The Great Liquidity Debate | Michael Howell & George Robertson on The Fed & Moneyprinting
Вставка
- Опубліковано 3 лип 2024
- Forward Guidance is sponsored by VanEck.
Learn more about VanEck Bitcoin Trust (HODL) vaneck.com/HODLFG.
VanEck Bitcoin Trust (HODL) Prospectus: vaneck.com/us/hodlprospectus.
__
Michael Howell of Crossborder Capital and George Robertson of The Monetary Fronteir have two things in common: they both correctly predicted the renewed bull market in stocks and they both have been guests on The Forward Guidance podcast. That is where the similarities end, as Michael and George have entirely different explanations for what is driving the surge in equity prices. While Michael is renowned for his models on Global Liquidity and closely tracks the changes in central bank balance sheets (most notably the Fed’s), George dismisses the Fed entirely and thinks that monetary authorities have effectively zero influence on the economy and stock market. What ensues is a heated debate not just about what is driving the stock market and economy but about the very nature of money and credit creation itself. Recorded on April 10, 2024.
__
Follow VanEck on Twitter / vaneck_us
Follow Michael Howell on Twitter / crossbordercap
Follow George Robertson on Twitter / bickerinbrattle
Follow Jack Farley on Twitter / jackfarley96
Michael’s Substack t.co/7jRGW9iR0S
George’s Substack themonetaryfrontier.substack....
Michael’s Book www.amazon.com/Capital-Wars-R...
Follow Forward Guidance on Twitter / forwardguidance
Follow Blockworks on Twitter / blockworks_
__
Timestamps:
00:00 Introduction
00:32 Jack's Intro
02:28 Michael's Opening Statement
06:09 George's Opening Statement
18:17 The Draining of The Fed's Reverse Repo (RRP) Facility
24:59 VanEck Ad
26:03
28:38 The Portfolio Rebalancing Theory (I.E. How Quantitative Easing (QE) Theoretically Works)
45:21 Duration Impact of U.S. Treasury Issuing Longer-Maturity Paper
51:39 Spread Between Agency Mortgage-Backed Securities (MBS) Yield And 10-Year Treasury Yield
01:12:09 There's A Distortion In The Yield Curve, That's For Sure"
01:17:47 Beyond The Fed's Balance Sheet
01:23:18 Jack's Comment On Cause And Effect
01:25:07 Views On Markets: George And Michael Remain Very Bullish
__
Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets. - Розваги
Finally, you can easily access Bitcoin in a low-cost ETF with the VanEck Bitcoin Trust (HODL). Visit vaneck.com/HODLFG to learn more.
Michael: Here's my thesis and supporting data
George: Trust me bro
what a nitwit statement come on help up come up with more
@@georgerobertson608 haha. Tell me more about the new magic 'private-sector-Fed' that will be created and other magical fantasies that I should just 'believe'. lol
@@georgerobertson608 only the US matters... trust me bro. It only makes up 4% of the world's population but the markets where the other 96% live do not matter.
"It's a fallacy" okay why?
🤔I think George was saying the FED is more of a cheerleader. I always think back to 2020 when they said they would purchase junk bonds, the markets front ran the FED and actually saved themselves. At the end of the day, the FED made a small purchase to save face but the heavy lifting was done by the markets as always
George=incoherent, inconsistent and contradictory
Michael=well spoken, consistent and winning!
They both made solid points actually, despite the delivery
George came across as dismissive, where Michael has a long line of quant models over time backing liquidity as real
George Robertson = Word salad
"USA is best. Now that I have your attention, follow my stock trading tips bro."
LOL
TBH, George made a lot of sense in the second half of the interview (and even Mike agrees with him on a lot of points) - to see he didn't make sense is nonsense. Go back and watch.
You have it backwards. Unsurprisingly - herd mentality confuses pleasing, familiar tones for truth-value.
Don’t be afraid of a little clank & jangle.
Investor skepticism surrounds the Fed's plan to maintain interest rates until inflation stabilizes. Personally, I'm unsure about investing $150k in my stock portfolio. I seek advice on the optimal strategy for navigating this market.
Investing in stocks can be a wise decision, especially if you have a reliable trading system that can lead you to fruitful days of success.
The issue is most people have the "I want to do it myself mentality" but not equipped enough for a crash, hence get burnt, no offense. In general, Financial Consultants are ideal reps for investing jobs, and at firsthand encounter, since Jan.2020, amidst covid outbreak, my portfolio has yielded massively in ROI, summing up to 7-figures as of today.
