Chris Whalen: We're One Bad Treasury Auction Away From Trouble
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- čas přidán 23. 07. 2024
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Today's guest wrote the book "Inflated: How Money & Debt Built The American Dream"
In it, he wrote: "The first rule of any fiat system is no fiscal deficit"
Well, the US -- and virtually every other G7 country -- is breaking that rule six ways to Sunday given the unprecedented record levels of deficit spending currently underway.
Does that mean we're headed for trouble?
To find out, we'll ask the author himself, Chris Whalen, Chairman of Whalen Global Advisors LLC and expert on the banking, mortgage finance and fintech sectors.
#inflation #debt #bankingsystem
0:00-4:35 The Threat Of 'Too Much Debt'
4:36-7:24 Will Will Adopt A Smarter Course In Time?
7:25-9:37 The Eurodollar Market
9:38-25:09 Deficits & Inflation
25:10-29:08 Where Is Inflation Headed?
29:09-37:30 Banking System & Recession Risk?
37:31 Market Outlook
_____________________________________________
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My company just let go 2k (15% of staff) employees yesterday, and we're relatively insulated as a payroll/workforce management company.
As much as they act like the economy is doing well it's clearly shrinking. And i think after the election you're really going to see the wheels finally come off as the narrative is no longer necessary.
Bidenomics to pump economy with gov money to keep GDP above zero resulting in inflation. Blame it on Russia. Gov sector is the only sector growing besides health care. It would be hard to wind down when Trump takes over.
My guess is the UKG layoff was driven by Hellman & Friedman and Blackstone, not Aron. The PE guys will pay themselves a dividend and protect EBITDA at all cost.
true and unfortunately they'll blame Trump.
Fully agree
Please bring back Chris Whalen, Adam. An excellent thinker and speaker from the banking side. I always enjoyed listening to him and his perspectives.
Adam... I had that class in 12th grade at John H Reagan HS in Austin, Texas in 1986. It was a class required for students that were working internships prior to college. Mr Schultes taught us financial literacy with brutal honesty. The Man ran the class like the most tyrannical boss you'll ever work under. He was an legend. The HS was in a rougher side of town. It's since been cancelled for its name, and likely the class has been replaced with a personal identity course.
You were very fortunate. I'll wager you look back on that as one of the most practically valuable classes you ever took. True?
Good economy = stocks go up, bad economy = stocks go up.... nothing matters anymore, just keep borrowing and building that debt pile to infinity, i.e. print more money to existence, which then finds its way into stock prices. That about sums it up in my view.
Don't bet on it...The bubble can't inflate for ever. One of Schiller's identifiers of a bubble is new era thinking, that a downturn is impossible.
@@CrashBr0Yep I agree with that, my sarcasm probably didn't come through the computer screen too well, lol... however what I said is the predominant view and it could be years before things matter again
The question you must ask your self is What course correction can I make now? Then act. Respect 🙏
It may seem like “nothing matters”… but that’s not true. Inflation matters, a lot. Why not just let inflation run higher? Because no investor buys a bond paying 4% if inflation is 6%. That’s a 200 basis point loss, guaranteed.
Until the selling begins and everyone tries to sell. You can’t eat stocks. We are very close to a tipping point
Even if you eliminated all of government, except entitlement spending and the military, US would still have a very large deficit. Every penny the Congress gets to vote on is now borrowed money. This is incredible and cannot end well.
Is that even a good goal though? Coolidge and Clinton both balanced the budget and reduced the national debt. The end result were the worst economic periods in the past 100 years. Public debt is private sector savings.
@@Hueyck??? 😂
I walked into a Pizza Shop in Washington Crossings ,PA. and said I'd like that slice of pizza. The lady sliced it off, put it on a paper plate and brought it to the cash register. She rang it up at $6.00. I said ma, I can't afford 1 slice of your pizza, then walked out.
I'll bet you were invited to tip on top of that $6
How about 3 pancakes for 23.99 at a local dive restaurant?
Where’s the punchline? I thought u we’re telling a joke😮😅😊😢
Still $2 at costco
@@RandyBeecher-ug3dh The punch line is if food inflation is at 25% my boss expects a B.J. if I get a 3-4% raise.🥰
This guy makes up history: the second half of 1800s the US had deflation, NOT INFLATION. Remember the guy who said he didn't want to be crucified on a cross of gold? He wanted silver. There's a certain narrative that's embraced by wealth, cause it serves their interests. That's what this buy is all about.
We had inflation due to excess gold from the western gold rush flooding the market
The south was Gaza in a deep recession. Tariffs protected infant industries. They caused inflation in the north.
