Conversations With Money Managers – Tue 7 Jan, 2020

The Era Of Hard Choices – What Financial Event Will Cause The Next Recession?

With a multitude of red flags in the financial world the question is what will be the event that causes the next financial crisis? Nick Pardini, Managing Partner at The Davos Investment Group joins me to share his thoughts on what he calls the “Era of hard choices” that large funds and institutions are facing currently. We discuss what has been driving these markets, the roll central banks are playing, and what he thinks is critical to watch moving forward.

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Comments:
  1. On January 7, 2020 at 9:39 am,
    cfs says:

    I agree with much of this commentary.
    I’m not sure about the Fed being too easy.
    The Fed is TRYING to generate inflation, or more inflation.
    I personally believe NO INFLATION is BEST INFLATION. But we all know governments want as much inflation as they can get away with, because this creates higher (hidden) taxation.
    EVERYTHING, however, is RELATIVE to what the rest of the world is doing. The U.S. is not an island.
    As the UK becomes a clear winner because of Brexit and increasing trade with commonwealth ex-colonies, no longer restricted by EU rules, I would expect much of capital which had drained out of the UK during the Brexit uncertainties, to return back.
    This could effect both the EU and the US.
    It is usually the case that the Fed chooses to be slower than expected in raising rates to curtail inflation.

  2. On January 7, 2020 at 9:42 am,
    cfs says:

    The people usually don’t blame governments, but big pharma or insurance for excessive healthcare costs.

  3. On January 7, 2020 at 9:45 am,
    cfs says:
  4. On January 7, 2020 at 9:59 am,
    cfs says:

    After Australia comes California, both run rune progressive morons.

    https://www.youtube.com/watch?v=B_tn8f0uaB4

    And of course, as trees burn down CO2 increases. But the good news is that with more CO2 the trees will grow back faster.

  5. On January 7, 2020 at 10:02 am,
    cfs says:

    ? rune ? my computer put in something to replace a mis-type, replace “rune” with “by”.

  6. On January 7, 2020 at 11:08 am,
    cfs says:

    Bix Weir has suggested (agreeing with Martin Armstrong) that European banks, by virtue of the non-bail-out policies, will bring down first the EU monetary system, and then the U.S. system.
    Since the most precarious bank (DeutscheBank) can use the U.S. repo window I’m not sure about that statement.
    I am much more concerned with JPMorgan’s derivative book. Their actions seem capable of wiping out FDIC and the whole U.S. Banking system:

    https://wallstreetonparade.com/2020/01/stock-exposure-has-exploded-at-jpmorgans-federally-insured-bank-to-2-4-trillion/

    The amount of leverage JPMorgan is exposed to is irresponsible in my opinion.
    (All so the directors can get fat bonuses, as they potentially destroy shareholders.)

    • On January 7, 2020 at 1:03 pm,
      JMiller says:

      Well there has already been bailouts of some European banks under the supposed non-bailout policy, so bailouts are still on the table.

      https://www.reuters.com/article/us-eu-montepaschi-stateaid/eu-clears-italys-6-billion-state-bailout-for-monte-dei-paschi-idUSKBN19P1PQ

      • On January 8, 2020 at 1:12 pm,
        paul says:

        How true.

    • On January 7, 2020 at 1:04 pm,
      JMiller says:

      And I take it that you are referring to the FDIC deposit insurance being wiped out. I am not worried about FDIC insurance. As you may know the FDIC insurance fund does not cover derivatives. They only cover deposit accounts below $250,000. And not only does the FDIC have a deposit insurance fund to cover insured deposits, they also have a line of credit with the U.S. Treasury from which they can borrow and they also have the authority to borrow from the Federal Financing Bank, from Federal Home Loan Banks and from insured depository institutions.

      https://www.fdic.gov/regulations/laws/rules/1000-1600.html

      The FDIC has stated that it is not concerned with having the money needed to cover insured deposits. However they have stated that they are concerned with how they can protect uninsured deposits.

      • On January 8, 2020 at 1:11 pm,
        paul says:

        Good to know. Thank you.

  7. On January 7, 2020 at 11:11 am,
    cfs says: