It is a government inspired crisis this time. The Treasury have to sell Bonds to cover the trade imbalance and the government spending imbalance. In order to sell them they have to raise interest rates and the old long-term, low risk, low interest, AAA investments (including Treasury Bonds), held by the banks (often due to government regulatory policy), become next to worthless. The next milestone is the 15th when the government issue a new batch of Bonds. I have approximately 350k stagnant in my portfolio that needs growth. What is the best way to take advantage of this downturn?
That’s right! Downturns provide plenty of opportunities for regular people to build wealth from the scratch. However, you may need to get some professional advice from an Investment planner if you need an aggressive return.
In the world of finance, recessions are prime opportunities for wealth creation. When my portfolio suffered a significant loss in April of last year, I realized the need to enlist the expertise of a financial consultant. With her guidance, I have not only recovered from my losses but also generated a profit of 250k. The knowledge and skills I have acquired through this experience have been invaluable in my journey towards financial success.
Kate Elizabeth Amdall She is a genius when it comes to diversifying her holdings. You can verify her identity for yourself by looking her up online. She is well knowledgeable about the financial markets.
What bothers me about this situation is the fact that the news and media are all going about a recession which is understandable due to the war and pandemic but still the same media still publish articles about folks in the same economy pulling off hefty 6figure profit(Averg. 200k in barely 8weeks) in this downtrend how is that possible?
I've come to realize both bear and bull market provide opportunities to make high gains, I used to call bluff on folks that bragged about making a fortune from such down-markets until I happened to do so myself.
Indeed, you are correct! On the advantageous aspect, economic downturns offers numerous prospects for ordinary individuals to create wealth from the ground up. Nevertheless, seeking guidance from an investment planner might be necessary if you desire a more assertive return.
In the world of finance, rece-ssions are prime opportunities for wealth creation. When my port-folio suffered a significant loss in April of last year, I realized the need to enlist the expertise of a financial consultant. With her guidance, I have not only recovered from my losses but also generated a profit of 250k. The knowledge and skills I have acquired through this experience have been inval-uable in my journey towards financial success.
@@joshbarney114I've been thinking of going that route has been holding on to a bunch of stocks that keep tanking and I don't know if to keep holding or just dump them, think your Inv-coach could guide me with portfolio restructuring.
@@FabioOdelega876 I've shuffled through a few advisors in the past, and "Colleen Janie Towe" remains the most resourceful thus far. Her strategy proves profitable, and sustainable both in a bull & bear market. Most likely, her details can be found on the net, so you can confirm yourself.
Investors have just turned back the clock on the Fed’s tightening campaign and cast aside the Fed fears that ruled them for 15 months. It just gets very daunting to me when I’m sitting there looking at charts and trying to determine if i’m right or wrong! I’ve been trying to grow my portfolio of $300K for sometime now, I would greatly appreciate any suggestions.
First of all, You could lose it all and you could win it all. It goes both ways. Secondly, what works for A may not necessarily work for B and you should not be a bandwagon investor. A good number of folks are raking in huge 6 figure gains in this downtrend, but such strategies are mostly successfully executed by folks with in depth market knowledge.
Facts!! Since the market became extremely volatile and pressure increased (I should be retiring in 17 months), I took the decision to work closely with a financial advisor. It has already been 9 months and counting, and I have made approximately 600K net from all of my holdings.
That's impressive, my portfolio have been tanking all year, tried learning new strategies to gain in the current market but all of that flew right over head, please would you mind recommending the advisor you're using
My advisor is “Natalie Marie Tuttle”. She has since provide entry and exit points on the securities I focus on. You can look her up online if you care for supervision. I basically follow her trade pattern and haven’t regretted doing so
With markets falling, inflation soaring, the Fed imposing a sharp hike in interest rates, while Treasury yields are rising rapidly, meaning more red ink for portfolios this quarter. How can I take advantage of the current market volatility, I'm still at a crossroads deciding whether to liquidate my $125,000 ETF/Growth Stock portfolio.
Focus on two main goals. First, stay protected by learning when to sell stocks to cut losses and reap profits. Second, prepare to profit when the market turns. I recommend that you seek advice from a CFP or an investment advisor.
Right, I've been in constant touch with a CFP since the pandemic. You know these days it's really easy to buy into trending stock's, but the task is determining when to hold or sell . My advisėr decides entry and exit commands on my portfølio, I've accrued over $550k from an initially stagnant reserve of $80k.
No doubt, the stock market is definitely the most awkward teenager with the wildest mood swings! I began with "JILL MARIE CARROLL". Her approach is transparent allowing total ownership and control over my position and fees are very reasonable in comparison with my ROI.
@@TruckeeFam This is useful information; I copied her whole name and pasted it into my browser; her website appeared immediately, and her qualifications are excellent; thank you for sharing.
The system is failing as a result of both government and federal policy. In the next days, the banking crisis would have to be epic and gigantic for the FED to decide not to raise interest rates. This won't happen; an increase and a crash are coming. There will be more negative portfolios this 2nd half of 2023 with markets tumbling, soaring inflation, and banks going out of business. My concern is how can the rapid interest-rate hike be of favor to a value investor, or is it better avoiding stocks for a while?
Just ''buy the dip'' man. In the long term it will payoff. High interest rates usually mean lower stock prices, however investors should be cautious of the bull run, its best you connect with a well-qualified adviser to meet your growth goals and avoid blunder
Very true, you can be passively involved in the markts and still amass wealth-gains using an investment advisor. I first dabbled in stocks late 2019, just before the pandemic, and that same year gained over 150% with no prior investing experience, basically all I was doing was following directions of my advisor. We are working on a retirement ballpark of $3m and I’m certain my goal isn’t farfetched after subsequent investments and tremendous returns so far.
This is striking! could you share info of your advisor, please? i'm in dire need of asset allocation and standing at a crossroads, whether to sell-off or keep holding my positions, my portfolio is retrogressing bad as of late
Can't reveal much, but the advisor guiding me is NICOLE DESIREE SIMON. She has gained a good deal of expertise over the past two decades in the financial system and her credentials speak for itself. She's well-grounded and known, shouldn't be a hassle finding her page.
Thanks a lot for sharing, I just looked her up and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get.
My biggest criticism of his thesis, is there is no scenario at all in which he believes liquidity decreases. He states based on this ‘new normal’ it can only go up. Even though we know this is not historically true.
That’s wrong. He showed his long term cyclical liquidity cycle in other vids. It declined recently starting in mid 2021 And he called the bottom last fall perfectly
Heard someone say the best season for a fin.ancial breakthrough is now, I have approximately $250k stagnant in my port_folio that needs growth. What is the best way to take advantage of this downturn?
No guarantee that the days will be before or after a bear market, also no guarantee that they will be consecutive or at least all in the same couple of months or a year or two. Also “the best” days are during the times with a lot of market volatility, where the market may also go downwards. Please just stop with the “if you miss the X best days in…”
Even the most successful invstors experience losses when the market is weak or when they make choices that don't work out as planned. However, overall invstment ought to significantly improve your net worth; because mine wasn't, I had to work with “Eleanor Annette Eckhaus” who clarified my mistakes and enabled me to make clear progress...
Market declines, soaring inflation, a significant increase in interest rates by the Fed, and rising Treasury yields all point to additional losses for portfolios this quarter. How can I profit from the present market turbulence? I'm still debating whether to sell my $125,000 ETF/Growth Stock portfolio.
Yes, ever since the outbreak, I've been in contact with a CFP. The tough element of investing in hot stocks nowadays is figuring out when to purchase and sell. My adviser picks the entry and exit instructions for my portfolio, which has grown to about $550k from an original beginning reserve of $80k.
The stock market is without a doubt the awkward teenager with the most extreme mood swings! I started out with a commentator named “Colleen Rose Mccaffery” Her honest approach gives me complete ownership and control over my position, and her rates are incredibly affordable given my ROI.
I love how he explains the liquidity levels plummeting in china are a sign liquidity is about to rise, and how liquidity levels rising elsewhere are also a sign liquidity is about to rise more. Every scenario he gives has the same answer.