This guys is obviously Jewish and fails to mention the Jewish role in inflation.
William Jennings Bryant
@@kevinobrien9271 Bingo!
Perhaps rather than increasing taxes on the people how about decreasing spending by eliminating forever wars and payoffs to the MIC, Israel, Ukraine, et al.
And hand the world over to Xi and Putin. All will be real rosy then.
Tipping point…Locally, regionally and Globally. Perhaps we don’t fully feel the pain evenly but sure as hell it’s coming!
You don’t learn this in school because teachers don’t know themselves. They bank on a pension- which may or may not help them in the future.
I do teach this stuff to both middle and high school students. My kids know we are a debt-based economy, and we track the dying dollar since 1971. Kids understand it, too. Too bad their parents don't.
Mr. Whalen projects confidence in all his opinions, yet he was the guy who touted New York Community Bank. He bought the stock in 2023 and apparently didn't see the problems coming. So his insights may not be as sound as he would like you to believe.
Or the level of corruption goes to the top
The bears always sound smart.
They're all like that. And if anyone tells you they never made a loss-making trade or took a loss-making position I will show you a liar. The point is to learn from it and to spread risk because everyone's an armchair expert with their theoretical 100% correct trades.
The issue is how coherent, integrated, well informed and inclusive the experts are being and what the overall reliability is of their judgements.
It's absurd to expect 100% correct calls and making that expectation marks you rather than them. It takes years of experience to understand this and there is no substitute for cultivating hard work and objectivity.
His bullish view on NYCB back then was rooted in the acquisition of Flagstar Bank, a top wholesale mortgage lender with a huge MSR book. Since has been overshadowed by the mess that the bank found itself in with its multifamily loan portfolio
Chris has a unique style of communicating finance and economics, not copying the trends of others, and for me he stood out from the crowd of commentators in 2008 and before. Pay attention and he will make you think.
Adam, great interview and great guest. Christopher Whalen gave us a banking system understanding with its history and long term view and how we fit into that world. I truly appreciated his advice about challenging power, have more depth in subject matter by reading books. But what got my attention the most about advice was "go work for a receiver" and see what a failed company can teach you. I think exposure to that area without having to be crushed by it, makes alot of sense. More knowledge in this area could really help a lot of young people in their financial education. What went wrong and answering those questions are key.
Show me the incentive and I will show you the outcome - The Late Charlie Munger - RIP
I take some of the criticism I’m reading here about this guy. Still, he’s obviously sharp and incredibly knowledgeable. Great guest. Good on Adam.
Oh, my goodness. Our needs and Social Security are breaking the economy? Maybe we should stop financing wars and the military -- trillions of dollars worth.
Exactly. Plus have a flat tax so the rich actually have to pay their taxes
Spot on to give tax money to foreign countries. Why to buy leverage.
Think what we could have done with the hundreds of billions we've given to Ukraine and Isreal over the years.
and increase the social security income cap! it's WAY out of date.
The "rich" do pay most of the income taxes. The top 1% make 26% of income, but pay almost half of the income tax. The bottom 50% pay less than 3% of income taxes.
Everything is nice and calm before a Tsunami 🌊.
I know at some point a bull market ends and a bear begins, it goes on and on... I have a 7 figure ballpark goal and I intend spreading across maybe 100k - 250k on plummeting stocks, my question is how can I know when a market bottom has been reached?
You won’t know. Just spread everything across different funds.
in my opinion, some financial situations can be handled on your own if you research enough, while others are best navigated in consultation with a financial advisor
Agreed, partnering with the right advisor is invaluable, my portfolio is well-matched for every season of the market, and recently hit 140% rise from early last year. I and my FA are working on a 7-figure ballpark goal, tho this could take another year.
@@StephenTho42 mind sharing info of this person guiding you please? truly appreciate the implementation of ideas and strategies that result to unmeasurable progress, thus the search for a reputable advisor
Can't divulge much, I delegate my excesses to someone of great expertise ''Katherine Nance Dietz'' preferably you can look her up on the web, her qualifications speak for itself.
Excellent guest. Useful and interesting overview of national finance. My hope is for the rise of the new global majority and an end to the present system dominated by a small group.
My viewpoint is invest in companies that do real things or produce real things. I don't buy if the P/E is too much -- like the S&P index -- it's just way too overpriced for the value. I wouldn't overpay for a small business ... so why overpay for a large business?
Can you share 5-10 companies that you would purchase today at their current valuations?
