WEBVTT - Chris Joye Returns: Middle East Chaos, Trump’s Tariffs & Australia’s Economic Drift

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<v Speaker 1>Hi, my Boris, And this is straight Talk Chris Joey

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<v Speaker 1>walking back to the straight Talk mate. Lots happening since

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<v Speaker 1>I last said you like you're hearing what March March

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<v Speaker 1>March this year and we were talking this is sort

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<v Speaker 1>of trade war announcement, sort of period pre trade war,

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<v Speaker 1>pre trade war. Okay, so it was pre liberation Day,

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<v Speaker 1>that's right, preliberation day, so called liberation day. So he

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<v Speaker 1>announced and you know, you were predicting rate cuts, and

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<v Speaker 1>we've got a recut in may RBA recut and then

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<v Speaker 1>we're probably going to get a rate cut again in July.

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<v Speaker 1>But we'll come back to that in a second. Just

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<v Speaker 1>if we just peel back though, because you know, with Trump,

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<v Speaker 1>you know, doing what he's doing, and with the world,

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<v Speaker 1>the volatility is crazy. But sometimes we sort of tend

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<v Speaker 1>to forget what has happened before, Like we just sort

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<v Speaker 1>of concentrated what's happening now. And we will talk about

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<v Speaker 1>Israeli run. But if we just go back to that

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<v Speaker 1>March discussion, just remind us what you were saying in March,

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<v Speaker 1>pre trade war. Trump.

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<v Speaker 2>Yeah, so I said, I thought you were s equities

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<v Speaker 2>would fall forty percent and that it was going to

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<v Speaker 2>be really bad, and he was really serious on tariffs,

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<v Speaker 2>and no one was prepared for this very hawkish Trump

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<v Speaker 2>on tariffs, and that it was basically going to get

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<v Speaker 2>pretty ugly. And what happened was the SMP five hundred.

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<v Speaker 2>US equities fell twenty two percent post Liberation Day YEP,

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<v Speaker 2>and the Nasdaq index fell twenty seven percent. And that

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<v Speaker 2>was through to nine April. So two April was Liberation Day,

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<v Speaker 2>and then Trump, being the increasingly consummate iterator, backflips on

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<v Speaker 2>nine April. He says, Okay, I've scared the shit out

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<v Speaker 2>of markets. I've kind of declared a forever trade war

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<v Speaker 2>on everyone. I'm going to focus on China, but everyone

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<v Speaker 2>else I'll do a deal with. So he's sticking true

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<v Speaker 2>to his plan. He's decoupling from China. That's happening. He's

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<v Speaker 2>going to bring all that manufacturing home. That's going to

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<v Speaker 2>be super positive for US growth in the medium term.

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<v Speaker 2>But he's doing trade deals with everybody. Markets loved it.

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<v Speaker 2>The day he backflipped, the US sequity market jumped nine

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<v Speaker 2>and a half percent. We on that day bought one

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<v Speaker 2>point seven billion dollars of bonds.

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<v Speaker 1>And then we've been Colby.

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<v Speaker 2>Yeah, the firm I run, we run fifteen billion, and

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<v Speaker 2>then from nine April to thirty April we bought four

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<v Speaker 2>point six billion of bonds and we thought, so we were.

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<v Speaker 1>Super bearish March. He bonds between about global wares y.

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<v Speaker 2>Yeah, US banking, so he banks. But on the show

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<v Speaker 2>last time.

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<v Speaker 1>I was, you know, the uber bear.

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<v Speaker 2>But we flipped one hundred and eighty degrees when we

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<v Speaker 2>saw him basically shift from being an ideological trade warrior.

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<v Speaker 2>So basically this hyper zealous guy which was Trump from

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<v Speaker 2>the election to nine April to suddenly becoming a market whisperer.

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<v Speaker 2>Our judgment was on nine April he was going to

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<v Speaker 2>do everything he needed to do to plicate markets, and

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<v Speaker 2>therefore it was a super attractive buying opportunity. And at

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<v Speaker 2>the same time he's still running some pretty serious intensive

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<v Speaker 2>warfare with the boss of the Fed Power.

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<v Speaker 1>Yeah see that.

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<v Speaker 2>And interestingly, and I think this is genius.

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<v Speaker 1>Because because his term is coming up to yeah next year.

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<v Speaker 2>But the genius trade that Trump looks like I think

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<v Speaker 2>he's going to affect is he's going to pre announce

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<v Speaker 2>his successor I think.

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<v Speaker 1>Soon announce power successor, Yeah, which.

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<v Speaker 2>Is just genius, so he will undermine power and anoint

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<v Speaker 2>his success who's dubbish. And the Federal cut rates this

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<v Speaker 2>year and pretty aggressively, I think, because they can, and

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<v Speaker 2>because rates are very high in the US, so they

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<v Speaker 2>are around four and a half percent here ast with

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<v Speaker 2>three point eight four And as you said on the

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<v Speaker 2>show last time, we said that the RBA would cut

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<v Speaker 2>in May. They cut in May, They're going to cut

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<v Speaker 2>in July. There will be three more cuts this year,

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<v Speaker 2>so five cuts. In title last time we spoke about

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<v Speaker 2>the fact that, you know, we were very bullish on housing.

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<v Speaker 2>Sydney house prices started rising and Melbourne started rising in

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<v Speaker 2>February and they're.

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<v Speaker 1>Climbing quickly off the back of the eight in the

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<v Speaker 1>February cut.

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<v Speaker 2>Yeah, and so we call that cut in December, and

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<v Speaker 2>basically of the view that the housing market would turn

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<v Speaker 2>in February. It's actually notwithstanding we expected. It's quite amazing

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<v Speaker 2>how inch straight elastic the market is and Sydney prices

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<v Speaker 2>and Melbourne prices going gangbusters.

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<v Speaker 1>When you mean lest you get to a most sensitive

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<v Speaker 1>so how the market responds quickly excuse me to either

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<v Speaker 1>asset classes, particularly housing just explained something to our listeners.

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<v Speaker 1>When you go off and buy global bonds, which were

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<v Speaker 1>whether it be issued out of the US or Australia wherever,

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<v Speaker 1>how do you make money in these markets? How does

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<v Speaker 1>Coolibar make money for its clients or for its basic investors.

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<v Speaker 2>Firstly, our yield's really attractive right now. So we're earning

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<v Speaker 2>interest rates on our bond portfolios of around seven to

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<v Speaker 2>eight percent, which.

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<v Speaker 1>Is much higher than people would get if they put

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<v Speaker 1>in the bank, for example.

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<v Speaker 2>So our yield's really attractive. And then when we buy

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<v Speaker 2>and sell bonds, we trade about half a billion to

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<v Speaker 2>a billion a day, and we make money eighty ninety

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<v Speaker 2>percent of the time.

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<v Speaker 1>Because other people would like to buy those very attractive

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<v Speaker 1>interest rates from you because they're not getting it anymore.

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<v Speaker 2>Correct, and they pay you a capital gain correct exactly.

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<v Speaker 2>So we might buy a bond paying five point one

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<v Speaker 2>percent and sell it for a year to five percent,

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<v Speaker 2>and that lower yield to give us a bit of

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<v Speaker 2>price appreciation, and that capital gain augments our total return.

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<v Speaker 1>And the reason you make cable gain because you don't

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<v Speaker 1>buy one bond at five point one as eleven five

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<v Speaker 1>of you buy thousands of millions.

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<v Speaker 2>Yeah, and they're trading like you know, up to a

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<v Speaker 2>one to two billion a day, right, And you know

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<v Speaker 2>I've got the fifty sixty super smart guys and girls

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<v Speaker 2>that work for us, much smarter than me. I'm the brawn,

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<v Speaker 2>they're the brains. I'm the window dressing and and but yeah,

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<v Speaker 2>crazy smart team. I mean lots of university medalists and

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<v Speaker 2>PhDs and super smart dudes.

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<v Speaker 1>How do you find these people?

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<v Speaker 2>We actually find I like to call us like the

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<v Speaker 2>odd bods. Like our guys are always just you know,

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<v Speaker 2>that crazy smart guy, a girl who's sitting inside a

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<v Speaker 2>big organization, who's not political. He's probably been stiffed on

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<v Speaker 2>camp a few times and wants to be part of

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<v Speaker 2>a big team.

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<v Speaker 1>Stan they missed out on a commission that they're expected

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<v Speaker 1>to get or get a bonus or something like that.

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<v Speaker 2>But they're not political, but they are the smartest guys

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<v Speaker 2>in the room, and they want to play a team sport.

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<v Speaker 1>Basically, I don't appreciate it. Underappreciated.

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<v Speaker 2>Yeah, and all of our guys are pretty idiosyncratic, a

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<v Speaker 2>little eccentric, but they're all team players and cool of

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<v Speaker 2>bar as a team sport. Like you know, we're fifty

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<v Speaker 2>sixty very talented guys and girls, but it's it's like

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<v Speaker 2>a machine. It's not one person making decisions. Where ninety

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<v Speaker 2>eight percent of our trading is driven by models, so

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<v Speaker 2>financial models, and there's no rock stars, there's no heroes

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<v Speaker 2>that billionaire a day. That way, trading is quantitative.

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<v Speaker 1>So when when when the RBA does its modeling And

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<v Speaker 1>most people think that you know, the RBA just sits

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<v Speaker 1>around there and they will put their hand UPBA or NA.

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<v Speaker 1>There's actually the the people within the RBA. The people

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<v Speaker 1>work there as opposed to the board. They make submissions

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<v Speaker 1>as to what should happen. But the RBA is continually

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<v Speaker 1>doing modeling. I mean they they run off I think

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<v Speaker 1>one of the model models of the al models users

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<v Speaker 1>called Martin I think, or.

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<v Speaker 2>Something along the model of that.

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<v Speaker 1>And there's another one to do GSC. I don't know

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<v Speaker 1>what it stands for. But in any event, what are

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<v Speaker 1>your guys doing relative to analytics around what the RBA

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<v Speaker 1>is doing, because you know, like I just get this

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<v Speaker 1>feeling though most people out there think that we're just

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<v Speaker 1>sort of saying, well, you know that number coming out

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<v Speaker 1>of the AUSTRAMI your statistics was a bit low or

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<v Speaker 1>it was a great two point one is a great

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<v Speaker 1>headline inflation rate, two four is a great trim million,

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<v Speaker 1>and therefore we should just reduce interust rates. No, the

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<v Speaker 1>RBA has got all these variables, so they stick into

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<v Speaker 1>their models and we'll come back to the model in

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<v Speaker 1>a second. But they're sticking to the models, and that

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<v Speaker 1>spits out a result. And there's lots of variables, like

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<v Speaker 1>there's millions of them, not millions, there's a lot anyway,

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<v Speaker 1>And then they build different scenarios for sensitivity. What do

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<v Speaker 1>you guys do do you do work around that stuff

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<v Speaker 1>too with your team I'm.

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<v Speaker 2>Talking about yeah, So, I mean most of our modeling

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<v Speaker 2>is pricing the right interest rate for CBO, RAINS or

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<v Speaker 2>NAB to pay us on their.

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<v Speaker 1>Debt so on a bond that U motorable from them CORET.

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<v Speaker 2>So we're lending money to everyone in the world Google, Apple, JP,

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<v Speaker 2>Morgan Gold and Sacks, CBA. And what we do is

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<v Speaker 2>pricing interust rates better than anyone in the world, we believe,

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<v Speaker 2>and we require a huge amount of tech to do that.

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<v Speaker 2>So we have like eighty models that we use around

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<v Speaker 2>the world. We also more or less let the models trade,

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<v Speaker 2>so we have our goes that trade alongside our humans

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<v Speaker 2>basically like a proper count. Yeah, like ninety eight percent

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<v Speaker 2>of our trading is quantitativele.

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<v Speaker 1>When sentiment gets involved and the cont doesn't understand it.

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<v Speaker 2>Yeah, so that's where the two percent comes in, right.

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<v Speaker 2>You know, it's just not a cookie cut of trade.

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<v Speaker 2>It might be April or you know, there might be

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<v Speaker 2>a trade war, or it might be Trump backflipping, and

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<v Speaker 2>then the team step in and saying, okay, we'll wait

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<v Speaker 2>a second. The models are saying things are cheap, but

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<v Speaker 2>we also think there's a regime change here the personality. Well, yeah,

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<v Speaker 2>Trump's shifting course and that's really important for future pricing.

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<v Speaker 2>So in addition to pricing every bond of the world

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<v Speaker 2>all day every day, we also run a ton of

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<v Speaker 2>modeling to try and predict what the RBA and the

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<v Speaker 2>fair are going to do. Not because we punt interest rates,

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<v Speaker 2>so this is a little bit confusing. We don't bet

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<v Speaker 2>on the direction of the RBA before they make a decision, correct,

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<v Speaker 2>we never do that with price bonds. But we want

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<v Speaker 2>to understand what the RBA is going to do and

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<v Speaker 2>what's the what the Fed will do before anyone else

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<v Speaker 2>so that we can better trade the bonds.

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<v Speaker 1>So just to take it back a step, just like

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<v Speaker 1>you're very technical, super bright, I'll just try to put

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<v Speaker 1>that into mark speak. So when you buy the bonds,

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<v Speaker 1>you buy the word of the shoe prices, as you know,

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<v Speaker 1>whoever's issue in the bonds will be whatever it is.

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<v Speaker 1>And what if the shoe prices and the rate they're

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<v Speaker 1>offering you ines rate they're offering you. But what you're

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<v Speaker 1>talking about is when you do do this analysis or

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<v Speaker 1>your team does this analysis in a quantitative sense using

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<v Speaker 1>perhaps software or the systems doing it for you, just

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<v Speaker 1>put aside the qualitative stuff and a set We'll come

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<v Speaker 1>back to that beause I want to talk about Trump.

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<v Speaker 1>You're trying to get a sense of what the RBA

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<v Speaker 1>is going to do, so you know whether to get

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<v Speaker 1>ahead of it by doing a trade in relations to

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<v Speaker 1>what you already hold.

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<v Speaker 2>Correct. Yeah, So the way I describe is that we

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<v Speaker 2>don't trade macro like the RBA or what they're going

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<v Speaker 2>to do almost all the time. However, once or twice

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<v Speaker 2>a year, once every couple of years, macro is really important.

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<v Speaker 2>Macro is super important in March and April. So because

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<v Speaker 2>of our macro modeling, and our macro guys were saying

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<v Speaker 2>Trump's going to be crazy hawkish on trade and that's

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<v Speaker 2>going to blow up equities. We'd hedged twenty five to

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<v Speaker 2>fifty percent of all of our skin March before Liberation Day,

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<v Speaker 2>and we'd sold a lot of our bonds. And then

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<v Speaker 2>because of our macro analysis in mid April and the

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<v Speaker 2>ninth of April, we thought that there was another regime

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<v Speaker 2>and that he was going to be much more of

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<v Speaker 2>a guy that tried to assuage market concerns and manage markets,

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<v Speaker 2>and that this would be risk positive. So our macro

0:12:03.760 --> 0:12:06.080
<v Speaker 2>influenced the one point seven billion of buying we did

0:12:06.520 --> 0:12:09.640
<v Speaker 2>on the ninth of April. And you know, to talk

0:12:09.640 --> 0:12:12.760
<v Speaker 2>a geopolitics, I mean that's been very important for our

0:12:12.800 --> 0:12:16.360
<v Speaker 2>trading as well. I mean I was sitting last week

0:12:16.520 --> 0:12:18.920
<v Speaker 2>or soo two weeks ago in Zuri at the airport,

0:12:19.880 --> 0:12:23.120
<v Speaker 2>and I think we've developed quite a good capacity to

0:12:23.280 --> 0:12:25.600
<v Speaker 2>read Trump and to discern his tails.

0:12:25.679 --> 0:12:29.320
<v Speaker 1>He's got clear tells. Can you talk about that? Yeah?

0:12:29.600 --> 0:12:34.000
<v Speaker 2>So, like when he came out and said just before

0:12:34.320 --> 0:12:39.440
<v Speaker 2>Israel launched it's onslaught against Iran, he came out and

0:12:39.480 --> 0:12:40.959
<v Speaker 2>made this really strong statement.

0:12:41.120 --> 0:12:43.000
<v Speaker 1>He said thirteen fifteen days ago.

0:12:43.160 --> 0:12:47.480
<v Speaker 2>Yeah, and he said there is no risk of Israel

0:12:47.920 --> 0:12:51.560
<v Speaker 2>attacking I run imminently, but they might do it. So

0:12:51.760 --> 0:12:55.440
<v Speaker 2>at some point internally we were of the view that

0:12:55.559 --> 0:12:59.760
<v Speaker 2>he was engaging in subterfuge and that there was a

0:12:59.760 --> 0:13:03.199
<v Speaker 2>good chance that actually Israel was about to strike immediately.

0:13:03.200 --> 0:13:04.400
<v Speaker 1>And that's exactly what happened.

0:13:05.160 --> 0:13:08.120
<v Speaker 2>And in that Zime and I wrote about this actually

0:13:08.120 --> 0:13:11.360
<v Speaker 2>in the AFI and the reason being, So, the reason

0:13:11.400 --> 0:13:13.520
<v Speaker 2>being is he just can't help himself. He's a massive

0:13:13.559 --> 0:13:17.200
<v Speaker 2>front runner of inside information. So whenever Trumpy has the

0:13:17.240 --> 0:13:19.640
<v Speaker 2>good oil, which he as president of the United States

0:13:19.640 --> 0:13:22.840
<v Speaker 2>and leader of the free world, ostensibly he gets the

0:13:22.920 --> 0:13:25.680
<v Speaker 2>juice all the time, something cooking well. He always knows what,

0:13:25.760 --> 0:13:27.640
<v Speaker 2>he knows what everyone's going to do right, all the time,

0:13:27.880 --> 0:13:30.120
<v Speaker 2>and he can't help himself. He wants to be man

0:13:30.160 --> 0:13:32.320
<v Speaker 2>in the middle. He wants to be the center of attention.

