Get In Now! (Guest: Leonid Mironov)

Hit it. It's Friday, July 18th, 2025, episode 268. I'm Patrick Ceresna. And I'm Kevin Muir. This week, we have the great pleasure to welcome back to the show Leonid Mironov. author of Panda Perspectives. We have a fascinating discussion as to why he thinks the Trump Chinese tariffs are actually good news for China and how he is playing it. And then he leaves us with a macro country call you don't want to miss.

And well, I guess we're going to do some charts too, eh, Kev? Oh, yeah. Sorry. I forgot. No worries. But listen. I'm just, you know, I've been so lazy with these beers. I'm just cracking another one of these super box out here in Portugal. So I don't even want Danny to, Danny, don't even bother to give me a description of this beer.

All right. All right. But anyway, why don't you give us some of the side effects here, Kev? Nothing in this podcast should be viewed as investment advice. Listeners should consult an investment professional. before making any decisions regarding topics mentioned in the show. Side effects of too much huddle may include forward guidance fatigue, volatility compression anxiety syndrome, and the Powell panic syndrome.

Two of those bad syndromes at the end there. Yeah, I know. You know what? We'll have to talk about that volatility compression anxiety because I've been having it all week. Anyway, let's get to the guest. It's our great pleasure. Welcome back to the show, my friend.

Someone that seems to find a way to come to all my meetups, whether they're in New York or London, he's just an absolute terrific guy. Leonid Mironov, the author of The Panda Perspectives. Leonid, thanks for joining us. Kevin, it's a pleasure to be back. Yeah. I was really appreciative when I was in London, you managed to come to that one. You were at my New York market huddle meetup when I'm going to do.

The Toronto one, I expect you there or the next, you know, I was talking maybe about doing a Switzerland one. You're always seem to be there and we really always appreciate you coming. And I know that my subscribers had a real blast chatting with you about it. So let's.

find out a little bit about what you think in terms of the markets, because there's actually a lot going on, even though most of the world is focused on, you know, Trump or the tariffs or the U.S. or the stock market or AI trades.

meanwhile in china things are quietly happening behind the scenes nobody seems to really care and yet you're thinking that uh there's some real positive developments could you update us on what's happening there look it's been uh yeah you'd think the biggest story would be the tariffs and everything to do with that but actually it really isn't i mean obviously that's the headline race can obviously we sold off um on the headlines in april but

So far, you know, the Hang Seng is up almost 25%, right? It's been really strong across the board. And it's not the Babas over the world leading it. It's the financials, right? It's the dividend stories and things like that. the core of the big sort of developments in China that we're expecting and that we've touched upon last time around, that just continue to be delivered upon, right? We're seeing hookah reforms.

Right. Implemented. Before you go on there, why don't you explain to people that aren't familiar with that what hookah is or what I don't know, I guess the term, what it means and what the reforms are and why that's so important for the markets.

So this is important, not just for the markets, it's important for life in China in general, right? So if you're a Chinese citizen, you have the right to receive government services at your place of birth, wherever that may be. But of course, if you want to move, say, to Shanghai, beijing or any other big city to for work or after university you don't actually have the right for child care for example and things like that right um or

If you live in one of these cities where you're not registered, Hukou is a factory registration, right? If you live in a city where you're not registered, you get a smaller social payment, right? Your medical insurance coverage is smaller, right?

in this other bucket of like slightly well not slightly significantly less coverage so slowly removing those restrictions is a massive transfer to um consumers right and it's a permanent transfer it's not a one-off right it's it's a thing that happens regularly right and so uh we're not fully there right but slowly but surely the urban residency restrictions have been removed which you would expect to go first as well because it helps with the prices for um apartments in in the cities right

Then the other thing that happened, the marriage registration limits have been removed. So you no longer need to go back to your place of registration to register a marriage. You can get married where you live, which sounds like a trivial thing, but actually has prevented... people from getting married in the past.

And so the whole point is to make it more people-centric. So they've entrenched it both in terms of language to do with the hookah itself, but also recently they held the government work conference on urbanization. where they also said, look, the whole point is to make the cities livable and nicer and not just to build for the sake of building or legislate for the sake of legislation, which I think is...

But, you know, a really nice sort of sentiment to focus on. This obviously goes hand in hand with social safety net reforms that have also happened. They've increased both benefits and subsidies to pretty much all. vulnerable. parts of the population, which, you know, again, it's important to remember that relative to the US or especially the UK, right, the social safety net in China is not what you'd expect of a communist.

country. I mean, in general, I find this quite funny because we have an Austrian leader of a very sort of... a very data-driven, business-friendly country, and they're calling themselves communists for some reason. But, you know, okay, right? I mean, it's what it is, I guess. So they are absolutely increasing subsidies, both urban and rural. And it's important because rural ones are really low, right? I mean, these are like real peanuts. So getting those up.

was important we already see that consumption growth in tier three and four cities and so like lower end of still like a million plus cities but like lower end of it yeah um is a far outpacing uh growth in beijing shanghai shenzhen and guangzhou

right okay the tier ones i i have no doubt that this is in part to do with um the fact that they just have more money in these cities now given that they were on the receiving end of much lower government payouts and now it's more money to spend of course this is also married with dramatic growth of

companies going into these cities. So both on the food and bev scene, both in terms of food delivery stuff, there is real battle for the consumer in these cities. So for a change, they're enjoying a big sort of improvement. into the quality of life just through accessibility of these things, like Domino's Pizza, for example.

like 2000 uh they will be up to 2000 units by the end of next year right and across china so right we should all be apologizing to the chinese for um so this is this So this is important because this ends up being the much needed and the much, you know, heralded, you know.

increase in consumption is that ultimately you know we've always complained that they're just an export-led economy and that they're not doing any proper consumption on their own end and this is finally the point where they're going to do that

that's right and it is happening right i mean we had a very strong gdp print just now obviously a lot of it has to do with that the exports didn't fall off uh to the degree that uh people were anticipating 5.3 right uh in the run rate for the first um half of

the year the expectation on the street was i mean obviously adjusted over time but if you look at some of these um early predictions for the year it was in the sort of low to mid fours right and now everybody's bumping it up um to five i'm happy to say that

at 5.2 to begin with so you know this is not a surprise to me but uh i'm guessing um you know there's always a naysayer or two in in the sort of in the broken world out there um but i think it's important to understand that yes exports are a big part

of the story yes absolutely there is still a meaningful part of the growth yeah sure uh but nobody is denying that the important thing is that the consumption is also uh growing right we had a really strong consumption number in june for example right this is all very good stuff right i mean

Or, you know, we can't say that, look, it's a 10-year trend that is finally sort of here and it's arrived. But then that's not how markets work either, right? I mean, we kind of need to pick up on these things earlier on rather than sort of once they've already happened. And, you know, we've been talking about it for a year and a half, I think, roughly, right? Since my first year.

And it kind of is going as quickly as can be, given the restrictions with, you know, with the way that the Chinese do their, you know, policymaking process. And also the fact that.

uh the the top decision-making body is clearly of the austrian school of economics right they very much dislike bailing people out and giving money um sort of to address the business cycle style concerns right Now, this might sound counterintuitive given all the policy measures that have been implemented over the years in terms of new business development, new...

new technology development and things like that. But these are completely separate lines of thinking. One is to do with addressing business cycle issues today, and the other one is thinking about industry development over the long term, right? And these are addressed very separately. Right. And I think when you were on last, or maybe when I chatted with you last, I can't remember, we were talking about the national peoples.

uh congress and how that was going to be this this point where they finally instituted it all and it was one of those things that a lot of the folks that were focused on what kind of is kind of, I guess, lazily called fiscal reform in China, was going to be put into place during this National People's Congress. So did it end up being as kind of dramatic as you had hoped? And are we on our way for them to have more spending? And is that the HUCO reform that you're talking about?

yeah um all of it is in sort of again i would say that because of the way that things are done over there the um We can't say something is entrenched in law, right? I mean, there tends to be a reference and the formulation around this particular policy. And that has been put in place, right? So that has been done. And I think had it not been for the wonderful tariffs...

that we were all treated to in april it would have been a much bigger deal and sort of amongst everybody because um they finished the npc finished mid-march right and as people were digesting and figuring it out when how soon and what the impact will be have had much more of a focus on that now of course um there is still issues right so the

property market, right? I mean, that's dragging a little bit longer than personally I anticipated, right? And things like that. So there is always negative things to talk about, right? But I'm pretty sure we would have been having a very different conversation about Chinese consumption patterns.

and the degree to which these things will have efficacy over the long term, as opposed to all those experts and trade access and things like that. Right. Okay. So let's just, you know, talk about the elephant in the room.

tariffs and the policy that, you know, the battle that the Trump administration has waged on a lot of the rest of the world, but most specifically on China. How do you think this plays out? Is it a concern? Does it change your investment in China? Just kind of walk us through your thinking from that perspective.

I'm completely the other way on this. I think this is excellent for China. Everything that's happening right now is really, really poised for China along different avenues. On the one hand, it's pissing off everybody else in Asia, especially Japan.

