Kontrarian Korner #125 - Jesse Felder

Yesterday I had Jesse Felder back on the podcast. We covered his outlook for AI and data centers, including a couple stories that are similar to the old shoeshine boy story. He also laid out some of the problems he sees in private equity and private credit, along with real estate. We wrapped things up by talking about what is going on in the commodities space, and why he favors energy right now despite the recent price action. If you’re looking for a conversation that covers the different asset classes across financial markets, this one’s for you. You can find Jesse at his website, The Felder Report, and on Twitter and Bluesky.Podcast Summary* The AI and data center frenzy that has built up and the shoeshine boy stories from recent weeks.* Why the AI models are going to be commodities, and the potential changes to locally hosted models.* The cockroaches in private equity and private credit, and why he thinks we could be seeing the beginning of the credit cycle.* The layers of leverage in the system, including leveraged ETFs and increases in margin debt. * The potential policy response from the Fed and the Treasury, and what it means for interest rates.* Why the inflation story is baked into the cake and related to more than just energy costs.* The issues in the real estate market, and why he doesn’t think it’s as frothy as other asset classes.* The relationship between capital and labor, and why he thinks that will change in the next crisis.* Why there are opportunities in the energy sector despite the recent selloff in oil.* Other opportunities in the commodities space, including precious metals.* Book Recommendations: The Great Demographic Reversal and The Unanchored Central Banker by Charles Goodheart and Manoj Pradhan. Kontrarian Korner is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.kontrariankorner.com/subscribe