Why Liquidity Matters More Than Anything Else w/ Raoul Pal & Michael Howell
VloĆŸit
- Äas pĆidĂĄn 1. 05. 2023
- A bull market in liquidity started in October of 2022, and we know liquidity leads asset markets.
Raoul speaks with Michael Howell, CEO of CrossBorder Capital, about why the biggest force in global macro is pointing towards a new bull market in equities.
CHAPTERS:
1 Understanding Global Liquidity 00:46
2 Liquidity & Central Banks 08:42
3 Is it Possible Central Bankers Actually Know What They're Doing? 0:19:15
4 Where Are We in the Global Monetary Cycle? 0:30:12
5 The Takeaways 0:45:08
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The most timely interview , almost the only interview ive watched that fits what we are seeing
Right and itâs still the case. Itâs shocking how so few experts are actual experts.
One of the best conversations I have listened to đđđ
Soem really solid thinking here. Raoul deserves thanx for putting this together.
Michael should offer his book as an audio book!
I am buying the capital wars book
Agree we need as audio, I read with my ears while driving, no time to sit and stare at a book Iâm too busy
Love that exchange and we need more of this, many thanks
Its been a year....the man is on point
Awesome. 3rd with Rauol Pal this morning. ;)
Very interesting interview.
Date of interview: April 17th 2023.. just something I always like to verify before watching with these uploads.. don't want to waste time on outdated stuff..
Agreed. One month later I think is still relevant for these high level views
@@mgarduno6064 months later itâs still relevant. As an investor, when it comes to financial markets and portfolio allocation, Michael Howell is one of the rare few who is almost always on point and a great resource to have.
I learned so much . thanks Raoul
I need to listen to this again but this already does feel like a lightbulb moment for me. It has left me with a lot of questions floating in my kind though. Thanks
How to find global Liquidity index or measure?
fantastic content
Thanks!
Thanks for watching.
I get that you need balance sheet capacity to roll the debt but it's this controlled by rates? When rates are higher you just can't borrow as much against an asset?
1:7 Spending to refinancing
Yanis varoufakis has talked about taxing robots and AI while humans enjoy a day at the beach.
Awesome guest
excellent!
Monetary hedges like gold, cryto or tech. But what about broader commodities?
spot on
How can this be discussed more? Is Jeff Snyder correct?
I think he said there ll be a dollar shortage is right
What are those assets that you should own ??
First Class.đ
Novel idea: TAX THE FâN CORPORATIONS
Nice book placement on the shelf behind him đ
Aging investors need income, so any duration play needs to provide stable income, assets that don't provide it must fall. Adding liquidity while not providing income does what ?
Jeff Snider has an radical opposite point of view concerning what will come from here
Moar Cowbell. More than Mr Walken could even imagine.
Superb, thank you
Universal basic assets - thatâs why blockchain and NFTs are importantly it allows for citizens to own parts of the new economy
The Dollar is a great position?
whats the TLDR?
Markets have bottomed, More stimulus & money debasement coming. Buy gold, crypto and long duration assets
China is ahead of the curve because they are the world's factory.
Orders slow, then production slows, then you see employment start to cut.
Service sectors aren't immune to the employment cuts, but they dont show stress as early in the cycle.
9:19
It's the liquidity bros
Talk to Richard Murphy of Tax Research UK. The growth of base money does not correlate with rising inflation. Quantity theory of Money is simple and appealing, but its wrong.
Neither guest said it did. We had money growth from 2009 to 2020 and no inflation - just asset pricing growth. Handing out money to people during a supply shock caused inflation.
What they're saying is that the money growth caused debasement.
@@thesolitaryadventurer Thank you for this thoughtful reply. Tell me what the difference is between debasement and inflation?
@@thesolitaryadventurer 2/ Assets went up between 09-2020 because of zero rate treasuries.
Why is a deeply negative term premium in the treasury market evidence of a collateral shortage?
Its not necessarily that we want a market crisis. Its that my work per share of s&p purchase has diminished incredibly over the past 10 years and i want a mean reversion either my salary needs to go up or S&P down. S&P down is both easier and more likely than my wages going up unfortunately. So hopium.
116
Why do rates come down? Rates going to 8%
Iâm in a piping union and we just got a $3 an hour raise from the contractors. So, inflation imo is never coming back down
@22:46 "japanification" with respect to consumer behaviour will not happen because of the culture of savers and hyper-hard-work that is unique to Japan, which contrasts with Western/American style "spend, spend, spend". Japanification with respect to CB policy, perhaps, because the BoJ seems to be at the spearhead of experimental monetary policy.
Thanks for the free lunch, thought to share some lunch with you too.
His liquidity model doesnât make sense heading into a recession. The Fed is normally aggressively easing (providing liquidity) as we head into recession. That doesnât prevent the stock market from selling off.
