Fixed income market legend Harley Bassman (@convexitymaven), known as “The Convexity Maven,” joins Julia La Roche on episode 24 for a wide-ranging conversation on the bond market, volatility, housing, demographics, and more. 

Bassman is currently a managing partner at Simplify Asset Management, a fast-growing Exchange Traded Funds (ETFs) provider. At the recording date, the Simplify Interest Rate Hedge ETF (PFIX), which aims to hedge interest rate movements arising from rising long-term interest rates and to benefit from market stress when fixed income volatility increases, is up 100% year-to-date.

Bassman is also the creator of the MOVE Index, a standard measure of interest rate volatility similar to the VIX. He clarifies how investors should think about the index and why levels near 50 and 150 are the “wrong number.” 

In the conversation, Bassman discusses the implications of the Federal Reserve’s monetary policy and why there needs to be a repricing of all assets for reality. 

0:00 Intro

0:31 Harley’s background

1:42 Convexity explained

3:22 Macro views

5:17 Inflation isn’t coming down quickly

8:30 The Fed is doing the job

11:17 Demographics is the iceberg

14:17 Boomers have robbed the Millennials

15:14 Public policy mistake with housing

18:14 People trying to buy a house right now are ‘unfortunate’

20:40 Not going to be a housing crisis

22:19 The MOVE Index

30:27 Yield Curve single best predictor of a recession

34:58 MOVE and the VIX

37:19 Stocks will likely go down in an orderly fashion

40:25 The world’s not broken

43:47 Repricing for reality

46:34 Recession outlook

49:55 Learn to write, expand your mind

53:12 The Maven Mantra