The Pandemic Broke the Economy (EP.264)

Animal Spirits Podcast

The Compound

Investing, Business News, Business, News

4.7 • 2.1K Ratings

🗓️ 6 July 2022

⏱️ 54 minutes

🔗️ Recording | iTunes | RSS

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Summary

On today's show we talk about why the first 6 months of the year were one of the worst ever for financial markets, why it's so difficult to gauge the economy right now, what's priced into the stock market, the worst earnings call ever, the psychology behind inflation and much more. Find complete shownotes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Like us on Facebook And feel free to shoot us an email at animalspiritspod@gmail.com with any feedback, questions, recommendations, or ideas for future topics of conversation. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Today's animal spirits is brought to you
0:01.5	by our friends at Y-charts.
0:03.7	Michael, one of the things that I've been watching
0:05.4	lately on Y-charts, five-year tips,
0:07.5	treasury break even rate.
0:09.7	You see this thing?
0:10.5	It's crashing.
0:11.5	Hit a high of about 3.6% in the spring,
0:14.5	right after the war started.
0:16.5	But what this is, this is the difference
0:17.9	between the yield on nominal treasuries,
0:20.1	so five-year treasuries, and the tips yield.
0:22.9	And if it's rising, that means people think
0:25.3	inflation expectations are going up.
0:27.2	If it's falling, it means expected
0:29.6	inflation is potentially going down.
0:31.0	Do you think it matters what the market thinks
0:32.6	about inflation expectations?
0:34.3	Always or now, now I think it matters.
0:36.4	That's true, especially because it's coinciding
0:38.6	with other breadcrumbs, not breadcrumbs.
0:42.0	Science and inflation might be peaking.
	...

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