GM04: Global Macro from a High Level ft. Larry McDonald

Top Traders Unplugged

Niels Kaastrup-Larsen

Business, Business News, Investing, News

4.8 • 712 Ratings

🗓️ 24 July 2020

⏱️ 61 minutes

🔗️ Recording | iTunes | RSS

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Summary

Today we are very lucky to welcome Larry McDonald as our guest. Larry is the founder of the Bear Traps report, and has extensive experience in consulting and investment banking. His bestselling book “A colossal failure of common sense”, described his time as a Vice President at Lehman brothers where Larry had a ringside view of the last financial crisis. Needless to say this gives him an interesting perspective on the current state of the global markets. Our very enjoyable conversation covered a wide range of topics from high level macro, across Silver and Copper, and down to individual stocks like Tesla. Topics Discussed in this Episode Risk Indicators Unemployment Modern Monetary Theory US Dollar "At the end of the day, so the dollar ripped 82 to 104 and that moved crushed middle American jobs and really, I think it partially cost Hillary Clinton the election… I think the Trump camp has learned that you really can't have a runaway dollar heading towards an election. You really want that dollar down and that will help whatever is left of middle America. Inequality Inflation “The inflation camp, every one of them is pegging it on twelve to eighteen months from now. Whereas, the deflation camp is pretty high conviction that we're going to have a problem near-term. ” Gold and Silver 2020 Election "I just don't think that the White House really wants to have a problem with China in the last two, three months before the election." Tesla " Tesla is at close to three hundred (billion), so Tesla would come in at anywhere between twelve and ten in terms of the S&P 500. So it would come in, basically, in the top twelve companies which has never happened before." Warren Buffet Fed balance sheet Links Catch up with Larry McDonald and learn more about his work: The Bear Traps Report Follow Niels, Moritz, & Rob on Twitter: Niels Kaastrup-Larsen Moritz Seibert Rob Carver Subscribe on:

Transcript

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0:00.0	When my book came out, Charlie Munger invited me to Omaha, and I went out to see the annual meeting.
0:12.0	And it was incredible. There was just so many people, about 30,000 people in the Omaha, Nebraska, in the stadium.
0:20.0	And then he invited me to, like, on Sunday, we went
0:24.6	into the Marion Hotel. And there was one room that was Buffett with the pension funds. And
0:29.4	another room there was Bill Gates. And, you know, I'll never figure out in the room waiting for
0:33.4	Charlie Munger. And in he came and my wife introduced, I introduced my wife. And he said,
0:40.9	one thing he said to me, I'll never forget. He said, Larry, the toughest thing in the world to do
0:45.6	is stare at a screen all day and do nothing. And he was talking about, you know, this is a couple of years,
0:52.0	just several years ago. He was just talking about how, you know, Berkshire will sit there and wait.
0:56.0	Then I look at the last two years and this is, I've just been incredible.
1:00.0	I mean, they have 136 billion in cash and they didn't buy any stocks in the drawdown in 2018.
1:06.0	That was a 20% drawdown.
1:08.0	And then in 2020, we had a 36% drawdown and they didn't put any money to work.
1:12.7	So it tells you they're sitting in the boat and they're waiting for better values.
1:19.9	Our guest today is someone who looks for the unexpected instead of focusing on the obvious
1:25.5	as he analyzes the intersection between politics and markets,
1:30.0	which is a relationship that is perhaps more important than ever before in our lifetime,
1:35.5	and where politics could well be the key driver of markets.
1:39.5	And on top of this, he is a New York Times best-selling author,
1:43.2	with his book, A Colossal Failure of Common Sense,
1:47.3	which is about the collapse of Lehman Brothers. So I'm absolutely convinced that you will have
1:52.7	your eyes opened from our conversation with Larry Macdonnell of the Bear Traps Report.
	...

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