1 00:00:00,400 --> 00:00:04,320 Speaker 1: Strap on your Parachute's time for What Goes Up with 2 00:00:04,400 --> 00:00:14,080 Speaker 1: Sarah Ponzick and Mike Reagan. Hello and welcome to What 3 00:00:14,200 --> 00:00:17,880 Speaker 1: goes Up, a Bloomberg Weekly Markets podcast. I'm Sarah Pons, 4 00:00:18,200 --> 00:00:21,320 Speaker 1: a reporter on the Cross Asset team, and I'm Mike Reagan, 5 00:00:21,520 --> 00:00:26,280 Speaker 1: a senior editor at Bloomberg and as Sarah's official hype man. 6 00:00:26,320 --> 00:00:28,800 Speaker 1: I have to give a shout out to Sarah this 7 00:00:28,840 --> 00:00:32,920 Speaker 1: week for getting the cover story of Business Week magazine Football. 8 00:00:32,960 --> 00:00:35,199 Speaker 1: Our listeners rush out to the newsstand and grab it 9 00:00:35,240 --> 00:00:38,680 Speaker 1: on Robin Hood. Congratulations, Sarah, Thank you. I'm flattered. Mike, 10 00:00:38,840 --> 00:00:41,800 Speaker 1: I'm so lucky to know that I have such a 11 00:00:41,840 --> 00:00:44,680 Speaker 1: loyal hype man. So everyone who's listening, you have to 12 00:00:44,680 --> 00:00:47,320 Speaker 1: take Mike's word, even though he hasn't read the story, 13 00:00:47,720 --> 00:00:50,360 Speaker 1: um and go read it yourself. Thank you so much. 14 00:00:50,360 --> 00:00:53,760 Speaker 1: It's fabulous. Even though you've only seen the title, We'll 15 00:00:53,760 --> 00:00:55,720 Speaker 1: take it and run with it. But it is about 16 00:00:55,800 --> 00:00:58,360 Speaker 1: Robin Hood. If you haven't listened to last week's episode either, 17 00:00:58,440 --> 00:01:01,440 Speaker 1: we spoke to Listen Saunders over at Schwab about the 18 00:01:01,480 --> 00:01:03,800 Speaker 1: date Trader of Facts, so it's also a great episode 19 00:01:04,120 --> 00:01:06,920 Speaker 1: to listen to if you haven't already, but this week 20 00:01:06,920 --> 00:01:09,679 Speaker 1: on the show anyway, Mike, investors are coalescing around the 21 00:01:09,680 --> 00:01:12,760 Speaker 1: idea that no matter who wins the election, there will 22 00:01:12,800 --> 00:01:15,480 Speaker 1: be more stimulus down the road. But with all this 23 00:01:15,600 --> 00:01:19,160 Speaker 1: government spending, will there be enough demand to meet all 24 00:01:19,160 --> 00:01:22,039 Speaker 1: the supply? And of course we will close out the 25 00:01:22,040 --> 00:01:25,319 Speaker 1: episode with our tradition the craziest thing I saw in 26 00:01:25,440 --> 00:01:28,360 Speaker 1: markets this week. And after all, if you saw something crazy, 27 00:01:28,480 --> 00:01:31,679 Speaker 1: give us a call on the Bloomberg Podcast hotline at 28 00:01:32,280 --> 00:01:36,880 Speaker 1: six four six three two four three four nine. Oh, 29 00:01:36,920 --> 00:01:39,320 Speaker 1: and leave us a voicemail. Maybe we'll play it on 30 00:01:39,400 --> 00:01:42,240 Speaker 1: the show with your crazy thing or any other feedback 31 00:01:42,280 --> 00:01:45,280 Speaker 1: you have for the show. And sorry, let's introduce that guest. 32 00:01:45,440 --> 00:01:46,960 Speaker 1: Sort of a change of pace for us this week, 33 00:01:47,000 --> 00:01:50,120 Speaker 1: because our guest is a real expert on fixed income 34 00:01:50,200 --> 00:01:54,520 Speaker 1: currency markets, so we're gonna dive into things like inflation 35 00:01:54,600 --> 00:01:58,120 Speaker 1: break evens and the yield curve and that sort of thing. 36 00:01:58,520 --> 00:02:02,480 Speaker 1: But without any further ado from Wells Fargo Securities were 37 00:02:02,680 --> 00:02:05,960 Speaker 1: very happy to have one of their macro strategists, Zachary 38 00:02:06,040 --> 00:02:08,680 Speaker 1: Griffith's Zach, welcome to the show. Thanks for having me on. 39 00:02:08,720 --> 00:02:11,440 Speaker 1: Great guy, Great to see you. Again, you know, Zach, 40 00:02:11,520 --> 00:02:14,120 Speaker 1: I wanted to get in all the things Sara mentioned, 41 00:02:14,160 --> 00:02:16,280 Speaker 1: but I wanted to start off with something kind of 42 00:02:16,280 --> 00:02:19,280 Speaker 1: in the weeds because it's a topic that really fascinates me, 43 00:02:19,320 --> 00:02:22,320 Speaker 1: and that's the interest rate swap market. We had what 44 00:02:22,360 --> 00:02:27,359 Speaker 1: they call the Big Bang last weekend where basically, and 45 00:02:27,560 --> 00:02:29,839 Speaker 1: this is amazing to me, Sarah, I'm not sure how 46 00:02:29,919 --> 00:02:31,760 Speaker 1: much you know about the swaps market. I know a 47 00:02:31,760 --> 00:02:34,960 Speaker 1: little bit, not much. I will completely be honest and 48 00:02:35,000 --> 00:02:37,640 Speaker 1: admit that, right right, I I know a little bit. 49 00:02:37,680 --> 00:02:39,800 Speaker 1: I happen to edit a long story on on the 50 00:02:39,800 --> 00:02:41,440 Speaker 1: Big Bag. So now, of course I'm an expert. I 51 00:02:41,639 --> 00:02:43,760 Speaker 1: can I can talk with with guys like Zach about 52 00:02:43,760 --> 00:02:47,200 Speaker 1: it like huge market that I don't think a lot 53 00:02:47,240 --> 00:02:51,239 Speaker 1: of our listeners really necessarily appreciate how it's important. Something 54 00:02:51,280 --> 00:02:56,160 Speaker 1: like a hundred trillion dollars in notional value on interest 55 00:02:56,400 --> 00:02:59,799 Speaker 1: rate swaps, something like eighty some trillion is through clearing. 56 00:02:59,800 --> 00:03:02,720 Speaker 1: How is and what happened last weekend is it's been 57 00:03:02,760 --> 00:03:05,880 Speaker 1: part of this multi year switch to get away from 58 00:03:05,960 --> 00:03:10,040 Speaker 1: lib war and other interest rate benchmarks and promote the 59 00:03:10,480 --> 00:03:14,480 Speaker 1: secured overnight financing rate or so for um as sort 60 00:03:14,480 --> 00:03:17,160 Speaker 1: of the replacement for library. So what they did is 61 00:03:17,200 --> 00:03:20,920 Speaker 1: they they switched uh, interest rate benchmarks as far as 62 00:03:20,960 --> 00:03:24,200 Speaker 1: the discounting rate of how you value these swaps from 63 00:03:24,240 --> 00:03:28,760 Speaker 1: the effective federal funds rate to so forth. Now it 64 00:03:28,800 --> 00:03:31,680 Speaker 1: sounds like a pretty simple thing to switch, but Bory 65 00:03:31,760 --> 00:03:34,400 Speaker 1: not really. I mean, you think of eighty some trillion 66 00:03:34,440 --> 00:03:38,840 Speaker 1: and notional swaps out there. Having to change discount rates 67 00:03:39,080 --> 00:03:41,720 Speaker 1: even a few basis points is going to cause massive 68 00:03:42,280 --> 00:03:45,000 Speaker 1: sort of changes in valuations of these swaps, which is 69 00:03:45,200 --> 00:03:48,160 Speaker 1: just what happened. And the clearinghouses had to sort of 70 00:03:48,160 --> 00:03:50,720 Speaker 1: match up the winners and losers and sort of divert 71 00:03:51,120 --> 00:03:54,520 Speaker 1: billions of dollars from people who swaps went up in 72 00:03:54,600 --> 00:03:57,440 Speaker 1: value to those who went down, and they also issued 73 00:03:57,640 --> 00:04:00,960 Speaker 1: tens of billions in swaps to compensate it for changes 74 00:04:01,000 --> 00:04:04,800 Speaker 1: in risk in this market. Really fascinating thing that happened 75 00:04:05,040 --> 00:04:07,120 Speaker 1: now is that I know you had a note on 76 00:04:07,160 --> 00:04:10,440 Speaker 1: this talking about sort of the potential ripple effects. A 77 00:04:10,440 --> 00:04:14,040 Speaker 1: lot of people who got basis swaps as compensations, whether 78 00:04:14,320 --> 00:04:18,560 Speaker 1: whether their banks or hedge funds don't really use basis 79 00:04:18,560 --> 00:04:21,720 Speaker 1: swaps to hedge the way, uh, you know, the clearinghouses 80 00:04:22,040 --> 00:04:25,159 Speaker 1: view other counterparties using them. So the idea was that 81 00:04:25,200 --> 00:04:27,839 Speaker 1: there were these auctions of I think was like twenty 82 00:04:27,880 --> 00:04:31,800 Speaker 1: five billion worth of swaps at CME and UH a 83 00:04:31,839 --> 00:04:35,120 Speaker 1: bunch more at lc H in London, and there was 84 00:04:35,279 --> 00:04:37,880 Speaker 1: a lot of concern about sort of dislocations in the 85 00:04:37,960 --> 00:04:40,240 Speaker 1: in the market after that. How did it all go 86 00:04:40,320 --> 00:04:43,440 Speaker 1: down from your perspective, Was there any sort of market 87 00:04:43,440 --> 00:04:46,640 Speaker 1: anomalies that you noticed, any sort of inkling that some 88 00:04:46,800 --> 00:04:48,760 Speaker 1: hedge funds or banks might be feeling a little pain 89 00:04:48,839 --> 00:04:51,480 Speaker 1: because of the switch. Well, I