Joué
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DC Analyst joins Joseph Wang and Jack Farley for a discussion about commercial banks, treasuries, and bearishness on banks.
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DC on Twitter: @AnalystDC
Joseph Wang on Twitter: @FedGuy12
Jack Farley on Twitter: @JackFarley96
Blockworks on Twitter: @Blockworks_
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Links
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Liberty Street Economics, "The Fed’s Balance Sheet Runoff and the ON RRP Facility":
https://libertystreeteconomics.newyorkfed.org/2022/04/the-feds-balance-sheet-runoff-and-the-on-rrp-facility/
Bullard's Triple Rate Hike Comment: https://www.bloomberg.com/news/articles/2022-04-19/last-resort-fed-hike-enters-debate-as-bullard-invokes-1994-move
DC's substack: https://dcchartbook.substack.com/p/chartbook-15?s=r
Joseph Wang's writings: https://fedguy.com/draining-the-rrp/
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(00:00) Introduction To DC Analyst
(02:01) Why Are Banks Buying Fewer Treasuries?
(14:30) Implosion Of The Japanese Yen
(20:40) Who Will Buy The Treasuries?
(31:20) What If Banks Don't Lend More?
(37:30) Bearish For Banks? (No)
(42:47) Quantitative Tightening - Will The Fed Be Forced to Sell?
(46:57) Mortgage-Backed Securities
(57:40) Bullard's Comments on Triple-Hike -
Ed Harrison, senior editor at Bloomberg and author of The Everything Risk, joins Jack Farley to share his outlook on inflation, the Federal Reserve’s ongoing tightening efforts, and the sell-off in long-duration tech stocks. Harrison shares his outlook on China, commodities, the FAANG stocks, and why he sees the makings for a new era for markets.
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Follow Ed Harrison on Twitter https://twitter.com/edwardnh
Follow Jack on Twitter https://twitter.com/JackFarley96
Follow Blockworks: https://twitter.com/Blockworks_
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(00:00) Introduction
(02:36) Is The Era of East Money Over?
(04:56) Comparisons to the 2000s Tech Album
(13:30) Valuing Companies With Network Effects
(16:23) Markets Reaction To Monetary Policy
(18:46) ARKK
(22:25) Fed Rate Hikes & Credit Markets
(27:26) Where Is The Fed Put?
(31:53) Bit.com Ad
(32:25) A Shift From Deflation to Inflation?
(37:31) FANTAMAN Stocks
(40:28) How China is Exporting Stagflation
(41:55) Russia's Invasion of Ukraine & The Effect On Energy Markets
(46:19) Will High Energy Prices Cause Demand Destruction?
(50:05) 5YR Breakeven Inflation
(51:40) Inflation in Europe
(52:58) The Global Dollar Wrecking Ball
(56:06) Final Thoughts
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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. -
Follow Jim Bianco https://twitter.com/biancoresearch
Follow Joseph Wang https://twitter.com/FedGuy12
Follow Jack Farley https://twitter.com/JackFarley96
Follow Blockworks https://twitter.com/Blockworks_
Timestamps:
(00:00) Opening Thoughts
(08:05) Powell's "Codewords"
(15:10) The Balance Sheet: Stock vs. Flow
(22:10) Is The Fed No Longer Credible?
(27:32) When Is Inflation Going to Peak?
(47:15) Worst Bond Market Sell-Off Since George Washington Became President
(51:30) Systemic Risks For The Financial Systems
(53:00) Are Rate Hikes Good for Commercial Banks?
(1:01:04) How Far Can The Fed Go?
