1 00:00:13,800 --> 00:00:17,480 Speaker 1: Hello, and welcome to What Goes Up a weekly markets podcast. 2 00:00:17,720 --> 00:00:20,400 Speaker 1: My name is Mike Reagan. I'm a senior editor at Bloomberg, 3 00:00:20,680 --> 00:00:23,720 Speaker 1: and I'm Aldana hire Across as a reporter with Bloomberg. 4 00:00:25,079 --> 00:00:28,080 Speaker 1: And this week on the show. Well, as you've probably 5 00:00:28,120 --> 00:00:31,120 Speaker 1: heard by now, for the last two weeks, trouble in 6 00:00:31,160 --> 00:00:34,760 Speaker 1: the US and European banking sectors, not to mention the 7 00:00:34,840 --> 00:00:40,000 Speaker 1: responses to it from authorities, has captivated the intention of investors, 8 00:00:40,600 --> 00:00:43,160 Speaker 1: and it's sparking fears of a credit crunch that could 9 00:00:43,240 --> 00:00:47,519 Speaker 1: ultimately drag the economy into a recession. It doesn't yet 10 00:00:47,520 --> 00:00:49,599 Speaker 1: appear to be as big of a train wreck as 11 00:00:49,600 --> 00:00:53,160 Speaker 1: the global financial crisis in two thousand and eight knock 12 00:00:53,240 --> 00:00:56,960 Speaker 1: on wood, fingers crossed and all that. Still, it's hard 13 00:00:57,000 --> 00:01:00,360 Speaker 1: not to get flashbacks to that troubling era. So we're 14 00:01:00,400 --> 00:01:03,640 Speaker 1: gonna do a little comparing and contrasting to that ugly 15 00:01:03,720 --> 00:01:06,840 Speaker 1: time with a veteran market strategist who was helping to 16 00:01:06,880 --> 00:01:10,360 Speaker 1: manage a three point four billion dollars market making book 17 00:01:10,520 --> 00:01:14,399 Speaker 1: back then. But first, Phil donna Um, I did hear 18 00:01:14,440 --> 00:01:16,959 Speaker 1: from a loyal listener because you left us with a 19 00:01:16,959 --> 00:01:20,240 Speaker 1: little bit of a Cliffhanger last week, and he was 20 00:01:20,280 --> 00:01:23,240 Speaker 1: worried about you. You had told us you were just 21 00:01:23,319 --> 00:01:29,880 Speaker 1: about to close on a mortgage with dot First Republican. Yeah, 22 00:01:29,959 --> 00:01:32,759 Speaker 1: so how did it go? Tell what was the resolution? 23 00:01:32,840 --> 00:01:34,560 Speaker 1: You have no idea? How's trusted? I was like a 24 00:01:34,680 --> 00:01:37,280 Speaker 1: nutcase last week. I was so worried about First just 25 00:01:37,400 --> 00:01:40,560 Speaker 1: last just last week, more so than usual, like way 26 00:01:40,600 --> 00:01:44,080 Speaker 1: more so than usual. And I I like, when something's 27 00:01:44,240 --> 00:01:46,440 Speaker 1: really weighing on me, I can't help but bring it 28 00:01:46,520 --> 00:01:49,440 Speaker 1: up all the time. So I would run Iran into 29 00:01:49,600 --> 00:01:52,800 Speaker 1: the radio. I've never noticed. Yes, but even like the 30 00:01:52,880 --> 00:01:55,600 Speaker 1: radio producer Paul Brennan. We took the escalator up at 31 00:01:55,600 --> 00:01:57,600 Speaker 1: the Bloomberg office. He was like, how are you? And 32 00:01:57,640 --> 00:02:00,680 Speaker 1: I was like, I'm not. Well. First republic is my bank. 33 00:02:01,720 --> 00:02:04,720 Speaker 1: He was like, okay, well, it's it's stressful enough to 34 00:02:04,800 --> 00:02:08,760 Speaker 1: close on a new home in normal time, so I 35 00:02:08,760 --> 00:02:12,000 Speaker 1: can't even imagine. Yeah, but oh so we closed. We 36 00:02:12,080 --> 00:02:14,120 Speaker 1: rushed it, and we closed in front. Rushing is not 37 00:02:14,240 --> 00:02:16,760 Speaker 1: a good thing, obviously, but in this case, I think 38 00:02:16,760 --> 00:02:22,240 Speaker 1: it's okay to make an exception. So it's closed, it's done. 39 00:02:22,360 --> 00:02:26,280 Speaker 1: It's good as a Friday night. Yeah, but you know 40 00:02:26,320 --> 00:02:28,600 Speaker 1: even our guests on the podcast this week, I told 41 00:02:28,639 --> 00:02:34,359 Speaker 1: because I couldn't help myself but to to to tell 42 00:02:34,440 --> 00:02:36,320 Speaker 1: him about all my troubles. When I was talking to 43 00:02:36,360 --> 00:02:38,639 Speaker 1: him last week and I told him, I was like, oh, 44 00:02:38,680 --> 00:02:40,640 Speaker 1: I have this mortgage pending with the First Republic, And 45 00:02:40,680 --> 00:02:43,560 Speaker 1: all he said back was oh, And then we never 46 00:02:43,600 --> 00:02:47,639 Speaker 1: spoke again, which was not a good sign of confidence. 47 00:02:49,120 --> 00:02:50,480 Speaker 1: I thought you were going to be looking for a 48 00:02:50,480 --> 00:02:53,120 Speaker 1: couch to crash rone. Oh my gosh, stop it, Oh 49 00:02:53,160 --> 00:02:56,840 Speaker 1: my gosh. No. But maybe maybe our guests can explain 50 00:02:56,880 --> 00:02:59,120 Speaker 1: why he just left me hanging like that when I 51 00:02:59,160 --> 00:03:03,760 Speaker 1: was looking for reassurances. I want to bring in Steve Sausnick, 52 00:03:03,880 --> 00:03:07,400 Speaker 1: chief strategists at Interactive Brokers. Thanks so much for joining us. 53 00:03:08,000 --> 00:03:10,280 Speaker 1: It's great to be here, Valdona. Great to be here, Mike. 54 00:03:10,919 --> 00:03:13,000 Speaker 1: If just in my own defense, I figured, if I 55 00:03:13,040 --> 00:03:15,920 Speaker 1: had nothing constructive to say, and I could sort of 56 00:03:15,960 --> 00:03:20,000 Speaker 1: sense the nervousness even via the via the interview, you know, 57 00:03:20,040 --> 00:03:22,760 Speaker 1: the IB messages, I figured it was best not to 58 00:03:22,800 --> 00:03:26,160 Speaker 1: say anything. But fortunately it worked out because I really 59 00:03:26,200 --> 00:03:30,320 Speaker 1: had no idea what would happen. I think nobody knows. 60 00:03:30,600 --> 00:03:32,959 Speaker 1: But and you did the opposite of what Mike did. 61 00:03:33,200 --> 00:03:37,560 Speaker 1: Mike would find really bad stories and then copy paste 62 00:03:37,600 --> 00:03:41,320 Speaker 1: the worst parts of people panicking, and he would send 63 00:03:41,320 --> 00:03:44,080 Speaker 1: them to me highlighted with the worst parts. And I'm 64 00:03:44,080 --> 00:03:47,760 Speaker 1: sure you already saw this, but just FYI, you better 65 00:03:47,800 --> 00:03:50,080 Speaker 1: start double apping at, which is a new word. I 66 00:03:50,720 --> 00:03:55,280 Speaker 1: learned people with pending mortgages at First Republic were applying 67 00:03:55,280 --> 00:03:58,200 Speaker 1: for other mortgages double apping, they call it. Yeah. I 68 00:03:58,240 --> 00:04:00,640 Speaker 1: was like, Phildoni better, why aren't you double lapping? But 69 00:04:01,200 --> 00:04:03,640 Speaker 1: hey came through. Hey, yeah, you know, shout out to 70 00:04:03,680 --> 00:04:06,480 Speaker 1: my banker, Kyle. One thing I was going to say 71 00:04:06,960 --> 00:04:09,520 Speaker 1: was already too late because once you'd already closed was 72 00:04:09,880 --> 00:04:12,040 Speaker 1: once they got the lifeline, you figured you got a 73 00:04:12,080 --> 00:04:15,840 Speaker 1: three to four month window because well I figured they're 74 00:04:15,880 --> 00:04:19,840 Speaker 1: not going anywhere for a while, They're not going immediately out, 75 00:04:19,880 --> 00:04:22,400 Speaker 1: and uh but you know, not knowing how long, not 76 00:04:22,480 --> 00:04:24,279 Speaker 1: knowing how far along you are in the process. I 77 00:04:24,360 --> 00:04:26,960 Speaker 1: just you know, if I don't have anything helpful to say, 78 00:04:27,000 --> 00:04:30,599 Speaker 1: it's best not to say. And I would also assume, 79 00:04:30,960 --> 00:04:33,520 Speaker 1: you know, if if you're if you're getting a mortgage 80 00:04:33,560 --> 00:04:35,880 Speaker 1: at you know, I know you got a pretty good rate, 81 00:04:35,920 --> 00:04:39,040 Speaker 1: but at any rate sort that's sort of a perfect 82 00:04:39,160 --> 00:04:41,479 Speaker 1: prevailing market rate or close to it. They're gonna want 83 00:04:41,480 --> 00:04:44,160 Speaker 1: to close on that, regardless of the buildings on fire, 84 00:04:44,200 --> 00:04:48,359 Speaker 1: I would think, you know at this point, So there's that, okay. So, Steve, 85 00:04:48,720 --> 00:04:50,800 Speaker 1: the reason I was talking to you last week and 86 00:04:50,839 --> 00:04:53,200 Speaker 1: some of my teammates is because we've been asking people 87 00:04:53,600 --> 00:04:55,400 Speaker 1: where were you in two thousand and eight and what 88 00:04:55,520 --> 00:04:58,080 Speaker 1: were some of the lessons learned that you can apply 89 00:04:58,279 --> 00:05:01,960 Speaker 1: to today? And obviously we're getting a ton of comparisons 90 00:05:02,279 --> 00:05:06,560 Speaker 1: to that period of time. I think Jonathan Pharaoh from 91 00:05:06,600 --> 00:05:09,960 Speaker 1: Bloomberg TV said something just to put it a bit 92 00:05:10,000 --> 00:05:15,120 Speaker 1: more in perspective, because maybe it's sort of like panicky 93 00:05:15,160 --> 00:05:18,520 Speaker 1: to make comparisons to two thousand and eight at this point. 