State of Play: Inflation, Recession Signals, and the Housing Market — with Mark Zandi

COVID-19 Policies

China's stringent COVID-19 policies have sparked significant debate and unrest. Scott Galloway highlights the ongoing protests in China, where a quarter of the population remains under lockdown. He argues that the Chinese Communist Party (CCP) must be responsive to the middle class to avoid potential revolution, given the lack of a two-party system 1.

They estimate that if Covid had kind of followed the same pattern as the west, and it didn't, their zero COVID policy was effective. They would lose three to 5 million chinese people, which is obviously a huge, huge loss of human life, but also would just be bad.

--- Scott Galloway

Scott also questions the effectiveness of a zero COVID policy now that the virus is more contagious but less lethal, suggesting that some level of exposure might be necessary 1.

   

Stock Market Trends

The performance of Chinese stocks is closely tied to the country's COVID-19 policies and government actions. Scott Galloway notes that recent protests have led to a rise in US-listed Chinese stocks, with the Nasdaq Golden Dragon China index seeing a significant increase 2. He discusses the potential of Chinese internet stocks, which offer competitive valuations compared to their American counterparts.

I think on a risk adjusted basis the best buy right now would be a basket of chinese Internet stocks.

--- Scott Galloway

However, Scott warns that these stocks are heavily influenced by the CCP, which has shifted from supporting to hindering their growth, creating an existential threat to their performance 2.