YouSaid · the spoken record

Marko Papic

lines on the record: 113
first: 2023-11-29
most recent: 2023-11-29
sittings or episodes: 1
sources: podcast

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“Marco, thanks so much. We'll leave it there. People can find you on Twitter at geo underscore popic. They could read your book, Geopolitical Alpha, and they should check out your work at the Clock Tower Group. Thanks so much, Marco.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“Well, I think proving that American elites are not very smart. And I say that because every single time that he gets put under a new court case, everyone who lives in Manhattan's like, yay, this will matter. And he raises $40 million off of it. This is a very good example of why consensus is something that's very wrong. I mean, none of that has mattered. I think what will matter is the economy and the three-party candidates and their effect on the distribution of votes.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“I think right now Trump is a clear frontrunner. I really think so. I mean, he's in a head-to-head polls with Biden. He's ahead of Biden. Biden is the incumbent president who's presiding over inflation that's come down a lot, nominal GDP growth that's through the roof, unemployment that's very low, and yet he's losing. So you need to paint me a scenario where the economy is better in six months. That's hard. That's very tough. So if the economy has any kind of a hiccup and Trump's leading right now, then why wouldn't he be leading in six months?”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“I mean, that's more of a conversation for after the election because we don't know whether Biden can carry the Senate. I think it would be tough for him to do that. But I do think that in case of Trump, you have to assume that if Trump wins, he does carry the House in the Senate mathematically. Would Biden you don't? So what I would say is that with Biden, fiscal profligacy probably remains on the current trajectory, which is unsustainable, but it's not Argentina. And with Trump getting elected, like, hey, man, all bets are off. You know, it's gonna be fun.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“If Biden wins, fiscal deficits will continue. If Trump wins, you could have also very large fiscal deficit of a different flavor. Either way, you're saying the money printing on fiscal deficits will continue and that will be stimulative and inflationary.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“Over the course of the next 12 months, as the market realizes that if there is no recession, they won't hike no matter what. And if there is a recession, they'll cut a lot.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“Non OGP growth could be 10%. They are not raising rates. Like I'm being obviously obnoxious here, but we're at the end of a podcast and I just want to leave you, what do you take from this? Forget what America under Trump looks like. That's something we can talk about in six, 12 months, whatever. That's a cool conversation. Much more relevant is what is the risk of an anti-establishment candidate for the establishment? I can tell you in France, I can tell you in other countries the way that the establishment reacts when something like this happens, they act like antibodies against the disease. They all hands on deck. In terms of monetary policy, that means the Fed will be behind the curve for the next 12 months. So you should be a dollar bear, I think. And I think, you know, U.S. equities could have significant upside.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“It that we have our Nero that comes, gets selected, and says, Know what did Biden get to do what he won? I believe two trillion dollar stimulus. Well, I'm going to have my $2 trillion stimulus. OIJ Powell. Yeah, CPI, I don't really care. Here's a new president. I mean, this is much bigger, much more important than what happens in the next 12 months to CPI prints. And so what is my point? What's my takeaway from here? My takeaway is very simple. I think there's no way in hell the Fed raises rates over the next 12 months, no matter what.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“He will try to drain the swamp. And so this creates a real conundrum for the next 12 months if you're JPAL, you're running the Fed. What if there isn't a slowdown? I mean, I think there will be a growth slowdown, and I think the Fed will use that as an excuse to be extremely lenient as the market is now forecasting for 100 basis points worth of cuts. But I think that there's a reason for that. It's political. And it's that even if the economy is strong, I don't think the Fed can do anything about it, no matter where the CPI print is. Because you have this real existential risk to the way that American federal government works, to the way the American government works. And that risk is that an anti-establishment candidate wins and truly dreams the swamp. If you're the Fed and you're thinking about long-term inflation expectations, what happens if Trump does become the president? What is the biggest risk to inflation expectations? Is it tinkering with CPI with a 25 basis points here or there?”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, but Trump 2.0, I mean, he has been disappointed, to put lightly by all these members of his previous administration, most of them in some way, shape, or form, turn on him, whether in writing books or giving interviews or testifying in court. And so I think the Trump 2.0 really does mean what he says. In particular, the one thing that the U.S. president does have constitutional power over, which is the federal employee.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“Which sets them up for a very interesting kind of loss of confidence by a lot of the public in the leadership because very few voted for them. So that's the first issue, kind of a profound moment in US history. The other issue is that I think that American elites, establishment elites, and I don't mean that in some conspiratorial way, I just mean, you know, both Republicans and Democrats who are part of the establishment, they are much more afraid of Trump 2.0 than they were of 1.0. 