Episode Details

Banker and author Chris Whalen (@rcwhalen), chairman of Whalen Global Advisors, who is also the author of The Institutional Risk Analyst, joins Julia La Roche on episode 108.

In this episode, Whalen delves into what he terms a ‘Silent Crisis’ lurking within the commercial real estate sector and its ripple effects on regional banking and the broader economy. Whalen highlights the intricacies of the Federal Reserve’s policy shifts and how the central bank is slowly killing the world of credit and putting banks in a tough spot.

Links:

Chris on Twitter/X: https://twitter.com/rcwhalen

The Institutional Risk Analyst: https://www.theinstitutionalriskanalyst.com/

0:00 Welcome Chris Whalen to the show 

1:14 Big picture is the Fed is slowly killing the world of credit 

2:13 Bond market is signaling the Fed is going to stop soon

3:34 Commercial real estate risk 

4:18 Banks are looking at another down quarter for net income 

5:30 Commercial, not consumer 

6:18 New York State Assembly killed multi-family housing 

9:26 A typical recession was led by consumers, but this recession is being caused by the Fed 

11:24 Landlords are a small business 

13:00 Silent crisis

14:50 Impact on banks 

16:00 Politics need to change if NYC is going to survive 

17:30 A strange economic cycle 

19:22 Half the banks in the country are insolvent on mark-to-market 

20:24 Banks are a fixed income trade that masquerades as an equity trade

21:30 Fed will drop rates by end of the year because of banks

22:14 Should we have mark-to-market accounting? 

23:50 Housing outlook, tips for homebuyers 

27:00 Parting thoughts