1 00:00:00,160 --> 00:00:03,440 Speaker 1: The Bloomberg invest Conference kicked off today with some of 2 00:00:03,440 --> 00:00:06,880 Speaker 1: the most influential leaders in finance gathering in New York 3 00:00:06,920 --> 00:00:12,840 Speaker 1: for conversations on a wide range of topics, including artificial intelligence, cryptocurrencies, 4 00:00:12,880 --> 00:00:16,599 Speaker 1: and global trends in wealth management. At the conference, Bloomberg 5 00:00:16,680 --> 00:00:20,720 Speaker 1: Shanali Bassek spoke with Stanley Druckenmiller, the chairman and CEO 6 00:00:20,760 --> 00:00:24,280 Speaker 1: of Duquine Family Office, for his outlook on the global 7 00:00:24,400 --> 00:00:25,640 Speaker 1: financial landscape. 8 00:00:25,720 --> 00:00:27,280 Speaker 2: Now, I actually want to start with you, not with 9 00:00:27,320 --> 00:00:30,480 Speaker 2: the presidential elections. We'll get there, but I do want 10 00:00:30,520 --> 00:00:33,640 Speaker 2: to start with you on the US deat limit, because 11 00:00:33,640 --> 00:00:36,360 Speaker 2: this is something where we're out of clear on the surface. 12 00:00:36,960 --> 00:00:40,560 Speaker 2: But you have been very, very clear. You've recently revived 13 00:00:40,560 --> 00:00:43,440 Speaker 2: a presentation you did ten years ago with students at USC, 14 00:00:43,960 --> 00:00:46,760 Speaker 2: and you've told them that the economic storm that's brewing 15 00:00:46,920 --> 00:00:51,320 Speaker 2: from US spending is worse than you had imagined. I 16 00:00:51,320 --> 00:00:52,879 Speaker 2: also want to bring up on the screen some of 17 00:00:52,920 --> 00:00:54,920 Speaker 2: the charts that you showed them kind of the pace 18 00:00:54,960 --> 00:00:59,280 Speaker 2: of entitlement spending in the United States. I want to 19 00:00:59,320 --> 00:01:02,120 Speaker 2: ask you what the consequences now that we're kind of 20 00:01:02,160 --> 00:01:06,560 Speaker 2: past the initial pains in Washington, What is the country 21 00:01:06,600 --> 00:01:08,039 Speaker 2: and the economy and investors. 22 00:01:08,160 --> 00:01:09,000 Speaker 3: What are they ignoring? 23 00:01:11,000 --> 00:01:17,360 Speaker 4: Thanks Shanalie, nice to be here. I don't think the 24 00:01:17,520 --> 00:01:20,959 Speaker 4: entitlement situation is something you should be trading on in 25 00:01:21,000 --> 00:01:24,720 Speaker 4: the next three to six months. What I've been focused on, 26 00:01:25,800 --> 00:01:30,080 Speaker 4: actually for over a decade is the long term picture 27 00:01:30,120 --> 00:01:33,080 Speaker 4: and the long term applications. So the last thing you 28 00:01:33,120 --> 00:01:36,120 Speaker 4: should do is run out of this conference after I 29 00:01:36,200 --> 00:01:39,319 Speaker 4: say something about entitlements. I think there's a trade to 30 00:01:39,360 --> 00:01:45,080 Speaker 4: me made on it. That's not the situation. Okay, I 31 00:01:45,120 --> 00:01:48,480 Speaker 4: need to go back a little bit, but way back 32 00:01:48,520 --> 00:01:53,160 Speaker 4: in the nineties, somebody sent me a paper outlining how 33 00:01:53,160 --> 00:01:56,320 Speaker 4: the birth rate in the fifties was so high and 34 00:01:56,360 --> 00:01:58,320 Speaker 4: it had shrunk, and that we're going to have this 35 00:01:58,400 --> 00:02:03,560 Speaker 4: demographic hit sometime in the twenty twenties, and you could 36 00:02:03,600 --> 00:02:07,800 Speaker 4: pretty much map it because the demographics of public information. 37 00:02:08,480 --> 00:02:10,880 Speaker 4: This was on top of the fact that since Medicare 38 00:02:10,919 --> 00:02:15,120 Speaker 4: and Medicaid joined Social Security as entitlements in the sixties, 39 00:02:15,200 --> 00:02:21,560 Speaker 4: the seniors share of government spending had already grown dramatically, say, 40 00:02:21,639 --> 00:02:25,320 Speaker 4: from thirty to fifty eight percent of outlays during that time. 41 00:02:26,080 --> 00:02:31,240 Speaker 4: And I was concerned way back then when that sometime 42 00:02:31,360 --> 00:02:35,119 Speaker 4: the twenty twenties, sort of like the pig and the python. 43 00:02:35,400 --> 00:02:41,640 Speaker 4: When the baby boomers became seniors, already with them a 44 00:02:41,720 --> 00:02:45,840 Speaker 4: high percentage of government spending, your growth of seniors would 45 00:02:45,840 --> 00:02:50,079 Speaker 4: be dramatic. And by the time I was looking at it, 46 00:02:49,160 --> 00:02:53,360 Speaker 4: the birth rate for the current generation was below two. 47 00:02:53,880 --> 00:02:56,320 Speaker 4: So you're going to have this huge increase in seniors 48 00:02:56,639 --> 00:02:59,040 Speaker 4: at the same time that you had a reduction workers 49 00:02:59,400 --> 00:03:02,240 Speaker 4: in the ware works. You take the taxes of current 50 00:03:02,280 --> 00:03:07,720 Speaker 4: workers to pay for seniors. It really looked bad to 51 00:03:07,760 --> 00:03:13,000 Speaker 4: me in around twenty eleven twenty twelve, so much so 52 00:03:13,639 --> 00:03:16,640 Speaker 4: that I thought I go out and see if I 53 00:03:16,639 --> 00:03:20,440 Speaker 4: could move the needle on this issue. I was really successful. 54 00:03:20,560 --> 00:03:23,120 Speaker 4: The only thing Donald Trump and Hillary Clinton agreed on 55 00:03:23,680 --> 00:03:26,400 Speaker 4: was that you shouldn't touch in titlements. In other words, 56 00:03:26,440 --> 00:03:32,919 Speaker 4: nobody listened to me. It was a tough situation then 57 00:03:33,360 --> 00:03:36,640 Speaker 4: and looking out, it was really scary. But when you 58 00:03:36,800 --> 00:03:39,560 Speaker 4: just use the term worse than I ever imagined. What 59 00:03:39,640 --> 00:03:43,960 Speaker 4: I didn't know is the next ten years we were 60 00:03:44,000 --> 00:03:47,600 Speaker 4: just going to have a proliferation of government debt, even 61 00:03:47,640 --> 00:03:52,480 Speaker 4: outside of outside of entitlements. And then when COVID hit, 62 00:03:52,520 --> 00:03:55,880 Speaker 4: it was just sort of the cherry on top. It's 63 00:03:55,960 --> 00:03:59,760 Speaker 4: hard to believe looking back during those ten years within 64 00:04:00,200 --> 00:04:07,280 Speaker 4: rates near zero, you had two big economic booms. One 65 00:04:07,320 --> 00:04:12,800 Speaker 4: going into eighteen under Donald Trump, supposedly a Republican, supposedly 66 00:04:12,840 --> 00:04:15,920 Speaker 4: with a party that cared a lot about spending, and 67 00:04:16,080 --> 