1.0 Trump was like a fake populist. He didn't really mean the things he said. He stabbed his cabinet full of Goldman Sachs executives and generals. I mean, you know, he did. And it was very bullish for the market.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“Look, I will say this will be the most extraordinary election, I think, in U.S. history. The third party candidates, it's funny we say third party. I mean, what if there's three of them? Know, I mean, we're gonna have Jill Stein from the Green Party, which had an impact in 2016 on the election. We're going to have Kennedy, who is polling at 10%. And I do think we will have Joe Manchin running under a no label banner as a candidate as well. And I mean, if Joe Manchin gets into the race, you know, you're talking about third-party candidates getting a 30% of the vote. I think this could be a very serious paradigm shifting election. So why is that important? It's important because somebody like Donald Trump or Joe Biden could become the president of the United States with 30, 35% of the vote.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“In China, where you were locked in for 10 years, very difficult to have a handle on that. And I think that's appropriate given the geopolitical tensions we're talking about, the different routes, Chinese policymakers can take over the next five to ten years, both an internal and external politics. That's all up in the air. But in terms of public markets, I think he can still be a trait. China can be a very, very interesting trade. The question is, can it really be an investment? And that's something that they're going to have to answer over the next five years. Are they still pro-business, pro-markets, pro-growth, pro-investor or not?”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“I mean, I think there will be a huge buying opportunity in Chinese markets over the next 12 or 18 months. It's just really difficult to time because Chinese policymakers themselves need to, number one, satisfy you on that question, which I don't think they have. They're starting to. I mean, she going to US is a good start. But the second more importantly is they need to stimulate the economy more. They need to become aware that they're in a secular stagnation and that the only way to fix an economy where the private sector is deleveraging is for the public sector to releverage. And they have been unwilling to do that because they just don't understand that they are in a secular stagnation. So I think that when those two questions get answered, I think you can have a pretty significant rally in Chinese markets. Now, is China a safe investment or the very long term? Well, in private markets, you know, private markets in China are frozen. So they've already spoken.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“And then just on the point of China, is money safe in China? If you invest in some of China's great tech companies, is that money going to be returned to shareholders eventually? Like if you invest in Apple, every iPhone, you know, okay, that's going to the investors ultimately, whether it's redeploying growth, that will just increase the value of the company. But there's a big question mark with the Chinese government. And then when foreigners invest in markets, publicly traded Chinese securities, it's through an entity in the Cayman Islands that has a variable interest entity that say, okay, we have effective control, but we don't actually own it to some effect. I think the geopolitical risk premium for that is quite high because many Chinese equities are quite cheap right now. If you just look at the market. So, yeah, what's your view on that? And does that shape your view on if there's opportunities in the Chinese equity market?”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“Because if you don't, the French And so that competitive nature and that inability to coordinate with allies creates an A paradox, which is that in a multipolar world, enemies trade with one another. And so it becomes the ultimate constraint on this complete decoupling from a country. So you can reshore manufacturing, that's fine, but you're still trading with China. And that's why what I would say to you is the U.S. will continue to impose restrictions on investment, on high tech, exports and trade, but it's going to be very difficult for it to go beyond this very sort of specific and very high tech breakdown in trade.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“Well, the argument is that you could stimulate the domestic US economy more by producing it at home, even if that's inflationary. That will keep the unemployment rate low, that will keep people happy. In other words, because China produces so much and consumes so little and produces a lot more than it consumes, they are much a bigger seller than they are a buyer.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“To complete breakdown in trade. And this is something that I think that the Biden administration and the Trump administration before it kind of woke up to. They walk in, they're like, oh, China rivalry. Yes. Let's go. We know this playbook. We got it. Like, let's pick up the Cold War playbook. You know, all right, everyone, let's contain China. And they look around and then no one's standing next to them except Australia. Australia is like, hey, we're here. Like, what do you guys want to do? You know, and you're like, where's France? Where's UK? Where's Italy? What's going on? Where's Japan? Ah, it's not so easy. They still want to trade with China. And if they want to trade with China, you have to trade with China. Because why wouldn't you? I mean, like, it's just stupid not to trade with China if you're allies are making money off of it.