That's truly remarkable. I hope you don't mind pointing me towards their direction.
Certainly, there are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’Colleen Rose Mccaffery” for about five years now, and her performance has been consistently impressive.She’s quite known in her field, look-her up.
Thank you for this tip. It was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her resume.
At 11 minutes in I had no idea what George was talking about. Glad I checked the comments and saved myself 90 minutes. I have seen recent Howell interviews and know his thoughts, so not missing anything skipping the rest
Really difficult to understand George Robertson argumentations..
He doesn't have any
Certainly. Exchange-Traded Funds (ETFs) are popular for long-term investments due to their diversified nature. ETFs offer exposure to a wide range of assets, such as stocks, bonds, or commodities, which can help reduce risk. Some top choices for long-term investing include broad market index ETFs, sector-specific ETFs, and bond ETFs, as they provide potential for growth and income over an extended period while minimizing the risk associated with individual stocks.
Numerous compelling stocks span various industries for you to consider tracking. While it's not necessary to act on every prediction, enlisting the guidance of a financial advisor is advisable. They can assist you in determining optimal entry and exit points for purchasing and selling shares or ETFs, ensuring well-timed decisions aligned with your investment goals.
I agree, that's the more reason I prefer my day to day investment decisions being guided by an advisor seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, it's near impossible to not out-perform, been using my advisor for over 4years+ and I've netted over 2.8million.
Kindly share the details for reaching your advisor. With inflation negatively affecting my funds, I'm in search of a more lucrative investment strategy to optimize their performance.
Deborah Lynn Dilling covers things like investing, insurance, making sure retirement is well funded, going over tax benefits, ways to have a volatility buffer for investment risk. many things like that. Just take a look at her full name on the internet. She is well known so it shouldn't be hard to find her.
I greatly appreciate it. I'm fortunate to have come upon your message because investing greatly fascinates me. I'll look Deborah up and send her a message. You've truly motivated me. Thank you.
5 minutes in and George is making no sense. Not sure why he's invited on this pod
He seems to know what he's saying but nobody else does
@@stoneyj1a1if George seems to know what he says you should enlighten us and explain. Other than that George is pure American hubris and flat out denial of the American reality: it's a 3rd word country by plenty of standards, especially standard of living of the average people or like 90% of population.
He has some good insights if you can get voer his personality, I love his twitter feuds ahahah
@@stoneyj1a1 Seems like he is just yapping away
George is that kid in class who forgot to read the book but has to give a book report in front of the class.
"Yes, 'A Tale of Two Cities' was about, ummm, two cities. Yes. And ummm... they were really great cities. Awesome cities. Yea."
I gotta say, I’m more with Howell on this one. I really enjoyed this format as a fan of Howell and his work because it allowed for a bit of discovery into his process and assumptions. Thank you Jack and Blockworks!
Damn Jack, love your show but George's rambling is brain numbing. Needed you to redirect.
George is just as bad as he was in his first appearance
In the second part of the show, George, Michael, and Jack are saying the long end is discounted as part of Fed policy measures, which Michael is calling liquidity, while George has disagreed that this is a form of easing. Really good interview. The commenters saying that George doesn't make sense are not following his terminology. These are ex Solomon Bros. guys here people.
What is George saying!!?
No1 knows😭
I will be forever grateful to you, you changed my entire 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 Michelle Stewart.
Wow. I'm a bit perplexed seeing her been mentioned here also Didn’t know she has been good to so many people too this is wonderful, I'm in my fifth trade with her and it has been super.
She is my family's personal broker and also a personal broker in many families in United States, she's a licensed broker and a FINRA AGENT in United states
You trade with Michelle Stewart too? Wow that woman has been a blessing to me and my family.
I'm new at this, please how can I reach her?
I was skeptical at first till I decided to try. Its huge returns is awesome. I can't say much
Howell is the GOAT 🐐Would be great to see see a deflationist like Danielle DiMartino Booth or Hugh Hendry debate him
Hendry hasn’t got a Scooby
@@diddy1302 I agree, DDB would be the smarter option, but Hugh is entertaining.
George- most typical example of American “pseudo-intelligence “ - (I know nothing but can talk a lot) I have ever experienced. 🤕
I am infinitely dumber for having wasted my time listening to any word salad he spewed 😢
Strange how anything George can’t understand - “ doesn’t exist” ! 😮
Excellent debate from both sides of the argument. Very glad that block works hosts such extremely informative debates from such capable articulators of both sides of the argument, including the excellent host moderation and insightful questions. Please keep up the great work of such interviews!
