UK financial assets just experienced once-in-a-generation type moves in the wake of the government's mini-budget announcement. Not only did both gilts and the pound sell off dramatically, they rebounded just as dramatically after intervention from the Bank of England. What does it all mean? And how did pension accounting contribute to the massive volatility? On this episode of the Odd Lots podcast, we spoke with Toby Nangle, an economics and markets commentator, who spent several years running a...
Oct 06, 2022•47 min
One of the biggest drivers of inflation is rent. Arguably, it's the whole ballgame right now. If rent growth stays firm, it's hard to see inflation getting back to the Federal Reserve's intended target anytime soon. If it rolls over, then maybe that will allow the Fed to breathe a little bit easier. But signals about the future direction of rents are mixed. While the government data is red hot, various private surveys do show some easing. On this episode, we speak with Omair Sharif, the founder ...
Oct 03, 2022•43 min
When Russia invaded Ukraine, there was a widespread expectation of a surge in prices for numerous commodities. That happened initially, but by and large things have not played out the way many investors would have anticipated. So what did markets get wrong? And what are they getting wrong now? On this episode of the podcast, we speak with Marko Papic, a geopolitical expert and the chief strategist at Clocktower Group. He offers his view that the war is entering a stage of stasis and stability th...
Sep 29, 2022•52 min
Europe is facing an energy crisis and there are some dire predictions about how it will deal with the upcoming winter, when demand for electricity and heating oil are expected to surge. But commodities trader Pierre Andurand sees a path for Europe to survive without Russia's fuel. He suggests that LNG imports can make up a significant amount of lost Russian oil and gas, while simple actions like turning down the thermostat and turning off the lights, can make a big difference to the region's ove...
Sep 26, 2022•50 min
Stablecoin regulation has become a hot topic, and for very good reason. For one thing, it's an extremely fast growing space. Stablecoins are also a primary way that the crypto interacts with the banking system. And beyond that, as we know, crises often originate from assets that promise to be safe (remember money market mutual funds that broke the buck during the 2008 financial crisis. But are regulators equipped to deal with stablecoins under existing law? On this episode, we speak with Timothy...
Sep 22, 2022•43 min
For years, it's been on the Ethereum roadmap to transition its blockchain from proof-of-work to proof-of-stake. Well, it's finally happened. This means that there are no more "miners" validating blocks on the Ethereum network. Instead, they've been replaced with "stakers" or "validators" who manage the network's rules by posting coins as a type of bond or security deposit. Why is that such a big deal for the industry? And what does it say about the future of crypto? On this episode, we speak wit...
Sep 19, 2022•1 hr
Cryptocurrencies often don't fit neatly into traditional asset buckets. They're not exactly currencies. They're not exactly commodities. And while many share commonalities with stocks, there are differences there as well. As such, US regulators haven't come up with clear rules on their trading and issuance, leaving entrepreneurs and investors in limbo. On this episode, we're joined by Pennsylvania Senator Pat Toomey, who has been harshly critical of the SEC's approach, particularly under current...
Sep 15, 2022•36 min
Credit Suisse strategist Zoltan Pozsar has found a new level of fame over the last year, arguing that we're witnessing the birth of a new currency regime that he calls "Bretton Woods 3.0". In this new era, the centrality of the dollar will fade, in favor of commodities or commodity-backed currencies. But not everyone is convinced. And in fact one skeptic is Pozsar's own close collaborator Perry Mehrling, who is now a professor at Boston University. In a special live episode of the podcast, recor...
Sep 11, 2022•1 hr 12 min
To the surprise of many people, the Biden administration has notched some significant economic policy wins this year. The CHIPS Act represents a major piece of industrial policy aimed at bolstering the US semiconductor sector and making the supply chain more resilient. Meanwhile, the Inflation Reduction Act puts a lot of money towards a range of energy options, with a particular focus on advancing renewables. Ezra Klein, the New York Times Opinion columnist and host of "The Ezra Klein Show," has...
Sep 08, 2022•50 min
In the wake of the Great Financial Crisis, China arguably led the world out of the downturn. Its gigantic fiscal stimulus not only boosted domestic growth, it also created an incredible amount of demand for commodities all around the world. Today the story is different. The government's Covid Zero policies have been a drag on growth and the real estate sector is deeply troubled, with a rise in homebuyers refusing to make mortgage payments. On top of that, the country is experiencing searing heat...