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“Why? Because it's very difficult to coordinate with allies. It's very difficult to coordinate with allies. You can coordinate with them on very limited things, like super advanced semiconductors. Fine. You know, Japan and the Netherlands are going to be like, okay, America, like, we'll do it. But you try telling France not to sell Airbus airplanes to China. Good luck with that. No way. They're going to be like, all right, sure. So that's where it becomes a problem because if suddenly every single Chinese order is just Airbus airplanes, Boeing is going to knock on your door of the White House and say like, hey man, do you want us to develop hypersonic cruise missiles? Because if you do, we need revenue from China. We need to sell them nineteen ninety's technology of, you know, wide body aircraft. Who cares if we sell them 737s? You know, like the world's not going to end if America sells China some aircraft. And so that becomes a real impediment.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“You know, obviously, there's been also the technological commerce department had the expert ban on semiconductors of October 2022. There's just a slew of these things. I would say that multi-polarity. A country like US from getting its weight.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“What is your view on economic policies between China and the US and capital flows policies? There was a time a lot of money was flowing into China. Obviously China has a huge trade surplus with the rest of the world and the United States in particular. But there have been, I think there was an executive order by Biden, the so-called reverse Siphius. It was much, I think less strong than some were anticipating. But I mean, you tell me what it does, but it restricts particularly sensitive to national security investments in China. I mean, an extreme version of that is no money is allowed to go in China at all, just like no money is allowed to go into Russia at all. We're very far from that. But you think those will escalate as well? And then also maybe you talk about the tariffs that US puts up puts on China.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“Them control the paint, like as a way to counter something that you don't have. And I think in China's case, trying to build a blue water navy to counter the US is a mistake. It's not a smart way to spend money.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“Hat to the idea that US and China conflict is inevitable. I respect that. I respect Gretham Allison, his Thycitus trap concept. Obviously, John Mershammer, who I would argue is like a mentor and someone who I respect immensely. But at the same time, I can see a future where China chooses to be that challenger to the US in a way that minimizes their need to compete with the US directly on America's turf. Certainly, if I was running China, I would just say, you know what, we're not going to play America's game. We're just not. We're not going to play your naval dominance. We'll spend our money on another way. It's like sports. Why are you trying to outshoe the Golden State Warriors? You're never going to shoot three pointers as well as them. So take the ball inside. You know, learn how to pound the ball in the paint. Dominate the paint. Seed the three-point contest.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“I mean, I guess it depends, you know, but there is a worldview in China that they don't have to invade other countries. And certainly, like the US doesn't invade and hold other countries. I mean, other than Iraq and Afghanistan, for the most part, the US has exerted that power through a line structures. And through quid pro quo's, the benefit members of this alliance. I mean, the US was a benevolent hegemon. I think non-Americans probably scoffed at that idea. I think it's fair to say it kind of has been for the most part. And I think it's created very beneficial alliance structures. So China would have to figure out how to do that. One of the ways to do that is to give access to its internal economy, to its potential economic allies. And so for that to happen, by the way, they first have to have a healthy domestic economy, which is, again, takes us back to the cyclical point. But over the long term, yeah, as a realist, I have to tip.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“Thinking. But as I said, it makes sense for America because it's so far away from these parts of the world to have land bases and lily pads. Maybe it doesn't make sense for China if it becomes a land-based power.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“Think is a mistake. I wouldn't be if I was them. I would cede control of the seas for America. Have it. At the same time, to have this one belt one road initiative, which is focused on this other geopolitical view, which is like, hey, let's just build infrastructure to suck the natural resources out of Russia and to be connected to the European markets. And it's going to be interesting to me to see whether Chinese policymakers themselves come to terms with these two conflicting views of what it takes to be a hegemon. Now, the planet hasn't seen a continental hegemon in a very long time. We haven't seen a really, really powerful country without really a dominant navy in a very long time. And I mean, you know, China could elect to do that. And if they do, then they truly don't need Taiwan. Taiwan is only kind of important if you're thinking of expanding navally and you want to get that first island chain and the second island chain. These are the topics that dominate American strategic.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“Of domination that the United States and the United Kingdom before it have used. China has an alternative route to naval domination, and it's the Eurasian continent. It's the landmass, it's the giant, basically part of the planet, that if it was unified under a single dominant power, wouldn't have to build a single ship. Like, let me say that again. If you controlled Eurasia, you control so much wealth and technological innovation in Europe, you control so many natural resources that you don't have to have a single boat. Americans can have 75 nuclear-powered aircraft carriers zooming around your Eurasian land mass. You don't care. You're like, hey, what's up? Have fun over there. You know, hope you're getting enough sun. You know, put some sunscreen because we have everything we need on this Eurasian landmass. And I think the Chinese policymakers are kind of struggling with this. They are building a navy, which I think.