Only a retired multi-millionaire perhaps billionaire says I only keep 10% in cash and 90% in equities, his 10% is in the millions. As a retired small time investor I realize that some opinions of the guests on this show are irrelevant to most of the viewers, but I continue to watch…
Long term treasuries are not risk free if you might have to sell them before they mature. I know that. Consuelo knows that (she's covered it many times). Mr. Wilby knows that. I would expect bankers to know that. Mr. Willby suggests that somehow banks were forced to buy long term treasuries because the Fed issued so many. I don't follow this at all. How is it that most banks somehow evaded this coercion? Why couldn't SVL have purchased safer, more liquid investments, like short term treasuries? Alas, Mr. Willby does not explain. Like Mr. Buffett says, "It's only when the tide goes out that you learn who's been swimming naked." SVL was chasing return and the tide went out. Surely the Fed has many faults but I don't know why they are responsible for bad banking in general. But what do I know.
An other excellent presentation. Really found Mr Wilby’s prospective of managing his retirement accounts in retirement very helpful. Having retired from semiconductor development I would agree ASML is a definite key stone to chip technology advancement. I would include Ziess in that as they (at least when I was there) produced components for the ASML tools.
I wish Mr. Wilby would discuss why he has no confidence in precious metals. I think a chunk of PMs, as one part of a diversified portfolio, makes a lot of sense, especially when faith in currencies is taking a hit.
Awesome interview! Fair and frank. No salesman here. There are a lot of digital infrastructure projects as well. AI is progressing every day last 50 years. It might soon be a dominant force, still not sure when revolution is.
The Fed is not selling the treasury securities that it owns. It just lets some of them mature without buying new ones. That has the effect of making more treasury securities available for purchase by other economic actors. All other things being equal that would tend to push up yields.
The Federal Reserve is advised by 400 Ph.D. economists. Their work is on-going and likely always will be. Extrapolating one or two very imprudent allocations of capital to particular reserves and to thusly infer much broader cataclysm would seem foolish. I will grant that pushing capital into the banking system hoping that bankers would use it to create stimulatory loans was naive in the extreme. Rigor should be imposed on the banking system when that becomes possible. It should include restrictions on the way in which banks actually create capital out of liabilities. Is federal paper (Treasury and agency) investible? Of course it is with holders all over this planet. Of course buying power is diminished during periods of inflation. If you aren't buying, that's relatively irrelevant. As inflation is brought down (sometimes with great difficulty), greater value returns. In the meantime, the taxpayers continue to guarantee the dividends.
The apparent effect of Bernanke and Paulson offering the Big Banks a few bucks to cover bad credit risks, appears to have been depleted a while ago? The Credit Card Blizzard that replaced cash, did overcome a potential for the effects of a "Run on the Banks". Now with Consumer Debt at $17 trillion, what is the next move to be?
I've been in BI/AI for years and most of these software companies have never made a profit. They pay you only when they get acquired. I've been shorting the AI pop recently because this is a long tail investment that will get crushed temporarily. Buy the right companies when they drop 50%
Great interview! Bill knows his stuff. I think his take on ASML us spot on. Agree that it is expensive, but they clearly have a monopoly on the machines that make the most advanced chips. Read "Chip War" by Chris Miller.
Are longer term treasuries not a risk only if you buy them at the wrong time (ie before the end of the rate hike cycle)? Once we are getting closer to a recession, where is the risk in say TLT?
The fact that a competing Currency is appearing, to challenge the stability of Fiat Dollars, seems to be a subject that western media avoids discussion about. The ability to back the Federal Reserve Note with something of value, now presents a challenge to the US Government. Swapping responsibility between the FED and the Treasury, appears to have run out of room to hide?
