The Rise of “Too Big To Fail” In Private Equity

The Rise of “Too Big To Fail” In Private Equity | Carolyn Sissoko & Joseph Wang

Рет қаралды 18,017

Күн бұрын

Carolyn Sissoko, senior lecturer at University of the West of England, joins Forward Guidance alongside Joseph Wang, CIO of Monetary Macro and author at FedGuy.com, to discuss the Federal Reserve’s public acknowledgement that it may cut interest rates in 2024, the collateral supply effect, and the merging of of credit allocation facilities and money markets. Filmed on December 19, 2023.
Today’s interview is brought to you by Sustainable Bitcoin Protocol, an environmental solution for bitcoin. Interested parties can find out more at bit.ly/46gFlgr
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Follow Carolyn Sissoko on Twitter / csissoko
Follow Joseph Wang on Twitter / fedguy12
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Joseph’s latest, “Independent Tracks”: fedguy.com/independent-tracks/
Professor Sissoko’s publications: people.uwe.ac.uk/Person/Carol...
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Timestamps:
00:00 Introduction
00:51 Joseph's Take On The Fed's December FOMC Meeting
09:25 Does Zero Interest Rate Policy Cause Malinvestment And Misallocation of Credit?
15:02 The Rise of "Too Big To Fail"
24:32 Line Separating Bank Lending And Money Markets Has Been "Almost Completely Obliterated"
38:25 Central Bank Digital Currencies (CBDCs) and Stablecoins
40:48 Joseph On Why Fed Quantitative Tightening (QT) Could Continue Even As It Cuts Rates
45:20 Joseph's Views On Bonds
01:02:03 The Collateral Effect
01:17:04 CLOs and Private Equity
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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.

Пікірлер: 103

@BlockworksHQ 6 ай бұрын

Today’s interview is brought to you by Sustainable Bitcoin Protocol, an environmental solution for bitcoin. Interested parties can find out more at bit.ly/46gFlgr

@penderyn8794 6 ай бұрын

Can you hold an in-depth debate on how small companies are being massively harmed by pro corporate monopoly policies

@ralphp.3954 6 ай бұрын

Professor Sissoko, please do more podcasts/videos. This was great.

@ardentenquirer8573 6 ай бұрын

I disagree with her on digital money

@jpok1 6 ай бұрын

Best youtube vid to watch on xmas eve :) thank you Jack

@annakavan1869 6 ай бұрын

Prof Sissoko is a dreamer.

@PolicyFailureIsExpensive 6 ай бұрын

Studying the cold war era of banking - limit legal interest rates banks can give and limit whether the national currency can be used to lend to foreign actors - suggests when regulators place excess rules on banks, the activity desired to be reduced is not eliminated. Instead, the activity seeks a different legal entity or jurisdiction to operate within. These regulations are - in part - some of the root causes of the US dollar's large share of global trade. I anticipate if the speaker's regulations were put in place - limit interest some banks may pay, implement a CBDC with intentionally high government control, restrict what assets banks may own - the result would be capital fleeing from the US towards international banks with friendlier regulations. I do not anticipate this would decrease the prevalence of "too big to fail" financial institutions. I also do not anticipate these changes would be beneficial for asset price discovery or for the stability of retirement plans/assets.

@BigHenFor 6 ай бұрын

I disagree. After the demise of LIBOR, the Fed has more direct control over offshore USD flows through Term SOFR. The Banks in the offshore Eurodollar System no longer control themselves Interest rates for USD denominated loans. And you have to have US Treasuries to get financing. That's a Fed leash on USD interest rates, and they're not letting go of it.

@AllNighterHeider 6 ай бұрын

Controlled is the opposite of free, I'm all about free markets. Time to push accountability, not regulations, and create some free markets

@pluto1of1 6 ай бұрын

As an investing enthusiast, I've kept asides a good sum of capital to invest for financial independence and early retirement, but my concern right now is the market rally being a propaganda. Is this really a good time to buy stocks, or do I wait for crash?

@Adrian_misterblue 6 ай бұрын

First two years I lost money, until I got my sea legs actually by the help of a certified financial planner, my portfolio is well-matched for every season of the market, and recently hit 7-figure after 5 years of subsequent investments. I'm retired and never leaving the mkt.

