WEBVTT - Tudor Investment CEO Paul Tudor Jones Talks Next Fed Chair Should Be 'Uber Dovish' 0:00:02.520 --> 0:00:07.120 Bloomberg Audio Studios, podcasts, radio news. 0:00:07.360 --> 0:00:10.159 Now, we welcome our TV and radio audiences for a 0:00:10.200 --> 0:00:13.920 conversation with one of the most respected traders on Wall Street. 0:00:13.960 --> 0:00:16.720 Paul Tudor Jones made his name calling the Black Monday 0:00:16.800 --> 0:00:21.040 market crash in nineteen eighty seven, shortingstocks during the largest 0:00:21.079 --> 0:00:24.680 single day percentage drop in US history. Jones became a 0:00:24.720 --> 0:00:27.160 gold bowl in the aftermath of the GFC and bought 0:00:27.200 --> 0:00:30.560 bitcoin as the money printer went burr during COVID. He 0:00:30.640 --> 0:00:34.000 also founded the Robin Hood Foundation in nineteen eighty eight 0:00:34.040 --> 0:00:37.040 and has helped since then to raise nearly three billion 0:00:37.159 --> 0:00:41.160 dollars to get New Yorkers permanently out of poverty. Paul 0:00:41.159 --> 0:00:44.000 Tutor Jones, a coach, chairman and chief investment officer of 0:00:44.360 --> 0:00:45.879 Tutor Investment, joins us now on set. 0:00:45.920 --> 0:00:47.800 Paul's great to have you here. It's great to be here. 0:00:47.840 --> 0:00:48.960 Thanks so much for joining us. 0:00:49.000 --> 0:00:51.440 I want to talk, first of all, before we get 0:00:51.479 --> 0:00:56.480 into the markets, economics, and AI, about your philanthropic efforts 0:00:56.480 --> 0:01:00.360 and specifically a partnership that Robinhood has with Blue Blomberg 0:01:00.480 --> 0:01:02.320 in a contest called pick a Ticker. 0:01:03.200 --> 0:01:04.800 You have a ten thousand. 0:01:04.520 --> 0:01:08.200 Dollars bet essentially one long, one short. How did this 0:01:08.240 --> 0:01:09.959 contest go and who was the winner? 0:01:10.200 --> 0:01:11.880 Well, we did it right. 0:01:12.360 --> 0:01:15.119 It actually starts right before our investor conference that we 0:01:15.520 --> 0:01:19.240 hold every fall. This year we had forty participants. We 0:01:19.319 --> 0:01:23.800 raised about four hundred thousand dollars that went, three quarters 0:01:23.840 --> 0:01:27.680 of which went to Robinhood. It was fantastic. The winner 0:01:27.959 --> 0:01:31.240 was Bill Ackman, a Pershing Square. He was long Fannie 0:01:31.280 --> 0:01:35.400 May and see number two was a guy named Mark 0:01:35.400 --> 0:01:37.399 Gallott who actually used to work for me. In three 0:01:37.720 --> 0:01:41.600 was Stan Druckmiller. No surprise, he's going to always be placing. 0:01:42.959 --> 0:01:43.680 They came in. 0:01:44.160 --> 0:01:47.520 I think if you took the top three or four 0:01:47.680 --> 0:01:49.440 and you had made their bet, you would have made 0:01:49.520 --> 0:01:51.440 seven times your money in six months. 0:01:51.680 --> 0:01:53.920 So it's a great competition. 0:01:54.760 --> 0:01:57.640 I really hope this year we can expand it so 0:01:57.720 --> 0:02:01.000 it'll be a much bigger group. It's ten thousand dollars, 0:02:01.000 --> 0:02:04.760 it's a six month competition, one long, one short, and 0:02:05.080 --> 0:02:06.960 uh yeah, it's it's a lot of fun. 0:02:07.040 --> 0:02:10.240 Actually, shout out also to Anna Nikolsky, you got up 0:02:10.280 --> 0:02:11.320 there on the board with. 0:02:11.560 --> 0:02:14.880 Who's our only female entront I hope we get a 0:02:14.880 --> 0:02:18.480 lot more ladies that'll participate this time, so. 0:02:18.520 --> 0:02:21.040 They have another chance coming up this fall, and I thought, 0:02:21.080 --> 0:02:24.040 since we have you here, you could help us give 0:02:24.120 --> 0:02:24.560 us a tip. 0:02:24.720 --> 0:02:26.119 What's the what's the one. 0:02:25.960 --> 0:02:29.680 Long you would hit for the next contest. 