Hidden Risk
Benny & The Squirrel: Episode 46.
Show was recorded at 6.20pm EST on Sunday 26th April, 2026.
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Today’s Slide Deck
Composite Security Fragility Index Deck
Pod Summary
Chinese Financials and the Reach for Yield:
Recent strong performance of Chinese life insurance companies and banks. Chinese retail investors, with Chinese 10-year yield dipping below 3%, have aggressively bought high-yielding bank stocks, outperforming global markets and the broader MSCI China index.
Asian Demographics and Insurance Growth: Massive demographic tailwinds for the Asian insurance market.
Two-track story: selling classic wealth management products to aging, wealthy (aging) Northern populations, and introducing first-time insurance product buying by the emerging middle class in South and Southeast Asia
Treasury Volatility and the PFIX ETF (Minute 13)
Shifting to the bond market, the discussion focuses on the recent epic “volatility crush” in U.S. Treasuries.
They review the Harley Bassman PFIX ETF (a play on 30-year interest rates) and debate whether current low volatility levels present a near-term opportunity to add to treasury volatility hedges.
Distortions in the MSCI Emerging Markets Index (Minute 18)
Discussion of the skewed composition of the MSCI Emerging Markets Index (EEM).
Despite recent market turbulence, the index posted a record month, largely because it is heavily weighted toward semiconductors and memory stocks (acting more like a tech index) rather than traditional emerging market index.
The Composite Fragility Security Index (Minute 27)
The episode introduces a proprietary “Composite Fragility Security Index” model that ranks the top 50 countries by GDP based on hidden risks like water safety and food security.
Many developed nations, including Singapore and Australia, possess significant underlying fragilities despite their apparent wealth.
Discussion of specific geopolitical and currency risks that the market is currently ignoring:
Taiwan
Potential break of the Saudi dollar peg
Singapore and Dubai resilience
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