The IRF Podcast

David Osman of the IRF is joined by Helen Thomas, the Founder and CEO of Blonde Money, an independent consultancy firm that was established in 2014.

----more----

Helen Thomas has had an impressive career in both finance and politics. Helen was an adviser to the former Chancellor of the Exchequer, George Osborne and she also created the Financial Markets Reform Programme for the think tank, Policy Exchange. Previously, Helen has been a partner in the global macro hedge fund, ABD Investment Management and a former Head of Currency Alpha for State Street Global Advisors. The Blonde Money consultancy analyses and monitors the political, economic and financial risks that are mispriced in the financial markets in the US, UK and EU.

Helen assesses the policies of the two contenders challenging to be the next leader of the Conservative Party and the next UK prime minister. She explains how a government led by Liz Truss or Rishi Sunak would differ from the Johnson regime, particularly on the matter of tax cuts. From economic policy to foreign affairs, the next PM will be facing formidable policy challenges. This will complicate the policy choices. Helen points out what all of this will mean for the British Pound and for the UK bond and stock markets.

 JP Smith of the IRF is joined by John Ryding of RDQ Economics, a US based macro-economics consultancy which he founded along with former Bear Stearns colleague Conrad Dequadros in 2008, to discuss the outlook for the US economy over the coming months. 

----more----

John describes the process and approach of RDQ fusing economic history and John and Conrad’s own extensive experience of the relationship between macro-economics and financial markets, with the more classical economic modelling and data-based techniques. This eclectic methodology enabled RDQ to be well ahead of the consensus in forecasting much higher inflation over the past fifteen months and John outlines the reasons behind the Fed’s mistaken belief that inflation would prove transitory and what this implies for the future trajectory of inflation and direction of monetary policy. RDQ remain pessimistic about the Fed’s ability to curb excess demand due to previous policy errors, the overheating labour market and secular trends such as demographics and the reshoring of manufacturing. 

RDQ believe that US dollar strength is likely to persist given further tightening of US monetary policy relative to current expectations and the increasingly dire outlook in Europe and China; ’the currency markets can run an awful lot further than one would think’. John is sceptical that tighter monetary policy is fully priced into financial markets, but that commodities and real assets have even greater downside as Fed action slows the global economy. John and JP concur that lower earnings are not yet fully discounted in equities which are likely to remain volatile without any clear direction over the coming months.

David Osman of the IRF is joined by Lane Dusserre, the President of SMI, a global equity market strategy advisory service, which was established in New York in 1962.

----more----

Lane Dusserre is an expert in global investment management, with a long career that has included portfolio management at top European institutions and investment advisory consulting to leading institutions in Europe, Asia and the USA.

SMI provides technical research consulting on global equity markets and industry sectors. The analysis predicts the direction, duration and magnitude of equity market trends, both short-term and intermediate-term trends. SMI identifies inflection points using proprietary technical indicators and a deep database of historical indicator behaviour.

Lane discusses the origins of SMI, their proprietary indicators and momentum strategy that are used to assess market conditions and formulate SMI’s predictions. As an example, Lane discusses the NYSE Intermediate Term Indicator (INI), which measures the percentage of stocks with positive momentum in the NYSE Composite. This provides a good measure of both the breadth and momentum of the US equity market with data going back as far as 1972. Lane also explains how SMI generates buy and sell signals, and determines the duration and magnitude of the expected trend.

Using SMI’s proprietary indicators, Lane predicts that the US S&P 500 Index will have 15% upside to the year end. Following on from this positive view for the US stock market, Lane also discusses the intermediate-term outlook for global emerging markets and the prospects for the European equity markets, including the UK FT All Share Index.

David Osman of the IRF is joined by Peter Warburton, the Founder of Economic Perspectives, which he established in 1996.

----more----

Peter Warburton discusses the way that the UK cost of living crisis is being compounded by a cost of credit crisis. Peter argues that following the global financial crisis in 2008/09, there has been a prolonged period of financial repression with low interest rates and the suppression of debt default. The impending credit crunch is not only due to rising interest rates, as there are also concerns about the mispricing of credit risks. Hence, with the economy deteriorating, debt defaults will rise.

Peter points out that fiscal policy has entered an era of bigger government with stagnating living standards. Looking further afield, he identifies those countries where double-digit inflationary pressures are particularly troubling. Those central banks that have failed to control inflation, like the US Federal Reserve, are considered to be no more than “paper tigers”.

Peter concludes by identifying the main implications of the cost of living and credit crises for the financial markets. In the near term, greater inflation, rising interest rates and higher bond yields will have an adverse impact on equity valuations.

For the longer term, Peter says there is a multi-dimensional problem confronting asset allocators, who are having to respond to such factors as monetary regime change, deglobalisation and the balkanisation of supply chains, as well as the dynamics of intergenerational wealth and income in an era of elevated inflation.

