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Welcome to another edition of the Chicks
on the Right Show, where we have

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our BFF and sponsor of the show, Zach Abraham from Bulwart Capital Management,

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join us to talk about all things
finance and economy related. And we just

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saw a big, fat headline today
that says the FED is done hiking interest

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rates, but they will only start
to cut them mid twenty twenty four,

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economists claim, Do you agree with
that assessment? Yes and no, meaning

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I think that I don't think that
they're far off, but I just think

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it's for a lot of different reasons
than they think. So, first of

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all, I do think the FED
is done raising and I've said it before.

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I think that, and it's weird
to say because I've been an advocate

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of them raising rates for a long
time. But I do think that they've

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raised them too far in the sense
that they're going to get more things blowing

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up than they want to. So
I think that you will see them for

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now. The FED themselves are claiming
that they don't expect to be raising rates

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till the end of twenty twenty four
or to the middle of twenty twenty five.

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I just don't. I just I
don't see again You never want to

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say never in this industry because you
know, look at the last three years,

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right Wait, they're not going to
raise them, or they're gonna or

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they're not going to Let has said
they're not going to cut them. Yeah,

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so they're saying that they're right because
the theoretically the way what what those

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economists that that that article is about
are saying is that the economy is really

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strong. You know, it's the
CNBC line that you're going to hear from

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anywhere else, and that the FED
will ease interest rates as inflation pulls back

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to target. Well, our whole
thinking is if inflation still pulls back to

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target, what that means is that
prices will keep accelerating at the rate of

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two to two and a half percent. Well, prices are too high right

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home prices are at record in affordability. Now part of that is due to

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rates, But what the Fed wants
is prices to come down, and so

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I think that they will be will
be forced. See that the people in

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that article think everything's going so great. The economy is going to stay strong,

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inflation will continue to abate, and
we're gonna get this nirvana like soft

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landing right where the economy right to
me, it seems like kind of a

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nursery rhyme, nurserytail, you know, child's tale. But I think that

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they're gonna start cutting next year.
And the FED says they're not going to

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cut until the very end or the
beginning of twenty twenty five. I think

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they're going to cut, but I
think it's going to because things are starting

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to blow up. And just since
the last time we talked, we're seeing

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more and more of this happening in
commercial office space. So just this last

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week, an office building in twenty
eighteen that was purchased for sixty six million

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dollars just got auctioned off for fifteen
point five million dollars. Yeah, So

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I mean for those keeping score at
home, and that's like an eighty percent

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right down right Yeah. And you
know another one in two Toronto that just

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a couple of weeks ago, one
point two billion dollar property owner just handed

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it back to the bank, just
gave the keys back, right. So

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yeah, And we're also starting to
see now you're starting to see delinquencies,

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especially in the forty years in younger
category of economy, you're seeing delinquencies that

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are rising to levels that we haven't
seen since nine in twenty ten, meaning

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people aren't paying their bills for obvious
reasons. The alarming part of it is

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that you're seeing delinquencies climb, and
I wouldn't say that they're climbing at a

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rate that would be like a flashing
red light, but it's getting close to

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there. What is a flashing red
light? Or the size of the delinquencies

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that is mind numbing because there's a
big they're not normal, meaning people are

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defaulting on much bigger loans or are
not paying on much larger sized loans than

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would be typical. That these are
numbers in excess of what we saw in

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eight oh nine. So I just
think that the FED has done and I've

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said this before, but I think
it's kind of a classic FED mistake.

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I think they waited way too long
to raise I think that they have overcorrected

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to the upside. I mean,
you guys are out there in the real

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I mean, you know, there's
so many people out there that have money

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that are in a decent place but
aren't going to buy because of where rates

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are right. And as people don't
buy right, that slows down economic activity

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that feeds back through the economy,
and so we just think, yeah,

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they're going to they're probably going to
cut, but it's not for good reasons,

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right, because things are going bad, And will it matter? Will

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it? Will it? Probably not
in the beginning, because like we're seeing

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right now, they've been raising rates
now for like eighteen months. Would they

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start We started in January of twenty
twenty two, right, And what you

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see or people misunderstand this, and
it happens going into every recession, they

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start raising rates. Guys like me
say, oh, here it comes,

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and then for usually like a year
to sixteen months, you don't really see

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anything bad happen, and everybody's assumption
is, oh, well, the economy

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can handle it. Well, just
think about it. Right, when you

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raise rates, even if you do
it really aggressively, there are a lot

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of people that don't feel that.
The only people that feel that pressure are

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people that are forced to refinance,
right, people that have to go purchase

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a home. And so what we
call it is a leg effect, meaning

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anytime you're using monetary policy or interest
rate adjustments, it takes time to feedback

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through the economy. And like I
said, what every single time happens is

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those legs that time, it takes
fools everybody into thinking there's no problem,

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and I just don't see any evidence
that it's any different this time. And

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you're starting to see wages have stopped
going up, and they're not moving down

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sharply, but they've stopped going up. You've got eight the jobs numbers continue

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to get revised lower. You saw
a very weak jobs print. Now it

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wasn't horrible, but it was considerably
lower than expectations recently. And we just