have some heartbreaking news 90 00:04:51,520 --> 00:04:54,760 Speaker 1: to start us out. That was actually my crazy thing 91 00:04:55,120 --> 00:04:58,240 Speaker 1: in markets. I figured, just like last time. I mean, 92 00:04:58,279 --> 00:05:00,599 Speaker 1: any time you can say hut of them funny trillion 93 00:05:00,640 --> 00:05:04,040 Speaker 1: notional of anything occurred, that's pretty crazy, right, And that's 94 00:05:04,080 --> 00:05:08,240 Speaker 1: just for l H. And so far it seems like 95 00:05:08,279 --> 00:05:12,359 Speaker 1: the auctions went fairly well. And we had been concerned 96 00:05:12,400 --> 00:05:15,480 Speaker 1: about some potential widening in the sofa fed funds basis, 97 00:05:15,680 --> 00:05:18,400 Speaker 1: and you may have seen some of that, but overall 98 00:05:18,400 --> 00:05:21,440 Speaker 1: it's it's gone well. But it's really a huge step 99 00:05:21,760 --> 00:05:25,960 Speaker 1: in the process towards shifting away from live or into 100 00:05:26,040 --> 00:05:30,360 Speaker 1: sofa as the risk free rate and the benchmark rate 101 00:05:30,560 --> 00:05:34,159 Speaker 1: in the US. So it's it's really an incredible thing 102 00:05:34,240 --> 00:05:37,400 Speaker 1: that that went on over the weekend, and so far, 103 00:05:37,839 --> 00:05:40,280 Speaker 1: I think it's going to be a process seeing how 104 00:05:40,279 --> 00:05:42,359 Speaker 1: it all shakes out. But the initial indications are at 105 00:05:42,400 --> 00:05:45,240 Speaker 1: the auction works fairly well and that the market has 106 00:05:45,279 --> 00:05:49,560 Speaker 1: been stable in the wake of the huge move. So 107 00:05:49,560 --> 00:05:51,159 Speaker 1: we'll put you on the spot. You have about twenty 108 00:05:51,160 --> 00:05:53,000 Speaker 1: minutes now, Zack, to come up with something new by 109 00:05:53,000 --> 00:05:54,400 Speaker 1: the time we get to the end of the podcast. 110 00:05:55,040 --> 00:06:01,719 Speaker 1: That kidding, Zach, wasn't a long time coming though. Were 111 00:06:01,760 --> 00:06:04,120 Speaker 1: there signs that this is going to happen? Yeah, it 112 00:06:04,160 --> 00:06:06,880 Speaker 1: was a long time coming, and you saw some reaction 113 00:06:07,040 --> 00:06:10,080 Speaker 1: in markets as certain participants were setting up for the 114 00:06:10,120 --> 00:06:12,240 Speaker 1: big bang. So there's a chance that a lot of 115 00:06:13,360 --> 00:06:16,640 Speaker 1: positioning around the big bang was was done and dusted 116 00:06:17,400 --> 00:06:20,520 Speaker 1: before the weekend hit, and so I think that probably 117 00:06:20,560 --> 00:06:26,480 Speaker 1: contributed to some of the relative stability around it. And overall, 118 00:06:26,520 --> 00:06:29,800 Speaker 1: I think it's a it's a huge step towards the 119 00:06:29,800 --> 00:06:32,919 Speaker 1: transition to SOFA and I think when any time that 120 00:06:33,000 --> 00:06:36,640 Speaker 1: you have such a shift in these these clearing houses, 121 00:06:36,640 --> 00:06:39,960 Speaker 1: which really see the majority of swaps that are done 122 00:06:40,240 --> 00:06:44,080 Speaker 1: go through, then that's that's really a landmark thing. And 123 00:06:44,480 --> 00:06:47,880 Speaker 1: when we talked to certain clients, it does seem like 124 00:06:47,920 --> 00:06:50,880 Speaker 1: there's still skepticism that this shift from live or is 125 00:06:50,880 --> 00:06:53,200 Speaker 1: going to happen. And this was I think a big 126 00:06:53,240 --> 00:06:57,320 Speaker 1: step in the right direction. And yes it was widely expected, 127 00:06:57,360 --> 00:07:01,400 Speaker 1: but it's just another step towards this this process that 128 00:07:01,440 --> 00:07:04,280 Speaker 1: we've been kind of banging on the drum that it's 129 00:07:04,360 --> 00:07:07,560 Speaker 1: very real and so of the regulators. So it's it's 130 00:07:07,560 --> 00:07:10,240 Speaker 1: a big thing, and um, you know, there's there's only 131 00:07:10,240 --> 00:07:13,080 Speaker 1: going to be more shifting in that direction going forward. 132 00:07:13,960 --> 00:07:16,680 Speaker 1: There's that let's switch to sort of a more mundane 133 00:07:17,040 --> 00:07:20,440 Speaker 1: fixed income topic, and that's the The backup in yields 134 00:07:20,480 --> 00:07:23,320 Speaker 1: we've seen this week is getting interesting. I mean, we're 135 00:07:23,360 --> 00:07:27,560 Speaker 1: still at very low rates in the US uh ten years, 136 00:07:27,920 --> 00:07:31,400 Speaker 1: you know, eightiesome basis points, you know, thirty years, still 137 00:07:31,480 --> 00:07:34,640 Speaker 1: well below two. What do you make of it? Is 138 00:07:34,640 --> 00:07:37,280 Speaker 1: it sort of part of this blue wave trade idea? 139 00:07:38,040 --> 00:07:40,960 Speaker 1: Is it? You know, the economic recovery is starting to 140 00:07:41,400 --> 00:07:43,280 Speaker 1: perk up. What do you make out of what's going 141 00:07:43,320 --> 00:07:45,880 Speaker 1: on with rates this week? Yeah, it's tough to parse 142 00:07:45,960 --> 00:07:49,720 Speaker 1: out what some of these moves are really directly attributable 143 00:07:49,760 --> 00:07:53,160 Speaker 1: to I think part of it comes down to the 144 00:07:53,200 --> 00:07:56,960 Speaker 1: prospect of a blue wave, which equals more stimulus. The 145 00:07:57,000 --> 00:07:59,400 Speaker 1: one thing that's been kind of fascinating to us over 146 00:07:59,440 --> 00:08:01,480 Speaker 1: the past couple of weeks and maybe even a couple 147 00:08:01,520 --> 00:08:04,560 Speaker 1: of months is how much the market has focused on 148 00:08:04,680 --> 00:08:09,160 Speaker 1: headlines around fiscal stimulus, sort of expecting it to happen 149 00:08:09,200 --> 00:08:11,960 Speaker 1: before the election. And we've been in the camp that 150 00:08:11,960 --> 00:08:15,440 Speaker 1: that's a very unlikely outcome and has only gotten less 151 00:08:15,480 --> 00:08:17,960 Speaker 1: likely as we are so close to the election now, 152 00:08:18,760 --> 00:08:22,240 Speaker 1: and I think that's been a key driver of where 153 00:08:22,280 --> 00:08:24,440 Speaker 1: we've gotten to today. So when we think about the 154 00:08:24,520 --> 00:08:26,880 Speaker 1: risks in the near term heading into the election, you 155 00:08:26,920 --> 00:08:30,040 Speaker 1: have a week that contains the US election and f 156 00:08:30,120 --> 00:08:33,240 Speaker 1: O m C meeting, a Treasury refunding announcement, and non 157 00:08:33,280 --> 00:08:36,200 Speaker 1: farm payrolls. We think that I can't believe that's allowed. 158 00:08:36,600 --> 00:08:39,760 Speaker 1: Neither can we. It's I feel like even two of 159 00:08:39,760 --> 00:08:42,319 Speaker 1: those things is too much. And and we have four 160 00:08:42,880 --> 00:08:46,120 Speaker 1: Tier one super Tier one events all in one week. 161 00:08:46,200 --> 00:08:49,880 Speaker 1: But when we think about the risks too yields in 162 00:08:49,920 --> 00:08:53,120 Speaker 1: the near term, we think it's to the downside. And 163 00:08:53,160 --> 00:08:55,840 Speaker 1: that's sort of a weighted average of these different outcomes 164 00:08:55,840 --> 00:08:58,559 Speaker 1: that you can have with the election, with the fo 165 00:08:58,679 --> 00:09:01,040 Speaker 1: MC meeting, with treasury re lending. And the thing that 166 00:09:01,080 --> 00:09:04,560 Speaker 1: we think might not be reflected in yields right now 167 00:09:04,880 --> 00:09:07,920 Speaker 1: is the possibility of a delayed election outcome or a 168 00:09:07,960 --> 00:09:10,800 Speaker 1: contested election outcome where you have a big risk off move. 169 00:09:11,320 --> 00:09:15,319 Speaker 1: The tenure yield shifts dramatically lower in that scenario, and 170 00:09:15,800 --> 00:09:18,199 Speaker 1: that will sort of be dynamic. As you know, I 171 00:09:18,440 --> 00:09:23,280 Speaker 1: don't think it's anticipated that will have the results at 172 00:09:23,280 --> 00:09:27,520 Speaker 1: the end of November three, just depending on how close 173 00:09:27,600 --> 00:09:31,200 Speaker 1: the race is and how many mail in ballots you have. 174 00:09:31,320 --> 00:09:34,720 Speaker 1: You're really dealing with an election that is unlike any 175 00:09:34,760 --> 00:09:36,880 Speaker 1: others we've had in recent past, with all of the 176 00:09:36,920 --> 00:09:40,720 Speaker 1: potential mail in voting. So we think that the risks 177 00:09:40,720 --> 00:09:43,440 Speaker 1: are to the downside in the near term, but over 178 00:09:43,480 --> 00:09:46,200 Speaker 1: the medium term, we do think that the story remains 179 