WEBVTT - The `Odd Lots' Crossover Episode 0:00:14.840 --> 0:00:18.320 Hello, and welcome to What Goes Up, a weekly markets podcast. 0:00:18.360 --> 0:00:21.600 My name is Mike Reagan. I'm a senior editor at Bloomberg. 0:00:21.160 --> 0:00:23.840 And I'm Wildonna high Across asset reporter with Bloomberg. 0:00:24.160 --> 0:00:28.280 And this Weekvil Donna, a very special episode shows up. 0:00:28.400 --> 0:00:29.840 You know, when I was a kid in the seventies 0:00:29.840 --> 0:00:33.080 and eighties, the best TV was always the crossover events. 0:00:33.120 --> 0:00:35.640 Are you sure it was this the eighteen seven Yeah? 0:00:35.720 --> 0:00:39.320 I knew that was coming old shaming as usual, but 0:00:39.440 --> 0:00:41.280 I had to google it to figure out what the 0:00:41.320 --> 0:00:44.479 best crossover okay, TV episodes ever were. Do you know 0:00:44.560 --> 0:00:47.559 what The first one? I think was No Superman on 0:00:47.720 --> 0:00:50.920 I Love Lucy in nineteen fifty seven. How about that? Yeah? 0:00:50.960 --> 0:00:52.760 I was not around for that, but I was around 0:00:52.800 --> 0:00:55.360 for The Jetsons meet the Flintstones. That was a thing, 0:00:55.560 --> 0:00:57.680 you remember that, the Jetsons meet. I don't know how the 0:00:57.800 --> 0:01:01.000 Jetsons could have met the Flintstone. It doesn't seen logical. 0:01:01.080 --> 0:01:02.800 Yeah, because one is future one is past. 0:01:03.000 --> 0:01:06.600 Right. Yeah, so here's one of your generations, I think, Okay, 0:01:07.760 --> 0:01:10.840 the Sweet Life of Hannah Montana. You remember that? 0:01:10.920 --> 0:01:13.080 Oh my god, I watched that when I was little. Yeah, 0:01:13.080 --> 0:01:14.600 of course, Miley Cyrus. 0:01:14.800 --> 0:01:17.480 Miley Cyrus. He watched Hannah of course, and did you 0:01:17.520 --> 0:01:19.119 remember them her on The Sweet Life? 0:01:19.520 --> 0:01:22.959 No, The Sweet Life with Zach and Cody? Is that right? 0:01:23.040 --> 0:01:24.200 Yeah? Yeah? 0:01:24.240 --> 0:01:25.880 Anyway, No, I don't remember that. 0:01:25.959 --> 0:01:28.240 The point is I love a good crossover episode. 0:01:28.360 --> 0:01:32.000 Yeah, we have one today, we do. We're really really 0:01:32.000 --> 0:01:35.880 fortunate to have Joe Wisenthal and Tracy Alloway the co 0:01:36.000 --> 0:01:39.760 hosts or hosts hosts co hosts, co host, co host 0:01:39.760 --> 0:01:42.360 works of What goes Up Now I'm just kidding. 0:01:44.360 --> 0:01:46.200 The Jetsons. We have the Jetsons meeting. 0:01:46.000 --> 0:01:49.320 The Flintstoness meeting the flint Scents. There. They are the 0:01:49.360 --> 0:01:53.680 hosts of the uber super popular Odd Lots podcast. 0:01:54.040 --> 0:01:57.160 Thank you, thank you. Really have very psyched to be here. 0:01:57.440 --> 0:02:00.480 But anyway, we want to actually start out by talking 0:02:00.480 --> 0:02:02.600 about you guys a little bit cool. We are going 0:02:02.640 --> 0:02:04.760 to put you on the spot, okay, but actually, Joe, 0:02:04.880 --> 0:02:06.960 right before we started taping, you said you when you 0:02:06.960 --> 0:02:08.400 were little, you lived in Malaysia. 0:02:08.840 --> 0:02:11.200 I did I live for I moved around a Fairmount 0:02:11.240 --> 0:02:13.040 when I was a kid, and my dad was a 0:02:13.440 --> 0:02:16.840 he's a physics professor and the Malaysian government in the 0:02:17.160 --> 0:02:18.680 I don't know, maybe they still have the program. But 0:02:18.720 --> 0:02:21.280 in the late eighties and early nineties, they had this 0:02:21.360 --> 0:02:26.520 program where they imported American university professors to Malaysia for 0:02:26.560 --> 0:02:29.240 a few years so that local like sort of like 0:02:29.280 --> 0:02:32.639 promising students could train under like a sort of US 0:02:32.720 --> 0:02:35.480 style university system for their first two years of college 0:02:35.720 --> 0:02:38.079 and then complete their degrees in the US for their 0:02:38.080 --> 0:02:38.840 final two years. 