00:04:18,640 Speaker 4: with three and a half percent unemployment, we had something 68 00:04:18,640 --> 00:04:21,680 Speaker 4: on precedent. We had a trillion dollar deaf sit. Usually 69 00:04:21,680 --> 00:04:24,520 Speaker 4: when the economy is roaring, tax revenues go up, in 70 00:04:24,600 --> 00:04:28,839 Speaker 4: the deficit shrinks. We then had a post COVID boom 71 00:04:29,560 --> 00:04:34,679 Speaker 4: in twenty twenty one, which was also accompanied by wild 72 00:04:35,279 --> 00:04:39,160 Speaker 4: increases in tech and in tech stock prices, so much 73 00:04:39,200 --> 00:04:42,960 Speaker 4: so that we had capital gains six hundred billion dollars 74 00:04:43,480 --> 00:04:46,920 Speaker 4: above the average capital gains for a year. We sold 75 00:04:46,960 --> 00:04:51,479 Speaker 4: one hundred billion in spectrum sales. We had ten percent 76 00:04:52,480 --> 00:04:56,720 Speaker 4: nominal growth because of inflation. So you might ask yourself, 77 00:04:57,160 --> 00:04:59,640 Speaker 4: since the last tech boom in ninety nine under a 78 00:04:59,680 --> 00:05:03,800 Speaker 4: demo crack administration, by the way, we had a surplus, 79 00:05:03,839 --> 00:05:06,320 Speaker 4: how big was the surplus with all these anomalies in 80 00:05:06,400 --> 00:05:11,560 Speaker 4: twenty one, again I've led my own question. We had 81 00:05:11,600 --> 00:05:13,720 Speaker 4: over a trillion dollar depths that we didn't even get 82 00:05:13,760 --> 00:05:17,040 Speaker 4: to less than five percent of GDP. So what I 83 00:05:17,080 --> 00:05:21,360 Speaker 4: was worried about ten years ago, you now have an 84 00:05:21,520 --> 00:05:25,520 Speaker 4: enormous amount of debt on top of it. The zero 85 00:05:25,560 --> 00:05:30,000 Speaker 4: interest rates kind of suppressed. What I would say is 86 00:05:30,040 --> 00:05:32,720 Speaker 4: the concern about this. Obviously a lot of debt, you're 87 00:05:32,720 --> 00:05:35,440 Speaker 4: not pay any interest on it. Who cares? But now 88 00:05:35,480 --> 00:05:38,560 Speaker 4: once the inflation hit, interest rates are going to go up. 89 00:05:38,600 --> 00:05:41,760 Speaker 4: So the punchline I'm rambling on here more than I 90 00:05:41,800 --> 00:05:45,960 Speaker 4: wanted to the punch. The punchline is if you take 91 00:05:46,040 --> 00:05:51,479 Speaker 4: the current situation and you ask yourself, well I should 92 00:05:51,480 --> 00:05:54,360 Speaker 4: I actually say something else? The current the debt went 93 00:05:54,400 --> 00:06:01,960 Speaker 4: from say twenty trillion to I'm sorry, fifteen trillion to 94 00:06:02,000 --> 00:06:05,039 Speaker 4: thirty one trillion over that time. That debt, and this 95 00:06:05,160 --> 00:06:09,240 Speaker 4: is important because most people don't understand it, assumes they'll 96 00:06:09,320 --> 00:06:13,800 Speaker 4: never be another Medicare or SOB security payment made. 97 00:06:13,960 --> 00:06:16,200 Speaker 2: That's two hundred trillion is the present value as you've 98 00:06:16,240 --> 00:06:17,800 Speaker 2: calculated for the students. 99 00:06:17,600 --> 00:06:22,240 Speaker 4: Not me, credible people Larry Kotlikoff and others. So if 100 00:06:22,279 --> 00:06:24,400 Speaker 4: you assume we're never going to have another so security 101 00:06:24,520 --> 00:06:27,320 Speaker 4: or Medicare payment, the debt is thirty one trillion. But 102 00:06:27,360 --> 00:06:30,320 Speaker 4: if you did your accounting like any corporation, and you 103 00:06:30,400 --> 00:06:32,839 Speaker 4: assume those payments are going to be made. Yeah, the 104 00:06:32,920 --> 00:06:36,800 Speaker 4: present value is probably around two hundred trillion dollars, So. 105 00:06:37,080 --> 00:06:40,200 Speaker 2: You know, I should also say that the big title 106 00:06:40,480 --> 00:06:43,680 Speaker 2: of this presentation is US Exceptionalism at risk? 107 00:06:44,080 --> 00:06:44,360 Speaker 3: Is it? 108 00:06:46,080 --> 00:06:51,359 Speaker 4: Yeah? I think it is. America is an amazing country 109 00:06:51,400 --> 00:06:54,279 Speaker 4: with an amazing system. And if you look at the 110 00:06:54,320 --> 00:06:57,640 Speaker 4: innovation in this country, just look at what's happened since 111 00:06:57,760 --> 00:07:01,560 Speaker 4: nineteen eighty. We let in the in the PC revolution, 112 00:07:02,600 --> 00:07:04,880 Speaker 4: we led the development of the Internet, we led the 113 00:07:04,920 --> 00:07:08,680 Speaker 4: development of cloud, we led the development mobile. Maybe it's 114 00:07:08,720 --> 00:07:12,200 Speaker 4: not good that we let in crypto. Who knows. And 115 00:07:12,360 --> 00:07:16,160 Speaker 4: we're obviously leading and in generative AI. So we've been 116 00:07:16,200 --> 00:07:20,440 Speaker 4: the leader throughout, but we've also been the reserve currency. 117 00:07:20,520 --> 00:07:26,120 Speaker 4: And we've been eating so much seed corn presently that 118 00:07:26,280 --> 00:07:29,600 Speaker 4: I worry about the future. If if you were to 119 00:07:29,640 --> 00:07:34,360 Speaker 4: take economists have this. Only economists come up with this term. 120 00:07:34,400 --> 00:07:38,000 Speaker 4: It's called fiscal gap. What is fiscal gap? That's how 121 00:07:38,080 --> 00:07:42,400 Speaker 4: much you would have to raise taxes today to guarantee 122 00:07:42,640 --> 00:07:47,520 Speaker 4: the benefits you've promised seniors in the future. It's seven 123 00:07:47,560 --> 00:07:50,960 Speaker 4: point seven percent of GDP. What does seven point seven 124 00:07:51,000 --> 00:07:55,760 Speaker 4: percent of GDP. Mean to actually pay for the entitlements 125 00:07:55,800 --> 00:07:58,600 Speaker 4: we promised in the future, you'd have to raise all 126 00:07:58,680 --> 00:08:04,040 Speaker 4: taxes forty percent today forever, or cut all spending thirty 127 00:08:04,040 --> 00:08:10,920 Speaker 4: six percent today forever. So what I'm looking at here 128 00:08:11,240 --> 00:08:13,920 Speaker 4: is this stuff is borrowing from the future. You're going 129 00:08:13,920 --> 00:08:16,800 Speaker 4: to crowd out private investments. You're going to crowd out 130 00:08:16,800 --> 00:08:18,800 Speaker 4: the kind of investment that made us a leader on 131 00:08:18,840 --> 00:08:22,160 Speaker 4: all those kind of things. But again, this is a 132 00:08:22,200 --> 00:08:26,960 Speaker 4: long term worry. But the statement by both parties that 133 00:08:27,160 --> 00:08:31,080 Speaker 4: entitlements are off