Richard Christopher Whalen is an investment banker and author who lives in New York City. He is Chairman of Whalen Global Advisors LLC and focuses on the financial services, mortgage finance and technology sectors. Christopher is a member of FINRA and is associated with Bradley Woods & Co in New York.
From 2014 through 2017, Christopher was Senior Managing Director and Head of Research at Kroll Bond Rating Agency, where he was responsible for ratings by the firm’s Financial Institutions and Corporate Ratings Groups. He was a co-founder and principal of Institutional Risk Analytics from 2003 through 2013.
Over the past three decades, Chris worked as a writer and financial professional in Washington, New York and London. He has held positions in organizations such as the House Republican Conference Committee, the Federal Reserve Bank of New York, Bear, Stearns & Co., Prudential Securities, and Carrington Mortgage Holdings.
Christopher holds a B.A. in History from Villanova University. He is the author of three books, including his most recent work “Ford Men: From Inspiration to Enterprise” (2017), a study of Ford Motor Co and the Ford family published by Laissez Faire Books. He is the author of "Inflated: How Money and Debt Built the American Dream" (2010) published by John Wiley & Sons; and co-author of “Financial Stability: Fraud, Confidence & the Wealth of Nations,” also published by John Wiley & Sons.
Christopher is a member of the Economic Advisory Committee of FINRA. He is on the board of directors of the Global Interdependence Center (GIC) in Philadelphia. Christopher previously served as a fellow of Networks Financial Institute at Indiana State University (2008-2014) and as a member of the Finance Department Advisory Council at the Villanova School of Business (2013-2016).
Christopher edits The Institutional Risk Analyst newsletter and contributes to other publications such as Zero Hedge, American Banker, Housing Wire and The National Interest. He has testified before Congress, the Securities and Exchange Commission and Federal Deposit Insurance Corporation on a range of financial, economic and political issues. He appears regularly in such media outlets as CNBC, Bloomberg, Fox News and Business News Network. Christopher is active in social media under the Twitter handle “rcwhalen”.
https://www.macrovoices.com/289-chri...ready-to-crash
Erik: Let’s move on to the US equity market. We’ve had a lot of people on the program arguing that the market is way overvalued, this thing is overdone, it just has to crash here, the top has to be in. Yet it continues to march higher. And we’ve also heard the other opposite argument, which is that there’s so much new liquidity in the system in terms of the feds supporting the market, even if we’re supposedly talking about shrinking the balance sheet now it’s shrinking very slowly. Which way do you see this, or where do you think it’s going? What’s your outlook for short, medium, long-term in the equity markets?
Chris: Equity markets are clearly overvalued. They’re very much like what you see in the residential real estate market in the United States and also in commercial real estate. The Fed manipulated the credit markets, they took four trillion dollars’ worth of securities out of the market, and they’ve essentially forced all of us to invest in something else. And so you’ve had a situation where low interest rates have driven money into stocks.
You’ve also had companies buying back their stock because debt is so cheap. Look at IBM. They’ve a negative book value for the company now, because they’ve levered up so much and bought back so much stock. And so you have a scarcity of supply. And so I would not disagree at all with your other guests that the stocks are overvalued.
The Street keeps coming up with rationales why that’s not so, but I think it’s clear that it is. But on the other hand, do I expect the market to crash? No. Because, remember, the constraint here is supply. And there’s so much money looking to invest that it’s going into all of the possible asset classes and in some cases into surreal asset classes like bitcoin and all of these digital currencies.
It’s very much a function of the central banks. And I think that’s a problem, because when we “normalize” interest rates we’re going to see a lot of credit losses on the books of banks and bond investors because crappy companies are able to go out and borrow money like they were good companies. Thanks to Janet Yellen. There is a cost to the social engineering that the Federal Reserve Board engages in, and, you know, I think it’s going to—over time the history is not going to be kind to Yellen and her colleagues. Because they have created the next problem. We just haven’t gotten there yet. Rising interest rates could quickly expose the companies’ “short-term thinking” surrounding how we paid for buybacks.”
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