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Podcasts

US warns against cruise ship travel as industry reels

Our CEO and founder is one of the live guests at BBC: Business Matters that talked about the cruise ship travel warnings, Italy’s Coronavirus, Wells Fargo, US politics, and sports.

 

BBC Notes:

 

The US State Department has told US citizens not to travel on cruise ships. We will look at how the industry has been left reeling from these latest government instructions.

 

Italy meanwhile remains on lockdown as the country attempts to stop the spread of coronavirus gripping it currently.

 

Wells Fargo, the bank that went bad, promises to Congress that it has turned the corner.

 

We look at whether we – or Congress – can take its new chief executive at his word. We ask who will help out companies when coronavirus hits supply chains harder, from Kerstin Braun, President of Stenn Group, an international provider of trade finance.

 

We talk about all this live with guests Yumiko Murakami from the OECD (Organisation for Economic Co-operation and Development) in Tokyo, and Tony Nash, CEO and Founder of Complete Intelligence, a contextual artificial intelligence platform in Houston, Texas.

 

 

Show Notes:

 

Do you think this is the way that all countries (same as Italy) will have to go? Could it happen in the States?

It could, but I don’t think it will.  Part of the problem in Italy is almost 25% of Italians are over the age of 65. If you look at the mortality rate, for those over 80 years old, it’s about 15% and for those over 70 is 8%. The biggest risk is in older populations. With Italy being the oldest country in Europe.

 

The people who are affected by it are largely older people and they are not working-age population and not consumption cohorts of the economy. Anybody under 60 years old, there’s a less than a 0.5% chance of fatality. It’s just not bearing out in the direct economy. But we are seeing concerns for older people, justifiably, we should be. But does it necessarily require the shut down of the economy? I’m not so sure.

 

Do you think he’s got what it takes to take on Trump?

I think it’s gonna be hard to beat Joe Biden at this point. But it’s gonna be an uphill battle for him with Trump because Trump is already taken him on in social media and speeches, and I’m not sure Joe Biden has the ability to respond to Trump in a debate, etc. in a way that Americans expect.

 

The populism way of 2016 is not really over in the US yet and Biden cannot grasp that. There was an issue with him in a factory him cursing a factory worker that upset a lot of people.

 

Do you think if the Coronavirus continues at this rate, and tips the economy into recession, does that make the President more vulnerable?

I think it can. That’s 6 months away, anything is possible in 6 months in politics. If the US is the only one affected or affected worse, then sure, it will make Trump vulnerable. But if the US is kinda similarly affected to other places, I think it’s hard to blame him. I’m not exactly sure how Biden will take that in November. They may just blame China.

 

It’s very hard for Biden to play the common man message. If you’re talking about the economic dislocation (1% vs the 99%), Joe Biden has been carried in the womb of government health care plans for the last 60 years or something. Most Americans are very resentful at public sector workers because they have a very good insurance plan. It will be very hard for Joe Biden to play the populist in that role. I just don’t see a scenario that Biden looks better than Trump in that scenario.

 

If you really want to drive a clear wedge between the Republicans and Democrats, Sanders would have been a very clear alternative to Trump. But you can’t really say that Biden, at least from the kinda rich guy getting his kids job, it’s really hard to say that Biden’s really much that different.

 

Listen to the podcast on BBC: Business Matters.

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Podcasts

Policy Action Kicks In As Bull Market Officially Ends

Various central banks are implementing emergency rate cuts to respond to the coronavirus and as the bull market ends. Meanwhile, it remains to be seen whether peak infections in China and South Korea are a light at the end of the tunnel.

 

Presented by: Wong Shou Ning, Lyn Mak, Julian Ng

 

 

The UK has launched a stimulus plan. Do you think the ECB will be pressured to do the same?

 

I’m sure they will. I don’t think they have that much power into interest rate cutting area – the rates are already right around zero. What they’ll most likely do: buy more government bonds, ease up on the reserve ratio, loan incentives, etc.

 

Europe is in a pretty bad position partly because COVID really attacks older people more aggressively than younger people, and the demographic profile of Europe is pretty terrible. So the ECB has to do something to help the economy. What they’re trying to do is to make sure the consumers don’t totally close their wallets and the banks don’t totally close lending. They’re really trying to stimulate banks to keep money moving.

