The Julia La Roche Show Julia La Roche

Investment banker and author Chris Whalen, chairman of Whalen Global Advisors, who is also the author of The Institutional Risk Analyst, returns to The Julia La Roche Show to discuss the big picture of the economy and markets.



He highlights the dichotomy between the consumer side, which is doing relatively well, and the commercial side, which is suffering due to low interest rates and illiquidity. Whalen predicts that interest rates will rise, leading to a preference for income-focused investments and a shift away from speculative pricing. 



He also emphasizes the need for reimagining and redeveloping cities to address the challenges in the commercial real estate sector. Overall, Whalen believes that the economy is producing nominal growth but that people are struggling due to rising costs.





Links:

Twitter/X: https://twitter.com/rcwhalen

Website: https://www.rcwhalen.com/

The Institutional Risk Analyst: https://www.theinstitutionalriskanalyst.com/

The Death of Leverage; What’s the WAC of Bank America? https://www.theinstitutionalriskanalyst.com/post/the-death-of-leverage-what-s-the-wac-of-bank-america



Timestamps:

0:00 Intro and welcome Chris Whalen 

0:55 Macro view, we’re in a weird dichotomy  

2:55 Higher interest rates 

4:03 Rate outlook 

7:13 5 handle on 10-year treasury 

10:18 The death of leverage 

12:00 Confidence 

16:43 Silent crisis in commercial real estate 

20:25 A qualitative recession 

25:15 Election year 

27:23 Higher rates and impact on investor behavior 

32:30 Goodbye 

Scott Galloway, Professor of Marketing at NYU Stern School of Business, returns to the pod to join Julia La Roche on episode 163 to discuss his newest book, “The Algebra of Wealth: A Simple Formula for Financial Security.” 



The Algebra of Wealth book: https://www.amazon.com/Algebra-Wealth-Formula-Financial-Security/dp/0593714024





0:00 Intro and welcome Scott Galloway 

1:04 Macro picture of the economy 

3:03 Prosperity is not evenly distributed generationally 

5:32 The Algebra of Wealth 

7:30 Don’t follow your passion, follow your talent 

9:20 Focus + Stoicism x Time x Diversification 

9:56 Galloway went broke twice 

12:25 Divorce 

13:30 Having children 

15:35 Myth of balance 

17:00 Raised by a single mom 

21:00 We’re turning into something that’s not very American 

25:31 Investing and harvesting 

27:00 Our economic policy is we’ve declared war on the young 

24:47 Universities, free speech, and antisemitism on campuses 

32:32 DEI 

38:15 Masculinity 

50:00 Parting thoughts

Keith Fitz-Gerald, principal of the Fitz-Gerald Group, shares his macro view of the world and the five big picture lenses through which he sees the world.



He believes that investing in optimism and knowing where the world is going is better than trying to be right at specific moments in time. He emphasizes the importance of focusing on companies that have great demand for their products and services and can change consumer behavior. Keith also discusses the role of the Fed and the importance of investing in optimism rather than trying to second-guess the unpredictable actions of the Fed.



Link: https://www.keithfitz-gerald.com/





00:00 Introduction and welcome Keith to the show

0:53 Simple is better

1:50 The five Ds

2:50 Does the Fed matter? 

5:30 The AI Opportunity and Changing the World

8:22 Keith Fitz-Gerald’s S&P 4750 target in 2023 

10:50 Buying right now — chaos creates opportunity 

13:00 History doesn’t repeat, but it rhymes 

14:00 Geopolitics and markets 

15:55 When in doubt, zoom out 

17:13 Portfolio construction 

19:03 Took out S&P 500 price target, 5500-5600 may be next stop

20:20 The Fed needs to stay on sidelines 

22:40 Are markets healthy? 

26:00 Outlook for the U.S. 

26:50 Gold 

29:20 Parting thoughts

Michael Howell, CEO of CrossBorder Capital, an investment advisory firm, and author of the book, “Capital Wars: The Rise Of Global Liquidity,” returns to The Julia La Roche for episode 161 to discuss the global liquidity cycle and its impact on the economy. 



He explains that liquidity is a key driver of asset prices and that the current liquidity cycle is pushing asset prices higher. Howell argues that the focus on interest rates and policy rates is misplaced, and that the long-term rate and liquidity are more important factors. He also highlights the importance of liquidity in the refinancing of debt and warns of the risks of a liquidity shortage. Howell suggests that investors should consider assets like gold, cryptocurrencies, and solid companies on Wall Street as hedges against monetary inflation.





