WEBVTT - Markets, Digital Assets, and Goldilocks 0:00:00.840 --> 0:00:04.000 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.080 --> 0:00:05.240 my co host Matt Miller. 0:00:05.640 --> 0:00:09.600 Every business day, we bring you interviews from CEOs, market pros, 0:00:09.720 --> 0:00:13.600 and Bloomberg experts, along with essential market moving news. 0:00:14.160 --> 0:00:17.279 Find the Bloomberg Markets Podcast on Apple Podcasts or wherever 0:00:17.400 --> 0:00:20.480 you listen to podcasts, and at Bloomberg dot com slash podcast. 0:00:20.680 --> 0:00:22.079 Let's go to our next guest, get right back to 0:00:22.120 --> 0:00:25.800 these markets. John Hurdle joins US executive chairman at Hurdle, 0:00:25.880 --> 0:00:28.880 Callahan and Company. Hey, John, we have a risk one 0:00:28.960 --> 0:00:31.840 day today, but there's still a lot of concern out there. 0:00:31.920 --> 0:00:35.840 September was a tough month for risk assets, stocks down. 0:00:37.120 --> 0:00:39.280 How do you guys think about the rest of this year. 0:00:39.800 --> 0:00:42.279 You know it's still driven in large part by this 0:00:42.320 --> 0:00:44.120 federal Reserve. How are you guys thinking about it? 0:00:45.479 --> 0:00:47.080 Well, we'd like to have a real yield in the 0:00:47.120 --> 0:00:49.479 bond portfolio for the first time in a long time. 0:00:49.640 --> 0:00:51.960 You know, I the first thirty years I was in 0:00:51.960 --> 0:00:55.560 the business, bonds were such a critical dimension of a diverse, 0:00:55.600 --> 0:00:57.840 fied portfolio, and then we got this place where we 0:00:57.880 --> 0:01:00.080 had no real yield and we needed the bonds to 0:01:00.080 --> 0:01:03.960 stabilize the portfolios, but the price of that stabilization was 0:01:04.040 --> 0:01:07.240 huge because we've got no real yield. So as an investor, 0:01:07.319 --> 0:01:09.600 I like having real yield back in the bond market. 0:01:10.000 --> 0:01:11.959 I also feel like this is more of a stock 0:01:12.040 --> 0:01:15.360 picker's market. It's not just risk on risk off. That's 0:01:15.400 --> 0:01:17.600 a term that has really become popular in the last 0:01:17.600 --> 0:01:20.160 ten years. It's more of a trading term than an 0:01:20.200 --> 0:01:23.399 investing term. We're always risk on because we think to 0:01:23.680 --> 0:01:27.160 fulfill our client's missions, we've got to be in growth assets, 0:01:27.200 --> 0:01:29.920 which are stocks and private equity and so forth. So 0:01:30.360 --> 0:01:33.520 it's really a question we're not you know, we're investors, 0:01:33.560 --> 0:01:36.600 not traders, and so this market actually feels a little 0:01:36.640 --> 0:01:38.600 more normal than what we've gone through for the last 0:01:38.600 --> 0:01:39.520 ten years. 0:01:40.319 --> 0:01:43.520 So what do you think in terms of the sixty 0:01:43.640 --> 0:01:46.840 forty split, Is that still the way to go for 0:01:46.880 --> 0:01:47.920 the average investor? 0:01:48.200 --> 0:01:48.440 Or? 0:01:48.560 --> 0:01:51.640 Would you allocate more to bonds right now at these yields? 0:01:53.440 --> 0:01:56.800 We wouldn't really allocate. We're not allocating more to bonds yet, 0:01:56.800 --> 0:01:59.080 and we've been about seventy thirty so for a long 0:01:59.120 --> 0:02:01.960 time we've been more growth oriented than fixed income than 0:02:02.000 --> 0:02:05.960 income oriented. But we are adding duration. So we feel 0:02:06.040 --> 0:02:08.920 like if we can move up duration and we're still 0:02:09.040 --> 0:02:13.040 underweight relative to the Investment Great Index, but we're you know, 0:02:13.320 --> 0:02:16.760 closer to matching it. We're adding duration, so we field 0:02:16.800 --> 0:02:19.760 with a ten year to four sixty. We're getting closer. 0:02:20.680 --> 0:02:23.760 You know, could it get to a five percent? Interesting? 