Is the U.S. labour market finally crashing? What will it take to kill the U.S. economy? We ask Michael Cembalest of J.P. Morgan who explains The Rasputin Effect. We also cover the outlook for fiscal policy, interest rates and the short- and longterm effects of the Chips Act and IRA in this great interview. And of course – we give our take on how to allocate given all of this.
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Hosts: Andreas Steno and Emil Møller
Guest: Michael Cembalest
#banking #investing #stocks #economy #jpmorgan #macroeconomy…(read more)
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Macro Sunday is always an exciting event for those who are interested in the macroeconomic landscape. On the 13th edition of this informative series, the topic of discussion was “The Rasputin Effect” and the guest speaker was none other than Michael Cembalest, Chairman of Market and Investment Strategy for J.P. Morgan. Cembalest is someone who is highly regarded in the financial industry, known for his deep analysis and insightful perspectives.
The Rasputin Effect is a term coined by Cembalest himself and refers to the phenomenon where events that were once seen as impossible or highly unlikely actually end up happening. It draws inspiration from the infamous figure Grigori Rasputin, who was a mystic and close advisor to the Romanov family in early 20th-century Russia. Rasputin’s influence and ability to survive multiple assassination attempts and predict future events make him a fitting metaphor for unexpected occurrences.
During the Macro Sunday session, Cembalest delved into various examples of the Rasputin Effect that have unfolded in recent history. He discussed unexpected events such as the Brexit referendum, the election of Donald Trump, and the global pandemic caused by COVID-19. These events, despite their unlikely nature, had significant and far-reaching consequences for the global economy.
Cembalest emphasized the importance of understanding the Rasputin Effect in the context of financial planning and risk management. He stated that by recognizing the potential for such unexpected events, investors can better position themselves to navigate turbulent times. Through this lens, he provided valuable insights and advice for market participants.
One key takeaway from Cembalest’s discussion was the necessity of diversification in investment portfolios. By spreading investments across various asset classes and geographical regions, investors can mitigate the impact of the Rasputin Effect. He stressed the importance of not placing all eggs in one basket, as unforeseen events can have a significant impact on specific sectors or regions.
Additionally, Cembalest underlined the significance of incorporating scenario analysis into risk management strategies. By considering a range of potential outcomes, investors can identify potential vulnerabilities and take measures to address them proactively. This forward-thinking approach can help protect portfolios from the unexpected and reduce the negative impact of the Rasputin Effect.
Overall, Macro Sunday #13 provided valuable insights into the Rasputin Effect and its relevance in the world of macroeconomics. Michael Cembalest’s expertise and experience added depth to the discussion, offering a unique perspective on the importance of understanding and preparing for unexpected events. As always, Macro Sunday continues to be a must-watch for anyone interested in staying informed about the ever-changing landscape of the global economy.
I'm not a financial expert like you two. Didn't the US sell most of its oil reserves to China during the last couple of years? Will that have an impact? If so, what might that impact be?
Excellent guest.
I wouldn't listen to this schmuck. I mean really – he's saying we're going to buck history – let's see – steepest yield curve inversion since 1980 – and he thinks that's no big deal. Forget that noise.
Michael’s comments how large institutions abandoned the long duration end of the curve contradict the MS chart Mr. Steno frequently posts depicting institutions being “all in” on long duration. Given massive long duration short positioning in CFTC data I’d say whatever long duration institutions have is fairly well hedged. My guess is a lot of traders who bought the initial rate rise didn’t stick around otherwise we’d be hearing about a lot more blowups in hedge fund land. Because this cycle is so completely unique as each and every cycle is, historical analysis is pretty useless. There’s never been any prior cycle with such an overwhelmingly large influence from both monetary and fiscal policy simultaneously coupled with an extremely large presence of offshore dollar denominated debt. Never happened before. 1940s or 1970s analogs have no real relevance given entities like the PBOC BOJ etc etc didn’t even exist much less exert huge influence over capital flows. Still Michael seems sincere and likeable so I’ll give you a thumbs up.
“Lots of things going on last time” = “this time is different”
the podcast claims to be action oriented, but absolutely no actionable ideas whatsoever. in the old format they were but not anymore. i listened last week and i thought at the end, hang on, did i mss the idea. nope, same as this week, they had none. my take on this is it may be worth listening to the guest but not the two actual podcast doofuses
good show guys!
Fact 1: 1.2 million native-born workers lost their job in August, they were replaced with 711K foreign-born workers.
Fact 2: 670K Full-Time Jobs Lost In 2 Months Vs 1 Million Part-Time Surge
Always great