Apologies, I am pretty much into MM funds, precious metal and cash (literally), but what is a pointer for what funds are illiquid in the next crisis?

Re equity - there are some sectors that surely remain interesting buys, especially when we have an opportunity to buy dips. I am thinking IoT, 5G, Cloud, AI as well as other selected sectors (healthcare, cannabis ?). It would be interesting to hear your thoughts about where you would look for entries if a ‘buy the dip’ opportunity arises at some point during 2020.

Julian/Raoul if there is a chance that employment paddles higher 1H next year and now that the dot plots are pricing in no rate hikes in 2020 and a rate hike in 2021, isnt it as good of a time as any to put the 2 year bond trade back on?

Please any additional thought after reading Zoltan #26? Thank you.

Gents. As ever great chat. I just thought that I’d throw in a comment/observation on the gating of the M&G Property Fund. A couple of months ago the Public Works Loan Board, who lend money to local authorities here in the U.K., raised their borrowing rate from 1.81% to 2.81% ( 100bps). The PWLB lend cov lite and there are no restrictions on amounts that can be borrowed by local authorities. (What could possibly go wrong!) Now this is important as one of the biggest buyers of commercial property in the U.K. over the last few years have been those local authorities. We’ll ignore the fact for now that local authorities aren’t allowed to invest in commercial property purely to generate return. But that is exactly what they have been doing. They have been exploiting the arbitrage between 1.81% and whatever the yield generated has been. The trade is obviously not nearly as lucrative at a cost of 2.81%. It’s long been suspected that professional property portfolio managers have been offloading ‘marginal’ assets to less qualified buyers. I’m wondering if the game of pass the parcel has now been shut down and the likes of M&G have no one to sell to? In the mid 80s you may recall that loads of local authorities went bust in the U.K. by getting involved in financial markets beyond their skill set (interest rate swaps with Goldman’s Sachs on that occasion if memory serves me right). I wonder if history is about to re-run? And property managers have just lost their ‘buyer of last resort’. Cheers. Pete

Thank you guys. Great chat.

Raoul - when you pull that trigger to add EDs / steepeners ...pls give us the shout here / twitter :)

FYI at&t has layoffs coming q1. No clue the extent but that’s happening.

Thanks for this Raoul and Julian, an eagerly awaited discussion in a complicated environment. Picking up on the mention of Oil, this being important as it has been interesting to watch the correlation of price action in oil to risk appetite of late. That in conjunction with OLV revisiting the years lows certainly should be of note. Whether its a liquidity shock or perhaps a more organic decomposition, something in the system is about to start the reversion. Have a great festive season!

Raoul - In your "Being Tested" piece and on twitter you have called out December 2021 Eurodollars. But in the portfolio there are ED 2020 positions. Also, if you're looking for this cycle to bottom Sep 2020, wouldn't 2020 EDs make the most sense? Could you just clarify which year is your preferred position? Sorry if this has already been asked. Julian - We were recently stopped out of platinum, but I assume you're still bullish. Is there a point at which you put that trade back on? Hope your ankle heals quickly! I'm in Salt Lake City so I know how frustrating that must be!

Wish you a speedy recovery on your ankle injury Julian There was also a major blip down in Silver and we are now dangerously close to our Stop Loss! Eek