0:02:24.120 --> 0:02:27.960 But at this point we can increase yield, so get 0:02:28.000 --> 0:02:31.840 current yield. The yield curve is steepening a little bit, 0:02:32.280 --> 0:02:35.160 and if we do slip into a recession and interest 0:02:35.200 --> 0:02:37.600 rate strop again, then we get capital appreciation out of 0:02:37.639 --> 0:02:39.160 those bonds. So we're adding duration. 0:02:40.240 --> 0:02:42.160 John On on the equity side here, you know, some 0:02:42.240 --> 0:02:45.200 of the performance are most of the vast majority, if 0:02:45.200 --> 0:02:46.600 not all, of the performance in the S and P. 0:02:46.680 --> 0:02:48.440 Five hundred has been from a handful of names to 0:02:49.480 --> 0:02:52.400 magnificent seven. Do you chase those here or do you 0:02:52.520 --> 0:02:54.240 try to look for some of the names that have 0:02:54.400 --> 0:02:55.600 not participated. 0:02:56.880 --> 0:03:00.200 Well, you know, Mark Andresen wrote years ago that sawfwar 0:03:00.360 --> 0:03:04.160 is eating the world, and so that is a secular change. 0:03:04.160 --> 0:03:07.280 It's kind of like the industrial revolution. On the other hand, 0:03:07.280 --> 0:03:10.200 Howard Mark says beautifully that there is no asset in 0:03:10.200 --> 0:03:13.000 the world. It's a good investment at any price. It 0:03:13.120 --> 0:03:15.280 depends on the name. We've got to go name by name. 0:03:15.320 --> 0:03:17.280 And by the way, there are other companies that we 0:03:17.400 --> 0:03:19.640 like that are We do like the tech set. We 0:03:19.760 --> 0:03:23.040 like the US relative to the world because of our 0:03:23.040 --> 0:03:26.400 exposure to technology. But really, when we think about the 0:03:26.480 --> 0:03:30.440 great technology companies like Microsoft, they have strong balance sheets, 0:03:30.440 --> 0:03:32.320 they have an installed base, and they have a moat 0:03:32.440 --> 0:03:35.880 around their business. There are other businesses like Thermo Fisher 0:03:36.000 --> 0:03:40.040 and Canadian Pacific Rail that aren't tech companies. Well, Canadian 0:03:40.040 --> 0:03:42.720 Pacific isn't a tech company per se, but it also 0:03:42.800 --> 0:03:45.840 has a strong balance sheet, installed base, and moat around 0:03:45.920 --> 0:03:49.400 its business. So you know, it's not just tech companies, 0:03:49.400 --> 0:03:51.800 but we think it's companies that have that kind of 0:03:51.840 --> 0:03:56.560 a strong position and can manage through these uncertain times. 0:03:57.240 --> 0:03:59.680 Are you concerned about you know, we talk so much 0:03:59.720 --> 0:04:05.040 about the fact that inflation was helpful to earnings and 0:04:05.080 --> 0:04:08.200 now we're in a disinflationary environment withouthurt earnings. 0:04:09.480 --> 0:04:13.680 Maybe you know, markets are always priced at equilibriate, So 0:04:13.720 --> 0:04:16.000 every time I sell something, someone's buying it from me, 0:04:16.040 --> 0:04:18.360 and every time I buy something, someone's selling it from 0:04:18.520 --> 0:04:21.960 to me. So if there's this notion that there's always 0:04:22.000 --> 0:04:25.240 a positive and negative story and interest rates. You know, 0:04:25.320 --> 0:04:27.719 five years ago we were desperate to get interest rates 0:04:27.760 --> 0:04:30.400 higher and the Fed just couldn't get it done. And 0:04:30.440 --> 0:04:33.839 then you know, we had this COVID situation and probably 0:04:34.080 --> 0:04:35.400 the six trillion dollars. 0:04:35.480 --> 0:04:36.919 Hey, John, we're gonna have to I'm sorry, We're going 0:04:36.960 --> 0:04:38.039 to leave it there just because of the time, but 0:04:38.040 --> 0:04:40.839 we appreciate getting your thoughts. John Hurdle, Executive chairman at Hurdle, 0:04:40.880 --> 0:04:41.680 Callahan and Company. 0:04:42.680 --> 0:04:46.080 You're listening to the team Ken's are online program Bloomberg 0:04:46.120 --> 0:04:49.520 Markets weekdays at ten am eastering on Bloomberg dot com, 0:04:49.600 --> 0:04:52.720 the iHeartRadio app, and the Bloomberg Business app, or listen 0:04:52.800 --> 0:04:54.919 on demand wherever you get your podcasts. 