Business

The Julia La Roche Show

Julia La Roche brings her listeners in-depth conversations with some of the top CEOs, investors, founders, academics, and rising stars in business. Guests on “The Julia La Roche Show” have included Bill Ackman, Ray Dalio, Marc Benioff, Kyle Bass, Hugh Hendry, Nassim Taleb, Nouriel Roubini, David Friedberg, Anthony Scaramucci, Scott Galloway, Brent Johnson, Jim Rickards, Danielle DiMartino Booth, Carol Roth, Neil Howe, Jim Rogers, Jim Bianco, Josh Brown, and many more. Julia always makes the show about the guest, never the host. She speaks less and listens more. She always does her homework.

Latest Episodes:

#143: Danielle DiMartino Booth On The Jobs Market, The Economy, And Why The Recession Already Started Feb 13, 2024

Show notes

Danielle DiMartino Booth, CEO and Chief Strategist for QI Research, a research and analytics firm, returns to The Julia La Roche Show for episode 143.

In this episode, Danielle provides an update on the economy, highlighting the challenges faced by the job market and the increase in layoffs. She discusses the impact of the white collar recession and the decline in net worth for high-income individuals. DiMartino Booth also shares her insights on the market performance and the Federal Reserve's approach to interest rates. She suggests a question for Fed Chair Powell regarding the regulatory changes and their impact on the financial system. Additionally, DiMartino Booth emphasizes the importance of backlogs as an indicator and discusses the current state of the economy in an election year.

A global thought leader in monetary policy, economics, and finance, DiMartino Booth founded QI Research in 2015. She is the author of FED UP: An Insider’s Take on Why the Federal Reserve is Bad for America (Portfolio, Feb 2017), a business speaker, and a commentator frequently featured on CNBC, Bloomberg, Fox News, Fox Business News, BNN Bloomberg, Yahoo Finance and other major media outlets. Prior to QI Research, DiMartino Booth spent nine years at the Federal Reserve Bank of Dallas. She served as Advisor to President Richard W. Fisher throughout the financial crisis until his retirement in March 2015. Her work at the Fed focused on financial stability and the efficacy of unconventional monetary policy.

DiMartino Booth began her career in New York at Credit Suisse and Donaldson, Lufkin & Jenrette where she worked in the fixed-income, public equity, and private equity markets. DiMartino Booth earned her BBA as a College of Business Scholar at the University of Texas at San Antonio. She holds an MBA in Finance and International Business from the University of Texas at Austin and an MS in Journalism from Columbia University.

Links:

QI Research: https://quillintelligence.com/subscriptions/

Twitter/X: https://twitter.com/dimartinobooth

Fed Up: https://www.amazon.com/Fed-Up-Insiders-Federal-Reserve/dp/0735211655

Takeaways

The job market is facing challenges, with layoffs increasing and the demand for labor collapsing.
The current recession can be characterized as a white collar recession, with high-income individuals experiencing a decline in net worth.
The market performance is driven by the anticipation of Federal Reserve rate cuts, but the timing and extent of these cuts are uncertain.
Backlogs serve as an important indicator of the economy, reflecting pent-up demand and potential future trends.
The upcoming election is crucial, and voters should be aware of the government's spending and the importance of their vote.

Timestamps

00:00 Introduction and update on the economy

03:08 Job market and layoffs

08:25 White collar recession

10:03 Market performance

15:06 Outlook for interest rates

17:19 Question for Fed Chair Powell

18:41 The importance of backlogs as an indicator

20:05 Recession

21:34 Journalism background and Warren Buffett

24:00 Parting thoughts

#142 Dr. Burton Malkiel On 'A Random Walk Down Wall Street,' The Best Way To Invest, And What You're Getting Wrong About 'Efficient Markets' Feb 08, 2024

Show notes

Dr. Burton Malkiel, author of the influential book, "A Random Walk Down Wall Street," which revolutionized how people approach investing, joined Julia La Roche on episode 142.

Link: https://www.amazon.com/Random-Walk-Down-Wall-Street/dp/1324051132

0:00 Intro and welcome Dr. Burton Malkiel

1:30 Writing ‘A Random Walk Down Wall Street’

4:30 Reaction to ‘A Random Walk’

5:30 90% of active managers do worse than the index

8:14 Investing in the first index fund, and its returns

12:48 This is the way to invest

19:30 Exchange Traded Funds (ETFs)

22:29 Bitcoin spot ETF, bubbles

27:18 Debunking that ETFs distort financial markets, fuel a passive investing bubble

33:40 Efficient Market Hypothesis and what the media gets wrong

38:20 View of the markets, macroeconomics

43:50 Retirement crisis ahead?

