What was the short-lived SVB baking crisis all about? Has it forced the Fed’s hand? Are we done tightening? Lots of Macro questions so who better to dig into it with than the appropriately nicknamed Macro Alf. In this episode of The Derivative, we sit down with Alfonso Peccatiello, founder of The Macro Compass and owner of the wonderful Twitter handle @MacroAlf to discuss the challenges of generating alpha in a low-volatility environment.
Peccatiello shares his experience of working for ING Bank and managing the Treasury Department's investment portfolio, how regulatory forces have pushed the large players into what looks currently like the wrong investments. They explore the difficulty of generating more return by taking the same amount of risk, especially in a market where the last basis point of carry of risk premia available was the name of the game.
Alfonso and Jeff also delve into the bond market's predictive ability (or maybe more fair to say inability) and its role in predicting the economy's future, the importance of risk management, and the blending of systematic and discretionary processes in making investment decisions. They emphasize the need to consider various factors when analyzing the bond market and interpreting its nuances, plus so much more!
So sit back, relax, and get ready to learn valuable insights into investment and macro trading and the challenges faced in generating alpha in a low-volatility environment — SEND IT!
Chapters:
00:00-02:18 = Intro
02:19-14:54= It’s Alf! Regulatory schemes, Bond exposure, Macro volatility, & Quitting the bank
14:55-25:34= Real Estate: The largest asset class under pressure
25:35-35:38= The Macro Compass – Blending Risk appetite, Research & tools
35:39-50:39= The fall of SVB: regulations, funding & risk management & The Swiss Credit Suisse
50:40-01:02:48= Off the Radar: China & its reopening
From the Episode: Fed Pricing chart
Follow Alfonso on Twitter @MacroAlf and check out his research, podcasts, and more at TheMacroCompass.com and subscribe!
Don't forget to subscribe to The Derivative, follow us on Twitter at @rcmAlts and our host Jeff at @AttainCap2, or LinkedIn , and Facebook, and sign-up for our blog digest.
Disclaimer: This podcast is provided for informational purposes only and should not be relied upon as legal, business, or tax advice. All opinions expressed by podcast participants are solely their own opinions and do not necessarily reflect the opinions of RCM Alternatives, their affiliates, or companies featured. Due to industry regulations, participants on this podcast are instructed not to make specific trade recommendations, nor reference past or potential profits. And listeners are reminded that managed futures, commodity trading, and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. For more information, visit www.rcmalternatives.com/disclaimer