94 00:05:18,520 --> 00:05:21,479 Speaker 1: So he said something like, you know, it's like saying, 95 00:05:22,040 --> 00:05:24,720 Speaker 1: oh I broke my foot. It really hurts, but it's 96 00:05:24,720 --> 00:05:26,719 Speaker 1: all right. It's not as bad as like that time 97 00:05:26,760 --> 00:05:32,760 Speaker 1: I got shot, you know, So like, can you can like, 98 00:05:33,120 --> 00:05:36,480 Speaker 1: is it warranted at this point to be making those comparisons, 99 00:05:36,520 --> 00:05:38,559 Speaker 1: and maybe you can tell us about some of those 100 00:05:39,120 --> 00:05:41,920 Speaker 1: lessons learned from two thousand and eight to that you're 101 00:05:41,920 --> 00:05:45,960 Speaker 1: applying to today. It's not unwarranted. You know the problem 102 00:05:46,080 --> 00:05:49,840 Speaker 1: is we're always looking for a historical precedent, and you know, 103 00:05:49,960 --> 00:05:53,919 Speaker 1: it behooves us to think about what paradigm because we 104 00:05:54,000 --> 00:05:57,279 Speaker 1: all need to think in terms of some sort of paradigm. 105 00:05:57,279 --> 00:06:00,440 Speaker 1: What paradigm is most is most like what we're seeing. Well, 106 00:06:00,880 --> 00:06:04,200 Speaker 1: the last bank crisis, you know that we that we know, 107 00:06:04,360 --> 00:06:06,800 Speaker 1: you know that really took hold was in two thousand 108 00:06:06,839 --> 00:06:09,680 Speaker 1: and eight. We're not there yet. We're not at that 109 00:06:09,839 --> 00:06:11,720 Speaker 1: full flat and I hope we don't get there. Let 110 00:06:11,720 --> 00:06:14,240 Speaker 1: me be very clear. We're not at the point where 111 00:06:14,279 --> 00:06:17,599 Speaker 1: things you know, have really begun to metastasize. And I 112 00:06:17,600 --> 00:06:21,400 Speaker 1: do think because we've set up some firewalls systemically, you know, 113 00:06:21,480 --> 00:06:24,600 Speaker 1: Dodd Frank and and and you know, some of the 114 00:06:25,320 --> 00:06:29,400 Speaker 1: um exotic products that cause the last crisis are not 115 00:06:29,520 --> 00:06:34,320 Speaker 1: really as prevalent. We're not. You know, subprime mortgages UM 116 00:06:34,640 --> 00:06:37,400 Speaker 1: are not are not a thing this time. I assume 117 00:06:37,440 --> 00:06:39,680 Speaker 1: you went through all kinds of nice credit checks to 118 00:06:39,720 --> 00:06:42,080 Speaker 1: get your mortgage bill, Donna. You know they weren't just 119 00:06:42,160 --> 00:06:44,520 Speaker 1: handing them out. Banks this time around have not been 120 00:06:44,600 --> 00:06:48,120 Speaker 1: using credit to fault swaps to substitute for permanent capital 121 00:06:48,400 --> 00:06:50,839 Speaker 1: that sort of thing. So so it is different. There's 122 00:06:50,839 --> 00:06:53,680 Speaker 1: a lot so far the banks that have come out 123 00:06:53,760 --> 00:06:57,640 Speaker 1: under crisis it's a little more straightforward. I mean, we'd 124 00:06:57,680 --> 00:07:01,040 Speaker 1: silver Gate and the Culprit there as crypto as part 125 00:07:01,080 --> 00:07:03,800 Speaker 1: of so of the ongoing crypto troubles, which you know 126 00:07:03,880 --> 00:07:06,800 Speaker 1: you can speak to better than I can. But then 127 00:07:06,839 --> 00:07:08,839 Speaker 1: you had SBB, which you know, we all know the 128 00:07:08,880 --> 00:07:12,120 Speaker 1: story there. It's a classic mismatch. It's really they had 129 00:07:12,120 --> 00:07:14,360 Speaker 1: too much. They had too many deposits that they couldn't 130 00:07:14,400 --> 00:07:18,320 Speaker 1: actually loan out in sort of an efficient way, but 131 00:07:18,400 --> 00:07:21,000 Speaker 1: they kept taking them in any way, and so that 132 00:07:21,200 --> 00:07:23,400 Speaker 1: was sort of a plain vanilla type of a problem. 133 00:07:23,400 --> 00:07:27,080 Speaker 1: Really duration risk, which always is a risk for banks. 134 00:07:27,600 --> 00:07:29,920 Speaker 1: You know, along the way you had Signature Bank, which 135 00:07:30,080 --> 00:07:32,080 Speaker 1: you know was not only a little bit of crypto 136 00:07:32,200 --> 00:07:33,960 Speaker 1: and a little bit of they seem to have their 137 00:07:33,960 --> 00:07:37,240 Speaker 1: finger in every sort of odd pot, you know, oddball 138 00:07:37,480 --> 00:07:40,760 Speaker 1: place in the banking system, taxi loans, etc. Etc. And 139 00:07:40,800 --> 00:07:43,680 Speaker 1: then of course Credit Squeeze, which has been choose my 140 00:07:43,720 --> 00:07:47,480 Speaker 1: words carefully, they've been under some stress for first quite 141 00:07:47,520 --> 00:07:50,280 Speaker 1: some time, love me put it that way, and so 142 00:07:50,360 --> 00:07:52,920 Speaker 1: that's a nice way to put it. So in that sense, 143 00:07:53,040 --> 00:07:55,360 Speaker 1: we're not at the level where you started to work, 144 00:07:55,400 --> 00:07:57,559 Speaker 1: where we started to worry about banks like City Group 145 00:07:57,600 --> 00:08:00,000 Speaker 1: and Deutsche Bank and things like that, although I guess 146 00:08:00,000 --> 00:08:03,840 Speaker 1: Credit suieces analogous to Deutsche Bank and UBS, which ironically 147 00:08:03,840 --> 00:08:06,560 Speaker 1: had its own issues back then and is now the acquirer. 148 00:08:07,040 --> 00:08:10,760 Speaker 1: So there's definitely you know, history. They say history doesn't repeat, 149 00:08:10,800 --> 00:08:13,560 Speaker 1: but it often rhymes, and I think there's there's a 150 00:08:13,600 --> 00:08:17,360 Speaker 1: certain rhyme to it. But we're not there yet, and 151 00:08:17,440 --> 00:08:20,200 Speaker 1: I certainly hope we don't get there. But so, I mean, 152 00:08:20,280 --> 00:08:23,920 Speaker 1: I was at that point my responsibility was making markets 153 00:08:23,920 --> 00:08:28,000 Speaker 1: and being a specialist in bank options, and so that 154 00:08:28,080 --> 00:08:32,839 Speaker 1: was a very it was a very challenging time. I 155 00:08:32,880 --> 00:08:36,240 Speaker 1: do think we actually, I will say we did. We 156 00:08:36,280 --> 00:08:40,040 Speaker 1: did rather well then I you know, I know that's 157 00:08:40,120 --> 00:08:44,560 Speaker 1: really counterintuitive, and especially when systemic risk is a foot. Um. 158 00:08:44,800 --> 00:08:47,520 Speaker 1: But the thing that really got us on the right 159 00:08:47,600 --> 00:08:52,960 Speaker 1: foot was almost a random conversation I had Yeah tell 160 00:08:53,040 --> 00:08:55,920 Speaker 1: us about this because we talked about this, and UM, 161 00:08:55,960 --> 00:08:58,400 Speaker 1: I want to give credit to Katie Garfield who originally 162 00:08:58,440 --> 00:09:00,480 Speaker 1: asked you this question and you told this story, so 163 00:09:00,520 --> 00:09:04,880 Speaker 1: if you wouldn't mind, not at all, we you know, 164 00:09:05,640 --> 00:09:08,520 Speaker 1: we're in a we're in a small office building in Greenwich, 165 00:09:08,559 --> 00:09:11,400 Speaker 1: and you know, you park in the garage underneath because 166 00:09:11,480 --> 00:09:15,040 Speaker 1: you know that's everybody commutes by car because it's Connecticut. UM. 167 00:09:15,120 --> 00:09:18,320 Speaker 1: And so you know, get in the elevator and there's 168 00:09:18,400 --> 00:09:21,520 Speaker 1: Thomas Patterfie who founded the firm and UM, you know, 169 00:09:21,760 --> 00:09:25,760 Speaker 1: whom I'm sure the listeners are familiar with. UM. Get 170 00:09:25,760 --> 00:09:30,360 Speaker 1: in the elevator. UM. You know what's new? UM, And 171 00:09:30,440 --> 00:09:34,480 Speaker 1: you know Thomas's Thomas is not a man who's big 172 00:09:34,480 --> 00:09:37,040 Speaker 1: on small talk. So it's it's you know, that was 173 00:09:37,120 --> 00:09:38,720 Speaker 1: I think more. You know, I took that as a 174 00:09:38,840 --> 00:09:41,920 Speaker 1: business related question rather than you know, tell them about 175 00:09:41,960 --> 00:09:43,800 Speaker 1: you know, tell them about the kids and stuff. And 176 00:09:43,840 --> 00:09:47,439 Speaker 1: I said, you know what's really interesting to me is UM, 177 00:09:47,480 --> 00:09:50,319 Speaker 1: this story that the story that that that I'm reading 178 00:09:50,360 --> 00:09:53,520 Speaker 1: this morning about how bear Stearns may have as much 179 00:09:53,520 --> 00:09:57,080 Speaker 1: as twenty billion in losses at some of their hedge funds. 