Watling: Australian recession is still my base case

The Rules of Investing

Livewire Markets

Back in February, Chris Watling, CEO and Chief Market Strategist at Longview Economics, wrote that a recession in Australia was likely, and that rates would be cut to zero if this happened. While he acknowledges that a lot has changed in Australia since then - not the least of which being the surprise re-election of the coalition government - his base case remains that a recession is on the way.

"The basic thesis on recession is that housing was in a bust phase, and the bust phase will probably be bigger than 10-15% peak to trough. Obviously we're having a bounce in house prices now that questions that, I personally think it's probably a head-fake."

In the latest episode of The Rules of Investing podcast, Chris discusses his views on Australia in-depth. He also shares why the outlook for the US is more positive, shares his favourite chart in the world today, and discusses eight key asset bubbles globally.

Links and charts discussed:

Time stamps

  • 2:37 - The challenges and joys of being non consensus
  • 3:24 - Tracking the performance of macro calls
  • 5:16 - Chris shares his favourite chart in the world today
  • 9:26 - Are low rates here to stay?
  • 11:18 - A high conviction trading idea
  • 15:16 - Is Australia heading for recession?
  • 19:37 - Is QE on the cards in Australia?
  • 23:16 - Can the US avoid recession?
  • 24:42 - Why inflation won't be an issue in the near future
  • 29:42 - The eight key asset bubbles globally
  • 31:15 - The asset bubbles that are most important to Australia
  • 34:16 - What is the current account balance, and why does it matter?
  • 36:53 - China's current account balance, and what it's telling us
  • 38:53 - Chris answers our three favourite questions

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The Rules of Investing is one of Australia's top investing podcasts. We interview the leading investment minds from Australia and overseas to better understand their processes and philosophy. After launching in October 2017, there have been over...

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