🔴The Weakest Links in the Economic Cycle (w/ Mohamed El-Erian) | Real Vision Classics

[Music] Mohamed el-erian pleasure to have you with us thank you Larry that a fan for the longest time and the other way around and you inspired me when I wrote a colossal failure common sense because I think your book was the first one out on the financial crisis definitely you were more proactive than most authors that try to write the books after the after the facts and a job well done there thank you but most inspiring is when you're live phone ringing how do you make it from the highest levels of academics to the buy-side I mean that transition it's just fascinating because as we see with the Fed and a lot of these economists around the world a lot of them get stuck in neck anemia so the big secret is none of this was planned okay none of it was planned I was doing my PhD in England and I was gonna be an academic and then my father passed away suddenly my mother had never worked my sister was seven years old so the issue became who pays a PhD economist and at the time there were only really two organizations that did the IMF in the war back so I ended up at the IMF in Washington DC for 15 years had the time of my life it was incredible exposure to policymaking I was turning 40 I had never tried the private sector I thought I better tried now before human capital disappears completely and the IMF had this wonderful program where you could leave for two years and come back at the same level so basically with free move so but wasn't there's still some comfort you know a comfort zone there or is it really there was but it was also a sort of Drive you better get to know how to private sector work so I went to Salomon now if you want a shock go from a bureaucracy in Washington Wow - Salomon about what was a big break to get into zone so I I literally went to the emerging market research team okay and they they offered me a job to head that nine months into that I get a phone call maja hunters saying there's this very large investment management firm in the west coast they've identified 20 people for the e/m team they're looking for one would you like to go and I thought wait they're gonna fly me to California I've never been to California and I went and I met the smartest people that I had ever come across and we had I had a series of interviews and I remember being told we're gonna hire you for a portfolio management team and I said but I've never traded a bond in my life and they said we can teach you that that's not more we hire you so they help the transition so it went from academia policy the sell-side yeah to the buy-side but none of it was planned it was all a series of good fortune all along so you make it you make the move from academia to the buy-side which is the asset management side now you're at the highest level of asset management and the difference in terms of your daily routine the inspiration did you find it was a little bit tougher bar each day to hang with that crowd in terms of you know daily inspiration and and and I guess achieving alpha yeah a lot of it and and for two reasons one is at PIMCO the people that were in the room were the smartest people I had ever met in fact I've ever met so far I haven't met a group of smarter people and more driven people than people so you and in completely different environment and the second is that you judged every single day by the markets and if it's not going your way which as you know happens you've got to figure out why is it a question of time did I get something wrong so you can't just rest every single day you're being questioned and even if it good is going in your way you have to think well has it gone as far as it will go so it was it was quite a shock to the system but something that I really enjoyed and I was very lucky to be at PIMCO when I was and as a Lehman one of them is the most impressive investors that I've ever met and worked with was Mike galbanum who now runs Exodus Point and Mike used to come by the desk and he's to say you'd look at your position it's stare in the face and say are you long because you like it or do you like it because you're long it is amazing how many people end up in the second bucket yes right and we always used to say if we didn't have to trade on we put it on now and we would try to question that my I tell you I've had lots of major events that have changed my life one was my first day at Salomon so I come with a research Griffin policy driven approach and my boss is a 24 year old trader and I wrote about this in the book and he tells me look I want you to understand all days when I listen to you and the other days if you come anywhere near me I'll shoot you and the difference is that sometimes the market trades on fundamentals sometimes it trades on technicals and I don't want to see your face when the marketer trades on technicals and that for me was this sort of early indication that I better figure out what those technicals are otherwise I'm going to be relevant for just part of the time so it was a really important way of understanding a broader point which is while we like to specialize in one of four circles either the academic side of it or a policy side of it or the market side of it or the political side of it that's not where the world solves the world solves at the intersection of all four and you've got to realize that most people specialize in one of the four or two of of the four but if you are gonna serve your clients you better understand how they intersect so now we're looking at the world today in different markets and thinking about your book and I'm thinking about Canada because you have a highly leveraged consumer income relative to debt levels you have housing sales which are falling at a very you know they say as they say but real estate sales lead prices so if you have very steep declines in sales typically a year from now you'll have problems on the pricing side and then you have a central banker mr. Poulos that has been last year and a half aggressively hiking into a leveraged consumer how do you look at Canada relative the us now and do you think there's a a 2007 ruling in