The Julia La Roche Show

"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

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

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

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?

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

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

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

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

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 

Jon Hilsenrath of The Wall Street Journal joins Julia La Roche on episode 43 to discuss his new book, "Yellen: The Trailblazing Economist Who Navigated an Era of Upheaval."  In this episode, Hilsenrath discusses his decision to write a book about Treasury Secretary Janet Yellen and her husband, Nobel laureate economist George Akerlof, in the form of a love story. He highlights the couple's central role in economic debates over the years. He aims to humanize top figures in economics while also incorporating historical lessons and personal lessons about work, family, and more. He also touches on the imperfect nature of capitalism and democracy, the importance of rebuilding trust in institutions, the state of journalism, and his own experiences as the son of a war refugee. He also shares how he got a C in Economics 101 at Duke (Full disclosure: Julia also got a C in Econ 101 at UNC).  Hilsenrath is a senior writer for The Wall Street Journal, where he has written about economics and finance since 1997. He has worked as a writer and editor in Hong Kong, New York and Washington, D.C. Many of his stories have focused on causes and consequences of economic and financial crises. He was a Pulitzer Prize finalist in 2014 for his coverage of the Federal Reserve; part of a WSJ team that was a Pulitzer finalist in 2009 for coverage of the financial crisis; and contributed on-the-ground reporting to the WSJ’s 9/11 coverage which won a Pulitzer in 2002. He graduated from Duke University in 1989 and was a Knight-Bagehot Fellow and M.B.A. graduate from Columbia Business School in 1996. 0:00 Intro 0:45 A shower idea 2:00 A love story 3:17 4 lessons for breaking glass ceilings 7:35 What did Yellen get right? What did Yellen get wrong? 10:00 Recency bias in economics profession 12:28 Larry Summers 15:00 Late to the Biden Administration 17:00 She’ll be the Treasury Secretary for a little longer 17:55 Yellen, Summers’ approach to an airport 20:30 Human behavior in economics, markets 22:40 Human screw up on both sides of the equation 24:30 Hilsenrath’s takeaways 27:33 Trust is a mess 30:26 Examining issues through Yellen’s story 31:00 Rebuilding, restoring trust 34:58 Hilsenrath’s family story 38:10 Are you proud to be a journalist? 41:59 Jon and Julia both got a C in Econ 101 45:21 Explaining economics through the book, “Yellen” 46:17 Thoughts on “Fed Whisperer” nickname 52:22 Parting thoughts