Chris Whalen, chairman of Whalen Global Advisors and author of The Institutional Risk Analyst blog, returns to The Julia La Roche Show for episode 240 to discuss markets and the state of the economy.
Sponsor: This episode is brought to you by Monetary Metals. https://monetary-metals.com/julia
Whalen explains why market euphoria has faded under Trump's "shock and awe" strategy. Banks face a $3 trillion mortgage securities problem yielding under 3% against 3% funding costs. He notes the FDIC has stopped reporting troubled bank asset totals after 35 years, suggesting numerous insolvent institutions need resolution. Despite these issues, Whalen doesn't forecast a recession, seeing continued growth with isolated credit problems. In commercial real estate, he describes a "silent recession" where banks avoid taking properties, while for residential real estate he predicts price softening, then a rate-cut mini-boom before a major 2028 correction. Whalen also calls Fannie & Freddie stocks a "pump and dump" trade, states gold is "the only form of money that's not debt," and dismisses crypto as "nothing."
Links:
Twitter/X: https://twitter.com/rcwhalen
Website: https://www.rcwhalen.com/
The Institutional Risk Analyst: https://www.theinstitutionalriskanalyst.com/
Inflated book (2nd edition): https://www.amazon.com/Inflated-Money-Debt-American-Dream/dp/139428571X
Stanley Middleman book: https://www.amazon.com/Seeing-Around-Corners-Achieving-Business/dp/B0D5PTSJVC/
0:00 Intro and welcome back Chris Whalen
1:06 Big picture market overview and Trump policy impact
2:49 Stock market as political proxy and market conditions
4:46 Fed policy outlook and potential rate cuts
6:09 Banking sector challenges and mark-to-market issues
8:07 Silicon Valley Bank anniversary and bank issues
11:10 Economic assessment and credit conditions
13:52 Commercial real estate challenges
16:11 Discussion of tariffs and Trump's structural changes
20:13 Debt, government spending, and economic growth
22:18 Investment approach and AI skepticism
24:36 Gold vs cryptocurrency perspective
25:58 Fannie Mae and Freddie Mac
27:29 Housing market conditions and affordability
29:50 Closing thoughts and where to find his work
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