Today, we feature the second installment of the virtual and in-person series, “Ukraine: What’s Next?” sponsored by the University of South Florida and the Global Interdependence Center, in partnership with Cumberland Advisors and others. See https://www.youtube.com/watch?v=8N2zwKobfyw.
We wrote about the first installment, focusing on military and intelligence insights, on Sunday, May 15. See https://www.cumber.com/market-commentary/ukraine-whats-next-part-1. The second program, “Financial and Economic Impacts,” was held at the Sarasota-Manatee campus of the University of South Florida on April 27. Organizers brought together two panels, each followed by audience Q&A, and a keynote presentation, for a multifaceted, in-depth three-hour program.
The program opened with introductory remarks by Rhea Law, USF President; Casey Welch, Director, Institute of Public Policy and Leadership at USF; General Scott Gray, President of the Florida West Coast Chapter of the Air Force Association; and Karen Holbrook, Regional Chancellor, USF Sarasota-Manatee. It was my pleasure to serve as emcee.
Session 1, “The Economic Reaction to the Russian Invasion of Ukraine” (beginning at 14:30) was moderated by Michael McKee, International Economics and Policy Correspondent for Bloomberg TV & Radio. We had three terrific panelists:
Leland Miller, CEO and Cofounder and of China Beige Book
Holly Wade, Executive Director of the National Federation of Independent Business Research Center
David Berson, Chief Economist at Nationwide
Leland Miller offered a compelling picture of how the Biden administration’s planned focus on China and trade policy has had to pivot in view of Russia’s war of aggression in Ukraine. Leland also addressed China’s challenges in the months ahead, examining the implications of Covid spread and lockdowns that can slow China’s growth to a crawl and force the country to depend heavily on exports.
Holly Wade addressed the challenges small business owners face as they navigate the ramifications of these three simultaneous global shocks: inflation (being the most impactful), supply chains, and labor supply. With “no end in sight,” some 30% of 300,000 surveyed expect that they will have to increase prices 10% or more.
David Berson offered an analysis of markets and economies recovering from the Covid shock and then slam-dunked by the war. We featured several of David’s slides in our May 18 commentary, “What Is the Neutral Real Interest Rate? What About Munis? (https://www.cumber.com/market-commentary/what-neutral-real-interest-rate-what-about-munis), but there is no substitute for watching David’s analysis and the entirety of Session 1. We can’t capture all the important takeaways in a quick summary by way of introduction.
Session 2, “Market Impact of Russia’s Invasion of Ukraine,” (beginning at 1:12:20) was moderated by Bill Kennedy, CEO and CIO of RiskBridge Advisors and Chair of the Global Interdependence Center, and again featured three distinguished panelists with diverse expertise.
Natalie Cohen, President and Founder of National Municipal Research, discussed the impacts of the Ukraine war on the bond market and noted that states and municipalities may face quite different effects depending on, for example, whether they produce what the war has made more scarce.
Matt McAleer, Executive Vice President and Director of Equity Strategies at Cumberland Advisors, discussed the war’s implications for the stock market and folded in analysis about what types of long-term disturbances — a chemical or nuclear attack, for example — might escalate its impacts.
Brandon Zick, CIO of Ceres Partners, LLC, discussed the war’s impacts on other markets and particularly on agriculture, agricultural inputs, and the food supply in various parts of the world. He shed light on the challenges that farmers now face in various parts of the world as a result of the war and on how they are navigating those challenges. He also addressed the potential that Russia might use food and food production as a weapon of war.
All three answered pressing questions about the role of energy supply in various markets and about a recession and its timing. This was another session not to be missed.
In Session 3 (begins at 2:09:30), David Kotok and then Peter Gold, Chair of the Global Interdependence Center’s College of Central Bankers, introduced the unique mission of the College of Central Bankers and Session 3’s keynote speaker, College of Central Bankers Fellow Katarzyna Zajdel-Kurowska. Katarzyna is the Executive Director at the World Bank Group and a former member of the Management Board of the National Bank of Poland. She brought both a central banking perspective and detailed insight into the humanitarian crisis unfolding on the ground and what will be needed address it. She noted that the poverty level in Ukraine may rise as high as 60% by 2024, while food shortages will push 50 million around the globe to extreme hunger this year. Given central banks raising interest rates globally to rein in inflation, she foresees more debt distress and defaults and a hard landing going forward, though she does not expect a technical recession this year. She, too, answered questions from the virtual and in-person audiences.
We highly recommend the entire program to our readers. Again, the link is https://www.youtube.com/watch?v=8N2zwKobfyw. Take the time. Additionally, we are building a playlist with all videos in this series which can be viewed here: https://youtube.com/playlist?list=PLu1JZIQ1mPru7BcW4k3CtlRu5Hea36SBE
Part 3 of the “Ukraine: What’s Next?” series, “Cyber Security Analysis,” was held on May 10, and we’ll offer our thoughts in a future commentary. The replay link just went live May 19th and can be viewed here today: https://youtu.be/UQRQmLbzDI8
Part 4, “Diplomatic and Humanitarian Aspects,” takes place on May 24.
Part 5 has just been announced and is currently under development.
Tickets for final programs of the series are available here: https://www.eventbrite.com/e/ukraine-whats-next-tickets-333787847437.
David R. Kotok
Chairman & Chief Investment Officer
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Cumberland Advisors Market Commentaries offer insights and analysis on upcoming, important economic issues that potentially impact global financial markets. Our team shares their thinking on global economic developments, market news and other factors that often influence investment opportunities and strategies.
