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Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene Jaily.

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Speaker 1: We bring you insight from the best in economics, finance, investment,

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Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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Speaker 1: Bloomberg dot Com, and of course, on the Bloomberg. Earlier

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Speaker 1: this week, Tom kene you asked me whether this was

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Speaker 1: fun and I sat there and thought fun for who?

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Speaker 1: And then I had lunch yesterday with two Global Macro guys.

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Speaker 1: They bought and literally, let me say, what did they bought? It?

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Speaker 1: A redd oh keeper of the MX boy. They could

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Speaker 1: not have been happier. They could not have been happier

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Speaker 1: after Global Macro has been smacked around for like five, six,

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Speaker 1: seven years. For these guys, they're hoping this is regime

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Speaker 1: change all of us and it's a trader's market with

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Speaker 1: a time arising of like two minutes. Get in, get out,

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Speaker 1: get back in again, get out. James Sweeney, is this

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Speaker 1: is this a change? Or is Global Macrow just got

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Speaker 1: a break for a week. I think this is a change.

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Speaker 1: I think we're going to have more volatile interest rates

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Speaker 1: and exchange rates than we've had for a while. I

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Speaker 1: think we could have some new trends, including a downturns

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Speaker 1: in the dollar, which which we think can continue, and

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Speaker 1: you can have real conversations about inflation and central banks

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Speaker 1: like the b o J and the ECB in terms

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Speaker 1: of actually doing something in the in the years ahead.

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Speaker 1: So I think that's why this is This is a

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Speaker 1: really important conversation for our listeners who have been conditioned

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Speaker 1: by the by hold, by the e t F by

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Speaker 1: hold passive strategies for the last decade. Do they need

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Speaker 1: to start rethinking that? Because if the global macro guys

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Speaker 1: are right, if we're shifting into a trader's market where

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Speaker 1: active is really going to outperform, I wonder what our

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Speaker 1: listeners need to do if they've been passive by hold

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Speaker 1: as much of the last decade. That's right. Like two

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Speaker 1: facts about the recent week. The the US equity market

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Speaker 1: was the worst performing thing, and within the US equity

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Speaker 1: market there wasn't a great deal of sector differentiation. Basically

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Speaker 1: everything went down. So to a stockpicker, that's great. That's

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Speaker 1: I mean, basically to a macro guy or to a

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Speaker 1: stock picker, this is the kind of thing that's going

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Speaker 1: to create opportunities, and and you're seeing volumes and activity

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Speaker 1: levels and interest in different markets. Pick up on this,

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Speaker 1: James John said two words this week. One is whippy

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Speaker 1: and the other is regime. And we're here in this

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Speaker 1: John fer a lot, aren't we? Regime change? And a

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Speaker 1: huge debate Thomas to whether we've actually got one or

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Speaker 1: entering on in your world. This goes to James Bullard

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Speaker 1: of St. Louis and is important short non academic paper

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Speaker 1: on how it FED needs to work with regime change.

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Speaker 1: Is j Powell going to enjoy a regime change? Well,

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Speaker 1: so the regime change. Actually I wrote something on this

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Speaker 1: last year, and I think the critical thing about the

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Speaker 1: regime from a policy perspective is the inflation regime. So

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Speaker 1: what is the inflation regime? So, since since the early

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Speaker 1: to mid nineties and the developed market countries, you've had

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Speaker 1: essentially trendless core inflation with very low volatility, with very

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Speaker 1: low correlations to the previous year's growth, wages, credit, all

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Speaker 1: these things that the precursors to inflation in the past.

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Speaker 1: And this has been that this has been the inflation

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Speaker 1: targeting central bank era. And and so you know, you

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Speaker 1: can't really find equations math econometrics that forecast next year's

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Speaker 1: inflation on the basis of this year's unemployment rate, wages work,

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Speaker 1: it used to work, it used Could that change? That's

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Speaker 1: the regime change. That's that's the most regime change here

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Speaker 1: is to go mathematically to jump conditions. How do our

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Speaker 1: listeners adapt to a world of jump conditions. Well, there's

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Speaker 1: there's you know, there's different types of regimes. So the

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Speaker 1: regime I just mentioned in terms of inflation is a

