Annaly and Mortgage REIT Risks

In this episode of The Wrap, Chris Whalen says stagflation is now the base case — the Iran war has already cost American investors trillions in reduced investment value, Treasury auctions are weak, and mortgage rates are heading toward 7% if the 10-year hits 5%. Despite all of this, he still calls for a Fed cut in April, arguing the inflation is caused by war not monetary policy, and the Fed's real mandate is employment. He says we're heading toward a medium to long-term reset in risk premia, equities are out and debt is in, and that a recession by 2028 — "misery on the eights" — is becoming a near certainty. He's adding to gold and silver on the dip and if Annaly goes down he's buying more.

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Links:    

The Institutional Risk Analyst: https://www.theinstitutionalriskanalyst.com/ 

The Wrap: https://www.theinstitutionalriskanalyst.com/post/theira826

Inflated book (2nd edition): https://www.barnesandnoble.com/w/inflated-r-christopher-whalen/1146303673

Twitter/X: https://twitter.com/rcwhalen    

Website: https://www.rcwhalen.com/   

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Timestamps:

0:00 - Intro and welcome Chris

0:47 - The Iran war and long-term damage to the global economy

2:18 - Are we headed toward more inflation?

2:41 - The term structure of interest rates is blowing out — here's why

4:02 - Making the case for a Fed cut despite $100 oil

4:26 - Stagflation is ahead

5:30 - The Fed's real mandate is employment — that's what forces the cut

6:40 - Whalen calls for a rate cut in April

7:51 - What difference would a cut actually make?

8:19 - Bonds are behaving like equities

9:08 - The $5.12 trillion cost of the Iran war to American investors

11:11 - Where Whalen is putting his own money right now

13:03 - Why the market has stayed resilient despite all the headlines

13:53 - Private credit - Is Apollo facing a Lehman moment?

18:53 - Weak Treasury auctions — what that means for mortgage rates

20:06 - People don't want to understand what the war is doing to the economy

21:03 - This year is the opposite of last year — no easy trades

21:58 - Bob Elliott's world where long rates are closer to 4% than 2% — is that the new normal?

23:11 - If the 10-year hits 5% has the bond market lost trust in the Fed?

24:16 - Gold at $4,500 today — volatile but Whalen is staying long

25:26 - Viewer question: crypto-backed mortgages with Fannie and Freddie?

27:20 - Is recession now a near certainty?

28:07 - Viewer Mail: What are the downside risks to Annaly?

30:00 - Viewer Mail: Should you invest in Canadian banks?

31:49 - What Whalen is watching next week