180 00:09:58,240 --> 00:10:00,679 Speaker 1: And he said twenty billion. I said, I said, no, 181 00:10:00,840 --> 00:10:03,400 Speaker 1: that's that's the number that's being thrown around. I don't, 182 00:10:03,440 --> 00:10:05,520 Speaker 1: you know, I obviously I don't know if it's one 183 00:10:05,559 --> 00:10:08,120 Speaker 1: hundred percent true, but I trust I trust the reporting 184 00:10:08,840 --> 00:10:11,440 Speaker 1: um and he said, how big is you know? What's 185 00:10:11,440 --> 00:10:16,520 Speaker 1: their market cap? And I said, I think about twenty billion. 186 00:10:16,559 --> 00:10:18,800 Speaker 1: Now at this point, it's only like a it's only 187 00:10:18,800 --> 00:10:20,839 Speaker 1: like a four story building. So we're out of the 188 00:10:20,880 --> 00:10:23,959 Speaker 1: elevator at this point, walking down the hall um, you know, 189 00:10:24,000 --> 00:10:25,880 Speaker 1: and I said it, I think it's about twenty billion 190 00:10:25,960 --> 00:10:27,719 Speaker 1: ish and he looks at me. He said, he are 191 00:10:27,760 --> 00:10:32,160 Speaker 1: you telling me bear Stearns is broke? And I said, 192 00:10:32,160 --> 00:10:35,320 Speaker 1: I wasn't going to put it that way. But now 193 00:10:35,360 --> 00:10:39,320 Speaker 1: that you you know this, this is why Thomas is. 194 00:10:39,360 --> 00:10:41,280 Speaker 1: You know this why Thomas is the success he is. He's, 195 00:10:41,320 --> 00:10:43,800 Speaker 1: you know, because he sees right through these situations. I said, 196 00:10:43,800 --> 00:10:47,760 Speaker 1: I I guess I am, aren't I? And he looked 197 00:10:47,760 --> 00:10:50,240 Speaker 1: at me and he said, don't sell any puts on 198 00:10:50,280 --> 00:10:52,560 Speaker 1: banks until you hear until you hear from me otherwise, 199 00:10:53,160 --> 00:10:56,960 Speaker 1: And that was that was probably you know, I don't 200 00:10:56,960 --> 00:10:58,720 Speaker 1: think I heard from a motherwise for about a year 201 00:10:58,760 --> 00:11:01,079 Speaker 1: and a half. But which is not to say I 202 00:11:01,160 --> 00:11:03,440 Speaker 1: never sold a put. It's impractical. You can't do that 203 00:11:03,480 --> 00:11:05,320 Speaker 1: as a market maker. But what it means is don't 204 00:11:05,320 --> 00:11:08,400 Speaker 1: be a net seller puts. If you sell them, replace them, 205 00:11:08,920 --> 00:11:11,520 Speaker 1: adjust the models so that we are not the best 206 00:11:11,600 --> 00:11:14,240 Speaker 1: offer on them. And one of the interesting features that 207 00:11:14,320 --> 00:11:17,520 Speaker 1: came out in two thousand and eight was because credit 208 00:11:17,559 --> 00:11:20,360 Speaker 1: to fault swaps were pretty new, and really, you know, 209 00:11:20,440 --> 00:11:24,600 Speaker 1: I believe that every new financial innovation gets a real 210 00:11:24,600 --> 00:11:26,840 Speaker 1: world test, and some of them pass, and some of 211 00:11:26,840 --> 00:11:29,120 Speaker 1: them fail, and some of them get rejiggered as a 212 00:11:29,160 --> 00:11:31,959 Speaker 1: result of it. And that was credit to fault swaps 213 00:11:32,040 --> 00:11:36,520 Speaker 1: real world test, and they were being used in inappropriate 214 00:11:36,600 --> 00:11:40,080 Speaker 1: ways and the market wasn't ready for a full scale 215 00:11:41,080 --> 00:11:44,800 Speaker 1: test of credit default of the how they work. But 216 00:11:44,920 --> 00:11:49,040 Speaker 1: the logical hedge if you're trading credit to fault swaps 217 00:11:49,240 --> 00:11:52,880 Speaker 1: is to buy long term out of the money puts 218 00:11:52,960 --> 00:11:57,280 Speaker 1: on equities. And so the big trade there was people 219 00:11:57,320 --> 00:12:03,199 Speaker 1: buying whatever the lowest strike leap put was on insert 220 00:12:03,280 --> 00:12:06,520 Speaker 1: bank name here, because that would be you know, if 221 00:12:06,600 --> 00:12:11,600 Speaker 1: I had sold credit to fault swaps on um Lehman Brothers. 222 00:12:12,120 --> 00:12:14,640 Speaker 1: You know, the bond. Because of the way a capital 223 00:12:14,679 --> 00:12:18,839 Speaker 1: structure works, the bonds bonds go bad before stocks. And 224 00:12:19,160 --> 00:12:21,280 Speaker 1: I know that's an issue here with credits WEE and 225 00:12:21,280 --> 00:12:24,800 Speaker 1: the Coco bonds, etc. We'll get it. You know, I'm 226 00:12:24,840 --> 00:12:27,360 Speaker 1: not a restructuring expert. My brother actually is you know, 227 00:12:27,360 --> 00:12:28,840 Speaker 1: I haven't gotten a straight answer at it. I haven't 228 00:12:28,840 --> 00:12:32,600 Speaker 1: asked him actually how that all is working out. But um, 229 00:12:32,760 --> 00:12:34,960 Speaker 1: but what happens is, you know what happened there is 230 00:12:34,960 --> 00:12:36,480 Speaker 1: so if the bonds are going to go bad, well 231 00:12:36,480 --> 00:12:38,080 Speaker 1: then the stock is going to go bad. The stock 232 00:12:38,160 --> 00:12:41,480 Speaker 1: is going to go worse. So um, so people were 233 00:12:41,559 --> 00:12:45,160 Speaker 1: really clamoring for those So it just basically kept ratcheting 234 00:12:45,240 --> 00:12:47,720 Speaker 1: up that volatility and kept ratcheting it up and and 235 00:12:48,000 --> 00:12:52,000 Speaker 1: but as a result, we went into this um and 236 00:12:52,120 --> 00:12:57,240 Speaker 1: stayed into it pretty you know, pretty much on on 237 00:12:57,240 --> 00:13:00,280 Speaker 1: a decent footing um, which is not to say there 238 00:13:00,280 --> 00:13:03,920 Speaker 1: weren't hiccups and accidents and everything else. As a market maker, 239 00:13:04,080 --> 00:13:07,280 Speaker 1: you you you sort of expect that you're going to 240 00:13:07,440 --> 00:13:10,040 Speaker 1: have your bad days and your bad weeks, and you 241 00:13:10,080 --> 00:13:12,800 Speaker 1: know you're even your bad months, but you keep tight 242 00:13:12,920 --> 00:13:16,440 Speaker 1: risk parameters and over time, um, if you're doing it right, 243 00:13:17,480 --> 00:13:20,400 Speaker 1: it pays off. You know. You you you collect a 244 00:13:20,400 --> 00:13:22,720 Speaker 1: lot of change along the way, and sometimes you you know, 245 00:13:22,800 --> 00:13:25,280 Speaker 1: sometimes you make pennies and give back dollars, but you 246 00:13:25,320 --> 00:13:27,600 Speaker 1: have to manage the dollars that you give back and 247 00:13:27,640 --> 00:13:32,240 Speaker 1: We fortunately were able to um not give back to dollars. 248 00:13:32,280 --> 00:13:34,679 Speaker 1: And those days we ran pretty much a we always 249 00:13:34,720 --> 00:13:38,559 Speaker 1: pretty much did, ran a long volatility UM model. Just 250 00:13:38,760 --> 00:13:41,559 Speaker 1: that was the way we traded. It could be expensive UM. 251 00:13:41,679 --> 00:13:44,040 Speaker 1: A lot of a lot of people don't do that UM. 252 00:13:44,200 --> 00:13:49,280 Speaker 1: But in an era where volatility was constantly UM, constantly 253 00:13:50,240 --> 00:13:54,080 Speaker 1: rising more or less UM, and skew was getting extraordinarily steep, 254 00:13:54,440 --> 00:13:56,679 Speaker 1: it was. It was the right It worked for us, 255 00:13:56,760 --> 00:13:58,200 Speaker 1: and we were we were in a good place at 256 00:13:58,240 --> 00:14:02,199 Speaker 1: the right time. Something to be said for taking the 257 00:14:02,280 --> 00:14:04,280 Speaker 1: elevator ride with the boss. I guess this is a 258 00:14:04,280 --> 00:14:06,960 Speaker 1: good argument for everyone getting back into the office. I 259 00:14:06,960 --> 00:14:09,800 Speaker 1: guess I say, yes, I'm working for a moment, but 260 00:14:16,080 --> 00:14:20,280 Speaker 1: big picture wise too, I'm thinking about the difference in 261 00:14:20,320 --> 00:14:23,480 Speaker 1: the reaction function from the