With just one playful reversal, people can easily apply it like a mathematical formula. However, that's not the point; it needs to be viewed within the context of mutual relationships. If we summarize this, the possibility of stagnation is increasing. In the end, if technology falters, the probability of heading into a recession becomes very high. They say that if technology declines, it will cycle back, but that’s not the case.

Hello, this is Lee. I have CEO Yoon Ji-ho with me. Hello. Yes, hello. You came suddenly, and it’s been a while since you’ve been here. I’d like to start by discussing the recent U.S. presidential debate, but I heard you haven't seen it yet, right? I haven't watched it yet. I just found it very interesting as soon as I got here. CEO Lee, did you watch it? What are your thoughts?

Harris seemed to have quite an impact. When looking at various evaluations and comments, it gives off a feeling like a student who is being scolded by their mother and is throwing a tantrum. Trump, on the other hand, feels like he is continuously being pushed back. However, Harris handles the situation well and seems to take it in stride. Originally, Trump had made a mistake during Biden's time, saying something like, The country is in chaos right now. Then, Harris would respond, Wait a minute, aren't you the one who is being sued next month? It was quite funny, and as she spoke, there was a sense of ease, which made people lean more towards Harris. Given this situation, I think Trump might start to feel a bit anxious.

Actually, I've been feeling that the price reactions are moving significantly towards Harris, not just in our country but overall. Last time, I mentioned that the secondary battery sector must be quite strong right now, right? Both the secondary batteries and renewable energy are strong. There was a chart from Goldman Sachs about the themes of the upcoming presidential election, and interestingly, it showed that nearly 40% of the focus was on renewable energy. A representative example of renewable energy would be secondary batteries, and another area is healthcare. When the Democrats were doing well, the Republicans would typically benefit from deregulation. Banks were naturally underperforming, and the same goes for oil, gas, and steel. This indicates that the market is leaning towards one of these choices to some extent.

I expected that it would go in this direction once a conclusion was reached, but it seems that the market has somewhat anticipated this over the past couple of days. Yesterday, I noticed the decline in bank stocks, and I wondered if there was a reason for JP Morgan to drop by 6%. There was actually positive news about regulatory easing yesterday, but I also thought maybe Trump was betting on things not going well. Coincidentally, oil prices also dropped significantly yesterday, so it seems like everything has been reflected in the market. The reason I brought up Gold Masters is that everyone is already aware of it, but since I mentioned the election first, let’s start with that. Why have so many people been paying attention to the presidential debates? The U.S. electoral system is somewhat...

We need to understand that in the United States, especially after COVID-19, early voting has become extremely important. For instance, in North Carolina, it's almost a 50-50 split, and California is also very close, with around 48 to 45. Now, we are watching the debate today to decide how to vote. Until now, the predictions have suggested that Trump would win. That's right, that's right; the debate is likely to favor Trump, so the question is whether he can turn things around. I listened to the representative today, and it seems he didn't perform well. It looks like he struggled. 

Another potential obstacle is the vice presidential debate on October 1st. Our candidate, Trump’s vice presidential nominee, has made quite a few gaffes, which could be problematic. Of course, Harrison, the current candidate, is also involved in this.

Biden is much more progressive, and some severe critics even call him a politically correct advocate. When you look at what he says, there have been past statements from Pence that contradict this politically correct stance. If Pence, on October 1st, ends up not defending himself well, this election could actually turn into a situation where Trump could regain his position. Those are the concerns I have. 

This time around, Trump's campaign seems to have a lot more energy than expected, with many events taking place. However, there is a discussion about Trump's performance in the debates. Is he really a qualified candidate? There seems to be a lot of praise for Harris's performance; many believe she handled herself quite well. 

Speaking of the Democratic Party, the first thing that comes to mind is taxes. They mentioned raising corporate taxes and targeting the wealthy.

Increased taxation is another significant risk related to China. It seems like a form of decoupling under Trump’s administration. The concept of de-risking is very hostile; if we look at it that way, the advantage is that it maintains the IRA. This is the kind of picture we are seeing. If the market leans towards this direction, it will grow in that way, and trade will proceed in a manner that largely excludes China, while the IRA will continue to be sustained. Today’s situation is somewhat like this, but if Trump were to return to power, regardless of what anyone says, the IRA's scope would be reduced. However, it seems that things are changing a bit. One point we can discuss is that, when looking at the issues, the most important factor is understanding macroeconomic policies. I haven’t heard much about immigration policies, but from Trump’s perspective, there has been a lot of aggressive rhetoric regarding immigration policy.