@okaydamian 6 ай бұрын

@@Adrian_misterblue congrats! the market to me is like a lucrative chess game, incredibly difficult to outperform, it's all about understanding how the world moves, its history and psychology... mind disclosing info of your CFP? i'm quite curious

@Adrian_misterblue 6 ай бұрын

She goes by the name ‘Theresa Leigh Detrick’ I suggest you look her up. To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did.

@kzen848 6 ай бұрын

Our financial ecosystem will soon be just apex predators.

@ConsciousOne369 6 ай бұрын

With one FED to rule them all 😳

@jdean126 6 ай бұрын

Debt disintermediation has had a dramatic effect on leverage as well. The GFC showed us just how difficult it was to deal with bad disintermediated debt.

@AllNighterHeider 6 ай бұрын

I love how classy Joseph is to usher in any co-guest on the show, as well as gifts I have received from him. Great content of character in this man.

@TedNugenTsTankSchool78 6 ай бұрын

All night sausage hider

@AllNighterHeider 6 ай бұрын

@TedNugenTsTankSchool78 I hide my sausage in many woman, glad they told you of my legend

@TedNugenTsTankSchool78 6 ай бұрын

@@AllNighterHeider not likely but glad my sloppy seconds are working out for ya. Enjoy Mr. Wants gifts that spur you to write pausitive reviews for bunk commentary

@AllNighterHeider 6 ай бұрын

@@TedNugenTsTankSchool78 sloppy 2nds with your Mom? You're gross and should be locked up.

@mr.cromwell9472 6 ай бұрын

What a GREAT answer to the CLO question. Carolyn is fantastic, must-repeat-guest.

@1985yf 6 ай бұрын

Good episode. Watching the CLO episode together with this proved to be insightful

@DougSmileyVirgo 6 ай бұрын

Wang is describing a "No Landing" economy in 2024. Inflation will remain sticky and not come down to the Fed's target rate. I'm in the Jim Bianco camp going long short term TIPS.

@drajdew1664 6 ай бұрын

Wang worked for the fed and still working for them secretly.

@mattanderson6672 6 ай бұрын

Brilliant discussion!! Thanks guys!!

@brianjamessoden-ku7ly 6 ай бұрын

Thanks!

@x-bebi8943 6 ай бұрын

thanks

@tactileslut 6 ай бұрын

"Controls on the amounts banks are allowed to pay on deposits." Oh yeah. My big bank 0.02% annual savings dividend is totally the problem.

@rrrfamily565 6 ай бұрын

She's just another woke prof.

@penderyn8794 6 ай бұрын

Low unemployment doesnt mesn good quality jobs or secure jobs......social unrest will bubble up as millions are forced into dead end lives with warehouse work etc

@MusikLirikJohanSayuti 6 ай бұрын

Crypto enthusiast here, and Staxum just joined the ranks of projects that make my heart race. And you can still get in early as a f...

@asknwclips7672 6 ай бұрын

hearing ppl say 'right?' after making a statement is like hearing chalk screeching on a chalk board to me, lol. it's a verbal tick that discloses a weak argument.

@TrasNo-re5yl 6 ай бұрын

I also invested yesterday in Staxum, can´t wait for the launch.

@RichardSKLim 6 ай бұрын

The professor should be heard by policy makers and central bankers.

@0DTEVIXCALLS 6 ай бұрын

She is spitting pure fire the entire time 56:47

@RichardSKLim 6 ай бұрын

Badly run banks big (eg. Credit Suisse) or small must be allowed to fail to allow the efficient functioning of the market based system.

@CalebRogers-ho1bd 6 ай бұрын

Just stumbled upon Staxum, and the excitement is real! This project feels like the secret sauce for some crypto magic.

@rodneytrynor7374 6 ай бұрын

Which is the largest ever syndicated loan? REC closes Largest-ever Syndicated Term Loan by an Indian NBFC with USD 1,175 Million Term Loan. REC Limited, formerly Rural Electrification Corporation Limited, of which Power Finance Corporation Limited is holding company, which in turn is under the ownership of the Ministry of Power, the Government of India

@TripToTrappist1 6 ай бұрын

both guests spitting hot 🔥

@Notrocketscience101 6 ай бұрын

Joseph, has such a great demeanor. He’s terrible at anticipating market moves but nice guy.