0:04:56.960 --> 0:04:58.960 All right, Tom Farley joins us here. He's the chief 0:04:58.960 --> 0:05:02.920 executive officer a Bullish, former president of the New York 0:05:02.960 --> 0:05:06.080 Stock Exchange, here to chat with this. Hey Tom, First 0:05:06.080 --> 0:05:09.560 of all, thanks for joining us. Tell us about what 0:05:09.600 --> 0:05:13.520 you guys are doing at Bullish. 0:05:13.560 --> 0:05:16.160 Great to be on with you. I am soaked by 0:05:16.200 --> 0:05:18.680 the way I heard you talking about the rain. I 0:05:19.680 --> 0:05:23.599 just I just walked into the office from a meeting 0:05:23.880 --> 0:05:25.240 and completely drenched. 0:05:25.279 --> 0:05:27.760 There you go, I'm glad this. I'm glad this is radio. 0:05:29.200 --> 0:05:30.320 But you're on Zoom as well. 0:05:30.400 --> 0:05:33.200 We got you on YouTube, we got you out on YouTube. 0:05:33.200 --> 0:05:34.560 There you go, my man. 0:05:35.279 --> 0:05:37.279 Great to be with you, guys. Yeah, bullish. 0:05:37.960 --> 0:05:41.240 Look from the outset, we're taking an approach of being 0:05:41.600 --> 0:05:45.920 a compliant adult digital assets exchange, and that didn't really 0:05:45.960 --> 0:05:49.280 benefit us, to be honest with you, eighteen nineteen twenty, 0:05:49.360 --> 0:05:52.640 it felt like the exchanges that were winning in many 0:05:52.720 --> 0:05:56.159 in many cases were kind of cutting corners and doing 0:05:56.200 --> 0:05:58.400 things differently than we were doing. But in the long run, 0:05:58.480 --> 0:06:01.279 it'll it'll, you know, it'll work out in many ways, Paul. 0:06:01.839 --> 0:06:04.240 Guys like you and I. You know that people might 0:06:04.240 --> 0:06:05.880 look at and say our granddads. But we've been in 0:06:05.960 --> 0:06:09.159 markets for all this time. We've seen the future, and 0:06:09.680 --> 0:06:14.240 the professional financial services businesses will win in the digital 0:06:14.240 --> 0:06:18.880 asset space. There will be two to four global exchanges, 0:06:18.960 --> 0:06:23.120 not five, not one, and they will be well run businesses. 0:06:23.120 --> 0:06:27.159 And so we've just focused on institutions, only fully regulated 0:06:27.480 --> 0:06:30.919 did coins that actually make sense. You know, everybody loves 0:06:31.600 --> 0:06:34.359 a frog coin or or digital animal drawing or what 0:06:34.480 --> 0:06:37.320 have you. But what I'm really looking for are the 0:06:37.360 --> 0:06:39.479 projects that are adding real value in the world that 0:06:39.520 --> 0:06:43.320 are benefiting from blockchain technology to do good things, to 0:06:43.400 --> 0:06:46.800 make for a more efficient financial market. And so those 0:06:46.800 --> 0:06:48.520 are the areas we've been focusing on Bullish and it's 0:06:48.600 --> 0:06:50.920 it's working. We're gaining market share. Where the number two 0:06:51.520 --> 0:06:54.120 exchange in the world for ether, where on any given 0:06:54.200 --> 0:06:57.359 day three, four or five for bitcoin, which are you know, 0:06:57.360 --> 0:06:59.359 obviously two of the big the big ones out Well, I. 0:06:59.400 --> 0:07:01.720 Definitely not a granddad. I want to point out that 0:07:01.760 --> 0:07:04.320 Tom Farley was born after the Beatles broke up. 0:07:04.839 --> 0:07:05.080 So. 0:07:07.400 --> 0:07:10.080 You did, though, Tom, which, by the way, in crypto 0:07:10.160 --> 0:07:13.040 and crypto, it makes me a great grand dad exactly. 0:07:13.760 --> 0:07:14.160 Honestly. 