Mike Green, portfolio manager and chief strategist at Simplify Asset Management, returns to Forward Guidance to share his views on the labor market, the U.S. economy, and stocks and bonds. Green tells Jack Farley that the apparent strength of the labor market is not fully capturing the layoffs in tech, and that last year’s spike in interest rates are already causing damage in commercial real estate and auto lending that is only beginning to draw attention.

Green concludes that the U.S. economy is headed towards a recession, and he then proceeds to explain zero day-to-expiry (“0DTE”) options and weigh hedging strategies in the volatility space. Filmed on February 28th, 2023.

Today's show is sponsored by Public.com: Get a 5.1% yield when you open a government-backed Treasury Account by going to https://public.com/forwardguidance

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Timestamps:

(00:00) Introduction

(00:45) Is The Labor Market Truly Strong?

(05:46) Where We Are In The Economic Cycle

(08:40) Commercial Real Estate & Auto Market

(10:59) Interest Rate Sensitivity of U.S. Economy

(14:20) We Are Approaching A Recession

(20:52) Explaining The Recent Rally

(24:58) Is Liquidity Rising?

(29:08) Public Ad

(30:12) The True Cause Of Inflation

(33:19) Debt Is Just A Tool

(36:02) Outlook on Stocks And Bonds

(38:25) What A Bear Market Dominated By Passive Flows Looks Like

(42:47) Zero Day To Expiry Options (0DTE)

(58:49) Conclusions about 0DTE Options

(01:06:03) Simplify Asset Management

(01:09:16) Advanced Discussion on Options & Hedging

(01:13:29) Disclaimer on Options

(01:14:24) Cash Is A Cheap Option

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Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.