Episode 25
Lacy Hunt | The Global Macro Forces of Debt, Deflation, and Demographics on Markets and the Economy
Episode 25
Lacy Hunt
Lacy Hunt | The Global Macro Forces of Debt, Deflation, and Demographics on Markets and the Economy
summary
In this week’s episode of Hidden Forces, host Demetri Kofinas speaks with Lacy Hunt, Executive Vice President of Hoisington Investment Management Company. For nearly 14 years, Dr. Lacy Hunt was Chief U.S. Economist for HSBC Group, one of the world’s largest banks. He was also Executive Vice President and Chief Economist at Fidelity and held the position of Senior Economist for the Federal Reserve Bank of Dallas.
Global Macro is an investment strategy based on the interpretation and prediction of large-scale events. Many such events are driven by chronic conditions, including debt deflation, structural demographics, and low savings rate. What role have governments played in amplifying and perpetuating the impact of these forces by bailing out financial markets and flooding the banking system with cheap money?
In order to answer this question, we must rely on a panoply of data, statistics, and econometrics – bank lending, money velocity, monetary aggregates, disposable income, liquidity coverage ratios, and credit spreads. How will we navigate the next recession, having wasted the last 8 years chasing the shadows of wealth through buy-backs, stock appreciations, and financialization? Where will the demand come from in a consumer-led economy still fighting the forces of debt-deflation with diminishing savings rates and rising interest expenses? How will we manage our unfunded liabilities, mortgage payments, rents, and college tuitions, with such poor structural demographics? And how does all of this tie back to the resurgence of populism and the escalation of geopolitical tension in a world bound together by our liabilities but torn apart by the specter of conflict, the failures of diplomacy, and the expediency of war?
Producer & Host: Demetri Kofinas
Editor & Engineer: Stylianos Nicolaou
Join the conversation at @hiddenforcespod
bio
Dr. Lacy H. Hunt, an internationally known economist, is Executive Vice President and Chief Economist of Hoisington Investment Management Company (HIMCO), a firm that manages $4 billion for pension funds, endowments, insurance companies and others.
Lacy is the author of two books, and numerous articles in leading magazines, periodicals and scholarly journals. Included among the publishers of his articles are. Barron’s, The Wall Street Journal, The New York Times, The Christian Science Monitor, the Journal of Finance, the Financial Analysts Journal and the Journal of Portfolio Management. The Board of Governors of the Federal Reserve System and the Dallas Federal Reserve Bank both published his research.
The Wall Street Journal, The New York Times, Business Week, Barron’s, Time, Newsweek, U.S. News and World Report, Investor’s Business Daily and many other domestic periodicals have quoted Lacy. Among the foreign press, Lacy’s views have appeared in The Financial Times, the Nihon Keizai Shinbun, the South China Post, The International Herald Tribune and The Straight Times. He has been a guest on PBS on The Nightly Business Report, The News Hour, and Wall Street Week. He has been on CNNshows Moneyline, and Business Morning and on CNBC’s Squawk Box and World Business. He has also appeared on CBS Evening News, NBC’s Today Show, and ABC’s World News Tonight.
He has made numerous presentations in all the major financial and economic centers in Europe, Asia, the Middle East, Africa and North America. He has appeared on radio and television outside of the United States, including The BBC, NHK and TV Tokyo. Dr. Hunt has testified before various committees of Congress, including House Ways and Means, Senate Finance and Senate Banking.
Previously, Lacy was Chief U.S. Economist for the HSBC Group, one of the world’s largest banks, Executive Vice President and Chief Economist at Fidelity Bank and Vice President for Monetary Economics at Chase Econometrics Associates, Inc. Lacy considers himself fortunate that he had the opportunity of working for two firms led by great bankers: David Rockefeller (Chase) and Sir William Purvis (HSBC).
