Odd Lots

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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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