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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:

#053 Michael Howell On How Liquidity Drives Markets And Where We're Likely Headed Feb 07, 2023

Show notes

Michael Howell, CEO of CrossBorder Capital, an investment advisory firm, and author of the book, "Capital Wars: The Rise Of Global Liquidity," joins Julia La Roche on episode 53 to provide a deep dive on what is global liquidity, why it matters, and how it drives markets.

Michael points out that liquidity is inflecting upwards and explains what's driving that move and the implications for markets, which are sensitive to these infections. What's more, with the liquidity cycle inflecting upward, the economy will likely see a turning point in the U.S., which Michael predicts will happen around May. He believes there will be a few more months of softness, but we're near "a turning point."

While many believe an inverted yield curve warns us that a recession is fast approaching, Michael explains why it's a flaky predictor and how term premia bias the yield curve.

Julia and Michael also explore some of the themes from the book, "Capital Wars," including that as the investment world has gotten bigger, it's become more volatile, where financial crises are more common. They also touch upon the intensifying tussle between the U.S. and China as the dominant financial economy.

Michael founded CrossBorder Capital in 1996. He developed the quantitative liquidity research methodology while he was Research Director at Salomon Bros. from 1986. He was subsequently appointed Head of Research at Baring Securities in 1992, and was top-ranked "Emerging Market Strategist" by institutional investors for the three years before setting up CrossBorder Capital. Michael has worked in financial markets since 1981 and is a regular international conference speaker. He is a qualified US Supervisory Analyst and has a Doctorate in Economics.

0:00 Intro

0:31 Macro view

1:00 Understanding money flows

1:30 Salomon Brothers

3:35 What is liquidity and what is it signaling today

5:00 Financial markets suddenly kickstarted upwards

6:00 Crypto is purely a liquidity phenomenon

7:00 Tech bouncing significantly as liquidity has picked up

7:15 Why is liquidity turning up?

8:00 China

9:30 What's happening in the big economies

11:15 Liquidity conditions from Fed have picked up

12:50 Q.T. is dead effectively is dead in the U.S.

13:27 Implications for markets

15:06 Term premia for bond investors

17:50 Why the inverted yield curve is a flaky predictor of a recession

18:08 What are fixed-income markets signaling?

18:28 Think of the stock market as a predictor of the economy

19:09 Close to an inflection point on the economy

22:37 Global financial system is now collateral based

23:00 Term premia is biasing the 10-2 yield curve

25:34 Good reasons why the yield curve is distorted

26:19 Evidence the Fed is in control

26:45 Ukraine War

28:48 U.S. is the cleanest shirt in the laundry

29:50 Ultimate job of central banks is financial stability

31:30 Capital Wars

35:00 As the world gets bigger it becomes more volatile

35:19 China's ambition to unseat the U.S. Dollar as the global reserve currency

38:40 Understanding equity markets

40:17 Tech stocks

41:30 Credit is dependent upon collateral

44:13 Debt mountain has grown

47:00 Financial crises will appear more regularly in the future

47:35 Japan is the canary in the coal mine

50:00 Threat to the financial system

51:15 Need liquidity because of debt

52:00 Financial markets of Victorian London

53:17 Yield curve control is coming klTK j

#052 James Lavish: We're Walking A Very Thin Tightrope Over A Cliff Feb 03, 2023

Show notes

"Reformed" hedge fund manager James Lavish (@jameslavish), the author of The Informationist, joins Julia La Roche on episode 52 for a wide-ranging discussion on macro and a deep dive into the debt problem in the U.S.

In this episode, Lavish makes a case that the world has changed in a way that the market understands, and that is — we can't go into economic turmoil because we're walking a "very thin tightrope over a cliff" because of the massive amounts of debt in the U.S.

Lavish explained that the tax base in the U.S. currently brings in about $4.6 trillion, which could get impacted by a recession. At this same time, a massive amount of entitlement spending goes to Social Security, Medicare, Medicaid, and unemployment in addition to long-term contracts for defense spending and, finally, interest payments on bonds we've issued. Adding up all those expenditures, it's over $6 trillion annually, so the U.S. is spending $1.4 trillion more than its bringing in tax revenue. As Lavish puts it, if the U.S. were a company, it would be considered a "Zombie."

"The Fed's got to either lower rates to appease The Treasury because the Treasury has got all these payments it's got to make, or [The Fed's] got to somehow get inflation under control without crippling the economy. It's a problem," Lavish said on the show.

Right now, the U.S. is in a precarious position. The big picture is this tension between inflation versus recession, where the Treasury needs inflation to help inflate away all this accumulated debt, while at the same time, the Fed wants to curb inflation via rate hikes and quantitative tightening, which creates a risk of pushing the economy into recession.