Links: 

Website: http://www.crossbordercapital.com/

Twitter: https://twitter.com/crossbordercap

Substack: https://capitalwars.substack.com/

Book: https://www.amazon.com/Capital-Wars-Rise-Global-Liquidity/dp/3030392902



Takeaways


Liquidity is a key driver of asset prices and the current liquidity cycle is pushing asset prices higher.
The focus on interest rates and policy rates is misplaced; the long-term rate and liquidity are more important factors.
A shortage of liquidity can lead to banking and refinancing crises.
Investors should consider assets like gold, cryptocurrencies, and solid companies on Wall Street as hedges against monetary inflation.



Timestamps: 

00:00 Introduction 

1:38 Macro view + liquidity cycle 

3:07 Interest rates 

6:10 What really matters is the integrity of the US Treasury market 

07:47 Hedging Against Monetary Inflation

9:16 Gold

11:56 US public debt 

15:15 Monetizing the debt 

18:06 Gold is the pole star in the financial system

20:40 US dollar

26:29 Inverted yield curve

31:37 Conclusion and parting thoughts

Bill Fleckenstein, president and founder of Fleckenstein Capital, discusses the macro view of the world and the impact of the Federal Reserve's monetary policies. 



He criticizes the Fed for its incompetence and reckless policies that have led to the creation of two huge bubbles and misallocated capital. 



Fleckenstein also highlights the power of the passive bid in distorting the market and the importance of understanding its effects. He believes that the stock market has become a lagging indicator and that the Fed is trapped and unable to fight inflation. 



Elsewhere, Fleckenstein discusses the bond market, gold, and silver.  He also expresses concerns about the US national debt and the lack of fiscal responsibility.



Links: 

Book: https://www.amazon.com/Greenspans-Bubbles-Ignorance-Federal-Reserve/dp/0071591583

Twitter/X: https://twitter.com/fleckcap

Website:https://www.fleckensteincapital.com/



Takeaways


The Federal Reserve's incompetence and reckless policies have led to the creation of two huge bubbles and misallocated capital.
The passive bid, driven by defined contribution plans and 401k plans, has distorted the market and changed what works and what doesn't.
The stock market has become a lagging indicator, and the Fed is trapped and unable to fight inflation.
The US national debt is a significant concern, and there is a lack of fiscal responsibility.
Gold and silver are seen as insurance policies against inflation and financial disruptions.



Chapters

0:00 Introduction and welcome Bill Fleckenstein

0:55 Macro view and what the Fed does really matters

4:30 The distorting effects of the passive bid

6:30 The stock market is a lagging indicator 

10:45 Equity markets in a bubble or not? 

13:30 End game — long end of the bond market rates rise

18:26 Inflation and the inflation psychology  

23:53 The Fed’s inflation fight, Fed cutting rates would be an obvious mistake

26:30 The economy and millennials 

29:49 Gold price, gold market has figured out Fed is trapped 

34:44 Silver

37:04 Outlook on the U.S. and conclusion

Investment researcher and macroeconomic analyst Lyn Alden, founder of Lyn Alden Investment Strategy, joins Julia La Roche on episode 159 to discuss the macro view of the economy, focusing on fiscal dominance. 

Alden highlights the wide performance gaps between sectors, which are influenced by fiscal and monetary policies. She discusses the implications of fiscal dominance and the challenges it poses for the Fed's tools to control inflation. 

Alden also shares her insights on asset markets, including the rise of gold, Bitcoin, and undervalued energy stocks.



Links: 

https://www.lynalden.com/

https://www.amazon.com/Broken-Money-Financial-System-Failing/dp/B0CG83QBJ6

https://twitter.com/LynAldenContact



00:00 Introduction and overview

01:16 Fiscal dominance and its impact sectors

04:37 Fiscal dominance, explained 

09:37 Higher highs, higher lows of inflations in 2020s

12:20 Ironically stimulative 

16:18 Assessment of the economy, is it healthy? 

18:53 Asset markets, rise in gold is indicative of fiscal problems 

22:00 undervalued energy stocks and their catalysts

25:33 Insights on Bitcoin, its performance, why it could hit six-figures in next two years

30:17 Conclusion and parting thoughts