@@DegenerateSpeculator Yes and the moment the job market contracts faster then inflation, his entire thesis and all his models are invalidated… he even says he assumes that inflation decreases will never be overtaken by job market declines…. Which in a recession is almost always the case that the job market collapses will always exceed drops in inflation
The issue I have with Howell's thesis that the Fed has been targeting a level of reserves is that it is totally unsubstantiated. The Fed doesn't have control over the TGA. The Fed didn't change the parameters of the RRP. The Fed didn't change the rules regarding reserves. The Fed didn't alter its pace of non-reinvestments. Where, please tell me where they've been intentionally supporting reserves.
My greatest concern is how to recover from all these economic and global troubles and stay afloat especially with the political power tussle going on in US.
Stocks are pretty unstable at the moment, but if you do the right math, you should be just fine. Bloomberg and other finance media have been recording cases of folks gaining over 250k just in a matter of weeks/couple months, so I think there are a lot of wealth transfer in this downtime if you know where to look.
Such market uncertainties are the reason I don’t base my market judgements and decisions on rumors and here says, got the best of me 2020 and had me holding worthless position in the market, I had to revamp my entire portfolio through the aid of an advisor, before I started seeing any significant results happens in my portfolio, been using the same advisor and I’ve scaled up 750k within 2 years, whether a bullish or down market, both makes for good profit, it all depends on where you’re looking.
Having a counselor is essential for portfolio diversification. My advisor is "JACKSON STEN MARSH. who is easily searchable and has extensive knowledge of the financial markets.
Instead of trying to predict whether or not we’re going into more recession and keep losing your money, a better strategy is simply having a portfolio that’s well prepared for any eventually, that’s how some folks' been averaging 150K every quarter according to Bloomberg.
That’s crazy, I’m just doing everything wrong with my portfolio,25% of my portfolio is in the red and I really don’t know how long I can stomach the losses. I’m beginning to reach a breaking point.
I do feel your pain mate, I’d suggest you look into passive index fund investing and learn some more. For me,I had my share of ups and downs when I first started looking for a consistent passive income so I hired an expert advisor for aid, and following her advice, I poured $30k in value stocks and digital assets,Up 200k so far and pretty sure I'm ready for whatever comes
Having an expert is essential for portfolio diversification. My advisor is "Pamela Helynn Kirchoff” who is easily searchable and has extensive knowledge of the financial markets.
@@simrans3675 yeah, you are totally correct. It would have been super complicated if he said just look at the Fed's balance sheet or bank reserves to measure liquidity... but thank goodness he really dumbed it down. The "shadow" liquidity is so simple I'm sure you can explain to me in a few sentences, correct? Go ahead, bro. help me out and reinforce what I think I heard and help summarize for me.
@@aggerleejones200 Bruh? You questioning my intelligence? Losing best, if you ask me. I am a big deal life yo. Dawg, I can teach you to hunt but don’t assume you aren’t talking to a big duck chad here - you are.
Basically times are uncertain, the market is out of control, and banks are gradually failing. I was really hopeful of my investments this year, but I followed some stock suggestions that didn't go so well, I've been studying the stock market and I realized some investors made millions from the last recession and I was wondering if such success rate could be achieved in this present market.
I feel exceptionally lucky I started investing in my early 40s and compounded my income to create more cash flow. I retired with to a 7 figure well-diversified portfolio having exposure to different prolific investments mainly stocks, real estate, precious metals, and high yield dividend funds. ever grateful to Trisha Jean Webb my F.A... keep investing and you will be fine.
Stocks are pretty unstable at the moment, but if you do the right math, you should be just fine. Bloomberg and other finance media have been recording cases of folks gaining over 250k just in a matter of weeks/couple months, so I think there are a lot of wealth transfer in this downtime if you know where to look.
@@williamschaefer282 Such market uncertainties are the reason I don’t base my market judgements and decisions on rumours and here-says, got the best of me 2020 and had me holding worthless position in the market, I had to revamp my entire portfolio through the aid of an advisor, before I started seeing any significant results happens in my portfolio, been using the same advisor and I’ve scaled up 750k within 2 years.
@@user-hq9iv4ff2c True, we’re only just an information away from amassing wealth, I know a lot of folks that made fortunes from the Dotcom crash as well as the 08’ crash and I’ve been looking into similar opportunities in this present market, could this coach that guides yo help?
@@williamschaefer282 Having a counsellor is essential for portfolio diversification. My advisor ASHLEY AIRAGAHI who is easily searchable and has extensive knowledge of the financial markets.
Fantastic interview, explains clearly the momentum behind the move. Whilst the Fed rescues the banks (again) I need to hang up my bearish attitude, I just feel kinda dirty going long tho’
Inflation hits people a lot harder than a crashing stock or housing market as it directly affects people's cost of living that people immediately feel the impact of. It's not surprising negative market sentiment is so high now. We really need help to survive in this Economy. The ETF/Equity market keeps swinging.
@champhallier8468 The best course of action if you lack market knowledge is to ask a consultant or investing coach for guidance or assistance. Speaking with a consultant helped me stay afloat in the market and grow my port-folio to about 65% since January, even though I know it sounds obvious or generic. I believe that is the most effective way to enter the business at the moment.
@@hannahdonald9071 I've been looking at comparable opportunities in the current market because I know a lot of people who made fortunes from the Dotcom crash and the 2008 crash. Could this consultant who helps you be of any assistance?
I've been consulting with SALVATORE FORTUNATO SOFIA, a financial consultant whom I learned about and got in touch with thanks to a Kiyosaki radio interview she was featured on. Since then, she has served as the point of entry and departure for the equities/stocks we have emphasised. A search using her name on the internet can be done if tracking is necessary.
I will be forever grateful to you, you changed my whole life and I will continue to preach on your behalf for the whole world to hear you saved me from huge financial debt with just a small investment, thank you *ROCH DUNGCA-SCHREIBER* .
*ROCH DUNGCA-SCHREIBER* is my portfolio-coach, I found her on Bloomberg where she was featured, I looked up her name on the internet. Fortunately I came across her site and reached out to her, you can verify her yourself.
This is the best in depth analysis of liquidity dynamics I have heard and agree this and the wall of worry dynamic explain this year's market gains. Trading this market requires a comprehensive understanding of the Fed, Treasury, fiscal, economic cycles and market psychology
🌹Nadie se vuelve millonario o multimillonario trabajando para otros y dependiendo de ellos, una buena inversión genera millones de dólares y la constancia genera miles de millones*
Estuve de acuerdo contigo y creo que el secreto de la estabilidad financiera es tener las ideas de inversión correctas que te permitan ganar más dinero. No sé quién está de acuerdo conmigo, pero de cualquier manera recomiendo bienes raíces o criptomonedas y acciones.
@@JoshuaFabric¡¡Sí!! Sería más beneficioso y generaría más ganancias si realmente opera con criptomonedas. He estado operando desde la caída, he obtenido muchas ganancias operando.
También trabajo con AFNAN. Su concepto es clave para vencer todas las probabilidades y sobresalir en la forma de productos básicos en línea. ¡Su equipo de gestión es bastante impresionante hasta ahora! Con $5k obtuve una ganancia de más de $30,200
Suppressing asset price volatility will lead into explosion in volatility in future. Policy makers turned investors into speculators that we can’t expect income from dividends no more and saving will be punished. Government will tax capital gains even more, so there will be less risk takers in the market at the end. Future of the world looks really poor. Weak men create bad times for real.
What Michael states here aligns with what Russell Napier has warned about for a few years about government spending overtaking the role of Central Banks. Michael makes it look all so easy to reason about
Well said ! Other topics Michael and Russell are in agreement I noted would be the interest rates level and the stock market direction both on the long term.
@@somejohndoe3004 I guess one way to frame it "when have governments been profitable?" Gov Bonds generally underperform in the long term (because repression) relative to stocks
What an informative and insightful interview! A ton of knowledge was dispensed in this 1.5 hr content. it is basically a free masterclass on financial market liquidity. Thank you!
thanks, this explains A LOT! Wonder why no one confronts Powell on the on the Q&A session on FED day? Also, these would seem to be counter productive to his fight against inflation, no? Kind of like putting out a fire with gasoline!
Too few “experts” actually understand global liquidity at his level. I guess that’s why self proclaimed “macro liquidity analysts” often defer to Howell as the leading expert.
