I want to know the performance of these guests before I waste my time listening to them. One thing I’ve learned about all these supposed expert pontificators is they arn’t even as good as buy and hold the SPY
I've seen Lahkman Acuthan from ECRI and Darius Dale from 42 Macro call the: March 2020 downturn, the March 2020 upturn, the 2022 Risk Off downturn. Lahkman from ECRI in particular has calls going back further than 2011. Right every time. They both agree with this guests' outlook give or take a few quarters.
I think we should learn how the market work ourselves at this point. Lots of resources to learn. I don't mean podcast, videos, etc. Like textbook kind of knowledge and wisdom
@@Reutzel507 🤣 seriously? Wouldn’t you wanna know A surgeon’s track record before he cut you open? I’ve seen guys sell terrible advice for 40 years straight, I guess I just met one of their patrons.
Andy is an underrated legend. He has a point of view and a position to match it. Is there anything else you one can do as a trader? So much to learn from him and very generous with his time. Thanks Jack and Andy for the great pod
The ONLY way we get a rate cut is if disaster happens. I only see downside in 2023. If rates get cut, that means something really bad happened and equities will be down 20% plus. The other option (without a disaster) is higher for longer...an equities slow bleed. I like Rosenberg's analysis that no bear market bottom has ever been reached without bonds rallying first. Never. We are not even close to that yet. The other thing to consider, equity bottoms historically happened 6 months AFTER Fed started cutting rates. Think about that. That would suggest mid 2024 bottoming process.
Not much talk about the Fed's ability and willingness to manipulate the DXY (USD value) by selling bonds (QT) to keep commodity prices i.e. Inflation lower. The Fed has not really sold many assets off their balance sheet yet. If they start doing so, could that drive the USD value and Treasury yields up?
My question would be, if earnings look like they're going to be cut significantly and premiums to short are high, wouldn't that make the most sense to then just buy 4-week or 12 week bills and earn 10% for your clients with no risk to principle? The case for being bond bullish right now I think on a global spectrum far outweighs any case to be short or out of them. The only times the US and Germany's curves have been inverted and this far in disagreement with monetary policy have been when they are sniffing out a huge problem in the future. And they've always been right when inverted this deeply. Compile that with 6-12 months of manufacturing, services and shipping contractions and the objective base case is earnings come down- growth seizes and most people run to fixed income. There is already a pretty large amount of evidence that there is a significant global dollar shortage and the thing that bonds offer that puts do not is liquidity for banks and businesses. If earnings fall sharply, broker/dealers collateral standards rise sharply like they have been, and you're undergoing a dollar shortage simultaneously- people holding bonds will be holding something that is high in demand. Just watching repo failure in 2022, you can see that corporates are not satisfactory. Introduce some sharp unemployment and a lot of MBS's will turn to being very unsatisfactory. Again, the name of the game will be treasuries. To argue that outcome, you would need substantial evidence that the economy is healthy, and the best I've heard is that a lot of people are living pay check to paycheck- so they're not broke yet but living that close to the edge with the headwinds of global contraction seems to be clearly telling us the risk is to the downside not the upside if the best case is true currently. If we are already below the best case, that would tell us the future is already in motion and to prepare for hard times.
Excellent analysis. Jumping in at present MAY work out, but does that risk outweigh the potential gains? Andy presents a good case: the Return on Cash - a rough 4% Return with no risk justify a potential 10+ percent loss? Not in my mind, but that’s me. Now, if we do indeed have a 1st quarter 10+ percent drop after the initial Excitement of the new year wears thin? Should we jump in? Perhaps. But that’s still a few months away, and in this environment, no clear direction is available. Will “the Center Hold” ? (To use a past military term) That is still to be determined. I would advise holding back the “reserves” till the fog clears, and the outcome of the Battle becomes more apparent. Everyone Pooh poohs Timing, but timing is still everything, no? The time is not yet. Enjoyed your comment.
Yes,. I regret buying the s and p index and should have bought short term treasuries in 2022 instead. It’s a learning experience, but thinking about buying 3 month treasuries soon. Equities are too volatile right now for me
@@Tendertroll1 I see no downside to buying short term treasuries. Collect a good return, and as soon as the FED stops hiking they will get a hefty bump in price. If your worst downside is 'only making' 4% with no risk with an upside of price blowing up if/when the Fed stops rising or there is a liquidity crises (more than likely the longe the Funds rate is above 4%) then I think you're doing well. If you have a more stable and long term portfolio, you could look to buy longer term bonds which have more upside potential in price. The people who do the best in the long haul are the ones who miss the worst periods of the market. Maintain liquidity for when things bottom and you'll be able to set yourself up for compounding rates in the long term that far outpace the extra couple of points you think you might be able to eek out of a risk off market environment.
Some part of the discussion sounds wrong. When you do a steepener trade you need to take into account the duration. So it is not 1 to 1 if you do 2y -10y for example.
Call it anything you want. Recession or not look around you! The prices and house hold goods, interest rates and low supply. It’s a new thing! People are getting attacked from all sides in financial world. Please be realistic and don’t get distracted with words. It’s a no brainer!