Mr Whelan's depth and breadth of know and history is formidable. Thank you for inviting him. I learned several things about the true history of our money system that were incorrectly presented in college. Thank you again.
Doug W.
Asbury Park NJ
Your new broccoli wall looks delicious with some ranch dressing.
There needs to be a more healthier assortment of other vegetables in Adam's salad wall.
OMG it looks like a big fat green snake to me!
Whatever he paid it was too much by 10
@@randywhelchel4674 I was thinking the same but didn't want be the one to break it to him
Yes, agreed. Whenever I have gone for a rustic wood look... on anything... never have I thought, "Do you know what this needs to complete the look? A large mass of green fungal mold growing through it!" 😂
I shouldn't rush to judge though. Maybe it'll grow on me. 😂 (Pun totally intended.)
I would submit, and I am not the only one to say this, that the Fed is not really very restrictive.
I agree. Current setup at 5% is low key stim. Real slow.
True... but more specific what they do doesn't really matter if congress and the treasury are spending like druken sailors (stealth QE) that's the real problem. Almost no one tracks treasury auctions. It is not reported in the main stream news that often. It is something folks have to specifically look for and understand. What I have been seeing is terrifying.
@@bpb5541 If someone is retiring in a few months at 65 with no pension, very risk averse and not collecting SS until 70 which will cover 70% of income how would you invest your money? currently 25/75 mix with most in money markets.
the debt can not be repaid, it is just mathematically impossible
It will be repaid. Eventually someone somehow will pay the price for what we have allowed. I guarantee it.
It will be paid through the inflation tax. Eventually the debt will be accounted for by the debt going to infinity as the dollar goes to zero. This is how debt has been 'paid back' historically - through hyperinflation. There are many historical examples of this, and in every case the people suffered badly.
It will be defaulted on.
All things end... even super powers. The death of a super power has always been tied to the reserve currency status ... america has been losing theirs for a while now.. and it is picking up steam. Americans are spoiled little brats ... they are not ready for that scenerio. They might burn everything to the groud when they can't afford housing or food.
@@_Ekaros What assets will be defaulted on? Is it safer to purchase corproate debt or equities?
what the heck is that background behind adam??
😂
It’s a conversation piece apparently it’s working😂😂
its oasis cube bonzai puff ball tribles from star trek residing in an unfinished wall, complete with led lighting. simple dimple. i wonder if he feeds it quadratritacailey?
@@randywhelchel4674That conversation is not complimentary 😅
Clearly that's the rough board wall with some insulation protruding through. Drywall hangers must not have been through yet.
Tank you to Chris for returning to finish this interview!!
It was worth it, Thank you Chris!!
Really interesting, I'm inclined to agree with you
Currency does not really exist. The score of the game is not the game. The score is imaginary. The game is real. Breath is real. Credit is man made fantasy. The debt, credit, crypto is all imaginary. The US public debt is imaginary. The debt is fantasy. Gold is honest and real. That is why gold has lasted 4,000 years as money but currency does not last. Currency is ALWAYS printed to zero. Always. No exceptions. The US dollar will be printed down to zero. Guaranteed. The same will not happen to gold. Gold? Get you some.
I like you
There are lots of things that can go wrong. A failed treasury auction isn't one of them.
Adam, your new background looks very impressive and unique!
Thank you!!
Thank you for choosing such credible guests and asking the right questions Adam! I didn't want this discussion to end. Please get Chis back soon if you can.
Excellent guest. I think his predictions are spot on.
This guy is legit. 100%. Bravo Adam for getting him on the channel!
Another amazing interview. Chris is truly a genius.
This was one of the best financial interviews I have ever seen. Thank you so much. I´d love to see more of Chris Whalen. Very smart, very educated, very informed and experienced person. Wow. Honest and authentic!
You don't get out much
Glad you enjoyed it!
@@adam.taggart 🙏
Thank you...........and there is real value in picking up books. 💪💪💪
I like that he ties things back to previous events in history. As for predictions...."previous performance is no indication of future results" or something like that. It will be an interesting time going forward! He is from the investor class and it shows in the way he speaks of those that aren't.
Great host; great guest. Chris Whalen is the knowledgeable, “no spin zone.”
Great interview! I would like to see interview with Randy Woodward.
One of the best interviews ever. Love this Guy!
Thank you. You put out a lot of content, catching up.
Excellent guest, excellent questions. Congratulations on the new background.
Thanks so much!
But if we issued massive super long debt during COVID some parties would be sitting on massive losses which could be problematic, say if pension funds or banks piled into that.