Wonderful analysis by Michael Howell. He's far and above those guests who push weird China theories about race, etc. I'm quite disappointed by some of the hyper partisan and hyper nationalistic guests -- but Michael and so many of your guests are breaths of fresh air in this space. Keep up the good work.
treasury issuance correlation isn't really paradoxical when you think about the use of them as the most safe and liquid form of collateral. the more treasuries are issued the more potential for balance sheet expansion. and don't forget they are reused and rehypothecated. so yeah you may have spent 500 billion to purchase these treasuries, but now you can lever that up 10x, 20x and create 5 or 10 trillion dollars
It depends where the money to purchase them comes from. If from private sector cash reserves then no, it does not lead to balance sheet expansion and liquidity. If from the Fed or if through bank lending, then yes.
@@omrit2 it doesn't lead to Fed balance sheet expansion but it has potential to increase commercial balance sheet expansion, it depends what they do with the treasuries. But as we know treasuries are used to expand balance sheets by being used as collateral for loans, so it does correlate. My question yet to be answered is can the Fed, without congressional approval, take part in live treasury auctions. I.e. do bank reserves literally end up in the TGA. And I don't think that they do. Anytime the Fed is expanding their balance sheet they are simply bidding up bad collateral for lenders to recoup their capital from defaults by loans backed by that respective collateral. So whenever they expand their balance sheet (the Fed) that's guaranteeing money destruction because all the debt on top of that collateral is destroyed. I.e. it's an actual monetary contraction. Thought?
Thought it was ridiculous to see liquidity and qe. Wasn't going to watch this thinking it would be a crazy guy talking nonsense. Pleasantly surprised. This guy makes a lot of sense! Really enjoyed this guy. Hope to see more of him
The problem with Michael Howell is that he says so much that I have to watch these long interviews more then once. He ideas are always useful in getting my course of action straight.
If the fed earns 1% on its treasuries but pays 2% in RRP where does the delta come from? Is it printed or does the treasury fund it via bond/bill issuance?
@@Carutsu There's no hit. When there's a surplus, the Fed remits to the Tsy. When the Fed is in the red, they don't. They don't have to worry about insolvency.
The Market's overall are down with only 7 to 10 stocks in deposit does not make this a bullish Market as far as the liquidity it's just money moving from one stock that's going down to another that's going up
The problem is, Michael Howells separation of Fed liquidity, reverse repo and bond issuance is that they all affect market reaction. There's no escaping that the more this happens the less liquidity there will be moving forwards.
Interview between Michael H and Professor Steve Hanke would be nice to get a more clear picture. Professor Steve is saying that a financial meltdown is baked in the cake
Omg, I remember how everyone hated bulls half a year ago and how many dislikes these videos got, look how many likes we have now, crowd starts agreeing with everything he says and all of a sudden he is a genius, ridiculous!
A lot of good points here. One can disagree with his overall conclusions, but a rational truth-seeker must still consider all of his points. I suspect that Howell is correct in his overall conclusions.... but if not, SOMETHING has to explain the behavior of the stock market over the last 6 months.
More bank failures coming despite the new BTFP program. People see the RRP as a sign there is plenty of liquidty left. But what they miss is that pile of cash is not an even representation of the liquidty levels of all market participants
He nearly got it when he touched on the PE ratio, but not quite. I believe the equity markets have adjusted for inflation, in part at least. Unprecedented levels of cheap currency were pumped into a shutdown economy. This should cause depreciation in the currency and inflation. This secular inflation in goods and services results in an eventual increase in revenue and earnings in monetary terms (even if the profit margins don't improve overall). Assuming that the volume of outstanding shares is stable, the EPS should thus increase. If the PE ratio is remain about the same then the P must adjust with the E. If earnings increase in monetary value, the price of equities must increase with it. Now theoretically the DCF model should act as a deflator and discount any increase in earnings from mere secular inflation. Investors don't want to pay for such passive earnings. But secular inflation typically overwhelms this discount in the end, though I'm not entirely sure why. You would think that the threat from higher rates would factor in reducing prices due to default risk etc as well. Not all equities will benefit from this, some will benefit with exaggeration. But overall it seems secular inflation is a net gain for equities. The financial industrial complex doesn't really like talking about this as it would rather promote the increase in earnings and asset prices as a success in these products, rather than a passive benefit from a depreciating currency. This is of course assuming we get a no/soft landing scenario. If a recession does materialise then earnings can fall and thus prices. But unlikely to return to old lows due to overall inflation. I don't think it's speculation or euphoria that's driving equity prices up, it's the wall of worry that they'll never return to the low points again.
B.S! Yellen clearly stated liquidity's going dry in sept-oct! Hes talking about the over-nite bailouts quietly feeding the banks, saving theyre own ass's
His whole thesis is based on the fed returning to Q.E. the question is if there isn't a financial panic would they be able to come to the rescue with Q.E. Also iif inflation stays sticky it ain't gonna happen.
Global stocks headed for their biggest weekly decline in more than three months following a spate of central bank rate hikes that have pushed up bond yields and heightened fears of recession. I'm just focused on making better investments and earning more, apparently there are strategies to 10x gains in this present market cos I read of someone that pulled a profit of $650k within 2months, and it would really help if you could make a video covering these strategies.
The strategies are quite meticulous for the typical average person. As a matter of fact, If you're considering growing your portfolio for a successful long-term strategy, you have to seek guidance from a broker or financial advisor who have had a great deal of skillset/knowledge to pull such trades off.
I agree, I've been in constant touch with a Investment advisor for approximately 17 months. These days, it's really easy to buy into trending stocks, but the task is determining when to sell or hold. That's where my advisor comes in, to help me with entry and exit points , I've accrued over $337k from an initially stagnant reserve of $148K all within 18 months
@@judynewsom1902 I’m new to all this, heard it's a good time to buy and basically I've just got cash sitting duck in the bank and I’d really love to put it to good use seeing how inflation is at an all time-high, who is this coach that guides you, mind I look them up
Sharon Louise Count is my Adviser, She has been of great help and her tutelage has brought me to a higher understanding of profit generation. You can look up her name on the net for her page and reach out. Understands the job perfectly.
This recommendation literally came at the right time. I’m down by $7k in stocks this week alone. It's crazy! I just looked up Sharon online, and researched her accreditation. She seems very proficient,. I wrote her detailing my fin-goals and scheduled a call.
Would be interested to know what Jack really thinks about his thesis. Anyone who claims the stock markets are forward looking (like the guest did) always has me worried because this is not historically true at all. Seems to be a bit of tunnel vision going on here.
With $2 trillion deficits,... who'da thought there'd be more QE eventually? This isn't driven by the Fed,.. it's driven by fiscal insanity. That the Fed and other central bankers are forced to react to. I do agree that there will need to be a balancing act for yields when the econmy reaches stasis in a few years. not too low so as to deter more fiscal abuse,... but not so high that interest on the debt overwhelms the budget. The Treasury issung bills,.. as opposed to noites or bonds seems to imply that longer term rates will be lower in the future than current note and bond rates,... otherwise they would try to lock in the current rates. Which says, pending what the Fed does with rates at the next couple of meetings,.. it may be time to buy the long bonds. Because longer term rates are significantly lower than the short term rates, apparently that's what investors are doing. Currently holding the 6 month & 1 years, I've been hoping to load up on the 30 years at or above 4% for the oncoming recession and the eventual need to cut rates in 12 months or so.
Questions for Michael. You seem acutely aware of some collaboration of the Fed to purchase recently issued Treasury debt from the open market. How is this any different from directly monetizing the Treasury's debt? How could the market be unaware of a lack of organic (non-Fed) demand for Treasury debt?
"Line goes up" is all that matters. Why? Stop asking silly questions you perma-bear. Enjoy staying poor. Did I do that right? These are the arguments I see on the perma-bull side.
What about the marginal product of debt (Lacy Hunt) ? Also people need income. The system can only push out duration so far for so long. At some point the economy must produce income to pay for asset levels.
Damn this guy is fucking sharp. No idea if he’s right on all of these things since it takes 1 assumption to be wrong for the whole thing to fall apart - but amazing reasoning. What’s his Twitter?
Let me simplify this for you, Just watch the DAILY chart for FAS and FAZ for the last quarter and you will see where the market is going. Put a Linear Regression study on them for clarity.
Melt up? the bit melt up before the bigger melt down? Youre the experts... but a lot of guys would advise caution. Honestly now, isn't the FED playing both ends against the middle? tighten/loosen all things to all folks.
