GM48: Resilient Growth BUT Economic Downturn Ahead ft. Chen Zhao
Top Traders Unplugged
Niels Kaastrup-Larsen
4.8 • 715 Ratings
🗓️ 30 August 2023
⏱️ 57 minutes
🧾️ Download transcript
Summary
Chen Zhao, co-founder and Chief Global Strategist at Alpine Macro joins us today to outline why growth has been resilient in 2023 but why he sees deflation and an economic downturn as a rising risk as we move into in 2024. We hear why the best global macro trades are the hardest to hold and why he believes long fixed income is the best trade at the moment. We discuss the long term outlook for growth and inflation in the major economies and hear why Chen is dismissive of the idea that deglobalisation and the greening of the global economy may be inflationary forces going forward. We also discuss investment opportunities in Japan and emerging markets and hear why Chen is concerned about the macro outlook in China but sees value in the local stock market.
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Episode TimeStamps:
02:13 - Who is Chen Zhao?
06:19 - Why has the economy been so resilient?
11:20 - The typical electoral cycle?
16:44 - The outlook for inflation
19:27 - Concerns about stagflation - valid or not?
26:07 - Rates going back to zero?
28:48 - Achieving high sustained investment growth
31:01 - The effect of moving towards climate friendly production
32:57 - China - a deflationary force
38:38 - Bond yields - any surprises?
39:29 - Concerns about the U.S. debt dynamics?
42:07 - Have yields reached their peak?
42:54 - The situation in Europe
45:20 - Back to the 2010s?
46:36 - A global increase in spending?
47:37 - Concerns from a global risk perspective
51:00 - The Japanese economy
52:35 - The outlook for emerging markets
54:45 - Advice for other traders
55:59 - Thanks for listening
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Transcript
Click on a timestamp to play from that location
| 0:00.0 | I think the world will return to pre-pandemic low inflation environment. |
| 0:12.0 | The inflation break-even curve told us all the way along, look at the 10-year, 5-year |
| 0:18.0 | 5-year forward inflation break-even rate. It's already back to pre-pandemic lows. |
| 0:23.6 | Even two-year inflation-break-even rate back to 2%. |
| 0:27.6 | The bond market has spoken out. |
| 0:29.6 | We're going back to the pre-pandemic laws. |
| 0:32.6 | Imagine spending an hour with the world's greatest traders. |
| 0:36.6 | Imagine learning from their experiences, their successes, and their failures. |
| 0:41.3 | Imagine no more. |
| 0:43.3 | Welcome to Top Traders Unplugged, the place where you can learn from the best hedge fund managers in the world, |
| 0:49.3 | so you can take your manager due diligence or investment career to the next level. Before we begin |
| 0:55.0 | today's conversation, remember to keep two things in mind. All the discussion we'll have about |
| 0:59.6 | investment performance is about the past, and past performance does not guarantee or even |
| 1:04.4 | infer anything about future performance. Also understand that there's a significant risk of |
| 1:09.1 | financial loss with all investment strategies, |
| 1:11.7 | and you need to request and understand the specific risks from the investment manager about their product |
| 1:16.6 | before you make investment decisions. |
| 1:19.0 | Here's your host, veteran hedge fund manager, Niels Kostrup Larson. |
| 1:36.2 | Welcome and welcome back to another conversation in our series of episodes that focuses on markets and investing from a global macro perspective. |
| 1:46.5 | This is a series that I not only find incredibly interesting as well as intellectually challenging, but also very important given where we are in the global economy and the geopolitical cycle. |
| 1:50.1 | We want to dig deep into the minds of some of the most prominent experts to help us better |
| 1:54.2 | understand what this new global macro-driven world may look like. |
... |
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