government and the central banks 262 00:14:24,080 --> 00:14:27,960 Speaker 1: to this occasion versus two thousand and eight. Yeah, I'm 263 00:14:28,520 --> 00:14:31,520 Speaker 1: thinking back to that original vote. I think it was 264 00:14:31,560 --> 00:14:34,600 Speaker 1: in the House on the TARP bill. There was a 265 00:14:34,640 --> 00:14:37,280 Speaker 1: lot of optimism in the market that, of course they're 266 00:14:37,320 --> 00:14:41,000 Speaker 1: gonna pass this bill, the TARP build to in chect 267 00:14:41,600 --> 00:14:44,400 Speaker 1: capital into all the biggest banks, and it failed on 268 00:14:44,440 --> 00:14:49,320 Speaker 1: the first vote, and the market just you know, went 269 00:14:49,400 --> 00:14:52,200 Speaker 1: down instantly in a big way. I forget the exact numbers, 270 00:14:52,240 --> 00:14:58,120 Speaker 1: but this response to me seems much quicker, much more 271 00:14:59,480 --> 00:15:05,520 Speaker 1: focus and um targeted and sort of able to put 272 00:15:05,520 --> 00:15:07,280 Speaker 1: out the fire a lot quicker. Is that is that 273 00:15:07,320 --> 00:15:12,440 Speaker 1: your impression too? Absolutely? Yes, yeah. Once you know, they 274 00:15:12,440 --> 00:15:15,600 Speaker 1: were writing the playbook in two thousand and eight, and 275 00:15:16,160 --> 00:15:19,120 Speaker 1: I think to a certain extent they've been using that playbook, 276 00:15:19,240 --> 00:15:24,080 Speaker 1: particularly in twenty twenty, and they're using it now, um, 277 00:15:24,280 --> 00:15:28,600 Speaker 1: you know, and that was essentially monetary and fiscal shock 278 00:15:28,640 --> 00:15:31,080 Speaker 1: and awe, and I think you know, in two thousand 279 00:15:31,120 --> 00:15:34,120 Speaker 1: and eight, Um, you know, remember there was the you know, 280 00:15:34,320 --> 00:15:39,240 Speaker 1: they ridiculed helicopter ben um, but that actually he wasn't wrong, 281 00:15:39,800 --> 00:15:43,520 Speaker 1: you know, and and the Nobel Committee eventually agreed. But 282 00:15:43,600 --> 00:15:45,520 Speaker 1: that was you know, real world test at one of 283 00:15:45,560 --> 00:15:48,240 Speaker 1: his theories, which was essentially dropped money out of helicopters 284 00:15:48,240 --> 00:15:52,360 Speaker 1: in the time of a crisis. Um. And I think 285 00:15:52,400 --> 00:15:56,000 Speaker 1: now they've realized, well it works, um. And that was 286 00:15:56,120 --> 00:15:58,000 Speaker 1: you know, and that was that was why it had 287 00:15:58,040 --> 00:16:02,120 Speaker 1: worked during COVID, and that really wasn't much complaint about 288 00:16:02,160 --> 00:16:04,960 Speaker 1: what the FED was doing. And then it was certainly 289 00:16:05,280 --> 00:16:09,080 Speaker 1: you know, the fiscal bills were generally passed along bipartisan 290 00:16:09,120 --> 00:16:13,560 Speaker 1: lines um, so there wasn't. So by now we sort 291 00:16:13,560 --> 00:16:16,560 Speaker 1: of we're going to use that playbook, which I think 292 00:16:16,600 --> 00:16:18,480 Speaker 1: is a good thing. That's that's kind of the that's 293 00:16:18,640 --> 00:16:22,600 Speaker 1: that means we're actually learning from our you know, from 294 00:16:22,600 --> 00:16:26,560 Speaker 1: our efforts you know, societally. Now we can argue to 295 00:16:26,640 --> 00:16:28,880 Speaker 1: what extent it's appropriate. We can you know, we can 296 00:16:28,960 --> 00:16:31,960 Speaker 1: certainly question whether there was moral hazard in the way 297 00:16:32,000 --> 00:16:35,080 Speaker 1: they um in the way they guaranteed all deposits sort 298 00:16:35,080 --> 00:16:38,560 Speaker 1: of with the stroke of a pen um at at 299 00:16:38,600 --> 00:16:41,760 Speaker 1: silic at Silicon Valley Bank, and and and who benefited 300 00:16:41,800 --> 00:16:43,960 Speaker 1: from that. I mean, you know, we're going to be 301 00:16:44,000 --> 00:16:45,880 Speaker 1: arguing about this for a while. And of course we're 302 00:16:45,880 --> 00:16:49,040 Speaker 1: still you know, with the FED meeting yesterday, we're still 303 00:16:50,000 --> 00:16:52,440 Speaker 1: dealing with the idea of did the Fed and the 304 00:16:52,640 --> 00:16:55,760 Speaker 1: and the you know, and the and the and Congress, 305 00:16:55,760 --> 00:16:58,760 Speaker 1: the fiscal authorities overdo it in their response to COVID. 306 00:16:58,880 --> 00:17:02,520 Speaker 1: I mean, these are that'll be that'll be the stuff, 307 00:17:02,760 --> 00:17:06,000 Speaker 1: you know, when when Vildonna's my age, she'll be having 308 00:17:06,040 --> 00:17:09,119 Speaker 1: that discussion. She'll be having that discussion with the in 309 00:17:09,160 --> 00:17:11,399 Speaker 1: a couple of years, right, you got a waste to 310 00:17:11,440 --> 00:17:14,879 Speaker 1: go to your catch up to me. Um, but but 311 00:17:15,000 --> 00:17:17,640 Speaker 1: that's really the you know, she'll still be talking about 312 00:17:17,640 --> 00:17:21,120 Speaker 1: her mortgage, I think, Steve. So she'll still be telling 313 00:17:21,160 --> 00:17:24,320 Speaker 1: that story. Yeah, yeah, well that's you know mortgage. Well, 314 00:17:24,960 --> 00:17:27,679 Speaker 1: you know it added twenty years to my life just 315 00:17:27,840 --> 00:17:33,040 Speaker 1: from yeah, Steve. One thing. Um, there's almost this knee 316 00:17:33,080 --> 00:17:36,520 Speaker 1: jerk reaction in the market, I think, to this notion 317 00:17:36,720 --> 00:17:39,399 Speaker 1: of the Fed's balance sheet. You know, a bunch of 318 00:17:39,480 --> 00:17:42,520 Speaker 1: banks went to the discount window at the FED and 319 00:17:42,720 --> 00:17:45,280 Speaker 1: borrowed I I don't know what the exact number is 320 00:17:45,320 --> 00:17:48,000 Speaker 1: at the moment, but call it hundreds of billions of dollars. 321 00:17:48,359 --> 00:17:52,240 Speaker 1: The thinking in many quarters is that, well, that's almost 322 00:17:52,280 --> 00:17:55,720 Speaker 1: like quantitative easing, or at least a reversal of the 323 00:17:55,800 --> 00:18:00,239 Speaker 1: quantitative tightening tightening that the central bank was doing. Sure, 324 00:18:00,240 --> 00:18:03,520 Speaker 1: if that's the same the appropriate way to look at it, 325 00:18:03,560 --> 00:18:08,119 Speaker 1: You know, the FED increasing its balance sheet by extending 326 00:18:08,560 --> 00:18:13,320 Speaker 1: discount window loans versus buying treasuries and mortgage securities. Is 327 00:18:13,320 --> 00:18:15,320 Speaker 1: that the wrong way to think about that? Do you 328 00:18:15,359 --> 00:18:19,000 Speaker 1: think it's interesting because I've had this exact debate with 329 00:18:19,040 --> 00:18:22,439 Speaker 1: my colleague Jose Torus, who was an economist and you 330 00:18:22,440 --> 00:18:25,520 Speaker 1: know his his He pointed out after the last h 331 00:18:25,640 --> 00:18:28,360 Speaker 1: dot four dot one report, which is something I actually, 332 00:18:29,160 --> 00:18:31,160 Speaker 1: you know, in a nerdy way, look a look at 333 00:18:31,200 --> 00:18:35,000 Speaker 1: every Thursday afternoon. But but you're even Mike, You're probably 334 00:18:35,040 --> 00:18:37,560 Speaker 1: not old enough to remember on Thursday afternoons everybody stopped 335 00:18:37,560 --> 00:18:39,479 Speaker 1: to wait for the M two report. When I started 336 00:18:39,480 --> 00:18:41,120 Speaker 1: out in the business, you know, that was the thing 337 00:18:41,160 --> 00:18:44,840 Speaker 1: everybody was looking forward to. So so we've had this debate, 338 00:18:44,880 --> 00:18:46,840 Speaker 1: and you know, he said, well, look, you know, the 339 00:18:46,880 --> 00:18:48,680 Speaker 1: deposits went up by I think it was three hundred 340 00:18:48,720 --> 00:18:53,480 Speaker 1: billion or something, which which um, you know, would eradicate 341 00:18:53,600 --> 00:18:57,520 Speaker 1: essentially the QT that's done year to date. Meanwhile, though 342 00:18:57,560 --> 00:19:01,480 Speaker 1: they did continue to let securities roll off the balance sheet. 