the table, it's like seventy percent of 134 00:08:31,080 --> 00:08:34,040 Speaker 4: the federal budget and rising, and now that interest rates 135 00:08:34,320 --> 00:08:38,160 Speaker 4: have come up, it's a fantasy. In fact, it's a lie. 136 00:08:38,840 --> 00:08:41,240 Speaker 4: We are definitely going to cut in titlements. It's just 137 00:08:41,280 --> 00:08:43,920 Speaker 4: a matter we're going to cut them today or in 138 00:08:43,960 --> 00:08:47,000 Speaker 4: the future. And the longer we wait, the more it 139 00:08:47,080 --> 00:08:51,120 Speaker 4: piles up. A year or two ago or right now. 140 00:08:51,160 --> 00:08:54,520 Speaker 4: The interest expense is about one or two percent of GDP. 141 00:08:54,640 --> 00:08:59,280 Speaker 4: It's about six percent of outlays. The CBO's estimate, not mine, 142 00:09:00,160 --> 00:09:03,160 Speaker 4: interest expense is twenty seven percent of outlays by two 143 00:09:03,160 --> 00:09:07,760 Speaker 4: thousand and fifty, and just entitlements and interest expense, just 144 00:09:07,880 --> 00:09:11,600 Speaker 4: though two things alone. No defense, no running the government, 145 00:09:12,040 --> 00:09:15,400 Speaker 4: no money for the disadvantage will be one hundred and 146 00:09:15,400 --> 00:09:18,560 Speaker 4: seventeen percent of taxes by twenty and fifty, and it'll 147 00:09:18,600 --> 00:09:21,120 Speaker 4: be more than all taxes by two thousand and forty. 148 00:09:21,559 --> 00:09:24,840 Speaker 4: But again, for investors in the room, this is just 149 00:09:25,840 --> 00:09:27,920 Speaker 4: stuff to worry about in the long term, I like 150 00:09:28,000 --> 00:09:30,640 Speaker 4: to think in the long term. But for trading, it 151 00:09:30,679 --> 00:09:33,000 Speaker 4: doesn't impact your original question the way. 152 00:09:32,840 --> 00:09:35,120 Speaker 2: You put it to the students, it's the tsunami that 153 00:09:35,200 --> 00:09:37,840 Speaker 2: is ten foot out on the horizon. But you know, 154 00:09:37,880 --> 00:09:40,280 Speaker 2: the other thing here is, you know, I think it's 155 00:09:40,280 --> 00:09:42,280 Speaker 2: pretty safe to say you've been pretty critical of fiscal 156 00:09:42,400 --> 00:09:46,199 Speaker 2: and monetary policy. The question here, and I want to 157 00:09:46,200 --> 00:09:48,000 Speaker 2: pull one more chart on the history of bubbles that 158 00:09:48,040 --> 00:09:50,640 Speaker 2: you show to students as well, because the question I 159 00:09:50,720 --> 00:09:53,360 Speaker 2: have for you there is do you believe that there 160 00:09:53,400 --> 00:09:56,520 Speaker 2: are still many shoes to drop as the central bank 161 00:09:56,559 --> 00:10:00,280 Speaker 2: stays tight? 162 00:10:01,640 --> 00:10:07,520 Speaker 4: That's my central case ideal in the world of risk reward. 163 00:10:08,160 --> 00:10:11,480 Speaker 4: There's a five hundred year history of asset bubbles, well 164 00:10:11,520 --> 00:10:14,360 Speaker 4: documented in a book that you had some issues with 165 00:10:14,480 --> 00:10:21,000 Speaker 4: the price of time and basically it documents and I 166 00:10:21,040 --> 00:10:23,280 Speaker 4: had already known this about the last hundred years, but 167 00:10:23,280 --> 00:10:25,520 Speaker 4: it's going on for five hundred years. Every time you've 168 00:10:25,559 --> 00:10:30,200 Speaker 4: had a significant asset bubble, economic trouble way ahead. But yeah, 169 00:10:30,240 --> 00:10:35,800 Speaker 4: when you had eleven years of free money, people do 170 00:10:35,960 --> 00:10:38,560 Speaker 4: stupid things. All you have to do is look it up. There. 171 00:10:38,600 --> 00:10:41,600 Speaker 4: About the stupidness is somebody paid eighty billion dollars for 172 00:10:41,679 --> 00:10:45,280 Speaker 4: doze coin, which was invented as a joke. I mean, 173 00:10:45,280 --> 00:10:48,000 Speaker 4: that can only happen in the world of free money. 174 00:10:48,120 --> 00:10:51,199 Speaker 4: It also suppressed people worrying about the kind of stuff 175 00:10:51,240 --> 00:10:53,680 Speaker 4: I just talked about two or three minutes ago, because 176 00:10:54,000 --> 00:10:57,680 Speaker 4: you keep rates at zero. But the fact that this 177 00:10:57,840 --> 00:11:01,120 Speaker 4: was arguably the most disruptive economic period we've had since 178 00:11:01,120 --> 00:11:04,960 Speaker 4: the late eighteen hundreds and there were no bankruptcies apparently 179 00:11:04,960 --> 00:11:08,040 Speaker 4: they've started in the last few weeks tells me there's 180 00:11:08,080 --> 00:11:10,120 Speaker 4: a lot of stuff under the hood. When you go 181 00:11:10,240 --> 00:11:14,360 Speaker 4: from this kind of environment, the biggest broadest asset bubble ever, 182 00:11:15,120 --> 00:11:17,640 Speaker 4: and then you jack rates up five hundred basis points 183 00:11:17,679 --> 00:11:21,880 Speaker 4: in a year. I think the probabilities would suggest that 184 00:11:22,000 --> 00:11:26,400 Speaker 4: Silicon Valley banks, that bath thing beyond, they're probably the 185 00:11:26,440 --> 00:11:30,040 Speaker 4: tip of the iceberg. Nothing's guarantee. I've been wrong a lot. 186 00:11:30,080 --> 00:11:35,679 Speaker 4: I've been right a few times, but yeah, our central cases, 187 00:11:35,720 --> 00:11:38,920 Speaker 4: there's more shoes to drop, particularly in addition to the 188 00:11:39,080 --> 00:11:39,880 Speaker 4: asset markets. 189 00:11:39,920 --> 00:11:41,640 Speaker 3: Economically, what are you most worried about. 190 00:11:41,679 --> 00:11:44,199 Speaker 2: We'll definitely get to the opportunities and the fat pitches 191 00:11:44,200 --> 00:11:47,080 Speaker 2: that you see on the horizon, But before we even 192 00:11:47,080 --> 00:11:49,000 Speaker 2: get there, what starts to sink. 193 00:11:52,920 --> 00:11:57,640 Speaker 4: I could see corporate profits down twenty to thirty percent. 194 00:11:58,200 --> 00:12:00,880 Speaker 4: Normally I would say forty or fifty in a hard landing, 195 00:12:01,480 --> 00:12:05,280 Speaker 4: but this recession is so anticipated. I don't think a 196 00:12:05,280 --> 00:12:07,080 Speaker 4: lot of corporations are going to be caught with their 197 00:12:07,120 --> 00:12:10,400 Speaker 4: pants down, which is how normally you lose a lot 198 00:12:10,400 --> 00:12:13,720 Speaker 4: of money as you're not prepared for something that happens. 