On episode 91, Julia La Roche is joined by Peter Atwater, an adjunct professor of economics at William & Mary, and author of "The Confidence Map: Charting a Path from Chaos to Clarity". Atwater explains how confidence is the real "invisible hand" in our economy, markets, and everyday lives. He also shares his concern about the divergent economy, where billionaire confidence is soaring while a large population feels left behind, not only in the US but also in other countries. Atwater is the first who shared the notion of a K-shaped recovery in the economy.

Links: 

The Confidence Map: https://www.amazon.com/Confidence-Map-Charting-Chaos-Clarity/dp/0593539559/

Twitter: https://twitter.com/Peter_Atwater

LinkedIn: https://www.linkedin.com/in/peter-atwater-08467034/

Peter’s website: https://peteratwater.com/

0:00 Intro / Background

2:48 Psychology of investor decision-making and economic decision-making

3:35 Behavioral economists typically focus on what we do wrong

4:30 The role of confidence 

6:40 Confidence Quadrant framework 

10:00 Application of the Confidence Quadrant on macro/micro level 

13:00 Executives discussing AI 

14:47 Investors are in the “comfort zone” on the Confidence Quadrant 

15:35 The K-shaped recovery 

17:48 If markets were to price in Main Street sentiment they would considerably lower 

18:30 Two different sets of moods and preferences 

20:30 Assessment of the current state of America today 

24:00 Evaluating consumer confidence and the 2016 election 

28:00 Gen Z’s confidence? 

31:00 Millennials’ sentiment 

33:00 Real life moves us around 

35:00 Music and the mood 

38:00 Taylor Swift phenomenon 

39:30 Peak confidence? 

40:30 Mania in the Magnificent Seven 

41:15 Passive investing puts investors in the “passenger seat” 

44:00 Elon Musk is the “Kevin Bacon” of every popular investment theme

47:20 Media is the “mirror of mood” 

50:30 Why confidence is the real “invisible hands” 

53:00 Best indicator of an upcoming recession 

55:00 Bidenomics is another sentiment indicator  

Jens Nordvig, founder and CEO of Exante Data, joins Julia La Roche on episode 90 to share his macro outlook, his views on the U.S. dollar, and his latest venture — Market Reader — a startup providing real-time explanations of market movement for investors and advisors.

Links

Twitter: https://twitter.com/jnordvig

Substack: https://moneyinsideout.exantedata.com/

Market Reader: https://marketreader.com/

Exante Data: https://www.exantedata.com/

0:00 Intro

0:55 Macro picture

1:57 A turning point in inflation

4:10 Evidence of an inflection point

7:35 Market

8:30 Don’t see evidence of a dramatic tip in the economy

10:00 Housing not crashing

12:40 A brief history of dollar hatred

19:00 Impact of weakening dollar on investments

20:25 Artificial Intelligence and building Market Reader

24:33 Started Market Reader pre ChatGPT

26:55 AI and the macro outlook

28:48 Two trends that are worrisome

31:40 Will Fed policy have to consider AI?

33:43 No cuts any time soon

35:13 Positives of AI for a researcher

37:50 Impact of AI on certain finance jobs

42:00 Founding a startup

45:00 Market Reader examples

48:49 How Market Reader has helped Jens' productivity

51:20 Study

52:52 Parting thoughts

Macro researcher Jim Bianco (@BiancoResearch), the president of Bianco Research, joins Julia La Roche again for a wide-ranging conversation on the macroeconomic environment.

In this episode, Bianco shares why he thinks we've seen a bottoming in inflation and that it will start to creep back up. He also explained why he doesn't see the Fed pivoting because the inflation rate is likely to be problematic. Elsewhere, Bianco explains why he's not necessarily in the recession camp.

0:00 Intro 

1:00 Macro view 

4:20 That’s not “TINA” 

6:35 Unusual market performance this year 

10:29 Thoughts on passive investing

14:00 On AI: Overhype the short-term, underestimate the long-term 

18:00 Impact of AI on finance

25:05 Might not be in the recession camp 

29:40 Did something already break? 

32:34 Sticky inflation 

36:00 Labor market is very different from what anyone thinks it is right now 

43:00 Impact on cities, commercial real estate, public transportation 

51:33 Regional bank risk 

55:15 Energy 

1:01:00 Parting thoughts 

Dr. Edward I. Altman, Max L. Heine Professor of Finance, Emeritus at the Stern School of Business, New York University, joins Julia La Roche on episode 88 for an in-depth discussion on where we are in the credit cycle and the global phenomenon of zombie companies.

Dr. Altman is a renowned professor and researcher for his bankruptcy prediction and credit risk analysis work.

Dr. Altman earned his MBA and Ph.D. in Finance from the University of California, Los Angeles. He has been with NYU Stern School of Business since 1967.