00:09:46,679 --> 00:09:50,600 Speaker 1: extremely heavy heavy treasury issuance. And that's even without another 180 00:09:50,600 --> 00:09:53,560 Speaker 1: fiscal package, which might become more likely once you have 181 00:09:54,000 --> 00:09:57,480 Speaker 1: an election result in a better understanding of who's in 182 00:09:57,520 --> 00:10:01,120 Speaker 1: the White House and in Congress, and you know that 183 00:10:01,280 --> 00:10:05,040 Speaker 1: that only increases the risk of of higher yields from here. 184 00:10:05,080 --> 00:10:07,440 Speaker 1: So short term you could see yields come down a 185 00:10:07,480 --> 00:10:10,640 Speaker 1: bit depending on how things go with the election. Over 186 00:10:10,679 --> 00:10:13,960 Speaker 1: the medium term, we think the directionally, it's yields higher 187 00:10:14,000 --> 00:10:16,520 Speaker 1: and curse steeper. I am going to go ahead and 188 00:10:16,600 --> 00:10:19,400 Speaker 1: head yourselves a little bit and just say, we do 189 00:10:19,520 --> 00:10:24,240 Speaker 1: record this podcast on a Thursday, so if by chance 190 00:10:24,400 --> 00:10:28,040 Speaker 1: something happens with stimulus on Friday, we will have recorded 191 00:10:28,080 --> 00:10:30,280 Speaker 1: this beforehand. I feel like I have to say that 192 00:10:30,440 --> 00:10:35,240 Speaker 1: just in case. But that's important said, very important disclosure. 193 00:10:35,400 --> 00:10:38,840 Speaker 1: But going forwards, if no matter what, we do get 194 00:10:38,880 --> 00:10:41,040 Speaker 1: another stimulus package and and say we do have a 195 00:10:41,080 --> 00:10:45,719 Speaker 1: blue wave, and that means trillions dollars more worth of 196 00:10:45,800 --> 00:10:48,640 Speaker 1: fiscal stimulus down the pipeline. I remember the last time 197 00:10:48,679 --> 00:10:52,240 Speaker 1: we spoke earlier this year, we talked about the supply 198 00:10:52,760 --> 00:10:57,680 Speaker 1: coming to the treasury market from that first round of stimulus, 199 00:10:57,720 --> 00:11:01,840 Speaker 1: the Cares Act, and there were are a few concerns 200 00:11:01,880 --> 00:11:06,200 Speaker 1: about supply or demand meeting that supply. If we got 201 00:11:06,280 --> 00:11:09,920 Speaker 1: trillions and trillions dollars more worth of stimulus, what is 202 00:11:09,960 --> 00:11:13,640 Speaker 1: that going to look like from US supply and demand standpoint. Yeah, 203 00:11:13,640 --> 00:11:15,640 Speaker 1: that's a great point, Sarah. And if you think back 204 00:11:15,720 --> 00:11:20,600 Speaker 1: to March, April, even May all of that supply was 205 00:11:20,760 --> 00:11:23,640 Speaker 1: handled through the bill market. Almost all of that supply 206 00:11:23,880 --> 00:11:29,280 Speaker 1: is Treasury less frequently adjusts its coupon auction sizes as 207 00:11:29,320 --> 00:11:33,640 Speaker 1: it wants it's auctions to be regular and known and 208 00:11:34,040 --> 00:11:38,480 Speaker 1: not very volatile. They sort of handle any shifts in 209 00:11:39,160 --> 00:11:42,360 Speaker 1: issuance needs through the bill market. So that's I mean, 210 00:11:42,760 --> 00:11:45,520 Speaker 1: the what they did back then as they introduced these 211 00:11:45,559 --> 00:11:47,960 Speaker 1: cash management bills that they have been issuing on a 212 00:11:48,000 --> 00:11:51,360 Speaker 1: regular basis since then, and they've driven up the cash 213 00:11:51,400 --> 00:11:54,400 Speaker 1: balance to one point seven trillion I think it's at 214 00:11:54,880 --> 00:11:59,120 Speaker 1: around now, and so the big difference going forward is 215 00:12:00,080 --> 00:12:03,840 Speaker 1: of this additional stimulus will be able to be handled 216 00:12:03,960 --> 00:12:07,480 Speaker 1: with the cash balance. That's that's really so high if 217 00:12:07,480 --> 00:12:10,559 Speaker 1: you think about it, treasuries own forecast for the cash 218 00:12:10,559 --> 00:12:12,400 Speaker 1: balance for the end of this year is eight hundred 219 00:12:12,440 --> 00:12:16,719 Speaker 1: billion dollars or nine billion dollars above that. Now now 220 00:12:16,720 --> 00:12:20,200 Speaker 1: Treasury has baked into its forecast one trillion dollar fiscal 221 00:12:20,240 --> 00:12:24,120 Speaker 1: stimulus package, which has not materialized yet. So when we 222 00:12:24,160 --> 00:12:28,360 Speaker 1: think about the next one to three trillion, a lot 223 00:12:28,400 --> 00:12:31,400 Speaker 1: of that can be handled through the cash balance, and 224 00:12:31,520 --> 00:12:35,840 Speaker 1: that sort of takes the edge off of the ultimate 225 00:12:35,920 --> 00:12:38,440 Speaker 1: size of the new package because they can they have 226 00:12:38,520 --> 00:12:40,520 Speaker 1: the cash to pay for a certain amount of that, 227 00:12:41,200 --> 00:12:44,240 Speaker 1: and having that cash on hand, if they are to 228 00:12:44,440 --> 00:12:48,720 Speaker 1: decide to ramp up unemployment insurance to the additional six 229 00:12:49,120 --> 00:12:54,040 Speaker 1: billion per month again or right checks to certain US households, 230 00:12:54,040 --> 00:12:56,839 Speaker 1: they can do that with that supply of cash. And 231 00:12:58,559 --> 00:13:02,880 Speaker 1: going forward, more of that supply is going to be 232 00:13:02,960 --> 00:13:06,920 Speaker 1: turned out. And and you've really seen extreme increases in 233 00:13:07,080 --> 00:13:10,760 Speaker 1: long term auctions at May and August, even higher than 234 00:13:10,800 --> 00:13:14,200 Speaker 1: we had anticipated. But they've gone fairly well up to 235 00:13:14,240 --> 00:13:16,880 Speaker 1: this point. But we do think going forward you're gonna 236 00:13:17,000 --> 00:13:20,800 Speaker 1: hit a point where some of these buyers that maybe 237 00:13:21,120 --> 00:13:23,760 Speaker 1: are buying out of need and not of want, they 238 00:13:23,840 --> 00:13:26,480 Speaker 1: just need the duration and they don't necessarily have to 239 00:13:26,520 --> 00:13:29,840 Speaker 1: look at at the yields, which are still quite unattractive. 240 00:13:30,400 --> 00:13:32,839 Speaker 1: As that starts to dry up and people can take 241 00:13:32,880 --> 00:13:37,160 Speaker 1: a step back and perhaps reconsider, then, I think that's 242 00:13:37,200 --> 00:13:40,240 Speaker 1: one of the contributing factors that that sends yields higher, 243 00:13:40,640 --> 00:14:02,120 Speaker 1: especially if you do get another fistical stimulus package. Well, Zack, 244 00:14:02,160 --> 00:14:05,040 Speaker 1: you talked about buyers in the treasury market, which I 245 00:14:05,080 --> 00:14:07,559 Speaker 1: think obviously the elephant in the room there is the FED, 246 00:14:07,720 --> 00:14:10,160 Speaker 1: who I still believe. Correct me if I'm wrong. But 247 00:14:10,200 --> 00:14:12,600 Speaker 1: the last figures I saw, they're still buying something like 248 00:14:12,679 --> 00:14:17,240 Speaker 1: eighty billion a month in UH treasury treasury notes and bonds. 249 00:14:17,960 --> 00:14:21,440 Speaker 1: I mean that seems like a lot to me. And 250 00:14:21,520 --> 00:14:25,920 Speaker 1: you know, the motivation originally was to restore liquidity in 251 00:14:25,960 --> 00:14:29,520 Speaker 1: the treasury market. It's the liquidity still that bad that 252 00:14:29,600 --> 00:14:33,120 Speaker 1: we need eighty billion of purchases a month from the Fed. 253 00:14:33,240 --> 00:14:35,480 Speaker 1: Where is this kind of maybe a little bit of 254 00:14:35,560 --> 00:14:39,440 Speaker 1: yield curve control in disguise in your opinion, Yeah, that's 255 00:14:39,440 --> 00:14:43,400 Speaker 1: a great point. Market liquidity has largely been restored for 256 00:14:43,400 --> 00:14:47,920 Speaker 1: several months now, and some of the discussion around asset 257 00:14:47,960 --> 00:14:51,600 Speaker 1: purposes has shifted toward the FED needing to do more 258 00:14:52,160 --> 00:14:55,920 Speaker 1: by way of accommodation, and that could involve either increasing 259 00:14:55,960 --> 00:15:00,240 Speaker 1: purposes overall or shifting them further out the curve. One 260 00:15:00,280 --> 00:15:03,640 Speaker 1: thing that they changed in the policy statement recently is 261 00:15:03,920 --> 00:15:08,160 Speaker 1: they explicitly recognize that these purchases are not simply for 262 00:15:08,360 --> 00:15:13,120 Speaker 1: stabilization and restoring market liquidity. They are providing accommodation. So 263 00:15:13,600 --> 00:15:17,520 Speaker 1: when we kind of balance some of the public speeches 264 00:15:18,080 --> 00:15:23,080 Speaker 1: and some speculation around shifting purchases