Daily Briefing - May 6, 2020


Hi I'm Ralph Pal. The CO founder and CEO Vision. Thank you so much for listening to the interview the Premier Business and Finance interview series in the world at real vision. We pride ourselves on providing the best in-depth expert analysis. Tell You understand business? Finance and the global economy. If you like what you hear on the interview I really hope you look set my invitation to try real vision plus the thirty days for just one dollar visit real vision podcast dot com today and join us as we navigate the financial world together chairs. Welcome to the Real Vision daily briefing. It's Wednesday may sixth. I'm Peter Cooper and we have visions Bennington Roger hearst's standing by to give you their macro analysis but before that let's go over the latest. Many countries around the world are starting to reopen their economies or rolling out plans to do so. Let's examine you of these countries plans in actions in how they're faring. Against the corona virus currently in the United States many states are already reopened or will be soon and they're under a lot of pressure to act yesterday president trump and vice president pence discussed winding down the corona virus taskforce as the. Us transitions into reopening today. Though president trump stepped back from that instead he would have the task force work indefinitely. Trump also acknowledged yesterday. Even though many people will suffer in this reopening America still needs to reopen its economy in those who leave their homes and resume. Their everyday lives can consider themselves to be warriors. I'm viewing our great citizens of this country. To a certain extent and to a large extent as warriors the warriors. We can't keep our country club. We have to open our country. Somebody said Oh we could keep them for the next eighteen months. We could keep it for the next two years. Doug Ducey's done an incredible job as the governor of Arizona. People aren't going to accept it. They won't accept it and they shouldn't accept it. We have a great country. We can't keep it. I mean I've had doctors say well. Why don't we close it for a couple of years? This is the United States of America. I created with a lot of other very talented people and the people of our country the greatest economy in the history of the world. The greatest that we've ever had the greatest employment numbers the best numbers we've ever had the best stock markets. I think we had one hundred and forty four days of wreckage stock markets. And then one day. They said we have to close country. Well now it's time to open it up the. Us is still battling a high number of daily confirmed cases as they did in April. Almost half of the states have initiated a partial reopening at this point with several more to reopen soon. So we'll need to keep a close eye on the data for the next week and see how things unfold relative to where they are now in the UK. Boris Johnson is expected to announce plans for reopening this coming Sunday. Originally the lockdown was supposed to end tomorrow the seventh but on April Sixteenth Dominic Robb. Acting as the prime minister said had laid out five requirements. In order to consider reopening they are one evidence that the H. S. can cope across the UK to a sustained fall in daily death. Three evidence that the rate of infection is decreasing for confidence that supplies of testing N. P. P. E. R. Meet demand and five no risk of a second peak on the twenty eighth. The fifth test was edited to make it easier to pass so instead of saying no risk of a second peak but rather a second peak that overwhelms the. Nhl US at the moment the UK's Daily confirmed cases remain in a sustained level ranging anywhere between four thousand six thousand in the last few days for their daily death counts. They've declined slightly but are still maintaining a consistent level of five hundred to one thousand based on where the stats are in how rigorous passing these tests will be locked down could be extended for the UK for the time being in for Germany chancellor. Angela Merkel has announced that they will be emergency brake enacted. In case any of the sixteen states of Germany experiencing uptick in new cases. Each of the federal states have been taken control over when they will be open. But this emergency brake will help maintain the downward trend that they've had relaxing. Their physical distancing measures means that all shots will be allowed to reopen as long as masks are still worn in social distancing maintained. Schools will gradually reopen so that all students will return by summer. Term in Germany's football league. The first and second divisions will start again in the later half of me. The federal states have been charged with creating strategies to reopen their establishments such as restaurants hotels in theaters. Their daily confirmed cases have been demonstrating a strong decline over the past few weeks as well as their daily death counts their daily net. Active cases have consistently been negative since mid April. These of course are just a few countries and their specific plans and circumstances vary but as much of the world is making a synchronized movement towards reopening. It's important to recognize where these countries are in their battles against the corona virus. It will have a significant trickle down impact on a country's economy if these decisions to reopen actually encourage the spread of the virus in make it even more difficult to control. Now we'll