They absolutely hate what's going on because the thing they really don't like is uncertainty and unreliability, right? This is the sort of thing that, you know, if you want to upset the Japanese guys, let them, you know, not know what it is that you're after or what it is that...

you're trying to get is that true is that that's just a cultural thing like i i wasn't aware of that okay yeah and i also try and bully them right they also absolutely don't like that right and i don't know anyone does like that but yeah they're also very nice and polite but you know they will not tell you that they don't like what you're doing but absolutely right and

You then put on top of it the fact that with Indonesia, for example, there is this talk about doing a deal, or like with Vietnam, there is talk about doing a deal. But what are these deals really, right? It's like, okay, well, we'll tariff you at 20%. all right well what about re-export stuff no you absolutely must not re-export but also okay kind of right it's like okay well all of a sudden there is very little substance to the ways that these deals are presently structured.

Clearly, the real deal is being done between the US and China, and it's much more of a quick pro quo. So now there is this relaxation of H2O exports into sort of the NVIDIA chips. not actual water, relaxations from... uh us into china uh there's probably going to be um now that ai diffusion rules have just generally been relaxed it's not uncommon to see chinese guys with suitcase full of hard drives travel up to.

a country in asia uh and just load up their data and train uh their data and uh up in on the uh up to date nvidia chips in that country and then travel back with the sort of models trained up right wow That's like a thing that's actually happening these days, right? So as diffusion rules become weaker and weaker, we can expect more of this, right?

I think the assumption is on the American side that keeping China hooked on NVIDIA will prevent domestic development. I think on any side, they're happy to take whatever they can right now, but they'll absolutely continue focusing on domestic development. It seems to me along every avenue, they needed to kick up the bum to get the consumption measures in place. This was a significant enough kick up the bum to get it going, right? Similarly.

um all these global rebalancing right all these trade uh changes they have to come from somewhere right there's got to be a reason to change the status quo and this american porsche is clearly a thing right and i think it has emerged in china this argument that i was making um what half a year ago maybe nine months ago the demand is a strategically important asset for china right it might not appear that way but they need to grow it and that's

on their weekend this is their own domestic demand demand yes um this is something they're talking about um quite publicly now right a lot this is entered the economic side guys there and um i really think that this is one of the reasons why we can be a lot more um

trusting in this general direction shift in terms of consumption encouragement because it has permeated the economic thinking, right? You can just see it everywhere. So the end result is it's not going to be handouts, of course. It's just they will continue.

improving the overall structure, right? Because there's an awful lot to go. Like pension reform is another big one that's happening right now, both higher pension payouts, more certainty in the fact that pension is going to happen, but also 401ks or 401k style saving. systems, right?

right that is a huge deal for any market right and the thing is the longer the longer it goes on the bigger deal it becomes as we see in the us now right i mean this this relentless bid as it were right once it manifests itself you're all of a sudden dealing with a very different

market and in china all of it is coming together all at the same time and we have a securities reform on top of it right i mean it's just the fact that it's all sort of coming together all at once is the reason why i talk so much about china i mean that's right i'm not you know just bullish on china for no reason right i mean all these things are like once you start digging into these things you really start getting excited uh and i guess your argument is very similar to my argument about canada

It's like, yes, over the short run, what Trump is doing to Canada is really painful. But in the long run, it's going to make us do the changes that will make us ultimately more competitive and more productive as a society. Is that a similar type of argument? And in case of China, a more balanced economy. The idea that this consumption push needs to happen. If it comes because of Trump, well, okay, you take the short-term pain with the long-term gain. Right.

Okay. Sorry, go ahead and finish your thought. I was going to say this also. reframed the China-EU argument, right, and dialogue. I'm absolutely loving the bifurcation in the European approach because you have the hawks on China and Russia, the ladies, the von der Leidens and Kalas.

of the world who are very happy to do any deal with america doesn't matter we'll be it'll be fine let's just do a deal and let's fight china together and then you have the actual um reasonable people who like the german business lobby the french business lobby the spanish business lobby for like guys we've taken all the pain and now we need an actual working deal with china doesn't mean we're gonna let them flood our market with cheap

vehicles or anything like that but let's find a framework that works for us and for them and so for example you see like bmws of the world signing up to advanced driver assistance grouping in China. So like BMWs that will be sold in the next couple of years will have Chinese brains, right? At least in the China market, right? Okay.

things like that because they understand that in this environment and with the u.s tariffs this is not something that will benefit the eu in any way so they need access to the chinese market and they need to work with chinese companies because there might actually be

sort of fruitful collaboration that's possible between the sides right and Okay, so your argument is that we're going to actually get a more balanced, not only will China get a more balanced economy, but we might actually get a more balanced trade out of this.

That's right. Balanced trade, which kind of has always been the thing about tariffs, right? Like them or dislike them immediately right now, they've come about for a reason. And that trade imbalance needed to have been corrected somehow, right? if it's this okay well it's this right i mean okay so the argument is although at first blush it might seem really bad for china in a lot of ways this is putting in place the measures that needed to be done and ultimately might be very bullish for china

Let's talk about a little bit about how much they've gone up the value curve, because I think that's a story that hasn't got enough attention. And I'm always shocked when my... buddy louis vincent gov tells us stories about like what they're creating and they're sending us things and this idea that they're like a t-shirt maker is just is is kind of like antiquated and not very

you know representative of what's really happening could you give us your stories about like how much the chinese economy has evolved in terms of their true value add in terms of things of cars tractors, anything, you know, the wide appliances, a wide variety of different things where they've really become much more value added than we've experienced in the past.

Well, for sure. I think, let's start with cars, right? I mean, you look at these new Chinese vehicles coming out, like especially the Xiaomi's of the world, right? The chairman of Ford... shipped himself a xiaomi and this is his daily driver now and he's saying it's the best car to drive and um the goal of ford is to catch up to that right and uh that is that is quite the statement, especially in this economic and political environment.

obviously on the phone side there's not been a difference between like an apple and a chinese phone in quite some time right i mean the chinese ones are if i mean you know okay we can nitpick but basically it's the same thing right i mean arguably they're better and some things worse than some others but it's basically the same thing in laptops you look at some of these new huawei toys you know it's a full sort of

foldable massive screen that has a sort of keyboard projected at the bottom of it is it's just really cool it's been a while since you've seen something that was introduced by non-chinese farm it's different it might work it might not but it's just it's a different level of um

innovation right right um obviously in trains um phenomenal high-speed development out there right now they're not the only ones developing all these things but they certainly are the ones rolling it out and they're doing so in a really cost-conscious manner, right? I mean, you look at how much the Californians are paying for the high speed that they're trying to build out there, right? And China is building...

$112, $113 the price, right? Something sort of to that effect. And they're actually building it and also doing it quickly and launching. And wherever you look, you look at the most recent partnership between BHP and... CATL, CATL being China's largest battery technology company. They're working on powering excavators for BHP with, well, CATL's batteries, right, and installations.

things like that. It's happening all over the world and it's happening in all sorts of industries you wouldn't have even thought about. It's a really exciting time. Like, generally, hard tech in China is... really special right now right i mean it's an exciting time because they're trying everything right like one of the

Maybe misconceptions about it is that China selects champions and lets them run with it. That's not quite right. China selects a target and lets all the firms compete for it. And then whomever gets through checkpoints, they get more money, right? Or more rebates or more.

incentives or whatever else so competition in its most raw form and this is why we end up within in these really weird competitive um hunger games right yeah because there's like 200 car makers or something isn't there electric car makers Well, it was 300, like the highest count was about 305, but now we're down to like under 100, right? And slowly they're folding, merging, and things like that. So like Gili Group, for example, they listed their...

electric subsidiaries in fact all of them separately now they're merging them back in and things like that and okay of course now you see the winners and the losers and you know because of the way that financing is done in china and there's like significant local government participation in some of these players. They don't let them fold quickly or not as quickly as maybe they should have, but...

You know, eventually they get there, right? And, you know, we're getting to the point where, like, BYD is a natural market leader. And, you know... they are the biggest dog of course but you have local champions and you have uh market niche champions and like lioto for example uh

they're sort of doing really well in their range extended electric vehicle niche and their sort of family focus is paying off right i mean probably lead motor is going to be one and a half million vehicles next year right so it's like all these companies that, again, are on the periphery are actually doing really, really well. But the thing is, on the hard tech side, it's the other way around. It's not like, have they caught up? It's more like, haven't they caught up?

and where haven't we fallen behind right it's it is what's one of them now so of course you know of course there are areas where uh like semiconductors first and foremost but uh nevertheless the the the pace of innovation in china is exhilarating and this is the sort of thing that i really want to spend some time uh looking

at in more detail in the coming sort of in the coming months all right so you mentioned that the chinese stock market has done really well why don't you talk a little bit about what you've liked during this period and then talk about uh what you see as potential opportunities where you're positioning yourself going forward.

