DICK BOVE Says Government Doesn’t Want US Banks to Grow; Reasons America Skirted Recession; New Untested Era for Global Trade; More Millionaires & Billionaires; SEC Votes for Crypto. America’s Malaise

Bank earnings season is well underway with DICK BOVE, the dean of bank analysts, concluding the sector’s outlook is bleak. Four of Wall Street’s premier league banks — JP Morgan, Chase, Citigroup and Bank of America — reported on Friday. A multitude of write offs and some $2.9 billion in charges linked to the rescue of regional weighed heavily on results. Citigroup reported a quarterly loss of $1.8 billion and announced it would eliminate 20,000 jobs worldwide, or 10 percent of its workforce.  BOVE, chief financial strategist at ODEON CAPITAL GROUP,  says a fundamental shift is underway in US banking as new rules and regulations are forcing banks to offload assets and become more risk averse. “The US government does not want the banks to grow,” says BOVE. In this changed environment, there will be winners and lossers, he says.  </p> Why has the US economy defied Wall Street expectations and skirted recession? By some measures, the economy should already have been in sharp contraction as rising interest rates raise borrowing costs and inflation pinches consumers. BOVE traces the surprising resiliency of the US economy to the massive stimulus spending during the Covid . That spending  saw consumer net worth by $41 trillion from the start to the official end of the Covid lockdowns from early 2020 to the middle of 2023, according to BOVE. </p> Still, MAT VAN ALSTYNE, says polling show American consumers are feeling downbeat on the economy in sharp contrast to the upbeat message of the official data. “People don’t feel good,” VAN ALSTYNE adds. “We have rents rising, high rates, the world seems to be chaotic and things are falling apart.” Elsewhere, the CONVERSATION examines the SEC voting to expand investors ability to buy cryptocurrency in the form of ETS and mutual funds. And there’s more. Joining the CONVERSATION is our host, JOHN AIDAN BYRNE</p> Questions & Comments: podcast@odeoncap.com</p> <br /></p>

00:53:20

Labor Data in Doubt: Did US Economy Shed 150K Jobs in December? Most Significant Decline in Money Supply Since Great Depression. ‘Dismal’ Bank Earnings Forecast. Lessons of Nazi Gold & War in Ukraine

Lies, damn lies and statistics? DICK BOVE, once again, challenges the US Bureau of Labor Statistics (BLS), this time attacking its announcement that the US economy generated 216,000 jobs in December as the unemployment rate held steady at 3.7 percent. Using government data on hirings, layoffs, people quitting jobs and hourly wages, BOVE concludes December’s BLS report is widely off the mark. “We lost 150,000 jobs last month,” says BOVE, chief financial strategist at ODEON CAPITAL GROUP. “It’s an outrageous misstatement of these numbers by the press that creates major losses in the hands of investors,” he adds.   </p> In fact, BOVE sees weaker signs in the labor markets than is acknowledged by other analysts. Are we therefore, inching ever closer to that long anticipated recession?  The CONVERSATION examines the US money supply which BOVE has been tracking for months. The latest data shows the M2 money supply continues to shrink with the first significant drop in M2 since the Great Depression. Some analyst see that as a harbinger of recession. MAT VAN ALSTYNE, ODEON co-founder and managing partner, says BOVE’S analysis of the US Money Supply is on target.</p> Meanwhile, bank earnings season is upon us. BOVE, a veteran bank analyst, expects dismal results and explains why.  Will we see a sharp decline in 2024 in management fund fees for ETF mutual funds and other funds? One report hints at fee reductions. The CONVERSATION also looks at the lessons of history – how many nations supposedly neutral – reportedly profiteered by quietly working with the Third Reich. What might this suggest about the stance of “non-aligned” nations today as the brutal war in Ukraine grinds on, asks our host JOHN AIDAN BYRNE.</p> Questions & Comments: Podcast@odeoncap.com  </p>  </p>  </p> <br /></p>

01:01:06

How Fed Rate Cuts in 2024 Could Boost Uncle Sam, Unleash New Challenges. End of Corporate ‘Greedflation’? Banks ‘Screwed’ on Mortgage Originations. Manufacturing Investment Surges. A World in Turmoil