The Whalen-Yutani Corporation
sent this man.
Nice show with Adam and Chris
Thank you for the rare case that you add time stamps.
Great guest!! Chris may not look like the brightest bulb in the room but for the topic today he certainly is one of the best!
It's tough not being bright enough, isn't it - your projection gives you away.
This was an excellent interview. Thanks, Adam
Big fan of your show Adam. Regarding your background, respectfully, so far I liked the style of the Wealtheon one the best. The new one is ok, I love the wood, but Broccoli reminds me a little too much of what you see on the wall in walk-in restaurants. Perhaps try a design that's all wood?
At first glance, I thought Adam's new background featured a green boa constrictor 😮
Yes, we're the age of summarizing, even by artificial intelligence! Such a good video.
Good practical insight. Thank you.
"The Fourth Turning is Here" by Neil Howe is a must read. Chris Whalen mirrors much of what is in that book. While I don't philosophically percribe to the "Doom and Gloom" scenario, it does open one's mind into future possibilities. Thankyou Adam and thankyou Chris. Happy Independence Day!
Getting close to 100K !!
So close!!
I’m predicting 100K by Labor Day 🍾🎉
Excellent interview. Thanks, Adam.
Nice new background Adam - is it a live plant/moss wall?? Very cool.
Great interview, thanks. I would really look forward to a roundtable discussion on the risks of a civil uprising.
Thank you very much...
Great take chris is very intelligent and super clear in his take .great guest !!
Excellent interview and excellent advice!
Best economic channel !!! Thanks Adam
Honest straight talk. Keep this guest!
Debt has two sides that have to stay in balance. That is, the borrower and the lender each have to meet expectations. The current global financial crisis shows we are out of balance. Foreclosure follows as confidence fails.
Great interview. Thanks
Great interview 👍
Good morning and Happy 4th of July Everybody!🌞
Great guest and great looking backdrop, that I assume is your new set🤓 NICE!
Are we at a seven or a 9.5? Seems worse than a seven.
Thanks! Yes, it's the new background
Make no mistake about it. The day of reckoning will come. The question is when.
What is that behind Taggart?
check out some of the natural wood "pictures" - one is rather suggestive.
To the point of the national sales tax. It would be interesting to have the Steve Hayes from the FairTax organization as a guest. The FT-HR25 also eliminates capital gains and inheritance tax.
Government used to raise taxes and/or cut spending to pay down the debt. Now inflation, the Hidden Tax, is the ONLY Tax. So spending has no limits.
Inflation in the prices of things you need and deflation in the prices of things you want is always a leading indicator of the system falling apart. Always.
I always love a Chris Wallen interview! He is a font of information and his delivery is very easy to listen to.
Great show, great guest.
👏👏👏
The problem we have is because Most people always taught that " you only need a good job to become rich". These billionaires are operating on a whole other playbook that many don't even know exists.
That new backdrop has potential. Though my OCD is driving me crazy with those drawn cut lines. I'd be all over those lines with a little sand paper and erase them from existence.
Chris needs to be a regular guest!
Véry interesting interview! 👍
Spending is the problem, not tax revenue. Shut down most of the federal government, simplify taxes to get rid of hundreds of $billions of compliance costs, stop instigating wars, secure the border, that should turn things around. Hiking taxes is pushing a string when we're this far past the Laffer curve.
So you don't think there is a problem with tax revenue? I have noticed alot of businesses in my location are insisting on cash😂
@@Golden.5555 There's only a problem with tax revenue because tax rates are ridiculously oppressive (because spending is ridiculously off the charts). So much so that people now risk prison to avoid paying taxes.
TO MUCH GOVERNMENT CONTROAL & TAXES! Just do the math:, to own a car you have: DMV fees (drivers lic and tags and smog it), Gas fees, Insurance, s toll roads, and now the government controls tire companies by not allowing them to put on 5-year old tires you have in the garage. To own a home, same thing: property tax, insurance, permit to improve it, gas, water, light, trash all with taxes and when you buy some f---g supplemental tax bill X2! OWN A BUSINESS: Prop tax, City Lic. County Use tax, Ins. GAs,light, water, trash, Ins.--F U USA GOVERNMENT!
Yeah sure lets just cut more taxes for the the top 1%. That sure helped matters didnt it?
You couldn’t be more wrong. Trump lowered taxes on the rich and corporations to 21%. In the hey day of the middle class (you know, the one that the GOP says they want to go back to…) taxes were over 80% at the highest brackets.
If you cut your income by 1/2 and can’t pay bills…do you have an income problem or a spending problem?