As Lavish puts it, the Fed and the Treasury are "painted into a really tight corner here, and the market knows it. And they know the first sniff of what would be instead of inflation — deflation — the first sniff of that, the Fed's got to print again."

It's one of the reasons Lavish, currently launching a hedge fund, The Bitcoin Opportunity Fund for accredited investors, wants to own bitcoin because it's a system that doesn't depend on inflation.

0:00 Intro

0:41 Macro view

2:00 Understanding money

2:50 Inflation vs. Recession

4:00 Market participants terrified of missing the pivot

6:00 Why did the market melt-up on Thursday

7:54 Market conditioned to Fed put

11:00 We can’t go into economic turmoil because we’ve got so much debt

12:20 Fed and Treasury painted into a tight corner

15:42 How does the sovereign economy work?

18:20 U.S. is essentially a “Zombie” country

20:00 We’re in a debt spiral

23:00 We’re going toward Japan

28:00 There’s no longer free money

29:40 High probability of a credit event

30:40 Money printing is the root of all evil

33:50 Bitcoin thesis

36:00 Money will continue to pour into Bitcoin

38:40 Bitcoin is still seen as a risk asset

42:00 Bitcoin Opportunity Fund

46:00 Bitcoin should not be correlated to anything

47:00 Treasury needs inflation, Fed doesn’t want inflation

49:30 Likelihood of a recession

54:27 Why inflation is higher than what’s reported

58:00 Parting thoughts

#051 Peter Boockvar On The 'Death By A Thousand Cuts' Economy Jan 31, 2023

Show notes

Peter Boockvar (@pboockvar), Chief Investment Officer of Bleakley Financial Group and author of macro newsletter The Boock Report, joins Julia on episode 51 for a wide-ranging conversation on macroeconomics.

In this episode, Boockvar makes a case that investors need to get accustomed to a slower rate of growth in this new interest rate environment where rates will stay higher for longer. As Boockvar puts it, it’s a “death by a thousand cuts” economy.

The conversation touched on the housing market, the Federal Reserve, earnings, layoffs, China’s reopening, inflation, and much more.

0:00 Intro

0:31 Macro view

1:12 Still in a bear market

2:31 Debt coming due

5:56 A death by a thousand cuts

8:06 A slower rate of growth

9:40 Housing market

10:35 To what extent do home prices fall?

13:58 Economic outlook

15:00 Higher rates relative to inflation is a more healthy environment

17:00 The Fed’s reputation has been shattered

18:03 Powell doesn’t want to repeat the 1970s

19:00 Fed wants market to ‘sober up’

20:44 2% inflation target is an arbitrary number

25:00 Earnings picture are a headwind for stocks

27:40 White Collar recession

30:24 China’s reopening

31:40 Chinese consumer has been unleashed

34:45 Why oil will go well north of $100 this year

36:30 Playing the China reopening

37:40 U.S. big tech’s best of their stock days are over

40:30 Every investor focused on macro has to keep an eye on BOJ

44:00 How to think about inflation

49:00 Be aware of your investing/economic surroundings

50:08 Boockvar’s marrying macro and micro

53:11 Time horizon is the key to successful investing

#050 Cullen Roche On Macro Outlook And Housing Risks Jan 26, 2023

Show notes

Cullen Roche, CIO of Discipline Funds and author of Pragmatic Capitalism, joins Julia La Roche on episode 50 for a wide-ranging discussion of the macro environment and Housing — the risk keeping him up at night.

In this episode, Roche raises the point that when it comes to macro research, many economists argue that the U.S. economy is a housing economy, meaning when the housing market slows down a lot, it filters through everything else.

“It’s really up in the air… Does this environment look more like a 2008-type of slowdown? Is it more like a 2002-ish type of long drawn-out slowdown that nothing really crashes, but things persistently adjust lower?” Roche said on the show.

Roche is in more of the 2002 scenario camp, but he notes there’s still an outlier risk of a credit event lurking that’s more akin to a 2008-style event, but that’s a big outlier.

If you enjoy the show, please leave a rating and review. Email me at julia@julialaroche.com with any future guest ideas or suggestions. I’d love to hear from you!

0:00 Intro

0:39 Slinging stocks and bonds after college

2:30 Coming full circle to low-cost ETFs

5:40 Understanding the details of what you’re buying

8:45 Big picture macro view

10:40 Process of digesting Fed policies during the pandemic

11:09 The big uncertainty — the housing market

13:38 Housing market is the backbone of everything the credit market is structured around

15:13 House prices boomed 40% during COVID

15:47 Outlier scenario that worries Cullen

17:00 Housing has become a speculative asset

18:45 Looking at the stock market as a multi-decade instrument

20:29 Is your house a great investment?

