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By Bilal Hafeez 29-10-2019
In: post | Newsletter

Macro Hive Podcast Playlist: Blackrock’s Fears / 4 Party UK / Venture Capital Advice

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Halloween is coming up, so get ready to be scared.  In our first podcast, we feature several seasoned economists sharing their biggest macro fears. In another podcast, Elga Bartsch from Blackrock shares her pessimism on global growth, including seeing no incoming fiscal stimulus. We’ll also try to scare you later this week with the Macro Hive scariest charts of the season. So stay tuned for a fright!

In our third podcast, researchers from Bruegel debate the balance between fiscal policy and government intervention in public spending. Elsewhere, the University of Kent’ Professor Matthew Goodwin discusses the recent power struggle between populists and establishments in the developed world and why he sees the UK now having a four-party system.

Finally, legendary investor Ben Horowitz, co-founder of Andreesen Horowitz, shares his leadership wisdom and advice on how quality of management can make all the difference. And with the change of clocks this weekend and winter impeding, I explore the cyclicality of seasons – and the stages of life – in my latest podcast.




Scary Stories from the Eek-conomy (The Indicator, 10 min listen) In this episode of Halloween specials, ‘The Indicator’ asks economists, what scares them about the current US economy? The first “monster” they identify is global uncertainty, largely caused by governments’ unpredictable decision-making processes. This will lead people into more reserved decisions that are ultimately detrimental economic growth. The second “monster” is the record level of corporate debt due to low interest rates. Companies are failing to add enough value to the economy with the amount of cash they borrow.

Halloween Economics

The final “monster” is the preliminary benchmark revision to the BLS unemployment numbers. This year’s adjustments to this data are greater than usual, suggesting that the growth of jobs in the US labour market might be slowing. This week, we also plan to release Macro Hive’s scariest charts for Halloween, so stay tuned!


Why does this matter? In the face Halloween, a reality check on the global economy causes chills. Yes, when compared with the rest of the world the US’s overall performances are keeping it buoyant. However, we should look beyond the face value of US economy data and take account of subtle signs of pessimism in the dark. Only then will we recognise the tricks wrapped up in treats.


Global Growth Monetary Macro

UBS CIO Global Investment Forum: Macro Environment (UBS On-Air, 5 min listen) Elga Bartsch, Head of Research at Blackrock Investment Institute, shares her views on the macro environment into 2020. For Bartsch, the global growth slowdown of 2019 has much to do with trade policy uncertainties. But as a result of a dovish Fed, US consumers and a healthy US labour market are still prevailing against the headwind. Policies – not just fiscal ones – will also impact investors in the coming years, and Bartsch doesn’t see a major fiscal stimulus in the near future.

She also expects a turnaround in the manufacturing sector. Finally, her investment recommendation involves adding bonds to equity positions.


Why does this matter? Blackrock, one of the largest asset managers in the world, is yet to throw its weight behind a recession call. It’s putting a lot of emphasis on consumer demand – yet we don’t know how long that will last as 2019 has been called the  year of ‘retail apocalypse’. While emphasising bonds as a safe haven, there remains a question as to how safe bonds are with yields so low.



How to Spend it (The Sound of Economics, 30 min listen) This podcast discusses public finance. Is quantity more important than quality? Boris Cournede, Deputy Head of Public Finances at OECD; Francesco Papadia, a senior fellow at Bruegel; and Maria Demertzis, Deputy Director at Bruegel, delve into how fiscal policy makers’ attitudes have changed over public spending. There are areas where tax can be increased in order to reduce the burden on lower classes, such as on sources of emission. How can we improve the quality of finance in an environment where countries are continuously being asked to spend more money and where countries are at a very high level of debt, meaning that their budgets are limited?


fiscal policy spending

The speakers question the balance between fiscal policy and government intervention and whether it is possible to have a pragmatic approach to public spending. Ultimately, they agree that quality spending is equally (or more important) than quantity because it addresses inequality in a more effective way. For example, through distribution policies that pay attention to deviations from means and not just averages.


Why does this matter? Public spending is particularly important as there are a number of risks foreshadowing economies. For example, the IMF forecasts growth stagnation, which could be compounded by Brexit and trade wars. We must question how fiscal policy can react to this. Furthermore, it is important to question the way governments spend money and whether they are being as effective as possible in tackling issues such as inequality.




The Future of the Establishment (Project Syndicate, 30 min listen) Political Science professor Matthew Goodwin from the University of Kent discusses the recent power struggle between populists and establishments in both the US and the UK ahead of their major elections. Goodwin suggests that both in the US and UK, the establishment responses to populism are ineffective: they are too judicial to address this issue ideologically. Inequality and overzealous social liberalism ideals are now making nationalist populism narratives increasingly poignant.

Certain demographics (often blue-collar or conservative voters) believe their socioeconomic and cultural interests are at stake and blame the current system for it. Goodwin also argues that ‘cultural insecurity’ is the fundamental cause of European populist movements. Finally, he questions whether Lib Dems will overtake Labour as the number 2 party, given Labour’s struggle to have a clear Brexit stance. The UK might be heading to a new, 4-party system.


Why does this matter? While populist movements in the western world have grown increasingly influential over the past few years, note that the ‘faces’ of these movements – be it Donald Trump or Boris Johnson – will need to rely heavily on the establishments when it comes to execution. Aside from radical trade and immigration policies, western populist representatives still follow in the footsteps of traditional conservatives in areas such as public expenditure policies. However, we should ultimately stay cautious and closely monitor how populist movement progresses among voters: politics is never a zero-sum game.



What You Do Is Who You Are (The Tim Ferris Show, 73 min listen) A fascinating conversation with Ben Horowitz, co-founder of VC firm Andreessen Horowitz, on his new management book, What You Do Is Who You Are, where he shares wisdom on running companies. He describes the book as a guide on how to shape culture for new CEOs and considers what the behaviours are that reflect personal belief and whether or not it is possible to re-invent culture. His book draws extensively from the Haitian Revolution.

Ben Horowitz CEO

More generally, the podcast covers the distinctions between management and leadership and the job of a CEO. Horowitz also gives his top book recommendations for budding entrepreneurs, his advice for first-time executive leaders, and tips on how to manage your own psychology.


Why does this matter? Being in any senior management position requires much more than leadership, it seems – Horowitz appears to have mastered the art of being a CEO and it’s worth listening to his experience.



Bilal Hafeez is the CEO and Editor of Macro Hive. He spent over twenty years doing research at big banks – JPMorgan, Deutsche Bank, and Nomura, where he had various “Global Head” roles and did FX, rates and cross-markets research.

(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)