May 23, 2023
In this episode, The Annuity Man and Owen Schrum discuss:
The interconnectivity of financial structures
How a hard recession could be avoided
Annuity companies are more regulated than banks
Positive trends in the economy
Inflation, the debt limit, the Federal Reserve, and the markets are not standalone. They are all directly connected and related. Being careless with one part can cause the whole thing to collapse.
If the chairman of the Federal Reserve says that they’re considering lowering the rates based on the numbers that they have, then it might prevent a hard recession. The market will take care of the rest.
Annuity companies and banks buy the same bonds, but the difference is that annuity companies are not forced to sell them. There can be no run-on annuities because they have regulations that prevent that.
Inflation is getting back under control. Also, despite inflation being 10%, both small and large businesses’ earnings held up better than people thought they could.
"Not one of those things are standalone items, particularly inflation and interest rates. They are all directly related. It's like some big puzzle, you pull out one log, and the whole thing may collapse." — Owen Schrum.
John Mack talks to Wharton class about Morgan Stanley default: https://www.youtube.com/watch?v=R9sQtmPAYO0&ab_channel=KnowledgeatWharton
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