25:23 Will 2023 be the year of Disinflation?

30:30 Disinflation or deflation?

31:44 Can the Fed remain too aggressive?

38:50 Factor investing

42:20 Bonds

44:40 Importance of understanding time with asset allocation

47:40 Bitcoin as a 90-year instrument

52:00 Parting thoughts

#049 You're Going To Be Working Until You're 85 Or 90 | Ric Edelman Jan 24, 2023

Show notes

Ric Edelman (@ricedelman), one of the most influential people in the financial planning and investment management profession, joins Julia La Roche on episode 49 for a wide-ranging discussion on the economy, markets, retirement, Bitcoin, and more.

Edelman, ranked three times as the nation’s No. 1 Independent Financial Advisor by Barron’s, is also a best-selling author of a dozen books, including his newest, “The Truth About Crypto.” He’s also a top financial educator, host of The Truth About Your Future Podcast, and the founder of the Digital Assets Council of Financial Professionals (DACFP).

0:00 Intro

0:31 Macro view

1:30 Stock market is a leading indicator

2:40 Understanding the difference between the economy and the stock market

4:28 Separate the headlines from your financial planning goals

7:46 Technology is changing everything

9:44 Time to rethink the financial planning process

11:39 People are not financially prepared for retirement

13:22 Social Security

14:33 Rethinking retirement

17:27 Life-long learning 18:48 Higher education paradigm is completely shifting

21:23 Generation wealth transfer

23:19 A formula for how much you need to retire today

26:14 Thoughts on FIRE

29:18 Health of the population is a problem

31:50 No. 1 subject is crypto

33:50 Thoughts on crypto winter

35:40 Thoughts on SBF/FTX fiasco

39:12 Involved in crypto since 2012

45:03 Need for a financial advisor

50:52 Questions to ask an advisor

52:29 Bitcoin $150,000?

57:03 Stock market outlook?

#048 Carol Roth On How The Government And The Fed Created The Largest Wealth Transfer In History Jan 19, 2023

Show notes

Carol Roth @caroljsroth, a “recovering” investment banker, financial television commentator, entrepreneur, and best-selling author, joins Julia La Roche on episode 48 to discuss her last book “The War On Small Business: How The Government Used The Pandemic To Crush The Backbone of America.”

Carol’s book highlights how the government's actions during the COVID-19 pandemic favored the wealthy and well-connected at the expense of small businesses. This has led to a consolidation of power and wealth, with small businesses struggling while the stock market reached new highs. According to Carol, this is not a new problem, but the pandemic exposed it. In "The War on Small Business,” Carol details the abuses of power inflicted on small businesses during the pandemic and argues that government is the problem, not the solution. The book also advocates for decentralization to help small businesses and individuals participate in wealth creation.

In this episode, Carol discusses how capitalism in the U.S. is being replaced by cronyism, the Fed’s role in this epic wealth transfer, the nonsense surrounding ESG and the nefarious side of that movement, her biggest fear when the next pandemic arises, and more.

0:00 Intro

1:05 “Recovering” investment banker

3:04 Cronyism replacing capitalism in the markets

4:00 Didn’t have Fed tipping the scales and picking winners/losers

5:40 A focus on short-termism

6:15 ESG nonsense

7:23 Why write “The War On Business”?

9:30 The underreported story of the epic wealth transfer

10:40 The “Black Swan” was the government’s reaction to the pandemic

12:50 Partial lockdowns, not full lockdowns

15:00 “All in this together” got “completely bastardized”

16:00 Impact on small business owners like Shelly Luther

19:05 Carol’s “biggest concern” about future pandemics

20:40 Less trust in government, media

21:28 Covid amnesty?

24:30 Importance of small businesses in U.S.

26:38 Central planning is “America’s worst trade deal”

27:33 Capitalism is freedom and choice

30:00 Assessment of capitalism today

32:34 The Federal Reserve is a “failed experiment for the average American”

36:30 Ways to reform the Fed

38:50 The Fed’s actions got us here

41:48 The epic wealth transfer

44:38 Millennials, Gen-Z making more money, but don’t have as much wealth

47:05 Fed’s role in financial institutions buying up homes

47:33 Nefarious side of ESG

50:25 Worried about personal recessions

54:15 Parting thoughts

#047 Joe Fahmy On Why Biotech Will Outperform The Broader Market In 2023 Jan 17, 2023

Show notes

Joe Fahmy (@jfahmy), a portfolio manager at Zor Capital, LLC, a New York-based investment management firm, joins Julia La Roche on episode 47 to share his 2023 market outlook.