48:48 Background

50:38 Parting thoughts

#141 Marc Faber On Interest Rates, Inflation, And 'QE Infinity' Feb 06, 2024

Show notes

Dr. Marc Faber, editor of “The Gloom, Boom and Doom Report," provides a macro view of the global economy and financial markets. He discusses the diverging trends in different countries and the impact on standards of living.

Dr. Faber expresses concerns about inflation, interest rates, and the high levels of debt in the US. He recommends investing in gold as a safe asset and highlights the undervalued opportunities in Latin America.

Dr. Faber emphasizes the importance of being a contrarian investor and encourages individuals to focus on personal freedom and not rely on government interventions. In uncertain times, Faber advises diversification as a strategy, allocating assets to stocks, precious metals, real estate, and cash and bonds. He emphasizes the importance of maintaining a consistent asset allocation regardless of market conditions.

Timestamps

00:00 Introduction and welcome Dr. Marc Faber

01:13 Macro view

04:00 Cost of living in advanced economies is higher

06:00 EM valuations attractive, US expensive

08:46 Long-term cycles of inflation and interest rates

10:00 Inflation is not under control

11:28 The rich have never had it this good in their lives

12:27 A silent depression for ordinary people

14:45 Long-term cycles of inflation, interest rates in context of growing debt

20:00 Printing money

23:20 Re-acceleration of inflation

26:00 The Economics of Inflation

28:01 ‘If you trust the central banks, you’re stupid’

35:08 Gold and precious metals

48:17 Recession outlook

50:39 Investment opportunities, asset allocation

54:50 Parting thoughts

#140 DoubleLine Capital's Jeff Sherman On Fed Policy, The Economy, And Why Rate Cuts Likely Won't Happen Until June Or Later Feb 01, 2024

Show notes

Jeff Sherman, Deputy CIO of DoubleLine Capital, joins The Julia La Roche Show for episode 140 to break down the first FOMC meeting of 2024 and his outlook for the economy and the markets, inflation, and more.

Takeaways

The FOMC meeting indicated that interest rate cuts may be on the horizon, but the timing and extent of the cuts are uncertain.
Positive real yields in the bond market offer attractive investment opportunities, especially compared to the volatility of the equity market.
The current economic outlook is relatively positive, but there are risks to consider, such as potential inflation and the impact of interest rate policy.
Investors should be cautious and evaluate the risks associated with their investments, considering factors such as inflation, market volatility, and the potential for economic downturns.

Timestamps:

00:00 Introduction and welcome

01:00 FOMC meeting reaction

05:27 QT

11:20 Positive real yield investment opportunities

14:50 Stocks vs. bonds

20:00 Economic outlook

30:00 Value threshold is higher

32:30 Inflation

39:00 Risks

Links:

Twitter/X: https://twitter.com/DLineCap and https://twitter.com/ShermanShowPod

DoubleLine Capital: https://doubleline.com/

Podcast: doubleline.com/podcasts/

#139 'Dr. Doom' Nouriel Roubini On The 10 Megathreats That Could Destroy Our Economy Jan 30, 2024

Show notes

Nouriel Roubini, Professor Emeritus of Economics at New York University's Stern School of Business, returns to The Julia La Roche Show for a wide-ranging discussion on economics.

Roubini, known as "Dr. Doom" due to his tendency to make pessimistic predictions, shared his near-term macro outlook for 2024, pointing out that a hard or no landing scenario looks unlikely, and a soft or soft-ish landing is the most likely probability.

Elsewhere, Roubini gave an update on the medium-to-longer-term outlook, which includes ten interconnected megathreats that collectively are a slow-moving trainwreck.

Roubini is the Chief Economist at Atlas Capital Team, CEO of Roubini Macro Associates, and Co-Founder of TheBoomBust.com. He is a former senior economist for international affairs in the White House's Council of Economic Advisers during the Clinton Administration. He has worked for the International Monetary Fund, the US Federal Reserve, and the World Bank. His website is NourielRoubini.com, and he is the host of NourielToday.com.

