UGO12: Why the Next Financial Crisis Could Change America Forever ft. Danielle DiMartino Booth

**Cem Karsan** (0:03)
Welcome back to another episode of You Got Options from the SIBO Floor, brought to you by Chi Media and Top Traders Unplugged. Today, we meet with Danielle DiMartino Booth, the ex-advisor to the Dallas Fed and author of FedUp. I can't think of a better time to be talking to her. Warsh becoming the new Fed President, where will he go? What will the new mandate potentially be of the Federal Reserve? Is it still inflation or are we talking about backstopping the Treasury and the debt? Lastly, what is the final endgame here? How will we get out of this multifaceted tectonic play mess?
I believe we're going towards a place where the US equity market gets backstopped by the Treasury at the end here. We'll see what Danielle thinks. Tune in. You're going to love this one.

**SPEAKER_3** (1:08)
Welcome to You Got Options, an exciting series right here on Top Traders Unplugged, hosted by none other than Cem Karsan, one of the sharpest minds when it comes to understanding what's really driving market moves beneath the surface. In this series, Cem brings his deep expertise and unique perspective honed from years of experience on the trading floor to candid conversations with some of the brightest minds in the industry. Together, they unpack the shifting tides and underlying forces that move markets and the opportunities they create. A quick reminder before we dive in, You Got Options is for informational and educational purposes only. None of the discussions you're about to hear should be considered investment advice. As always, please do your own research and consult with a professional advisor before making any investment decisions. Now, what makes this series truly special is that it's recorded right from the heart of the action on the trading floor of the CBO. That means you might catch a little background buzz, phones ringing, traders shouting, as Cem and his guests unpack real-world insights in real-time. We wouldn't have it any other way, because this is as authentic as it gets. And with that, it's time to hear from those who live and breathe this complex corner of the markets. Here is your host, Cem Karsan.

**Cem Karsan** (2:25)
Welcome back to another episode of You Got Options. Today, I got none other than Danielle DiMartino Booth. It's such a pleasure to have her.
I couldn't think of a better time. Now, with Warsh just getting started, an incredibly important fork in the road for the Fed in a lot of ways.

**Danielle DiMartino Booth** (2:41)
Absolutely.

**Cem Karsan** (2:42)
So, excited to get into it. I know we have some different opinions, but it always makes for a great conversation and excited to kind of dive into some of these topics today.

**Danielle DiMartino Booth** (2:50)
Let's start.

**Cem Karsan** (2:51)
Yeah. So, first of all, I kind of want to start with the big picture. What is your view of Warsh and where the Fed currently sits?

**Danielle DiMartino Booth** (3:04)
So I think Warsh is walking into a hornet's nest of dissent. I don't think he's got very many friends on that committee. I think they're making that pretty clear in what they're saying publicly.
Ironically, Powell might be one of his greatest advocates.
He was very deferential in his last press conference in saying that he would step aside and make way for Warsh to be able to kind of create a consensus or at least try. And Warsh is faced with the inflation that Americans are living, which we call that the headline inflation rate.
And Warsh is younger. He's more in tune with the fact that we live headline. We don't live court. And fertilizer prices are starting to fall into food prices. We're seeing increases there. We've come back down to $90 a barrel on West Texas Intermediate. But that's still way north, $25 a barrel north of 65 barrels before Iran. So American families right now are having an extraordinarily hard time. I don't think that Warsh is going to be naive or stodgy enough to rely on the labor market indicators that are lying to Americans. I think he'll look for more real-time ways of gauging the labor market. He'll get a lot of pushback from the staff, though. There's nothing easy here. And he could be facing a liquidity crisis. The hits don't stop coming if it's private equity or private credit or private anything. And we have to bear in mind, as of 2024, the non-banking global financial system was $258 trillion. That's 51% of global assets. Now, does Warsh, will he be faced with a liquidity crisis even if it's in a sector that's non-regulated? That the Fed technically doesn't have any proof here? Yes, he will, because so many of these non-bank players are now too big to fail, just like the big banks were too big to fail in 2007, 2008