Passive Investing Poses Systemic Economic & Market Risks | Michael Green
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- Опубликовано: 5 фев 2025
- Financial markets are more concentrated than ever, with a handful of companies dominating the stock market like never before. In this insightful Speak Up interview, Anthony Scaramucci sits down with Simply Asset Management’s Michael Green to examine how this unprecedented market concentration creates systemic risks-not just for the stock market, but for the broader economy. Together, they delve into the brewing crisis in passive investing and its potential to destabilize America’s financial system. Plus, Michael unpacks Bitcoin’s biggest challenge and his thought-provoking vision for humanity’s future. Don’t miss these essential insights to navigate today’s most pressing financial risks and prepare for what’s ahead.
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Investment Concerns? Get a free portfolio review with Wealthion’s endorsed financial advisors at bit.ly/40M0LCg
I applaud this man’s opinion. He’s a voice of reason in a world of stupid.
"There is no such thing as a free market." --- ha! Mike popped that balloon
Michael Green is genius. I am a thorough analyst with 30+ years of investment experience and what Michael argues here is spot on from not only historic, financial and economic standpoint but also for his take on the astro possibilities of mining gold…..
Fantastic and thoughtful conversation!
Green is top, always eagerly consuming his content. The chap is another level…
Excellent talk. Pretty unique exploration w Mike - good job!
Enjoyed this interview. Enjoyed this interview. Thank you. Looking forward to more.
If taxing is important to soak up liquidity, then why don’t we tax corporations to deflate the bubble? Seems the individuals in the work force are being punished for the government’s error.
Taxation isn’t a practical way to control inflation because voters don’t like it, and politicians want to get re-elected. Also, taxation in itself just moves money around: it doesn’t destroy money.
Less profits for corporations = less investment = less jobs = less tax income. In the uk over 10,000 millionaires moved abroad since tax increases. We should be offering tax reductions for businesses who invest
@@steviedsolve Put the money back into the workers and improvement of the company, CEO's and associates pocket all of it!
You're right, we could tax the corporations more than the average joe, Dubai does that. It is a policy choice the Congress has made to have higher payroll taxes than corporate taxes. Dubai has no income tax but has a VAT and a corporate tax structure and their people are happy and progressing.
Yes tax the rich!! So all the prices go up even more..as much as life is not fair tax the rich is not bringing benefit to the poor. That's guaranteed.
The 2008 recession hit so many people hard, and I think we’re all a bit on edge with how things are looking in the economy right now. It’s hard to ignore the signs, a slowing job market, inflation, and now interest rate hikes. When I look at my portfolio, I’m wondering if I’m properly prepared for a potential downturn. The last thing I want is to be left scrambling like so many people were during the last recession.
I feel that. I was just reading about how the 2008 crash wiped out billions in wealth for people who didn’t diversify their portfolios. It’s crazy how much you can lose if you don’t have the right mix of assets. I’m trying to focus more on defensive investments stuff like dividend-paying stocks and some real estate exposure. And honestly, I can’t imagine not having someone guiding me through this mess.
I learned that the hard way. In 2008, I had way too much in tech and consumer discretionary. When the market took a dive, I didn’t have a safety net, and I lost nearly half of my savings. But after that, I made it a point to get professional help. I started working with Donna Lynn Herme last year, and honestly, it’s been a game changer. She’s been predicting market moves and adjusting my portfolio in ways I never would’ve considered. Last year, even with all the volatility, I ended up seeing returns instead of losses. It’s a big difference when someone’s actually managing your risk.
You know, I’ve been hearing a lot about Donna lately too. I’ve been in the market for years, but I never really thought about a fiduciary until this year. With everything that’s going on, I finally decided to get help, and I can’t tell you how much it’s paid off. She helped me move some funds into more stable assets before things started looking sketchy. While a lot of my friends are panicking, I’m feeling pretty good about my position.
I was kind of the opposite of you, I didn’t get that professional advice soon enough. When the market tanked, I took a huge hit because I was too focused on the high growth stocks. I ended up selling in a panic just to avoid more losses, but of course, that only locked in my losses. This time around, I’m doing things differently. I’ve been researching fiduciaries like Donna Lynn Herme and seriously thinking about getting someone who has a plan to help protect me from the next potential downturn. I don’t want to make the same mistake twice.