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Speaker 1: is a longer term thing, and I don't think we've

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Speaker 1: had a big inflation regime change at this point. It's

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Speaker 1: just something worth speculating. But volatility in equity markets has regimes,

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Speaker 1: and volatility can jump from a low volatility regime where

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Speaker 1: basically things aren't moving around that much, suddenly jump and

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Speaker 1: then be much more volatile for several months, even a

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Speaker 1: year at a time. So that's regime is a little

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Speaker 1: bit of a kind of over over glamorous word and

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Speaker 1: something like that can change over a shorter period. I

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Speaker 1: think a twenty five year inflation regime is more regime

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Speaker 1: e to me. But but I think, you know, I

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Speaker 1: think the clustering of low volatility and then the clustering

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Speaker 1: of high volatility within a market is of the essence.

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Speaker 1: At this moment, maybe it looks like that might have

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Speaker 1: just happened. Maybe we should use the word paradigm. Um,

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Speaker 1: the current paradigm that we've been in for such a

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Speaker 1: long time. The FET reaction function has been pretty clear.

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Speaker 1: That doesn't like vol if, that doesn't like draw downs,

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Speaker 1: that doesn't like corrections. Um, something's changed because apparently the

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Speaker 1: FETE doesn't care now. Well, I think the causality is

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Speaker 1: running a little bit differently this way. I I think

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Speaker 1: what's happened recently is that the market has been pricing

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Speaker 1: in more policy, and not just from the US but

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Speaker 1: the rest of the world. And and you know, you know,

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Speaker 1: there's this big uh, there's gonna be this reduction of QWI.

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Speaker 1: The ECB is gonna stop purchasing later this year, the

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Speaker 1: FETE is reducing its balance sheet. People are actually even

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Speaker 1: talking about bo J policy change over over the next

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Speaker 1: over the next few years. I think, really what's happening

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Speaker 1: is this is sinking into the market and and and

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Speaker 1: so the market has to adjust to those James Sweeney,

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Speaker 1: thank you so much, barely appreciate it. With credit sweez

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Speaker 1: very valuable. Uh this morning and Jeff Curry joins us

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Speaker 1: from Goldman Sex. Right, Now here's the number one question.

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Speaker 1: Is commodities part of this party? We talk about modern correlations,

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Speaker 1: f X correlation. Is there a commodity correlation to equity upset? Well,

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Speaker 1: there was one exception, Jonathan, that was Bulks iron Ar,

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Speaker 1: and that because there are a pure e m play

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Speaker 1: and they didn't have as many investors in it. So

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Speaker 1: I like to point out the greater the trend, the

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Speaker 1: more the investors that were in these markets, the bigger

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Speaker 1: to sell off like x, like the short sellers. And

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Speaker 1: in fact, I like to point out in commodities world

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Speaker 1: had to this. We had it all last year, exactly,

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Speaker 1: it all last year. But Monday you have to publish

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Speaker 1: for Goldman Sex. What will be the tone of that

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Speaker 1: report to your clients, One in which most of this

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Speaker 1: is driven by trend following, short sellers, systematic trading strategies,

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Speaker 1: and that the underlying fundamentals are very much intact. The

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Speaker 1: transmission mechanism between this weakness and trading and the fundamentals

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Speaker 1: is through financial conditions. Yes, financial conditions have tightened, but

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Speaker 1: they were at the highest ever, the best ever recorded

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Speaker 1: last Monday before the sell off, so you have it's

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Speaker 1: the underlying fundamental situation deteriorate enough for us to change

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Speaker 1: of views. Absolutely not. In fact, there's not even one

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Speaker 1: data point that you can point to that suggests that

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Speaker 1: there's a fundament something wrong fundamentally. Is this a period

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Speaker 1: of deleveraging that's going to take a little bit more

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Speaker 1: time to play out When you sit around the table

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Speaker 1: with the committee at Golment Sacks, it's that the view

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Speaker 1: of of you guys right now, Jeff, there's financial de

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Speaker 1: leveraging happening, but there's not fundamental de leveraging happening. Fundamentally.

