Credit Risk & The Bitcoin Hedge with Greg Foss & Andy Edstrom
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Credit Risk & The Bitcoin Hedge with Greg Foss & Andy Edstrom - WBD402
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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.
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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Mentioned in the interview:
Evergrande's Global Bondholders Didn't Receive Interest Payment
The Impact of China Devaluing the Yuan in 2015 - Investopedia
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