Investing Experts Liquidity flows, volatility shocks
11 snips
Sep 8, 2025 Michael Kramer, a macro trends and market volatility expert from Reading The Markets and Mott Capital Management, dives into the impacts of trade wars on market dynamics. He explains the difference between implied and realized volatility and discusses strategies for protecting portfolios amid uncertainty. Kramer also highlights the Federal Reserve's potential pivot on tightening policies, the significance of the reverse repo facility as a liquidity signal, and the cautious approach investors should take in the current climate.
AI Snips
Chapters
Transcript
Episode notes
Trade War Volatility Can Stall Returns
- Trade War 1.0 produced heavy volatility but little net return, creating a prolonged stagnant market.
- Michael Kramer sees similar volatility drivers today that may repeat that pattern.
Volatility Is Rate Of Change, Not Direction
- Volatility means rate of change, not just market declines; it can occur with up or down moves.
- Both realized and implied volatility spiked after the sharp 2025 sell-off and then reset as moves narrowed.
Treat Implied Volatility As A Forecast
- Use implied volatility as the market's bet on future realized volatility when considering option strategies.
- Michael Kramer notes implied vol fell before realized vol peaked, so shorting implied vol can be risky if timing is off.