Invest Like the Best with Patrick O'Shaughnessy

Chad Cascarilla – Update on Tail Risk - [Invest Like the Best, EP.165]

Mar 25, 2020
Chad Cascarilla, a seasoned investor who thrived during the global financial crisis, now leads Paxos, a trust company for crypto assets. He discusses the tail risks in today’s markets during the pandemic, emphasizing the need to be aware of lesser-known threats. Lessons from 2008 are highlighted, as well as insights on inflation and the importance of financial strategies that consider a balanced recovery. Chad also explores the unique strengths of the U.S. economy in comparison to others, offering a compelling view on future investment opportunities.
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INSIGHT

Economic Fragility

  • The US economy, highly leveraged and with asset prices at historical highs, faces a "100-year storm."
  • This creates little resilience, necessitating unprecedented fiscal and monetary responses.
INSIGHT

Crisis Comparison

  • The current crisis differs from 2008, resembling a war or pandemic more than a typical financial crisis.
  • Fast responses are crucial to prevent cascading feedback loops, unlike the slower responses of 2008.
INSIGHT

Mortgage Servicer Risk

  • Mortgage servicers, crucial for mortgage bond payments, face risks if stimulus excludes non-bank entities.
  • Delays in aid could trigger systemic problems within months, highlighting the need for targeted and timely intervention.
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