Keeping it Simple with Simplify Asset Management Keeping it Simple | Ep. 46: With a Liquid Howell, She Cried More, More, More
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Mar 10, 2025 
Michael Howell, a global macro expert and founder of Cross Border Capital, shares his insights on liquidity in financial markets. He tackles the difference between market and funding liquidity and their impact on asset volatility, especially during crises. Howell explores the proposed Mar-a Accord and its potential to reshape the U.S. economy, emphasizing gold's significance amid financial unrest. He also discusses the challenges of capital allocation, debt management, and the vital role of demographic trends in shaping economic cycles.
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Funding Liquidity vs. Market Liquidity
- Funding liquidity, or the flow of savings and credit, drives markets more than market liquidity (trade depth).
- Liquidity can be viewed as an asset's total value divided by its duration.
Credit's Role in Liquidity
- Credit is a crucial component of liquidity, impacting asset performance.
- Longer-duration assets perform well during liquidity upturns, like tech stocks and Bitcoin.
Hidden US Stimulus
- The US government implemented hidden stimulus through non-QE measures and bill issuance.
- This bill-focused financing adds liquidity to money markets and benefits credit providers like banks.