Forward Guidance

Andy Constan, veteran macro investor and founder of Damped Spring Macro Research, joins Jack to share his macro framework for 2023. Looking at rallying risk assets and an interest rate futures market that is pricing in over 200 basis points worth of cuts by the Fed, Constan argues that the market is assigning too high a probability to two “blue pill” scenarios - a soft landing or a Fed pivot. Constan says he is positioned to fade these two scenarios by being short everything - namely, stocks, bonds, and commodities. Constan explains why he is betting on red pill scenarios of either a severe recession or “higher-er for longer-er” interest rates. Filmed on January 11, 2022. __This episode is sponsored by Curve. Curve is unlike any other credit card. It gives you the power to connect multiple credit and debit cards into one, convert your cashback into crypto rewards, Go Back in Time ®, create Smart Rules, and more. Apply now through https://link.curve.com/forward_guidance, you’ll earn $20 in Curve Cash after your first transaction. So sign up today! Terms and conditions apply.__Get top market insights and the latest in crypto news. Subscribe to Blockworks Daily Newsletter:https://rb.gy/5weeywMarket commentary, charts, degen trade ideas, governance updates, token performance, can’t-miss-tweets and more. Subscribe to the Blockworks Research “Daily Debrief” Newsletter: https://rb.gy/feusos__Timestamps:(00:00) Intro(00:47) "I'm Short Everything"(08:24) Blue Pill Scenarios (Soft Landing Or Fed Pivot) Are Less Likely Than Market Is Pricing In(15:19) Betting Against Rate Cuts(23:06) Curve ad(24:08) Are Stocks Expensive Relative to Bonds?(30:51) Equity Risk Premium (ERP)(40:36) In China, Cash Is Trash(49:08) Views on Commodities(54:28) Can the Superb Macro Returns of 2022 Be Repeated?__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.

Use code GUIDANCE10 to get 10% off Permissionless 2023 in Austin:https://blockworks.co/event/permissionless-2023As big banks start to report their earnings, Jack turns to banking specialist Alex Gray for insight. Gray taps her prior experience both as a commercial banking underwriter and as a senior analyst of large cap banking stocks to glean insights from the fourth quarter reports of JPMorgan Chase & Co ($JPM)., Bank of America ($BAC), and Wells Fargo ($WFC). Gray navigates the delicate balance between loan growth and credit quality, evaluates the cumulative effect of the Federal Reserve’s rapid rate hikes on the profitability and balance sheets of the nation’s largest money centers. As disclosed in the interview, Alex Gray currently serves as the director of finance for Blockworks.Follow Jack on Twitter https://twitter.com/JackFarley96Follow Blockworks on Twitter https://twitter.com/Blockworks_--Get top market insights and the latest in crypto news. Subscribe to Blockworks Daily Newsletter:https://rb.gy/5weeywMarket commentary, charts, degen trade ideas, governance updates, token performance, can’t-miss-tweets and more. Subscribe to the Blockworks Research “Daily Debrief” Newsletter: https://rb.gy/feusos__Timestamps:(00:00) Intro(00:59) How To Value Bank Stocks(03:10) Bank Profitability When Interest Rates Are At Zero(10:07) How To Measure Credit Losses(14:09) Commercial Lending Is In A New Bull Market(21:17) The Importance of Collateral(26:20) Permissionless Ad(33:55) Current Default Rates Are Low (But Rising)__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.

Use code GUIDANCE10 to get 10% off Permissionless 2023 in Austin:https://blockworks.co/event/permissionless-2023--With U.S. monthly inflation coming in negative, what’s in store for the future economy and interest rate path? Bob Elliott, chief investment officer at Unlimited Funds, and Jeff Snider, chief strategist at Atlas Financial and host of Eurodollar University, discuss.--Follow Jeff Snider on Twitter https://twitter.com/JeffSnider_AIPFollow Bob Elliott on Twitter https://twitter.com/BobEUnlimitedFollow Unlimited Funds on Twitter https://twitter.com/UnlimitedFndsFollow Jack on Twitter https://twitter.com/JackFarley96Follow Blockworks on Twitter https://twitter.com/Blockworks_--Get top market insights and the latest in crypto news. Subscribe to Blockworks Daily Newsletter:https://rb.gy/5weeywMarket commentary, charts, degen trade ideas, governance updates, token performance, can’t-miss-tweets and more. Subscribe to the Blockworks Research “Daily Debrief” Newsletter: https://rb.gy/feusos--Timestamps:(00:00) Introduction(00:55) December CPI Report(08:45) Is There Monetary Inflation?(11:45) The Labor Market Remains Strong (Or Does It?)(32:37) Personal Income(34:43) Permissionless Plug(35:43) Biblical Levels of Yield Curve Inversion(54:25) Consumer Spending & Bank Lending--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.

