moneymarkets

What is a money market? What is the difference between a money market and a money market fund? They are at their highest demand since 2008, but there’s still confusion. On this episode of Your Life Simplified, Valerie Escobar, senior wealth advisor, and Michael MacKelvie, wealth advisor, compare the different types and what investors should know, including the risks.

Markus Brunnermeier is a professor of economics and the director of the Bendheim Center for Finance at Princeton University. Markus is also a nonresident senior fellow at the Peterson Institute for International Economics. Markus joins Macro Musings to discuss his new book, titled “The Resilient Society,” as well as his work on safe assets and their implications for inflation. Specifically, David and Markus discuss the implications of the fiscal theory of the price level for inflation, the role of the Fed in stabilizing money markets, what is meant by “resilience” compared to “robustness” in economies, and much more.

Transcript can be found here.

Markus’s Twitter: @MarkusEconomist

Markus’s Princeton profile: https://scholar.princeton.edu/markus/home

Related Links:

*The Fiscal Theory of the Price Level with a Bubble* by Markus Brunnermeier

https://scholar.princeton.edu/markus/publications/fiscal-theory-price-level-bubble

*The Resilient Society* by Markus Brunnermeier

https://bcf.princeton.edu/the-resilient-society/

*What Makes US Government Bonds Safe Assets?* by Zhiguo He, Arvind Krishnamurthy, and Konstantin Milbradt

https://www.aeaweb.org/articles?id=10.1257/aer.p20161109

David’s Twitter: @DavidBeckworth

David’s blog: http://macromarketmusings.blogspot.com/

Hanno Lustig is a professor of finance at Stanford University, and a senior fellow at the Stanford Institute for Economic Policy Research. Hanno joins David on Macro Musings to discuss his work on dollar safety, safe assets, convenience yields, and more. More specifically, Hanno and David discuss the dollar dominance in global financial markets, how the US’s status as the world’s safe asset provider reinforces its exorbitant privilege in money markets, whether the countercyclical demand for safe assets can help explain why US inflation has been so low this past decade, how years of low interest rate policy might have contributed to the growing wealth gap, and much more.

Transcript for the episode can be found here.

Hanno’s Twitter: @HannoLustig

Hanno’s Stanford profile: https://www.gsb.stanford.edu/faculty-research/faculty/hanno-lustig

Related Links:

*Dollar Safety and the Global Financial Cycle* by Zhengyang Jiang, Arvind Krishnamurthy, and Hanno Lustig

https://www.gsb.stanford.edu/faculty-research/working-papers/dollar-safety-global-financial-cycle

*Mind the Gap in Sovereign Debt Markets: The U.S. Treasury basis and the Dollar Risk Factor* by Arvind Krishnamurthy and Hanno Lustig

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3443231

*Manufacturing Risk-Free Government Debt* by Zhengyang Jiang, Hanno Lustig, Stijn Van Nieuwerburgh, and Mindy Z. Xiaolan

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3646430

*US Government Debt Valuation Puzzle* by Zhengyang Jiang, Hanno Lustig, Stijn Van Nieuwerburgh, and Mindy Z. Xiaolan

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3333517

*The Fiscal Theory of Price Level with a Bubble* by Markus K. Brunnermeier, Sebastian A. Merkel and Yuliy Sannikov

https://www.nber.org/papers/w27116

*Debt As Safe Asset: Mining the Bubble* by Markus K. Brunnermeier, Sebastian Merkel, and Yuliy Sannikov

https://scholar.princeton.edu/markus/publications/debt-safe-asset-mining-bubble

*The Safety Trap* by Ricardo J. Caballero and Emmanuel Farhi

https://www.nber.org/papers/w19927

*Financial and Total Wealth Inequality with Declining Interest Rates* by Daniel Greenwald, Matteo Leombroni, Hanno Lustig, and Stijn Van Nieuwerburgh

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3789220

*The Saving Glut of the Rich* by Atif Mian, Ludwig Straub, and Amir Sufi

https://scholar.harvard.edu/straub/publications/saving-glut-rich-and-rise-household-debt

David’s blog: macromarketmusings.blogspot.com
David’s Twitter: @DavidBeckworth

Joseph Wang is a former senior trader on the open market desk at the Federal Reserve Bank in New York and the author of the book Central Banking 101. He also blogs at fedguy.com and is active on Twitter. Joseph joins Macro Musings to discuss what has happened at the Fed from the operational side, and we consider its implications for money markets. Specifically, Joseph and David discuss recent events from the perspective of the Federal Reserve trading desk, Joseph’s conception of a two-tiered monetary system, continued dollar dominance in global money markets, whether the Fed’s overnight repo facility is truly a temporary facility or trending towards a permanent one, and much more.

Transcript for the episode can be found here.

