The CONVERSATION conducts a post mortem on comments by Fed Reserve Chairman, JEROME POWELL, in his speech last week in Jackson Hole, Wyoming.  “There is this belief that he [Powell] doesn’t believe in what he says,” says DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP. But he warns: “The market should not ignore him. Inflation is not beaten.” POWELL also seemed to telegraph that the course of interest rates would be “data dependent,” according to MAT VAN ALSTYNE, ODEON co-founder and managing partner. (Case in point: US job openings dropped in July by more

Either way, rising interest rates have negatively impacted US housing on several fronts. With the average 30-year fixed mortgage reaching its highest rate since 2001, home affordability and cost of ownership are pinching many buyers’ finances. DICK BOVE, once again, sounds the alarm for the real possibility of a housing crisis. Still, there’s a solution for the impaired financial mechanism setting up the housing market for potential collapse, according to BOVE. Private capital would be unleashed, and more affordable homeownership would be within buyers reach if housing agencies, Fannie Mae and Freddie Mac, are taken out of conservatorship, he says.

Elsewhere, the CONVERSATION looks at the latest stresses on banks from capital to the retention of customer deposits. On the global scene, China’s economy remains deeply challenged while Germany’s is shrinking. “[Global] debt got us to where we are now, and debt won’t be able to take us out,” says BOVE. Joining the CONVERSATION is JOHN AIDAN BYRNE.

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With markets about to parse the forthcoming speech this week of US Fed Chairman, JEROME POWELL at Jackson Hole, Wyoming, all eyes were suddenly on mortgages rates, which have hit a 23-year high on 30-year fixed loans. Home affordability in America is becoming more expensive, demand is far outpacing supply, and the funding mechanisms for home mortgages are creaking. "We're seeing a breakdown in the housing financing system, " says DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP. "I think the possibility of a housing crash is very real." MAT VAN ALSTYNE, ODEON co-founder and managing partner, says in the event of a housing crash, it is conceivable the Fed would intervene to control the financial debacle with a series of familiar measures to stimulate liquidity.

Banks continued to be squeezed with S&P following Moody's and Fitch in downgrading banks. The CONVERSATION examines the growing risk now facing the US bank system as regulators step up their capital requirements for lenders. On the positive side, after a sustained slowdown, investment banking is showing signs of renewal as deal making and stock offerings slowly return. Meanwhile, BOVE lays out his case for why Goldman Sachs CEO, DAVID SOLOMON, has positively contributed to the financial strength and future of the fabled investment bank. Elsewhere, we look at China and thedisturbing signs of economic decline. Joining the CONVERSATION is JOHN AIDAN BYRNE.

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Investing in US bank stocks the past five years has disappointed many investors. "The result was not a random event," says DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP, outlining three reasons why he believes the industry performed so badly relative to the market overall. The reasons include the steady climb in US interest rates as the Fed embarked on its campaign to tame runaway inflation.

Many banks are now scaling bank as lending is curbed, and as rating agencies signal warnings, downgrade a roster of banks and put others on a watch list. "My bigger issue is this," says MAT VAN ALSTYNE, ODEON co-founder and managing partner, referring to the regulatory environment. "The United States government is telling the world: We don't want regional banks; we don't want smaller banks because we have different rules for big banks - so the goal is to become a big bank, or get out of the way."

Elsewhere, the CONVERSATION looks at developments, political and economic, in China, Russia and compares their performance and stability with the US. As China grapples with multiple economic challenges, BOVE says China's banks in the nation's troubled real estate sector would have declared bankruptcy if they had been operating under US rules. Host JOHN AIDAN BYRNE notes how global investment flows have been shifting since COVID-19 altered dynamics. The US, he adds, has seen a pick up in foreign direct investment, for example.

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Wall Street is paying close attention to the latest data on labor markets and inflation, as well as on wage growth and more, as the Fed weighs up its next move. For DICK BOVE, the Fed seems increasingly likely to extend its interest rate hike campaign to finally tamp down inflation closer to its target rate of 2.00 percent. BOVE, chief financial strategist at ODEON CAPITAL GROUP, continues to see evidence of a pick up in the pace of inflation. That would factor heavily into the Fed's decision on US interest rates, which many analysts nevertheless expect to see headed back down in the next 12 months. MAT VAN ALSTYNE, ODEON co-founder and managing partner, sees that latter course unfolding. In his view, that's because of the perilous state of US government debt. "What we're looking at is the complete collapse of the fiscal ability of the US government to function—and there's only one way out," says VAN ALSTYNE.