0:13:32.880 --> 0:13:36.680
<v Speaker 2>And so I thought he was being I said to

0:13:36.720 --> 0:13:39.679
<v Speaker 2>my guys, he's come out bizarrely and said there's no

0:13:39.760 --> 0:13:42.319
<v Speaker 2>chance of an Israeli strike, but Israel's going to do

0:13:42.320 --> 0:13:45.200
<v Speaker 2>what Israel's going to do. They're an independent sovereign. Say yeah,

0:13:45.200 --> 0:13:47.160
<v Speaker 2>that will be influenced by him. But it's kind of

0:13:47.200 --> 0:13:51.920
<v Speaker 2>bizarre that he's taken away that sort of sovereign right

0:13:52.120 --> 0:13:55.360
<v Speaker 2>and that decision making he would front run whether they

0:13:55.360 --> 0:13:58.200
<v Speaker 2>would and wouldn't strike, because he's also taking.

0:13:57.960 --> 0:13:58.840
<v Speaker 1>Away there.

0:14:00.679 --> 0:14:05.520
<v Speaker 2>To capitalize on strategic surprise. Why would you do that?

0:14:05.520 --> 0:14:07.640
<v Speaker 2>It doesn't make sense. So I said to my guys,

0:14:07.679 --> 0:14:11.120
<v Speaker 2>I actually think they're going to have a shot, because

0:14:11.120 --> 0:14:16.160
<v Speaker 2>this is Trump playing games. He's trying to manipulate global

0:14:16.160 --> 0:14:20.040
<v Speaker 2>perceptions of what they will won't do. And subsequently, apparently

0:14:20.080 --> 0:14:21.960
<v Speaker 2>he was all in on it, and he said that

0:14:22.000 --> 0:14:24.840
<v Speaker 2>to mislead the Iranians. But the really interesting thing was then,

0:14:25.320 --> 0:14:28.680
<v Speaker 2>So I was sitting in Zurich airport, I guess almost

0:14:28.680 --> 0:14:33.000
<v Speaker 2>a week later, and I was catching a flight to Dubai,

0:14:33.760 --> 0:14:37.440
<v Speaker 2>and I had a conference call with my traders in London,

0:14:37.560 --> 0:14:41.520
<v Speaker 2>New York. And as I'm talking to them, I'm reading

0:14:41.520 --> 0:14:45.000
<v Speaker 2>this article that says that Trump's come out and said

0:14:45.440 --> 0:14:49.040
<v Speaker 2>that he's going to give Iran basically two weeks, that

0:14:49.600 --> 0:14:52.280
<v Speaker 2>he'll make a decision on whether to strike Iran in

0:14:52.680 --> 0:14:55.240
<v Speaker 2>approximately two weeks time. And I said to my guys,

0:14:56.400 --> 0:14:58.280
<v Speaker 2>I think he's going to go. I think he's going

0:14:58.320 --> 0:14:59.800
<v Speaker 2>to go this weekend. I wrote this in the Financial

0:15:00.040 --> 0:15:04.600
<v Speaker 2>you as well. I said on the Friday before he

0:15:04.760 --> 0:15:07.720
<v Speaker 2>bombed Ran, I said in the AFR, I think he's

0:15:07.720 --> 0:15:09.640
<v Speaker 2>going to have a shot this weekend. And so we

0:15:09.720 --> 0:15:12.080
<v Speaker 2>sold about three to five hundred million dollars of bonds

0:15:12.720 --> 0:15:14.640
<v Speaker 2>in that phone call, just because I wanted to de

0:15:14.840 --> 0:15:17.880
<v Speaker 2>risk and dude. I then jump onto the Emirates flight

0:15:18.840 --> 0:15:20.400
<v Speaker 2>and I wake up in the middle of the flight

0:15:20.440 --> 0:15:22.560
<v Speaker 2>and the whole planes I can feel the g forces

0:15:22.560 --> 0:15:24.680
<v Speaker 2>pushing me back into the seed, the planes kind of

0:15:24.680 --> 0:15:28.920
<v Speaker 2>switching direction in an unusually sort of rapid way. I

0:15:29.000 --> 0:15:32.720
<v Speaker 2>hit the in flight map. We're right on top of Baghdad,

0:15:33.040 --> 0:15:36.200
<v Speaker 2>like literally right above Bagdad, flying through Iraqi air space.

0:15:36.640 --> 0:15:38.440
<v Speaker 2>And then I go to my phone and I look

0:15:38.480 --> 0:15:41.600
<v Speaker 2>at my Bloomberg chat and there's a headline that the

0:15:41.720 --> 0:15:45.400
<v Speaker 2>guys have put up missile sighted in Iraq heading towards

0:15:45.440 --> 0:15:48.600
<v Speaker 2>Iran from Israel. And then I chatted my guys and said,

0:15:48.600 --> 0:15:50.720
<v Speaker 2>what's going on? Any more headlines? And then they hit

0:15:50.720 --> 0:15:53.160
<v Speaker 2>me with a stream of headlines. And so as we

0:15:53.200 --> 0:15:57.120
<v Speaker 2>were over Baghdad, the Israelis had launched their wall and

0:15:57.160 --> 0:16:00.480
<v Speaker 2>fired three hundred and thirty missiles at Iran and we

0:16:00.480 --> 0:16:03.200
<v Speaker 2>were evacuating the air space and I opened my window

0:16:03.320 --> 0:16:05.280
<v Speaker 2>shade and looked at the window. I don't know what

0:16:05.320 --> 0:16:07.760
<v Speaker 2>they were, but it was a very clear night sky.

0:16:07.760 --> 0:16:09.800
<v Speaker 2>I could see Bagdad below us, all the lights, the

0:16:09.800 --> 0:16:14.200
<v Speaker 2>city lights, and I could see about five different things

0:16:14.280 --> 0:16:17.720
<v Speaker 2>moving at great pace through the sky, whether our cruise

0:16:17.760 --> 0:16:22.160
<v Speaker 2>missiles fast jets, I don't know. And that the Iraqi

0:16:22.200 --> 0:16:25.000
<v Speaker 2>air space within an hour would be a no fly zone.

0:16:25.200 --> 0:16:29.080
<v Speaker 2>And so that was pretty discombobulating. And then we arrived

0:16:29.080 --> 0:16:31.000
<v Speaker 2>in Dubai and I'm like, holy shit, like, you know,

0:16:31.400 --> 0:16:33.800
<v Speaker 2>get me help, Yeah, game on. And then, of course,

0:16:33.880 --> 0:16:37.840
<v Speaker 2>you know Trump he himself bombs aren't so so this

0:16:38.040 --> 0:16:41.560
<v Speaker 2>to answer your question, you know, fund managers and investors

0:16:41.640 --> 0:16:44.840
<v Speaker 2>sometimes say things like stock because we'll say I pick stocks,

0:16:44.880 --> 0:16:46.440
<v Speaker 2>I don't do macro, and I think that's all shit.

0:16:46.480 --> 0:16:48.120
<v Speaker 1>I think you got to do everything. And that's what

0:16:48.200 --> 0:16:50.600
<v Speaker 1>we try and build. We try and bring to.

0:16:50.560 --> 0:16:56.200
<v Speaker 2>Bear unrelenting intellectual horsepower in every conceivable vector, whether it's

0:16:56.200 --> 0:16:58.800
<v Speaker 2>pricing the bonds, predicting what the IBA is going to do.

0:16:58.880 --> 0:17:00.880
<v Speaker 2>So we run a ton of quant models that are

0:17:00.920 --> 0:17:04.000
<v Speaker 2>solely geared towards trying to forcus what the feed is

0:17:04.000 --> 0:17:05.000
<v Speaker 2>going to do with the IBA is going to do,

0:17:05.160 --> 0:17:07.040
<v Speaker 2>not because we're trading it day to day, but once

0:17:07.040 --> 0:17:09.480
<v Speaker 2>a year it might be relevant and also doing a

0:17:09.520 --> 0:17:12.879
<v Speaker 2>ton of geopolitical work. So you know, we built AI

0:17:12.960 --> 0:17:16.400
<v Speaker 2>models that for the first time in history, we've published

0:17:16.400 --> 0:17:18.440
<v Speaker 2>research on this. You can go to our website predictingwar

0:17:18.480 --> 0:17:20.920
<v Speaker 2>dot com we published years ago.

0:17:21.000 --> 0:17:23.280
<v Speaker 1>Go to your website cool and look on the tab

0:17:23.320 --> 0:17:24.600
<v Speaker 1>predicting war dot com.

0:17:24.640 --> 0:17:26.959
<v Speaker 2>And there's actually a separate website called predicting water coom.

0:17:27.119 --> 0:17:30.720
<v Speaker 2>We've created at about seven eight nine years ago, and

0:17:30.760 --> 0:17:33.840
<v Speaker 2>we built AI models to predict military conflicts between nation

0:17:33.920 --> 0:17:38.359
<v Speaker 2>states using two hundred years of military conflict data in

0:17:38.440 --> 0:17:41.399
<v Speaker 2>the University of Michigan data set. But we wanted to

0:17:41.400 --> 0:17:43.479
<v Speaker 2>show you could put a probability on these things if

0:17:43.480 --> 0:17:46.280
<v Speaker 2>you look at you know, what nation states are saying

0:17:46.280 --> 0:17:48.600
<v Speaker 2>about one another, if you look at the development of

0:17:48.640 --> 0:17:54.040
<v Speaker 2>their military capability, their power projection capacity, if you look

0:17:54.080 --> 0:17:57.280
<v Speaker 2>at their demography, their economics. The models are quite accurate,

0:17:57.320 --> 0:17:59.080
<v Speaker 2>and you know, for example, they put a forty nine

0:17:59.080 --> 0:18:02.720
<v Speaker 2>percent of the US and China being involved in some

0:18:02.760 --> 0:18:04.439
<v Speaker 2>sort of conflict over the next ten years, and we

0:18:04.440 --> 0:18:06.680
<v Speaker 2>published research on it none had ever done, but none

0:18:06.720 --> 0:18:11.960
<v Speaker 2>it ever put empirical probabilities, predictive probabilities on the prospective

0:18:12.000 --> 0:18:14.280
<v Speaker 2>military conflicts before it. I wanted to show that data

0:18:14.680 --> 0:18:16.600
<v Speaker 2>can give you a lot of insight on this. So

0:18:18.359 --> 0:18:21.800
<v Speaker 2>so yeah, so I think we got the you know,

0:18:22.240 --> 0:18:27.440
<v Speaker 2>we did a good job of anticipating the initial Israeli strikes.

0:18:27.359 --> 0:18:29.120
<v Speaker 1>And that allowed you to de risk.

0:18:29.359 --> 0:18:31.199
<v Speaker 2>No, we actually didn't do anything in response to that,

0:18:31.560 --> 0:18:34.800
<v Speaker 2>so we didn't monetize that insight. But we then definitely

0:18:34.840 --> 0:18:39.920
<v Speaker 2>did monetize the second event when we anticipated that Trump

0:18:39.960 --> 0:18:42.200
<v Speaker 2>would strike over that weekend and bomb ran with the

0:18:42.480 --> 0:18:46.399
<v Speaker 2>B two stealth bombers and the GBU fifty seven mop

0:18:46.960 --> 0:18:49.480
<v Speaker 2>bombs of twelve thousand ton bombs.

0:18:49.200 --> 0:18:50.840
<v Speaker 1>That the two thousand pounds. Yes, yeah, that he.

0:18:51.240 --> 0:18:54.159
<v Speaker 2>Dropped on Fedora and the Tance and the third nuclear

0:18:54.240 --> 0:18:57.399
<v Speaker 2>side and so we did risk ahead of that, and

0:18:57.440 --> 0:19:02.080
<v Speaker 2>then when he executed that mission, we then so after

0:19:02.160 --> 0:19:05.160
<v Speaker 2>that he basically announced the world, our bombers are out

0:19:05.200 --> 0:19:09.960
<v Speaker 2>of Iraqi Iranian airspace. No American souls have been hurt.

0:19:10.480 --> 0:19:15.639
<v Speaker 2>We've obliterated these nuclear targets. We actually put all the

0:19:15.720 --> 0:19:18.840
<v Speaker 2>risks back on immediately and started to have continuously added risk,

0:19:19.000 --> 0:19:24.120
<v Speaker 2>and our view was yeah, continuously brought billions. And that's

0:19:24.160 --> 0:19:27.320
<v Speaker 2>because our view was a few things. We think Comedie

0:19:27.359 --> 0:19:29.560
<v Speaker 2>is dead. We think his son's dead. We've been arguing this.

0:19:29.760 --> 0:19:31.840
<v Speaker 2>You still think that, Yeah, I think, I mean, I

0:19:31.840 --> 0:19:33.560
<v Speaker 2>don't know, but we've thought for about a week or

0:19:33.600 --> 0:19:34.520
<v Speaker 2>so that Comedy is dead.

0:19:34.720 --> 0:19:36.080
<v Speaker 1>I think it's very haven't seen him.

0:19:36.119 --> 0:19:37.520
<v Speaker 2>We haven't seen him. We haven't heard from him.

0:19:37.600 --> 0:19:38.800
<v Speaker 1>You've seen the foreign minister or.

0:19:39.400 --> 0:19:41.720
<v Speaker 2>His successor, which is his son. They're all am I A.

0:19:43.040 --> 0:19:45.159
<v Speaker 2>And so we think either community is dead and his

0:19:45.200 --> 0:19:47.280
<v Speaker 2>son's dead, which I think is very very likely, or

0:19:48.280 --> 0:19:50.040
<v Speaker 2>there's been some sort of regime change that we don't

0:19:50.040 --> 0:19:51.600
<v Speaker 2>know about yet. But I think the Iranians are going

0:19:51.640 --> 0:19:55.879
<v Speaker 2>to reveal whatever they reveal in due course. And it

0:19:55.920 --> 0:19:58.720
<v Speaker 2>looks like there's six hundred kilos of enricher iranium was

0:19:58.760 --> 0:20:01.280
<v Speaker 2>inside for door. You remember there was all this reporting

0:20:01.320 --> 0:20:03.679
<v Speaker 2>that oh, they evacuated with it, but I think the

0:20:03.720 --> 0:20:06.000
<v Speaker 2>intelligence suggests it was actually sitting inside for Door.

0:20:05.840 --> 0:20:06.760
<v Speaker 1>And it's been buried in there.

0:20:07.920 --> 0:20:10.400
<v Speaker 2>And the kind of mainstream media claims that they did

0:20:10.400 --> 0:20:14.040
<v Speaker 2>no damage to Fedora absolute horseshit, Like all the damage

0:20:14.040 --> 0:20:16.679
<v Speaker 2>assessments from the Iranians, from Israelis and now from the

0:20:16.720 --> 0:20:20.120
<v Speaker 2>CIA say that you know, this stuff was very very

0:20:20.119 --> 0:20:23.080
<v Speaker 2>seriously damaged and has put the program back many many years.

0:20:24.800 --> 0:20:26.800
<v Speaker 2>So yeah, so macro is important, mate, as you know,

0:20:26.960 --> 0:20:29.960
<v Speaker 2>like you, I do it all grow your whole life.

0:20:29.720 --> 0:20:34.320
<v Speaker 1>But but I mean, what I find extraordinarily interesting is

0:20:34.720 --> 0:20:37.520
<v Speaker 1>working out the tell based on language. And it's not

0:20:37.600 --> 0:20:40.000
<v Speaker 1>just based on words, but it's based on timing. There

0:20:40.040 --> 0:20:41.720
<v Speaker 1>are probably a number of elements in these things. And

0:20:41.760 --> 0:20:43.960
<v Speaker 1>we look, we used to sort of do this with

0:20:44.000 --> 0:20:46.760
<v Speaker 1>the Reserve Bank and the Geroe Powells. Well he used

0:20:46.760 --> 0:20:48.399
<v Speaker 1>to always trying to sort of second guess what he

0:20:48.520 --> 0:20:52.280
<v Speaker 1>or she's going to do, and you know, set your

0:20:52.280 --> 0:20:54.359
<v Speaker 1>interest rates for example, and in my case at mees

0:20:54.440 --> 0:20:56.200
<v Speaker 1>rates ahead of a rate reduction, trying to get ahead

0:20:56.240 --> 0:20:58.399
<v Speaker 1>of her and get market share. It's a bit more

0:20:58.400 --> 0:21:00.800
<v Speaker 1>difficult today, but it's interesting in terms of the trades

0:21:00.840 --> 0:21:02.879
<v Speaker 1>that you do that you look at your user comp models,

0:21:02.920 --> 0:21:04.600
<v Speaker 1>but then you go off and you do your sort

0:21:04.640 --> 0:21:08.240
<v Speaker 1>of you know, your reasonable inness assessment, your overall assessment

0:21:08.320 --> 0:21:10.959
<v Speaker 1>based on what you see and where you see what

0:21:11.000 --> 0:21:13.879
<v Speaker 1>you hear? How many other things leading up to that?

0:21:14.160 --> 0:21:16.800
<v Speaker 1>And I'll get off this and see but this intreaues

0:21:16.880 --> 0:21:19.960
<v Speaker 1>me how many other things for example, for example, when

0:21:20.000 --> 0:21:24.000
<v Speaker 1>Trump was not available to talk to Albanizi and sort

0:21:24.040 --> 0:21:26.920
<v Speaker 1>of the meeting of the G seven, what it was

0:21:26.960 --> 0:21:30.119
<v Speaker 1>when Albanzi turned up, Trump sort of made himself unavailable.

0:21:30.680 --> 0:21:33.119
<v Speaker 1>Do you look at those things and also say, hang on,

0:21:33.240 --> 0:21:34.199
<v Speaker 1>something is big going on.

0:21:34.280 --> 0:21:37.359
<v Speaker 2>Yeah, this signal with the noise wasn't just that. It

0:21:37.520 --> 0:21:39.479
<v Speaker 2>was the key for me where I thought, Okay, this

0:21:39.560 --> 0:21:42.320
<v Speaker 2>is really on. So we thought he'd bomb them that weekend,

0:21:42.440 --> 0:21:43.840
<v Speaker 2>even though he'd set the world up to think it

0:21:43.920 --> 0:21:47.960
<v Speaker 2>was two weeks away. Because he can't help himself again,

0:21:48.000 --> 0:21:49.080
<v Speaker 2>he wants to be a man in the middle. He

0:21:49.080 --> 0:21:50.919
<v Speaker 2>wants to be smarter than everyone else. And he is

0:21:51.040 --> 0:21:54.560
<v Speaker 2>freaking smart. Like he is serially underestimated. Like I'm one

0:21:54.600 --> 0:21:58.440
<v Speaker 2>hundred percent certain Trump is crazy smart guy. He's never drunk,

0:21:58.640 --> 0:22:01.679
<v Speaker 2>he's never done drugs. Yes, got all these hyperbolic and

0:22:01.880 --> 0:22:05.240
<v Speaker 2>other sort of you know for many people on savory characteristics,

0:22:05.280 --> 0:22:07.560
<v Speaker 2>but this dude is he's an absolute weapon.