0:02:38.880 --> 0:02:40.360 So that was really fun. I want to go back 0:02:40.360 --> 0:02:41.040 to Malaysia here. 0:02:41.080 --> 0:02:42.320 I thought you were from Texas. 0:02:42.800 --> 0:02:43.799 No, I'm a Fox Texans. 0:02:44.040 --> 0:02:46.919 I want to college secular misconception. I was from Texas. 0:02:47.000 --> 0:02:49.079 I'm glad I give off. I'm glad I pull it off. 0:02:49.440 --> 0:02:50.880 You've got the swagger the cowboys. 0:02:50.919 --> 0:02:53.960 Well, because you go to Texas on vacations. 0:02:53.480 --> 0:02:54.960 One of the college there and I go back there. 0:02:55.560 --> 0:02:56.680 Yeah you do that. 0:02:57.200 --> 0:03:00.000 Yeah, what's your backstory? 0:03:00.120 --> 0:03:01.600 Can you give us the actual chronology? 0:03:01.600 --> 0:03:04.640 Because no, I can't because I don't remember everything. So 0:03:04.720 --> 0:03:07.920 I was born in Arkansas in a place that no 0:03:08.000 --> 0:03:10.720 longer exists. It was a military base. My dad was 0:03:10.720 --> 0:03:11.440 with the Air Force. 0:03:11.720 --> 0:03:12.400 And then I lived in. 0:03:12.440 --> 0:03:14.800 Chicago for a bit, Dallas for a bit, and then 0:03:14.840 --> 0:03:17.120 I moved to I was in Tokyo for a part 0:03:17.160 --> 0:03:19.680 of preschool, and then at some point I moved to 0:03:19.680 --> 0:03:23.200 Tokyo first to fourth grade, and then I was in 0:03:23.280 --> 0:03:26.160 Chicago from middle school, and then I was in Vienna 0:03:26.200 --> 0:03:28.080 for two years, and then my last two years of 0:03:28.200 --> 0:03:29.960 high school were in Tokyo. 0:03:30.240 --> 0:03:32.960 It's interesting you both have sort of this. You know, 0:03:33.040 --> 0:03:35.400 grew up moving around a lot of will Don and 0:03:35.520 --> 0:03:37.840 I think I barely left the Tri state area. But 0:03:37.960 --> 0:03:40.800 let's get into sort of I want to talk about 0:03:40.840 --> 0:03:44.160 what makes you two such good co hosts and what 0:03:44.240 --> 0:03:46.840 makes you tick, because I feel like there's a bit 0:03:46.880 --> 0:03:49.240 of a ying and yang thing going on. You know. 0:03:49.560 --> 0:03:52.080 I look at Tracy and I the way you view 0:03:52.120 --> 0:03:55.320 markets and correct me if I'm making too many leaps here. 0:03:55.360 --> 0:03:57.880 But you're almost like a chief risk officer to me. 0:03:58.120 --> 0:04:01.920 You look at the economy and markets from that angle, 0:04:02.120 --> 0:04:05.160 whereas Joe is sort of like, I don't know, and 0:04:05.160 --> 0:04:10.080 this is a compliment, but sort of perennial optimists, risk embracing. 0:04:10.160 --> 0:04:11.880 I mean, is that a fair way to. 0:04:12.640 --> 0:04:16.320 Describe you to I think we skew in those respective directions. 0:04:16.480 --> 0:04:18.920 I think I've spoken about this before, but a lot 0:04:18.960 --> 0:04:22.479 of my career as a financial journalist was colored by 0:04:22.600 --> 0:04:25.479 the two thousand and eight financial crisis. I actually left 0:04:25.640 --> 0:04:30.800 Bloomberg En joined the ft Are in September of two 0:04:30.880 --> 0:04:33.159 thousand and eight, and that was the first time I 0:04:33.240 --> 0:04:37.040 covered hardcore finance, so banks and markets, and you can 0:04:37.120 --> 0:04:40.279 imagine what that experience was like. And I think to 0:04:40.360 --> 0:04:44.480 some degree that has shaped my approach to financial journalism, 0:04:44.520 --> 0:04:47.000 which is you're always looking for the next risk over 0:04:47.120 --> 0:04:50.400 the horizon. That's kind of where the big prizes for 0:04:50.440 --> 0:04:53.360 a lot of financial journalists. But I have also come 0:04:53.400 --> 0:04:56.120 to realize, thanks in part to Joe, that there is 0:04:56.160 --> 0:04:59.320 a whole other discourse of financial journalism out there. You know, 0:04:59.360 --> 0:05:03.159 people are interest in potential investments, obviously, people are interested 0:05:03.160 --> 0:05:06.200 in how things actually work, and that has been very, 0:05:06.279 --> 0:05:07.040 very fun to cover. 