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Tag: geopolitics

Recession in 2023 Should Be Benign With Ample Job Growth: Alex Chausovsky (Szn 4, Ep. 35)

Alex Chausovsky, vice president of analytics and consulting at Miller Resource Group, rejoins the podcast to discuss his surprisingly upbeat economic outlook for 2023, driven by a healthy labor market in the US.

Content Highlights

  • There may be a recession in 2023 but the US labor market should hold up just fine (3:03);
  • The guest’s assessment is due to first-hand knowledge as his employer is a recruiting firm. None of their clients are slowing hiring (5:37);
  • The trend is due in part to re-shoring of high-end manufacturing to the US, but also to non-US companies seeking to establish manufacturing centers stateside (7:46);
  • The Federal Reserve has been hiking rates aggressively and plans to continue this policy (albeit less aggressively) in 2023, but most of the damage may be done already (9:12)
  • With inflation abating there will be less impetus for the Fed to “truly break things” in 2023 (13:05);
  • Supply chain issues have mostly been resolved, with auto production and semiconductors especially benefiting. Further easing can be expected on the labor side (14:44);
  • One sector of the economy that is clearly poised to benefit: automation (16:56);
  • Background on the guest (22:56);
  • Housing has already contracted but this should turn around by the end of 2023 or early 2024 (31:32);
  • The outcome he’s expecting in his native Ukraine (37:35).

More Information on the Guest

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Hard Assets the Place to Be in ’23: Kyrill Asatur, Centerfin (Szn 4, Ep. 34)

This podcast episode brought to you by Covey — Covey is designed to find, reward, and train the next top investment managers —from any background—that anyone can copy, so everyone can win.

Kyrill Asatur, co-founder and CEO of Centerfin, joins the podcast to discuss his view on asset allocation going into 2023: why he is bullish on hard assets like energy and bearish on fixed income — and why the inflationary environment is likely going to stick around.

Content Highlights

  • How Centerfin was set up coming into this year and what went into its contrarian decision to avoid fixed income (4:06);
  • Current views on the market after a tough year (5:25);
  • Centerfin’s take is to be long hard assets, including commodities and commodity-linked equities while continuing to avoid fixed income like bonds (7:44);
  • The environment is different now. There has been a regime change since 2017. Inflation can’t just be exported anymore (9:48);
  • There will likely be a recession. Once we emerge from it, leading industries will probably be different than they were in past recoveries (11:18);
  • Why Centerfin is bullish energy and how they are playing it (12:55);
  • Their chosen ETF to get exposure to clean energy (14:48);
  • There is no need to buy international (ex-US) energy stocks (16:36);
  • Short discussion on the concept of introducing different prices for different uses of energy (18:48);
  • Re-shoring from China with Apple (AAPL) moving all its production out of the country and how to potentially play that trend (20:46);
  • Background on the guest and what got him to start Centerfin (25:53);
  • Distressed investing remains out of reach for most investors but Centerfin is considering ways to change that… (30:52);
  • The bullish case for copper (39:13);
  • How best to gain exposure to uranium (40:00).

More on Kyrill Asatur and Centerfin

This podcast is for informational purposes only. Nothing here is intended as investment advice. Do your own research, make your own decisions.

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China Unrest: A Synopsis

The following is an amended version of the Nov. 28 Daily Contrarian. This briefing and accompanying podcast are released to premium subscribers each market day morning by 0700. To subscribe, visit our Substack or Supercast.

This weekend saw numerous protests in China as anger spread over the country’s strict Covid lockdown policies. The catalyst was a deadly fire at an apartment building in Urumqi, in the country’s far-western Xinjiang region. Apparently the Covid policies hampered rescue efforts. It quickly spread to other regions. Demonstrators in Shanghai clashed with police yesterday. In Beijing, protests apparently went all night and took demonstrators near the infamous Tiananmen Square, where officials still insist nothing happened in June 1989.

Economically, the damage has been pretty limited so far. The People’s Bank of China said it would cut the reserve ratio for banks (effectively the country’s interest rate). The Chinese yuan weakened against the US dollar. Stocks in Shanghai, Shenzhen, and Hong Kong all sold off but not terribly (down ~1% each).

The Latest Round of China Protests

China protests
Source: Reuters

Protests are nothing new to China. Nor are protests over the country’s Covid policies. What is new is that Xi Jinping is being specifically targeted and even urged to step down. Some talk of how this is the biggest deal since Tiananmen, but pretty sure we’ve heard that before. And Tiananmen didn’t just materialize overnight like this, but followed what were literally months of protests. So the safe bet here is probably that this will fade away in a few days or weeks, tops.

It still bears watching of course, especially on a day when there is little else in terms of known events that will move markets. Friendly reminder not to believe everything you hear on Twitter or in the western media. Yes, the regime in Beijing definitely has its friends in the western press (cough) but there is just as likely to be disinformation; for example about this being pro-democracy protests that will bring down Xi and the CCP. Both are extreme long shots, at least at this point.

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