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Tag: tail risk

Stagflation Is Coming Soon, Staying Awhile: Axel Merk (Szn 4, Ep 25)

Published September 21, 2022

This podcast episode was recorded on Sept. 16, with a short highlight clip containing the most actionable items released to premium subscribers that same day. The full episode was released to premium subscribers without ads or interruptions a day after recording. 

Axel Merk, president and chief investment officer at Merk Investments, joins the podcast to discuss his views on stagflation, the Federal Reserve, U.S. dollar, and why the bottom is not yet in for stocks.

Content Highlights

  • Printing money does not fix supply issues. Next stop: Stagflation (2:59);
  • The current environment simply is not conducive to taking risks (11:15);
  • There’s too much groupthink at the Fed and it’s time for Jerome Powell to step down (13:21);
  • The bottom for stocks is not in yet. The Fed needs to pivot first. What to watch for there (15:26);
  • Background on the guest (24:43);
  • The outlook for gold (31:20);
  • How high might the Fed go with interest rates? (34:09).

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Inflation Will Ease, Fed Hikes Will Not: Richard Excell (Szn 4, Ep 24)

Published September 14, 2022

Richard Excell, former prop trader and portfolio manager and currently a professor of finance at Gies College of Business, joined the podcast to discuss his outlook on the economy, inflation, Federal Reserve interest rate policy, and more.

Content Highlights

  • The outlook on inflation: 5% by December, but don’t expect the Fed to ease off of rate hikes (7:14);
  • Can the Fed engineer a soft landing? It has succeeded just three of the last 14 times it hiked rates… (9:34);
  • We may not see a housing price decline on a national basis anytime soon (14:05);
  • Expect a 75 basis point rate hike at the next FOMC meeting on Sept. 20 — and again at the subsequent meeting in November, even though the economy should not start to brake until next year (16:11);
  • Background on the guest (22:02);
  • Views on asset allocation: more constructive for bonds than equities at present (27:03);
  • A recession will happen. The good news: it may be mild… (32:30);
  • How much of a concern are global issues in Europe and China? (35:40).

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Convertible Bonds Offer Protection Against Stagflation, Other Ills Facing Markets: Daniel Partlow (Szn 4, Ep23)

Published September 6, 2022

Daniel Partlow, chief risk officer at Advent Capital Management, joins the podcast to discuss convertible bonds. Partlow is a specialist in these securities, having written a book on the subject titled ‘Convertible Securities: A Complete Guide to Investment and Corporate Financing Strategies.’

Content Highlights

  • First, the basics: What are convertible bonds and how do they work? The asset class has actually been around for more than three centuries… (3:29);
  • Some of the characteristics of converts include a maturity of about four to five years but with low interest rate sensitivity of much shorter duration bonds (6:42);
  • A typical balanced convert will provide downside protection (via the bond floor) and upside potential through the equity participation (9:18);
  • Converts have done well in inflationary environments, with less volatility than stocks (11:44);
  • The default rate for converts is a fraction of high yield and leveraged loans (20:38);
  • Background on the guest (24:59);
  • The specter of stagflation and how converts can protect against that (27:50);
  • Where might there be particular opportunities in the converts market right now? (33:07);
  • Examples of individual securities that may be of interest (37:52).
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