Canada so I don't think there's a 2007 brewing in Canada because 2007 was a crisis of a payments and settlement system and I don't think that's gonna happen I think central bankers have understood that they can't take risks with the payments in settlement system and that means the banking system so it's not a 2007 situation but they in Canada and I can cite you other other countries face conflicting signals and insufficient policy tools and they're trying to strike the balance not only between competing domestic issues but also competing domestic issues and competing global issues it's easy for the Fed the Fed is the most important central bank the most powerful central bank it is operating in the biggest economy in the world which is relatively close so the Fed can say I will just focus on the domestic economy then it has to figure out what to do for the rest of the world and especially for the open economies Canada Australia the UK you have to strike that balance and it's a very tricky balance to strike you know I read your tweets you thank you almost every day and I liked it for the way you balance your personal tweets with the business and I'm thinking about when you watch someone's tweets over the course of say two three years I can see some moments in your tweets from this higher conviction and I remember toward October you know the Fed and October November you know the Fed was talking up a very aggressive rate hike cycle and I think over through October November 2 separate rise December I saw you as being a more more and more skeptical of the policy path and I'm just thinking the way the Fed has turned relative to you know to say to the world in October November they were going to stay in our lanes that the global economy isn't such a meaningful factor and then to make such a drastic turn number one you know what's really happening behind the scenes they see something that's not that famous you know December 24th 25th a weekend that you know maybe in the repo market that was heading not at 2008 but where were we in a situation where they had to make a drastic move or it just seems like the move was such an embarrassment to the Fed that something behind the scenes was more powerful than meets the eyes yeah I think to understand that episode and it is a really important episode because it was a dramatic u-turn that happened in three months without a major shot to the economy if you look how much they swung you have to go back a little bit earlier you have to go back in the begin of the year the Fed like a lot of other country a lot of other analysts and central banks bought into the notion of a synchronized pickup in global why because every major economic jurisdiction was accelerating in terms of growth but they didn't realize and I had a girl at the time is that this was just a coincidence there were different things happening in different places but there was nothing synchronize about them and the feedback mechanisms wouldn't work and in particular what was driving Europe what was driving China was short in duration so the Fed was thinking this is wait we have the tailwind of the global economy we have the use of the US economy doing great with the business sector responding to deregulation but the household sector responding to tax cuts with the labor market strong we can normalize and not only can we normalize but we can maintain the notion of automatic pilot on the balance sheet towards the middle of the year it became clear the Fed had started to guide towards for hikes which I thought was excessive I kept on say three and wait towards the middle of the year it was clear to markets that this synchronized pickup in global growth was having problems markets started to be a little nervous but the Fed continued on the same path and and this Fed in particular has I think issues understand market technicals so we enter the fourth quarter where the markets start getting really negative numbers from the rest of the world not the US the rest of the world markers get nervous said continues and continues delivering guiding and delivering on for hikes in December and we repeating when autopilot now it doesn't take long for the markets to realize that the Fed is over tightening on rates and it's forgoing major policy flexibility on the balance sheet so what happens we start getting market disruptions I think somewhere in November December they realized that there was a chance of bad market technicals contaminating the economy and then the question is how do you do a u-turn and I think the biggest mistake that was done is that they not that they delivered the fourth rate hike but they continued to stress or a pilot and the market punished yeah and I think there's two consequences of this one is a recognition that the Fed needs to understand market technicals better but to which is problematic for the Fed this market has it has been emboldened this market now believes there's a Powell put just like there was a yelling put just like those of Bernanke board that feeling was in there a year ago and I think that that's going to prove problematic for the Fed going forward if you look at the Fed last year and then through the fall you know not just the balance sheet but the dollar so when I was younger the US was like 30 40 percent of global GDP now there's 18 trillion of GDP inside of the United States and 62 outside 18 trillion inside 62 outside you know granted I'm not an academic I'm more of a trading background but I look at it like these academics in the Fed are very poor risk man and you can trade against them because when they try to talk up an aggressive policy path you get a strengthening dollar and there's so much debt that's tied to the dollar globally there's about 13 14 trillion of new dollar-denominated debt globally so the question is we've had two moments here since 2015 where the Fed has really lost control of the policy path partially because of the dollar and partially because of the bet their balance sheet plans isn't the dollar isn't there an invisible cap on the dollar at that ninety seven eight level because if if if they talk up say these talk likes to say we strengthen in the middle