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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