Odd Lots

To the surprise of many people, the Biden administration has notched some significant economic policy wins this year. The CHIPS Act represents a major piece of industrial policy aimed at bolstering the US semiconductor sector and making the supply chain more resilient. Meanwhile, the Inflation Reduction Act puts a lot of money towards a range of energy options, with a particular focus on advancing renewables. Ezra Klein, the New York Times Opinion columnist and host of "The Ezra Klein Show," has been a major proponent of "supply-side liberalism," or the idea that Democratic policy aims should focus more on building out supply-side capacity, as opposed to simply redistributing demand. On this episode, we talk about the politics and economics of this endeavor.

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In the wake of the Great Financial Crisis, China arguably led the world out of the downturn. Its gigantic fiscal stimulus not only boosted domestic growth, it also created an incredible amount of demand for commodities all around the world. Today the story is different. The government's Covid Zero policies have been a drag on growth and the real estate sector is deeply troubled, with a rise in homebuyers refusing to make mortgage payments. On top of that, the country is experiencing searing heat and drought. So how bad is it? Are things meaningfully worse than in previous downturns? To understand more, we speak with Tom Orlik, Chief Economist at Bloomberg Economics and author of the book "China: The Bubble that Never Pops." 

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At Jackson Hole, Federal Reserve Chair Jerome Powell gave a hawkish speech intended to leave no ambiguity about the Fed's commitment to defeating inflation. But what does that mean in practice? How aggressively will the Fed have to hike? And how much pain will the economy endure as a result of it? On this episode of the podcast, we speak with Neel Kashkari, the President of the Minneapolis Fed. He explains his thinking and why he's become one of the most hawkish officials at the central bank. We also discuss the future of the Fed's decision making framework, the impact of student loan relief, the market and much more. 

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The unemployment rate is down to 3.5%, which is far lower than just about anyone thought it would be a year ago. So that's great. On the other hand, measures of labor force participation are below where they were pre-crisis. So the question is whether there's been some fundamental shift in the composition of the labor market vs. the pre-pandemic era, or whether we're still in the process of normalization. To dive into this more, we spoke to Joelle Gamble, Chief Economist at the US Department of Labor. Among other things, we discuss the narrowing gap between black and white unemployment and whether this progress can be sustained throughout the cycle.

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The Federal Reserve is in tightening mode. And there's that old adage "don't fight the Fed" which means in theory it's a bad time for stocks. And yet we saw a surprisingly powerful rally off the bottom in June. But now what? Can the market resume its ascent? Or will we return to the lows, or possibly make new lows? On this episode we speak to Helene Meisler, who has been trading stocks for roughly four decades, and who has a unique approach to analyzing the market. She draws stock charts by hand. In our chat, Meisler explains her methodology, and gives her assessment of the market right now. 

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In theory, what gets people most excited about crypto is lines going straight up. But one of the biggest successes in crypto is the rise of stablecoins. Basically, stablecoins allow people to hold dollar-linked assets directly on the blockchain. This is potentially important for P2P payments, trading, cross-exchange arbitrage and more. But by holding actual money, the big stablecoin issuers potentially have a massive amount of power in a space that's supposed to be all about decentralization. On this episode, we speak with Jeremy Allaire, the CEO of Circle, which issues the USDC stablecoin. We talked about regulation, the business model of stablecoins, and the influence he has within the broader ecosystem.

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Gas prices are central to everything these days. Biden's approval rating seems to move inverse with the price of gasoline. The entire market started rallying after gasoline prices started moving lower in June. But then, what exactly determines the price of gasoline? Of course oil is a big part of it, but it's just one significant driver. There is also refining capacity. And taxes. And the gas station's margin. And the cost of distribution within the United States. So how does it all shake out? On this episode we speak with Patrick DeHaan, head of Petroleum Analysis at GasBuddy, who breaks it all down, and helps us understand the market for gasoline.

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Thanks to surging energy costs and extreme weather events, there's a greater urgency to decarbonize the electricity grid. However, it's not enough just to add more solar panels, or wind turbines or even nuclear plants. We need a way to move all that power. And today's grid wasn't made for intermittent energy sources. On this episode we speak to Rob Gramlich, the Founder and President of Grid Strategies, about what we need in our grid to take advantage of intermittent power and what it would take to get there, both from a monetary and regulatory standpoint.

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As everyone knows, electricity prices in Europe have soared, due to a combination of factors, most prominently Russia's war in Ukraine and the curtailing of natural gas supplies. But how bad is it going to get this winter? Will Germany have enough energy to power homes and factories? Or will industrial operations have to shut down. On this episode, we speak with two guests: Bloomberg Opinion Columnist Javier Blas as well as Singapore-based hedge fund manager Alex Turnbull. They walk through how to think through both the European and global energy situation as the weather gets cold.

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Markets have staged an impressive bounce since the middle of June. Stocks are way up. Credit spreads have come in. Mortgage rates have tightened again. And long rates have mellowed out. So is the coast all clear? On this episode of the podcast, we speak with Pimco Group Chief Investment Officer Dan Ivascyn about why this is an environment characterized by a high level of uncertainty. It's not that he's pessimistic or bearish, per se, but rather that there are risks all over the place as the Federal Reserve attempts to tame inflation.

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