0:22:07.760 --> 0:22:09.000
<v Speaker 1>Can we just get into that a little bit? Like,

0:22:09.000 --> 0:22:10.479
<v Speaker 1>as I I'm waiting before we did.

0:22:10.640 --> 0:22:13.199
<v Speaker 2>Let me answer your question, h because there was something interesting.

0:22:13.640 --> 0:22:16.200
<v Speaker 2>So he bolts from the G seven for his emergency

0:22:16.240 --> 0:22:19.480
<v Speaker 2>national security meetings. He has multiple multiple meetings over the

0:22:19.480 --> 0:22:20.960
<v Speaker 2>course of the weekend. But the thing that was really

0:22:21.000 --> 0:22:23.040
<v Speaker 2>interesting for me where I thought, Okay, we've really got

0:22:23.040 --> 0:22:25.919
<v Speaker 2>this right, was he's always giving presses, so he's always

0:22:25.960 --> 0:22:27.880
<v Speaker 2>talking the media. Every time he's in Force one, he's

0:22:27.880 --> 0:22:34.200
<v Speaker 2>giving you basically a doorstop interview, and on this occasion,

0:22:35.000 --> 0:22:38.080
<v Speaker 2>to the National security meeting and from the National security meeting,

0:22:38.240 --> 0:22:40.360
<v Speaker 2>he refused to talk to the media, and I thought,

0:22:40.400 --> 0:22:43.240
<v Speaker 2>that's different. So the accumulation of evidence, the fact that

0:22:43.280 --> 0:22:45.199
<v Speaker 2>he once again tried to mislead the world about the

0:22:45.200 --> 0:22:47.000
<v Speaker 2>timetable and he wanted to be the smartest guy in

0:22:47.000 --> 0:22:52.280
<v Speaker 2>the room, the fact that Israel had aerial superiority and

0:22:52.320 --> 0:22:55.120
<v Speaker 2>it was a very easy mission to execute, the fact

0:22:55.119 --> 0:22:57.359
<v Speaker 2>that the GBU fifty sevens are really the only weapon

0:22:57.400 --> 0:23:00.800
<v Speaker 2>that can penetrate sixty meters of high performance contray concrete.

0:23:01.040 --> 0:23:03.199
<v Speaker 2>And even then the GBU fifty sevens, which are the

0:23:03.680 --> 0:23:06.840
<v Speaker 2>thirty pound bombs that they dropped on the tents and

0:23:07.240 --> 0:23:11.919
<v Speaker 2>for door fourteen of them twelve year, twelveteen. Yeah, but

0:23:12.000 --> 0:23:13.840
<v Speaker 2>even though they actually can't get through sixty meters of

0:23:13.920 --> 0:23:16.400
<v Speaker 2>high performance concrete, so they drop them through the aerill sorry,

0:23:16.560 --> 0:23:21.639
<v Speaker 2>the air conditioning shafts, so the ventilation shafts, and so,

0:23:21.880 --> 0:23:26.120
<v Speaker 2>you know, for me, and also being a narcissist, I thought,

0:23:26.200 --> 0:23:28.280
<v Speaker 2>this is just such a perfect window of opportunity where

0:23:28.280 --> 0:23:29.679
<v Speaker 2>he can come in. The Israelis have done all the

0:23:29.720 --> 0:23:32.040
<v Speaker 2>heavy lifting. You know, they killed thirty generals, They've got

0:23:32.080 --> 0:23:36.000
<v Speaker 2>rid of all the air defenses, all the aircraft decimated.

0:23:36.000 --> 0:23:37.480
<v Speaker 2>I ran, and he just comes over the top with

0:23:37.520 --> 0:23:43.159
<v Speaker 2>his seven, you know, deathly looking stealth B twenty B

0:23:43.280 --> 0:23:47.560
<v Speaker 2>two raiders and finishes the Iranians off. And then so

0:23:47.640 --> 0:23:50.040
<v Speaker 2>this is the Kamene puzzle that we still don't know

0:23:50.040 --> 0:23:54.920
<v Speaker 2>the answer to. He tweets out afterwards that the hit

0:23:55.960 --> 0:24:00.320
<v Speaker 2>quote unquote is what sealed the peace steal right says

0:24:00.359 --> 0:24:03.920
<v Speaker 2>like our raid on these nuclear sides and the hit,

0:24:04.320 --> 0:24:07.359
<v Speaker 2>but he puts it in adverted commas sealed the piece. Still,

0:24:07.440 --> 0:24:11.119
<v Speaker 2>I reckon he was intimating to a Kamene hit. So

0:24:11.160 --> 0:24:15.159
<v Speaker 2>I think he's got the old double entendre going. And

0:24:15.240 --> 0:24:17.040
<v Speaker 2>so the one hit was obviously the hit on the

0:24:17.119 --> 0:24:19.439
<v Speaker 2>nuclear sides. But the other hit was I think he

0:24:19.520 --> 0:24:23.360
<v Speaker 2>knows that comedy's gone. It's also interesting, fascinating. Actually he

0:24:23.480 --> 0:24:26.320
<v Speaker 2>called for regime change in Iran. He called for Migga

0:24:26.720 --> 0:24:29.320
<v Speaker 2>makeer run great again. And then now when they've asked

0:24:29.359 --> 0:24:31.320
<v Speaker 2>him a war about regime change run, he say, oh,

0:24:31.320 --> 0:24:32.960
<v Speaker 2>we don't need regime change in a run. You know,

0:24:33.320 --> 0:24:34.920
<v Speaker 2>that would be chaos, That would be a huge one

0:24:35.040 --> 0:24:36.640
<v Speaker 2>for me. What he's actually saying is we've already had

0:24:36.640 --> 0:24:38.520
<v Speaker 2>regime change in a run. We're now dealing with the

0:24:38.520 --> 0:24:39.479
<v Speaker 2>new guys and we're fine with that.

0:24:39.480 --> 0:24:41.159
<v Speaker 1>That's very interesting. And why do you think that it

0:24:41.200 --> 0:24:43.280
<v Speaker 1>hasn't been revealed here is because the Iranians just don't

0:24:43.280 --> 0:24:43.920
<v Speaker 1>want to tell the world.

0:24:44.040 --> 0:24:45.719
<v Speaker 2>Yeah, I think they want to manage the optics. I mean,

0:24:45.720 --> 0:24:48.439
<v Speaker 2>they've just had the worst twelve day war, you know,

0:24:48.640 --> 0:24:51.400
<v Speaker 2>arguably and ranks up there in the history of warfare.

0:24:51.520 --> 0:24:53.879
<v Speaker 2>Is one of the most one sided conflicts ever. So

0:24:54.040 --> 0:24:59.040
<v Speaker 2>you know, as a proud nation, they're obviously humiliated, and

0:24:59.280 --> 0:25:02.120
<v Speaker 2>I think they I think it's also there's a real

0:25:02.200 --> 0:25:06.600
<v Speaker 2>problem in terms of geopolitical precedent with a nation state

0:25:06.680 --> 0:25:10.040
<v Speaker 2>knocking off a national leader doesn't really happen often.

0:25:10.160 --> 0:25:11.080
<v Speaker 1>It's very very rare.

0:25:11.480 --> 0:25:13.960
<v Speaker 2>So I think neither the Israelis nor the Americans really

0:25:13.960 --> 0:25:17.880
<v Speaker 2>want to author that assassination, even though it's extremely likely

0:25:17.960 --> 0:25:20.560
<v Speaker 2>that he and his son and he's in he's wider

0:25:20.640 --> 0:25:22.720
<v Speaker 2>family have all been assassinated because they were sitting in

0:25:22.800 --> 0:25:26.040
<v Speaker 2>a bunker in northern Tehran. I think it's called Leversan

0:25:26.200 --> 0:25:29.959
<v Speaker 2>the suburb and the Israelis and the Americans, I think

0:25:29.960 --> 0:25:32.080
<v Speaker 2>we're pounding. Well, the Israelis were certainly pounding that bunker.

0:25:32.160 --> 0:25:36.040
<v Speaker 2>Remember Trump came out and boasted on Twitter or truth

0:25:36.160 --> 0:25:39.879
<v Speaker 2>social that he knew exactly where KEMANI was and we

0:25:40.000 --> 0:25:42.960
<v Speaker 2>weren't going to kill him yet, right, We weren't going

0:25:43.000 --> 0:25:44.680
<v Speaker 2>to We weren't going to take him out at this point.

0:25:45.600 --> 0:25:47.560
<v Speaker 1>But he You know, I could be wrong, but I

0:25:47.600 --> 0:25:51.400
<v Speaker 1>think he's been taken out. That is, if I could

0:25:51.440 --> 0:25:55.680
<v Speaker 1>just go one step further on their cynicism that some

0:25:55.800 --> 0:25:59.919
<v Speaker 1>people might suggest it's just cynicism. But in terms of timing,

0:26:01.080 --> 0:26:02.760
<v Speaker 1>do you think the whole thing was time for his

0:26:04.040 --> 0:26:06.359
<v Speaker 1>arrival at NATO to sort of take control of NATO

0:26:06.359 --> 0:26:09.560
<v Speaker 1>as well, Because like, if I'm wanting to convince ever

0:26:09.640 --> 0:26:11.280
<v Speaker 1>a NATO, you now spend five percent or three and

0:26:11.280 --> 0:26:13.639
<v Speaker 1>a half plus one and a half of your GDP

0:26:14.119 --> 0:26:19.960
<v Speaker 1>on defense. But if I want to convince you, I

0:26:20.040 --> 0:26:22.200
<v Speaker 1>wanted to show you that I can do what I

0:26:22.560 --> 0:26:24.520
<v Speaker 1>say I'm going to do. And I mean, do you

0:26:24.560 --> 0:26:26.920
<v Speaker 1>think the whole thing was timed around this NATO? I

0:26:26.960 --> 0:26:28.280
<v Speaker 1>think am I being super cinical here?

0:26:28.600 --> 0:26:30.439
<v Speaker 2>I mean, I just take a step even further back.

0:26:30.480 --> 0:26:33.000
<v Speaker 2>I mean, it's extraordinary. This has been a multi decade

0:26:33.040 --> 0:26:36.800
<v Speaker 2>problem for the world, dealing with a theocracy that is

0:26:36.920 --> 0:26:40.359
<v Speaker 2>hell bent on trying to evistrate America and Israel. I mean,

0:26:40.400 --> 0:26:43.639
<v Speaker 2>it's a really serious problem. And that was also hellbent

0:26:43.720 --> 0:26:48.280
<v Speaker 2>on weaponizing uranium and developing nuclear weapons that they could

0:26:48.280 --> 0:26:50.200
<v Speaker 2>potentially provide to the who he is and you know,

0:26:50.320 --> 0:26:55.880
<v Speaker 2>theirs pro mass Hesbela. So this was a profound, multi

0:26:55.960 --> 0:27:02.720
<v Speaker 2>decade problem that George Bush, Obama, Clinton and Biden and

0:27:02.760 --> 0:27:04.800
<v Speaker 2>Trump had never been up to resolve, and then one

0:27:04.840 --> 0:27:09.679
<v Speaker 2>fell swoop. Trump has again superficially dealt with the problem now,

0:27:09.960 --> 0:27:12.520
<v Speaker 2>but also in a very kinetic aggressive way, like sending

0:27:12.520 --> 0:27:15.480
<v Speaker 2>his seven stealth bombers and bombing these guys, you know,

0:27:16.280 --> 0:27:19.359
<v Speaker 2>back into the dark ages. It's pretty full on. I

0:27:19.400 --> 0:27:21.399
<v Speaker 2>had never thought about the NATO angle. I think you're right.

0:27:21.880 --> 0:27:23.680
<v Speaker 2>I think he wanted to capitalize on that window. I

0:27:23.760 --> 0:27:25.800
<v Speaker 2>had a naper Nator. But here's the next profound because it.

0:27:25.800 --> 0:27:27.920
<v Speaker 1>Was literally a week after but mart and he normally,

0:27:28.280 --> 0:27:29.879
<v Speaker 1>I mean, he's not going to go unless he controls it.

0:27:30.080 --> 0:27:31.760
<v Speaker 1>I mean, if you saw he sat, He's sat next

0:27:31.800 --> 0:27:34.320
<v Speaker 1>to the president of NATO, right next to him. And

0:27:34.440 --> 0:27:37.399
<v Speaker 1>actually they changed the whole event for him, so they

0:27:37.440 --> 0:27:39.840
<v Speaker 1>because he doesn't like to sit too long in those disations,

0:27:39.880 --> 0:27:41.399
<v Speaker 1>so they actually said, okay, we're just going to have

0:27:41.400 --> 0:27:43.159
<v Speaker 1>one on ones. That's pretty amazing.

0:27:43.520 --> 0:27:46.760
<v Speaker 2>But here's what's even more amazing is this guy, the

0:27:46.840 --> 0:27:51.320
<v Speaker 2>celebrity apprentice star. He'll from a business partner, right, he

0:27:51.840 --> 0:27:56.920
<v Speaker 2>has single handedly, single handedly changed European history, Like he

0:27:56.960 --> 0:28:01.120
<v Speaker 2>has reversed the course of European history by forcing these

0:28:01.240 --> 0:28:04.960
<v Speaker 2>otherwise previously very dubbish from a military perspective, state, So

0:28:05.040 --> 0:28:08.159
<v Speaker 2>we're spending nothing on defense to boost defense spending to

0:28:08.280 --> 0:28:11.760
<v Speaker 2>five percent of GDP, I mean, that's extraordinary. That's sort

0:28:11.800 --> 0:28:14.040
<v Speaker 2>of in line with long term US defense spinning. But

0:28:14.080 --> 0:28:16.080
<v Speaker 2>no one in the world spends that much on defense

0:28:16.080 --> 0:28:19.600
<v Speaker 2>aside from America and China. Here in Australia, we're spending

0:28:19.640 --> 0:28:22.200
<v Speaker 2>less than half that, and we're an arguably.

0:28:21.920 --> 0:28:24.000
<v Speaker 1>Just a small GDP relative everybody else.

0:28:24.080 --> 0:28:28.160
<v Speaker 2>And we're arguably in a equally if not more precarious

0:28:28.200 --> 0:28:30.680
<v Speaker 2>position given our proximity to the south trying to see Taiwan.

0:28:31.640 --> 0:28:33.520
<v Speaker 2>But Trump has done this. No one else has done this.

0:28:33.840 --> 0:28:38.320
<v Speaker 2>You know, he was excoriated for you know, not being

0:28:38.360 --> 0:28:41.960
<v Speaker 2>a multilaterist, and for threatening to withdraw from NATO, and

0:28:42.120 --> 0:28:45.240
<v Speaker 2>for being you know, Pudin's bitch, and then Ella Mask's bitch,

0:28:45.360 --> 0:28:48.440
<v Speaker 2>and then China's bitch and North Korea's bitch. But actually

0:28:48.600 --> 0:28:51.960
<v Speaker 2>he's There was some sort of interview I saw in

0:28:52.000 --> 0:28:54.680
<v Speaker 2>the last twenty four hours where apparently the American head

0:28:54.680 --> 0:28:58.520
<v Speaker 2>of NATA referred to him as daddy and this is Trump.

0:28:59.080 --> 0:29:00.840
<v Speaker 2>But he's pretty, and he's the guy with the big

0:29:00.880 --> 0:29:03.520
<v Speaker 2>swinging dick, and he's a trigger puller, like he's a killer.

0:29:04.080 --> 0:29:08.040
<v Speaker 1>And yeah, trump trade, the so called Trump trade, the

0:29:08.160 --> 0:29:10.480
<v Speaker 1>taco trade, that was the other thing. So like he's

0:29:10.640 --> 0:29:11.920
<v Speaker 1>absolutely blasted it.

0:29:12.240 --> 0:29:14.920
<v Speaker 2>Yeah yeah, so you know Trump always chickens out the

0:29:15.000 --> 0:29:17.080
<v Speaker 2>taco trade trade. That was the other reason I thought

0:29:17.120 --> 0:29:18.640
<v Speaker 2>he'd go hard and go quickly.

0:29:18.760 --> 0:29:19.400
<v Speaker 1>He wouldn't like that.

0:29:19.680 --> 0:29:22.080
<v Speaker 2>He would have hated the tarco trade and this taco

0:29:22.160 --> 0:29:26.280
<v Speaker 2>trade was getting a huge amount of narrative or momentum,

0:29:27.200 --> 0:29:30.480
<v Speaker 2>narrative momentum in the mainstream media, and that would have

0:29:31.040 --> 0:29:33.320
<v Speaker 2>That's the antithesis of the way he sees himself. He

0:29:33.360 --> 0:29:36.080
<v Speaker 2>sees himself as a hitter, right, and he is. He

0:29:36.240 --> 0:29:40.440
<v Speaker 2>makes decisions, and he often changes his mind, but which

0:29:40.520 --> 0:29:42.760
<v Speaker 2>is entitled to do right, Like, you know, he wages

0:29:42.800 --> 0:29:45.160
<v Speaker 2>forever trade war and everyone and then he decides, you know,

0:29:45.560 --> 0:29:47.640
<v Speaker 2>a week and a half later that he'll do deals,

0:29:47.680 --> 0:29:49.400
<v Speaker 2>but he won't do deal with deals with China. He's

0:29:49.440 --> 0:29:51.400
<v Speaker 2>saying he'll do deals with China, but the reality is

0:29:51.800 --> 0:29:54.200
<v Speaker 2>they're decoupling right that manufacturing is coming home, and that's

0:29:54.320 --> 0:29:56.560
<v Speaker 2>his key mission. He wants to square up the rest

0:29:56.560 --> 0:29:58.480
<v Speaker 2>of the world and make sure that people don't cheat

0:29:58.560 --> 0:30:00.680
<v Speaker 2>on trade. And I think that's a perfectly kind of

0:30:00.720 --> 0:30:04.240
<v Speaker 2>reasonable ambition. But isn't it interesting that this guy that

0:30:04.400 --> 0:30:08.560
<v Speaker 2>has been dismissed by everybody as being you know, hypermiopic

0:30:08.920 --> 0:30:14.480
<v Speaker 2>and just incapable of rational cojun deep strategic thought, this

0:30:14.680 --> 0:30:21.240
<v Speaker 2>is the dude that is revolution revolutionizing the geostrategic environment

0:30:21.320 --> 0:30:23.000
<v Speaker 2>in the Middle East and Europe.

