The Macro Trading Floor The World is Different Now
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Sep 13, 2024 Alf and Brent delve into the changes in the macro cycle since the pandemic, highlighting critical structural differences. They discuss the turbulent bond market and effective trading strategies to navigate it. The duo raises intriguing questions about the US Dollar's performance in a potential recession. Gold is examined as both a risky asset and a safe haven during economic upheavals, while the complexities of interest rate cuts in Europe are analyzed, emphasizing the need for strategic financial responses.
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Lehman Anniversary
- Brent Donnelly recounts his experience trading dollar-yen at Lehman Brothers on September 12, 2008.
- Dollar-yen correlated with Lehman stock, reflecting market fear, but Donnelly's trading couldn't save the bank.
Pre-Pandemic Resemblance
- Recent economic data, like cooling core inflation and rising unemployment, resembles the pre-pandemic period (2017-2019).
- Using real-time shelter data, core CPI is estimated at 1.6%, suggesting a path towards the 2% target.
Structural vs. Cyclical
- While cyclical economic indicators mirror pre-pandemic levels, structural differences exist, notably in fiscal policy.
- The current acceptance of large structural deficits contrasts sharply with pre-pandemic norms.
