If Global Trade Breaks, It’s Worse Than 2008 | Ed Conway

Ed Conway (0:00)

You've got two serious kinetic wars happening in the Gulf and in Ukraine, and in a sense, they're bleeding into each other in various different ways. It's not implausible that if things go south from here, people will look back and say this was the foothills for another world war. The thing that I'd say which is different this time around, the nature of the global economy is fundamentally different now to how it was before. You didn't have supply chains that genuinely bestowed the globe back in 1914

Our degree of integratedness, integration, rather, is so much greater now than ever before in history. If we were to have a kind of breakdown in the global trading system, God forbid, it would make the financial crisis look like a walk in the park because this is everything.

All of which is why I think and I hope that world leaders would be conscious of that when they're, as Trump and Xi are going to have their meetings. But the stakes are seriously high.

Wilfred Frost (1:04)

Welcome to The Master Investor Podcast with me, Wilfred Frost, where we celebrate and learn from the success of the greatest investors, business leaders and politicians in the world to give you, our listeners, the edge. The Master Investor Podcast is sponsored by LSEG, Interactive Brokers, The World Gold Council and BNY Investments. Please do remember the views expressed in this podcast are for general information purposes only. Nothing in the podcast constitutes a financial promotion, investment advice or a personal recommendation. More on that in the show notes.

My guest today is Ed Conway. He's the Economics & Data Editor at Sky News, regular columnist for The Times and Sunday Times, and author of The Summit, The Biggest Battle of the Second World War, Fought Behind Closed Doors of Material World, and now most recently Trade World, which came out just a couple of weeks ago. He's not just my esteemed colleague at Sky News, but a great friend of mine over a very long period of time as well. And Ed, it is a delight to welcome you to the podcast.

Ed Conway (2:12)

It's intimidating for me because I'm conscious that I'm neither an investor nor a politician, nor basically any of the above.

Wilfred Frost (2:18)

I thought you were going to say it's intimidating because you know me so well and my tactics.

Ed Conway (2:22)

Also because you know where all the bodies are buried. So this is the moment.

Wilfred Frost (2:27)

We should do another podcast episode about some of the nights out of the past.

Ed Conway (2:33)

About the history.

Wilfred Frost (2:34)

Ed, by the way, for those who don't know, is an outstanding DJ.

Ed Conway (2:38)

Thank you. Yeah, that's my real forte.

Wilfred Frost (2:40)

David Solomon.

Ed Conway (2:42)

Yeah, not at the same time.

Wilfred Frost (2:43)

The economist who also likes to DJ.

Ed Conway (2:46)

He's on the top floor and I'm somewhere in the basement.

Wilfred Frost (2:48)

Well, the parties I've attended with you.

I've interviewed him, but I haven't been to one of the parties. He's DJ. Now, Trade World came out just a couple of weeks ago. You were kind enough to give me a copy which I read over the summer and I absolutely adored it. Once again, Ed, what you've done is kind of bring together unbelievably complex topic in a digestible way and highlighted how relevant it is to us. So thanks for the book early and for sharing with us. We're going to spend most of this podcast episode going through it. But I did want to start on the topic du jour, which is kind of in the topic du jour on this podcast for a few months now, but it just gets more and more important and the levels get higher as we go through, which is bond yields. You cover this daily very closely. Ultimately, stepping back, what is driving them higher?

Ed Conway (3:39)

I should say that one of the great sea changes that Wilfred Frost has brought to Sky News is...

Wilfred Frost (3:47)

Someone for you to talk to about with bond yields.

Ed Conway (3:49)

I wouldn't say a fixation, but more bond yields than we've ever had before, especially in the early hours of the day, which is kind of a sign of the times as well.

Because obviously, this audience will know all about bond yields already, but a lot of my job is to try as economics editor at Sky, and someone who's trying to communicate this stuff, is to try to explain why this stuff is relevant. Obviously, of all the numbers in the world, you could take crude oil, you could take maybe one or two exchange rates, but the treasury yields, what is the number of the treasury yield right now? Just in terms of its significance infusing into the rest of the economy, you couldn't get a more important number.