Economic Time Bomb: The Silent Threat of Passive Investing Exposed by Michael Green

Join James Connor as he dives deep with Michael Green, Portfolio Manager and Chief Strategist at Simplify Asset Management, into the critical distinctions between passive and active investing and its implications on market signals and the economy. This conversation sheds light on the concerns surrounding the US economy, debt levels, real estate sectors, and the broader global economic landscape. Michael Green offers invaluable insights into how investors can navigate these complex times, emphasizing the importance of understanding the growing influence of passive investing strategies on market dynamics. Discover practical advice for safeguarding your investments and learn why educating yourself on these topics is crucial in today's financial environment.

TIMESTAMPS:
00:33 - The Impact of Passive Investing on Market Signals
04:04 - The Real Picture of the US Economy: Beyond GDP Growth
06:21 - Unemployment Rates and the Housing Affordability Crisis
08:55 - US Federal Debt Levels and Economic Implications
11:31 - The Nvidia Phenomenon: Stock Market Reflections
13:16 - Equity Markets Analysis: Nvidia's Unprecedented Rise
16:37 - Comparing Today's Market Dynamics to the Late 1990s
19:26 - The Future of the S&P and NASDAQ Amidst Economic Concerns
22:49 - The Emerging Banking Crisis: A Look at New York Community Bank
25:57 - Global Economic Concerns: Europe and Asia in Focus
33:34 - The Evolution of Passive vs. Active Management

#passiveinvesting #investing #economicinsights
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[JeniferPetros]

It's crazy how passive investing and all this leverage from bank loans can create false signals, Lately, as I've observed these trends, I find myself rethinking $2m in ETFs alone. The risk of sudden corrections is something I can't ignore anymore

[PenguinWhispererThe]

Always great to have an interview with Mike Green.

[FelixTheCat]

Well I sure hope you can get this man back soon. I have not seen him before, but what a stream of gems coming out of his mouth. Talk about easy to comprehend. The part toward the end about money blindly entering the markets through 401Ks and inflating. Conversely, we have boomers retiring and extracting money and could easily overwhelm the system. I thought of something like a bank run. What if boomers started to get scared of losing their nest eggs due to some geopolitical events and trying to get their money out of their retirement accounts? Look out below when a bunch of people head for the exits at once. Great interview. I always appreciate how you let the guests finish their thoughts.

[kolankprof]

Wow ... very impressive and all from the driver's seat! Thanks for sharing you wisdom, Mike!

[TKEnvironments]

This was a great interview, very enlightening. Really enjoyed how clear Michael Green conveys his thoughts, and he has a really good point about passive investing distorting the markets.

[GazP]

Great chat, really liked the interview.

[scotthodor]

So much great straight talk on a lot of subjects. Really great content. Thanks

[politics]

The vast majority of "Active" managers that charge to manage your money for you do not beat the market average so they have to be very good at making arguments that you should not be passive investor and turn your money over to them. More and more people are learning the truth not to give so much of their earning over to a money manager. Once you account for taxes and inflation they could be getting more than you. Definitely true if the market is flat or goes down.

[floydsgarage]

It took 1.55 in government spending and 2.55 in debt to get $1 of gdp. United States Government debt accounted for 124.2 % of the country's Nominal GDP in Dec 2023, compared with the ratio of 122.9 % in the previous quarter. Credit creation for asset purchases and consumption is unsustainable and leads to inflation

[guy]

Been waiting for this fomo pumped stock and housing market to blow up. I'll keep patiently waiting while buying deep value and incrementally shorting fomo overpriced stocks. Lazy index investing has been great in the last 14 years, but I agree with Mike that it will end badly. Same with overpriced homes. The complacency by most is astounding.

[sirfoulto]

Mike Green is a good guy. Enjoy his analysis.

[caradelatorre]

Not every person want to own a house. I do not if there is actually a good for this but what should U.S. do about it debt and defeit? What I fear is that congress will raise the taxes and low ss payout to precent and future retirees to keep the fund going. also if the governed reduce Medicare and medicare funding that will be the end to medical care for the bulk of retiree and disabled. This at a time where the rate of medical visits and dementia will skyrocket. Most of the dementia case will lead to the kids taking care of their parents because it cost to much to go into long term care.

[erinsweet]

Where can I learn more about the writings Mr. Green did on passive investing?

[robertdagge]

These self-driving cars don't go very fast.

[rd]

Always like listening to Mike Green, great interview. Was surprised to see it at 2am pst but i'm always up this time so that's a good thing.

[wapiti]

Mr. Green is extremely intelligent, especially with regard to economics, investing, and banking. I venture to say that he is underpaid (not knowing, of course, that he might already be earning a 7-figure salary!

[JP-iqpu]

Remember, companies won't pay taxes; we, the consumers, pay for most of their taxes. Yeah, but how much of that margin is reinvested into the company? An improper forecast can happen in any market or for any company.

[michaelbrown]

Mike had some great comments on passive investing and how it is impacting the markets but I cant help but think of Warren Buffett and how he is always recommending to investors to just buy the S&P ETF.

[rickyaz]

Passive indexing got through Covid just fine. Mistake was pulling out and not getting back in. Passive just kept buying, got the rebounds. Staying invested has always been the key, timing is a false hope

[OMG_BeCkY]

If passive index/ETF investing is so dangerous then why is Warren Buffet advising his wife to put 90% of his money into an S&P500 index fund after he dies?