343 00:19:02,040 --> 00:19:06,840 Speaker 1: So I think that the differentiating factor here is the 344 00:19:06,920 --> 00:19:09,879 Speaker 1: deposit stuff is meant to be a band aid, um, 345 00:19:09,960 --> 00:19:12,439 Speaker 1: whereas the QT is meant to be more of a 346 00:19:12,480 --> 00:19:15,840 Speaker 1: permanent shift in the way the Fed is is approaching that, 347 00:19:16,600 --> 00:19:19,960 Speaker 1: you know, tightening and easing of their balance sheet. But 348 00:19:19,720 --> 00:19:22,800 Speaker 1: they use their balance sheet and a crisis, and so 349 00:19:23,240 --> 00:19:26,520 Speaker 1: I don't think it's apples to apples, but certainly it 350 00:19:26,680 --> 00:19:29,520 Speaker 1: was they did throw money into the system. You know, 351 00:19:29,520 --> 00:19:32,240 Speaker 1: they need to do it to keep lubricating the gears. 352 00:19:32,240 --> 00:19:34,960 Speaker 1: I just think it's a little bit in theory. This 353 00:19:35,160 --> 00:19:37,720 Speaker 1: three hundred billion can roll itself off. I don't think 354 00:19:37,720 --> 00:19:41,440 Speaker 1: it has yet. Well, well, we'll know this afternoon, I guess. 355 00:19:42,200 --> 00:19:43,800 Speaker 1: But I think as long as their stress in the 356 00:19:43,800 --> 00:19:46,879 Speaker 1: banking system, it's going to the FED. The feed is 357 00:19:48,119 --> 00:19:51,399 Speaker 1: you know, is and can be the guaranteur of you know, 358 00:19:51,440 --> 00:19:54,200 Speaker 1: the lender of last resort. And it's to me, this 359 00:19:54,240 --> 00:19:56,720 Speaker 1: is one of the fascinating things. Right we've talked about 360 00:19:56,720 --> 00:19:59,880 Speaker 1: the we we haven't yet, but the Fed's dual mandate 361 00:20:00,680 --> 00:20:04,840 Speaker 1: is stable prices and full employment. Yet it's very clear 362 00:20:04,920 --> 00:20:07,280 Speaker 1: that the fed's real job and why they were created, 363 00:20:07,960 --> 00:20:11,840 Speaker 1: was to maintain the safety and stability of the banking system. Now, 364 00:20:11,920 --> 00:20:14,359 Speaker 1: without a safety and stability the banking system, you can't 365 00:20:14,400 --> 00:20:17,800 Speaker 1: have stable prices and full employment. But their real mandate 366 00:20:17,880 --> 00:20:21,040 Speaker 1: is sort of unspoken, and I think that's but it's 367 00:20:21,080 --> 00:20:24,040 Speaker 1: important that that mandate really comes into play when there's 368 00:20:24,080 --> 00:20:27,880 Speaker 1: a crisis going on, and that's what we're seeing now. Steve. 369 00:20:27,960 --> 00:20:31,800 Speaker 1: I'm curious because everything keeps changing so much, so fast. 370 00:20:32,000 --> 00:20:35,359 Speaker 1: How you're thinking has evolved since the start of the year. 371 00:20:35,560 --> 00:20:38,919 Speaker 1: And obviously we even had some economists at some of 372 00:20:38,960 --> 00:20:42,119 Speaker 1: the big banks coming out before this week's FED meetings 373 00:20:42,200 --> 00:20:46,280 Speaker 1: saying they're not going to be hiking rates, and obviously 374 00:20:46,280 --> 00:20:49,239 Speaker 1: they're raised by twenty five basis points. So how are 375 00:20:49,240 --> 00:20:52,000 Speaker 1: you thinking about all of the changes? Everything we've seen, 376 00:20:52,080 --> 00:20:56,200 Speaker 1: everything we've heard from the FED, the bank turmoil, everything, 377 00:20:56,240 --> 00:20:59,560 Speaker 1: and how it's you're thinking about what we might be 378 00:20:59,720 --> 00:21:03,639 Speaker 1: seeing for the remainder of the year has evolved. Thinking 379 00:21:03,680 --> 00:21:07,280 Speaker 1: really hasn't changed all that much. You know. I'm still 380 00:21:07,280 --> 00:21:09,520 Speaker 1: of the belief that we're in a period where if 381 00:21:09,520 --> 00:21:11,200 Speaker 1: the FED is raising rates and if the FETE is 382 00:21:11,240 --> 00:21:13,920 Speaker 1: shrinking their balance sheet, things are things are going to 383 00:21:14,000 --> 00:21:16,840 Speaker 1: break and you're going to have accidents. Well we did, 384 00:21:17,480 --> 00:21:19,800 Speaker 1: you know? And I think that the problem here is 385 00:21:19,840 --> 00:21:22,160 Speaker 1: that I'm going to take a little victory lot because 386 00:21:22,160 --> 00:21:26,000 Speaker 1: literally what I wrote yesterday was that, um, let me 387 00:21:26,080 --> 00:21:28,280 Speaker 1: just pull it up, was that my base case was 388 00:21:28,320 --> 00:21:30,280 Speaker 1: for a twenty five basis point hike. The FED doesn't 389 00:21:30,320 --> 00:21:32,919 Speaker 1: typically surprise market. No, no hike would be considered a 390 00:21:32,920 --> 00:21:35,640 Speaker 1: surprise if they stood pat with people would worry about 391 00:21:35,640 --> 00:21:38,640 Speaker 1: what's wrong. Um, you know that, but but you now 392 00:21:38,680 --> 00:21:40,640 Speaker 1: have the dot plot. I won't go into the whole thing, 393 00:21:40,680 --> 00:21:43,439 Speaker 1: but basically then said the dot plot was going to 394 00:21:43,480 --> 00:21:46,159 Speaker 1: be relatively unchanged, which was very much at odds with 395 00:21:46,200 --> 00:21:49,760 Speaker 1: FED funds futures, and that um he would play down 396 00:21:49,760 --> 00:21:54,800 Speaker 1: concerns about, you know, the banking crisis metastasizing, which would 397 00:21:54,840 --> 00:21:58,040 Speaker 1: actually potentially disappoint people. I think, you know, I think 398 00:21:58,040 --> 00:22:00,879 Speaker 1: that all fits, and I think that's still what we 399 00:22:00,920 --> 00:22:05,160 Speaker 1: see now. We saw sort of the way that zero 400 00:22:05,240 --> 00:22:09,000 Speaker 1: dated options can cause, you know, microverse of volatility. That's 401 00:22:09,000 --> 00:22:11,760 Speaker 1: a new feature. It's it's not as dire as I 402 00:22:11,800 --> 00:22:14,399 Speaker 1: think a lot of other people I believe it is. 403 00:22:14,600 --> 00:22:17,040 Speaker 1: I really don't think it's a stemic. I just think it's, 404 00:22:17,160 --> 00:22:19,200 Speaker 1: you know, buckle up and get used to it. But 405 00:22:19,280 --> 00:22:22,000 Speaker 1: I still think this is the issue, and right now 406 00:22:22,160 --> 00:22:25,160 Speaker 1: what I'm wrestling with our two basic things. One thing 407 00:22:25,200 --> 00:22:31,159 Speaker 1: I didn't really foresee was that the January effect would 408 00:22:31,160 --> 00:22:34,600 Speaker 1: be quite so lasting. I think we're still seeing the 409 00:22:34,680 --> 00:22:37,000 Speaker 1: January effect. I think the risk on move that we're 410 00:22:37,000 --> 00:22:44,960 Speaker 1: seeing occurred largely because some of your biggest, most you know, 411 00:22:45,040 --> 00:22:48,880 Speaker 1: most followed, most popular stocks both within individuals and institutions 412 00:22:49,359 --> 00:22:51,640 Speaker 1: got the crap kicked out of them in twenty twenty two, 413 00:22:51,680 --> 00:22:53,480 Speaker 1: and that led to a lot of tax last selling 414 00:22:54,000 --> 00:22:57,720 Speaker 1: in December, which then made it even worse. They got 415 00:22:57,720 --> 00:23:01,680 Speaker 1: deeply oversold. They were the first to bound as well 416 00:23:01,720 --> 00:23:06,040 Speaker 1: they should have. And I think that that bounce then 417 00:23:06,160 --> 00:23:09,480 Speaker 1: turned into a full fledged risk on rally, which I 418 00:23:10,160 --> 00:23:12,960 Speaker 1: didn't actually foresee the amount of the legs that this 419 00:23:13,000 --> 00:23:15,680 Speaker 1: would have. And I think that's what we're wrestling with now, 420 00:23:15,720 --> 00:23:18,680 Speaker 1: and I think that you know, we're still seeing it. 421 00:23:18,920 --> 00:23:22,840 Speaker 1: You know, we're also getting though tremendous concentration to you know, 422 00:23:22,880 --> 00:23:25,920 Speaker 1: Apple and Apple and Microsoft or together just those two 423 00:23:26,000 --> 00:23:28,639 Speaker 1: stocks are about thirteen percent of SMP right now and 424 00:23:28,720 --> 00:23:33,320 Speaker 1: about twenty five percent of of the qqqs. Nuts. You know, 425 00:23:33,560 --> 00:23:35,760 Speaker 1: I think back, you know, you want a bigger historical precedent. 