turn it over Ashton Roger Ash. It's Wednesday may sakes just Africa's markets European time. I'm asked Bennington. This is the daily briefing. I'm here with Roger Hurst from the guy. Welcome Roger Goodell Again are you thinks he's health. I'm doing great so yesterday. I don't know if you had a chance to see the show. We had Tony greer on. Yeah I did I loved. It actually are reserved because I'm always interested in the various perspectives in terms of in some ways. It's a bit like one. Kings technicals individually as in all their own technicals and fundamentals on their own battery. Good with either but together I find them quite powerful and it's the same way that is I think the perspective in the short term perspective given the size of the mix. I mean if you think about it emo- away which is people trying to get five to seven percents. Years certainly does a little pension funds trying to get forty percents in a few days. Then you should care about these moves. I think he's always kind of key to to think about that. That there's a short term opportunity where you can make a lot of money to the small. Move it you'll trading it or you can pick up some very very big. When volatility picks up the moments or even into the long rule where you've got to have You know you to have the long-term glossies on the key with all of this. I think is something which Doug mentioned before. I mentioned it on When I used to writing tank on did a podcast stuff like that is that framework is the most important thing regardless of anything else. Framework is the most important thing rally talks about hedge. I talk about it. A framework applies to absolutely everybody. Trade idea might only apply to temps the talked to when I was in when I was in sales. Business unfunded maybe ten twenty percent hit home with my ideas but for was the most important thing because everybody needs to understand the framework and from that everybody trade ideas. We'll be down to your risk profile. Age will sort of Also the acids you'd like to trade in those little play with each other and against each other but they are all on the same thing which the framework. Yeah I think that's very well said it's part of the framework and it's also part of having diversity of different views along different time arises which really interesting in vigorous series of comments is yesterday which were terrific. I think we're incredibly lucky here religion. We've got like the smartest subscribers in the conversation that we have in. The comments is the rarest of all things. Is that Unicorn. We have really intelligent debate among people who can disagree with each other in a way. That's that's cordial and collegial. We just want to thank you for that. That was great. I mean that's Read the comments pretty much every day because not only this offense tick insights but also gives me waste food for thought about what I should be looking at next. Because I'm a plagiarist talked about the framework but my framework is pure plagiarism. I I try and read as many different peoples I can see reviews the normally have a complete opposition to and factual those sorts of things in when I have a view on something very like. Oh this year and this is going to be right. It's kind of being tried on. A rally talked about being tried. I think that's right. We all tribal in our views. But I think also route is not belligerently tribal as in you can be tribal but you can change tribes as the facts change. I think being tribal can be dangerous because if people are very hurry myopically tribal missing the opportunities and an example of that in a motorway was phrased the is. Es Gee I've always said whatever various yet already cabinets on so yes. She's going to double play that game. I chase that. Take what athletes regardless of mind thing is ultimately. We're here to make money as well as an infinite number of ways you can make money. We can make money. England gets to pick up on your point. It's all about the conversation right. It's all about what we're doing right now. It's all about this discourse I'd I reminded the Great Gore Vidal quote. I HAVE NOTHING TO SAY. Only Dad and that this is a conversation that goes back and forth. We have so many wonderful contributors. We have so many different strands. Something's you may identify with a really core in visceral level some things you may here and be like. I'm not really sure that I agree with that. But the more you reflect on it and think about it sometimes there's some value in those ought alternative perspectives as well and that's what we try. Hard to prevent present not prevent represents yes right on one of the big debates the moments and I think he's a very understandable. One is that there is this debate between the economy between economy on the equity markets. The equity market is no the economy it can reflect the economy. But it's not the economy is not just the SNP. People often thing the mock is is is they ask people to think that the equity market is the Nasdaq and the S&P but was global equity markets as well and that's very very different way to the US equity market so there's all different some games at play and maybe global equity markets instead another emerging markets reflect true underlying economists much much better than maybe the SNP reflects the underlying US economy. And I think we go separate those at and you can be completely right or wrong and completely raw wrong rights on the other and you can have two completely different views the