I think the big takeaway here is really about being proactive. We all know the market’s unpredictable, and trying to time it yourself can be dangerous. When I look at the 2008 crash, I see how those who were diversified, had defensive stocks, or worked with an advisor came out way better. It’s not just about surviving a recession, it’s about positioning yourself to still grow in a tough market. I'm really starting to think a financial advisor could be the key to weathering this storm without losing my shirt.
Wow…. Amazing insight into the current economic and social challenges facing America and great suggestions as to what can be done to ensure “equal opportunity” for all
Anthony, thanks for sharing a great interview with Mike Green. Please consider running for President of USA and hire thoughtful, honest, informed people like Mike Green who give a damn about the future of our young people, the future of America .
Great, thoughtful conversation. Education and nutrition should be the basics!
Great guest
Green is great. 12 min: the H1B visas are definitely a means of holding down wages. I have been in discussions with 10 engineers, 50% of them on these visas, everyone agreed that this was the case. As for the interest rates, houses are unaffordable because the rates were kept too low, not because they are now too high . (also the supply choke) Middle income people save cash---and deserve a return on it!
Damn Antony!! I sat down this evening feeling great about my financial situation (which is great ) and our country’s future-then you brought up seed oil and food coloring- I only use butter and bacon grease- what the hell do I do now? What if I am still working at 95 because I like to work can I get a hip replacement? What if I pay for it? Are we gonna get a pullback in bitcoin?
Great content
Smart guys - important conversation.
A good discussion. Agree with maybe 75% of what Mike has to say.
His arguments against Bitcoin however I disagree.
1. There is nothing stopping new entrants to the economy from earning bitcoin. It is a fair and open system. The price per unit bitcoin as measured in USD makes it appear as though it is unfair to the future entrants. The reality is that when bitcoin becomes the unit of account it will be much more clear that everyone wins. Earning sooner and spending later will be incentivized.
2. Handing the keys to a drunk driver in an emergency? Nope. Rely on warbonds, taxed and the coordination of the population to willingly make sacrifices in case of such needs for emergency spending. Theft via the money printer is never morally justified.
Love Michael Green...He is an educator
A show on the 70s would be good. I experienced the same situation seeing my dad's wages decline as well...
I agree that taxation would be a great way to fix the problem; however, our tax system would have to be completely overhauled. As it stands, the proportional burden of taxation falls more heavily on the middle class.
I’m middle class and don’t pay much in federal taxes- pay a whole bunch more in property taxes. I think the irs has statistics on which income groups pay the most, you should check out there website
This is a highly intelligent and nuanced conversation. I especially liked the “conscious capitalism” that most people favor. Good segment, Anthony.
This man is so smart and yet his ETF is a big loser. How can this be?
because he's a bear. everybody knows about passive flows; there's no "edge" in being aware of this. what do you do with this information? take your money out of the S&P 500? good luck.
I find people like this don’t make great investors. Great points but they don’t play out in the real world, or the markets stay wrong longer than you can express your view financially.
Knowledge and skill are two separate and different attributes.
@@mulatto2776Well said.
Because He follows fundamentals in the system is rigged
Such a great guest, and excellent questions from all. Thank you.
Thank you,Michael, for being brave and stating that you voted for Trump. You are on the right side of history and have a higher probability of profiting.
This was a great guest.
Yes, focus on how money is spent! Thx Professor
And reduce or stop spending how? What specifically do we reduce or eliminate?
For decades the fed has kept interest rate low which hurt old American on fix income who count on savings to help pay their bills. The high interest rate is new within the last year. The low interest rates we had for decade help the younger people to buy homes and auto
Tax as a way of soaking up liquidity was an epiphany for me. Thank you, that explains a lot.
Mike Green for president, no seriously always learn something new and different , something that makes you think , thx
I need a way to draw up a plan to set up for retirement while still earning passive income to meet my day to day need and also get charged lesser taxes even while in a higher tax bracket. i want to invest around $250K savings.
Don't put all your eggs in one basket; instead, diversify into different asset classes to mitigate risk. If you lack extensive knowledge, consult a financial advisor.
I've been looking to get one, but have been kind of relaxed about it. Could you recommend your advis0r? I'll be happy to use some help.
Thanks for the info. I searched for her full name and found her website right away. I reviewed her credentials and did my research before reaching out to her.
