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:

#093 Neil Howe: The Fourth Turning Is Here — How Will This Crisis End Aug 08, 2023

Show notes

Neil Howe, author, historian, economist, and consultant who is best known for his work on social generations and generational trends, joins Julia La Roche on episode 93.

Along with the late William Strauss, Howe is credited with creating the concept of generational theory and popularizing terms such as "Millennial Generation." Howe has written several books on generational trends, including "The Fourth Turning" and "Generations." His work focuses on understanding the cyclical patterns of history and how different generations shape society.

A quarter of a century ago, Howe and Strauss introduced an innovative interpretation of American history. They identified a recurring pattern: modern history proceeds in cycles, roughly 80 to 100 years long, mirroring a human lifespan. Each cycle encompasses four distinct eras, or "turnings," each lasting about 25 years and always following the same sequence. The fourth and final turning, they found, was invariably the most tumultuous and transformative, on par with events like the New Deal, World War II, the Civil War, or the American Revolution.

In his newest book, "The Fourth Turning Is Here," Howe applies his understanding of historical cycles to anticipate the resolution of current civic unrest and project the potential future state of America over the next decade. According to Howe, we will reach a climax by the early 2030s. While this climax poses substantial risks, it also carries the potential for a new era of prosperity in America. The outcome of this critical juncture, he argues, will be determined by every living generation's involvement.

Links:

Twitter: https://twitter.com/HoweGeneration

The Fourth Turning Is Here: https://www.amazon.com/Fourth-Turning-Here-Seasons-History/dp/1982173734

0:00 Intro

1:21 Generational Theory

5:00 Generations arrive in patterns

8:00 These periods of crisis come once in a lifetime

11:20 Writing “The Fourth Turning” in 1997

13:00 Fourth Turning catalysts

15:30 Sales of “The Fourth Turning” book accelerated since pandemic

16:50 The role of Millennials in the Fourth Turning

20:00 Younger people losing faith in democracy

21:18 Generational archetypes

27:43 Millennials as the “Hero”

33:40 Fourth Turning will likely end in the early 2030s

39:00 An internal or external conflict?

44:00 Macroeconomic picture and the Fourth Turning

49:00 Relationships

50:28 What keeps Neil up at night?

53:00 Optimistic about the future

#092 Milton Berg On Why There’s Strong Evidence The Market Won’t Do Well Aug 03, 2023

Show notes

Milton Berg, CFA, the CEO and Director of Research of MB Advisors (https://miltonberg.com), joins Julia La Roche on episode 92 for a deep dive into his technical analysis and macro.

Berg focuses on "Turning Point Analysis,” where he looks for turning point ends of trends. In this episode, Berg shared reasons for why he sees strong evidence that this market won't do well and the bull market may be ending and heading toward a significant correction.

0:00 Intro

0:37 Long-term big picture

6:27 Short-term big picture

8:54 Turning points in the market

11:00 No evidence of momentum. It’s an emotional feeling

21:30 Accelerations

27:02 Bank stocks and the bear market

35:40 Why he’s short right now

37:38 Gap down and gap up, explained

47:00 Price target for the S&P 500

50:00 Worried about dissing capitalism

#091 Peter Atwater On The Troubling Disconnect Between Main Street & Wall Street Aug 01, 2023

Show notes

On episode 91, Julia La Roche is joined by Peter Atwater, an adjunct professor of economics at William & Mary, and author of "The Confidence Map: Charting a Path from Chaos to Clarity". Atwater explains how confidence is the real "invisible hand" in our economy, markets, and everyday lives. He also shares his concern about the divergent economy, where billionaire confidence is soaring while a large population feels left behind, not only in the US but also in other countries. Atwater is the first who shared the notion of a K-shaped recovery in the economy.

Links:

The Confidence Map: https://www.amazon.com/Confidence-Map-Charting-Chaos-Clarity/dp/0593539559/

Twitter: https://twitter.com/Peter_Atwater

LinkedIn: https://www.linkedin.com/in/peter-atwater-08467034/

Peter’s website: https://peteratwater.com/

0:00 Intro / Background

2:48 Psychology of investor decision-making and economic decision-making

3:35 Behavioral economists typically focus on what we do wrong

4:30 The role of confidence

6:40 Confidence Quadrant framework

10:00 Application of the Confidence Quadrant on macro/micro level

13:00 Executives discussing AI

14:47 Investors are in the “comfort zone” on the Confidence Quadrant

15:35 The K-shaped recovery

17:48 If markets were to price in Main Street sentiment they would considerably lower

18:30 Two different sets of moods and preferences

20:30 Assessment of the current state of America today

24:00 Evaluating consumer confidence and the 2016 election

28:00 Gen Z’s confidence?

31:00 Millennials’ sentiment

33:00 Real life moves us around

35:00 Music and the mood

38:00 Taylor Swift phenomenon

39:30 Peak confidence?