Scenes have come out, but why, why, why is this an issue? Currently, the annual cap for South America at the U.S. entry is set to 125,000 people starting from 2023. But as you know, during Trump’s time, I implemented asylum restrictions, and in 2019, it was about 30,000. Now, it's 400,000. Trump said he would do it that way. So, this is a political move that significantly reduces the labor force. This reduction in supply could be a factor that might lower the unemployment rate. This is a crucial point because the unemployment rate has become more significant compared to before. Do you understand what that means? So, based on this supply reduction, a decrease in the unemployment rate was somewhat expected. However, Trump originally aimed to prioritize employment for U.S. citizens, meaning wages would now...

Since immigrant wages are not cheap, wages will likely rise. At that time, there were concerns about inflation due to wages, but the key point is that the unemployment rate is important now. There was a thought that if Trump were to be elected, he might manage to control the unemployment rate. However, if Harris were to become president, she has mentioned that she would address the border crisis. She agrees with expanding management and detention, but the fact is that Harris is considered more left-leaning. As I mentioned earlier, regarding the rights of immigrants and asylum seekers, there is a notion that Harris leans towards the left. If we look at it this way, it could be quite concerning regarding employment immigration policy. If Trump were to take office, he might not accept immigrants, which would mean no cheap labor.

There may have been concerns that inflation would arise due to a lack of workers coming in, but the current macroeconomic focus is not on inflation; rather, the unemployment rate is important. This indicates that there could be a significant impact. Now, let's briefly discuss the economic cycle. When people ask me about the unemployment rate, they might be wondering why we are talking about the economic cycle with the current level of employment. Although I sometimes appear on other broadcasts and share my thoughts, I have one unique strength: I have a lot of experience with past mistakes. One of the lessons I've learned from those experiences is that crises can hit unexpectedly. For instance, in the fourth quarter of 2007, we were unaware of how bad things would get.

In the fourth quarter of 2007, the growth rate forecast for the U.S. was positive. That's right, it turned out better than expected. In the first quarter, however, it went straight to negative. Something happened, and then in the fourth quarter of 2008, it was also positive, but in the first quarter of 2009, it dropped to negative again. In 2008, it was somewhat uncertain, but from the third quarter of 2008, it suddenly went completely negative due to COVID-19. What I'm trying to say is that there are discussions about various reasons for the decline, but I want to point out that we are talking about events we haven't experienced before, and our experiences are insufficient. I once wrote about this nuance, and I think it's interesting that the U.S. could be in this situation, but the indicators are not really that bad.

This is a statement that came out in August from Dallas, Texas. We are preparing for a recession. There are signs that the recession is intensifying. The details below are very concerning, but I personally don't mind. However, when the economy worsens, there tends to be an increase in sausage demand because meat becomes more expensive. So, there are a lot of such signs. What I'm trying to say is that there are these indicators, and another major counterpoint is that this morning, there was fresh news about the small business optimism index. This index had risen significantly last month. So, it seems like things are turning around. The reason this could be misleading is that, as we mentioned earlier, wealthy people aren't really affected; they still eat meat.

The fact that the economy is not doing well doesn't mean that the wealthy are becoming unemployed. It actually means that those who are already struggling are facing even more difficulties during an economic downturn. Many people tend to misunderstand this. The small business optimism index is based on surveys conducted with small business owners, asking them how they feel about their situation. However, we are currently at a level of economic recession. The index has slightly turned back but has dropped again. I think it was around 93 points, and it came out when it was in the 90s. Earlier, we were discussing unemployment rates before immigration, and this is related. The small business optimism index survey has specific questions. One of the questions is about sales. It asks how sales are doing and whether there are poor sales. The ratio of businesses experiencing poor sales is what we are looking at. Last month, there was a slight decrease, which gives some hope.

있었는데 다시 치고 올라왔어요. 근데 이걸 과거의 실험과 놓고 보면 정말 비슷하지 않아요? 그까 다시 한번 말씀드릴게요. 자꾸 사람들이 우리나라도 어떻죠? 지금 경기가 힘들어지니까 명품은 팔리지만 필수품은 좀 어려워지죠. 우리가 소비재로 말한다면, 경기 관련 소비재 소비가 주춤하자, 아, 그건 살아야 되니까 필수 소비자는 사는데, 필수 소비자는 바꾸거나 컴퓨터 바꾸거나 핸드폰 바꾸거나 옷 바꾸거나 할 때 돈을 아끼게 되잖아요. 그죠? 결국 이쪽을 보면 실업률이 좀 올라오는 모습이 보일 수 있죠. 우리가 요즘에 경기 침체를 이야기하는 여러 가지 근거들 중 하나가 장단기 금리차 역전이 정상화되는 것뿐만 아니라, 대표님이 얘기하시는 것은 다양한 데서 그런...

