1 00:00:09,039 --> 00:00:12,760 Speaker 1: Hello, and welcome to another episode of the ad Thoughts Podcast. 2 00:00:12,800 --> 00:00:17,439 Speaker 1: I'm Tracy Alloway and I'm Joe wisent. Joe. I am very, 3 00:00:17,560 --> 00:00:20,880 Speaker 1: very excited about this episode because we are about to 4 00:00:20,920 --> 00:00:25,560 Speaker 1: embark on our second series here at Odd Lots. Our 5 00:00:25,640 --> 00:00:31,680 Speaker 1: first series was about financial crime and financial Shenanigan's right. Yeah, 6 00:00:31,760 --> 00:00:34,319 Speaker 1: it was great. You must remember it wasn't that long ago. 7 00:00:34,400 --> 00:00:36,400 Speaker 1: No no, no, no no, I no, I'm playing. Don't I 8 00:00:36,440 --> 00:00:39,320 Speaker 1: do remember it? It It was very fun um and I'm 9 00:00:39,360 --> 00:00:43,640 Speaker 1: excited about our new series. Yeah. So, in our grand 10 00:00:43,680 --> 00:00:47,839 Speaker 1: tradition I guess of dealing in the worst of human character, 11 00:00:48,080 --> 00:00:50,920 Speaker 1: we are going to be all about fear and greed 12 00:00:51,400 --> 00:00:54,480 Speaker 1: in our next series. We're gonna be talking about bubbles. 13 00:00:54,960 --> 00:00:57,440 Speaker 1: This is gonna be a great I'm really excited. Let's 14 00:00:57,440 --> 00:00:59,680 Speaker 1: just be honest. Bubbles are when markets are at the 15 00:00:59,720 --> 00:01:02,560 Speaker 1: most fun. I mean, there may be markets at their worst, 16 00:01:02,920 --> 00:01:07,040 Speaker 1: but when markets are just trading on pure emotion, fear 17 00:01:07,160 --> 00:01:12,360 Speaker 1: and greed, totally divorced from fundamentals. Panic, everyone wanted to 18 00:01:12,360 --> 00:01:15,319 Speaker 1: get rich. It's hard to argue that that isn't when 19 00:01:15,319 --> 00:01:18,440 Speaker 1: markets are there at their most interesting. No, I totally agree, 20 00:01:18,440 --> 00:01:19,920 Speaker 1: and you hit the nail on the head, because if 21 00:01:19,959 --> 00:01:24,319 Speaker 1: you think markets are reflection of human emotions and human nature, 22 00:01:24,760 --> 00:01:28,679 Speaker 1: then the extremes are probably the most interesting facets of that. 23 00:01:28,800 --> 00:01:30,640 Speaker 1: And I mean, I have to say the other thing 24 00:01:30,760 --> 00:01:33,120 Speaker 1: about bubbles, and I think the real reason that everyone 25 00:01:33,280 --> 00:01:37,000 Speaker 1: is always perpetually fascinated with them is that you can 26 00:01:37,160 --> 00:01:40,240 Speaker 1: get rich during the bubble if you can time it 27 00:01:40,280 --> 00:01:43,160 Speaker 1: perfectly right. And who doesn't want to get rich? So 28 00:01:43,200 --> 00:01:46,760 Speaker 1: what bubble are we starting with? Are we starting with today? 29 00:01:46,800 --> 00:01:50,200 Speaker 1: All right? We're going to start out with the quintessential bubble, 30 00:01:50,560 --> 00:01:53,800 Speaker 1: in my opinion, um, and that has to be the 31 00:01:54,160 --> 00:01:58,520 Speaker 1: sort of nineteen twenties stock bubble and the subsequent crash. 32 00:01:58,600 --> 00:02:01,160 Speaker 1: And we're also going to be discussed saying some other 33 00:02:01,400 --> 00:02:04,320 Speaker 1: stock market bubbles that happened along the way, including of 34 00:02:04,360 --> 00:02:09,040 Speaker 1: course seven and we might even get to two thousand seven, 35 00:02:09,080 --> 00:02:12,320 Speaker 1: two eight. I can't wait. I mean, obviously there's bubbles 36 00:02:12,320 --> 00:02:15,040 Speaker 1: in many things, in many things. We've had some episodes 37 00:02:15,040 --> 00:02:19,400 Speaker 1: in fact about bubbles, including beanie babies and catfish and 38 00:02:19,480 --> 00:02:22,440 Speaker 1: probably some others. But I do think that when people 39 00:02:22,480 --> 00:02:25,560 Speaker 1: think bubble, they probably first think stock market bubbles. So 40 00:02:25,600 --> 00:02:27,480 Speaker 1: I think, you know, the sort of some of the 41 00:02:27,560 --> 00:02:29,920 Speaker 1: history of the big ones in the United States is 42 00:02:29,919 --> 00:02:34,480 Speaker 1: a great way to start. We're starting out very very classical, alright. 43 00:02:34,520 --> 00:02:38,320 Speaker 1: So here with us to talk about various stock bubbles 44 00:02:38,560 --> 00:02:41,920 Speaker 1: is Scott Nations. Uh. He is the author of a 45 00:02:42,360 --> 00:02:46,280 Speaker 1: book called A History of the United States in five crashes, 46 00:02:46,360 --> 00:02:49,960 Speaker 1: stock market meltdowns that defined a nation. I actually know 47 00:02:50,120 --> 00:02:53,720 Speaker 1: him from his other job, which is president of Nations Shares. 48 00:02:53,919 --> 00:02:56,680 Speaker 1: It's a company that's been building a lot of indexes, 49 00:02:56,760 --> 00:03:00,919 Speaker 1: including some interesting volatility indexes, so we might even ask 50 00:03:01,000 --> 00:03:13,800 Speaker 1: him about those later in the show as well. Scott, 51 00:03:14,040 --> 00:03:16,400 Speaker 1: thanks so much for coming on. It's great to be here. 52 00:03:17,040 --> 00:03:19,680 Speaker 1: So Scott, you know your book I think is probably 53 00:03:19,720 --> 00:03:24,040 Speaker 1: the perfect one for us to begin this series. But 54 00:03:24,200 --> 00:03:26,600 Speaker 1: just to set the scene for us, I want to 55 00:03:26,639 --> 00:03:32,920 Speaker 1: start with crash. If you could pinpoint one thing that 56 00:03:33,120 --> 00:03:37,040 Speaker 1: sort of sparked the euphoria that led to that initial 57 00:03:37,160 --> 00:03:40,520 Speaker 1: nine twenties stock bubble, what would it be. It would 58 00:03:40,560 --> 00:03:43,160 Speaker 1: have to be a friendship. And I know that sounds goofy, 59 00:03:43,200 --> 00:03:45,560 Speaker 1: but it was a friendship between the head of the 60 00:03:45,600 --> 00:03:49,760 Speaker 1: Federal Reserve Bank in New York and the governor of 61 00:03:49,800 --> 00:03:53,320 Speaker 1: the Bank of England, and these two wonderful guys, Montague 62 00:03:53,360 --> 00:03:57,960 