further out the curve 265 00:15:23,240 --> 00:15:25,560 Speaker 1: with with the policy statement, it would suggest that they're 266 00:15:25,600 --> 00:15:29,520 Speaker 1: acknowledging what they're already doing is providing accommodation. So maybe 267 00:15:29,560 --> 00:15:33,600 Speaker 1: that's an effort to buy them time to really understand 268 00:15:33,680 --> 00:15:35,760 Speaker 1: what's going to happen on the fiscal side before they 269 00:15:35,760 --> 00:15:40,240 Speaker 1: try to adjust their purchases, increase their purchases to become 270 00:15:40,240 --> 00:15:43,560 Speaker 1: more accommodative, since they recognize now that they are already 271 00:15:43,560 --> 00:15:47,600 Speaker 1: providing accommodation, and when we think about what's sort of 272 00:15:47,600 --> 00:15:51,320 Speaker 1: missing from the equation on the fiscal side, the fiscal 273 00:15:51,680 --> 00:15:54,480 Speaker 1: side of the equation is much more equipped to handle 274 00:15:54,520 --> 00:15:57,640 Speaker 1: the issues that we have now, whether that be writing checks, 275 00:15:58,360 --> 00:16:03,040 Speaker 1: providing additional unemployment insurance. I don't think that you can 276 00:16:03,080 --> 00:16:08,520 Speaker 1: replace the fiscal those fiscal policies with buying more treasuries. 277 00:16:08,960 --> 00:16:11,480 Speaker 1: I mean, we have seen a backup and yields, but 278 00:16:11,880 --> 00:16:17,280 Speaker 1: borrowing costs are low and increasing asset purchases from I 279 00:16:17,320 --> 00:16:21,480 Speaker 1: don't see that really providing the type of relief that 280 00:16:21,600 --> 00:16:24,960 Speaker 1: the U. S economy needs now as we continue to 281 00:16:25,000 --> 00:16:29,000 Speaker 1: deal with partially shut down economies and people there are 282 00:16:29,000 --> 00:16:32,440 Speaker 1: still out of work. That's asset purchases are not really 283 00:16:32,480 --> 00:16:34,800 Speaker 1: well equipped to handle that situation, which is why we 284 00:16:34,880 --> 00:16:38,840 Speaker 1: think that any adjustment to the asset purchase program is 285 00:16:38,960 --> 00:16:41,760 Speaker 1: probably a little ways out at this point. So when 286 00:16:41,800 --> 00:16:44,000 Speaker 1: we look up at this backup and yield that we've 287 00:16:44,040 --> 00:16:47,080 Speaker 1: seen this past week and its components, something I've seen 288 00:16:47,160 --> 00:16:50,480 Speaker 1: highlighted is that the backup and yields that we're seeing 289 00:16:50,680 --> 00:16:53,960 Speaker 1: is actually due to arise in the term premium, so 290 00:16:54,000 --> 00:16:56,880 Speaker 1: that being the premium that investor holds for holding a 291 00:16:56,920 --> 00:16:59,560 Speaker 1: longer dated security instead of just rolling a shorter dated one. 292 00:17:00,120 --> 00:17:04,040 Speaker 1: Not so much actually inflation expectations. I want to get 293 00:17:04,040 --> 00:17:06,080 Speaker 1: your take on this. Are you guys seeing the same breakdown? 294 00:17:06,160 --> 00:17:08,080 Speaker 1: And if so, I mean I feel like that has 295 00:17:08,119 --> 00:17:10,159 Speaker 1: a lot of implications for other trades if we're not 296 00:17:10,200 --> 00:17:14,400 Speaker 1: seeing a backup and yields for inflation or growth reasons. Yeah, 297 00:17:14,480 --> 00:17:17,359 Speaker 1: that's an interesting point, and it's it's tough to to 298 00:17:17,440 --> 00:17:20,160 Speaker 1: break all of this down because you have seen break 299 00:17:20,240 --> 00:17:23,679 Speaker 1: evens come back quite a bit, especially in you know, 300 00:17:23,720 --> 00:17:27,159 Speaker 1: looking at tenure break evens moving back towards a hundred 301 00:17:27,160 --> 00:17:29,840 Speaker 1: seventy bass points, and when you think about how that 302 00:17:29,920 --> 00:17:34,280 Speaker 1: compares to inflation fundamentals, it's actually in excess of what 303 00:17:34,320 --> 00:17:38,280 Speaker 1: you're seeing or right around what you're seeing in core inflation. 304 00:17:38,400 --> 00:17:41,680 Speaker 1: So I think you are seeing some of the rising 305 00:17:41,760 --> 00:17:45,679 Speaker 1: yields as as a result of rising inflation expectations, but 306 00:17:46,440 --> 00:17:50,280 Speaker 1: with the economy as fragile and frail as it still 307 00:17:50,440 --> 00:17:54,520 Speaker 1: is coming out of the largest shutdowns that we had 308 00:17:54,560 --> 00:17:58,679 Speaker 1: back in in March and April, I think the the 309 00:17:58,760 --> 00:18:01,840 Speaker 1: story remains that some of these or all of these 310 00:18:01,880 --> 00:18:06,159 Speaker 1: factors are contributing at least somewhat, But the FED just 311 00:18:06,240 --> 00:18:10,800 Speaker 1: saying that they are targeting average inflation is not enough 312 00:18:10,880 --> 00:18:15,439 Speaker 1: to push up expectations materially until you start to see 313 00:18:15,480 --> 00:18:17,960 Speaker 1: some of of it in the hard numbers, which which 314 00:18:17,960 --> 00:18:20,080 Speaker 1: we haven't seen yet. And if you think back to 315 00:18:20,119 --> 00:18:23,040 Speaker 1: the latest CPI figure, almost all of the growth and 316 00:18:23,119 --> 00:18:27,280 Speaker 1: core CPI was in used cars and trucks. So you 317 00:18:27,400 --> 00:18:32,919 Speaker 1: have a situation where court prices aren't rising broadly, you 318 00:18:33,000 --> 00:18:36,280 Speaker 1: have you're still having some of this funky data, and 319 00:18:36,440 --> 00:18:38,920 Speaker 1: it's sort of hard to back out what that really 320 00:18:38,960 --> 00:18:43,879 Speaker 1: means for inflation going forward. But I think you know, 321 00:18:44,160 --> 00:18:46,560 Speaker 1: part of part of the story is certainly an increase 322 00:18:46,640 --> 00:18:49,920 Speaker 1: in expectations, and like a lot of these FED policies 323 00:18:49,960 --> 00:18:53,120 Speaker 1: we saw back in March in April, just the announcement 324 00:18:53,119 --> 00:18:55,720 Speaker 1: of them restored a lot of liquidity to the commercial 325 00:18:55,760 --> 00:18:58,800 Speaker 1: paper markets, the corporate bond markets, and I think you 326 00:18:58,800 --> 00:19:01,680 Speaker 1: get a little bit of that and in inflation expectations 327 00:19:01,680 --> 00:19:04,159 Speaker 1: based on the new policy, But it remains to be 328 00:19:04,200 --> 00:19:07,040 Speaker 1: seen if if the if the hard data will actually 329 00:19:07,040 --> 00:19:10,440 Speaker 1: back it up. It's like, let's shift gears a little 330 00:19:10,440 --> 00:19:13,600 Speaker 1: bit and talk about currencies a little bit. You know. 331 00:19:13,640 --> 00:19:16,479 Speaker 1: The other big trend we've seen in recent weeks and 332 00:19:16,560 --> 00:19:20,280 Speaker 1: months is uh, some pretty noticeable weakening of the dollar 333 00:19:20,560 --> 00:19:23,359 Speaker 1: versus other currencies. To me, what I find interesting is 334 00:19:23,640 --> 00:19:26,199 Speaker 1: you tend to have these regimes where the dollar can 335 00:19:26,240 --> 00:19:30,320 Speaker 1: be sort of appreciating for months or even years at 336 00:19:30,320 --> 00:19:32,879 Speaker 1: the time and then depreciating for months and years at 337 00:19:32,880 --> 00:19:36,639 Speaker 1: the time. Obviously too early in this sort of phase 338 00:19:36,720 --> 00:19:40,000 Speaker 1: of weakening too to say if we're a new regime 339 00:19:40,080 --> 00:19:42,359 Speaker 1: or not. But but what's your take? Is this a 340 00:19:42,440 --> 00:19:45,359 Speaker 1: sign of more to calm or can we expect a 341 00:19:45,359 --> 00:19:49,080 Speaker 1: week er dollar, say going into one? I mean, is 342 00:19:49,080 --> 00:19:51,440 Speaker 1: is this a new sort of regime for the dollar? 343 00:19:51,520 --> 00:19:55,280 Speaker 1: In your opinion, we do expect to see sort of 344 00:19:56,480 --> 00:19:59,240 Speaker 1: dollar weakness over the medium term. I guess, I would say, 345 00:19:59,280 --> 00:20:03,159 Speaker 1: and that's as global growth starts to come back. What 346 00:20:03,280 --> 00:20:06,239 Speaker 1: you've noticed over the past six months or so is 347 00:20:06,760 --> 00:20:09,280 Speaker 1: the US dollar really has been the number one safe 348 00:20:09,280 --> 00:20:12,480 Speaker 1: haven currency. So in times where you have a risk 349 00:20:12,560 --> 00:20:15,960 Speaker 1: off tone, that's that's positive for the dollar. And and 350 00:20:16,000 --> 00:20:18,080 Speaker 1: when you have risk on, the dollar has fallen. And 351 00:20:18,320 --> 00:20:21,400 Speaker 1: when you think about what's happened in equity markets over 352 00:20:21,440 --> 00:20:24,840 Speaker 1: the past six months, you know, we're touching new highs, 353 00:20:24,840 --> 00:20:28,520 Speaker 1: and while we're off recent highs, the the story has 354 00:20:28,560 --> 00:20:32,000 Speaker 1: been mostly risk on. Improved risk sentiment. You have corporate 355 00:20:32,000 --> 00:20:36,280 Speaker 1: bond spreads hitting new tights and things have gotten a 356 00:20:36,280 --> 00:20:39,040 Speaker 1: lot better, and that's really been a negative for the U. S. Dollar. 