0:07:14.360 --> 0:07:17.400 You know, when I first I got into this back 0:07:17.440 --> 0:07:19.560 in twenty twelve, but it was it was through an 0:07:19.560 --> 0:07:25.160 investment in coinbase pre revenue. I got lucky, to be honest, 0:07:25.520 --> 0:07:27.840 but kind of learned the space and then immerse myself 0:07:27.880 --> 0:07:32.800 in Night twenty twenty and it was like the jargon, 0:07:32.880 --> 0:07:36.080 the inscrutable jargon, and I would say like that doesn't 0:07:36.120 --> 0:07:38.040 make any sense, and people would look at me like 0:07:38.080 --> 0:07:40.560 literally like I was one thousand years old, like oh, 0:07:40.600 --> 0:07:41.800 you'll just never get it. 0:07:41.840 --> 0:07:43.920 That's why they make up that kind of jargon. By 0:07:43.920 --> 0:07:48.520 the way, I've been following crypto for about the exact 0:07:48.560 --> 0:07:52.160 same time. I bought my first bitcoin in December of 0:07:52.840 --> 0:07:55.600 I guess twenty thirteen. December of twenty thirteen was when 0:07:55.600 --> 0:07:57.560 I got nice trade for six hundred dollars. 0:07:58.000 --> 0:08:00.960 Well, he lost it the key though, I did lose 0:08:01.000 --> 0:08:01.640 my password. 0:08:02.040 --> 0:08:04.559 But Tom, you were pretty busy at the time running 0:08:04.560 --> 0:08:07.360 the New York Stock Exchange, which is arguably, you know, 0:08:07.400 --> 0:08:11.680 the most important exchange in the world, certainly historically it is. 0:08:13.240 --> 0:08:16.280 How have you used what you learned at ICE and 0:08:16.320 --> 0:08:19.920 at NYC in the world of crypto. 0:08:21.000 --> 0:08:26.000 Oh, my gosh, like a million ways, especially now, you know, 0:08:26.040 --> 0:08:30.120 coming out of all the Shenanigans of twenty twenty one 0:08:30.200 --> 0:08:35.240 and twenty twenty two and people being hurt and you know, 0:08:35.320 --> 0:08:39.040 deception outright fraud in some cases, people now care about 0:08:39.800 --> 0:08:42.960 credit worthy counter parties, they care about. 0:08:42.920 --> 0:08:44.559 Businesses being run the right way. 0:08:45.559 --> 0:08:48.000 And look, I'd love to tell you what we're doing 0:08:48.000 --> 0:08:52.760 at Bullish is like, you know, solving differential equations, but 0:08:52.840 --> 0:08:57.240 it's not. It's connecting buyers and sellers and ensuring that 0:08:57.280 --> 0:09:01.160 you have a lot of bids and offers tightly tightly 0:09:01.240 --> 0:09:05.640 wrapped around the market price. And that's what I've done 0:09:05.960 --> 0:09:08.880 since I was twenty eight years old, twenty nine years 0:09:08.920 --> 0:09:12.360 old when I when I went into the New York 0:09:12.400 --> 0:09:14.440 Board of Trade, which is could be a whole nother 0:09:14.600 --> 0:09:16.959 radio hour to talk about a twenty nine year old 0:09:17.000 --> 0:09:20.280 kid trying to break up floor trading, but let's leave 0:09:20.320 --> 0:09:22.800 that aside. Hey, Tom, it's really it's really the same, 0:09:22.840 --> 0:09:23.679 it's really the same thing. 0:09:23.720 --> 0:09:25.199 In fact, in some ways it's easier. 0:09:25.240 --> 0:09:27.560 You know, in New York soalcing change, we were processing 0:09:27.600 --> 0:09:31.320 one hundred million messages a second in our options feed, 0:09:31.360 --> 0:09:34.760 one hundred million messages second. In crypto, if you're doing 0:09:34.800 --> 0:09:37.560 five thousand a second, you get a gold medal. So 0:09:37.720 --> 0:09:40.040 in some ways it's it's easier. Some ways it's it's 0:09:40.120 --> 0:09:44.079 more difficult. But every day, all day, I'm benefiting from 0:09:44.400 --> 0:09:46.880 the great people that I learned from in exchange world 0:09:47.320 --> 0:09:48.360 my whole career. 0:09:48.480 --> 0:09:51.080 Tom, How frustrating is it to you? And maybe just 0:09:51.080 --> 0:09:53.480 a crypto market in general, when it still feels like 0:09:54.000 --> 0:09:57.840 traditional financial Wall Street, if you will, Global banking, if 0:09:57.880 --> 0:10:02.120 you will, still does not really recognize or appreciate crypto. 0:10:02.160 --> 0:10:04.000 I mean, Jamie Diamond's still not on board. Just for 0:10:04.040 --> 0:10:06.520 an example, how do you put that in context? 