Michael Pettis On China Exporting Of Debt, Class War And Role Of Chinese Yuan
Michael Pettis is someone who I have followed closely over my career and he is one of the most widely followed China experts in the investor community. He is currently based in Beijing and is Professor of Finance at Guanghua School of Management at Peking University and is the co-author of the recently published book “Trade Wars Are Class Wars”. In this podcast we discuss: How economists don’t understand debt Understanding when high savings rates work for countries How advanced economies investment needs changed since 1970s How trade surplus countries like China and Germany suppress the household wages and income Why China’s high savings rates will now only lead to higher debt, rather than growth How Spanish workers are harder working than German workers How the US and UK are forced recipients of excess savings Why high debt levels lead to low rates The problem with official Chinese GDP data The importance of the US dollar as reserve currency Why the Chinese yuan will not collapse Recommended books: the works of Kindleberger, Adam Tooze’s The Deluge, Eichengreen’s Golden Fetters, Mark Nelson’s Jumping the Abyss: Marriner S. Eccles and the New Deal, 1933-1940
Lyn Alden On Tesla, Finding Quality Stocks And The Impact Of High Debt
I’m always on the lookout for podcast guests with unconventional backgrounds, and on this episode, we have one such guest, Lyn Alden. Lyn has an academic background in engineering and currently works at an aviation simulation facility. But on top of her day job, she has developed a widely followed framework for investing in markets. Her approach is value with a global macro overlay and she’s been doing this research for over fifteen years. I learnt a lot in our conversation, and I’m sure you will too. In this podcast we discuss: The differences between today’s tech boom and the dot-com period How she is currently playing tech stocks Finding value in international stocks and in quality stocks Metrics to use for quality Underappreciated sectors like tobacco and energy Views on Tesla, Amazon and Apple Looking at equally-weighted vs market-cap weighted stock indices Bullish on China tech How to think about debt cycles and the special case of Japan Bullish views on gold and bitcoin Book that influenced her: Big Debt Crises
Professor Laura Veldkamp On How the COVID Shock Will Lower Growth For Decades
In this episode, I talk with Professor Laura Veldkamp. Laura presented one of the key papers at the Federal Reserve’s 2020 gathering at Jackson Hole. Her paper co-authored with Julian Kozlowski and Venky Venkateswaran on ‘Scarring Body and Mind: The Long Term Belief Scarring Effects of COVID-19’ will likely be viewed as a seminal paper in years to come. Laura is a Professor of Finance at Columbia University’s Graduate School of Business and a co-editor of the Journal of Economic Theory. She’s a frequent consultant for the New York and Minneapolis Federal Reserve Banks. She is also the author of the textbook, Information Choice in Macroeconomics and Finance. In this podcast we discuss: Importance of the knowledge economy How alternatives to rational expectation models need to be used when dealing with tail events The critical role of the reactions and belief scarring from events like pandemics Why the long-term costs of COVID will be ten times larger than the current year costs How safe haven assets will be in even more demand, which will keep rates low The role of data accumulation in economies The limits of big data A book that influenced Laura: Guns, Germs and Steel
David Beckworth On The Problems With The Fed And How To Fix It
In this episode, I talk with David Beckworth. David is the host of one of my favourite economics podcasts, Macro Musings. He is also a Senior Research Fellow at the Mercatus Center at George Mason University and a former international economist at the US Treasury. He is the author of Boom and Bust Banking: The Causes and Cures of the Great Recession. His research focuses on monetary policy, and he has advised congressional staffers on policy. In this podcast we discuss: 1. What did the Fed do right and wrong in its COVID response 2. How the Fed is losing independence 3. The advantages of price level and average inflation rate targeting 4. Why nominal GDP/income targeting is the best approach 5. What has caused the 30y decline in US rates 6. How the Fed should be reformed 7. Books that influenced David: Secrets of the Temple and Less Than Zero
Shahraab Ahmad On New York Real Estate, Corporate Fraud And SPACs
In this episode, I talk with Shahraab Ahmad. Shahraab was previously the Chief Investment Officer of the credit fund Decca Capital. Prior to launching the fund in 2015, he managed the Hutchin Hill Liquid Credit Strategy (2008-2013). From 2005 to 2008, he was a partner at Sailfish Capital, where he traded global relative value within credit, and prior to that, he was Co-Head of the HY Credit Trading Group at J.P. Morgan (1999-2004). In this podcast we discuss: The early years of CDS trading Transitioning from the sell-side to hedge funds How credit markets are less efficient today than in the past How the 2008 crisis compared to the 2001-2002 credit crisis The challenges of launching your own fund How he traded the COVID crisis Potential value in NY residential real estate The opportunities in Venezuelan bonds How to use SPACs to gain value How central bank QE could help hide corporate fraud The book that influenced his trading the most