this year and they start talking rates up again the dollar rips they're still doing quantitative tightening to some extent then all of a sudden once again we have a liquidity problem in emerging markets that's 62 trillion of GDP outside the unit's you know I'd say it starts to weaken dramatically and once again that vetoes the Fed policy path right so we're going to test we're gonna test I think that cap I really do I think we're gonna test it and in terms of what's problematic I think it's about three things starting from the least problematic the least problematic is that a strong dollar is bad for growth in the US the u.s. is simply not that open so that's not an issue more problematic is that it's bad for the SMP because the US companies as you know and revenues are from the rest of the world that much bigger than what the u.s. trades what trade is as part of it the rest the economy but the third element you're absolutely right when the dollar appreciates sharply it breaks something else and the reason why it breaks something else is what's called the original sin which is that countries have tended to borrow in dollars because that's where the most liquid market saw but don't produce enough dollars on their own so they have a fundamental currency mismatch and when the dollar weakens it's in your favor and the dollar strengthens is against you now a lot of countries have understood that but the original sin migrated to companies so the the big risk is you end up breaking something else and then it feeds back onto the US economy I think we gotta test that I think that you know we've had now so far four quarters of dollar strength ending in March of 2019 we haven't had that for a decade it wouldn't surprise me if if we D XY is around ninety seven now if they continue upwards and so I suspect we're gonna test that hypothesis again okay so that's maybe that sets up a potential risk for the third fourth quarter yeah and I think that people have to realize that the first quarter should not be extrapolated philosophy the first quarter had two things going for it an awful fourth quarter yeah where the market technicals had really shifted completely and secondly what we talked about earlier which is a dramatic turnaround you turn in the Fed so you you and I have done our CNBC hits our Bloomberg hits and the problem with that kind of media is and I love I love both networks but it's you can't really get into answering important questions in a long format I want to give you a chance right now to answer a question that so many academics have really failed that and that's describing you know what happened in that third quarter and well as we look forward to is you know a lot of people including traders that I talked to our clients our bear traps clients around the world are looking at the liquidity situation with the Fed balance sheet and they're literally trading desks around the world now are looking at the schedule of liquidity so tax revenues coming in debt issuance from Treasury is an extra 150 200 billion this year so you've got tax revenues you've got more debt issuance and then you have the Fed still in qt quantitative tightening until at least September help - help - help the real vision viewer really understand in October the Fed was in 50 billion a month of QT draggy and the ECB had gone from 30 40 billion a month of quantitative easing down to like 10 15 so for the first time we're in a net net liquidity draw now this has been written about in all kinds of research but aren't you a buyer into this global according to the dynamic that that had helped trigger that problem in the third fourth quarter and could we be looking at that again this year so I do think we are in the midst of a change in the liquidity regime okay 2008 to 2010 was about the Fed normalizing the financial system 2010 onwards and you can go back to the August speech by Ben Bernanke at Jackson Hole it was about using the acid channel to consume macroeconomic objectives no long about normalizing time the finance system had been normalized it was about buying time so the economy until the Fed could hand off to a much more comprehensive set of policies no one I think imagined at the Fed that there would be in that regime all the way into 2016 2017 but they were now what happens in in that regime one is that the central bank becomes a major provider of liquidity in markets why to encourage us to take more risk to push asset prices up why did I want to push asset prices up because you triggered the wealth effect all you hope to you feel you look at your statements you feel made sure you want to spend more and you hope to trigger animal spirits among corporations so they invest more it didn't work that well but the whole system got used to this liquidity so people migrated to less liquid asset classes and when people migrated to less liquid assets classes the industry said that's great let's provide them with instruments so it still passive spread all over the place very efficient way to get exposure passive passive products so you saw people start offering ETFs that in that intrinsically promised you instantaneous liquidity at reasonable bid-offer spread that's what an ETF signals to you they started getting offered on illiquid asset classes you saw a short valve ETF emerge and the whole system got used to this liquidity sloshing around plus corporates balance sheet had their own liquidity so they added to that so and all this liquid is all sugar and the system adjusted but there were two things in the background that would be better were critical one is that this liquidity from central bank's wouldn't last forever because Ben Bernanke's famous phrase it's about benefits costs and risks and after a while the costs and wakes exceeds the benefits and then people didn't realize that regulation had changed the structure of the system that in the old days the intermediaries were very big and the end-users were small but through regulation and because of 2008 the intermediates got shrunk both directly and by more precautionary management of the balance sheet while the end-users got very big goods we have a structural liquidity issue