A native of Texas, Lacy has served as Senior Economist for the Federal Reserve Bank of Dallas. While at the Dallas Fed, he served on the Federal Reserve System Committees: Financial Analysis and International Economics. He successfully completed the training program at the Federal Reserve Bank of New York. When he entered the Fed, William McChesney Martin was grappling with a severe inflation and when he left Author Burns was also trying to contain rampant price increases, virtually the opposite of the challenges facing Janet Yellen and the Fed today. At the Fidelity Bank of Philadelphia he had the responsibility for managing the Trust Department’s Comingled Fixed Income Fund in the 1970s and early 1980s. This fund produced one of the highest returns during this inflationary era.
He earned his BA from Sewanee: The University of the South (1964), his MBA from the Wharton School of the University of Pennsylvania (1966), and his Ph.D. in Economics from the Fox School of Business and Management of Temple University (1969). From Sewanee, he received an honorary Doctor of Civil Laws in 2013 and their Distinguished Alumnus Award in 2016. Lacy served on the Board of Trustees of Temple University from 1987 to 2010 and is now an honorary life trustee.
He received the Abramson Award from the National Association for Business Economics for “outstanding contributions in the field of business economics.” He is a life member of the American Finance Association. He was a member of the Economic Advisory Board of the American Bankers Association and Chairman of the Economic Advisory Board of the Pennsylvania Bankers Association. He served on the Monetary and Fiscal Policy Affairs Committee of the National Chamber of Commerce. He was a member of The Money Marketeers of New York University.
The honorary doctorate from Sewanee reads “His career path has included stops at some of the most powerful financial institutions in the country, where he has not only influenced internal investment policy but has left an indelible mark on the nation’s economic policy through his publications, speeches and appearances in the national media.”
Lacy and his wife JK (Janet Kay) live in Austin, Texas. They have four daughters, two sons and three grandsons.
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Lorem ipsum dolor sit amet, consectetur adipiscing elit. Conferam avum tuum Drusum cum C. Prave, nequiter, turpiter cenabat; Ea possunt paria non esse. Hunc vos beatum; Nemo nostrum istius generis asotos iucunde putat vivere. At, illa, ut vobis placet, partem quandam tuetur, reliquam deserit. Neque enim disputari sine reprehensione nec cum iracundia aut pertinacia recte disputari potest. Duo Reges: constructio interrete. Quantum Aristoxeni ingenium consumptum videmus in musicis? Est autem etiam actio quaedam corporis, quae motus et status naturae congruentis tenet;
Utram tandem linguam nescio? Cur id non ita fit? Laelius clamores sofòw ille so lebat Edere compellans gumias ex ordine nostros. Neque solum ea communia, verum etiam paria esse dixerunt. Te enim iudicem aequum puto, modo quae dicat ille bene noris.
Ex ea difficultate illae fallaciloquae, ut ait Accius, malitiae natae sunt. Hoc dixerit potius Ennius: Nimium boni est, cui nihil est mali. Hic nihil fuit, quod quaereremus. Cur post Tarentum ad Archytam? Primum in nostrane potestate est, quid meminerimus? Claudii libidini, qui tum erat summo ne imperio, dederetur. Ergo hoc quidem apparet, nos ad agendum esse natos.
Mihi vero, inquit, placet agi subtilius et, ut ipse dixisti, pressius. Habes, inquam, Cato, formam eorum, de quibus loquor, philosophorum.
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Lorem ipsum dolor sit amet, consectetur adipiscing elit. Qui enim voluptatem ipsam contemnunt, iis licet dicere se acupenserem maenae non anteponere. Si verbum sequimur, primum longius verbum praepositum quam bonum. Iubet igitur nos Pythius Apollo noscere nosmet ipsos. Sin autem est in ea, quod quidam volunt, nihil impedit hanc nostram comprehensionem summi boni. Duo Reges: constructio interrete. An eum discere ea mavis, quae cum plane perdidiceriti nihil sciat? Scio enim esse quosdam, qui quavis lingua philosophari possint; Superiores tres erant, quae esse possent, quarum est una sola defensa, eaque vehementer. Nihil enim hoc differt.