Speaker 1: Norman and Benjamin Strong had a wonderful friendship, and they 63 00:03:58,000 --> 00:04:00,040 Speaker 1: were trying to help each other, and in doing so, 64 00:04:00,200 --> 00:04:05,120 Speaker 1: Benjamin Strong kept interest rates in the United States ridiculously low. 65 00:04:05,240 --> 00:04:07,160 Speaker 1: It's not the first time the Fed has done that, 66 00:04:07,800 --> 00:04:10,800 Speaker 1: but he kept interest rates in the United States ridiculously low, 67 00:04:10,960 --> 00:04:14,080 Speaker 1: even lower than they had been during the emergency level 68 00:04:14,080 --> 00:04:17,839 Speaker 1: of World War One. And that is really what fed 69 00:04:17,880 --> 00:04:21,880 Speaker 1: the bubble that became the nineteen twenties and then ultimately 70 00:04:21,960 --> 00:04:25,440 Speaker 1: the nineteen nine crash. And it's it's easy to think 71 00:04:25,440 --> 00:04:30,320 Speaker 1: about these crashes in numbers, but their dramas. Each of 72 00:04:30,360 --> 00:04:32,000 Speaker 1: them is a drama. Each one of them is a 73 00:04:32,040 --> 00:04:35,720 Speaker 1: fascinating drama. And in nine it's a little bit like 74 00:04:35,760 --> 00:04:38,320 Speaker 1: the story of the Titanic. We know how it ends, 75 00:04:38,400 --> 00:04:43,000 Speaker 1: and it ends badly, but it's a fascinating story. I 76 00:04:43,040 --> 00:04:45,440 Speaker 1: don't want to skip ahead to another bubble, so I'm 77 00:04:45,480 --> 00:04:48,000 Speaker 1: not going to. But in when when I've read about 78 00:04:48,000 --> 00:04:52,560 Speaker 1: the nineteen twenties, something that struck me was, you know, 79 00:04:52,880 --> 00:04:56,200 Speaker 1: analogies to the late nineties bubble, because in addition to 80 00:04:56,240 --> 00:04:59,280 Speaker 1: the good financial conditions you characterized, there were a lot 81 00:04:59,320 --> 00:05:03,719 Speaker 1: of genuine, the genuine reasons to be excited about things. 82 00:05:03,760 --> 00:05:07,120 Speaker 1: It was peace, There was the increasing wide spreadness of 83 00:05:07,160 --> 00:05:12,680 Speaker 1: the automobile, the radio, the new communications technology was taking off. 84 00:05:13,040 --> 00:05:16,000 Speaker 1: But there was just a all kinds of non financial 85 00:05:16,000 --> 00:05:19,440 Speaker 1: reasons for people to start start to get excited. Absolutely 86 00:05:19,640 --> 00:05:22,520 Speaker 1: all of Europe had been devastated by World War One. 87 00:05:23,320 --> 00:05:28,680 Speaker 1: The American industrial base had been untouched. People were buying automobiles. 88 00:05:28,760 --> 00:05:32,520 Speaker 1: There was another invention, relatively new invention that everybody had 89 00:05:32,560 --> 00:05:35,719 Speaker 1: to have. It was the radio. Our ci a Radio 90 00:05:35,800 --> 00:05:39,239 Speaker 1: Corporation of America started the decade as a two dollar 91 00:05:39,360 --> 00:05:42,919 Speaker 1: stock and after splits it into the decade while almost 92 00:05:42,920 --> 00:05:46,800 Speaker 1: into the decade at about five seventy dollars, So you're 93 00:05:46,839 --> 00:05:50,640 Speaker 1: absolutely right. Everybody felt great about America and America's place 94 00:05:50,680 --> 00:05:54,440 Speaker 1: in the world. Interest rates were low. The Treasury had 95 00:05:54,480 --> 00:05:58,120 Speaker 1: also made the country a country of investors by selling 96 00:05:58,160 --> 00:06:02,799 Speaker 1: them war bonds, and that bled into them buying stocks 97 00:06:02,800 --> 00:06:05,679 Speaker 1: once the war was over. So you have this mix 98 00:06:05,680 --> 00:06:10,320 Speaker 1: of low interest rates, relatively positive economic growth, a lot 99 00:06:10,360 --> 00:06:15,640 Speaker 1: of optimism about the future of fairly steady geopolitical landscape. 100 00:06:15,960 --> 00:06:19,360 Speaker 1: When did the wheels start to come off and what 101 00:06:19,400 --> 00:06:24,039 Speaker 1: were the signs that trouble was potentially ahead. Unfortunately, in 102 00:06:24,120 --> 00:06:28,520 Speaker 1: nine we really didn't get any clues until very late 103 00:06:28,600 --> 00:06:31,760 Speaker 1: in the game. There were certainly some people that were worried, 104 00:06:32,520 --> 00:06:36,440 Speaker 1: but it wasn't really until September of nineteen nine that 105 00:06:36,520 --> 00:06:40,280 Speaker 1: people started to worry and and and talk about their 106 00:06:40,320 --> 00:06:43,919 Speaker 1: worry out loud. The striking thing about each of the 107 00:06:43,960 --> 00:06:46,800 Speaker 1: five crashes that I talked about is that each has 108 00:06:46,839 --> 00:06:50,560 Speaker 1: a catalyst that has very little to do often very 109 00:06:50,600 --> 00:06:54,359 Speaker 1: little or nothing to do with finance. And it had 110 00:06:54,400 --> 00:06:56,360 Speaker 1: a little to do with finance. There was a fraud 111 00:06:56,400 --> 00:06:59,960 Speaker 1: ster in London by the name of Clarence Hatchery who 112 00:07:00,440 --> 00:07:05,479 Speaker 1: uh simply started counterfeiting stock certificates and in a day 113 00:07:05,480 --> 00:07:10,040 Speaker 1: when everything was on paper, he managed to completely undermine 114 00:07:10,160 --> 00:07:13,080 Speaker 1: the stock market. And he wasn't found out until September 115 00:07:13,120 --> 00:07:18,040 Speaker 1: of nine, and that's when the wheels tracing your in 116 00:07:18,040 --> 00:07:21,320 Speaker 1: your phrase really started coming off. One thing I like 117 00:07:21,440 --> 00:07:25,680 Speaker 1: about crashes is it really is, I think impossible to 118 00:07:25,880 --> 00:07:28,480 Speaker 1: pinpoint what caused the crash because you can point to 119 00:07:28,560 --> 00:07:32,080 Speaker 1: a million things. I know one of the is so minor, 120 00:07:32,160 --> 00:07:34,400 Speaker 1: but I think, uh, one of the things people point 121 00:07:34,440 --> 00:07:39,520 Speaker 1: to was some regulator in Massachusetts preventing a utility company 122 00:07:39,680 --> 00:07:43,880 Speaker 1: stock from splitting, the most minor thing in the world. 