@drajdew1664 6 ай бұрын

There was no reason for fed to pivot so hard. It simply shows that fed has been sold out and works only for rich people. Fed has been a complete failure when it comes to inflation as inflation for last 3 year alone has been more than 50 percent. Would fed to address this 50 plus percent inflation problem as well ?

@AllNighterHeider 6 ай бұрын

What pivot, rates haven't dropped. Market participants have pivoted, not the fed

@chrispaul1117 6 ай бұрын

The fed created the problem and now is praised for fixing it. The fed is and was the problem

@drajdew1664 6 ай бұрын

@@AllNighterHeiderpivot is not just rates going down. It also has to do with financial conditions and long term rates. Right now we have loosest financial conditions and rates collapsed. Fed just made it official.

@AllNighterHeider 6 ай бұрын

@drajdew1664 I don't see the fed driving the markets, I see the markets doing what they will and the fed reacting with more influential talk. Market participants seem to be addicted to cheap lending, regardless of the anemic returns, that problem is remedied by trade volume. That typed, I do not claim to have a deep understanding yet. Always learning Merry Christmas

@mitchellbunnell7448 6 ай бұрын

Is KZfaq allowing scam adds now?

@mattgriffiths6488 6 ай бұрын

There is a scam ad featuring Michael Saylor offering to double victims BTC holdings running at the beginning of your podcast.

@jmwSeattle 6 ай бұрын

She doesn’t explain what funding is.

@LyGiang-eq7wt 6 ай бұрын

Forget the crystal ball, my gut feeling says Staxum is gearing up for a crypto rollercoaster ride! Who's ready for the thrill?

@MC-oo4pk 6 ай бұрын

I love this woman

@BigHenFor 6 ай бұрын

She's telling it how it is, straight no chaser.

@lindamckenzie6885 6 ай бұрын

I don’t understand why people say it’s not about the debt but about how we spend the money

@HectorYague 6 ай бұрын

Their argument (and they are right) is that debt in itself is not bad per se, it is just a tool to accelerate investment and productivity. What this professor "forgets" to mention is that 99% of public spending has a negative ROI, meanign that for every dollar the govt goes into debt, the GDP grows less than a dollar. So, if public debt returned a possitive ROI, then a growing debt would not be a problem. As it stands (negative ROI), it definitely is.

@MC-oo4pk 6 ай бұрын

Prof Sissoko is a straight shooter. Circle and USDC should have gone under.

@RichardSKLim 6 ай бұрын

The banks have become big gamblers with free and easy money. They're taking on big market risks, whereas their forte is supposed to be taking good credit risks.

@buyfixrentrepeat1270 6 ай бұрын

I don’t see what this topic is worth worry’s about

@edreeves121 6 ай бұрын

The Saylor ad is a scam.

@edreeves121 6 ай бұрын

Jack Farley, the Jerry Falwell of all things crippletos.

@joshuaburns3167 6 ай бұрын

We went off the gold standard

@matthewmelange 6 ай бұрын

Get over it.

@TheJrole 6 ай бұрын

Top down central planners have no idea how the world works.

@mylescharlesworth7771 6 ай бұрын

I’m glad she was like regulators are allowing and enabling TBTF so what we need is more regulation to regulate the regulation *sigh* 🤦‍♂️ I agreed with what she had to say about allowing these TBTF banks to actually fail the problem is regulators and the political powers that be will never allow that to happen cause economic austerity isn’t politically popular. The barriers she refers to is a hard money standard. It was a naturally occurring Economic force in the 19th century. This crossover between markets is caused by the existence of the federal reserve. F your CBDC (central bank digital control) system lol and then she circles back to Bailouts are ok when she refers to the guild crisis in England and enabling TBTF is ok as long as you sacrifice one of those big firms or some of the smaller guys to the economy gods as an “example”and then bail out the rest. She’s a joke. Political money isn’t actually going to risk calling big business bluff. They’ll continue to act recklessly it’ll just be a race to the bottom where they are trying to be just slightly less reckless than the others so they aren’t the ones sacrificed. My prediction is that inflation will rip when the fed cuts rates cause they think they have it under control but they don’t. 5% is the new r-star they’ll have to hike again and then we’ll have corporate restructure and market collapse when corporate realize they won’t be able to refi like the guest points out they can normally rely on. We’ll see thought, I’m no college educated economist 🤷

@ahmadabada-hp1gq 6 ай бұрын

Fuk trading, get into presales like Staxum, and make 200x in few months.