Use code GUIDANCE10 to get 10% off Permissionless 2023 in Austin:https://blockworks.co/event/permissionless-2023--Jacob Shapiro, partner and director of geopolitical analysis at Cognitive Investments and geopolitics editor at Lykeion, joins Jack to share his geopolitical outlook for 2023. Jacob tells Jack why he thinks that Russia’s war again Ukraine will sadly continue for some time, and he explains how the war is impacting global supply chains, commodity prices, and international relations. Jacob also shares with Jack his take on China’s economy, which is at a crossroads between a slow-motion train wreck of its collapsing real estate sector, and the reflationary tailwinds from the end of its zero-Covid policy. Filmed on January 10, 2022. --Follow Jacob Shapiro on Twitter: https://twitter.com/JacobShapFollow Cognitive Investments on Twitter: https://twitter.com/CognitiveInvestFollow Jack on Twitter https://twitter.com/JackFarley96Follow Blockworks on Twitter https://twitter.com/Blockworks_--Get top market insights and the latest in crypto news. Subscribe to Blockworks Daily Newsletter: https://blockworks.co/newsletter/--Timestamps:(00:00) Intro(00:43) Russia's Invasion of Ukraine(06:07) Economic Consequences of The War(13:35) China and India Are Buying Russian Oil In Bulk(15:42) European Price Cap On Russian Oil(19:47) Who Are Russia's Allies?(22:52) How Might This War End?(31:33) Permissionless Plug(32:33) China(35:34) Will Liquidity Be Restored In China?(49:00) Taiwan & Semiconductors--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.

In December 2021, Kevin Muir, veteran trader and author of The Macro Tourist, came on Forward Guidance and made a series of bold predictions all of which came true. Now, with a red carpet rolled out for him, Kevin returns to Forward Guidance to share his predictions for 2023.Kevin argues that U.S. stocks will underperform foreign equities, that 2023 will be far more “boring” than investors expect, and that deep trouble is brewing in private markets (venture capital, private equity, and private debt). Kevin also contends that the economy might fare better than many anticipate, and that bank stocks will do well.Filmed the afternoon of January 6th, 2023.--Follow Kevin Muir on Twitter https://twitter.com/kevinmuirKevin Muir’s newsletter, The Macro Tourist, can be found here: https://themacrotourist.com/Follow Jack Farley on Twitter https://rb.gy/uesguvFollow Forward Guidance on Twitter https://rb.gy/cy0dkiFollow Blockworks on Twitter https://rb.gy/igyzsjKevin’s interview on Forward Guidance in 2021: https://www.youtube.com/watch?v=gJkEokqqaKM&t=400s--This episode is sponsored by Curve. Curve is unlike any other credit card. It gives you the power to connect multiple credit and debit cards into one, convert your cashback into crypto rewards, Go Back in Time ®, create Smart Rules, and more. Apply now through https://link.curve.com/forward_guidance, you’ll earn $20 in Curve Cash after your first transaction. So sign up today! Terms and conditions apply.--Get top market insights and the latest in crypto news. Subscribe to Blockworks Daily Newsletter:https://rb.gy/5weeywMarket commentary, charts, degen trade ideas, governance updates, token performance, can’t-miss-tweets and more. Subscribe to the Blockworks Research “Daily Debrief” Newsletter: https://rb.gy/feusos--Timestamps:(00:00) Introduction(00:27) The Fed(05:43) When Will Recession Come (If At All)?(13:32) 2023 Will Be More Boring Than People Expect(18:09) The Bond Market Pain Might Continue(25:01) Where Is The Terminal Rate?(29:25) Curve Ad(30:26) The Era of U.S. Equity Outperformance Is Over(47:42) There Will Be Trouble In Private Markets(01:00:54) The Tide Is Out, Who Will Be Left Swimming Naked?(01:08:06) The Banks Will Do Fine(01:13:57) Outlook on Crypto--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.

