Recession Near As Fed Hikes Rates While Economy Slows | Peter Boockvar

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  4. I just talked to my Korean dry cleaner located in Ohio and he said South Korea has no middle class. He said it's a real problem. A few families own all apartments driving rent sky high.

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  5. EXCELLENT: Adam you have a great channel!!!! Logical/thoughtful, edifying content for those of us who are looking at our economic situation :"seriously and responsibly" while there is so much that makes absolutely no economic responsible sense . Peter delivers great analysis and incite/explanation with so much to grasp. OH as Columbo always said…just one more thing….all of your content and guests all have that underlying value of liberty freedom and fee market business. Valuing sound economics and business principles. Principles our constitution provides.

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  7. How is recession not base case? War, inflation, pandemic, fed rate hikes. What happened to the yield curve inversion of late 2019? Or end of cycle correction PRIOR to 2020? That all disappeared? On to the next bull run? Doesn't add up to me

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  8. Absolutely amazing interview. Adam, you are the best!! What i enjoy most is how deep you dig into the questions people like me need the answers to?! Is there any way we can get in touch with you but Twitter?

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  9. It's almost as if everything(from stupid19 to the Russian-Ukraine conflict) is all just a deliberate plan to crash the already dying economy from the get-go.

    Be wise with your portfolios, plan wisely & stay safe out there, people!

    Ps, another great interview & guest, Adam & team!

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  11. I sometimes find real value in what you (and your guests) have to say–however your constant negative bias is very obviously self-serving and obviously not a fair representation. You should have people on your show that are able to provide a counter-point. Yes interest rates are low, yes inflation is here, yes real returns on index investing will be low, yes financial assets are expensive…however you fail to mention that LONG-TERM stock returns are MORE correlated to company fundamentals than p/e expansion/contraction/inflation/macro events. You use macro events to scare people while they have shown to have no real impact in long term stock holdings. 92% of stock returns are due to fundamentals if held for 10+ years. There are great companies that are reasonably valued now (Cigna, Enterprise Products, Ally Financial, Alibaba, Facebook just to name a few). Yes I understand that most of your viewers are simply ETF indexers and for them they really should listen to you, but you should be explaining that doom and gloom does not equate to investment losses.

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  19. They're not going to let their asset prices drop, they'll push everyone back onto the breadline. Also, if interest rates go up and asset prices fall people and the government will default in a negative feedback scenario. They have no other choice other than to QE.

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  24. It is all well and good to opine about solutions to the present overvaluations of Stocks AND Bonds in terms of – perhaps a sharp clearing out of dross would be beneficial long term, but unfortunately this means if one continues to be in those markets, a haircut that might extend down to the neck!
    It kind of reminds me of when people discuss someone they know who has developed a serious cancer. “Oh, that’s terrible! But after radical surgery, and a long treatment of chemo, he should do much better!”
    But when you have to endure such catastrophic treatments, it’s a far far different experience. You May never be the same!
    Likewise an impending possible financial meltdown, which quite just might take down both Stocks and Bonds.
    I’ve watched numerous times Lacy Hunt’s analysis’s which appears quite certain, it’s difficult to argue with Facts, but his apparent final analysis is that there’s no solution to avoid this collapse.
    I wish it were not so. The overall Debt, the terrible Demographics, Inflationary pressures, Economic dysfunctions, Political instability and unrealistic expectations, seem far too massive to overcome.
    Doom AND Gloom everywhere with Henny Penny’s galore, and the Woke police banging on the door.
    Be careful my good Wealthion buddies. This is not the time to take Risk, unless you much money to spare.
    Cash is looking better and better for now…

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  33. There's no way the Fed is going to raise rates past 1.75%. The Fed is not "independent." They are just another political animal and would never accept the responsibility of driving unemployment higher as a solution to curtailing consumer demand for products & services. There won't be a Paul Volcker 2.0. Our citizenry is incapable of enduring such hardship, even though our retirees deserve the higher interest rates as they've been robbed for a decade. The Fed's only solution is to monetize the problem – that is, allow prices/inflation to continue to rise until Americans spend less on goods, services, fuel, etc. until prices stabilize at a much higher level. In effect, socializing the impacts of the Fed's / Federal government's terrible policies across the entirety of the American public with horrible regressive consequences to the middle-class and poor. In "real terms," we'll all be poorer.

