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The Market Huddle

A Credit Cycle That Hasn’t Cycled (Guest: Dario Perkins)

Sep 7, 2024
Dario Perkins, MD of Global Macro at TS Lombard, returns to share his insights on the unique current economic cycle shaped by COVID-19. They discuss the misleading economic indicators and the unprecedented responses from central banks. Dario highlights why Modern Monetary Theory might be losing its relevance and provides investment strategies that balance risk amid market volatility. The dialogue covers trends in the copper market, the dynamics of the 'Mag 7' stocks, and the implications of global central bank movements.
01:39:42

Episode guests

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Quick takeaways

  • The unique economic cycle post-COVID-19 is characterized by massive government stimulus and unexpected consumer spending shifts.
  • Labor market dynamics are complex, as companies continue hiring despite broader economic uncertainties, complicating recession predictions.

Deep dives

The Unique Economic Cycle

The current economic cycle is differentiated from previous ones, primarily due to the effects of the COVID-19 pandemic. Unlike typical business cycles, this cycle saw massive government fiscal stimulus following widespread economic shutdowns, leading to unexpected shifts in spending patterns from goods to services. Investors have been confused about where we are in this cycle, leading to incorrect assumptions based on traditional economic indicators like leading manufacturing data and the yield curve. As such, many familiar models and indicators have failed to accurately forecast economic conditions, with traditional recession signals not aligning with the unique circumstances post-pandemic.

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