economy. That is the question I keep all posing. Don't have the altitude but could I potentially see a depression in the US economy yes could I potentially see the SNP hit? Four thousand was the. Us Isn't a depression. Yes is the equity market trading on corporate and economic fundamentals no and it has not been trading on those fundamentals four while some somebody would argue never trades on fundamentals. What it used to be. It was policed by insecurity active manages who were using fundamentals as the basis for investing buying body. Expense his stalks. That what was we get? Those periods like two thousand two thousand and one where valuations become bubbling. Everybody GETS SWEPT UP Japan. Nine thousand nine hundred nine but overall. I don't think that you know the amount of time that the an equity index is in line with fundamentals is very very rare. And I think what's happened more recently? However is that fundamental have been almost relative because we've seen manages hemorrhaging cash so the policing Laden only done basically gone by the wayside because up until two or three months ago money was coming in. Money was following rules based systems like risk parity and that just pulled them all in some ways is enormous but also without any forethought for valuation at other factors at play and as a result of that. I think we now in a world where we're GONNA try to account weather. Those fundamentals or lease the fundamental players are going to reassert themselves. Green believes we conceive more concentration into those plays. You don't full evaluation Roger. I think that is the core question that we're looking at right now. We talk about dialogue. We talk about conversation. You've just hit on. What I think is the key to this. When we look at this market in a broader context the question is. How do you reconcile what's happening in the broader economy? We see things here in the United States that are really grim right literally outside my front door versus the relative sort of mild. Sell off that we've seen in. Us Equity Markets. Looking right. Now I think we're down fifteen percent from the all time high in the S. Were up about one one and a half percent on the week. As of midday on Wednesday this doesn't reflect economic frankly carnage that we've seen in the US economy. This really is the key question and this is why the Tony. Greer perspective is so valuable to understand. I wrote the comments yesterday. Look if you want to understand the disconnect that's happening between what we see in markets and what we see in the economy you have to look and think and hear what's coming from the traders who are actually trading. These markets were making these decisions. Who were looking at different price points? Were looking at the tape and saying hey look. I don't really care what the broad picture is. What I'm seeing is demand at this particular level and I'm a buyer and you contrast that against with some of the bigger sort of strategic macroeconomic perspective that we've done it real vision for so long. I think when you put all those things together you've got a really compelling way of viewing the world. Yeah the way I looked at didn't my framework coming into this whole settle ambitions. The frame. None of these were certain days. I said these are the time so you get people who are trying to make money out of his book refinished to show back in early March. I said look I think the sell off will head tools the expiry then on this show in the week. Spry said look. It often happens that we see a significant inflection. Points exploring some comments. I said that again categorically this is something which is you know. You can't fundamentally put your money on this something which you should account for new framework and we're GONNA low the day the first full trading night ultra expiry. Now some people look to kind of saint. He's generalizations and with hindsight backtra. Say say that they actually said these things I didn't. I said as a framework we might see a low around those periods. That's my framework. And now we're going into a training your that point which is okay. We're in the rebound. We get a sixty two percent. Rebound wasn't voting. On the way up. This is on the way down with the Goldens Hall on the way up. They were on the way down full million just today on the way down to inch today on the way up. So you gotta bring all these things in say now consideration where the sixty seven retracing the SNP with through that on the Nasdaq. But we've had a phenomenal injection of capital liquidity from Fed. But that is really. Money is going to find his way into banks. Men Leverage by banks into risk assets into the real economy real economy needs to fiscal. So I'm looking at both a mattress viewpoints fiscal but a trading viewpoints. And as I said before if they pay break sixty percent than I have to start thinking very very aggressively whether central banks themselves with. It's he can push through the all-time highs thousand was the real economy as as indicated by Bob Deals and by emerging-market currencies. That's still telling me that the real world is having problems whilst he's wanted to ask some really only five stokes in reality which is significantly up in the Nasdaq Adroit concepts of the equity. I ended the to trade woman. One informs my future expectations. Yeah and that's exactly the point right. You just tied them together. They're perfectly. That's the flip side of the technical versus fundamental strategic