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Resolve's Gestalt University

Nov 29, 2022

Alfonso – also known as MacroAlf – joined Adam and Mike to discuss his most recent report entitled “Yes, But When Recession?” Our conversation covered:

  • Alf’s experience managing a $20B multi-asset book at a global bank
  • Experience launching an independent macro newsletter for greater freedom of views
  • Benefits of interacting with central bankers, regulators and senior officials at the bank
  • Currently focused on recession – when and how bad will it be?
  • Economic, social and market impacts of recessions
  • How recession might change the Fed’s reaction function
  • Powell and other central bankers questioning the benefits of QE and whether Fed may have a different reaction function this time
  • Exploring the pros and cons of QE
  • Why banks lend, and why they didn’t want to lend over the past decade of QE?
  • Powell’s focus on Volcker and implications for policy trajectory
  • Expectations for a second leg down and the 2000 – 2002 analog
  • What happens in bear markets after Fed pivots?
  • Prospects for a longer, grinding bear market
  • Impact of high returns on cash competing with low returns on real estate and other risk assets
  • Character of stock market bottoms in a cyclical downturn
  • Market indicators of recession and inflation risk using Alf’s Volatility Adjusted Market Dashboard
  • Negative credit impulse signaling recession in Q2 2023
  • Impact of rate of change vs level of credit given enormous surge in bank reserves in 2020
  • Leading indicators suggesting recession in late Q2 2023
  • Housing market and Sahm Rule implying recession in Q2 2023
  • Expectations for returns on stocks, bonds and other assets over the next several years

*ReSolve Global Inc. refers to ReSolve Asset Management SEZC (Cayman) which is registered with the Commodity Futures Trading Commission as a commodity trading advisor and commodity pool operator. This registration is administered through the National Futures Association (“NFA”). Further, ReSolve Global Inc. is a registered person with the Cayman Islands Monetary Authority.