Odd Lots

In 2018, Columbia history professor Adam Tooze published his magisterial work “Crashed”, which framed the Great Financial Crisis as essentially a crisis of the global dollar system (as opposed to merely a housing bubble). Now we’re experiencing numerous systemic frailties all at the same time, amid extraordinary difficult times for the real economy, the financial system, and virtually every government around the world...

The fate of the economy remains extremely unclear. However there is little doubt that the Fed has taken dramatic steps to arrest the crisis. Not only has Jerome Powell’s Federal Reserve dusted off old tools that were designed during the last crisis, it’s engaged in unconventional actions, such as lending directly to municipal authorities, as well as becoming a player in the market for private sector corporate debt...

With major economies around the world coming to a screeching halt, emerging markets are in a squeeze of historic proportions. Not only are they being buffeted by a domestic health crisis, but export industries are getting clobbered at the same time as access to dollars is drying up. On this episode, we speak with Brad Setser of the Council on Foreign Relations on the historic nature of this episode, which countries are particularly vulnerable, and what policies might allow for a way out.

Commerce and payments are increasingly digital. This shift from physical to electronic is one that governments and businesses are eager to accelerate for a host of reasons...

At the end of March, Congress passed the CARES Act in an attempt to mitigate some of the massive economic devastation being caused by the coronavirus crisis. A key piece of the legislation includes grants for small businesses that keep employees on their payroll during the emergency. On this episode, we speak with Florida Senator Marco Rubio about the program, what's working, what isn't, and what it will take to move the economy back towards full employment. 

With the U.S. economy going into a deep slump, the Federal government has attempted to counteract the pain by increasing spending. But for cities and states, it’s virtually impossible for them to run counter-cyclical fiscal policy. Furthermore, the crisis is draining local coffers due to public health expenditure and the collapse of tax revenue. This has already led to the start of a state and local austerity wave (spending cuts, layoffs, etc.) that could take years to reverse...

Earlier this year on Odd Lots, we did an episode about Korean structured investment products that were sold to retail investors, whose performance was tied to various market indices around the world. Crucially, those payouts were premised on there not being a major crash in those world markets. Obviously, we’ve seen quite the crash. So, for this week’s episode, we’ve gone back to Benn Eifert, the CIO of QVR Advisors, to check out the state of them now...

The commercial real estate market has been clobbered in this crisis, as restaurants and stores virtually shut down entirely throughout the month of March. On this week’s Odd Lots episode, we speak to Tom Barrack, the CEO of Colony Capital, on the crisis facing the industry, and what he feels needs to be done further to prevent the industry from going into a tailspin.

The plumbing of the financial system is coming under strain like never before. On this week’s podcast, we speak with two legendary experts on how the money system works: Zoltan Pozsar of Credit Suisse and Perry Mehrling of the Frederick S. Pardee School of Global Studies. They explain the extreme level of stress we’re seeing, what the Fed has done to alleviate, what more needs to be done, and what the post-crisis future may look like.

In normal times, U.S. Treasuries are the ultimate safe haven. They are highly liquid and guaranteed to pay out. So when people want to hide out during periods of economic and financial market volatility, you can typically count on there being a strong bid for them. But in the last couple of weeks, the volatility has been so extreme, and the flight-to-cash so severe, that the market stopped behaving as normal...