Russian Civil War & The Tight Labour Market

In this episode, Parth & Abdul discuss the ongong tensions in Russia between the Wagner Group and Putin. In addition, they explore the tight labour market, and talk about their plans for the future of this podcast.

Episode Transcript

(00:00):
Good afternoon, ladies and gentlemen.Welcome back to the Investor's Diary podcast,
where we help you work smarter andharder by providing weekly market updates and insights.
We're back again this week with ourregularly scheduled podcast, and today's main
topic of interest will be the ongoingcivil war in Russia but being putin and
the Wagner Group and its potential impacton the financial markets, and towards the

(00:22):
end of the podcast, we willalso dive a little bit deeper into our
plans and for the future of thispodcast, as well as our ongoing job
search, so I don't take itaway. Yeah, So let's start with
the big one, the threat ofthe civil war in Russia. As you
may know disclaimer if we you know, butcher aining pronunciations, they're pretty hard.
But yeah, as I know,ye have. Guinea Pregozin, the

(00:43):
head of the Wagner Group Mercenary Force, sees control over military facilities in two
southern Russian cities. Last week.This led to public feud between Pregozin and
the Kremlin, with pregos In oftenusing social media to call out Russia's military
leadership for willing to keep the Wagnerfighters supplied. He also made allegations that
the Kremlin had squandered gains made atthe cost of his troops. The situation

(01:07):
escated on Saturday morning when Russian PresidentVladimir Putin vowed to punish those behind an
armed uprising. However, by theend of the day it appeared that the
crisis had been diffused, with Progisonand his forces returning to their base in
Rostov Ondawn. Yeah. But justto give a little bit more context into
what essentially happened is the Wagner Groupis a private military in Russia that is

(01:32):
run by as of those said,the yev Getti pre goes In and his
military was essentially PoTA was helping Putinin Ukraine flat the war. But what
happened was that the owner of theWagner Group essentially said that the Russian military
was attacking his private military, andthis essentially caused him to challenge Putin publicly

(01:53):
and through social media, primarily throughhis telegram group. He was giving orders
about marching into mos Scout and threatenedPutin's leadership, and as as mentioned earlier,
Putin publicly denounced this and essentially threatenedeveryone that was threatening his power that
they will suffer. But they didreach a collective agreement in which Yevgeny pri

(02:19):
goes In and his group was exiledto the Belarus and his soldiers could follow
or just stay and join the Russianmilitary. And the overall impact was interesting
because it showed that Russias or putinstep into the war in Ukraine has not
been as straightforward as he would havehoped, and there is a chance that
his power can be threatened. Yeah. Um, Again, it's also still

(02:42):
unclear what exactly happened, you know, during this brief period, and again,
like you said, it is possiblethat this situation could flare up again
because his position was threatened. Andbut however, for now it does seem
that the thread has been averted.Yeah, And talking about its impact on
the stability of the markets, thismutiny will raise concerns simply about the stability

(03:06):
of the Russian government and the potentialfor further instability in the region given the
ongoing Ukraine War and potential civil warimpacts. And I would say overall this
led to increased risk aversion in themarkets, which essentially means that investors are
going away from risky assets, whichhas led to a downward pressure on stock
prices and bond yield in the region. On the other hand, there's also

(03:30):
highlighted the growing tensions between Putin andthe Russian military, and this could in
the coming months or years we leadto a power struggle within the Russian government,
which is hard to say how thatwould impact the markets, but stalk
about a potential few financial implications thiscould have. Yeah, so let's jump
into the most obvious one, maybethe impact that it would have on the

(03:52):
Russian stock market, right, andthe market the Russian stock market has already
been very vaaltile in recent months andthe civil war, you know, and
it will add more fire to themore fuel to the fire, and will
likely lead to further declines. Andlike you said, you know, there's
investors might become more risk averse investorsagain. Yeah, there'll be increased concern

(04:14):
about risk and their investments, andpeople will be worried about, you know,
losing money, and a lot ofmoney will leave markets. Another possible
one on the banking system, alsolinking to risk aversion here, but a
lot this would put a big strainon the banking system. A lot of
banks would be free to lend moneyto business or individuals because they're concerned about

(04:38):
the risk of not being repaid,and it would be more difficult for business
to operate and for individuals to accesscredit, which would further hurt the economy.
Yeah, and talking about a moreglobal issue that could arise from all
this would be the effect on theiroil and gas industry. So the Russian
oil and gas industry is a majorsourcial remedy for the Russian government, and
an internal civil war would most slightlydisrupt the production and export of oil and

(05:02):
gas, which would majorly hurt thegovernment's finances. This could also make it
difficult for Russia to reach its exportcommitments or energy come into other countries around
the world, which could globally leadto a surge in energy prices for consumers
around the globe. So it's notjust necessarily a national issue, but it
could also become an international issue.And let's go back into the Russian economy.