0:05:07.480 --> 0:05:08.880 I love the framework. 0:05:08.920 --> 0:05:12.400 Our old colleague Luke Kawa has said multiple times that 0:05:12.640 --> 0:05:16.000 Tracy is value and I'm momentum, which is basically, like, 0:05:16.080 --> 0:05:18.880 you know, Tracy captures the value factor. It's like eternal 0:05:19.560 --> 0:05:22.520 and you know, like me, I am. You know, it's like, oh, 0:05:22.520 --> 0:05:25.039 everyone's talking about crypto now, and it's not that like 0:05:25.080 --> 0:05:28.119 I'm into crypto per se, or like that I'm into 0:05:28.160 --> 0:05:31.039 AI or whatever. It's more just that like, oh, this 0:05:31.200 --> 0:05:32.560 is the thing, and I want to figure it out, 0:05:32.680 --> 0:05:35.600 and then Tracy is like the ballast maybe like you know, 0:05:35.880 --> 0:05:39.560 Tracy is the bonds on the sixty forty portfolio and 0:05:39.600 --> 0:05:41.960 I'm the stocks or something like that. I do think 0:05:42.000 --> 0:05:45.839 that it balances out well, that completes the optimal portfolio 0:05:45.920 --> 0:05:47.520 allocation between the two of us. 0:05:47.600 --> 0:05:49.600 Well, that's an interesting way to think of it, because 0:05:49.720 --> 0:05:53.080 I think, you know, risk aversion is probably the biggest 0:05:53.120 --> 0:05:55.840 mistake over too much risk version is the biggest mistake 0:05:56.080 --> 0:05:58.160 an investor can make, I think totally. 0:05:58.200 --> 0:06:00.359 And this is something that I used to write a 0:06:00.360 --> 0:06:03.400 lot about credit and corporate bonds, and I kept writing 0:06:03.440 --> 0:06:05.800 about how, oh, when interest rates go up, this is 0:06:05.839 --> 0:06:07.240 going to be a big, big issue. 0:06:07.600 --> 0:06:08.440 And I kind of. 0:06:08.360 --> 0:06:11.000 Had to get over that to some extent because in 0:06:11.040 --> 0:06:13.120 twenty twenty, you know, what did we see. We saw 0:06:13.160 --> 0:06:16.960 the Fed announce a corporate bond buying program. And after that, 0:06:17.120 --> 0:06:19.680 I think the risk kind of shifts a little bit 0:06:19.720 --> 0:06:21.760 and you start to realize that there are a lot 0:06:21.800 --> 0:06:24.360 of problems out there in the world, but central banks 0:06:24.360 --> 0:06:28.080 are also sort of endlessly creative at solving them, and 0:06:28.240 --> 0:06:31.360 to some extent I stopped worrying so much about those 0:06:31.520 --> 0:06:32.560 types of risks. 0:06:33.080 --> 0:06:34.000 I do think it's interesting. 0:06:34.080 --> 0:06:36.480 I mean, now we're actually talking literally about like sort 0:06:36.480 --> 0:06:38.520 of financial assets, but it is interesting. 0:06:38.520 --> 0:06:39.240 I've always think, you. 0:06:39.240 --> 0:06:43.520 Know, if you're like into bonds, your payout is capped right, 0:06:43.600 --> 0:06:45.120 like you know that you want to get paid back 0:06:45.120 --> 0:06:47.200 at one hundred dollars on the dollar. It's the downside 0:06:47.200 --> 0:06:48.800 that can you go all the way to zero. So 0:06:48.839 --> 0:06:51.520 it's like an entirely a sort of worldview of like 0:06:51.920 --> 0:06:56.000 downside avoidance, whereas with stocks, you know, the upside is 0:06:56.040 --> 0:06:58.760 theoretically unlimited. So it's like you have one side that's 0:06:58.760 --> 0:07:01.120 trying to like cut off the left tail, and you 0:07:01.120 --> 0:07:03.000 have another side that's trying to like shoot for the 0:07:03.120 --> 0:07:05.599 right tail. But I really do think, like in covering 0:07:05.640 --> 0:07:09.600 markets too, you start to see these like personality types 0:07:09.680 --> 0:07:11.640 like a merge where it's like, I don't know, stock 0:07:11.720 --> 0:07:13.120 people seem. 0:07:12.920 --> 0:07:13.720 A little sunnier. 