Forward Guidance Blockworks

This week Ben Miller Fundrise Co-Founder and CEO joins the show. We begin by discussing the U.S public debt problem as debt to GDP remains elevated over 100%. For the second half of the conversation, we deep dive into the current state of the U.S real estate market focusing primarily on CRE. Enjoy!
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Timestamps:
(00:00) Introduction
(00:47) The U.S Debt Problem
(08:25) Private vs Public Debt
(15:02) VanEck Ad
(16:05) Can The U.S Handle Higher Interest Rates Past 2024?
(31:22) Commercial Real Estate & The Debt Duration Reset
(35:26) The Commercial Real Estate Time Bomb
(47:02) State Of The Housing Market
(49:24) Prices Are Not At Distressed Levels... Yet
(56:03) The Bull Case For CRE
(01:05:59) The Real Estate Sector Is Praying For A Recession
(01:07:28) Lending & Private Credit
(01:12:16) What Happens If Rates Stay Higher For Longer?
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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.

Forward Guidance is sponsored by VanEck.

Learn more about VanEck Bitcoin Trust (HODL) http://vaneck.com/HODLFG.

VanEck Bitcoin Trust (HODL) Prospectus: https://vaneck.com/us/hodlprospectus.
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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.

Timestamps
(00:00) Introduction
(00:37) Banking Net Interest Income Is "Flat To Down"
(04:26) Commercial Real Estate (CRE)
(13:26) VanEck Ad
(14:26)
(17:31) Consumer Deposits Have Become "Toxic"
(20:07) Schwab
(22:15) Chris Expects Mid-Size Banks To "Do Better Than The Big Guys" Next Year
(24:43) If There's No Recession, Are Bank Stocks Still Cheap?
(27:41) Higher For Longer Will Continue To Be Bad For Banks' Core Business of Taking Deposits And Making Loans
(30:19) Bank of America Should Be "Spanked"
(32:59) Only A Few Fed Cuts Are Needed To Improve Banks' Position
(35:13) Consumer Credit Continues To Be Fine ("Not Even At 2019 Levels")
(37:10) Credit Risk Issues For Banks Are Primarily In CRE
(38:12) New York Community Bank

Forward Guidance is sponsored by VanEck.
Learn more about VanEck Bitcoin Trust (HODL) http://vaneck.com/HODLFG.
VanEck Bitcoin Trust (HODL) Prospectus: https://vaneck.com/us/hodlprospectus.
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Michael Howell of Crossborder Capital and George Robertson of The Monetary Fronteir have two things in common: they both correctly predicted the renewed bull market in stocks and they both have been guests on The Forward Guidance podcast. That is where the similarities end, as Michael and George have entirely different explanations for what is driving the surge in equity prices. While Michael is renowned for his models on Global Liquidity and closely tracks the changes in central bank balance sheets (most notably the Fed’s), George dismisses the Fed entirely and thinks that monetary authorities have effectively zero influence on the economy and stock market. What ensues is a heated debate not just about what is driving the stock market and economy but about the very nature of money and credit creation itself. Recorded on April 10, 2024.
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Michael’s Substack https://t.co/7jRGW9iR0S
George’s Substack https://themonetaryfrontier.substack.com/
Michael’s Book https://www.amazon.com/Capital-Wars-Rise-Global-Liquidity/dp/3030392872
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Timestamps:
(00:00) Introduction
(00:32) Jack's Intro
(02:28) Michael's Opening Statement
(06:09) George's Opening Statement
(18:17) The Draining of The Fed's Reverse Repo (RRP) Facility
(24:59) VanEck Ad
(26:03)
(28:38) The Portfolio Rebalancing Theory (I.E. How Quantitative Easing (QE) Theoretically Works)
(45:21) Duration Impact of U.S. Treasury Issuing Longer-Maturity Paper
(51:39) Spread Between Agency Mortgage-Backed Securities (MBS) Yield And 10-Year Treasury Yield
(01:12:09) There's A Distortion In The Yield Curve, That's For Sure"
(01:17:47) Beyond The Fed's Balance Sheet
(01:23:18) Jack's Comment On Cause And Effect
(01:25:07) Views On Markets: George And Michael Remain Very Bullish
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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.

Forward Guidance is sponsored by VanEck.
Learn more about VanEck Bitcoin Trust (HODL) http://vaneck.com/HODLFG.
VanEck Bitcoin Trust (HODL) Prospectus: https://vaneck.com/us/hodlprospectus.
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Mark Dow has had experience in the global monetary system, having worked at the IMF, as an advisor to three Presidents, and at many central banks around the world. But he thinks that generally, monetary plumbing is given too much credit for the gyrations of asset prices and economic outcomes. He joins Forward Guidance to share why. Recorded on April 9, 2024.
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Timestamps:
(00:00) Introduction
(00:39) How Much Does Monetary Policy Actually Matter?
(07:27) The Fed Matters In A Crisis
(12:11) Psychology Impacts Stock Market Valuations More Than Interest Rates
(16:41) ...But Interest Rate Fall Stimulates Housing Mortgage Credit Creation, Doesn't It?
(20:48) Mark Argues Mortgage Spread Not Very Affected By Quantitative Easing (QE) - Jack Pushes Back
(26:11) VanEck Ad
(27:13)
(30:51) QE's Impact on Bond Yields And The Difficulty Of Determining What Is Cause And What Is Effect
(39:39) The Wealth Effect Has Been Very Weak
(41:36) Mark Argues The Bulk Of Inflation Was Caused By Transitory Supply-Side Factors
(51:29) Federal Reserve's Role In U.S. Treasury Market
(58:54) Mark's View On The Narrative That Fed Will Monetize U.S. Fiscal Deficits
(01:00:51) Gold and Real Rates
(01:08:04) Changes In Monetary System Since 2008 Great Financial Crisis (GFC)
(01:14:51) Fed Balance Sheet Policy DOES Matter For Institutional Fixed-Income Portfolios Sensitive To A Few Basis Points In Bond Spreads
(01:18:49) Mark's Market Views: Is He Still Bullish On Stocks?
(01:21:34) Mark's Trading Framework Using Technicals and Behavioral Economics