0:02:31.400 --> 0:02:34.640 I would say probably probably the yield curve. It just 0:02:34.680 --> 0:02:36.720 depends on where I think it'll be higher at that 0:02:36.760 --> 0:02:39.680 point in time. Mine would be very esoteric, so let 0:02:39.720 --> 0:02:43.400 me think, uh, well, it would definitely I would definitely 0:02:43.480 --> 0:02:49.400 be betting on substantially lower front end rates. We'll have a 0:02:49.560 --> 0:02:51.880 we'll have a new FED chair within six months at 0:02:51.880 --> 0:02:54.440 that point in time, and I think Trump's gonna pick 0:02:54.480 --> 0:02:57.680 someone who's gonna be uber dubbish. 0:02:57.760 --> 0:03:00.000 Well, let's talk a little bit more about the yield curve. 0:03:00.160 --> 0:03:02.040 Matt and I were actually emailing it like four in 0:03:02.080 --> 0:03:04.800 the morning about the yield curve because it's broken a 0:03:04.800 --> 0:03:07.360 lot of hearts that's steepener bed, and the way you 0:03:07.440 --> 0:03:09.400 lay it out, short end rates coming down, you have 0:03:09.400 --> 0:03:12.640 concerns about the deficit potentially boosting the long end. It 0:03:12.720 --> 0:03:14.600 seems like a no brainer, but it feels like it 0:03:14.840 --> 0:03:16.200 just hasn't worked. 0:03:16.240 --> 0:03:17.480 So what's different this time. 0:03:17.760 --> 0:03:21.320 Well, it's working, it's just you know, it's vall adjusted 0:03:21.400 --> 0:03:22.880 it's just a slow moving train. 0:03:23.040 --> 0:03:25.919 But I think in the long run it has to work. 0:03:26.480 --> 0:03:31.680 We are fiscally constrained and we're going to have budget 0:03:31.720 --> 0:03:34.040 deficits of six percent plus. 0:03:33.720 --> 0:03:35.440 As far as the I can see. 0:03:35.720 --> 0:03:38.520 So one of the major offsets if I was the 0:03:38.560 --> 0:03:42.680 president would be to lower my interest rate cost appointing 0:03:42.680 --> 0:03:46.400 a FED chair who is as dubvish as could possibly be. 0:03:47.320 --> 0:03:50.000 That's kind of the playbook when you're one hundred percent 0:03:50.080 --> 0:03:52.600 debt to GDP and you're fiscally constrained. 0:03:52.640 --> 0:03:54.840 You can see it happening in Japan right now. 0:03:55.360 --> 0:03:59.680 He's way is reluctant to raise rates more than beyond 0:03:59.680 --> 0:04:03.440 fifty basis points, even though they have inflation pick a 0:04:03.520 --> 0:04:06.240 number somewhere between two and three percent. I think they 0:04:06.280 --> 0:04:09.080 fudge the numbers down all the time. You've got wage 0:04:09.120 --> 0:04:12.160 growth at three and a half percent there, So that's 0:04:12.320 --> 0:04:14.800 you know, Historically, the way that you get out of 0:04:14.800 --> 0:04:18.640 a debt trap is you run the lowest real rates possible, 0:04:18.800 --> 0:04:21.680 you lower your interest burdens, and I'm sure that's what 0:04:21.720 --> 0:04:24.560 we'll see beginning when the next FED chair comes. 0:04:24.880 --> 0:04:27.560 Well, we definitely want to talk about who the next 0:04:27.560 --> 0:04:29.440 FED shair might be. And who you would like to see. 0:04:29.440 --> 0:04:31.320 But let's talk first a little bit. 0:04:31.240 --> 0:04:34.040 More about the deficit, because it feels like, you take 0:04:34.040 --> 0:04:36.200 a look at the bond market over the past few weeks, 0:04:36.200 --> 0:04:39.440 the past few months, you can see those fears being expressed, 0:04:39.480 --> 0:04:42.360 but concerns about a higher deficit. It feels like one 0:04:42.360 --> 0:04:46.400 of those evergreen issues out there. So give us first 0:04:46.480 --> 0:04:50.720 your feel how you're feeling about the deficit, production projections 0:04:50.760 --> 0:04:53.080 that we've been getting, and also how you might invest 0:04:53.120 --> 0:04:53.600 around that. 0:04:55.120 --> 0:04:59.479 Well, the Big Beautiful Bill is really interesting. It's it's 0:04:59.520 --> 0:05:02.640 first of all, well, it's a genius in branding. The 0:05:02.720 --> 0:05:04.440 name of it's a genius in branding. 