versus tactical macro versus trading view. Absolutely you gotTA T- together as I said fundamentals technicals off when I talk about head and shoulders if I hadn't shoulders but there was no fundamental change in the market. I'd be very skeptical about head and shoulders formation and I've seen so many of those fail because it'd been no fundamental difference pricing some amazing head and shoulders reverse had been shoulders whether a fundamental change with Dalian Ling. The Nikai back in two thousand twelve six around two thousand ten. You can see a very very significant. I hadn't shoulders in the ratio of spiders versus EMC Emoji markets at a time when it looked like Dole was trying to break the upside. The fundamental changes with great technical. Backups as well when you can say okay. This looks like it's going to bring us both both doing for myself. Awards a fundamental story. I want to store. I WanNa see volumes in the markets and the S&P blows out through the upside. I will stop thinking about my own Barish arguments. Even though I still think at this stage I'm correct on my. You know this economy Monday giresse significantly for a long period of time but the monkey my surprise me in how is even more disconnected than it has been for the last ten years just finishing that remedies lost ten years. We saw almost no instructs most of that period we still GDP rose but most of Nema can't running from six six six in two thousand nine to thirty four hundred The beginning of this year. That is an amazing Megan and equity market while the underlying fundamentals really justified. Yeah and that's extremely well said and the only thing that I have to add to that is look. The complexity of this conversation has to mirror the complexity that we see in the real world. We deal with. We look at markets when we when we follow the we follow the news flow we see complexity ambiguity and frankly contradictory statements all the time for markets from policymakers from new stories. And how we stitch all of that together and how we try and find and explore and have this conversation to understand what's happening in markets to build that framework. I think the critical of what we hear religion. Yeah absolutely and and it's a fascinating is amazing mosaic of there's so much to try Try to take this voice I plagiarize I try and read as many people that are trying to play. Plagiarize other people's frameworks together. You know the classic. What is Bryan Johnson? Zone milkshake elements completely agree with these other elements. That don't agreement on. I take it on board trying to myself based on my own requires risk profile my age. And that's how you might trading investing based on that somebody can be sure to that has a one year to ultimate ten year view because the military towards your time. Yup exactly so. We've been very Meta here today. What else are you looking? Tactically in terms of news flop will you so going back demarcus? An essence what we've been talking about is that receive the Nasdaq doing well. But it's the banks the key disappointing on the one hand so today when I looked to the small we sort of flashy sunny up on the NASDAQ DOWN. Opposites leading on Knx. Similar amount down on the European banks. European banks haven't even managed to bounce city. Send something that goes. Twenty three percent the S. in the US. They balanced the buying all still integral to global economy. An in some ways. If you WANNA look actimel can worry about think about which equity market signals telling you about the real economy Amazon because that is a content sites who I spoke to a few weeks ago. They said that basically Amazon is a macro stocks a metrics on the Bengals but the dying saw similarly with certain emerging-market currencies and emerging markets. Once again if you look at the ratio the SNP facility Market yes impedes making mutual time high. So new new high for this movie which hasn't been in place for ten years bowdoin sort of things. I look at my signals. Sorta ignoring the pay the Nasdaq. Because I do think that that separate base. But outside of that banks your your maturity we'll talk about emerging emerging-market currencies in collecting collection the J. P. Morgan index the dollar index. All these are saying look. There's still some serious problems even as we talk about coming out right before we move on to do. We have so much to cover. Could you talk a little bit about your view of the distinction between the momentum that we see in the SNP the momentum that we see in Nasdaq will the momentum is really kind of a bit of both because one of the tall stalks in the pace? Find Big names technique. They I think the twenty three percents things all the time so the top five now is bigger than it's ever been driving the Nasdaq as well. So this is basically a fly stock story. But I think there's something like if you take out if you take the stocks out the rest of the SNP twenty eight percent Down Thirteen the difference. Being those fly stopped so again. It's it's how you look at this when we talk about the equities doing well we had talk about equities doing well or five doing well because it's difficult to interpret bats as a signal for the economy. You look at these other things. So emerging market affects said before emerging market bonds these things which are not being distorted by particularly US equity the kind of freely floating and they're giving different signals now. They're still doing better than they were telling me. The economy