In this episode, Joe shares his 2023 outlook and why he thinks the biotech sector is poised to outperform the S&P. He also reflects back on lessons gleaned from the challenging environment in 2022.

Joe explains why having a big-picture macro view is important, but there’s no need to obsess over it. He also shares why “don’t fight the Fed” has resonated with this trading and investment style in recent years and how folks should think about what that phrase really means.

Joe has nearly 25 years of trading experience, during which he developed his investment strategy. His extensive knowledge of technical analysis, market forecasting, and risk management has landed him appearances on Wall Street Week, CNBC, Fox Business, ABC News, and CNN Money. He is a regular contributor to Yahoo Finance.

0:00 2023 market outlook

1:00 Don’t fight the Fed

1:34 Don’t fight the Fed works both ways

2:15 A new uptrend in the market this year?

2:40 What the phrase “don’t fight the Fed” really means

3:30 Understanding the big picture

4:20 Does the macro matter more than ever?

5:30 Important not to be obsessive over macro

6:29 Opportunities in 2023

7:55 Why biotech could outperform the S&P

9:53 Energy thesis

11:13 A return stock picking?

14:00 Where are we headed in the markets?

16:00 The big institutions control the markets. Period.

17:45 How to watch what the biggest players are doing in the market

19:33 A shift in the sentiment?

22:00 Lessons from 2022

25:44 Book recommendations for trading

28:52 What’s Joe watching in 2023?

31:23 When will we see the pause?

32:14 How much does the economic picture matter?

35:00 Parting thoughts

#046 Whitney Tilson On Avoiding The 5 Calamities That Can Ruin You Jan 13, 2023

Show notes

Former hedge fund manager Whitney Tilson, now the founder and CEO of newsletter publisher Empire Financial Research, joins Julia La Roche on episode 46 to share some worldly wisdom and his views on the market.

The bulk of this conversation focuses on life lessons from his new book “The Art Of Playing Defense: How To Get Ahead By Not Falling Behind.” Whitney outlines five calamities to avoid, including:

Loss of reputation and/or wealth
Loneliness and/or suffering a permanently impaired relationship with a loved one
A bad marriage, often ending in divorce
Addiction and abuse
The death, serious injury, or illness of yourself or a loved one

In this episode, Whitney, 56, revisits his childhood, including growing up in Africa with his educator parents. He also shares whether or not he ate the marshmallow in the famed Stanford marshmallow experiment, a psychological study that examined delayed gratification among young children. He recounts how he met his wife Susan (thanks to his friend Bill Ackman!) and his journey from being the lowest-paid Harvard Business School graduate in his class working for a non-profit to the world of hedge funds (also thanks to Bill Ackman).

Throughout the conversation, there are plenty of lessons gleaned over the years from being a long-time student and follower of Warren Buffett and Charlie Munger. Whitney also discusses value investing in the current environment and why he’s “reasonably bullish” and estimates the market could rise 15 to 20% this year.

0:00 The Marshmallow Experiment

4:30 Whitney likely didn’t eat the marshmallow

5:10 Growing up in Tanzania

7:00 Emphasis on education

9:15 Met wife after crashing party with Bill Ackman

10:15 Interest in investing

12:20 Amassed $10K, called up Bill Ackman

13:58 Early days of the internet stocks

14:32 Warren Buffett

15:50 A ‘clueless fool’ turning $20,000 into $120,000 in AOL

17:00 Absolutely no business starting a hedge fund

19:20 Dale Carnegie’s “How To Win Friends And Influence People”

21:18 Lessons for Tilson’s daughters

23:23 Raising athletic daughters

24:30 Price of Privilege

27:00 Sports and self-confidence with teenage daughters

36:00 The most important decision is who you marry

37:00 ‘Fishing in the right ponds’

39:00 Other important relationships

41:30 Epidemic of loneliness

44:00 Repairing and building relationships

46:10 Scott Galloway

49:00 Avoiding calamities

51:00 Loneliness or ruptured relationships as a calamity

52:48 The 5 calamities

53:30 How not to screw up your marriage

1:05:00 Risk taking and risk management

1:15:08 Reasonably bullish on the markets

1:19:57 Best guest is the market is up 15-20%

1:20:20 Value investing back in favor?

1:22:19 Berkshire Hathaway, Meta (Facebook), Netflix, Amazon, PayPal

1:23:40 Why the average person shouldn’t be picking stocks

1:30:00 Achieving long-term wealth

#045 Caleb Franzen: The Fed Is Being Challenged By Ongoing Labor Market Dynamics Jan 10, 2023

Show notes

Caleb Franzen (@CalebFranzen), senior market analyst at Cubic Analytics, joins Julia La Roche on episode 45 to discuss macro, markets, Bitcoin, and more.