199 00:12:16,200 --> 00:12:19,440 Speaker 4: Commercial real estate, you know, I'm not informing anybody in 200 00:12:19,440 --> 00:12:21,480 Speaker 4: this room is something I don't know. But office is 201 00:12:21,520 --> 00:12:24,240 Speaker 4: a problem. It would have been a problem anyway, but 202 00:12:24,760 --> 00:12:28,120 Speaker 4: change of lifestyle and COVID makes it even bigger problem. 203 00:12:28,240 --> 00:12:31,400 Speaker 4: Financing rates going up make it a problem. I'm worried 204 00:12:31,400 --> 00:12:35,560 Speaker 4: about credit tightening the next six to nine months. Obviously, 205 00:12:35,600 --> 00:12:39,600 Speaker 4: the banks are going into an economic period that, if 206 00:12:39,640 --> 00:12:42,200 Speaker 4: in fact we get a recession, their balance sheets are 207 00:12:42,200 --> 00:12:45,000 Speaker 4: already impaired, not from where they usually lose money, which 208 00:12:45,040 --> 00:12:49,120 Speaker 4: is loans, from the fact that the Fed convinced them 209 00:12:49,120 --> 00:12:51,640 Speaker 4: that they're going to keep rates to zero until twenty four, 210 00:12:52,760 --> 00:12:54,880 Speaker 4: So they bought a bunch of treasuries yielding one or 211 00:12:54,920 --> 00:12:57,719 Speaker 4: two percent, and now they're carrying them at five. So 212 00:12:58,400 --> 00:13:02,640 Speaker 4: their balance sheets are impaired. But if we get in 213 00:13:02,720 --> 00:13:06,319 Speaker 4: a recession, then the real loss has come, which is 214 00:13:06,360 --> 00:13:09,559 Speaker 4: stuff like credit cards, commercial real estate, that kind of stuff. 215 00:13:09,600 --> 00:13:16,000 Speaker 4: So those would be my worries. You asked me my worries. 216 00:13:16,040 --> 00:13:17,640 Speaker 4: That's different than my predictions. 217 00:13:17,920 --> 00:13:20,720 Speaker 3: I well, the predictions you've been talking about. 218 00:13:20,800 --> 00:13:23,440 Speaker 4: I'm so tired of being a bear and being laidel bear. 219 00:13:27,160 --> 00:13:29,000 Speaker 2: To the bearriage point of view, we haven't seen it. 220 00:13:29,040 --> 00:13:31,440 Speaker 2: We have not seen that hard landing yet, and there's 221 00:13:31,520 --> 00:13:33,800 Speaker 2: going to be many people after you today that are 222 00:13:34,000 --> 00:13:36,360 Speaker 2: predicting a soft landing. And so to the extent you 223 00:13:36,400 --> 00:13:38,559 Speaker 2: still believe that a hard landing is ahead of us. 224 00:13:38,640 --> 00:13:41,680 Speaker 2: When does it come, what does it look like? Do 225 00:13:41,800 --> 00:13:43,000 Speaker 2: we see it anymore? 226 00:13:44,679 --> 00:13:51,240 Speaker 4: Yeah, A lot of people, because we haven't had any 227 00:13:51,280 --> 00:13:55,320 Speaker 4: economic decline start yet, have changed her forecasts from a 228 00:13:55,320 --> 00:13:57,600 Speaker 4: hard landing of soft landing, and a lot of others 229 00:13:57,679 --> 00:14:01,959 Speaker 4: have changed it from self landing to landing. I haven't 230 00:14:02,040 --> 00:14:05,560 Speaker 4: changed mine at all. The fact that it hasn't happened 231 00:14:05,640 --> 00:14:10,040 Speaker 4: yet doesn't change the probability if it does happen of 232 00:14:10,080 --> 00:14:14,920 Speaker 4: the depth of it. I mean, basically, ten trillion dollars, 233 00:14:14,960 --> 00:14:18,560 Speaker 4: five trillion monetary, five trillion fiscal was put in during COVID. 234 00:14:20,120 --> 00:14:24,120 Speaker 4: What has happened is that created this giant, giant stock 235 00:14:24,200 --> 00:14:27,400 Speaker 4: of liquidity. I think Jamie Diamond said a couple of 236 00:14:27,440 --> 00:14:29,400 Speaker 4: years ago there were two and a half trillion excess 237 00:14:29,440 --> 00:14:34,160 Speaker 4: to demand deposits. We've been working that liquidity off slowly. 238 00:14:34,800 --> 00:14:39,880 Speaker 4: That liquidity interruption, liquidity shrink was interrupted when Bank of 239 00:14:39,960 --> 00:14:43,360 Speaker 4: Japan changed YCC. They went in and they bought four 240 00:14:43,440 --> 00:14:46,400 Speaker 4: hundred billion dollars worth of bonds to defend their bomb market. 241 00:14:46,880 --> 00:14:50,880 Speaker 4: Very odd situation. They raised rates, but then liquidity exploded 242 00:14:50,920 --> 00:14:57,400 Speaker 4: on it, and then obviously the death ceiling Secretary yell 243 00:14:57,480 --> 00:15:00,760 Speaker 4: And drew down the TGA. That's basically the treasury saving 244 00:15:00,760 --> 00:15:04,400 Speaker 4: his account from seven hundred billion to practically nothing last week. 245 00:15:05,120 --> 00:15:10,200 Speaker 4: That also will ended up in non issuance of government debt, 246 00:15:10,800 --> 00:15:13,280 Speaker 4: so that was a big boost of liquidity. All that 247 00:15:13,400 --> 00:15:18,280 Speaker 4: is set to change now. Actually, the TJ is going 248 00:15:18,320 --> 00:15:20,400 Speaker 4: to go the other way. She's already stated she wants 249 00:15:20,480 --> 00:15:22,480 Speaker 4: to build it back up to normal levels. So you're 250 00:15:22,480 --> 00:15:25,680 Speaker 4: going to have probably about eight hundred billion in treasuries 251 00:15:25,720 --> 00:15:28,480 Speaker 4: issue between now and year end. The FED will be 252 00:15:28,520 --> 00:15:32,560 Speaker 4: continuing on with QT. You've got the student loan thing, 253 00:15:32,720 --> 00:15:35,960 Speaker 4: which I think has kept consumption up. That's all changing 254 00:15:36,000 --> 00:15:38,560 Speaker 4: in September. They're going to have to actually, God forbid, 255 00:15:38,600 --> 00:15:42,400 Speaker 4: in the United States, somebody actually pays interest on alone. 