123 00:07:43,960 --> 00:07:47,560 Speaker 1: But it freaked out utility investors, pointing to if this 124 00:07:47,720 --> 00:07:51,160 Speaker 1: one minor regulatory body in Massachusetts can freak out investors, 125 00:07:51,160 --> 00:07:54,200 Speaker 1: how fragile the whole edifice. Because you make a great point. 126 00:07:54,320 --> 00:08:00,480 Speaker 1: Until then, this financial regulator had allowed any any utility 127 00:08:00,480 --> 00:08:03,440 Speaker 1: that wanted to split its stock. They had allowed them 128 00:08:03,520 --> 00:08:06,520 Speaker 1: to do so. Uh. They were essentially a rubber stamp. 129 00:08:06,560 --> 00:08:09,920 Speaker 1: But then a utility in Massachusetts came to home and said, 130 00:08:09,960 --> 00:08:12,560 Speaker 1: we'd like to split our stock for for one their 131 00:08:12,600 --> 00:08:16,560 Speaker 1: reason was because it's the fashion of the day. No 132 00:08:16,600 --> 00:08:18,720 Speaker 1: more reason than that, it's the fashion of the day. 133 00:08:18,760 --> 00:08:21,360 Speaker 1: And finally the regulator had had enough and they said, nope, 134 00:08:21,720 --> 00:08:26,720 Speaker 1: your stock is already trading much higher than any intrinsic value. 135 00:08:27,080 --> 00:08:29,400 Speaker 1: If we allow you to split, it will get even worse. 136 00:08:29,800 --> 00:08:31,680 Speaker 1: And this is our line in the sand. And was 137 00:08:31,760 --> 00:08:34,839 Speaker 1: finally somebody who had said, somebody, an authority who had 138 00:08:34,880 --> 00:08:37,800 Speaker 1: said this is not right and this needs to stop. 139 00:08:37,920 --> 00:08:41,720 Speaker 1: I love the idea that maybe a regulator in Massachusetts 140 00:08:41,720 --> 00:08:45,800 Speaker 1: of utility companies could possibly be responsible for the stock 141 00:08:45,880 --> 00:08:49,319 Speaker 1: market crash on the subsequent create depression. Well, they they 142 00:08:49,360 --> 00:08:52,440 Speaker 1: certainly helped. They certainly helped things on their way. Okay, 143 00:08:52,480 --> 00:08:56,640 Speaker 1: so you get these sort of idiosyncratic things happening and 144 00:08:56,679 --> 00:09:00,680 Speaker 1: people start to get a little bit nervous and stocks, uh, 145 00:09:00,720 --> 00:09:04,600 Speaker 1: I guess they really start coming down on Black Tuesday, right, 146 00:09:04,640 --> 00:09:07,000 Speaker 1: I always got it mixed up with Black Thursday. But 147 00:09:07,040 --> 00:09:10,360 Speaker 1: Black Tuesday was the first big drop, is that right? Well, 148 00:09:10,360 --> 00:09:13,520 Speaker 1: there were two, there were two nearly identical drops. They 149 00:09:13,800 --> 00:09:17,200 Speaker 1: and the twenty nine that it actually started just after 150 00:09:17,320 --> 00:09:20,760 Speaker 1: Labor Day, that was the day after Labor Day was 151 00:09:20,960 --> 00:09:24,280 Speaker 1: the peak of the market. But you're right, the twenty 152 00:09:24,360 --> 00:09:27,559 Speaker 1: ninth of October when the market both of those days, 153 00:09:27,600 --> 00:09:29,280 Speaker 1: the market was down about twelve and a half or 154 00:09:31,000 --> 00:09:34,000 Speaker 1: that's when it that's when it really really really got bad. 155 00:09:35,120 --> 00:09:38,240 Speaker 1: So how do people how are people reacting in that 156 00:09:38,280 --> 00:09:42,560 Speaker 1: time period, because whenever we see stocks drop nowadays, you know, 157 00:09:42,600 --> 00:09:45,600 Speaker 1: we always get the chorus of people talking about how 158 00:09:45,640 --> 00:09:49,440 Speaker 1: this is a healthy correction, to use the cliche. I 159 00:09:49,480 --> 00:09:54,160 Speaker 1: wonder if the same thing happened in I don't think 160 00:09:54,200 --> 00:09:57,640 Speaker 1: people understood, well, certainly people didn't recognize what the nineteen 161 00:09:57,720 --> 00:09:59,600 Speaker 1: thirties were gonna look like and there's no way they 162 00:09:59,640 --> 00:10:01,880 Speaker 1: could a I think what they were doing was they 163 00:10:01,880 --> 00:10:04,080 Speaker 1: were looking back to what had happened in nineteen o seven. 164 00:10:04,120 --> 00:10:06,360 Speaker 1: The panic of nineteen o seven is the first crash 165 00:10:06,400 --> 00:10:09,040 Speaker 1: I talked about, and that was a panic, and each 166 00:10:09,040 --> 00:10:11,760 Speaker 1: of the each of the crashes have heroes and villains. 167 00:10:12,280 --> 00:10:15,520 Speaker 1: The hero in nineteen o seven was undeniably JP Morgan, 168 00:10:15,600 --> 00:10:18,040 Speaker 1: and I mean the man, not the bank, because he 169 00:10:18,240 --> 00:10:22,120 Speaker 1: nearly single handedly stopped the crash. Well. In nineteen there 170 00:10:22,200 --> 00:10:24,480 Speaker 1: were a bunch of financiers who thought that they could 171 00:10:24,520 --> 00:10:27,440 Speaker 1: be the modern day JP Morgan, and they tried to 172 00:10:27,480 --> 00:10:30,400 Speaker 1: do that. They tried to step in, raise some capital, 173 00:10:30,640 --> 00:10:33,960 Speaker 1: buy some stocks, and so I think that for most 174 00:10:34,120 --> 00:10:39,720 Speaker 1: of October of nine, I think most people thought this 175 00:10:39,840 --> 00:10:42,559 Speaker 1: is bad, but it will stop and then we'll go 176 00:10:42,600 --> 00:10:45,040 Speaker 1: back up and it will be like every other break 177 00:10:45,280 --> 00:10:48,040 Speaker 1: that we've had in the market. They didn't realize that 178 00:10:48,240 --> 00:10:50,360 Speaker 1: they were going to end up making things worse than 179 00:10:50,400 --> 00:10:51,960 Speaker 1: it was going to get. As bad as it did, 180 00:10:52,520 --> 00:10:54,520 Speaker 1: I feel like we could actually probably just do the 181 00:10:54,559 --> 00:10:59,400 Speaker 1: whole episode one because it's so rich and we should 182 00:10:59,400 --> 00:11:02,200 Speaker 1: move on to and one other right nugget I really 183 00:11:02,240 --> 00:11:04,360 Speaker 1: like from it I remember during the two thousand and 184 00:11:04,360 --> 00:11:06,839 Speaker 1: eight crash. You know, there was that famous um Warren 185 00:11:06,880 --> 00:11:09,040 Speaker 1: Buffett up ed in the New York Times. I think 186 00:11:09,040 --> 00:11:11,400 Speaker 1: he's like, buy stocks. I know I am. And there 187 00:11:11,440 --> 00:11:14,920 Speaker 1: was something similar. John Rockefeller had did a similar thing. 