Signs are emerging. Not long ago, the stock price of Dollar Tree plummeted, which gives the impression that even Daiso is struggling to do business. This is a very important statement. Recently, I've been surprised by the inversion of the yield curve. I often mention this, but when I said this in a discussion two years ago, nobody was interested. At that time, people were saying that the yield curve had inverted and a recession was coming. I argued that, fundamentally, when the yield curve inverts, it indicates that there is a problem in the financial system, sending a warning signal. This could lead to difficulties due to interest rate issues, affecting both the economy and individuals. If short-term interest rates, meaning policy rates, are lowered, the short-term rates will come down and alleviate the situation. Therefore, this is a matter of the equation of recession.

No, we need to understand the situational mechanism. Earlier, people found NF 5 and similar concepts very difficult. This is ultimately the problem. For example, many people raise counterarguments regarding this. I don’t know the answer, and no one does. But, for instance, look at the delinquency rate; it's not that high. However, when we look at American households, the Debt Service Ratio (DSR) shows that they are doing okay. People say that it's really not that bad right now. So, let me draw a different picture. Household interest expenditures in the U.S. have increased. Why has this happened? Because interest rates are high, the interest expenditures relative to disposable income have also increased. This is similar to what we saw just before the financial crisis. For example, since you are from that background, I can speak freely.

When we want to obtain certain desired data, we tend to search for it. The representative probably thinks the same way. The data that comes to my mind right now is this: for example, as interest rates rise, the U.S. housing market will decline, right? Consequently, household Debt Service Ratios (DSR) will decrease. Many people think, Oh, the DSR is fine, so there are no issues with U.S. households. In fact, this could be interpreted as an increase in the stability of U.S. households, but that's not entirely correct. It's not completely wrong, but if we look deeper, the interest expenditures relative to income have risen too much. It's too high. This is a bigger problem because it's not a secured resource. So, will this lead to consumption? What I'm saying is not that I have all the answers; rather, I'm just a bit confused these days. With the development of social media ecosystems, people seem to treat this information like a mathematical formula, and that’s what I'm trying to address.

No, that's not the mathematical formula. It needs to be viewed within the context of interrelationships. If we summarize this, I believe the possibility of stagnation is increasing. Yes, that's right. This morning, I wrote a column in the Kyunghyang Shinmun discussing what economic stagnation means, and I mentioned Hyman Minsky. It’s been a while since I talked about Minsky. I'm not saying that because of Minsky, the financial system is collapsing, but if you ever get a chance to read his book—there's only one translation in our country, aside from the original—I once studied it. I didn't fully understand the book, but the key point I grasped is that stability gives rise to the seeds of instability. When there’s overheating and euphoria, if something goes wrong, looking back, we realize that was the moment. He often says things like that. The funny thing about Minsky is that in 2008, he had a huge impact on us.

The moment of the Minsky moment that was summoned, Minsky passed away in 1996. In fact, during his lifetime, he was not well-received in academia. However, he mentioned that when capitalism appears to be very stable, significant instability is often conceived. He elaborates on this logic in various data throughout his writings. So, when stability becomes a kind of illusion, somewhere, he pointed out the emergence of instability. If you read it, you'll see that when I talked with the representative, it was enjoyable because he had written that. At that time, if it flowed quickly, it felt like everything was already in my head, and I was just letting it out. Normally, I still had to submit it, but I realized it was due soon in February. So, I wrote it very hurriedly. However, while writing quickly, I felt quite satisfied with the piece, not because I thought it was well-written, but rather...

It was a situation where, if we put together various thoughts, consumer spending in the United States has significantly increased. However, according to the Debt Service Ratio (DSR), it shouldn't be that way. The DSR is currently high, which means people are not buying houses and spending less. This leads to the argument that things are stable, but that might not be the case. 

