Sam Rines: Making Sense of the Economy - [Making Markets, EP.1]

Oct 27, 2023

In this episode, Samuel Rines, economist and author, discusses the current economic cycle, the concept of 'excuseflation', and the state of the consumer. They also explore the impact of leisure vacation travel on the economy and the effects of global geopolitical events on investment portfolios. This wide-ranging discussion offers insights into the economy and its various sectors.

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INSIGHT

Pricing Shift Became Sustained Margin Expansion

Many firms kept higher post-COVID prices while input costs fell, converting pricing into lasting margin gains.
That margin improvement is likely to surprise investors in 2024.

ADVICE

Prioritize Income Over Savings Metrics

Focus on income trends not just excess savings when judging consumer strength.
Monitor nominal wage growth and higher interest income as the drivers behind ongoing spending.

INSIGHT

The Revenge Of Middle America

Middle America is booming with low unemployment and IRA-driven manufacturing investment.
Coastal tech and finance weaknesses don't capture the full U.S. economic picture.

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I'm thrilled to welcome you all to the first episode after the rebranding to Making Markets. This is a wide-ranging discussion on the economy with Samuel Rines - economist, author and managing director of Corbu LLC. We cover where we are in the economic cycle, 'excuseflation', the state of the consumer and the different sectors of the American economy.

I hope you enjoy the kick off of "Making Markets" with Sam Rines.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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Show Notes

(00:02:00) - (First question) - What Sam believes The Fed is likely to do based off the current economic cycle

(00:05:00) - The inflationary pressure on The Fed even though tech is replacing the workforce

(00:06:40) - His explanation of price over volume

(00:09:30) - How temporary price over volume is and its impact on consumer spending

(00:13:40) - Current consumer spending money and where it's coming from

(00:16:15) - Ignoring the coastal markets and focus on middle America

(00:18:30) - What he thinks is slowing consumers

(00:20:00) - The revenge of the middle and its meaning for economic stability

(00:21:15) - His view on soft landings in the market and which sectors are affected

(00:23:30) - His take on the travel and leisure sector

(00:25:30) - A look at the current residential and commercial real estate markets

(00:30:00) - Red flag market areas he thinks people should be weary of

(00:32:00) - Contagion risk caused by potential private sector collapses

(00:34:00) - Whether he thinks The Fed missteps or not

(00:36:15) - Global turmoil and its impact on market portfolios

(00:39:30) - How he positions his portfolio building based off of global risk

(00:41:00) - Sam's favorite out-of-consensus bet

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