David Osman of the IRF is joined by David Murrin, the Founder of Global Forecaster who is renowned for the development of unique and effective behavioural models, which when combined with a geopolitical overlay have a most impressive track record at predicting financial markets. David has also authored the highly acclaimed book, Breaking The Code of History, which has striking parallels with the work of Ray Dalio. 

----more----

David discusses the importance of the Kondratiev Wave commodity super-cycle on the outlook for inflation and other financial markets. He explains the implications of the K Wave for his “Five Stages of Empire” model and the dramatic ramifications, including the growing risks of a World War in the next five years as empires collide. 

He believes we have entered the doomsday bubble with the stock market peaking in November last year and now on a rapidly accelerating downward spiral with inflation out of control and the Fed out of levers to fight back. Meanwhile expect Putin to take over Ukraine and move towards occupying a NATO country whilst China will go for Taiwan and South Korea. The world is entering a key juncture, investors should be prepared for the worst!

David Osman of the IRF is joined by Barry Knapp, the Managing Partner and Head of Macro & Public Policy Strategy at Ironsides Macroeconomics, which he founded in 2019 and is based in Colorado.----more----

In a world that has been rocked by a global pandemic, supply chain disruptions, an energy crisis and the ramifications of Russia’s atrocious war on Ukraine, the USA has some obvious attractions. Barry Knapp has had a long and distinguished career in the financial sector with a number of leading investment firms. His career has evolved from equity derivatives to principal trading, then equity strategy research, unconstrained fixed income investment and now macroeconomic & public policy strategy. His knowledge of the US economy and US financial markets is arguably second to none. In this podcasts Barry explains why US economic growth and corporate profits are likely to be higher than current consensus expectations for this year. He sets out how this will have a meaningful impact on the prospects for inflation, monetary policy, the yield curve in the government bond market and the US dollar. In addition, Barry discusses his bullish view for the US stock market and highlights those sectors that are most (and least) attractive in these circumstances.

David Osman of the IRF is joined by Julian Morris, the Chief Economist of Unicus Research, which is based in New York.----more----

In addition to his expertise in economic and financial matters, Julian Morris is an acknowledged expert on environmental, health and technology issues with nearly three decades of relevant experience for ESG investing. ESG funds have become more popular with investors and have performed well in both 2020 and 2021. However, it is not so easy to define exactly what is (or is not) environmentally friendly, social or good governance. Increasing regulation and litigation are adding to the complexities for corporates and for ESG investors. In this podcast, Julian explains many of difficulties associated with green investing, including the reliability of ecolabelling and government-led green business initiatives. He also highlights the definitional problems of what constitutes a good ESG investment, particularly with respect to the social and governance aspects. Julian explains how the different characteristics of ESG can be incommensurate with one another. In doing so, he raises questions about the future of a ‘checkbox’ approach to ESG as a meaningful term for ethical and impact investing. Nevertheless, there are some interesting long-term ESG investment opportunities and Julian points out where Unicus Research has been able to identify profitable ESG investment situations.

David Osman of the IRF is joined by Brian Pellegrini, the founder of Intertemporal Economics, which is based in New York.

----more----Central banks around the world face difficult choices with respect to the trade-off between employment and inflation, none more so than the US Federal Reserve. Monetary policy is becoming less accommodative, but how tight will it become? In this podcast, Brian Pellegrini discusses the outlook for US monetary policy before and after the mid-term congressional elections in November. With US interest rates soon to be back on a rising trend, Brian focusses on the potential changes in the shape of the yield curve and the prospect that the Fed will pursue a policy of yield curve control in the government bond market. He also assesses the outlook for the US dollar and the implications for international investors.

Legendary strategist David Roche, founder and CEO of Independent Strategy, in conversation with the IRF's own JP Smith, himself a former specialist on Russia, focusing on the implications of the build up of Russia's forces around the borders of the Ukraine.----more----

• Putin's prioritises political and ideological  motives over economic and/or financial considerations, he is therefore very likely to take some tangible military actions, most likely after the Beijing Olympics.

IRF’s JP Smith is joined by Donald Luskin of TrendMacro in this riveting podcast where Donald iterates his view that the post-pandemic bull market is not over.----more----

Recalling past crises, Donald remarks that such events promote rapid innovation. In the case of the Covid-19 pandemic, technological innovations have partly facilitated vast growth. Thus, despite the challenge of reliably measuring productivity and a workforce reduced by 5 million, US GDP on a real inflation adjusted basis is far higher than pre-pandemic levels. Addressing the elephant in the room, the looming impact of the Omicron variant, Donald draws on TrendMacro's COVID-19 pandemic and impact of lockdowns model which provides insights on the supposed benefits, or lack of benefits, from implementing lockdowns. Additionally, he expresses his view that inflation is transitory and that the bond market does not reflect the views of many prominent economic thinkers. Donald further shares his thoughts on commodities and in particular, oil – which is experiencing a demand shortfall due to reduced global mobility.