Prometheus Podcast Episode 6: Peter Farac
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Jun 6, 2025 
Joining the conversation is Peter Farac, a seasoned portfolio manager specializing in systematic macro funds and the mind behind The Macro is Dead Substack. He shares insights on the shift to quantitative investment models and the importance of adapting strategies to market regimes. Peter dives into the connections between U.S. debt and Chinese manufacturing, revealing how these dynamics impact global trade. The discussion also includes navigating economic growth through debt dynamics and exploring trading strategies around overnight premiums for optimizing returns.
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Quantitative Models Require Regime Awareness
- Peter Farac uses a quantitative investment process based on momentum, mean reversion, and carry factors.
- He integrates qualitative long-term regime analysis to adapt strategy parameters and improve model effectiveness.
Debt Growth Drives Economic Regimes
- Debt growth in different sectors historically precedes market movements and crises.
- From corporate debt in the 1980s to household debt pre-GFC, then government debt today, debt dynamics shape economic regimes.
Private vs Public Debt Dynamics
- Private sector debt introduces cyclical economic dynamics due to repayment obligations.
- Government debt is more stable with no principal amortization, allowing continuous borrowing that sustains growth.