Well, like I was saying, the surprising hits were the financials. I mean, surprising to me. Then another very big beneficiary of reform recently has been the medical space. I just finished a very big month-long... series of write-ups on the china medical industry and whether you look at biotech or hospitals or makers of joints or pacemakers or any of these things right they've been booming right

everybody outside of contract manufacturers are up 50 to like 300% this year, right? They've done the medical reform last year. And now, and this is actually very interesting because Before the reform, every hospital in China did its own procurement, which again is kind of weird for a country that is technically a country that has centralized medical care.

care provision. Right. So they've done this volume based procurement where it's all procurement decisions have to be centralized and prices dropped like 80, 90 percent, which led to a difficult year in 2024, of course. But the winners of that. are real winners right these are the winners that have scale and that have quality right both in device manufacturing and in terms of treatments on offer and this for some reason is coinciding with their

biotech guys coming to fruition, like a bunch of cancer drugs and things like that. GLP-1 is a big deal over there. All these things. concept stocks from five years ago will be profitable this year, and actually cheaper as of 2027. And so all these things have done really well. But looking out, my core focus is on hard tech. So excavators.

engines, electrification thereof, copper miners, electric vehicle makers still, obviously, robots, obviously very big folks of mine is humanoid robots, but also assembly. and automation robot. These are all sort of industries in which decades happen in weeks, right? I mean, especially on...

Mark my words, in March next year, we'll be having the new Shanghai Auto Show, and it will have a dedicated robotics section. There will be a show for just the robots, right? I mean, it's not just going to be a side. show. It's going to be an actual part of the show. You'll see all these walking, talking, welding, moving robots that are all the rage in China right now. okay so give me a play on the robot side well you know what how what's the stock we should look at there

Well, the big gorilla in the room is Unitree, but it's not listed yet. This is the one everybody's waiting for. But even right now, my favorite is Dobut.

um it's a smaller uh producer of cobots uh like collocated industrial robots and so what they've done instead of making a um a robot for the family right not like a tesla thing that's not an assistant it's it's an actual industrial robot that walks around and can move along the production line and weld or do whatever it is you need to do right in the place uh not in a fixed place but rather in a sort of anywhere on on the line

And it's really cool. And for me personally, I think that on the... price side right i mean when we're talking robots there is this thinking it's 150 160 000 no like adobe uh is 200 000 rmb right uh which is uh what 15 grand uh us something like that right so you can get

of them um walking assistant type things um for for a price of a small car right there is a there is another company called ub robotics before you go on there before you go to a new one how do i dial the the chart Is there a number for that? Or is there a symbol? How do I get that symbol? It's 2432, I think. Yeah, there it is. Hong Kong. Yeah. 243 to Hong Kong? Yeah.

Yeah. And it's small. It's IPO recently. It's CEO owns a bunch of it. And, you know, pretty much a third of its staff is in R&D. Right. It's it's like they have. niche, a particular niche. So like my thesis with humanoid robots is like, it's cool, but industrial applications will happen first. And that's a way to play exactly that because

I compare it to UB Tech 9880, which is a bigger competitor in the space. And they're focusing on just the robotic hardware without the brain, right? So you can get like... a UBTech robot for a very similar price to Adobe, but you kind of need to install your own thinking into it. Whereas Adobe comes with pre-training that the company has sort of done over the years.

of running assembly lines and things like that. But Ubitech also does very cool stuff, right? I mean, they've just debuted Walker 2, a robot that can change its own batteries, right? So you can let it... walk around, and once it feels like it needs a recharge, it walks up to a charging station and swaps out its own battery for a new one. It's all very, very exciting, right? That's kind of what I mean. It's like it's so much fun looking at these things.

Okay, got it. So now let's go on. So that's a robot side. Why don't you give us, did you say copper miners? Like are there actual material type companies that you like in China? What was the other? Okay. This is my bread and butter, right? Give us some names you like there. I would love to see what the... From a traditional point of view, like nothing that's high tech, something that's just like a copper miner, you know, how cheap is it? And like, well, what should we be looking at?

Excellent question. So at times this year, you could get a Spivy Chocopo miner at about three times earnings, right? That would be MMG. Again, they're kind of angling for a million tons of copper output a year, right? But by the time all their expansions are done, they run a big mine in Peru. They have a big expansion project in Africa.

But this is kind of the blueprint why the Chinese copper plates have evolved. They were buyers at the bottom of the market. Like, obviously, Zijin is the best-known example where they went with Wivenho, right? And they've really grown their production out in Kamoka.

who are in... the drc uh but it's not just them uh we have cmok uh the former china molybdenum corporation that is now just cmok um they have a very big mind in congo as well right and they're going to be doing over a million tons of copper a year once all the expansion

are up and running right and so you have Zijin that is highest quality and best known around the world but also have a lot of gold assets and they've done really well recently because they're looking to spin out their international gold operations they've done really well over the past however many years right i mean i remember buying this thing at like a buck 92 dollars right and here it is almost 22 right

Yeah, and it happened in, what, six, seven years? It's been a hell of a run, right? Exceptional focus on efficiency, these guys, right? I mean... No waste of any kind in an air operation, right? I mean, it's quite fascinating.

um and then as you go sort of lower down in sort of an order of preference you have cmok that is kind of the in-between guys they are good and efficient just not as good as egen but also they're a little bit pricier there's probably about like six seven times after the recent move. And then MMG is the really torquey one, right? Okay. That goes up and down, right? I mean, you look at the volatility on that thing. Yeah, it's doubled since the liberation.

almost doubled since the liberation tariff flows so there you go okay give us one more um sector you like in in china and a name or two in there well this one is um maybe With everything that I've said, right, it comes across as I'm quite optimistic on the China assets and China equities. Natural function of that is that you'd have to be optimistic on the financials, right? But not the banks, but rather the brokers, the exchange.

and fintech, right? So there are a couple of really interesting fintechs listed in the US. So let's go with those, right? Obviously, Hong Kong Exchange and Clearance is the absolute blue chip out there, right? I mean, that's the one you want to own, but it is expensive now and it's done. really well right but then you look at things like futu um the broker uh that's listed in the us right okay what's the symbol there futu f-u-t-u f-u-t-u okay and um they've done

You look at how dorky they are to positive news around China, right? And if you look at like October last year, for example, and how that thing traded, right? It's like bending backwards sort of chart, right? Yeah. And now, you know, it's settled in now, but they got a crypto license in Hong Kong recently. So it's just it's a very big local brokerage, right, that is still surprisingly trading at very cheap.

earnings multiples especially relative to some peers um and then there is a bunch of fintech fintechy things right for example uh some of the smaller names um that do like risk assessment and lending on credit cards and things like that. And surprisingly, because they use all your...

WeChat data. They can do a much more accurate profile of the customer than what you can do in the West because they have more data and they have access to more stuff, right? And so the default rates on those things is under 1%. So, you know, you're... like, okay, well, how about, yeah, it looks pretty good. And I mean, obviously, they've done quite well over the years, but... I think it's still quite interesting.

okay right there we go you gave us some real dgen type names there to play um why don't we move away from china for a little bit because recently you brought to my attention um uh another kind of macro bigger macro picture play and that's indonesia why don't you tell us the bull case there and what you're seeing and uh

Well, as I look at all of Asia, right, and you kind of see trends developing, and they're quite similar, right? I mean, a very long-term undervaluation of the currency and capital flows that weren't particularly, you know.

know, enticing. And then at some point, it changes. And then you look at Japan, obviously, is a great example of that Korea, you know, you go down the list, like the macro, the shape of the macro trade is basically the same, right. But in Indonesia, you have a particular kicker that we talk about Indonesia as being quite democratic.

and but also you know the people that they elect to be president tend to have quite a lot of power right and so they've elected a new guy uh to lead them pravobo and he um he's not really an economics first kind of guy he's a military man and uh he is um on record as saying that stock markets don't matter and bond yields don't matter and kind of indonesia traded as such for a while right and uh and then one day

he realized that currency matters, whether through his personal consumption patterns when traveling overseas or somebody told... and it's hard to say but he realized that the cheap um rupee has an impact right and that is the economic angle that he understands and this is the angle that uh was responsible for a bunch of policy making including creating this

uh supernatural supernatural um debt instrument it's called srbi um is basically a national bank issued instrument with a higher yield than you would normally get um the idea was entice foreigners to buy this thing right to keep the money in the country to keep the currency going but of course this ended up being an instrument that almost exclusively locals have bought because foreigners have no interest

And so you ended up in a situation where this instrument basically absorbed a massive chunk of domestic liquidity, right? And so it's... it's it's a trillion uh of local money europea right i mean that got sort of sent into this and it is slowly being released so it started being released in june and like every month uh this summer we're having a hundred billion uh rupiah being released so the first batch happened uh the second batch is happening uh as we speak and then

is another batch and for about a third of the value of the program. This is actually really big because the overall increase in the banking system's deposits was about 60 billion of rupiah in 2024. liquidity release is 330 billion so you can see how massive it is relative to the size of the thing now not all of it is going to go into the stock market and the pawn market right some of it of course is going to go and you know

But nevertheless, it's good for the banks because they'll have money and they can lend. It's good for the banks because it lowers their cost of capital. And at the same time, it releases the central bank to lower the rates as well.