If you want to get rich ,quit spending your money on drugs and put your eggs in one basket
I never understood this theory about "passive" dominating the market. If that were the case then all stocks should move more or less in tandem, because each new dollar is evenly spread over all stocks, based on their market cap. This is of course an absolute skew towards large cap but never a relative skew! The fact that stocks move differently shows that active investment decisions drive perhaps not the overall market but individual stocks.
If im Vangaurd or Blackrock, im playing outside of the index market with additional capital and manipulating markets to keep suspicion down. This is unsustainable, but it does not actually matter because of the pension protection act put in place 2006. These corporations are not liable for mismanaging your money, so when the Ponzi scheme is up, they avoid jail.
Passive does dominate the market. That doesn’t mean it’s 100% of the market. Of course there are tons of individual investors and investment advisors, institutional investors, and such that are buying and selling individual stocks. passive inflows are only a percentage, therefore it places a floor under the market. Think of it as a passive put so to speak.
If QDIA is sort of the problem, makes it be part of the solution. Require a higher portion of QDIA to go to bonds. Bond demand up, yields down, interest cost down, deficit down. Rinse and repeat.
I hope everyone heard what Mike said about the retirement wealth. Imagine -- all your retirement money is in the market, so what you think, so is everybody's else's, we can't ALL be wrong right? Passive tries to sell and the market goes 7,13, 20 stop. Next day -- 7, 13 ,20 stop. The market does not open the 3rd day out of fear of another 20% drop -- the really smart people go on TV and begin saying what Mike has for 4 years now -- passive has destroyed the market and its f**cking somebodies fault. Fed changes some rules and says "we will buy the indexes, but not at 38PE, but 14PE which is almost the price now after two days of 20% drops. In the words of Gommer "Suprise Suprise Suprise"
The Mean Mike Green Machine 👍
Excellent drunk analogy, Michael really nailed it there.
Why can't we get smart people like this person running the country. We seem to get the exact opposite and that's why we our society and economy is screwed.
The guest says that we need to tax excess liquidity out of the economy. I think we need to tax excess liquidity and return it to the economy (through spending) to keep it turning in the economy. That is what will create jobs for the "lower classes". Small business needs their customers to 'have more money'. In the long run, taxing money back into the economy is better than borrowing money for the economy.
What a great interview!!!
One way to fix the Social Security system stop the unfair practice that the person that makes $150k a year pays the same as somebody that makes 1 million or more. It’s so wrong.
45:05 No old age boob growth if you drop the seed oils (Anthony & Mike)
ITS YA BAOOOYY MIKE.
With equities so pricey right now, my major goal is to make the correct value additions to improve my portfolio growth in this bubble in 2025, with roughly $250k parked in the bank earning nothing. What stocks should be added to my watchlist?
My strategy is to hold Bitcoin until 2025 and then invest in high yield ETFs during the weak market from 26' to 27'.
Index funds and ETFs: 40-50%, emerging markets (e.g., VWO): 10-15%, dividend stocks: 10-20%, growth stocks/small-caps: 10-20%, and REITs: 5-10%.
To avoid getting burned, always consult with a qualified financial market professional when first starting out.
There are numerous advantages of having a financial counselor, but here's an example: My advisor allocated a modest portion of my portfolio to Nancy Pelosi's investments, which is entirely legal. That percentage has increased 71% in just six months-take that information what you will.
There are plenty of benefits of having a financial adviser, but here's an example: My advisor dedicated only a small percentage of my portfolio to Nancy Pelosi's investments, which is entirely legal. That percentage has increased 71% in just six months-take that information what you will.
There are plenty of benefits of having a financial adviser, but here's an example: My advisor dedicated only a small percentage of my portfolio to Nancy Pelosi's investments, which is entirely legal. That percentage has increased 71% in just six months-take that information what you will.
Whatever anyone says, the fact is, its easier than ever to do gig work that pay pretty descent, lower wages have gone up quite a bit in the past few years nationwide, the only issue is the housing/rental market that has gone up quite heavy in the past 3 yrs, if that can be brought down including the int rates, this is one of the best times ever to make money via various means!! When I was in collz there was no uber, no doordash, no other various gigs and even investing felt like way out of reach! So what needs to be done? the housing/rental needs to be controlled thats all there is to it mainly!
