Odd Lots

The economic crisis will result in an extraordinary amount of pain for emerging markets. In addition to the health disruption, the global economic collapse means that in many cases, exports have come to a standstill. So how can poorer countries be helped right now? On this episode, we speak with three experts in the field of sovereign debt. Lee Buchheit is formerly at Cleary Gottlieb and is considered to be the world’s foremost expert on sovereign debt law and restructurings. Mitu Gulati is a professor at Duke University School of Law and Ugo Panizza is a professor at the Graduate Institute of International and Development Studies in Geneva. The three have been working throughout the crisis to help put together a comprehensive aid plan for EMs. They talk to us about what it would look like, and why moving it forward has proven to be so difficult.

See omnystudio.com/listener for privacy information.

Even with the recent stock market rally, expectations are poor for a robust recovery in the U.S. So what does history teach us about what works and what doesn’t? Richard Werner is an economist at Linacre College at the University of Oxford, and the proponent of what he calls the “Quantity Theory of Credit.” On this episode, he tells us about what he learned studying years of the Japanese economy, and what it means for the current crisis.

See omnystudio.com/listener for privacy information.

How should the government address the economic crisis? On this episode, we talk with Mark Cuban, the Shark Tank co-host and billionaire owner of the Dallas Mavericks, who has been outspoken about what he sees as necessary to address this crisis. He explains to us why he thinks the government should directly get in the business of hiring millions of people, along with other ideas to keep people employed and stimulate demand. We also talk about the NBA, his plan to fix healthcare, as well as his future political ambitions.

See omnystudio.com/listener for privacy information.

With the acute phase of the health crisis having faded in China, factory activity has ramped up again. One big problem though: With the economy so depressed everywhere else, demand for the goods made in those factories has fallen off a cliff. This is just one way in which the virus is massively exacerbating trade imbalances that existed prior to this crisis, and which are now shaking the global economic order. On this episode, we speak with Matt Klein, an economics columnist at Barron’s, and the co-author of the new book Trade Wars Are Class Wars about the interplay of the crisis, world trade, geopolitics, and domestic political tensions.

See omnystudio.com/listener for privacy information.

Countries around the world are undergoing an unprecedented, simultaneous real economic shock. So how should policymakers respond? Richard Koo is the Chief Economist at the Nomura Research institute, and is well known for having popularized the concept of the “Balance Sheet Recession” drawing on his work from Japan’s post-bubble era. In today’s episode, he talks about how his work applies to this crisis, what can be done to revive growth, and why the aftermath will be so difficult.

See omnystudio.com/listener for privacy information.

We’ve seen a huge market crash this year and a number of firms reporting portfolio losses. So why were so many big investors crowded into the same trades, and what does it say about investing as a whole? Should investors be playing up to their competitive advantage, or following the crowd to profit from momentum? Steven Abrahams, head of investment strategy at Amherst Pierpont Securities, has written a new book about competitive advantages in investing. We talk to him about how different types of investors place their money and why some portfolios can survive better than others.

See omnystudio.com/listener for privacy information.

During the last crisis, the economist Nouriel Roubini earned the nickname “Dr. Doom” for his ominous prognostications about the economy and financial system. While he prefers the moniker “Dr. Realist” Roubini is once again extremely negative. On this week’s episode he explains why he sees a poor recovery, then a bout of inflation, and then ultimately a depression in the wake of this crisis.

See omnystudio.com/listener for privacy information.

The hunt is on for a clinical therapy to prevent or treat COVID-19. But what’s the best way to go about this? How can governments accelerate this process? And what can governments do now to help a robust economic recovery? On this week’s Odd Lots, we speak with Bill Janeway, an economist and venture capitalist, who has written extensively on how the government can accelerate innovation by the private sector. He explains how his thoughts translate into the medical space and the post-crisis economy overall.

See omnystudio.com/listener for privacy information.

In 2018, Columbia history professor Adam Tooze published his magisterial work “Crashed”, which framed the Great Financial Crisis as essentially a crisis of the global dollar system (as opposed to merely a housing bubble). Now we’re experiencing numerous systemic frailties all at the same time, amid extraordinary difficult times for the real economy, the financial system, and virtually every government around the world. On this week’s episode, Tooze compares and contrasts the last crisis to this one, and how it might permanently change our world.