0:07:13.920 --> 0:07:16.840 Commity people are the most sociopathic because they're sort of 0:07:16.880 --> 0:07:20.080 vetting against human ingenuity, and bond people are like the 0:07:20.120 --> 0:07:22.960 most like sort of like yeah, like risk avoidant because 0:07:23.280 --> 0:07:26.040 they already know what they're the best outcome is they're 0:07:26.040 --> 0:07:27.560 just trying to cut off the worst outcomes. 0:07:27.800 --> 0:07:29.520 And then there are FX traders. 0:07:29.520 --> 0:07:33.920 What about crypto. It's like this like weird mix of 0:07:33.920 --> 0:07:36.120 like optimism and like derange pessimism. 0:07:36.200 --> 0:07:38.240 I don't know, Like, no, you're absolutely right. 0:07:38.600 --> 0:07:41.880 It's like we're going to get a massive payout because 0:07:41.960 --> 0:07:42.800 the world. 0:07:44.040 --> 0:07:48.440 Yeah, all right, well, Tracy, I'm going to point you 0:07:48.520 --> 0:07:50.280 chief risk officer of Odd Lots. 0:07:50.320 --> 0:07:51.440 I like, thank you. 0:07:51.480 --> 0:07:54.400 But Joe has always been a big proponent of the 0:07:54.440 --> 0:07:57.720 trillion dollar coin. For those who are unfamiliar, I don't 0:07:57.720 --> 0:07:59.880 know how you could be after all the talk of it. 0:08:00.120 --> 0:08:03.000 But the idea is that when the government, when Congress 0:08:03.040 --> 0:08:06.560 reaches this impass on raising the debt ceiling, that there's 0:08:06.760 --> 0:08:10.200 an obscure law that allows the Treasury to meant a 0:08:10.240 --> 0:08:12.720 trillion dollar coin. It's such a Joe topic, and I 0:08:12.760 --> 0:08:16.400 love that about it. It's like because it's quirky, it's weird, 0:08:16.440 --> 0:08:20.040 but also it is like a potential real life solution 0:08:20.120 --> 0:08:23.080 to a major problem that is worth discussing. And this 0:08:23.600 --> 0:08:27.120 past episode of the debt ceiling talks, I feel like 0:08:27.280 --> 0:08:30.160 it bubbled up to the highs. 0:08:30.240 --> 0:08:35.280 It it bubbles up every time. It never actually happens one day. 0:08:35.720 --> 0:08:37.920 He let's hear your take on the trillion dollar coin. 0:08:38.120 --> 0:08:40.760 So, first of all, let me say I admire Joe's 0:08:40.800 --> 0:08:45.520 commitment to the trillion dollar coin, and in many ways 0:08:45.640 --> 0:08:49.960 it is a exceedingly clever loophole that sort of gets 0:08:50.000 --> 0:08:52.280 to the heart of the way the US monetary and 0:08:52.360 --> 0:08:56.520 legal system actually works. However, my issue with it, I 0:08:56.559 --> 0:09:01.600 think is optics matter, right, and I think pitching this 0:09:01.760 --> 0:09:04.000 idea as like, we got a lot of really smart 0:09:04.000 --> 0:09:07.000 people in a room to find a really esoteric loophole 0:09:07.080 --> 0:09:10.120 that you know, is difficult to explain to a lot 0:09:10.160 --> 0:09:13.160 of people, and then trying to explain that to a 0:09:13.320 --> 0:09:17.840 general population of voters I think would be extremely difficult. 