it's a great setup right i mean um also in indonesia the the the sort of the The overall reserved approach by the president led to a contraction in central government spending and most notably around the construction of the new capital city that they're doing in Borneo. you know fiscal tightening of any kind is going to be a rough experience right for for any market and so they've gone through it in 24 and now we're talking about another 300 billion being spent on uh new in the uh sort of

improved infrastructure projects and slowly they're approving developments private and government funded in other ways, right? So all of it is slowly happening. And the backdrop of... of corruption and anti-corruption campaigns, whilst it's still sort of reducing the load on hotels and things like that, because people used to love going to hotels at the government's expense, and that's not happening anymore. We're at the point where it already happened last year, right?

effect is quite strong so it's not causing any more damage right so it's it's all it's all in the price at this stage so uh i feel like it's come together quite nicely on on on the jci so we have both fiscal expansion through the renewed infrastructure spend combined with a monetary release which again will be an expansion and i guess the worries

and and and an easing from central bank about another 50 bips of easing probably right and i guess the worry like wouldn't the kind of concern be that the currency depreciates like what's your feeling there like or you know do you do it on a hedge basis or can you actually own the currency too even in the wake of all this liquidity can can own the currency in fact a stronger currency is something that they want right so uh but i think at this point it is is actually similar to uh the rmb and

actually a bunch of other Asian currencies, that the stronger currency is all of a sudden not a headwind, really, because it helps with a bunch of other stuff, right? And so, especially on the consumption side, right? Okay. And so trading this a little more difficult, I think you were mentioning to me that you own like the banks or something, or there's a way, but is there a way for folks that just wanted to look at the bigger macro play? Is there a...

an ETF or something you can own? There is an ETF for Indonesia. Indonesia. Is that the end? Let me just see ETF. Let me just pull it up. I'll see if I can. Is this the EIDO? The iShares MSCI Indonesia ETF. Okay. So there you go. And there's also a VanEck one, IDX US. Okay. um right um but honestly the indonesian banks are the way to go for all of this right mandiri is obviously the biggest one um but

all of them, they're cleaning up, they're paying more dividends. The tailwinds are significant and come from all sorts of angles over there, right? It's only a matter of time until it all starts sort of. moving like it's interesting to compare indonesia and thailand for example and in thailand everything seems to be going wrong right i mean like everything that can go wrong is going wrong they've reversed the cannabis uh law right i mean i mean not necessarily a bad thing in its own right

it kills off a billion dollar industry in one go, right? And they have this spat with Cambodia and now there's talk about removing the prime minister or maybe the military guys coming back in and managing the country for a bit, right? Wherever they turn, it's just, it's a screw. up on a screw up on a screw up in indonesia it's almost the other way around now it hasn't really benefited them yet but it seems like everything is turning out quite positive for them

Got it. Okay. So, you know, as we end this thing, I've asked you a lot of questions. Is there something that you can think about if you were interviewing yourself that I should have asked you? I think where does developed Asia fit in all of this, right? I mean, what is the difference between the emerging side and the developed side? And I would say...

That is distinction without a difference, right? In as much as... um yes absolutely you know the market's history in japan is longer they're all in the same boat right i mean i may it may have sort of um come across from the the other questions but quite frankly india is this is the one that's different because of

sorts of all sorts of historical economic reasons but the entirety of east asia is basically in the same boat right the the the currency is getting stronger the domestic consumer is getting stronger it comes at the cost of exports of course but then that's not necessarily

end of the world, because the other thing is that intra-block trade is going to go up in Asia, right? I mean, as their collective currencies go up, intra-block trade becomes more and more interesting. And obviously, let's recall that. the regional trading partnership deal has been done. RCEP was done not three years ago now, right? And so obviously there is a framework for fairly low tariff, low barrier trade into Asia. So that I feel like is where it's all.

And I think distinguishing between Japan's and Korea's of the world versus China. Yeah, sure, there is a difference. These are all very different places. sort of economically speaking, they're along the same highway, right? Moving at slightly different speeds, right? Because then you go into like demographic differences, you go into like government's willingness to do proactive fiscal and things like that. But really, they're all in the same.

boat and it's just only how quickly they're rowing that sort of that's the difference i like that expression they're all in the same boat just how quickly they're rowing that's a great line okay we're gonna end with something fun you being a good sport you you've agreed to my new uh my new little game i'm going to play here at the end and there's something on the bbc called desert island discs and for those who aren't familiar with it i guess each guest has to choose eight tracks

a book and a luxury what would you take on a desert island i'm going to make something and i'm still trying to come up with a name for this so if anybody uh you know that's listening has any good ideas please let us know but we're going to have our basically our trader version of Desert Island Discs. And instead of asking for a book and a luxury, what we're going to ask for is three albums and any trader dead or alive at any point in their career.

who would you want to be with to help you manage your portfolio from a desert island so let's start with the three the three albums that you take on there what albums would you choose leonard well um Honestly, for the listeners, this wasn't sort of rehearsed, right? You hit me with this one. I'm putting them on the spot. Just name three of your favorite bands then, OK?

Yeah, I think my favorite, like red hot chili peppers. There you go. Californication probably would be my chili, but I do like it. I enjoy it. Then Soundgarden, probably Bad Motofinger or Super Unknown, which either one of the two, but probably Bad Motofinger is where I would end up. Very child of the 90s here. Okay, keep going. I am. Unashamedly so.

you know and master of puppets probably uh metallica would be the the third one right i mean it's not very diverse but it sort of it gets me i like it i like good choices you're definitely showing your age there buddy um you definitely know what you're when you grew up and what you won't listen to. Okay, so now this is the big one. Trader, any trader, any point in his career, who are you taking to the island to chat with? Or portfolio manager, anyone you want, who are you taking?

Well, I'm taking Ed Thorpe. I thought about it. I think his approach, and I mean, you know, we're talking like the Newport at Thorpe, right? So like early 70s and 80s, right? I feel like... a the environment is kind of getting there where i feel like those skills will come in handy and um b uh he evolved so nicely from the 70s into the 80s and like very few people did um so i feel like he can uh more or less take on any market environment. And I'm very much looking forward to working with you.

on that desert island, you know? You've been a real good sport and it's a great answer. Why don't you tell people a bit about what you write and where they can find and subscribe to your great sub stack. Thank you. Panda Perspectives is the name of the substack. I write there. I try and do two articles a week. My approach right now to China and Asia in general is get in, right? And then we can figure out relative trades and things like that. First and foremost, here is the smorgasbord.

pick see what you like get in right i mean the time is now and then the blog will evolve hopefully um and then we can do more sort of relative preference and things like that right now my my goal is to get as much open coverage done as possible so i'm writing up things that i have done before like the commodity plays things i haven't done before like the medical stuff uh in august we'll be doing a big focus on semiconductors so that's going to be really exciting um

My goal for the year is to publish as much as possible in terms of just getting the information out there. So for all the subscribers, there's going to be an archive that you can treat as an almanac of China and Asia. names that will grow over time but then we can reference this in more sort of

tactical way sort of further down the line. Basically, I hope it'll be worth it for anyone who's even a little bit interested in Asia. And then, of course, if your interest is more serious, just a little... bit then i personally can do an awful lot of stuff for you right get in touch if you feel like you know you need more help or you need more more of a input from somebody

I'm good. I'm good with that. I got to finally got it. Check it out. And Leonid, it's been just a great time chatting with you again. And thank you for coming on. Kev, my pleasure. Anytime. Thank you very much for having me. All right, Patrick, time for talking charts. What do you got? Kev, it's been a quiet week. Well, I mean, there's been a couple little earnings things, but... So, you know, you say that, and I guess if you're looking at the indexes...

or indices, whatever you prefer, depending on how fancy you are. If you're the Winnie the Pooh in the regular red sweater, it's indexes. If you're the Winnie the Pooh in the tuxedo, it's indices. apart from the like even though the indexes haven't gone anywhere the reality is that there's been some dramatic moves under the hood and some crazy movements in stock so yes i hear what you're saying but Within the market, it's actually some exciting stuff happening. Absolutely. Up until Wednesday.

week over week the market was literally flat so we we went into this opex with a very tight index range and um and now uh the question is is that uh you know i mean i think there was like a couple trillion dollars of opex uh rolling off uh options that are expiring that typically kind of uh unclenches some of that gamma every month that's just a typical month it wasn't a special month in any regard that way but it we now have a chance for some volatility

mostly driven by earnings because we have the pig in the Python moment of earnings coming up where all the big bellwether, big... mega cap names are going to well at least a big chunk of them are going to be reporting in the next two weeks We started off with some of the bank earnings, which actually overall didn't play any boogeyman role towards the market. Like JP Morgan was a little bit weak on its earnings and then ended up over the last...

couple of days, trying to break out of that trade range to upside. Bank of America this morning, yesterday had a bullish engulfing candle off the 50-day moving average. This is a pattern. And that Goldman was doing well. Yeah. Like we could look at them all, but like, I was just going to show like the Fibonacci retracement right to the 61.8, 50 day moving averages right there.

bullish engulfing candle. It's a classic bull setup. Point is, is that the banks don't look bad. Citi gapped higher on its earnings, Goldman Sachs. Well, Goldman Sachs is still tight in its range. But the point, though, is that there were no disappointments that really rocked the boat in any way, at least coming from the financials.