See omnystudio.com/listener for privacy information.

The fate of the economy remains extremely unclear. However there is little doubt that the Fed has taken dramatic steps to arrest the crisis. Not only has Jerome Powell’s Federal Reserve dusted off old tools that were designed during the last crisis, it’s engaged in unconventional actions, such as lending directly to municipal authorities, as well as becoming a player in the market for private sector corporate debt. Amid this crisis, Nathan Tankus, a researcher at the Modern Money Network, has emerged as one of the foremost experts on what the Fed has done, and what it’s capable of doing, through his widely read newsletter. He joined us on this episode to explain and contextualize the historic nature of the Fed’s actions so far.

See omnystudio.com/listener for privacy information.

With major economies around the world coming to a screeching halt, emerging markets are in a squeeze of historic proportions. Not only are they being buffeted by a domestic health crisis, but export industries are getting clobbered at the same time as access to dollars is drying up. On this episode, we speak with Brad Setser of the Council on Foreign Relations on the historic nature of this episode, which countries are particularly vulnerable, and what policies might allow for a way out.

See omnystudio.com/listener for privacy information.

Commerce and payments are increasingly digital. This shift from physical to electronic is one that governments and businesses are eager to accelerate for a host of reasons. But what gets lost when we no longer have access to physical cash? On this episode, we speak with Rohan Grey, President of The Modern Money Network and the research director of the Digital Fiat Currency Institute about how governments can introduce digital currencies that enable electronic commerce, while preserving the privacy protections of physical cash.

See omnystudio.com/listener for privacy information.

At the end of March, Congress passed the CARES Act in an attempt to mitigate some of the massive economic devastation being caused by the coronavirus crisis. A key piece of the legislation includes grants for small businesses that keep employees on their payroll during the emergency. On this episode, we speak with Florida Senator Marco Rubio about the program, what's working, what isn't, and what it will take to move the economy back towards full employment. 

See omnystudio.com/listener for privacy information.

With the U.S. economy going into a deep slump, the Federal government has attempted to counteract the pain by increasing spending. But for cities and states, it’s virtually impossible for them to run counter-cyclical fiscal policy. Furthermore, the crisis is draining local coffers due to public health expenditure and the collapse of tax revenue. This has already led to the start of a state and local austerity wave (spending cuts, layoffs, etc.) that could take years to reverse. On this week’s episode, we speak with three people who have been writing about this aspect of the crisis, and how it could be addressed by both the Fed and the U.S. Treasury. We’re joined by Skanda Amarnath of Employ America, Yakov Feygin of the Berggruen Institute, and Alex Williams, a grad student at the Levy Economics Institute of Bard College, to discuss the shape of the problem and the way back to economic health.

See omnystudio.com/listener for privacy information.

Earlier this year on Odd Lots, we did an episode about Korean structured investment products that were sold to retail investors, whose performance was tied to various market indices around the world. Crucially, those payouts were premised on there not being a major crash in those world markets. Obviously, we’ve seen quite the crash. So, for this week’s episode, we’ve gone back to Benn Eifert, the CIO of QVR Advisors, to check out the state of them now. And we also talk, more broadly, about the extreme volatility we’ve seen around the world, and what drove that, and whether or not we’ve seen the worst.

See omnystudio.com/listener for privacy information.

The commercial real estate market has been clobbered in this crisis, as restaurants and stores virtually shut down entirely throughout the month of March. On this week’s Odd Lots episode, we speak to Tom Barrack, the CEO of Colony Capital, on the crisis facing the industry, and what he feels needs to be done further to prevent the industry from going into a tailspin.

See omnystudio.com/listener for privacy information.

The plumbing of the financial system is coming under strain like never before. On this week’s podcast, we speak with two legendary experts on how the money system works: Zoltan Pozsar of Credit Suisse and Perry Mehrling of the Frederick S. Pardee School of Global Studies. They explain the extreme level of stress we’re seeing, what the Fed has done to alleviate, what more needs to be done, and what the post-crisis future may look like.

