Chris Whalen, chairman of Whalen Global Advisors and author of The Institutional Risk Analyst blog, joins The Julia La Roche Show for "The Wrap with Chris Whalen."
In this episode, Whalen calls Trump's $200 billion mortgage bond buyback idea "idiotic" and says institutional investors aren't the problem with housing - the Fed buying 30-year mortgages and driving up home prices 50% in five years was the real culprit. He explains the Fed has been "operating like a hedge fund" with dangerous variable duration securities that won't pay off for over 10 years. On Venezuela, Whalen says it should have happened long ago - the Iranians had offensive missiles there that could strike the US, and he's astounded previous administrations tolerated it. He warns AI hype is now a systemic risk to tech valuations, with Oracle's Larry Ellison risking his company to chase the crowd, and predicts 2025's "magical year with no apparent cost for risk" is ending as banks prepare for consumer credit deterioration in 2026-27.
Links:
The Institutional Risk Analyst: https://www.theinstitutionalriskanalyst.com/
https://www.theinstitutionalriskanalyst.com/post/theira796
Inflated book (2nd edition): https://www.barnesandnoble.com/w/inflated-r-christopher-whalen/1146303673
Twitter/X: https://twitter.com/rcwhalen
Website: https://www.rcwhalen.com/
Timestamps:
00:00 Intro and welcome Chris Whalen
00:48 Non-farm payrolls report - weakness supports those saying economy is weak
01:46 Rate cuts likely this year on short end, but long-term rates not coming down
02:45 Trump's $200 billion mortgage bond idea - Chris calls it "idiotic"
07:25 Housing correction already building in weaker markets
08:24 Institutional investors not the problem - Fed buying 30-year mortgages was the problem
12:04 What would actually help housing? Build more houses, change zoning
13:04 NYC
18:16 Venezuela should have happened long ago
24:49 AI hype now a systemic risk to tech valuations?
27:06 Buying cheap financials - Flagstar below book, knows the team
28:39 2025 magical year with no apparent cost for risk - that's changing
30:05 Bank earnings next week
30:35 Viewer question: Deregulation impact on banks and real estate
32:53 Viewer question: If correction coming, wouldn't metals also fall?
34:52 Wrap up and parting thoughts