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“Will they do it? I think the only way it happens is if it's a fair complete. And what that means is that China will reunify with Taiwan when it's so overwhelmingly powerful because of economic development and technological innovation that there's nothing anyone, including Americans or the Taiwanese, can do about it. That is the only way that I see China reunifying with Taiwan. Until then, I think the risks are way too high. Now, Americans see it differently. You know, American view is that they have to reconquer Taiwan because America is obsessed with a view of geopolitics that emphasizes oceans and seas and control of naval routes. And this comes from obviously the bias that America has because it's so far from the rest of the world. It has used oceans as a way to control wayward interests that it may have. I'm not sure that China has to pursue the same”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“power and a legitimate representative of China, legitimate government of China for the past 80 years without ever having conquered or attacked or thought about doing so with Taiwan. Their legitimacy is assured. Nobody in China is clamoring for the reunification. It is a desire, but it's not in any way a strategic necessity. And so I'm not sure that they need to do that. I don't think that they have to. And so.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so it's purposefully ambiguous because obviously we don't recognize Taiwan as an independent country. At the same time, the question is, would we defend it? It's ambiguous. It's strategic ambiguity. So what I would say is a couple of things. A long time is a very long time. It's difficult to figure out. But I will say one thing. You know when I said I don't care where Zelensky says, I truly don't. Like he is now my friend. He is a subject of my analysis. And similarly, she is now my friend. He's a subject of my analysis. So, why should I care what he says in his speeches? Obviously, The issue is this. I don't know to what extent it's really relevant to China to reunify with Taiwan. It's not necessary at all in any way, shape, or form. And it's not necessary because Chinese Communist Party has been a legitimate”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“That's over the next decade. Long term, do you think it is inevitable that China will attempt to take over Taiwan? And can you remind us of, forget the name for it, but U.S. policy towards Taiwan, where maybe has a military alliance, but it doesn't necessarily recognize Taiwan.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“Can China remain cool under pressure, under extreme American pressure that will come, whether it's the Biden or the Trump administration, can they continue to say like, no, you know, we don't want to fight. We're going to take our toys and leave the sandbox. Like, we're good. We're going home. Can they continue to do that? And I think that will be the big question for the next five years. And by the way, you asked me earlier, what causes Marco Popic to care about systemic nature of conflict? Israel Hamas know it doesn't. But China, US, over Taiwan, or over any other part of Southeast China, it would. Right now, my thesis is the Chinese are kind of humbled. They're focusing on domestic issues, but if that changes, then we have a problem. And then we should have geopolitical risk premium across various assets.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“Meet you and the conciliatory tone of she was quite interesting. We're noticing on the ground in China more and more skate media trying to paint US not as an ally but as a partner You know, and one of the arguments is like, oh my God, look at all this risk, Israel Hamas, Ukraine, Russia. We need to work with the American partners as responsible superpower. The two of us, we have a common interest in making sure the world doesn't descend into war. So the Chinese government, I think, has been humbled and I think it's turning towards a little bit more of a conciliatory position, at least for the next five years, largely as a result of domestic economic conditions, but also I think by just observing what's happening around the world and realizing, I think they're never going to admit this, but what I would say is that I think that if they could speak honestly, they would say, you know what? We got way too aggressive in 2012, geopolitically speaking. And it wasn't a moment. You know, this was way too early for us to try to challenge the US. We need more time. Obviously, the US is not going to play ball. And so there we have a conundrum.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“No, no, and certainly I'm not, you know, we can talk about the markets in a second. All I'm saying is from a geopolitical perspective, this is another humbling of China. Like, whoa. Whoa, this is we need external markets. We need Europeans. We need Americans. We didn't think we did, but we do. And I think that, so again, I want to be respectful to the thesis that a realist would have, which is that China has a rational interest in acquiring as much power as it can. But I would also say that cyclically, for the next five years, I can forecast that they're going to be humbled. And Xi's visit to Biden in San Francisco is evidence of this. You know, it's a real problem for she to meet Biden on American soil, for the protocol obsessed Chinese. This is a big kind of tip of the hat to the US, but she didn't meet him at the G20 summit in a neutral country because clearly the US had insulted China, quote unquote. And then suddenly a couple of months later, they're saying, okay, fine, you know what? We're going to go.