See omnystudio.com/listener for privacy information.

In normal times, U.S. Treasuries are the ultimate safe haven. They are highly liquid and guaranteed to pay out. So when people want to hide out during periods of economic and financial market volatility, you can typically count on there being a strong bid for them. But in the last couple of weeks, the volatility has been so extreme, and the flight-to-cash so severe, that the market stopped behaving as normal. And popular trades involving arbing Treasuries and Treasury bond futures started to fail. On today’s episode, we speak with Josh Younger, a managing director at JPMorgan, who explains how and why it started to fall apart.

See omnystudio.com/listener for privacy information.

For a long time, people have been warning that corporate debt could be the major source of vulnerability in today's economy. And the market meltdown that we've been seeing since the beginning of March could make those fears a reality. On this week's podcast, we speak with frequent Odd Lots guest Chris White of Viable Markets, on how the extreme search for yield in recent years, combined with massive issuance of debt, combined with the idiosyncrasies of the corporate debt market, could be a setup primed for disaster.

See omnystudio.com/listener for privacy information.

Markets around the world are so extremely volatile that nobody can think of any perfect precedent. There are shades of the Great Recession, 1987, the period in the wake of 9/11, and other moments of extreme turbulence. This week's special episode was recorded on Monday March 16 with Naufal Sanaullah, a macro strategist at EIA All Weather Alpha Partners. He walked us through his thinking on the market, and even discussed how he was trading things, right then, during the market open.

See omnystudio.com/listener for privacy information.

Saudi Arabia recently announced that it was engaging in a full-on price war by pumping oil like crazy. At one point, after the move, the price of Brent Crude plunged 31%. This was a body blow to U.S. shale companies, who are already reeling from falling prices and tightening credit markets. On this week's episode of Odd Lots, we speak with Buddy Clark, a Houston lawyer at the offices of Haynes and Boone about why this came at the worst possible time for the industry, and what could happen next.

See omnystudio.com/listener for privacy information.

The U.S. is on the verge of an economic crisis due to the coronavirus, as people and businesses aggressively pull back on spending. On this week's Odd Lots podcast, we speak with Claudia Sahm, the director of Macroeconomic Policy at the Washington Center for Equitable Growth, about what the government can be doing right now to stop a recession. Claudia has done extensive research on exactly this topic, and now is the moment to put her theoretical work into practice.

See omnystudio.com/listener for privacy information.

Questions continue to arise over the effect of passive investing, and whether or not it's somehow distorting the market. On this week's episode, we speak to Vincent Deluard, the Director of Global Macro for INTL FCStone Inc., who argues that the endless bid for ETFs have helped fuel a bubble in megacap stocks, which continue to outperform the market.

See omnystudio.com/listener for privacy information.

In recent weeks, before the stock market plunged, a page on reddit called r/WallStreetBets suddenly started exhibiting enormous influence on a handful of stocks. The emergence of online chat rooms making huge wagers in the market calls to mind the message boards of the dotcom era. But this page is taking it to a new level. On this week's episode, we're joined by Bloomberg News reporter Luke Kawa, who has been covering the page, as well as the page's founder, Jaime Rogozinski, who started it up in 2012.

See omnystudio.com/listener for privacy information.

There are lots of famous debt crises in history, but the story of Iraq's government debt build-up in the 1980s and subsequent restructuring in the early 2000s is probably one of the most unusual. Iraq transformed from a net creditor to a net borrower in a single decade, tapping a bunch of unusual sources (including funds linked to the CIA) for money to finance war against Iran. All that borrowing eventually culminated in one of the biggest debt restructurings in history. On this episode of the Odd Lots podcast, we speak to Simon Hinrichsen, a doctoral candidate at the London School of Economics, and the first to trace the build-up of Iraq's debt going back to 1979. He walks us through lessons learned from the Iraq restructuring – including one big missed opportunity in the world of sovereign debt.

See omnystudio.com/listener for privacy information.