0:10:08.640 --> 0:10:08.800 Uh? 0:10:09.240 --> 0:10:11.800 I mean, you know, it's interesting, it's a good question. 0:10:11.840 --> 0:10:15.920 And you know, Warren Buffett I would add to that. 0:10:15.960 --> 0:10:18.560 I mean, these are these are people I think highly of, 0:10:20.520 --> 0:10:23.839 but when you drill into their message, I actually share 0:10:23.920 --> 0:10:27.400 a lot of their concern. You know, they were especially 0:10:27.559 --> 0:10:30.880 Jamie was talking at the height of the mania and 0:10:30.960 --> 0:10:33.840 kind of saying, hey, I've seen this movie before, ye 0:10:34.920 --> 0:10:38.120 and and look at to some extent he was right. 0:10:38.160 --> 0:10:40.840 And and we as an industry have brought the uncertainty 0:10:40.880 --> 0:10:42.640 that we're in right now upon us. It was, as 0:10:42.640 --> 0:10:44.760 I said, it was too much jargon, there's too much deception. 0:10:44.840 --> 0:10:47.880 There are too many frog coins. So so it was 0:10:47.960 --> 0:10:51.960 right on the At the same time, JP Morgan, uh, 0:10:52.120 --> 0:10:55.800 is you is doing projects to benefit from the interesting 0:10:55.840 --> 0:10:59.680 technological facets of blockchain, you know, the finality, the instant 0:10:59.679 --> 0:11:02.200 finale to your instant settlement, the transparency that goes along 0:11:02.200 --> 0:11:05.240 with blockchain, the incremental security that goes along with blockchain. 0:11:06.240 --> 0:11:11.720 JP Morgan engages in brokerage for and and and and 0:11:12.559 --> 0:11:15.760 prime brokerage or futures kind of commissioned business for bitcoin 0:11:16.120 --> 0:11:19.679 or bitcoin futures on the CMME. So I think really 0:11:19.800 --> 0:11:21.760 what you were seeing from some smarter look. There were 0:11:21.800 --> 0:11:24.080 some people that just don't get it. They think Bitcoin's 0:11:24.080 --> 0:11:26.199 going to go away tomorrow. Bitcoin ain't going away anytime. 0:11:26.840 --> 0:11:29.520 But there were some people, I think who just sensed 0:11:29.640 --> 0:11:32.520 something wasn't right, and there was some merit to that. 0:11:33.120 --> 0:11:35.200 And this is a time of retrenchment, and I have 0:11:35.320 --> 0:11:38.520 a lot of hope, maybe even optimism that we've bumped 0:11:38.520 --> 0:11:41.040 along along the bottom and things are getting a lot 0:11:41.120 --> 0:11:42.240 better quickly. 0:11:42.920 --> 0:11:44.959 Hey, Tom, thanks so much for joining us. Really appreciate 0:11:44.960 --> 0:11:49.080 you taking the time there. Tom Farley, CEO of Bullish, 0:11:49.400 --> 0:11:52.560 former president at the n y S talking about the 0:11:52.600 --> 0:11:56.880 crypto space and the exchanges that support the crypto space, 0:11:56.880 --> 0:11:59.640 as Thomas suggesting, they've got some work to do. Arguably 0:11:59.640 --> 0:12:02.720 as an industry, it's kind of short a lot of 0:12:03.000 --> 0:12:04.040 aspects of that market. 0:12:03.880 --> 0:12:05.400 Man ten years ago. If you had the choice tween 0:12:05.520 --> 0:12:08.000 JP Morgan, Stock and bitcoin boom oh. 0:12:09.040 --> 0:12:12.199 You're listening to the tape. Cat's are live program Bloomberg 0:12:12.240 --> 0:12:15.840 Markets weekdays at ten am Eastern on Bloomberg Radio, the 0:12:15.880 --> 0:12:19.120 tune in app, Bloomberg dot Com, and the Bloomberg Business app. 0:12:19.160 --> 0:12:22.000 You can also listen live on Amazon Alexa from our 0:12:22.000 --> 0:12:26.000 flagship New York station. Just say Alexa play Bloomberg eleven 0:12:26.080 --> 0:12:28.080 thirty Again. 0:12:28.200 --> 0:12:30.080 I'm looking at the two year here. I can just 0:12:30.280 --> 0:12:33.000 jump into a two year treasury five point zero three percent. 0:12:33.160 --> 0:12:35.280 I think on a rainy day like today, that's just fine. 0:12:35.480 --> 0:12:36.800 Dude, you're all in on the two years. 