Vance Spencer, co-founder of Framework Ventures, a venture firm that invests exclusively in digital assets, joins Jack to look back on crypto’s rough 2022 and look forward to what is on the horizon. Spencer shares his framework for valuing digital assets, explains why he thinks the vast majority of crypto projects are unsuitable for this valuation methods, and offers his reasoning for why he is very bullish on Ethereum above all else. Filmed on December 21, 2022.--Follow Vance Spencer on Twitter https://twitter.com/pythianism Follow Framework Ventures on Twitter https://twitter.com/hiframework Follow Jack Farley on Twitter https://rb.gy/uesguv Follow Forward Guidance on Twitter https://rb.gy/cy0dki Follow Blockworks on Twitter https://rb.gy/igyzsj -- Get top market insights and the latest in crypto news. Subscribe to Blockworks Daily Newsletter: https://rb.gy/5weeyw Market commentary, charts, degen trade ideas, governance updates, token performance, can’t-miss-tweets and more. Subscribe to the Blockworks Research “Daily Debrief” Newsletter: https://rb.gy/feusos--Timestamps:(00:00) Introduction(02:36) The Seeds of A Bear Market(10:10) Why Vance Is Skeptical On Solana(12:57) Crypto Health Check in 2023(16:17) How Does Macro Impact Crypto?(24:53) Permissionless Ad(25:53) Big Tech(27:38) Genesis And The Grayscale Bitcoin Trust(32:10) Crypto "Yield" And Its Many Problems(35:59) Bitcoin(41:08) Valuation of Eth(45:24) Contagion Risks Within Crypto(48:25) Tether(50:48) Investment Strategies In A Bear Market(52:33) Crypto Gaming & The Metaverse(59:57) Who Had Accounts At FTX?(01:01:48) Why have prices been rangebound over the past month?(01:03:11) Non-Ethereum Projects That Vance Likes--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.

Felix Jauvin, macro analyst at Reflexivity Research, joins Jack Farley to share his outlook on liquidity, the Fed, and inflation. Jauvin argues that the liquidity that the Federal Reserve is removing from the financial system via quantitative tightening (QT) is being sterilized by the draining of the Fed’s reverse repo facility (RRP) - in other words, the Federal Reserve is removing money with one hand and adding money back with another. Jauvin shares his outlook on assets such as bonds, stocks, commodities, the dollar, and crypto. Filmed on December 20, 2022.--Follow Felix Jauvin on Twitter https://twitter.com/fejau_incFollow Jack Farley on Twitter https://rb.gy/uesguvFollow Forward Guidance on Twitter https://rb.gy/cy0dkiFollow Blockworks on Twitter https://rb.gy/igyzsj--Get top market insights and the latest in crypto news. Subscribe to Blockworks Daily Newsletter:https://rb.gy/5weeywMarket commentary, charts, degen trade ideas, governance updates, token performance, can’t-miss-tweets and more. Subscribe to the Blockworks Research “Daily Debrief” Newsletter: https://rb.gy/feusos--Timestamps:(00:00) Introduction(00:29) Liquidity In 2023(15:30) Reverse Repo & Treasury General Account (TGA)(20:59) What's Going To Break?(30:05) A "Nightmare Scenario" For Powell And The Fed(34:16) Pivot And Yield Curve Control(37:07) Views On Inflation(43:57) Commodities Outlook(48:57) Equities(56:03) Crypto--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.

Jane Knodell, professor of economics at the University of Vermont and author of "The Second Bank of the United States: Central banker in an era of nation-building" joins the show for a masterclass in financial history. Taking us back to the founding of the First & Second Bank of the United States, Knodell discusses the origins of banking, central banking and everything in between, taking us on a tour from the late 1700's to present day. To hear all this and more, you'll have to tune in!--Follow Jane: https://twitter.com/JaneKnodellFollow Jack Farley on Twitter https://rb.gy/uesguvFollow Forward Guidance on Twitter https://rb.gy/cy0dkiFollow Blockworks on Twitter https://rb.gy/igyzsj--Get top market insights and the latest in crypto news. Subscribe to Blockworks Daily Newsletter:https://rb.gy/5weeywMarket commentary, charts, degen trade ideas, governance updates, token performance, can’t-miss-tweets and more. Subscribe to the Blockworks Research “Daily Debrief” Newsletter: https://rb.gy/feusos--Timestamps:(00:00) Introduction(01:02) The First Bank In The United States(04:29) The Coinage Act Of 1790(08:37) The Financing Of The Revolutionary War(14:40) How Successful Was The First Bank?(17:14) The Second Bank of the United States: “Central” Banker in an Era of Nation-Building(24:50) The Mechanics of "Discounts, Exchange & Treasury Debt"(29:05) The Panic Of 1819(33:02) The Panic of 1825 & The Role Of "Central" Banking(40:12) Did The Second Bank of the United States Closing In 1836 Have Any Effect On The Panic Of 1837?(46:29) The Panic Of 1907: The J.P. Morgan Bailouts(53:55) The Financial System's Plumbing(57:54) The Financing of WWI(01:02:34) The Great Depression(01:07:47) Can The Federal Reserve Print Money?(01:11:13) Bretton Woods(01:15:35) The Treasury-Fed Accord(01:19:15) The FTX Fallout--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.