Apple's recent revenue warning reminded the world of how exposed the company is to China, and in particular its factories. As the coronavirus continues to shutter huge swaths of the Chinese economy, this is a potential risk for numerous companies beyond just Apple. On this week's Odd Lots podcast, we speak with Dan Wang, a China tech industry analyst at Gavekal Dragonomics about how this, along with pressure on Huawei, are putting extraordinary pressure on the Chinese supply chain.

See omnystudio.com/listener for privacy information.

One of the best recent movies was Uncut Gems, in which Adam Sandler plays a Diamond District jeweler with an addiction to gambling and risk. It turns out, one of the workers in Sandler's shop was played by an actual, real-life jewelry dealer. On this week's episode, we speak with Maksud Agadjani, the founder and owner of TraxNYC, which sells a range of items, from traditional bracelets and necklaces to highly customized, 3D-printed items for celebrities. Agadjani talked to us about the movie, the business of gems, and why people will spend wild sums on his flashy items.

See omnystudio.com/listener for privacy information.

Back in 2017, the World Bank issued the world's first pandemic bonds. The bonds are meant to shift some of the financial risk of a global pandemic on to investors, but they've been criticized for having 'triggers' that are too tough to generate payouts. Now, as the coronavirus outbreak continues to spread, it's worth looking at how these bonds are structured and what they can tell us about the future of public-private partnerships in finance. In this episode of Odd Lots, we speak with Olga Jonas of the Harvard Global Health Institute, and a former economist at the World Bank with significant pandemic experience. She gives us her take on the bonds as well as the economic impact of big epidemics.

See omnystudio.com/listener for privacy information.

Over the last decade or so, we've seen an incredible rise in so-called passive investing. While definitions differ over what this means, we've seen more and more money poured into index funds (which own every stock in a given basket). Meanwhile, money has been yanked away from money managers who attempt to select individual stocks. One school of thought argues that this is a positive, in part due to lower fees. But is there a dark side? On this week's episode, we speak to Mike Green of hedge fund Logica Capital, who argues that the trend is causing major market distortions that will eventually unwind with ugly consequences.

See omnystudio.com/listener for privacy information.

There's a growing consensus that governments need to act more aggressively in using fiscal policy to stave off the next recession, and that monetary policy simply isn't powerful enough. But how do you actually go about it? What do you spend the money on, and how do you get politicians to disburse it in a timely manner? On this week's Odd Lots, we speak with Claudia Sahm, a former Fed economist who is now at the Washington Center for Equitable Growth, on ways to systematize and automate an early and aggressive fiscal response to economic weakness. Sahm has achieved fame for her so-called "Sahm Rule" which can provide policymakers with an early warning sign of when a recession might be brewing.

See omnystudio.com/listener for privacy information.

Even to this day, there are economists who don't understand money or don't think that money is an important aspect of the economy. They see the world as still operating essentially under a barter system, with money only there as a means of lubricating transactions. But this is precisely the opposite way you should be looking at things, according to this week's guest. Perry Mehrling is a Professor of International Political Economy at the Pardee School of Global Studies, Boston University, and he's known for advocating what he calls "The Money View." In his framework, money is front and center (not something to be abstracted away). In our discussion, he explains how this view helps explain the financial crisis, the repo blowup, and the weaknesses of post-crisis regulations.

See omnystudio.com/listener for privacy information.

At the recent World Economic Forum in Davos, there was a lot of talk about the need to change the world's energy usage in order to address climate change. While it's easy to get cynical about business leaders and politicians talking about sustainability on a mountaintop in Switzerland, it turns out that a lot is already happening right now. On the latest Odd Lots episode, we speak with journalist and analyst Gregor Macdonald, the editor of The Gregor Letter, about what's actually happening on the ground. And why the transition to renewable energy is happening fast, even in the absence of aggressive government subsidies.

See omnystudio.com/listener for privacy information.

What's the connection between low global interest rates, Korean retail investors, and the U.S. options market? On this week's Odd Lots podcast, we discuss the fascinating world of Korean structured notes with Benn Eifert of QVR Advisors. He explains how a very exotic type of investment sold to Korean retail investors could, through a series of hedging requirements, end up causing massive volatility in the market for S&P 500 options.

