The decades-long trend of globalization has come to an end and the fracturing of geopolitics will have huge implications for capital markets and investing in 2023, according to strategists at JPMorgan Chase & Co.  Jared Gross, head of institutional portfolio strategy at JPMorgan Asset Management, joined the What Goes Up podcast to discuss how everything from supply chains to industrial policy, energy and defense will feel the impact.

The decades-long trend of globalization has come to an end and the fracturing of geopolitics will have huge implications for capital markets and investing in 2023, according to strategists at JPMorgan Chase &amp; Co. <a href="bbg://screens/17530076" data-web-url="" data-cke-saved-href="bbg://screens/17530076"> Jared Gross</a>, head of institutional portfolio strategy at JPMorgan Asset Management, joined the What Goes Up podcast to discuss how everything from supply chains to industrial policy, energy and defense will feel the impact.

Hosts Mike Regan and Vildana Hajric are joined each week by expert guests to discuss the main themes influencing global markets. They explore everything from stocks to bonds to currencies and commodities, and how each asset class affects trading in the others. Whether you’re a financial professional or just a curious retirement saver, What Goes Up keeps you apprised of the latest buzz on Wall Street and what the wildest movements in markets will mean for your investments.

Hosts Mike Regan and Vildana Hajric are joined each week by expert guests to discuss the main themes influencing global markets.

What Goes Up

JPMorgan's Obituary for Globalization

When  Steve Sosnick recalls 2008 and tries to make parallels to the current turmoil in the banking sector, one memory sticks out: riding the elevator with Thomas Peterffy, founder of Interactive Brokers, who offhandedly asked him “what’s new?”

“And I said, ‘what’s really interesting to me is the story that I’m reading this morning about how Bear Stearns may have as much as $20 billion in losses at some of their hedge funds,” recalled Sosnick, who’s currently chief strategist at Interactive. “And he said, ‘what’s their market cap?’ And I said, ‘I think about $20 billion.’”

“‘Are you telling me Bear Stearns is broke?’” Peterffy asked. Sosnick recalls saying, “‘I guess I am, aren’t I?’”

Sosnick joined the What Goes Up podcast to discuss what lessons from the 2008 financial crisis can be applied today. Though the current predicament isn’t similar to that period—banks are in much stronger positions and the economic backdrop is vastly different—it’s important to keep lessons learned in mind, he says. 

“They say history doesn’t repeat, but it often rhymes,” Sosnick says. “And I think there’s a certain rhyme to it, but we’re not there yet. And I certainly hope we don’t get there.”

When <a href="bbg://people/profile/1923681" data-web-url="" data-cke-saved-href="bbg://people/profile/1923681"> Steve Sosnick</a> recalls 2008 and tries to make parallels to the current turmoil in the banking sector, one memory sticks out: riding the elevator with Thomas Peterffy, founder of Interactive Brokers, who offhandedly asked him “what’s new?”
“And I said, ‘what’s really interesting to me is the story that I’m reading this morning about how Bear Stearns may have as much as $20 billion in losses at some of their hedge funds,” recalled Sosnick, who’s currently chief strategist at Interactive. “And he said, ‘what’s their market cap?’ And I said, ‘I think about $20 billion.’”
“‘Are you telling me Bear Stearns is broke?’” Peterffy asked. Sosnick recalls saying, “‘I guess I am, aren’t I?’”
Sosnick joined the What Goes Up podcast to discuss what lessons from the 2008 financial crisis can be applied today. Though the current predicament isn’t similar to that period—banks are in much stronger positions and the economic backdrop is vastly different—it’s important to keep lessons learned in mind, he says. 
“They say history doesn’t repeat, but it often rhymes,” Sosnick says. “And I think there’s a certain rhyme to it, but we’re not there yet. And I certainly hope we don’t get there.”

Flashbacks to 2008

Torsten Slok had been firmly in the “no landing” camp of economists. More positive than a “soft landing,” its adherents say the Federal Reserve will tame inflation without triggering a recession at all. But for Slok, chief economist of Apollo Global Management, that all changed with the failure of Silicon Valley Bank. Now he’s bracing for a “hard landing.”

Slok joined the What Goes Up podcast to discuss the sizeable role regional banks play in the US economy, and the reasons why SVB’s collapse changed his outlook. A big reason is how regional banks may now change their behavior.

“Regional banks make up 30% of assets and roughly 40% of all lending,” he explains. That big chunk of the US banking sector is now looking at what happened to SVB and worrying what comes next. With a slowdown potentially underway thanks to the central bank’s rate hikes, Slok warns a reluctance to lend by SVB’s mid-size brethren might mean it comes “faster simply because of this banking situation.”

Torsten Slok had been firmly in the “no landing” camp of economists. More positive than a “soft landing,” its adherents say the Federal Reserve will tame inflation without triggering a recession at all. But for Slok, chief economist of Apollo Global Management, that all changed with the failure of Silicon Valley Bank. Now he’s bracing for a “hard landing.”
Slok joined the What Goes Up podcast to discuss the sizeable role regional banks play in the US economy, and the reasons why SVB’s collapse changed his outlook. A big reason is how regional banks may now change their behavior. “Regional banks make up 30% of assets and roughly 40% of all lending,” he explains. That big chunk of the US banking sector is now looking at what happened to SVB and worrying what comes next. With a slowdown potentially underway thanks to the central bank’s rate hikes, Slok warns a reluctance to lend by SVB’s mid-size brethren might mean it comes “faster simply because of this banking situation.”

The Huge Significance of Small Banks

Jeremy Grantham blames the US Federal Reserve for creating a bubble in asset prices—one he says has a long way to go before it’s fully deflated. As a result, stock prices may not reach bottom until late next year, he warns.

The 84-year-old co-founder of investment firm GMO joined the What Goes Up podcast to explain what he calls the current, “meat grinder” phase of the market, and why he believes the central bank has “hardly gotten anything right.”  

“Since Alan Greenspan first arrived—Paul Volcker knew what he was doing—but since then it’s been a long, continuous horror show,” Grantham says of US monetary policy. “They’ve engaged in policies that drive up the prices of assets, other things being even, and create spectacular overpriced bubbles. They then break because that’s what bubbles have to do. They simply break of their own extreme overpricing, and we pay a very tough price.”

Grantham also discusses broader market risks, including shortages of labor and natural resources, the climate crisis, de-globalization and a new version of the Cold War. “All of these long-term factors are beginning to bite,” he says. “This will make this particular down-leg more dangerous, and perhaps worse than we anticipated.”

Jeremy Grantham blames the US Federal Reserve for creating a bubble in asset prices—one he says has a long way to go before it’s fully deflated. As a result, stock prices may not reach bottom until late next year, he warns.
The 84-year-old co-founder of investment firm GMO joined the What Goes Up podcast to explain what he calls the current, “meat grinder” phase of the market, and why he believes the central bank has “hardly gotten anything right.”   “Since Alan Greenspan first arrived—Paul Volcker knew what he was doing—but since then it’s been a long, continuous horror show,” Grantham says of US monetary policy. “They’ve engaged in policies that drive up the prices of assets, other things being even, and create spectacular overpriced bubbles. They then break because that’s what bubbles have to do. They simply break of their own extreme overpricing, and we pay a very tough price.” Grantham also discusses broader market risks, including shortages of labor and natural resources, the climate crisis, de-globalization and a new version of the Cold War. “All of these long-term factors are beginning to bite,” he says. “This will make this particular down-leg more dangerous, and perhaps worse than we anticipated.”

JPMorgan's Obituary for Globalization

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