Interest rates are a key measure of the price of money, but as the plural suggests, there is one more than just one interest rate. Today Jack dives deep into the interest rate structure with whiz kid Kemen Linsuain, known commonly as DC Analyst, who knows a thing or two about the many different kinds of risk-free rates that punctuate the financial system. Kemen tells of the Federal Funds rate, which is the nominal overnight rate that the Federal Reserve controls, to other rates within the Fed’s remit such as the interest on reserve balances (IORB) and the reverse repo rate (RRP). Kemen and Jack then discuss overnight interest rates not within the Fed’s control such as the Secured Overnight Financing Rate (SOFR), the London Interbank Offered Rate (LIBOR), and then other rates and derivatives such as Treasury bill futures and swap rates. Note: the vast majority of rates discussed in this conversation are short-term rates with minimal amounts of credit risk, and should not be confused with corporate bond yield, mortgage rates, or commercial banking rates. Lastly, Kemen shares his thoughts on crypto, and tells Jack about his latest venture into crypto as a content creator at Gauntlet. --About Gauntlet: https://gauntlet.network/DC Analyst blog: https://dcchartbook.substack.com/Latest chartback from DC Analyst: https://dcchartbook.substack.com/p/chartbook-17Follow Kemen on Twitter https://twitter.com/AnalystDCFollow Gauntlet on Twitter https://twitter.com/gauntletnetworkFollow Jack Farley on Twitter https://rb.gy/uesguvFollow Forward Guidance on Twitter https://rb.gy/cy0dkiFollow Blockworks on Twitter https://rb.gy/igyzsj--Get top market insights and the latest in crypto news. Subscribe to Blockworks Daily Newsletter:https://rb.gy/5weeywMarket commentary, charts, degen trade ideas, governance updates, token performance, can’t-miss-tweets and more. Subscribe to the Blockworks Research “Daily Debrief” Newsletter: https://rb.gy/feusos--Timestamps:(00:00) Introduction(01:08) Interest Rate Mayhem in 2022(14:19) Repo Markets(21:08) Curve Ad(22:14) Secured Overnight Financing Rate (SOFR)(37:03) Interest Rate Derivatives Market(41:39) LIBOR to SOFR Transition(50:14) Spread Between EFFR & SOFR (Effective Fed Funds Rate & Secured Overnight Financing Rate)(55:26) Overnight Index Swaps (OIS) and Forward Rate Agreements (FRA)(56:50) Negative Swap Spreads(59:48) Term Premium(01:02:12) Thoughts On The Fed(01:06:53) Crypto & DeFi(01:13:34) Where Did The (Crypto) Yield Come From?--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.

Today Jack welcomes George Goncalves and Joseph Wang to share their 2023 outlook on the Federal Reserve and inflation. Goncalves, Head of U.S. Macro Strategy at MUFG Securities, argues that inflation is slowing rapidly and the Federal Reserve is nearly done with raising interest rates. Joseph Wang, former senior trader for the New York Fed, contends that 2023 will be the year that “transitory will die” and that the Federal Reserve will tighten as far as it can as inflation stays high. Wang and Goncalves also discuss the housing market, quantitative tightening, yield curve inversions, and their outlook on risk assets.--Follow George Goncalves on Twitter: https://twitter.com/bondstrategistFollow Joseph Wang on Twitter: https://twitter.com/FedGuy12Follow Jack Farley on Twitter https://rb.gy/uesguvFollow Forward Guidance on Twitter https://rb.gy/cy0dki--This episode is sponsored by Curve. Curve is unlike any other credit card. It gives you the power to connect multiple credit and debit cards into one, convert your cashback into crypto rewards, Go Back in Time ®, create Smart Rules, and more. Apply now through https://link.curve.com/forward_guidance, you’ll earn $20 in Curve Cash after your first transaction. So sign up today! Terms and conditions apply.--Follow Blockworks on Twitter https://rb.gy/igyzsjGet top market insights and the latest in crypto news. Subscribe to Blockworks Daily Newsletter:https://rb.gy/5weeywMarket commentary, charts, degen trade ideas, governance updates, token performance, can’t-miss-tweets and more. Subscribe to the Blockworks Research “Daily Debrief” Newsletter: https://rb.gy/feusos--Timestamps:(00:00) Introduction(00:59) A 2023 Global Macro Outlook(09:33) The Tightening of Financial Conditions(13:37 Forecasting The Fed Terminal Rate Into 2023(20:33) Curve Ad(21:36) A Classic Boom/Bust Cycle?(29:12) Lagarde Is Undoubtedly Hawkish(31:26) Should We Listen To The Fed's Forward Guidance?(36:58) The Cycle of Financial Conditions(47:19) Stocks, Bonds & The Wealth Effect(49:54) 2023 Outlook For Risk Asset's(56:37) Analysing The Effects Of Quantitative Tightening(01:03:12) George & Joseph's Final Thoughts & Outlook For 2023(01:12:00) The Outlook For Bonds Throughout 2023--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.