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Speaker 1: The market still re levering. So you know, we look

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Speaker 1: at you know, commodity prices. You still have very high

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Speaker 1: commodity prices. You know, you still have brand at sixty

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Speaker 1: four dollars a barrel um, you have iron r at

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Speaker 1: seventy seven fifty, you have copper nearly at seven thousands.

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Speaker 1: So yes, we've seen a five point two percent correction

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Speaker 1: in um commodities altogether, but that's not the end of

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Speaker 1: the world. So, you know, we look at the underlying

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Speaker 1: fundamentals re leverying on the demand side. In fact, that's

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Speaker 1: the core of our three rs. Reflation leads to re levering,

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Speaker 1: re Levering leads to re convergence of global growth, and

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Speaker 1: it cycles back over. That story has not changed. So

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Speaker 1: the equity market pain, you think it can the main

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Speaker 1: contained to the equity market. So it was so far

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Speaker 1: it appears to be the case because again the underlying

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Speaker 1: fundamental story, even on the equities is still rocks. And

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Speaker 1: this is critical, John, I was so busy today, folks,

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Speaker 1: I didn't have a chart out in TV. You'll see

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Speaker 1: it first on Bloomberg Radio, which puts in perspective the

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Speaker 1: Dow of where it is versus nine. You mentioned the

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Speaker 1: c T as the commodity traders with an alternative investments,

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Speaker 1: and they're all trend based. Good morning, Monroe Trout, Good

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Speaker 1: morning John, Henry and everybody else had invented this act.

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Speaker 1: We're just back to support on too many charts, aren't

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Speaker 1: we to be clear, Jeff Curry, we haven't broken support

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Speaker 1: thing after thing efter thing three absolutely, which just goes

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Speaker 1: the point that the bigger the up word trend, that

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Speaker 1: the bigger the sell off has man because you're just

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Speaker 1: bringing yourself back into a correction where you're finding these

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Speaker 1: normal support levels. Have they cleared markets? And this is

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Speaker 1: something that John Farrow would ask, do we have one

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Speaker 1: way bets on live cattle? Do we have one way

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Speaker 1: bets on copper? Do we have one way Ben's on

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Speaker 1: burnt crude? Right now? Is the market stacked or is

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Speaker 1: it flat ready to go? At this point, You've cleaned

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Speaker 1: up a lot of the markets, particularly in oil in

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Speaker 1: the last and that was the one that was the longest.

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Speaker 1: In fact, if you ask somebody to tell a bear

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Speaker 1: story in oil two weeks ago, it was positioning. Now

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Speaker 1: the positioning has been cleaned up, which again reinforces the

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Speaker 1: fundamental story going forward. Jeff, I want to talk to

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Speaker 1: the economist in you, not just the market participant um.

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Speaker 1: A big discussion of bloombags avance throughout the whole of

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Speaker 1: this week has been whether we're breaking into a new regime,

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Speaker 1: Whether this is regime change? Is it for you? Is

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Speaker 1: that what this is this price sanction a symptom of

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Speaker 1: the beginning of a regime change. I would argue we

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Speaker 1: had the regime change last year, and so in terms

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Speaker 1: of thinking about you know, the underlying fundamental story that

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Speaker 1: that came out of last year is you know, you

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Speaker 1: see that the correlation between oil and the dollar resurfacing

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Speaker 1: a lot of you know what, you know, the process

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Speaker 1: asset correlation you're referring to the lynch pin to that

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Speaker 1: really is the dollar. So from our perspective, that regime change,

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Speaker 1: it happened last year. Um, we're in it. And then

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Speaker 1: part of it reinforces that bullish story. We've seen what

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Speaker 1: happens when you have this whole three rs reflation, re leveraging,

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Speaker 1: and re convergence, UM, and the lynch pen that keeps

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Speaker 1: the cycle going and creating the upward pressure and commodity prices.

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Speaker 1: Really is the dollar. Let's be clear here the reflation story,

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Speaker 1: this is reminiscent of this time last year. A lot

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Speaker 1: of people very bullish on inflation and a lot of

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Speaker 1: money made over the preceding months by fading the reflation trade.