BOVE reports on the fast moving events in the US bank sector, including Moody's decision to cut the ratings of a roster of banks. Banks are also feeling more pressure from regulators, who BOVE says are taking extreme measures damaging the industry. "Banks are shrinking, or as I put it, they have gone on strike," he says. Elsewhere, the CONVERSATION strikes up a debate on falling levels of trust in US government and on US Supreme Court decisions which have roiled the nation. Joining the CONVERSATION, JOHN AIDAN BYRNE points out that the highest court in the land may be a scapegoat at large for a society in disarray.

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The white-hot stock market in the first half of this year, wage gains, a tight labor market, rising home prices— as well as falling inflation data—have contributed to a widespread view among many analysts that the US economy has avoided a major recession. A soft landing, if any, is now a popular narrative. But DICK BOVE is filled with conviction that our latest gains on the economy and inflation could soon be reversed. With wages rising faster than inflation, more people entering the workforce and the wealth effect of sharply higher asset prices from stocks to housing, the Fed may soon be back at the drawing board, he says. That's because of a return of a higher pace of inflation from inflation's recent low of 3 percent. In this scenario, the Fed would extend its interest rate campaign far longer than many have anticipated. "We're looking at an inflationary spiral, " says BOVE, chief financial strategist at ODEON CAPITAL GROUP. "I think the Fed will continue to raise interest rates. I don't think the conventional view is correct."

Meanwhile, regulators' efforts to supervise the troubled US banking sector could backfire. An acceleration in bank consolidations and hightened risks for the sector is predicted by BOVE. On the global front, the Conversation will look at the prospects for expanding investment opportunities in the African continuent bouyed by favorable demographics. China, meanwhile, is facing a plunging population more severe than officially reported, according to one analyst. Joining the Conversation is JOHN AIDAN BYRNE who poses the question: Is the current blistering streak for the stock market a symptom of an asset bubble that will burst?

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Stocks surged as Wall Street scaled back its recession fears, the S&P 500 trading at its highest level since April 2022, by the close of trading on Tuesday July 25. "Investors have changed their outlook on the economy," says DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP. "They have made the decision that inflation is dead or dying, that there's one more final US rate hike. Jobs are continuing to grown." Still, there's a batch of negative indicators, including the bond market, which flies in the face of this stock market rally, according to MAT VAN ALSTYNE, ODEON co-founder and managing partner. Numerator's latest Consumer Sentiment Study also shows consumers' strong level of concerns about the US economy, says JOHN AIDAN BYRNE. Despite the high levels of public and personal debt, BOVE says it is still consistent with a growing US economy even as consumers run out of credit-fueled steam.

Meanwhile, BOVE explains why the FDIC has issued a warning to US banks on their uninsured deposits, the key element in the recent collapse of Silicon Valley Bank. BOVE also took aim at the FDIC, the US government agency which facilitates insurance for bank depositors. "The FDIC didn't recognizxe that the increase in interest rates could reduce the value of bank assts." Elsewhere, the CONVERSATION takes a closer look at the latest UN forecast on national populations. The EU countries are forecast to see a drop in populations. The US, meanwhile, is grappling with its own demographic crisis with repeared calls for a steady stream of immigrants.

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Stocks continued their recent upswing as investors absorbed a stream of quarterly earnings. The rally in part reflected a positive response to earnings reports from big banks like Bank of America (BAC) and Morgan Stanley (MS). A certain “euphoria” also gripped the markets as fears of recession and inflation eased. Is this positive momentum overblown? “You have to wonder if this euphoria is enough to carry the markets

Despite Treasury Secretary, JANET YELLEN, tamping down worries of an imminent recession—and economists dialing back the risks of a slowdown—the US and global economy may have entered its most uncertain phase in months. MAT VAN ALSTYNE, ODEON co-founder and managing partner, says many are ignoring an important indicator. That’s the government bond market, which is signaling recession, he says. Moreover, US tax receipts are down, 20 percent year-on-year, another negative recessionary indicator. Piling on the debt burden, JOHN AIDAN BYRNE, notes the US national debt has soared by $1 trillion since  the debt ceiling was lifted, much of that reflecting a catch up on stalled payments during the debt ceiling standoff. Still, total outstanding public debt has now reached $32.5 trillion.

