In this episode, I’m joined by Alan Dunne and Kevin Coldiron, a co-author of "The Rise of Carry", for an in-depth discussion on the recent unwinding of the Yen carry trade and a broader exploration of how carry trades are becoming more embedded in both our financial decisions and everyday lives. We revisit key insights Kevin took from his book, published in 2019, and explore where things have unfolded differently than anticipated. Kevin also breaks down how the S&P 500 might be central to the current carry regime and offers thoughts on how we could assess the risk of a ‘deflation shock’ or ‘carry crash.’ We round out the conversation by considering the future of carry and the role geopolitics might play in shaping its course.

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Episode TimeStamps:

03:02 - How carry trading has evolved since "The Rise of Carry" was published

06:04 - How carry is related to the COVID-19 crisis

09:12 - Has anything surprised Kevin since he wrote the book?

17:02 - Was SVB a lucky escape?

23:15 - S&P 500 - the essence of a carry trade?

30:16 - Short-term moves are being exacerbated

32:30 - VIX inversions and structural changes

34:23 - What are the characteristics of a carry trade?

37:58 - A change in carry = a change in the monetary system?

45:09 - How could you make money from a carry unwind?

49:13 - Will we ever get away from the Fed Put?

53:47 - A new way of treating the S&P 500

56:33 - How the carry regime impacts the economy

59:15 - The impact of geopolitics on carry

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GM71: The Carry Risk Lurking in Your Portfolio ft. Kevin Coldiron 01:05:21 Share

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GM71: The Carry Risk Lurking in Your Portfolio ft. Kevin Coldiron