Dempta enim aeternitate nihilo beatior Iuppiter quam Epicurus; Quae quidem sapientes sequuntur duce natura tamquam videntes; Deinde prima illa, quae in congressu solemus: Quid tu, inquit, huc? Cur igitur, cum de re conveniat, non malumus usitate loqui? Ergo et avarus erit, sed finite, et adulter, verum habebit modum, et luxuriosus eodem modo. Nos commodius agimus.
Cum id quoque, ut cupiebat, audivisset, evelli iussit eam, qua erat transfixus, hastam. Nam si amitti vita beata potest, beata esse non potest. Certe nihil nisi quod possit ipsum propter se iure laudari. Quae diligentissime contra Aristonem dicuntur a Chryippo. Non igitur potestis voluptate omnia dirigentes aut tueri aut retinere virtutem. Paupertas si malum est, mendicus beatus esse nemo potest, quamvis sit sapiens. Respondent extrema primis, media utrisque, omnia omnibus.
Ergo in utroque exercebantur, eaque disciplina effecit tantam illorum utroque in genere dicendi copiam. De ingenio eius in his disputationibus, non de moribus quaeritur. Nunc haec primum fortasse audientis servire debemus. An est aliquid per se ipsum flagitiosum, etiamsi nulla comitetur infamia?
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Lorem ipsum dolor sit amet, consectetur adipiscing elit. Hoc est vim afferre, Torquate, sensibus, extorquere ex animis cognitiones verborum, quibus inbuti sumus. Quamquam te quidem video minime esse deterritum. Primum cur ista res digna odio est, nisi quod est turpis? Perturbationes autem nulla naturae vi commoventur, omniaque ea sunt opiniones ac iudicia levitatis. Si ista mala sunt, in quae potest incidere sapiens, sapientem esse non esse ad beate vivendum satis. Duo Reges: constructio interrete. Nunc vero a primo quidem mirabiliter occulta natura est nec perspici nec cognosci potest.
Sed ad illum redeo. At cum de plurimis eadem dicit, tum certe de maximis. Stoicos roga. Nosti, credo, illud: Nemo pius est, qui pietatem-;
Minime id quidem, inquam, alienum, multumque ad ea, quae quaerimus, explicatio tua ista profecerit. Itaque eos id agere, ut a se dolores, morbos, debilitates repellant. Semper enim ex eo, quod maximas partes continet latissimeque funditur, tota res appellatur. Nonne videmus quanta perturbatio rerum omnium consequatur, quanta confusio? Naturales divitias dixit parabiles esse, quod parvo esset natura contenta. Sin te auctoritas commovebat, nobisne omnibus et Platoni ipsi nescio quem illum anteponebas? Scrupulum, inquam, abeunti; Sed nimis multa. Aberat omnis dolor, qui si adesset, nec molliter ferret et tamen medicis plus quam philosophis uteretur. Quid, cum volumus nomina eorum, qui quid gesserint, nota nobis esse, parentes, patriam, multa praeterea minime necessaria? Quia nec honesto quic quam honestius nec turpi turpius. Isto modo ne improbos quidem, si essent boni viri.
Traditur, inquit, ab Epicuro ratio neglegendi doloris. Quis Aristidem non mortuum diligit? Sin kakan malitiam dixisses, ad aliud nos unum certum vitium consuetudo Latina traduceret. Eiuro, inquit adridens, iniquum, hac quidem de re; Sextilio Rufo, cum is rem ad amicos ita deferret, se esse heredem Q. Ergo illi intellegunt quid Epicurus dicat, ego non intellego? Tu enim ista lenius, hic Stoicorum more nos vexat. Si longus, levis dictata sunt.