Joseph’s Twitter: @FedGuy12

Joseph’s website: http://fedguy.com/

Related Links:

*QE Zombifies Money Markets* by Joseph Wang

https://fedguy.com/qe-zombifies-money-markets/

*The Gravitational Pull of Zero* by Joseph Wang

https://fedguy.com/the-gravitational-pull-of-zero/

*RRP At The ZLB* by Joseph Wang

https://fedguy.com/rrp-at-the-zlb/

David’s blog: macromarketmusings.blogspot.com
David’s Twitter: @DavidBeckworth

Record amounts of cash are piling up in money market funds. And while not all of it is available for investment—a lot could be. Yet anxiety about markets and the powerful force of inertia prevents many investors from putting that money to work. We lay out a step-by-step framework to help you get comfortable enough to move off the sidelines. For more on the blogs mentioned in today’s episode, visit https://blog.alliancebernstein.com/library/you-just-sold-your-business-what-should-you-do-with-the-cash.htm? and https://blog.alliancebernstein.com/library/is-a-cash-stock-barbell-weighing-you-down

Note to All Readers: The information contained here reflects the views of AllianceBernstein L.P. or its affiliates and sources it believes are reliable as of the date of this podcast. AllianceBernstein L.P. makes no representations or warranties concerning the accuracy of any data. There is no guarantee that any projection, forecast or opinion in this material will be realized. Past performance does not guarantee future results. The views expressed here may change at any time after the date of this podcast. This podcast is for informational purposes only and does not constitute investment advice. AllianceBernstein L.P. does not provide tax, legal or accounting advice. It does not take an investor’s personal investment objectives or financial situation into account; investors should discuss their individual circumstances with appropriate professionals before making any decisions. This information should not be construed as sales or marketing material or an offer or solicitation for the purchase or sale of any financial instrument, product or service sponsored by AllianceBernstein or its affiliates.
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© 2021 AllianceBernstein L.P.

Carolyn Sissoko is an associate professor of economics at the University of the West of England, and she has written widely on shadow banking, money markets, and the plumbing of the financial system. Carolyn joins Macro Musings to talk about the evolution of money markets over the past few decades, and its implication for both monetary and fiscal policy. Specifically, David and Carolyn discuss the collateral supply effect, the consequences of moving from LIBOR to SOFR, and solutions to other money market concerns.

Transcript for the episode can be found here.

Carolyn’s Twitter: @csissoko

Carolyn’s UWE Bristol profile: https://people.uwe.ac.uk/Person/CarolynSissoko

Related Links:

*The Collateral Supply Effect on Central Bank Policy* by Carolyn Sissoko

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3545546

David’s Twitter: @DavidBeckworth

David’s blog: http://macromarketmusings.blogspot.com/

In November 2019 I started a podcast about the realities of day trading. I’m taking this leap despite feeling scared. I wanted to start this project for a while now, but I’ve been holding myself back thinking I needed to be consistently successful before I could talk about trading.

Yet here I am. I’m not quite as successful as I’d like to be yet, but I decided to document my trading journey anyway. I wanted to show its real highs and lows, my wins and losses, my breakthroughs and setbacks. I wanted to show the process of finding consistency and success while working on my mindset and discipline.

I was seeking to share my journey with others especially because I left a career to trade full-time. It wasn’t easy because I didn’t quite “make it” yet. But I’m willing to be open and share my trades, my strategies and my results here in this blog, on my Youtube channel and on my podcast show.

Follow me to see me grow as an investor and a trader. Subscribe to get my trading tips and see how my trading strategy works out.

In November 2019 I started a podcast about the realities of day trading. I’m taking this leap despite feeling scared. I wanted to start this project for a while now, but I’ve been holding myself back thinking I needed to be consistently successful before I could talk about trading.

Yet here I am. I’m not quite as successful as I’d like to be yet, but I decided to document my trading journey anyway. I wanted to show its real highs and lows, my wins and losses, my breakthroughs and setbacks. I wanted to show the process of finding consistency and success while working on my mindset and discipline.

I was seeking to share my journey with others especially because I left a career to trade full-time. It wasn’t easy because I didn’t quite “make it” yet. But I’m willing to be open and share my trades, my strategies and my results here in this blog, on my Youtube channel and on my podcast show.

Follow me to see me grow as an investor and a trader. Subscribe to get my trading tips and see how my trading strategy works out.

Figuring out day trading is a process, and I’m still working on developing my trading strategy and a plan. I got a lot better over the years, now it’s just a matter of sticking to my rules and exercising discipline.

To help me with it, I’m now looking for a place to work as the reserves are slowly dwindling away. I’d like to be able to focus on trading well without the added pressure of making a quick and sometimes risky profit. Having a day job and restarting my career might just be the right move for me and my trading journey.

 I’ve been trading for close to 2 years and I’ve developed a skill set that allows me to spend roughly 30 minutes a day on trading. I successfully do it on autopilot as I know what to look for. Of course, trading used to take much longer when I wasn’t sure what I was doing. Trust me, it took a lot of work to get to this point.

So thanks to this skill set I can get a day job that will provide a steady income and take some of the pressure off my trading process, allowing me to focus on trading well rather than chasing a quick buck.

Follow my channel and listen to my podcast to get my trading tips and see my journey as a trader.

Figuring out day trading is a process, and I’m still working on developing my trading strategy and a plan. I got a lot better over the years, now it’s just a matter of sticking to my rules and exercising discipline.

To help me with it, I’m now looking for a place to work as the reserves are slowly dwindling away. I’d like to be able to focus on trading well without the added pressure of making a quick and sometimes risky profit. Having a day job and restarting my career might just be the right move for me and my trading journey.

 I’ve been trading for close to 2 years and I’ve developed a skill set that allows me to spend roughly 30 minutes a day on trading. I successfully do it on autopilot as I know what to look for. Of course, trading used to take much longer when I wasn’t sure what I was doing. Trust me, it took a lot of work to get to this point.

So thanks to this skill set I can get a day job that will provide a steady income and take some of the pressure off my trading process, allowing me to focus on trading well rather than chasing a quick buck.

Follow my channel and listen to my podcast to get my trading tips and see my journey as a trader.