357 00:20:39,200 --> 00:20:42,360 Speaker 1: You also have the backdrop of the FED still has 358 00:20:42,400 --> 00:20:45,080 Speaker 1: all of these U. S. Dollar liquidity facilities in place. 359 00:20:45,119 --> 00:20:48,480 Speaker 1: They're really not getting tapped anymore. I know the repo 360 00:20:48,600 --> 00:20:51,040 Speaker 1: facility has gone down to zero. I think central bank 361 00:20:51,080 --> 00:20:54,480 Speaker 1: liquidity swaps has fallen a bunch as well, not quite 362 00:20:54,480 --> 00:20:57,720 Speaker 1: down to zero, but I think you have a super 363 00:20:57,800 --> 00:21:02,919 Speaker 1: combinative FED, and that's that's certainly not unique. To defend 364 00:21:03,040 --> 00:21:06,240 Speaker 1: all these major global central banks are are very accommodative 365 00:21:06,280 --> 00:21:09,639 Speaker 1: and considering new policies every day to try to combat 366 00:21:09,680 --> 00:21:12,840 Speaker 1: the fallout from the virus. But the one thing that's 367 00:21:12,920 --> 00:21:16,520 Speaker 1: changed materially is if you look at the yield differential 368 00:21:16,640 --> 00:21:22,360 Speaker 1: between treasuries and other major government bonds on currency unadjusted basis, 369 00:21:22,400 --> 00:21:24,560 Speaker 1: that's collapsed the ton. So that's one of the things 370 00:21:25,160 --> 00:21:27,800 Speaker 1: that we think had prior to all of this supported 371 00:21:28,160 --> 00:21:30,280 Speaker 1: the dollar and is now more of a head and 372 00:21:30,359 --> 00:21:32,040 Speaker 1: for the dollar. And we expect that to be the 373 00:21:32,119 --> 00:21:35,320 Speaker 1: case going forward, as we do expect yields to rise, 374 00:21:35,480 --> 00:21:40,880 Speaker 1: but the differential between European government bonds and treasure yields 375 00:21:41,200 --> 00:21:43,800 Speaker 1: is going to remain pretty low on a historical basis 376 00:21:44,760 --> 00:21:47,520 Speaker 1: now is and it all connected the sort of you know, 377 00:21:47,600 --> 00:21:51,439 Speaker 1: your old textbook catalysts for for the dollar, meaning the 378 00:21:51,480 --> 00:21:54,320 Speaker 1: trade depsit and the and the budget depthsit the twin 379 00:21:54,400 --> 00:21:57,400 Speaker 1: deficits really kind of blowing out. Um, is that part 380 00:21:57,480 --> 00:21:59,520 Speaker 1: of the story here or is it a matter of 381 00:21:59,640 --> 00:22:02,760 Speaker 1: you know what government is really uh running a huge 382 00:22:02,760 --> 00:22:05,280 Speaker 1: StarPlus now anyway? Is it? Is it? Or those catalysts 383 00:22:05,320 --> 00:22:07,080 Speaker 1: not as important to say they would be in in 384 00:22:07,119 --> 00:22:10,200 Speaker 1: a quote unquote normal, normal world where we're not dealing 385 00:22:10,240 --> 00:22:12,920 Speaker 1: with all the drama we've dealt with this year. Yeah, 386 00:22:12,960 --> 00:22:15,440 Speaker 1: I think that's safe to say. And what we've really 387 00:22:15,480 --> 00:22:18,480 Speaker 1: focused on for the U s Dollar in the near 388 00:22:18,560 --> 00:22:22,280 Speaker 1: term is really just general risk sentiment and thinking about, 389 00:22:22,320 --> 00:22:25,200 Speaker 1: you know, tying that into the election and what might 390 00:22:25,240 --> 00:22:27,080 Speaker 1: happen in the next couple of weeks. We sort of 391 00:22:27,119 --> 00:22:31,280 Speaker 1: see an outcome where if it's highly contested or a 392 00:22:31,359 --> 00:22:35,600 Speaker 1: very close election, that would result in US dollar strength 393 00:22:35,680 --> 00:22:39,160 Speaker 1: because that's really more of a risk off story and 394 00:22:39,560 --> 00:22:42,320 Speaker 1: would probably push people in into the dollar. But if 395 00:22:42,359 --> 00:22:46,720 Speaker 1: you have a clear election outcome, big fiscal stimulus coming, 396 00:22:47,240 --> 00:22:50,680 Speaker 1: more inflation coming, that's that's more of a dollar weakness 397 00:22:50,840 --> 00:22:52,920 Speaker 1: risk on trend. And so those are those are really 398 00:22:52,960 --> 00:22:55,120 Speaker 1: more of the things that we're focused on. It's almost 399 00:22:55,400 --> 00:22:58,960 Speaker 1: more of a sentiment thing at this point rather than fundamental. 400 00:22:58,960 --> 00:23:02,439 Speaker 1: It's just because fundamental US have shifted so drastically with 401 00:23:02,560 --> 00:23:05,840 Speaker 1: these budget deficits, and you have sovereign nations that have 402 00:23:06,000 --> 00:23:09,640 Speaker 1: typically run surpluses like Germany, they're they're doing deficit spending now. 403 00:23:09,720 --> 00:23:13,119 Speaker 1: So the game has really changed from that perspective, and 404 00:23:13,119 --> 00:23:15,000 Speaker 1: as we think about what drives the dollar in the 405 00:23:15,040 --> 00:23:18,200 Speaker 1: near term, it's going to be more about broader risk 406 00:23:18,240 --> 00:23:22,240 Speaker 1: sentiment Along those lines, If you look at the dollar 407 00:23:22,440 --> 00:23:25,320 Speaker 1: versus the offshore Chinese you on the past a hundred 408 00:23:25,400 --> 00:23:28,800 Speaker 1: day decline. I was running some calculations on the terminal 409 00:23:29,080 --> 00:23:32,800 Speaker 1: the fastest decline since at least eleven, which is pretty 410 00:23:32,840 --> 00:23:36,040 Speaker 1: amazing to me. And I've heard some describe that as 411 00:23:36,640 --> 00:23:40,080 Speaker 1: betting on a Biden wins. So you see a stronger 412 00:23:40,200 --> 00:23:43,679 Speaker 1: Chinese currency versus the US dollar, Do you buy that 413 00:23:43,720 --> 00:23:49,800 Speaker 1: at all? That's an interesting perspective that I haven't delve 414 00:23:49,920 --> 00:23:52,800 Speaker 1: too much into myself. But so is that from the 415 00:23:52,840 --> 00:24:00,640 Speaker 1: perspective that a Biden presidency is easier on US China relations? Yeah, 416 00:24:00,680 --> 00:24:05,119 Speaker 1: I could see that. That's you know, I yeah, you 417 00:24:05,160 --> 00:24:09,560 Speaker 1: know I I'm not a percent sure that that's you know, 418 00:24:09,600 --> 00:24:12,240 Speaker 1: that we're going to have a complete reversal of the 419 00:24:12,240 --> 00:24:16,920 Speaker 1: trade war that President Trump started back in nineteen But 420 00:24:17,400 --> 00:24:21,120 Speaker 1: I think from the perspective of Biden being a little 421 00:24:21,119 --> 00:24:23,720 Speaker 1: bit easier on China and that being positive for the 422 00:24:23,760 --> 00:24:28,600 Speaker 1: currency does make some sense. But you know, how much 423 00:24:28,920 --> 00:24:33,879 Speaker 1: of the process that Trump has put in place as 424 00:24:33,920 --> 00:24:37,760 Speaker 1: far as teriffs goes gets unwound quickly. I don't know 425 00:24:37,880 --> 00:24:39,600 Speaker 1: that's going to be a very high priority as we 426 00:24:39,640 --> 00:24:42,320 Speaker 1: have so much going on with the pandemic right now, 427 00:24:42,359 --> 00:24:46,600 Speaker 1: and and President or Vice President Biden's policies of or 428 00:24:46,960 --> 00:24:50,359 Speaker 1: seemed to be would be focused more on getting fistical 429 00:24:50,400 --> 00:24:54,280 Speaker 1: stimulus done here first and just focusing on the public 430 00:24:54,280 --> 00:24:58,360 Speaker 1: health situation much more than than perhaps immediately diving back 431 00:24:58,440 --> 00:25:00,760 Speaker 1: some of the tariffs and thing is not that against 432 00:25:20,240 --> 00:25:22,440 Speaker 1: it's that another note you guys had out that caught 433 00:25:22,480 --> 00:25:26,280 Speaker 1: my attention, and you were talking about the correlation between 434 00:25:26,400 --> 00:25:30,720 Speaker 1: inflation break evens and the SMP five hundred the stock market, 435 00:25:30,760 --> 00:25:33,320 Speaker 1: And for listeners who aren't familiar with break evens, it's 436 00:25:33,320 --> 00:25:37,200 Speaker 1: basically just the bond markets sort of forecast for inflation 437 00:25:37,359 --> 00:25:40,560 Speaker 1: over a certain number of years by comparing the yields 438 00:25:40,560 --> 00:25:44,000 Speaker 