The idea that China decreasing their purchases of USTs will decrease the US ability to fund its deficit and increase interest rates is a common misconception. Capital account and current account must balance, if China reduces their purchases of USTs, ie reduce their capital exports, their current account must necessarily shrink by the same amount. By definition this will reduce the US trade deficit, which would make it easier to fund not more difficult. Foreign purchases of excess amounts of USDs or USD denominated assets is a policy aimed at generating trade surpluses and employment, and it necessarily requires excess savings to be exported abroad. This excess savings must be balanced by either an increase in investment or a reduction in savings elsewhere, ie the US. Because the artificial strength of the dollar relative to the foreign currency (Yuan) rises as a result of the UST purchases, US consumers are effectively subsidized at the expense of US manufacturers, which ultimately leads to layoffs (ie, unemployment rises). So, either US unemployment must rise, or debt must rise (or some combination of the both) if savings falls (which is more likely given domestic manufacturing would fall, warranting less investment). The only way for the US to effectively combat and reduce the unemployment is to increase the private consumer, public, or corporate financing (given domestic manufacturing falls, this is less likely to be the case). Essentially, this means that the only way to maintain full unemployment is to increase the supply of USTs along with the increase in foreign purchases of USD denominated assets, ie USTs. Point being, foreign purchases of USTs does not assist funding nor does it reduce interest rates, it widens trade deficits and forces a larger supply of debt, which, if it were reduced (from China reducing its purchases of USTs), would reduce the deficit, allow for greater availability of funding for US manufacturers, and reduce risk in the collateral market; ie, interest rates would be largely unaffected and are actually more likely to be reduced as a result.
During the crash of 1987, the FED said they would now provide "liquidity", meaning supplying electronic debits and credits. Well, if you, the central bank provide this electronic "liquidity", then you are the Market. You are the buyer and seller and, as such, you determine prices, not human buyers and sellers. How is this NOT being a SHILL in a so called "Free Market" bidding process?
Annuity style oil storage. Its out there and already starting to enable companies that need storage of petroleum products to de-risk their productions that need it for JIT sources. Lower capital requirements + this storage contract = even more explosive growth
I think that traders and investors are different kind of people. Short term the trend maybe down, but if people like Michael are right, the central banks are supporting the markets in a stealth way and in a very strategic manner. Could it be that there is a hidden agenda that targets the system to make the significant financial institutions stronger and the other ones weaker? So a stealth policy to support a global agenda (the latter as we hear from the WEF), to divide the world into 2 main parts; those who own and those who own nothing, but still will be happy? It smells like something that isn't what it seems to be...
I think the Fed will indirectly have banks absorb much of the upcoming Treasury issuance (as opposed to Fed directly monetizing Treasuries). The Fed will do this by: (1) exempting Treasuries from SLR, as the Fed did post-pandemic; (2) reducing the interest rate paid on IOER; and (3) becoming more stringent about bank lending to the private sector, thereby forcing banks to buy sovereign debt, which has a zero risk weighting for bank capital regulatory requirements.
They could just issue T-bills which don't count towards the SLR either. with 'only' 3.2 trillion in bank reserves at the moment that would amount to 1/3rd of the total (1.1 trillion needed) reserves. That's a big shock. We'll need to watch treasury auction closely and the levels of the RRP to see where the liquidity comes from.
How can the "Fed" add liquidity when it is a bankrupt entity"corporation" in the us is was rolled into the treasury... I live in Australia and even I know and understand this. Central banks are nearly dead
cmon Jack ask about financials they r not leading n jack should have countered the brit every stock mkt coming out of economic recession leads with financials HBs have terrible booking numbs its 40% lower then when the group was last at ATH there is also LUMBER COPPER not confirming moves in HBs
Some interesting thoughts. I haven't looked at these metrics in these ways enough to opine about their veracity and I doubt that anyone else who is commenting on this show really knows what they're talking about unless they've looked at these metrics in the way described for longer than this show and the graphs that are being shown.
I have long respected Michael's liquidity cycles. However, this time using his own chart it shows liquidity bottoming in 2006 2007 and we still had bank failures in 2008. 2 + 2 does not equal 3
How it is liquidity when banks won't lend beacuse they are borrowing at high rates in short term and can't lend in long term due to invesrsion. They can only invest in other risk assets. Once the earning slowdown kick in, it's all going to be one big mess
One opinion expressed in this show that Michael Howell highlighted at least a couple times I don't necessarily agree is that he seems to feel it's important to identify who the future buyers of US (or any sovereign) debt will be. Once upon a time Saudi Arabia was a big buyer but today not so much. China was a big buyer for a decade or so up until about 13 years ago probably because of Xi's grand plans to eventually do something that would anger the US and doesn't want to be exposed when it happens. Japan followed up buying plenty of US T-bills in recent years. The point is that there are plenty of wealthy people, businesses and nations around the world that have valued possessing Dollars for various reasons and as long as the US is the foremost and best managed economy in the world, its currency is the most stable and reliable currency to store value and use. The US Dollar and US sovereign debt will continue to be in strong demand unless and until the US causes self-inflicted harm, it's unlikely that any other entity including BRICS or China can seriously threaten the Dollar's dominance and demand for the Dollar.
It is a government inspired crisis this time. The Treasury have to sell Bonds to cover the trade imbalance and the government spending imbalance. In order to sell them they have to raise interest rates and the old long-term, low risk, low interest, AAA investments (including Treasury Bonds), held by the banks (often due to government regulatory policy), become next to worthless. The next milestone is the 15th when the government issue a new batch of Bonds. I have approximately 350k stagnant in my portfolio that needs growth. What is the best way to take advantage of this downturn?
That’s right! Downturns provide plenty of opportunities for regular people to build wealth from the scratch. However, you may need to get some professional advice from an Investment planner if you need an aggressive return.
In the world of finance, recessions are prime opportunities for wealth creation. When my portfolio suffered a significant loss in April of last year, I realized the need to enlist the expertise of a financial consultant. With her guidance, I have not only recovered from my losses but also generated a profit of 250k. The knowledge and skills I have acquired through this experience have been invaluable in my journey towards financial success.
Please can you leave the info of your invstment analyst here? I need such luck lol
Kate Elizabeth Amdall She is a genius when it comes to diversifying her holdings. You can verify her identity for yourself by looking her up online. She is well knowledgeable about the financial markets.
Thanks, I just googled her and I'm really impressed with her credentials. I reached out to her since I need all the assistance I can get.
What bothers me about this situation is the fact that the news and media are all going about a recession which is understandable due to the war and pandemic but still the same media still publish articles about folks in the same economy pulling off hefty 6figure profit(Averg. 200k in barely 8weeks) in this downtrend how is that possible?
I've come to realize both bear and bull market provide opportunities to make high gains, I used to call bluff on folks that bragged about making a fortune from such down-markets until I happened to do so myself.
Indeed, you are correct! On the advantageous aspect, economic downturns offers numerous prospects for ordinary individuals to create wealth from the ground up. Nevertheless, seeking guidance from an investment planner might be necessary if you desire a more assertive return.
In the world of finance, rece-ssions are prime opportunities for wealth creation. When my port-folio suffered a significant loss in April of last year, I realized the need to enlist the expertise of a financial consultant. With her guidance, I have not only recovered from my losses but also generated a profit of 250k. The knowledge and skills I have acquired through this experience have been inval-uable in my journey towards financial success.
@@joshbarney114I've been thinking of going that route has been holding on to a bunch of stocks that keep tanking and I don't know if to keep holding or just dump them, think your Inv-coach could guide me with portfolio restructuring.
@@FabioOdelega876 I've shuffled through a few advisors in the past, and "Colleen Janie Towe" remains the most resourceful thus far. Her strategy proves profitable, and sustainable both in a bull & bear market. Most likely, her details can be found on the net, so you can confirm yourself.
Investors have just turned back the clock on the Fed’s tightening campaign and cast aside the Fed fears that ruled them for 15 months. It just gets very daunting to me when I’m sitting there looking at charts and trying to determine if i’m right or wrong! I’ve been trying to grow my portfolio of $300K for sometime now, I would greatly appreciate any suggestions.
First of all, You could lose it all and you could win it all. It goes both ways. Secondly, what works for A may not necessarily work for B and you should not be a bandwagon investor. A good number of folks are raking in huge 6 figure gains in this downtrend, but such strategies are mostly successfully executed by folks with in depth market knowledge.
Facts!! Since the market became extremely volatile and pressure increased (I should be retiring in 17 months), I took the decision to work closely with a financial advisor. It has already been 9 months and counting, and I have made approximately 600K net from all of my holdings.
