With signs of the Fed winning the battle to tame inflation in America, and as the money supply shrinks sharply, the real issue now facing America is the risks of recession, according to DICK BOVE, chief financial strategist at Odeon Capital Group. Will it be a mild, moderate or deep recession? That is the crucial question, says BOVE. "The Fed is very nervous at the moment," he adds, given the market indicators. "Listening to some Fed governors, it sure seems some of them think we're getting closer to causing harm to the economy than they mean to," said MAT VAN ALSTYNE, Odeon co-founder and managing partner. "Listening to [Fed Chairman] Powell, it looks like he's full steam ahead, let's crash this economy."

Meanwhile, the demise of crypto platform FTX is shaking the foundations of the financial system. "It is having a [huge] multi-billion dollar impact," says BOVE. While FTX reportedly has liabilities of $8 billion following its collapse, the wider market losses for multiple industry crypto players is estimated at over $1 trillion. Elsewhere, the CONVERSATION turns to China and its competition with the US for superpower economic status. Also examined is global hot spot, Iran. Joining the CONVERSATION is JOHN AIDAN BYRNE.

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The US midterm elections didn’t result in the huge red wave of Republican victories predicted by polls and media pundits. The Conversation came closer than many of these same forecasts in calling it correctly in our last episode, seeing narrow gains in the House of Representatives and no big shake up in the Senate. As of this latest Conversation, it was a lackluster performance overall for Republican candidates nationwide. Democrats, though likely to lose the House, far outperformed many expectations. Republicans turned in the worst midterm performance for the opposition in 20 years, analysts say. In this latest Conversation, DICK BOVE, chief financial strategist at Odeon Capital Group, said that in his opinion the results were “very positive” since it would help return the nation back to “American core beliefs.” 

Still, MAT VAN ALSTYNE, Odeon co-founder and managing partner, said the only consistent thread in this election and US elections every two and four years is how wrong the pollsters have been.  JOHN AIDAN BYRNE noted that Republicans overall won the popular vote and notched up some significant gains in New York and other parts of the country. In the midst of vote counting came the collapse of the giant crypto platform, FTX.  BOVE argues that the industry will ultimately emerge stronger from the implosion of this once revered crypto operator with losses estimated in the billions of dollars. MAT VAN ALSTYNE says the FTX destruction was bad for everybody. “It was the equivalent of the Fed failing,” says. “It looks like a classic Ponzi scheme.”

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As American voters went to the polls, in the closely-watch mid-term elections, the CONVERSATION sees signs of more gridlock with control of Congress at stake. DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP, says Fed Chairman, Jerome Powell, is the only major figure in Washington fighting inflation. MAT VAN ALSTYNE, ODEON co-founder and managing partner, agrees, presenting the case for bringing this white-hot inflation menace in America under control. The CONVERSATION takes a deep dive into the latest labor and productivity numbers for a clearer picture of employment and hiring trends. "I think we've crested in terms of jobs," says BOVE. In a recent note to investors, BOVE said the broader numbers published by the US Labor Department each month tend to be very confusing. "However, assessing the associated wage, hours worked, and productivity data suggests that the job market may have peaked," he writes. 

The CONVERSATION also turns to Germany and its business and political ties to China and Russia. "Germany has kind of sold its soul to Russia on gas and to China on selling goods," says BOVE. German Chancellor, Olaf Sholz, recently visited China accompanied by business leaders from Germany who signed major deals with China for the purchase of German products. Elsewhere, BOVE provides startling background on what he calls the "illegal" seizure of housing agencies, Fannie Mae and Freddie Mac during the financial crisis.  Fannie and Freddie were in court again recently in a battle for control of the agencies by plaintiffs. 

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The Conversations takes a victory lap for the many predictions on this podcast that were validated by subsequent events. At the same time, this episode will look ahead to what may come next in the financial markets and for the global economy. "These predictions were made well before they became conventional wisdom," writes DICK BOVE, chief financial strategist at Odeon Capital Group. In this latest Conversation, BOVE takes us through his litany of forecasts, from soaring inflation to the Fed acting as a buyer of last resort in funding Federal deficits. MAT VAN ALSTYNE, Odeon co-founder and managing partner, warns that some 50 percent of US debt turns over every three years, raising the prospect for trouble in our current environment. With mortgage rates in the US having topped 7 percent, a 20-year high, JOHN AIDAN BYRNE examines how that translates for borrowing costs. The Conversation also examines the latest risks of the much anticipated recession in the US and worldwide, with BOVE looking at contributing factors that could shape its outcome. On Wednesday, November 2, the US Fed announced a fourth consecutive 75 basis points rate rise, which puts the benchmark federal funds rate at a range of 3.75% and 4.00%.  The total of rate hikes for the year is now at 375 bps. 