0:09:17.880 --> 0:09:20.839 So that's number one. You can imagine the Fox News 0:09:20.880 --> 0:09:25.240 headlines on Democrats minting the coin effectively. And then the 0:09:25.280 --> 0:09:27.960 second thing that worries me about it is it is 0:09:28.000 --> 0:09:31.520 a very clever loophole, but a loophole nonetheless, And we 0:09:31.679 --> 0:09:35.240 might think it's worthwhile in the context of a debt 0:09:35.320 --> 0:09:38.400 sealing argument, but what about the next president. What if 0:09:38.440 --> 0:09:40.640 the next president decides, oh, actually I can do something 0:09:40.679 --> 0:09:45.080 similar to I don't know, fund my like fascist army 0:09:45.200 --> 0:09:46.120 or something like that. 0:09:46.440 --> 0:09:47.200 That worries me. 0:09:47.600 --> 0:09:50.600 And loopholes seem great when they're being used for things 0:09:50.600 --> 0:09:53.360 that you agree with. They do not seem so great 0:09:53.360 --> 0:09:56.439 when they're being used for things that are more nefarious. 0:09:56.480 --> 0:09:58.360 All right, I'll give you my one worry about it, 0:09:58.360 --> 0:10:00.680 then we'll let Shoe respond all of it. My worry 0:10:00.800 --> 0:10:03.160 is like it could create a Liz Trust type of 0:10:03.200 --> 0:10:06.680 moment in the markets. You know, the UK leader who 0:10:07.040 --> 0:10:10.040 introduced you know, big tax cuts. 0:10:10.760 --> 0:10:14.079 Joe has thoughts on liz Trust too, and the lettuce right. 0:10:15.000 --> 0:10:17.560 My fear would be that would be this immediate reaction 0:10:17.640 --> 0:10:22.360 in the markets, Like that would cause you know whatever, 0:10:22.400 --> 0:10:24.520 the dollar to saying, bond yields to go nuts. 0:10:24.840 --> 0:10:26.520 Everything you guys say is probably mostly right. 0:10:26.559 --> 0:10:29.760 I'll say two things is like, one is the worst 0:10:29.760 --> 0:10:32.640 outcome I think of a debt ceiling fiasco would be 0:10:32.679 --> 0:10:36.080 an actual miscredit payment or mistrageric payment. And there are 0:10:36.160 --> 0:10:40.480 many things loopholes, gimmicks, potential market risk, credibility, things that 0:10:40.520 --> 0:10:43.080 would probably be worth taking if the alternative is an 0:10:43.160 --> 0:10:46.240 actual default on the debt. And the other thing is 0:10:46.280 --> 0:10:49.360 I'll just say, look at my enthusiasm. It's like, in addition, 0:10:49.440 --> 0:10:51.760 it to being a loophole like and Tracy sort of 0:10:51.960 --> 0:10:55.400 hinted at this. I love the didactic potential of it 0:10:55.480 --> 0:10:58.000 because you do learn a lot through like how our 0:10:58.040 --> 0:11:01.520 monetary system is like and these inversational why wouldn't cons inflation? 0:11:02.000 --> 0:11:04.960 And you learn a lot about constitutional origins, et cetera. 0:11:05.040 --> 0:11:08.640 So it's almost like a thought experiment in the form 0:11:08.720 --> 0:11:12.160 of a physical coin. It's like it's something it is, 0:11:12.200 --> 0:11:14.640 this like physical thing that could exist, but there are 0:11:14.679 --> 0:11:18.040 so many interesting legal and economic ideas embedded in this 0:11:18.120 --> 0:11:21.440 coin that I can't help but resist want to see 0:11:21.480 --> 0:11:21.839 it happen. 0:11:21.840 --> 0:11:24.720 One is there a little bit of mischievousness too on 0:11:24.760 --> 0:11:25.040 your own? 0:11:25.120 --> 0:11:25.400 You know what? 0:11:25.400 --> 0:11:26.280 I just say, yes. 0:11:26.320 --> 0:11:28.640 But what I really do enjoy about it from a 0:11:28.720 --> 0:11:33.440 sort of like mischief a standpoint, is that most arguments 0:11:33.440 --> 0:11:37.400 against it, not saying traces are yours, but most arguments 0:11:37.559 --> 0:11:42.200 end up being extremely bad and easily debunked and easily 0:11:42.280 --> 0:11:44.959 argued against. And so what I sort of enjoy from 0:11:45.040 --> 0:11:48.560 a you can call it trolling, is that you do 0:11:48.600 --> 0:11:50.960 see these people like tilted windmills because it seems like, oh, 0:11:50.960 --> 0:11:53.640 