0:05:04.480 --> 0:05:05.800 But I think what. 0:05:05.720 --> 0:05:08.000 You've got to do is you you have to go 0:05:08.080 --> 0:05:13.919 to first principles. What would the actual budget look like 0:05:14.520 --> 0:05:18.599 if we were trying to balance the budget, If we 0:05:18.600 --> 0:05:22.200 were actually trying to balance the budget, what is the 0:05:22.880 --> 0:05:25.160 counterfactual to the Big Beautiful Bill. 0:05:25.320 --> 0:05:27.520 So if you actually had. 0:05:27.400 --> 0:05:30.120 To balance the budget, it probably would be the Big 0:05:30.160 --> 0:05:31.000 Beastly Bill. 0:05:32.200 --> 0:05:34.720 And at some point down the road, who knows when 0:05:34.760 --> 0:05:35.320 that's going to be. 0:05:35.480 --> 0:05:39.480 Maybe it's next year, maybe it's the next administration, Maybe 0:05:39.480 --> 0:05:43.760 it's ten years down the road. At some point, probably 0:05:44.760 --> 0:05:51.120 the bomb markets are going to call bs on governments 0:05:51.160 --> 0:05:55.800 around the world playing chicken with them, right. So to 0:05:55.839 --> 0:05:58.280 give you an idea if you were to balance the 0:05:58.320 --> 0:06:02.000 budget today, let's assume the first thing I would do 0:06:02.000 --> 0:06:03.760 if I was president, I was trying out to point 0:06:03.800 --> 0:06:07.560 the most douvish central banker I could to lower interest costs. 0:06:07.600 --> 0:06:11.360 So let's assume that I could. 0:06:11.440 --> 0:06:14.760 Make a pack with my UH, with my Chairman of 0:06:14.800 --> 0:06:17.719 the Fed. But I'm going to go through an austerity package. 0:06:17.760 --> 0:06:20.960 I'm going to balance it, but I need you to 0:06:21.120 --> 0:06:24.080 really drop rates to let's say two and a half percent. 0:06:24.880 --> 0:06:26.480 So if you drop rates to two and a half 0:06:26.480 --> 0:06:29.159 percent and you get a fifty basis point reduction or 0:06:29.240 --> 0:06:32.000 let's say even one hundred basis point reduction in ten 0:06:32.080 --> 0:06:35.080 ure rates, that saves you one hundred and seventy five billion. 0:06:36.320 --> 0:06:37.839 The starting gap is nine. 0:06:37.680 --> 0:06:39.880 Hundred billion, so that saves you one hundred and seventy 0:06:39.920 --> 0:06:43.200 five Now I'm down to seven hundred and twenty five 0:06:43.200 --> 0:06:47.480 billion that I've got to find through tax hikes and 0:06:47.520 --> 0:06:50.479 spending cuts. So let's assume that we're going to do 0:06:50.520 --> 0:06:53.680 this fairly. We're gonna do fifty percent tax hikes in 0:06:53.720 --> 0:06:57.239 the rich because they've benefited the most in the last 0:06:57.279 --> 0:06:58.480 thirty forty years. 0:06:59.080 --> 0:07:00.640 Fifty pp and cuts. 0:07:00.760 --> 0:07:06.440 What does that look like On the spending cut size side, 0:07:06.560 --> 0:07:10.360 I would just do, just to make it simple, let's 0:07:10.400 --> 0:07:14.400 just call it a blanket six percent reduction in everything, 0:07:14.560 --> 0:07:20.520 social Security, medicaid, defense, spending, you name it. I'm just 0:07:20.560 --> 0:07:24.120 going to cut everything six percent across the board. That's 0:07:24.160 --> 0:07:27.080 what it would take to get you three hundred and 0:07:27.080 --> 0:07:28.320 sixty billion half. 0:07:28.120 --> 0:07:30.960 Of that sentence to do with Congress, right, I'm. 0:07:30.800 --> 0:07:34.200 Just saying there'll be a point where the markets are 0:07:34.240 --> 0:07:35.880 going to demand it. I don't know when it'll be. 0:07:36.200 --> 0:07:38.920 Maybe it'll be in my lifetime. Who knows when it'll be. 0:07:39.120 --> 0:07:40.640 By the way, how do you invest around that? 0:07:40.720 --> 0:07:43.520 Because you famously made a lot of money shortening the 0:07:43.600 --> 0:07:45.960 end in Japanese assets into the last decade, which was 0:07:46.000 --> 0:07:50.240 another situation where you saw a country just boost its 0:07:50.280 --> 0:07:51.520 fiscal debt and deathicis. 