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The Compound and Friends

Unlimited Economic Stimulus and the Yield Curve Indicator

The Compound and Friends

Josh Brown

Investing, Business News, News, Business

4.72.2K Ratings

🗓️ 8 May 2020

⏱️ 50 minutes

🧾️ Download transcript

Summary

Unlimited Economic Stimulus: What Are Your Thoughts? Join Michael Batnick and Downtown Josh Brown for another all-new edition of What Are Your Thoughts? as they discuss:  - US stocks just had their best monthly performance in 30 years  - what was the catalyst?  - Has Warren Buffett's magic touch faded away? Why Berkshire's annual shareholder "meeting" was so underwhelming.  - Josh got the antibody test. Why wouldn't everyone? Maybe because it doesn't mean anything.  - Is there any limit to how much money the Fed and Treasury can throw at the economy? Do we have any choice?  - Michael Jordan talked about the downside of fame in this week's 'The Last Dance' - the press tears our idols down on Wall Street too.  The Yield Curve Indicator is UNDEFEATED Josh here - Okay, so now we're officially in recession. What happens next? How long will this go on for?  Last fall we had Professor Campbell Harvey, partner and senior advisor to Research Affiliates, on The Compound to discuss the inverted yield curve, an economic indicator he had discovered in the 1980's. Cam explained that this indicator - when Treasury interest rates on shorter-term bonds rise above those being paid on longer-dated bonds - has been successful at predicting recessions 7 out of 7 times with zero false signals along the way. This recession means it's now 8 for 8!  Join us for a discussion about the way the signal should be thought about now with the Fed's overnight rate back at zero. We also discuss whether or not the economy is bottoming, what has to happen for the recession to end, and why this environment is like nothing we've ever seen before in history. Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

Click on a timestamp to play from that location

0:00.0

Hello, and welcome to an all new edition of what are your thoughts? I'm here with Michael

0:09.7

Batnik as always. Michael doesn't know what I'm going to ask him. I don't know what he's going to ask me.

0:14.1

Stick around. Let's see what's happening.

0:18.3

Welcome to the compound show podcast. Each week we let you in on some of the best conversations we're having about markets, investing, and life.

0:28.0

Just a quick reminder, the host of the show are employees of Ridholz wealth management, all opinions

0:33.0

are solely their own opinions and do not reflect the opinion of Riddholz wealth.

0:38.6

This podcast is for informational purposes only and should not be relied upon for investment decisions.

0:44.8

Clients of Ritholz wealth management may maintain positions in the securities discussed

0:49.7

in this podcast. Okay, here we go.

0:58.2

Did you get a tanning salon in your house? You look, you look dark. No, I've been on, I've been on the bike a lot and, and the pool opened I'm getting I'm getting color I'm getting

1:06.4

call it's I mean what else what else there to do all right let's get into this

1:09.5

your post was awesome about what's the catalyst and like people will be studying some of these

1:15.9

stats for years to come but you make the point that April was the best month for stock market returns in 30 years and there was absolutely no

1:26.7

what you would call catalysts to explain it so somebody who doesn't live through

1:31.9

this and reads about it 20 years from now, they're

1:35.2

going to be like, I don't understand.

1:36.8

And I just want to read this one part and then have you react to what you yourself said.

1:41.3

I just think it's so amazing. In the five weeks from February 20th through March

1:46.4

19th there were 1.1 million jobless claims and the stock market fell 29%.

1:52.0

In the five weeks since and the stock market fell 29%.

1:52.8

In the five weeks since, there were 26.5 million jobless claims

1:57.8

and the market rallied 28%.

...

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