Links:

Megathreats book: https://www.amazon.com/MegaThreats-Dangerous-Trends-Imperil-Survive/dp/031628405X

Twitter/X: https://twitter.com/nouriel

Website: https://nourielroubini.com/

0:00 Intro and welcome

1:00 Macro view — soft landing, no landing, or hard landing scenario

3:54 No landing and hard landing scenario don’t look as likely today

6:00 The downside scenario

9:03 Why we avoided a recession in 2023

12:49 Update on Megathreats, worrisome risks in the longer-term, stagflation

20:00 Impact of AI, positive deflation

23:00 Deaths of despair

28:38 Debt situation, the mother of all debt crises

31:00 Inflation in the medium-term, 5 or 6%

34:00 Fiscal dominance

36:00 Addressing the debt situation in the U.S.

41:00 Inflation rate likely 6% rather than 2%, impact on 10-year treasury, mortgage rates

46:00 Take on the markets. Are they pricing in a soft landing?

49:30 Bitcoin, Bitcoin Spot ETF, and crypto

55:25 World Economic Forum in Davos, the conventional wisdom of WEF is always wrong

#138 Peter Mallouk, CEO of $245B Creative Planning: 'It’s Hard To Be Anything But Optimistic Over The Long Run' Jan 25, 2024

Show notes

Peter Mallouk, CEO and President of Creative Planning, a $245 billion RIA, shares his macroeconomic view, emphasizing long-term optimism due to low unemployment, emerging markets, and technological innovation. He advises investors to focus on the long run and not be swayed by short-term risks.

Mallouk discusses the potential for rate cuts, the US debt situation, and his skepticism towards cryptocurrencies and gold as investments. He recommends a diversified portfolio focusing on equity-oriented investments, including stocks and private equity. Mallouk also highlights the importance of avoiding common investor mistakes and maintaining a long-term perspective.

Takeaways

Maintain a long-term perspective and focus on the macroeconomic factors that drive long-term growth, such as low unemployment, emerging markets, and technological innovation.
Do not try to time the market or make investment decisions based on short-term events. Instead, focus on asset allocation and diversification to protect your portfolio.
Be cautious about investing in cryptocurrencies, as the majority of them are likely to go to zero. Treat them as speculative bets rather than long-term investments.
Gold is not recommended as an investment for wealth growth, as it has historically underperformed other asset classes. However, it can serve as a store of value in uncertain times.
Avoid common investor mistakes, such as market timing and overactive security selection. Instead, focus on long-term asset allocation and controlling costs and taxes.

Links:

Money, Simplified book: https://www.amazon.com/Money-Simplified-Peter-Mallouk/dp/B0CLZ1W9RD

Twitter/X: https://twitter.com/PeterMallouk

Creative Planning: https://creativeplanning.com/

Timestamps

00:00 Introduction

00:46 Macroeconomic view

03:14 Navigating short-term risks

04:42 Market outlook for 2024

06:15 Investing in stocks, small caps

07:38 International markets

08:28 Federal Reserve and interest rates

10:30 US debt situation is the No. 1 risk

14:00 Bitcoin and cryptocurrencies

15:23 Role of gold in a portfolio, Mallouk not a fan of gold

17:06 Preferred investments

18:54 Common investor mistakes

20:21 Investor psychology

23:07 Peter Mallouk's journey

24:46 Where to find Peter Mallouk

25:17 Long run optimism

#137 Professor Campbell Harvey, The Inventor Of The Most Famous Recession Indicator — The Inverted Yield Curve — Sees Economic Slowdown In 2024 Jan 23, 2024

Show notes

Professor Campbell Harvey, professor of finance at the Fuqua School of Business at Duke University and the inventor of the most famous recession indicator — the inverted yield curve — joins The Julia La Roche Show for a wide-ranging conversation on the economy, the Federal Reserve, and the yield curve.

In this episode, Professor Harvey highlights how the Federal Reserve made things worse in 2023 with its unnecessary rate hikes. According to Professor Harvey, we’re fortunate if the economy delivers slow growth this year in spite of the Fed’s damaging actions. He argues that the Fed will need to undo the damage they did with immediate rate cuts no smaller than 50 basis points at the next meeting.

Elsewhere, Professor Harvey shares the origin story of the inverted yield curve indicator and it’s 8 for 8 track record in predicting economic recessions. Now that we’re in the 9th inversion, he shares that it’s way too early to call if we’re in a false signal. He also makes a case that the inverted yield curve is causing slower economic growth, and that’s not necessarily a bad thing because you avoid a deep recession.