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  34. The SnP 500 is NOT the economy. We’re so far beyond moral hazard in this respect it’s madness. It’s becoming more uncoupled from actual prosperity for the normal people on the ground. I want a clearing event and companies trading on the fundamentals. But let’s be real, politicians can step in and have intervention for people who are unemployed for a change, in stead of the market being bailed out.

    Investors have had a good time for too long and balance is needed. The fed has also left its self with very weak leavers for inflation. Storms are coming. As always a fantastic guest.

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  35. Why anyone would consider Bonds in an overindebted, money printing, inflationary economy is beyond me! Short term, sure, if you need to park some cash for short periods, but long term? What the hell are you thinking! I am happy to hear someone echo a similar position finally!

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  37. Each economic cycle over the past 40 years has had an ever lower peak interest rate. This peak interest rate is now approaching the zero lower bound. Based upon historical trends the Fed funds interest rate required to "break" the economy is now somewhere between 1 and 2 percent. Given the Covid response damage to the economy in recent years the 1 percent end of the range is possibly the rate required to cause a reduction in economic activity. This implies that a 1 percent increase in the Fed funds rate will be enough to cause economic contraction.

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  38. Fwiw , why not just give UBI to the bottom 40% of citizen , just to get buy with inflation ?
    At some point prices will be high enough to start producing stuff again in the US , restoring « old jobs » like farming etc .
    At the same time be more autonomous and probably reducing oil consumption by reducing the Globalize economy ?

    The US dollar will have to share its reserve currency status anyway soon enough .
    Mind as well start now and use it while it last ?

    It’s the natural path anyway .
    The US debts as consume a lot of commodities , time to pay a bit more with a weaker currency .

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  39. I would like to add that the UK about 10 years ago did manage to sell austerity surprisingly well in my opinion with the tories continually winning elections and promoting austerity to strengthen the country. Whether our government officials in the US are able to do this kinda Thatcher approach for the longer term fiscal benefit of the country and currency, that remains to be seen.

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  43. Thanks Adam, but man you don't have to summarize everything guests say. Rather hear more questions than summations of what we've just heard.

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  44. Excellent discussion and analysis. The policy interventions of the past 50 years have led us down this path to where there's no clean escape. The global debt overhang is exerting enormous deflationary pressure that the central banks are trying to counter. We should have taken the medicine after 2008 but instead doubled down on credit subsidies. Eventually Mr. Market will have his due, but you can bet central bankers and govts will do everything in their power not to take their medicine until there is no choice. The borrowers of the world (every govt) have every incentive to inflate away debt as a survival strategy.

    The one quibble I have concerns the explanation of how the normal market economy adjusts through i rates. Low interest rates are a signal to increase consumption and thus reduce savings and investing. The increase in demand then translates into more investment starting to put upward pressure on rates. High interest rates are a signal to defer consumption in favor of saving and investing leading to more production. The central bank manipulation of i rates in a fiat currency regime has caused both consumption and investment to go up fueled by excess debt. This has been a very foolish policy. The interest rate is the price of money and the most important price signal in a market economy. It is meant to smooth out consumption patterns over time and is influenced by both demographics and technology.

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  46. Peter Shiff and Marc Faber say serious inflation, yet many like your guest and George Gammon predict serious recession. How do you reconcile those two positions? Thanks for this and all your lectures/interviews.

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  47. It's simple to me. Always and I mean always set the prime interest rate at a 1/4 point above the inflation rate. Never have a prime interest rate below the inflation rate. That's trouble.

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  48. As it is an election year, I imagine with monetary policy in tightening mode and backed into a corner on inflation, the politicians will try to win some votes with fiscal stimulus if they can. This could be a wild card in the recession equation.

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  49. Thanks Adam,
    I think there is no political will to raise interest rates to high and pop this bubble.
    Unfortunately I am pretty sure they will sacrifice the dollar differing the pain of lower assets prices.
    As we know they are in a box here with destruction on each side.
    You can't print money as the western world has done and not expect a day of reckoning.

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