That's impressive, my portfolio have been tanking all year, tried learning new strategies to gain in the current market but all of that flew right over head, please would you mind recommending the advisor you're using
My advisor is “Natalie Marie Tuttle”. She has since provide entry and exit points on the securities I focus on. You can look her up online if you care for supervision. I basically follow her trade pattern and haven’t regretted doing so
Looked up her name and her website popped up immediately, interesting stuff so far, about to schedule a session with her.
With markets falling, inflation soaring, the Fed imposing a sharp hike in interest rates, while Treasury yields are rising rapidly, meaning more red ink for portfolios this quarter. How can I take advantage of the current market volatility, I'm still at a crossroads deciding whether to liquidate my $125,000 ETF/Growth Stock portfolio.
Focus on two main goals. First, stay protected by learning when to sell stocks to cut losses and reap profits. Second, prepare to profit when the market turns. I recommend that you seek advice from a CFP or an investment advisor.
Right, I've been in constant touch with a CFP since the pandemic. You know these days it's really easy to buy into trending stock's, but the task is determining when to hold or sell . My advisėr decides entry and exit commands on my portfølio, I've accrued over $550k from an initially stagnant reserve of $80k.
@@TruckeeFam I'm glad I came across this discussion. If you don't mind, could you tell me how to contact your financial advisor?
No doubt, the stock market is definitely the most awkward teenager with the wildest mood swings! I began with "JILL MARIE CARROLL". Her approach is transparent allowing total ownership and control over my position and fees are very reasonable in comparison with my ROI.
@@TruckeeFam This is useful information; I copied her whole name and pasted it into my browser; her website appeared immediately, and her qualifications are excellent; thank you for sharing.
The system is failing as a result of both government and federal policy. In the next days, the banking crisis would have to be epic and gigantic for the FED to decide not to raise interest rates. This won't happen; an increase and a crash are coming. There will be more negative portfolios this 2nd half of 2023 with markets tumbling, soaring inflation, and banks going out of business. My concern is how can the rapid interest-rate hike be of favor to a value investor, or is it better avoiding stocks for a while?
Just ''buy the dip'' man. In the long term it will payoff. High interest rates usually mean lower stock prices, however investors should be cautious of the bull run, its best you connect with a well-qualified adviser to meet your growth goals and avoid blunder
Very true, you can be passively involved in the markts and still amass wealth-gains using an investment advisor. I first dabbled in stocks late 2019, just before the pandemic, and that same year gained over 150% with no prior investing experience, basically all I was doing was following directions of my advisor. We are working on a retirement ballpark of $3m and I’m certain my goal isn’t farfetched after subsequent investments and tremendous returns so far.
This is striking! could you share info of your advisor, please? i'm in dire need of asset allocation and standing at a crossroads, whether to sell-off or keep holding my positions, my portfolio is retrogressing bad as of late
Can't reveal much, but the advisor guiding me is NICOLE DESIREE SIMON. She has gained a good deal of expertise over the past two decades in the financial system and her credentials speak for itself. She's well-grounded and known, shouldn't be a hassle finding her page.
Thanks a lot for sharing, I just looked her up and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get.
My biggest criticism of his thesis, is there is no scenario at all in which he believes liquidity decreases. He states based on this ‘new normal’ it can only go up. Even though we know this is not historically true.
Yup.
That’s wrong. He showed his long term cyclical liquidity cycle in other vids. It declined recently starting in mid 2021
And he called the bottom last fall perfectly
@@peterruh60 He thinks it can only go up from here. He also thinks FED liquidity is a big driver of the market when it has very little correlation.
Heard someone say the best season for a fin.ancial breakthrough is now, I have approximately $250k stagnant in my port_folio that needs growth. What is the best way to take advantage of this downturn?
No guarantee that the days will be before or after a bear market, also no guarantee that they will be consecutive or at least all in the same couple of months or a year or two. Also “the best” days are during the times with a lot of market volatility, where the market may also go downwards. Please just stop with the “if you miss the X best days in…”
Exactly, such a faulty statistic, maybe you miss the 10 best days but you also miss the slew of bad days wrapped around them.
Even the most successful invstors experience losses when the market is weak or when they make choices that don't work out as planned. However, overall invstment ought to significantly improve your net worth; because mine wasn't, I had to work with “Eleanor Annette Eckhaus” who clarified my mistakes and enabled me to make clear progress...
My life ain't better .. all i got is a mortgage and child support payments thats kicking me hard on the balls . How do i reachout to annette?
insightful Selena.. I curiously looked up her name on the internet and I found her site, thanks for sharing
Market declines, soaring inflation, a significant increase in interest rates by the Fed, and rising Treasury yields all point to additional losses for portfolios this quarter. How can I profit from the present market turbulence? I'm still debating whether to sell my $125,000 ETF/Growth Stock portfolio.
Yes, ever since the outbreak, I've been in contact with a CFP. The tough element of investing in hot stocks nowadays is figuring out when to purchase and sell. My adviser picks the entry and exit instructions for my portfolio, which has grown to about $550k from an original beginning reserve of $80k.
The stock market is without a doubt the awkward teenager with the most extreme mood swings! I started out with a commentator named “Colleen Rose Mccaffery” Her honest approach gives me complete ownership and control over my position, and her rates are incredibly affordable given my ROI.
I love how he explains the liquidity levels plummeting in china are a sign liquidity is about to rise, and how liquidity levels rising elsewhere are also a sign liquidity is about to rise more. Every scenario he gives has the same answer.
I like him since he was right about the liquidity crash in 2020, but he is off here. Collateral shortages are persistent
@@DegenerateSpeculator Yes and the moment the job market contracts faster then inflation, his entire thesis and all his models are invalidated… he even says he assumes that inflation decreases will never be overtaken by job market declines…. Which in a recession is almost always the case that the job market collapses will always exceed drops in inflation
This man knows every inch of public financial plumbing. Great guest love his updates!
The issue I have with Howell's thesis that the Fed has been targeting a level of reserves is that it is totally unsubstantiated. The Fed doesn't have control over the TGA. The Fed didn't change the parameters of the RRP. The Fed didn't change the rules regarding reserves. The Fed didn't alter its pace of non-reinvestments. Where, please tell me where they've been intentionally supporting reserves.
Exactly
Always exciting to see Michael Howell show up in my feed. Dude is an absolute beast in his field.
Is he so? Will listen then
the real beast is Werner
My greatest concern is how to recover from all these economic and global troubles and stay afloat especially with the political power tussle going on in US.
Stocks are pretty unstable at the moment, but if you do the right math, you should be just fine. Bloomberg and other finance media have been recording cases of folks gaining over 250k just in a matter of weeks/couple months, so I think there are a lot of wealth transfer in this downtime if you know where to look.
Such market uncertainties are the reason I don’t base my market judgements and decisions on rumors and here says, got the best of me 2020 and had me holding worthless position in the market, I had to revamp my entire portfolio through the aid of an advisor, before I started seeing any significant results happens in my portfolio, been using the same advisor and I’ve scaled up 750k within 2 years, whether a bullish or down market, both makes for good profit, it all depends on where you’re looking.
I’m in dire need of guidance so i can salvage my portfolio due to the massive dips and come up with better
strategies. How can I reach this advisor?
Having a counselor is essential for portfolio diversification. My advisor is "JACKSON STEN MARSH. who is easily searchable and has extensive knowledge of the financial markets.
Found him, I wrote him an email and scheduled a call, hopefully he responds, I plan to start 2023 on a woodnote financially..
Instead of trying to predict whether or not we’re going into more recession and keep losing your money, a better strategy is simply having a portfolio that’s well prepared for any eventually, that’s how some folks' been averaging 150K every quarter according to Bloomberg.
That’s crazy, I’m just doing everything wrong with my portfolio,25% of my portfolio is in the red and I really don’t know how long I can stomach the losses. I’m beginning to reach a breaking point.
I do feel your pain mate, I’d suggest you look into passive index fund investing and learn some more. For me,I had my share of ups and downs when I first started looking for a consistent passive income so I hired an expert advisor for aid, and following her advice, I poured $30k in value stocks and digital assets,Up 200k so far and pretty sure I'm ready for whatever comes
that's actually quite impressive, I could use some Info on your FA, I am looking to make a change on my finances this year as well.