I predict that stock market will drop like a rock, I predict that the stock market will go to the moon, I predict the end of the world, and I will be right on all counts, but without timing my predictions are worthless.
I’ve witnessed people in their 80s and beyond turned down for surgeries. Sometimes it’s known they could not handle recovery. Sometimes they are disqualified for other other medical reasons. There is some wisdom there. You just cannot see it.
@ 29 min OMFG YES Australia’s superannuation system (similar to a 401k) has only been fully operational for the past 30 years or so. As the baby boomer generation begins to retire en masse, these funds will face significant drawdowns. With fewer income-based contributions flowing in, there’s a risk that the system may struggle to remain sustainable. This could lead to a sharp decline in returns, potentially triggering a major financial crisis in Australia.
I was just thinking about this topic. My brother launched an IPO about twenty years ago, and it is doing ok / pretty good -- still hanging in there -- but how would anyone find someone like him today?
Not true that auto enroll in 401k since 2006. More likely that the dominant companies are simply more dominant & therefore attract more money & are not solely focused on the US. How would this guy explain Meta dropping significantly in 2022? And then rebounding so strongly?
Very straightforward -- those auto enrolled 401Ks since 2006 (yes true) are largely invested in Target Date Funds which systematically rebalance between bonds/equities. When the Fed hikes rates sharply after a long period of low rates, it causes bond markets to fall sharply. A rebalancing then involves selling equities to buy bonds. 2022 was a good example of what the passive unwind could look like when it eventually happens.
Great video!
It is far from clear that a country on a fiat money system is better able to defend itself than a country on a gold standard, or bit coin . Green could not prove that by historical examples. The ability to defend comes not from the currency system, but the economic development and the loyalty of the citizens.
Bitcoin is destroying all the old models as we speak.
BTC is trud
The market will never go down more than 5% ever ever again
4% interest is normal. It is a very modest income for seniors. Not sure where your coming from!
🔥
I always drove my friends to the hospital drunk and sometimes high- good times
The idea that Bitcoin can't work as a currency because of it's fixed quantity is simply wrong. People naturally create derivatives to scarce forms of currency which is why we've used sliver, copper, and paper as gold derivatives. In the absence of gold derivatives people use other commodities such as phone cards or cigarettes. As Bitcoin becomes more scarce, an underlying derivative will naturally take over to provide liquidity to a market that has a shortage of currency. Bitcoin ETFs, alt coins and stablecoins. are evidence that this has already begun.
Then what's the point?
Gold itself is being tokenized.
Bitcoin can’t be a currency simply because it’s unacceptable that a cohort of people who hold it become the new aristocracy; just not socially acceptable. It may go on to be worth millions but won’t be a currency.
It's not wrong. Hundreds of years using gold (also limited in total quantity, at the time) as money shows us why it can't work.
@@davidboreham it's actually thousands of years, but Bitcoin hasn't been around for thousands of years so that's a bad comparison. If you want a real comparison, Bitcoin is the only asset to outperform gold since it's inception.
I was going to point out that everything went downhill after citizens united in the large 70s i think
Good to here this thank you both. Michael green makes a great point he sees the issue and the shared light is hopefully for enough people to learn from mistakes and improve. The truth is that, as Anthony says the wealthy don’t care hopefully we see a shift
Regarding Bitcoin as away to keep the govt from spending too much, it's almost like instead of bitcoin we need some kind of way for the masses to have their will heard....like where they could each weigh on issues to change how the govt functions....
35:59 bitcoin "is a system that's fantastic for number go up." Sounds like investment advice to me.
RMD’s are in full force now. But they seem to be going back into risk assets.
It amuses (and saddens) me that these guys walk themselves naturally to the point of realising they think that what's needed is at it's core socialism, with a layer of carefully moderated and regulated capitalism on top, and then run away from the conclusion in fear.
Excellent edition. View from the UK, but shouldn't the democats approach Michael Green for some kind of role in 2028, or at least get him fully on-side?
As a matter of fact the whole Market is about the tank the fundamentals are way out of hand
I will watch the interview despite Anthony Scaramucci
Nice catch on the name. Maybe Raoul Pal should rename his label of “How to Unfig Your Future!” 😂😂😂
What about the possibility of “ The Great Taking” given the vast amount of wealth in 401ks
True. For the young and future generations. ❤ Knowledge is Power.
