Chris Whalen, chairman of Whalen Global Advisors and author of The Institutional Risk Analyst blog, returns to The Julia La Roche Show for episode 247 to discuss tariffs, markets, and the economy.
Sponsor: This episode is brought to you by Monetary Metals. https://monetary-metals.com/julia
Chris Whalen explains why the tariff debate is largely a distraction - part of Trump's "shock and awe" strategy to force trading partners to negotiate fairer terms as America attempts to end the Bretton Woods system after 75 years. He sees credit deterioration emerging in auto loans and credit cards while warning about multi-family housing defaults, particularly in smaller urban properties where market indicators show values 50% below their last sale. Despite market fears, Whalen believes the bond market is already cutting rates regardless of Fed action, with the 10-year yield dropping to 3.94% due to strong demand for risk-free collateral and Treasury's efforts to reduce auction sizes. He predicts financial consolidation will continue, pointing to the mortgage industry shrinking to just five major lender/servicer groups, while suggesting investors should look for stock opportunities despite current volatility.
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 Introduction
1:27 Tariffs
3:03 Market reaction assessment
5:11 Investment strategy amid volatility
7:40 Historical context of tariffs
10:37 Main Street vs Wall Street priorities
11:17 Impact and distribution of tariff costs
13:30 Consumer credit and lending trends
15:34 Multi-family housing defaults
17:36 Real estate overbuilding concerns
18:17 Consumer recession outlook
20:46 Job market and recession dynamics
22:57 Fed outlook and rate environment
24:52 Balance sheet impact discussion
26:56 Treasury market outlook
29:36 Client questions about market positioning
30:57 Closing remarks and contact information