A big theme in the conversation centers around the labor market and the Fed. Franzen discusses the Federal Reserve's prioritizing of three methods for reducing demand to bring down inflation, including creating an inverse wealth effect, increasing the cost of capital, and softening the labor market. The Fed suppressed demand in two of its three approaches, but the dynamics in the labor market are keeping demand elevated and offsetting these effects. That's why the Fed focuses on the labor market softening this year. As Franzen puts it, the labor market is "the last box that they're really looking to check to ensure that inflation is on a sustainable path lower."

Franzen makes the case that the Fed balancing the scales of its dual mandate — maximum employment and price stability — will be a thin line for the Fed to walk in 2023, with the labor market being historically tight (full/max employment) and inflation at historically elevated (price instability).

0:00 Macro view

1:05 Historic tightening cycle

2:04 Not a rosy picture for risk assets

3:25 Why the Fed will continue to raise after inversion

5:30 Inflation likely to moderate lower

7:16 A soft landing still on the table?

8:54 3 dynamics that stood out in the NFP data

11:18 The Fed can’t be too happy right now

12:30 Market outlook

16:25 Became macro obsessed in college

20:53 Enthusiasm capitulation then price capitulation

29:08 Bitcoin

30:00 Speculating on bitcoin is dead

36:00 Content diet

#044 Standing Up to the Woke Mob and Walking Away From $1 Million: Jennifer Sey's Story Jan 05, 2023

Show notes

Jennifer Sey (@jennifersey) said she was on track to be the first female CEO of Levi Strauss & Co. until she resigned after over two decades at the jeans maker after facing pressure to stay quiet about her opposition to San Francisco’s public school closures during the COVID-19 pandemic.

Throughout the pandemic, Sey was vocal about the policies impacting children, including the closure of schools and playgrounds, the masking of toddlers, learning loss, the increased educational gap, and the mental health crisis among teens that resulted from these closures. In February 2022, Sey, then-Brand President of Levi Strauss & Co., resigned and published an op-ed in Bari Weiss’s Common Sense (now The Free Press) where she revealed that she was offered $1 million in severance if she signed a non-disclosure agreement. She chose to forfeit the money and tell her story in the new book, “Levi’s Unbuttoned: The Woke Mob Took My Job But Gave Me My Voice.”

In this episode, Sey discusses her time at Levis, joining as a marketing assistant in 1999, rising to Chief Marketing Officer, a role she held for several years, and her promotion to Global Brand President in October 2020. In January 2022, she was asked to resign because of her social media posts that were critical of COVID mandates.

Topics featured in the episode include woke capitalism infiltrating corporate America, cancel culture, policy failures during the pandemic, free speech, the political divide, why there shouldn’t be pandemic amnesty, and more.

Sey, the 1986 USA Gymnastics National Champion and a 7-time member of the U.S. Women’s National Team, also revisited her time as an elite gymnast and why she walked away from the sport ahead of the 1988 Olympics. She is the author of the book “Chalked Up,” which detailed the coaching cruelty in the sport, and the producer of the Emmy award-winning documentary “Athlete A.”

0:00 Intro

1:06 An ‘unusual childhood’ as an elite gymnast

2:00 Gymnastics rife with abuse

3:30 Too broken to continue

5:00 Said the thing you’re not supposed to say out loud

6:23 Thoughts on quitting

9:26 Imposter syndrome

12:21 Early career after Stanford

15:50 Overcoming the doubters

18:38 CMO is a very slippery seat

20:00 Live In Levi’s campaign

22:22 No raise, no equity

26:05 No stock payout at the IPO

26:41 ‘Use your voice’

28:00 Speaking out during COVID

30:56 The ‘controversial’ tweets

32:12 An ‘unacceptable’ ‘problematic’ view

33:58 The Fox News appearance

35:00 The viral Twitter thread

35:36 The email before the ‘apology tour’

37:29 A dark time, treated as a ‘toxic employee’

39:00 ‘It’s really cult-like’

39:44 Promoted to brand president in October 2020

40:53 Told she was a candidate for CEO

41:28 Submitted to a background check

43:00 Offered $1M severance to walk away quietly

45:30 Vaccine mandate

46:30 Wrote book to encourage folks to speak up

47:19 Why are people quiet?

48:50 Views on political binary

51:50 A return to corporate America?

53:25 Should there be COVID amnesty?

56:29 Lessons for children

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