119 episodes

The laws of macro investing are being re-written, and investors who fail to adapt to the rapidly changing monetary environment will struggle to keep pace. Jack Farley interviews the brightest minds in finance about which asset classes they think will thrive in the financial future that they envision.

Forward Guidance Jack Farley | Blockworks

    • Business
    • 4.7 • 10 Ratings

The laws of macro investing are being re-written, and investors who fail to adapt to the rapidly changing monetary environment will struggle to keep pace. Jack Farley interviews the brightest minds in finance about which asset classes they think will thrive in the financial future that they envision.

    Liquidity Spiral In The Bond Market Is Causing "Tremendous Stress" | Jim Bianco

    Liquidity Spiral In The Bond Market Is Causing "Tremendous Stress" | Jim Bianco

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    Jim Bianco, founder of Bianco Research LLC, joins Jack Farley to explain how the meltdown in the British bond (“gilt”) market, which occurred on Wednesday, September 28th, is exposing serious cracks in the plumbing of the financial system. Bianco argues that the Bank of England’s injection of liquidity was necessary in order to prevent the failure of a major institution. Bianco tells Farley that the Federal Reserve is not close to “pivoting” to a looser policy because the labor market remains strong. Bianco breaks down key bond market concepts, such as convexity and duration, explains why we are likely already in a recession, and argues that the work-from-home trend is here to stay. Filmed on Thursday, September 29th.
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    (00:00) Introduction 
    (00:30) Chaos In the U.K. Government Bond ("Gilt") Market
    (08:53) What's Next To Break?
    (15:41) What Can Bring Inflation Down (Other Than A Global Recession)?
    (19:18) The Stress On Banks Is Tremendous"
    (33:46) Are Bonds Attractive At These Levels?
    (36:56) Bianco's Outlook on Stocks
    (38:47) I’m Going To Channel My Inner Zoltan Pozsar Here"
    (51:05) Why Working From Home Is A Permanent Trend
    (57:09) Closing Thoughts On The Labor Market and The Fed
    (1:02:14) Asset Allocation in Stocks, Bonds, and Crypto
    (1:04:49) Outro
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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.

    • 1 hr 5 min
    Oil Will Trade Flat To Down Until Biden Backs Down & China Re-Opens | Rory Johnston

    Oil Will Trade Flat To Down Until Biden Backs Down & China Re-Opens | Rory Johnston

    Use code GUIDANCE250 to get $250 off tickets to Blockworks’ London Digital Asset Summit: https://blockworks.co/events/digital-asset-summit-2022-london/

    Rory Johnston, investor at Price street and author of Commodity Context, joins Jack Farley to share his outlook on the price of oil, the commodity at the heart of the turmoil in financial markets and the global economy. Johnston explains why he thinks oil will trade “flat to down” in the short-term as he notes that China’s zero-covid policy has sharply curtailed oil demand but that may change in 2023. He argues that the release of millions of barrels of oil from the Strategic Petroleum Reserve (SPR), the U.S.’ stockpile of emergency oil reserves, has drastically changed the supply dynamics and has likely depressed the price. Johnston also shares with Farley his views on other important drivers of oil market such as the proposed price cap, sanctions on Russian oil, and the response function from U.S. shale oil producers and the Organization of Petroleum Exporting Countries (OPEC).
    NOTE: This interview was filmed on September 23rd, a day where the price of oil fell by as much as 7%.
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    (00:00) Introduction
    (00:13) Why Is Oil Crashing?
    (05:41) Demand Destruction & Recession Risk
    (12:46) Is The Backwardation In Oil
    (16:44) Biden's Release of Strategic Petroleum Reserve
    (27:21) Price Cap On Russian Oil
    (36:18) The Gasoline Crisis
    (39:56) Coal
    (42:53) Volatility and Illiquidity In Oil Markets
    (46:57) European Electricity Prices
    (50:17) Natural Gas Unit Economics
    (54:02) The Mechanics Of A Price Cap on Russian Oil
    (1:02:18) U.S. Shale
    (1:11:49) Is Oil Going To Go Up?
    (1:14:21) How Would A Recession Impact The Price Of Oil?
    (1:16:35) About Commodity Context
    (1:18:43) Closing Thoughts On Twitter Sentiment
    (1:20:57) Outro
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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.