426 00:23:35,800 --> 00:23:37,639 Speaker 1: Certainly I wasn't active then, but I've read up on 427 00:23:37,680 --> 00:23:39,959 Speaker 1: it was the nifty fifty or the one decision stocks 428 00:23:40,000 --> 00:23:43,680 Speaker 1: back in the sixties and those. You know, Eventually, every 429 00:23:43,720 --> 00:23:47,240 Speaker 1: time you've had narrowing leadership, it tends to work out 430 00:23:47,320 --> 00:23:50,840 Speaker 1: somewhat poorly um and end in a bad way. And 431 00:23:50,880 --> 00:23:54,600 Speaker 1: I'm not I don't know. I'm not going quite so far. 432 00:23:54,720 --> 00:23:57,320 Speaker 1: But but if but if we're that top heavy in 433 00:23:57,400 --> 00:24:02,719 Speaker 1: two stocks, that's not the it's not a great sign. Um. 434 00:24:02,760 --> 00:24:06,640 Speaker 1: But another thesis of mind that I've really been laying 435 00:24:06,640 --> 00:24:09,879 Speaker 1: out recently is that I think it's generational. Um. And 436 00:24:09,960 --> 00:24:12,560 Speaker 1: I think, you know, we can debate that with different 437 00:24:12,560 --> 00:24:16,280 Speaker 1: generations here on this podcast. UM. I think if you 438 00:24:16,480 --> 00:24:21,560 Speaker 1: were not around in two thousand and eight, Um, well, 439 00:24:21,600 --> 00:24:23,440 Speaker 1: if you were around in two thousand and eight, you're 440 00:24:23,520 --> 00:24:27,160 Speaker 1: you're you're wary because you've you've been through this before. 441 00:24:27,200 --> 00:24:29,679 Speaker 1: And as we said, it's not the same, it's not 442 00:24:29,760 --> 00:24:35,560 Speaker 1: as bad yet, but it could. It's too early to 443 00:24:35,560 --> 00:24:37,679 Speaker 1: give the all clear. It could get worse before it 444 00:24:37,680 --> 00:24:43,040 Speaker 1: gets better. You know. My theory, which I've grossed out 445 00:24:43,080 --> 00:24:44,679 Speaker 1: two of your colleagues, but I'm going to say it 446 00:24:44,680 --> 00:24:47,800 Speaker 1: again anyway, UM, is you know, if you see one, 447 00:24:47,960 --> 00:24:50,960 Speaker 1: if you see one cockroach, there's probably plenty more hiding 448 00:24:51,000 --> 00:24:54,199 Speaker 1: out of hiding, just out of sight. Um. And so 449 00:24:54,240 --> 00:24:57,200 Speaker 1: I think the older crowd, those who've those who've been 450 00:24:57,200 --> 00:25:00,440 Speaker 1: through a crisis like this, have that in the back 451 00:25:00,480 --> 00:25:02,119 Speaker 1: of their minds. And I was out to dinner with 452 00:25:02,160 --> 00:25:05,720 Speaker 1: some friends of mine a week ago. Um, you know, 453 00:25:06,200 --> 00:25:09,480 Speaker 1: and that was sort of the theory. You know, what 454 00:25:09,880 --> 00:25:14,440 Speaker 1: else is lurking out there? If you're younger, you've only 455 00:25:14,480 --> 00:25:17,880 Speaker 1: really ever lived through a period where the FED has 456 00:25:17,920 --> 00:25:22,479 Speaker 1: been your friend and where there's been no inflation. You know. 457 00:25:22,600 --> 00:25:24,520 Speaker 1: That's the part of that's the part of my main 458 00:25:24,600 --> 00:25:27,080 Speaker 1: thesis that that I think is still has to be 459 00:25:27,119 --> 00:25:32,480 Speaker 1: worked out, is that they're not the FED is at 460 00:25:32,520 --> 00:25:35,320 Speaker 1: every given turn, they're they're telling you that they're fighting 461 00:25:35,320 --> 00:25:40,640 Speaker 1: inflation first, and Powell told us that yesterday, and yet 462 00:25:41,440 --> 00:25:44,280 Speaker 1: and yet there's a certain amount of disbelief, and there's 463 00:25:44,280 --> 00:25:47,000 Speaker 1: certainly a big amount of disbelief in the FED funds futures, 464 00:25:48,119 --> 00:25:50,320 Speaker 1: which which I think we could bat'll merit its own 465 00:25:50,320 --> 00:25:54,760 Speaker 1: part of the conversation. But you know, generationally, you look 466 00:25:54,800 --> 00:25:57,280 Speaker 1: at anything that might look as the FED coming into 467 00:25:57,280 --> 00:26:01,600 Speaker 1: the market as Fed, you know, Fed easing this is good, 468 00:26:01,760 --> 00:26:04,680 Speaker 1: and like you said, it's it's tough to say it's 469 00:26:04,680 --> 00:26:07,439 Speaker 1: exactly the same thing. The Fed's not necessarily easing for 470 00:26:07,480 --> 00:26:10,440 Speaker 1: the best reasons, and it's not clear that they're really easing, 471 00:26:11,440 --> 00:26:14,760 Speaker 1: especially if they're raising rates at the same time. You know, 472 00:26:15,640 --> 00:26:18,520 Speaker 1: any investor who's sort of under forty, has never been 473 00:26:18,560 --> 00:26:22,480 Speaker 1: in a period where the FED has not been a tailwind, 474 00:26:22,760 --> 00:26:24,760 Speaker 1: with the exception of like a few months here and there, 475 00:26:25,840 --> 00:26:28,160 Speaker 1: And that's a very It's so I think you're getting 476 00:26:28,160 --> 00:26:32,000 Speaker 1: two very different mindsets at work. Um, not a bad thing, 477 00:26:32,040 --> 00:26:34,120 Speaker 1: but but it'll have to get resolved, you know, when 478 00:26:34,119 --> 00:26:36,280 Speaker 1: we find out if it gets in favored of the 479 00:26:36,880 --> 00:26:39,440 Speaker 1: younger set or the older set. And the problem also 480 00:26:39,640 --> 00:26:42,920 Speaker 1: is none of us, unless you're you know, unless you're 481 00:26:43,040 --> 00:26:47,600 Speaker 1: sort of in your seventies or older, have been investing 482 00:26:47,640 --> 00:26:51,520 Speaker 1: in a period where inflation was problematic. And so no 483 00:26:51,560 --> 00:26:54,280 Speaker 1: one knows what that playbook is like firsthand. You know, 484 00:26:54,320 --> 00:26:56,960 Speaker 1: I can talk about what the playbook was like firsthand 485 00:26:56,960 --> 00:26:59,880 Speaker 1: in twenty twenty, in two thousand and eight. I can't 486 00:27:00,000 --> 00:27:02,320 Speaker 1: talk about what the playbook was like in nineteen seventy eight, 487 00:27:02,359 --> 00:27:05,640 Speaker 1: nineteen seventy nine. And the historical data is not as 488 00:27:05,800 --> 00:27:08,119 Speaker 1: complete for back then. You know, it's it's hard to 489 00:27:08,600 --> 00:27:10,680 Speaker 1: even as if you're a quant to go back and 490 00:27:11,920 --> 00:27:14,760 Speaker 1: you know, parse it and pick it apart the way 491 00:27:14,760 --> 00:27:18,399 Speaker 1: you do with modern data. One note to listeners. We 492 00:27:18,440 --> 00:27:23,840 Speaker 1: are recording this episode on Thursday, March twenty third, So 493 00:27:24,359 --> 00:27:28,040 Speaker 1: keep that in mind when any references to yesterday and today. 494 00:27:28,080 --> 00:27:30,280 Speaker 1: In case I don't know, Voldana, maybe some people are 495 00:27:30,320 --> 00:27:32,439 Speaker 1: listening to this on Saturday night and they're having a 496 00:27:32,480 --> 00:27:35,840 Speaker 1: party and this is their soundtrack. I listened to podcast 497 00:27:35,880 --> 00:27:54,280 Speaker 1: on Saturday night. Yeah, yeah, I'm sure you do. But Steve, 498 00:27:54,359 --> 00:27:56,600 Speaker 1: I always love to sort of cut to the chase 499 00:27:56,680 --> 00:28:00,159 Speaker 1: here and get to the well. Man, Just tell me 500 00:28:00,200 --> 00:28:01,800 Speaker 1: what to do with my money right now? What are 501 00:28:01,800 --> 00:28:05,160 Speaker 1: you advising? What's the best way to position right now 502 00:28:05,240 --> 00:28:08,159 Speaker 1: the markets? I mean, you've got money market funds that 503 00:28:08,200 --> 00:28:12,280 Speaker 1: are finally sporting a yield that's three or four percent? 504 00:28:12,440 --> 00:28:18,680 Speaker 1: You know, is it cash? Is it you're excited about 505 00:28:18,720 --> 00:28:22,720 Speaker 1: long duration bonds? Is it defensive stocks? But what would 506 00:28:22,760 --> 00:28:25,560 Speaker 1: you be doing right now? I've tended toward risk averse, 507 00:28:25,640 --> 00:28:27,360 Speaker 1: which has meant that I've missed, you know, a lot 508 00:28:27,359 --> 00:28:30,560 Speaker 1: of the NASDAK move higher. I don't feel like I've 509 00:28:30,560 --> 00:28:32,600 Speaker 1: missed too much in terms of the SMP, you know, 510 00:28:32,640 --> 00:28:35,520 Speaker 1: in the SMP and the broader stuff. Let's go back 511 00:28:35,560 --> 00:28:37,880 Speaker 1: and think of what the theses have been for investing 512 00:28:37,920 --> 00:28:40,200 Speaker 1: over the last few years. Number One, don't fight the FED. 513 00:28:40,600 --> 00:28:42,440 Speaker 1: So what does that mean right now? Does that mean 514 00:28:42,600 --> 00:28:45,920 Speaker 1: loading up on risk? No, because the FED is not 515 00:28:46,400 --> 00:28:49,520 Speaker 1: your friend at this point, and whatever market friendly things 516 00:28:49,560 --> 00:28:54,000 Speaker 1: they may be doing now, it's crisis response, not true stimulus. 