256 00:15:42,840 --> 00:15:47,800 Speaker 4: So to me, the probabilities haven't changed. It's been pushed 257 00:15:47,800 --> 00:15:52,560 Speaker 4: out relative expectations, but in no way does the fact 258 00:15:52,600 --> 00:15:55,640 Speaker 4: that it hasn't started yet change the probability whether it's 259 00:15:55,640 --> 00:15:58,120 Speaker 4: going to be hard or soft. I would actually argue 260 00:15:58,440 --> 00:16:01,360 Speaker 4: since it's taken so long, the FED has ended up 261 00:16:01,400 --> 00:16:05,560 Speaker 4: with a higher terminal rate, and in fact, inflation gets 262 00:16:05,600 --> 00:16:09,239 Speaker 4: stickier the longest stays in the system, that it increases, 263 00:16:09,320 --> 00:16:13,840 Speaker 4: not decreases, probably of hard landing. By the way, after 264 00:16:13,920 --> 00:16:16,720 Speaker 4: the eighty seven crash, I was convinced we're gonna have 265 00:16:16,680 --> 00:16:20,600 Speaker 4: a depression. So I've been wrong before, and if I'm 266 00:16:20,640 --> 00:16:24,560 Speaker 4: wrong on this, I'll adjust. But I have to weigh 267 00:16:24,600 --> 00:16:27,640 Speaker 4: the probabilities and do what I do with my process, 268 00:16:27,720 --> 00:16:29,960 Speaker 4: and right now that's where we are and. 269 00:16:29,880 --> 00:16:34,080 Speaker 3: When I have been. 270 00:16:35,640 --> 00:16:38,320 Speaker 4: I think September is the first time when I was 271 00:16:38,360 --> 00:16:42,680 Speaker 4: sort of a boom afraid of booming economy. Inflation guide too. 272 00:16:42,720 --> 00:16:47,240 Speaker 4: I'm more worried about growth that I am about inflation, 273 00:16:48,360 --> 00:16:53,400 Speaker 4: and originally I was. Fourth quarter of twenty three, I 274 00:16:53,480 --> 00:16:56,520 Speaker 4: temporarily maybe lost my mind, or maybe I was right 275 00:16:57,640 --> 00:17:01,560 Speaker 4: when the Silicon Valley thing happened. Anecdotals and stuff that 276 00:17:01,600 --> 00:17:05,800 Speaker 4: has traditionally led like trucks in retail, move that up 277 00:17:05,960 --> 00:17:09,680 Speaker 4: to now. I think I'm probably wrong, and I'm going 278 00:17:09,720 --> 00:17:11,240 Speaker 4: to go back to the end of twenty three. But 279 00:17:11,280 --> 00:17:12,960 Speaker 4: the real answer is I don't. 280 00:17:12,680 --> 00:17:16,200 Speaker 3: Know, so recession or no recession. Though. 281 00:17:16,240 --> 00:17:18,800 Speaker 2: One thing that's interesting, and you included a lot of 282 00:17:18,840 --> 00:17:21,679 Speaker 2: people are very encouraged by certain areas of the market, 283 00:17:22,000 --> 00:17:24,560 Speaker 2: particularly the AI boom. 284 00:17:25,440 --> 00:17:27,760 Speaker 4: There's always stuff to do. We had a hard landing 285 00:17:27,800 --> 00:17:30,560 Speaker 4: in seventy four to seventy five, and chemicals and oils 286 00:17:30,600 --> 00:17:33,920 Speaker 4: and that stuff did great. I'm sorry, go ahead, answer well. 287 00:17:33,840 --> 00:17:36,040 Speaker 2: Do you think that all of AI makes it through 288 00:17:36,320 --> 00:17:38,480 Speaker 2: this recession or do you think that some areas of 289 00:17:38,520 --> 00:17:41,280 Speaker 2: the market, particularly in AI, start to look like they're 290 00:17:41,280 --> 00:17:45,080 Speaker 2: in bubble territory. 291 00:17:45,200 --> 00:17:48,680 Speaker 4: Well, all of AI's not going to make it through, 292 00:17:48,720 --> 00:17:51,639 Speaker 4: whether we have a recession or not, because they haven't 293 00:17:51,680 --> 00:17:55,919 Speaker 4: separated the weed from the chef yet. But I do believe, 294 00:17:57,560 --> 00:18:02,720 Speaker 4: unlike crypto, I think AI is real. It's probably it 295 00:18:02,760 --> 00:18:07,200 Speaker 4: could be as transformative as the Internet. It's a huge thing, 296 00:18:08,000 --> 00:18:13,800 Speaker 4: and I think I've argued publicly that if staples can 297 00:18:13,840 --> 00:18:17,359 Speaker 4: go up in price in a recession, why can't a 298 00:18:17,400 --> 00:18:20,560 Speaker 4: company like Nvidia If they go up, if they go up, 299 00:18:21,160 --> 00:18:24,280 Speaker 4: if their orders and earnings go up seventy percent in 300 00:18:24,359 --> 00:18:28,280 Speaker 4: a hard landing, which is what I think would probably happening. 301 00:18:28,840 --> 00:18:31,640 Speaker 4: It's not clear that me that in Vidia goes down 302 00:18:31,760 --> 00:18:36,600 Speaker 4: despite the lofty valuation level. History has proved if you 303 00:18:36,680 --> 00:18:39,320 Speaker 4: do if you have very good earnings in a recession 304 00:18:39,880 --> 00:18:43,399 Speaker 4: and they're sustainable, if they're not, the market somehow figures 305 00:18:43,440 --> 00:18:49,119 Speaker 4: it out, those stocks will do just fine. So we 306 00:18:49,200 --> 00:18:52,440 Speaker 4: have some lungs, we have some shorts, and the ais 307 00:18:52,480 --> 00:18:55,000 Speaker 4: have sort of dominated the long portfolio for five or 308 00:18:55,000 --> 00:18:55,639 Speaker 4: six months. 309 00:18:55,760 --> 00:18:57,639 Speaker 3: How do you think about going short in this market? 310 00:18:59,400 --> 00:19:02,080 Speaker 4: Our shorts? I've been fine this year, except by Indeth shorts, 311 00:19:02,080 --> 00:19:06,879 Speaker 4: which have been a disaster. But we always short the 312 00:19:06,880 --> 00:19:10,919 Speaker 4: same way. I just try and look at the current situation, 313 00:19:11,840 --> 00:19:14,000 Speaker 4: and then I try and think of a situation twelve 314 00:19:14,080 --> 00:19:16,960 Speaker 4: to eighteen months from now based on my forecast, and 315 00:19:17,040 --> 00:19:19,320 Speaker 4: I think, if I think the security prices are going 316 00:19:19,359 --> 00:19:25,520 Speaker 4: to be less, then I short them. Frankly, I'm not 317 00:19:25,560 --> 00:19:29,760 Speaker 4: sure I've ever made money. If I took back the 318 00:19:29,800 --> 00:19:33,960 Speaker 4: last forty years, I'm afraid to look. I've never had 319 00:19:34,000 --> 00:19:36,480 Speaker 4: a down year, but I'm not sure I've made money 320 00:19:36,480 --> 00:19:40,640 Speaker 4: in shorts. I like it. It's fun, but you can 321 00:19:40,680 --> 00:19:44,040 Speaker 4: get your head handed to you, and it's a game 322 00:19:44,080 --> 00:19:47,239 Speaker 4: that really only professionals in the mass against you. If 323 00:19:47,840 --> 00:19:50,040 Speaker 4: you're dead wrong on a long, you can lose one 324 00:19:50,080 --> 00:19:53,040 Speaker 4: hundred percent. If you're dead wrong on a short, you 325 00:19:53,080 --> 00:19:57,560 Speaker 4: can lose ten times your money. And when I was 326 00:19:57,600 --> 00:20:00,600 Speaker 4: at Soros, I shorted two hundred million dollars worth Internet 327 00:20:00,600 --> 00:20:04,560 Speaker 4: stocks in March of ninety nine and in three weeks 328 00:20:04,600 --> 00:20:07,000 Speaker 4: covered them at a six hundred million dollar loss. I 329 00:20:07,040 --> 00:20:09,280 Speaker 4: lost six hundred million dollars on a two hundred million 330 00:20:09,280 --> 00:20:12,760 Speaker 4: dollar investment in three weeks. I was short twelve stocks 331 00:20:13,160 --> 00:20:16,040 Speaker 4: they all went bankrupt, every one of them. 332 00:20:16,280 --> 00:20:17,440 Speaker 3: Don't try that at home. 333 00:20:17,880 --> 00:20:21,720 Speaker 2: So well, I mean to that to that point, when 334 00:20:21,760 --> 00:20:23,719 Speaker 2: you look at the AI kind of boom, Here are 335 00:20:23,720 --> 00:20:25,960 Speaker 2: there lessons to be learned from the dot com bubble? 