Can the Fed Handle the Truth?

Thank you, Danielle DiMartino, for sharing your truths, zingers and solutions during the ETF Think Tank’s Get Think Tanked Happy Hour. Clearly, you can handle the truth as well as dish it out!

Zingers, Questions and Answers

Sorry for those who missed it – we purposely don’t record the Happy Hour because the best insights shared are done “off the record,” and given the unscripted nature of Happy Hours, we never know what is going to be said. Nevertheless, here are a couple pivotal questions, zingers and even proposed solutions.

Top Zingers and Fun Exchanges
  • Danielle: “The Fed is going to need a Black Swan…again.”
  • Danielle: “The biggest bubble we have is the confidence bubble in central bankers.”
  • Danielle: “Markets are bigger than the Fed.”
  • Danielle: “My answers were stolen” from…

Laughter and Fun

We launched the Get Think Tanked Happy Hour with this exact purpose: addressing serious investment subjects with humility, authenticity and yes, a little fun during these difficult times. Given that, we were thrilled to raise a glass on January 21, 2021 and use the toasting word 921, on the 21st year of the 21st century. However, we just couldn’t wait until 9:21 pm. Coincidentally, at 5:21:21pm, Danielle’s zinger on her description about Janet Yellen had us laughing in our seats! Sometimes, you just have to be there!

Questions and Key Discussion Points

While we definitely had a fun time on this Happy Hour, we also pierced some real truths that were proposed by Danielle. We also had some interesting questions and debate proposed by the audience.

  1. I hear that you are a critic of the Fed and concerned about the future, but how do you have your money positioned under the risks you are foreshadowing?
  2. Why can’t we issue a 100-year Treasury?
  3. Why can’t we have a real infrastructure bill?
  4. What might burst the bubble in the confidence that investors have in the central bank?
  5. How vocational retraining and job skills solve part of the problem.
  6. What is the Move Index? Answer: A measure of fixed income volatility similar to the equity VIX. Thank you, Jim Carroll (@vixologist), for your quick explanation. Note the Move Index went from $43, where it is today, to $163.70 at the peak in March 2020. Reflecting on the complacency today, we note that the VIX index was around $16 during this same period and peaked at $82.69.

Key Takeaways

The Happy Hour was a constructive discussion and highlighted various key points that we often address at Toroso. The wealth gap needs to be solved, and the Fed has the power to solve the problem. The fact is that “lower for longer” may feel good for investors, but it doesn’t solve the root problem and arguably also screws retirees. Bold moves are necessary, but different constituencies and their respective agendas mean that investors need to look for real diversification in their portfolios. This means that what hasn’t worked for investors of late may be the best place to be in the future, because conditions may change.

Thank you, Danielle, for sharing your insights with us. Here is the link to learn more about Danielle DiMartino-Booth. To subscribe to her newsletter, click here.

This week we have Lakshman Achuthan from the Economic Research Institute as our guest speaker. Looking for a reason to be optimistic – come join us! It would seem Mr. Achuthan has a positive stance on the cyclical growth of the market (see recent CNBC interview.) Bring your challenging questions!


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