George saying the federal reserve is required for democracy....all if his arguments are meaningless after that
Michael is truly a saint…….for patiently sitting through George’s utter nonsense 🤦♂️
George was misrepresenting Michael’s positions and using other views as examples that aren’t even Michael’s. 🤨
I will never be able to follow George’s logic
Because he doesn't supply any
@@theguy9067😂
@@stoneyj1a1again, enlighten us and explain George's logic.... forget it, I'll do it for you: George's logic is pure smugness, and yeah, hubris is always logical as it is superficial and supports simplistic arguments. Whenever reality doesn't agree hubris simply denies it.
Great interview! One point I wish they had discussed is the role of t-bills as collateral in offshore and shadow banking. More privately held t-bills means more collateral which leads to more lending. That's a plausible mechanism for why both the level and share of t-bills matter.
George Robertson 🤡 🌎 comments
Confabulation inefficient trash talk
Holy COW can’t wait to see this!! Strong opinions!! What a GREAT PAIRING!!
Having worked in the BIS for 9 years. Michael is spot on here.👏🏼
Great episode. Solid arguments from both sides. I follow the work of both michael and george. Don't get why some in comments don't understand george.
Can u "explain like I'm 5" George's general stance? Seems somebody like u is needed here
This was a good format Jack: relatively loose and informal, long form, and good natured. Please host more of these.
Michael is someone to listen to.
This was fascinating. It shows how complex these topics can be, and how people can derive such vastly different views and opinions. Great pod...I really enjoyed listening to this debate! Also...how awesome would these two guys be in a debate with Janet Yellen and Jerome - let's make that happen! lol..
Thanks guys!!
Great debate guys 2 of the best!
Thanks for having both George and Michael on. Hmmm….sounds like WHAM!! Lol
Leaned a lot from both of them.
Love when investors are secure enough to debate like this. Would love more. Well moderated, Jack
As someone who watched every one of Jeff Snider’s Eurodollar University YT videos for over a year, George is making identical arguments. This is a fascinating debate.
Oh boy, please bring these 2 bright minds back on the show very regularly!!! I haven’t enjoyed this kind of super constructive dialogue for a long time.
I’m with Michael 100% about liquidity, but ain’t George adorable when he tried denying the existence of liquidity???😅
I felt that George was making a few points, I just couldn’t wrap my head around his ideas… yet! However, he struck me with the idea that the Fed doesn’t exist!!! And he got me thinking that maybe he’s trying to say that the Fed is political after all even it says it doesn’t. Obviously, fiscal policy commands monetary policy, right? Or I’m wrong? I always have a biased view that Politics and Money are always connected if you dig hard enough. Anyone who tries to convince anyone else otherwise is just a fool of the system… anyway, very well-constructed discussion. Big thanks!!!
George Gammon or whatever does a much better job imo showing and explaining that Reserves don't matter when it comes to M2 until we get to the covid bail out period. M2 grows by trillions while Reserves stay around 40 billion. It's not until 2021 that you see Reserves, Stocks, and M2 rise exponentially together. John Titus also has great work on this topic. As far as I can tell from this interview george is a uniformitarian kool aid drinker when it comes to the US and the dollar. I'm sure he makes good investments because most other investors are USA koolaid drinkers too. I don't think the dollar is going anywhere anytime soon but to act like there is no time component to the availability of capital (ie liquidity) makes no sense. If I make a million dollars over the course of my life at no point would I ever be a millionaire. So saying "but the money will be spent eventually" doesn't mean when or how doesn't matter lol
Michael Howell has a scientific approach to markets that is rooted in facts and empirical evidence.
spicy as promised. Excellently executed and moderated, Jack. Thanks for this
Given the current economic difficulties that the country is experiencing, how can we enhance our earnings during this period of adjustment? I cannot let my $680k savings vanish after putting in so much effort to accumulate them.
Well the bigger the risk, the bigger the reward and such impeccable decisions are better guided by professionals
Yes true, I have been in touch with a brokerage Advisor. With an initial starting reserve of $80k, my advisor chooses the entry and exit commands for my portfolio, which has grown to approximately $550k.
I’ve been looking to switch to an advisor for a while now. Any help pointing me to who your advisor is?
Amber Russell Bennett is the licensed advisor I use. Just research the name. You’d find necessary details to work with to set up an appointment.