has recovered in a dramatic way. Is telling me that? There's still a very very large headman out there. Yeah you know to pick up on a point that you made earlier in in his piece the question that I have about the five stocks and we all know the Fang stocks that we're talking about here the big tech stocks The question that I have is is that a momentum play is that just a sort of bubbalicious a trend following play or does that represent something that looks more like a perspective shift a paradigm shift in the US economy that investors are betting that Google model for the way. The economy is going to work. his going to be something that's going to be bigger stronger and higher growth perspective by potential rather than what we've seen in brick and mortar. Yes I think what we're seeing here is. Twofold is wrong. The Fed did coming with courtesy to hold the show on the downside. Now the rebound willow trailing the rebound the same time we have seen a concentration and an acceleration of the old trends. Bricks and mortar was always under pressure going downhill and eventually with seen the mood. That we're seeing seeing here is a four. You move in three or four weeks and if that concentration is taking place now the other thing to think about with these this before it's not happened yet. Is that normally? When you see these sorts of news and was in a ban get you see the winner's getting sold as well and they were so but knowles in the way that I would have expected in fact when you looked at Chichi Sharon standing. That's you know the open interest effectively on the increasing three most of the settle which is quite remarkable. Some money was concentrating in today's but what we look here. Is this sort of fundamental story for these stokes winning market because the fundamental story for people who only stokes if my balance sheet is in pad some near sometime in the future needs raise cash in the same way that we saw people selling goal which has been one of the winners of this whole kind of scenario people eventually settled win is like Amazon if they need to raise capital so we had. We don't just think about a balance sheets of Amazon. We have to think about the balance sheets of the people who analysis that's impaired over the next five six months people will have to sell them as an eventually to rake Spanish so once again. It's technical story. It's a fundamental story. There momentum plays end as Marc Andreessen famously said software is eating the world yet trends. They're they're going to be in place. Full a significant period of time. But that doesn't mean it should be a way to the outside this. There's a limit I think there's a limit on the the cash that is you're gonNA concentrates into these names. Because cash is in the balance sheet has been driving that caches impact pension fund balance sheets. Pensions balance sheets themselves. Individual balance-sheets at other cooper ban sheets which affects me paying the wings. The people buying these goods and eventually you're going to see these impediment. Amazon has right down. Four billion in order to offset the cost all the current ivars himself now in that same time they've been buying market share because it'd been building facilities to make sure they take advantage but but if everybody who's using these companies he's going to suffer and economic slowdown that. I think he's coming will be directing eating for those you know. There's also the question about you know the extent to which Mr Bezos is using that to build out infrastructure Four Amazon that is going to further impair mainstream the ability of brick and mortar businesses to to function. Yeah look the other thing is GonNa Command to this again. Mentioned this before. But these are the cash rich companies in a world where we're going to be cashing. Pat Is not a stretch to think of. These companies are going to have to be taxed in the future. When will list the dust settle so catch the cash balances these companies tab will be in the? Cross has held governments. Which then probably means. These guys won't get rid of the cash. Balances might may rushing through early into some. Some emanate which effectively dilutes the model of buys Malkin shed a buys monkey showed companies which knows efficient so again the will be gravitational limitations on the ability of these companies generates unlimited cash. Yeah and to shift gears a little bit. Here's something different You know one of the reasons that I'm so glad you're on the show. Today is one of the things that I've been watching Is The story I here in the US? That I've been joking with my American friends. Think of visit. It's just ambien but is absolutely crucial story. Because I think it's at the very heart of the European project itself there's a a German Federal Bank ruling About Ecb review to analyze whether the bond buying program that these UB's engage in has has met various requirements. It's all very technical very legal. I think a lot of people's eyes glaze over when they read this story but to me. It's something that seems incredibly important to understanding what the frankly viability of the European project might be or what the risks the viability of the European project by did not to put such a pessimistic to on it. What are you're thinking about Roger? And can you help US UNDERSTAND FROM THE EUROPEAN PERSPECTIVE? Why the story could be so significant so gonNA sneak in very much. Generalizations hit because there is a lot of legal speech and all of this