He is most famous for developing the Z-Score formula in the late 1960s. The Z-Score is a financial model that uses historical data to predict a company's likelihood of bankruptcy. This formula is widely used by investors, financial analysts, and auditors as a tool for predicting corporate defaults and an aid in credit risk management.

Dr. Altman has published numerous books and articles on the topics of bankruptcy, corporate distress analysis, corporate financial restructuring, and credit risk. His work has had a significant impact on both academic finance and practical investment analysis.

Links: 

Where We Are In The Credit Cycle: https://creditorcoalition.org/special-feature-professor-ed-altman-on-where-we-are-in-the-credit-cycle/

Wiser Funding: https://www.wiserfunding.com/

Corporate Financial Distress, Restructuring and Bankruptcy Book: https://www.amazon.com/Corporate-Financial-Distress-Restructuring-Bankruptcy/dp/1119481805/

NYU Stern: https://www.stern.nyu.edu/faculty/bio/edward-altman

0:00 Intro 

0:49 Where are we in the credit cycle? 

2:43 5 indicators (Default Rates; Recovery Rates, Required Rates of Return; Distressed Ratio; and Liquidity) 

10:00 Is the market underestimating the near-term risk of defaults?

15:50 We’ve reached an inflection point 

18:00 Historical default rates, benign credit cycles, and recession periods in the US

22:00 Warning of a great credit bubble in 2007 

25:15 Why have defaults been so low? 

28:20 Scenario of 10% default rates in credit markets?

33:30 Zombies and the Z-Score

39:40 Zombieism globally has increased from 1.5% to about 7% 

44:00 Implications of keeping zombie companies alive 

48:30 Why does the US have so many zombie companies? 

50:00 Triple Cs risk of default 

53:48 Bankruptcy v. Bailout

1:01:00 Bankruptcy reforms and impact on zombies 

1:04:25 Zombies only increased slightly during Covid 

1:06:30 What are people asking Dr. Altman on his lecture tour? 

1:08:36 Starting a fintech called Wiser Funding 

1:12:08 Parting thoughts 

Jason Trennert, co-founder and CEO of Strategas Research Partners, joins Julia La Roche for a wide-ranging conversation on the macro picture.

Strategas has been voted the top independent macro research provider by Institutional Investor for six consecutive years. Trennert discusses the major macro themes that will shape the investment climate for the foreseeable future.

0:00 Intro

1:06 Quite cautious on the markets/economy 

2:40 Chances are good that you’re going to get a recession 

4:33 The magnificent seven 

6:06 40% of the Russell 2000 has not had profits in the last 12 months 

7:10 Inflation 

9:00 Long way away from the Fed easing 

10:25 Not buying stocks at reasonable prices right now 

12:30 Opportunities, energy sector 

15:30 Thoughts on AI  

17:50 Themes 

18:40 The end of globalization 

22:11 Labor market 

24:17 Hard or soft landing 

26:00 Regional banks 

27:48 Energy sector

32:50 Lobbying ETF (policy opportunities) 

37:24 TINA 

40:30 Fair value of S&P is probably between 3500-4100

42:00 Career in financial markets 

The Acid Capitalist Hugh Hendry (@Hendry_Hugh) joins Julia La Roche again for an unfiltered conversation on macro, markets, Bitcoin, the Fed, and more. 

Hendry founded Eclectica Asset Management, a global macro hedge fund that was pretty much uncorrelated to everything in the financial universe. Hugh started Eclectica in 2002 and ran for 15 years before closing in 2017. He made more than 30% in 2008 betting against banks.

These days, Hendry is a luxury hotelier on St. Barts, where he spends his time surfing and still thinking about macro. He also hosts a weekly podcast called "Acid Capitalist" and shares his views on Instagram, Twitter, and Substack.

0:00 Intro

1:18 Macro picture, ‘my imagination is as dark as it was in 2007’

5:00 “I’m fearful”, already in recession as we speak 

8:18 Want to own equities right now 

12:30 Bitcoin 

15:00 Sitting with cash, waiting to buy 

17:58 Been in a depression since 2008 

22:30 Banking sector 

27:30 Eurodollar system 

32:00 Entrepreneurial dream has been replaced 

34:50 Inflation Reduction Act is actually smart 

38:00 A recession of a similar magnitude to 2008-2009 

42:47 The five who know 

45:30 Music and charts 

47:30 Twitter

49:23 Parting thoughts 

Texas-based hedge fund manager J. Kyle Bass, the founder and chief investment officer of Hayman Capital Management and founder of private equity firm Conservation Equity Management, joins Julia La Roche for a wide-ranging discussion on macro, geopolitics, and the rising threat of China. 

