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Another edition of the Chicks on the
Right podcast where we invite our good friend

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and sponsor of the show, Zach
Abraham, chief investment officer at Bulwart Capital

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Management, to come in and weigh
in on some important financial issues of the

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day. And Wow, as we
record this podcast today, there's a lot

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of stuff going on, and by
the time we get done with this recording,

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the we got to talk first of
all about Jerome Powell earlier this week

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and interest rates. You know,
this is a personal issue for me.

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I'm going to be doing a mortgage
later this year. You promised me,

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Zach, the interest rates were going
to come down. And then we got

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Powell coming out and saying, hold
everything, what are they coming down or

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what? Oh? Well, yeah, so that's not that's not really what

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he said. So what he said
was he's not hiking at this meeting.

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But most importantly what he said is
he still expected to cut three times times

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this year. Three times okay,
so which would probably correlate. And it's

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not it's no exact science because the
way they get to a thirty year mortgage

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rate is pretty complicated. But I
think in your mind you can sit there

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and go if they cut three times, which is seventy five basis points.

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So that would take the Fed funds
rate from five and a half to four

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seven five. I would think that
that would drop a thirty year mortgage somewhere

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between one percent and one and a
half percent. That's fine, that's fine.

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Yeah, yeah, Well, hey, if we're sub six, right,

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that's it feels painful because we came
from you know, two seven five

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is what my house is totally,
and I just sold it and so we're

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going to be eating at a larger
interest rate as well. As a matter

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of fact, I think we just
took an offer on Monday. So but

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but he so he promised the three
rate cuts. But in and of itself,

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that is really historic, okay,
because he sat there and said we're

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going to get rid of inflation over
time, and that we've made a lot

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of progress on inflation. Okay,
Well, here's the deal. Inflation has

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been flat or up for the last
eight months. It's been up the last

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three months. How that qualifies as
making progress, I don't know. But

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remember, I remember we were talking
to you guys about the fact that we

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were expecting economic indicators to pick up
at the beginning of the year because the

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stock market rallied so hard it's pumping
money into the system, and then we

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think the FED is going to be
forced to cut to keep the game going

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this year, and so they are
going to be cutting rates into an accelerating

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inflationary picture and an accelerating economy because
of the inflationary picture. And this really

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bring I'm not test saying that people
should count on this, but this is

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bringing back the scenario that we were
afraid of, which is I'm not worried

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about a crash right now. What
I'm worried about is a skyrocketing stock market.

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Right now, You're not worried about
it because the stock market, so

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it reached forty k earlier in the
week and that so that's real. That's

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how that happened. And then so
when is the crash going to happen?

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Well, who knows? So right
now, it basically is I think the

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easiest way to look at the economy
right now is that there is a hole

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in the bathtub. Okay, so
we've talked about this before. There's water

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getting out all over the floor,
but you've got a really high flow faucet

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and they just keep cranking that bad
boy up. So the water level stay

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in pat right. So everybody's like, everything's fine. It's a great analogy.

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Yeah, you know, so we
came up with that because they never

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fixed any problems. The answer is
just permanently, right, So we're not

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going to patch up the bathtub or
it's going to get a higher flul foster.

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Right. So, and that's literally
what we're doing. And so you're

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going to be cutting rates into an
environment where you've got three point eight percent

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unemployment, which is full employment,
you've got supposedly you've got rising inflation,

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you've got houses at or record in
affordability, and you have stock markets approaching

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thirty times earnings and hitting new record
hives. And you're going to cut rates

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into that environment. And people go, why are you afraid of a stock

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market going parabolic? Why are you
afraid of a stock market? Because whatever

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shoots up like that crashes on the
other side time in the past, right,

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And so that's a real threat.
But but hey, this is where

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risk management comes in because on the
not on the more sanguine side of it,

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if you're not an idiot and you're
not getting too exposed to risk,

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there's going to be a lot of
money you made over the next year to

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year and a half to two years. And it's not for the right reasons.

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But they're pumping so much money into
this system right now, and now

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they're going to cut rates on top
of it. It's it's really hard to

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imagine a scenario where anything goes down. Yeah, that's I don't like any

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of the things that you just said. I have a super serious question for

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you, So, Jerome Power,
do you think that he looks like he

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just like was told by his kid
that his kid wants to be like a

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professional artist or a hamster dealer or
something, because his face always looks like

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he's always disappointed, you know,
Is it just me? Yeah? No,

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I think that I think that he
is. No, he's he seemed

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especially like that, honestly in the
last few years. And I think I

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think that the reason for it is, and this is kind of us reading

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the tea leaves, but he's a
private equity guy, so he came from

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private equity, and private equity is
getting killed right now. And because you

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know, private equity is not the
stock market. It like people actually have

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to go in and spend hard dollars
on those companies, right, some interest

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rates really matter, and so I
think he's fighting internal wars. He does,

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though he seems frustrated. He's very
frustrated. Yeah, he's really frustrated.

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I think he's really frustrated by the
fact that inflation isn't further down considering

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what they've done on the interest rate
side of it. As we all are.

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We're all we were screaming into the
computer last year, you know,

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going or not the computer but the
microphones in the show and just saying you

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hear my dog behind me. Your
dog is frustrated. Yeah, she's ticked.

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Well, she's not a Biden fan. Yeah, no, dogs are

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No dogs are Biden fans. She
hates she hates the Fed. Right,

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it is getting crazy out there,
and it's I think the thing that's really

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scary about this environment is it's going
to seem really exciting, it's going to

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suck a lot of people in,
but it's it sets up a really nasty

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situation. So well, and this
is kind of stuff, yeah, right,

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exactly, This is the kind of
stuff that we can always count on

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you to break down for us.
And you do this on the regular for

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people who listen into your own show. How can people find it yeah,

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so just Google Know Your Risk radio
podcast. We do a daily fifteen to

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twenty five minute summation of everything important
to happen in the economy of the markets,

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and then we do a We do
a one hour radio show every week,

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and then we do an interview that
this week is really interesting. We're

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interviewing a really well known, really
sharp young guy that he's a short seller,

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so he bets against what he thinks
are fraudyle in companies, and he's

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got a really good track record and
he's releasing his new short vet and so

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we're gonna we're gonna have him on
the show and he's gonna walk us through

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it. So awesome. Cool.
You will see again in a couple of

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weeks. All right, ladies,
wish we wish Hollow Dog the best hope

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she can. Thanks for recovery and
see you next week. Thank you.

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Investment advisory service is offered through Trek
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Investment advice, does not take into
consideration your specific situation, and does

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not intend to make an offer or
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securities or investment strategies. Investments involve
risk and are not guaranteed, and past

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