I looked up her name online, went to her website, and sent her an email to arrange a meeting. I'm grateful.
I’m with Mike.
Will always listen to Howell. I don't think the other side believes in dollars created outside the US Eurodollar.
his point about govt spending driving up the market is true
Yes, but that is no insight, everyone listening already knew it.
One of the best shows on the internet and I believe both are arguing the point that our money system is broken. Bitcoin will be the currency and the network of the people's money. In time!!😎👍
Ty ❤
That was awesome!
Jack you are the GOAT. Love Michael Howell. Really was interested to hear George because I like out of the box perspectives, but it's hard to understand what he is trying to say. Sometimes I think there might be something there, and other times he seems to just get flustered people are not agreeing. Would love to see someone like Dr. Lacy Hunt instead discuss with Michael Howell. If I could see a dream discussion it would be Dr. Lacy Hunt and Joseph Wang. I really hope something like that happens.
George should not get more air time, he simply does not understand that Fed assets are outside the economy.
George not very articulate unfortunately.
Awesome!👍🏻💛
If George was an Astrophysicist he’d claim Black Holes don’t exist because he can’t see them. Right?
Mr. Robertson saying RRP isn't a facility even though it is explicitly referred to as such by pretty much everyone = huh? And that liquidity doesn't exist?? C'mon. Ability to roll debt in a massively over levered world is critical to keeping the system afloat.
Overall, I'd say Dr. Howell came out the winner of this debate. He's not saying anything new, but his reasoning is clear, actionable, and backed up with plenty of data. It's rare you can say that a 'macro guy' made you money but that is the case with Dr. Howell.
If the liability is never repaid then its net money in the system. Debt printer go brrrr
which on a large scale it literally never does it's only refinanced. M2 would have to grow at rates connected to the real world otherwise.
I was just thinking about the guy who was so ... on Blockworks Macro with Jack yesterday wondering who he was and what interview was that again!!!
How is that possible!!! And here he is today and hence I got my answer.
The world works in mysterious ways. Would love for them to have follow up discussion where they bring rigour, data and charts to the discussion for further conversation and clarity to the viewers!!!
Would be highly entertaining and provocative for learning purposes!
Okay George saying the real yeild curve is the future price of growing the economy - now that was a gold nugget.
Michael is the best!
Heck of a debate
So you're saying markets are complex adaptive dynamic systems...got it!
are they both just coming from different angles to identify the same thing: Sentiment/Confidence/Animals Spirits/etc?
Mr. Robertson is really something to figure out.
Michael Howell reminds me of Michael Caine. Well spoken and well mannered.
I strongly disagree with George and think that the variable rate countries will take the US down with em. But he does make a logical point and seems correct this far.
i have no clue what the 2nd guy said. We went through so many diff topics in 5 minute
😭😭😭
George is wrong about Canada's channel corridor system. This was changed to a floor system just like the USA back in 2020 when Covid happened.
I agree with both to some degree but I believe George is looking at things as they are whereas Michael is seeing them as they always has been.
Jack, what would be interesting is if you had a Lacy Hunt or Professor hanker join this type of debate. They are brilliant and claim the money supply is shrinking at the fastest rate in decades. I am trying to understand the difference between the money supply and global liquidity.
liquidity in todays world is honestly the ability to pay debts when they come due. A liquidity crunch is the not the lack of assets it's a lack of cash when the bills come due. Look at SVB, they had their money in illiquid assets (albiet US treasuries which should be the most liquid asset in the world) but when the FED changed rates they had to sell those TBills at a loss to try and come up with cash to pay debts in real time. So did they not have the assets to back their liabilities? No but they didn't have the liquidity to pay their debts and depositors in the here and now when the demand came through. That's why having everyones savings tied up in homes an real estate is actually a negative as far as the velocity in the economy. If they would stop destorying the money people would just safe cash because it's 6-24 months more liquid than a house. So how do they solve that problem? Refinance. But who would refinance now? At a higher rate? No way. So that money is now locked up in thise homes. That reduces liquidity. Someone might have 300k dollars "saved in their home" but as soon as they don't have 2k cash on hand to pay the mortage they loose it all.
They’re basically saying the same thing differently
Jack such a great open.
6000 by year's end, thanks George!
im so glad i came to the comments i thought i was the only one who thought George was confidently talking shit
The irony of George telling Michael he is going to get wrecked is emblematic of that entire conversation.
when did he say that?
Michael crystal clear on logic and won!!
George, i just lost focus!
