Jim Bianco: Liquidity Spiral In The Bond Market Is Causing “Tremendous Stress”

Blockworks Macro, Released on 10/3/22 (Recorded on 9/29/22)

00:00 Introduction
00:30 Chaos In the U.K. Government Bond (“Gilt”) Market
08:53 What’s Next To Break?
15:41 What Can Bring Inflation Down (Other Than A Global Recession)?
19:18 The Stress On Banks Is Tremendous”
22:02 Bittrex ad
22:37 The Stress On Banks Is Tremendous”
33:46 Are Bonds Attractive At These Levels?
36:56 Bianco’s Outlook on Stocks
38:47 I’m Going To Channel My Inner Zoltan Pozsar Here”
51:05 Why Working From Home Is A Permanent Trend
57:09 Closing Thoughts On The Labor Market and The Fed
1:02:14 Asset Allocation in Stocks, Bonds, and Crypto
1:04:49 Outro

Jim Bianco is President and Macro Strategist at Bianco Research, L.L.C. Since 1990 Jim’s commentaries have offered a unique perspective on the global economy and financial markets. Unencumbered by the biases of traditional Wall Street research, Jim has built a decades long reputation for objective, incisive commentary that challenges consensus thinking. In nearly 20 years at Bianco Research, Jim’s wide ranging commentaries have addressed monetary policy, the intersection of markets and politics, the role of government in the economy, fund flows and positioning in financial markets. Prior to joining Arbor and Bianco Research, Jim was a Market Strategist in equity and fixed income research at UBS Securities and Equity Technical Analyst at First Boston and Shearson Lehman Brothers. He is a Chartered Market Technician (CMT) and a member of the Market Technicians Association (MTA). Jim has a Bachelor of Science degree in Finance from Marquette University (1984) and an MBA from Fordham University (1989).

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Karl Graz

Jim, if the Fed continues to raise interest rates as you seem to believe it will, and the economy goes into a severe recession as a result, as I believe it will, this will probably result in massive layoffs and employees may soon find that going to an office is a small price to pay in order to have a job. At that point the “I’m working from home today” era will come to an abrupt end.

In my profession I could have worked from home twenty five years ago but chose not too. Too many potential distractions, no feedback regarding my design decisions and just plain boring. Aside from the absence of a commute, I really don’t see the attraction. Maybe employers will one day begin to adjust downward the salaries of “at home workers” since they no longer have to pay for the cost of a commute. I can actually see that happening if resistance to working in an office continues.

I think Elon Musk said it best when he told his employees who were unwilling to come back to the office to “go somewhere else and pretend to work there”. Like him or not, that was one great line!