0:30:23.120 --> 0:30:25.200
<v Speaker 1>I mean, it's extraordinary generary.

0:30:25.320 --> 0:30:27.719
<v Speaker 2>He's aways been nominated for a Nobel Peace Prize as

0:30:27.760 --> 0:30:30.960
<v Speaker 2>a result of the And not only does he bomb,

0:30:31.400 --> 0:30:33.840
<v Speaker 2>you know, the Iranians into oblivion, but he is also

0:30:34.520 --> 0:30:38.560
<v Speaker 2>catalyzed and negotiated the ceasefire. And I presume now that

0:30:38.840 --> 0:30:41.200
<v Speaker 2>Ukraine and Russia and the crosshairs, and he's kind of

0:30:41.200 --> 0:30:43.560
<v Speaker 2>started to create a lot of distance between himself and

0:30:43.600 --> 0:30:45.800
<v Speaker 2>Putin because he's running around now saying, well, Puttin, offer

0:30:45.840 --> 0:30:49.120
<v Speaker 2>to mediate between Punaimi and said, I'll mediate between a

0:30:49.200 --> 0:30:51.400
<v Speaker 2>run and Israel. And he said, dude, you mediate your

0:30:51.440 --> 0:30:54.320
<v Speaker 2>own war. My problems with you, mate, You're not meeting anything,

0:30:54.400 --> 0:30:55.840
<v Speaker 2>mediating anything on my buff.

0:30:55.640 --> 0:30:56.000
<v Speaker 1>He said this.

0:30:56.920 --> 0:31:00.360
<v Speaker 2>So it's interesting, and it's classically sort of he's a

0:31:00.400 --> 0:31:03.760
<v Speaker 2>preternatural businessman, like, you know, I take you at face

0:31:03.800 --> 0:31:05.360
<v Speaker 2>value until I can't take you at face value. But

0:31:05.400 --> 0:31:06.880
<v Speaker 2>when I can't take you at face value, I'm going

0:31:06.920 --> 0:31:08.520
<v Speaker 2>to treat you differently. And that's the way Trump seems

0:31:08.560 --> 0:31:08.760
<v Speaker 2>to work.

0:31:08.800 --> 0:31:09.600
<v Speaker 1>It's very itederative.

0:31:09.880 --> 0:31:12.600
<v Speaker 2>We were talking about this before. He's massively adaptive, like

0:31:12.680 --> 0:31:17.440
<v Speaker 2>he's constantly iterating his business model or his mental model

0:31:17.960 --> 0:31:20.360
<v Speaker 2>to adjust for the circumstances. You know, if people want

0:31:20.400 --> 0:31:24.480
<v Speaker 2>to be you do handshake deals and principle based transactions.

0:31:24.520 --> 0:31:26.959
<v Speaker 2>I can do that. But if they fuck me over, well,

0:31:27.040 --> 0:31:29.400
<v Speaker 2>then I'll fuck them back five times harder and then

0:31:29.440 --> 0:31:30.920
<v Speaker 2>we'll see, you know what the consequences are.

0:31:31.640 --> 0:31:34.280
<v Speaker 1>Just if I could just go flip back to because

0:31:34.480 --> 0:31:38.280
<v Speaker 1>that stuffs fascinating in terms of someone being so strategic

0:31:38.480 --> 0:31:40.480
<v Speaker 1>and on their not on their own. Obviously you've got

0:31:40.480 --> 0:31:42.360
<v Speaker 1>a team, but someone is so strategy and such a

0:31:42.400 --> 0:31:43.920
<v Speaker 1>short period. He's had to be the president for like

0:31:44.760 --> 0:31:47.040
<v Speaker 1>most of this year. So if I just tracked back

0:31:47.080 --> 0:31:51.320
<v Speaker 1>on one step bar in terms of the bringing manufacturing

0:31:51.320 --> 0:31:53.560
<v Speaker 1>back to the United States and the point you just

0:31:53.640 --> 0:31:56.680
<v Speaker 1>may decoupling, maybe we could just spend a little bit

0:31:56.680 --> 0:31:59.640
<v Speaker 1>of time thinking about that, particularly in relation to interest rates,

0:31:59.680 --> 0:32:04.240
<v Speaker 1>because in the US and the like, if we take

0:32:04.680 --> 0:32:06.520
<v Speaker 1>what you just said is being correct, and I tend

0:32:06.560 --> 0:32:09.840
<v Speaker 1>to agree with I do agree with you, his constant

0:32:11.160 --> 0:32:16.320
<v Speaker 1>belligerent behavior against the current Federal Reserve boss your own

0:32:16.360 --> 0:32:20.880
<v Speaker 1>power would be indicative of a bigger strategy. Plant It's

0:32:20.920 --> 0:32:22.760
<v Speaker 1>not just because he doesn't like him there's a Biggert

0:32:22.760 --> 0:32:25.120
<v Speaker 1>strategy plan. What is it that? Why do you think

0:32:25.160 --> 0:32:27.840
<v Speaker 1>he wants to get interest rates down in America irrespective

0:32:27.920 --> 0:32:30.120
<v Speaker 1>and just take inflation out of it. Why is he

0:32:30.200 --> 0:32:31.960
<v Speaker 1>trying to make money cheap in the United States? And

0:32:32.040 --> 0:32:33.800
<v Speaker 1>why does he want to do couple from China? And

0:32:33.880 --> 0:32:36.160
<v Speaker 1>why does why would he be happy for the US

0:32:36.200 --> 0:32:38.480
<v Speaker 1>dollar to suffer as a result of that? There's some

0:32:38.560 --> 0:32:41.680
<v Speaker 1>obviously examples reasons for it, but maybe you could explain that,

0:32:41.760 --> 0:32:44.640
<v Speaker 1>you know, like they might manufacture, they need to export

0:32:44.720 --> 0:32:47.360
<v Speaker 1>get better currency results. Why do you take us through that?

0:32:47.440 --> 0:32:49.560
<v Speaker 2>So when you peel back the onion on Trumps, there's

0:32:49.600 --> 0:32:54.719
<v Speaker 2>always a really lucid strategic clarity underpinning his decision making.

0:32:54.760 --> 0:32:56.840
<v Speaker 2>That's what I'm finding. And you know, I'm not a

0:32:57.160 --> 0:33:00.840
<v Speaker 2>trump ack lite. I didn't have strong views on him

0:33:00.840 --> 0:33:01.880
<v Speaker 2>in his first administration.

0:33:02.040 --> 0:33:04.160
<v Speaker 1>Like he's different this time, Aroun one hundred percent.

0:33:04.240 --> 0:33:06.840
<v Speaker 2>Yeah, And this is the keyp on is different, which

0:33:07.120 --> 0:33:09.800
<v Speaker 2>doesn't normally happen. Like we've just elected our government. Our

0:33:09.840 --> 0:33:11.440
<v Speaker 2>bow is going to be exactly the same, charm is

0:33:11.440 --> 0:33:13.880
<v Speaker 2>going to let me be the same. And presumably they're

0:33:13.920 --> 0:33:15.520
<v Speaker 2>in bolden because they think they have a mandate, so

0:33:15.520 --> 0:33:16.880
<v Speaker 2>they're going to do more of the same. We're not

0:33:16.920 --> 0:33:19.960
<v Speaker 2>going to see I doubt much iteration or evolution, other

0:33:20.120 --> 0:33:21.880
<v Speaker 2>than them doubling down on whatever they were doing in

0:33:21.920 --> 0:33:23.480
<v Speaker 2>the past, which is spending a shitload of money and

0:33:24.120 --> 0:33:27.880
<v Speaker 2>crowding out the private sector, and government solving all of

0:33:27.920 --> 0:33:31.840
<v Speaker 2>our problems and tax reform, which will be interesting.

0:33:31.640 --> 0:33:34.160
<v Speaker 1>Right so I think.

0:33:34.400 --> 0:33:38.000
<v Speaker 2>So the Trump program is actually really simple, but it

0:33:38.120 --> 0:33:42.680
<v Speaker 2>is intricate. So part one is, okay, we set up

0:33:42.720 --> 0:33:44.760
<v Speaker 2>this free trade system after World War two and we

0:33:44.800 --> 0:33:48.880
<v Speaker 2>said we'll trade with anyone, and over the period since

0:33:48.960 --> 0:33:51.760
<v Speaker 2>that time, we dropped all about tariffs and our trade subsidies.

0:33:52.320 --> 0:33:54.760
<v Speaker 2>And the idea was if everyone trades on equal terms.

0:33:54.880 --> 0:33:58.640
<v Speaker 2>You know, Mark bills houses, Chris has a factory that

0:33:58.720 --> 0:34:02.200
<v Speaker 2>produces close that's your pawer of advantage, that's my competitive advantage,

0:34:02.600 --> 0:34:04.600
<v Speaker 2>and we all benefit from trade and we're prosperous. And

0:34:04.640 --> 0:34:07.080
<v Speaker 2>that's the capitalist model, the Western liberal democratic model, which

0:34:07.080 --> 0:34:10.040
<v Speaker 2>worked incredibly well post World War two. But then, of

0:34:10.120 --> 0:34:12.600
<v Speaker 2>course some country started to cheat, like Australians to cheated.

0:34:12.760 --> 0:34:15.480
<v Speaker 2>We decided to subsidize the production of movies and we

0:34:15.560 --> 0:34:19.080
<v Speaker 2>start stealing investment from Hollywood. No one really talks about this,

0:34:19.200 --> 0:34:21.960
<v Speaker 2>but the reality is we've stolen a ton of investment

0:34:21.960 --> 0:34:23.799
<v Speaker 2>from Hollywood. And then Trump turns around say's, actually, I'm

0:34:23.800 --> 0:34:25.959
<v Speaker 2>going to wa one hundred percent tariffs on any foreign

0:34:26.000 --> 0:34:28.080
<v Speaker 2>made films. And we're like, oh, shock, how did you

0:34:28.160 --> 0:34:30.200
<v Speaker 2>do that? But the truth is we just can't compete

0:34:30.200 --> 0:34:32.800
<v Speaker 2>with Hollywood, and so we're cheating by getting government to

0:34:33.160 --> 0:34:38.920
<v Speaker 2>kind of bonds, yeah, compensate for our deficiency. So he's like,

0:34:39.040 --> 0:34:41.439
<v Speaker 2>we need to square everybody up globally. But the main

0:34:41.960 --> 0:34:45.360
<v Speaker 2>culprit here has been China. China has been treating cheating

0:34:45.719 --> 0:34:50.120
<v Speaker 2>relentlessly and also stealing an intellectual property and being very

0:34:50.200 --> 0:34:54.080
<v Speaker 2>strategic in trying to dominate key market sectors that have

0:34:54.920 --> 0:35:00.800
<v Speaker 2>long term geostrategic value, like telecommunications ext up with Huawei,

0:35:01.600 --> 0:35:05.279
<v Speaker 2>and so Trump's like, we've actually thought we were outsourcing

0:35:05.360 --> 0:35:07.640
<v Speaker 2>all of our manufacturing to a benign partner in China

0:35:07.880 --> 0:35:10.239
<v Speaker 2>over the last thirty forty years, but actually they've ended

0:35:10.320 --> 0:35:12.480
<v Speaker 2>up with control of all of our supply chains, and

0:35:12.520 --> 0:35:15.400
<v Speaker 2>the event of any kinetic conflict, we're really screwed. And

0:35:15.480 --> 0:35:18.080
<v Speaker 2>the truth is now with automation AI and digital printing,

0:35:18.120 --> 0:35:20.360
<v Speaker 2>we can produce all this stuff at home, because obviously

0:35:20.480 --> 0:35:22.120
<v Speaker 2>Musk has been an influence in the background. You know,

0:35:22.200 --> 0:35:24.400
<v Speaker 2>Musk with SpaceX and with Tesla has proven you can

0:35:24.440 --> 0:35:26.280
<v Speaker 2>build anything you want in an America and be well beating.

0:35:26.719 --> 0:35:26.880
<v Speaker 1>You know.

0:35:27.239 --> 0:35:31.160
<v Speaker 2>He's got a monopoly in global satellite business more or less,

0:35:31.680 --> 0:35:34.520
<v Speaker 2>and he was dominant in the EV business until the

0:35:34.600 --> 0:35:36.760
<v Speaker 2>Chinese totle it all his IP and created a BYD

0:35:36.920 --> 0:35:41.239
<v Speaker 2>and BYD started decimating Tesla. So so I think part

0:35:41.320 --> 0:35:43.520
<v Speaker 2>one is he wants to get trade back on an

0:35:43.560 --> 0:35:47.040
<v Speaker 2>equal footing. Part two is unless you're a trusted counterparty,

0:35:47.080 --> 0:35:48.560
<v Speaker 2>as in, if you're going to try and ask for

0:35:48.680 --> 0:35:50.600
<v Speaker 2>US twenty four to seven and you're going to present

0:35:50.680 --> 0:35:54.759
<v Speaker 2>a serious, potentially existential military threat to US, as the

0:35:54.880 --> 0:35:57.239
<v Speaker 2>Chinese in his view, he's not going to trade with

0:35:57.239 --> 0:35:58.320
<v Speaker 2>you at all, and he's going to bring all that

0:35:58.360 --> 0:36:00.920
<v Speaker 2>investment home. So that's the game plan. To do that.

0:36:01.000 --> 0:36:04.960
<v Speaker 2>You need to have credible trade barriers and that investment

0:36:05.239 --> 0:36:07.680
<v Speaker 2>reassuring that home will create massive growth in the year.

0:36:07.719 --> 0:36:09.160
<v Speaker 2>So that's really positive the United States.

0:36:09.280 --> 0:36:10.440
<v Speaker 1>Massive economic growth.

0:36:10.280 --> 0:36:15.320
<v Speaker 2>Massive economic growth, but it also create capacity and that

0:36:15.800 --> 0:36:17.600
<v Speaker 2>all things being equal. On the one hand, the investment

0:36:17.640 --> 0:36:19.719
<v Speaker 2>could be inflationary, but the capacity could be deflactury. But

0:36:19.840 --> 0:36:22.080
<v Speaker 2>just that's one part of his program. The second part

0:36:22.120 --> 0:36:24.200
<v Speaker 2>of his program is he wants to deliver about eight

0:36:24.200 --> 0:36:26.719
<v Speaker 2>point one trillion tax cuts, massive tax cuts. He has

0:36:26.800 --> 0:36:28.799
<v Speaker 2>to pay for them, and if he doesn't have money,

0:36:28.840 --> 0:36:30.799
<v Speaker 2>he's got to borrow the money, and that means he's

0:36:30.840 --> 0:36:33.080
<v Speaker 2>got to issue eight point one trillion dollars worth of

0:36:33.160 --> 0:36:35.919
<v Speaker 2>debt and that's going to push up long term interest

0:36:35.960 --> 0:36:38.080
<v Speaker 2>rates because people like me, the christ Joys the world

0:36:38.120 --> 0:36:40.000
<v Speaker 2>are going to say, actually, Trumpy, I'm not going to

0:36:40.080 --> 0:36:41.680
<v Speaker 2>lend you that money unless you pay me high rates.

0:36:41.680 --> 0:36:43.839
<v Speaker 2>And that's generally what's happened in the US. Ten government

0:36:43.880 --> 0:36:46.560
<v Speaker 2>bond yield has risen from about three point six percent

0:36:46.600 --> 0:36:49.440
<v Speaker 2>in September last year to mid fours and people are

0:36:49.520 --> 0:36:54.239
<v Speaker 2>very worried about the global tsunami of government borrowing and

0:36:54.320 --> 0:36:56.920
<v Speaker 2>therefore the dead binge, partly because here in Australia, the

0:36:56.960 --> 0:36:58.759
<v Speaker 2>States and the Feds are spending crazy amounts of money.

0:36:59.360 --> 0:37:02.200
<v Speaker 2>We've now our government has a share of our economy

0:37:02.840 --> 0:37:04.719
<v Speaker 2>is the biggest it's been since World War Two. Our

0:37:04.800 --> 0:37:06.920
<v Speaker 2>government here in Australias accounted for two thirds of all

0:37:06.960 --> 0:37:10.520
<v Speaker 2>economic growth since the pandemic and has accounted for more

0:37:10.560 --> 0:37:11.879
<v Speaker 2>than fifty percent of all jobs growth.

0:37:11.880 --> 0:37:13.239
<v Speaker 1>And that's not your federal birth state now.

0:37:13.320 --> 0:37:17.040
<v Speaker 2>Federal and state, so that's Australia. Now Europeans are saying, well,

0:37:17.040 --> 0:37:18.600
<v Speaker 2>we're going to spend five percent of g to be

0:37:18.719 --> 0:37:23.719
<v Speaker 2>having done Circle one to fund defense. So where they

0:37:23.800 --> 0:37:24.920
<v Speaker 2>going to get their money. They have to borrow the

0:37:24.960 --> 0:37:27.640
<v Speaker 2>money and massive amount of debt, which means it's actually

0:37:27.760 --> 0:37:29.680
<v Speaker 2>perversely good for someone like Maye because it means I'm

0:37:29.680 --> 0:37:31.480
<v Speaker 2>going to get great interest rates on those bonds, right,

0:37:31.880 --> 0:37:34.160
<v Speaker 2>so it means long term interstrates are going to stay high.

0:37:34.200 --> 0:37:36.239
<v Speaker 2>But coming back to Trumpy, he wants people to pay

0:37:36.239 --> 0:37:38.680
<v Speaker 2>a lot of taxes. I get that. In California, if

0:37:38.680 --> 0:37:41.239
<v Speaker 2>you're a top income, your top producer, you pay more

0:37:41.280 --> 0:37:42.759
<v Speaker 2>than fifty to fifty five percent.

0:37:42.960 --> 0:37:45.919
<v Speaker 1>That's because you pay Californian text too, and federal text.

0:37:46.160 --> 0:37:49.160
<v Speaker 2>And in New York you pay over fifty percent as well.

