If The Fed Doesn't Pull Up On Some Initiatives, They Could Cause A Bank Crisis | 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, including an impending maxi reset in home prices and the potential for more bank failures.
He also highlights the “silent crisis” in commercial real estate and the potential increase in bank failures. Whalen shares his insights on the earnings of big banks and media coverage. He provides an outlook on the Federal Reserve and discusses the debt situation in the US. Lastly, he addresses the possibility of releasing Fannie Mae and Freddie Mac from conservatorship and shares his work and parting thoughts.
Takeaways
* The commercial side of the economy is experiencing pain, particularly in commercial real estate and corporate defaults.
* The housing market is expected to undergo a reset in the future, leading to a decrease in home prices and potential challenges for developers.
* There is a silent crisis in commercial real estate, with legacy properties becoming toxic and banks being urged to sell assets.
* The Federal Reserve may need to drop rates, start buying bonds, and increase reserves to address the challenges in the economy and banking sector.
The US debt situation is a significant concern, and long-term rates may rise, impacting various sectors of the economy.
* The release of Fannie Mae and Freddie Mac from conservatorship is unlikely due to their credit ratings and challenges in functioning as private entities.
Links:
Twitter/X: / rcwhalen
Website: www.rcwhalen.com/
The Institutional Risk Analyst: www.theinstitutionalriskanaly...
Comments most recent Fed proposal in Basel III Endgame: www.regulations.gov/comment/O...
Timestamps:
00:00 Intro
01:08 Big picture view of the economy and markets
3:29 Impact of Basel III endgame
4:50 A maxi reset in housing
06:20 Silent Crisis in commercial real estate
09:28 Potential increase in bank failures
13:00 Big bank earnings and media coverage
15:30 Grim economic picture for commercial
21:15 Outlook on the Federal Reserve
24:55 Fed could cause a bank crisis
26:15 Debt situation in the US
31:30 Release of Fannie Mae and Freddie Mac from Conservatorship?
35:15 Parting Thoughts
#economy #housingmarket #commercialrealestate

[@TheJuliaLaRocheShow]

Hey everyone! I hope you enjoy this conversation with Chris Whalen as much as I did. Please let me know who you'd like to see on the show. I love taking your guest suggestions. We'll have Prof Jeremy Siegel on this Thursday. Thank you again for subscribing to the channel and supporting this content. 💙Julia

[@issenvan1050]

So, the FED should stop QT by Q3 2024 & cut the funds rate & re-start QE later on (with no additional MBS on their BS): is this Chris’s base-case for 2024?

[@issenvan1050]

John Greenwood.

[@issenvan1050]

Doug Casey, Lobo Tiggre, Richard Heart.

[@issenvan1050]

Nick Gerli, & whoever else talks about money supply (not the funds rate).

[@issenvan1050]

Gary Cardone.

[@sandrapospyhala277]

I just love Chris Whalen - I watch all his podcasts. So informative and knows what he’s talking about. He’s the BEST!

[@vermeerrecpt9290]

Fannie and Freddie are insolvent, the banks are in trouble, the national debt is out of control. Yes we have major problems.

[@whodat122]

And Whalen wants to save the banks lmao. All the more reason to let TBTF banks and institutions fail, send people to prison, let the system cleanse itself

[@MosesKim-je5rj]

Always learn something with Chris. Not your typical analyst.

[@lonhoss324]

WHY should we not let these banks fail? Total moral hazard. Is anyone bailing out the US citizens who are going to lose their home, their car, etc.?

[@sivi9741]

Fwiw the problem isn’t bailing banks , it’s afterwards bailing them out we do not cut them in many smaller banks where the needs of bailing them out would disappear being too small for applying the moto of « too big to fail ». But politicians are bought by wall street lobbies so … Same mistake keeps being repeated 🤷🏻

[@Joedisney]

I'm fed up with these kind of people on here. They'd be the first ones to complain if we receive the stimulus check. Well I rather have a stimulus check come to the people, then bail out these criminal bankers. Just like covid we bailed out all these businesses, they didn't have to sell their stock. No we had to go into our savings yet every business will gotta bailout and never had to pay it back. While the working class is out there struggling to survive

[@whodat122]

100%, fk these banks, let them fail, let people go to prison, fk the elite, we don’t need to help them, if they can’t figure it out, that’s capitalism, fk em. Fed needs to stop bailing out bankers and letting them fail, letting companies fail

[@jbru8725]

Agree banks should not be all win / losses backstopped. The moral hazard potentially expected with Biden pursuing student loan cancellations, politicians willing to send cheques for cost of living.

[@WingofTech]

How do you find such intelligent and eloquent guests on? The analysis is unmatched. Thank you kindly Julia! Do your best!! ✨😖✨📰

[@junkscience6397]

Chris Whalen is one of the best minds out there. I'm so glad we keep getting him back on this channel! And nobody gets him opening up and expanding on important topics quite like Julia LaRoche!