All eyes are on the US Fed and Central bankers worldwide at the start of 2024. Investors are increasingly convinced this year will see a pivot to lower interest rates and the end of money tightening that saw the Fed's benchmark overnight interest rate reach the current 5.25% to 5.50% range. Federal Reserve posts suggest that there is a possibility the Fed could cut interest rates as much as six times in 2024, according to DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP. BOVE believes the Fed’s approach will be measured and may not begin until the middle of 2024. However, the real question is whether companies will benefit more from interest rate cuts than from a diminution of inflation. </p> Thus opens a lively exchange on conflicting reports on company pricing policies at the peak of our recent inflation. BOVE cites various studies and reports, and identifies the term ‘greedflation,’ coined by former Labor Secretary, ROBERT REICH. The claim is that many companies were able to significantly expand profit margins with no consumer push back as prices escalated. JOHN AIDAN BYRNE presents a study showing how companies grew margins by a median of 49 percent. BOVE concludes that if indeed companies were engaged in ‘greedflation’ then the path to profitability in 2024 will be through expanded unit sales. </p> The CONVERSATION looks at some upsides of falling interest rates. BOVE notes that the Federal government debt could plunge to a level below 2022 fiscal total with a fall in interest rates. Declining rates should be a boost for consumers. Still, BOVE believes the US economy is really slowing down despite increased holiday spending. </p> Questions & Comments: Podcast@odeoncap.com </p>

00:54:04

Veteran Bank Analyst, DICK BOVE, Upgrades Five Bank Stocks As Interest Rates Forecast to Decline. Banks Are Still In 'Deep Trouble,' And Losing Market Share, BOVE Says

In our final episode of 2023, DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP, explains his rationale for his upgrade of five bank stocks, from Hold to Buy: Bank of America Corp (NYSE:<a href="https://www.investing.com/equities/bank-of-america">BAC</a>), Wells Fargo & Company (NYSE:<a href="https://www.investing.com/equities/wells-fargo">WFC</a>), U.S. Bancorp (NYSE:<a href="https://www.investing.com/equities/us-bancorp">USB</a>), PNC Financial Services (NYSE:<a href="https://www.investing.com/equities/pnc-fin-serv">PNC</a>), and Truist Financial Corp. (NYSE:<a href="https://www.investing.com/equities/bb-t-corp">TFC</a>). </p> It could arguably be the handiwork of the Federal Reserve, which has sent clear signals that the war against inflation is over. After a massive series of rate hikes, the next step is the other direction, rate cuts, a move which factors into BOVE'S latest outlook for bank stocks.</p> Questions & Comments: Podcast@odeoncap.com</p> <br /></p> </p>

00:07:20

Why Is Stock Market Soaring? Who'll Pay For America's Record Deficit Spending As Foreigners Retreat? How To Defeat Putin. Next Stage Of New World Order. Negative Equity On Auto Loans At Pre-Covid High

Is America now in recession, or within striking distance? DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP, thinks so. As the US stock market skyrockets in anticipation of a series of interest rate cuts in 2024, BOVE sees huge trouble in sections of the US economy. Forget about the standard textbook definition of recession—two consecutive quarters of declining GDP—the cracks are already appearing. Negative equity on automobiles in America, for instance, is at the highest level in three years. (Two consecutive quarters of declines are not always applied in the designation of recessions today, according to MAT VAN ALSTYNE, recalling the most recent bouts of recession.)</p> While investors anticipate rate cuts, BOVE says the Fed has muddied the waters with conflicting communications from Fed Chair Jerome Powell, and separate comments by Fed governors. "Investors don't care, they see inflation has come down and they see rates coming down," he added.</p> BOVE is out with a new report. Who Owns the US Federal Debt? Who Will Pay For It? With the US National Debt at over $33 trillion and rising, deficit spending could hit some $2.2 trillion in fiscal 2023. Now foreign buyers of US Treasuries are scaling back, raising questions on who will step in. Meanwhile, the brutual war in Ukraine continues to grind on. "My view is that Russia is winning, " says BOVE, "not so much as in Ukraine but in the global financial system." Joining the CONVERSATION, our host, JOHN AIDAN BYRNE, outlines Putin's strategy for leveraging the exit of foreign companies from Russia to his advantange, a tax that has contributed to his nation's coffers. </p> Questions & Comments: Podcast@odeoncap.com</p>

00:57:00

Surprising New Buyers for US Treasuries. Money Supply Much Bigger Than Fed Tally. Large Scale Write Offs As Bank Rules Reduce Activity, Hurt Stocks. Russia Doubles Income on Oil Exports

