Mark Dow: The Bears Are Making Stuff Up About Fed/Treasury Plumbing To Excuse The Fact That They Were Wrong

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Apr 15, 2024

Mark Dow, with vast experience in the global monetary system, challenges the notion that monetary plumbing drives asset price fluctuations. He discusses the limited impact of QE on mortgage spreads and questions the wealth effect. Dow highlights the psychology behind stock market valuations and the misattributed influence of interest rates.

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Introduction

00:00 • 2min

Factors Influencing Financial Decisions Beyond Interest Rates

02:09 • 24min

Analysis of Stock Market Rise and Federal Reserve's Role

26:13 • 5min

Assessing the Impact of Monetary and Fiscal Policies

30:53 • 21min

The Federal Reserve's Intervention in the Treasury Market

51:31 • 16min

Understanding Monetary Policy and Market Dynamics

01:07:12 • 20min

Navigating the Challenges of Shorting Stocks and Differences Between Trading and Investing

01:26:53 • 2min

Analysis of Small Cap Stock HOV and the Home Builders Market

01:29:05 • 2min

Insights on Home Builders' Performance and Monetary Policy Impact

01:31:08 • 2min

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Mark Dow has had experience in the global monetary system, having worked at the IMF, as an advisor to three Presidents, and at many central banks around the world. But he thinks that generally, monetary plumbing is given too much credit for the gyrations of asset prices and economic outcomes. He joins Forward Guidance to share why. Recorded on April 9, 2024.

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Timestamps:

(00:00) Introduction

(00:39) How Much Does Monetary Policy Actually Matter?

(07:27) The Fed Matters In A Crisis

(12:11) Psychology Impacts Stock Market Valuations More Than Interest Rates

(16:41) ...But Interest Rate Fall Stimulates Housing Mortgage Credit Creation, Doesn't It?

(20:48) Mark Argues Mortgage Spread Not Very Affected By Quantitative Easing (QE) - Jack Pushes Back

(26:11) VanEck Ad

(27:13)

(30:51) QE's Impact on Bond Yields And The Difficulty Of Determining What Is Cause And What Is Effect

(39:39) The Wealth Effect Has Been Very Weak

(41:36) Mark Argues The Bulk Of Inflation Was Caused By Transitory Supply-Side Factors

(51:29) Federal Reserve's Role In U.S. Treasury Market

(58:54) Mark's View On The Narrative That Fed Will Monetize U.S. Fiscal Deficits

(01:00:51) Gold and Real Rates

(01:08:04) Changes In Monetary System Since 2008 Great Financial Crisis (GFC)

(01:14:51) Fed Balance Sheet Policy DOES Matter For Institutional Fixed-Income Portfolios Sensitive To A Few Basis Points In Bond Spreads

(01:18:49) Mark's Market Views: Is He Still Bullish On Stocks?

(01:21:34) Mark's Trading Framework Using Technicals and Behavioral Economics

Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.