and I think what we're going through now is that once in a while we get these bouts of a liquidity that's spread like this like this Larry hmm and it's because structurally we no longer can rely on this continuous injection and we have a system that actually needs to manage with the reality of less liquidity so I worry about that and and that is why I think when push comes to shove the central bank's blinked because they realized that the risk had morphed from the banking system from individual banks to something else and that non banks actually had a lot of liquidity risk on exhibit and they don't want they don't want the non banks to disruptive in economy which is thinking about long-term capital ninety seven eight that's a that's a problem in that kind of regime right where you have a by side hedge fund account with a liquidity problem whereas the Lehman situation was you know Bank having that kind of problem we you know think of it in January February of seventeen you almost have demolished of all space yes what actually happened very little happened and you remember the high-yield episode and I think these are just warnings that you have to take liquidity risk more seriously so this year when I look at capital markets in 2019 2020 and when I say capital markets to the viewer watching us I'm talking about the ability of companies to issue bonds issue stock and have enough buyers and then I think about mr. greenspan and you know his discussions and warnings around the crowding out effect and growing up in the 70s and 80s my dad warned me about the crowding out effect and the crowding out effect is okay looks let's look at this year we have seven hundred billion of investment grade leveraged loans and junk bond so maybe seven hundred seven to eight hundred billion of the bonds that have to be a member they're maturing in many cases those companies have to sell more paper to redeem that paper and then you have the US Treasury issuing an extra because the trillion dollar deficit an extra one hundred try three aliy more like 150 to 200 billion of Treasury issuance all this year and then we look at buybacks the buyback behemoth beast that serpent that is buybacks is still on a record pace but in order to achieve that buyback pace that's been holding up the market you'd need an a very very happy open capital markets and I look at the current equity market today you know where the S&P is and I'm thinking okay you really need wide open capital markets for companies like the Tesla's the world and there's so many other companies just to be alive and be able to function what its greens been getting at with that crowding out effect and I think some people are complacent around this because they look at mmm tea and the monetary policy are around the world and maybe maybe somehow we've moved into a new regime where the crowding out effect doesn't exist so there's lots there's lots there if you look at the sources and the users of capital both have gone up over time and now you're absolutely right that you may end up with the mismatches we need sources of capital and the users so the sources are you cited it was money coming from central banks it was money coming in from balance sheets there's a limited by the way to how high profits can go as a share of GDP but the users are still expecting a lot so you start having a mismatch on that and then the question is how do you equalist people worried that if you simply ration the users then you create a self-fulfilling economic contraction and give us an example what would we rationing the users mean so you think of all the companies that need to refinance their mature in bed sure you suddenly tell them I'm sorry we've closed the shop the betting with the betting window is closed what are you gonna do default rates will go up amid the folk always go up investors become more cautious so they start rationing other companies the next thing you know the good the bad contaminates the good we've seen it over and over again there is this concern now people come with solutions there is they of course the Austrian solution which is the recession is cleansing quote-unquote so that just cleaned up the whole system yes it's gonna be painful in the short term the opposite of that is you can inject as much liquidity as neat as you as you want to the nmt theory because we neither see inflation no we see high interest rates and if you wear them according out you'll get one of the two so clearly there's no crowding out going on so let's just put a lot of acquitted in the end I think both those views are problematic I think the answer is somewhere in the middle but it's so difficult to get to an answer without also saying it's gonna be really bumpy even if we solve that it's gonna be bumpy but if you think we have issues go to other parts of the world who don't naturally attract capital we we are very lucky because a our economy is doing a lot better than other advanced countries so we attract capital B we structurally wired to get money when things go wrong because we offer the reserve currency and we offer the deepest most predictable capital markets that problem is going to be particularly we saw how acute it can be in the emerging markets during the crises but keep an eye on Europe you are for me is the most vulnerable segment of the global economy this year in next they are approaching what I call stall speed ok so look at Europe mr. Draghi is leaving in October this is Mario Draghi mr. everything it takes Draghi and we have pretend miss Merkel's potentially on the way out so the glue of Europe that Angela Merkel that foundation that's held everything together it's potentially leaving whereas the Salvi knees of the world in Italy are strengthening we have forces that political forces in Europe that are much more more much more evenly distributed than centralized strength of political force if you think about the next head of the ECB might we have a ECB head that maybe is more supportive of populism in the south and supportive of deficits or might we have a more Austrian looking shawwal type in our global net would never be in that role but he's the former finance minister but