate

  • JA

    John A.

    16 6 2018 09:03

    2       1

    The thought process on display is just fantastic to behold. Particularly when he described not having enough "bandwidth" to short Tesla, among other things that might tempt him. It is so easy to get side tracked from one's core investment framework. Peter Brandt being one end of the spectrum, and James Aitken on the other. Truly world class professionals both. Both share the same dogged commitment to their strategy, and maybe most importantly, they both are able to step back and manage themselves to keep their focus on their own strategy. This all ties in nicely with the videos on the mental game of trading. Brilliant interview Jim and James!

  • DP

    Duncan P.

    16 6 2018 05:31

    0       3

    JG as cantankerous as ever. Nice work James(s).

  • CN

    Charles N.

    16 6 2018 04:56

    6       0

    Fascinating interview, easily an all-time favorite. Interesting to note that Mr. Aitken appears (according to Bloomberg) to have ties to several blockchain technology companies. May we be fortunate enough to enjoy a future interview where he shares his unique insights on that space as well. Cheers to Mr. Aitken, Mr. Grant, and to RealVision for hosting them both!

  • JW

    James W.

    16 6 2018 04:23

    2       1

    Thanks to everyone involved for doing this. Exceptional guest in Mr. Aiken, and Mr. Grant did an outstanding job. This is the kind of content in which RV cannot be excelled.

  • YL

    Young L.

    16 6 2018 03:45

    4       1

    That was awesome. Even though a lot of it went over my head but I found it fascinating none the less. The hour flew by...

  • VS

    Valentin S.

    16 6 2018 02:35

    7       0

    This is painfully good material. Thank you, Real Vision, and great thanks to Messrs. Aitken & Grant. The value of the insight, knowledge and wisdom being imparted here is inestimable.

  • PW

    Phil W.

    16 6 2018 02:27

    2       0

    What a privilege to listen in on the thoughts of such a deep thinker!!!

  • PM

    Patrick M.

    16 6 2018 02:03

    2       1

    Sick Chelsea's James.

  • OM

    Omar M.

    15 6 2018 23:49

    2       0

    Excellent👍🙏

  • JH

    Jesse H.

    15 6 2018 23:38

    7       0

    Excellent - gotta love Jim Grant, unbelievable interviewer.

  • rm

    russell m.

    15 6 2018 22:40

    5       0

    Top shelf.

  • BS

    Brian S.

    15 6 2018 22:03

    4       0

    Jim Grant does an excellent job. Looking forward to more of his interviews. James was very good as well.

  • JM

    Jason M.

    15 6 2018 21:53

    6       0

    Yep James is the real deal. I hope he'll come back frequently. Would love to see an example of his writing (even 6 months old) submitted to RV's Think Tank

  • GF

    Gordon F.

    15 6 2018 20:18

    4       0

    I loved the analogy about removing the tablecloth gently, and the mess that will ensue. But I understand WHY the Fed is trying to do it slowly. They (and many others) realize that an upset is coming, and raising rates suddenly could easily (probably would) trigger it.
    They DON'T want the blame, so are gradually raising rates (so as to have room to lower them as they ride to the rescue) while waiting for something else to happen that can be blamed for the upset. I'm sure the Fed is also hoping fervently that said upset is postponed for at least another year so they have at least 3 percentage points in their quiver to fight the next downturn.
    And it is clear that there are plenty of sharp points around the current bubble, so I would guess that they will get their wish, i.e., the central banks will not be fingered as the culprits when this bubble finally blows, even though it seems clear that they inflated it.

  • VS

    Victor S.

    15 6 2018 20:12

    2       0

    To the James boys -beware of not knowing the NEW RULES OF THE GAME. Bond prices to certain buyers are a no risk ,no capital needed proposition! Thereby caveat emptor to the sellers of US treasury debt.
    Moreover -Great interview !

  • RD

    Ryan D.

    15 6 2018 19:38

    1       2

    I didn’t like the “West Coast” crack, but then I realized that I understood it much better once they explained it. Another great interview by Jim, and obviously and incredibly sharp and insightful guest in Mr. Aitken. Cheers from Southern California.

  • VP

    Vincent P.

    15 6 2018 19:28

    5       0

    Too short. It felt like 5 minutes. Must have been intrigued. Yes I was! Excellent!

  • BH

    Brian H.

    15 6 2018 18:30

    2       0

    Magnificent!

  • MM

    Mak M.

    15 6 2018 17:35

    2       0

    AMAZING interview! The best i have seen so far.Very informative and Mr James was excellent speaker with slow and smooth voice, which it helped me to understand quicker because i am not native English speaker.Thank you RV

  • MM

    Mike M.

    15 6 2018 17:23

    4       0

    Wonderful, you have given me a lot to contemplate. Jim Grant makes interviewing look easy. Keep up the good work. In the mean time I will wait for the Central Bankers to make a misstep.

