Macro Voices All-Stars

All-Star Luke Gromen and Erik discuss:

• Everyone was so focused on the Jobs number that they missed the re-widening of Fed Funds over IOER, which is more important according to Luke
• Luke explains the significance of FF > IOER, what it means, and what the consequences are
• Luke’s take on the global dollar squeeze thesis we’ve discussed extensively on MacroVoices
• Why the dollar squeeze doesn’t deter Luke from being bearish on the USD and bullish on risk assets, gold, and Bitcoin
• Luke’s outlook for how things will play out from here in markets

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All-Star Brent Johnson and Erik discuss:

• Brent says he was caught by surprise by the Gold breakout, but he’s still not chasing it
• Ultimately, Brent thinks Gold will move much higher, but still questions whether this is really the time
• Brent’s conviction that the USD is headed higher has never been stronger
• But he also points out that he las long predicted Gold and the Dollar would eventually move higher together, and this may have begun
• Brent says 4,000+ on the S&P 500 is entirely possible in the next year or two, not because of strong fundamentals but because Brent believes the U.S. Stock market will become the global safety trade benefactor

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All-Star Louis-Vincent Gave and Erik discuss:

• U.S. Stock Market at all-time highs, but bond markets are also very high. Is this about foreign capital using U.S. markets as a “safety trade?”
• Is Deutche Bank’s current distress the new “Lehman Moment” that could indicate coming distress for the entire financial sector?
• Will Hong Kong real estate crash as a result of China’s aggressive policy moves and Carrie Lam’s Extradition Bill debacle?

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All-Star Dr.Pippa Malmgren and Erik discuss:

• How Trump's "photo ops" have been making waves in the markets
• Why Facebook's Libra raises fundamental questions about our roles as consumers, investors, and private citizens
• Why privacy will be "the governance issue of our time"

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All-Star Juliette Declercq and Erik discuss:

• Does Christine Lagarde’s appointment to head the ECB change the Financial Repression outlook?
• Macron is still the chief architect of who has power in Europe
• Outlook for ECB policy leading up to the U.S. Election
• Effect on asset prices
• Conclusion: Giving power over the ECB to someone with strong relationships with EU leaders AND a strong fiscal background has to be a good thing

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Today's All-Star Danielle DiMartino Booth and Erik discuss: 

• Economic conditions are deteriorating globally. We’re in a global recession.
• The U.S. Can’t stay de-coupled from global economic slowdown indefinitely!
• Danielle’s take on the feud between the Fed and the Trump Administration
• Why monetary policy must remain independent from political influence

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All-Star Prof. Steve Keen and Erik discuss:

• Why economists don’t consider Credit in their Aggregate Demand models
• Why they’re wrong, and why credit matters
• Detailed review of credit’s role in aggregate demand

Prof.Steve Keen - Credit Bubbles 

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All-Star Jeff Snider and Erik discuss:

• Treasury and Eurodollar LIBOR yield curve inversions
• Fed Funds Money Equivalents
• Interest Rate Swaps
• Eurodollar Futures Curve

Jeff Snider Chartbook July 1, 2019

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Today's All-Star Luke Gromen and Erik discuss: 

• Policy developments since Luke’s May 28 All-Stars Appearance
• Gold and Bitcoin are starting new bull moves; the Dollar is starting a new bear trend
• Lael Brainard’s speech and why it’s so important to markets
• Luke’s “bottom line” call for markets

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All-Star Julian Brigden and Erik discuss: 

• Can Trump pull off a trade deal with China setting us up for a run into the election?
• What do Middle Eastern tensions mean for markets?

