When a young Charlie Jamieson arrived at work in London on September 11th, 2001, little did he know how much that day would affect his views on markets. At the time, he was trading US Dollar bonds from Merrill Lynch’s London office, having just left the New York office three weeks earlier. It was a harrowing time, but it wouldn’t be the last time that he faced a major catastrophe as an investor, later managing Euro portfolios through the GFC and the Euro Crisis. While many investors would remember the equity sell-offs that followed, these crises were often centred around debt markets. But it’s not just in times of crisis that rates matter. As Charlie explains in the full podcast, rates are the virus that affects all assets...
- The lessons learned from investing through major crises
- What the world would need to look like for Jamie Dimon’s prediction of 5% rates in the USA to come true
- The ‘bondcano’ scenario; the truths and misconceptions that underpin this narrative
- How interest rates affect the prices of all other asset classes
- What the credit cycle is, and where we are in the cycle today
- Why the Australian banks may raise rates ‘out of cycle’ (recorded before Westpac's recent announcement of a 14bps hike)
- What’s changed in markets recently that’s caused commentators to slash the forecasts for rate hikes in Australia
- What is “yield curve flatness” and what is it telling us right now?
Charts & books discussed:
Chart 1: Discussed at ~9 minutes
Source: JCB team analysis, based on data sourced from Bloomberg
Chart 2: Discussed at ~22 minutes
Source: JCB team analysis
Book: Discussed at ~45 mins 30 secs
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Thank you for sharing your knowledge
Looking forward to my weekend podcast, thanks for putting this together Patrick!
Excellent podcast, thank you Patrick & Charlie. You did a terrific job explaining everything in laymans terms. Made it really enjoyable to listen to + I learned a few new things
On the belief that a technical indicator becomes less useful as more people use it, when did the 2 / 10 curve become popular? I don't recall the same emphasis being placed on it leading up to previous recessions.
That was really interesting to listen to, I really enjoyed it. I could have only wished there was be a bit more cover on corporate bonds rather than just treasury bonds.
Thanks for the feedback Ronen. Charlie is a government bond specialist, hence the limited discussion of credit. I'm sure we can have a chat to a credit manager in a future episode.
Great interview, Charlie speaks really well.