The U.S. Response to Coronavirus (w/ Raoul Pal & Giovanni Pozzi)
RAOUL PAL: And you've mentioned before about the Federal Reserve. What do you think America is going to do at this point, because it's at the interesting juncture where it's about to run out of ammunition? What's your viewpoint on that? GIOVANNI POZZI: Well, I think one of the keys will be-- I know it might sound impossible-- for Mr. Trump and the other representatives of the government to sound wise and talk as our prime minister did, clearly to all the people and firmly. So, it sounds like a different style from the one he has had up until now. We'll see what happens. But that, on the psychology of the people, will matter. In terms of the economy, well, we all expect from the US just a big number, however it will come. From Europe, you always say as a joke that in the US everything is bigger. The supermarket is bigger. They have a mall. We have the small supermarkets. So, now let's see if they bring a ton of money on the table. And that will be the key. Temperature, which is a lot more varied in the US than in Europe, might help. The younger people, the younger demography might help. So, all in all, we could have a better situation than in Europe. RAOUL PAL: Yeah. And so I guess the next phase is waiting. We've seen this before in crises in the past. They test ideas. The market usually rejects them all. And then they come out with the bazooka because it's the only way to stop it. But I guess we'll go through that process of testing a few ideas. It's not enough for the market. Even whatever the Fed said-- 1 and 1/2 trillion of repo-- didn't really stop anything yesterday. GIOVANNI POZZI: Yeah. Yeah. Well, my impression is that the investors are not overloaded with positions on risky assets at the moment. I think a lot was already offloaded. We've seen record flows into cash, into government bonds in the last few weeks. So, that should support the market at some point, because we know positioning is quite key.