0:37:49.280 --> 0:37:52.160
<v Speaker 2>But in Florida, where they're running budget surpluses and they're

0:37:52.239 --> 0:37:54.400
<v Speaker 2>running their finances really well, you only pay thirty eight

0:37:54.440 --> 0:37:56.600
<v Speaker 2>percent total tax if you're a top income. So a

0:37:56.640 --> 0:37:58.719
<v Speaker 2>lot of people are moving from New York and California

0:37:58.800 --> 0:38:00.399
<v Speaker 2>down to Texas where you have the same think thirty

0:38:00.440 --> 0:38:04.640
<v Speaker 2>eight percent top tax, and Florida. And so the US

0:38:04.680 --> 0:38:08.120
<v Speaker 2>has had this cathartic internal conflict that's created the huge

0:38:08.840 --> 0:38:12.840
<v Speaker 2>intense debate between the Republicans and the Democrats because they're

0:38:12.840 --> 0:38:17.680
<v Speaker 2>seeing economic mayhem and social mayhem in California, particularly San

0:38:17.719 --> 0:38:22.600
<v Speaker 2>Francisco kind of failing city, California, fault state, massive budget deficits,

0:38:22.880 --> 0:38:25.080
<v Speaker 2>sort of on the brink of insolvency. And then they're

0:38:25.120 --> 0:38:28.279
<v Speaker 2>seeing the counterfaction, which is Florida and Texas, budget surpluses,

0:38:28.480 --> 0:38:32.680
<v Speaker 2>crime under control, generally, business thriving and flourishing. And that's

0:38:32.760 --> 0:38:35.960
<v Speaker 2>I think what's galvanized the momentum behind Trump's program. So

0:38:36.000 --> 0:38:38.279
<v Speaker 2>he wants to get taxes low. He's got to fund

0:38:38.320 --> 0:38:40.000
<v Speaker 2>them to do that. He's got to get rid of

0:38:40.040 --> 0:38:43.240
<v Speaker 2>big government. Specifically, he's got a shrink government by fifteen percent.

0:38:43.520 --> 0:38:45.600
<v Speaker 2>It's not that much. If he does that, he gets

0:38:45.600 --> 0:38:47.520
<v Speaker 2>about a trillion a year in savings, and that fully

0:38:47.520 --> 0:38:50.920
<v Speaker 2>pays for the tax cuts. Now, if you shrink government

0:38:51.120 --> 0:38:53.440
<v Speaker 2>and you cut government spending by fifteen percent or a

0:38:53.440 --> 0:38:56.120
<v Speaker 2>trillion a year, that's deflationary. Because all that money a

0:38:56.160 --> 0:38:59.400
<v Speaker 2>trullion year was going out there to contractors, builders, you know,

0:39:00.000 --> 0:39:02.439
<v Speaker 2>service providers and government employees. Now are spending that money.

0:39:02.520 --> 0:39:05.800
<v Speaker 2>That demand goes, So that's deflation and that creates job losses.

0:39:06.040 --> 0:39:08.640
<v Speaker 2>On the other hand, the tax cuts, tax cuts are

0:39:08.760 --> 0:39:11.080
<v Speaker 2>inflationing because that's more money in people's pockets they can

0:39:11.160 --> 0:39:14.880
<v Speaker 2>spend that. And then clearly the returning all the supply

0:39:15.000 --> 0:39:17.719
<v Speaker 2>chains back to America, so reassuring the manufacturing, getting this

0:39:17.960 --> 0:39:20.600
<v Speaker 2>massive manufacturing boom in the US, which I think will happen.

0:39:20.920 --> 0:39:23.520
<v Speaker 2>It'll happen much faster than people think over the next

0:39:23.560 --> 0:39:26.880
<v Speaker 2>few years. That's also inflationy. But the key point is

0:39:26.960 --> 0:39:29.600
<v Speaker 2>the Fed things are normal ingstraate it's three percent. They're

0:39:29.600 --> 0:39:31.200
<v Speaker 2>currently at four and a quarter to four and a half.

0:39:31.800 --> 0:39:35.400
<v Speaker 2>Inflation has been pretty benign. Tariffs will push up inflation temporarily,

0:39:35.640 --> 0:39:38.120
<v Speaker 2>but it'll pass through the data like a pig through

0:39:38.120 --> 0:39:41.320
<v Speaker 2>a python. And here and now the Fed should be

0:39:41.320 --> 0:39:43.640
<v Speaker 2>cutting now. Trump is right about power, So this is

0:39:43.680 --> 0:39:45.600
<v Speaker 2>where the signal and the noise is. Power's a bit

0:39:45.600 --> 0:39:47.920
<v Speaker 2>of a dickhead. Okay, I shouldn't probably say that, but

0:39:48.040 --> 0:39:51.000
<v Speaker 2>I'll tell you he was very political prior to and

0:39:51.120 --> 0:39:53.720
<v Speaker 2>during the U S election, So he was pulling super

0:39:53.800 --> 0:39:55.719
<v Speaker 2>hard for Biden and Harris, and they were cutting when

0:39:55.719 --> 0:39:57.839
<v Speaker 2>they shouldn't have been cutting. As I argued at the time.

0:39:58.160 --> 0:40:00.279
<v Speaker 2>As soon as Trump was elected, they stopped cutting. They

0:40:00.320 --> 0:40:01.840
<v Speaker 2>cut once more in descemi've basically they said we're not

0:40:01.840 --> 0:40:03.759
<v Speaker 2>going to do any more cuts. They haven't cut since.

0:40:04.000 --> 0:40:06.000
<v Speaker 2>And he's been quite reckless in the way that he's

0:40:06.040 --> 0:40:10.319
<v Speaker 2>been talking about, for example, the tariffs. He's been trying

0:40:10.320 --> 0:40:13.520
<v Speaker 2>to maximize financial market volatively. He's been trying to sheet

0:40:13.560 --> 0:40:17.200
<v Speaker 2>home as much blame to Trump for the tariffs, even

0:40:17.200 --> 0:40:19.920
<v Speaker 2>though the tariffs in and of themselves are necessary and

0:40:19.960 --> 0:40:24.320
<v Speaker 2>reasonable because everyone the world's been cheating and stealing American

0:40:26.239 --> 0:40:30.120
<v Speaker 2>sort of basically stealing their prosperity, particularly the Chinese, anyone

0:40:30.120 --> 0:40:32.239
<v Speaker 2>who hasn't been trading on fair terms, and he's just

0:40:32.320 --> 0:40:34.720
<v Speaker 2>trying to square them up. So you do need tariffs

0:40:34.760 --> 0:40:37.480
<v Speaker 2>of some sort to rewrite big global economy. But the

0:40:37.600 --> 0:40:40.840
<v Speaker 2>ultimate endgame is we're going to have multiple trading blocks.

0:40:40.840 --> 0:40:44.400
<v Speaker 2>We're going to have the non democratic authoritarian states, the Chinas,

0:40:44.480 --> 0:40:47.720
<v Speaker 2>the Irans, the Russias and North Koreas trading with themselves

0:40:47.760 --> 0:40:49.560
<v Speaker 2>and probably some African and Asian nations, and then you

0:40:49.640 --> 0:40:52.920
<v Speaker 2>have the Western liberal democracies. But you can see this

0:40:52.960 --> 0:40:55.120
<v Speaker 2>is a big juggling tax cuts on the one hand,

0:40:55.200 --> 0:41:00.600
<v Speaker 2>cutting government spending on the other hand, reassuring some applight chains,

0:41:01.480 --> 0:41:04.120
<v Speaker 2>and then issuing potentially a lot of debt if you

0:41:04.280 --> 0:41:06.759
<v Speaker 2>can't if you can't get the government spending changes, he

0:41:06.800 --> 0:41:07.960
<v Speaker 2>will have to issue a lot of debt. And this

0:41:08.000 --> 0:41:09.960
<v Speaker 2>comes back to the FED. The feeds at four and

0:41:10.000 --> 0:41:12.440
<v Speaker 2>a half percent. Inflation in the US has been benign.

0:41:12.960 --> 0:41:15.680
<v Speaker 2>Normal is three. So what Trump is saying, you should

0:41:15.680 --> 0:41:17.560
<v Speaker 2>be closer to three, and you should be moving towards three,

0:41:17.800 --> 0:41:18.719
<v Speaker 2>and they haven't been doing.

0:41:18.760 --> 0:41:22.080
<v Speaker 1>And we America in the country as a as a borrower,

0:41:22.280 --> 0:41:24.480
<v Speaker 1>as a borrower, could be paying a lot less interest

0:41:25.280 --> 0:41:26.719
<v Speaker 1>exactly if you reduce the rate.

0:41:27.000 --> 0:41:29.000
<v Speaker 2>Yeah, that's the one liner. The one liner is the

0:41:29.400 --> 0:41:32.200
<v Speaker 2>Americans have a lot of government debt. Potentially that government

0:41:32.200 --> 0:41:34.280
<v Speaker 2>debt is going to increase unless they crush government spending.

0:41:34.480 --> 0:41:36.279
<v Speaker 2>So Trump wants to get the interest right down on

0:41:36.360 --> 0:41:38.000
<v Speaker 2>that government debt. And one way to do that is

0:41:38.040 --> 0:41:39.960
<v Speaker 2>definitely try and get the Fed to cut But I

0:41:40.040 --> 0:41:43.560
<v Speaker 2>think intellectually he's right, the FED should be cutting I mean,

0:41:43.600 --> 0:41:46.520
<v Speaker 2>I think the FED should be cutting right now. It's

0:41:46.560 --> 0:41:48.399
<v Speaker 2>not that they should put rates at a really low level,

0:41:48.719 --> 0:41:50.840
<v Speaker 2>but they should probably be getting closer to neutral and

0:41:50.840 --> 0:41:52.520
<v Speaker 2>their way. I mean, they're miles away from neutro at

0:41:52.520 --> 0:41:54.000
<v Speaker 2>four and a quarter to four and a half neutral three.

0:41:54.440 --> 0:41:56.239
<v Speaker 2>They should be much closer to three. And I think,

0:41:56.880 --> 0:41:59.040
<v Speaker 2>you know, he's had it with power, and so he's

0:41:59.160 --> 0:42:01.520
<v Speaker 2>latest I think movies to say, you know what, I'm

0:42:01.560 --> 0:42:06.480
<v Speaker 2>going to appoint your successor or naming name your successor exactly,

0:42:07.000 --> 0:42:10.799
<v Speaker 2>and then that will completely undermine powers authority, and power

0:42:10.840 --> 0:42:13.360
<v Speaker 2>will be forced now to contend with an internal replacement

0:42:14.040 --> 0:42:15.880
<v Speaker 2>that he will have to to some extent reflect the

0:42:15.880 --> 0:42:18.840
<v Speaker 2>will of So so it's all really interesting and the

0:42:18.880 --> 0:42:22.160
<v Speaker 2>world's definitely a more safe and stable place post Trump

0:42:22.239 --> 0:42:25.280
<v Speaker 2>Bombinger run, just make no mistake about that. Like, everyone

0:42:25.320 --> 0:42:27.200
<v Speaker 2>feels better about the Middle East. The Saudis are happy,

0:42:27.440 --> 0:42:29.880
<v Speaker 2>the Syrians are happy, the Jordanians are very happy, the

0:42:30.000 --> 0:42:31.080
<v Speaker 2>Israelis are happy.

0:42:30.880 --> 0:42:31.640
<v Speaker 1>The Emirates happy.

0:42:32.200 --> 0:42:37.160
<v Speaker 2>The Emirates are very happy. Happy, everyone's even Qatar and Oman,

0:42:37.320 --> 0:42:41.080
<v Speaker 2>which you know have had close ties to a run. Yeah,

0:42:41.280 --> 0:42:45.879
<v Speaker 2>they're probably neutral to positive. So so you know, one

0:42:45.920 --> 0:42:48.160
<v Speaker 2>guy's done this and it's just quite amazing.

0:42:48.320 --> 0:42:50.120
<v Speaker 1>It's amazing, It is quite amazing because.

0:42:50.239 --> 0:42:52.120
<v Speaker 2>We don't have leadership like that in this country. Mate.

0:42:52.200 --> 0:42:54.640
<v Speaker 2>Well yeah, but like you should run for office, thanks

0:42:54.719 --> 0:42:55.040
<v Speaker 2>very much.

0:42:55.239 --> 0:42:59.680
<v Speaker 1>So let's just bueld it back. You should do something. Yeah, well,

0:43:00.480 --> 0:43:02.200
<v Speaker 1>you can't run for office in this country. The problem

0:43:02.280 --> 0:43:03.560
<v Speaker 1>is in this country. You can in the US, but

0:43:03.640 --> 0:43:05.080
<v Speaker 1>you can't in this country. In this country got to

0:43:05.120 --> 0:43:07.800
<v Speaker 1>being a party. The party's got to win or be

0:43:07.840 --> 0:43:10.680
<v Speaker 1>able to do deals with somebody else and have a coalition,

0:43:10.800 --> 0:43:12.279
<v Speaker 1>so to speak. And then you're going to be by

0:43:12.320 --> 0:43:14.719
<v Speaker 1>your party voted in to be the dute And that's

0:43:14.760 --> 0:43:17.120
<v Speaker 1>the problem in this country. That's the issue around that.

0:43:17.200 --> 0:43:19.080
<v Speaker 1>I mean, it's fraught with danger. If I could just

0:43:19.120 --> 0:43:22.560
<v Speaker 1>peel it back then. So relative to anyone who's listening

0:43:22.560 --> 0:43:24.960
<v Speaker 1>to this, who's interested in interest rates and prosperity here

0:43:25.000 --> 0:43:27.400
<v Speaker 1>in Australia, which by the way, is that the RBA

0:43:27.560 --> 0:43:32.280
<v Speaker 1>is that mandate you know, welfare and prosperity of all Australians,

0:43:32.320 --> 0:43:36.720
<v Speaker 1>by the way, which is the terminology in its mandate.

0:43:37.840 --> 0:43:40.840
<v Speaker 1>What do you think all this means for Australia. So

0:43:41.160 --> 0:43:43.560
<v Speaker 1>I'm not going to talk just put interest rates aside

0:43:43.600 --> 0:43:45.360
<v Speaker 1>for the moment. What do you think this means for

0:43:45.440 --> 0:43:47.839
<v Speaker 1>US just as a nation? What's happening in the US.

0:43:48.920 --> 0:43:51.080
<v Speaker 2>I'm actually loath to kind of talk about it because

0:43:51.280 --> 0:43:55.279
<v Speaker 2>I've got some pretty serious concerns and fears short term,

0:43:56.400 --> 0:43:58.440
<v Speaker 2>like we're spinning like drunken salors. So all that a

0:43:58.560 --> 0:44:02.239
<v Speaker 2>government levels, at government levels, all that public money from

0:44:02.280 --> 0:44:04.040
<v Speaker 2>the states and the fairs, is going to mean that

0:44:04.120 --> 0:44:05.840
<v Speaker 2>growth in austral is going to be good and the

0:44:05.920 --> 0:44:08.040
<v Speaker 2>economy will look good, will look good. Economy is going

0:44:08.080 --> 0:44:09.799
<v Speaker 2>to be totally fine because the government will be powering

0:44:09.880 --> 0:44:10.560
<v Speaker 2>that growth well.

0:44:10.480 --> 0:44:13.239
<v Speaker 1>In terms of dudyp measurement. Correct, Yeah, but that doesn't

0:44:13.239 --> 0:44:13.640
<v Speaker 1>mean it's good.

0:44:13.760 --> 0:44:14.040
<v Speaker 2>It doesn't.

0:44:14.280 --> 0:44:15.920
<v Speaker 1>If we go to look at private sectors part it's

0:44:16.040 --> 0:44:16.480
<v Speaker 1>not so good.

0:44:16.560 --> 0:44:19.479
<v Speaker 2>Yeah, it's abysmal. And then we've also got super strong

0:44:19.560 --> 0:44:21.360
<v Speaker 2>population growth and a lot of these new immigrants have

0:44:21.440 --> 0:44:24.000
<v Speaker 2>voted for labor and so that's going to continue and

0:44:24.000 --> 0:44:25.799
<v Speaker 2>it's putting a lot of pressure on cities. But as

0:44:25.840 --> 0:44:27.959
<v Speaker 2>far as the economic data's concerned, people come to the country,

0:44:28.000 --> 0:44:30.920
<v Speaker 2>they spend money. That's positive in the long run. I mean,

0:44:31.040 --> 0:44:31.760
<v Speaker 2>we're really screwed.

0:44:31.920 --> 0:44:33.880
<v Speaker 1>Do you think it's your musing? Okay, do you think

0:44:33.960 --> 0:44:37.960
<v Speaker 1>GDP today is a poor measurement of how well we're

0:44:37.960 --> 0:44:40.080
<v Speaker 1>doing because it can be manipulated.

0:44:39.920 --> 0:44:42.399
<v Speaker 2>Yes, one hundred percent can be manipulated. I mean it's

0:44:42.640 --> 0:44:48.480
<v Speaker 2>a measurement. It's a very carefully measured proxy for the

0:44:48.800 --> 0:44:52.040
<v Speaker 2>rate of change in output over time. But I mean

0:44:52.400 --> 0:44:54.480
<v Speaker 2>what I'm focused on is productivity and what that means

0:44:54.560 --> 0:44:57.280
<v Speaker 2>is output for our work, So how much we produce

0:44:57.360 --> 0:44:59.080
<v Speaker 2>for the amount of time we put into it. And

0:44:59.320 --> 0:45:02.280
<v Speaker 2>on that basis, Australia. Australia looks terrible. I mean, we're

0:45:02.360 --> 0:45:06.279
<v Speaker 2>on a productivity basis, labor productivity in total what's called

0:45:06.360 --> 0:45:08.600
<v Speaker 2>multi factor productivity, but basically.

0:45:08.680 --> 0:45:11.240
<v Speaker 1>Whether you've gone backwards MFP, Yeah, it's gone backwards.

0:45:11.239 --> 0:45:13.040
<v Speaker 2>So if whether you look at broad productivity or just

0:45:13.120 --> 0:45:18.480
<v Speaker 2>labor productivity, what you see as Australia's productivity performance has

0:45:18.640 --> 0:45:21.360
<v Speaker 2>not really improved over a quarter of a century, and

0:45:21.719 --> 0:45:24.919
<v Speaker 2>we're lagging Europe, We're lagging by long way the US,

0:45:25.600 --> 0:45:27.399
<v Speaker 2>and we're going to end up Asia as of etha.