0:12:36.880 --> 0:12:37.240 I'm all in. 0:12:37.240 --> 0:12:39.240 And keep telling you there's reinvestment risk there. 0:12:39.520 --> 0:12:41.679 I'll deal with that when it happens. And I'm all 0:12:41.720 --> 0:12:42.199 about today. 0:12:42.240 --> 0:12:45.360 Get the stick from a money market. You know that 0:12:45.360 --> 0:12:49.160 that rolls over for you. I am your daughter's Marcus account. 0:12:49.200 --> 0:12:50.760 I'm in that one with her. You're in that so 0:12:51.000 --> 0:12:53.040 I matched her. So we bubbled up on this. 0:12:53.160 --> 0:12:55.040 My wife gets in it, and then she recommends all 0:12:55.040 --> 0:12:58.000 our friends, and every time she recommends somebody, she gets 0:12:58.000 --> 0:12:59.640 a bump on her rate. 0:13:00.240 --> 0:13:02.480 That's a nice incentive there. I guess that's how my 0:13:02.600 --> 0:13:06.120 daughter did it. Anyway, Ben Emmage joints is because he's 0:13:06.120 --> 0:13:09.240 a professional. He's had a fixed income with New Edge Wealth. Ben, 0:13:09.320 --> 0:13:11.600 do I buy the two year here? Or you got 0:13:11.600 --> 0:13:12.400 something better for me? 0:13:13.040 --> 0:13:14.800 So I would agree with you, Paul that if you 0:13:14.880 --> 0:13:17.240 take the two yields and he will subtract any of 0:13:17.240 --> 0:13:19.520 the core measures that we saw today. Yep, it's actually 0:13:19.600 --> 0:13:20.520 positive real return. 0:13:20.559 --> 0:13:22.560 That's why we're getting really illed these days, right right. 0:13:22.520 --> 0:13:24.880 So that for that reason, I say, yes you should 0:13:24.960 --> 0:13:28.000 because you don't have the duration risk. You may have 0:13:28.040 --> 0:13:30.920 to have a investment risk, but you certainly get compensated 0:13:30.920 --> 0:13:34.559 for inflation. So that's good, okay, And out the you curve, 0:13:34.679 --> 0:13:37.439 I still remain relatively skeptical. I think at ten years 0:13:37.440 --> 0:13:40.640 and thirtyth Bondh's is not enough compensation there. 0:13:40.679 --> 0:13:40.920 Yet. 0:13:41.040 --> 0:13:42.600 We may get there, you know, if we hit that 0:13:42.640 --> 0:13:45.720 five percent level, which I think we're going. But I 0:13:45.720 --> 0:13:47.480 think your best bet is on the front of the curve. 0:13:48.240 --> 0:13:50.640 We see almost that on the twenty year, don't we. 0:13:50.760 --> 0:13:54.079 I mean, I feel like, do you see yields going 0:13:54.240 --> 0:13:56.319 much higher out out the curve? 0:13:57.320 --> 0:13:59.280 So that depends on a few things, Matt, that it 0:13:59.320 --> 0:14:02.199 depends one on obviously, the message of the FAT coming 0:14:02.240 --> 0:14:04.360 out of all those data we're getting now is what's 0:14:04.480 --> 0:14:06.880 higher for longer? Is it still higher and then longer 0:14:07.040 --> 0:14:09.640 or are we at the high I think there's a 0:14:09.720 --> 0:14:12.240 mixed message on this from the fat currny or as. 0:14:12.120 --> 0:14:15.160 In there is because Powell says, on one hand in 0:14:15.200 --> 0:14:17.439 a press press conference, he'll say, we're not going to 0:14:17.480 --> 0:14:20.000 cut rate for years. Any there's an X on the 0:14:20.040 --> 0:14:22.080 end of that year, So I mean it's multiple, not 0:14:22.240 --> 0:14:24.800 just one year. We're not going to cut rates for years. 0:14:25.120 --> 0:14:27.640 Then I look at the dot plot and I see 0:14:28.120 --> 0:14:32.000 two rate cuts scheduled for next year. Not scheduled. I 0:14:32.080 --> 0:14:37.680 realized they're just prognoses. But the majority of the Federal 0:14:37.760 --> 0:14:40.600 Reserve expects to cut twice next year. Were they not 0:14:40.800 --> 0:14:42.800 listening to Powell or are they not on the same 0:14:42.840 --> 0:14:43.720 page as Powell? 