Higher Interest Rates, Illiquidity, And The Death Of Leverage | Chris Whalen

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: / rcwhalen
Website: www.rcwhalen.com/
The Institutional Risk Analyst: www.theinstitutionalriskanaly...
The Death of Leverage; What’s the WAC of Bank America? www.theinstitutionalriskanaly...
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
#economy #markets #investing

[@TheJuliaLaRocheShow]

Hey everyone! Chris Whalen is always a fan favorite, and I love getting him on the show every quarter. Please let me know what you think of our conversation in the comments section. And who else would you all like to see on the show more often? Let me know. Thanks for your support. You all are the absolute nicest people on the internet. 💙Julia

[@issenvan1050]

Jim Chanos, Doug Casey, Christopher Aaron, John Polomny, Jeffrey Gundlach, Stan Druckenmiller, Jim Rogers, Steve Hanke, John Greenwood, Michael Pento, Robert Shiller, Jordan Roy-Byrne, Robert Moriarty, Robert Kiyosaki, James Lavish, Nick Gerli, Gary Cardone…

[@nickynick1014]

Julia nice work managing these interviews. Allowing your guests to complete their thoughts is refreshing.

[@Greg_Chase]

Mr. Whalen at time 18:10 makes a point about our cities. The challenge with cities right now is similar to what occurs if you work at a company that gets acquired/bought out and the new management team lacks the skills to operate well. When poor management shows up at a business, a large number of employees leave. That's what is happening in cities like San Francisco, Chicago, NYC, Portland, and so on. Just really poor management. This is a big country and it's just like employees who know there are better-run companies to choose from. They're going to leave for greener pastures. Mr. Whalen is very well-informed and this was a great interview - thank you! .

[@junkscience6397]

Thank you, Ms. La Roche, for bringing the ever-wise Mr. Whalen back for another timely update. This guy knows his stuff...and he likes talking with you! You bring out the best in people. Keep up the good work on this growing channel!

[@kingcountyband]

Chris can teach more practical info about banking in 10 minutes than anyone else on fintwit. The guy is a banking phenom.

[@patrickbarry8374]

Great interview! Whalen is a gem!

[@fubarbrandon1345]

Thanks Julia...great guest and interview.

[@ryantinney]

Great discussion.

[@thehungergames8918]

Great depression 🧙🏼‍♂️

[@thach0x0]

Fabulous interview ,Julia

[@lesleyjohnson8488]

Absolutely amazing interview - as always. 😊

[@rolandrenteria5519]

Nice to hear from someone who actually knows what they're talking about.

[@dave8212]

Thanks Julia - excellent content from Chris 👍🏻💛

[@brianborse3555]

Wow, you always get the best guests 🎉 🙏

[@michaelstock9351]

Awesome interview as always

[@markrand652]

Good interview, enjoyed it and learned.

[@ask_why000]

No more taxpayer bailouts of any industry. If private industry cannot figure it out without taxpayer backing, then let capitalism have its say.

[@stephtraveler7378]

New to your channel. So far, you have excellent guests. I like that you let them talk and allow them to present their point of view. Much of the reason Joe Rogan is so successful. (He doesn't try to get to a root cause in a 6 second sound bite...)

[@maxangeles6279]

good guest speaker. very informative.

[@mattbrandt9796]

Always a great listen, thank you Julia & Chris.

[@TheJuliaLaRocheShow]

Thank you so much! Chris is wonderful. We'll bring him on more often.

[@E_incognito]

You have improved tremendously. The show is fantastic. You should have asked ,Chris about NYCB which he recommended last time.

[@BlackMan614]

Yikes. You're kidding?? He seems to be bullish on commercial real estate - except NY. And his take on King of Prussia mall is just bad. Please... affluent areas will always support exclusive retail.

[@E_incognito]

@@BlackMan614 I guess you don't usually dabble in sarcasm

[@BlackMan614]

@@E_incognito How do I know its sarcasm if I didn't watch his last appearance??

[@detectiveofmoneypolitics]

Economic investigator Frank G Melbourne Australia is following this informative content cheers Frank 😊

[@ericarseneau1904]

Love this guy

[@sbar39]

32:40 I fully agree

[@frankstudent]

Julia is on fire!

[@pauldelray5839]

Nice show. Always learning here.

[@TheJuliaLaRocheShow]

Aww! So happy to hear. I feel the same way. I'm also learning. 💙

[@agnesteyssedre4616]

Good work as always,next time Charles Gave ? Or Milton Berg ?

[@Jeff-gm8vs]

Have seen Chris numerous times. Gives a lot of insight. He did get it wrong with NYCB. Otherwise the interview was great

[@galandoftruth6730]

Favorite part 27:00 so true for change.

[@mikahundin]

The assessment of the consumer's economic health can vary depending on the specific metrics and data being considered. In the interview, Chris Whalen states that the consumer side of the economy is doing relatively well, with low default rates on consumer mortgages and construction loans for single-family homes. However, he also acknowledges that low-income consumers are facing challenges and that there is a bifurcation in the consumer market. To gain a more comprehensive understanding of the consumer's economic health, it's important to consider a range of indicators such as consumer confidence, employment levels, wage growth, savings rates, and consumer spending. Additionally, it's important to recognize that there can be significant variation in economic experiences among different consumer segments, such as low-income versus high-income consumers, or rural versus urban consumers. Overall, while there may be evidence to support the claim that the consumer side of the economy is doing relatively well, it's important to acknowledge the nuances and complexities of the consumer market and the varying experiences of different consumer groups.