1: on nominal treasuries to the yields on on inflation linked 439 00:25:44,280 --> 00:25:48,920 Speaker 1: tips treasuries. Inflation expectations by this metric have been firming up, 440 00:25:49,560 --> 00:25:53,159 Speaker 1: sort of correlating with a higher stock market. You know, 441 00:25:53,280 --> 00:25:56,119 Speaker 1: it kind of surprised me. You know, I took that 442 00:25:56,200 --> 00:25:57,840 Speaker 1: note and I went back and looked, you know, how 443 00:25:57,840 --> 00:26:01,000 Speaker 1: long has that correlation been positive? Been positive for a 444 00:26:01,000 --> 00:26:04,800 Speaker 1: long time, not necessarily a one to one, super strong 445 00:26:04,840 --> 00:26:08,439 Speaker 1: correlation but reliably positive for a long time. But I 446 00:26:08,480 --> 00:26:12,560 Speaker 1: wonder how long does that correlation stay positive if inflation 447 00:26:12,840 --> 00:26:16,720 Speaker 1: expectations really start to get up there, start getting above 448 00:26:16,760 --> 00:26:19,840 Speaker 1: two percent? Say um, I mean, we know the FED 449 00:26:20,119 --> 00:26:23,720 Speaker 1: is willing to allow inflation to run a little bit hot, 450 00:26:24,640 --> 00:26:27,520 Speaker 1: but I wonder, you know when and if could you 451 00:26:27,560 --> 00:26:31,600 Speaker 1: see that correlation breaking down where UH inflation gets so 452 00:26:31,680 --> 00:26:33,560 Speaker 1: hot that that people are worried about it, that it 453 00:26:33,600 --> 00:26:35,280 Speaker 1: becomes sort of a risk off thing in the in 454 00:26:35,320 --> 00:26:38,120 Speaker 1: the stock market. I don't think it's tomorrow or next week, 455 00:26:38,160 --> 00:26:40,520 Speaker 1: but you know where where would you sort of start 456 00:26:40,520 --> 00:26:43,320 Speaker 1: to look for that to happen. What kind of break 457 00:26:43,359 --> 00:26:45,920 Speaker 1: even UH inflation numbers? Would would you start to worry 458 00:26:45,920 --> 00:26:47,760 Speaker 1: about that? If you would worry about it all, maybe 459 00:26:47,800 --> 00:26:50,479 Speaker 1: I'm wrong and it's not something to worry about. Yeah, 460 00:26:50,520 --> 00:26:53,080 Speaker 1: that's that's a great point, Mike. I certainly don't think 461 00:26:53,160 --> 00:26:57,520 Speaker 1: tomorrow or any time soon is is possible or even 462 00:26:57,560 --> 00:27:01,640 Speaker 1: remotely possible. But I think you will see a switch 463 00:27:01,960 --> 00:27:04,399 Speaker 1: and trying to call out in the exact number on 464 00:27:04,800 --> 00:27:07,720 Speaker 1: called the tenure break even is it's going to be difficult. 465 00:27:07,720 --> 00:27:12,920 Speaker 1: But I think depending on where inflation expectations go relative 466 00:27:13,000 --> 00:27:16,919 Speaker 1: to realized inflation. I think letting it run north of 467 00:27:17,440 --> 00:27:19,880 Speaker 1: two percent, maybe north of two and a half percent, 468 00:27:20,440 --> 00:27:23,680 Speaker 1: is not going to be something that really concerns the FED. 469 00:27:23,840 --> 00:27:27,400 Speaker 1: But as you as you get to that point, there's 470 00:27:27,400 --> 00:27:30,720 Speaker 1: definitely gonna be speculation that now is when the FED 471 00:27:30,840 --> 00:27:34,760 Speaker 1: is going to start removing accommodation, maybe increasing rates. And 472 00:27:35,000 --> 00:27:37,440 Speaker 1: we're talking way down the line. If if you look 473 00:27:37,480 --> 00:27:41,560 Speaker 1: at the FEDS Summary of Economic Projections from September, they 474 00:27:41,600 --> 00:27:46,720 Speaker 1: don't have PC inflation hitting two percent until three and 475 00:27:46,800 --> 00:27:49,080 Speaker 1: at no point in their forecast horizon do they have 476 00:27:49,160 --> 00:27:54,560 Speaker 1: it above two percent. So from the perspective of does 477 00:27:55,080 --> 00:28:00,399 Speaker 1: higher inflation expectations result in shifting folk expectation for the 478 00:28:00,400 --> 00:28:03,800 Speaker 1: FED to perhaps start tightening, I think that's a ways 479 00:28:03,840 --> 00:28:08,080 Speaker 1: down the road. And if you have inflation expectations running 480 00:28:08,680 --> 00:28:10,920 Speaker 1: at two and a half three percent but you're not 481 00:28:11,000 --> 00:28:14,840 Speaker 1: seeing it and realized inflation, the FED is probably gonna 482 00:28:14,880 --> 00:28:18,600 Speaker 1: be somewhat slow to react as they have shifted the 483 00:28:18,680 --> 00:28:22,800 Speaker 1: policy to this flexible average inflation targeting. But I think 484 00:28:22,840 --> 00:28:28,280 Speaker 1: they've left themselves the ability to have some subjective aspect 485 00:28:28,320 --> 00:28:31,920 Speaker 1: to that because we don't know over what time frame. There, 486 00:28:33,119 --> 00:28:36,840 Speaker 1: the average inflation has to hit two percent, so I 487 00:28:36,880 --> 00:28:39,280 Speaker 1: think it will be definitely be a factor. But for 488 00:28:39,320 --> 00:28:44,000 Speaker 1: the correlation to remain positive indefinitely is unlikely. But it 489 00:28:44,000 --> 00:28:48,240 Speaker 1: should remain positive for the foreseeable future as right now. 490 00:28:48,360 --> 00:28:51,320 Speaker 1: Our call, the Fed's call is not for inflation too 491 00:28:52,000 --> 00:28:57,240 Speaker 1: to run super hot through um. If you do see 492 00:28:57,240 --> 00:29:01,000 Speaker 1: inflation expectations go way north of that, that's definitely something 493 00:29:01,000 --> 00:29:03,960 Speaker 1: that I think they'll take into account, but it's unlikely 494 00:29:04,040 --> 00:29:10,000 Speaker 1: to cause on its own a risk off shift anytime soon. Yeah, 495 00:29:10,000 --> 00:29:12,880 Speaker 1: they seem to be intentionally vague on how high they'll 496 00:29:12,920 --> 00:29:14,680 Speaker 1: let it go and for how long. I guess. I 497 00:29:14,680 --> 00:29:16,880 Speaker 1: guess there's you know, a good reason for that. You 498 00:29:16,920 --> 00:29:18,440 Speaker 1: don't want to pay yourself in a corner or to 499 00:29:18,480 --> 00:29:22,680 Speaker 1: some degree, And I think just the ft is isn't 500 00:29:22,800 --> 00:29:27,760 Speaker 1: sure what the fiscal policy outlook is and what the 501 00:29:27,800 --> 00:29:30,320 Speaker 1: economy is gonna look like, what the public health situation 502 00:29:30,400 --> 00:29:32,800 Speaker 1: is gonna look like, So tying themselves too closely to 503 00:29:32,840 --> 00:29:37,680 Speaker 1: any certain economic outcome seems like an unnecessary box to 504 00:29:37,720 --> 00:29:40,520 Speaker 1: put themselves in. So, while it's a little bit frustrating 505 00:29:40,560 --> 00:29:43,800 Speaker 1: as a forecaster to have some of this vagueness. It's 506 00:29:43,840 --> 00:29:46,560 Speaker 1: a bit more understandable in this time that we're in 507 00:29:47,360 --> 00:29:52,520 Speaker 1: versus a more normal time, let's say, certainly not normal times. 508 00:29:52,520 --> 00:29:54,920 Speaker 1: And I think that's a great place to leave it. 509 00:29:54,960 --> 00:29:58,560 Speaker 1: Then to get into our crazy things. Oh nice segway, Sarah, 510 00:30:00,200 --> 00:30:03,600 Speaker 1: very good, very good. Stand clear of the craziest things 511 00:30:03,720 --> 00:30:07,320 Speaker 1: we saw in markets this week? All right? Well is 512 00:30:07,360 --> 00:30:09,640 Speaker 1: that god a good one? I gotta admit that the 513 00:30:09,680 --> 00:30:13,880 Speaker 1: big bang in the swaps markets pretty good one. It 514 00:30:16,400 --> 00:30:18,680 Speaker 1: I like it, all right, Sarah. You know what, Sara, 515 00:30:18,720 --> 00:30:21,040 Speaker 1: I'll give you one and then we'll go to yours. 516 00:30:21,040 --> 00:30:23,280 Speaker 1: And then I've got I feel like I'm stuck in 517 00:30:23,320 --> 00:30:25,960 Speaker 1: the alternative asset class that the people are gonna be 518 00:30:26,040 --> 00:30:28,280 Speaker 1: disappointed if I don't, if I don't go back to that, well, 519 00:30:28,760 --> 00:30:32,240 Speaker 1: but I'll start with one from our colleague Katie Greifeld. 520 00:30:32,480 --> 00:30:35,520 Speaker 1: I find these stories hilarious. It's about the NASDAC. One 521 00:30:36,200 --> 00:30:38,720 Speaker 1: knew you were going to say that it's too q C. 522 00:30:39,000 --> 00:30:41,280 Speaker 1: Do you Is that yours too? No, it's not mine, 523 00:30:41,280 --> 00:30:45,600 Speaker 1: but it's so good. So apparently, when when these e 524 00:30:45,720 --> 00:30:48,200 Speaker 1: t s were set up in the q q Q 525 00:30:48,480 --> 00:30:52,479 Speaker 1: was was created in nineteen nine as a unit investment trust. 