About this episode
Chris Whalen, chairman of Whalen Global Advisors and author of The Institutional Risk Analyst blog, joins The Julia La Roche Show for "The Wrap with Chris Whalen." Whalen breaks down the latest FOMC meeting, revealing a divided Fed with no clear consensus on future rate cuts. He predicts a home price correction coming and also warns of a brewing crisis in private equity, where 15-20% of companies are insolvent and relying on payment-in-kind structures. Whalen also discusses JPMorgan's surprise expense guidance this week, the Fed's Reserve Management Purchases (and whether it's QE by another name), and explains why the commercial real estate market remains a major risk. He expects higher bank earnings next year despite hidden dangers in lending to non-depository financial institutions, and shares his skeptical view on stablecoins and AI infrastructure spending.Links: The Institutional Risk Analyst: https://www.theinstitutionalriskanalyst.com/ https://www.theinstitutionalriskanalyst.com/post/theira785Inflated book (2nd edition): https://www.barnesandnoble.com/w/inflated-r-christopher-whalen/1146303673Twitter/X: https://twitter.com/rcwhalen Website: https://www.rcwhalen.com/ Timestamps:00:00 Intro and welcome Chris Whalen00:49 FOMC meeting recap04:03 Inflation as the #1 issue for Americans05:13 Home price correction coming06:03 Commercial real estate crisis deepening07:25 Fed's Reserve Management Purchases explained09:22 Fed managing liquidity into year-end11:35 JPMorgan's surprise expense guidance14:33 NDFIs: Lending reminiscent of 1920s practices15:45 Private equity insolvency crisis? (15-20% insolvent)16:51 Deflationary risk from forced asset sales22:45 Private credit hidden risk23:53 2026 outlook24:24 Ginnie Mae vs Fannie/Freddie liquidity problem26:28 Do stablecoins make sense?27:56 Oracle CDS spiking and AI infrastructure spending30:27 Viewer question: Fed control over mortgage rates33:33 Viewer question: Manufacturing renaissance under Trump?34:57 Viewer question: Are 10-year treasuries a good investment now?36:16 Wrap up and where to find Chris Whalen