    Best regards,
    Mike

  • IO

    Igor O.

    15 6 2018 16:40

    2       0

    Reading Jim Mellon Juvenescence.

    • BS

      Bernie S.

      20 6 2018 02:28

      1       0

      I have read it and reread it. Everyone who wants to have a long and healthy life should do so as well.

  • rr

    rlw r.

    15 6 2018 16:07

    1       0

    Another brilliant Grant episode, thanks to J & J

  • TH

    Truman H.

    15 6 2018 16:07

    4       0

    I so admire the brilliant observation that the faulty premise underpinning current markets is that long rates can never go up. So many other ideas come to mind as to what could challenge current thinking, and what consequences and required preparations could flow from various scenarios. Buy, sell or hold the 30-year and/or the Euro? Sell! is the unequivocal answer. Terrific, thought-provoking stuff.

  • FG

    Fred G.

    15 6 2018 15:37

    10       0

    Amazing. Possibly the best on RV yet, thank you! Especially liked the insights on china. The majority of current commentary on China is akin to doctors saying a broken ankle will immediately kill the patient - I.e not looking at the big picture and not appreciating greater complexity

  • PR

    Pedro R.

    15 6 2018 15:29

    7       0

    This one goes to the top interviews. Superb!

  • PB

    Pieter B.

    15 6 2018 15:12

    1       0

    Brilliant! Thanks a lot!

  • KJ

    Kulbir J.

    15 6 2018 15:00

    14       0

    Please make James a regular on Real Vision. Amazing interview!

  • DB

    David B.

    15 6 2018 14:37

    10       3

    "Hold" the institution of managed paper currencies because "I don't know what the alternative is". Decentralized cryptocurrencies, my friend. You would short THE alternative?

    • DB

      David B.

      15 6 2018 14:37

      6       0

      That said, I absolutely love this interview!

  • YB

    Yuriy B.

    15 6 2018 13:06

    5       0

    This is beyond brilliant. Thank you Real Vision!

  • MS

    Manuel S.

    15 6 2018 11:56

    15       0

    Real Vision, I had missed you dearly....welcome back!

  • JS

    John S.

    15 6 2018 11:48

    2       0

    Outstanding

  • KS

    Karen S.

    15 6 2018 11:20

    12       0

    loved the buy/hold bit. it'd be cool to see it happen more often at RV.

  • RC

    Robert C.

    15 6 2018 11:18

    20       0

    Jim has a knack of interviewing for the audience, the countless times he probes James on the plain English version of the jargon used made this interview really digestible. Jim and Grant are both excellent interviewers with this very unique trait. Bravo!

  • RP

    Raoul P.

    15 6 2018 11:09

    65       0

    James is a good friend. Ive been trying to get him for three years now but he shies from publicity. Jim pipped me to it! (Im jealous of Jims star power vs mine). James is one of the smartest, granular but yet big picture thinkers in the financial plumbing world. He is the benchmark and has the ear of everyone who matters. No one know this stuff better.

    • JA

      James A.

      16 6 2018 16:17

      27       0

      Thanks very much mate, & thank you to all for he kind feedback. I’m just trying to be less wrong, obsess over process, preference the reflective over the reactive, & then from time to time take advantage of consensus narrative overshoots. Too many people think “macro” means “looking for things that are going wrong or could go wrong”. In reality, “macro” also means “looking for things that are going right or could go right”. In other words, macro isn’t always asymmetrical (e.g. 2008). It’s symmetrical. Keep that in mind.

  • CM

    Carlos M.

    15 6 2018 11:08

    1       0

    good intereview

  • RR

    Ray R.

    15 6 2018 10:58

    3       0

    Best interview I think I’ve ever observed. James Aitken phenomenal.

  • RM

    Robert M.

    15 6 2018 10:56

    3       1

    Still find it hard to worry about various supply (increased US fiscal deficit related issuance of hundreds of billions) or demand issues (reduced Japanese demand because of increased hedging costs which may see their 1Tn US treasury holdings run off by a hundred billion?) versus the much larger factor of whether the economy will for example run 1% slower and thus change the pricing on all of the $20Tn of treasury bills and bonds outstanding.
    And thanks to Jim for some plain speaking about China's similarity to the soviet model, especially after hopes of a liberalising Xi have proven very misguided and the implications for future slow growth (eg: the middle income trap).

  • IA

    Ibrahim A.

    15 6 2018 10:50

    17       0

    Amazing. Amazing. Amazing.

    What a privilege to listen in on the thoughts of such a deep thinker.

    Thank you Jim Grant. Thank you Real Vision.

  • RA

    Robert A.

    15 6 2018 09:57

    8       0

    Two great financial minds in the same place at the same time! Great job in getting these guys together.