GM68: Chief Strategist: “Most Scenerios Point to Recession” ft. Peter Berezin
Top Traders Unplugged
Niels Kaastrup-Larsen
4.8 • 670 Ratings
🗓️ 28 August 2024
⏱️ 62 minutes
🧾️ Download transcript
Summary
Peter Berezin Chief Strategist and Research Director at BCA Research returns in this episode to discuss with Alan Dunne why he believes the US economy will soon enter recession and the S&P 500 will fall as low as 3750. Peter highlights the leading indicators in the housing market, labour market and in manufacturing that suggest to him that the economy is on a weakening trend and why he expects the unemployment rate to rise from here. They discuss current equity valuations, the Mag 7 and why investors may be overly optimistic on AI - Peter believes his base case of a fall in the S&P 500 to 3750 might be optimistic given the elevated level of profit margins. They also delve into what a Fed easing cycle will look like in the next downturn, Peter’s call for 3% 10 year yields in the US and the implications for fixed income, the US dollar and commodities.
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Episode TimeStamps:
02:19 - What has changed since our last conversation?
07:29 - Signs of weakness?
09:31 - The key indicators of weakness
12:15 - Are we actually becoming more wealthy?
15:26 - Assessing the savings rate
17:02 - Berezin's model for analyzing the economy
20:04 - Is the lag kicking in now?
22:00 - Challenges in the banking system
24:37 - Are we seeing a tail wind...
Transcript
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| 0:00.0 | You're trying to get the temperature of the water just right, but there's a long lag between |
| 0:11.2 | when he turned the knob and the temperature adjusts. So either you're too hot or too cold. |
| 0:16.4 | You know, maybe the Fed just moves the knob just right. And we have an economy that doesn't |
| 0:22.6 | overheat, doesn't cool down to the point that unemployment starts to rise and feed on itself. |
| 0:27.4 | It's possible. But if you're an investor, I think you need to sort of have a scenario analysis |
| 0:33.2 | in mind. And in my view, most scenarios point to recession. |
| 0:40.2 | Imagine spending an hour with the world's greatest traders. |
| 0:44.1 | Imagine learning from their experiences, their successes, their failures. |
| 0:48.5 | Imagine no more. Welcome to Top Traders Unplugged, the place where you can learn from the best hedge fund managers in the world, |
| 0:56.7 | so you can take your manager, due diligence, or investment career to the next level. |
| 1:01.3 | Before we begin today's conversation, remember to keep two things in mind. |
| 1:05.2 | All the discussion we'll have about investment performance is about the past, |
| 1:08.7 | and past performance does not guarantee or even |
| 1:11.4 | infer anything about future performance also understand that there's a significant |
| 1:15.7 | risk of financial loss with all investment strategies and you need to request |
| 1:19.6 | and understand the specific risks from the investment manager about their |
| 1:23.3 | product before you make investment decisions here's's your host, veteran hedge fund manager, |
| 1:28.8 | Niels Kostrup Larson. |
| 1:35.9 | Welcome and welcome back to another conversation in our series of episodes that focuses on |
| 1:40.8 | markets and investing from a global macro perspective. This is a series that I not only find |
| 1:46.3 | incredibly interesting, as well as intellectually challenging, but also very important, given |
| 1:51.6 | where we are in the global economy and the geopolitical cycle. We want to dig deep into the minds |
... |
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