Academy Securities: Geopolitical & Macro Strategy Podcast

Last week Secretary of State Mike Pompeo announced significant US investment and strategy for the Indo-Pacific Region. Academy Securities's Head of Geopolitical Strategy Major General James "Spider" Marks and Head of US Rates Sales and Trading Glen Capelo provide their thoughts onn this announcement in this episode. Geopolitical Strategy Associate Rachel Washburn moderates the discussion.

Table of Contents:

• Indo-Pacific Campaign: 00:00 - 4:23
• Trade War Update: 4:24 - 10:04
• Allies in the Region: 10:05 – 25:35

Key Points:

• Secretary Pompeo’s announcement for the Indo-Pacific economic strategy:
• Pompeo has put a spotlight on a long-term effort in the Indo-Pacific Region
• The US has never lost sight of the importance of this region, but the perceived negligence exists because the US has spent the last 17 years at war in the Middle East and SW Asia
• It is critical for the US to remain engaged in the Indo-Pacific
• Any solution with North Korea runs through Beijing:
• China, Japan, and Russia are important partners in the Indo-Pacific
• Security guarantees help incentivize economic growth
• Economic effort, on the part of the Chinese, has been their primary element of power to achieve global influence
• They create dependency- the US needs to provide a legitimate alternative
• North Korea and Indonesia showcase perfect opportunities for the US to compete with China for influence:
• China is not going to back away from their military presence in the South China Sea
• Friends in the region need to know that we remain committed to partnerships- a consistent partner and friend
• Any engagement with Chinese companies is an engagement with the Chinese intelligence collection apparatus

Market Impact:

• The market is digesting this information especially as it pertains to long-term challenges with trade:
• China’s economic system can sustain a long-term trade war and President Xi is prepared
• This is the beginning of something new:
• President Trump’s negotiation style is reflective of this new management
• It is a monumental turn that we have gotten North Korea to the table and opened a dialogue
• No doubt that the trade war could have collateral damage on our progress with North Korea
• Economically, these issues will benefit our relationship with Japan
• When dealing with China, you are not only dealing with private companies but also with the state