0:45:27.480 --> 0:45:30.400
<v Speaker 2>We're going to be a beach resort for rich members

0:45:30.440 --> 0:45:34.879
<v Speaker 2>of the literati in the Indo Pacific region. And it's

0:45:34.960 --> 0:45:36.880
<v Speaker 2>okay for the short term, it's okay probably for the

0:45:36.920 --> 0:45:38.839
<v Speaker 2>next five, ten to fifteen years, but eventually for our

0:45:39.760 --> 0:45:42.320
<v Speaker 2>children's children, it's going to be a massive problem and

0:45:43.239 --> 0:45:45.600
<v Speaker 2>we won't produce anything. There won't be any entrepreneurship, any

0:45:45.640 --> 0:45:49.759
<v Speaker 2>real innovation, and then living standards will start to decay signif.

0:45:49.800 --> 0:45:51.759
<v Speaker 1>Have but not significantly, I guess because one of the

0:45:51.800 --> 0:45:53.680
<v Speaker 1>things I found quite fascinating the other day when I

0:45:53.719 --> 0:45:55.759
<v Speaker 1>was looking at capital investments, So in other words, the

0:45:55.760 --> 0:45:58.480
<v Speaker 1>amount of money that gets reinvested by not any prophecies,

0:45:58.520 --> 0:46:01.520
<v Speaker 1>but also by the government in terms of how efficient,

0:46:02.160 --> 0:46:06.000
<v Speaker 1>how efficient I should say, employees can be for example,

0:46:06.120 --> 0:46:09.120
<v Speaker 1>you know the verious tools that employees can use to

0:46:09.200 --> 0:46:13.040
<v Speaker 1>be much more productive. Our cabin investments like at an

0:46:13.080 --> 0:46:19.920
<v Speaker 1>all time low. As you just mentioned. Our productivity relatively speaking,

0:46:20.000 --> 0:46:22.799
<v Speaker 1>has been in terms of normal measurements is ridiculously loan

0:46:23.200 --> 0:46:25.520
<v Speaker 1>as probably the worst it's been for a long long time.

0:46:26.120 --> 0:46:28.600
<v Speaker 1>But what a really fascinating is a sent about eighty

0:46:28.640 --> 0:46:31.040
<v Speaker 1>percent of our productivity is coming from services sector. It

0:46:31.040 --> 0:46:34.719
<v Speaker 1>doesn't come out of product products actual products, So eighty

0:46:34.719 --> 0:46:37.560
<v Speaker 1>percent and becaurse I'm not having here having to go

0:46:37.640 --> 0:46:39.720
<v Speaker 1>at you, Jimlake, but you know, when you keep putting

0:46:39.719 --> 0:46:42.000
<v Speaker 1>people long into public service and not having our public

0:46:42.000 --> 0:46:44.640
<v Speaker 1>servance side because as a space for public service saying

0:46:44.640 --> 0:46:49.799
<v Speaker 1>can be wrong. But the more times you just keep

0:46:50.040 --> 0:46:53.680
<v Speaker 1>loading up the employment number, well then I'm employed as

0:46:53.719 --> 0:46:55.480
<v Speaker 1>a result of all the people you bring into the country.

0:46:55.840 --> 0:46:57.920
<v Speaker 1>The more times you can continue to do that, you're

0:46:58.000 --> 0:47:01.680
<v Speaker 1>just building up this services sector which by definition, generally speaking,

0:47:01.760 --> 0:47:03.840
<v Speaker 1>isn't that productive. So as a result of that, the

0:47:04.120 --> 0:47:07.640
<v Speaker 1>productive productivity of the country is very very low. Opposite

0:47:07.680 --> 0:47:10.160
<v Speaker 1>in the United States, opposite in Germany, and heavily with

0:47:10.200 --> 0:47:13.640
<v Speaker 1>the amount of capital that Germany and the US have reinvested,

0:47:14.000 --> 0:47:17.759
<v Speaker 1>we aren't investing anything into our public service in terms

0:47:17.800 --> 0:47:19.560
<v Speaker 1>of making them more efficient and therefore more production.

0:47:19.680 --> 0:47:21.799
<v Speaker 2>You're exactly right, Mark, It's interesting, Well, not only we're

0:47:21.840 --> 0:47:25.839
<v Speaker 2>not really producing anything in Australia like tangible goods, that's

0:47:25.840 --> 0:47:30.279
<v Speaker 2>all been offshore, but we're not actually investing in technology

0:47:30.360 --> 0:47:32.480
<v Speaker 2>or soft capital investment. Yeah, but we're not investing in

0:47:32.560 --> 0:47:35.080
<v Speaker 2>technology to support our services.

0:47:35.160 --> 0:47:36.920
<v Speaker 1>Yeah, correct, that's what I'm saying. We're just saying, go

0:47:37.040 --> 0:47:39.520
<v Speaker 1>into the job, so people working longer hours, more hours,

0:47:40.160 --> 0:47:42.560
<v Speaker 1>but they're not working more efficiently and they're more productive.

0:47:42.640 --> 0:47:44.200
<v Speaker 2>So it doesn't matter hay sliced, does it. Whether you

0:47:44.239 --> 0:47:45.880
<v Speaker 2>look at research and development, whether you look at the

0:47:45.920 --> 0:47:49.600
<v Speaker 2>amount of money that firms are investing in technology, software

0:47:50.560 --> 0:47:54.920
<v Speaker 2>and tools to make their employees more productive, whether you

0:47:54.960 --> 0:47:57.920
<v Speaker 2>look at overall capital spending, labor productivity, which is bismal,

0:47:58.040 --> 0:48:02.120
<v Speaker 2>total productivity terrible. It's just a disaster, and we're kind

0:48:02.160 --> 0:48:05.320
<v Speaker 2>of just kicking the can down the road by bringing

0:48:05.600 --> 0:48:07.719
<v Speaker 2>massive amounts of people in the country to grow through

0:48:07.800 --> 0:48:12.080
<v Speaker 2>population growth, and by borrowing from the future and spending today.

0:48:12.840 --> 0:48:15.799
<v Speaker 2>You know, a country, a state like Victoria just prior

0:48:15.840 --> 0:48:18.440
<v Speaker 2>to the pandemic in twenty nineteen, I think owed the

0:48:18.480 --> 0:48:21.439
<v Speaker 2>world forty five to fifty billion. Within a few years

0:48:21.840 --> 0:48:25.000
<v Speaker 2>Victoria owed the world close to three hundred billion. And

0:48:26.040 --> 0:48:28.879
<v Speaker 2>it's interesting. I saw Peter Thiel in the last twenty

0:48:28.920 --> 0:48:30.520
<v Speaker 2>four hours came out and said that he thinks the

0:48:30.680 --> 0:48:34.719
<v Speaker 2>reason that millennials have sort of pivoted to a hard

0:48:34.880 --> 0:48:37.160
<v Speaker 2>left political direction is they've got a lot of student

0:48:37.239 --> 0:48:40.160
<v Speaker 2>debt and they can't afford to buy a home, so

0:48:40.239 --> 0:48:43.240
<v Speaker 2>they're looking for the public sector to provide that panacea

0:48:43.280 --> 0:48:46.800
<v Speaker 2>to that solution. And I definitely, you know, notice it

0:48:47.080 --> 0:48:50.200
<v Speaker 2>when I speak to the younger generations that worked for us,

0:48:51.239 --> 0:48:54.120
<v Speaker 2>a lot of them voted labor and which is not

0:48:54.200 --> 0:48:57.640
<v Speaker 2>a bad thing, Jim. I'm not party political. I don't

0:48:57.640 --> 0:49:01.000
<v Speaker 2>really care. I just want solutions. But but it is

0:49:01.120 --> 0:49:03.800
<v Speaker 2>interesting I think people, and particularly in a very entitled

0:49:03.960 --> 0:49:07.680
<v Speaker 2>place and economy like Australia, where you've had just like

0:49:07.840 --> 0:49:09.840
<v Speaker 2>you've been hit on the ass by every golden rainbow,

0:49:09.880 --> 0:49:13.560
<v Speaker 2>imaginable well beating population growth, world beating endowments of commodities

0:49:13.560 --> 0:49:17.240
<v Speaker 2>and natural resources and now you know, mega public spending

0:49:17.320 --> 0:49:19.880
<v Speaker 2>and the absence of a bona fidi recession since nineteen

0:49:19.960 --> 0:49:24.320
<v Speaker 2>ninety one. You know, people have just become accustomed to

0:49:24.440 --> 0:49:29.120
<v Speaker 2>expect these solutions to be perveyed to them. And I

0:49:29.160 --> 0:49:31.880
<v Speaker 2>think that's the problem. So Asias of bethro is the

0:49:31.920 --> 0:49:35.040
<v Speaker 2>direction in which we're heading a beach resort for the

0:49:35.080 --> 0:49:37.840
<v Speaker 2>well held of the region. And I think it's a

0:49:37.920 --> 0:49:39.560
<v Speaker 2>huge problem. But what can we do about it in

0:49:39.600 --> 0:49:42.680
<v Speaker 2>the meantime? In the short term, and everyone's so myopic

0:49:42.719 --> 0:49:44.560
<v Speaker 2>and hedonistic. In the short term, everything's going to be fine.

0:49:44.560 --> 0:49:46.400
<v Speaker 2>In Australia like rate's going to come down. The rbable

0:49:46.400 --> 0:49:48.319
<v Speaker 2>to cut three times this year. The cash read will

0:49:48.320 --> 0:49:50.000
<v Speaker 2>go to three percent. It's currently a three point eight

0:49:50.040 --> 0:49:53.080
<v Speaker 2>five percent. House prices are starting having been very weak

0:49:53.120 --> 0:49:55.080
<v Speaker 2>in Sydney and Melbourne, house prices we're falling in twenty

0:49:55.120 --> 0:49:57.680
<v Speaker 2>twenty four. House prices are rising at a decent clip,

0:49:57.760 --> 0:50:01.280
<v Speaker 2>not a crazy clip, but we'll get a very robust

0:50:01.360 --> 0:50:02.680
<v Speaker 2>housing recovery, which is good.

0:50:02.880 --> 0:50:05.839
<v Speaker 1>Do you subscribe to the View you rate reductions house

0:50:05.880 --> 0:50:06.560
<v Speaker 1>price increases?

0:50:06.640 --> 0:50:09.960
<v Speaker 2>Of course? Yeah, Well it's not, it's an empirical fact.

0:50:10.280 --> 0:50:13.040
<v Speaker 2>I know my esteemed mate he does not.

0:50:13.280 --> 0:50:15.440
<v Speaker 1>I saw I saw something of on next recently. He

0:50:15.840 --> 0:50:16.880
<v Speaker 1>doesn't subscribe to View.

0:50:17.560 --> 0:50:20.200
<v Speaker 2>It's just wrong. I mean it affis purchasing power. The

0:50:20.320 --> 0:50:24.680
<v Speaker 2>only way interest rates coming down directly and very materially

0:50:24.840 --> 0:50:27.719
<v Speaker 2>change the amount of debt that you can afford.

0:50:27.520 --> 0:50:29.920
<v Speaker 1>To assume, and it goes straight into the property.

0:50:30.120 --> 0:50:34.239
<v Speaker 2>And therefore interest rates coming down directly impact the value

0:50:34.239 --> 0:50:38.000
<v Speaker 2>of the property that you can purchase. Nothing formula, and

0:50:38.080 --> 0:50:40.520
<v Speaker 2>it gets capitalized into prices and the only thing that

0:50:40.560 --> 0:50:43.439
<v Speaker 2>can change that is supply. Yeah, and so you produce

0:50:43.520 --> 0:50:46.720
<v Speaker 2>more houses. But you know, we can't change supply instantaneously.

0:50:46.800 --> 0:50:49.320
<v Speaker 2>That's a multi year process. So the supply side, so

0:50:49.480 --> 0:50:51.640
<v Speaker 2>you know, in the long run, the supply side should

0:50:53.280 --> 0:50:55.759
<v Speaker 2>react to those changes in demand that are a function

0:50:55.840 --> 0:50:58.160
<v Speaker 2>of changes in interest rates. But there's no doubt that

0:50:58.520 --> 0:51:01.520
<v Speaker 2>house prices are highly interest rate sensitive. And it's not

0:51:01.600 --> 0:51:03.120
<v Speaker 2>a bad thing. I mean, this is what the NBA.

0:51:03.239 --> 0:51:05.839
<v Speaker 2>This is called the transmission mechanism. The RBA cuts rates,

0:51:06.760 --> 0:51:12.040
<v Speaker 2>that reduces borrowing costs, and that shows up in the

0:51:12.120 --> 0:51:17.800
<v Speaker 2>form of more discretionary disposable income, higher house prices. So

0:51:17.920 --> 0:51:20.200
<v Speaker 2>the housing market is a key channel through which monetary

0:51:20.239 --> 0:51:25.600
<v Speaker 2>policy provides it bequeaths that economic relief to the broader community.

0:51:26.040 --> 0:51:26.839
<v Speaker 2>It's not a bad thing.

0:51:26.920 --> 0:51:30.720
<v Speaker 1>But yeah, there's a lot of power for our monetary

0:51:30.760 --> 0:51:34.799
<v Speaker 1>policy too. We observe during the rate rise period because

0:51:34.920 --> 0:51:38.279
<v Speaker 1>most trainers are on fixed on verable rates, but during

0:51:38.440 --> 0:51:41.280
<v Speaker 1>a rate reduction period, that verbal rate is pretty valuable

0:51:41.719 --> 0:51:44.839
<v Speaker 1>and it actually reflects in the purchase purchasing power. As

0:51:44.880 --> 0:51:48.360
<v Speaker 1>as you said, it's amazing, it's actually just as solid

0:51:48.440 --> 0:51:50.120
<v Speaker 1>on the way down as it is on the way up.

0:51:50.239 --> 0:51:51.800
<v Speaker 2>Well, I'll tell you this, and i'd say this to Kookie.

0:51:52.160 --> 0:51:54.480
<v Speaker 2>Doubt Cookie's got to this, well, maybe has got to

0:51:54.560 --> 0:51:56.360
<v Speaker 2>this part of the interview. But if you look at

0:51:56.400 --> 0:51:59.120
<v Speaker 2>the daily Cooreo Logic house price indexes that I helped

0:51:59.200 --> 0:52:02.200
<v Speaker 2>co create, they're published on College Week's website. You can

0:52:02.200 --> 0:52:03.920
<v Speaker 2>see them every day, and you hit the back series

0:52:04.000 --> 0:52:06.720
<v Speaker 2>tab on the core Logic website and you dis select

0:52:06.760 --> 0:52:08.480
<v Speaker 2>every city except for Sydney. What you'll see is that

0:52:08.520 --> 0:52:11.400
<v Speaker 2>Sydney prices were falling until the middle of Februar this

0:52:11.520 --> 0:52:16.319
<v Speaker 2>year cuts rates. Literally the same week they cut rates,

0:52:16.560 --> 0:52:19.319
<v Speaker 2>house prices turned one hundred and eight degrees, started rising again,

0:52:19.920 --> 0:52:22.279
<v Speaker 2>and then rose and rose and rose, and then they

0:52:22.360 --> 0:52:25.120
<v Speaker 2>started to stabilize a little bit until May. When May

0:52:25.239 --> 0:52:27.239
<v Speaker 2>came along, we got the cut and they went off

0:52:27.280 --> 0:52:30.880
<v Speaker 2>again to the races. So there's you know, it's unambiguously

0:52:30.960 --> 0:52:33.600
<v Speaker 2>the case that prices are very responsive to changes in

0:52:33.680 --> 0:52:38.040
<v Speaker 2>the purchasing power of those properties, which is governed by incomes.

0:52:38.719 --> 0:52:41.960
<v Speaker 1>And income is fixed, but the amount of money you

0:52:41.960 --> 0:52:45.359
<v Speaker 1>can borrow is variable. Because correct interest rates goes down,

0:52:45.440 --> 0:52:46.960
<v Speaker 1>you can borrow more money. That's what we do. We

0:52:47.080 --> 0:52:49.680
<v Speaker 1>lend you more money if because when we do our calculation,

0:52:49.760 --> 0:52:52.080
<v Speaker 1>your debt servicing ability is far greater because the interest

0:52:52.120 --> 0:52:54.080
<v Speaker 1>rate we assume you're going to pay is much lower.

0:52:55.640 --> 0:52:57.520
<v Speaker 2>I actually want to ask you a question, like, you've

0:52:57.680 --> 0:53:00.080
<v Speaker 2>had a bit to do with Trump yourself back the

0:53:00.160 --> 0:53:03.240
<v Speaker 2>day when he was the gregarious entrepreneur and he's political,

0:53:03.600 --> 0:53:06.040
<v Speaker 2>he wasn't in that political decision making mode. But I

0:53:06.160 --> 0:53:08.040
<v Speaker 2>remember asking you about this years ago. I actually can't

0:53:08.040 --> 0:53:09.880
<v Speaker 2>remember your response. So what was he like?

0:53:10.200 --> 0:53:11.960
<v Speaker 1>Well, yeah, but the thing I've had a trumpes is

0:53:12.080 --> 0:53:17.879
<v Speaker 1>very purposeful. So he knew everything he was doing, down

0:53:17.960 --> 0:53:22.200
<v Speaker 1>to the most minute detail, how he dressed, how he

0:53:22.280 --> 0:53:25.000
<v Speaker 1>addressed the camera, what we talked about. Because I interviewed

0:53:25.320 --> 0:53:28.919
<v Speaker 1>interviewed him. I spent like forty five minutes interviewing him. Yeah, yeah,

0:53:29.480 --> 0:53:32.799
<v Speaker 1>we did a live TV interview, Yeah, one online which

0:53:32.800 --> 0:53:34.239
<v Speaker 1>I'm trying to call you but I can't find it.

0:53:34.600 --> 0:53:39.840
<v Speaker 1>But it's his purposefulness in relation to his answers and

0:53:40.040 --> 0:53:42.560
<v Speaker 1>everything he tracks and he sits on the same topics

0:53:42.600 --> 0:53:44.560
<v Speaker 1>he won't It doesn't matter what questions ask He knew

0:53:44.600 --> 0:53:45.759
<v Speaker 1>what answers he wanted to give me.

0:53:46.239 --> 0:53:50.160
<v Speaker 2>So so interesting because I see that in that mindfulness

0:53:50.160 --> 0:53:54.040
<v Speaker 2>and purpose purposefulness that you mention. You see that actually

0:53:54.040 --> 0:53:54.680
<v Speaker 2>in his interviews.

