#031 Danielle DiMartino Booth On Recession, Housing, And Killing The Fed Put
The Julia La Roche Show
Is the Fed a Major Influence on the Housing Bubble?
The Fed was a major influence on the housing bubble running amok. The only thing we've seen thus far is a pure result of interest rate risk and the inability to refinance. You have not seen credit worthiness necessarily peak out its head, but it's coming. And you can see that in the data.
Danielle DiMartino Booth, the CEO and Chief Strategist for Quill Intelligence LLC, a research and analytics firm, joins Julia La Roche on episode 31.
DiMartino Booth set out to launch a #ResearchRevolution, redefining how markets intelligence is conceived and delivered with the goal of not only guiding portfolio managers, but promoting financial literacy. To build QI, she brought together a core team of investing veterans to analyze the trends and provide critical analysis on what is driving the markets – both in the United States and globally.
Since inception, commentary and data from DiMartino Booth’s The Daily Feather have appeared in other financial sources such as Bloomberg, CNBC, Fox Business, Institutional Investor, Yahoo Finance, The Wall Street Journal, MarketWatch, Seeking Alpha, TD Ameritrade, TheStreet.com, and more.
A global thought leader on monetary policy, economics and finance, DiMartino Booth founded Quill Intelligence in 2018. She is the author of FED UP: An Insider’s Take on Why the Federal Reserve is Bad for America (Portfolio, Feb 2017), a full-time columnist for Bloomberg View, 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 Quill, DiMartino Booth spent nine years at the Federal Reserve Bank of Dallas where 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.
(Also, here are the links to Danielle's 2007 papers at the Dallas Fed, The Rise And Fall Of Subprime Mortgages: https://www.dallasfed.org/~/media/documents/research/eclett/2007/el0711.pdf, and From Complacency To Crisis: Financial Risk Taking in the early 21st Century https://www.dallasfed.org/~/media/documents/research/eclett/2007/el0712.pdf)
0:00 Intro
0:42 At a critical juncture
1:38 We’re in a global recession right now
2:50 A much different construct in this layoff cycle
4:17 A white-collar recession
5:45 How a white-collar wave of layoffs impacts the economy
6:37 Quiet quitting is un-American
8:32 Can the Fed engineer a soft landing?
10:40 Few are accustomed to the type of Fed we have now
12:05 Maybe Jay Powell wants to kill the Fed put
15:20 Jay Powell wants to establish a better legacy
16:47 Not enough at the Fed has changed
18:12 If the Fed succeeds, Main Street will be the real winner
22:22 There will be air come out of this housing bubble
25:08 Investors exacerbating this housing cycle
27:13 Fed policies fed speculation in housing
28:18 The risk lives in the credit market
30:50 Watching continuous jobless claims
32:00 Are we set up for an even worse recession?
33:00 Biggest risk
35:19 Millennials, Gen Z will have to deal with a different reality
37:17 Time for Millennials to rise
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