Macro researcher Jim Bianco (@biancoresearch), founder and president of Bianco Research, returns to The Julia La Roche Show for episode 41. 

In this episode, Bianco makes the case that we’ve entered a different market era from 2009 to 2021 and why he doesn’t expect the Fed to cut rates or pivot anytime soon. He also breakdowns this paradox where for the first time most Wall Street strategists expect a decline in the stock market in 2023, which wasn't the case during the Great Recession or after 9/11.  He explains that a recession has become their bull story where the Fed will cut rates and the market will rise.

Bianco also outlines how we’ve entered a post-pandemic economy marking the end of an era of cheap goods, labor, and energy. As such, he makes a case for why inflation won’t return to 2%. 

Bianco notes that the market going forward will turn into a stock picker’s market versus buying indexes and ETFs and relying on the Fed put. He also outlines opportunities in fixed income, what he’s watching for in equities, and his thoughts on gold. Finally, Bianco weighs in on the FTX fiasco and explains why he’s still a big fan of cryptocurrencies and what’s needed for the space. 

0:00 Macro view

0:31 2023 starts off with a divergence

1:10 A different era of persistent inflation

2:14 Market is a liquidity junkie

3:36 Paradox of wanting a recession

5:01 A recession is the bull story

5:35 Bianco’s view on a recession

7:05 What the Fed is hoping for

10:35 Inflation

12:41 Why we won’t get back to 2%

13:11 Watch what the MTA is doing with subway service

14:40 Giant shift in workforce attitude

15:42 China is a disaster right now

18:02 Era of cheap goods, labor, and energy is over

20:30 The path 2% requires killing the economy

23:00 Energy

27:48 What folks are missing on the China reopening story

33:10 Bank of Japan expands trading band for 10-year Japanese government bonds

35:58 Japan has an inflation problem

37:00 There’s a developed world inflation problem

38:22 More implications from the BOJ’s surprise move

40:29 It’s now a stock picker’s market

42:26 George Noble

43:33 Fixed income is becoming interesting

45:35 Equities

47:00 More on fixed income

50:45 Thoughts on gold

52:20 GLD

58:09 Thoughts on crypto in the wake of FTX/SBF

1:01:01 Crypto turned into a casino

1:02:48 Banking system is inherently unstable

1:05:37 Impacts of FTX on the crypto industry

1:11:40 Book recommendation