See omnystudio.com/listener for privacy information.

Iran's stock market is one of the most unfamiliar equity markets in the world. With Iran under stringent U.S. sanctions, it's hard to even find data on where Iranian stocks are trading. Then there's geopolitical risk. This month the U.S. killed Iran's top general Qassem Soleimani and Iran retaliated by firing missiles at U.S.-Iraqi air bases, sparking a sell-off in global markets. So what happened to Iranian stocks in this time period? On this week's episode of Odd Lots, we speak with Maciej Wojtal, who runs the only European asset manager focused on Iranian stocks.

See omnystudio.com/listener for privacy information.

Americans are paying more and getting less for their health care than ever before. On the new season of Prognosis, reporter John Tozzi explores what went wrong. 

See omnystudio.com/listener for privacy information.

From Argentina to Chile to Lebanon, we're seeing a high degree of political and economic uncertainty among emerging market economies. On this week's Odd Lots podcast, we speak with Paul McNamara, a veteran fund manager at GAM Investments. McNamara explains why this moment is so turbulent, and what it will take to settle these economies down.

See omnystudio.com/listener for privacy information.

The severity of the Great Financial Crisis took economists by surprise, particularly the ones who believed that markets were largely stable and self-regulating. So why did so many eminent thinkers get it so wrong? On this week's episode of Odd Lots, we speak with Lord Robert Skidelsky, an economic historian who is known for being the pre-eminent biographer of John Maynard Keynes. Skidelsky is the author of the new book “Money and Government: The Past and Future of Economics”, and he tells us why economists' failure to understand what money is has been so detrimental to their understanding of the world.

See omnystudio.com/listener for privacy information.

When people think about Bitcoin, they often think about neo-goldbugs who hate inflation and the Federal Reserve. But beyond the financial case for it, there's a moral, human rights case as well. On this week's podcast, we talk with Alex Gladstein, the Chief Strategy Officer at the Human Rights Foundation. He explains why he sees Bitcoin as an essential tool in his fight for human rights all around the world.

See omnystudio.com/listener for privacy information.

By this point, everybody knows that online dating is a massive phenomenon, reshaping the social habits of the young and the single. But perhaps people are still not appreciating the significance of it. On this week's podcast, we speak with Dan McMurtrie, a hedge fund manager, who has done significant research on the impact of online dating. Through his work, he has found huge potential ramifications in terms of family formation, economic development, commerce, and more.

See omnystudio.com/listener for privacy information.

Many people like to claim that the Federal Reserve is responsible for the high degree of leverage and speculation in the economy. But the mechanism via which this happens is often misunderstood. On this week's episode of Odd Lots, we speak with Srinivas Thiruvadanthai of the Jerome Levy Forecasting Center about how the Fed's goal of inflation targeting contributed to a massive buildup in private debt. As he explains, the approach to minimizing the volatility of inflation at a low level created a perfect environment for lenders, creating all kinds of other risks elsewhere in the economy.

See omnystudio.com/listener for privacy information.

For years, defaults were few and far between in China's corporate bond market. Most investors thought that the Chinese government would never let companies — whether they be state-owned enterprises (SOEs) or private businesses — actually default on their debt. But times have changed. Defaults by private companies have been rising and there's even a question mark over the implicit government guarantee in debt sold by SOEs. One state-owned enterprise in Tianjin has proposed a 64% haircut for bond investors, in what could amount to the first de facto default by an SOE in more than two decades. On this week's episode of the Odd Lots podcast we speak with Jun Pan, Professor of Finance at Jiao Tong University, about her recent research examining what China's corporate bond prices are actually telling us about the health of its companies and wider economy.

See omnystudio.com/listener for privacy information.

How do Millennials view investing and spending? How do the rising costs of healthcare, education, and housing affect their economic outlook? How does fear of climate change affect one's long-term life choices? These questions are crucial for understanding the perspective of Millennials as they increasingly enter middle age. On this week's episode, we speak with freelance writer Karen Ho about her perspective as both a member of this generation and a journalist who has covered their attitudes about money.

See omnystudio.com/listener for privacy information.