0:07:52.360 --> 0:07:54.640 I will get to that, but let me just finish 0:07:54.920 --> 0:07:58.640 the tax hike side. So to get three hundred and 0:07:59.280 --> 0:08:02.960 sixty three and tax hikes, you're gonna have to raise 0:08:03.040 --> 0:08:06.680 the top income rate to forty nine. You're gonna have 0:08:06.720 --> 0:08:10.880 to have a one percent wealth tax annually, and you're 0:08:10.880 --> 0:08:12.760 gonna have to raise the capitol games right. 0:08:12.640 --> 0:08:14.160 To forty huh. 0:08:14.200 --> 0:08:16.640 So if we're just gonna if all we're gonna do 0:08:17.280 --> 0:08:22.760 is stabilize debt to GDP, that's the big beastly bill 0:08:23.360 --> 0:08:24.960 that's somewhere down the road. 0:08:25.400 --> 0:08:27.600 And again who knows what it's gonna be. 0:08:27.920 --> 0:08:32.080 Remember you have Italy, France, and Japan who on the 0:08:32.120 --> 0:08:35.640 current projections, will be in worse fiscal shape than we are, 0:08:35.920 --> 0:08:38.720 and they seem to be doing okay. And that's why 0:08:38.760 --> 0:08:41.600 we keep that's why we keep the we keep going 0:08:41.679 --> 0:08:46.559 with the cafe in wrestling, the suspended reality where we 0:08:46.720 --> 0:08:48.920 like to watch the show, but we know it's not real. 0:08:49.040 --> 0:08:53.280 So we know that these six percent budget deficits are 0:08:53.360 --> 0:08:56.440 not sustainable in the long run. But it's okay because 0:08:56.440 --> 0:08:58.920 it's okay now, it's okay the short run, and it 0:08:58.960 --> 0:08:59.800 feels good and it's not. 0:09:00.320 --> 0:09:01.960 It's actually really easy. 0:09:02.080 --> 0:09:06.559 Remember in the first Trump administration, he normalized four percent 0:09:06.640 --> 0:09:10.040 budget deficits, that's what we had pre COVID, and now 0:09:10.080 --> 0:09:14.920 in this administration he's normalizing six percent budget deficits. So 0:09:15.920 --> 0:09:19.120 and I'm not judging I'm just calling balls and strikes. 0:09:18.840 --> 0:09:20.040 That's where we are. 0:09:20.600 --> 0:09:26.600 So with that in mind, knowing that we have a 0:09:26.720 --> 0:09:31.439 whole pricing structure that's created on something that's not sustainable, 0:09:32.080 --> 0:09:35.280 it's really really hard to invest for the long run 0:09:35.360 --> 0:09:40.079 because the day that it'll probably be the bond market first, 0:09:40.800 --> 0:09:44.080 or maybe it's the dollar, who knows, the day that 0:09:44.120 --> 0:09:47.440 we're called a carpet on that and the day that 0:09:47.480 --> 0:09:50.679 you actually went through that exercise that I just described, 0:09:50.720 --> 0:09:54.960 and you know that multiples on stocks will not be 0:09:55.080 --> 0:09:56.400 where they are right now. 0:09:56.520 --> 0:09:58.640 Right, But are you short the dollar? I mean you 0:09:58.720 --> 0:10:00.640 mention you're into yields. 0:10:01.280 --> 0:10:04.400 I would say that the easiest long term trades are 0:10:05.240 --> 0:10:07.599 you know, the yield curve's going to steepen probably to 0:10:07.800 --> 0:10:11.160 historic wise. You know, we're going to cut short term 0:10:11.240 --> 0:10:15.000 rates dramatically in the next year, and you know the 0:10:15.120 --> 0:10:21.719 dollar will probably be lower because of that, a lot 0:10:21.800 --> 0:10:22.840 lower because of that. 0:10:22.960 --> 0:10:26.640 How much lower off ten percent from our high right now? 0:10:26.800 --> 0:10:30.679 Yes, I would say that that's I think that's a 0:10:30.760 --> 0:10:34.040 year from today and that's probably a realistic assumption. 