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All-Star Louis-Vincent Gave weighs in on the protests which brought 25% of Hong Kongers to the streets and opines on the longer term outlook for the Chinese Yuan

• Summary of the issues that led to the 2 million person protests in the streets of Hong Kong
• Longer-term, Louis thinks investors should be more concerned about the risk of Yuan appreciation than the widely feared risk of yuan devaluation

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All-Star Professor Steve Keen recaps his recent trip to Sweden for the Central Bank Digital Currency conference, and commonts on Swedish and Nordic economic outlooks

• Prof. Steve’s experience at the Central Bank Digital Currency Conference
• Steve’s assessment of the Swedish economy
• Outlook for the Nordic economies more broadly

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All-Star Juliette Declercq weighs in on what we can expect from this week's FOMC statement, and the disparity between equity and fixed income markets discounting different growth expectations. Also Yuan deval risk. 

• Factors that will determine the Fed’s “reaction function”
• Growth & Inflation outlook
• Discrepancy between equity and fixed income markets in growth expectations
• Powell’s Priorities: Curve Inversion or Financial Conditions?
• China’s role in stabilizing the global economy
• Risk of yuan devaluation

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All-Star Danielle DiMartino-Booth: BRACE FOR IMPACT… The Fed is getting ready to launch NIRP!

• Jay Powell replaced ‘zero lower bound’ in his lexicon with ‘EFFECTIVE lower bound’
• This is no coincidence; Danielle says they’re getting markets ready for negative interest rates
• But… wouldn’t that lead to cash hording? Do they have a plan for that?? (Spoiler alert: No, they don’t)
• What to watch for in next week’s FOMC statement

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All-Star Brent Johnson: This past weekend’s developments don’t change Brent’s Dollar-bullish view

• Brent was just featured on last week’s MacroVoices podcast, where he expressed a secular dollar-bullish view
• Brent says this past weekend’s developments (ECB alluding to rate cuts and U.S.-Mexico tariff deal) don’t change his outlook for the USD
• Brent explains why there’s still plenty of upside in U.S. stocks, especially if he’s right about the USD

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All-Star Luke Gromen: The USD-centric system is slowly losing ground

• Luke opens by reviewing the predictions he made at MacroVoices Live in Toronto, and comparing his predictions with how things have actually turned out in the marketplace
• Luke reviews the four choices China faces in navigating their monetary policy in the face of ongoing trade negotiations
• Luke says the implications of China moving to non-dollar settlement for a wide variety of commodities are poorly understood (he then explains them)
• Luke reviews a variety of indications suggesting the Fed will have to inject liquidity again soon

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All-Star Jeffrey Snider: Yield curves and Eurodollar futures say something is very broken!

• Why Jeff thinks the Fed has been ‘hiking for all the wrong reasons’
• What happened on May 29, 2018
• Eurodollar calendar spreads and what they mean
• Rate CUTS (not hikes) are coming to an open market committee near you!

Jeff Snider Chartbook - Alhambra Investments June 2019

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All-Star Julian Brigden: The Fed needs to ease

• Why the dollar is crucial to kick off the next wave of the cycle
• Why the feedback loop between asset prices and the real economy is toxic
• Why the risk reward has deteriorated in the bond market / why bonds aren’t necessarily the correct risk off trade

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All-Star Steve Keen: Debunking the fake climate science of William Nordhause

• Prof. Keen’s debunking of the Nobel prize-winning work of economics William Nordhaus
• The role of Energy in the economy and why classical economic models fail to consider it
• Why Prof. Keen says the risks posed by climate change are far worse that Nordhaus estimates
• Prof. Keen’s prediction of an eventual energy short for traders (and our host’s disagreement)

Climate Change and the Nobel Prize in Economics by Steve Keen

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All-Star Danielle DiMartino-Booth: Deflation is the name of the game unless/until helicopter money hits the stage

• We review Danielle’s market calls from her Christmas 2018 newsletter to see how they performed
• Danielle says USD has reached her upside target and trajectory from here is less clear
• Danielle still sees lower treasury yields, low inflation, and lower commodity prices on the horizon
• But she emphasizes that investors must stay nimble, because a change in political winds in favor of Modern Monetary Theory or other “Helicopter Money” benefits could be a game changer

Shadow Boxing the Consensus

Living to Tell

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