The stock market usually rallies into a recession start
@@shakespear7675 He said the market bottomed in October based on his liquidity model.
Do you feel the FED is aggressively providing liquidity going into this recession?
(I do not.)
@@1Bob4All Not yet, but once unemployment starts to rise they will pivot from tightening to easing.
@@42dunbar I've been following this guy for last couple years he's been right about everything so far
Raoul, what happens to liquidity when Janet Yellen has to refill all of the accounts she is now draining?
Gold is up 10% yearly compared to dollar last 20 years... Please review your data source.
Stop đ dividing đ things đ by đfed đ balance đ sheet đ
AI and robotic as a technological replacement to employees also can give advancement to reshore manufacturing back to America. For eighty years large companies have moved manufacturing globally. American made, American jobs, American infrastructure, American GDP, immigration for new Americans ... NOT more QE. That is our future tax base. Better policies, better politicians, better planning, better housing, better healthcare, better planning, not just throwing money at it.
Bitcoin should perform best in this environment
Wrong again Raoul đ
This guy is not objective on purpose. He a smart dude though.
Bubble vision.
Markets don't bottom when yield curve are inverted... Also Recessions don't start until the yield curve flattens... Unless you are trying to predict a DOUBLE DIP recession... Also this is not pricing ANY China/Taiwan escalation plus the de-dollaring that is occurring right now. You are pricing in a PERFECT SCENARIO. AKA SOFT LANDING>
Right, and there's a difference between liquidity to banks for emergency measure, and liquidity provided to the real economy.
Powell has promised high interest rates until inflation eases, so another year of 5% interest. With 70Trilliion of debt refinanced in that time... Forcing more layoffs and bankruptcies. Why be bullish on liquidity when lending is stopping cold?
I'm missing something in their Convo, but Im not sure what
I agree. He sounds too married to his liquidity model. Historically the Fed starts to aggressively ease (provide liquidity) heading into recessions and markets still manage to sell off. The only real bullish scenario I can come up with from here is a soft landing and few people still believe that is going to happen. Of course Raoul has been saying to buy tech stocks and crypto for over a year now so I understand why he likes this guyâs viewâŠ
And the soft landing is not considered a base case scenario
đ. Liquidity isnât possible with, what is is now, 31 trillion? That would be tantamount to the state of Florida stacked 12â tall with stacks of fiat 100 dollar bills however, the dollars have to be backed by something of value rather that the full weight of the US military.
XRPL and other crypto networks being readied
Yes listen to Raoul, who was calling for higher crypto prices while they were dropping. Another swing and a miss đ
Chewing gum wrappers đ€Ł
So more debt. Imagine that?
so in a nutshell, buy eth
Crypto carbon credit tax incoming!!! Get under a table!!!
Cripto idiocy is astonishing.
This guest seems way off point.
That's probably because you are watching the wrong data
Buy stocks heading into recession. Thatâs basically Raoulâs view too lol.
đHow so? Demographic based decrease in spending globally, should look similar to the Japan demographic, which hit earlier.
So basically deflationary on the demand side. Supply side is definitely looking inflationary with no end.
Fiscal deficits, deficit spending & public debt interest expense are driving inflation & liquidity. Everything else is irrelevant.
â@@42dunbarhow did this opinion work out?
Is Raoul straight?
Who cares
Recession is most likely the result of an external factor. For the first time in decades, the United States is losing its clout as a federal reserve currency. They don't have any more economies to use to control inflation, and less money is being spent on stock and oil trading than in the past. They all lend support to the idea that a new multilateral world order is in the works.
raoul has a reputation of scammer now
You guys know no more about what's coming in the markets than a set of tarot cards.
I believe that the current financial system is deeply flawed and in need of a major overhaul before it completely breaks. It is clear that the system, which is designed to provide access to resources, is no longer effective and fails to ensure equitable and sustainable distribution of our planets resources. it is imperative that we carefully evaluate and fundamentally reimagine how we manage and distribute resources in a way that is independent of the current financial system.
Our priority should be to design a system that promotes stability, sustainability, and fairness. To achieve this, we must focus on innovative and inclusive policies that empower individuals and communities to make better use of their resources. This can be achieved through the use of technology, education, and incentives that encourage responsible behavior and discourage wasteful consumption.
Overall, it is clear that a bold and transformative approach is needed to create a financial system that better serves the needs of society, rather than just printing money or pulling on the interest rates levers. As macroeconomic enthousiasts we have a responsibility to take the lead and look beyond the current system to develop ideas and policies that facilitate a better, more equitable and sustainable distribution of wealth and resources, free from the constraints of the current financial system.
Thanks!
Thanks for watching.
Chewing gum wrappers đ€Ł