Having an expert is essential for portfolio diversification. My advisor is "Pamela Helynn Kirchoff” who is easily searchable and has extensive knowledge of the financial markets.
Thanks for getting him back on your show. I can listen to Michael Howell all day long,
Bruh, take it easy yo. He shared some very obvious points. A Fin 101 and Econ 101 major could tell ya that. What's your problem bro?
@@simrans3675 yeah, you are totally correct. It would have been super complicated if he said just look at the Fed's balance sheet or bank reserves to measure liquidity... but thank goodness he really dumbed it down. The "shadow" liquidity is so simple I'm sure you can explain to me in a few sentences, correct? Go ahead, bro. help me out and reinforce what I think I heard and help summarize for me.
@@aggerleejones200 Bruh? You questioning my intelligence? Losing best, if you ask me. I am a big deal life yo. Dawg, I can teach you to hunt but don’t assume you aren’t talking to a big duck chad here - you are.
@@simrans3675 still waiting for you to explain it to me. It's 101 bruh and you have the video to reference. I'll wait bruh... like you said, it's 101.
@@aggerleejones200 Ok bruhv. It’s late here but will type it for you. Not that hard.
His models at 40:43 fall apart if the economy shrinks faster then inflation does. Which in a crisis it often will at some point.
Basically times are uncertain, the market is out of control, and banks are gradually failing. I was really hopeful of my investments this year, but I followed some stock suggestions that didn't go so well, I've been studying the stock market and I realized some investors made millions from the last recession and I was wondering if such success rate could be achieved in this present market.
The market always bounces back. Make sure you are taking the time, and putting yourself in a position, to be able to do so when the timing is right.
I feel exceptionally lucky I started investing in my early 40s and compounded my income to create more cash flow. I retired with to a 7 figure well-diversified portfolio having exposure to different prolific investments mainly stocks, real estate, precious metals, and high yield dividend funds. ever grateful to Trisha Jean Webb my F.A... keep investing and you will be fine.
@@JuneroseCarcina Did a quick web search, she has a pretty decent bio, I wrote her and I'm waiting on her reply.
Stocks are pretty unstable at the moment, but if you do the right math, you should be just fine. Bloomberg and other finance media have been recording cases of folks gaining over 250k just in a matter of weeks/couple months, so I think there are a lot of wealth transfer in this downtime if you know where to look.
yes, transportation, e-commerce among other sectors are expected to experience growth, but who knows, the market has been a basket of surprises.
@@williamschaefer282 Such market uncertainties are the reason I don’t base my market judgements and decisions on rumours and here-says, got the best of me 2020 and had me holding worthless position in the market, I had to revamp my entire portfolio through the aid of an advisor, before I started seeing any significant results happens in my portfolio, been using the same advisor and I’ve scaled up 750k within 2 years.
@@user-hq9iv4ff2c True, we’re only just an information away from amassing wealth, I know a lot of folks that made fortunes from the Dotcom crash as well as the 08’ crash and I’ve been looking into similar opportunities in this present market, could this coach that guides yo help?
@@williamschaefer282 Having a counsellor is essential for portfolio diversification. My advisor ASHLEY AIRAGAHI who is easily searchable and has extensive knowledge of the financial markets.
@@user-hq9iv4ff2c Thank you for this amazing tip. I verified her and booked a session with her. She seems Proficient.
Fantastic interview, explains clearly the momentum behind the move. Whilst the Fed rescues the banks (again) I need to hang up my bearish attitude, I just feel kinda dirty going long tho’
Inflation hits people a lot harder than a crashing stock or housing market as it directly affects people's cost of living that people immediately feel the impact of. It's not surprising negative market sentiment is so high now. We really need help to survive in this Economy. The ETF/Equity market keeps swinging.
@champhallier8468 The best course of action if you lack market knowledge is to ask a consultant or investing coach for guidance or assistance. Speaking with a consultant helped me stay afloat in the market and grow my port-folio to about 65% since January, even though I know it sounds obvious or generic. I believe that is the most effective way to enter the business at the moment.
@@hannahdonald9071 I've been looking at comparable opportunities in the current market because I know a lot of people who made fortunes from the Dotcom crash and the 2008 crash. Could this consultant who helps you be of any assistance?
I've been consulting with SALVATORE FORTUNATO SOFIA, a financial consultant whom I learned about and got in touch with thanks to a Kiyosaki radio interview she was featured on. Since then, she has served as the point of entry and departure for the equities/stocks we have emphasised. A search using her name on the internet can be done if tracking is necessary.
current s&p prices are misleading. I think it is more a reflection of accumulation on tech.
I will be forever grateful to you, you changed my whole life and I will continue to preach on your behalf for the whole world to hear you saved me from huge financial debt with just a small investment, thank you *ROCH DUNGCA-SCHREIBER* .
I'm surprised you know her. I've been making a lot of profits investing with her for a few months now.
*ROCH DUNGCA-SCHREIBER* is my portfolio-coach, I found her on Bloomberg where she was featured, I looked up her name on the internet. Fortunately I came across her site and reached out to her, you can verify her yourself.
This is the best in depth analysis of liquidity dynamics I have heard and agree this and the wall of worry dynamic explain this year's market gains. Trading this market requires a comprehensive understanding of the Fed, Treasury, fiscal, economic cycles and market psychology
📤☝️
🌹Nadie se vuelve millonario o multimillonario trabajando para otros y dependiendo de ellos, una buena inversión genera millones de dólares y la constancia genera miles de millones*
Estuve de acuerdo contigo y creo que el secreto de la estabilidad financiera es tener las ideas de inversión correctas que te permitan ganar más dinero. No sé quién está de acuerdo conmigo, pero de cualquier manera recomiendo bienes raíces o criptomonedas y acciones.
la mayoría de las personas no entienden que vivir una vida sin ingresos pasivos no vale mucho, excepto tratar de pagar deudas y préstamos.
@@JoshuaFabric¡¡Sí!! Sería más beneficioso y generaría más ganancias si realmente opera con criptomonedas. He estado operando desde la caída, he obtenido muchas ganancias operando.
¿Hablan en serio porque siempre quise intercambiar criptografía, pero siempre estoy confundido con las fluctuaciones en el precio, por qué?
También trabajo con AFNAN. Su concepto es clave para vencer todas las probabilidades y sobresalir en la forma de productos básicos en línea. ¡Su equipo de gestión es bastante impresionante hasta ahora! Con $5k obtuve una ganancia de más de $30,200
Suppressing asset price volatility will lead into explosion in volatility in future. Policy makers turned investors into speculators that we can’t expect income from dividends no more and saving will be punished. Government will tax capital gains even more, so there will be less risk takers in the market at the end. Future of the world looks really poor. Weak men create bad times for real.
📤☝️
What Michael states here aligns with what Russell Napier has warned about for a few years about government spending overtaking the role of Central Banks. Michael makes it look all so easy to reason about
Well said ! Other topics Michael and Russell are in agreement I noted would be the interest rates level and the stock market direction both on the long term.
I would love to hear Michael's take on financial repression, hopefuly we'll get that when he comes back to the show.
@@somejohndoe3004 I guess one way to frame it "when have governments been profitable?" Gov Bonds generally underperform in the long term (because repression) relative to stocks
What an informative and insightful interview! A ton of knowledge was dispensed in this 1.5 hr content. it is basically a free masterclass on financial market liquidity. Thank you!
Can you explain to me in simple terms how the fed is pumping liquidity and how to track it?
thanks, this explains A LOT! Wonder why no one confronts Powell on the on the Q&A session on FED day? Also, these would seem to be counter productive to his fight against inflation, no? Kind of like putting out a fire with gasoline!
Mike was very generous with his time and sharing his research. Very commendable I learned a great deal.
📤
Too few “experts” actually understand global liquidity at his level. I guess that’s why self proclaimed “macro liquidity analysts” often defer to Howell as the leading expert.
Look, the recent rise in US stocks has been in a handful of AI stocks whos cap weighting gives a distorted positive impact to the indexes.
Correct. 7 stocks are moving the market up. The rest are stagnant or slipping.
So what this guy is saying is to prepare our anus for the unchecked inflation ahead.
Perhaps the most professional research in the Wall st community. Great work !
Risk assets have NOT gone up. Only big caps.
Exactly,.. it's not the stockmarket that's up,.. it's about 8 stocks that are up huge. The rest are flat at best.