188 00:11:14,960 --> 00:11:16,880 Speaker 1: He sort of came out of seclusion. He's like, I'm 189 00:11:16,920 --> 00:11:19,400 Speaker 1: buying American shares. It's a good it's a good deal. 190 00:11:19,600 --> 00:11:22,560 Speaker 1: Like all these attempts by the sort of business legends 191 00:11:22,559 --> 00:11:25,800 Speaker 1: to just instill confidence with their words alone. Well, John D. 192 00:11:25,920 --> 00:11:29,760 Speaker 1: Rockefeller in nine said my son and I are buying stocks. 193 00:11:30,320 --> 00:11:33,920 Speaker 1: And he at the time he mentioned some outlandish number 194 00:11:34,000 --> 00:11:37,959 Speaker 1: he had spent, a number that only Jape that that 195 00:11:38,120 --> 00:11:41,920 Speaker 1: Rockefeller could spend. But for the most part, people weren't 196 00:11:41,960 --> 00:11:47,480 Speaker 1: really afraid in a way that that Rockefeller could could calm. 197 00:11:47,520 --> 00:11:50,520 Speaker 1: I mean they were, they were They ultimately were really afraid. 198 00:11:50,559 --> 00:11:52,880 Speaker 1: They were afraid that they were gonna lose everything. Yeah, 199 00:11:52,960 --> 00:11:55,280 Speaker 1: And it's funny we still see that happening. I mean 200 00:11:55,320 --> 00:11:57,200 Speaker 1: all the way up to two thousand and eight, when 201 00:11:57,320 --> 00:12:00,400 Speaker 1: Warren Buffett came in and invested in Goldman Sack Shares, 202 00:12:00,480 --> 00:12:03,800 Speaker 1: a right in the middle of the banking crisis. I 203 00:12:03,840 --> 00:12:06,200 Speaker 1: have a feeling that Joe wants to move on to 204 00:12:06,600 --> 00:12:10,120 Speaker 1: a later stock market bubble and crash, and that would 205 00:12:10,160 --> 00:12:14,480 Speaker 1: be the events of night seven. That sounds good, Let's 206 00:12:14,480 --> 00:12:20,400 Speaker 1: talk about eight seven. Um, you know, uh, Well, it's 207 00:12:20,440 --> 00:12:23,520 Speaker 1: interesting because we hear so much about quants these days, 208 00:12:23,559 --> 00:12:25,960 Speaker 1: and people are sort of nervous that the quant machine 209 00:12:26,559 --> 00:12:29,160 Speaker 1: are going to malfunction. We're gonna get this like wave 210 00:12:29,280 --> 00:12:33,040 Speaker 1: of uncontrollable selling from computers and everything's gonna melt down. 211 00:12:34,480 --> 00:12:38,480 Speaker 1: Seven was kind of a precursor to these fears. It's 212 00:12:38,520 --> 00:12:41,720 Speaker 1: interesting there. The five crashes that I discussed pan more. 213 00:12:42,440 --> 00:12:46,800 Speaker 1: They span more than a century, but each one is 214 00:12:47,040 --> 00:12:50,439 Speaker 1: abetted by some sort of I call and financial contraption 215 00:12:51,240 --> 00:12:54,839 Speaker 1: that is new, it's novel, it's poorly understood, and it's 216 00:12:54,920 --> 00:13:00,000 Speaker 1: untested under stress. And in seven, probably the prototypical contract 217 00:13:00,000 --> 00:13:04,280 Speaker 1: option was portfolio insurance. It seemed like a like an 218 00:13:04,400 --> 00:13:08,079 Speaker 1: ingenious invention by a couple of academics at cal Berkeley, 219 00:13:08,200 --> 00:13:10,920 Speaker 1: and it was a way they way they expressed it 220 00:13:10,960 --> 00:13:15,600 Speaker 1: as a way for investors, institutional investors to make certain 221 00:13:15,600 --> 00:13:19,720 Speaker 1: that their stock portfolio never fell below a certain value. 222 00:13:19,760 --> 00:13:23,920 Speaker 1: It required regular regimented selling of stocks as they fell. 223 00:13:24,600 --> 00:13:27,360 Speaker 1: The problem is that we and we know now we 224 00:13:27,400 --> 00:13:31,120 Speaker 1: should have known then that when we demand liquidity is 225 00:13:31,160 --> 00:13:36,760 Speaker 1: when it evaporates. And that's what happened. It was the typical, prototypical, 226 00:13:36,840 --> 00:13:40,319 Speaker 1: really financial contraption. The interesting thing is that in the 227 00:13:40,360 --> 00:13:46,320 Speaker 1: worst of the crash, of the guys that had created 228 00:13:46,360 --> 00:13:50,520 Speaker 1: this Leland, O'Brien and Rubinstein were running a business that 229 00:13:50,520 --> 00:13:55,640 Speaker 1: would sell futures to affect this insurance, and their trader, 230 00:13:55,760 --> 00:14:01,520 Speaker 1: at one point on October seven, refused to sell anymore futures. 231 00:14:01,559 --> 00:14:04,480 Speaker 1: His quote was, if I sell all the futures that 232 00:14:04,600 --> 00:14:07,720 Speaker 1: I'm supposed to, I'm certain I will drive the market 233 00:14:07,800 --> 00:14:12,120 Speaker 1: to zero. Wow. So did he save the world. Well, 234 00:14:12,120 --> 00:14:14,400 Speaker 1: I'm not sorry he saved the world, but he he 235 00:14:14,679 --> 00:14:18,120 Speaker 1: helped stop the bleeding. If somebody saved the world, it 236 00:14:18,200 --> 00:14:21,240 Speaker 1: might it might have been Alan Greenspan the next morning 237 00:14:21,280 --> 00:14:26,680 Speaker 1: with a wonderfully terse um comment that consistent with its 238 00:14:27,040 --> 00:14:29,440 Speaker 1: position is the Central Bank, the FED is ready to 239 00:14:29,600 --> 00:14:33,800 Speaker 1: essentially give anybody anything they want. And then the Federal 240 00:14:33,840 --> 00:14:37,040 Speaker 1: Reserve got on the line with banks and said we'll 241 00:14:37,080 --> 00:14:40,600 Speaker 1: give you anything you want. Now I don't I'm worried 242 00:14:40,640 --> 00:14:43,000 Speaker 1: we're cheating a little bit here because we talked about 243 00:14:43,040 --> 00:14:47,840 Speaker 1: the crash of but this is the bubble series. Was 244 00:14:47,920 --> 