We're obviously going to get a lot more tech earnings and other things like that coming up here in the coming weeks. It'll be interesting to see whether or not that stirs up some volatility. Volatility is going to come. The question is, is the volatility... going to be more upside or that much anticipated 5% market correction that's long overdue.

And, you know, I obviously am concerned anytime a market is 300 S&P points above its 50 day moving average usually depicts that kind of overextended overbought state. that the market's in like the rsis are all well above their overbought levels but yet these vault targeting funds are still up to bat to keep doing some buying. I mean, you've done some research on that. Like, where are we in that cycle? I'd love to get an update. Well, we still, if we continue to be this calm.

like this, like this kind of subdued, then it's going to be buying for another month. And the really big, you know, chunk of it will occur midway through next month. Now, having said that, Patrick, we're getting closer to the point where if we actually got some realized moves that started to kick in, like if we saw just little hints of it when Trump floated the idea or...

It was leaked that he was floating the idea of firing Powell. We started to see some volatility. So one of the things that I just want everyone to be aware of is the vol control funds. If it continues with summer type conditions, we have another month of buying. Having said that, if all of a sudden things get spicy, if we get an earnings mess or whatever like that.

it won't take much for a realized vol to lift enough that that bind dries up. I think I did the math the other day, and I think at a 17 realized vol. We, the buying almost disappears and in 19 it flips. So we're closer. We're closer. So long and short of it is. And where are we right now?

well, we're averaging like it's almost zero. Like it feels like these days. No, but like it's still, I think it's 12 over the last 30 or something. It's very low digits. The realized vol is actually much more narrow.

than implied. Can I bring it back though? You mentioned that stat about the S&P 500 being above its 50 day and how extended it is. I thought that was interesting. I have this private feed recap that I send out every night and or most nights. or maybe a lot of nights. Anyways, and I clipped this guy, Mr. Derivatives, and he said, correct me if I'm wrong here because I did this manually, but the S&P has gone on the longest streak.

58 days and counting without closing below its 20-day moving average since Jan to April of 1998. So I thought I'm going to do my best, Ronald Reagan, trust but verify. And I'll go do the math. So I confirmed. First of all, Mr. Derivative, you're spot on correct. This last time we had gone more than 56 days was in 2021. Sorry.

Up until 2021, we went 56 days and that ended on January 26th. But one of the things that I thought was interesting, Patrick, was wouldn't you have thought if I had asked you a question that this would have been... an environment where we've never seen this before? Like, if I would add to you, like, what's the long, like, wouldn't you have thought that in this current environment of kind of.

trending markets and just this relentless buying. I would have thought it would have already happened before. No, but my question to you is, you think that there would have been longer streaks in the past? Yes, I would have. Really? Okay. And when would you, what periods would you have thought?

Well, I mean- I'm not trying to put you on the spot, but like- No, no, no, no. But like, look at these kind of extended periods back over here where the market, this was early, late 2023 to 2024. You know, I mean, that was a pretty sustained- bull advance. But it didn't work. That one must have gone under the 20-day. It's not there. Yeah, it might have touched it at some point. But the point is, is that there are lots of times where we have seen the sustained...

multi-month pushes without corrections that, in my mind, could have met that criteria. So I'm a little bit surprised. I was surprised because I figured... that in this new environment of program trading slash systematic trading vol control funds i would have thought that the era of trending of getting bought and staying overbought

above your 20-day moving average was a new phenomenon. And I am so wrong. And I'll tell you, I'm going to read you some of the dates. 1987, March of 1987, we went 59 days. In March of... It's 1975. We went 60 days. 1975. You know what immediately catches me when you were saying that? Those are all periods after market crashes. Well, what about 1971? It went on 61 days. 1986.

These are before crashes. Like the 87 one was before the crash. 86 was before the crash. 61 days. 1997 in the summer, it went 61 days. That might have been post. I don't, that wasn't long-term. That was the Asian crisis. And then 1998, that was definitely probably post long-term capital. And then the longest one, this has really surprised me, 76 days. It ended in August 7th of 1997. Okay. So lots of previous century. Yeah.

Well, not only that, now that I'm looking at this, thinking about it, it's not like we've closed below the 20-day moving average. It's still in play. Let's go for it, baby. Let's see if we can beat the 1997 August 7th date.

Yeah, the one thing that I want to debate, right, because like. obviously i've in the past uh been uh known to be a bear no no like always like looking for for a crash even though i've caught so many of them and had fun with them but the thing that is like okay when we look at a stat like this yes 5% market corrections happen even three, four times a year. They are par for the course. The crazy part about being this 300 points above the 50-day moving average is that...

A 5% market correction is only testing the moving average. It could get bought on dip. right at that moving average and come right back up. And it wasn't even a bear signal that we could have a 5% drop and it would stay in bull territory. Yeah. That's the crazy part. Yeah, no, you're absolutely right. Right. And and so, you know, at some point here, we're going to get this five percenter. It just happens like as an example, like looking back at the bull run from 2024.

there was the five percenter and the ten percenter that happened during the bull run. right this one and this one right over here right and they were just reversions back to the 50-day they so they temporarily traded below there and then the bull market resumed and the the question here is What would have to happen here for this to be a more ominous another market event versus it just being

markets are overbought they mean revert you have your five to ten percenter that just gives the next buying opportunity and then the market advances back to their highs which camp are you in right now i'm just in the five percenter like i'm not

like i'm bearish but and you do you short five percenters yeah i'm playing this here okay because like to me it's it's so frothy it feels like everyone i know is bullish like it's crazy and on on uh on that show i cheat on you with uh the both uh lynn and darius came on uh and we're basically like juice it up juice juice more give it give it all and uh but you know i mean they're making the fiscal argument that you often make isn't it ironic

that I gave that fiscal argument in 2023 and 2024, and everyone told me why it didn't work. And it was just like, I had to listen to folks say, no, no. Kev, you're a real nice guy, but you just don't understand that that doesn't affect the markets and stuff. And now everyone's lecturing me on the fiscal and I'm like,

Okay, I agree, but eventually it gets all in the price. And then not only that, I think the point that a lot of folks are missing, Patrick, on the fiscal side, is what if the tariffs end up being bigger than they think? The tariffs are a tax. Right. Yeah. And that's a drag. Yeah. So anyways, I just, it's kind of funny though. I do find it amusing. So at some stage, like the way that I kind of been talking to my members about this is essentially like this is a time where.

it's not a smart time from a bigger picture to be putting new money to work but It doesn't mean you should be going to cash. You know, like you could do short term tactical hedging or simply just leave some money on the sidelines so you can take advantage of a five percenter.

and uh and one of those things where you know you don't want to boogeyman people out of the market just because there's going to be a thing now question becomes is there going to be something a little bit more intimidating from the market perspective once we move on to like that september october period right like so here maybe at the end of july early august we're going to get a fiber

center there's going to be this quick correction that's going to come down it's going to most likely be bought on dip probably very close to the 50-day moving average there'll be some tactical opportunity and probably the market will run back to its highs maybe even make a higher high who knows but maybe maybe i'm just not ruling it out okay uh the the the point being that that probably could be a topping formation double tops

a head of a head and shoulders pattern. There could be all sorts of things that are developing. The thing is there's zero topping formations right now.

we are in a straight line bull run on the upside and rarely does a market vtop where it just hits a point and crashes i mean there was the covet event and there's always going to be someone's going to reference some period when the market has done it but it's not common commonly markets will retest highs

take a little bit of time basing along there get heavy as an example prior to the trump uh liberation day drop there was a extended topping formation uh that that took two three months to establish itself and so the odds are the summer may be heavy, which is that there's going to be a ceiling somewhere on these markets where they're just not going to go higher and it's going to get sideways. Well, I think we've already hit that.

But this is like, come on, Ken. We're one week into this little thing. And like when we're talking like multi-month topping formations like this, this is like, it's very hard to argue that we're already in the middle. of one of these ah okay i'm gonna go on a limb i think we're already there i think the market feels really already very heavy and like the shittier and shittier stocks just keep rising to the top

By the way, did you see good old Kramer came up with an index? No. Jim Kramer came up with an index. Park, he calls it. Let me just go get it. But the funny thing about it is. Few guys on the street highlighted how if you put it backwards, it spells crap. And it is just rocking. Like it is awesome how crazy this index is. uh let me just get it for you one second i gotta get you the names uh where are we here it was um what was it was like uh coinbase is one of them

So let's go through his charts. So here you can give me, give me the, the, the chat about this. Like, give me the technical. Coins ripping. Like what I want is it's like, it's gone parabolic. Okay. coinbase um oh man i gotta have to pull this up because i don't have it ready here sorry i'm okay well while you you pull it up while i talk uh so the the stocks have been running this is a fact

I got it. Sorry. App 11. What is the symbol? APP. Oh, my God. What kind of DJN are you? You're not even trading the app 11? No. By the way, this does look like a pullback to the 50-day, which is a typical 50% retracement that could bullishly break out. Okay, I see that. Robinhood? H-O-O-D. But did you say Palantir? Yeah, Palantir. Sorry, Palantir first. Yeah.