40:30 Mania in the Magnificent Seven

41:15 Passive investing puts investors in the “passenger seat”

44:00 Elon Musk is the “Kevin Bacon” of every popular investment theme

47:20 Media is the “mirror of mood”

50:30 Why confidence is the real “invisible hands”

53:00 Best indicator of an upcoming recession

55:00 Bidenomics is another sentiment indicator

#090 Jens Nordvig On How AI Is Changing Investing Forever Jul 27, 2023

Show notes

Jens Nordvig, founder and CEO of Exante Data, joins Julia La Roche on episode 90 to share his macro outlook, his views on the U.S. dollar, and his latest venture — Market Reader — a startup providing real-time explanations of market movement for investors and advisors.

Links

Twitter: https://twitter.com/jnordvig

Substack: https://moneyinsideout.exantedata.com/

Market Reader: https://marketreader.com/

Exante Data: https://www.exantedata.com/

0:00 Intro

0:55 Macro picture

1:57 A turning point in inflation

4:10 Evidence of an inflection point

7:35 Market

8:30 Don’t see evidence of a dramatic tip in the economy

10:00 Housing not crashing

12:40 A brief history of dollar hatred

19:00 Impact of weakening dollar on investments

20:25 Artificial Intelligence and building Market Reader

24:33 Started Market Reader pre ChatGPT

26:55 AI and the macro outlook

28:48 Two trends that are worrisome

31:40 Will Fed policy have to consider AI?

33:43 No cuts any time soon

35:13 Positives of AI for a researcher

37:50 Impact of AI on certain finance jobs

42:00 Founding a startup

45:00 Market Reader examples

48:49 How Market Reader has helped Jens' productivity

51:20 Study

52:52 Parting thoughts

#089 Jim Bianco On Why Inflation Will Be Problematic And There Won't Be A Fed Pivot Jul 25, 2023

Show notes

Macro researcher Jim Bianco (@BiancoResearch), the president of Bianco Research, joins Julia La Roche again for a wide-ranging conversation on the macroeconomic environment.

In this episode, Bianco shares why he thinks we've seen a bottoming in inflation and that it will start to creep back up. He also explained why he doesn't see the Fed pivoting because the inflation rate is likely to be problematic. Elsewhere, Bianco explains why he's not necessarily in the recession camp.

0:00 Intro

1:00 Macro view

4:20 That’s not “TINA”

6:35 Unusual market performance this year

10:29 Thoughts on passive investing

14:00 On AI: Overhype the short-term, underestimate the long-term

18:00 Impact of AI on finance

25:05 Might not be in the recession camp

29:40 Did something already break?

32:34 Sticky inflation

36:00 Labor market is very different from what anyone thinks it is right now

43:00 Impact on cities, commercial real estate, public transportation

51:33 Regional bank risk

55:15 Energy

1:01:00 Parting thoughts

#088 Dr. Ed Altman: We’ve Reached An Inflection Point In The Credit Cycle Jul 20, 2023

Show notes

Dr. Edward I. Altman, Max L. Heine Professor of Finance, Emeritus at the Stern School of Business, New York University, joins Julia La Roche on episode 88 for an in-depth discussion on where we are in the credit cycle and the global phenomenon of zombie companies.

Dr. Altman is a renowned professor and researcher for his bankruptcy prediction and credit risk analysis work.

Dr. Altman earned his MBA and Ph.D. in Finance from the University of California, Los Angeles. He has been with NYU Stern School of Business since 1967.

He is most famous for developing the Z-Score formula in the late 1960s. The Z-Score is a financial model that uses historical data to predict a company's likelihood of bankruptcy. This formula is widely used by investors, financial analysts, and auditors as a tool for predicting corporate defaults and an aid in credit risk management.

Dr. Altman has published numerous books and articles on the topics of bankruptcy, corporate distress analysis, corporate financial restructuring, and credit risk. His work has had a significant impact on both academic finance and practical investment analysis.

Links:

Where We Are In The Credit Cycle: https://creditorcoalition.org/special-feature-professor-ed-altman-on-where-we-are-in-the-credit-cycle/

Wiser Funding: https://www.wiserfunding.com/

Corporate Financial Distress, Restructuring and Bankruptcy Book: https://www.amazon.com/Corporate-Financial-Distress-Restructuring-Bankruptcy/dp/1119481805/

NYU Stern: https://www.stern.nyu.edu/faculty/bio/edward-altman

0:00 Intro

0:49 Where are we in the credit cycle?

2:43 5 indicators (Default Rates; Recovery Rates, Required Rates of Return; Distressed Ratio; and Liquidity)

10:00 Is the market underestimating the near-term risk of defaults?

15:50 We’ve reached an inflection point

18:00 Historical default rates, benign credit cycles, and recession periods in the US

22:00 Warning of a great credit bubble in 2007

25:15 Why have defaults been so low?

28:20 Scenario of 10% default rates in credit markets?

33:30 Zombies and the Z-Score

39:40 Zombieism globally has increased from 1.5% to about 7%

44:00 Implications of keeping zombie companies alive

48:30 Why does the US have so many zombie companies?

