A Recession, More Inflation, or Both? | Eric Basmajian

Hidden Forces

Demetri Kofinas

Government, Business

4.8 • 1.6K Ratings

🗓️ 1 August 2022

⏱️ 57 minutes

🔗️ Recording | iTunes | RSS

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Summary

In Episode 263 of Hidden Forces, Demetri Kofinas speaks with Eric Basmajian. Eric is an economic cycle analyst and the Founder of EPB Macro Research, an economics-based research firm focusing on inflection points in economic growth and the impact on asset prices. His research has been featured across major financial media outlets and he’s been kind enough to provide a sample of his latest cyclical trends monthly update report for premium subscribers to our super nerd tier that you can get through this week’s episode page on our website.

This conversation is the latest in a series of episodes on markets and investing, with an especially strong focus this time on the macro economy, and in particular, the secular and cyclical trends in the rate of growth and inflation. Secular forces are things like demographics, debt-to-GDP levels, trends in globalization, and the regular and predictable doubling in computing power commonly referred to as Moore’s Law—long-term trends in other words that remain in place through multiple economic cycles. Cyclical trends on the other hand are the 6-18 month fluctuations in growth determined by things like income, production, consumption, and employment. We can anticipate changes in the direction and magnitude of these trends by relying on a variety of what are known as leading as well as coincident economic indicators, things you’ve probably heard of before like building permits, new manufacturing orders, non-farm payrolls, personal consumption, industrial production, etc. Understanding where you are in an economic cycle and what the long-term, secular forces are that are pulling you or pushing you in any particular direction is as important to investors as the weather and the ocean currents are to the navigator of a sailboat. They inform the allocation strategies and performance expectations for a variety of asset classes, business models, and policy choices over time.

Today’s conversation will expose you to a framework for thinking about the macroeconomy that is empirical, data-oriented, and very much based in reality—one that you can use to forecast major economic inflection points and their resulting impact on asset prices, a valuable tool for anyone trying to manage his or her portfolio or make informed investment decisions.

You can access the full episode, transcript, and intelligence report to this week’s conversation by going directly to the episode page at HiddenForces.io and clicking on "premium extras." All subscribers gain access to our premium feed, which can be easily added to your favorite podcast application.

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Producer & Host: Demetri Kofinas

Editor & Engineer: Stylianos Nicolaou

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Episode Recorded on 07/26/2022

Transcript

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0:00.0	What's up everybody? My name is Dmitri Kofinas and you're listening to Hidden Forces,
0:06.0	a podcast that inspires investors, entrepreneurs and everyday citizens, the challenge consensus
0:12.7	narratives, and to learn how to think critically about the systems of power shaping our world.
0:18.5	My guest in this week's episode is Eric Bismagian. Eric is an economic cycle analyst and
0:24.0	the founder of EPB Macro Research, an economic-based research firm focused on inflection points
0:31.2	in economic growth and the impact on asset prices. His research has been featured across major
0:36.4	financial media outlets and has been kind enough to provide a sample of his latest cyclical
0:41.7	trends monthly update report for premium subscribers to our super nerd tier that you can get
0:47.4	through this week's episode page on our website at hiddenforces.io.
0:53.2	This conversation is the latest in a series of episodes that I've been releasing on markets
0:58.3	and investing, with an especially strong focus this time on the macroeconomy and in particular,
1:03.9	the secular and cyclical trends in the rate of growth and inflation.
1:09.4	Secular forces are things like demographics that the GDP levels, trends in globalization
1:14.4	and the regular and predictable doubling in computing power, commonly referred to as
1:19.8	Moore's Law. Long-term trends in other words that remain in place through multiple economic
1:24.9	cycles. Cyclical trends, on the other hand, are the six to eighteen-month fluctuations in growth
1:31.0	determined by things like income, production, consumption and employment. We can anticipate changes
1:37.5	in the direction and magnitude of these trends by relying on a variety of what are known as leading
1:43.1	as well as coincident economic indicators. Things you've probably heard of before like building
1:49.0	new manufacturing orders, non-farm payrolls, personal consumption, industrial production,
1:54.6	stuff like that. Understanding where you are in an economic cycle and what the long-term
2:00.5	secular forces are that are pulling you or pushing you in any particular direction is as important
	...

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