336 00:20:27,840 --> 00:20:31,320 Speaker 4: Yeah, there are lessons. There are definitely lessons to be learned. 337 00:20:31,359 --> 00:20:34,280 Speaker 4: Don't get emotional, don't get crazy. But I will I 338 00:20:34,400 --> 00:20:38,800 Speaker 4: will say this about the AI in Nvidia bottomed in 339 00:20:38,880 --> 00:20:43,960 Speaker 4: October in the low one hundreds. It's true, it's three 340 00:20:44,040 --> 00:20:48,320 Speaker 4: eighty or three ninety. It's in nosebleed territory. If this 341 00:20:48,400 --> 00:20:51,200 Speaker 4: is a secular move, if this is if this thing 342 00:20:51,280 --> 00:20:55,280 Speaker 4: is real, you just don't have ten month moves. That's 343 00:20:55,320 --> 00:20:58,399 Speaker 4: not how it works. Even the dot tom bubble lasted 344 00:20:58,960 --> 00:21:02,760 Speaker 4: two two and a half years. For many of the 345 00:21:02,800 --> 00:21:05,639 Speaker 4: guts of the Internet, it lasted four years the Cisco's 346 00:21:05,680 --> 00:21:11,200 Speaker 4: the Sun micros. So could in Vidia go down materially 347 00:21:11,280 --> 00:21:13,600 Speaker 4: in the short term from any point, Yes, but I 348 00:21:13,640 --> 00:21:18,679 Speaker 4: would be I would be surprised if I'm right on 349 00:21:18,800 --> 00:21:21,679 Speaker 4: AI and the impact on it. I mean, it's already 350 00:21:21,720 --> 00:21:25,120 Speaker 4: making the top coders seven to eight times, seventy eight 351 00:21:25,200 --> 00:21:29,280 Speaker 4: times more productive than they were five months ago. If 352 00:21:29,280 --> 00:21:33,080 Speaker 4: it's as big as I think it is in Nvidia 353 00:21:33,240 --> 00:21:34,760 Speaker 4: is something we're going to want to own for at 354 00:21:34,800 --> 00:21:38,720 Speaker 4: least two or three years, not for ten months, and 355 00:21:38,800 --> 00:21:39,560 Speaker 4: maybe longer. 356 00:21:40,119 --> 00:21:42,600 Speaker 2: Certainly the topic dujor. There's another thing that a lot 357 00:21:42,640 --> 00:21:44,879 Speaker 2: of investors are talking about. It's the promise of China, 358 00:21:45,200 --> 00:21:47,119 Speaker 2: this idea, and you know it's time to get your 359 00:21:47,119 --> 00:21:49,080 Speaker 2: global view here because so many people rely on you 360 00:21:49,119 --> 00:21:50,679 Speaker 2: for the macro perspective. 361 00:21:51,480 --> 00:21:53,320 Speaker 3: The view here is that the GDP. 362 00:21:53,080 --> 00:21:55,600 Speaker 2: In China will expand faster than the United States, and 363 00:21:55,640 --> 00:21:58,440 Speaker 2: a lot of investors are kind of shaking off geopolitical 364 00:21:58,480 --> 00:21:59,640 Speaker 2: tensions on the. 365 00:21:59,560 --> 00:22:00,720 Speaker 3: Back of that theory. 366 00:22:01,200 --> 00:22:04,200 Speaker 2: Do you see the same promise that the China bowls 367 00:22:04,200 --> 00:22:04,679 Speaker 2: are seeing? 368 00:22:05,040 --> 00:22:10,520 Speaker 4: I do not. I was in love with China until 369 00:22:10,560 --> 00:22:12,920 Speaker 4: about six or seven years ago. You go over there 370 00:22:13,040 --> 00:22:16,879 Speaker 4: and the energy in Shanghai was like New York on crack. 371 00:22:17,440 --> 00:22:22,200 Speaker 4: I mean just it's just fantastic energy. The entrepreneurs were exciting, 372 00:22:22,800 --> 00:22:29,720 Speaker 4: they were into it. And then Shijinping did his thing, 373 00:22:30,640 --> 00:22:34,320 Speaker 4: and if you look at China and the rise of China, 374 00:22:34,520 --> 00:22:36,400 Speaker 4: I think it all sort of happened. You had this 375 00:22:37,119 --> 00:22:40,800 Speaker 4: internal capitalist system with a bunch of people that act 376 00:22:40,880 --> 00:22:46,439 Speaker 4: like crazy New Yorkers building new businesses in a dynamic economy. 377 00:22:48,520 --> 00:22:53,360 Speaker 4: But he has proved he's not a capitalist. He's definitely 378 00:22:53,400 --> 00:22:56,880 Speaker 4: not a monopolist. There's only a room for one monopolis 379 00:22:56,880 --> 00:22:59,640 Speaker 4: in China in his mind. That's him. Anybody that gets 380 00:22:59,640 --> 00:23:04,119 Speaker 4: their heads stuck up, and I honestly think he either 381 00:23:04,160 --> 00:23:09,080 Speaker 4: doesn't understand why China grew and succeeded the way they did, 382 00:23:09,480 --> 00:23:13,280 Speaker 4: or frankly, he doesn't care because in terms of staying 383 00:23:13,320 --> 00:23:18,600 Speaker 4: in power, but I would be looking out ten or 384 00:23:18,680 --> 00:23:22,879 Speaker 4: fifteen years. I just don't see it unless there's a 385 00:23:23,000 --> 00:23:26,120 Speaker 4: change in power there at the top. I think that's 386 00:23:26,119 --> 00:23:29,560 Speaker 4: going to be a very un dynamic economy. It's not 387 00:23:29,600 --> 00:23:32,879 Speaker 4: so much the geopolitical concerns. I will say this that, 388 00:23:32,960 --> 00:23:37,080 Speaker 4: if I'm right, it makes me more fearful of military action, 389 00:23:37,280 --> 00:23:40,760 Speaker 4: because that's when dictator has become more dangerous, is when 390 00:23:41,320 --> 00:23:44,800 Speaker 4: they've got a divert attention from the immediate problem. So 391 00:23:44,960 --> 00:23:47,720 Speaker 4: what they're doing now is very stimulative. We're expecting a 392 00:23:47,760 --> 00:23:52,240 Speaker 4: sugar high and some kind of robust growth there maybe 393 00:23:52,280 --> 00:23:56,600 Speaker 4: for six and nine months, But looking out I do 394 00:23:56,760 --> 00:23:58,760 Speaker 4: not look at them as a big challenge. In the 395 00:23:58,880 --> 00:24:01,680 Speaker 4: United States, in terms of economic power and growth. 396 00:24:02,000 --> 00:24:04,320 Speaker 2: There's equally been a lot of investor questions about the 397 00:24:04,359 --> 00:24:07,280 Speaker 2: future of Japan as well. How do you think about 398 00:24:07,320 --> 00:24:09,000 Speaker 2: the opportunity set and how to invest. 