Is the Atlanta Fed's GDP Now Estimate a Recession?

The Atlanta Fed's GDP now estimate is at 4.1% quarter over quarter from, I think, Q3 to Q4. That doesn't sound so recessionary to me. So we're headed into a recession very quickly if we aren't in one already. And you have a short-term bearish outlook, but you have a plan for going long as the recession develops.

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The last time Tian Yang, founder of Variant Perception, appeared on Forward Guidance in August 2022, he gave viewers a well-timed warning that the commodity supercycle was “on hold.” Now, he returns to argues that the world is well on its way to a global recession that will provide a hostile environment for risk assets. Yang shares his “equity bottom checklist” with Jack Farley to argue that equities have much more down to fall, and he explains why he thinks risk-off assets like bonds will perform well. Yang expects a “blow-out” of credit spreads and he thinks that the U.S. dollar will perform less well against other currencies than it does in a typical recession. Filmed on January 12th, 2023.

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Timestamps:

(00:00) Intro

(01:36) Base Case For 2023

(04:14) Where's The Recession?

(08:11) Liquidity

(18:25) Housing and Manufacturing Are Weak

(24:21) Interest Rates

(28:05) Cruve Ad

(29:08) China

(33:36) Underweight Equities (Asset Allocation Part 1)

(43:03) The Checklist For A Market Bottom

(47:19) Incredibly Rare Set-up in Gold"