50:00 Triple Cs risk of default

53:48 Bankruptcy v. Bailout

1:01:00 Bankruptcy reforms and impact on zombies

1:04:25 Zombies only increased slightly during Covid

1:06:30 What are people asking Dr. Altman on his lecture tour?

1:08:36 Starting a fintech called Wiser Funding

1:12:08 Parting thoughts

#087 Jason Trennert: If You're Playing The Odds Expect A Recession In The Next 6-12 Months Jul 18, 2023

Show notes

Jason Trennert, co-founder and CEO of Strategas Research Partners, joins Julia La Roche for a wide-ranging conversation on the macro picture.

Strategas has been voted the top independent macro research provider by Institutional Investor for six consecutive years. Trennert discusses the major macro themes that will shape the investment climate for the foreseeable future.

0:00 Intro

1:06 Quite cautious on the markets/economy

2:40 Chances are good that you’re going to get a recession

4:33 The magnificent seven

6:06 40% of the Russell 2000 has not had profits in the last 12 months

7:10 Inflation

9:00 Long way away from the Fed easing

10:25 Not buying stocks at reasonable prices right now

12:30 Opportunities, energy sector

15:30 Thoughts on AI

17:50 Themes

18:40 The end of globalization

22:11 Labor market

24:17 Hard or soft landing

26:00 Regional banks

27:48 Energy sector

32:50 Lobbying ETF (policy opportunities)

37:24 TINA

40:30 Fair value of S&P is probably between 3500-4100

42:00 Career in financial markets

#086 The Acid Capitalist Hugh Hendry On The Economy: 'I'm Fearful' Jul 13, 2023

Show notes

The Acid Capitalist Hugh Hendry (@Hendry_Hugh) joins Julia La Roche again for an unfiltered conversation on macro, markets, Bitcoin, the Fed, and more.

Hendry founded Eclectica Asset Management, a global macro hedge fund that was pretty much uncorrelated to everything in the financial universe. Hugh started Eclectica in 2002 and ran for 15 years before closing in 2017. He made more than 30% in 2008 betting against banks.

These days, Hendry is a luxury hotelier on St. Barts, where he spends his time surfing and still thinking about macro. He also hosts a weekly podcast called "Acid Capitalist" and shares his views on Instagram, Twitter, and Substack.

0:00 Intro

1:18 Macro picture, ‘my imagination is as dark as it was in 2007’

5:00 “I’m fearful”, already in recession as we speak

8:18 Want to own equities right now

12:30 Bitcoin

15:00 Sitting with cash, waiting to buy

17:58 Been in a depression since 2008

22:30 Banking sector

27:30 Eurodollar system

32:00 Entrepreneurial dream has been replaced

34:50 Inflation Reduction Act is actually smart

38:00 A recession of a similar magnitude to 2008-2009

42:47 The five who know

45:30 Music and charts

47:30 Twitter

49:23 Parting thoughts

#085 Kyle Bass On China: 'We Sit At A Hinge In History Right Now' Jul 11, 2023

Show notes

Texas-based hedge fund manager J. Kyle Bass, the founder and chief investment officer of Hayman Capital Management and founder of private equity firm Conservation Equity Management, joins Julia La Roche for a wide-ranging discussion on macro, geopolitics, and the rising threat of China.

0:00 Intro

0:35 ‘Out of body experience’ meeting with former central bankers, academics

3:30 Fed is ‘completely out of touch with reality’

5:30 This has nothing to do with the Phillips Curve

6:58 Chain-weighting inflation

9:57 Frictions in society

12:15 Heading toward a recession

14:15 Commercial real estate

19:22 Yellen’s trip to China

26:00 Wall Street greed

21:03 Is the business community waking up?

26:20 Exposure to China

28:00 Risk of invading Taiwan

30:00 Talk about what Xi Jinping says

34:00 Should be ringing alarm bells about China

38:00 Need peace through strength

41:00 Economic War Department is needed

44:00 We sit at a hinge in history right now

#084 Michael Green On Passive Investing Creating Distortions In The Market Right Now Jul 06, 2023

Show notes

Michael Green (@profplum99), Chief Strategist and Portfolio Manager for Simplify Asset Management, joins Julia La Roche on episode 84 for a wide-ranging conversation on the economy and market.

In this episode, Mike Green breaks down some of the implications of systematic and passive investment strategies and how they lead to the current market phenomena.

Michael has been noted for his work as a market theoretician and financial media participant. He is a graduate of the University of Pennsylvania and a CFA holder.

Follow Mike on Twitter: https://twitter.com/profplum99

Read Mike’s Substack: https://www.yesigiveafig.com/

0:18 When are we going to see a recession?

1:06 In the recession camp

2:40 Labor is bifurcated

4:55 Student loan debt

8:00 Implications of AI

13:55 Markets and the implications of passive investment strategies

18:10 Creating an asset bubble

21:57 What happens when the selling starts?

24:00 Driving a car uphill with no brakes

28:20 Growth of passive