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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.

Forward Guidance is sponsored by VanEck.
Learn more about VanEck Bitcoin Trust (HODL) http://vaneck.com/HODLFG.
VanEck Bitcoin Trust (HODL) Prospectus: https://vaneck.com/us/hodlprospectus.
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Jonathan Treussard of Treussard Capital Management joins Forward Guidance to help define what a bubble is. By his strict definition, nothing qualifies right now. But as money flows into risk assets, valuations become stretched. Treussard has trouble with the high valuations in the U.S. market, and sees opportunities in the cheaper European and Japanese markets. He also shares his views on the risk of the “engineered yield” that comes from strategies that sell options explicitly or implicitly. Filmed on April 2, 2024.
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About Treussard Capital Management: https://www.treussard.com/
2004 Paper on Bubbles with Earl Thompson and Charles Hickson: http://www.econ.ucla.edu/workingpapers/wp836.pdf
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Timestamps:
(00:00) Introduction
(00:45) Hallmarks Of A Financial Bubble: New Technology and Valuations Stretching Far Beyond Fundamentals
(05:24) How Bubbles Remake Social Orders
(07:25) Credit Bubbles Vs. Equity Bubbles
(10:00) The Rise of Private Credit
(11:44) In Wealth Management, Private Credit Tends To Be "More Sold Than Bought"
(15:25) Private Credit Is "Concerning" But "Not A Bubble"
(17:05) U.S. Stocks Are Expensive
(19:55) Trade Wars & Geopolitical Blockades Are A Serious Risk To Nvidia
(26:49) Europe and Japan
(29:08) VanEck Ad
(30:10) T-Bill And Chill Has Been Drastically Outperformed By Stock Market Beta
(31:03) Investment Framework For The New Cold War
(43:58) How Option Theory Applies To Economics, Investing, And Life
(49:35) Jonathan's Work As A Risk Manager During 2008
(55:53) Beware "Engineered Yield"
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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.

Forward Guidance is sponsored by VanEck.
Learn more about VanEck Bitcoin Trust (HODL) http://vaneck.com/HODLFG.
VanEck Bitcoin Trust (HODL) Prospectus: https://vaneck.com/us/hodlprospectus.
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Rupert Mitchell of Blind Squirrel Macro joins Forward Guidance for the first time to share his learnings from an extensive career as an investment banker moving Chinese IPOs to a corporate financier for an electric vehicle producer. The rodent shares his views on tires, refiners, and gold miners, and makes the case that cheaply produced Chinese electric vehicles (EVs) will unleash a “bloodbath” on the middle-market global EV market. Recorded on April 2, 2024.
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Blind Squirrel Macro on Twitter https://twitter.com/SquirrelMacro
Blind Squirrel Macro Substack https://t.co/mgOvPYwOAi
Latest piece on Gold: https://www.blindsquirrelmacro.com/p/april-fool-or-a-hamlet-moment
Piece on Refiners: https://www.blindsquirrelmacro.com/p/a-cracking-sunset?r=9ef2u&utm_campaign=post&utm_medium=web
Piece on Ben Graham’s Electric Car: https://www.blindsquirrelmacro.com/p/acorn-ben-grahams-electric-car
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Timestamps:
(00:00) Introduction
(00:47) The Squirrel's Background As An Investment Banker
(03:14) The Chinese IPO Boom Of 2000s
(13:51) The Squirrel's Current View On Chinese Economy and Stock Market
(20:00) Is The Chinese Real Estate Crisis Just Getting Started?
(23:55) VanEck Ad
(24:57) The Squirrel's Experience In The Electric Vehicle (EV) Business
(29:49) China Will Unleash "Bloodbath" On Global EV Auto Market
(36:07) Toyota Is Having The Last Laugh
(40:52) For Auto Stocks, The Squirrel Prefers Price To Sales
(44:56) Many EV Companies That Went Public In 2020 & 2021 Were Bubbles And Frauds
(50:18) Tesla
(53:51) Old School Auto Manufacturers (Ford, GM, Volkswagen, etc.)
(54:40) Squirrel's Bull Thesis On Tire Producers
(01:02:55) The Offshore Oil Thesis
(01:12:50) Macro
(01:18:26) Squirrel's Inflationista Thesis
(01:22:12) Options
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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.