Mike Green: Passive Stock Market Edifice Put To The Test As Recession A Near Certainty

Forward Guidance

Forward Guidance is sponsored by VanEck. Learn more about the VanEck Morningstar Wide MOAT ETF (MOAT) at https://vaneck.com/MOATFG.

This interview was recorded at 10am ET on Friday, August 2. The jobs report, which was released 90 minutes prior at 8:30am ET, showed the unemployment rate move non-linearly up from 4.1% to 4.3%, and the stock market fell sharply and short-term interest rate futures market priced in a high likelihood of the Federal Reserve doing a DOUBLE (50 bps) cut by its September meeting. The Fed Funds pricing changed throughout our interview and Jack references that in the conversation.

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YouTube video on Canadian market bubble and Nortel Networks: https://www.youtube.com/watch?v=I6xwMIUPHss&t=2219s&ab_channel=BobbyBroccoli

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Timestamps:

(00:00) Introduction

(00:13) Stock Market Pukes In Reaction To Horrible Jobs Report

(05:45) Is The U.S. In A Recession Now?

(06:01) How Passive Investing Has Driven The Stock Market Higher

(28:35) VanEck Ad

(29:15) Passive Flows In The Context Of Other Market Forces

(32:25) Has Passive Investing Boosted Valuations of The Biggest Companies?

(42:25) Will The Same Passive Forces That Boosted The Market Higher Work In Reverse Now That The Market Is Declining?

(48:40) Permissionless Ad

(49:39) If Passive Is A Bubble, It Can Get A Whole Lot Bigger

(53:16) SPAC Flows Are No More

(01:16:52) Soros-like Reflexivity of High Stock Prices

(01:18:49) Mike's Views On Ongoing "Market Hiccup"

(01:34:00) Mike's Closing Thoughts on Private Credit

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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.