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Speaker 1: Why is this time different? It isn't. As you know,

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Speaker 1: if you look at this this story, it really began

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Speaker 1: in April two thousand and sixteen. The reflation story, and

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Speaker 1: you know is my boss likes to point out, if

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Speaker 1: you go back to the nineteen sixties, a reflation story

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Speaker 1: took started in nineteen sixty two. It didn't finish until

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Speaker 1: nineteen seventy eight. Um, it takes a while for these

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Speaker 1: for the fundamentals to create these inflationary pressures. It doesn't

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Speaker 1: fundamental markets are not like finance to markets. They just

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Speaker 1: don't happen overnight. Um. You know, it takes years for

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Speaker 1: you to get these pressures to develop. So talked to

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Speaker 1: me about the transmission. We've got the market pain. It's

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Speaker 1: financial market pain. Let's be clear about that. It's not

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Speaker 1: economic pain yet. Um, when do you start to see

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Speaker 1: it bleed into the economy if it's all there any concerns,

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Speaker 1: and if there are, there is a transmission mechanism, what

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Speaker 1: have you got your on? What is it? It's it's

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Speaker 1: the financial conditions that the financial markets create. And you

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Speaker 1: know you have you have a drop in equity prices

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Speaker 1: that creates a drop in wealth. You have rising interest rates?

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Speaker 1: Is which which what's what you see with the ten

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Speaker 1: your treasure? But even there you look at the rise

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Speaker 1: and you know interest rates what you're still two point

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Speaker 1: eight two versus two point seven seven? Shun we talk

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Speaker 1: about non crisis stuff. The vix in a stick, futures

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Speaker 1: negative five down futures negative. How's oil demand spectacular. That's

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Speaker 1: the thing is, if you look at all of these markets,

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Speaker 1: demand is solid across not only across geography, across product.

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Speaker 1: So I'm talking to Rio Tinto CEO yesterday. He's taken

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Speaker 1: a victory lap and allocating financial I know you've got

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Speaker 1: people at Goldman follow individual stocks. You don't want to

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Speaker 1: comment on that. I get that. But is the industry

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Speaker 1: gonna make the same mistakes or are they like the

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Speaker 1: airline business where they finally wised up. This time the

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Speaker 1: financial participants won't let them make the same And the

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Speaker 1: key here is we had a theme that we talked

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Speaker 1: about in the late nineties and early two thousand. It's

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Speaker 1: called revenge of the Old economy. It's the same dynamic here.

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Speaker 1: The new economy, the fans the bats are printing great

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Speaker 1: financial numbers. Capital is being redirected towards the new economy

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Speaker 1: at the expense of the old economy. And I know,

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Speaker 1: I know Jean Sebastian Jacket, Rio sin so very very well.

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Speaker 1: In the shift after Walsh left, Rio was to get

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Speaker 1: away from the volume story and get to value. They

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Speaker 1: got punished by their investors for what they did over

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Speaker 1: the last ten years. Tom and I think it's a

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Speaker 1: real discipline amongst the private companies at least to respond

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Speaker 1: in the way they were done, to stay disciplined. I

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Speaker 1: think the key question it's not in iron all, it's

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Speaker 1: not in copper. It's not these big companies riot inside

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Speaker 1: HP bulletin. It's way whether the governments of OPEC can

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Speaker 1: remain disciplined. It's whether Soundi Arabia can remain disciplined. It's

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Speaker 1: whether some of these big Opeque participants that have capped

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Speaker 1: volume can remain disciplined with crewed. Getting back towards when

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Speaker 1: you talk commodities and you talk iron or in copper,

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Speaker 1: with the British accent, it sounds better do a London

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Speaker 1: medals aluminum aluminium exactly. But to John's important question, if

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Speaker 1: they learned the lessons or there is the Middle East

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Speaker 1: going to make the same lessons again failures again in oil.

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Speaker 1: But but even you take take Saudi Arabia, they're focused

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Speaker 1: on their their vision, which is diversification across the economy.

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Speaker 1: They need to make investments in other things. And I

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Speaker 1: guess it's the point here is the attractiveness of the

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Speaker 1: rest of the world outside of commodities is much better

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Speaker 1: at this time around than it was a decade ago.

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Speaker 1: Jeff Curry, thank you so much. I get some sleep

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Speaker 1: this weekend, and never an Tom Jeff, That's true. I

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Speaker 1: always feel that way. Nobody knows the minutia of how

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Speaker 1: you actually spend it. Like John Hugh Deck at Brookie's Institution.

