Kontrarian Korner #33 - Paulo Macro & Rudy Havenstein

Last week I had PauloMacro and Rudy Havenstein on the podcast to discuss financial markets, financial nihilism, and the generational divide. The financial nihilism and generational divide are two big picture topics that I have started to spend more time thinking about in recent weeks. Paulo’s recent post on financial nihilism is why I wanted to record this episode in the first place. If you can make it through Paulo’s opening monologue without wanting to listen to the rest of the podcast, I will be shocked.

Podcast Summary

* A “turducken of market disasters” coming together, with shades of the 1970s inflation and concentration reminiscent of the Nifty 50.

* How income inequality has only gotten worse, and real wages have stagnated for decades.

* The Boomer generation’s responsibility in the increasing wealth inequality.

* We are watching a pessimistic bubble for the first time in history (this is where the nihilism comes from, and is something Dave Collum has talked about as well).

* What if this isn’t the end of max stupid, what if this is just the beginning? We recorded on Friday, before the launch of Trump coin, so Paulo’s question looks prescient.

* The long term impact of entitlements like Social Security, Medicare, and Medicaid.

* How the passive market has created the kindling for some potential fireworks. No one is sure if 2025 is the year, but I think we were all on the same page that it is a matter of when, not if for passive investing.

* Why Paulo and Rudy are both watching the bond market, and why the move higher in yields might not be over.

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