No better than Howell 💪🏻
George asks Mike to explain something
Mike explains it clearly and with data to back it up
George still doesn't believe him
JFC
We should listen to all people regardless of their style. The liquidity argument seems to imagine a world where its debt function doesn't matter.
Of course it matters, but when your centrist bias of the U.S. blinds you to the debt (monetary spiral) it's in like George's position takes, you simply can't afford to think about liquidity in any other way than a market phenomena.
Mrkts went up and down before liquidity but now that central banks stepped in they take away dwnsde risk
Seems like it matters now but its still debt to be paid later
Giddy-up.
The core of the issues with george’s argument is the fact that he views the US financial system as a completely closed system. “ there is no funding of the US Government.” Wow
Just a quick synopsis : George robertson and David hunter are best friends. MIchael Howell loves liquidity.
I cant follow George arguments at all. Im here to listen to Howard.
Jack ends it with saying the Fed doesn't matter in the long run effectively.
That's a spicy meatball!
In our county we say "if you talk to much you have less to say"... These Georg talks but I can't hear the point...
Japan didn't prove qe doesn't matter. Japan had fiscal deficits but nowhere near the size the u.s. is doing, especially once considering the natural need for higher deficits once the country is built out and population near peak (much lower construction of homes and buildings). The u.s. is completely different and the fed's excessive qe is allowing congress to spend at such a high rate that inflation is bad. Japan never even got close to that. The only reason their debt to gdp is higher is because they hit peak construction investment way before we did and government had to spend more to keep the bubble from collapsing. In contrast, the u.s. is pumping in twice what they need to, causing the bubble to get so big it's almost unfathomable to me that Congress and the fed are allowing this insanity to destroy our once great country. It's making me so ill I can't even keep watching the video to think about it any more. Plus I don't care about stocks and crypto. Teeasuries is all you need to invest in and sleep well at night, with 5% in gold as insurance.
LETS GOO. George’s work always fascinating
Plunge protection team
George is a bond trader. Spinning therory’s is easy, Managing money over decades isn't.
FOMC = monetary v Congress = Fiscal policy. FOMC QT Rates. Congress Infrastructure and Chips act and COVID relief. The debt will cause stock market to go up = 1 trillion every 100 days.
I would like to see Howell paired with someone up to his caliber of speaking. George may have good arguments, I don’t know enough about economics to say, but it was difficult to follow his chain of logic and his exasperated tone at times wasn’t helping.
It seems he realized early on he's outmatched and tried to be condescending which exposed his weak arguments even more.
If I have to 'believe', I prefer Michael as he has something to explain coherently. On the other hand, George only tries to link things that come to his mind as some type of pseudo theory.
George Robertson really does a poor job explaining his point of view.
7.5 trillion isn’t liquidity?
George always brings the cowbell. 👏
Ray Dalio of the largest macro hedgefund rarely discusses such arcane notions as liquidity. ...but were to believe its a useful notion because these two guys made a prediction, were lucky enough to be right, and used the word to support their thinking... mmmmhhhmm
Was checking out $ICP , that shit is insane,
This guy is wise but he talks in circles and uses a lot of jargon. Hard to make sense and understand his point.
Howell speaks more to the layman.
There is no Fed effectively?! Tell that to people that are trying to be a home.
It goes deeper than the interest rate - the only reason peoples "savings" must be represented in their nominal home price is because they keep ruining the money. If I knew I could start saving for a 300k house now it would still be 300k by the time I had saved up enough to buy it, there would be no rush to lock up 2k every month in a mortage for the next 30 fking years. I would save and invest and watch that money grow and be able to buy the house much faster - can't do that though, because by the time the average joe saves 300k the same house is worth 700k. By the time you save that it's worth 1.5 million. Maybe if no new homes are built the demand goes up do to scarcity, but it's basically shrinkflation. Homes are as shitty or worse as they've been since the 60s. What has changed in housing to justify these extreame price tags? Absolutely nothing. But because we can't just save the actual money, people are buying houses they don't need, locking all that capital up in the home and screwing over new families - all because they keep devaluing the currency.
So George says "Money Printer" doesn't matter? BS.
You always need an intellectual argument, George destroys it. It is more American vs non American thing to come up with models and explanations, maybe. You can't unsee what George said(King is powerful, nacked and does what it says). Thanks Jack.
So no more crashes no bear markets, a never ending bull market hmmmm, ok good luck with that
George seems super hung up on terminology...ie "It's not liquidity it's Money". One and the same George.