 

 

In China and South Korea, there are indications that the infections have peaked. Pres. Xi visited Wuhan. Is this the light at the end of the tunnel?

 

I think it’s a natural progression and it’s quite possible that things are dissipating in China and things are improving. We see road traffic congestion gradually building back. That’s good for everybody. 2/3 recovered. We’re getting there. There may still be quite a lot of bounce back in March. Hopefully, in Q2, we’re back to an almost normal level.

 

 

Japan’s economy seems to be bordering on the recession. Do you think even the Bank of Japan has assisted on the current downward cycle? Have they got any more policy options left?

 

Central banks can do for the ending bull market. The BOJ really has been focused since 2012 on Abenomics to try to raise the inflation rate to 2%. They never achieved that. But they have helped some other things to stimulate the economy.

 

Japan’s in a very tough place because it’s tied to the Northeast Asian supply chain and it has the same demographic problem that Europe has. They really need to start circulating money. They can use these tools on reserve rates and loans, but how much further can they push it?

 

 

The fall in crude prices has also negatively affected shale oil producers. What’s your near and long-term outlook for the industry?

 

Shale for the US is energy security. Americans are tired of the political issues that they face in the Middle East to secure their energy supply chain. The current administration help the shale producers to survive including backing up their loans, working with banks to extend the payback period, etc. Shale is seen as a national asset by the current administration as they work very hard to make sure that those companies continue to be competitive and have the resources.

 

 

Listen to this podcast on the bull market at BFM: The Business Station.

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Visual (Videos)

Is coronavirus the straw that’s going to break the camel’s back of the US bull market run?

Tony Nash, CEO and founder of Complete Intelligence, is a guest on Asia First of Channel News Asia and was asked if COVID19 (coronavirus) will stop the US bull market run, the why’s of the way market is moving, mandatory policies, and what investors should do. Below are the show notes:

 

Is coronavirus the straw that’s going to break the camel’s back of the US bull market run?

I don’t think so. I think what we’re seeing is a view that it’s good to be paranoid/worried. We need to remember that the markets here is in a pretty euphoric state, and had a rapid acceleration since then. A lot of markets are looking for a reason to be more defensive, some see that the market is a little overvalued.

 

Why are markets moving the way they are — they’re important parts of the value chain but they’re not China? 

In the US, we have business optimism, consumer optimism at high numbers. There is a lot of positive momentum here. COVID19 is a catalyst to bring for a lot of people at getting defensive. But the fatality rate is very small. 66% of China’s manufacturing capacity is back on. It seems China made a decision to make them working and spending again.

 

How about mandatory policies? What are the odds that the Fed will cut given the possible impact of Coronavirus on the economy?

I don’t think the Fed will cut, and they will wait to see how and if it gets bad. We have a really strong dollar now. And if other countries become more aggressive without the US being aggressive, the depreciation of their currencies become problematic for their debt market and their trade balance. We need to be careful about the central banks in emerging markets becoming more aggressive in supporting their economies. It’s very complex math from here on out.

 

Are you seeing Beijing not letting certain companies fail?

They are in a position where they can. China has put these measures in place. I don’t think anybody blamed China for the measures they’re taking to get their economy back on track. It’s other countries where there is a lower incidence of the virus, where people become more skeptical, from a central banking perspective.

 

What is the portfolio re-alignment that you are suggesting?

It looks like people are getting defensive. This isn’t at all surprising. People are waiting for a couple of weeks.

It seems that the broad market in the West is becoming aware of the risk of COVID 19, which is good for the robustness of markets in the medium term. As these investors get accustomed to COVID19, they will factor that into their risks. But right now, it seems to be a shocking risk and so short term we should just expect more volatility.

 

Watch the interview on Channel News Asia.

Categories
Podcasts

Has COVID-19 Exposed Over-Dependence on Chinese Manufacturing?

The Business Station Malaysia spoke to Tony about his insights from the Federal Reserve’s minutes released yesterday as well as his thoughts on Chinese manufacturing as activity slowly ramps up again. How long will it take for global supply chains to return to a sense of normalcy?

 

Beyond that, this podcast also get into Germany’s economy as weak economic data dragged down the Euro, and thoughts on whether we’ll see Asian Central Banks cut rates due to the Covid-19.

