MH+ Ep.19 : 'No Bad Bonds, Just Bad Prices' Kev Catches Up With Harley Bassman

This week Kevin catches up with Simplify Managing Partner and Author of The Convexity Maven, Harley Bassman. They discuss bonds, mortgages, trading and Harley's two new strategies, TUA and MTBA.
Follow Aidan on X: @ConvexityMaven
Check out PGM Global: www.simplify.us
*Got questions for Kevin and Patrick? Submit your questions to: 📩 [e-mail]
Visit our merch store!!! ⭐️ www.themarketh... ⭐️
To receive our emails with the charts and links each week, please register at: markethuddle.com/

[@efanshel]

The great salesman is really a teacher. Something that should humble us all. Let's say you're right 50% of the time and you compensate by buying convexity at a reasonable price- good, but when you are right about the price but you got the scenario wrong, now you really don't have a great right wrong ratio, and people just don't mention this. That's why Druckenmiller says he's wrong so often he has to make money without being right. This applies to us all. The thing I like about Harley is he is a great trader , not just a great analyst and exponent. He is on my list. If he's talking, I'm listening....

[@efanshel]

Thanks for mentioning Alex Gurevich, I'm a big fan of his too....

[@bruceaulabaugh]

Harley is my hero!

[@efanshel]

Me too

[@yamomanemjazz]

Plumper. Got it. Thank u convexity maven 🎉

[@NJTCO1]

Mr. Bassman is brilliant and smart and his advice is as close to perfect as possible. So, this quibble is offered with complete respect. He is wrong in one small way about the equivalence between Treasury bonds and FNMAs. FNMAs are not usually exempt from State Income Taxes; Treasuries are.

[@ConvexityMaven]

My comment was strictly limited to the "Credit" risk, and in any case, SALT issues are quite variable away from a few Blue States

[@AHofmann25]

Eloquently explained but I still had to listen twice. Thanks

[@emcardleinvest]

Great guest!

[@darrenritsick4219]

TUA I get and love - I want to love MTBA (and suspect there is good reason to) but I need an MTBA For Dummies handbook first

[@yanivpete]

For MTBA will the monthly dividend include both the interest and principle payments from the underlying MBS, or will the principle be reinvested?

[@ConvexityMaven]

Their strategy re-invests via the structure of the process. (Rolling TBAs, which are functionally MBS futures contracts)

[@Cayman-Straddler]

Does this new ETF have withholding taxes on the distributions for non US accounts?

[@MetRoamer]

Great interview, but what I dont understand why Harley so much against the 30 years stripes, if the longer maturities are the most sensitive about rate cuts then 30 year bonds expected to increase more than shorter maturities.

[@ConvexityMaven]

Zero's are a function of the Yield Curve, as such, if the Curve steepens sharply in a rally, long-dated Strips can actually go down in price. Check the math

[@bentonkb]

I am a huge Harley fan, but I don't understand why he is expecting a Federal Funds rate that is 0.5% above the inflation target rate. The FF rate has typically been 1.5% above the inflation rate.

[@Cayman-Straddler]

I’ve been told that TUA has a 30% Withholding tax on dividends to non US owners

[@filipnolev5911]

Pfix was the best ….. and typical for men I sold it way too early….

[@lak1294]

The Simplify products are great (although CYA has crashed hard). I'm going to spend time learning about all of them.

[@j_ltz_]

how levered was druck / ptj? is 5x somewhat modest?

[@emmanuelananda6551]

Absolutely top notch content.