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." Whalen breaks down the latest FOMC meeting, revealing a divided Fed with no clear consensus on future rate cuts. He predicts a home price correction coming and also warns of a brewing crisis in private equity, where 15-20% of companies are insolvent and relying on payment-in-kind structures. Whalen also discusses JPMorgan's surprise expense guidance this week, the Fed's Reserve Management Purchases (and whether it's QE by another name), and explains why the commercial real estate market remains a major risk. He expects higher bank earnings next year despite hidden dangers in lending to non-depository financial institutions, and shares his skeptical view on stablecoins and AI infrastructure spending.
Links:
The Institutional Risk Analyst: https://www.theinstitutionalriskanalyst.com/
https://www.theinstitutionalriskanalyst.com/post/theira785
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
00:49 FOMC meeting recap
04:03 Inflation as the #1 issue for Americans
05:13 Home price correction coming
06:03 Commercial real estate crisis deepening
07:25 Fed's Reserve Management Purchases explained
09:22 Fed managing liquidity into year-end
11:35 JPMorgan's surprise expense guidance
14:33 NDFIs: Lending reminiscent of 1920s practices
15:45 Private equity insolvency crisis? (15-20% insolvent)
16:51 Deflationary risk from forced asset sales
22:45 Private credit hidden risk
23:53 2026 outlook
24:24 Ginnie Mae vs Fannie/Freddie liquidity problem
26:28 Do stablecoins make sense?
27:56 Oracle CDS spiking and AI infrastructure spending
30:27 Viewer question: Fed control over mortgage rates
33:33 Viewer question: Manufacturing renaissance under Trump?
34:57 Viewer question: Are 10-year treasuries a good investment now?
36:16 Wrap up and where to find Chris Whalen