00:14:52,120 Speaker 1: their exuberance? What was the pre October seven vibe in 245 00:14:52,160 --> 00:14:55,560 Speaker 1: the market where people are just thinking that things would 246 00:14:55,560 --> 00:14:58,280 Speaker 1: just go straight up? Exuberance doesn't even begin to cover it. 247 00:14:58,800 --> 00:15:02,680 Speaker 1: The first thirteen days, the doll did something it had 248 00:15:02,720 --> 00:15:04,560 Speaker 1: never done before and it has never done since. It 249 00:15:04,600 --> 00:15:07,840 Speaker 1: gained thirteen straight days in a row. At the market's 250 00:15:07,880 --> 00:15:11,200 Speaker 1: top in August, it was up forty three for the year. 251 00:15:11,600 --> 00:15:13,400 Speaker 1: I think that would have made it the sixth or 252 00:15:13,440 --> 00:15:16,200 Speaker 1: the eighth best year ever if it could have just 253 00:15:16,280 --> 00:15:19,760 Speaker 1: held onto that. So exuberance doesn't even begin to describe it. 254 00:15:20,280 --> 00:15:23,080 Speaker 1: Much of it was a function of corporate raiders who 255 00:15:23,120 --> 00:15:28,600 Speaker 1: had started to recognize the unrecognized value previously unrecognized value 256 00:15:28,600 --> 00:15:30,600 Speaker 1: and a lot of stocks, and they were buying them up. 257 00:15:31,000 --> 00:15:33,520 Speaker 1: And so we gotten into a situation where everybody felt 258 00:15:33,560 --> 00:15:36,800 Speaker 1: like they could buy a stock confident that some raider 259 00:15:36,840 --> 00:15:39,600 Speaker 1: would come along and bid it even higher. Yeah. Really, 260 00:15:39,680 --> 00:15:44,320 Speaker 1: the era of greed is good. To Joe's earlier point, 261 00:15:44,680 --> 00:15:47,200 Speaker 1: I'm wondering, you know, nowadays we talk a lot about 262 00:15:47,200 --> 00:15:50,840 Speaker 1: the potential for quant funds or systematic funds or risk 263 00:15:50,920 --> 00:15:54,040 Speaker 1: parity funds to spark a broad sell off in the 264 00:15:54,160 --> 00:16:00,040 Speaker 1: style of portfolio insurance in the eighties. Was anyone talking 265 00:16:00,080 --> 00:16:03,040 Speaker 1: about the risks of portfolio insurance or you know, the 266 00:16:03,120 --> 00:16:06,840 Speaker 1: downsides of black shoals before it actually happened. Even the 267 00:16:06,880 --> 00:16:11,640 Speaker 1: inventors of portfolio insurance realized that it had some limitations 268 00:16:11,880 --> 00:16:14,040 Speaker 1: when they go into when they went into sales meetings, 269 00:16:14,040 --> 00:16:17,720 Speaker 1: they would say that this will work until something like 270 00:16:17,800 --> 00:16:21,200 Speaker 1: in the analogy they used was the Soviets invade Iran. 271 00:16:22,120 --> 00:16:24,040 Speaker 1: There were some other people who were talking about it, 272 00:16:24,120 --> 00:16:26,560 Speaker 1: but you really had to be pretty geeky in order 273 00:16:26,600 --> 00:16:30,160 Speaker 1: to have gotten that message. It was actually precisely a 274 00:16:30,160 --> 00:16:33,400 Speaker 1: week before the crash that an article appeared in the 275 00:16:33,440 --> 00:16:38,600 Speaker 1: Wall Street Journal by Beatrice Garcia that really introduced people 276 00:16:38,640 --> 00:16:44,440 Speaker 1: to the fear of portfolio insurance. Alright, I want to 277 00:16:44,560 --> 00:16:48,200 Speaker 1: uh skip ahead to actually what I think is. I 278 00:16:48,240 --> 00:16:50,560 Speaker 1: don't know if it's my favorite crash, but it's the 279 00:16:50,560 --> 00:16:52,640 Speaker 1: one that I feel like I know the best because 280 00:16:52,880 --> 00:16:54,640 Speaker 1: I sort of came of age during it, and that 281 00:16:54,800 --> 00:16:58,560 Speaker 1: is the late nineties bubble. As a student in high school. 282 00:16:59,000 --> 00:17:01,440 Speaker 1: I got really tessed with the market then and I 283 00:17:01,480 --> 00:17:04,240 Speaker 1: think it is a good chance that due to that 284 00:17:04,320 --> 00:17:06,920 Speaker 1: timing is the reason I'm in financial media today because 285 00:17:06,920 --> 00:17:10,920 Speaker 1: I just found the whole thing, uh fascinating. What in 286 00:17:10,960 --> 00:17:14,440 Speaker 1: your when did that bubble start? In your view, that's 287 00:17:14,440 --> 00:17:17,359 Speaker 1: a great question. Once I don't talk about what happened 288 00:17:17,400 --> 00:17:19,879 Speaker 1: in two thousand, two thousand, two thousand and two in 289 00:17:19,920 --> 00:17:22,040 Speaker 1: my book. I don't consider that quite a crash. It 290 00:17:22,640 --> 00:17:27,080 Speaker 1: took place over actually several years. It had several down legs, 291 00:17:27,240 --> 00:17:29,760 Speaker 1: first of all, starting in March up two thousand and 292 00:17:29,760 --> 00:17:34,280 Speaker 1: then with nine eleven. Uh. But when did when did 293 00:17:34,320 --> 00:17:38,320 Speaker 1: the bubble of of the es start? I think it 294 00:17:38,400 --> 00:17:41,639 Speaker 1: would have to I look at it as something that 295 00:17:41,760 --> 00:17:45,600 Speaker 1: started with the the Apple Super Bowl ad that ran 296 00:17:45,720 --> 00:17:49,360 Speaker 1: one time, because that really started to put the personal 297 00:17:49,359 --> 00:17:53,719 Speaker 1: computer and personal technology front and center in people's thinking. 298 00:17:54,160 --> 00:17:58,480 Speaker 1: And that's I think when that market really started taking off. 299 00:17:59,720 --> 00:18:04,880 Speaker 1: I've conceptual question, which is, uh, you know, after bubbles burst, 300 00:18:05,320 --> 00:18:08,800 Speaker 1: we always talk about the pricing is having been irrational, 301 00:18:09,400 --> 00:18:13,440 Speaker 1: But the run up to all these bubbles actually often 302 00:18:14,119 --> 00:18:18,840 Speaker 1: has a rational explanation. There's usually a narrative to accompany it, right, Oh, yeah, 303 00:18:18,840 --> 00:18:25,440 Speaker 1: there's always an explanation. Unfortunately, So in terms of those explanations, 304 00:18:25,480 --> 00:18:28,320 Speaker 1: I mean, what is it about human nature that we 305 00:18:28,440 --> 00:18:32,360 Speaker 1: always buy into those explanations and we're never more skeptical 306 00:18:32,600 --> 00:18:36,080 Speaker 1: of the story that we're hearing. It's a phrase that 307 00:18:36,119 --> 00:18:40,280 Speaker 1: we've used before, and the phrases it's different this time. 308 00:18:40,359 --> 00:18:44,560 Speaker 1: It is so easy to convince ourselves that it is 309 00:18:44,640 --> 00:18:50,520 Speaker 1: different this time in we had not really seen we've 310 00:18:50,560 --> 00:18:55,720 Speaker 1: seen a single modern stock market crash in nine seven. 