Fixed income market legend Harley Bassman (@convexitymaven), known as “The Convexity Maven,” joins Julia La Roche on episode 24 for a wide-ranging conversation on the bond market, volatility, housing, demographics, and more.
Bassman is currently a managing partner at Simplify Asset Management, a fast-growing Exchange Traded Funds (ETFs) provider. At the recording date, the Simplify Interest Rate Hedge ETF (PFIX), which aims to hedge interest rate movements arising from rising long-term interest rates and to benefit from market stress when fixed income volatility increases, is up 100% year-to-date.
Bassman is also the creator of the MOVE Index, a standard measure of interest rate volatility similar to the VIX. He clarifies how investors should think about the index and why levels near 50 and 150 are the “wrong number.”
In the conversation, Bassman discusses the implications of the Federal Reserve’s monetary policy and why there needs to be a repricing of all assets for reality.
0:00 Intro
0:31 Harley’s background
1:42 Convexity explained
3:22 Macro views
5:17 Inflation isn’t coming down quickly
8:30 The Fed is doing the job
11:17 Demographics is the iceberg
14:17 Boomers have robbed the Millennials
15:14 Public policy mistake with housing
18:14 People trying to buy a house right now are ‘unfortunate’
20:40 Not going to be a housing crisis
22:19 The MOVE Index
30:27 Yield Curve single best predictor of a recession
34:58 MOVE and the VIX
37:19 Stocks will likely go down in an orderly fashion
40:25 The world’s not broken
43:47 Repricing for reality
46:34 Recession outlook
49:55 Learn to write, expand your mind
53:12 The Maven Mantra