 

Listen to the podcast in BFM: The Business Station 89.9.

Categories
Podcasts

Virus? What Virus? [Brexit’s impact, equities, coronavirus, etc.]

Brexit’s impact on the Sterling and tech stocks at nosebleed-highs are the subject of the day’s market discussion with Tony Nash, Founder and CEO of Complete Intelligence.

 

You forecasted that any loss in trade to be modest at best. Why do you say that?

 

“The nation tariff rate for non-EU member is something like 2.3%–2% on the price of anything is not going make a major difference. The trickier issue is the non-tariff barriers that Europe has. The UK has to navigate around those non-tariff barriers,” said Nash.

 

“In terms of country partners, the US is actually the largest trade partner of the UK. It’s around $67-68 billion a year. The second largest export partner in Germany at about $45 billion dollars. The EU as an aggregate partner is, of course, larger than the US. But the EU as a trade partner is stagnant. It’s not growing from the UK. It hasn’t grown noticeably since 2015/16. Meanwhile, the US is growing at a billion dollars per year.”

 

Where do you see the Pound this year?

 

“We’re seeing the Pound continuing to strengthen until about April. And once April hits, we see some of its strength tail off just a bit,” said Nash.

 

Listen to the Brexit’s impact podcast at BFM: The Business Station.

Categories
Podcasts

Business and Market Discussion Podcast: Coronavirus and its impact to economy

Tony Nash, founder, CEO and Chief Economist of Complete Intelligence is a guest in RTHK’s Business and Market Discussion podcast. He says that the lockdown of major Chinese cities could make foreign enterprises re-think their supply chain strategy.

 

Some notes below:

 

Do you see this in the US purely as a China problem or is it a global problem?

 

People here are taking precautions. A lot of airlines have stopped direct flights to China. People are concerned about it, but that’s not an overwhelming worry. The preparations that are happening around Asia, but we had this drill before. From a western perspective, it looks like these preparations are being mode and it’s a panic mode. I think Asian governments are doing the right thing by ramping up and preparing for the worst. Best case, it’s not really that bad, but we’ve done all these preparations just in case.

 

How this is hitting tourism, retail sales, trade, commerce because Wuhan is a logistics center. The whole country is virtually shut down. People are not traveling at the moment. You can imagine China will take a big economic hit. One think tank saying economic growth could drop below 5 percent.

 

I would argue that it’s already below 5% for about a year. The magnitude of the response is enough for anyone to get nervous. I think the response is the right response, but it has made people nervous. It’s a difficult balance to strike for the Chinese government. Yes, it will have a hit to the economy. But there may be a sharp rebound.

 

It’s happening over the new year season. But in terms of manufacturing and exports, if these things can be contained before the end of new year, it can be rebound.

 

And that’s because there will be a lot of demands once this is over.

 

How about the impacts on commodities? Copper? Ag products?

 

These are all the typical fear plays when people are worried or when China is in crisis. Traders are shorting because the trade deal may not be implemented. My hope is for the government to turn this around in a couple of weeks.

 

I think that it’s oversold like Gold is overplayed. People are still learning the magnitude of the impact.

 

Do you think this could derail the Phase 1 deal?

 

There are two years for that. This is a relatively short impact like 1 to 2 months. I don’t think the demands will change that much. Because there will be a spike on buying. If this is a medium impact, then this will change.

 

This maybe the event that pushes some manufacturers over the end, and may start moving their production capacity to other areas.

 

And that’s the thing that there’ll be a long impact on the Chinese economy.

 

Absolutely, and that’s where the economy will be stagnant. That’s the main worry.

 

Do you think there will be a big equities sell-off?

 

It’s possible but I don’t think it will happen until we have evidence about the cases or intensity of the impact. We have to wait a little bit of time to see if these are properly reported cases.

 

Listen to the podcast at RTHK.HK’s Money Talk Podcast. 

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News Articles

6% The Best China Can Do

As markets overnight were bolstered by concerns over a virus spreading from China, we speak to Tony Nash, CEO of Complete Intelligence, for his insight into the downgrade of China’s GDP forecast, the upside to US equities, and a fall in oil prices as a result of China’s coronavirus.

 

Presented by: Roshan Kanesan, Wong Shou Ning, Lyn Mak

 

Listen to the podcast from BFM: The Business Station.