0:14:44.240 --> 0:14:48.120 So actually that forecast changed the last meeting because there 0:14:48.120 --> 0:14:50.880 were people predicting a Hanna based points cuts, so they 0:14:50.880 --> 0:14:53.240 took some of that back, which I think, by the way, 0:14:53.240 --> 0:14:55.400 explains a lot of the yield movement we have seen 0:14:55.440 --> 0:14:58.360 of last period. It's just a fat has acknowledged this. 0:14:58.360 --> 0:15:01.120 This is a stronger economy. So it depends on that too. 0:15:01.200 --> 0:15:04.720 Where the economy conditions showed is resilience, including today's data. 0:15:05.240 --> 0:15:07.440 You can you know it's softening, is cooling, but it's 0:15:07.480 --> 0:15:10.600 not collapsing in any sort of way. Lastly, we do 0:15:10.680 --> 0:15:13.800 have a I think is supply demand imbalance so to speak, 0:15:13.840 --> 0:15:16.680 in the treasury markets. Then we've got tons of supply 0:15:17.280 --> 0:15:20.360 and we're seeing this change in demand. Maybe you call 0:15:20.400 --> 0:15:23.560 like I read Jersey as some interesting specific analis on 0:15:23.600 --> 0:15:26.320 that I would echo more that that that you know, 0:15:26.360 --> 0:15:29.000 the supply is large, and it looks like that they 0:15:29.080 --> 0:15:31.240 want to continue to issue more long term bonds. So 0:15:31.880 --> 0:15:34.800 I think all those factors drive you to that that 0:15:34.920 --> 0:15:38.080 five percent barrier. Now how high from there, who knows, 0:15:38.120 --> 0:15:41.040 but I think five percent of the psychological number. 0:15:41.480 --> 0:15:45.800 What you know, I've just been fascinated with energy, global 0:15:45.880 --> 0:15:48.240 energy price at WTI crude oil here we're off about 0:15:48.240 --> 0:15:50.160 a half a percent today, but still above ninety one 0:15:50.200 --> 0:15:52.720 dollars or barrows at a just a real big move 0:15:52.760 --> 0:15:55.920 off that high sixties we had just several months ago, 0:15:56.920 --> 0:16:00.400 and that's inflation area. How do you think about energy 0:16:00.400 --> 0:16:02.320 prices and how does that kind of factor into I 0:16:02.320 --> 0:16:03.200 guess the economy. 0:16:04.160 --> 0:16:07.120 It certainly is well because you know the data today 0:16:07.120 --> 0:16:11.200 in PC Basker too showed an increase of energy there, 0:16:11.560 --> 0:16:14.400 just like in CPI. So at some point people are 0:16:14.400 --> 0:16:16.320 going to take notice of it and factor that again 0:16:16.320 --> 0:16:19.840 in their expectations. So that's one issue you know Googlesby 0:16:19.920 --> 0:16:22.600 in the speech yesterday made a real point about that, saying, 0:16:22.800 --> 0:16:25.000 if you know, if we could TATA have this inflation 0:16:25.080 --> 0:16:28.120 on the right path, if people expect differently from inflation 0:16:28.120 --> 0:16:30.120 in the future, we may have to adjust policy. Right, 0:16:30.200 --> 0:16:34.080 So there's that issue. Then I think it's about how 0:16:34.120 --> 0:16:37.480 high will oil prices go before we getting real impact 0:16:37.520 --> 0:16:40.480 on the economy because the past is I think a 0:16:40.560 --> 0:16:43.320 good guy there. If high oil prices were the search 0:16:43.560 --> 0:16:46.400 and spike high, then it's going to slow down activity. 0:16:46.400 --> 0:16:48.880 People are going to pair back. It just seems to 0:16:48.920 --> 0:16:52.600 be always a factor for slow down. Nonetheless, it will 0:16:52.600 --> 0:16:56.160 be inflationary because we're still in a very high inflation. 0:16:55.880 --> 0:16:59.240 Environment we have seen or we haven't seen. I should 0:16:59.320 --> 0:17:03.840 say gas prices keep up with oil prices. And I'm 0:17:03.880 --> 0:17:06.000 not talking about at the pump, you know, I'm talking 0:17:06.000 --> 0:17:09.760 about the R BOB futures contract. It's not taken off 0:17:09.800 --> 0:17:12.240 at the same rate. Do you think that means that 0:17:12.320 --> 0:17:15.119 oil prices. Is this just a spike and they're going 0:17:15.200 --> 0:17:17.800 to come back down or are they holding at this level? 