but basically what it really has been driven by that the ACP can bygones combined balls troll every country in years old on the. Have these things called Castle keys which is basically you can buy to get will take thirty three percents all others so you get to limits and break. That's about a year and a half ago. They're getting close to the limits and remember drought and he said you know we can have unlimited bone by people say the capital keys. But what he really meant was yes but if easily just print some prints and guy says ball off the bond off the bone Delta bonds and increase his bones out in circulation by one hundred percent than with your fixtures and lint. You can still buy balls now. We'll they're really saying currently with this whole discussion from the German Colt is saying all you'll capsule keys because what you're doing right now. Mr. ECB is you're buying nine billion for me too but only one billion from Germany. So you're buying too many Italian bones to help Italy you'll know buying him in the right measure and therefore you cannot do this. I didn't deny took now. I think the reality of this is that they've been doing it for a long time. It's this is folk cases been rumbling on Gregory longtime will with the idea of whether the Fed by equities fudge. They're always trying to fudge it and the be the Bundles Bank. Jovan calls will fudge. Both Syria here is that if the German court is above a European code of Justice which theoretically it should be but people in most countries and say well actually we will but if it is than does not bring the whole concept of Europe. Surely D. C. J. D. European quota justice should be the highest form of the little within the euro zone. And that's being challenged right now. But he's been challenged before. Deutsche Bank in two thousand sixteen seventeen there was a sieve luck scenario and we'll go pretty excited because nothing else going on and then it happened and nothing happened same again today. Why weren't feeling is when you're going through a crisis light today to fudge it again because you don't want to add any extra paints this current environment so I think there's of a stolen NC Cup. Today this will never go away. This will be trevor within the European Union or at least the year is. Yeah it feels like a pub. That's got a strict to pint per patron limit. But if you walk out the door and spend sixty seconds on the sidewalk and then walk back in your new patron. Yeah and they will try to do. Here is is obviously Italy. Desperate for this mutualisation and the the frugal full. He'd let the Netherlands in Germany. Desperate not to effectively ultimately found the pensions of people in the rest of Europe. Ultimately about you think about your you had Franz wanted to reduce pensionable age at the same time the whole and increasing. Is You gotTa have the same pensionable age? Got To have pretty much the same tax system throughout the whole of the euro-zone if you're going to mutualise death brings you to do that. But in time of crisis like today place like it today in Spain desperately needs some help which means you're gonNA have to break. Some of the rigid rule will always be Sodhi countries with different requirements. Such a counter consensus is almost impossible. Unless you get to that point extreme pain as twenty thousand twelve. Where affects goes? Okay Ya. We'll let it go this time. We're not quite there. I think and if anything because in the commandments of pain in the moments we're actually seeing these arguments coming service if we go back into extreme pain over the next few weeks again. Yeah you know to get out. Pick up on the point of pain. Someone who's washing this a very high level from the opposite side of the Atlantic. Obviously you know the feeling that I get is places in in Europe right now. Italy and Spain especially that have experienced a lot of pain. A lot of real human hardship right with this virus has been very difficult and you have countries in northern Europe fared better in terms of the actual impact of the virus itself. But in those places there's still a lot of collective fear and if you're if you're a relatively wealthy economy the fear is going to be in the form of not wanting to subsidize some what's might be perceived as another country's problems but when you put these two things together Roger You have you have people who are not human level of felt inexperienced a lot of pain you have people on the other side in places like Germany and the Netherlands Reeling Zion about the fiscal situation. It seems to me that the procedural issues notwithstanding pug metaphors and all of that you have something that philosophically starts to feel like a real problem. It's I mean in some ways it's been back to ten years and we'll talk to this because of the UK has left or should be leaving at the end of this year. You can no longer paying the budget. So all the countries that would be subsidizing. The with subsidize subsidize could great extent which is adding to the hangs so the whole combat whole attritional lack of political cohesion. That has been the coaling cod of Europe. In in many ways over the last ten years is back at play and the way that these kind of the Germans and the Dutch might be looking at this thinking okay. It's not just about the pain today in some of the things that we've been talking about with this whole experience right now. It's just a pain today as paying next year in ten years Ford and you still about that and there is no