The Annual Senate hearing on US banking was different this year, turning most of the attention to a single topic—the proposed new banking regulations that would radically reshape the industry. In years past, the committee grilled the assembled CEOs of America’s top banks on a wide range of topics, from assisting underserved communities to community development. Not this year as the leaders of eight banks, among them Jamie Dimon, CEO of JP Morgan and Bryan Moynihan of Bank of America, gathered in DC. </p> As DICK BOVE recalls, there was widespread criticism of the new rules on both sides of the aisles and among the bankers. BOVE, chief financial strategist at ODEON CAPITAL GROUP, said the industry view is that the rules would reduce bank lending as well as hurt the US economy. “This raises the question as to why are these regulations being discussed when everyone is against them,” according to BOVE. “The reason is that the government cannot meet its obligations.” In an interesting twist, as banks' capital requirements increase, and as they scale back in a range of money making activities, US banks may become larger buyers of US Treasuries.  The CONVERSATION assesses one strategy— stock buybacks — many US banks and other public companies have used to shore up their stock price. “I believe in the free markets but this is disgusting,” says MAT VAN ALSTYNE, ODEON co-founder and managing partner. </p> Meanwhile, BOVE is out with his latest measure of the US Money Supply. He explains the methodology and why this is substantially larger than the Fed's official count of the US Money Supply. The CONVERSATION also parses the latest data on inflation and labor as the Fed deliberates this week on the trajectory of US interest rates. While inflation continues to cool, there may be some evidence of “a little bit more heat” in the inflation numbers than is immediately evident, according to VAN ALSTYNE. BOVE reports on wage data based on college and non-college educated workers.  JOHN AIDAN BYRNE, our host, quotes the opinion of one commentator: US universities are pursuing political agendas instead of excellence. Elsewhere, we look at significant global events.</p> Questions & Comments: Podcast@odeoncap.com</p> <br /></p>

00:55:03

US Home Equity Surges, $95,900 Three-Year Average Gain. Boosts Economy, Spending. Harvard Sees Room for More US Houses. DICK BOVE disagrees. S&P 500 Strong. Investment Banking Hot.

With the US economy still perked up with trillions of dollars created during the Covid-19 pandemic to stimulate the financial system, with inflation easing, and expectations of interest rate cuts in 2024, the markets are responding in kind. The S&P 500 is hot, rising 8.9% in November, investment banking is booming, and there's a feel-good nationwide ripple effect. Homeowners too, are enjoying a surge in home equity values, an average of $95,900 in the past three years. That's on top of earlier gains fuelled in part by stimulus payments, and outlays during the Covid-19 pandemic </p> Still, it is a tale of two economies. "The rich are really getting richer now, and the poor are up against significant issues," says DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP. "Are the consumers with the most money going to continue to drive the game? Or, is it now the consumers who are unable to pay their loans? Will they drive this game?"</p> Meanwhile, interest rates cuts are the buzz of Wall Street. Many investors see a series of rate cuts by the US Fed in 2024. MAT VAN ALSTYNE, ODEON co-founder and managing partner, says it may not be that straightforward. "The Idea that the Fed commences an easing cycle voluntarily," he says, "by preemptively cutting rates because they think they have gone far enough [and] now want to engineer a soft landing - that is phenomenal news." But Van Alstyne warns it may not be that simple. </p> Elsewhere, BOVE doubles down on his research on US housing trends, repeating his expectations for a housing bust based on demographic and census trends. BOVE is highly critical of new research on housing by the Harvard University Joint Center for Housing. "The university should be ashamed of itself for producing this dribble," he says. JOHN AIDAN BYRNE, our host, questions BOVE on his basic assumptions from regional trends to evidence of vast tracks of ghost towns across America.</p> Questions & Comments: podcast@odeoncap.com</p> <br /></p> <br /></p>

00:58:19

Banks Could Soon See A Wave of Loan Losses in Private Markets. Too Early to Say Fed Has Peaked on Interest Rates. How ‘Doom Loop’ Could Cripple US Budget. A New Millionaire Class. China in Argentina.