Elsewhere, the CONVERSATION examines the rise of “non-bank” lenders, a sector competing with traditional banks that includes  some pension funds, insurers, mutual funds, hedge funds and other institutions. According to the Financial Stability Board, these “non-banks” had $239 trillion on their books in 2021. “The risk of loan losses in this sector if staggering,” according to BOVE. Meanwhile, a surge in home equity lending is coming, says BOVE, as US homeowners tapped into the rising equity in their homes.

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US consumers are borrowing like gangbusters and spending heavily in a post-Covid world of destination travel, luxury purchases and more personal freedom. Yet there are signs consumers are also becoming tapped out as Covid savings evaporate and US household debt rises, a sum now hovering around $17 trillion. That could be a disaster for US banks, according to analyst DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP. Many of the thousands of small to medium-sized US banks specializing in consumer lending, could be in the eye of a financial storm in our rising interest rate environment, BOVE says. "We'll see more failures," he adds, referring to a a group of approximately 3,500 lenders.

In one telltale sign of consumer stress: A surge in negative equity in the auto loan sector. This rise in bad auto loans is being watched closely for the impact on several banks active in the sector. Meanwhile, Federal regulators have issued reports on a key rump of US banks following annual audits known as 'stress tests.' BOVE repeats an earlier warning that the tests do not properly sum up the latest financial health of the banks. "I am repeating my warning because the banks are in trouble," he says.

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The latest quarterly GDP, January through March, shows the US economy grew at a 2 percent annual rate driven by consumers spending at the fastest pace in nearly two years. Real personal income rose 2.4 percent quarter-over-quarter on an annual basis. Exports grew 3.5 times faster than imports. These are some highlights of a report by DICK BOVE comparing and contrasting the upsides and downsides of the government's latest GDP numbers.

On the downside, he notes that growth in personal income is substantially offset by a surge in government transfer payments during the quarter. A massive proportion of spending is also directed at debt service payments. The bull case depends on continued momentum from consumers; the bear case argues this can't continue, according to BOVE, chief financial strategist at ODEON CAPITAL GROUP. US consumers are spending generously despite rising borrowing costs, a potential sign of lingering post-Covid feel-good optimism, according to MAT VAN ALSTYNE, ODEON co-founder and managing partner.

Meanwhile, BOVE is out with a scathing critique of the Federal Reserve, "The Last Straw. Is the Federal Reserve Deliberately Publishing Questionable Data?" BOVE notes, for example, that despite the latest bank stress test indicating US banks are in sound condition, the likelihood of more interest rate rises, "will intensify the problem that caused the recent bank failures." Joining the CONVERSATION is out host, JOHN AIDAN BYRNE.

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The past week has seen a series of sweeping global developments — from the military mutiny in Russia that was suddenly averted, to the historic US visit by India’s Prime Minister Narendra Modi. At the same time US Secretary of State, Anthony Blinken, met with Chinese President Xi Jinping in Bejing with trade and mutual cooperation on the table. These major events, amidst unfolding regional drama and changes, could portend opportunities for the US and free markets, according to DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP.  “China took a major hit last week,” says BOVE. “But the biggest coup of all was India, they can’t be anti-US anymore.” The CONVERSATION looks in more detail at this seeming pivot in global commerce and trade. “China is an export dependent economy, if it does not export, it does not have an economy,” says MAT VAN ALSTYNE, ODEON co-founder and managing partner, underlining one of China's main priorities and the benefits of peaceful co-existence with neighbors. What could go wrong? JOHN AIDAN BYRNE raises questions about the internal stability of the Chinese economy from high youth unemployment to a weak consumer sector.

New data from BOVE shows the US money supply as a share of the world’s money supply, has been steadily declining — from a high of nearly 90 percent in the 1950s to some 20 percent in recent years.  We examine what that means for the greenback. The dollar is still the globe’s major currency. Despite a push by many countries to destabilize it, the US dollar is the main currency held by central banks worldwide. Elsewhere, the demographic crisis in Western nations continues with the sharp drop in US fertility rates offset by sustained levels of immigration.  Finally, we look at the decline and fall of once mighty empires from the Roman to the British Empires.

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