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“Asleep at the wheel. Donald Trump ended that. Number two, they realized that it's not that easy being aggressive and the Ukraine conflict taught a very valuable lesson, not just to China, but all the other countries trying to kind of become regional hegemonts. Like this is really difficult. Just because the US invades countries every Tuesday, it's not as easy when you do it. You know, because you don't have the experience in doing so. And especially with Taiwan, if Russia struggled to do something of a country next door, try crossing the Taiwanese straits with the military. It's very difficult and complicated. And the final thing is, of course, domestic economic situation, which your listeners will be very much aware of. I think China is in a secular stagnation. I think their household is going to deleverage. Households in China are going to deleverage for the rest of this decade. You know, they are where the US was in 2009. So internal source of demand, the internal growth engine is going to be...”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“The move has kind of wasted itself. And I think in the case of China, I would say they were aggressive. They were assertive. They were throwing out nine-dash lines, which is this ludicrous claim of sovereignty over all of South China Sea, which is like makes no sense for people who don't know it, just Google image it. It's silly. China was, of course, building islands in the middle of nowhere where there were no islands and putting military installations on him. This is aggressive stuff. Now, didn't evade anyone, you know, to their defense, but they were very assertive. And then something flipped over the last couple of years. And I think a couple of things that have flipped, number one, Donald Trump getting elected and being very aggressive and in your face woke up China like, wow, America will retaliate against us. The more assertive we are, Americans will be more assertive too. Interesting. We didn't expect that. We thought they were kind of...”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“Of great power politics. The reason he wrote this book and the reason he titled it The Tragedy is because it's tragic. It's not because countries are mean. It's because they're trying to pursue security for themselves. They end up falling into this Greek tragedy of conflict. So that said, I do think that we have to understand that while China definitely has interests in controlling its sphere of influence just as the US did in the Western Hemisphere, The difference is that there is cyclicality to this secular view. And we as investors should be very much aware of the difference between having a secular, like you could be a dollar bear, but tactically or cyclically, you're like a dollar bull. The Fed is raising hiking, so I'm going to be a dollar bull, but I think this thing is going downhill over the next decade.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“I think, you know, I come from a realist school of political science. So I would argue yes, and they should. God bless them. Like every country should want to rule the world. Not because you're mean or evil or you want to make everyone speak Mandarin. Just because that's ultimate security. You're ultimately safe by acquiring as much power as you can. So this is very much like John Mersheimer's thesis.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“What is China's current foreign policy? What are China's global foreign policy ambitions? Like what is Xi Jinping and the Communist Chinese Party leadership? What do they want the next 10, 20 years to look like? Presumably they want China to be more of a great power, but how much of that is military? Because you can say there are some countries like Japan clearly had very imperial ambitions in the 1900s. So did Germany for the first half of the 1900s the entire history of China, China often is on the defense. Now maybe is it going to be on offense? Is it fair to say that China does China want to rule the world is kind of my rough way of asking a question?”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“That is acting as if the world is not unipol. That would not have happened during the Cold War. Turkey and Greece famously had a war over Cyprus that was again clamped down by the Americans. Like, hey, you guys can't go to war, your NATO member states behave accordingly, settle it like adults. You know, today you have multiple countries like Turkey that have the ability to pursue a foreign policy independent of one another, even though they're not superpowers. And I think that is a proof that's evidence that the world is multipolar. In other words, don't be too obsessed with data. Don't try to prove multipolarity empirically. It's very difficult to do so because, again, you'll just end up saying US is the most powerful country in the world, which is true. You infer from behavior of states that the world is multipolar. Too many countries are not listening to America. Too many countries are not listening to China, certainly.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“Its head and shoulder above everyone else, but to maintain a unipolar order, they need to be head, shoulders, torso, hips above everyone else. So this is why, by the way, a lot of Americans, especially American analysts, like scoff at this idea of multipolarity. And then they start doing something I call aircraft carrier counting. Like, well, we have 11, blah, blah, blah, blah. You know, did you look at R&D spending or VC spending? And I'm like, yeah, it's cool. I get it. Number one, yay. But again, preponderance of power comes with being preponderantly powerful. That's the first thing that it illustrates. The second thing it illustrates is what makes a great power. And I would say, again, can you pursue an independent foreign policy? So like Turkey invading Syria. Turkey invading Iraq multiple times, the Kurdish region in Iraq. You know, Turkey doing things that the US doesn't want him to do is a good example of a country.