Moreover, what's very meaningful is that when we look at the economy, the most important point is consumption. What is consumption? Broadly speaking, there are two types. One is essential consumer goods. In the essential consumer goods sector, we have food and beverages, which are necessary for survival. Don't forget that cosmetics are also essential consumer goods. Some people tend to confuse this; cosmetics can be quite expensive, but they are still considered essential. Regarding the question of what essential consumer goods are, Professor Damodaran has spoken about this.

They say that the products and services coming out of the tech industry are essential for consumers. So, when we look at it from that perspective, it’s important to recognize that this essential consumer viewpoint has changed. It used to mean something that you had to use all the time, but now it has evolved. From the consumer's perspective, an essential item is something that you must have regardless of whether the economy is good or bad. This applies to smartphones as well, and it's about having the necessary items. In that sense, we can say that while we can also argue that you don’t need to change your smartphone if you don’t have the money, consumer goods are influenced by your economic status. That’s what we call cyclical consumer goods, which include things like cars, luxury items, and travel. Currently, it seems that we are not in a recession, as cyclical consumer goods are performing well. Another connection to this is that when it comes to cyclical consumer goods in tech, tech stocks have managed to hold up well.

From a stock perspective, I have removed some graphs, but there are still a few pieces of data worth noting. Ultimately, the important point is that if tech stocks decline, the probability of entering a recession significantly increases. People keep talking about a cyclical recovery in tech, but that’s not the case. In my view, the current situation is such that tech is indeed at a turning point. 

Now, while I can’t say the Federal Reserve has all the answers, they are certainly facing several dilemmas. Before we move into tech, I would suggest that, for the time being, they are not going to lower interest rates. However, the reason why concerns about a recession are rising is that discussions about a 50 basis point cut are emerging. 

This is something we need to consider. Based on historical data, if a 50 basis point cut occurs, it ultimately leads to...

In the end, it has risen. This gives a sense of urgency. The very fact that they are lowering it by 50 does not convey a feeling of being relaxed or that they are taking their time, like, Oh, let's do this slowly, like a safety measure. So, even if they lower it by 25 in September, and then do it by 50 in November—doing it twice—this is now being reflected. Right? What I mean is that people keep saying we are in a recession. When have I ever said we are definitely in a recession? That’s what I mentioned earlier. So, the likelihood of that is increasing. The resolution of the yield curve inversion means that as the short-term interest rates go down, it gets resolved. Therefore, I see the probability of a recession increasing. To overcome this, the U.S. seems to need a strong capacity to stimulate the economy. The issue is that after the election, while there has been talk about sectors, employment...

There are problems, but there is a commonality between Harris and Trump. Both of them seem to want to spend recklessly on finances. Then the national debt of the United States becomes astonishing. This is my opinion. If I keep mentioning this, our research center might not appreciate it much, but I preface this with the fact that it is a personal opinion. I try to reference the opinions of the House and our research opinions as much as possible. However, I believe that there is often a financial issue that arises after a change of administration in the United States. In mid-January next year, the U.S. debt ceiling negotiations will be due. It needs to be extended quickly, but there seems to be some concern on that front, especially at the beginning of next year. Even if we can hold on for now, it is more concerning for the early part of next year.

It's my position, but the reason I feel this way is that recently, gold has been the strongest asset. As you know, many people interpret the strength of gold in relation to the real interest rates in the U.S., but from my perspective, when you look at the dollar index, it is clearly moving in the opposite direction. This could be due to several factors: one could be that the dollar lacks confidence, and another could be that the U.S. is tolerating a weaker dollar. So, one might say that they are also tolerating a stronger yen. In any case, with such a situation arising, those who are quick to notice have turned to gold. Currently, gold, compared to its value, is quite expensive, but even though it has become more expensive than before, it's still true that the more expensive something gets, the more it can keep rising. This may reflect some uncertainties for early next year. That's the thought I have.

Regarding the recession, I have just one question. There's talk that individuals in the U.S. are running out of money. Of course, there is excess savings, but the savings rate is very low. However, there is still a lot of money in money market funds. I'm curious about where that money will go.

주도주가 바뀌는게 아닙니다. '이것'이 다가오는 신호에요⎮윤지호 LS증권 리테일사업부 대표

효친님들을 위한 바이사이드 애널리스트 이효석 매니지스트입니다. 
운용 경험을 살려서 변화된 세상에서 생존을 위한 투자전략을 리서치하고 있습니다.
비즈니스/광고/협업 문의 : contact@hs-academy.kr


주도주가 바뀌는게 아닙니다. '이것'이 다가오는 신호에요⎮윤지호 LS증권 리테일사업부 대표

스크립트