32:19 Bitcoin maxie destroyed with pure logic.
Wants to quit and walk off stage?
33m bit coin: you get money by working for it. The fact that the money increases in value over time does not alter that. We've had decades of depreciating money. WAs that good for the younger generation? He said earlier that inflation was bad. Now deflation is bad. A currency which kept it's purchasing power exactly is impossible. Read about great sag: 1870-1890 deflation great time for the middle class and workers!
I'm confused: we have an infinite amount of gold? Why do we need an infinite amount of gold? We can't eat it. Besides some electronic parts, it is not a part of most people's lives. I can't imagine expending any of a community's resources to go off-planet to find and mine gold. Mining gold off-planet will do nothing for the welfare of the vast majority of the world population. I would love it if all of these big thinkers that spend their time trying to figure out how to play the game of wealth would, instead, invest their mental faculties to figure out how to create a more just and equitable community, right where they live. The fact that we live in a world where even in the wealthiest nation on earth 1/3 of the population sacrifices their economic security on the altar of a system that demands unlimited growth for the top 1% completely destroys the urgency behind presentations like this.
What do you mean by high interest rates when inflation is eight percent they’re killing the savers in America
Grown ups talking here. Rare and welcome.
Brilliant!
Great video! I have a quick off-topic question: I have some USDT in my OKX wallet, and I also have 12 words: iron observe slam major mad decorate feed photo awesome vast kitchen faint. Could you kindly guide me on the easiest way to transfer the USDT to Binance? Thank you!
Bitcoin is a negative sum gain speculation vehicle. Rather slimey.
It is basically gold with terrible environmental impacts, no industrial uses and limited value as a means of exchange.
"passive investing" sounds like something that shouldn't exist.
WOW, epiphanies abound!
Didn’t we start an opt out 401K program to increase the amount of people investing for retirement? I think 62% of Americans own stocks and that’s from an 8% increase from 2022 or 2023.
If the politicians and rich ppl gave a f$&@ about the middle and lower class they would make a tax/interest rate system that makes things more equal. For example 0-25k 0 tax and 1-2% interest rate 26-50k 2-5% and 3-5% 51-100k 5-7% and 6-7% and so on all the way up to the rich say 1mill-100m 10-15% and 10-15% and same all the way up to billionaires but they won’t prove me wrong
3:32 'I think the incentives for everybody are just misaligned what politic ician is going to cut spending when they need to get themselves reelected and what politician is going to tell the American people the truth?' Trump as a two-term president can't be re-elected.
Re minute 28…our son has a forced retirement fund as you say. He also has a tiny Private Fidelity. Can he ask for a form from Fidelity and sweep his current retirement balance at his job into an equivalent retirement account in Fidelity? He works at a hospital. I think it’s a 403 b or something no profits use for 401k.
Nifty 50 is an Indian Index 😮
Please get rid of the scams in your comments
Hmmm.. young generation doesn’t have ability to buy bitcoin? Are all exchanges shut down?
Mike the best
NUVB is about to bounce maybe it squeezes
I just have a different view of the ideal world.
Paying off 5-7 trillion in taxation? In what world
Is there any of these shows that dont play on fear?
Two people who refuse to study bitcoin. It is free to study bitcoin. The purpose of universities is and has always been to maximize the number of people who would be too proud to study bitcoin upon its inevitable discovery by humanity.
Bitcoin has been studied by the greatest investors and they said it’s a scam that will end badly
I think the government spends way too much
Good job on trying to start a
wealth class warfare
Just wanna remind you that the discovery of massive new gold reserves in the Americas absolutely destroyed the Spanish empire. It disincentivized innovation in such a deleterious way that I think it’s fair to argue Spain *still* hasn’t truly recovered.
Great guest but it is hard to understand a more progressive tax unless it factors in state taxes better. At 50 percent for top earners, why would I take any risk with my wealth. If I lose, I lose all. If I win I keep half. And if I do win, I’ll make sure it is in things I can never sell. I don’t get it, but overall the conversation was really good.
How much money or wealth is needed to meet basic needs, create security and contribute to happiness and joy in a person’s life?
Yep. The index funds are the new “Nifty Fifty.”
👀