Harley Bassman, managing partner at Simplify Asset Management and widely known as the “Convexity Maven,” joins Monetary Matters to break down the hidden risks shaping today’s markets. He explains why inflation is likely to remain structurally higher, why massive fiscal deficits matter more than Fed policy, and how passive flows continue to support equities despite growing cracks underneath. The conversation dives deep into bonds, mortgage-backed securities, credit risk, gold as an alternative currency, and why convexity is the key concept investors consistently underestimate. Bassman also outlines practical portfolio hedges designed to perform when markets move to extremes, offering a rare, long-horizon framework for navigating uncertainty in 2026 and beyond.

Read Harley’s 2026 Stocking Stuffers here: https://www.convexitymaven.com

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Timestamps:

00:00 Introduction to Financial Crises and Convexity

00:30 Meet the Convexity Maven: Harley Bassman

01:08 Macro View: Inflation and Economic Drivers

01:48 Demographics and Spending Trends

03:24 Immigration and GDP Growth

04:21 Fiscal Policy and Inflation

05:36 Bond Market Predictions

13:27 Equity Markets and Passive Flows

17:31 Mortgage-Backed Securities: A Safe Bet?

23:51 Leveraged Trades and Interest Rate Hedges

32:09 Comparing Long Duration Investments

33:50 Understanding Positive Carry in Options

40:36 Private Credit and High Quality BDCs

48:48 Investing in Big Oil and MLPs

55:03 Gold as an Alternative Currency

01:00:12 Portfolio Construction and Sizing

01:01:50 Conclusion and Future Episodes