Wonderful analysis by Michael Howell.
He's far and above those guests who push weird China theories about race, etc. I'm quite disappointed by some of the hyper partisan and hyper nationalistic guests -- but Michael and so many of your guests are breaths of fresh air in this space. Keep up the good work.
Michael is a BEAST - Chad at his thesis; he has been right and I agree with him; we are headed north boyz...get ready
treasury issuance correlation isn't really paradoxical when you think about the use of them as the most safe and liquid form of collateral. the more treasuries are issued the more potential for balance sheet expansion. and don't forget they are reused and rehypothecated. so yeah you may have spent 500 billion to purchase these treasuries, but now you can lever that up 10x, 20x and create 5 or 10 trillion dollars
Exactly
It depends where the money to purchase them comes from. If from private sector cash reserves then no, it does not lead to balance sheet expansion and liquidity. If from the Fed or if through bank lending, then yes.
@@omrit2 it doesn't lead to Fed balance sheet expansion but it has potential to increase commercial balance sheet expansion, it depends what they do with the treasuries. But as we know treasuries are used to expand balance sheets by being used as collateral for loans, so it does correlate. My question yet to be answered is can the Fed, without congressional approval, take part in live treasury auctions. I.e. do bank reserves literally end up in the TGA. And I don't think that they do. Anytime the Fed is expanding their balance sheet they are simply bidding up bad collateral for lenders to recoup their capital from defaults by loans backed by that respective collateral. So whenever they expand their balance sheet (the Fed) that's guaranteeing money destruction because all the debt on top of that collateral is destroyed. I.e. it's an actual monetary contraction. Thought?
Michael Howell vs. Jeff Snider. Please make it happen Jack.
Thought it was ridiculous to see liquidity and qe. Wasn't going to watch this thinking it would be a crazy guy talking nonsense. Pleasantly surprised. This guy makes a lot of sense! Really enjoyed this guy. Hope to see more of him
The problem with Michael Howell is that he says so much that I have to watch these long interviews more then once. He ideas are always useful in getting my course of action straight.
Ima watch it twice for sure
Better than the opposite!
If the fed earns 1% on its treasuries but pays 2% in RRP where does the delta come from? Is it printed or does the treasury fund it via bond/bill issuance?
from QT or the Treasury takes the hit
@@Carutsu There's no hit. When there's a surplus, the Fed remits to the Tsy. When the Fed is in the red, they don't. They don't have to worry about insolvency.
It comes from congress
Michael is such a great speaker. Even though I have no idea what he’s talking about most of the time, he is still so easy to listen to.
📤☝️
The Market's overall are down with only 7 to 10 stocks in deposit does not make this a bullish Market as far as the liquidity it's just money moving from one stock that's going down to another that's going up
The problem is, Michael Howells separation of Fed liquidity, reverse repo and bond issuance is that they all affect market reaction. There's no escaping that the more this happens the less liquidity there will be moving forwards.
Interview between Michael H and Professor Steve Hanke would be nice to get a more clear picture. Professor Steve is saying that a financial meltdown is baked in the cake
Omg, I remember how everyone hated bulls half a year ago and how many dislikes these videos got, look how many likes we have now, crowd starts agreeing with everything he says and all of a sudden he is a genius, ridiculous!
Best scientifecaly explenation I have seen for a melt up. Follow the money, as one dude used to say🙂
You need to get Howell and Danielle Demartino at the same time. Michael says, new liquidity, new bull.. others say, fed is still draining liquidity.
Yes… liquidity went up.. temporarily. It’s still in an overall downtrend is likely going lower from here… just like the market.. go figure!
NO. STOCKS ONLY GO UP
Yes, the FED delays crashes and helps out the hedge funds pump up the markets before the big drain, its a temporary gift.
Would be great to get Darius' input on this from 42 Macro
A lot of good points here. One can disagree with his overall conclusions, but a rational truth-seeker must still consider all of his points. I suspect that Howell is correct in his overall conclusions.... but if not, SOMETHING has to explain the behavior of the stock market over the last 6 months.
More bank failures coming despite the new BTFP program. People see the RRP as a sign there is plenty of liquidty left. But what they miss is that pile of cash is not an even representation of the liquidty levels of all market participants
He nearly got it when he touched on the PE ratio, but not quite.
I believe the equity markets have adjusted for inflation, in part at least.
Unprecedented levels of cheap currency were pumped into a shutdown economy. This should cause depreciation in the currency and inflation.
This secular inflation in goods and services results in an eventual increase in revenue and earnings in monetary terms (even if the profit margins don't improve overall).
Assuming that the volume of outstanding shares is stable, the EPS should thus increase. If the PE ratio is remain about the same then the P must adjust with the E. If earnings increase in monetary value, the price of equities must increase with it.
Now theoretically the DCF model should act as a deflator and discount any increase in earnings from mere secular inflation. Investors don't want to pay for such passive earnings. But secular inflation typically overwhelms this discount in the end, though I'm not entirely sure why. You would think that the threat from higher rates would factor in reducing prices due to default risk etc as well.
Not all equities will benefit from this, some will benefit with exaggeration. But overall it seems secular inflation is a net gain for equities. The financial industrial complex doesn't really like talking about this as it would rather promote the increase in earnings and asset prices as a success in these products, rather than a passive benefit from a depreciating currency.
This is of course assuming we get a no/soft landing scenario. If a recession does materialise then earnings can fall and thus prices. But unlikely to return to old lows due to overall inflation.
I don't think it's speculation or euphoria that's driving equity prices up, it's the wall of worry that they'll never return to the low points again.
AI , and the fact that we had 14 years of a bull market. the psychology is very much bull market psychology.
Economic investigator Frank G Melbourne Australia is still watching this very informative content cheers Frank ❤
B.S! Yellen clearly stated liquidity's going dry in sept-oct! Hes talking about the over-nite bailouts quietly feeding the banks, saving theyre own ass's
Great video. Lots of interesting points. Will bookmark this part 44:34 - upsurge in oil prices
This guy is a god of economics
His whole thesis is based on the fed returning to Q.E. the question is if there isn't a financial panic would they be able to come to the rescue with Q.E. Also iif inflation stays sticky it ain't gonna happen.
📤☝️
Global stocks headed for their biggest weekly decline in more than three months following a spate of central bank rate hikes that have pushed up bond yields and heightened fears of recession. I'm just focused on making better investments and earning more, apparently there are strategies to 10x gains in this present market cos I read of someone that pulled a profit of $650k within 2months, and it would really help if you could make a video covering these strategies.
The strategies are quite meticulous for the typical average person. As a matter of fact, If you're considering growing your portfolio for a successful long-term strategy, you have to seek guidance from a broker or financial advisor who have had a great deal of skillset/knowledge to pull such trades off.
I agree, I've been in constant touch with a Investment advisor for approximately 17 months. These days, it's really easy to buy into trending stocks, but the task is determining when to sell or hold. That's where my advisor comes in, to help me with entry and exit points , I've accrued over $337k from an initially stagnant reserve of $148K all within 18 months
@@judynewsom1902 I’m new to all this, heard it's a good time to buy and basically I've just got cash sitting duck in the bank and I’d really love to put it to good use seeing how inflation is at an all time-high, who is this coach that guides you, mind I look them up
Sharon Louise Count is my Adviser, She has been of great help and her tutelage has brought me to a higher understanding of profit generation. You can look up her name on the net for her page and reach out. Understands the job perfectly.
This recommendation literally came at the right time. I’m down by $7k in stocks this week alone. It's crazy! I just looked up Sharon online, and researched her accreditation. She seems very proficient,. I wrote her detailing my fin-goals and scheduled a call.
Would be interested to know what Jack really thinks about his thesis. Anyone who claims the stock markets are forward looking (like the guest did) always has me worried because this is not historically true at all. Seems to be a bit of tunnel vision going on here.
With $2 trillion deficits,... who'da thought there'd be more QE eventually?
This isn't driven by the Fed,.. it's driven by fiscal insanity. That the Fed and other central bankers are forced to react to.
I do agree that there will need to be a balancing act for yields when the econmy reaches stasis in a few years.
not too low so as to deter more fiscal abuse,... but not so high that interest on the debt overwhelms the budget.
The Treasury issung bills,.. as opposed to noites or bonds seems to imply that longer term rates will be lower in the future than current note and bond rates,... otherwise they would try to lock in the current rates.