517 00:28:54,400 --> 00:28:57,600 Speaker 1: There is no alternative, Yes, there is, now there is. 518 00:28:58,320 --> 00:29:00,400 Speaker 1: I think we're in. The situation we're in is because 519 00:29:00,440 --> 00:29:03,240 Speaker 1: for so long there was no alternative. And so money, 520 00:29:03,320 --> 00:29:06,920 Speaker 1: you know, liquidity, like financial liquidity, is like real liquids. 521 00:29:06,760 --> 00:29:09,960 Speaker 1: It finds the lowest level. And we're still working through 522 00:29:10,000 --> 00:29:13,880 Speaker 1: a lot of liquidity that found the lowest level during 523 00:29:13,960 --> 00:29:19,200 Speaker 1: you know, during twenty twenty one, etc. Is the economy. 524 00:29:19,440 --> 00:29:22,480 Speaker 1: The economy is generally robust. Um, you know. I think 525 00:29:22,520 --> 00:29:24,800 Speaker 1: we can argue whether whether we're going to come in 526 00:29:24,880 --> 00:29:28,520 Speaker 1: for a soft landing or hard landing. My gut tells 527 00:29:28,560 --> 00:29:32,880 Speaker 1: me this probably doesn't end all that well. But the question, 528 00:29:32,920 --> 00:29:35,840 Speaker 1: of course is when, and the question is how much. Now. 529 00:29:35,880 --> 00:29:39,920 Speaker 1: I think it's great that on the job front um 530 00:29:40,040 --> 00:29:43,000 Speaker 1: things things are going along swimmingly. It's also not so terrible, 531 00:29:43,040 --> 00:29:44,960 Speaker 1: by the way, if you have a job to see 532 00:29:45,040 --> 00:29:48,720 Speaker 1: the fact that wages are are strong, Um, you know, 533 00:29:48,840 --> 00:29:52,120 Speaker 1: so it is that that, let me preface it that way. 534 00:29:52,440 --> 00:29:55,440 Speaker 1: But I think the problem you have now is you've 535 00:29:55,480 --> 00:29:58,080 Speaker 1: got a lot of you really have this this dissonant 536 00:29:58,680 --> 00:30:01,560 Speaker 1: factor going on. You've got stock markets happy because they 537 00:30:01,600 --> 00:30:05,680 Speaker 1: see the idea that rates might come down, But you 538 00:30:05,760 --> 00:30:08,360 Speaker 1: have to ask yourself, why are they going to come down? 539 00:30:09,640 --> 00:30:11,760 Speaker 1: The Fed, as we've mentioned in the dot plot, the 540 00:30:11,800 --> 00:30:14,000 Speaker 1: FED governors who have been saying all along, we don't 541 00:30:14,000 --> 00:30:16,000 Speaker 1: see any rate hikes through the end of the year, 542 00:30:16,360 --> 00:30:18,520 Speaker 1: pretty much said the same thing yesterday. The dot plot's 543 00:30:18,560 --> 00:30:21,560 Speaker 1: telling us, you know, rate cuts, rather, we're not cutting 544 00:30:21,640 --> 00:30:24,440 Speaker 1: rates by the end of the year. Yet at one 545 00:30:24,440 --> 00:30:26,760 Speaker 1: point at the end of the day, late in the day, 546 00:30:26,920 --> 00:30:30,440 Speaker 1: it's bounced back a little bit. The FED funds futures 547 00:30:30,520 --> 00:30:33,720 Speaker 1: for you know, for the for the January twenty four meeting, 548 00:30:33,760 --> 00:30:37,840 Speaker 1: we're showing three ninety nine. Yeah, that's a lot of cuts. 549 00:30:37,880 --> 00:30:40,760 Speaker 1: So ask yourself, what do we have to do to 550 00:30:40,800 --> 00:30:45,640 Speaker 1: get those cuts? More cockroaches? Well, that's kind of my worry. 551 00:30:45,920 --> 00:30:50,120 Speaker 1: Is nothing good unless we magically beat inflation, in which 552 00:30:50,120 --> 00:30:51,880 Speaker 1: case I still don't think the FED is going to 553 00:30:51,920 --> 00:30:54,800 Speaker 1: be racing to cut rates. You know, if if you've 554 00:30:54,840 --> 00:30:57,960 Speaker 1: just won the if you've just won the war, you're 555 00:30:58,000 --> 00:31:01,000 Speaker 1: not gonna start a new one, you know, which which 556 00:31:01,040 --> 00:31:03,320 Speaker 1: is what rate cutting would do if you just sort 557 00:31:03,320 --> 00:31:06,320 Speaker 1: of arbitrarily said, you know, let me just say this. 558 00:31:06,360 --> 00:31:11,080 Speaker 1: My pause does not mean pivot, you know, under normal circumstances. 559 00:31:11,120 --> 00:31:15,000 Speaker 1: So so otherwise, what we would need to be is 560 00:31:15,040 --> 00:31:17,000 Speaker 1: some sort you either have to have some sort of 561 00:31:17,000 --> 00:31:21,240 Speaker 1: financial accident or some sort of recession, neither of which 562 00:31:21,280 --> 00:31:24,200 Speaker 1: is particularly market friendly. So that to me is a 563 00:31:24,280 --> 00:31:28,040 Speaker 1: huge cognitive dissonance out there in terms of in terms 564 00:31:28,080 --> 00:31:31,520 Speaker 1: of what what's being priced in certain places, what's being 565 00:31:31,560 --> 00:31:35,320 Speaker 1: priced in in order to justify, you know, the rallies 566 00:31:35,320 --> 00:31:38,200 Speaker 1: we're having. If stocks are supposed to be looking six 567 00:31:38,240 --> 00:31:40,680 Speaker 1: to twelve months down the road, what are you looking at? 568 00:31:41,560 --> 00:31:44,840 Speaker 1: And that's that's the tricky part right now. Steve Sasnik, 569 00:31:45,000 --> 00:31:48,440 Speaker 1: chief strategist at Interactive Brokers. All right, Steve, Oh, we 570 00:31:48,480 --> 00:31:51,360 Speaker 1: can't let you go just yet. As a veteran of 571 00:31:51,400 --> 00:31:53,600 Speaker 1: the show, you know, we've got to hear about the 572 00:31:53,600 --> 00:31:56,160 Speaker 1: craziest thing you saw in markets. Well, Dotta, I have 573 00:31:56,200 --> 00:31:58,920 Speaker 1: a funny feeling we're all going to pick the same 574 00:31:58,960 --> 00:32:01,760 Speaker 1: crazy thing. So I'm gonna scoop us all and go first. 575 00:32:01,800 --> 00:32:05,200 Speaker 1: How about that? Yes, we often talk about these futures 576 00:32:05,240 --> 00:32:10,120 Speaker 1: contracts in the market, oil, soybeans, corn, whatever it is. 577 00:32:11,120 --> 00:32:13,760 Speaker 1: You don't often think about what it means to take 578 00:32:13,960 --> 00:32:17,760 Speaker 1: the livery of those contracts. And at the London Metal 579 00:32:17,760 --> 00:32:20,240 Speaker 1: Exchange they had a little bit of an issue on 580 00:32:20,280 --> 00:32:24,880 Speaker 1: that front. They announced they had canceled nine nickel contracts 581 00:32:25,120 --> 00:32:29,440 Speaker 1: worth about one point three million dollars after discovering quote 582 00:32:29,520 --> 00:32:34,160 Speaker 1: unquote irregularities. Now you know what the irregularities were. When 583 00:32:34,200 --> 00:32:37,200 Speaker 1: they went and looked at these bags of nickel, it 584 00:32:37,320 --> 00:32:41,520 Speaker 1: was just a bunch of bags of rocks. You we're 585 00:32:41,520 --> 00:32:43,280 Speaker 1: going to go with this story, which is why I 586 00:32:44,640 --> 00:32:50,040 Speaker 1: one of my favorite stories, uh ever, of JP Morgan 587 00:32:50,160 --> 00:32:53,880 Speaker 1: turned out to be the owner of I think at 588 00:32:53,920 --> 00:32:57,080 Speaker 1: least some of these nickel contracts. You know, whenever there's 589 00:32:57,280 --> 00:32:59,960 Speaker 1: a Nickel's crazy nickel story in the market, you can 590 00:33:00,120 --> 00:33:02,720 Speaker 1: on JP Morgan and the LM being at the center 591 00:33:02,760 --> 00:33:06,560 Speaker 1: of it. So I don't think they've figured out why 592 00:33:07,120 --> 00:33:10,000 Speaker 1: there were bags of rocks instead of bags of nickels. 593 00:33:10,040 --> 00:33:11,960 Speaker 1: But I'm dying to know. I wonder if I had 594 00:33:11,960 --> 00:33:13,800 Speaker 1: something to do with that short squeeze. I would love 595 00:33:13,840 --> 00:33:16,160 Speaker 1: to know who've found it, Like we found the bags 596 00:33:16,200 --> 00:33:19,680 Speaker 1: of rocks. Yeah, I don't know. There's there's so much 597 00:33:19,720 --> 00:33:22,320 Speaker 1: more we need to know about this period. Absolutely, I 598 00:33:22,320 --> 00:33:23,840 Speaker 1: mean the idea well, first of all, I mean, just 599 00:33:23,880 --> 00:33:26,080 Speaker 1: think of all the craziness. You know, when when nickel 600 00:33:26,120 --> 00:33:30,280 Speaker 1: prices were going insane. It would behoove some scammy person 601 00:33:30,400 --> 00:33:33,680 Speaker 1: to say, you know what if I just delivered about 602 00:33:33,720 --> 00:33:36,080 Speaker 1: what if I just you know what if I sell 603 00:33:36,160 --> 00:33:38,400 Speaker 1: short and you know, sell them and I got nothing 604 00:33:38,440 --> 00:33:41,280 Speaker 1: to live for, so you know, maybe maybe no one 605 00:33:41,280 --> 00:33:45,360 Speaker 1: will catch me and I wouldn't do it. Someone had 606 00:33:45,400 --> 00:33:48,520 Speaker 1: to sneak into this warehouse removed I don't know, or 607 00:33:48,520 --> 00:33:50,520 Speaker 1: maybe it came from the spire. Who knows. We'll have 608 00:33:50,520 --> 00:33:53,920 Speaker 1: to stay tuned and see how this all resolves itself. 