So, yeah, this has been on fire. It hasn't really gone parabolic, but it's been running like the stock market since April, right? It's just a huge thing. Yeah, HUD's been insane. Yeah. And so it's Palantir App 11, Robinhood, Coinbase. So I put these in together and they're like 120%. They go up 5% a day.

they are the perfect example of crap that's rising. So that's it. So that's the Jim Cramer index. It's crap. And just so everyone knows, he's selling his oil, his last oil stock to buy more crap. Oh, yep. You know what's interesting is that I took a shot on Schlumberger's earnings and I got Nick today.

it's it's it's don't squirm you never shoot yeah it's uh i i took it I took a hit, shot in the solar plex, but it's a little bit. But the question here, are these oil service stocks are even the worst of all? Like you look at even Halliburton, the way that Halliburton's just trading along its lows. At least, you know.

a bunch of those like refiners have been running. Let's actually talk about this. So since we're talking, okay, first of all, just before we do, can I, can I be, yeah, the crapless. Can I just augment our crap story? I didn't realize this, but in October of 2020, Kramer made his own Mag-7 before I think anyone had ever said Mag-7. So I think he might be responsible.

for magnificent seven but he chose seven other stocks can i read you his seven other stocks i would love to know these okay so he's got netflix and tesla in there so those aren't bad but this don't forget this is in like Six months into the COVID issue. Peloton, PayPal, Roku, Square, and Zoom, baby. So I went and made the chart. And when he did it, it was up like the index was already up like 100% from the COVID lows. And then to his credit, it went up another 40% from there.

until going right back down to the COVID lows in 2022. So crap index holders, just be aware you might get another 40%, but ultimately you're probably headed back down to. Much lower. It's one of those scenarios where you're almost guaranteed. that something that goes like for instance uh hood it like this is not uh

This is not a revolutionary stock. Patrick, you haven't put the hours in on Bitcoin and stuff. You don't understand, buddy. Really? When you put in the hours, when you truly put in the hours. After Hood, I want you to go to Mr. And I want you to truly put in the hours. And when you truly put in the hours, then you can make those sorts of comments.

It's true. I haven't put in the hours. We shouldn't be laughing. We're freaking having fortunes and we're sitting here having fun being poor. No, no, no. I'm sorry. They're making fortunes only if they sell. Why would they sell? The world's going to be denominated in Bitcoin.

They're going to have the last little ones. Like Robinhood's just a traditional brokerage now. Or did they go? I think they do a lot of crypto stuff. I don't think it's just brokerage. I think it's doing, I don't know. What do I know? I have no clue. Jim Cramer likes it. What else do you need to know?

Not much at all. Let's briefly talk oil here for a moment. First of all, this is a continuous chart. We rolled actually to the September contract. So there was a little bit of a backwardation roll in the. chart here but oil has been kind of dead on the short term but my my kind of view on this and I remains that we're not in a recession

And, you know, they continue to try to sanction Russia. And the Middle East is still a hot zone. I just don't see the scenario where we're going to 52-week close. And so... At this moment, what is the fair value of oil? Do I want to be bullish to calling for $90 barrel? Well, maybe later on in the year if we see technical development.

and things turning up and the fundamentals start catching up. But right now, I feel that the floor is pretty much somewhere around here. The $65, $64, $65, $66 area. I mean, we have these. inventory builds the oil sells and then turns up the next day like when when bad news is no longer causing cell cycles, to me it's kind of establishing a base, an accumulation zone where the kind of lows will start to come in. My call here...

is we're not going back under 60. There you go. Good call. I like it. I like sticking your neck out. It's just a matter of time. for when we'll see 70 plus dollar oil again i think we'll be back to 75 very easily at some point here uh i don't i don't want to be bullish like 80 90 100 oil but the thing is is that if oil just gets back into the mid 70s on a sustained basis oil stocks will get a huge flow yep um by the way you know i like this bull call

And I have to apologize to you. You should. I was on a podcast. I was trying to make a point. I called you out on it. I know. One of your members highlighted the fact. So on this podcast, I tried to make a point that there's very few oil bulls. And I might have exaggerated a little. I might have used a little hyperbole and said, I know no one that is bullish oil. And I get this.

Overhead, you know, tweet from your member, you know, highlighting, like clipped it and then said, you know, no one that's bullish oil. And I was like, oh, yeah. So you're right. And I do know one guy. And he's been pretty smart so far. And my point, though, was that sentiment on oil is just so negative. And even the oil bulls I know, I try to forget that I know them. There you go.

Okay. I'm with you. I think it's a good call. It's kind of thing. But let's talk about the energy stocks themselves. So like XLE, obviously the April crash was devastating on the majors.

but generally they've been crawling higher but they've been quite inactive they've been more or less underperforming the market they're getting no attention but overall we've made persistently higher lows there's clearly some sort of quiet accumulation going on here and when people eventually need to diversify out of their crap stocks then we will most likely end up seeing oil finally getting bid.

i think that these these things will start to turn up but it is interesting that the oil service stocks the oih they're the they're the worst They've been so punished. And like I was showing that Schlumberger chart and Halliburton, they're still down along their lows. There's just no love going whatsoever. into the oil service. That's probably the most contrarian spot in the market.

And it'll be really interesting to see whether or not they bought them. Now, what has been working? Well, it has to be the refiners. Like this is the crack, which I love the name of the ETF, the oil refinery ETF crack. And this thing's been ripping.

Like from 24 to 34 bucks in off of the April lows It's like actually performing very very well and obviously the Valeros of the world have all been participating in that run and so in the refining space they've been getting a lot of love and as well where we've seen a lot of interesting turnarounds are things like the offshore drillers, like the Valeris, like the cuppy kind of stories where these things have turned up off of.

their lows. Look at this, making persistently higher lows and higher highs since that April low. I mean, this thing is literally doubled in value off of that low. Yep. So they're working. So the question is, do these oil service stocks start to catch up here?

And that's one of the things that I'm kind of trying to think about as to when will they start to join the party? I think they will. And I think the fact that the refiner is going is actually the... uh kind of mirror image of the fact that you that the oil has gone down is their input you know oil has gone down in price and their output gasoline or whatever

is gone is still gasoline hasn't that no no but my point is that they you know i don't know why people talk about refiners is there like some sort of long oil play no they're not they're not they're not yeah No, they're not. Like, this is, like, here, like, this is the RBOB gasoline Brent crack spread, and it's, like, at 21 bucks, and at its lows was around eight bucks.

So like the cracks. In wonder they're making money. Yeah. I mean, there's definitely room to make money in that space. Yeah. So let's quickly.

turn back here quickly to uh currencies for a moment because i want to talk some commodity stocks as well but i want to start off here just talk the dollar here for a moment And it was an interesting, I'm trying to remember the name of the analyst on Deutsche Bank. Someone came out and said, like, what would be the impact of Powell being fired on the markets?

and uh he was obviously making calls on short rates and all sorts of these different things but what i was shocked at and i wanted you to tell tell me whether you agree with this he was saying that if powell got fired it would be a six percent down on the dollar oh yeah for sure but but six percent yeah that's like six percent is fucking down to like 93 oh i can see that if he gets fired by the way depending on who he does

I might finally get my $1,000 gold up week. That's how bullish I am on gold if he gets fired. All right. I don't want to say anything, but like, listen. Chances are nothing's going to happen this weekend. You know, there's something what Polymark's got at like a 25% chance or something that he's going to get fired sometime in the next year. Right. So.

The odds are he's not even going to get fired. And then the odds of him getting fired this weekend is very, very low, like almost zero. But if you think about it. If you're having all sorts of problems with some other thing that's, you know, you know, dominating the headlines, maybe a way to, you know, punt the blame. Well, distract, distract.

would be a little firing Powell. Probably not going to happen. Listen, very, very, very low chance. Just saying might be more of a chance than the market realizes this weekend. So no way it's going to happen now that I said that out loud. Yeah. So technically, I want to just highlight that the dollar had this rally back in April. retesting this 50-day moving average in the 102 level. This has been generally a weaker version of that rally, but testing the 50-day right now.

And obviously the bearish dollar call is just outright consensus. We talked about this last episode. Yeah, I disagree with this. I hear what you're saying, but I... Completely push back. I know no one that is short dollars. The currency whisperer is going to send me a note now saying, again, you know one guy is short dollars. Yes. There are the occasional guys short dollars. But on the whole, everyone I know is actually playing for the bounce. I just don't see it. I don't see this.

huge, you know, currency, US dollar short out there. Well, I mean, all those fund manager surveys say that this is like the most crowded market. They say it's the most crowded because everyone else thinks that everyone else is short. I actually really know you like you think I'm kidding, but I'm not. And it's funny. I got a piece coming out. I've been waiting for the.

The rally, because I didn't want to, you know, publish a US dollar short piece at the lows. So I've been waiting for the rally and I think it might be here enough that I'm going to do it. But because my play is a longer term play. But I really, truly think that everyone assumes everyone else is short and that they're very much not short. And although they are quick to say.

They understand the negatives about the dollar. Very few people have actually gone and sold dollars. And the reason why is because over the long, long run, it's only hurt people in terms of. when they own U.S. assets to have a hedge on there. So I'm going to push back hard.

