Credit Risk & The Bitcoin Hedge with Greg Foss & Andy Edstrom

 
 
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“Over time bitcoin will be the benchmark for proper capital allocation and everything else is going to pay the pauper, and Western Union? Uh, I’m sorry guys, but your business is going the way of the horse and buggy.”
— Greg Foss

SHOW DESCRIPTION

Location: Remotely
Date: Thursday 23rd September
Company: Validus Power Corp, Swan Bitcoin
Role: Bitcoin Strategist, Head of Institutional Investment

Over the last week, markets worldwide were hit hard as fears continue to grow over the liquidity of Chinese property behemoth Evergrande. The S&P, Dow Jones and Nasdaq all suffered their worst days in months.

Evergrande is China's second-largest and the world's most indebted real estate developer. It expanded rapidly by borrowing more than $300 billion. however, when new rules were introduced to control the amount owed by big large estate developers, Evergrande was forced to sell properties at a significant discount and is now struggling to pay its debts.

In 2008, the Great Financial Crisis began with an insolvent institution which precipitated a credit panic across the global banking system. When markets are saturated with debt, a single event can turn into a contagion.

Will Evergrande spark another financial meltdown, or will it prove to be too big to fail?

In this interview, I talk to the Head of Institutional Investment at Swan Bitcoin and Bitcoin Strategist Greg Foss. We discuss the Evergrande insolvency, whether a debt crisis is looming, and why Bitcoin is the perfect hedge.

TIMESTAMPS

00:04:23: Introductions
00:06:31: Evergrande overview
00:09:56: The 60/40 rule and the distressed debt market
00:14:04: Evergrande comparison to Lehman Brothers
00:16:44: Chinese investment structure
00:22:45: Impacts on the high-yield market
00:24:54: Impact on Bitcoin
00:27:37: The Tether factor
00:32:20: How f*cked are we?
00:43:31: Peter's financial strategy
00:44:48: Greg's financial strategy
00:49:51: Long vol/short vol explained
00:53:44: Bitcoin is insurance
00:57:36: Why people may still be averse to Bitcoin
01:05:11: Banking in El Salvador and the neobank takeover
01:12:39: Final comments

 

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SHOW NOTES

PodcastPeter McCormack