GestaltU with Alfonso Peccatiello on the Timing and Magnitude of Recession
Alfonso – also known as MacroAlf – joined Adam and Mike to discuss his most recent report entitled “Yes, But When Recession?” Our conversation covered: Alf’s experience managing a $20B multi-asset book at a global bank Experience launching an independent macro newsletter for greater freedom of views Benefits of interacting with central bankers, regulators and senior officials at the bank Currently focused on recession – when and how bad will it be? Economic, social and market impacts of recessions How recession might change the Fed’s reaction function Powell and other central bankers questioning the benefits of QE and whether Fed may have a different reaction function this time Exploring the pros and cons of QE Why banks lend, and why they didn’t want to lend over the past decade of QE? Powell’s focus on Volcker and implications for policy trajectory Expectations for a second leg down and the 2000 – 2002 analog What happens in bear markets after Fed pivots? Prospects for a longer, grinding bear market Impact of high returns on cash competing with low returns on real estate and other risk assets Character of stock market bottoms in a cyclical downturn Market indicators of recession and inflation risk using Alf’s Volatility Adjusted Market Dashboard Negative credit impulse signaling recession in Q2 2023 Impact of rate of change vs level of credit given enormous surge in bank reserves in 2020 Leading indicators suggesting recession in late Q2 2023 Housing market and Sahm Rule implying recession in Q2 2023 Expectations for returns on stocks, bonds and other assets over the next several years *ReSolve Global Inc. refers to ReSolve Asset Management SEZC (Cayman) which is registered with the Commodity Futures Trading Commission as a commodity trading advisor and commodity pool operator. This registration is administered through the National Futures Association (“NFA”). Further, ReSolve Global Inc. is a registered person with the Cayman Islands Monetary Authority.