And I know you're not alone in giving me flack and saying you're wrong, Kev, because most currency guys say, well, if you read the bank research or if you say, or, you know, you talk to the longer, bigger accounts, they're all short. Maybe, but I just don't see it. And in fact, everyone I know, and maybe it just shows the degens that I know, is playing for the bounce and not for the continuation of the trend. Okay.

you heard it from kev i love it all right so the um but wait give me your theory though like are are we no i'm just i was talking just the technicals just saying i know but going back to the technicals don't you agree so like put aside first of all if we fail if we fail at this 50-day moving average yeah like even if it's just one of these things where it pops a few days above

It could be the midpoint of a continuation pattern down. There are measured moves down to the 96, 95 level, but it is a huge overshoot for there to be a 5% down move from here down to like 93, 95. technically, but this still is a primary downtrend, lower highs, lower lows. There's nothing bullish to say here. It's just speculation, only speculation about a squeeze. And you obviously shared your opinion.

shut up Kev but Kev let's talk here for a moment this US dollar yen it's terrible it's the worst one it sucks it's like I completely fudge that call like it's no you didn't you made you made the call up at the top dude i know i know but the reality if you double down at 140 then that would be no no but the last month i've like i have or the last two months i have not

participated as much as i should have in terms of the u.s dollar because i've been too long in okay and it's and it's stunk and and and i'll and i'll i i don't know patrick i'm almost i almost want to go and make sure i have other currencies and so this is the reason why the yen's probably going to finally go because i'm not as willing to stand here and say that it's going higher

at least at least right now uh it is closing above its last two three months range which means that you gotta be careful about this thing ripping north of 150 here at least on a short-term basis and your bigger macro thesis might be dead right It's just about whether or not there's a short to intermediate move here on it. But right now, that buying that's come in here in the last two weeks.

uh is is much different than what we've seen in other currencies now mind you the pound sterling did break its entire last rally which is uh usually a sign of heavy price action the euro is just a classic retracement nothing there like in fact it still looks relatively

It's done no damage to the bull trend basically. But the question becomes the U.S. CAD, right? Like after such a huge Eiffel Tower reversion. um is this major support line here going to contain the lower end of the us dollar and uh you know this is i think something uh that uh to me i Don't want to make a high conviction call because this is a shit show mess when you go currency by currency where it's just going to be a big muddle. Yeah, I don't disagree.

There's a lot of different things. Here's an interesting one if you want to talk currencies. One of my subscribers that I love chatting with, he's been highlighting Swiss yen. and this thing's been flying yeah one of the interesting things about this was i looked at this chart and i was like oh i've seen this chart before and i overlaid the goldman sachs winners versus losers chart on this and he was like almost followed it exactly

So I have this, I know you would think like, why, why is it doing that? I have a theory and he was kind enough to explain to me that the Swiss generally have higher hedging ratios with their US stock market holdings. So what that means is as U.S. stocks rally, they need to sell the U.S. dollar, the profits, and buy Swiss, right?

And then I'm all this other theory that, and this is part of the reason I think Japan is doing, why the yen is doing so bad. I think that the Japanese retail continues to chase Mag 7. And they're just buying it outright. And so they have to buy US dollars to pay for that. So to me, the Swiss yen is almost like a long stock market call. And so when the stock market rolls over, this thing rolls over too. That's just a theory. Throwing it out there. Love it. I love it. I like it.

I have no call. I never looked at that chart before, so this is new to me. I have nothing smart to say. That usually doesn't stop you, bud. Yeah, it doesn't. Well, okay. It's going down now. let's talk let's talk gold but before you do one second do you disagree with that six percent if they fire powell like you you sound like that i was i know i was surprised i i i didn't uh i i look

I feel that the market at some point has to be pricing the fact that Powell is going to be replaced next year. Yeah. And therefore, him being fired. should i like this to me should it be a market shock like uh the way i kind of look at it is is like uh It's what you don't know you don't know that always shocks the market.

Okay. Everyone is talking about Powell and the fact he's going to be replaced so openly and Trump is tweeting about it so openly that this isn't going to catch the market off guard. I disagree there because I think this is like the tariffs. Everyone was talking about the tariffs, but they expected Trump to be subdued and to not do crazy stuff. And then he comes to Liberation Day and is like, 45% for you, 75% for you. And in this case, I think that most...

of the market is assuming that Scott's going to keep him in line. He's going to realize that this is bad for the economy, the bad for markets. He's not going to do it. So although you're right that they're talking about it, it's almost so crazy. that people are refusing to price in the possibility. That's my theory. But listen, I understand your argument and I get it, but I just think it's so crazy that nobody thinks he'll do it. Right.

What do you think? Do you think he does it? No, I don't really know. I mean, I'm just guessing. At this moment, Trump is clearly like, you know what?

The way I look at it is Trump knows for the economy that lower rates is going to be juicing things up. Like, clearly, if they want to do the big, beautiful bill, they're not going to pay for it with tariffs. And so the only way is... to bubble shit up and juice things up and lowering rates is, in his mind, the way of kind of firing up the credit engine.

and uh and get everything going again and so like i see the reason why he wants to replace powell but does he shock everyone by doing it outside of the expected cycle is uh it's a crapshoot really yeah Too bad we have, we can't name our title of this episode. Bubble shit up. I like it. We're going to bubble some shit up. Okay. Sorry. I interrupted. Let's talk gold. Like gold. is coiling up into a horizontal triangle. And what's crazy about this is it's been nonstop doing this since April.

And, you know, we saw a deja vu of this numerous times in the last two years where these types of sideways triangles happen. And almost all of the prior ones resolved them. themselves bullishly. Is this going to be a deja vu?

like are all of these like sideways they all last three to four months gold just trade sideways and then it just breaks out bullishly and rips to the next leg and here we are literally three four months into this consolidation is this going to be a repeat of that and at this moment I want to continue to give the bulls the benefit of the doubt simply because there's been no negative price action. Overall, while there's been consolidation, it's pretty much been...

higher highs. It's pretty much been held by the 50-day moving average the entire time. And so you have to, at this point, there's zero evidence that the bears have in any way taken control of anything. And so on a kind of bias basis, you have to just respect the fact that the bulls have been commanding this trend and remain, you know.

in the driver's seat of of the trend and uh so will which way will this breakout occur inevitably it's going to break out it's not going to spend the whole year in this range and right now i'm going to give the bulls the benefit of the doubt but if if not my prediction but if there was uh going to be a correction it would be a ten percenter

It would be one of these retracements to 3,000. It would break. It would zigzag down to like 3,100 or 3,000. It would be an epic buy on dip if it happened. But I don't. necessarily think that that's going to be the base case that would just be my scenario playing it out if it uh if it kicked in that way any thoughts uh it's like that great trader yogi barrel once said it's deja vu all over again baby Yeah. Like I think it resolves higher, but. Well.

We all agree it's going to resolve higher. The only question is, is there going to be a bigger, deeper correction to give you a more tactical buy on dip to lever lever up? or does it just break out from this higher level? That's what we're really debating, right? But it does resolve itself bullishly, is that bias? When we look at the gold miners, they've... been trading in this flagging formation and uh and then they're also poised that if

Gold breaks out, they can totally go slamming higher in a continuation pattern. 50-day continues to hold in there. It's like these have been coiling up. Will it be earnings? What could end up driving? We'll see. But gold and gold miners have been in this range and they're now overdue for a breakout. So I'm watching. It could be next week, week after. We'll see. But at some point, they're going to break out of this range. Okay. What else you got? Silver. Yeah, it's in a bowl.

Like higher highs, higher lows. This is going to go to 40, 41 here. But what's crazy is that the other precious metals are running hotter. Platinum ripped to a higher high. Palladium ripping. uh to 1300 a little bit of reversals here at the end of the day but uh but still a huge bull markets underway in the broader precious metals market all right what else

uh what else you're not interested no comment no i you know i i just i i've been doing a lot of chatting i'm letting you go through your charts here Now, SBSW, which is the Stillwater, had a just what a run. this platinum palladium storyline has been ripping to the upside the thing has just gone full parabolic to the upside uh in bull market mode uh what a run

I am so disappointed in myself. Like sometimes the ones that you know, the story, you get busy with some other things. And I remember, you know, some good pals telling me, explaining platinum to me and. I'll never forget someone saying it's just like uranium way back when, when it was trading below the cost of production. The reality is that when it's below the cost of production, your downside is limited. Your upside is big. It's not that much to carry this thing.

Just own it. And someday you'll wake up and it'll be a lot higher. And that day, you know, happened way quicker than I ever imagined. I am disappointed in myself for not getting on this story. Yeah, but there's this one guy you do a podcast with that told you about the initial breakouts. I know you did. But you still didn't buy.

There were some personal things going on with my stupid, you know, I was gone for a week and a bit, a month and a bit. But just for a bit. Let's talk about the not so rare earths. Yeah. the uh the uh what what a uh breakout obviously mp materials has been like the the big hot one that uh like from 20 bucks to 60 bucks in a in a Crazy, isn't it?

Yeah, like who needs Robinhood when you can fucking own empty materials? Gap higher, like just gaps and gaps and gaps. Just wild. Insane, insane move on it. But the question is, is that did this now await? the rare earths I'm going to put a weekly so it's not this crunch this chart so much where we're now seeing a bear market low like this thing has been three years on the decline declined from $130 down to $30. Have we seen now the beginning of a new bull run in these rare earth stocks?