609 00:33:53,920 --> 00:33:57,600 Speaker 1: Hopefully they figure out what happened. But I don't know. 610 00:33:58,040 --> 00:34:01,360 Speaker 1: One of my favorites. That's a good one. What do 611 00:34:01,360 --> 00:34:02,880 Speaker 1: you know you were gonna go with it? Okay? Mine 612 00:34:03,000 --> 00:34:08,120 Speaker 1: is not markets related. Okay, this is seriously, I'll happily 613 00:34:08,160 --> 00:34:10,120 Speaker 1: be a loser of this game this week because it 614 00:34:10,200 --> 00:34:13,239 Speaker 1: has absolutely nothing to do with anything. It's just it's 615 00:34:13,280 --> 00:34:15,480 Speaker 1: my favorite story of the week. It's a ninety year 616 00:34:15,480 --> 00:34:20,560 Speaker 1: old tortoise named Mister pickles. He's the new dad of three, 617 00:34:20,920 --> 00:34:25,359 Speaker 1: so he has three brand new tortoise babies and they're 618 00:34:25,440 --> 00:34:34,399 Speaker 1: named Dill Gerkin and Hella penyol Gert. He's ninety years 619 00:34:34,400 --> 00:34:38,680 Speaker 1: old and his wife is fifty three. I think why 620 00:34:39,640 --> 00:34:43,120 Speaker 1: wife is a generous term. I just really like this story. 621 00:34:43,120 --> 00:34:46,120 Speaker 1: And they're so small and extremely cute, and they can 622 00:34:46,200 --> 00:34:50,360 Speaker 1: fit like in the palm of your hand. They're so tiny. 623 00:34:51,239 --> 00:34:53,400 Speaker 1: All right, that's pretty good. You can't, I mean, nobody 624 00:34:53,400 --> 00:34:56,520 Speaker 1: can see. I'm looking at pictures. There's I'm sure there's 625 00:34:56,520 --> 00:34:59,160 Speaker 1: a market for I don't know, turtle meat, so maybe 626 00:34:59,280 --> 00:35:02,600 Speaker 1: maybe that's but oh my god. They're an endangered species. 627 00:35:03,080 --> 00:35:05,759 Speaker 1: And one of the reasons that Galapagos turtles are endangered 628 00:35:05,880 --> 00:35:07,719 Speaker 1: is because there was a market for it. Because if 629 00:35:07,760 --> 00:35:10,040 Speaker 1: you were sailing along and stuck in the Middle Pacific, 630 00:35:10,239 --> 00:35:13,000 Speaker 1: they would let Galapagos in Spanish means tortoise, and they 631 00:35:13,040 --> 00:35:15,759 Speaker 1: would land on the Galapagos islands, put a couple of 632 00:35:15,800 --> 00:35:18,600 Speaker 1: tortoises on the boat. They didn't need much care and feeding, 633 00:35:18,680 --> 00:35:22,280 Speaker 1: and you could feed your crew for months. That actually 634 00:35:22,360 --> 00:35:26,080 Speaker 1: is it's it's just you know, see, we see where 635 00:35:26,440 --> 00:35:28,439 Speaker 1: you brought the conversation, Mike. I know we were talking 636 00:35:28,440 --> 00:35:31,360 Speaker 1: about nice little turtles and I should were on there. Sorry, 637 00:35:31,640 --> 00:35:33,960 Speaker 1: these were This is how you become a chief strategist. 638 00:35:34,000 --> 00:35:36,160 Speaker 1: By the way, if you you know, you need a 639 00:35:36,200 --> 00:35:38,920 Speaker 1: meal on a boat, you know the Galapagos, Steve, Steve's 640 00:35:38,920 --> 00:35:41,120 Speaker 1: got you covered, not anymore if they're endangered. I wouldn't. 641 00:35:41,239 --> 00:35:44,520 Speaker 1: I wouldn't do that. How about you, Steve, what's the 642 00:35:44,560 --> 00:35:47,319 Speaker 1: craziest thing you saw? I came with two because I 643 00:35:47,360 --> 00:35:49,680 Speaker 1: figured one of you might beat me to the bag 644 00:35:49,719 --> 00:35:54,080 Speaker 1: of rock story. So mine is that perhaps the best 645 00:35:54,200 --> 00:35:59,400 Speaker 1: investment in markets right now is swag in defunct banks. 646 00:36:02,120 --> 00:36:04,319 Speaker 1: You know, as someone I know who still has a 647 00:36:04,360 --> 00:36:07,040 Speaker 1: Solomon Brothers rugby shirt and I think I have from 648 00:36:07,080 --> 00:36:10,560 Speaker 1: my summer intern days in La Rothschild umbrella still m 649 00:36:10,920 --> 00:36:14,960 Speaker 1: I know, from my default defunct securities firm swag And 650 00:36:15,040 --> 00:36:17,799 Speaker 1: apparently if you had, you know, apparently there was some 651 00:36:17,840 --> 00:36:21,040 Speaker 1: sort of credit squeeze hat that was very popular. Um 652 00:36:21,080 --> 00:36:23,600 Speaker 1: that's going for good money and they're not even defunct. 653 00:36:23,760 --> 00:36:27,919 Speaker 1: They're not even defunct, but SVB stuff, and so I think, 654 00:36:28,320 --> 00:36:30,800 Speaker 1: you know, the ebayers are having some fun with the swag, 655 00:36:30,920 --> 00:36:34,480 Speaker 1: and so that's I think that's financially market financial markets 656 00:36:34,480 --> 00:36:38,279 Speaker 1: related enough. Now, that's pretty good. Yeah, no, yeah, In fact, 657 00:36:38,360 --> 00:36:40,960 Speaker 1: I think that's been a consenter in the past, so 658 00:36:41,200 --> 00:36:43,960 Speaker 1: it's it's always good to revisit that market. I once 659 00:36:43,960 --> 00:36:46,440 Speaker 1: found an MF Global golf ball out on the course, 660 00:36:46,480 --> 00:36:48,719 Speaker 1: and I've meant to throw that up on eBay, but 661 00:36:48,760 --> 00:36:50,200 Speaker 1: I think I lost it. I have a country I 662 00:36:50,200 --> 00:36:52,440 Speaker 1: have a country wide that I that I found, and 663 00:36:52,480 --> 00:36:54,080 Speaker 1: I keep it in my golf bag just as a 664 00:36:54,120 --> 00:36:56,480 Speaker 1: reminder of, you know, what can go wrong on the 665 00:36:56,520 --> 00:37:02,239 Speaker 1: golf course too. It's a good metaphor. The takeaway at 666 00:37:02,280 --> 00:37:05,800 Speaker 1: the end of all of the of this segment always 667 00:37:06,000 --> 00:37:08,160 Speaker 1: is that it's good and it pays off to be 668 00:37:08,200 --> 00:37:12,719 Speaker 1: a hoarder. That's right, that's right, that's right. I'm hoping 669 00:37:12,760 --> 00:37:15,440 Speaker 1: one day my wife will listen and realize why I 670 00:37:16,040 --> 00:37:19,719 Speaker 1: heard so much stuff around here. But hey, you know, 671 00:37:19,960 --> 00:37:22,680 Speaker 1: take that free hat when you're at the conference, Vildanna, 672 00:37:22,719 --> 00:37:25,759 Speaker 1: you never know, you never know. I should go through 673 00:37:25,760 --> 00:37:30,319 Speaker 1: my crypto swag. Yeah, yeah, don't don't throw it out. 674 00:37:30,560 --> 00:37:35,640 Speaker 1: Don't throw it, throw everything out. Steve Sasnick of Interactive 675 00:37:35,680 --> 00:37:38,239 Speaker 1: Brokers always a pleasure to catch up with you, Steve. 676 00:37:38,280 --> 00:37:40,920 Speaker 1: Thanks so much, my pleasure, My pleasure. Bill Donna, thank 677 00:37:40,960 --> 00:37:43,640 Speaker 1: you so much for inviting me today. I can't remember. 678 00:37:43,719 --> 00:37:45,640 Speaker 1: I can't believe how fast at the timeline I hope 679 00:37:45,640 --> 00:37:47,680 Speaker 1: it went. It's fast for the listeners as it did 680 00:37:47,719 --> 00:37:58,880 Speaker 1: for me sitting here. We'll catch you next time What 681 00:37:59,000 --> 00:38:00,840 Speaker 1: Goes Up. We'll be back next next week and so 682 00:38:00,960 --> 00:38:03,239 Speaker 1: then you can find us on the Bloomberg Terminal website 683 00:38:03,239 --> 00:38:06,680 Speaker 1: and app, or wherever you get your podcasts. We'd love 684 00:38:06,680 --> 00:38:08,440 Speaker 1: it if you took the time to rate and review 685 00:38:08,520 --> 00:38:11,560 Speaker 1: the show on Apple Podcasts so more listeners can find us. 686 00:38:12,120 --> 00:38:15,200 Speaker 1: And you can find us on Twitter. Follow me at Reaganonymous. 687 00:38:15,800 --> 00:38:19,200 Speaker 1: Bill Donna Hirich is at Bildonna Hirich. You can also 688 00:38:19,239 --> 00:38:24,000 Speaker 1: follow Bloomberg Podcasts at Podcasts. What Goes Up is produced 689 00:38:24,000 --> 00:38:26,879 Speaker 1: by Stacy Wong. Thanks for listening, See you next time.