43 min
Can The Fed Fail? | Q1 Winners Surprise the Crowd Broken Pie Chart
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- Investing
Derek Moore and ZEGA’s Mike Puck are paired once again to talk about markets and the economy. They discussed how Q1 asset class winners and losers weren’t what many thought coming into the quarter. They also talk about correlations, or how different asset classes and sectors have been more correlated over the last 12 months and what that means for portfolios. The lack of high yield debt coming due and how that keeps company’s interest costs down given they refinanced already. Finally, they check in with the Fed and how much of an IOU they owe the US Treasury. The Fed can’t fail, can it?
How correlations go to 1 when things get bad
If correlations go to 1, what does that mean for diversification?
Comparing 12-month correlations between stocks, bonds, commodities, and other factors
What do the current 12-month trailing PE ratios tell us if anything?
When do most high yield bonds and loans mature?
How companies locked in lower rates and what that means for interest coverage ratios
Using Netflix as an example by looking at their weighted average yield on their debt
What is the Federal Reserve Deferred Assets to the US Treasury?
Why is the fed running an IOU to the US Treasury?
When did the fed go from paying out excess interest to the treasury to owing a deferred asset?
Can the Federal Reserve fail?
How bad are the Fed’s unrealized losses on their own balance sheet at the end of 2022?
The Fed isn’t like commercial banks.
Mentioned in this Episode:
Fed Tightening and Easing all at once? https://podcasts.apple.com/us/podcast/fed-tightening-and-easing-all-at-once-how-wrong-were/id1432836154?i=1000605934758
What are Zombie Companies https://open.spotify.com/episode/3j2jm6hbS981GZGhIQn5X3
Is Warren Buffett right on stock buybacks? https://podcasts.apple.com/us/podcast/is-warren-buffett-right-on-stock-buybacks-bank-failures/id1432836154?i=1000604780531
Podcast Explaining Overnight Reverse Repos ON RRP by the FED https://open.spotify.com/episode/09VOIffldtn3WxNm7rzyNx
How Senior Loans work with Dan McMullen https://podcasts.apple.com/us/podcast/dan-mcmullen-talks-senior-loans-leveraged-loans-clos/id1432836154?i=1000527737992
Jay Pestrichelli’s book Buy and Hedge https://amzn.to/3jQYgMt
Derek’s new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag
Derek Moore’s book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr
Contact Derek derek.moore@zegafinancial.com
Derek Moore and ZEGA’s Mike Puck are paired once again to talk about markets and the economy. They discussed how Q1 asset class winners and losers weren’t what many thought coming into the quarter. They also talk about correlations, or how different asset classes and sectors have been more correlated over the last 12 months and what that means for portfolios. The lack of high yield debt coming due and how that keeps company’s interest costs down given they refinanced already. Finally, they check in with the Fed and how much of an IOU they owe the US Treasury. The Fed can’t fail, can it?
How correlations go to 1 when things get bad
If correlations go to 1, what does that mean for diversification?
Comparing 12-month correlations between stocks, bonds, commodities, and other factors
What do the current 12-month trailing PE ratios tell us if anything?
When do most high yield bonds and loans mature?
How companies locked in lower rates and what that means for interest coverage ratios
Using Netflix as an example by looking at their weighted average yield on their debt
What is the Federal Reserve Deferred Assets to the US Treasury?
Why is the fed running an IOU to the US Treasury?
When did the fed go from paying out excess interest to the treasury to owing a deferred asset?
Can the Federal Reserve fail?
How bad are the Fed’s unrealized losses on their own balance sheet at the end of 2022?
The Fed isn’t like commercial banks.
Mentioned in this Episode:
Fed Tightening and Easing all at once? https://podcasts.apple.com/us/podcast/fed-tightening-and-easing-all-at-once-how-wrong-were/id1432836154?i=1000605934758
What are Zombie Companies https://open.spotify.com/episode/3j2jm6hbS981GZGhIQn5X3
Is Warren Buffett right on stock buybacks? https://podcasts.apple.com/us/podcast/is-warren-buffett-right-on-stock-buybacks-bank-failures/id1432836154?i=1000604780531
Podcast Explaining Overnight Reverse Repos ON RRP by the FED https://open.spotify.com/episode/09VOIffldtn3WxNm7rzyNx
How Senior Loans work with Dan McMullen https://podcasts.apple.com/us/podcast/dan-mcmullen-talks-senior-loans-leveraged-loans-clos/id1432836154?i=1000527737992
Jay Pestrichelli’s book Buy and Hedge https://amzn.to/3jQYgMt
Derek’s new book on public speaking Effortless Public Speaking https://amzn.to/3hL1Mag
Derek Moore’s book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr
Contact Derek derek.moore@zegafinancial.com
43 min