The Ledger, every show

“I think if Europe hadn't followed such a boneheaded energy policy, perhaps Russia wouldn't have invaded Ukraine.”

“We saw this kind of discrepancy during COVID, and it took the economies a year to get back on their footing. This time, it's going to be just as bad. I don't see how the economy doesn't grind to a standstill. These strict discrepancies are going to be very uni…”

“This, I think, will end up being the negotiations with China. China, you get out of the Americas, and we'll get out of Asia. That is a trade that Xi Jinping will be very happy to make.”

“China doesn't need a devaluation. China's problem is first and foremost that consumer and business confidence has been crushed.”

“We also know that when China enters the room, profits walk out, so there's not going to be any profit in AI forever.”

“The whole lockdown thing made a couple of problems that are inherent to the US and to the US labor force worse, most notably obesity, which prevents a lot of people from holding the type of manufacturing jobs where you have to be sitting up and doing a lot of …”

“As the energy price goes up, Europe will go bust. The only question is at what price?”

“I think we're living through the end of the year of US exceptionalism. After a 15 year standing run, the US dollar is now rolled over. I think most people's portfolio is on position for a world of weaker dollar, and one where growth outside of the US is going …”

“Now the U.S. Is doing fiscal consolidation just as China and Europe step on the fiscal accelerator.”

“That leaves me, actually, super bullish to Latin America. It was very interesting that in these tariffs, Latin America was completely spared. Not only did they get a blanket 10%, but pretty much everything they export, whether copper, silver, lithium, et ceter…”

“The one that stands out the most to me is Chinese distressed debt. Chinese distressed debt was trading at 50, 60 cents on the dollar. When Russia invaded Ukraine, everybody decided China's uninvestable. Everybody redeemed. There was no markets. This stuff is s…”

“James, I think here we're at a super interesting crossroad where if in the next six months China does devalue the renminbi, it would have been a big policy mistake.”

“Over that same three-year period, against loans and equity markets that are flat to down, the private equity and the private credit managers are nominally up 50%.”

“They've outperformed so much that the rebalancing that you're going to see in every pension fund, in every endowment, away from these strategies back towards listed equities or back towards, frankly, just bonds, it should be relentless.”

“Today, if you're a young aspiring money manager, you should be launching an equity fund, you should be launching an EM fund, and even if you're doing it with very little money, that's the trade for the next 10 years. That's where the capital is going to go, be…”

“The second half of this year and the first half of next year, the rollovers are gargantuan. At its time, when the appetite of foreigners for US dollar assets It's going to be very, very limited. Selling bonds in a weakening currency is very hard. Spreads are a…”

“My fear is that over the past 10 years, private banks all around the world, private banks in Europe, in Asia, in America, Have made a lot of money selling structured products to private clients that essentially the clients where it's selling vault. They sold p…”

“So actually the total capital losses this time around are bigger than they were in 2008. Cause in 2008, if you had a diversified portfolio, you took your licks on your equities, but your bonds came through.”

“And then the other thing, of course, is the outperformance of energy. When I talk to people about it, they're like, oh yeah, I can't do anything about that. Can't invest. Which tells me great news. It's got lots of room to grow.”

“The new two anti-fragile assets are one energy and the other is emerging market bonds.”

“This is the first Fed tightening cycle in my lifetime where emerging market bonds are crushing U.S. Treasuries, German bonds, JGBs.”

“I think the next coming years, we're now entering a cycle of revaluation of Asian currencies, revaluation of emerging market bonds relative to those of the Western world. I think it started, and I think very few people are positioned for it.”

“Trying to sell China to US institution or even a European institution today, forget it. It's not going to happen. You're wasting your time.”

“Today's leftists in America are not the leftists from a generation ago. Again, you learn from your father's mistakes. In Latin America, you talk to guys in Chile and in Colombia and in Mexico, they've learned from Chavez. They've learned from Argentina. They d…”

“Now that BHP accepts RMB, what are the odds that China is going to go back to trading in US dollars with RMB? They're not. Instead, China's going to turn to Vale and Rio Tinto and say, your buddies at BHP, they accept RMB, so if you want our business, maybe yo…”

“It basically sounded the death of globalization, which was in my eyes, the main force for the global deflationary forces.”

“There's no doubt we are deglobalizing. The obvious impact is higher inflation. It's higher inflation, it's lower margins, higher structural interest rates, which makes for lower valuations.”

“Or do we go back to management by committee, in which case you massively crank down the level of political risk, and you make things like an invasion of Taiwan very unlikely?”

“On the flip side, if the party comes out and says, okay, Xi Jinping gets another mandate for five years, but in five years' time, he's done, and it'll be these guys who will be in charge in five years, the Chinese markets will rally a lot.”

“This reserve decision could be one of, I think it's the most important financial decision since the unpegging of the US dollar to gold”

“My starting point when I look at the world today is that the biggest comparative advantage the Western world has is the rule of law, is the fact that you can be brown, black, white, Chinese, Indian, it doesn't matter. You can be Hindu, Muslim, Jewish, Christia…”

“From now on, I think emerging markets, people will keep their money in emerging markets, which should make for much stronger currencies, domestic blue markets”

“The most obvious one for me is you're going to have to have the birth of new financial centers, which might be Hong Kong, might be Singapore, might be Dubai, but money will be starting to move away from Western world.”

“If you're, I think, a super rich guy, you probably think, I need to have some assets that are off the grid, for lack of a better word. And there's only two of them, really. It's gold and it's bitcoin.”

“Soon enough, you're going to get a refugee crisis coming in. From North Africa and the Middle East, if only because of soaring food prices and soaring energy prices, and the extremely likely political instability that high food prices and high energy prices te…”

“What I would like to suggest to you is that the era of the momentum investor and the era of the carry trade investor are now done. We've entered the period of the return to the mean investor.”

“And I would say that the sanctions that Russia has been hit by, the struggle that their army has had, if anything, it really highlights to Xi Jinping that the risks are really pretty big. It'd be a hell of a dice to roll to go ahead with this. So in that respe…”

“The odds of that succeeding are probably very low, and the Chinese are trying to be much more relaxed about it.”

“If you're Japan or Korea, you're dependent on the U.S. Security umbrella, you've got U.S. Troops in your territory, you're always going to do whatever deal the U.S. Puts in front of you.”

“Europe has this Damocles sword over its head with the Euro, which pops up every three, four, five years. I don't think it pops up over the next couple years”

“Anybody geared to U.S. Consumption, I think, is going to be struggling.”

“You're also going to get political pressure on all the Canadian pension funds that are massive to repatriate capital and to bring back money from the U.S. You're going to get the same pressure on European pension funds.”

“I think if you look at today, it's pretty obvious that not only are we in a more fools than money phase, we're actually in an outright liquidity crisis because you have a lot of drains on liquidity at the same time.”

“The most obvious and glaring difference is how this year you're losing more money on long bonds than you are on equities.”

“The emerging market outperformance, the outperformance of Brazil, of Mexico, of India, of Indonesia, of Singapore, et cetera, all that is being hidden by China.”

“The only country to ever go bust on its local currency bonds is Russia. In 98 or 99, they basically decided to stiff foreigners because that's how they are.”

“The first is the coming set of corporate earnings are going to be horrible. Your currency going up 20% year on year, that has an impact on earnings.”

“However you cut it, with the rising cost of capital in the US and the rising exchange rate, the ability of US corporates to massage earnings through creative accounting, issuing debt to buy back shares, et cetera, has disappeared.”