The Odds Of A Recession Are Going Up, Not Down @TheJuliaLaRocheShow

The Julia La Roche Show | The Odds Of A Recession Are Going Up, Not Down @TheJuliaLaRocheShow | Uploaded October 2023 | Updated October 2024, 13 hours ago.
David Hay, co-CIO at Evergreen Gavekal and author of the Haymaker newsletter on Substack, joins Julia La Roche on episode 111.

In this episode, Hay makes a case that the odds of a recession are going up, not down, with each passing day.

The conversation dives into the bond market, exploring the shift to a secular bear market and the implications this holds for the broader financial ecosystem.

Elsewhere, Hay shares where he’s allocated and why he’s mildly bullish on energy. He also points out we have a supply problem, and we’re likely to experience an acute and lasting oil shortage.

Links:
Substack: haymaker.substack.com

Bubble 3.0 Audiobook: awesound.com/a/bubble-30-historys-biggest-financial-bubble

Evergreen Gavekal: evergreengavekal.com/about-us

David Hay: evergreengavekal.com/team/david-hay

The Julia La Roche Show is produced by Marlinski Media: marlinskimedia.com

Timestamps:

0:00 Welcome David Hay to the show
1:20 Macro view
2:50 Odds of a recession are going up with each passing day
4:17 Misleading data
6:30 Higher for longer’s impact on bankruptcies
7:40 GDI recession
10:45 Federal Fiscal Funding Fiasco
12:29 Structural bond bear market
15:27 Supply and demand in bond market
17:44 Hedge funds buying USTs with leverage / the basis trade
19:40 T-bills
21:26 A ‘transitory’ bond rally
25:30 The country is circling the drain
28:00 Bondholders are going to be the sacrificial lambs
29:20 Where do you want to be allocated
31:40 We’re going to have an oil supply problem
33:00 Parting thoughts

#economy #recession #inflation

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$David Rosenberg On The Current Economic Illusion And The Stock Market Bubble In episode 203, David Rosenberg, founder and president of Rosenberg Research, joined Julia to discuss the current economic landscape and his outlook for the future. ✨ This episode is sponsored by Public.com. Lock in your 6.6% yield: https://public.com/julia ✨ Paid endorsement for Public Investing, Inc. Not investment advice. All investing involves the risk of loss, including loss of principal. Brokerage services for US Listed and registered securities, options and Bonds in a self-directed brokerage account are offered by Public Investing. ETFs, options and Bonds are available to US members only. *A Bond Account is a self-directed brokerage account with Public Investing, member FINRA/SIPC. Deposits into this account are used to purchase 10 fractional investment-grade and high-yield bonds. The 6.6% yield is the average annualized yield to maturity (YTM) across all ten bonds in the Bond Account, before fees, as of 9/18/2024. A bond’s yield is a function of its market price, which can fluctuate, and a bond’s YTM is “locked in” when the bond is purchased. Your yield at time of purchase may be different from the yield shown here. The “locked in” YTM is not guaranteed; you may receive less than the YTM of the bonds in the Bond Account if you sell any of the bonds before maturity, or if the issuer calls or defaults on the bond. While corporate bond yields should fall in reaction to a Federal Reserve rate cut, we cannot know whether that will be true of the bonds in the Bond Account, how quickly bond yields will respond, or how much they will decline. Public Investing charges a markup on each bond trade. Bond Accounts are not recommendations of individual bonds or default allocations. The bonds in the Bond Account have not been selected based on your needs or risk profile. Fractional Bonds also carry risks including liquidity risk, interest rate risk, credit risk, inflation risk, and potential tax liabilities. Read more about the risks associated with fixed income and fractional bonds and learn more about the Bond Account at https://public.com/disclosures/bond-account. In this episode, Rosenberg challenged the prevailing optimism about the U.S. economy, arguing that the apparent strength in GDP numbers is largely due to unsustainable government spending. He highlighted discrepancies between official data and other economic indicators, suggesting that the economy may be weaker than it appears. Rosenberg expressed concern about the stock markets high valuations, drawing parallels to previous market bubbles. He warned of potential risks, including a possible recession in 2025, and discussed the dangers of excessive exposure to equities, particularly among older investors. Rosenberg advocated for a more defensive investment strategy, recommending an increased allocation to bonds and gold, while maintaining a cautious approach to equities. Throughout the conversation, he emphasized the importance of understanding historical patterns and the risks of new era thinking in financial markets. Links: https://rosenbergresearch.com/ https://x.com/EconguyRosie Timestamps: 00:23 Introduction and overview of current economic situation 01:03 Discussion on GDP growth and survey data divergence 02:57 Analysis of the Feds Beige Book and economic indicators 05:19 Impact of government spending on GDP numbers 08:18 Discussion on fiscal policy and upcoming election 10:49 Analysis of government employment data and labor market 13:31 Long-term effects of fiscal policy 15:15 Lack of capital spending cycle and global economic slowdown 17:37 Diffusion analysis of the US economy 19:54 Potential fiscal policy changes after the election 21:10 Discussion on potential recession and historical comparisons 25:15 Analysis of interest rates and debt service costs 27:43 Lags in economic policy effects 31:35 Job report revisions and data reliability issues 35:43 Stock market valuation and earnings growth 39:21 Risks in current stock market valuations 42:26 Discussion on portfolio rebalancing and asset allocation 46:40 Concerns about passive index investing 50:01 Potential impact of stock market decline on the economy 54:15 Investment strategy and portfolio allocation 57:22 Approach to investing in bonds 01:00:45 Total return expectations for bonds 01:02:27 Parting thoughts$

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