Monetary Matters with Jack Farley

Andrew Granato, Assistant Professor of Law at the University of Texas at Austin, and Pranjal Drall, JD/PhD candidate at Yale, join Jack Farley to discuss their paper "Private Credit, State Backstop: How Private Equity Socializes Risk Through Insurers." Private equity ownership of life insurers has grown from roughly $23 billion in 2009 to about $700 billion by 2024, and Granato and Drall argue this has created a system that socializes losses even more sharply than federal deposit insurance does for banks. They walk through how state guarantee funds work: when a life insurer fails, its surviving rivals are assessed based on premium volume rather than risk, and in 44 states those assessments are recouped through tax credits, meaning taxpayers ultimately foot the bill without any vote ever taking place. The conversation covers how PE-linked insurers reallocate balance sheets into opaque private credit and affiliated loans, arbitrage ratings through firms like Egan-Jones and undisclosed private letter ratings, and use Bermuda "shadow reinsurance" to escape disclosure and capital requirements, with leverage reportedly running as high as 30-to-1 or 50-to-1. Jack and the guests also examine emerging run risk from funding agreement-backed notes (FABNs) and policy surrenders, using the Executive Life collapse as a historical precedent. The episode closes with the recent Guggenheim/Delaware Life/Clear Spring scandal, in which Mark Walter's insurers understated affiliated assets (including a loan to LeBron James) at 3% when the true figure was closer to 42%, prompting the sale of the Lakers to raise liquidity. Granato and Drall propose reforms including taxing opacity, banning private letter ratings, pre-funding guarantee funds on a risk-weighted basis, and making insurance holding companies partially liable for guarantee fund assessments. Recorded August 28, 2026.

Paper by Pranjal Drall and Andrew Granato, “Private Credit's State Backstop: How Private Equity Socializes Risk Through Insurers”:

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=7152239

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Jared Dillian, author of The Daily Dirtmap and the new book “The Awesome Portfolio”, returns to argue that the bond bear market is a sentiment story that has gone too far. Jared calls the market's obsession with deficits and inflation a "mind virus," notes that the $2 trillion deficit is only 6% of GDP versus 12% in 2010, and points out that everyone measures bond supply while nobody measures demand. He has moved a large share of his own money into long bonds as a three-to-five-year hold, calling 5.2–5.3% on 30s and 4.7% on 10s an incredible deal, especially with payrolls deteriorating, JOLTS and PMIs rolling over, and the market still pricing meaningful odds of a hike. On equities, Dillian walked the top 50 S&P charts and sees semis, healthcare, and financials topping — the broker-dealers look worst — while Intel and Oracle look like they're bottoming. He and Jack debate whether the semiconductor washout is over, disagree on where the leverage actually sits (Jack cites Vanda data showing retail positioning in semis near two-year lows), and Dillian warns that the Situational Awareness blowup was the Bear Stearns of this cycle, not the Lehman. He explains why he thinks AI is a bubble for a reason specific to this cycle: it's the first time in his career he's seen tech financed with debt rather than equity, at 6% coupons, for assets that go obsolete in three years. He also lays out his cautiously bullish gold view, why copper is his least favorite metal, why private credit still hasn't found a bottom, and the case for The Awesome Portfolio — equal weights in stocks, bonds, gold, cash, and real estate, which gives up one to two points of annual return but halves volatility and has never drawn down more than 12%. Recorded September 1, 2026.

Jared’s new book, “The Awesome Portfolio”: https://lnk.to/theawesomeportfolio

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Max Wiethe sits down with Capelight Partners founder Jeff Keller to dissect the massive Q3 technology sector divergence and the rapidly shifting landscape of AI investments. Keller breaks down why the market is rewarding near-term certainty in the tech sector and why he doesn’t like the "blow-off top" comparison between AI and the ARK implosion of 2021. He also gives his outlook for usage-based software vs. application software and explains the east coast vs west coast divide in assessing hyperscaler capex.

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Timestamps:

00:00 Intro

01:13 Tech Sector Divergence

05:23 Cyber Infra Valuation Risks

08:09 Why Themes Beat Stock Picking

12:01 Valuation and Forecast Limits

17:35 Retail Crowding Warning

20:15 2021Parallels

23:33 Rising Rates and Funding the AI Buildout

27:28 Mag Seven Return Profile Shift

29:43 CapEx is Existential

35:17 Meta Breakdown

39:38 Investor Positioning Themes

41:34 Long Biased Long Short

43:55 What Would Break AI?

46:26 AI Echo Chamber Risk

49:06 Factor Awareness Extremes

51:55 Deleveraging July Playbook

56:58 Year End Watchlist

58:58 Anthropic IPO and SpaceX Effect

01:01:06 Conclusion

Sponsor: Teucrium Corn Fund (NYSE Arca: CORN):

https://teucrium.com/corn

Jim Wiederhold, Commodity Indices Product Manager at Bloomberg, joins Monetary Matters for a deep dive into what's really driving this commodities cycle. We start with the AI buildout and why it's quietly becoming one of the biggest demand stories in copper and silver, not just semiconductors. From there, Jim breaks down why central banks keep adding to record gold reserves, and makes the case for why silver could still have room to run. On energy, we get into how much sanctioned oil is still finding its way to market, why refined products have outperformed crude itself, and whether $200 oil is really back on the table. Jim also lays out the case for commodities as a genuine diversifier against stocks and bonds, pointing to how the asset class held up when equities didn't. We close on the "everything rally" — why nearly every corner of the commodity complex is moving at once — and a few overlooked names, from agriculture to industrial metals, that could be next. It's a wide-ranging conversation for anyone trying to understand where commodities go from here. Recorded August 17, 2026.

Pieces discussed:

“Midyear commodity review 2026, Bloomberg Professional Services”:

https://www.bloomberg.com/professional/insights/markets/midyear-commodity-review-2026-2/

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Learn More About Unlimited HFGM Global Macro ETF $HFGM: https://unlimitedetfs.com/globalmacro

In this episode of "Other People's Money," host Max Wiethe welcomes back Warren Pies, co-founder of 3Fourteen Research, to unpack why macro risks are suddenly taking control of the stock market. Pies explains his tactical decision to downgrade stocks and commodities to neutral, shifting capital into cash as the market enters a historically weak seasonal window between August 15th and October 15th. The conversation dives deep into the Federal Reserve's true reaction function, the mispriced odds of a September rate hike, and the hidden political pressures driving the committee's choices. Furthermore, they discuss the critical data behind the AI build-out, including H200 GPU availability and the potential impact of major lab IPOs like Anthropic on the broader software sector.

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Timestamps:

00:00 Intro

01:21 Why Macro Takes Over

03:19 Earnings Season Structure

05:43 Upcoming Macro Catalysts

08:24 Fed Hike Odds Mispriced

10:37 Political Pressure on Fed

15:29 Sponsor Break HFGM

17:45 Coin Flip Meeting Dynamics

19:42 Rates Curve and Term Premium

24:54 How to Position in September

26:53 Tech Breadth and AI Cracks

30:17 Lab ARR Reality Check

34:40 Tech Leadership Needed

38:17 Data Center ROI Debate

40:36 Election and Policy Risk

43:44 AI Issuance Scapegoats

47:35 Energy as Diversifier

51:48 Anthropic IPO Impact

55:01 Software Versus Semis

58:28 Pair Trades and Correlations

01:01:19 Fade Macro Risk Playbook

01:02:55 Conclusion