Stephen Roach On The Dollar’s Coming 35% Decline
In this episode, I talk with Stephen Roach. Stephen is well known for his 30-year stint at Morgan Stanley, where he was Chairman of Morgan Stanley Asia and Chief Economist. He’s currently a Senior Fellow at Yale University’s Jackson Institute of Global Affairs and a Senior Lecturer at Yale’s School of Management. At Yale, he has introduced new courses on “The Next China” and “The Lessons of Japan.”. He’s an author too with his recent book published in 2014, which is called Unbalanced: The Codependency of America and China”. In this podcast, we discuss: How poor public health investment has made the recession worse Implications of the US’s diminished role on the global stage Three reasons for the dollar’s coming decline The problem with the lack of US savings Why investment has been too low The problem with Trump’s China policy The need for Europe to stand up on the global stage Likely Biden policies if he wins Life after Wall Street
Edward Misrahi On Decluttering Your Investment Process, EM Crises, And Current Risks
In this episode, I talk with Edward Misrahi. Edward is the CIO and Founder of Ronit Capital – a leading emerging markets focused hedge fund. He founded the fund in 2013, before that he was a founding partner of Eton Park Capital. Edward started his career at Goldman Sachs – where amongst other things he worked in the famous Risk Arbitrage group and later become a partner. In this podcast we discuss: The 1994 Mexico crisis and learning how to buy distressed assets The 1997-1998 Asia/Russia/LTCM crisis and the importance of correlations The problem with hedging and importance of thinking of gross positions How to think about the US factor when trading EM markets The three ingredients of EM crises Be careful of overweighting politics Decluttering the investment process COVID’s decoupling of markets and the economy Market risks still remain Which EM markets look good
Professor Justin Stebbing On Expecting A COVID Vaccine Before The US Election
In this episode, I talk with Professor Justin Stebbing. He is a professor in the Faculty of Medicine at Imperial college London. He initially trained at Oxford, before having a residency at the Johns Hopkins Hospital in the US, then returned to the UK to work at the Royal Marsden, Barts and now Imperial. He specializes in cancers and immunotherapies. He has an extensive research background having published over 550 peer-reviewed papers. He recently published in the Lancet new research on using AI to find drugs to treat COVID-19. In this podcast we discuss: Current vaccine trials Absence of COVID-19 reinfections Why is vaccine development faster than before Low mutability of COVID-19 Symptoms of COVID-19 Why are minority groups experiencing higher infection rates Why are elderly being affected the most Views on the Sweden approach Why is the US death rate not higher Policy recommendation
Samm Sacks On The US-China Data War, TikTok And EU Data Sovereignty
In this episode, I talk with Samm Sacks. She is a Cybersecurity Policy and China Digital Economy Fellow at New America. Her research focuses on emerging information and communication technology (ICT) policies globally, particularly in China. She has worked on Chinese technology policy issues for over a decade, both with the U.S. government and in the private sector. She recently testified before Congress on data security issues between the US and China. In this podcast we discuss: Why data flows matter Does the China government have access to all data in China How Chinese companies push back on data requests Are US tech firms helping the Chinese government? The right approach for the US dealing with China tech/data issues US companies need to manage US data better too EU is creating global standards EU is pushing back on US accessing European data Will US election impact US-China tech war?
Raghuram Rajan On Why MMT, Authoritarianism And Bailouts Won’t Work
This episode is sponsored by SGX – the largest Asian FX exchange. In this episode, I talk with Raghuram Rajan. He is currently Professor of Finance at Chicago Booth. Before that, he was the 23rd Governor of the Reserve Bank of India between September 2013 and September 2016. Between 2003 and 2006, Dr. Rajan was the Chief Economist and Director of Research at the IMF. He’s the author of several books – most recently, the excellent “The Third Pillar: How the State and Markets are leaving Communities Behind” in 2019. In this podcast we discuss: The sources of economic weakness around COVID The 5 steps policymakers need to take from relief to reform The fallacy of MMT and the absence of free lunches Debt levels matter – for every Japan, there is an Argentina Should international markets be liberalized? Dollar’s status as reserve currency China’s challenging growth prospects India’s wrong turn Rise of authoritarianism The failure to understand fall-out from international treaties What needs to be done to be optimistic about the future