526 00:30:53,160 --> 00:30:55,560 Speaker 1: And when you created an e t F under that 527 00:30:55,880 --> 00:31:00,440 Speaker 1: sort of rapper back then, you had to identify I 528 00:31:00,480 --> 00:31:04,160 Speaker 1: guess their trustees. They call them people that who are 529 00:31:04,200 --> 00:31:09,360 Speaker 1: are basically their lifespan dictates how long the trust will 530 00:31:09,400 --> 00:31:12,400 Speaker 1: be in business. So there were fifteen millennials who are 531 00:31:12,480 --> 00:31:15,640 Speaker 1: named in the founding documents of the q q Q. 532 00:31:16,680 --> 00:31:22,360 Speaker 1: And you know, my mind just goes in circles trying 533 00:31:22,360 --> 00:31:24,040 Speaker 1: to figure out how any of this makes sense. But 534 00:31:24,160 --> 00:31:29,200 Speaker 1: fifteen random millennials would determine how long the q q 535 00:31:29,400 --> 00:31:35,160 Speaker 1: Q lasts their lifespan at least. Uh. They got rid 536 00:31:35,160 --> 00:31:37,720 Speaker 1: of that this week and they changed it to it's 537 00:31:37,720 --> 00:31:40,200 Speaker 1: gonna last until the I guess the last security it 538 00:31:40,200 --> 00:31:42,520 Speaker 1: owns is liquidated or something like that. But what a 539 00:31:42,560 --> 00:31:46,280 Speaker 1: bizarre sort of way to to base on et F. 540 00:31:47,800 --> 00:31:50,040 Speaker 1: I don't know, it's set. Lawyers must love stuff like this. 541 00:31:50,080 --> 00:31:52,000 Speaker 1: I guess it's the only explanation I would have because 542 00:31:52,000 --> 00:31:56,440 Speaker 1: it was technically a trust. Uh, it's really strange and 543 00:31:56,760 --> 00:32:00,800 Speaker 1: kind of funny. Um Trillions, which is Bloomberg's et podcast 544 00:32:00,880 --> 00:32:03,560 Speaker 1: with Eric bel Tunis and Joe Weber. They did a 545 00:32:03,600 --> 00:32:07,720 Speaker 1: great episode on this with a couple of those millennials 546 00:32:08,080 --> 00:32:10,000 Speaker 1: and some of them had no idea, but this is 547 00:32:10,040 --> 00:32:13,440 Speaker 1: even going on, So it's a great listen. It's a 548 00:32:13,440 --> 00:32:17,480 Speaker 1: bit funny and also, um just informational. Who knew. Yeah, 549 00:32:17,600 --> 00:32:19,959 Speaker 1: I remember reading about that and I wasn't. I'm not 550 00:32:19,960 --> 00:32:22,720 Speaker 1: sure if it was that exact e t F for 551 00:32:23,280 --> 00:32:26,960 Speaker 1: Unit Investment Trust, but it was just the kids or 552 00:32:27,520 --> 00:32:32,440 Speaker 1: grandkids of people that were working on crazy that was 553 00:32:32,480 --> 00:32:35,800 Speaker 1: all about the spy. I guess the SMP E t F. Yes, 554 00:32:35,880 --> 00:32:38,400 Speaker 1: that's right, which I think it's only these really sort 555 00:32:38,440 --> 00:32:41,560 Speaker 1: of first generation nine G s ETFs that that they 556 00:32:41,600 --> 00:32:43,760 Speaker 1: did this and then they figured out another. They found 557 00:32:43,760 --> 00:32:45,560 Speaker 1: a smarter lawyer to figure out how to do it 558 00:32:45,560 --> 00:32:48,160 Speaker 1: where you eat enough to involve millennials, if I you know, 559 00:32:48,200 --> 00:32:52,080 Speaker 1: I'm surprised that just finding out fifteen millennials were determined 560 00:32:52,120 --> 00:32:53,440 Speaker 1: the fate of these et f s, that we just 561 00:32:53,480 --> 00:32:55,600 Speaker 1: didn't see a market crash right there. And then Sarah, 562 00:32:56,040 --> 00:32:59,360 Speaker 1: maybe that's just my maybe that's just my gen x 563 00:32:59,640 --> 00:33:02,880 Speaker 1: by so I don't know, you're just really worried about 564 00:33:02,960 --> 00:33:07,840 Speaker 1: leaving leaving a fund in the hands of kids no longer, 565 00:33:10,640 --> 00:33:14,479 Speaker 1: that's what that's what that means old and Senile Mike. Now, 566 00:33:14,560 --> 00:33:16,960 Speaker 1: but we had a we actually had someone right into 567 00:33:17,040 --> 00:33:20,479 Speaker 1: us on Twitter with a really good one. So this 568 00:33:20,600 --> 00:33:26,120 Speaker 1: comes from at g I Munich and they retweeted uh 569 00:33:26,360 --> 00:33:28,440 Speaker 1: Sam Row who is managing at a river over at 570 00:33:28,480 --> 00:33:32,960 Speaker 1: Yeahoo Finance. But basically what this was citing was a 571 00:33:32,960 --> 00:33:36,360 Speaker 1: Bloomberg article and there is a quote in it that 572 00:33:36,400 --> 00:33:40,400 Speaker 1: says cabbage prices are going nuts, and it says, I'll 573 00:33:40,400 --> 00:33:42,200 Speaker 1: read you the whole quote. It says cabbage prices are 574 00:33:42,200 --> 00:33:45,760 Speaker 1: going nuts, said Jumie, a mother of two who usually 575 00:33:45,760 --> 00:33:47,640 Speaker 1: loads up on the vegetable and fall to make our 576 00:33:47,680 --> 00:33:50,040 Speaker 1: own kimchi. I had to rub my eyes to see 577 00:33:50,040 --> 00:33:52,479 Speaker 1: the price tag again because it didn't make any sense. 578 00:33:52,880 --> 00:33:55,720 Speaker 1: So any of you big cabbage eaters, I feel bad 579 00:33:55,760 --> 00:34:00,320 Speaker 1: for you. Are you a big cabbage eater? I would 580 00:34:00,320 --> 00:34:04,360 Speaker 1: not put myself in that category now, only only with 581 00:34:04,400 --> 00:34:09,440 Speaker 1: the corned beef around. I'm surprised there. It must be 582 00:34:09,480 --> 00:34:11,319 Speaker 1: a seasonality to it. I'm gonna look that up. There's 583 00:34:11,320 --> 00:34:17,000 Speaker 1: gonna be I can't imagine it's because of demand demand 584 00:34:17,040 --> 00:34:21,399 Speaker 1: spike for cabbage. Hey, anything can happen this year, right, 585 00:34:23,480 --> 00:34:25,160 Speaker 1: all right? So that's a good one from Twitter and 586 00:34:25,160 --> 00:34:28,399 Speaker 1: Samurai was a good provider of crazy things. Good good 587 00:34:28,400 --> 00:34:31,520 Speaker 1: to get get him a shout out, what are you up, Sarah? 588 00:34:32,280 --> 00:34:34,280 Speaker 1: So I'm gonna do a little bit more self promotion. 589 00:34:34,320 --> 00:34:35,680 Speaker 1: I didn't know you were going to help me out 590 00:34:35,680 --> 00:34:38,560 Speaker 1: off the top of the show with Robin Hood story. Um, 591 00:34:38,840 --> 00:34:42,320 Speaker 1: but I wrote a story this week on intangible assets 592 00:34:43,000 --> 00:34:47,319 Speaker 1: and just the growth of intangible assets, and I just 593 00:34:47,520 --> 00:34:51,960 Speaker 1: thought a number within the story. So really it's it's 594 00:34:52,000 --> 00:34:55,480 Speaker 1: difficult to measure these things. But there was a report 595 00:34:55,520 --> 00:34:58,719 Speaker 1: by Ann and Potamon Institute, who was also uh kind 596 00:34:58,719 --> 00:35:01,600 Speaker 1: of picked up by Carlaw Carlisle by Bank of America. 597 00:35:02,520 --> 00:35:05,600 Speaker 1: They took the SMP five hundreds market values, subtracted out 598 00:35:05,600 --> 00:35:08,360 Speaker 1: its tangible book value, and came to this idea that 599 00:35:09,840 --> 00:35:12,319 Speaker 1: of the SMP five hundreds of value is derived from 600 00:35:12,320 --> 00:35:16,440 Speaker 1: intangible assets, which is just a crazy high number. And 601 00:35:16,640 --> 00:35:21,080 Speaker 1: I know one of Bank of America's strategists. I was 602 00:35:21,080 --> 00:35:24,000 Speaker 1: speaking to him about this because they cited this number, 603 00:35:24,000 --> 00:35:27,280 Speaker 1: but he himself was still kind of casting some doubt 604 00:35:27,320 --> 00:35:28,800 Speaker 1: on it, and I asked him, why are you casting 605 00:35:28,800 --> 00:35:30,080 Speaker 1: down on this number? And he was like, it's just 606 00:35:30,080 --> 00:35:32,279 Speaker 1: too high. I mean, it's really hard to believe that 607 00:35:32,800 --> 00:35:36,840 Speaker 1: this is true. Um, but it's just a fascinating topic, 608 00:35:37,120 --> 00:35:41,000 Speaker 1: very interesting, important, and I just thought that number was 609 00:35:41,040 --> 00:35:44,960 Speaker 1: pretty wild. That's a little concerning, I'd say, if I 610 00:35:45,000 --> 00:35:48,399 Speaker 1: mean intangibles, depending on what goes into that, if those 611 00:35:48,440 --> 00:35:52,239 Speaker 1: can be written down, that's uh goodwill right down. So 612 00:35:52,280 --> 00:35:54,520 Speaker 1: I mean, how many times have we seen, you know, 613 00:35:54,680 --> 00:35:59,560 Speaker 1: aol Time Warner Goodwill write down of mammoth proportions. I 614 00:35:59,560 --> 00:36:01,719 Speaker 1: would up shout out to our own Cameron Christ who 615 00:36:01,719 --> 00:36:04,560 Speaker 1: has written about this this topic, I think a long 616 00:36:04,600 --> 00:36:06,759 Speaker 1: time ago. So he had some good columns on that. 617 00:36:06,800 --> 00:36:09,080 Speaker 1: If you have a terminal, check them out. All right, Sorry, 618 00:36:09,120 --> 00:36:15,040 Speaker 1: I'm gonna conclude with some very tangible assets alternative alternative assets. 