Which says, pending what the Fed does with rates at the next couple of meetings,.. it may be time to buy the long bonds.
Because longer term rates are significantly lower than the short term rates, apparently that's what investors are doing.
Currently holding the 6 month & 1 years, I've been hoping to load up on the 30 years at or above 4% for the oncoming recession and the eventual need to cut rates in 12 months or so.
I get this thesis but i still think we will see a crash in equities soon
Questions for Michael. You seem acutely aware of some collaboration of the Fed to purchase recently issued Treasury debt from the open market. How is this any different from directly monetizing the Treasury's debt? How could the market be unaware of a lack of organic (non-Fed) demand for Treasury debt?
"Line goes up" is all that matters. Why? Stop asking silly questions you perma-bear. Enjoy staying poor.
Did I do that right? These are the arguments I see on the perma-bull side.
Can someone put this man in charge, please?
Really love the framework! Liquidity and Inflation as the key driver of price / earnings + Cycs - Defensives as a signal of the market!
Best podcast and conversation I’ve seen in a very long time!
📤
Awesome analysis 😃👋
📤
What about the marginal product of debt (Lacy Hunt) ? Also people need income. The system can only push out duration so far for so long. At some point the economy must produce income to pay for asset levels.
Wow, did this guy nail it or what. Perfectly articulated
📤☝️
Michael is a true gem, love to see him and darius go back and forward a bit on a stream
Your analysis of financial market trends is very accurate
Damn this guy is fucking sharp. No idea if he’s right on all of these things since it takes 1 assumption to be wrong for the whole thing to fall apart - but amazing reasoning. What’s his Twitter?
Click on title to see info
There's no need to swear🤬 I'm joking
@crossbordercap
Magnifique as always. Salute🙏
Dense interview, I was wondering exactly how to define liquidity. Amazing charts and research. Thank you!
So the US Treasury is selling off bonds to create liquidity but that money is not used entirely to pump into the stock market has to pay debt
📤☝️
Let me simplify this for you, Just watch the DAILY chart for FAS and FAZ for the last quarter and you will see where the market is going. Put a Linear Regression study on them for clarity.
Melt up? the bit melt up before the bigger melt down? Youre the experts... but a lot of guys would advise caution. Honestly now, isn't the FED playing both ends against the middle? tighten/loosen all things to all folks.
Precious metals should probably catch a bid then?
I would assume so.
Michael Howell is a genius definitely one of the best guests on any show
This is truly invaluable information. It also conveniently confirms my hypothesis. Subscribed.
Excellent interview! Great questions, Jack...and great answers Mike.
The idea that China decreasing their purchases of USTs will decrease the US ability to fund its deficit and increase interest rates is a common misconception. Capital account and current account must balance, if China reduces their purchases of USTs, ie reduce their capital exports, their current account must necessarily shrink by the same amount. By definition this will reduce the US trade deficit, which would make it easier to fund not more difficult. Foreign purchases of excess amounts of USDs or USD denominated assets is a policy aimed at generating trade surpluses and employment, and it necessarily requires excess savings to be exported abroad. This excess savings must be balanced by either an increase in investment or a reduction in savings elsewhere, ie the US. Because the artificial strength of the dollar relative to the foreign currency (Yuan) rises as a result of the UST purchases, US consumers are effectively subsidized at the expense of US manufacturers, which ultimately leads to layoffs (ie, unemployment rises). So, either US unemployment must rise, or debt must rise (or some combination of the both) if savings falls (which is more likely given domestic manufacturing would fall, warranting less investment). The only way for the US to effectively combat and reduce the unemployment is to increase the private consumer, public, or corporate financing (given domestic manufacturing falls, this is less likely to be the case). Essentially, this means that the only way to maintain full unemployment is to increase the supply of USTs along with the increase in foreign purchases of USD denominated assets, ie USTs. Point being, foreign purchases of USTs does not assist funding nor does it reduce interest rates, it widens trade deficits and forces a larger supply of debt, which, if it were reduced (from China reducing its purchases of USTs), would reduce the deficit, allow for greater availability of funding for US manufacturers, and reduce risk in the collateral market; ie, interest rates would be largely unaffected and are actually more likely to be reduced as a result.
📤☝️
During the crash of 1987, the FED said they would now provide "liquidity", meaning supplying electronic debits and credits. Well, if you, the central bank provide this electronic "liquidity", then you are the Market. You are the buyer and seller and, as such, you determine prices, not human buyers and sellers. How is this NOT being a SHILL in a so called "Free Market" bidding process?
Annuity style oil storage. Its out there and already starting to enable companies that need storage of petroleum products to de-risk their productions that need it for JIT sources. Lower capital requirements + this storage contract = even more explosive growth
I think that traders and investors are different kind of people. Short term the trend maybe down, but if people like Michael are right, the central banks are supporting the markets in a stealth way and in a very strategic manner.
Could it be that there is a hidden agenda that targets the system to make the significant financial institutions stronger and the other ones weaker?
So a stealth policy to support a global agenda (the latter as we hear from the WEF), to divide the world into 2 main parts; those who own and those who own nothing, but still will be happy?
It smells like something that isn't what it seems to be...
Likely a game of last man standing v China. Definitely feels like there's an ulterior narrative
What a duo. Thoroughly mind-blowing, once again.
I think the Fed will indirectly have banks absorb much of the upcoming Treasury issuance (as opposed to Fed directly monetizing Treasuries).
The Fed will do this by: (1) exempting Treasuries from SLR, as the Fed did post-pandemic; (2) reducing the interest rate paid on IOER; and (3) becoming more stringent about bank lending to the private sector, thereby forcing banks to buy sovereign debt, which has a zero risk weighting for bank capital regulatory requirements.
They could just issue T-bills which don't count towards the SLR either. with 'only' 3.2 trillion in bank reserves at the moment that would amount to 1/3rd of the total (1.1 trillion needed) reserves. That's a big shock. We'll need to watch treasury auction closely and the levels of the RRP to see where the liquidity comes from.
edward stone saw.. en el futuro hablando de la liquidez financiera...Un genio este señor !!
Or this latest run is a typical face-ripping bear market rally. But we shall see...
How can the "Fed" add liquidity when it is a bankrupt entity"corporation" in the us is was rolled into the treasury... I live in Australia and even I know and understand this.
Central banks are nearly dead
cmon Jack ask about financials they r not leading n jack should have countered the brit every stock mkt coming out of economic recession leads with financials HBs have terrible booking numbs its 40% lower then when the group was last at ATH there is also LUMBER COPPER not confirming moves in HBs
Excellent discussion. Great guest. Well done. Really appreciate ❤
Some interesting thoughts. I haven't looked at these metrics in these ways enough to opine about their veracity and I doubt that anyone else who is commenting on this show really knows what they're talking about unless they've looked at these metrics in the way described for longer than this show and the graphs that are being shown.
Excellent interview!
What an amazing walk through!
I have long respected Michael's liquidity cycles. However, this time using his own chart it shows liquidity bottoming in 2006 2007 and we still had bank failures in 2008. 2 + 2 does not equal 3
📤☝️
Another brilliant interview!!
Thank you for having Micheal on
How it is liquidity when banks won't lend beacuse they are borrowing at high rates in short term and can't lend in long term due to invesrsion. They can only invest in other risk assets. Once the earning slowdown kick in, it's all going to be one big mess
📤
It will end in a trainwreck at some point
Very informative. Explains a lot.
One opinion expressed in this show that Michael Howell highlighted at least a couple times I don't necessarily agree is that he seems to feel it's important to identify who the future buyers of US (or any sovereign) debt will be. Once upon a time Saudi Arabia was a big buyer but today not so much. China was a big buyer for a decade or so up until about 13 years ago probably because of Xi's grand plans to eventually do something that would anger the US and doesn't want to be exposed when it happens. Japan followed up buying plenty of US T-bills in recent years. The point is that there are plenty of wealthy people, businesses and nations around the world that have valued possessing Dollars for various reasons and as long as the US is the foremost and best managed economy in the world, its currency is the most stable and reliable currency to store value and use. The US Dollar and US sovereign debt will continue to be in strong demand unless and until the US causes self-inflicted harm, it's unlikely that any other entity including BRICS or China can seriously threaten the Dollar's dominance and demand for the Dollar.
Banks are forced to buy treasuries to leverage against their loans..they’re price indifferent.
Excellent information here.