Jack Farley
@JackFarley96 • 87,897 subscribers
Co-founder of Monetary Matters Network: https://t.co/yANVgsTvJU
Videos
The shipping squeeze on world's largest oil tankers has a primary cause and it is actually NOT the Iran War. Two years ago, a mysterious Korean billionaire predicted that Israel would attack Iran and started quietly buying Very Large Crude Carriers (VLCCs), Evangelos Ed_Finakis 🇬🇷 explains. After approaching the largest VLCC owners and making them "offers they couldn't refuse" (20% above market), he now controls a staggering 30-35%+ of (active compliant & bookable) VLCCs and started refusing to take cargoes unless firms paid him very expensive contracts. This has pushed VLCC rates to all-time highs BEFORE the Iran War, and has led to some analysts to say this this Korean billionaire-visionary was trying to "corner the market" in VLCCs (Ed acknowledges this term but does not use it himself). Now that the predictions of this man (Ga-Hyun Chung of SINOKOR) have come true, the VLCC market is at a critical juncture.... For the consequences in greater depth, not just on VLCCs but all tanker vessels, I recommend you watch Ed's full interview which is available below (some exceptionally unusual things are going on). For even more greater detail (much, much more), check out Ed's research service which includes his private X (Twitter) account. Discounted subscriptions are available to Monetary Matters subscribers until April 17th (7 days remain). Apple🔊 Spotify📽️ YouTube📽️ Misadventures in Shipping🚢
Jack Farley91,920 Aufrufe • vor 1 Monat
My message to those complaining I'm covering AI/Semis too much at expense of "bread & butter" Macro topics. Here's the reality. What's moving markets: - AI - Data Center CapEx What's not moving markets: - Treasury Issuance - Banking System - FX/Rates - Fed // Liquidity
Jack Farley29,354 Aufrufe • vor 1 Monat
When I interviewed veteran commercial real estate (CRE) investor Anthony Dilweg, I expected him to say that the bearish headlines about CRE & office were overblown. Instead, he said the headlines weren't bearish enough, & made an analogy to the Titanic hitting the iceberg🚢 This shocking conversation, nearly two hours long, is now released in full. Here are some of the key claims from Dilweg (who in a former life played quarterback for the Green Bay Packers 🏈) on how he is viewing the CRE world: - The huge challenges CRE & office will have to contend with are WORSE than what CRE faced during the 2008 Great Financial Crisis - Office as an asset class is "structurally broken" as remote and hybrid work has caused demand to tank - As vacancy rates skyrocket, over a billion square feet of office asset class (20% of the asset class in the U.S.) will be obsolete over next 3-5 years - "Return to office" trend is vastly overstated. The CEOs may say Monday - Friday is stern policy but utilization rates reveal Tuesday-Thursday is the de facto norm - Banks are "completely overwhelmed" as CRE investors use threat of strategic default (i.e. turning keys back) to aggressively renegotiate their loans. Banks must contend with forbearance, restructuring, and extreme reduction in loan yields (350 basis point declines in loan yields are not unheard of) - The claim that impairments to office as an asset class are just in major cities (NYC, San Francisco, LA) is an overrated narrative. I say to Dilweg (whose 5.5 million square footage portfolio is located in Southeast U.S.) "so you are not quite in the eye of the storm" (I like to support my guests) and he corrects me and says "No, I am." - If Fed doesn't drastically cut rates, there will be tremendous pain felt throughout the entire CRE industry - Some banks are "behaving in an interesting way" and Dilweg speculates that FDIC & OCC might still be operating behind the scenes to prevent more bank failures - Private credit is on the margin replacing some bank financing, but terms are "very punitive" As usual, this interview is available on Forward Guidance podcast and on " Blockworks Macro" YouTube channel Lastly, a big thank you to MetaMask.eth 🦊 Portfolio for sponsoring today's episode Enjoy! 🔥
Jack Farley479,722 Aufrufe • vor 2 Jahren
How @FedGuy12 is seeing things: - The recession doomers need to stop taking their "crazy pills" - Stocks will "crush" bonds as record fiscal deficits reignite inflation - Nominal GDP growth will continue to be strong as long as the U.S. government continues to print 2 Trillion of "helicopter money" 🚁 - However, the 2023 disinflation will itself prove to be "transitory," and the Fed will cut interest rates by less than the market expects (currently ~6 cuts are priced in by end of 2024) - Recent easing of financial conditions (rally in rates, stocks, and credit) will boost economic activity, particularly the housing market - Fed is likely planning to taper quantitative tightening (QT), which means that the shrinking of the Fed's balance sheet will continue even longer, until the Fed's reserves approach the LCLoR (lowest comfortable level of reserves) - We also discuss the draining of the reverse repo facility (Joseph was publicly talking about this literally 3 years, now everyone is talking about it) and mortgage-backed securities (MBS) role in QT. I ask Joseph if fall in rates will cause MBS prepays to rise, he says (I'm paraphrasing) technically yes, but it will be a very mild effect As usual, this interview is available on Forward Guidance on all podcast apps and on "Blockworks Macro" YouTube channel. Video version is now also available on Spotify Huge thank you to Public for sponsoring this interview! Enjoy 🔥
Jack Farley269,643 Aufrufe • vor 2 Jahren
Out now - how Luke Gromen is thinking about the current stress in the Treasury market: - Unless oil and/or the dollar goes down a lot, "the beatings will continue" in the bond market - The pain in bonds will continue & continue until there is a 2019-style spike except instead of in repo it's in the long-end of Western sovereign bond markets - This market meltdown will require - Federal Reserve intervention (rate cuts? QE? Repo?) in order to prevent market malfunction - America's Debt-to-GDP ratio is too high to stomach 5.5% rates... government needs to inflate the debt away by keeping rates below inflation, if the Fed sticks to this playbook it will have implications for hard assets such as gold & Bitcoin This is an early release on X - will go live on regular channels later Thursday (tomorrow) as usual Enjoy 🔥
Jack Farley289,069 Aufrufe • vor 2 Jahren