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Speaker 1: He has made a cottage industry of what you do

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Speaker 1: with the billions and trillions. John, wonderful they have you

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Speaker 1: with us. What's different now in how a given department

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Speaker 1: spends a given marble building in Washington, how they spend

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Speaker 1: the next marginal new billion. Well, these UH agencies have

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Speaker 1: a couple of choices. They can either continue to fund

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Speaker 1: the existing programs that they have under their authorization, or

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Speaker 1: where they have discretion, they can start to build out

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Speaker 1: new programs. And I think there will be some agencies

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Speaker 1: that are going to want to do that under the

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Speaker 1: new spending visions of the bill that was passed this morning.

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Speaker 1: At the same time, though a lot of agencies had

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Speaker 1: had hiring troubles, and hiring people back just to man

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Speaker 1: these agencies is something I think you're going to see

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Speaker 1: a lot of agencies doing out of the gate to review.

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Speaker 1: President Obama was am I right? Fiscally prudent on discretionaries spending?

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Speaker 1: What portion of what was wrought overnight is you know,

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Speaker 1: bipartisan catch up with the frugality that we've had over

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Speaker 1: the last X number of years. So so you're right,

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Speaker 1: we had sort of two different Barack Obama's. We had

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Speaker 1: Barack Obama early on, right after the recession began, where

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Speaker 1: he passed the stimulus bill, and that wasn't necessarily fiscally prudent,

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Speaker 1: although I think it was economically prudent at the time.

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Speaker 1: And then later on, under Republican pressure from Congress, you

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Speaker 1: had a more fiscally frugal President Obama. But now what

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Speaker 1: we're seeing is the Congress pass what is a massive

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Speaker 1: increase in spending, or rather the authorization for a massive

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Speaker 1: increase of spending, which is more than a third of

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Speaker 1: the size of the stimulus that many of these same

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Speaker 1: Republicans have railed against for years. How do we define

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Speaker 1: fiscal responsibility? John tweeted six hours ago, Make no mistake,

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Speaker 1: I will always stand up for fiscal responsibility. What does

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Speaker 1: he mean? Well, I'll say I think if you're a

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Speaker 1: member of Congress, you define fiscal responsibility by whatever you

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Speaker 1: happen to vote for that day. But I think what

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Speaker 1: we're seeing right now is a Congress that likes catch phrases.

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Speaker 1: But when it comes down to the actual business of governing,

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Speaker 1: the actual business of funding our government, there's a very

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Speaker 1: effective way to build bipartisan support, and that is not

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Speaker 1: to be fiscally prudent. And so you see Republicans who

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Speaker 1: are screaming about deficits olding twice now in the past

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Speaker 1: couple of months to expand deficits in a massive way,

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Speaker 1: first through the tax bill and second through this budget deal.

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Speaker 1: So important question for me, John It doesn't seem to

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Speaker 1: me that it matters what your political colors are. Once

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Speaker 1: you empower, your fiscal responsibility dissipates rather quickly when I

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Speaker 1: have the Democrats out of power, and I wonder whether

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Speaker 1: they inherit the position of the Republicans before them, where

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Speaker 1: they also become the fiscal responsible ones, the deficit hawks. Now,

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Speaker 1: if they do one, that's the first question. If they do.

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Speaker 1: The second question is whether that actually resonates with the

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Speaker 1: electorate at all. Well, Jonathan, there's certainly some uh, there's

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Speaker 1: certainly a lot of truths to that. Rather, the depending

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Speaker 1: on whether you're in power, helps determine how fiscally responsible

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Speaker 1: you are. When Democrats are in power, they don't care

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Speaker 1: that much about death, deficits and debt. When they're out

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Speaker 1: of power and Republicans are trying to spend money, then

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Speaker 1: all of a sudden they become fiscal hawks. And so yeah,

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Speaker 1: the the system ends up being turns upside down essentially

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Speaker 1: depending on who is in power. But it's important to

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Speaker 1: note that there are a lot of fiscally responsible individuals

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Speaker 1: who did vote against the legislation this morning, on both

