Michaell Howell, CEO of CrossBorder Capital, returns to Forward Guidance to update viewers on his outlook on global liquidity. Howell notes that further evidence supports his long-held view that liquidity bottomed in October 2022, and he explains why he expects liquidity to strengthen further into 2024, making for a favorable environment for liquidity-sensitive assets such as stocks, gold, and crypto. Filmed on January 11, 2024.
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Timestamps:
(00:00) Introduction
(00:57) Howell: Liquidity Conditions Continue To Strengthen From Their Lows In The Early Fall of 2022
(12:26) Implications For Stocks, Gold, and Crypto
(22:50) Industry Sectors At This Stage In The Liquidity Cycle
(24:37) The Bond Market Is Being Distorted By The Federal Reserve
(30:07) Term Premia And Convexity In Fixed-Income
(37:07) Bank Term Funding Program and Draining of Fed's Reverse Repo (RRP) Facility
(40:11) Drivers Of Fed Liquidity In 2024 and Beyond
(45:50) The Economic Cycle Is Different Than The Liquidity Cycle
(50:51) Is Demand For Refinancing (and Liquidity) Lower Because U.S. Corporates & Households Have Such Long-Duration Liabilities?
(54:35) China and The People's Bank of China (PBOC)
(01:06:56) Howell's View On Interest Rates
(01:09:08) Non-Central Bank Sources of Liquidity
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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.