    • 1 hr 21 min
    What Will Break First? | Joseph Wang & Peter Crane

    What Will Break First? | Joseph Wang & Peter Crane

    With the Fed hiking interest rates rapidly in order to fight inflation, cash is finally earning its highest yield since before the Great Financial Crisis. Peter Crane, President of Crane Data, and Joseph Wang, former senior trader for the Federal Reserve, join Jack to discuss how the growing attractiveness of cash might cause markets to “break” as investors pull capital out of risk assets and deploy it in cash and money market funds, which harvest yields on cash by investing them in ultra-short duration loans to extremely safe counterparties, primarily the U.S. government and the Federal Reserve. Filmed on September 22, 2022.
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    (00:00) Introduction
    (02:10) Reflecting On the Fed's September FOMC Meeting
    (04:48) What Is A Money Market Fund?
    (14:37) What Will Break?
    (18:41) Maturity & Composition
    (25:31) Why Are There No Inflows Into Money Market Funds?
    (27:37) Quantitative Tightening (QT)
    (31:316) Who Invests In Money Market Funds?
    (39:19) Offshore Dollar Money Market Funds
    (43:03) New SEC Regulation on Money Market Funds ("Swing Pricing")
    (51:45) What Part of The Financial System Will Crack First?
    (1:05:12) How Bad Is Treasury Liquidity?
    (1:06:33) Pete Crane on Stablecoins
    (1:10:55) Joseph Wang On Sales of Mortgage-Backed Securities
    (1:12:16) Outro
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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.

    • 1 hr 14 min
    "I'm Surprised The Market's Not Down More" | Aswath Damodaran

    "I'm Surprised The Market's Not Down More" | Aswath Damodaran

    When trying to find a culprit for the bear market in stocks this year, investors often point to the surging yields on U.S. Treasury bonds. But that’s only part of the story. Today Jack is lucky to speak to Dr. Aswath Damodaran, professor of valuation and corporate finance at NYU Stern School of Business, who is a pioneer in the field of valuation. Damodaran explains how the intrinsic value of a stocks is its future cash flows discounted back to the present with a “discount rate,” which is the sum of a risk-free rate on a Treasury bond and an “equity risk premium.” Damodaran notes that, in addition to risk-free rates surging higher, equity risk premia have expanded significantly. Damodaran also shares his views on inflation, the Federal Reserve, as well as currencies and crypto. Farley aFilmed on September 9, 2022.

    Data sets can be found on Aswath Damodaran’s website: https://pages.stern.nyu.edu/~adamodar/

    Lectures and presentations can be found on Aswath Damodaran’s YouTube page: https://www.youtube.com/c/AswathDamodaranonValuation

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    --

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    (00:00) Introduction
    (00:35) The "Sleep Test"
    (03:40) Inflation's Impact on Equity Valuations
    (19:43) Equity Duration
    (40:41) Cost of Capital for Individual Companies
    (44:17) Commodity & Energy Stocks
    (52:06) How Liquidity Increases Asset Values
    (59:53) Crypto, Currencies, and Commodities: Why They Are Impossible To Truly Value
    (1:11:29) Closing Thoughts On Overconfidence
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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.

    • 1 hr 13 min
    The Sovereign Debt Crisis Is Coming | Brent Johnson

    The Sovereign Debt Crisis Is Coming | Brent Johnson

    Why has the U.S. dollar exploded higher this year against other currencies, and what does its rise mean for the global economy? Brent Johnson, CEO of Santiago Capital and outspoken dollar bull, joins Jack Farley, host of the Forward Guidance podcast, to share his thoughts on what the strength of the greenback indicates about inflation, central banks, and growth rates. Johnson argues that a sovereign debt crisis for China and other emerging markets is within the cards. Filmed on September 14, 2022, on the second day of the Blockworks Digital Asset Summit.

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    • 24 min
    The Bear Market Has Only Just Begun | Ted Oakley

    The Bear Market Has Only Just Begun | Ted Oakley

    Use code GUIDANCE250 to get $250 off tickets to Blockworks’ London Digital Asset Summit: https://blockworks.co/events/digital-asset-summit-2022-london/

    Ted Oakley, founder and managing partner of Oxbow Advisors, joins Jack Farley to argue that asset prices remain well above their fair value, and that the drawdowns investors have seen in 2022 are likely not over. Oakley shares his outlook on inflation, the business cycle, and the Federal Reserve, and he outlines where he is finding value and safety for his investors in this turbulent macro environment.

    Filmed on September 6, 2022.
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    --
    (00:00) Introduction
    (01:38) Why Stocks Remain Overvalued
    (11:04) Why A Deep Recession Is Imminent
    (16:02) Energy
    (20:52) Fixed Income
    (28:14) Longer-Term Outlook on Inflation and Interest Rates
    (32:32) Is The Fed Still Behind The Curve?
    (41:44) Contrarian View
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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.

    • 48 min

Customer Reviews

4.7 out of 5
10 Ratings

10 Ratings

Missing61 ,

Podcast Review

Want to feel hopeful about life, the world, and your finances? Then do not listen to this podcast. It definitely leans into the perma-bear mindset. The guests are well informed, insightful folks, but it would help to have an occasional counterbalance of a guest or host with some optimism ………… about anything!

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