Credit to the guest for talking about income inequality. "...I worry about the rest of our society because they don't have that protection and we have to start thinking about ways to protect their income or we are going to have a political problem..." Some feel we are presently in the midst of political problems, I guess things can always get worse. Take it from the man.
@saucyrossy3698
The reason that fire watchtowers are built is so that forest fires can be spotted above the tree canopy from a distance. Without those towers, you wouldn't know there's a fire until it's right on top of you.
If it was your job to look for fires in order to protect your community from fire damage, do you announce the presence of a fire while it's still several miles away, or do you wait till it's close enough for everybody to smell it so that you know that they'll believe you?
As members of the community, if you don't understand the purpose of the watch tower or the reason why someone is standing in it, you might not have any worries when the person in the tower starts to get excited about something.
On the other hand, if you have knowledge of why the watchtower exists and the fact that wild fires are common in the environment then that knowledge helps you understand that when the person in the watch tower yells "fire!" It's time to take action to protect your property and fight the fire or flee if the fire's too big to deal with. Either way, you're prepared to deal with the worst-case scenario because of the KNOWLEDGE that you have.
If you've read this far and don't understand the analogy of what you just read, then you're probably screwed.
Regarding politics, for women reproductive rights may be the number one concern, along with inflation.
Corporations have been price gouging due to the stimulus package. Walmart is now lowering prices on certain items for to customers balking at the higher prices
All ppl need to do is stop paying for the greed
Inflation is killing us.
My grocery bill was $251.00
I cant afford that.
Bidenomics. Giddy up.
What? You are not still cruising off that 16 cents you saved on the '21 July 4th picnic thanks to Biden?
@@jwong8755 Do you know what inflation is? The amount of services or goods you buy is fixed. The amount of money in circulation is variable. You print 1000s of tons of greenbacks with nothing backing it, chasing the same amount of goods and services, then it takes a lot more of those greenbacks to buy anything. President Trump took office in 2017. By the end of his term four years later, the debt increased $6.6 trillion. He has stated he will do tax cutes, mostly for billionaires like last time. 54% of Americans own zero shares of any stock. How much stock do you own? None, like me? Why then would you want a capital gains tax cut? He will say what every republican president from Reagan on has said. That money will trickle down!! Been 40 years since Reagan said that. And it has not nor will never trickle down.
Shop at Aldi's.
@@MichaelHarrington17 we don't have Aldi in Northern California. At least not in Sacramento or the wine country
Awesome guest!
Re. investing in stocks, Keynes (a very good investor and trader) said it best when he likened the equity markets toa beauty contest.
Sales tax is horribly regressive. Woe to anybody who suggests one.
How do you tax 20,000,000 illegals who don’t file taxes? How do you tax drug dealers and criminals? National sales tax my friend
@ 50:00 "America is all about sale" makes me think about the great American icon PT Barnum, the supply of suckers is infinitely elastic. 🤡
Hi Adam, just trying to be helpful. You had mentioned the Walmart reordering story as being over 400% inflation. The story goes the original order was $145 and the reorder for the same basket of goods was $414 for an inflation rate of 185%. I like this channel a lot and just want it to maintain its integrity & accuracy with fact checking.
285%
Chris is a great guy!
I can say Adam, that both you and the fiat dollar look about equally young XD
You are already taxing us beyond belief.
Excellent interview! Please encourage a return visit by Chris 👍
shifting public deficits to surplus would inversely cause private and/or foreign sector deficits, which would be highly undesirable. Public deficits mean more money creation/inflation, expansion. Private deficits means economic contraction, deflation, depression. Foreign deficits are simply untenable for a global reserve currency.
Great new background
Great show Adam!
Thank you!
Financial advisors like your guest have been saying the inflection point is imminent for years. Eventually one of therm will have guessed right and can brag about how he predicted it. I have done that myself and was right a few times but I don't tell my friends and family that it was anything but a lucky guess.
No ressessions on fireworks in my hood
A financial tsunami is heading towards us of epic proportions. With the Yen that lost 40% in two years. With europe loosing it. No timing here but the next 12 months will be determin.
New background! hell ya!
🙂
Corps that can't make the hurdle rate will contract and more resources will shift toward the large corps who have refinanced at low longterm rates and /or have plenty of cash. This suggests further bifurcation of the equity markets. This suggests that some P/E ratios will expand more.
Adam you really need a sound diffuser behind you instead of the broccoli and burls. I don't think it's an accident that smart guests have bookshelves behind them. It would be a minor acoustic tweak to perfect an already great channel!