that thinking of austerity that that's it is not the key to this like we're if you look at the next head of the ECB and that female and sheep what are your thoughts on which way it might go so we don't know which way it's gonna go yeah because this is a political process and ultimately is going to be a political decision we don't know but but I think think it's not think go back to the Patriots okay okay what makes the Patriots such a powerful team and then compared to Europe they have a number of very strong players that you can rely on that teamwork is great and they're very well coached so let's look at Europe the five major players in Europe are all having problems you okay with brexit France with the yellow vest protest against Macomb Germany going through a major as you mentioned leadership transition Spain going to an election where it's not clear whether you got it clearly and Italy a new government is trying to find its way around so the first thing we say about this Patriots in Europe team is that the major players are problematic but if they don't worry I have teamwork what teamwork Europe is not functioning Greg cert has sucked all the oxygen there's no progress on banking Union there's no progress on fiscal integration you said that's okay the coaches are there I have balichek stay well you pointed out garages leaving Merkel's leaving which coaches there you don't we don't even know what the coaching staff is gonna look like at the end of this year so now markets hate uncertainty so if you look at now the ECB has been very lucky occurs with what the Fed u-turned have stayed off the radar screen yeah yeah but if you look at the challenges facing the ECB they're times ten what the Fed faces and that's before we look at the transition their economy is slowing rapidly you've got direct for PMI numbers out of Germany click Germany's beta is so high to emerging markets into China in other words because there's such a large exporter so this whole it's fascinating that you can have a man like mr. Draghi and the ECB do so much balance sheet but at the end of the day this trade war with China a strong dollar we can diem week in China in there just so for me it's not a surprise because because what do balance sheet of a balance sheet operations are like painkillers yeah so you Europe is structurally impaired yeah we have real issues in terms of competition productivity etc they need surgery they need a sort of surgery that Germany went through call it fifteen years ago before the labor markets etc you go to the surgeons and the surgeons can't agree so you go to your doctor's doctor says fine I'll give you some paint colors because I'm just gonna help you so a short-term period until the surgeons are ready to deal with your structural impairment and you know what they can do it does just need they need the political will to do it you come back and I say and you say it hasn't happened I say okay so I gave you a negative interest rates let me now give you more balance sheet so I'm gonna double the dose and we go through this repeated game a few times now a couple of things happen one is the medicine becomes less effective two is you started wearing about the side-effects what was negative interest rate doing to my banking system what's it doing to my ability to provide long term financial protection products with time and insurance so on that the recent comments public comments by central bankers in Europe are starting to question negative interest rates correct is this a real shift so I think it is I think that they've gotten to realize what I call the Bernanke equation benefits cause risks and you risk undermining and that's why people say ironically instead of encouraging people to send more you encourage them to save more because they can no longer rely on pool vehicles for long term savings and I think that that's the realization is the medicine is less effective it has side effects now the good news is that the surgeons just need to get the act together because we know what the surgery looks like we just need them to be able to be willing and able to intervene and they're able but not willing as yet so if you think of a Plaza Accord um I look at the Plaza Accord 1985 September and you look at James Baker there's Treasury Secretary United States look at the Reagan administration just came off two election wins and you had a US dollar that had ripped from the 90s up to 160 you had the joyce mark in germany the lire in italy currencies in italy's literally in flames around the world not Europe not just Italy then he really needed a surgery and you had a major market crisis emerging market crisis okay we cut because of the original sin yeah I look at they're really only there's only one way out of this in other words China's currency and the dollar and we get back to the dollar but I want to relate it to e/m and I want to relate to this I think they're one of the most biggest news stories of this month is China becoming part of the Barclays credit bag you know the old Lehman AG the bloomberg Barclays credit AG and you're talking about a so-called Illuminati yeah me too and what you know it's a fifty four trillion dollar index of global bonds corporates and sovereigns have I described that correctly 54 trillion and I became part of the MSCI okay index as well that's that's this is a great point just made because so right now China in terms of the Barclays Bloomberg Lehman Credit AG it's only two hundred and fifty billion of that 54 trillion two hundred fifty billion of the 54 trillion and they're supposed to come up in the next couple of years to because they just entered this is breaking news they're coming in which means that global bond investors on a larger scale can buy China debt and they're supposed to come up to six percent so that would be six there'd be close to two trillion of debt of Chinese corporate and sovereign debt that will be potentially bought by investors around the world that's a one positive for the next 18 months because that's supposedly in theory that's when they're going to try to do this now I don't know how they could do it in 18 months maybe it's 24 months in 36 