311 00:18:56,440 --> 00:18:59,119 Speaker 1: In seven, it had been so long since we've had 312 00:18:59,119 --> 00:19:03,040 Speaker 1: a crash fifty years that I think people just forgot 313 00:19:03,080 --> 00:19:05,000 Speaker 1: that they could happen, and they thought we are much 314 00:19:05,080 --> 00:19:09,919 Speaker 1: more sophisticated, much smarter now than we were then. I 315 00:19:09,960 --> 00:19:13,280 Speaker 1: think it's just the hubrists of humankind where we just 316 00:19:13,359 --> 00:19:16,639 Speaker 1: think we're smarter and it's different this time. I have 317 00:19:16,680 --> 00:19:21,120 Speaker 1: another human nature question, and it concerns the post crisis period, 318 00:19:21,640 --> 00:19:25,000 Speaker 1: because since two thousand and nine, we've essentially been in 319 00:19:25,040 --> 00:19:28,960 Speaker 1: this NonStop bowl market. Uh, there's been a few blips 320 00:19:28,960 --> 00:19:33,600 Speaker 1: along the way. That being said, throughout this rally, numerous 321 00:19:33,600 --> 00:19:35,960 Speaker 1: people have been talking about bubbles or the crash is 322 00:19:35,960 --> 00:19:39,359 Speaker 1: going to come back anytime soon, and so in a way, 323 00:19:39,680 --> 00:19:42,800 Speaker 1: rather than this period being characterized as care freeness are 324 00:19:42,840 --> 00:19:46,160 Speaker 1: buying into a new story. There's been this underlying deep 325 00:19:46,200 --> 00:19:49,320 Speaker 1: pessimism that's prevented a lot of people from actually participating 326 00:19:49,320 --> 00:19:52,440 Speaker 1: in this rally, and this belief that the next two 327 00:19:52,440 --> 00:19:55,160 Speaker 1: thousand and eight could happen any minute from now. Well, 328 00:19:55,200 --> 00:19:57,479 Speaker 1: and a lot of those people have something that they 329 00:19:57,600 --> 00:19:59,560 Speaker 1: want to sell, and they want to sell you a 330 00:19:59,600 --> 00:20:01,919 Speaker 1: news utter. They think that you should be buying gold 331 00:20:02,000 --> 00:20:04,440 Speaker 1: or whatever. But I think you make a great point, 332 00:20:04,480 --> 00:20:07,000 Speaker 1: and that is, if there's so much skepticism, it's hard 333 00:20:07,040 --> 00:20:09,440 Speaker 1: to think that we're going to have a crash. Now 334 00:20:09,480 --> 00:20:12,480 Speaker 1: we know the market can pull back substantially. Nobody is 335 00:20:12,520 --> 00:20:15,960 Speaker 1: saying that it can't. But with interest rates as low 336 00:20:16,000 --> 00:20:18,800 Speaker 1: as they are, if interest rates would go substantially higher 337 00:20:18,840 --> 00:20:21,639 Speaker 1: over the next couple of years, uh, in, the market 338 00:20:21,680 --> 00:20:23,760 Speaker 1: could very well be in trouble. But I I just 339 00:20:23,800 --> 00:20:26,320 Speaker 1: think that you're absolutely right. There's so much skepticism that 340 00:20:26,359 --> 00:20:28,120 Speaker 1: it's tough to think we're really going to get say, 341 00:20:28,160 --> 00:20:32,480 Speaker 1: bubble shous. There's skepticism. But on the other hand, uh, 342 00:20:32,560 --> 00:20:35,200 Speaker 1: you know, I really like the way city analysts once 343 00:20:35,240 --> 00:20:38,119 Speaker 1: phrased or once characterized a bubble. They said it was 344 00:20:38,200 --> 00:20:41,359 Speaker 1: something that I get fired for not owning. And in 345 00:20:41,400 --> 00:20:44,239 Speaker 1: that sense, you can complain about valuations as much as 346 00:20:44,280 --> 00:20:46,680 Speaker 1: you want, but if you have to invest money, well, 347 00:20:46,840 --> 00:20:49,359 Speaker 1: then you have to put it somewhere other than cash. 348 00:20:49,400 --> 00:20:52,680 Speaker 1: And so it's either going into stocks or credit. Um. 349 00:20:52,720 --> 00:20:56,359 Speaker 1: But Scott to uh, to Joe's point, if there was 350 00:20:56,560 --> 00:21:01,199 Speaker 1: one thing that you could pinpoint as a suspicious sign 351 00:21:01,480 --> 00:21:04,600 Speaker 1: when it comes to identifying a true bubble, what would 352 00:21:04,640 --> 00:21:08,840 Speaker 1: it be? That's a great question. I in my experience, 353 00:21:08,880 --> 00:21:12,560 Speaker 1: in my in my book, I talked about several similarities 354 00:21:13,480 --> 00:21:17,520 Speaker 1: that each of the crashes share. UM. There is there's 355 00:21:17,600 --> 00:21:21,280 Speaker 1: always some new financial contraption. I think that if we 356 00:21:21,320 --> 00:21:25,480 Speaker 1: can see something that is starting to um capture too much, 357 00:21:26,080 --> 00:21:29,720 Speaker 1: too many assets, uh, then that would be a problem. 