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“scientists use that is required for hegemon to truly maintain a unipolar order or at least in a bipolar world for one of the two superpowers to keep its allies in check preponderance of power and i would argue that nobody has that today even though quantitatively the us is clearly still the most powerful country in the world”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“I think the ability to pursue a foreign policy independent of any other country. I think that is a true. Like emblem or characteristic of a great power. Being able to pursue an independent foreign policy. Now, during the Cold War, Germany could not pursue an independent foreign policy. Very few countries really could. I mean, France tried. Think about the Suez crisis 1956-57. You know, France, United Kingdom, and Israel decide to take the Sinai in the Suez Canal from the Egyptians. And America says, nah, you don't get to do that. Sorry, give it back. And they were like, Okay, you know, this literally happened. These are nuclear powers, by the way. These are nuclear powers, colonial powers, empires. And the US picks up the phone and tells the Brits, like, look, we're going to crash the pound if you don't withdraw. Tell your buddies Israel and France, no. You don't get to get Sinai. That is an example of two things. One, the preponderance of power, the preponderance of power, which is a term political.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“A unipolar world, one geopolitical hegemon is kind of setting the pace for the rest of the world bipolar is two countries running things. Multipolar is three or more. When you say, oh, that country is a power, that country or that country is a great power, what makes you say that, in other words, oh, Germany became a great power in the 1900s. France was a great power UK and the United States became a great power. Then the Soviet Union, you know, Russia became a great power. Maybe Russia is no longer a great power. What makes you say that is it purely based on population because like the Qing dynasty, you know, what is now China, I think, had like a third of the global population, a huge population boom in the 1800s, but I don't think people consider them a great power. So is it just military? Is it economic? Is it just population? What makes you say that or assert this is a unipolar world with this country is running?”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“Now, one thing that I would say also about the current situation is that there's just multiple large independent players that I think is very interesting that didn't really exist in World War I. So countries like India, countries like Turkey, even though it's a NATO member, countries like Saudi Arabia, these are large players and they often kind of pivot and play wedge against these alliance structures. So that's also, I think, a positive.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“Has to send troops to defend Russian interests. So in a way, they are dangerous. Now, we in the West obviously see the collective defense of NATO as a positive. And I would say it is positive, but it has a very focused objective at defending European sovereignty and focusing just on Russia. But if NATO had an equivalent sort of grouping sitting across of it as it did during the Cold War into Warsaw Pact, then you are in a bipolar system where the two sides could go to a massive war over a stupid, stupid little conflict somewhere. And that's not really possible. Now, the war was like the war didn't happen during the Cold War, but Jack, if it had happened, it would have been a world war. Like the Warsaw Pact versus NATO, those structures guaranteed that we would have had a World War if there had ever been a conflict across those lines.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“I would say that they are dangerous now. I do think they are dangerous now. So if Russia and China were to create a military alliance beyond their endless friendship, whatever it is they call, which is nothing. It's a complete nothing burger, clearly, because China is not really supporting Russia the way they would a true ally. They're not. They're not shipping them weapons. The danger in military alliances is that a small conflict can then bring China into Europe, Russia's involvement in Moldova. Let's say there's a crisis in Moldova and Russia decides to defend Transnistria, which is the part of Moldova they have troops in, which is some kind of a semi-sovereign part. You know, this is a country in the middle of nowhere. Nobody cares about it, really. And then suddenly because of China and Russia's military alliance, China...”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“So, obviously, you want people to get along and have positive diplomatic relations, but our military alliances where Jack is invaded, then Marco has to invade whoever invaded Jack. Are those dangerous as they were in World War I? And if they dangerous now and if they're not dangerous now.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“They created an extremely, extremely dangerous military alliance structure that was triggered right away with no ability to slow it down. So Serbia murders the crown prince of Austria-Hungary. Austria-Hungary declares war on Serbia. Russia declares war in solidarity with Serbia against Austria-Hungary. Germany declares war against Russia. It triggers basically France and the United Kingdom to declare war right away. So this immediate quick alliance structure made it difficult to have an independent reaction function. And so a small conflict was grafted on to a bipolar structure. So yes, there wasn't one or two countries that were the most powerful, but the groupings themselves ossified into military camps. It was like two basically large military camps made up of countries.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT
“Even though there wasn't maybe the hegemon was maybe the great Britain still. But when you say bipolar, it wasn't one power versus one power. It was like three powers who were in a group against two other powers that were in a group.”
2023-11-29 · Forward Guidance · Marko Papic: Russia-Ukraine War Is Effectively Over, Israel-Hamas War Unlikely To Have Large Market Impact · IDENTIFIED FROM THE TRANSCRIPT