Macro Voices MacroVoices #392 Jesse Felder: Questioning the Soft Landing Narrative
38 snips
Sep 7, 2023 
Guest Jesse Felder questions the soft landing narrative for the stock market, expecting more turbulence. They discuss recession risks and market reactions, the relationship between interest rates and equities, and the potential value of recycling nuclear waste. Also, they express skepticism towards power in Dubai and analyze crude oil, S&P futures, and the dollar index. Outlook for gold and high-yield bonds is discussed as well.
AI Snips
Chapters
Transcript
Episode notes
Soft Landing Narrative Questioned
- The market's long bear market rally, despite predictions of a reversal, is puzzling.
- This suggests an overoptimistic "soft landing" narrative, ignoring the lagged impact of monetary policy.
Liquidity Hole Theory
- Bridgewater's "liquidity hole" theory explains the delayed market reaction.
- The Fed's actions and Treasury issues created temporary liquidity, now reversing, impacting markets.
Equity Valuations and Interest Rates
- The Buffett Yardstick (market cap to GDP) shows elevated equity valuations.
- These valuations are unsustainable given rising interest rates, suggesting a necessary reversion.