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David Dredge, CIO of Convex Strategies, returns sixteen months after his first appearance to grade the hopes he once had for Scott Bessent as the "adult in the room" at Treasury. This episode covers Bessent's yen intervention and Treasury bond buybacks, Kevin Warsh's rocky first months as Fed Chair, an eerie echo of 1990s Japan, the reawakened gold-and-Bitcoin debasement trade, the real purpose of stablecoins, and the spectacular blowup of a 24-year-old trader who turned $200 million into $45 billion — and back again. Dredge closes with where he thinks the market is currently mispricing risk, and why his answer to uncertainty is always better brakes, not less speed.
In this episode:
- Grading Scott Bessent's "3-3-3" plan and the failure of DOGE
- The "Hunger Games of debt issuance" — who's left to buy government bonds
- What Bessent's yen intervention and bond buybacks are really signaling to "Rational Accounting Man"
- Kevin Warsh's Fed: forward guidance is dead, but has "talk tough, do nothing" replaced it
- The Fed's new task forces — Bill White on inflation targeting, Mervyn King on communications
- Japan's subsidised inflation numbers and the 30-year JGB vs. a 1% policy rate
- Why gold and Bitcoin correlation spiking to near 1 is the market's real tell
- Stablecoins, the Genius Act, and the quiet dismantling of the Eurodollar market
- Lessons from the $45 billion trader who forgot he wasn't hedged
- Where cheap convexity is hiding now — and where it already got used up
Related episode: "Uncertainty, Volatility & Risk with David Dredge of Convex Strategies" (May 2025)
David Dredge, Convex Strategies, Scott Bessent, Kevin Warsh, Federal Reserve forward guidance, tail risk hedging, volatility investing, yen intervention, Bank of Japan, financial repression, gold Bitcoin correlation, debasement trade, stablecoins Treasury market, convexity, Rational Accounting Man.
This podcast explores stocks, markets, and capital, examines the role of gold in finance, unpacks tax policy and economics, discusses pathways to financial freedom and retirement, explains how interest rates affect investing, features insights from financial advisers, analyzes inflation, recession, and market volatility, covers the actions of central banks, evaluates different assets, addresses inheritance planning, reviews portfolio construction with bonds and an isa, assesses long-term returns and allocation strategies, explores macro trends, and helps listeners understand risk and pensions.