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The Conversation travels the globe examining the financial and political hotspots from China to the UK and the EU. "China may be on the cusp of busting," says DICK BOVE, chief financial strategist at ODEON CAPITAL CONVERSATION, in this latest episode. "Japan is off the charts in terms of being in trouble," he adds. MAT VAN ALSTYNE, ODEON co-founder and managing partner, says the outside world does not have access to what's really happening in China today. "What about Japan? " he asks. "Its Central Bank has been essentially bankrupt for multiple decades." 

With debt levels worldwide and in the US at historic highs, VAN ALSTYNE believe it is not a question of if America will see a return of quantitative easing, but a question of when. JOHN AIDAN BYRNE says the financial drama in the UK and the resignation of Prime Minister Liz Truss, followed by the election of her successor, RISHI SUNAK, fascinated the markets and the globe because it could foreshadow the fate of other nations. Also in this Conversation, BOVE spells it out—what bank earnings are saying about the US economy.

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Many investors are missing the reality of the latest bank earnings reports, dressed up to seemingly appear a lot more positive than negative because of  complex accounting standards and rules, according to DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP. Banks are overstating the value of their assets in a period of rising interest rates. As markets respond positively in one direction, BOVE says many investors do not realize banks are earning less than it appears. "All the [bank] companies I have looked at are down [in terms of] net worth," BOVE says. He adds that many investors are ignoring the fact that money flows out of banks have exceeded inward flows. Loan losses have soared, rising interest rates causing the value of bank assets to plunge, according to BOVE. Pre-tax earnings are down for the year while net worth, as noted, has declined.

Also in this CONVERSATION is the latest flare up in the British political establishment with a rub for the UK economy. UK Prime Minister LIZ TRUSS fires her finance minister, KWASI KWARTENG, replacing him with JEREMY HUNT. HUNT then immediately rips up her Conservative party's ambitious tax cut and spending plan. MAT VAN ALSTYNE, ODEON co-founder and managing partner, and JOHN AIDAN BYRNE look at what ails the UK and Europe generally.

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JAMIE DIMON, one of Wall Street's biggest bankers, pulled no punches, saying in an interview that "serious" headwinds are likely to propel the US and global economies into a recession next year. “These are very, very serious things which I think are likely to push the US and the world — I mean, Europe is already in recession — and they’re likely to put the US in some kind of recession six to nine months from now,” Dimon said in the interview Monday with CNBC. Dimon cited a number of indicators including inflation, rising interest rates and the war in Ukraine, that led to his outlook. The CONVERSATION picks up on Dimon's widely reported view with DICK BOVE taken aback. BOVE, Chief Financial Strategist at Odeon Capital Group, said the comments by DIMON, CEO of JP Morgan were, "very damaging to the market." The CONVERSATION elsewhere examines the labor markets with BOVE's forecast for the unemployment rate as the US seems likely to enter recession. 

JOHN AIDAN BYRNE notes the sharp decline in the numbers of workers entering the labor force today compared with earlier generations as context for today's labor environment and the rise in robotics. With former Fed Chairman BEN BERNANKE honored with a Nobel Prize for his work in economics, MAT VAN ALSTYNE points elsewhere to BERNANKE'S career at the Fed. "I would argue we are living with the repercussions of his bad decisions 14 years ago," VAN ALSTYNE says.

In a new comprehensive report covering the roots of today's inflation and monetary policy, and tracing the period of early 2021 through today, BOVE offers a penetrating guide to the realities of today's US economy struggling with the impact of massive money printing. "I don't see the [mass US] consumerist economy continuing in the fashion I have seen," BOVE says. "I see a change."

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After a sharp two day rally on Wall Street, the CONVERSATION ponders the outlook. DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP offers historical perspective noting how markets have risen in the month of October as businesses engage in seasonal commercial activity.  "I think the latest rally is [also] part of the bear market rally," he adds, as investors conclude the US Fed is under pressure to ease off on its campaign to fight inflation. BOVE, a resident of Tampa, Florida, escaped the worst effects of Hurricane Ian that pummeled his state. But he notes the huge toll, the loss of lives and extensive property damage statewide. BOVE says the reality for banks and insurance brokerage companies is a separate story. "Banks make a fortune from hurricanes as do the insurance brokerage companies," he says.  