simple fix that and just subsidizing one region one specific region. It's not actually going to fix things over the long term structural changes needs to be made both psychologically in northern Europe but also at the government level in a lot of southern Europe and structural changes are made. It's going to be very very hard for all to come together right. You've such an important and unique perspective. Having worked at a German Bank for so many years so Roger. What are you going to be looking for as this begins to unfold to get a sense of what's happening and how concern we should be mentioned afford some Bt Pay Spreads Airways so that early warning system and they didn't wiping out a little bit but not as were. This crisis cheats off the nowhere near as bad as they were in two thousand twelve but if going to come to an agreement and at the moment you Toronto bombs have been put on the sideburn. We're not talking about a half trillion rescue fund. But he's still gonna be with you know it's GonNa be loans with penal criteria on it. You look at those bond yields the spreads styles whitening ads again. And you start to get worried. I'm the euros a little bit of a tricky one because most people look at Europe and goat. It's about case but it goes down to okay if you sold. The Euro is going to disintegrate does disintegrates into being a euro for the Southern Countries Casey or should be lot lower or you're a newlyn countries which gets it should be higher and no ray knows and independence Do you get will depend on your view. Europe and as a result the euro is. That's been remarkably. Well behaved truth particularly the crisis. The two thousand twelve so. It's very very hard so euros. Not that ideal spreads the best thing on the banks of said before the banks all an absolute horror show in Europe. The lack of bounds tells you all you need to know these are gonNA get nationalized. The debts have never been the decimate have been sold. I would not going to see a flow problem of liquidity problems to true sold Z. Problems within Europe and is probably going to happen next year. Any particular countries banking system. That you're especially worried about or that you're following more closely than others now. Say He's always had. The problem is had appropriate for a long time. Unfortunately I think the one the one that really matches mount aways Jimmy Jimmy because Jimmy has been stateless full fold Fiscal austerity but if the Jenner banks off coming to the point where the non-performing loans are so significantly greater than their equity and they probably will take five percent number flowing loan in Colino gone recession. That's three times your equity on they need nationalizing quite hawks agenda to nationalize its banks but pretty need to do that. And then say but you know allowed to do that in Spain. And that's the point where Jimmy would have to go okay. We're all in this together to hold off on that for as long as they can. But that's why I think Jim and the ones that we really have to think about worry about because German banks that could give us a clue to whether Europe would thank you. Say Okay. We'll together. So what is your problem? I wish you luck when it's my problem. Were on this together. The classic the Classic Indeed Deep far-ranging Conversation Roger. Any other points that you'd like to bring out. I think the interesting one is the oil market. Because now with the value. Hindsight's all that excitement around the Max. Barring the June expiry is going to be coming up in mid May but it does look like mostly excesses that we saw downside in the market was to do with firstly the exploring being physical delivered because remember the big negative news gray low voting in the May contract but also then we saw the implode to roll from the front months to second third month and then we commodity in see rolling first to second and so I think that in some ways you see. That bus is night behind his technical story. But the rebound the we've seen in oil so fall again is a technical rebound from being oversold. I still think that we sat in a fifteen twenty five range on. Wti maybe slightly higher on Brent because it has less issues around its expiry and oil. I think is an oil. Is that real world acid but if we into recession wanting I would agree with Tony's into recession. You want to have the oil stocks because they had full in both lost team big recession solo fairly than in a recession. Everything else sells light. Yogi Nasdaq stokes which already priced in the slowdown in the real economy? Be Now people take money out to the winners and so those oil companies. I'm looking there. In fact we had a battle a religion of here in London and terrorists took about a month. Ago is out to the next quarter so this will slightly off side. But I've got my money so from European sovereignty to Adam macro perspective from the BBC. Back Down to oil and print of the tape. It seems Kinda go all over the place but he reality Wilbur. There's so many things that are connected and yet they're all connected these roll the macro stores. They're all coming out from the underlying Jalousie. But it's been in this global economy global risk acids for very long time so a bit of disconnect but at the same time I think the underlying stores are all adding these things. Intermingling them together. And that's what makes the conversation interesting. Absolutely Roger Thanks for joining us. Greek see again

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