Does a 15% loss of Capital outweigh a 7% Return on that Capital? Some say yes. They usually are the ones advising other people what to do with their monies (after their no risk “cut” of course) It is easy to sell on “long returns of investments” overcomes “short return losses”. Until unfortunately, it doesn’t - quite- work- out. (Past performance is no guarantee of future returns) Remember reading THAT little unimportant absolution of responsibility?
I don't believe he is shorting equities. I believe he sees the investment industrial complex view that cpi will be higher for longer and will drive up equities due to the E in the P/E ratio getting higher on that technicality.
The problem with Western economies in a nutshell: too much monetary and human capital used to move electrons around a financial ledger, producing nothing of tangible value.
I'm not interested in making money on 1 position and losing as much or more on another. This guy would be better off in t-bills and getting a life outside of gambling.
For a few months now I have been searching tirelessly for information on how to start investing. I even payed $1000 for a course that I now regret. It appears that there is no structured guidiance for beginners on how to get started in this realm. I've come across several investors making well over $250k/annum and would be grateful if anyone on here could provide insights on how to get started, identify potential stocks, when to make an entry, exit etc.
Keep it simple in the beginning. Buy something, like an index fund, and hold. Educate yourself in the meantime and elevate your risk tolerance over time.
How the F can you be short everything. I'm assuming this prat has his money somewhere therefore he is long at least in something whether it be a currency or some tangible asset.
Short stocks and bonds!? Hey, me too! Let’s get REKT together !😂
Thanks for having excellent guests with diverse points of view. Valuable insights.
I want to know the performance of these guests before I waste my time listening to them. One thing I’ve learned about all these supposed expert pontificators is they arn’t even as good as buy and hold the SPY
I've seen Lahkman Acuthan from ECRI and Darius Dale from 42 Macro call the: March 2020 downturn, the March 2020 upturn, the 2022 Risk Off downturn. Lahkman from ECRI in particular has calls going back further than 2011. Right every time. They both agree with this guests' outlook give or take a few quarters.
I think we should learn how the market work ourselves at this point. Lots of resources to learn. I don't mean podcast, videos, etc. Like textbook kind of knowledge and wisdom
So true
Why do you need to know someone’s track record to listen to their opinion?
@@Reutzel507 🤣 seriously? Wouldn’t you wanna know A surgeon’s track record before he cut you open? I’ve seen guys sell terrible advice for 40 years straight, I guess I just met one of their patrons.
Andy is an underrated legend. He has a point of view and a position to match it. Is there anything else you one can do as a trader? So much to learn from him and very generous with his time. Thanks Jack and Andy for the great pod
Where can i find the chart for the bonds he was taking about?
The ONLY way we get a rate cut is if disaster happens. I only see downside in 2023. If rates get cut, that means something really bad happened and equities will be down 20% plus. The other option (without a disaster) is higher for longer...an equities slow bleed. I like Rosenberg's analysis that no bear market bottom has ever been reached without bonds rallying first. Never. We are not even close to that yet. The other thing to consider, equity bottoms historically happened 6 months AFTER Fed started cutting rates. Think about that. That would suggest mid 2024 bottoming process.
Not much talk about the Fed's ability and willingness to manipulate the DXY (USD value) by selling bonds (QT) to keep commodity prices i.e. Inflation lower. The Fed has not really sold many assets off their balance sheet yet. If they start doing so, could that drive the USD value and Treasury yields up?
They have been doing $95B in QT a month since September. The majority of this was offset by their TIPS holdings at first.
here for the TGA liquidity master.
Wow. Good luck to him.
My question would be, if earnings look like they're going to be cut significantly and premiums to short are high, wouldn't that make the most sense to then just buy 4-week or 12 week bills and earn 10% for your clients with no risk to principle? The case for being bond bullish right now I think on a global spectrum far outweighs any case to be short or out of them. The only times the US and Germany's curves have been inverted and this far in disagreement with monetary policy have been when they are sniffing out a huge problem in the future. And they've always been right when inverted this deeply. Compile that with 6-12 months of manufacturing, services and shipping contractions and the objective base case is earnings come down- growth seizes and most people run to fixed income. There is already a pretty large amount of evidence that there is a significant global dollar shortage and the thing that bonds offer that puts do not is liquidity for banks and businesses. If earnings fall sharply, broker/dealers collateral standards rise sharply like they have been, and you're undergoing a dollar shortage simultaneously- people holding bonds will be holding something that is high in demand. Just watching repo failure in 2022, you can see that corporates are not satisfactory. Introduce some sharp unemployment and a lot of MBS's will turn to being very unsatisfactory. Again, the name of the game will be treasuries. To argue that outcome, you would need substantial evidence that the economy is healthy, and the best I've heard is that a lot of people are living pay check to paycheck- so they're not broke yet but living that close to the edge with the headwinds of global contraction seems to be clearly telling us the risk is to the downside not the upside if the best case is true currently. If we are already below the best case, that would tell us the future is already in motion and to prepare for hard times.
Excellent analysis.
Jumping in at present MAY work out, but does that risk outweigh the potential gains?
Andy presents a good case: the Return on Cash - a rough 4% Return with no risk justify a potential 10+ percent loss?