399 00:24:12,000 --> 00:24:15,560 Speaker 4: When I went to Soros, Japan like set me off 400 00:24:15,880 --> 00:24:18,479 Speaker 4: like a rocket ship because I shorter than Eke. At 401 00:24:18,520 --> 00:24:20,640 Speaker 4: the top, I had everything, and then I think every 402 00:24:20,680 --> 00:24:22,720 Speaker 4: trade I made, like five years later and on, I've 403 00:24:22,760 --> 00:24:26,720 Speaker 4: lost money in Japan. It's been the biggest value trap 404 00:24:27,440 --> 00:24:32,080 Speaker 4: in history. But I will say right now, I haven't 405 00:24:32,400 --> 00:24:36,040 Speaker 4: checked this, but it's by far been the deepest breadth 406 00:24:36,080 --> 00:24:39,919 Speaker 4: in the best market this year. Yeah, our market's up. 407 00:24:39,960 --> 00:24:42,240 Speaker 4: I think you said twelve percent, but it's like seven 408 00:24:42,359 --> 00:24:44,919 Speaker 4: socks and everything else is not even up. That's not 409 00:24:45,000 --> 00:24:48,000 Speaker 4: the case in Japan. The breath is tremendous there. You 410 00:24:48,040 --> 00:24:52,239 Speaker 4: have a couple of things going on. They look like 411 00:24:52,280 --> 00:24:57,200 Speaker 4: they're solving deflation plus so you're getting nominal growth. They've 412 00:24:57,240 --> 00:25:00,920 Speaker 4: also it's more than just talk. They're really into the 413 00:25:00,960 --> 00:25:04,000 Speaker 4: whole shareholder value thing. And then you've got a guy 414 00:25:04,760 --> 00:25:07,800 Speaker 4: running monetary policy and he sounds like Jerome Palell two 415 00:25:07,840 --> 00:25:10,920 Speaker 4: years ago. I mean, flation's taking off there and he's 416 00:25:10,920 --> 00:25:14,800 Speaker 4: saying we haven't quite achieved our goal yet, even though 417 00:25:14,840 --> 00:25:18,159 Speaker 4: he's like doubled his goal that has stated. So you 418 00:25:18,240 --> 00:25:22,280 Speaker 4: put all that together for now you have a dynamic market. 419 00:25:22,320 --> 00:25:25,959 Speaker 4: But give him my record trading Japan the last fifteen 420 00:25:26,000 --> 00:25:27,760 Speaker 4: years should do the opposite of what I say. 421 00:25:29,880 --> 00:25:32,440 Speaker 2: Back to the United States, I promised you politics. So 422 00:25:32,720 --> 00:25:35,800 Speaker 2: we're going to get there, you know, because the fiscal 423 00:25:35,840 --> 00:25:39,040 Speaker 2: will overtake the monetary pretty soon as well, especially as 424 00:25:39,080 --> 00:25:41,440 Speaker 2: we look forward to a twenty twenty four election cycle 425 00:25:41,480 --> 00:25:43,919 Speaker 2: in the United States, and when you look at the 426 00:25:43,960 --> 00:25:48,040 Speaker 2: wide range of Republican hopefuls who are either challenging or 427 00:25:48,119 --> 00:25:52,160 Speaker 2: may challenge Donald Trump, Nikki Haley, Chris Christy, Mike Pence, 428 00:25:52,320 --> 00:25:56,440 Speaker 2: Ron De Santis, Tim Scott, Glenn Youngkin. Who has your 429 00:25:56,560 --> 00:26:00,040 Speaker 2: money and who has your vote? 430 00:26:00,840 --> 00:26:03,960 Speaker 4: I loved him Scott. I'd like him to be the 431 00:26:03,960 --> 00:26:08,000 Speaker 4: next president. Whether he has the name recognition, whether he's 432 00:26:08,040 --> 00:26:11,040 Speaker 4: too nice a guy for this fight, I don't know. 433 00:26:11,200 --> 00:26:15,000 Speaker 4: But I'm not really into dividers. I'd like to see 434 00:26:15,000 --> 00:26:19,440 Speaker 4: the country united, and I think from that party, he's 435 00:26:19,480 --> 00:26:24,440 Speaker 4: the one that could probably most accomplish that. I'm kind 436 00:26:24,480 --> 00:26:31,159 Speaker 4: of excited about Chris Christy taking on Donald Trump. The 437 00:26:31,240 --> 00:26:36,160 Speaker 4: others dance around the subject. They don't even use his name. 438 00:26:36,320 --> 00:26:38,360 Speaker 4: I think somebody needs to hit him in the mouth well, 439 00:26:38,400 --> 00:26:41,000 Speaker 4: the way he hits people in the mouth, and Chris 440 00:26:41,080 --> 00:26:43,040 Speaker 4: Christy could be very good at that. I was very 441 00:26:43,080 --> 00:26:48,320 Speaker 4: disappointed the way he handled the twenty sixteen thing, for 442 00:26:48,320 --> 00:26:50,640 Speaker 4: those who don't know it, on national television, I said 443 00:26:50,680 --> 00:26:56,800 Speaker 4: that Donald Trump had the economic understanding of a kindergarten 444 00:26:56,840 --> 00:27:01,040 Speaker 4: of the US economy on national Television with John Kaisek, 445 00:27:01,080 --> 00:27:02,560 Speaker 4: and then I came a year later and said, I 446 00:27:02,600 --> 00:27:07,440 Speaker 4: overestimated his economic standing. So just saw you where no 447 00:27:07,480 --> 00:27:12,960 Speaker 4: I oh, But anyway, I don't think Chris Chrissy can win, 448 00:27:13,080 --> 00:27:16,080 Speaker 4: but I'm excited that he's getting in the race because 449 00:27:16,240 --> 00:27:20,000 Speaker 4: I think he can maybe exposed Donald Trump, and he 450 00:27:20,080 --> 00:27:21,520 Speaker 4: really needs to be exposed. 451 00:27:22,720 --> 00:27:25,040 Speaker 2: So what do you think about some of the other candidates, 452 00:27:25,119 --> 00:27:29,200 Speaker 2: especially rhndacentis you know the way that he has approached 453 00:27:29,440 --> 00:27:31,879 Speaker 2: corporations in Florida in particular, what do you think that 454 00:27:31,960 --> 00:27:34,240 Speaker 2: means for him as he enters the race. 455 00:27:36,160 --> 00:27:40,400 Speaker 4: I actually think until recently he did a great job 456 00:27:40,440 --> 00:27:48,600 Speaker 4: in Florida. If you look at the record, he's very smart, 457 00:27:49,080 --> 00:27:52,119 Speaker 4: not that broad in terms of the people around him. 458 00:27:52,400 --> 00:27:57,880 Speaker 4: He'd have to build that going in. But despite his intelligence, 459 00:27:58,640 --> 00:28:01,080 Speaker 4: it seems like his calculus is to go after the 460 00:28:01,119 --> 00:28:05,880 Speaker 4: Trump voters. I don't think the Trump voters care about policy. 461 00:28:06,080 --> 00:28:08,760 Speaker 4: I don't think they can be moved. And by going 462 00:28:08,800 --> 00:28:13,160 Speaker 4: after the Trump voters, he's alienating the other thirty to 463 00:28:13,160 --> 00:28:16,840 Speaker 4: forty percent of the pie, particularly women and others that 464 00:28:17,520 --> 00:28:21,160 Speaker 4: care a lot about the social issues. He's not He's 465 00:28:21,240 --> 00:28:25,400 Speaker 4: not my favorite, but frankly, if he ran against Joe Biden, 466 00:28:26,200 --> 00:28:28,080 Speaker 4: I vote for them enthusiastically. 