The Macro Trading Floor Financial Repression Is Here To Stay
5 snips
Oct 18, 2024 Alf and Brent dive into the shifting dynamics of US election polls, examining how rising odds for a Red Sweep may affect markets. They explore the implications of persistent financial repression, regardless of election outcomes. Additionally, there's a deep dive into government deficits and their influence on gold prices and bond markets. The conversation highlights the importance of asset correlations during market stress and offers strategies for portfolio management to maximize long-term wealth, focusing on the critical role of independent financial advice.
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Red Sweep Impact
- A red sweep in the US election has the clearest policy implications.
- This makes it the most impactful outcome for markets, unlike other scenarios.
2016 Yield Surprise
- In 2016, yields initially fell 20 bps on Trump's win due to perceived uncertainty.
- They then rose 40 bps, closing up 20 bps, defying initial expectations.
Diversification Strategy
- When diversifying a portfolio, consider how assets perform during equity sell-offs.
- Focus on assets that remain uncorrelated during these stressful periods.