@sdcaeastcountyfamily 6 ай бұрын

She essentially disagrees with capitalism.

@MoonBerryShrimp 6 ай бұрын

The opposite, she wants to return to capitalism. So much liquidity was injected by low rates, markets aren't allocating capital efficiently anymore. Infinite money destroys price discovery

@HectorYague 6 ай бұрын

@@MoonBerryShrimpagreed. A healthy capitalism needs organic price discovery, and ZIRP killed it.

@MattCRHughes 6 ай бұрын

Is Dr. Sissoko just the credentialed academic version of Jeff Snider? Interesting.

@ashanesubasinha8313 6 ай бұрын

Professor is very smart but not accurate on federal spending. 1.5 trillion goes to Medicare, 1.38 trillion goes to social security, 833 billion goes to defense, 702 billion goes to interest. Where is the so called good spending coming from the government? She got to get her facts right. These mandatory spending only will go higher. Federal income will only go down in the upcoming downturn. Federal spending is going to take all the good money out from the private sector which is the most productive sector in this country.

@jasongrig 6 ай бұрын

too academic topics

@deanswartz5812 6 ай бұрын

Papa Bear Powell made his real wealth in LBOs. Cynical sure, but got to help your friends.

@cletuskasady8016 6 ай бұрын

She lost me at "cbdc would be an incredible tool". A totalitarians wet dream.

@Dandy852 6 ай бұрын

She had to drop Trump s name. Haha. So you are nuts. Either right or left but you are nuts.

@mskmsk7174 6 ай бұрын

Such an informative interview with totally amateur- trashy video of the professor. Inexcusable in this day and age where cheap high quality video gear is everywhere.

@drewfriestedt1832 6 ай бұрын

I’m disappointed your guest was not wearing a mask too.

@sdcaeastcountyfamily 6 ай бұрын

Your academic guest let her politics show to a degree that is unbecoming of this channel.

@yessysee 6 ай бұрын

How do you figure? This was a great technical overview of bank balance sheet dynamics vis the bond market. Because she commented on the IRA and CBDCs without repeating Twitter talking points? This was an economic discussion not a political one.

@TedNugenTsTankSchool78 6 ай бұрын

Everybody on this podcast looks like they need to get some sun and eat a few vitamins. Just an observation. Pleas quit sleeping in your coffins

@HipHopCantSaveMe 6 ай бұрын

I disagree... 5.5% has broken America

@nonexistent5030 6 ай бұрын

I disagree... 0% broke America

@BigHenFor 6 ай бұрын

America was broken before that, lol. The historical return on investment is 4%. In which universe is significantly lower than this sustainable? It was the stupid attempt to rebuild American banks' balance sheets through ZIRP after 2008, instead of letting the greedy take the hit, that drove home the coffin nails. Your government is trying to quietly repair decades of malinvestment because of private sector debt farming and speculation by gambling in the stock market, by trying to rebuild an economy that works for everyone throughout the income distribution. But like junkies, who just want the buzz, begging for more cheap money, the banks and the Pump and Dumpers pay no attention to the real cost of that to the Real Economy, which is to bleed it dry. It's time to go to rehab, and normalise interest rates.

@MC-oo4pk 6 ай бұрын

How?

@AllNighterHeider 6 ай бұрын

Fragile, but not broken IMO

@MC-oo4pk 6 ай бұрын

@@AllNighterHeider higher rates means there is an abundance of risk free assets that can be used to support growth.

@TM-fr7gh 6 ай бұрын

I guess this woman doesn't realize that big banks and corporations are intentionally trying to kill small business. Don't you remember what happened during the pandemic? All small businesses had to close