Since Wealthion's transition of management, I haven't been impressed with much of the new content. However, I saw in this interview they were giving an explanation of the Fed "dot plot" so I watched to see what they have to say about that. Unfortunately, I didn't get much value out of the rest of the interview and I am skeptical of this guest's sources of information. According to his metrics, the economy is doing great and the American household has a strong balance sheet, but that's not what I see from other sources.

1:42 "Stock market bubble"
  • Companies have traded at a high PE, especially a narrow part of the stock market, reminds him of 2000 just before the dot-com stocks burst. Much optimism today just as there was back then. If the stock market declines substantially, it will affect the entire economy.
3:00 Since 2021, held opinion that US is not entering a recession, but investors should be prepared for rapidly increasing interest rates.
  • Job market is the most important piece of the economy, and has been strong. Latest unemployment numbers lower than expected. Unemployment is currently very low, and every uptick over the last couple of years has been matched by a downtick. Employment growth has been strong.
  • Too much demand relative to the supply of labor. People who didn't think they have a job in the job market can now enter the job market, giving better balance between demand and supply.
  • 5:10 Credit card balances - recently seen an uptick. Generally, credit card balances are low by historical standards. Economy supported by strong spending. Personal balance sheets still strong.


Umm... wtf is he talking about? Credit card balances are at all time highs and have surged since 2021!

Delinquency rates are the highest they've been since 2012! They've doubled since 2021.
  • If job creation slows, he would consider that a recessionary indicator.
  • There's no such thing as a "technical recession" - 2 quarters of negative real GDP growth is the generally used definition, and a technical recession objectively meets that criteria. That occurred in 2021. However, he thinks that a real recession is long and severe.
9:00 What is the Fed ignoring?
  • Fed states what they are looking for, but most people don't pay attention to what the Fed actually says. What they look for is getting inflation down, and that has been done. CPI cooling because housing prices are not going up dramatically, but it hasn't been reflected in the numbers yet. He then tries to make a point that lease renewals haven't been reflected in the CPI data yet, but I'm not exactly certain of that explanation. I still don't understand why he would see that but it's not yet in the inflation data. I think he's trying to say that the Fed looks at more updated rental numbers than are reflected in the latest CPI surveys?
13:00 Fed Dot Plot
  • If the Fed thinks people are losing confidence that the economy will keep going, then they will put out a surprise rate cut.
  • Dot plot is not a "prediction" of what interest rates will be. This is what the Fed thinks will be the appropriate interest rates in the future for given information of current economic conditions.
  • In September, they thought another rake hike would be needed to fight inflation, but if economy softens more quickly than expected then they will make a surprise rate cut.
16:15 Recession probability model


17:00 Job market employment imbalance


This chart is tracking groups of people more likely to lose employment in a recession. He does not see unemployment in the more vulnerable groups upticking right now.
Greenspud: Not sure what to think of this. He has "vulnerable" groups identified by race rather than industry or type of job. Skeptical of the usefulness of this chart.

23:00 Rental vs home ownerships

I don't see how he could say that renting is at all "affordable". I agree with him that home ownership is too expensive right now, but just because people can't afford the downpayment or financing right now doesn't mean that renting is "affordable" for them. People are getting squeezed as renters too right now. I don't see any value in this chart he's showing.

Brad then states that home ownership isn't necessarily a good investment because home prices don't always go up. I don't think he understands the point of home ownership. Home price speculation is a recent thing just because the market has been hot over the last 20 years, but the baseline case is that with a 30-year fixed mortgage you don't get clobbered by inflation increases while you are paying off your home as you would with rent. Home ownership gives people a chance to pay off their asset and not have to make future payments. I completely disagree with his arguments that renting is better than owning. It depends on your lifestyle situation and what you value.

32:16 Eric Chemi brings up the point that the landlord can kick you out of your house at any time and that some landlords are terrible. Brad says that Eric's point is just "in theory". He then says that landlords are incentivized to have stable renters and that they can easily be negotiated with. Greenspud: This is not what I see in real life at all. I'd like to see him try that with a big company like American Homes 4 Rent. They are going to want to get their money at the price they want to charge and don't care if you move out. Big companies love to shuffle their customers between service departments with multiple customer service people saying that they "can't" change the terms of their fee structure. At the end of the day most companies don't care when a customer comes begging for a discount and would rather eat losses to keep their list prices high rather than sell their product at a lower price. Many people get stuck forever renting because there's nothing they can do to fight the pervasiveness of rent inflation.

I gave this interview a chance because I don't know who Brad Case is and wanted to hear what he had to say, but I can't stand to watch this interview anymore because it's so full of factual distortions. Additionally, Wealthion has had more interviews with the same talking head clowns from CNBC, people who get promoted on TV for the showmanship and don't add a whole lot of intellectual value. So I'm done taking notes here and I'm done with Wealthion as a viewer.