(05:26):
This would have severe impacts on theRussian economy as a whole because it
would disrupt their economic production, Itwould reduce investment in nationally and for indirect
investment, and overall lead to higherinflation. Which we already know how that
impacts country and the overall impact thatwould obviously depend on the severity of how
the civil war is. But forthe time being, it looks like the

(05:48):
civil war has been put down asthe Wagner group has been exiled to Belarus.
But I have a feeling that won'tbe the last we see of them.
Yeah, I agree, And justtouching on a little um another impact
that um that could we could seeum, but uh, you know,
we'd we'd probably see a decline inthe value of the Russian ruble. That

(06:10):
just adds to you know, somepoints we made earlier about you know them
access and credit um. And youknow their their activity and you know in
in foreign markets and their exports andimports. You know, a decline in
the value the ruble would make itmore expensive for Russian businesses to import goods
and services, which will lead toa higher a race of inflation. It
would also make it more difficult forRussians to Russian companies to raise capital,

(06:34):
which would stifle the ecomic growth,and an addition in the civil war would
likely lead to a decline in foreigninvestment in Russia, which would further hurt
the economy. But yeah, justto echo some things you said, Um,
you know, we do think that, you know, the situation has
calmed down a little, but um, there's a you know, decent chance

(06:54):
that it might flare up again.Yeah. And I think one thing that
we are overlooking, or most peopleare overlooking, is how this might impact
China, because China and Russia haveclosed relations, right, so if Putin
does not remain in power, orif there's a power struggle that takes place
in Russia, then that would verymuch negatively impact the Chinese economy because,
as we already know, China hasbeen suffering because they have had to take

(07:17):
down their fake real estate complexes,which was really boosting up their GDP for
the last decade or so. Andsince that's not working for them anymore,
a power struggle in Russia couldn't meanthat they have to expend even more resources
to support the Russian government in orderto make sure that their ally stays in
his position. That's a very insightfulpoint there. But let's move on to

(07:43):
the future of our podcast. Sopretty exciting news, but we were thinking
of expanding and you know, takingthis a bit further, and part that
you want to talk a little bitabout it. Yeah, So, as
you know, our last well yearor two years or so, the podcasts
have primarily taken place on Spotify andApple podcasts and Google podcasts and wherever else

(08:07):
you listen to us on, butit's all been done through an audio format,
and over the last couple of episodes, we have privately been exploring the
potential of well making this a videopodcast because we do have professional setup,
we use professional microphones, and giventhe fact that our university commitments have significantly

(08:28):
been decreased, we believe that wecould probably get a couple of cameras and
start uploading YouTube videos or YouTube podcastsalongside what were you doing? And not
just YouTube, but expanding to TikTokyou know, Instagram page, having a
LinkedIn profile, you know, makingvery short clips at the moment. You
know our styles, you know,we sit down, we do things in

(08:50):
one take as well, we don'tedit our content, but hopefully hiring an
editor and you know, making avariety of different length different lengths of media
right right now, be a youknow, fifteen twenty nice thirty minutes podcast,
but maybe looking to record quick thirtysecond videos for TikTok you know,

(09:13):
one minute ones, and that wouldnow change our current format, so our
thirty minute episode would still remain.Yeah, everything else would just be on
top of what we're already doing.And we're already in talks with a few
potential sponsors that would be willing towell financially support us during that transition of
hiring an editor and get a couplenational equipment and go out once a week
to record some TikTok on spreading financialnews and financial Yeah. So it's it's

(09:37):
a step in the right direction andwe're excited to share that with you.
We don't have an exact deadline,well we will when when we will begin
that, but we're aiming to beginthe transition to video on top of everything
within the next one to two monthsor so. Yeah, very exciting news.
You know. It's good to grow, um and we've we've been enjoyed
what we do, right and Ithink expand just be a bit more.

