All-Stars #63 Juliette Declercq: This could mark the end of a chronic crisis rather than the beginning of an acute one

Macro Voices

Hedge Fund Manager Erik Townsend

Business, Investing, Business:investing

4.8 • 3.4K Ratings

🗓️ 27 September 2019

⏱️ 12 minutes

🔗️ Recording | iTunes | RSS

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Summary

All-star Juliette Declercq joins Jeff Snider and Danielle DiMartino Booth in saying the Fed is clueless with respect to the ongoing Repo crisis. Juliette gives the high-level picture to contrast Jeff’s deep analysis of the “plumbing”. Link: http://bit.ly/2nfMBJi

Transcript

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0:00.0	This is a special edition of Macrovoises with hedge fund manager Eric Townsend.
0:14.2	The premier financial podcast targeting professional finance, high net worth individuals, family
0:19.8	offices, and other sophisticated investors.
0:23.0	Now for this special edition of Macrovoises, here's hedge fund manager Eric Townsend.
0:30.0	Macrovoises All Stars episode 63 was recorded on September 25th, 2019.
0:36.4	I'm Eric Townsend.
0:38.0	Juliette Clark is back with us again today.
0:41.6	Juliette, we have heard so much on Macrovoises from several of our guests who've gone deep
0:46.9	into the nitty gritty plumbing details of the ongoing repo crisis.
0:52.5	You're really good at taking a step back and looking at the big picture.
0:56.6	So explain what's going on here.
0:58.6	What might be driving this from a macro perspective?
1:01.5	Eric, the old funding chestnut.
1:04.8	Well, my take on the funding spike that started last week is that it really is a liquidity
1:11.6	crisis and it is firmly rooted in the Fed's initial misunderstanding of what really drives
1:19.0	activity.
1:20.0	So on one side, there is the price of money and if it's too high, relative to expected
1:25.8	return on investment, growth will be choked.
1:29.7	This is well understood.
1:31.5	But on the other side, we have the quantity of money.
1:34.9	And this is not something that central banks understand well simply because business
1:40.3	cycles used to be driven by employment cycles and the price of money rather than liquidity
	...

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