According to the website The Hendon Mob, the top tournament poker player of all time is the American Bryn Kenney, who has won a staggering $55.5 million. In fact, he got there in just the last six months, having won $20.5 million at a single tournament! So how did a former Magic: The Gathering player vault to the top of this leaderboard? On this week's episode of Odd Lots, Kenney explains how it all came about.

See omnystudio.com/listener for privacy information.

Back in September, chaos erupted in short-term funding markets, as the cost for financial institutions to borrow reserves soared. Immediately a major debate broke out over whether this represented a systemic problem for the financial system or merely a technical problem with the "plumbing." Things have quieted down since September, but the debate hasn't stopped. And there's still no permanent fix. On this week's Odd Lots podcast, we spoke with Zoltan Pozsar of Credit Suisse, who has a reputation for understanding the mechanics of these funding markets better than anyone else in the world. He broke down what really happened, and why we could see more craziness as soon as next month.

See omnystudio.com/listener for privacy information.

Where did the notion come from that the obligation of a company's management is to maximize shareholder returns, even if it means pain for workers? On this week's Odd Lots podcast, we speak with Karen Ho, a professor of anthropology at the University of Minnesota, who can answer the above question. Unlike your typical anthropologist, she did her field work inside a Wall Street bank to discover how the specific culture of finance bled through to the real economy.

See omnystudio.com/listener for privacy information.

You probably haven't thought much about the Taiwanese life insurance industry. Why would you have? But they're among the most fascinating entities in the financial world. And for a long time they've been a source of incredible mystery. They've built up a gigantic position in foreign, US-dollar denominated assets in order to fund domestic liabilities denominated in Taiwanese Dollars. But how do they hedge this currency mismatch? Nobody has figured it out until now. On this week's podcast, we speak with Brad Setser of CFR and Exante Data about how he and a pseudonymous partner finally cracked the code.

See omnystudio.com/listener for privacy information.

Bloomberg's Travel Genius podcast is back! After clocking another hundred-thousand miles in the sky, hosts Nikki Ekstein and Mark Ellwood have a whole new series of flight hacking, restaurant sleuthing, and hotel booking tips to inspire your own getaways—along with a who's who roster of itinerant pros ready to spill their own travel secrets. From a special episode on Disney to a master class on packing, we'll go high, low, east, west, and everywhere in between. The new season starts Nov. 6.

See omnystudio.com/listener for privacy information.

Can the U.S. economy have a recession without it turning into a crisis? In the old days, such garden-variety recessions were fairly common. These days, less so. But why is this? And can we go back to the old-style soft recessions? The issue, arguably, is that private sector balance sheets (both debts and assets) have grown so large relative to incomes, that the value of financial assets swamp effects from changing incomes.

On this week's Odd Lots, we speak with David Levy of the Jerome Levy Forecasting Center about his new report called Bubble Or Nothing about how the economy works in a world of gigantic balance sheets and extreme risk taking.

See omnystudio.com/listener for privacy information.

It's well known that Japan has (until recently) been mired in years of mediocre economic growth. And policymakers and economists use Japan as a warning for how developed economies can enter into prolonged slumps. But has anyone learned the lessons of Japan? In our latest episode, we talk to Richard Koo of the Nomura Research Institute, about his concept of the "Balance Sheet Recession" and why developed economies with lots of debt don't behave the way they do in textbooks. He explains how the lessons of Japan apply to Europe and the U.S. and what policymakers have failed to learn.

See omnystudio.com/listener for privacy information.

On September 19, 2019, Odd Lots hosted its first-ever live event at the WNYC Greene Space in downtown New York City. With an all-star lineup of guests, the show featured convicted white-collar criminal Sam Antar, a panel on sovereign debt with Lee Buchheit and Brad Setser, and a discussion on MMT with Stephanie Kelton. We even had a surprise guest, SPY kid Kevin McGrath, not to mention two musical acts: country-singing economist Merle Hazard and a performance by Joe himself.

Be sure to check out videos from the event on Bloomberg's Markets and Finance channel on YouTube. 

See omnystudio.com/listener for privacy information.