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Speaker 1: sides of the eye. But John, the second pound of

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Speaker 1: the question for a fiscal conservative, For a conservative, being

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Speaker 1: a fiscal hawk resonates with most of your electorate, your

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Speaker 1: core electorate. So if you're a Republican and you're a

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Speaker 1: deficit hawk and you're out of power, you know that

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Speaker 1: will win your votes. If you're a Democrat, can you

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Speaker 1: make the same argument. So you can't make the same

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Speaker 1: argument with your base if you're a Democrat. But what

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Speaker 1: I think Democrats are trying to do in the next

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Speaker 1: ten months is to start to appeal to moderate voters,

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Speaker 1: independent voters, and a lot of independent voters. They might

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Speaker 1: be liberal on social issues, but a lot of them

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Speaker 1: are physical talks, and so I think it's reaching out

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Speaker 1: to them. Well, John Farroll doesn't understand. He just stumbled

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Speaker 1: in the Democratic Party history here, whether it's John Fitzgerald,

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Speaker 1: Kennedy or Scoop Jackson, etcetera, etcetera. I believe I can

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Speaker 1: identify former fiscally responsible Democrats. Are they out there or

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Speaker 1: does the party have to invent them? Well, in a

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Speaker 1: lot of ways, the party has to invent them. There

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Speaker 1: are a lot of Democrats now who don't look like

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Speaker 1: those same figures who you just mentioned. There aren't a

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Speaker 1: lot of Kennedy Democrats left in Congress, even though we

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Speaker 1: still have a Kennedy left in Congress. You really see

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Speaker 1: a party that is committed to expanding social programming and

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Speaker 1: not thinking about necessarily the long term fiscal health of

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Speaker 1: the nation. Very good, January, Nick, thank you for the

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Speaker 1: quick briefing here in the fiscal policy. We're gonna do

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Speaker 1: much more on this in the coming day forward. Right now,

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Speaker 1: A romantic conversation with Dennis Garbon. People. I got a

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Speaker 1: lot of emails. Old Garbon is going to be and

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Speaker 1: it's very important this. We spoke to one Douglas cast

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Speaker 1: of Florida earlier today, he is eighty percent in cash

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Speaker 1: and has applied long trades off the Catharsis yesterday. Did

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Speaker 1: you go along yesterday. I'm actually short, have been short

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Speaker 1: for the past two or three weeks, and I'm probably

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Speaker 1: going to get just a tiny little bit shorter. I

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Speaker 1: own a few things. I own some ball bearings manufacturers,

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Speaker 1: I own a bank here in in southern Virginia. But

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Speaker 1: on balance with derivatives, I'm I'm a little bit net short.

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Speaker 1: Probably gonna stay that way. I got eight questions. John

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Speaker 1: Farrell has twelve questions. But we're gonna go to a

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Speaker 1: clinic here right now. What you heard Mr Gartman say, folks,

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Speaker 1: is exceptionally important. You're in a trade, the trade is successful,

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Speaker 1: and you add more to the trade. That's called na

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Speaker 1: Martin Gale theory. Explain to me why you're adding more

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Speaker 1: shorts now, if you're looking pretty well, I think that

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Speaker 1: the simplest thing to understand about trading is is this

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Speaker 1: in life and in trading, the best rule to follow

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Speaker 1: us do more of that which is working and less

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Speaker 1: of that which is not. Why do you buy a

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Speaker 1: stock at twenty and buy more at fifteen? And buy

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Speaker 1: more at ten when the market is telling you you're wrong.

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Speaker 1: That's just illogical. If you bought a stock at twenty

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Speaker 1: and it goes to thirty, you should be buying more

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Speaker 1: because the market is telling you that you're right. For

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Speaker 1: whatever reason, you're right. So do more of that which

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Speaker 1: is working, do less of that which is not. If

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Speaker 1: you do that in life, if you if you take

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Speaker 1: flowers to your girlfriend more often, you're probably gonna get

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Speaker 1: lucky romantic. You think he was talking to Mrs Keane.