0:10:35.080 --> 0:10:37.040 I want to go to one point that you made 0:10:37.120 --> 0:10:40.200 in that blueprint that you laid out, and that comes 0:10:40.240 --> 0:10:43.960 to appointing the most stubbish fed chair possible. Jerome Pal's 0:10:43.960 --> 0:10:46.760 turn ends in May twenty twenty six. We've heard from 0:10:46.800 --> 0:10:51.080 the President recently that he's going to announce some contenders 0:10:51.360 --> 0:10:54.200 sometime soon. Bloomberg News has reported in the past twenty 0:10:54.240 --> 0:10:57.000 four hours that Scott Besson has emerged as a pick. 0:10:57.120 --> 0:11:01.040 Kevin worsh is under consideration. I mean, if you had 0:11:01.360 --> 0:11:03.600 your pick, who do you think is best suited. 0:11:03.320 --> 0:11:03.840 For the chair? 0:11:04.559 --> 0:11:12.320 Those are two great names. Those are two fabulous names. Again, 0:11:13.160 --> 0:11:17.440 if I was president, if I just think about President Trump, 0:11:17.480 --> 0:11:20.199 he's just a he's a growth guy, right, He's a 0:11:20.400 --> 0:11:24.720 He's a loyalty and growth guy. You're gonna be my pick. 0:11:24.720 --> 0:11:26.600 If you're loyal to me, you're gonna be my pick. 0:11:26.640 --> 0:11:29.880 If you're you're a growth guy. And I'd pick a 0:11:29.920 --> 0:11:34.719 growth guy. And probably Scott would be more uh in 0:11:34.720 --> 0:11:38.840 line with that than Kevin Wood. They will have had 0:11:39.640 --> 0:11:44.680 a really close working relationship at that point. I also think, again, 0:11:45.000 --> 0:11:50.280 the playbook's pretty clear, uh historically and right now, we're 0:11:51.040 --> 0:11:54.440 we are fiscally constrained, We're in a debt trap. 0:11:54.760 --> 0:11:55.839 You're gonna have to. 0:11:55.840 --> 0:11:59.040 Run negative real rates to get out of it. 0:11:59.120 --> 0:12:00.720 That's what we did in the fifties. 0:12:00.760 --> 0:12:04.280 We had if you'll remember, we had a variety of 0:12:04.360 --> 0:12:07.120 prices fixed by the treasury, why we had five and 0:12:07.200 --> 0:12:10.360 six percent inflation for a period of time. We're gonna 0:12:10.400 --> 0:12:13.840 have negative real rates, and that's why you have to 0:12:14.440 --> 0:12:19.800 think about what is facing our policy makers in this 0:12:20.000 --> 0:12:23.320 debt trap as you constructure portfolio. So what would an 0:12:23.360 --> 0:12:26.040 ideal portfolio be and something like that, Well, what has 0:12:26.120 --> 0:12:29.120 worked so far, What has worked so far has been 0:12:29.600 --> 0:12:30.920 some combination of. 0:12:30.920 --> 0:12:34.120 Stocks which won't do great, which. 0:12:33.920 --> 0:12:37.600 Would do terribly if we ever actually had if they 0:12:37.640 --> 0:12:40.600 called us out and the bottom market actually gave us 0:12:40.640 --> 0:12:43.720 an accident that then spilled over. But it would be 0:12:43.760 --> 0:12:49.880 some combination of probably gold vall adjusted bitcoin gold stocks, 0:12:50.280 --> 0:12:56.440 that's probably your best portfolio to fight inflation vol adjusted 0:12:56.480 --> 0:13:00.440 because the vall of bitcoins obviously five times out goal. 0:13:00.640 --> 0:13:04.480 So you're gonna you're gonna do it in different ways. 0:13:04.600 --> 0:13:07.000 You said at one point you would allocate one or 0:13:07.040 --> 0:13:08.800 two percent of your portfolio to bitcoin. 