Halal Investors Podcast - Episode 4

Please note: None of the contents of this podcast is financial advice, it is for educational and (hopefully) entertainment purposes only.

Overview

In this episode, we provide a comprehensive analysis of the current economic landscape, focusing on the United States and global debt, inflation, and the potential for an upcoming recession. We critically examine the Federal Reserve's decision to raise interest rates to combat inflation, the political maneuvering around the US debt ceiling, and the implications of these factors on the economy and stock market. Key Takeaways 📈 We note a hollowing out of the markets, with only a few large companies holding up the S&P 500 index, indicating a bearish signal. #MarketTrends 🏛️ The political brinkmanship in the United States regarding the debt ceiling is discussed, with a prediction of another increase. #DebtCeiling 🌐 Global debt is at an all-time high, with the US debt around $30 trillion. This is seen as a significant economic concern. #GlobalDebt 💵 The Federal Reserve's decision to raise interest rates to fight inflation, especially when debt is high. This leads to the government paying more interest on its debt, which acts as a fiscal stimulus, potentially exacerbating inflation. #InterestRates 💰 Inflation creates a demand for credit as people need more money to cover their expenses. At the same time, higher interest rates incentivize lenders to lend more, potentially leading to an increase in the money supply. #Inflation 🔄 Inflation is self-regulating and mean-reverting. As prices rise, people cut back on spending, which can eventually bring down price levels. We criticize the Federal Reserve for slowing down this natural process by raising interest rates. #EconomicTheory 📉 Leading economic indicators suggest a forthcoming recession. We also mention Warren Buffet's prediction of lower revenues and earnings for his portfolio of companies. #RecessionPredictions 💸 Once the debt ceiling issue is resolved, we predict that the US Treasury will refill its account at the Federal Reserve, which will remove a significant amount of money from the economy, potentially exacerbating the liquidity situation. #LiquidityCrisis 🎢 High market volatility and bearish activity across various asset classes, including gold and oil. #MarketVolatility

Halal Investors Podcast - Episode 3

Please note: None of the contents of this podcast is financial advice, it is for educational and (hopefully) entertainment purposes only.

Overview

In this episode of the Halal Investors Podcast, Umair Shakoor and Rehan Ahmed discuss the challenges and opportunities in the face of rising interest rates, inflation, and housing costs. They offer insights on smart ways for individuals to navigate these times, especially for those who want to grow their wealth in the current economic climate. 

Key Takeaways

• Interest rates are rising, putting pressure on people with mortgages and renters: People need to be prepared for higher costs and should consider staying in rental properties rather than rushing into mortgages at this time.
• Housing prices remain buoyed by investors: Investors with long time horizons and a lot of equity can ride out these challenging times by passing on costs to tenants, keeping the housing market afloat.
• Commercial real estate has not recovered from the pandemic: Office buildings remain largely empty, and the sector is sensitive to negative news in the real estate space.
• Options for growing wealth in this environment: Those looking to grow their wealth should consider investing in asset classes that contribute to inflation itself, such as certain commodities (e.g. lithium, copper, steel, and oil). Investing in a broad stock market might not be advisable at this time.
• Be cautious and tactical in investments: Given the volatility in the market and liquidity crunch, it is not a time to go all in on any particular asset class. Investors should remain cautious and be prepared for rapid changes in the market.

#HalalInvestors #Inflation #InterestRates #HousingMarket #InvestmentTips

Halal Investors Podcast - Episode 2 In this episode of the Halal Investors Podcast, we continue our discussion of the recent closure of Silicon Valley Bank and its impact on the global banking industry, including the Swiss bank Credit Suisse's troubles and the overall crisis of confidence in banks.

Key Takeaways

• The FDIC stepped in to guarantee all deposits in Silicon Valley Bank after its closure, with other banks also failing soon after. This led to people moving their funds from smaller banks to the "big four" in the United States, considered "too big to fail" (#banking #FDIC #SiliconValleyBank).
• Interest rates have risen, causing people to reconsider their banking options and putting pressure on banks to offer higher deposit interest rates to retain deposits (#interestrates #banking).
• Credit Suisse, one of Switzerland's top three banks, faced trouble and was bought out by UBS at a huge discount, with the Swiss National Bank stepping in to backstop potential losses. This resulted in UBS facing higher risk of default due to the acquired debt (#CreditSuisse #UBS #SwissNationalBank).
• A crisis of confidence in banks has emerged, with people scrutinizing the balance sheets of US banks and their exposure to potential losses. The uncertainty has led to an increased usage of the Federal Reserve's discount window and federal home loan banks (#bankingcrisis #FederalReserve).
• Banks are no longer trusting each other, leading to a seizing up of private lending markets and increased reliance on government-backed facilities (#banking #trust).

Halal Investors Podcast - Episode 1

In this podcast, we discuss the concept of investing, the difference between Halal and non-Halal investments, and how investing in equity markets is different from investing in loans or debt. We also touch upon the consequences of rating agencies not re-rating debt instruments and how it led to the global financial crisis.

Key Takeaways

• Investing is about deploying capital and expecting a return higher than what you've put in, whether it's worldly or for the Hereafter.
• Halal investing involves investing in assets like properties, company shares, or businesses, which are tied to productive economic activities, unlike interest-based investments which are not allowed in Islam.
• Investing in equity markets is tied to the company's economic activities, which makes it fairer and less risky than investing in debt instruments.
• Passive income can be generated by buying assets like properties, investing in businesses as a silent partner, or buying shares in companies.
• Debt instruments are rated by agencies, but the ratings do not change frequently, which can lead to a mismatch between the actual risk and the perceived risk of the instrument.
• The global financial crisis happened because rating agencies didn't re-rate toxic assets, leading to systemic risk and the eventual collapse of financial markets.
• We also correctly predicted the FDIC stepping in to rescue the Silicon Valley Bank