[@brianborse3555]

Wow! You always get the best guests

[@TheJuliaLaRocheShow]

Thank you, Brian 😊

[@fubarbrandon1345]

Thanks Julia...great guest and interview.

[@TheJuliaLaRocheShow]

Thank you so much 💙

[@edreeves121]

Excellent

[@johnborrelli7944]

Great info Chris.

[@peterdaly9283]

Great show. Thanks Julia and Chris!

[@TheJuliaLaRocheShow]

Thank you, Peter!😊

[@marilynnschroeder4436]

You always ask the best questions Julia! Awesome interview!

[@TheJuliaLaRocheShow]

Aww! Thank you so much. 😊

[@detectiveofmoneypolitics]

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

[@computerman9580]

Oohhh my heart bleeds for the banks… poor guys.

[@rudeawakening3833]

Central banks globally are and have been stockpiling physical GOLD . Now lately China , India , and most recently Turkey is stockpiling PHYSICAL SILVER ; which is in its fourth year global deficit . This also has been the most undervalued commodity on the planet .

[@Michael-qy1jz]

Let Hope Bankster Crash and DON'T get Bailed out, the Fed better NOT be buying assets, NO Cash 4 Trash, No loans 4 Trash etc. Let PRICES Correct to Fair Market value!! Horrific what they have done since 2008 !!!!!!

[@sdcaeastcountyfamily]

This is the kind of guy i love to listen to and do the exact opposite of what they say, because thats what they will be doing

[@sgrew]

really enjoy the format of your show. It is based on discussions with very knowledgable people and your style of interviewing is great. Please don't change your format to the typical youtube sensational channels. I know they have more subscribers but u will grow for sure!!!!!!!!!!!!

[@Notaslave1961]

Poor Chris, he likes to tell the Fed what to do, but global markets are not behaving with the Fed. Every Central Bank for themselves. Good Luck following Chrissy's advice.

[@jamesbowman1767]

Smart dude

[@jcgoogle1808]

Great interview. You get some of these macro talking heads on and rather than answer the question directly,.. they love to run down rabbit holes listening to themselves talk. Before you know it,.. you've forgotten what the question was.

[@Yetified_Mayhem]

Great chats, and awesome tiger teeth!

[@TheJuliaLaRocheShow]

Thanks. 🐯

[@choosiewhoo1700]

Absolutely, Fed is now causing a bank crisis because of the continuing higher for longer rate. 😢😢😢

[@justincadle7070]

Higher for longer. The fed needs to fix these insane housing prices. They caused this, they need to fix it.

[@sirluciussquigglesworthlll6503]

🔥

[@edwardschindler1369]

Great guest!! Excellent interview. One of the best.

[@Joedisney]

I guess you buy into more bank bailouts. Wake up these banks get bailed out every few years. Same thing with COVID, all these businesses got bailed out. They could have went to the market and sold their stock to raise money. No our government decided to bail out the businesses and the banks. Meanwhile, the consumer and the rest of us had to go into our savings and wipe them out in order to survive. Same as a small businesses, they had to go into their savings. It's socialism, for the wealthy. Capitalism harsh capitalism for the working class and small business

[@shannon-daygrant8754]

Not to be pedantic but: "The term "Gilded Age" is actually more commonly associated with the late 19th century, particularly the period between the 1870s and the 1890s in the United States. It is not typically used to describe the 1920s. The 1920s are often referred to as the "Roaring Twenties" or the "Jazz Age."" - Chat GPT (in response to his comment at the very end comparing today to the 1920s as a second gilded age)

[@kevocundo]

There are no buyers in housing right now. Once interest rates lower all the sellers with the golden handcuffs will sell brining more supply and thus prices will come down.

[@issenvan1050]

So, the FED should stop QT by Q3 2024 & cut the funds rate & re-start QE later on (with no additional MBS on their BS): is this Chris’s base-case for 2024?

[@bgwhalley]

6 months ago Whalen said we would get a reset in housing in 2025 and prices would return to 2019 levels. What changed in those 6 months? Nobody ever asks the right questions unfortunately!

[@issenvan1050]

Can you guys explain Fannie & Freddie?

[@TheJuliaLaRocheShow]

Maybe I can do a special on the GSEs if that's of interest...

[@markbrzezinski8889]

I have been looking foward to Chris giving his forcasts this year. Thanks Chris.

[@TheJuliaLaRocheShow]

So happy to hear! Thank you for watching.

[@Joedisney]

I guess you buy into banks getting another bailout. You need to wake up, these banks have been getting bailouts one after another after another. Meanwhile they keep all the profits and bonuses. I'm not sure what you do for a living, but I'm sure not getting treated that way and no one I know is getting treated that way. If banks can't run their business by now, they shouldn't be in business

[@justincadle7070]

Housing needs to correct and get back to fair value. 200-300 per square foot is ridiculous!!! We need to go back to 100 per square foot!!!!!!

