Danielle DiMartino Booth: A Wave of Junk Debt Could Force the Fed to Pivot

Tom welcomes back Danielle DiMartino Booth, she is CEO and Chief Strategist for Quill Intelligence, a research and analytics firm.

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Danielle discusses the amount of work that goes into every press release the Fed puts out. They have a hypersensitivity to how and what they place in these releases. Powell has a largely thankless job, and the question is are they relying on lagging information.

Danielle recently nicknamed Jerome Powell "make my day Jay" when he was told the markets were up during a press conference.

We're seeing larger moves in housing than was expected. Home prices are falling in half of the U.S. while some regions see prices still increasing as some people see it as an opportunity.

Amazon needs to match consumer demand, and we see them laying off people as demand declines. We're now seeing surplus inventory in the supply chains that no one is buying.

Powell's pain point will come when something critical breaks in the credit markets.

A yield curve inversion signalled that credit would be tightening. However, now the way to interpret it is in terms of banks extending credit. If banks can't see profit in lending, they won't lend, and then the economy will slow.

Lastly, Danielle discusses the recent FTX crypto exchange collapse and the concept of Central Bank Digital Currencies. Tom notes that the Ontario Teachers Pension had 90+ million invested in FTX. This is not the place you expect to find your pension plan investing diligently.

Time Stamp References:
0:00 - Introduction
0:38 - Fed & Press Releases
2:28 - Powell Nickname
5:13 - Carvana & Auto Sales
7:59 - Housing & CPI Metrics
13:22 - Wage Price Spiral
19:07 - CPI & PPI Numbers
23:05 - Fed Politics & Recessions
27:40 - Powell & Credit Markets
33:20 - Fed Data & Actions
35:33 - U.S. & U.K. Pension Systems
38:12 - Crypto & Regulators
40:05 - CBDCs & Governments
44:55 - Wrap Up

Talking Points From This Episode
- The Fed's micromanaging approach to press releases.
- The Recent Fed press statement and Jerome's responding aggressively to being told markets we're up.
- The housing markets and excess supply in goods that no one is buying.
- The problems with pensions and the crypto markets.

Guest Links:
Twitter: https://twitter.com/DiMartinoBooth
Website: https://quillintelligence.com/
YouTube: https://www.youtube.com/c/DanielleDiMartinoBoothQI

Danielle DiMartino Booth is CEO and Chief Strategist for Quill Intelligence LLC, a research and analytics firm.

DiMartino Booth set out to launch a #ResearchRevolution, redefining how market intelligence is conceived and delivered, with the goal of not only guiding portfolio managers but promoting financial literacy. To build QI, she brought together a core team of investing veterans in analyzing the trends and providing critical analysis of what drives the markets.

Since its inception, commentary and data from DiMartino Booth's The Daily Feather have appeared in other financial sources such as Bloomberg, CNBC, Fox Business, Institutional Investor, Yahoo Finance, The Wall Street Journal, MarketWatch, Seeking Alpha, TD Ameritrade, TheStreet.com, and more.

A global thought leader on monetary policy, economics, and finance, DiMartino Booth founded Quill Intelligence in 2018. She is the author of FED UP: An Insider's Take on Why the Federal Reserve is Bad for America (Portfolio, Feb 2017), a full-time columnist for Bloomberg View, a business speaker, and a commentator frequently featured on CNBC, Bloomberg, Fox News, Fox Business News, BNN Bloomberg, Yahoo Finance and other major media outlets.

Before Quill, DiMartino Booth spent nine years at the Federal Reserve Bank of Dallas, serving as Advisor to President Richard W. Fisher throughout the financial crisis until his retirement in 2015. Her work at the Fed focused on financial stability and the efficacy of unconventional monetary policy.

DiMartino Booth began her career in New York at Credit Suisse and Donaldson, Lufkin & Jenrette, where she worked in the fixed income, public equity, and private equity markets. DiMartino Booth earned her BBA as a College of Business Scholar at the University of Texas at San Antonio. She holds an MBA in Finance and International Business from the University of Texas at Austin and an MS in Journalism from Columbia University.