0:17:18.720 --> 0:17:22.639 I think it's the spike because of the little specific 0:17:22.720 --> 0:17:25.720 technical features in the oil market currently. I think what's 0:17:25.760 --> 0:17:29.760 happening there is that people recognize that the oil production 0:17:29.880 --> 0:17:32.600 costs cuts are really filtering through the global system. 0:17:32.680 --> 0:17:34.920 So how to watch the crack spreads? Right, I'm just 0:17:35.000 --> 0:17:35.720 learning our bob. 0:17:35.840 --> 0:17:36.600 That's a new one for me. 0:17:36.720 --> 0:17:37.080 Yeah. 0:17:37.119 --> 0:17:41.880 Really that's gasoline futures. Yes, why so again just to 0:17:42.160 --> 0:17:43.800 ask this question again, why is. 0:17:43.760 --> 0:17:44.360 It going down? 0:17:45.000 --> 0:17:45.119 So? 0:17:45.200 --> 0:17:47.280 I think that is a supply issue there, okay, And 0:17:47.440 --> 0:17:51.000 it was reported yesterday there was some additional supply there, 0:17:51.040 --> 0:17:53.800 so it is very much sensitive to that. Whereas with 0:17:53.960 --> 0:17:57.679 oil is the opposite situation. You know, John Ferrell on 0:17:57.800 --> 0:17:59.840 Saveant has me at this point this morning, we actually 0:17:59.880 --> 0:18:04.560 have high oil production United States. We just got low inventories, 0:18:04.560 --> 0:18:08.480 a cushing for all kinds of reasons. So the draw 0:18:08.520 --> 0:18:11.040 on that inventory pushes up the price. But once it 0:18:11.080 --> 0:18:14.200 gets back flooded in with all those oil production. 0:18:13.880 --> 0:18:16.439 Cushion that's in Oklahoma, right, and they have like the 0:18:16.520 --> 0:18:18.840 tanks that's where the pipelines go in and. 0:18:18.800 --> 0:18:21.159 Out Central I gotta get the Have you been the cushion? 0:18:21.520 --> 0:18:21.680 No? 0:18:21.760 --> 0:18:22.160 I haven't. 0:18:22.480 --> 0:18:26.639 Alex Steel goes all the time. The alyxis are. I 0:18:26.680 --> 0:18:28.359 want to go there because that seems like the pretty 0:18:28.520 --> 0:18:30.520 you want to see how the sausage is made in 0:18:30.560 --> 0:18:34.080 global energy. That's that's where we good. So so energy 0:18:35.560 --> 0:18:39.080 inflationary impact is it something that's more temporary from your perspective. 0:18:39.320 --> 0:18:43.240 So, I mean you have to watch headline inflation because eventually, 0:18:43.280 --> 0:18:46.040 if it gets higher headline, then it will spill over 0:18:46.080 --> 0:18:48.840 to an extending core. You know, Bloomberg has a very 0:18:48.920 --> 0:18:52.840 nice tracking of headline real time, and it has moved 0:18:52.920 --> 0:18:55.280 up again. It's sticked higher after a whole period of 0:18:55.320 --> 0:18:57.720 the cline. So I think we just have to watch 0:18:57.720 --> 0:19:00.240 this where this is going. They said, like, I think 0:19:00.240 --> 0:19:02.280 that if you're getting it little spike and oil prices 0:19:02.320 --> 0:19:04.440 they would go well over one hundreds. That it has 0:19:04.480 --> 0:19:06.639 a psychological effect on consumers. 0:19:06.920 --> 0:19:09.760 I don't understand why more people aren't worried about the 0:19:09.920 --> 0:19:15.240 strike dragging on because Okay, there's inventory now, but because 0:19:15.280 --> 0:19:18.760 they built up before the strike car of cars. But 0:19:19.200 --> 0:19:22.880 if they strike for longer, that inventory is gonna get 0:19:22.920 --> 0:19:25.200 whittled away. And we're already at a pretty high level 0:19:25.200 --> 0:19:27.800 in terms of car prices. New car prices, used car 0:19:27.840 --> 0:19:30.080 prices have been heading down, but that's going to turn 0:19:30.119 --> 0:19:32.159 around for sure. And then you get one hundred and 0:19:32.200 --> 0:19:34.399 fifty thousand people who are going to get a thirty 0:19:34.440 --> 0:19:39.000 percent raise. If this works out right, then other people 0:19:39.040 --> 0:19:42.120