Links:

DeFI and the Future of Finance: https://www.amazon.com/DeFi-Future-Finance-Campbell-Harvey/dp/1119836018

https://www.fuqua.duke.edu/faculty/campbell-harvey

https://people.duke.edu/~charvey/

https://twitter.com/camharvey

0:00 Intro

1:00 Big picture macro view

1:30 Understanding the current state of the economy and the role of the consumer

5:20 Fed needs to

5:55 The story has to do with the consumer

8:30 Federal Reserve undoing the damage

10:00 Inflation, the false narrative, and policy errors

18:00 Fed rate cuts need to happen immediately

21:27 What would Professor Harvey do differently at the Fed?

23:30 Inverted yield curve indicator origin story

30:00 Difference between long-term rate and short-term rate is highly predictive of economic growth

36:40 8 out of 8 without a false signal

39:00 If Fed undoes the damage it created, there’s a good shot of a soft landing

39:30 What do folks get wrong when it comes to the inverted yield curve?

45:00 The inverted yield curve is causing slower economic growth

47:00 Understanding how the inverted yield curve works

49:30 What keeps Professor Harvey up at night?

#136 Professor Jeremy Siegel Shares Outlook For The Economy, Fed Rate Cuts, And The Stock Market Jan 18, 2024

Show notes

Famed economist Professor Jeremy Siegel, professor of finance emeritus at Wharton, discusses the macroeconomic overview, his outlook for the Fed’s interest rate policy, the probability of a recession, the stock market outlook, and owning stocks for the long run.

Timestamps

00:00 Introduction

01:12 Macro overview

04:50 Probability of a soft landing is over 50%

06:09 3 reasons to lower interest rates

10:24 Commercial Real Estate and banks

13:07 Expectations for the Fed, how fast will the lower?

17:45 Misconceptions about rate cuts

20:27 Most important message from the latest FOMC

22:22 Goldilocks economy, 60-40 soft landing odds

25:20 Stock market

27:27 Productivity

29:10 Market outlook for 2024

32:00 Value stocks

34:37 Bond market outlook

34:30 The Noisy Market Hypothesis

37:48 10,000 students in 49 years as a professor

39:25 Never taken a finance class

42:42 Milton Friedman

44:10 Parting thoughts

Links:

https://ir.wisdomtree.com/company-information/advisor

https://fnce.wharton.upenn.edu/profile/siegel/

https://www.amazon.com/Stocks-Long-Run-Definitive-Investment/dp/1264269803/

#135 Chris Whalen On Pain In Commercial Real Estate, More Bank Failures, And A Maxi Reset In Home Prices In The Future Jan 16, 2024

Show notes

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: https://twitter.com/rcwhalen

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

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

Comments most recent Fed proposal in Basel III Endgame: https://www.regulations.gov/comment/OCC-2023-0008-0052

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

#134 Luke Gromen: A Hard Landing Isn't Going To Come In Stocks. It Will Come In Treasuries Jan 11, 2024

Show notes

Luke Gromen, founder of FFTT, joins The Julia La Roche Show to discuss the macro picture and the sovereign debt bubble that’s bursting in the U.S.

In this episode, Gromen makes a case that he thinks this is the year where the consensus realizes the Federal Reserve as a “shadow third mandate,” which is the Treasury market functioning. He explains the concept of fiscal dominance and its implications for the economy, including higher inflation and a weaker dollar.

Gromen predicts that there will not be a recession in 2024 due to the Fed's focus on maintaining the functioning of the treasury market. He recommends investing in gold, Bitcoin, and industrials as these assets are likely to perform well in the current environment.

Gromen also discusses potential scenarios that could avoid the negative outcomes of the sovereign debt bubble.

Links:

https://fftt-llc.com/

Twitter/X: https://twitter.com/lukegromen

Dr. Charles Calomiris’ paper on fiscal dominance: https://files.stlouisfed.org/files/htdocs/publications/review/2023/10/02/fiscal-dominance-and-the-return-of-zero-interest-bank-reserve-requirements.pdf

Timestamps:

0:00 Introduction and macro view

1:40 The Fed has a “shadow third mandate”

3:54 Fiscal dominance and its symptoms

9:24 Realization of fiscal dominance by the consensus

14:10 No recession in 2024

21:31 It’s a new Great Depression

26:00 Investment Opportunities: gold, Bitcoin, and industrials

35:19 Avoiding the scenario

40:05 Conclusion and parting thoughts