Not in my mind, but that’s me.
Now, if we do indeed have a 1st quarter 10+ percent drop after the initial Excitement of the new year wears thin?
Should we jump in?
Perhaps. But that’s still a few months away, and in this environment, no clear direction is available.
Will “the Center Hold” ? (To use a past military term)
That is still to be determined.
I would advise holding back the “reserves” till the fog clears, and the outcome of the Battle becomes more apparent.
Everyone Pooh poohs Timing, but timing is still everything, no?
The time is not yet.
Enjoyed your comment.
Are you going to buy treasury bills?
Yes,. I regret buying the s and p index and should have bought short term treasuries in 2022 instead. It’s a learning experience, but thinking about buying 3 month treasuries soon. Equities are too volatile right now for me
@@Tendertroll1 I see no downside to buying short term treasuries. Collect a good return, and as soon as the FED stops hiking they will get a hefty bump in price. If your worst downside is 'only making' 4% with no risk with an upside of price blowing up if/when the Fed stops rising or there is a liquidity crises (more than likely the longe the Funds rate is above 4%) then I think you're doing well. If you have a more stable and long term portfolio, you could look to buy longer term bonds which have more upside potential in price. The people who do the best in the long haul are the ones who miss the worst periods of the market. Maintain liquidity for when things bottom and you'll be able to set yourself up for compounding rates in the long term that far outpace the extra couple of points you think you might be able to eek out of a risk off market environment.
Wait, higher for longer should be somewhat bearish for equity no? If the cost of capital increases, implied valued decreases?
Some part of the discussion sounds wrong. When you do a steepener trade you need to take into account the duration. So it is not 1 to 1 if you do 2y -10y for example.
Crypto=Ponzi
Silver and Gold to the MOON 🌕🤣
Thanks Blockworks. Absolutely fantastic content 👍
am bullish on andys webcam .. btw which cam are you using ?
Isn't this Ben Bernanke in disguise?
Every short seller is a genius in a bear market
Thank you
Can someone who knows more on the matter explain how a soft landing means a rate cut? Shouldn't that imply keeping rates according to Fed's dot plot?
Thank you for your donation to the squeeze
Shorting now when we went down all year long is kind of risky if you ask me.
Call it anything you want. Recession or not look around you! The prices and house hold goods, interest rates and low supply. It’s a new thing! People are getting attacked from all sides in financial world. Please be realistic and don’t get distracted with words. It’s a no brainer!
Thanks fellas. Solid
A 'win' in equities is yield returning higher than risk free rate and/or inflation.
Does a 15% loss of Capital outweigh a 7% Return on that Capital?
Some say yes.
They usually are the ones advising other people what to do with their monies (after their no risk “cut” of course)
It is easy to sell on “long returns of investments” overcomes “short return losses”.
Until unfortunately, it doesn’t - quite- work- out.
(Past performance is no guarantee of future returns)
Remember reading THAT little unimportant absolution of responsibility?
damn, can't shake the Ben Bernarke on this one, but good insights indeed.
Higher WHAT for longer?
Fed rates or CPI?
Please, full and concise comprehensive language.
I like those boys, they do good guesses...
I have a feeling Andy is also short on his internet provider
I don't believe he is shorting equities.
I believe he sees the investment industrial complex view that cpi will be higher for longer and will drive up equities due to the E in the P/E ratio getting higher on that technicality.
Posting interview one week later they are conducted, that is impressive. That is what happen when you hire federal employee to do your editing 😂
"Bueller, Bueller, anyone?"
From the thumbnail I thought it was Tom Luongo
Reusing last year’s trade for the new year. All he needs is a long energy position.
Not very convincing.... 🙄
The problem with Western economies in a nutshell: too much monetary and human capital used to move electrons around a financial ledger, producing nothing of tangible value.
I'm not interested in making money on 1 position and losing as much or more on another. This guy would be better off in t-bills and getting a life outside of gambling.
I’m not smart enough to understand. Somebody please help me. How does cash earn 4.5% this year?
Money market funds. Short term Treasury bills
Ya, liquid cashlike assets are yielding ~4.5%
What did he really say at the end of the day that was novel, insightful and elucidating? Talk about meaningless blah, blah!
☢️😃👌
China reopening is positive for Europe & EM
For a few months now I have been searching tirelessly for information on how to start investing. I even payed $1000 for a course that I now regret. It appears that there is no structured guidiance for beginners on how to get started in this realm. I've come across several investors making well over $250k/annum and would be grateful if anyone on here could provide insights on how to get started, identify potential stocks, when to make an entry, exit etc.
Keep it simple in the beginning. Buy something, like an index fund, and hold. Educate yourself in the meantime and elevate your risk tolerance over time.
Major USD decline will impact US earnings positively... Keep in mind.
I didn’t really get shit from this guy, idk why. I’ll try again tmrw.
How the F can you be short everything. I'm assuming this prat has his money somewhere therefore he is long at least in something whether it be a currency or some tangible asset.
It's easy to say I'm bearish on this and that without proof. Don't believe in this bs
A lot of bla, bla, bla and nothing specific.