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think this is kind of the start
of the process. And I think most

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people are sleeping on it. So
I mean, I know, the good

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news I guess is that like when
interest rates are high, that means like

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savings accounts earn more, which is
like the one bright spot I guess if

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there's to be a break, Yes, and they're they're and they're this is

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kind of what. There are so
many things like that right now that I

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actually think are really attractive because one
of the things people don't realize. And

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look, I'm not advocating for you
to go out and buy a bunch of

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bonds right now, as people have
seen. And the reason I say that

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is we think of bonds they're safe, right Well, if you look at

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a lot of bond funds, the
average bond funds since January one of last

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year is down anywhere from you know, twenty to thirty percent, okay,

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in value. You look at the
thirty year US government bond since January one

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of last year, it's down sixty
three percent, okay, a government bond,

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right the ten year is down.
The ten year bond is down I

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think like forty. So I'm not
advising you can go out and lose them

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a bunch of money in bonds.
But I think everybody has been playing the

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stock market game for so long,
and you look at how expensive stocks are

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right now in general, you know, like, for instance, if we

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look at Apple like a bond.
Right, Apple's a great company, not

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say anything about about it, but
it is very expensive even after four quarters

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in a row of declining revenue and
sales. Okay. So but if you

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go look at their earnings. And
the reason I point this out, think

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of us owning the company Apple and
not the stock. Right, if we

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calculate that if we bought Apple right
now, the three of us, the

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price we pay right around three trillion
dollars to buy the company, the amount

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of profit we'd be getting off Apple
would equal about a three and a quarter

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percent return on our money per year. Okay, Well, we can go

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buy a guaranteed, a completely risk
free US government bond that pays five.

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Right, it's supposed to be inverse. Right. The reason we're willing to

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take stock market risk and risk on
individual companies is because they will pay us

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more, which justifies that greater level
of risk. Well, you're looking at

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it now and it's completely flipped.
So I think there's a lot of benefits

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out there that can be had by
investors with higher rates. Like you mentioned,

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you know, bonds. I think
that again cautiously, because rates could

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still go a little higher despite what
people are saying. But I think a

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lot of mortgages that have blown up. We just bought a real estate investment

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trust that owns triple A rated mortgages
and it's dropped so much that we're getting

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a twenty percent dividend off of it
per year. Yeah, and then as

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rates lower, those mortgages will go
up in price. So I think there

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are a lot of attractive things out
there to actually invest in. I just

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think the average investor is looking at
precisely the wrong like the stock market has

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been on the biggest run in history, the biggest bull market in history.

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Great, that's not where the value
is right now. The value is in

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that kind of stuff that we're talking
about. And unfortunately, like other periods

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of times in our past, when
we've dealt with inflation, I think stock

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market investors are going to be very
disappointed, if not hurt badly. Interesting.

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Okay, so, and I know
that you're doing. We saw that

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you've got one of your infamous free
webinars coming up soon. Tell everybody how

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they can take a listen and get
more of your expertise. And how long

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are those usually, Zach? How
like when people get involved, when people

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listen to one of those, how
long are they? Funny enough, they're

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scheduled to go about forty to forty
five minutes, but we probably and some

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people do, right, they just
go to the end of our presentation explaining

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what makes us different, how we're
active managers and risk managers and all that

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kind of stuff, so they'll log
off right away. But a lot of

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times the Q and A session goes
for another forty five minutes to an hour,

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so yeah, yeah, but the
presentation itself is forty to forty five

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minutes, and after listening to it, you're not going to know you can't

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we can't describe every single thing we
do in forty five minutes, but you're

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going to have a really good understanding
of what does make us different. How

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we don't just slap you in mutual
funds and ETFs and tell you to write

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it out all the time. You
know our active management, our risk management

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strategies, and so you'll afterwards you're
going to have a really good understanding of

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who we are, what we do, and how we lower fees, increase

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upside and drastically reduced risk. And
that's kind of our calling card. And

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you can get that. You can
sign up for the it's completely free.

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We don't track your information, we
don't keep emailing you. You can sign

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up at our website, Bowercapitalmanagement dot
com. And yeah, that's coming up

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next Thursday. So I think it's
a great opportunity to kick the tires without

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any obligations. And Thursday sixteen yep
at three pm, three pm specific standard

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time, Yeah, specific standard time. I'm on a global podcast here.

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I got to I got to clarify
these things, right. There's a lot

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of people that are central and Eastern. We got to like make sure that

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we're cognizant of that. Okay,
everybody should check that, absolutely check.

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Thanks once again, Zach. You
always break it down in a way that

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makes it just really a lot more
palatable than any other of those wonky people

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on TV do so we ladies,
and thanks for having me on. I

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enjoyed it. As always. Investment
advisory services offered through Financial LLC and SEC

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for educational purposes only. It should not

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be considered specific. Investment advice.
Does not take into consideration your specific situation,

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and does not intend to make an
offer or solicitation for the sale or

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00:11:03,960 --> 00:11:07,799
purchase of any securities or investment strategies. Investments involve risk and are not guaranteed,

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and past performance is no guarantee of
future results. For specific tax advice

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on strategy, consult with a qualified
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