[@thomassieckmann8962]

Chris is a wealth of knowledge

[@TheJuliaLaRocheShow]

He really is.

[@nohopeequalsnofear3242]

Just till we get QE & Hyperinflation... Then we will have real problems

[@Ryan-Fkrepublicnz]

Quality drop is a sort of hidden deflation

[@Michael-qy1jz]

Residential has NOT see mass defaults YET !!!! it's coming! And we do NOT have high interest rates.

[@LamLawIndy]

Maybe? ARMs aren't as common as in early 2000s & lending standards have majorly tightened (being self-employed, it was like pulling teeth to do a refi in 2022). We'll see.

[@Michael-qy1jz]

@@LamLawIndy yes, I agree, but remember > Subprime was 1 million of the 8 Million homes foreclosed back the. It ate right thru subrime into mass amounts of conforming, full Doc fixed loans. I've had dozens of rentals for 30 years etc. Absent of forced zero rates /Zirp. And massive massive direct stimulus again, we will see 30 to 50 % off. And I think the need the mass deflationary scare again to justify the massive printing after. Obviously none of know what will happen, but it's going to be a disaster.

[@mikahundin]

As a public figure and financial analyst, Chris Whalen may have biases that influence his perspectives and opinions. However, without more information on his personal and professional background, it's difficult to identify all of his potential biases. Here are a few potential biases that could influence Whalen's views: 1. Professional bias: Whalen is the chairman of Whalen Global Advisors and an author of the Institutional Risk Analyst, which could influence his views on financial markets, regulation, and monetary policy. He may have a bias towards policies that benefit the financial industry or towards certain investment strategies. 2. Political bias: While Whalen does not explicitly identify his political affiliation, he does criticize the Biden administration's policies and express a preference for a change in leadership. This could suggest a conservative political bias. 3. Ideological bias: Whalen's views on economics and finance may be influenced by his ideological beliefs, such as his views on the role of government in the economy, the importance of free markets, and the effectiveness of regulation. 4. Confirmation bias: Like all individuals, Whalen may be susceptible to confirmation bias, which is the tendency to seek out information that confirms his preexisting beliefs and to discount information that contradicts them. It's important to note that everyone has biases, and having biases does not necessarily mean that Whalen's analysis is flawed or inaccurate. However, being aware of potential biases can help consumers of financial news and analysis to evaluate information critically and make informed decisions.

[@mikahundin]

Several philosophers have discussed the importance of identifying biases: 1. **John Stuart Mill**: Emphasized the value of diverse perspectives to challenge biases. 2. **Immanuel Kant**: Believed in objective, critical thinking to overcome biases. 3. **Søren Kierkegaard**: Highlighted the role of self-reflection in identifying and addressing biases. 4. **Michel Foucault**: Argued that examining power relations and social context helps reveal biases. 5. **Martha Nussbaum**: Stressed the importance of empathy and imagination in overcoming biases. These philosophers underscore the need for self-reflection, critical thinking, and understanding to identify and address biases, promoting a more just and inclusive society.

[@mmm-cake]

Chris should record voice overs for cartoons lol. Reminds me of The Tick voice “ Townsend Coleman”

[@issenvan1050]

Rates rates rates…how about the money supply?

[@thehungergames8918]

❤

[@issenvan1050]

He had claimed Powell was gonna resign after the bsnking crisis…still waiting.

[@klam77]

Instead of the treasury's ten year, they should track Apples or googles ten year debt

[@issenvan1050]

How does China finance its economy by shorting the greenback?

[@A_D624]

This guy said we are in recession but gdp says Us is growing 1.6%

[@shannonk3909]

"Bueller, Bueller"

[@Rethanos]

Deflation is the rich what inflation is the poor. Deflation is not the problem.

[@Lex41127]

You are calling these people "investors" when, in reality, they are only traders. Investors in T bills do not sell when X and Z happen worldwide.

[@togoni]

This gay knows his business 👌👍

[@adriansmith7604]

Inflation here for least 18 months world debt cancerous savings extremely low half way into storm best luck people

[@vermeerrecpt9290]

Oh, Chris Whalen, this is the “expert” that thought NY Community Bank was a good investment. Bahahahahahah !!!!

[@CalgaryCowtown]

I think he may eat his words about Tesla being a mass misallocation of capital as well.

[@ronfesta771]

Me thinketh great interview just to tell a senior, successful Man to., set the table sounds so........unprofessional!@!?🤪😉🤑

[@TheJuliaLaRocheShow]

It's my signature question. When I said 'set the stage' instead of 'set the table,' the viewers called me out. I think we can all set the table! 💙

[@ronfesta771]

@TheJuliaLaRocheShow Impossible to always please everyone, great show......fantastic guests!!😁

[@AndriyTyurnikov]

Line about Bible and 6% - was it a joke? Or Bible really mentions 6%?

[@timkrouse345]

There is an obscure reference to 6% in 3rd Timothy, but it was determined to be a "later addition" to the original greek by a 4th century banker/monk.

[@AndriyTyurnikov]

@@timkrouse345 have a link?)

[@lesleyjohnson8488]

3rd Timothy is a short book. He trusts you can find it ;)

[@AndriyTyurnikov]

@@lesleyjohnson8488 I don't know what "3rd Timothy" means, google gives weird results

[@WilliamSchlott]

"There's a reason the Bible says 6%" lol I guess if you can get a better rate than Jesus your doing pretty good.

[@user-ev9to4xx2o]

Will america.get in a position.where it can neither.buy and sell.😂😂😂😂

[@nuki3234]

Thanks for the mess governdebt!