0:00 Intro 

0:35 ‘Out of body experience’ meeting with former central bankers, academics

3:30 Fed is ‘completely out of touch with reality’ 

5:30 This has nothing to do with the Phillips Curve 

6:58 Chain-weighting inflation 

9:57 Frictions in society 

12:15 Heading toward a recession 

14:15 Commercial real estate 

19:22 Yellen’s trip to China

26:00 Wall Street greed 

21:03 Is the business community waking up? 

26:20 Exposure to China

28:00 Risk of invading Taiwan 

30:00 Talk about what Xi Jinping says 

34:00 Should be ringing alarm bells about China 

38:00 Need peace through strength 

41:00 Economic War Department is needed

44:00 We sit at a hinge in history right now 

Michael Green (@profplum99), Chief Strategist and Portfolio Manager for Simplify Asset Management, joins Julia La Roche on episode 84 for a wide-ranging conversation on the economy and market.

In this episode, Mike Green breaks down some of the implications of systematic and passive investment strategies and how they lead to the current market phenomena.

Michael has been noted for his work as a market theoretician and financial media participant. He is a graduate of the University of Pennsylvania and a CFA holder.

Follow Mike on Twitter: https://twitter.com/profplum99

Read Mike’s Substack: https://www.yesigiveafig.com/

0:18 When are we going to see a recession? 

1:06 In the recession camp 

2:40 Labor is bifurcated 

4:55 Student loan debt 

8:00 Implications of AI 

13:55 Markets and the implications of passive investment strategies 

18:10 Creating an asset bubble 

21:57 What happens when the selling starts? 

24:00 Driving a car uphill with no brakes 

28:20 Growth of passive 

33:58 Inelasticity of the markets 

36:20 The Fed 

42:22 Operating off fantastically outdated theories 

45:00 Downside of these strategies 

49:30 Narratives in the markets 

54:00 Parting thoughts

Nassim Nicholas Taleb (@nntaleb), the author of “The Black Swan” and “Antifragile," joins episode 83 of The Julia La Roche show alongside veteran Wall Street Journal reporter Scott Patterson (@pattersonscott), author of “Chaos Kings: How Wall Street Traders Make Billions In the New Age of Crisis.” 

“Chaos Kings,” which features Taleb, recounts the story of Universa Investments, a Miami-based investment firm specializing in risk mitigation, deploying a tail-risk hedging strategy to limit losses from an outsized market event, like a Black Swan. Taleb is the Distinguished Scientific Advisor at Universa.

Led by Mark Spitznagel, Universa is among the best-performing investment managers of the last 15 years, reaping massive gains from market crashes. During the depths of the COVID-19 pandemic in early 2020, Universa delivered a stunning 4,000% return during the first quarter when markets sharply sold off. The firm has posted a 15-year average annual return on capital north of 100%.

0:00 Show open

1:00 Chaos Kings story 

6:40 A problem with infrequent but large losses  

9:45 Precautionary Principle 

12:29 Tail risk hedging 

15:30 Flaws of modern finance 

17:17 Mark Spitznagel learning to “love to lose” 

19:00 Fragilities, hidden risks, big picture macro environment 

23:43 Addressing misconceptions around Black Swans 

25:30 Optionality 

30:16 Experience and execution of the strategy 

31:49 Black Swans v. Dragon Kings 

34:30 Predicting an event is one thing; benefitting is another thing

36:00 Sornette’s Dragon Kings 

38:50 Universa’s 4,000% gain 

41:45 Getting to know Nassim Taleb 

46:01 Rethinking investing 

49:01 New age of crisis 

54:40 Parting thoughts 

David Hunter (@DaveHcontrarian), Chief Macro Strategist at Contrarian Macro Advisors, joins Julia La Roche on episode 83 to discuss his forecast for the market and economy.

Hunter, who’s been in markets for 50 years, is calling for the end of a 41-year bull market. He expects the market will continue to melt up, forecasting the S&P peak at 6,000 to 7,000 before a global bust. 

He’s also bullish on gold, calling for $3,000 by the end of the year. He also made a case for why gold could soar to $20,000 in the decade's second half. 

0:00 Intro 

0:40 Becoming a contrarian 

2:40 Macro view 

5:18 Stock market is one of the best leading indicators 

8:40 What is the market forecasting? 

11:22 Another melt up in the market 

16:39 Calling for the end of a 41-year bull market

18:24 Economic and market cycles 

20:17 Global bust forecast for 2024

23:05 Forecasting S&P peaking at 6,000-7,000, before 80% drop

29:00 Deflation

34:30 Bullish gold, calling for gold $3,000 this year, $20,000 second half of the decade

41:00 Outlook for the U.S. Dollar 

44:00 Treasuries 

47:00 The debt is ‘a giant Ponzi scheme’

49:20 Challenge to the thesis 

52:30 Parting thoughts