Sep 05, 2022•46 min
At Jackson Hole, Federal Reserve Chair Jerome Powell gave a hawkish speech intended to leave no ambiguity about the Fed's commitment to defeating inflation. But what does that mean in practice? How aggressively will the Fed have to hike? And how much pain will the economy endure as a result of it? On this episode of the podcast, we speak with Neel Kashkari, the President of the Minneapolis Fed. He explains his thinking and why he's become one of the most hawkish officials at the central bank. We...
Aug 31, 2022•56 min
The unemployment rate is down to 3.5%, which is far lower than just about anyone thought it would be a year ago. So that's great. On the other hand, measures of labor force participation are below where they were pre-crisis. So the question is whether there's been some fundamental shift in the composition of the labor market vs. the pre-pandemic era, or whether we're still in the process of normalization. To dive into this more, we spoke to Joelle Gamble, Chief Economist at the US Department of ...
Aug 29, 2022•45 min
The Federal Reserve is in tightening mode. And there's that old adage "don't fight the Fed" which means in theory it's a bad time for stocks. And yet we saw a surprisingly powerful rally off the bottom in June. But now what? Can the market resume its ascent? Or will we return to the lows, or possibly make new lows? On this episode we speak to Helene Meisler, who has been trading stocks for roughly four decades, and who has a unique approach to analyzing the market. She draws stock charts by hand...
Aug 25, 2022•48 min
In theory, what gets people most excited about crypto is lines going straight up. But one of the biggest successes in crypto is the rise of stablecoins. Basically, stablecoins allow people to hold dollar-linked assets directly on the blockchain. This is potentially important for P2P payments, trading, cross-exchange arbitrage and more. But by holding actual money, the big stablecoin issuers potentially have a massive amount of power in a space that's supposed to be all about decentralization. On...
Aug 22, 2022•59 min
Gas prices are central to everything these days. Biden's approval rating seems to move inverse with the price of gasoline. The entire market started rallying after gasoline prices started moving lower in June. But then, what exactly determines the price of gasoline? Of course oil is a big part of it, but it's just one significant driver. There is also refining capacity. And taxes. And the gas station's margin. And the cost of distribution within the United States. So how does it all shake out? O...
Aug 19, 2022•35 min
Thanks to surging energy costs and extreme weather events, there's a greater urgency to decarbonize the electricity grid. However, it's not enough just to add more solar panels, or wind turbines or even nuclear plants. We need a way to move all that power. And today's grid wasn't made for intermittent energy sources. On this episode we speak to Rob Gramlich, the Founder and President of Grid Strategies, about what we need in our grid to take advantage of intermittent power and what it would take...
Aug 18, 2022•50 min
As everyone knows, electricity prices in Europe have soared, due to a combination of factors, most prominently Russia's war in Ukraine and the curtailing of natural gas supplies. But how bad is it going to get this winter? Will Germany have enough energy to power homes and factories? Or will industrial operations have to shut down. On this episode, we speak with two guests: Bloomberg Opinion Columnist Javier Blas as well as Singapore-based hedge fund manager Alex Turnbull. They walk through how ...
Aug 15, 2022•59 min
Markets have staged an impressive bounce since the middle of June. Stocks are way up. Credit spreads have come in. Mortgage rates have tightened again. And long rates have mellowed out. So is the coast all clear? On this episode of the podcast, we speak with Pimco Group Chief Investment Officer Dan Ivascyn about why this is an environment characterized by a high level of uncertainty. It's not that he's pessimistic or bearish, per se, but rather that there are risks all over the place as the Fede...
Aug 11, 2022•47 min
The multi-trillion dollar question for the US economy is “Can inflation drop to the Federal Reserve’s target without a substantial jump in the unemployment rate?” Everything is riding on this, as it informs the trajectory for the Fed and for growth in the near future. On this episode of the podcast, we pose that question to Jan Hatzius, Chief Economist at Goldman Sachs. We discuss what it will take to bring the unemployment rate down, why it's going to be difficult to avoid a hard landing and al...
Aug 08, 2022•1 hr
Labor markets are considered to be "tight" right now, but wage growth continues to lag inflation. For decades, in fact, we've seen a steady decline in worker bargaining power, or labor's share of total income. So what would it take to turn this around? How can workers regain leverage? On this episode of the podcast, we speak with Anna Stansbury, an MIT economist who focuses on labor and macroeconomics. She discusses her research, the decline of labor's share and the role that unionization and ot...