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Speaker 1: I think he was talking to Mrs Kane West. You're

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Speaker 1: talking to my lovely bride. Were you were? I think

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Speaker 1: when Tom takes out vet bills, some flowers are arriving

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Speaker 1: from Mrs Kane, from Kennis Government. Um, Dennis, you said

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Speaker 1: you sure, okay, I want an idea. Just give me

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Speaker 1: sort of lift the lid on the options market at

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Speaker 1: the moment and tell me how expensive downside protection has

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Speaker 1: got on the SMP. Well, if you're using options, it's

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Speaker 1: gotten ridiculously over expensive. There are other cheaper methodologies. There's

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Speaker 1: futures that don't get more expensive, there's no they They

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Speaker 1: they fall, but they don't go and value higher than

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Speaker 1: an option does there are derivatives that that are I

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Speaker 1: think reasonably usable. UM I would avoid at this point

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Speaker 1: the options market just because of the expansion in premium.

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Speaker 1: So talk to me about the best, the best way

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Speaker 1: of expressing that trade at the moment, Dennis, what is it?

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Speaker 1: The easiest way, in the best way, in the cleanest

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Speaker 1: way is to use the the S and P futures.

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Speaker 1: And that's that's no question about that. The second best

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Speaker 1: way is to use the STS, which is a double

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Speaker 1: E T F and there are some problems with the

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Speaker 1: double ETFs. But the cleanest and best way is to

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Speaker 1: use the SMP futures. I think a big topic of

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Speaker 1: conversation for us on this program, Dennis through the week

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Speaker 1: is how elevated volatility has remained. If we look at

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Speaker 1: the term structure of volatility, the vix curves, so to speak,

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Speaker 1: incredibly inverted as well. Are you looking for that to

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Speaker 1: normalize anytime soon? It will normalize probably in the next

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Speaker 1: month or two when you have this kind of fever

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Speaker 1: that has broken upon the market. So it takes a

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Speaker 1: while for those sorts of exogen of circumstances to to

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Speaker 1: to fix themselves. Will will the market go back? Will

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Speaker 1: the Vics go back to a contango. Of course, is

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Speaker 1: it going to do it today? I doubt that at

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Speaker 1: this point, Dennis, do you see this as a technical

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Speaker 1: correction or something more fundamental that we need to start

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Speaker 1: listening to. All bear markets begin as technical corrections. Let's

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Speaker 1: let's understand that first of all, and they only become

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Speaker 1: bear markets after they've fall on what and they get

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Speaker 1: everybody's attention. So let's call this for right now a correction.

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Speaker 1: But I fear, honestly, I fear that something worses ahead.

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Speaker 1: This is really important, folks. Mr Gartman disagreeing with others

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Speaker 1: like Mr cass is short uh this market on a

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Speaker 1: trading basis, the technical construction of less six or seven

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Speaker 1: days agrees with you, Dennis Gartman. For those who want

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Speaker 1: to be brave and step in there, explain the resistance

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Speaker 1: that exists on the dour SMP chart right now. Oh,

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Speaker 1: there's there's just so many things that have happened. One

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Speaker 1: of the this is gonna be a little less eric Tom.

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Speaker 1: But take a look at what at the at the

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Speaker 1: cross between the europe between the British pound sterling and

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Speaker 1: the Japanese yenn sterling has been gaining upon the Japanese

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Speaker 1: yenne for months and months and months, and in fact

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Speaker 1: for for for years since the since the excitement over

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Speaker 1: breakfast had sent the British pound sterling down sharply. In

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Speaker 1: the course of the past two years, however, as the

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Speaker 1: stock markets of the world have risen, that spread sterling

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Speaker 1: has gained upon yen yesterday, that spread broke yesterday. Any

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Speaker 1: trend line that you drew broke that when correlations such

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Speaker 1: as those begin to falter and fall apart, you have

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Speaker 1: to pay attention. I know that's a bit esoteric, but

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Speaker 1: some of that there are things that are falling apart

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Speaker 1: within the interior the market that I find this may

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Speaker 1: Dennis Gartman, thank you so much, greatly appreciated. Thanks for

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Speaker 1: listening to the Bloomberg Surveillance podcast. Subscribe and listen to

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Speaker 1: interviews on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer.

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Speaker 1: I'm on Twitter at Tom Keane before the podcast. You

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Speaker 1: can always catch us worldwide. I'm Bloomberg Radio