I swing trade every day and hold a base in deep value stocks that are 3x undervalued. I own them for free and many pay me 8+% divs. Over trading works if you know what you are doing. I also hold 70% cash today at 5% and longer term bonds that when the idiots drop rates to 0 again will jump 50% +
I would have thought after the quickly rising interest rates over the last 2 yrs. The much higher yields on US treasuries, and thus lower prices, they would actually be much safer than they have been for many yrs, a better bet now
I love fiscal contraint. The govt is incapable of it. We need a third party that is serious with saving us from this debt bomb. In the meantime I'll use my lack of leverage to own more "real" assets and win
One contrarian play is coal plant clean tech stocks. The mainstream has mal-invested in green tech with no benefits and coal made a major comeback during the pendemic. Germany alone burns more coal than ever when they were the leaders in switching to green energy. ADES is one of these coal tech plays
The government has numerous federal land, its resources, buildings, parks, universities like West Point, etc, etc and the military to protect it, plus friendly neighboring countries, so, the treasury could mint a few trillion dollar coins backed by some of these assets if needed, and raise taxes temporarily to reduce the national debt. The GDP is climbing long term, so, the debt is manageable if the government wants.
Funny how an undergraduate course on asset-liability matching and bond duration is lost on high-powered bank managers? Makes one wonder why we have banks anyway? Could not reserve requirements be programmed for each person's checking account?
Seems pretty simple for the Treasury to fix. If you hold US securities, we know they are not totally risk free. If your treasury holdings exceed your deposit duration, you need them under a sliding scale risk based capital requirement even if HTM.
This guy is an over educated nut. All companies are essentially tech companies, which use iPhones, AI and various tech as needed. Don’t need to by speculative relatively new tech companies with no or small dividends.
![Financial Markets Are Dangerous for Investors: What You Need to Know [2022]](http://i.ytimg.com/vi/-Vjez85LlNE/mqdefault.jpg)
![Financial Markets Are Dangerous for Investors: What You Need to Know [2022]](/img/tr.png)
Only a retired multi-millionaire perhaps billionaire says I only keep 10% in cash and 90% in equities, his 10% is in the millions. As a retired small time investor I realize that some opinions of the guests on this show are irrelevant to most of the viewers, but I continue to watch…
Long term treasuries are not risk free if you might have to sell them before they mature. I know that. Consuelo knows that (she's covered it many times). Mr. Wilby knows that. I would expect bankers to know that.
Mr. Willby suggests that somehow banks were forced to buy long term treasuries because the Fed issued so many. I don't follow this at all. How is it that most banks somehow evaded this coercion? Why couldn't SVL have purchased safer, more liquid investments, like short term treasuries? Alas, Mr. Willby does not explain.
Like Mr. Buffett says, "It's only when the tide goes out that you learn who's been swimming naked." SVL was chasing return and the tide went out. Surely the Fed has many faults but I don't know why they are responsible for bad banking in general.
But what do I know.
An other excellent presentation. Really found Mr Wilby’s prospective of managing his retirement accounts in retirement very helpful. Having retired from semiconductor development I would agree ASML is a definite key stone to chip technology advancement. I would include Ziess in that as they (at least when I was there) produced components for the ASML tools.
I wish Mr. Wilby would discuss why he has no confidence in precious metals. I think a chunk of PMs, as one part of a diversified portfolio, makes a lot of sense, especially when faith in currencies is taking a hit.
Awesome interview! Fair and frank. No salesman here. There are a lot of digital infrastructure projects as well. AI is progressing every day last 50 years. It might soon be a dominant force, still not sure when revolution is.
Good show; timely and practical as per the usual! :)
A first principles thinker
The Fed is not selling the treasury securities that it owns. It just lets some of them mature without buying new ones. That has the effect of making more treasury securities available for purchase by other economic actors. All other things being equal that would tend to push up yields.
The Federal Reserve is advised by 400 Ph.D. economists. Their work is on-going and likely always will be. Extrapolating one or two very imprudent allocations of capital to particular reserves and to thusly infer much broader cataclysm would seem foolish. I will grant that pushing capital into the banking system hoping that bankers would use it to create stimulatory loans was naive in the extreme. Rigor should be imposed on the banking system when that becomes possible. It should include restrictions on the way in which banks actually create capital out of liabilities. Is federal paper (Treasury and agency) investible? Of course it is with holders all over this planet. Of course buying power is diminished during periods of inflation. If you aren't buying, that's relatively irrelevant. As inflation is brought down (sometimes with great difficulty), greater value returns. In the meantime, the taxpayers continue to guarantee the dividends.