0:53:54.719 --> 0:53:56.239
<v Speaker 1>Now he knows what he wants to get out before

0:53:56.280 --> 0:53:56.640
<v Speaker 1>he gets there.

0:53:56.760 --> 0:54:00.640
<v Speaker 2>He's delivering those very, very clearly cultivated messages, but he's

0:54:00.640 --> 0:54:03.400
<v Speaker 2>also very strategic with their delivery. Have you seen the

0:54:03.800 --> 0:54:06.319
<v Speaker 2>there's a really good little video of him recently where

0:54:06.640 --> 0:54:07.920
<v Speaker 2>he's getting ready for an interview.

0:54:07.960 --> 0:54:08.560
<v Speaker 1>Have you seen this one?

0:54:08.960 --> 0:54:13.080
<v Speaker 2>And so there's two actually, So he's prepping for an

0:54:13.080 --> 0:54:15.919
<v Speaker 2>interview and there's a table with a glass of water

0:54:16.280 --> 0:54:17.719
<v Speaker 2>next to him, and he's just sitting there and the

0:54:17.800 --> 0:54:21.120
<v Speaker 2>camera's rolling and the MIC's hot, and he says, hey, John,

0:54:22.360 --> 0:54:25.160
<v Speaker 2>move that table. And so he moves the table and

0:54:25.200 --> 0:54:27.480
<v Speaker 2>he just sits and he says, actually bring it back,

0:54:28.640 --> 0:54:30.080
<v Speaker 2>and bring the glass back. And the glass has a

0:54:30.080 --> 0:54:31.600
<v Speaker 2>little piece of paper on top of the glass. Just

0:54:31.719 --> 0:54:33.440
<v Speaker 2>get rid of the piece of paper on top of

0:54:33.480 --> 0:54:37.200
<v Speaker 2>the glass, and get rid of the matt under the glass.

0:54:37.400 --> 0:54:39.480
<v Speaker 2>And he's just looking himself in the camera. Yeah, that's perfect.

0:54:39.760 --> 0:54:43.160
<v Speaker 2>And then there's another shot of him in the Oval

0:54:43.239 --> 0:54:47.279
<v Speaker 2>office and he's recording his commentary on the I think

0:54:47.280 --> 0:54:50.480
<v Speaker 2>the US economy and he's being fairly there's a lot

0:54:50.520 --> 0:54:55.480
<v Speaker 2>of gesticulation and he's quite emphatic, and somebody coughers coughs

0:54:55.880 --> 0:54:57.440
<v Speaker 2>halfway through. You know what he is. This is a

0:54:57.480 --> 0:54:59.000
<v Speaker 2>kind of distant coffee you can hear in the background

0:54:59.000 --> 0:55:01.680
<v Speaker 2>because it stops. Why the hell would you cougher the room?

0:55:01.840 --> 0:55:04.920
<v Speaker 2>Leave the room and let's roll again, And he kind

0:55:04.960 --> 0:55:10.120
<v Speaker 2>of seamlessly just slides straight back into that discourse.

0:55:10.239 --> 0:55:13.320
<v Speaker 1>But yes, super super, I would say this, Chris, like

0:55:13.400 --> 0:55:16.960
<v Speaker 1>a irrespective of your politics, whether your Republican or a

0:55:16.960 --> 0:55:22.520
<v Speaker 1>Democrat or a liberal or a labor whatever, never underestimate him.

0:55:22.880 --> 0:55:24.040
<v Speaker 1>If you do, you're going to do it at your

0:55:24.040 --> 0:55:31.120
<v Speaker 1>own peril. The guy is on on narrative, on brand,

0:55:32.080 --> 0:55:35.640
<v Speaker 1>on everything. He absolutely does like he knows exactly what

0:55:35.760 --> 0:55:37.440
<v Speaker 1>he's going to do the outcome and it is not right.

0:55:37.520 --> 0:55:39.440
<v Speaker 1>He gets it fixed and he has the ability to.

0:55:39.600 --> 0:55:41.280
<v Speaker 1>By the way, when when when I did the interview

0:55:42.080 --> 0:55:44.880
<v Speaker 1>to preempt where you might go first because and I

0:55:44.920 --> 0:55:47.520
<v Speaker 1>won't say what he was asked me not to talk about,

0:55:47.920 --> 0:55:50.560
<v Speaker 1>but he actually preempted a number of things to me

0:55:50.880 --> 0:55:53.360
<v Speaker 1>before we got to that territory. And he did it

0:55:53.440 --> 0:55:55.880
<v Speaker 1>through his head of pr person here they come and

0:55:55.920 --> 0:55:59.680
<v Speaker 1>told me what territories you cannot go. And then when

0:55:59.719 --> 0:56:02.440
<v Speaker 1>we did talk about fainily enough. He was. He was

0:56:02.920 --> 0:56:08.080
<v Speaker 1>extremely critical of China an Australia's relationship with China, and

0:56:08.239 --> 0:56:09.760
<v Speaker 1>I said to him, well, you know, like at seventy

0:56:09.760 --> 0:56:12.759
<v Speaker 1>percent of our trade, you know, like export trade, and

0:56:13.719 --> 0:56:16.200
<v Speaker 1>he just didn't copy. He's just but they're raping you,

0:56:16.280 --> 0:56:18.399
<v Speaker 1>he said, are they are taking you for a ride?

0:56:18.920 --> 0:56:21.040
<v Speaker 1>And he did not. And I thought it was chill

0:56:21.120 --> 0:56:23.040
<v Speaker 1>because like you know, this is like they're a major

0:56:23.080 --> 0:56:24.759
<v Speaker 1>trading part I think I don't want to go down

0:56:24.800 --> 0:56:27.000
<v Speaker 1>the territory. But he didn't give a damn. So to

0:56:27.120 --> 0:56:30.320
<v Speaker 1>some extent, and be honest, he's fearless. He's fearless like

0:56:31.040 --> 0:56:34.399
<v Speaker 1>in a commercial Sceen is quite fearless. He doesn't care

0:56:34.440 --> 0:56:36.080
<v Speaker 1>if the opposition is his.

0:56:36.160 --> 0:56:37.759
<v Speaker 2>Ear blown off. And he was up there saying five

0:56:37.840 --> 0:56:41.160
<v Speaker 2>fight fight. The dude's got balls, like he's he's a hitter. Yeah,

0:56:41.160 --> 0:56:46.000
<v Speaker 2>he's a real hitter. And it's interesting how controlled and yeah,

0:56:46.040 --> 0:56:50.920
<v Speaker 2>strategic and disciplined he is with his own decisioning and

0:56:51.520 --> 0:56:55.080
<v Speaker 2>external as you were saying, communications like everything the no drinking,

0:56:55.520 --> 0:56:58.960
<v Speaker 2>the no drugs, the appearance, the way, everything's very very careful.

0:56:58.960 --> 0:57:02.360
<v Speaker 1>He's always on cure always and then he's messaging is

0:57:02.560 --> 0:57:06.879
<v Speaker 1>just relentless, and relentless is a good word. And we're

0:57:06.920 --> 0:57:09.040
<v Speaker 1>not here trying to blow smoke up the president's bump.

0:57:09.080 --> 0:57:12.680
<v Speaker 1>But in terms of observations, I think relentless is a

0:57:12.719 --> 0:57:16.320
<v Speaker 1>good word. He's relentless with his messaging about himself and

0:57:16.400 --> 0:57:18.760
<v Speaker 1>everything that he's trying to achieve. In terms of his strategy,

0:57:18.800 --> 0:57:21.439
<v Speaker 1>he's totally relentless. And even at seventy nine, just turns

0:57:21.480 --> 0:57:26.560
<v Speaker 1>seventy nine. That's quite amazing. Acuities, incredible leaks, bang bang bang,

0:57:26.640 --> 0:57:28.720
<v Speaker 1>and he's on and everything sort of set out, And

0:57:29.440 --> 0:57:30.480
<v Speaker 1>I just want to quickly.

0:57:30.280 --> 0:57:32.960
<v Speaker 2>Ask you before we go on, so one other point

0:57:32.960 --> 0:57:35.960
<v Speaker 2>here that is important to your comment that we're not

0:57:36.080 --> 0:57:39.000
<v Speaker 2>here to blow up, blow win up Trump's us. Like

0:57:39.160 --> 0:57:41.080
<v Speaker 2>my job, I run fifteen billion, My job is to

0:57:41.120 --> 0:57:43.840
<v Speaker 2>anticipate what the MOFO is going to do, right, I

0:57:43.960 --> 0:57:45.920
<v Speaker 2>have to. You know, I invest a huge amount resources

0:57:46.400 --> 0:57:49.080
<v Speaker 2>in trying to study him and understand him. And then

0:57:49.160 --> 0:57:52.240
<v Speaker 2>through that process, if I find his decision making interesting

0:57:53.040 --> 0:57:56.200
<v Speaker 2>and informative and illuminating, I'm actually trying to learn myself.

0:57:56.560 --> 0:57:58.760
<v Speaker 2>You know, how can I better prosecute my own decision

0:57:58.800 --> 0:58:03.000
<v Speaker 2>making problems? You know, when you've got a guy that's

0:58:03.040 --> 0:58:05.480
<v Speaker 2>been elected president twice, he's a multi billionaire. Okay, he

0:58:05.520 --> 0:58:09.280
<v Speaker 2>comes with all his again let's say acknowledged shortcomings, but

0:58:09.360 --> 0:58:12.680
<v Speaker 2>there's there's the signal with the noise, there's there's something

0:58:12.720 --> 0:58:14.160
<v Speaker 2>we can everyone can learn from Trump.

0:58:14.400 --> 0:58:16.440
<v Speaker 1>And that's what today's about. And by the way, what

0:58:16.560 --> 0:58:18.040
<v Speaker 1>do you read about the must trade?

0:58:19.360 --> 0:58:21.560
<v Speaker 2>Great question. Yeah, so I think he just blew up.

0:58:22.280 --> 0:58:28.040
<v Speaker 2>I think he really regrets the you know, vicious exit.

0:58:29.800 --> 0:58:32.920
<v Speaker 2>I think I think that was an amazing partnership. I

0:58:33.000 --> 0:58:35.919
<v Speaker 2>really hoped that it would endure. I actually think there'll

0:58:35.960 --> 0:58:39.120
<v Speaker 2>be a reproachment at some point. Musk will come back

0:58:39.160 --> 0:58:41.480
<v Speaker 2>to owl between his legs. I mean, Musk got way

0:58:41.560 --> 0:58:44.800
<v Speaker 2>over his skis. He was politicizing everything he touched. Tesla

0:58:45.000 --> 0:58:48.200
<v Speaker 2>was blowing up, he was a risk of losing SpaceX contracts.

0:58:49.120 --> 0:58:52.360
<v Speaker 2>He wasn't focused on his businesses. And you know, I

0:58:52.440 --> 0:58:54.080
<v Speaker 2>don't know, I mean he was. I don't want to

0:58:54.080 --> 0:58:56.080
<v Speaker 2>call him a nascist, but he was clearly enjoying being

0:58:56.120 --> 0:58:58.960
<v Speaker 2>in the Oval officer every day, sleeping in the Lincoln Room,

0:59:00.080 --> 0:59:03.840
<v Speaker 2>being joint press conferences with Trump all the time, and

0:59:03.920 --> 0:59:06.680
<v Speaker 2>I guess being at the center of a global decision

0:59:06.720 --> 0:59:09.680
<v Speaker 2>making authority, dealing with leaders of nation states. So he

0:59:09.920 --> 0:59:13.120
<v Speaker 2>was clearly getting off on that. You could see whether

0:59:13.160 --> 0:59:15.280
<v Speaker 2>he has this ketamine addiction, I'm not sure, but it's

0:59:15.400 --> 0:59:19.960
<v Speaker 2>clear that that he's an unusual cat, and it seemed

0:59:20.000 --> 0:59:22.440
<v Speaker 2>if you look at the tapes, he was on something.

0:59:23.400 --> 0:59:24.760
<v Speaker 1>And he has retracted a bit since.

0:59:25.080 --> 0:59:27.760
<v Speaker 2>Yeah, and he's you know, he's he's definitely retracted a

0:59:27.800 --> 0:59:31.840
<v Speaker 2>fair bit since. So, I mean, the big beautiful bill.

0:59:33.320 --> 0:59:35.320
<v Speaker 2>Sure it has a lot of pork barreling in it,

0:59:36.000 --> 0:59:38.000
<v Speaker 2>but these things are always compromises. You know. The tax

0:59:38.080 --> 0:59:40.800
<v Speaker 2>cuts are important, the defense spending is important. I thought

0:59:40.880 --> 0:59:42.680
<v Speaker 2>Doge had a lot of momentum behind it. So he

0:59:42.840 --> 0:59:46.120
<v Speaker 2>kind of torched Doge. He torched his constituency inside the

0:59:46.400 --> 0:59:49.600
<v Speaker 2>White House. He potentially torched a lot of his access

0:59:50.440 --> 0:59:52.720
<v Speaker 2>in the context of his own businesses like Tesla and SpaceX.

0:59:52.720 --> 0:59:56.120
<v Speaker 2>SpaceX's biggest customers the US government, So that's a that's

0:59:56.160 --> 0:59:59.240
<v Speaker 2>a big potential problem. I think it's interesting how his

0:59:59.760 --> 1:00:04.000
<v Speaker 2>crawl right back into his shell musk, and he's thus

1:00:04.080 --> 1:00:07.680
<v Speaker 2>far been pretty a political except for the Californian rights

1:00:08.080 --> 1:00:11.360
<v Speaker 2>where he's been retweeting what Trump and Jady Vance have

1:00:11.440 --> 1:00:13.960
<v Speaker 2>been saying, so I think I think Mask made a

1:00:13.960 --> 1:00:18.840
<v Speaker 2>big mistake and it wouldn't surprise me if he was intoxicated.

1:00:19.120 --> 1:00:20.840
<v Speaker 2>I also thought the way that Trump dealt with him

1:00:20.960 --> 1:00:24.560
<v Speaker 2>was really interesting, like really interesting. He was far less

1:00:24.640 --> 1:00:29.720
<v Speaker 2>vicious and far more restrained until Muss started dropping the

1:00:29.880 --> 1:00:31.800
<v Speaker 2>personal bombs on Trump, and then he just said, listen,

1:00:32.240 --> 1:00:33.520
<v Speaker 2>you know, if you want to get personal, we can

1:00:33.600 --> 1:00:35.040
<v Speaker 2>get personal. Like, you know, we don't need to do

1:00:35.160 --> 1:00:36.800
<v Speaker 2>business with you if you want to go down that route.

1:00:36.920 --> 1:00:39.400
<v Speaker 1>That's not shout, but that's like that's like the Iran

1:00:39.560 --> 1:00:43.120
<v Speaker 1>Iran trade, like, yeah, you got forty days. Yeah, yeah,

1:00:43.120 --> 1:00:45.000
<v Speaker 1>I mean will do a deal. He'll do an ultimatum

1:00:45.360 --> 1:00:46.400
<v Speaker 1>that's to anyone.

1:00:46.520 --> 1:00:49.720
<v Speaker 2>Correat Yeah, And Jady Vance said, I thought it was

1:00:49.760 --> 1:00:52.800
<v Speaker 2>really interesting. Jeddy Vance said, we love Elin, he's been

1:00:52.840 --> 1:00:56.600
<v Speaker 2>great for us, but do you really want to get

1:00:56.640 --> 1:01:00.600
<v Speaker 2>into a blood rivalry with Donald Trump at this point

1:01:00.720 --> 1:01:02.760
<v Speaker 2>in his career. No, that's not the trade you want

1:01:02.800 --> 1:01:04.440
<v Speaker 2>to do, and he was just like, you get back

1:01:04.480 --> 1:01:07.760
<v Speaker 2>into your box. I love Musk. I think he's amazing

1:01:08.160 --> 1:01:10.400
<v Speaker 2>and he's an extraordinary human being. He's done so much

1:01:10.480 --> 1:01:13.560
<v Speaker 2>for society. But I think it was just a mistake.

1:01:13.560 --> 1:01:15.520
<v Speaker 2>We all make mistakes, and I think I think Musk

1:01:15.560 --> 1:01:18.200
<v Speaker 2>will iterate big time. So I expect Musk to come

1:01:18.240 --> 1:01:21.000
<v Speaker 2>back out and swing strongly behind Trump in whatever ways

1:01:21.040 --> 1:01:24.360
<v Speaker 2>he can in the future. There was also I mean,

1:01:24.400 --> 1:01:26.880
<v Speaker 2>I think Trump made the point that Musk was upset

1:01:26.920 --> 1:01:33.120
<v Speaker 2>about him removing the electric vehicle subsidies by way of

1:01:33.200 --> 1:01:37.320
<v Speaker 2>this big, bold, beautiful bill, whatever it's called. And whether

1:01:37.440 --> 1:01:40.280
<v Speaker 2>that paid played part of it, I'm not sure. There

1:01:40.360 --> 1:01:43.200
<v Speaker 2>was also, I think issues with Musk dealing with the

1:01:43.240 --> 1:01:45.480
<v Speaker 2>broader administration. It's one thing to have a bilateral relationship

1:01:45.480 --> 1:01:46.600
<v Speaker 2>with Trump when you've got to deal with all of

1:01:46.600 --> 1:01:49.040
<v Speaker 2>his lackey's. Someone like Musk is going to blow up

1:01:49.080 --> 1:01:52.400
<v Speaker 2>those guys because he's just you know, for sure, he's

1:01:52.400 --> 1:01:57.160
<v Speaker 2>a force of nature. And so yeah, but I'm disappointed, mate,

1:01:57.160 --> 1:01:59.120
<v Speaker 2>because I thought Musk had a lot of answers to

1:01:59.240 --> 1:02:03.680
<v Speaker 2>Trump's problems from a policy perspective, like Musk has really

1:02:04.000 --> 1:02:07.640
<v Speaker 2>extraordinary strategic clarity, and he was right on the economics.

1:02:07.680 --> 1:02:09.560
<v Speaker 2>You know, you've got to cut government spending in the

1:02:09.720 --> 1:02:12.200
<v Speaker 2>US in order to balance the books, and you need

1:02:12.280 --> 1:02:14.360
<v Speaker 2>to balance the budget in order to start paying back

1:02:14.400 --> 1:02:17.480
<v Speaker 2>the debt and reducing the burden of the interest rate

1:02:17.800 --> 1:02:19.920
<v Speaker 2>servicing costs. So yeah, it was disappointed.