US banks are staring at rising loan losses among clients in the private equity markets. These customers, operating conglomerates and other businesses, are struggling on debt repayments as higher interest rates take a toll, according to DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP, in a new report. “You’d be amazed if you subtracted the net increase in debt from the cash flow statements of American companies, at how many are not generating enough cash,” he says. BOVE is forecasting multiple billions of dollars in bank loan losses in this sector in the coming months. “These losses are going to bankrupt a lot of companies,” he adds.</p> Meanwhile, BOVE says it’s premature to suggest the Fed is ready to call it done in its so far successful campaign to tamp down inflation. In good part, that’s because of the Fed’s tight monetary policy, a policy which has a direct influence on interest rates. Total assets at the Fed have been in steady decline for months. BOVE says the Fed may also raise the Fed Funds rate at least one more time, meaning a hike of 25-basis-points. Higher rates have inflicted financial pain all around, including in debt financing costs of the US government. MAT VAN ALSTYNE, ODEON co-founder and managing partner, says the government has, nonetheless, taken its eye off the financial ball, as political dysfunction rages in Congress. </p> Elsewhere, we look what it takes to be regarded as “rich and affluent” in America today as the ranks of millionaires swell to record levels. JOHN AIDAN BYRNE presents historical data of how being a millionaire about a century ago in America had a different financial meaning than today. We also look at global events.</p> Questions & Comments: Podcast@odeoncap.com </p>   </p> <br /></p>

00:57:24

US Housing Glut Is Developing, Says DICK BOVE. Housing Peak, Falling Prices & Loan Losses Forecast. Wealth Effect Buoys Americans, Spurs Spending. Retailers See Deflation. Citi Set to Axe 10,000 Jobs

In an in-depth new report, DICK BOVE sees the makings of a US housing bust. The latest data from the National Association of Realtors shows the pace of home sales plunged to its lowest level in more than 13 years in October, with an uptick in the median home prices. High mortgage rates are cited for the tightening conditions, falling home sales and reduced inventory. </p> BOVE looks beyond the latest malaise. Housing unit growth now exceeds the growth in the US population, he says. Moreover, the money supply that funded growth is now declining. "I think we're headed for a peak in housing activity," according to BOVE, chief financial strategist at ODEON CAPITAL GROUP. "You'll see a decline in housing activity; you'll see a decline in production, housing prices are going to come down. There's going to be loan losses." </p> Meanwhile, the pace of inflation is slowing with a range of commodity prices in sharp decline. Some retailers see a period of deflation. US government data shows, nonetheless, steady if not strong consumer purchasing activity. Consumers are enjoying the "wealth effect" of a rising stock market, with growing home equity fuelling a feel good spending climate, according to MAT VAN ALSTYNE, ODEON co-founder and managing partner. BOVE also discusses developments in the bank sector, from layoffs at Citi to the constraints of new banking regulations. Joining the CONVERSATIONS is our host, JOHN AIDAN BYRNE.</p> Questions & Comments: Podcast@odeoncap.com</p> </p>

01:00:15

America's Soaring Net Worth & New Millionaires. Inflation Eases. Markets Eye Interest Rate Cuts. Boom or Bust? Japan Embraces Inflation. China Fights Deflation. Wealth Management Faces New Challenges

Inflation eased in October with consumer prices up 3.2% from a year ago, <a href="https://www.bls.gov/news.release/cpi.nr0.htm">the Labor Department reported on Tuesday</a> November 14. That's a smaller annual increase in the consumer price index (CPI) than the month before when inflation came in at 3.7%. Inflation was flat on a monthly basis. "The markets have taken off like a rocket today under the assumption that inflation has been beaten," said DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP. The Fed, which embarked on an aggressive interest rate hike campaign, is credited for the sharp fall in inflation from its peak of 9.1 percent in June 2022. "The Fed is now in a very strong place," says MAT VAN ALSTYNE, ODEON co-founder and managing partner.</p> Meanwhile, BOVE is out with a comprehensive new report on the unprecedented rise in the net worth of American households and non-profit institutions. "Americans are filthy rich. Thousands are becoming millionaires every year," he says. Still, VAN ALSTYNE says as many as 40 percent of Americans are living paycheck to paycheck. Our host, JOHN AIDAN BYRNE, reminds us of the Gini index, or Gini co-efficient of income inequality, frequently referenced by BOVE and VAN ALSTYNE, which paints a dark picture of America's income distribution. Meanwhile, there's inflation and then deflation. Inflation is finally emerging in Japan after years of falling prices. China, on the other hand, is battling deflationary pressures. China has many challenges to overcome in its economy, according to BOVE. </p> Questions & Comments: podcast@odeoncap.com</p> <br /></p>

00:54:04