Jeff Mayberry and Sam Lau spend the Friday before Thanksgiving recapping the continued weak path for energy in the markets and reviewing a light load of macro data for the week of Nov. 15-19. Sam cites speculation about tapping the Strategic Petroleum Reserve, discussed in last week’s episode*, as detracting from portions of the energy sector (2:38). Bitcoin, up about 100% on the year, was down for the week as a possible precursor to the crypto bounce that has come during holiday seasons (7:20).
For the Question of the Week (14:07), Jeff and Sam break down the concept of financial repression, an intimidating moniker for a negative-real-yield scenario that functions as a tax on savers to the benefit of borrowers, particularly the government. Their deep dive includes discussion of the impact of such an investment environment (20:06) and coverage of some sectors that could provide positive returns (26:20), including a trio of previous QotW topics**: preferred stocks, closed-end funds and bank loans.
Jeff and Sam close the podcast by turning to the week ahead (31:39), including whether Jerome H. Powell will be enjoying Thanksgiving as the reappointed chair of the Federal Reserve or if he will be unseated by Lael Brainard (36:50). Betting markets favored Powell at about 60-40 at the end of the week. This episode was recorded Nov. 19, 2021.
*MMM Episode 41: Broad, Sticky Inflation and the Not-So “Strategic” Petroleum Reserve
**Questions of the Week
Episode 26 Preferred Stocks
Episode 28 Closed-End Funds
Episode 38 Bank Loans
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