1:02:19.920 --> 1:02:21.320
<v Speaker 1>I got down in Murky on in next week. What

1:02:21.480 --> 1:02:23.000
<v Speaker 1>would you say about the budget that came up from

1:02:23.000 --> 1:02:24.720
<v Speaker 1>New South Wales on Tuesday this week?

1:02:25.440 --> 1:02:28.280
<v Speaker 2>Mate, Mooki is probably the best politician in Australia. Definitely

1:02:28.280 --> 1:02:31.600
<v Speaker 2>the best treasure, best treasure in Australia. I'm sorry, definitely

1:02:31.600 --> 1:02:37.080
<v Speaker 2>the best stay treasurer your soft mate, come on, So yeah,

1:02:37.120 --> 1:02:39.680
<v Speaker 2>Mooki is definitely. I think he's the hardest working, smartest

1:02:39.720 --> 1:02:44.960
<v Speaker 2>politician in the country. He is formidably intelligent. He know

1:02:45.040 --> 1:02:46.919
<v Speaker 2>what's different about Murky as well. I think he really

1:02:47.040 --> 1:02:49.520
<v Speaker 2>is in it for the right reasons. He doesn't want

1:02:49.560 --> 1:02:53.520
<v Speaker 2>to be Premier or Prime Minister. He cares about change

1:02:53.720 --> 1:02:56.720
<v Speaker 2>and he's also very sensible. I've dealt with him a lot.

1:02:57.120 --> 1:02:59.520
<v Speaker 2>He's a fucking weapon, mate, He's an absolute beast man.

1:02:59.520 --> 1:03:01.120
<v Speaker 1>How much of the budget do you think was about

1:03:01.880 --> 1:03:05.800
<v Speaker 1>saying or preserving our credit rating for New South Wales

1:03:05.840 --> 1:03:06.640
<v Speaker 1>I'm talking about.

1:03:07.320 --> 1:03:09.640
<v Speaker 2>I mean with a good look. Yeah, I think we

1:03:09.760 --> 1:03:12.480
<v Speaker 2>think they're at risk of losing the credit rating. But

1:03:12.520 --> 1:03:14.680
<v Speaker 2>he's doing everything he can to try and salvage it.

1:03:15.080 --> 1:03:17.320
<v Speaker 2>I can tell you this. You know, the Victorians are

1:03:17.360 --> 1:03:20.240
<v Speaker 2>borrying about forty billion a year, the Queensland's borring about

1:03:20.240 --> 1:03:22.080
<v Speaker 2>forty billion a year. Mook, He's only borrowing twenty four

1:03:22.120 --> 1:03:24.160
<v Speaker 2>billion a year for a bigger state, for a much

1:03:24.160 --> 1:03:29.600
<v Speaker 2>bigger state. And so he's been incredibly disciplined on debt.

1:03:30.360 --> 1:03:32.240
<v Speaker 2>And that's something I spoke to him a lot about

1:03:32.320 --> 1:03:37.600
<v Speaker 2>before he became treasurer. He's an immense he's an immense

1:03:37.840 --> 1:03:40.240
<v Speaker 2>human being, and he's one of the good guys. Like

1:03:40.280 --> 1:03:43.240
<v Speaker 2>if someone like him could become premier or Prime minister,

1:03:43.400 --> 1:03:45.800
<v Speaker 2>that's when you win, you know, when you've got somebody

1:03:45.840 --> 1:03:48.040
<v Speaker 2>who's there for the right reasons, who isn't a narcissist,

1:03:48.040 --> 1:03:51.560
<v Speaker 2>who isn't just trying to accumulate power and kind of

1:03:52.480 --> 1:03:53.960
<v Speaker 2>settle scores, And then.

1:03:54.080 --> 1:03:55.800
<v Speaker 1>That's how that's how I see Christian's by the way,

1:03:55.840 --> 1:03:58.720
<v Speaker 1>at a state level, yeah, I think christ is there

1:03:58.760 --> 1:04:00.840
<v Speaker 1>for the right reasons. Us again that right, but he's

1:04:00.880 --> 1:04:02.720
<v Speaker 1>in the right reasons. He's not trying to settle scores.

1:04:03.320 --> 1:04:05.680
<v Speaker 1>It's I think it's a bit different at the federal level.

1:04:05.720 --> 1:04:07.280
<v Speaker 1>But I meant anyway, I rate both.

1:04:07.320 --> 1:04:09.520
<v Speaker 2>I've only met him once and I had like a

1:04:09.560 --> 1:04:12.560
<v Speaker 2>meeting with Min's and Murky and Men's was fantastic. He

1:04:12.600 --> 1:04:16.480
<v Speaker 2>went to Princeton. He's a farman, super impressive guy. And

1:04:16.560 --> 1:04:19.520
<v Speaker 2>I think the fact that there is also normal normal

1:04:21.760 --> 1:04:26.200
<v Speaker 2>and the fact that their relationship is sort of seem

1:04:26.240 --> 1:04:28.440
<v Speaker 2>to be high fidelity is very positive.

1:04:28.480 --> 1:04:31.040
<v Speaker 1>One more question for Chris. So one of our listeners

1:04:31.160 --> 1:04:35.040
<v Speaker 1>has asked asked us to ask you this question, he says,

1:04:35.080 --> 1:04:37.720
<v Speaker 1>from one of our Mental Plus subscribers, Aaron Scott, and

1:04:37.720 --> 1:04:41.479
<v Speaker 1>he says, I'm here to to hear Chris. Chris's thoughts

1:04:41.520 --> 1:04:43.760
<v Speaker 1>about tax reform, and we like to see lower income taxes,

1:04:43.800 --> 1:04:46.520
<v Speaker 1>a high broad based consumer tax such as an increase

1:04:46.600 --> 1:04:52.040
<v Speaker 1>the GST, or he says, an increase in CGT. So

1:04:52.320 --> 1:04:54.320
<v Speaker 1>I presume it could be meaning capital against AX or

1:04:54.360 --> 1:04:57.640
<v Speaker 1>the GST. But we are we do have a reform. Sorry,

1:04:57.680 --> 1:04:59.640
<v Speaker 1>we do have a someone coming up in August. I

1:04:59.640 --> 1:05:01.520
<v Speaker 1>think it is question is have they asked you to

1:05:01.600 --> 1:05:01.959
<v Speaker 1>come along?

1:05:02.960 --> 1:05:05.280
<v Speaker 2>And they haven't asked me either, So what are you

1:05:05.320 --> 1:05:07.360
<v Speaker 2>not one of the good guys as nor am I

1:05:07.600 --> 1:05:11.240
<v Speaker 2>one of Charmers himself, or one of those guys said

1:05:11.640 --> 1:05:13.280
<v Speaker 2>a long time ago that dealing with me, you've got

1:05:13.360 --> 1:05:15.960
<v Speaker 2>to use fireproof gloves, so they don't trust me. And

1:05:16.680 --> 1:05:18.480
<v Speaker 2>that's fine. I mean, I've got no problem with any

1:05:18.480 --> 1:05:20.480
<v Speaker 2>of them. As said, I'm pretty a political but I

1:05:20.640 --> 1:05:22.480
<v Speaker 2>just the problem is I say what I think and

1:05:22.560 --> 1:05:24.680
<v Speaker 2>I can't be controlled and therefore, well, you're not going

1:05:24.720 --> 1:05:25.160
<v Speaker 2>to be a job.

1:05:25.200 --> 1:05:25.640
<v Speaker 1>Why would you?

1:05:25.920 --> 1:05:28.480
<v Speaker 2>Yeah, But I think answer to the question, I think

1:05:28.560 --> 1:05:32.160
<v Speaker 2>everything's on the table, capital gains tax discounts, capital gains

1:05:32.200 --> 1:05:33.280
<v Speaker 2>tax period GSD.

1:05:34.080 --> 1:05:34.960
<v Speaker 1>He's made it pretty clearly.

1:05:36.400 --> 1:05:41.360
<v Speaker 2>I would just think that state taxes, gst capital gains taxes,

1:05:43.080 --> 1:05:48.800
<v Speaker 2>you know, mineral resource rent taxes, stamp duty is like

1:05:48.920 --> 1:05:50.840
<v Speaker 2>state and federal taxes. I think it's all on the

1:05:50.880 --> 1:05:52.480
<v Speaker 2>table because they're going to need to raise a lot

1:05:52.560 --> 1:05:53.160
<v Speaker 2>of tax.

1:05:53.960 --> 1:05:55.720
<v Speaker 1>Or that'll borrow more money, which is a problem.

1:05:55.960 --> 1:06:00.760
<v Speaker 2>Yeah, yeah, to pay the interest on the the borrowings

1:06:00.800 --> 1:06:01.960
<v Speaker 2>of their currently.

1:06:02.240 --> 1:06:02.439
<v Speaker 1>Yeah.

1:06:02.480 --> 1:06:05.360
<v Speaker 2>So I think taxes are heading one way, and I

1:06:05.360 --> 1:06:07.520
<v Speaker 2>think it's gonna be really nasty unfortunately. And I think

1:06:07.560 --> 1:06:09.919
<v Speaker 2>this is over a ten. Particularly if they get another

1:06:09.960 --> 1:06:12.000
<v Speaker 2>two terms, you're going to see a huge increase in

1:06:12.040 --> 1:06:13.960
<v Speaker 2>the public tax stake to fund the NDIS. I mean,

1:06:14.000 --> 1:06:17.440
<v Speaker 2>that's sixty billion a year, as big as medicare one

1:06:17.520 --> 1:06:22.440
<v Speaker 2>and nine kids are apparently autistic. It's just the biggest.

1:06:23.200 --> 1:06:24.880
<v Speaker 2>It's the biggest rued in the history of ruds.

1:06:25.320 --> 1:06:28.040
<v Speaker 1>And you know, one of the reason why I found

1:06:28.080 --> 1:06:32.760
<v Speaker 1>it the other day is because if you're diagnosed and

1:06:32.880 --> 1:06:36.640
<v Speaker 1>prescribed as autistic, and I don't mean severely autistic, I

1:06:36.680 --> 1:06:41.880
<v Speaker 1>don't mean completely different everybody else, because there are autistic

1:06:42.200 --> 1:06:45.000
<v Speaker 1>people in kids who are really at a disadvantage to

1:06:45.080 --> 1:06:50.000
<v Speaker 1>some extent, and fair enough, but even if you're mildly autistic,

1:06:50.120 --> 1:06:53.640
<v Speaker 1>however that it gets diagnosed that they at the HC,

1:06:54.080 --> 1:06:56.040
<v Speaker 1>they get special advantages in terms of how they do

1:06:56.120 --> 1:06:57.439
<v Speaker 1>the exam. They get much more time.

1:06:58.080 --> 1:07:00.400
<v Speaker 2>Well, it's also assessed not by anyone who's into pen interview,

1:07:00.480 --> 1:07:03.800
<v Speaker 2>but both whomever you choose to have the assessment made by.

1:07:04.040 --> 1:07:05.120
<v Speaker 2>And it's not means tested.

1:07:05.760 --> 1:07:11.120
<v Speaker 1>So clever parents will say that diagnosed every.

1:07:11.080 --> 1:07:15.360
<v Speaker 2>Man and their dogs now in the NDIS. And so

1:07:15.480 --> 1:07:17.400
<v Speaker 2>I think the taxes are heading one way. I mean,

1:07:17.440 --> 1:07:19.360
<v Speaker 2>you're going to be paying a lot of tax to

1:07:19.440 --> 1:07:21.320
<v Speaker 2>the government because the government's got to pay for the NDS.

1:07:21.360 --> 1:07:23.520
<v Speaker 2>They're going to pay for all this infrastructure, they're going

1:07:23.560 --> 1:07:26.439
<v Speaker 2>to pay for the huge public service and the fact

1:07:26.440 --> 1:07:28.680
<v Speaker 2>that they represent a larger share of the economy than

1:07:29.600 --> 1:07:32.120
<v Speaker 2>any government we've seen since more or less World War Two.

1:07:32.200 --> 1:07:37.200
<v Speaker 2>So I think forget what they say, like any any

1:07:37.400 --> 1:07:39.200
<v Speaker 2>claims that we're not going to do gs here, we're

1:07:39.200 --> 1:07:40.480
<v Speaker 2>not going to do with stay taxes. I think it's

1:07:40.520 --> 1:07:43.560
<v Speaker 2>all on the table. Maybe not this term, maybe next term,

1:07:43.720 --> 1:07:46.560
<v Speaker 2>but it's they're coming for everybody. There's gonna be a

1:07:46.600 --> 1:07:48.280
<v Speaker 2>lot of tax paid. I mean, and you see the

1:07:48.960 --> 1:07:53.880
<v Speaker 2>bifurcation here between libertarian states like Florida in the US

1:07:54.120 --> 1:07:57.120
<v Speaker 2>and the super center left states like California. I mean,

1:07:57.680 --> 1:07:59.960
<v Speaker 2>the totality of taxes you pay in California fifty six,

1:08:00.520 --> 1:08:03.320
<v Speaker 2>where you're paying basically half that in Florida, because they're

1:08:03.400 --> 1:08:06.800
<v Speaker 2>just two distinctly different business models. And I think it

1:08:06.920 --> 1:08:10.640
<v Speaker 2>also is unfortunately generational. Younger generations want government to solve

1:08:10.680 --> 1:08:13.160
<v Speaker 2>their problems. Order generations want government to get out of

1:08:13.200 --> 1:08:13.440
<v Speaker 2>the way.

1:08:14.080 --> 1:08:18.640
<v Speaker 1>And yeah, have you got one quick, quick one that

1:08:18.720 --> 1:08:21.960
<v Speaker 1>just came through to my mind. Let's forget about the

1:08:22.120 --> 1:08:24.160
<v Speaker 1>unfairness of the total tax or the way its been

1:08:24.200 --> 1:08:27.000
<v Speaker 1>calculator should say, but this superinnoation tax over over three

1:08:27.040 --> 1:08:28.439
<v Speaker 1>million dollars was your view.

1:08:29.120 --> 1:08:30.840
<v Speaker 2>It just doesn't make any sense to me at all, Like,

1:08:31.040 --> 1:08:32.360
<v Speaker 2>I have no idea where this came from.

1:08:32.479 --> 1:08:33.280
<v Speaker 1>It's not indexed.

1:08:33.880 --> 1:08:36.479
<v Speaker 2>I mean, it just looks like an a team gains

1:08:36.680 --> 1:08:39.080
<v Speaker 2>unrealized gains. It looks like an attempt just to attax

1:08:40.360 --> 1:08:43.240
<v Speaker 2>into oblivion anyone who has a large superbalance.

1:08:43.439 --> 1:08:44.719
<v Speaker 1>But what would be the episode?

1:08:44.920 --> 1:08:46.880
<v Speaker 2>Presumably the intent is to get them out of Super.

1:08:47.320 --> 1:08:49.240
<v Speaker 2>But where's that money going to go? It's probably going

1:08:49.280 --> 1:08:51.600
<v Speaker 2>to go back into the owner occupied property, right, Like,

1:08:51.760 --> 1:08:52.840
<v Speaker 2>what are you going to do? You're going to take

1:08:52.880 --> 1:08:55.120
<v Speaker 2>your fix million Super and say, fine, I'm just going

1:08:55.160 --> 1:08:58.639
<v Speaker 2>to upgrade to a bigger house and get tax free

1:08:58.720 --> 1:08:59.920
<v Speaker 2>capital gains on my home.

1:09:01.479 --> 1:09:02.880
<v Speaker 1>Maybe they've got that lined up as well.

1:09:04.280 --> 1:09:06.240
<v Speaker 2>Wouldn't surprise me, mate, it would not. I mean it's

1:09:06.240 --> 1:09:07.880
<v Speaker 2>going to be nasty. It's going to be really bad.

1:09:08.240 --> 1:09:10.599
<v Speaker 1>This is terrible. But but it's not yet. We'll wait

1:09:10.600 --> 1:09:12.360
<v Speaker 1>and see what happens in August or whenever he's having

1:09:12.439 --> 1:09:16.479
<v Speaker 1>commting and what you know, Dreasure, you should be inviting

1:09:16.520 --> 1:09:18.360
<v Speaker 1>this bloke and a few other people that I know,

1:09:18.439 --> 1:09:21.360
<v Speaker 1>but I doubt very much again invite us. We'll at

1:09:21.439 --> 1:09:23.360
<v Speaker 1>least tell you what you should you need to hear.

1:09:24.120 --> 1:09:26.000
<v Speaker 2>We won't be there, So I say what we need

1:09:26.080 --> 1:09:28.640
<v Speaker 2>to do is Australian needs to be a magnet for

1:09:28.680 --> 1:09:30.600
<v Speaker 2>the best talent globally and to do that we need

1:09:30.640 --> 1:09:33.200
<v Speaker 2>to have globally competitive tax rates. And we know we're close,

1:09:33.760 --> 1:09:36.760
<v Speaker 2>like we need to radically revise. We should be less

1:09:37.280 --> 1:09:38.879
<v Speaker 2>progressive in our tax regimes.

1:09:38.920 --> 1:09:39.360
<v Speaker 1>It should be.

1:09:40.960 --> 1:09:44.400
<v Speaker 2>Much the tax CAU should be much flatter, much lower.

1:09:45.200 --> 1:09:47.320
<v Speaker 2>And but it'll happen. What's going to happen is we're

1:09:47.320 --> 1:09:50.200
<v Speaker 2>gonna have a couple of terms of this and then

1:09:50.200 --> 1:09:51.920
<v Speaker 2>there will be big problems. But eventually you get a

1:09:51.960 --> 1:09:53.720
<v Speaker 2>trumpy and style character who just come in and will

1:09:53.720 --> 1:09:58.479
<v Speaker 2>just slash all the taxes, and so you know, the

1:09:58.560 --> 1:10:01.120
<v Speaker 2>pendulum will swing in the other direction and eventually just

1:10:01.200 --> 1:10:03.439
<v Speaker 2>gonna stay alive long enough, you guys, stay alive long enough.

1:10:03.520 --> 1:10:05.160
<v Speaker 1>Yeah, thanks mate, good to speak in Chris

1:10:18.439 --> 1:10:18.479
<v Speaker 2>M.