The Bond Market Is Already Broken - Stocks and Housing Are Next | Harley Bassman & Joseph Wang

Today Jack Farley welcomes two financial heavyweights who, in Jack’s view, have predicted and understood this year’s sell-off in bonds more accurately and clearly than anyone else in finance: Harley Bassman, founder of the MOVE Index and managing partner at Simplify Asset Management, and Joseph Wang, former senior trader for the Federal Reserve.

Bassman and Wang agree that it is likely that short-term interest rates are close to peaking, but that long-term bonds remain vulnerable to the triple threats of convexity, illiquidity, and duration.

Wang argues that the illiquidity in the U.K. gilt market might be a harbinger for the other sovereign bond markets around the world (including the U.S. Treasury market), and Bassman shares several parts of fixed-income that he personally finds attractive, such as AA 22-year callable municipal debt and agency mortgage-backed securities. Filmed on October 6th, 2022.
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00:00 Introduction
01:00 Is The Sell-Off In Sovereign Bonds Finally Over?
11:57 Risks in The Stock Market
13:53 When Will Powell Pivot?
18:45 The Housing Market Is Already Broken
20:37 What Will Be The First To Break?
28:08 “Bittrex Ad”
28:42 What Will Be The First To Break?
28:45 How To Hedge Against A Bond Market Sell-Off
34:39 Bullish on High-Rated Long-Term Municipal Bonds
40:31 The Mortgage-Backed Security (MBS) Market
48:12 If Something Breaks, What Will The Fed Do?
52:33 Questions From The Audience
55:29 Recession Risk and Inverted Yield Curves
59:05 Joseph Wang's Take On What Happened In The U.K. Gilt Market
1:02:38 Will Commercial Banks Lose Money?
1:04:21 Reverse Repo Facility
1:05:07 Titanic: Has The Fed Hit An Iceberg?
1:08:17 How High Will The Fed Hike To?
1:09:31 Outro
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Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.

[hamzariazuddin]

I used to watch a lot of Real Vision. But now this is my favourite channel. The guests you get on and the depth that you go into regarding the financial and monetary plumbing is quite incredible. All for free. A lot can be sad about the negative effects of social media and online media companies, but the fact that I can listen into an in depth conversation with these types of experts is just amazing. 20 years I would have had to go to a top bank or investment institution to get to hear these types of conversations.

Keep up the great work. Harley I have not heard from before, but now am a keen listener to his works. Joseph is already one of my favourite guests. His explanation are so simple yet thorough. And Jack you are brilliant at what you do. To keep up with such a high level conversation and push back and ask appropriate questions is up there with the best.

[Xmj]

Jack does a great job of explaining the concepts his guest describe

[guiart]

Hard to find 2 better guests! Good work Jack!

[tiagogferreira]

Really liked the section about municipal bonds, it was more technical than usual, but that kind of stuff is gold when it comes to having asymmetric info.

[greenhills]

One of the best financial interviewers around. Thanks Jack.

[uglahhmane]

Best interview yet Jack. I am extremely impressed with the depth of these topics that remain untouched by the mainstream journalists. Kudos to you and your team.

[humbecarito]

Fantastic show! Best interview in recent memory. Harley, thanks for explaining the levers in your PFIX product, that was very useful.

[JohnTaylor-tswk]

Wow, Harley’s even buying bonds now!
I was early and wrong, but I’m still long and it certainly feels better seeing Harley start to join my side here.

[libertysprings]

Yes, so glad he mentioned muni bonds. I try to explain to people how to buy them on fidelity. I think the problem most people have is after they buy a bond, they don't understand why it shows the value as being less. They try the explain it on fidelity that the value listed is only an estimated for resale but that doesn't mean you're going to lose any money on the bond if it's held until it's called or until maturity. I thinkany people just freak out seeing a low value and end up reselling it at a loss before it matures

[denniskaye]

Excellent Video! Jack is getting better and better as a moderator.

[eyzup]

Good to have Harley front and center, thanks!

[stephencuskley]

Jack, your guests are fantastic, but when it comes to interviewing, buddy, I gotta say that you're....
Equally fantastic!!!

[gregorykemp]

Thanks for the macro discussion on rates and bonds. Jack and Harley thanks for the discussion on the current status of the bond market, very helpful.

[jarrettcarbone]

That pfix product is exactly what I was looking for. Easy way to trade the movement of rates. Great value, thank you!

[Stavros_Steve_Deriziotis]

Jack is the best! Love this show! Appreciate all the content!

[jimmalmstrom]

Go ahead and Bassman right into the Investor Hall of Fame.

[Purnama]

As young as you are your interviews, questions and guests are excellent. Thank🍁you and keep awareness sharp in this swiftly changing times. Don’t take sides. Question everyone and everything. Thank🍁you.

[FrostWnd]

Great work Jack, much better than other ARKK fanbois that keep saying deflation is here forever, Fed is tightening too much, and then all in on ETH pre merge.

[danielwoolman]

So when the fed said in the past that inflation was not here and that it then was short term transitory, was the fed all agreed with that too. If so, what they say now, whether in agreement or not, it doesn’t hold much merit.

[dmiroflsup]

Putting the like in even before watching as I know it will be great!