619 00:36:15,320 --> 00:36:18,560 Speaker 1: And this is uh via the New York Post. So 620 00:36:18,640 --> 00:36:20,400 Speaker 1: there's and you know what we're gonna you know what 621 00:36:20,440 --> 00:36:22,120 Speaker 1: we're gonna do. You know what's coming. We're gonna play 622 00:36:22,120 --> 00:36:29,080 Speaker 1: priss al right, New York Post story about an auction 623 00:36:29,320 --> 00:36:33,839 Speaker 1: of some famous movie memorabilia. And now I'm gonna tell 624 00:36:33,840 --> 00:36:36,600 Speaker 1: you some of the items on auction and zach and 625 00:36:36,600 --> 00:36:39,160 Speaker 1: and sorry, I want you guys to give me what 626 00:36:39,239 --> 00:36:41,920 Speaker 1: do you think the highest priced item is? And and 627 00:36:42,040 --> 00:36:45,000 Speaker 1: a price all right, and this is all based on 628 00:36:45,040 --> 00:36:46,920 Speaker 1: what the auction house expects to get. We don't know, 629 00:36:47,000 --> 00:36:49,359 Speaker 1: you know, the auction hasn't happened yet, but all right, 630 00:36:50,239 --> 00:36:53,319 Speaker 1: First one on the block, the mechanical head from the 631 00:36:53,400 --> 00:36:58,839 Speaker 1: nineteen seventy nine movie Alien. Alright, that's one mechanical head 632 00:36:58,840 --> 00:37:03,920 Speaker 1: from Alien two. The thigh high black boots worn by 633 00:37:03,960 --> 00:37:10,640 Speaker 1: Julia Roberts in nineteen nineties Pretty Woman. Okay. Then we 634 00:37:10,760 --> 00:37:16,520 Speaker 1: have Shanno Reeves complete neo costume from the two thousand 635 00:37:16,520 --> 00:37:21,440 Speaker 1: and three movie The Matrix Matrix reloaded. Here's one from 636 00:37:21,440 --> 00:37:25,560 Speaker 1: My Day, Marty McFly's jacket from thee Back to the 637 00:37:25,600 --> 00:37:28,440 Speaker 1: Future Part two movie I thought you were a vest 638 00:37:28,480 --> 00:37:32,400 Speaker 1: I don't even know what jacket they're talking about. Um. 639 00:37:32,440 --> 00:37:37,200 Speaker 1: And finally, the helmet worn by Tom Hanks in Saving 640 00:37:37,239 --> 00:37:42,319 Speaker 1: Private Ryan, autographed by the entire cast. So we got 641 00:37:43,480 --> 00:37:49,840 Speaker 1: the head from Alien, Julia Roberts boots, Shadow Reeves Matrix costume, 642 00:37:50,280 --> 00:37:55,600 Speaker 1: Marty McFly's jacket or Saving Private Ryan's helmet. Zach, let's 643 00:37:55,600 --> 00:37:58,040 Speaker 1: start with you. What what's your highest bid? What's the 644 00:37:58,080 --> 00:38:00,879 Speaker 1: highest priced item there for you? Zach's trying to figure 645 00:38:00,880 --> 00:38:04,880 Speaker 1: out how to make derivatives. Off of all these. Yeah, 646 00:38:04,920 --> 00:38:09,080 Speaker 1: the wheels are really turning. I guess I think the 647 00:38:09,160 --> 00:38:13,399 Speaker 1: highest priced item would be the helmet from Saving Private Ryan. 648 00:38:13,600 --> 00:38:20,320 Speaker 1: And I think the autographs factor into that. Okay, the amount, yeah, amount, 649 00:38:22,200 --> 00:38:27,120 Speaker 1: I'm gonna go with a hundred grand, Okay, opened my 650 00:38:27,160 --> 00:38:29,200 Speaker 1: poker face. So and I'm not gonna realizing that you're 651 00:38:29,239 --> 00:38:31,600 Speaker 1: doing really well. I can't, I can't really can't read 652 00:38:31,600 --> 00:38:34,640 Speaker 1: you right now. I was gonna agree with Zach. I 653 00:38:34,680 --> 00:38:38,160 Speaker 1: was gonna say the helmet, but because of the autographs, 654 00:38:38,960 --> 00:38:40,640 Speaker 1: and if I had can I if I had to 655 00:38:40,680 --> 00:38:44,400 Speaker 1: go into a second third, then I would go into 656 00:38:44,480 --> 00:38:49,160 Speaker 1: Neo's Hoole Matrix costume. I'm thinking I also think the 657 00:38:49,200 --> 00:38:51,760 Speaker 1: boots might be up there. I'm gonna say the alien 658 00:38:51,840 --> 00:38:56,120 Speaker 1: head is last. Um goes some dollar figures here, a 659 00:38:56,440 --> 00:38:59,440 Speaker 1: dollar figures. How much do you pay for those boots? So, 660 00:38:59,480 --> 00:39:02,279 Speaker 1: assuming they fit you, they're the right size, how much 661 00:39:02,280 --> 00:39:05,640 Speaker 1: would I pay for those boots? Um? I mean, I'm 662 00:39:05,640 --> 00:39:09,120 Speaker 1: sure someone would bid way more than I would for that. Personally, 663 00:39:09,719 --> 00:39:12,279 Speaker 1: what would someone bid for those days? I'm gonna I'm 664 00:39:12,280 --> 00:39:16,920 Speaker 1: gonna go with uh all right, all right, I woulna 665 00:39:16,920 --> 00:39:19,120 Speaker 1: agree with both of you. That, I think, and we'll 666 00:39:19,120 --> 00:39:20,960 Speaker 1: see what the auction turns out. I would have I 667 00:39:20,960 --> 00:39:23,800 Speaker 1: would have assumed the saving Private Ryan helmet would be 668 00:39:23,840 --> 00:39:27,560 Speaker 1: the most it's got the autographs. They're only estimating thirteen 669 00:39:27,600 --> 00:39:33,000 Speaker 1: and nineteen grand for that one. But I think if 670 00:39:33,120 --> 00:39:35,719 Speaker 1: you think of this auction through the perspective of a 671 00:39:36,000 --> 00:39:39,480 Speaker 1: sort of a tech or crypto millionaire, if you will, 672 00:39:39,480 --> 00:39:43,800 Speaker 1: and then it comes easier. Canna Reeve's costume from the Matrix. 673 00:39:44,640 --> 00:39:47,279 Speaker 1: They're saying fifty two to seventy eight thousand for that 674 00:39:48,280 --> 00:39:51,240 Speaker 1: by high Julia Robert Broots only thirteen and nineteen thousand, 675 00:39:52,239 --> 00:39:56,680 Speaker 1: and the alien mechanical head fifty two. Really yeah, wow, 676 00:39:56,719 --> 00:39:59,680 Speaker 1: I've put that at the bottom. Yeah. I feel like 677 00:39:59,680 --> 00:40:03,319 Speaker 1: there's just such a fan base surrounding the matrix. Yeah. Yeah. 678 00:40:03,880 --> 00:40:06,560 Speaker 1: The frame of reference I was using was the one 679 00:40:06,600 --> 00:40:09,279 Speaker 1: from a couple of weeks ago, the notorious B I. G. 680 00:40:09,520 --> 00:40:12,359 Speaker 1: Crown That was that was in the hundred thousand's right. 681 00:40:12,840 --> 00:40:15,439 Speaker 1: I was, yeah, yeah, you're right, So that was kind 682 00:40:15,440 --> 00:40:19,080 Speaker 1: of my That was my starting point. But I guess 683 00:40:19,080 --> 00:40:23,200 Speaker 1: that you would prefer the helmet over over the crown. No, 684 00:40:23,440 --> 00:40:26,720 Speaker 1: I want the crown personally. I just thought the helmet 685 00:40:26,880 --> 00:40:29,160 Speaker 1: would be valued a little higher. I would too, I 686 00:40:29,200 --> 00:40:31,040 Speaker 1: would I would have guessed the helmet, but you know 687 00:40:31,840 --> 00:40:33,880 Speaker 1: who knows what that's that's why we are not in 688 00:40:33,920 --> 00:40:39,319 Speaker 1: the right right all right, well we will have to 689 00:40:39,360 --> 00:40:41,719 Speaker 1: leave it there. But Zach Griffith, thank you so much 690 00:40:41,760 --> 00:40:44,240 Speaker 1: for joining the show today. We really appreciate it. Thanks guys, 691 00:40:44,280 --> 00:40:56,320 Speaker 1: God bless What Goes Up. We'll be back next week. 692 00:40:56,760 --> 00:41:00,120 Speaker 1: Until then, you can find us on the Bloomberg Terminal, website, 693 00:41:00,000 --> 00:41:03,680 Speaker 1: an app, or wherever you get your podcasts. We'd love 694 00:41:03,680 --> 00:41:05,720 Speaker 1: it if you took the time to rate and review 695 00:41:05,719 --> 00:41:08,719 Speaker 1: the show on Apple podcast so more listeners can find us. 696 00:41:09,120 --> 00:41:11,719 Speaker 1: And you can find us on Twitter, follow me at 697 00:41:11,920 --> 00:41:15,399 Speaker 1: at Sarah Pontzack, Mike is that Reaganonymous, and you can 698 00:41:15,440 --> 00:41:19,920 Speaker 1: also follow Bloomberg Podcasts at podcasts. Also, thank you to 699 00:41:20,000 --> 00:41:22,600 Speaker 1: Charlie Pellett of Bloomberg Radio and the voice of the 700 00:41:22,600 --> 00:41:25,840 Speaker 1: New York City Subway System. What Goes Up is produced 701 00:41:25,880 --> 00:41:29,680 Speaker 1: by Jordan Gospore. The head of Bloomberg Podcast is Francesco Levie. 702 00:41:29,960 --> 00:41:31,719 Speaker 1: Thanks for listening. See you next time.