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Tag: recession

Fed’s Next Move, Trump 2.0, Opportunities in AI, Argentina (Szn 6, Epsd 15)

With James Fishback, Azorio Partners

James Fishback, founder of Azoria Partners, joins the podcast to discuss the Fed’s shift in monetary policy, opportunities afforded by another Trump administration, why AI hype is real, and a host of other issues.

James Fishback, founder of Azoria Partners, joins the podcast to discuss the Fed’s shift in monetary policy, opportunities afforded by another Trump administration, why AI hype is real, and a host of other issues.

This podcast was recorded on Sept. 4 and was being made available to premium subscribers that same day. More information about premium subscriptions is available here.

NB: The guest is outspoken on certain political beliefs discussed here. These views are not necessarily shared by the host or the Contrarian Investor Podcast more generally.

Content Highlights

  • The Federal Reserve is expect to cut 200 basis points off of interest rates when all is said and done. The reality should fall well short of that measure… (1:37);
  • The US is economy growing in aggregate. Pain points are felt among lower socio-economic classes (4:44);
  • The major change will not come from a major shift in monetary policy but what happens fiscally, with the November election (9:16);
  • How to trade a Republican sweep? There’s an acronym: T-R-U-M-P (10:54);
  • Many companies have taken advantage of cheap labor supplied by illegal immigration. Their stocks will suffer once this is rolled back… (15:31);
  • AI is real. Productivity gains will be massive (17:44);
  • Crypto discussion. The best opportunity for bulls may to bet on lower volatility for Bitcoin… (22:47);
  • Background on the guest (28:33);
  • Azoria’s first ETF will be called the Meritocracy Fund. The strategy (33:38);
  • Another opportunity: Argentina (43:18)

More Information About the Guest

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Economic Data Pointing in Right Direction, for Now (Szn 6, Epsd 14)

Feat Colin White, Verecan Capital

Colin White of Verecan Capital Management joins the podcast to discuss his views on the economy and why he considers the likelihood of a ‘soft landing’ to have increased…

This podcast was recorded on Wednesday, Aug. 14, 2024 and made available for premium subscribers the following day. More information on premium subscriptions is avalailable on our Substack page..

Content Highlights

  • Economic indicators are pointing to increased chances of a ‘soft landing’… (1:10);
  • The Federal Reserve (and other central banks) have ‘bullets in their gun’ in the form of interest rate cuts, should the need arise. Another reason for confidence (3:27);
  • Employment numbers are the most important datapoint to watch right now (6:41);
  • The Age of Finfluencers and dangers it has wrought (14:32);
  • Central banks have a responsibility to act in the best interests of the general public. If they stray from that responsibility, the structure that governs central banks can change (19:29);
  • Background on the guest (23:31);
  • No, real estate is not always a good investment (34:11);
  • AI discussion (37:41).

More on the Guest

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What’s Got the Fed Spooked?

This blog post is an amended version of the Daily Contrarian from July 10, 2024.

Federal Reserve Chair Jerome Powell in his Congressional testimony yesterday again put forward the case for rate cuts. “Elevated inflation is not the only risk we face,” Powell said. “Reducing policy restraint too late or too little could unduly weaken economic activity and employment.”

It may not sound like much, but this is some of the most dovish commentary we’ve gotten from Powell since before his 2022 Jackson Hole speech. It begs the question whether the economy is really in as dire enough shape to where rate cuts become necessary, presumably as soon as the FOMC meeting on Sept. 18.

Existing economic data doesn’t exactly shout slowdown, much less recession:

  • Job production is still plentiful. Jobless claims are up a bit, but that’s from a low base.
  • Retail sales may not be growing as much as they were early in the year, but are holding steady at a very high plateau.
  • The housing market has slowed in certain parts of the country, but that might be more due to overbuilding than broader macroeconomic forces.

Conspiracy theories aside, it’s hard to see how the Fed could legitimately have an ulterior motive for cutting rates early. Either Jay Powell & Co are just stupid and reckless, or they’re trying to get ahead of things. Perhaps there’s a third alternative, which is that they’re setting the market up for rate cuts just in case they need them?

Come to think of it, even that gets into conspiracy territory. They probably are just concerned about the trajectory of the economy based on labor data and the housing market. Whether that is justified is another question entirely.

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