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Lorem ipsum dolor sit amet, consectetur adipiscing elit. Qui autem de summo bono dissentit de tota philosophiae ratione dissentit. Atqui iste locus est, Piso, tibi etiam atque etiam confirmandus, inquam; Nonne igitur tibi videntur, inquit, mala? Universa enim illorum ratione cum tota vestra confligendum puto. Duo Reges: constructio interrete. Cur iustitia laudatur? Tu enim ista lenius, hic Stoicorum more nos vexat. Commoda autem et incommoda in eo genere sunt, quae praeposita et reiecta diximus; Et quidem, inquit, vehementer errat; Sin tantum modo ad indicia veteris memoriae cognoscenda, curiosorum.
Videamus animi partes, quarum est conspectus illustrior; Cum id fugiunt, re eadem defendunt, quae Peripatetici, verba. Audax negotium, dicerem impudens, nisi hoc institutum postea translatum ad philosophos nostros esset. Quis suae urbis conservatorem Codrum, quis Erechthei filias non maxime laudat? Tamen a proposito, inquam, aberramus. Quis enim est, qui non videat haec esse in natura rerum tria? Summus dolor plures dies manere non potest? Maximas vero virtutes iacere omnis necesse est voluptate dominante. Non enim solum Torquatus dixit quid sentiret, sed etiam cur. Quare conare, quaeso.
Sed vobis voluptatum perceptarum recordatio vitam beatam facit, et quidem corpore perceptarum. Sed haec quidem liberius ab eo dicuntur et saepius. Sed tamen intellego quid velit. Quis hoc dicit? Iam illud quale tandem est, bona praeterita non effluere sapienti, mala meminisse non oportere? De quibus cupio scire quid sentias.
Omnia contraria, quos etiam insanos esse vultis. Nam prius a se poterit quisque discedere quam appetitum earum rerum, quae sibi conducant, amittere. Quaesita enim virtus est, non quae relinqueret naturam, sed quae tueretur. Nec enim, dum metuit, iustus est, et certe, si metuere destiterit, non erit; Et quod est munus, quod opus sapientiae? Nam si propter voluptatem, quae est ista laus, quae possit e macello peti? Quia dolori non voluptas contraria est, sed doloris privatio. Illud quaero, quid ei, qui in voluptate summum bonum ponat, consentaneum sit dicere.
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Lorem ipsum dolor sit amet, consectetur adipiscing elit. Itaque hic ipse iam pridem est reiectus; Quamquam te quidem video minime esse deterritum. Quid censes in Latino fore? Duo Reges: constructio interrete. Ut scias me intellegere, primum idem esse dico voluptatem, quod ille don. Hoc mihi cum tuo fratre convenit. Sumenda potius quam expetenda. Hoc non est positum in nostra actione.
Itaque sensibus rationem adiunxit et ratione effecta sensus non reliquit. Graece donan, Latine voluptatem vocant. Sed erat aequius Triarium aliquid de dissensione nostra iudicare. Quem si tenueris, non modo meum Ciceronem, sed etiam me ipsum abducas licebit. Quod autem ratione actum est, id officium appellamus. Levatio igitur vitiorum magna fit in iis, qui habent ad virtutem progressionis aliquantum. Eorum enim omnium multa praetermittentium, dum eligant aliquid, quod sequantur, quasi curta sententia; Itaque in rebus minime obscuris non multus est apud eos disserendi labor. Iubet igitur nos Pythius Apollo noscere nosmet ipsos. Nondum autem explanatum satis, erat, quid maxime natura vellet.
Tubulo putas dicere? Prioris generis est docilitas, memoria; Ne tum quidem te respicies et cogitabis sibi quemque natum esse et suis voluptatibus? Quid in isto egregio tuo officio et tanta fide-sic enim existimo-ad corpus refers? Cur haec eadem Democritus? Respondent extrema primis, media utrisque, omnia omnibus. Atque his de rebus et splendida est eorum et illustris oratio. Quae cum praeponunt, ut sit aliqua rerum selectio, naturam videntur sequi;
Legimus tamen Diogenem, Antipatrum, Mnesarchum, Panaetium, multos alios in primisque familiarem nostrum Posidonium. In quibus doctissimi illi veteres inesse quiddam caeleste et divinum putaverunt.