358 00:21:30,240 --> 00:21:33,200 Speaker 1: Uh it interest rates too low for too long are 359 00:21:33,240 --> 00:21:37,520 Speaker 1: the reason. And then two thousand and eight happened. So 360 00:21:38,119 --> 00:21:40,320 Speaker 1: if you want to look now and say, boy, interest 361 00:21:40,400 --> 00:21:42,080 Speaker 1: rates have been too low for too long, and the 362 00:21:42,119 --> 00:21:46,080 Speaker 1: Federal Reserve seems just terrified of raising Fed funds rate 363 00:21:46,160 --> 00:21:50,040 Speaker 1: past one or of starting to shrink the balance sheet, 364 00:21:51,040 --> 00:21:53,320 Speaker 1: that might be the thing that would scare people right now. 365 00:21:54,600 --> 00:21:57,359 Speaker 1: And as Tracey you mentioned in the beginning. One of 366 00:21:57,400 --> 00:21:59,920 Speaker 1: the really well, let's be honest, one of the cool 367 00:22:00,040 --> 00:22:02,439 Speaker 1: things about bubbles is that you could get rich in 368 00:22:02,480 --> 00:22:05,200 Speaker 1: a really short period of time. And the only thing 369 00:22:05,240 --> 00:22:07,760 Speaker 1: you have to do to get rich during a bubble 370 00:22:08,560 --> 00:22:11,720 Speaker 1: is to sell before everybody else sells. As long as 371 00:22:11,720 --> 00:22:14,680 Speaker 1: you could do that, that bubbles are great. So when 372 00:22:14,680 --> 00:22:17,160 Speaker 1: you look at these crashes and you know, your book 373 00:22:17,240 --> 00:22:19,840 Speaker 1: is a history of the United States and five crashes, 374 00:22:20,600 --> 00:22:23,920 Speaker 1: are there any common themes out there that sort of 375 00:22:24,160 --> 00:22:27,720 Speaker 1: foretell the imminent collapse so that people know to uh, 376 00:22:27,760 --> 00:22:30,399 Speaker 1: you know, get out the door before everybody else does. Well. 377 00:22:30,440 --> 00:22:33,119 Speaker 1: The problem, it's a it's a fascinating question. The problem 378 00:22:33,160 --> 00:22:35,480 Speaker 1: is that and I mentioned these catalysts, and there's always 379 00:22:35,480 --> 00:22:38,359 Speaker 1: a catalyst. The problem is that the time between the 380 00:22:38,400 --> 00:22:42,440 Speaker 1: catalysts and the crash is collapsing. It was a year 381 00:22:42,480 --> 00:22:45,199 Speaker 1: between the catalysts for the nineteen o seven panic and 382 00:22:45,240 --> 00:22:48,920 Speaker 1: the actual panic. Um it was a year. Uh. In nine, 383 00:22:49,800 --> 00:22:52,320 Speaker 1: it was about a month between hatchery and the crash. 384 00:22:53,000 --> 00:22:56,240 Speaker 1: In seven, it seemed the friday before the crash seemed 385 00:22:56,320 --> 00:22:59,119 Speaker 1: like we'd finally gone to war with a ran. So 386 00:22:59,200 --> 00:23:01,879 Speaker 1: that was a weekend and we haven't talked about two 387 00:23:01,920 --> 00:23:04,320 Speaker 1: thousand and tend the flash crash, but the catalyst for 388 00:23:04,359 --> 00:23:07,160 Speaker 1: that happened the day before the crash. So we've gone 389 00:23:07,200 --> 00:23:09,919 Speaker 1: from waiting a year and then a month, and then 390 00:23:09,960 --> 00:23:13,280 Speaker 1: a weekend, and now a day. The problem is as 391 00:23:13,320 --> 00:23:16,720 Speaker 1: the time between the catalysts and the crash collapses, then 392 00:23:16,760 --> 00:23:20,000 Speaker 1: there's less opportunity for people to do what you're suggesting. 393 00:23:21,080 --> 00:23:24,920 Speaker 1: Real quickly, Well, you mentioned the catalyst for flash crash. 394 00:23:24,960 --> 00:23:27,240 Speaker 1: What do you identify that as? Oh? I think it 395 00:23:27,320 --> 00:23:31,240 Speaker 1: was clearly the rioting, arson and murder in the streets 396 00:23:31,240 --> 00:23:34,720 Speaker 1: of Athens on May five, two and ten. It seemed 397 00:23:34,760 --> 00:23:39,000 Speaker 1: just absolutely obvious that that all of the Greeks, all 398 00:23:39,040 --> 00:23:41,520 Speaker 1: of Greek society, was going to come apart, and that 399 00:23:41,640 --> 00:23:45,679 Speaker 1: as a result of the Eurozone was going to come apart. 400 00:23:45,880 --> 00:23:48,600 Speaker 1: It seemed absolutely certain A million people were in the 401 00:23:48,640 --> 00:23:52,480 Speaker 1: streets of Athens, a bank had been firebombed, three people 402 00:23:52,560 --> 00:23:56,800 Speaker 1: had been killed, um not just killed, murdered, three young 403 00:23:56,840 --> 00:23:59,959 Speaker 1: people who would come back to Athens to continue their 404 00:24:00,160 --> 00:24:02,320 Speaker 1: careers when they didn't need to come back to Athens. 405 00:24:02,920 --> 00:24:06,520 Speaker 1: And that and the fact that on the on the 406 00:24:06,560 --> 00:24:09,280 Speaker 1: seventh we were going to get a non farm payroll number, 407 00:24:09,960 --> 00:24:13,200 Speaker 1: the writing in Athens, which is obviously the catalyst for 408 00:24:13,280 --> 00:24:17,720 Speaker 1: what happened. Scott Nations, the author of a history of 409 00:24:17,720 --> 00:24:21,199 Speaker 1: the United States in five crashes stock market meltdowns that 410 00:24:21,280 --> 00:24:24,360 Speaker 1: defined a nation. Thank you so much for joining us. 411 00:24:24,520 --> 00:24:27,560 Speaker 1: Fascinating conversation. I'd love to have you back one day. 412 00:24:27,640 --> 00:24:30,320 Speaker 1: Did you just like talk more about because we could 413 00:24:30,359 --> 00:24:31,960 Speaker 1: do like two hours on it. But that was great 414 00:24:32,000 --> 00:24:34,560 Speaker 1: and a great start to our bubble series. Thanks so much. 415 00:24:34,640 --> 00:24:47,000 Speaker 1: It's been tremendous fund to be here, Joe. I thought, 416 00:24:47,119 --> 00:24:50,560 Speaker 1: as you said, that was a fantastic start to our series. Um, 417 00:24:50,600 --> 00:24:54,639 Speaker 1: I love drawing analogies between previous bubbles, and I have 418 00:24:54,760 --> 00:24:58,080 Speaker 1: to say, the idea that the window that you have 419 00:24:58,320 --> 00:25:01,439 Speaker 1: to get out first from a bubble ahead of an 420 00:25:01,480 --> 00:25:05,119 Speaker 1: imminent crash, the idea that that is shrinking rapidly, that 421 00:25:05,200 --> 00:25:08,680 Speaker 1: really resonates, especially when we think about the way markets 422 00:25:08,680 --> 00:25:12,679 Speaker 1: are more computerized nowadays, but also just the way information 423 00:25:12,800 --> 00:25:17,359 Speaker 1: gets disseminated so quickly nowadays. Yeah. I hadn't even thought 424 00:25:17,400 --> 00:25:21,320 Speaker 1: about that, but that is a great a great point, 425 00:25:21,400 --> 00:25:23,359 Speaker 1: I thought, and it was one that hadn't clicked to 426 00:25:23,400 --> 00:25:26,080 Speaker 1: me at all. But it seems easy to say on 427 00:25:26,160 --> 00:25:27,520 Speaker 1: the way up, and it was like, Yeah, I