The Interview · Featuring Warren Pies and Maggie Lake
Warren Pies, the founder of 3Fourteen Research, believes we need to prepare ourselves for a New World Order of Globalization. “We did not think the next 25 years were likely to resemble the last 25 years,” he says and adds that the movement between stocks and bonds is going to change. Pies believes also that globalization forever changed asset correlation and that Bitcoin is not a competition to the US dollar but instead it competes with gold. In the interview, Pies also talks about structural inflation and why a protectionist outlook has led to increasing prices of durable goods and major problems with global supply chains. Pies looks back at 1998 when globalization first made headwinds as China became a major manufacturer of the world, leading to structural secular deflation and removing the inflationary pressures between stocks and bonds. Pies gives his take on how investors should position their portfolios in this tumultuous macro environment. Interviewed by Maggie Lake on October 29th, 2021.
China’s Stock Melt Down to Spill Over to the U.S. Economy, We’re on Monetary Heroin | Peter Grandich
Warning Sign:
Junk bonds are yielding less than CPI
people haven’t been making i neverthought i’d see this in my careerdaniella the other day so-called junkbonds oryield bonds we’re yielding lower thanthe cpiindex it’s just unbelievable thatsomething we used to call junk we knowright nowis going to pay us less than what thecurrent inflation rate isi just don’t conceivably can’t bringmyselfuh to look at bonds in any way shape orformand quite frankly that’s a very scarything and maybei’ll end with this part the fixed incomemarket has been destroyed by the fedand that’s the last part of my businesswe i work with a group that specializesin retirement andbusiness and exiting and estate planningthe retirement business is completelyup in the air there’s no longer any safesecureprinciple secured investment out therepeople have to now takerisk to their principal in order tomaintain some sort ofyou know financial stability retirementwhatever it may beand that’s something we never thoughtwas going to be when we startedin this business and that’s the thingthat’s not being discussed by wallstreet but willwhen eventually the market implodes andthen people realize that hey what how doi do how do i keep maintaining mylifestylebecause i can’t i can’t keep making 5 10or twenty percent like it’slike it’s simple if i may one final noteit is an extreme pleasure and honor tobe interviewed by youand your listeners aredon’t recognize how fortunate andblessed they arebut because i know when i see you doother interviews that you’re on theother side of the coin orwho you’re interviewing but you don’tattack them you give them a chance toshare their views and in a nice wayyou bring up points that kind of pointout where they may not beand i have to tell you that’s a blessingand gift and i just hope you keep itmeans a lot to me peter thank you somuch thank you for those words andagain thank you for your time come backsoon to stansberry investor.com okay
Bonds Away
Some investors say the climb by the 10-year yield reflects bets that recent tax cuts will quicken the pace of growth and inflation, prompting the Federal Reserve to raise interest rates and denting the value of outstanding government debt. Other analysts say the continuing strength in the 30-year bond suggests the longer-term outlook may not be quite so rosy.
Goldman Sachs Begins Selling Some of Controversial Venezuelan Bonds
Goldman Sachs Asset Management has begun selling some of the $2.8 billion in Venezuelan bonds it acquired in a deal involving the country’s central bank
.. The Wall Street firm’s asset-management arm sold at least $300 million face amount of the bonds to a small group of hedge funds in recent days
.. GSAM’s purchase of the bonds in May drew harsh criticism from Venezuelan opposition leaders and some investors for supplying cash to the authoritarian regime of President Nicolás Maduro.
.. Four or five hedge funds in London and New York bought the bonds of state-owned oil company Petróleos de Venezuela SA, or PdVSA, due in 2022 from Goldman for about 32.5 cents on the dollar, slightly more than the 31 cents the firm paid when it purchased the bonds from Venezuela’s central bank in May
.. Goldman sold the debt to promote trading of the bonds, which the firm hopes will push prices up and legitimize the securities in the eyes of other investors
.. some firm executives have said privately that Goldman’s chief mistake wasn’t in buying the bonds—which it felt it obligated to do on behalf of clients in its funds—but in going it alone, buying nearly all of the $3 billion issuance.
.. Goldman and the new buyers of the debt are betting that a regime change in Venezuela could lift bond prices even if the country defaults.