0:13:08.920 --> 0:13:10.319 Is it still yeah? 0:13:10.400 --> 0:13:14.600 I mean I think you just particularly now that the 0:13:14.760 --> 0:13:20.400 that the roadmap is clear, then I mean the the again, 0:13:20.440 --> 0:13:24.800 if I'm a policymaker, I'm gonna run really low real rates, 0:13:24.960 --> 0:13:30.080 I'm gonna have inflation running hot. Uh, and I'm gonna 0:13:30.360 --> 0:13:34.400 tax the American consumer to get out of my debt trap. 0:13:34.400 --> 0:13:37.599 And that's exactly what Japan, who's the most fiscally constrained 0:13:38.000 --> 0:13:41.600 in the world, doing, And it works until until the 0:13:41.679 --> 0:13:44.880 population throws you out because you're let inflation get too hot. 0:13:45.640 --> 0:13:49.160 So maybe you're in a world with three three. 0:13:49.000 --> 0:13:52.000 And a half percent inflation and two and a half 0:13:52.040 --> 0:13:55.120 percent overnight rate and you're kind of trying to run 0:13:55.160 --> 0:13:56.600 hot and grow your way out of it. 0:13:56.840 --> 0:13:57.240 Mm hmm. 0:13:57.600 --> 0:14:00.000 Well, let's talk a little bit more about equities. You know, 0:14:00.120 --> 0:14:03.199 you mentioned in that scenario that you laid out equities 0:14:03.200 --> 0:14:06.240 obviously would do terrible. But where we stand right now, 0:14:06.280 --> 0:14:08.640 I mean, we're back to six thousand ish on the 0:14:08.679 --> 0:14:11.760 S and P five hundred, We're slightly positive for the year. 0:14:11.800 --> 0:14:15.120 It feels like after the big performance that we saw 0:14:15.200 --> 0:14:18.080 in May, though, that people are not sure where to 0:14:18.160 --> 0:14:22.160 go from here. So, assuming we continue along this path 0:14:22.200 --> 0:14:24.760 where inflation is under control, it seems like the labor 0:14:24.800 --> 0:14:29.200 market is under control, and trade negotiations continue to progress. 0:14:29.400 --> 0:14:31.200 I mean, what's your base case on equities. 0:14:31.360 --> 0:14:33.760 Well again, so. 0:14:35.360 --> 0:14:38.760 A year ago, I never thought the bond market would 0:14:38.800 --> 0:14:42.320 tolerate the big beautiful bill. I just didn't think it would. 0:14:42.400 --> 0:14:47.800 I thought, wow, I thought there'd be a revolt. I 0:14:47.800 --> 0:14:51.040 thought bomb vigilantes actually has. 0:14:50.200 --> 0:14:54.120 Some stuff, but they'd come back out. But they clearly 0:14:54.160 --> 0:14:54.960 haven't surfaced. 0:14:55.000 --> 0:14:59.880 And as we haven't seen inflation, and and well there's 0:15:00.000 --> 0:15:02.840 there's a couple of things going on. One we know 0:15:03.600 --> 0:15:06.680 twelve months from now rates are going to drop recipitously 0:15:06.720 --> 0:15:10.480 with a new FED share If you I mean, was 0:15:10.520 --> 0:15:13.040 it last week when Donald Trump. 0:15:12.760 --> 0:15:15.920 Saw after was it I forget? Was it adp I 0:15:16.240 --> 0:15:16.800 drop rates? 0:15:16.800 --> 0:15:19.120 One Hunter Basis points yes, So we know where his 0:15:19.120 --> 0:15:21.240 head is. We know who he's going to point well. 0:15:21.240 --> 0:15:25.640 And just now the Vice President jd Vance said this 0:15:26.000 --> 0:15:31.200 is monetary malpractice in a tweet reply to our Joe Weisenthal. 0:15:31.400 --> 0:15:33.600 So they really want the FED to cut rates. 0:15:33.960 --> 0:15:37.480 So that also is a tailwind for the bond market, 0:15:37.560 --> 0:15:40.760 right because you know, short rates right now aren't going 0:15:40.840 --> 0:15:44.080 to be there a year from today, So that's. 0:15:43.920 --> 0:15:44.520 A tail wind. 0:15:44.600 --> 0:15:48.240 And again, I think the biggest threat to the stock 0:15:48.320 --> 0:15:53.000 market has been the has been our fiscal profligacy, something 0:15:53.120 --> 0:15:56.720 like the Big Beautiful Bill, because that was always going 0:15:56.760 --> 0:16:01.520 to be a threat to the safety and security the 0:16:01.560 --> 0:16:05.560 bond market, whether investors would tolerate what's going on. And 0:16:05.760 --> 0:16:10.120 right now it seems like, both globally and domestically that 0:16:10.160 --> 0:16:14.240 the world's