[@E_incognito]

Homeboy recommend, on this episode, holding NYCB several days prior to a 40% crash. Just saying.

[@issenvan1050]

So, when should M2 stop contracting?

[@fillmorehillmore8239]

When M1 does.

[@issenvan1050]

@@fillmorehillmore8239 ?

[@JohnPong-ly2zg]

I don't think they'd do what they did back in 2008... otherwise the next occupy Wallstreet would become much much more severe. They'd probably Wipeout shareholders and have banks merge together instead

[@issenvan1050]

Why didn’t gold go up materially with Basel III?

[@sivi9741]

??? It did . It’s the US 🇺🇸 dollar being too strong still . Any other currencies gold been much higher . The 🇺🇸 dolllar still in a bubble.

[@nobodynever7884]

With 6% 10 year, im retiring in Japan.

[@issenvan1050]

So, he claims FED will do neither QT nor QE?

[@issenvan1050]

Does he still expect Powell & Yellen to resign?

[@auggieoutdoors3325]

I own a hard cover copy of his book "Inflated"....looking to sell and and will start the bidding at $2 trillion soon-to-be Venezuelan/American fiat dollars

[@rokyericksonroks]

That price is a bit inflated, is it not?

[@Poochie1]

Chris Whalen for President!

[@Joedisney]

This guy is advocating for more bank bailouts. What's wrong with you people, why do you want more bank bailouts. I was not buying bonds on purpose because the interest rate was too low it was so stupid thing to do. Yet banks were leveraging themselves to buy these bonds and collecting a decent interest rate. When it went all wrong we have to bail them out. Nobody's bailing me out, no one's paying me back for not doing a stupid thing like buying low interest bonds. When are you guys going to figure out, it's bailout after bailout for these banks. You have to keep the profits and they keep their bonuses. If private banks aren't able to handle being in business. They They should be out of business like the rest of us

[@Poochie1]

@@Joedisney he did not ask for this implicitly, also, banks will always need bailouts, thats the name of the game, deal with it

[@lonhoss324]

Sorry Chris, total BS that bank failures should be bailed out. Time to return to a world where you are responsible for your decisions and suffer for bad business decisions.

[@peterbedford2610]

He seems to always be saying things are close to imploding

[@acornsucks2111]

Lots of people are like that. Eventually, they will be right, like a broken clock.

[@RightTailAngst]

Just bought more puts in #EWBC. Whalen is crying and nobody is listening 😂. This will age well

[@deanswartz5812]

To simple, to easy

[@earlrothfus708]

Financial repression won't work the way it did after ww2 because demographics are so mu h poorer. We don't have the ability to grow out of this no matter how low rates are - real or nominal

[@georgetoth6768]

CRE is the 800lb gorilla.

[@Joedisney]

When does the working class get some help. We bail out banks constantly, yet they keep their profits and bonuses. Again it's socialism for the banks, and complete capitalism for the working class. We have to change this idea that banks make profits and pay themselves big bonuses. And then we have to bail them out when they get in trouble because they don't save money like us. Yes to your guest Banks need to fail, then we won't gettp out of this cycle, if they keep doing the same thing over and over keep profits and then we bail them out. your guests and everyone who thinks like him need to get a real job and work like the rest of us instead of pushing this nonsense. If the banks don't know how to run their business by now, maybe we need a new model. Going back to bailing them out is not acceptable any longer. Your guest would be the first one to complain about people receiving a stimulus check. Well instead of bailing out banks, give us a stimulus check that'll make the banking system healthy also. I'm I'm fed up with Jamie diamond making billions of dollars along with the rest of the bank and criminals. While the rest of us lose everything. Maybe it's time for a government bank, clearly the private sector is not able to handle this situation. Bail out after bailout after bailout it never ends.

[@secretariatgirl4249]

I'm surprised you didn't point out to your guest after his ranting about "progressive policies" (vague) how there are companies now in Texass that are raising the alarm that they are having a more difficult time recruiting people due to the Christo-fascist policies down there and in so many of the other states that are not "the enemy." Give me a break with the uninformed comments that don't give a balanced picture.

[@rudeawakening3833]

Fascist policies in Texas ?

[@secretariatgirl4249]

@@rudeawakening3833 you don't know? Then you are blind or don't care.

[@rudeawakening3833]

@@secretariatgirl4249 Yeah - and you didn’t answer . You are a “ woke “ nobody . MAGA ! Ha ha ! Iowa caucus said it all ! Snowflake nobody - troll ! Go away ! You know NOTHING about Texas … ( not enough character to answer me )

[@dougwilliams2194]

What companies have said this?