Aug 04, 2022•50 min
When people think about the market mania we recently experienced, the most glaring thing that comes to mind is the meme stocks. In early 2021, the huge moves in names like AMC and GameStop exemplified this new Robinhood, r/WSB, crypto world. But there were activities much more egregious than some retail traders buying odd lots on Robinhood. Serious, professional investors and traders lost huge sums of money giving out unsecured loans to crypto hedge funds like 3AC, which then proceeded to incine...
Aug 01, 2022•54 min
With energy prices booming, heatwaves ravaging Europe, and Russia going to war against Ukraine, there's an increased focus on the so-called energy transition. Interest in decarbonization is surging. But there's still a lot of ambiguity about what that might look like. As we've learned lately, with booming demand for coal, and many premature obituaries having been written for oil, energy sources don't just disappear easily like how Palm Pilots died after the introduction of the iPhone. In fact, t...
Jul 28, 2022•46 min
In theory, a big shift towards renewable sources of energy (like wind and solar and electric vehicles) mean less money and power for Russia, and the OPEC nations. But new forms of energy also require resource extraction. And we've already seen growing tension in places that have abundant copper and lithium deposits. So what are the new politics of extraction? On this episode of the podcast we speak with microbiologist Cristina Dorador who, among other things, has been a contributor to a proposed...
Jul 27, 2022•42 min
The Federal Reserve recently began shrinking its massive balance sheet, unwinding trillions of dollars worth of bond purchases that it started making during the depths effort to offset the effects of the Covid-19 pandemic. It's not the first time that the Fed has undertaken 'quantitative tightening,' as the process is called. But this time around is different. The central bank is withdrawing stimulus at an unprecedented speed. The big question for markets now is what the impact of this liquidity...
Jul 25, 2022•47 min
For years, venture capital firms have been pouring money into start-ups, trying to get a piece of the next Amazon or Apple. Valuations for new tech companies soared, and many of them took to crypto to explore new forms of raising money. That included issuing tokens to venture capital funds who sometimes then flipped them to retail investors. Now, Silicon Valley seems to be crashing back down to Earth. And an industry that's all about sourcing more and more money at higher valuations, is having t...
Jul 21, 2022•52 min
Every time a crisis hits, you get a new round of people warning about the end of US dollar dominance. The Covid crisis and its aftermath is no exception. It may be that the world will change over the long run in some way that does help to dislodge the greenback. But in the meantime, concerns about a looming recession mean that the dollar is booming against other currencies. It's at a 20-year high against the euro, and it's soared against the yen as well. So why has the dollar been rising? And wh...
Jul 18, 2022•47 min
This week, Twitter sued Elon Musk, attempting to force him to make good on his 44 billion buyout offer for the company. This story has already been surreal in many ways, and now we might get an actual trial out of it in a Delaware court. So what should we expect, in terms of the process and the law? On this episode we speak with Bloomberg Opinion columnist Matt Levine, who has been chronicling the whole saga in his newsletter Money Stuff. He walks us through the general legal arguments, and what...
Jul 15, 2022•31 min
If you've ever interacted with hardcore Bitcoin maximalists you might find some of them, at least, to be... abrasive. And it's not just no-coiners who are the target of their scorn. The real enemies are ex-maxis, who are viewed as apostates. Nic Carter, a co-founder and GP at the VC firm Castle Island Ventures, has been a longtime Bitcoiner. He has been in the sapce for a long time. He is a prolific writer. He has extolled the monetary case for Bitcoin. And he's defended the environmental aspect...
Jul 14, 2022•1 hr 1 min
The market for US Treasuries is arguably one of the most important and liquid markets in the world. But it's been experiencing a number of hiccups in recent years, such as the sudden selloff of March 2020. And in more recent weeks, yields on US government debt have also spiked as the Federal Reserve raises interest rates. Some of that makes sense as the central bank makes big changes to its forecast for inflation and markets adjust to the new path. But the degree of the moves has also led some t...
Jul 11, 2022•48 min
The first real explosive Internet IPO was a company called TheGlobe.com. It was kind of a proto-social networking/message board site, and on the day it went public in 1998, its shares soared 606%. Its co-founders were briefly worth around $100 million each. They become overnight celebrities, known for their extravagant lifestyles and even their fashion choices. Of course, it all came to an end when the tech bubble collapsed. So what is the experience of a bubble collapsing and watching all of yo...
Jul 07, 2022•47 min