okay with Cafe kicking the can down the road. 0:16:14.240 --> 0:16:17.760 We're going to suspend reality. It's okay. So in that 0:16:17.880 --> 0:16:20.960 scenario again, if. 0:16:22.320 --> 0:16:24.320 I have to make a decision on stocks and I 0:16:24.440 --> 0:16:27.720 think that rates are going to be three percent twelve months, yeah, 0:16:27.760 --> 0:16:28.800 I'm probably long. 0:16:29.120 --> 0:16:31.480 By the way, you keep mentioning KFE and we're all 0:16:31.560 --> 0:16:33.920 kind of watching this knowing it's fake, but don't really 0:16:34.000 --> 0:16:36.840 care right now? Is that because we're not invested Because 0:16:36.880 --> 0:16:39.680 Brad Gershner has this idea and Ted Cruz was on 0:16:39.720 --> 0:16:41.280 Bloomberg talking about it yesterday. 0:16:42.480 --> 0:16:43.520 I think it's invest. 0:16:43.240 --> 0:16:47.480 America where you give every child born one thousand dollars 0:16:47.560 --> 0:16:51.040 and then allow parents or relatives to invest five thousand 0:16:51.080 --> 0:16:52.920 a year. Then by the time they're eighteen of the 0:16:52.920 --> 0:16:55.960 stock market continues to appreciate they have a serious nut, 0:16:56.120 --> 0:16:58.480 but they're also they've got skin in the game. 0:16:58.680 --> 0:17:03.160 Yeah, I think it's see here, I'm here. 0:17:03.240 --> 0:17:08.160 I'm I'm I'm the I'm the budget I'm the budget. 0:17:09.880 --> 0:17:10.160 Hawk. 0:17:10.280 --> 0:17:13.320 And yeah, i'm the budget in the in the in 0:17:13.359 --> 0:17:15.840 the in the cranky guy. But that's the best four 0:17:15.920 --> 0:17:20.600 billion dollars that would ever spend in history, because the 0:17:20.640 --> 0:17:24.919 idea of making kids stakeholders from an early age and 0:17:25.080 --> 0:17:29.440 capitalism is so important, Oh my gosh, and then allowing 0:17:29.840 --> 0:17:33.560 employers or relatives or whatever to build that account so 0:17:33.600 --> 0:17:38.000 that at an early age they understand the idea of entrepreneurialship, 0:17:38.480 --> 0:17:47.840 of free markets, of of self individual excitement, about understanding 0:17:48.000 --> 0:17:54.000 how productivity actually works, how we build things through our 0:17:54.040 --> 0:17:54.960 own shared initiatives. 0:17:54.960 --> 0:17:57.040 I think it's just spectacular idea. 0:17:57.040 --> 0:18:00.200 It's the best four billion this government could ever spend. 0:18:00.840 --> 0:18:03.080 So there's a good way to add to the deficit, 0:18:03.119 --> 0:18:05.200 and there's a bad way. That would be the best 0:18:05.240 --> 0:18:07.720 four billion. I'm very conscious of the clock. We only 0:18:07.760 --> 0:18:10.680 have about eight minutes luck with you, so let's talk 0:18:10.680 --> 0:18:11.280 a little. 0:18:11.080 --> 0:18:12.320 Bit about AI. 0:18:12.720 --> 0:18:16.760 You've expressed concerns about AI in the past, and may 0:18:16.800 --> 0:18:19.040 I believe you said that. I mean, it could be 0:18:19.640 --> 0:18:22.600 pretty disastrous if you think about, if you really put 0:18:22.600 --> 0:18:26.360 your thinking cap on. But I'm curious from the investment perspective, 0:18:26.760 --> 0:18:30.199 when you wear your investor hat, how do you view it? 0:18:30.240 --> 0:18:30.400 Then? 0:18:30.600 --> 0:18:33.480 I mean, there's plenty of things to gets concerned about. 0:18:33.480 --> 0:18:35.680 But we were having a great conversation with Cliff Astiness 0:18:35.680 --> 0:18:37.919 of AQR last week. He's had a real change of 0:18:37.920 --> 0:18:40.960 heart when it comes to AI. He's embraced it. Are 0:18:40.960 --> 0:18:41.800 you embracing it? 0:18:42.480 --> 0:18:47.120 Well, for sure, I'm embracing it. We tested two models 0:18:47.240 --> 0:18:50.639 last week. Internally, we have a variety of quantinems a tutor. 