Summary
First session of 2023. Road map presented — 2023 a transition year (year ending in 3) — could be mildly bullish or sideways, setting up for strong 2024-2026. Sentiment shifted massively from October 2022 lows. Key observation: Westpac and Australian big banks approaching all-time highs. Home builders (NHB survey) declining steeply — 34-month decline in prior mid-cycle was the benchmark. Dubai, Qatar, Saudi Arabia competing for tallest/biggest/longest megaprojects — classic late-cycle signal. Akhil explains why 2023 had no recession (land prices spread activity to new locations). Phil: new home buyers in Australia getting no-tax-return loans (classic second-half credit loosening). Xi’s third term and lifetime appointment analyzed as a negative for China long-term.
Key Claims
- Sentiment shift visible since October 2022 — most negative was June 2022, not October. — confidence: high
- UK FTSE decisively breaking decades-long resistance level — very bullish for next few years. — confidence: high
- No-tax-return mortgage lending now available in Australia = clear repeat of last cycle credit loosening. — confidence: high
- 2023 had no recession because rising land prices spread economic activity to new cheaper locations. — confidence: high (Akhil)
- Xi lifelong presidency = disaster for China; 1966-1976 conditions (Cultural Revolution) likely to repeat 120 months later. — confidence: medium (Phil’s view)
- Middle East megaproject competition (Dubai/Qatar/Saudi) = peak-of-cycle speculative overreach. — confidence: high
- Possible 1920s Jazz Age analog: stock market may keep rising even after land prices peak. — confidence: medium
Predictions / Forecasts
- Mildly bullish to sideways 2023, strong trend establishment for 2024-2026. — status: confirmed
- US money supply M2 growth to normalize lower, pulling inflation down from June 2022 highs. — status: confirmed
- Japanese Nikkei to break through 38,000 (1990 high) — Japan narrative to dominate. — status: confirmed (2024)
- All-time new highs in Australian stock market by end of 2023. — status: confirmed
Concepts Referenced
- 18.6-Year Real Estate Cycle
- Decade Cycle Pattern
- Credit Creation
- Commodity Cycle
- Home Builders as Leading Indicator
Notable Quotes
“If 2023 is a surprise for most people, it’ll be in terms of it being stronger than people think.”
“For different reasons, we’re seeing the same things in the UK, US, and Australia — demand for rents, shortage of workers, high wages.”
“The sentiment was worse in October than in June, but the stock making higher lows in October tells you the professionals were seeing better earnings ahead.”