L2 Capital Podcast #11: Chat with Jeffrey Snider - Eurodollar system and financial crisis

L2 Capital

In today's episode, Marcelo spoke with Jeffrey Snider, Head of Global Investment Research at Alhambra Investments, a Florida-based company that provides portfolio management services to institutions with a focus on risk management.

Jeffrey Snider is one of the few people to openly and consistently talk about the Eurodollar System and he spoke to Marcelo extensively about the subject in this episode.

Jeff begins by explaining exactly what the Eurodollar system is. It originated through US currency deposits outside the US and outside the US’s regulation, but evolved to become a large, interconnected global network with an enormous volume of transactions. It has been key to financial dynamics for some decades now.

Asked about how the system really works, Jeffrey Snider sets an example to clarify the mechanics behind it and the effects on the economy and the financial markets in general, noting that the opacity of the system justifies the “shadow currency” nickname.

Speaking about the financial crisis of 2007-2008, Snider brings a surprising perspective about what happened. In addition to pondering the share of subprime mortgages in the context of the crisis, he lists some of the various signs that point to Eurodollar as the factor that exacerbated the problem and led to the financial dimensions it got to.

Still about the crisis, Jeff comments on the Fed's reaction and the adoption of quantitative easing (QE), drawing an elaborate and interesting explanation on the state of the world's monetary system and the ability of central banks to deal with the situation.

To conclude, Jeffrey Snider describes China's role and exposure to the Eurodollar market and provides insight into how to position oneself in regards to our own investments, in order to profit from the possible outcomes that he mentioned.

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The L2 Capital Podcast focuses on potential opportunities in the market, and brings to you industry leaders and intelligent conversation about their respective areas of expertise.

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