The apparent effect of Bernanke and Paulson offering the Big Banks a few bucks to cover bad credit risks, appears to have been depleted a while ago?
The Credit Card Blizzard that replaced cash, did overcome a potential for the effects of a "Run on the Banks".
Now with Consumer Debt at $17 trillion, what is the next move to be?
I've been in BI/AI for years and most of these software companies have never made a profit. They pay you only when they get acquired. I've been shorting the AI pop recently because this is a long tail investment that will get crushed temporarily. Buy the right companies when they drop 50%
Very insightful. Bearish takes have become commonplace but when they're nuanced and reasonable I put a lot more stock into them.
Great interview! Bill knows his stuff. I think his take on ASML us spot on. Agree that it is expensive, but they clearly have a monopoly on the machines that make the most advanced chips. Read "Chip War" by Chris Miller.
Great Interview and Intel, Consuelo !....The " Long Gray Line" ..Never lets US down......GO ARMY !.....
Are longer term treasuries not a risk only if you buy them at the wrong time (ie before the end of the rate hike cycle)? Once we are getting closer to a recession, where is the risk in say TLT?
The fact that a competing Currency is appearing, to challenge the stability of Fiat Dollars, seems to be a subject that western media avoids discussion about.
The ability to back the Federal Reserve Note with something of value, now presents a challenge to the US Government.
Swapping responsibility between the FED and the Treasury, appears to have run out of room to hide?
I swing trade every day and hold a base in deep value stocks that are 3x undervalued. I own them for free and many pay me 8+% divs. Over trading works if you know what you are doing. I also hold 70% cash today at 5% and longer term bonds that when the idiots drop rates to 0 again will jump 50% +
Retirees are told not to buy individual stocks/stick picking, so not very helpful for the average person.
I would have thought after the quickly rising interest rates over the last 2 yrs. The much higher yields on US treasuries, and thus lower prices, they would actually be much safer than they have been for many yrs, a better bet now
I love fiscal contraint. The govt is incapable of it. We need a third party that is serious with saving us from this debt bomb. In the meantime I'll use my lack of leverage to own more "real" assets and win
They bought the treasuries at the wrong time.
One contrarian play is coal plant clean tech stocks. The mainstream has mal-invested in green tech with no benefits and coal made a major comeback during the pendemic. Germany alone burns more coal than ever when they were the leaders in switching to green energy. ADES is one of these coal tech plays
Jeremy Grantham would disagree with him on green energy.
Likes Boeing stock one year ago, great move!
Great podcast
Happy Earth day Professor Mack.😇👑🌏🌎🌍💚@undwallace
Jamie Dimon is Mr, Bailout.
Please, no moralizing
Excellent interview! Thoughtful, measured, and worth an attentive listen. USMA!
The government has numerous federal land, its resources, buildings, parks, universities like West Point, etc, etc and the military to protect it, plus friendly neighboring countries, so, the treasury could mint a few trillion dollar coins backed by some of these assets if needed, and raise taxes temporarily to reduce the national debt. The GDP is climbing long term, so, the debt is manageable if the government wants.
Funny how an undergraduate course on asset-liability matching and bond duration is lost on high-powered bank managers? Makes one wonder why we have banks anyway? Could not reserve requirements be programmed for each person's checking account?
What's the name of the? I can't find it anywhere. HELP!
Sorry, what's the name of the book?
"I Can't Tell You Why I Don't Like Gold And Bitcoin " it one page long.
Seems pretty simple for the Treasury to fix. If you hold US securities, we know they are not totally risk free. If your treasury holdings exceed your deposit duration, you need them under a sliding scale risk based capital requirement even if HTM.
FLR has been a good swing trade for me in the last few years. I'm adding on drops.
What a FANTASTIC guest and insight No One is telling you !!!
👌
Excellent show. Thanks.
very informative ! thanks
I like Bill’s thoughts: be cool and be a “lazy” investor. Don’t over trade your portfolio.❤
Great interview!
The advice single best idea for investors is always wrong.
This guy is an over educated nut. All companies are essentially tech companies, which use iPhones, AI and various tech as needed. Don’t need to by speculative relatively new tech companies with no or small dividends.