0:18:50.720 --> 0:18:58.000 We tested two models, commercially available models. Where AI has 0:18:58.080 --> 0:19:01.440 gone in the last four months. In the last four 0:19:01.560 --> 0:19:08.160 months is so incredible. These models will the do democratize 0:19:08.800 --> 0:19:13.560 quant modeling for the markets Like I can just say 0:19:13.600 --> 0:19:18.200 I've I've been an investment in quant modeling for the 0:19:18.280 --> 0:19:23.960 last thirty years. Internally, externally, variety of ways, and what 0:19:24.080 --> 0:19:25.440 these new models. 0:19:25.080 --> 0:19:25.920 Do is. 0:19:27.640 --> 0:19:30.840 What you know, there's a huge barrier to entry if 0:19:30.880 --> 0:19:33.840 you think about quant modeling, which is I need to 0:19:33.880 --> 0:19:36.879 have dozens. If you look at the big ones, the 0:19:37.200 --> 0:19:40.560 really whether it's two Sigma or Jumper Human, they have 0:19:41.160 --> 0:19:42.879 one hundred thousands of employees. 0:19:42.920 --> 0:19:46.680 That's the edge, That's that's Cliff's edge, right with these 0:19:46.760 --> 0:19:47.440 new models. 0:19:47.680 --> 0:19:52.800 Wowie, it's it's incredible what these new models do. And 0:19:53.119 --> 0:19:55.240 the reason that I bring that up, of course, you 0:19:55.320 --> 0:19:59.360 have to embrace it. In our business, there's larger issues 0:19:59.520 --> 0:20:02.479 regarding to Yeah, I think if you don't mind, I 0:20:02.520 --> 0:20:05.840 can't tell you because I don't really trade individual stocks 0:20:05.840 --> 0:20:10.560 that much. I'm actually using the models from a quant standpoint, 0:20:10.600 --> 0:20:12.320 so I can't tell you which companies to buy. 0:20:12.400 --> 0:20:13.720 It's pretty clear. 0:20:15.200 --> 0:20:19.760 That this is obviously the most disruptive technology in the 0:20:19.800 --> 0:20:22.720 history of mankind. If I can just give you that, 0:20:22.800 --> 0:20:25.520 here's the way I think of AI. You're too young 0:20:25.560 --> 0:20:25.840 for this. 0:20:25.920 --> 0:20:29.280 But there was a great Twilight Zone Okay, great. 0:20:29.040 --> 0:20:32.600 Twilight Zone episode where Aliens came down to Earth and 0:20:32.640 --> 0:20:34.960 they had this and they hand this book. 0:20:35.000 --> 0:20:37.600 It says to serve Man, and everyone goes. 0:20:37.400 --> 0:20:42.560 Hooray, they're gonna They're gonna save humanity, see Humanitarian God. 0:20:43.280 --> 0:20:45.000 And it turns out to be a cookbook. 0:20:47.080 --> 0:20:50.000 I was ready to push back, but it's a beautiful kid. 0:20:49.880 --> 0:20:50.960 Book I have seen. 0:20:52.080 --> 0:20:58.160 So anyway, we just had a Robin Hood AI poverty 0:20:58.160 --> 0:20:59.920 summit on Monday, which I was at. 0:21:00.200 --> 0:21:02.520 Oh my lord, the things that AI are going to 0:21:02.640 --> 0:21:04.600 do for education. 0:21:04.880 --> 0:21:08.720 There is no excuse for a low income. 0:21:08.359 --> 0:21:10.400 Kid not to have the greatest education. 0:21:12.200 --> 0:21:15.800 If his parents are caregiver is taking care of them, 0:21:15.880 --> 0:21:19.080 My gosh, they're going to have an individual tutor to 0:21:19.200 --> 0:21:25.040 walk them through everything. So it's really spectacular. The downside 0:21:25.040 --> 0:21:30.199 of AI is that we've been served. Right when I 0:21:30.240 --> 0:21:34.280 say we've been served, you had in February Elon Musk. 0:21:35.160 --> 0:21:37.000 You can think what you think of and with regard 0:21:37.000 --> 0:21:39.960 to his moral compass, but he's the Thomas Jefferson Thomas 0:21:40.080 --> 0:21:44.399 Edison of our time said AI has the twenty percent 0:21:44.480 --> 0:21:49.040 possibility of wiping out humanity. There's the safety side that 0:21:49.160 --> 0:21:54.800 should send off alarm bells throughout the world, particularly in 0:21:54.880 --> 0:21:59.640