Global Macro Update Archive

A stress test is exactly that: a test. It is a mix of assumptions about adverse events and their theoretical outcomes. Ironically, the Fed released its 2023 bank stress test scenarios just weeks before the latest banking crisis erupted.

The last major recession began in 2007. Since then, central banks have done everything in their power to avoid such an event. But then, inflation.

Up until February, you would have done well to be overweight banks. “Banks do well in a rising interest rate environment” was the simple thesis. And that’s true if the banks have competent risk management.

My guest this week, Barry Habib of MBS Highway, breaks down in detail where SVB got it wrong and how mortgage-backed securities worked against the bank.

“Dr. Ed” has been in the markets for over 40 years. He was an economist at the Federal Reserve Bank of New York before becoming chief economist at EF Hutton and then a chief investment strategist at Prudential Equity Group and Deutsche Bank’s US equity division.

In this week’s Global Macro Update discussion, Sam Rines notes that the government no longer sets the minimum wage. Walmart does. When Walmart moved its nationwide minimum hiring rate to $14/hour, nearly all other employers had to follow suit.

What does a new normal look like? That’s the topic I covered with Bruce Mehlman in this week’s Global Macro Update interview (link at the bottom of this letter).

This week, we checked in on the fixed-income market with an asset manager who controls $40 billion in capital.

This week, I talked to Peter Boockvar, CIO of Bleakley Financial Group, an $8 billion wealth management firm, and editor of The Boock Report.

This week, I talked to Andy Greenberg, senior writer at WIRED magazine and author of the books Sandworm and Tracers in the Dark. I read both and had a hard time putting them down.

This week I spoke with entrepreneur and former tech executive turned presidential candidate Andrew Yang. Andrew is the co-founder of the Forward Party and author of the national bestseller, Forward: Notes on the Future of Our Democracy, a thoughtful examination of the threats imperiling our democracy.

This week, I spoke with Felix Zulauf, one of the top macro investors of our era. At Zulauf Consulting, he publishes a research service read by investment firms and family offices around the world. At our Strategic Investment Conference, he’s always one of the top-rated speakers.