#164 Chris Whalen On Higher Interest Rates, Illiquidity, And The Death Of Leverage

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: https://twitter.com/rcwhalen

Website: https://www.rcwhalen.com/

The Institutional Risk Analyst: https://www.theinstitutionalriskanalyst.com/

The Death of Leverage; What’s the WAC of Bank America? https://www.theinstitutionalriskanalyst.com/post/the-death-of-leverage-what-s-the-wac-of-bank-america

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