467 00:28:29,040 --> 00:28:31,960 Speaker 2: I wonder you define yourself as an independent as well. 468 00:28:32,080 --> 00:28:34,679 Speaker 2: Is there anybody and you voted for Democrats in the past, 469 00:28:35,520 --> 00:28:37,879 Speaker 2: is there anyone in the Democratic Party that excites you. 470 00:28:40,080 --> 00:28:42,240 Speaker 4: Well, I'd love it if Gina Romando would run, but 471 00:28:42,480 --> 00:28:45,120 Speaker 4: apparently we're going to put an eighty year old who's 472 00:28:45,200 --> 00:28:48,520 Speaker 4: going on one hundred up on the ticket. I don't 473 00:28:48,600 --> 00:28:51,600 Speaker 4: understand what the Democrats are doing. I voted for two 474 00:28:51,680 --> 00:28:55,520 Speaker 4: Democrats at the last five elections. I'm not like some 475 00:28:55,600 --> 00:29:03,640 Speaker 4: partisan crazy person, but what are they doing? So, you know, 476 00:29:03,760 --> 00:29:06,960 Speaker 4: I don't know, I don't know. There doesn't seem to 477 00:29:07,000 --> 00:29:09,880 Speaker 4: be anybody other than Bobby Kennedy who's willing to take 478 00:29:09,920 --> 00:29:12,880 Speaker 4: him on. Bobby Kennedy is a little nuts, but mark 479 00:29:13,000 --> 00:29:15,840 Speaker 4: my words, he's going to scare this guy because when 480 00:29:15,880 --> 00:29:20,120 Speaker 4: people go to the polls, particularly a year from now, 481 00:29:20,160 --> 00:29:23,960 Speaker 4: because Joe Biden is a moving puck. I wouldn't be 482 00:29:24,040 --> 00:29:29,040 Speaker 4: surprised if Bobby Kennedy doesn't get more support than any 483 00:29:29,080 --> 00:29:29,760 Speaker 4: of us could. 484 00:29:29,600 --> 00:29:32,880 Speaker 2: Imagine, you know, Democrat or a Republican. The kind of 485 00:29:32,960 --> 00:29:35,800 Speaker 2: trajectory you pointed at at the very beginning of this 486 00:29:36,480 --> 00:29:40,760 Speaker 2: higher spending, no matter what, no matter what scenario we're 487 00:29:40,800 --> 00:29:42,680 Speaker 2: in in the next couple of years in the United States, 488 00:29:42,760 --> 00:29:46,360 Speaker 2: do you think investors will be facing much higher taxes. 489 00:29:48,960 --> 00:29:55,440 Speaker 4: Eventually? I'll that for a hedge. Yeah. The only way 490 00:29:55,440 --> 00:29:58,680 Speaker 4: out of this is I mean, given what I talked 491 00:29:58,680 --> 00:30:01,480 Speaker 4: about earlier, taxes to be much higher in twenty years. 492 00:30:02,200 --> 00:30:05,040 Speaker 4: If it's a Republican president, can they hold out for 493 00:30:05,120 --> 00:30:08,520 Speaker 4: a few more years? I assume so, But taxes are 494 00:30:08,560 --> 00:30:11,280 Speaker 4: going up to either that or you know, thirty or 495 00:30:11,280 --> 00:30:13,800 Speaker 4: forty percent inflation, which I don't think is going to happen. 496 00:30:14,680 --> 00:30:17,160 Speaker 2: So before I let you go, I know you won't 497 00:30:17,240 --> 00:30:19,800 Speaker 2: perfectly answer at me on this with a lot of specificity. 498 00:30:19,800 --> 00:30:21,800 Speaker 4: Even I don't know I had any perfect answer. 499 00:30:23,200 --> 00:30:24,920 Speaker 3: Well, what is the fat pitch? 500 00:30:25,000 --> 00:30:27,520 Speaker 2: You've been saying that you have been kind of cautious 501 00:30:27,520 --> 00:30:29,920 Speaker 2: when it comes to markets. At what point do you 502 00:30:29,960 --> 00:30:31,560 Speaker 2: start to get in and you start to have a 503 00:30:31,560 --> 00:30:33,200 Speaker 2: conviction trade. 504 00:30:33,040 --> 00:30:33,880 Speaker 3: That is much bigger. 505 00:30:35,760 --> 00:30:40,560 Speaker 4: I think my record is as much knowing not when 506 00:30:40,600 --> 00:30:45,840 Speaker 4: to play as when to play, and because ideal in 507 00:30:46,000 --> 00:30:49,800 Speaker 4: five or six different asset classes, I've had the luxury. 508 00:30:50,680 --> 00:30:55,560 Speaker 4: If there's uncertainty inequities, usually that's a good time for bonds, 509 00:30:55,600 --> 00:30:58,680 Speaker 4: and currencies are doing crazy things when the world's blowing up, 510 00:30:58,720 --> 00:31:03,520 Speaker 4: So there's a lot of volatility there. And I would 511 00:31:03,600 --> 00:31:09,560 Speaker 4: love to answer your question, but this is the most complicated, 512 00:31:10,160 --> 00:31:16,400 Speaker 4: non roadmap, unanalyzable situation I've ever seen in terms of 513 00:31:16,480 --> 00:31:19,680 Speaker 4: having a lot of confidence in an economic prediction going forward. 514 00:31:20,840 --> 00:31:24,280 Speaker 4: So I honestly, and I hate not to answer a question, 515 00:31:24,400 --> 00:31:27,440 Speaker 4: I honestly don't see a fat pitch right now. What 516 00:31:27,560 --> 00:31:32,240 Speaker 4: I do think is given the change in liquidity, giving 517 00:31:32,320 --> 00:31:36,720 Speaker 4: everything I've outlined, some really fat pitches are going to 518 00:31:36,800 --> 00:31:40,360 Speaker 4: emerge and say that the next eight to twenty four months, 519 00:31:40,960 --> 00:31:46,920 Speaker 4: and I don't want to blow my cash and be 520 00:31:47,680 --> 00:31:50,920 Speaker 4: in a horrible mental state, being down eight percent, making 521 00:31:50,960 --> 00:31:53,320 Speaker 4: a big bet on something that I didn't have amazing 522 00:31:53,360 --> 00:31:56,160 Speaker 4: conviction on when I think the roadmap is going to 523 00:31:56,160 --> 00:32:01,840 Speaker 4: be good. So you talk me about this interview in January. 524 00:32:02,040 --> 00:32:04,280 Speaker 4: I probably wouldn't have accepted it if I knew that 525 00:32:04,360 --> 00:32:06,840 Speaker 4: I was going to be as messed up in the 526 00:32:06,880 --> 00:32:11,520 Speaker 4: head as I am right now in June. But I 527 00:32:11,560 --> 00:32:15,800 Speaker 4: also thought it would be bad to cancel. So I 528 00:32:15,800 --> 00:32:18,720 Speaker 4: don't have a fat pitch. But I hope, I hope 529 00:32:18,720 --> 00:32:21,080 Speaker 4: I've imparted something to your audience. 530 00:32:21,560 --> 00:32:21,720 Speaker 2: Yeah. 531 00:32:21,720 --> 00:32:23,920 Speaker 3: Absolutely, we will ask you again in eight months. 532 00:32:23,920 --> 00:32:28,000 Speaker 2: You said, thank you so much, mister Cully, appreciate it. 533 00:32:28,800 --> 00:32:33,560 Speaker 1: That's Stanley Druckemiller, the chairman and CEO of Duquane Family Office, 534 00:32:33,760 --> 00:32:37,760 Speaker 1: speaking at the Bloomberg invest Conference with our own Shanali 535 00:32:37,840 --> 00:32:40,920 Speaker 1: Basic And For more interviews like this, subscribe to the 536 00:32:40,960 --> 00:32:46,080 Speaker 1: Bloomberg Talks podcast, available on Apple, Spotify, and anywhere else 537 00:32:46,160 --> 00:32:47,360 Speaker 1: you get your podcasts.