know, 428 00:25:27,600 --> 00:25:30,000 Speaker 1: it's kind of a rational it's a bubble, but I'll 429 00:25:30,000 --> 00:25:34,199 Speaker 1: just be prudent. But if the you know, the crash 430 00:25:34,240 --> 00:25:36,399 Speaker 1: can happen that fast, probably there are a lot of 431 00:25:36,400 --> 00:25:39,240 Speaker 1: people who imagine they'll be prudent and not actually be 432 00:25:39,240 --> 00:25:43,399 Speaker 1: able to act on it. Yeah, exactly, all right, Um, 433 00:25:43,400 --> 00:25:45,960 Speaker 1: should we tease some of the other bubbles that we're 434 00:25:45,960 --> 00:25:48,600 Speaker 1: going to be discussing during this series. Wait, I just 435 00:25:48,600 --> 00:25:50,960 Speaker 1: want to make one more point too that I really 436 00:25:51,480 --> 00:25:54,320 Speaker 1: from Scott and that is the sort of what is 437 00:25:54,359 --> 00:25:58,639 Speaker 1: he characterized that the new financial contraption at any given moment, 438 00:25:59,040 --> 00:26:00,840 Speaker 1: because I think it's you know, and I think we 439 00:26:00,880 --> 00:26:03,760 Speaker 1: look at you could sort of tell that you need. Obviously, 440 00:26:03,800 --> 00:26:08,280 Speaker 1: there's the financial conditions puzzle, often characterized by low interest rates. 441 00:26:08,320 --> 00:26:11,080 Speaker 1: There's the sort of optimism part of the puzzle, the 442 00:26:11,119 --> 00:26:13,560 Speaker 1: idea that some new technology like the internet or the 443 00:26:13,640 --> 00:26:17,280 Speaker 1: radio is going to get people excited. But this other 444 00:26:17,320 --> 00:26:20,520 Speaker 1: thing that there's some new tool for investing, whether it's 445 00:26:20,560 --> 00:26:23,280 Speaker 1: the c d O or the online broker and the 446 00:26:23,359 --> 00:26:27,040 Speaker 1: nineties or whatever it is, or the mutual funds in 447 00:26:27,080 --> 00:26:30,080 Speaker 1: the twenties, that there has and of course now you know, 448 00:26:30,240 --> 00:26:32,280 Speaker 1: people are very concerned about e t f s and 449 00:26:32,400 --> 00:26:35,080 Speaker 1: other things like that we don't know exactly. Seems like 450 00:26:35,440 --> 00:26:37,560 Speaker 1: a very important point I had I'd never really like 451 00:26:37,640 --> 00:26:42,040 Speaker 1: put together before. Yeah, it's interesting that those new creations 452 00:26:42,119 --> 00:26:46,240 Speaker 1: often come from I don't want to say like a 453 00:26:46,359 --> 00:26:49,760 Speaker 1: good place. But if you think about the Investment Trust 454 00:26:49,800 --> 00:26:52,679 Speaker 1: of the nineteen twenties, that was really supposed to uh 455 00:26:52,960 --> 00:26:56,199 Speaker 1: democratize finance and make it easier to invest in the 456 00:26:56,280 --> 00:26:58,280 Speaker 1: same thing for e t f s now right, you 457 00:26:58,320 --> 00:27:00,119 Speaker 1: know you're supposed to be able to get easy and 458 00:27:00,200 --> 00:27:03,080 Speaker 1: cheap access to stocks. Uh. You could even argue the 459 00:27:03,119 --> 00:27:05,960 Speaker 1: housing bubble um going into two thousand eight. You know, 460 00:27:06,000 --> 00:27:11,560 Speaker 1: the government was trying to increase home ownership. Um anyway, Alright, 461 00:27:11,880 --> 00:27:14,520 Speaker 1: but I think there's a quote about the road to 462 00:27:14,600 --> 00:27:17,120 Speaker 1: good intentions or something like that, or the road to hell, 463 00:27:17,240 --> 00:27:20,320 Speaker 1: but I applies here. So let's real quickly. Uh. Yeah, 464 00:27:20,400 --> 00:27:23,800 Speaker 1: as you mentioned tease ahead to some of our future episodes, 465 00:27:23,840 --> 00:27:27,159 Speaker 1: what are you excited to talk about? Well, you know, 466 00:27:27,240 --> 00:27:32,399 Speaker 1: I said was the quintessential bubble and crash, but there's 467 00:27:32,480 --> 00:27:35,240 Speaker 1: one that is even more classic, and that has to 468 00:27:35,240 --> 00:27:38,359 Speaker 1: be the Tulip Bubble. I'm very excited to talk about 469 00:27:38,359 --> 00:27:41,600 Speaker 1: that one, although I've I am very much too. I 470 00:27:41,640 --> 00:27:44,240 Speaker 1: know there's a lot of debate about that one, about 471 00:27:44,280 --> 00:27:46,240 Speaker 1: how much of it was real and how much it 472 00:27:46,280 --> 00:27:49,160 Speaker 1: was a myth, but it is the number one thing 473 00:27:49,240 --> 00:27:53,000 Speaker 1: that when people think bubble, it's tulips again, and so 474 00:27:53,080 --> 00:27:55,480 Speaker 1: I feel like I can't wait to really dive into that. 475 00:27:55,960 --> 00:27:59,320 Speaker 1: Also because I'm super into U the twenties, I'm excited 476 00:27:59,320 --> 00:28:02,600 Speaker 1: we're gonna talk about the nine twenties Florida real estate bubble, 477 00:28:02,920 --> 00:28:06,680 Speaker 1: which is sort of a precursor to the overall crash, 478 00:28:06,840 --> 00:28:09,600 Speaker 1: and there are just some fabulous stories that came out 479 00:28:09,640 --> 00:28:14,320 Speaker 1: of that. So I am very excited about continuing this series. Yeah, alright, 480 00:28:14,400 --> 00:28:17,760 Speaker 1: so everyone should keep on listening because those episodes and 481 00:28:18,040 --> 00:28:21,440 Speaker 1: many more will be coming out in the coming weeks. 482 00:28:21,440 --> 00:28:24,960 Speaker 1: But that is it for the first edition of our 483 00:28:25,000 --> 00:28:28,280 Speaker 1: Bubbles series. I'm Tracy Alloway. You can follow me on 484 00:28:28,320 --> 00:28:31,400 Speaker 1: Twitter at Tracy Alloway, and I'm Joe wi isn't All. 485 00:28:31,480 --> 00:28:34,399 Speaker 1: You can follow me on Twitter at the Stalwart, and 486 00:28:34,440 --> 00:28:37,840 Speaker 1: you can follow Scott on Twitter at Scott Nations. And 487 00:28:38,160 --> 00:28:41,600 Speaker 1: our producer, Sarah Patterson Sarah pat with two teas. This 488 00:28:41,640 --> 00:28:44,200 Speaker 1: has been another episode of the Odd Lots podcast. Thanks 489 00:28:44,200 --> 00:28:44,680 Speaker 1: for listening.