Macro Voices

MacroVoices #382 Dr. Pippa Malmgren: A Tale of Two Civil Wars

Thu Jun 29 2023

MacroVoices financial podcast

00:08 - 08:18

Targets professional finance, high net worth individuals, family offices, and other sophisticated investors
Episode features Dr. Pippa Malmgren discussing the aborted coup in Russia and issues affecting the United States
Macro scoreboard for the week includes updates on S&P 500, US Dollar index, WTI crude oil contract, gold, copper, uranium, and US 10-year treasury yield
Key news to watch includes Friday's PCE price index and next week's ISM manufacturing PMI, OPEC meeting, FOMC minutes, and jobs numbers

Aborted coup in Russia

07:49 - 16:02

Coup involved the leader of Wagner security services announcing his dissatisfaction with the Russian defense ministry and threatening to turn tanks on Moscow if his demands were not met
Different scenarios are being considered regarding what deal was made to resolve the situation in Russia
Pragosian, aligned with Putin, starts to smell blood in the water and goes to the front line
Blame game breaks out between Wagner group and Russian military
Head of Wagner group turns guns on Russian military and criticizes Putin's leadership
Progosian goes to Moscow against both Putin and the Russian military, but then returns back to Rostov area
Lukashenko, leader of Belarus, flies out with his family before Progosian announces his return. They cut a deal together
Speculation arises that Putin, Pragotian, and Lukashenko were working together from the start as a theatrical sleight of hand

Russian military and Wagner group

15:41 - 23:38

Internal fight between the intelligence services (Cilaviki) and the military
Military questions why they should execute a war that is not compelling
Putin threatens to use nuclear weapons, but the military does not want to execute a nuclear strike for him
Wagner group operates as a private mercenary army funded by controlling resources in Africa and collaborating with China
Parallel between Russia and the US involves armed forces challenging their respective governments, requiring thought on diffusing anger and restoring trust
Geopolitical adventures have caused Russians and Americans to lose faith in their governments
Regardless of who wins in Russia, keeping nuclear weapons safe is crucial since Pragoshan might not exercise restraint like Putin has
The US is concerned about the safety of nuclear weapons in Russia

Future of Russia and US election

23:14 - 38:16

Breakaway republics in western Russia could emerge as a result of the current situation
Progosian's popularity in Rostov on Don may be due to the presence of nuclear weapons there
The future of Russia is uncertain, and stability may be compromised
Bigger concern is who will be in charge in Russia
Wagner has gained support from Russians, indicating dissatisfaction with the current president
Mikhail Kaderovsky may have aspirations to become the next leader of Russia
Robert F. Kennedy Jr. is being censored by mainstream media due to his candidacy for President of the United States
Prosecution of President Trump is politically motivated to prevent him from running for office again
Concerns that Trump was using promises of nuclear information in exchange for funding his private ventures
Mayor Suarez from Miami is an up-and-coming star on the right who shares similarities with Trump, while Robert F. Kennedy Jr. mirrors Trump on the left
Both Biden and Trump face investigations, raising questions about two presidents using the Oval Office for personal gain
This upcoming election is expected to be dynamic and interesting

Role of podcasts in the election

37:57 - 45:45

Podcasts are playing a significant role in this election, allowing candidates to discuss their positions in detail
Podcasts reach a larger audience than mainstream news stations
Shift towards podcasting may lead to more substantive conversations and less reliance on sound bites
Debate about the nature of free speech and its importance in fostering civil society outcomes
Civil dialogue with opponents is seen as necessary for a functioning society

Market analysis and US economy

52:40 - 59:26

EIA reported a massive 9.6 million barrel drawdown on crude oil inventories, with an additional 1.4 million barrels pilfered from the Strategic Petroleum Reserve
Cushing Oklahoma saw a build of 1.2 million barrels, while gasoline and distillates also built up
US production remained steady at 12.2 million barrels
Tape action was up on the bullish inventory report, but only reached the 13-day moving average
New uptrend in the market may be possible if short-term moving averages can stay above $70 and especially if they can get above $74
Crude oil has been in a year-long downtrend with lower highs and lower lows, but motivated selling on the downside has decreased
To see a potential trend shift, oil would need to re-enter the January to March trade range of $75 to $80 and test the 200-day moving average
S&P chart indicates a rally back toward new all-time highs despite fundamental views opposing it
Key levels on the S&P 500 are at $4500 for resistance and $4000 for support
NASDAQ remains bullish with key resistance at 378 and support at 335
Volatility remains low with VIX spot at around 13.5
Shorting volatility is not recommended, better to be long with a longer-term view
FOMC meeting in July may cause a spike in the VIX if the Fed raises rates
US Dollar Index is in a wide consolidation zone, no real change from last week
Currency markets are mostly consolidating, waiting for a big macro event to make a move
Gold continues to drift lower, target of $1860 with potential support at the 200-day moving average
Bulls need to hold the line on gold or it may return to the March low near $1800

Conclusion and future topics

59:04 - 1:05:36

'Dr. Pippa's Pen and Podcast' on Substack covers various topics related to the world economy, leadership, geopolitics, etc
'Dr. Pippa's Pen and Podcast' welcomes interaction with readers and aims to write the next book in public on that platform