Boom Bust Season 2 Episode 114 Schiff On US Market Risk and Magnus On EM Corporate Debt

Boom Bust season 2 episode 114 focuses on insights from two experts who provide their analysis on two critical issues. The first half of the episode features a discussion with Peter Schiff, the CEO of Euro Pacific Capital, who gives his views on the US market. The second half features a conversation with Marcus Magnus, the Global Head of Fixed Income and FX Strategy at SEB, who shares insights on emerging market corporate debt.

In the first half, Peter Schiff shares his concerns about the US market, highlighting its unsustainable nature. Schiff argues that the Federal Reserve's monetary policy has created a bubble in the market, leading to artificially high stock prices, a weak dollar, and a low-interest-rate environment. Schiff also warns that the US economy is in a recession and argues that the rising number of bankruptcies and job losses could lead to a severe market correction in the near future.

Schiff believes that the only way to avoid this scenario is for the Federal Reserve to change its course and stop propping up the market with cheap money. He calls for the central bank to increase interest rates and start tightening its monetary policy to let the market correct itself.

In the second half of the episode, Marcus Magnus focuses on the emerging market corporate debt. Magnus argues that the pandemic has impacted the corporate debt situation in emerging markets. This is due to both the reduced economic activity and the added pressure of servicing US dollar-denominated debt. Magnus states that corporate debt in emerging markets is at its highest level since 2015, and predicts that it will continue to increase in the near future, as governments and companies try to overcome the challenges of the pandemic.

Magnus explains that this situation creates a risk, especially since some of the emerging markets are dependent on commodity export and tourism, which have been hit hard by the pandemic. He also notes that the situation could worsen if the US dollar continues to appreciate against emerging market currencies.

To mitigate this risk, Magnus recommends that investors should be selective in their investment choices. He suggests that they should focus on companies with strong fundamentals and low default risks, and avoid those that are highly leveraged or with poor credit ratings.

Overall, Boom Bust season 2 episode 114 provides two insightful analyses of critical issues that impact the global economy. Schiff's take on the US market provides a unique perspective on the vulnerability of the world's largest economy, while Magnus' discussion on emerging market corporate debt highlights the challenges faced by companies and governments in these regions. The episode underscores the importance of careful analysis and informed decision-making in the ever-changing global economic landscape.