Meanwhile, the UK government did a revamp of its original tax cut and spending plan with the sterling suffering its worst month since Brexit. JOHN AIDAN BYRNE points to the enormous gross debt to GDP ratios for major economies saying by this measure the UK is faring much better than the US. "The US is not the UK," responds MAT VAN ALSTYNE, ODEON co-founder and managing partner. A fundamental economic problem for the UK currency is that it is a net importer of energy which it purchases in a currency that is not its own, according to VAN ALSTYNE. The US does not have this dilemma, he says. The CONVERSATION looks at how the US dollar is exporting chaos around the globe in the view of BOVE, who renews his calls for a new Plaza Accord with other leading economies. Will the US economy sees a rise in "housing slums" under present government policy? BOVE thinks it is a distinct possibility.

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In one of the most stark warnings yet of a pending recession, famed economist Nouriel Roubini, nicknamed Dr. Doom,  says this next recession could start by the end of 2022, stretching into 2023. In a recent media interview, Roubini, the man who correctly predicted the 2008 financial crisis, said in a run of the mill recession, the S&P 500 could slump by 30 percent. In a real hard landing, which he expects, that drop could be as much as 40 percent. Roubini’s searing forecast is picked up in this CONVERSATION by DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP as he debates the escalating debt in the US economy and worldwide with MAT VAN ALSTYNE, ODEON co-founder and managing partner. BOVE believes the US is now at a turning point and will firmly grapple decades-long growth in ballooning debt as the US faces a recession. “We can’t go back to a system of printing money when we are in trouble,” he says. VAN ALSTYNE disputes his outlook. He sees a short term strategy of tamping down America’s red hot inflation. But in the long term, he expects the government to unfortunately resort to further money printing to fund the mounting cost of entitlement and other programs. Roubini says the next recession could be “severe, long and ugly.”

The CONVERSATION looks at signs of trouble in China’s troubled Belt and Road Initiative Program. JOHN AIDAN BYRNE notes how some of the loans by China to foreign borrowers have now gone sour, raising more problems for China which is also managing internal challenges such as a housing crisis. The CONVERSATION looks at current events in other economies in the news, including the UK and Italy and examines the impact of the soaring US dollar. BOVE repeats his call for some form of “Plaza Accord” to manage and contain the latest wave of currency volatility triggered in large by the rising dollar. VAN ALSTYNE says that while such an idea has merit, it is hard to imagine major nations of the world with disparate agendas, gathering to hammer out a practical deal.  Bank CEOs are grilled on Capitol Hill. Meanwhile, the financial rape of Fannie Mae and Freddie Mac continues, according to BOVE.

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This CONVERSATION occurs as the US Fed makes its latest move on interest rates to tamp down the hottest US inflation in four decades. On Wednesday, September 21, the Fed increased its key short-term rate by three-quarters of a percentage point to a range of 3% to 3.25%. The move comes on the heels of four rate hikes earlier this year with the central bank now boosting the federal funds rate by 0.75% at each of its last three meetings. Today's inflation is a consequence of the massive growth in the US money supply and the Fed's easy money policies, DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP, reminds us in this episode of the ODEON CAPITAL CONVERSATIONS podcast. There are no solutions, only-trade offs [in seeking to satisfy the problems of our ages], says MAT VAN ALSTYNE, quoting Thomas Sowell, the economist and political commentator. In today's context, VAN ALSTYNE explains, that has meant the excessive printing of money to solve one problem in our economy, has led to problems elsewhere. "The chickens have come home to roost," he adds.

In an in-depth new report, BOVE highlights two major Wall Street firms, Goldman Sachs and Morgan Stanley, to examine seismic changes in the US economy. "My belief is that the United States is being forced into a transformative change of every aspect of its economy and financial system," BOVE writes. "Business models that worked well in the old environment will not work well in the new environment. Therefore, investment must be adjusted to reflect the change that is now underway." How are Goldman and Morgan facing these challenges? BOVE answers by first taking a deep dive into the multiple financial and geopolitical forces buffeting the globe. BOVE notes the massive amount of personal financial wealth in America today, a staggering sum of $100 trillion.

With America’s fertility rate in steady decline, the population aging and worker shortages everywhere, the CONVERSATION agrees that America needs more immigrants to fill jobs. The CONVERSATION also looks at the massive flow of migrants crossing the US border in the south. Is it possible the US State Department is looking to offset labor shortages in the long term through large scale migrant flows across the border today, JOHN AIDAN BYRNE asks.

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