(10:01):
Um. It's challenging, but alsoit's it's fulfilling, I think. Yeah.
And if we move on to well, another another topic, yeah,
is so I have officially finished mylast subject at university for my bachelor's degree
and I have technically graduated. Ihaven't had my graduation ceremony, and but

(10:22):
I finished all my exams, soI have. I am technically done with
university. I'm a graduate in Economicsand Finance from the University of Melbourne.
And well, yeah, let's talka little bit about that. I as
as we talked about a couple ofmonths ago. I did my internship in

(10:43):
Credit Twists in Singapore about three tofour months ago. And since their acquisition
by UBS, I have been activelyseeking new opportunities or graduate roles in the
financial industry that includes investment banking,as a management, privateking, so on
and so forth. And that thatjobs are just still ongoing given the tight

(11:05):
label market, labor market, andthe recessionary environment. It seems like,
and I think I'll do you willagree with this. You'll see a lot
of job offers or like job openingson like LinkedIn or their websites, but
you won't see anyone actually get hired. No. Um, And it's been
a common theme, I think.UM, I'm not too sure why why
that is. You know, I'vebeen a victim of this. You know,

(11:26):
I've applied to many places and Ihave not heard back, maybe have
heard back from some places, butit's been very evident that you know,
they were not hiring. Um.Why they do this, I'm not sure.
Yeah, maybe it's just to look, you know, maybe push out
this idea that the recreuitment team isactive when really it's not. Um,

(11:48):
but just to echo that point home. So without mentioning any names, I've
applied to a couple like I've appliedto a bunch of investment banks, boutiques
and bulge brackets. And let metell you that there was one bulge bracket
bank that I invite that I appliedto that hasn't responded to me in over
ten weeks now since the first applicationwas made. And that's a little crazy
because I haven't seen anyone else onLinkedIn announced that they got hired for that

(12:11):
position. So in theory that positionis open, but they never hired anyone
and supposedly the role is supposed tobegin in like a month. Yeah,
it doesn't make sense. I trulyfeel that they're not hiring. And you
know, and it's the topic oflike, you know not it's pro communication
too, right, I think yousaid, um, ten weeks was it

(12:33):
that? Yeah, since you firstapplied. Yeah, that's far too long.
I've been again, I've had similarsituations where I've not heard back trying
to reach out and you know,get a very you know, automated response.
Very you know, that doesn't reallyprovide much clarity or or updates on
my application. But you know,I guess that's just a reflection of the

(12:54):
current market, right, I think, you know, the market conditions just
very dry. Opportunities are you know, not really available, and there's not
much activity in the markets. There'sno M and A deals happening, there's
no IPOs happening. But I thinkin the next twelve months or so we
should see an uptick in well dealmaking activity such as MNAs and IPOs and

(13:18):
etc. Not just in Australia butglobally. And that would imply that these
banks once again need to start hiringjuniors to well do all the grunt book
and hopefully that's when we come in. But until then, I think we
just have to keep applying and hopefor the best. I think I can
tell you genuine bottom of my heart, I have easily completed two hundred and
fifty applications. No financial institutions Ican attest that. You know, I've

(13:43):
been talking to parts all week andweek out, and it's just more applications
on applications and I've I've I've hadmy fair Shield applications not nowhere nor near
two fifty. But um, it'sit's it's yeah, it's very bleak to
be honest in this market. Butagain we hope, Yeah, it picks

(14:03):
up in twelve months. Yeah,and our resume is not to like our
resumes are nowhere near perfect, right, No, nor is our academic transcript.
But I would say we are atleast the above average candidate for most
of these positions. I agree,And yeah, I guess the element of
luck too with it. Um,you know, I'm looking, I'm not
sure, you know, it's allin the air, but I think putting

(14:26):
your best foot forward is by puttinguh, you know, all this application.
So yeah, that's the best thingwe can do. Apply and just
and sit and wait. There's notmuch more that we can do, but
yeah, that's gonna be a wrapfor this week's Investor's Diary podcast. There
wasn't too much to discuss this week. It was primarily the news out of
Russia and the potential Silba war andhow that may impact the markets. Everything

(14:48):
it helps has been pretty standard interms of inflation rates and interest rates,
so we hope we can bring youa more exciting episode for the investors eary
pocket next week. But just aquick summary of what we covered. We
talked about the Wagner Group and theirmarch into Moscow and how that potentially threatened
Putin's position as a leader of Russiaand the potential impacts or financial implications that

(15:09):
a civil war would happen on theRussian stock market, their bonds, they're
the price of the ruble against otherforeign currencies, as well as their oil
and gas industry and their overall GDPand economy as a whole. We a
little discuss a little bit about ourplans for the future of this podcast and
moving to a video format alongside everythingelse, and our recent struggles in this

(15:33):
tight labor market struggles, and wewill keep you updated on everything else.
But thank you for tuning in foryet another episode of the Investments Every podcast.
We will, hopefully, once weget the video format sorted, start
interviewing more notable guests moving forward,so let us know if you have any
suggestions in mind on what kind ofpeople you would like, but thank you
for listening and peace. Thank you