months at the same time to your point on MSCI so in terms of the wan the chinese one you've got a twelve thirteen trillion dollar economy but they're only one two percent of swift payments what i hear behind the scenes when i take clients around the hill in washington with our bear traps clients or our ACG analytics clients is that there's a currency component to this China trade deal where Treasury is more supportive of China becoming a global currency and return for that there's trade that they'll do do you believe in this can trade this currency component of of a of this trade deal number one and number two talk to me about the implications for a 1 in terms of that amount of debt coming into the global system go global credit markets from China so first we should never under and underestimate the index effects sure I'll give an example 2000 2001 I was head of the emerging market portfolio and we like the vast majority of the UM investors were very negative volunteer very negative it's a group on Argentina yeah everybody knows okay okay it was the most well telegraphed default in history okay even better than Russia right in and I would sit on panels our Investor panels and they would ask us the question how to feel about Argentina negative negative negative how you positioned about Argentina on the way to underweight underweight underweight then they would say how underweight and then people say massively underweight now Argentina was 22% of the index so what does massively underweight mmm it was with four percentage points five percentage point six percentage points even at six percent triple you've got sixteen percent of your portfolio in Argentina Wow they came to us I would say we don't have any we don't have any but what an index does is it makes you think in relative terms so as the impact in terms of flows to China you should expect them to be significant some with you there will they be helpful with the currency then start entering currency management policy and what is the pew BOC going to do because it can take it out into into high reserves or stronger currency but I think there's a there's a more fundamental issue when it comes to relations and you see that as well debate in in Washington is no longer just about trade and currency policy the debate has become about national security and there's not concerned and that's why technology plays such a big role that's why we internationally intellectual property rights play so true that's why the one belt on road is starting to play subject because people were worried that you work what then Isaac developed what do you mean they ended up with ports all over the world in Sri Lanka in Djibouti how do they get those ports um so I I feel the debate in in DC about China is getting multifaceted in a way that is hard to predict where it's gonna end up in the old days or was about currency and trade now you have an overlay of national security and that may solve differently from what happened before it so in closing a perfect segues don't we need to get out of this situation with Europe right now and China we need a trade deal but we need a stronger one the way the one is you get a stronger one China's trading partners in emerging markets in Europe will be on better footing what's the plaza Accord of this generation like what is the way out of this number one number two do you think they're actually thinking about it or is this the 2020 election driving everything so the way out is for China for Europe to implement and genuine pro-growth policies you said earlier it seems that the stem measures in China or less effective yes they're less effective and is to you use of the old measures your relaxing with a requirement your direct state-owned enterprises to lend its what they need to do is take a big leap forward in terms of a market economy Europe also needs to do a lot on the pro-growth if you do that then the US can maintain its higher growth China and Europe start converging on to the way up with the US and they drag along the rest of the world that solves a lot of issues and for populism isn't that the ultimate solution if the countries in the north you're Germany's you're Austria Sweden Switzerland if they were to increase fiscal spending meaningfully that makes mr. Salvi nice job and Italy and the populace and the Steve bannon's of Italy doesn't that make their job very hard but is their pull the political will to pull that off so the blue well is a question it's it's four elements that need to be done one in structural reforms that enhance productivity to is where there is fiscal space and it's quite a bit of fiscal space Germany being an example use that fiscal space three is strengthen the regional and global architecture and for most difficult is acknowledged that while debt reduction is not a first base or a second best or third best for countries like Greece for us student loans it's much better India than the alternatives now you need political wealth for all these four steps and the question ultimately is not can we design can the engineers design a solution I think we should be pretty confident that you can design a solution the real question is can you implement it politically and the message you're getting over and over again is that the political process is not ready for that and be careful from the lesson of BRICS it the lesson of grexit the saga that has continued for almost three years now it's much easier to dismantle something than to build something so if you're gonna start dismantling be ready to go through a period where there's gonna be a lot more uncertainty Mohamed el-erian pleasure to have you with this thank you so much thank you really appreciated

Channel: Real Vision Finance

Views: 42,188

Rating: 4.8068967 out of 5

Keywords: Finance, Markets, Economy, Stock Market, Investing, Trading, Education, Financial Literacy, Recession, Interview, Conversation, Strategy, Insight, Analysis, Facts, Data, Fraud, Entertainment, Thesis, Short Seller, Real Vision, Equities, mohamed el-erian, economic cycle, investing, money, personal finance, macro

Id: fFi-irP9Hks

Length: 41min 41sec (2501 seconds)

Published: Sun Aug 25 2019