I think you could, Patrick. Some of these things are literally security threats. And I'm not going to name on the show one of the stocks that I own, but if you look at Tungsten Mines. Like tungsten is used in armor. It's used in like supersonic missiles or whatever those stupid things are. It's used in satellites. It's hugely important. And the reality is that China has like an 80% of the market.

And so there's a whole bunch of other, you know, very important metals and rare earths and things like this that the governments of the West are going to be forced. to go and actually get involved and give money to, which is what in essence happened with MP, right? They just said, the government said, this is important. We need to do this. This is going to happen more and more all over the place.

So I don't know how to play it in terms like obviously by the ETF. Yeah. I don't know if all the names in there are like proper and that you need them in the right jurisdiction and stuff like that. I personally love tungsten. I think tungsten is really important, but you should go look at this because there's opportunities and it could just be the start. It is imperative. Which one? Tungsten.

Oh, I don't know. You can't really trade it. I think it's one of those, like it doesn't trade. Oh, okay. So it's like a crappy little stock that hasn't got a mine yet that I have. But anyway, it doesn't matter. There's other, there's ways to play it. And I'm sure there's other tungsten players. The reality is that you need these things and the West is going to be forced for their governments to go and subsidize mines and guarantee prices because they need these things.

Right. It's like we need strategic reserves of rare earths, even though they're not so rare and things like tungsten. This is going to occur more and more. Right. And what's interesting is that some of the other spaces, like we were talking a little bit about lithium.

uh last episode where we just saw some of these initial breakout candles but this is uh lithium america's uh turning up off of a strong base albemarle's been making higher highs and higher lows and there's this is just a Sprott lithium miners have been working and this is like the Atlas lithium corp was just.

getting off of the mat down there but curious whether these things have put in their major bear market lows here or not the other thing is interesting is is that almost all of the iron ore and names have started to quietly turn up. This is Rio trying to turn higher off of it. Valet broke higher and is consolidating above the 50-day. BHP Billiton just starting to just...

attempt to break out of this kind of consolidated resistance it had around the 50 to $52. So these iron ore plays certainly have started to come interesting. Any comment on that? No, I think it's the same story though. Yeah, yeah. Like all these things, we're going to need way more of each country being able to do it for themselves.

So, and the only way you do that is by encouraging production of it and the government standing in there and like, whether it be through tariffs, like, you know, we saw tariffs, like. when Trump did graphite, he put like some obscene thing on the graphite. And there's...

There's a lot of things happening and lots of opportunities in these different kind of markets. Interesting, coal stocks also turned up. This is Peabody, but you can see almost like an inverted head and shoulders and just starting to roll up. and break out of a four or five month trade range. But ARLP trying to trade to the top end range. Warrior Met Coal starting to stay above its 50-day moving average for the first time since being... breaking below its 50-day last year.

And so it's interesting, but the coal names have all started to act this way. But the other one that was interesting is all of the shippers. I mean, a lot of our old school market hudlers from five years ago. We'll know about the stings of the world. you know sting went through a a nasty drop from like 80 bucks down to like 30 uh during the last year but suddenly

stopped kind of going down, started to show some accumulation. TK tankers looks like it's putting in a bottom. Will this thing start to break out? There's a lot of these kind of things that just weren't. hot like the rest of the stock market, but they really seem like they're putting in some basing formations that could result in bullish breakouts. There we go. Heard it from the guru himself. Guru? Is that what I did? I didn't listen to you on the platinum. I'll listen to you on these ones.

all right well i'm just uh i'm just saying pay attention the um the last thing i wanted to get your opinion on and we'll wrap um so for futures this is the december 2026. I love it that we've turned you into a sober, a stern trader. It's hilarious. Dude, you don't understand how much of this shit I own. It's just stupid.

point here is that the last couple of weeks have been obviously a material pullback. The inflation numbers actually uh weren't the boogeyman that everyone expected and these things have turned up here to me i still see this as an asymmetric trade in a sense that like what would have to happen for the market to pull out

all of the rate cuts everyone's expecting next year like it's anything's possible i don't want to say it's off the table but i would put that as a true outlier that's uh of what would have to happen for that to be the case at the same time You know, like this whole story of like, well, Powell gets fired or like you've talked about in the previous episode. Well, what if the market starts baking in a new Fed chair into the interest rate markets? Like to me.

I'm looking at this dip and asking, is this the tactical buy on dip here for playing these for a move up to like that 97.25 to 97.50 level? Screw that one, Fed. When Trump fires Powell and puts in the new Fed chair, he's going to cut the rates 300 points, baby. This is going to 99. You got to start thinking in full points. Really?

i don't know well that's what he's saying that's what he wants no that's what he wants that's whether he gets that is oh yeah no i get it i listen there's no way even even the most acquiescent uh puppet that he puts in is going to be able to rate lower rates 300 basis points but he might do 200 And between now and like, what is this? I would not be shocked if we saw 2% rates. Yeah. So this is December. These are 2026s you're trading? Yeah. Yeah, for sure.

So think about that. 2% rate is this thing trading at 98. Yeah. So that's some good, that's some good coin. Yeah, it's not bad. All right. Anyway, that's all I got, Kev. That's all I got. Listen, it's great chatting with you folks. Or before we do the folks, Patrick, where can they find more about you and your great analysis? You can find me at bigpicturetrain.com or follow my YouTube channel at just Patrick Ceresna.

There we go. We got to pump this. We got to get your YouTube ahead of everything else. They'll be like going there first, even before market huddle up soon. Oh my God. Okay. What do you have to say? Come see me at macro tourist.com. You guys know where to find me. Listen, bear market, bull market. We're just happy to spend some time together on this crazy ride, which has never been crazier.

Thanks for tuning in. Now stick around for the after show. All right. Patrick underscore Ceresna. There we go. I got to learn that. The original Patrick Ceresna took it. There's another Patrick Ceresna. No, I think I have the original Patrick Ceresna somewhere. Well, that was a fall. That was falling down. Just sticking an underscore in there. Well, yeah, because it was Danny's idea. He likes underscores. Really?

I like being the underdog. Yeah. Okay. Well, listen, we won't rate the beer because we know that Patrick hates it and it's crap. Where is everyone these days? Are you both in Portugal? No, Danny boy is back on the island. Back home. I leave on Monday. I'm back in Portugal on Monday. Well, I'm leaving on Monday.

Danny, someone told me that Jeremy Clarkson's got a new version of Clarkson's farm of your hometown there. That's it. Yeah. That's true. That is true. Actually, do you know what? Here's a funny story. It's not really a story. I drove to Oxford this weekend. Okay. And I had a little swing in, and I had some of the milk. Oh, so you went to Clarkson's farm? I did, yeah, and I had a bit of milk. It was lovely.

Oh my god. That's epic. Tell me that you got a video of that. I'll see if I can find it for you. I might. Was he there? Not that I saw, no. Was his wife there? Well, unfortunately not, no. She's a little old for you. Still, you know. She's Irish. She's lots of fun. Okay, so what else about it? Was anything surprising when you got there? Well, the weather was nice. Oh, okay. Well, that's rare. That's exactly rare.

Never happens immediately. That's not true. I was there for 10 days. It was sweltering the whole time. Well, it's been continuing. I'm baffled by the weather, actually. I'm baffled that it's nice here. I saw this sun. I was confused. Okay. So what's the, tell me what the farm's like. Give us some color, baby.

It's difficult because you pull up, there's usually a long queue of people. Yeah. There's a car park and then there's the farm shop. Yeah. That's it. Honestly, that's it. Okay. And then there's the dispensary machine for the milk. So that's what you did. You just had some milk and you left. Pretty much. You know, it was super busy. It was busy. I was passing through. I just wanted a little refreshing glass of milk.

Well, that's a good story. That's a good one to end it to. Patrick, you got anything fun to tell us? No. I did a crazy road trip to Italy and back. uh so i'm finally back in lisbon what you were there for jeff bezos wedding yeah where did you go in italy I went to Portofino. Oh, very nice. Very nice. Yeah, I threw out my back in Portofino. What did you do there? a friend into the pool and as like an old man like a friend in quotation marks friend

We'll cheers to you there, Pat. That is showing a little bit of your old age. Throwing someone in the pool and I'm like, oh, I can't. That's pretty pathetic, buddy. But anyway, it's good for you. I have nothing new or exciting to say, so I'm just going to leave it there. So thank you very much for tuning in, everyone. Zero. Zero. Zero, baby. How is the weather in Toronto?

uh hot like it's like 32 degrees 35 degrees like some days like it's hot yeah but do you know what that's the july month is yeah yeah no it's like i'm not complaining yeah okay i'm not gonna complain nobody would listen even if i complained

Plus, everything's good, man. I'm on the right side of the dirt. That's all that matters. You're on the right side of the dirt. You have nothing to complain about. Danny's confused by that. He's like, what the fuck does he mean, the right side of the dirt? I'll let you think about that, buddy. Anyways, thank you for tuning in. We'll see you in a couple of weeks, guys. All right. Take care, everyone.