it's obviously dumb, and then like one by one, the 0:11:53.720 --> 0:11:56.520 sort of like at their arguments fall apart, which is weird, 0:11:57.400 --> 0:11:58.640 and so it's kind of you can have a lot of. 0:11:58.600 --> 0:11:58.920 Fun with it. 0:11:59.200 --> 0:12:01.280 This is great for me because we're creating a lot 0:12:01.280 --> 0:12:04.760 of controversy with this this podcast. Okay, the other thing 0:12:04.760 --> 0:12:07.240 about both of you, and I've worked with both of 0:12:07.240 --> 0:12:11.000 you in different capacities over the last couple of years, 0:12:11.040 --> 0:12:14.840 but also you guys have so many ideas about stories 0:12:14.840 --> 0:12:18.320 that should be written about the market, like really good 0:12:18.320 --> 0:12:21.719 ideas all the time. Like Tracy, remember one of your 0:12:21.760 --> 0:12:24.040 mayonnaise story was so good, Oh thank you. 0:12:24.160 --> 0:12:26.280 Yeah, that was so toying with whether or not to 0:12:26.360 --> 0:12:30.320 do a third edition of may I will just do it. 0:12:30.360 --> 0:12:33.160 August is mayonnaise season for me, so maybe I will. 0:12:33.200 --> 0:12:35.720 Another topic you guys have been talking about a lot 0:12:35.760 --> 0:12:38.960 is organized labor and you've had some episodes about this, 0:12:39.000 --> 0:12:41.960 and I think Tracy you called it the hot union summer. 0:12:42.960 --> 0:12:45.000 I think Joe pointed out I was probably not the 0:12:45.000 --> 0:12:47.360 first person to say that, but it does feel like 0:12:47.400 --> 0:12:50.480 there is something in the air with more proactive labor 0:12:50.640 --> 0:12:52.880 union movements. And we talked about this actually in one 0:12:52.920 --> 0:12:56.200 of our really early pandemic episodes. We had on a 0:12:56.240 --> 0:12:59.199 financial historian to talk about what happened to the labor 0:12:59.280 --> 0:13:02.920 market are the plague in the Middle Ages, and he 0:13:02.960 --> 0:13:05.640 made the point that because so many people died, there 0:13:05.720 --> 0:13:08.000 was a lot of power that sort of swung to labor, 0:13:08.360 --> 0:13:11.959 and so you did start to see some pushback against 0:13:12.000 --> 0:13:14.320 I guess the sort of land barons of that time. 0:13:14.360 --> 0:13:16.800 Yeah, and maybe, you know, maybe that's what we're seeing now. 0:13:17.720 --> 0:13:20.800 The labor conversation, I feel like touches on so many 0:13:20.880 --> 0:13:23.280 different dynamics that we like to like what happens when 0:13:23.360 --> 0:13:25.960 labor markets just get really tight and work or bargaining power, 0:13:26.000 --> 0:13:28.760 which is something we discussed for years before the pandemic, 0:13:28.840 --> 0:13:31.800 and why was wage growth so mediocre and stuff, et cetera. 0:13:32.480 --> 0:13:35.360 The role of like organized labor is like, there's all 0:13:35.360 --> 0:13:40.000 this domestic investment in electric vehicles and electrifying, you know, decarbonization. 0:13:40.240 --> 0:13:41.280 That's really interesting. 0:13:41.360 --> 0:13:44.320 Tension corporate profits as well, which is something we've been 0:13:44.320 --> 0:13:45.160 talking a lot about. 0:13:45.400 --> 0:13:47.720 Yeah, So I just feel yeah, and also, you know, 0:13:47.840 --> 0:13:50.440 like so much of the seventies inflation story is like 0:13:50.520 --> 0:13:52.400 caught up in this thing of like this the sort 0:13:52.440 --> 0:13:55.000 of wage price spiral and the unions being able to 0:13:55.040 --> 0:13:57.720 claim higher wages than the work. The company is trying 0:13:57.760 --> 0:14:00.680 to pass that on, and so like the labor dimension, 0:14:00.720 --> 0:14:02.920 it just seems like like this big through line across 0:14:02.920 --> 0:14:04.040 so many of our different themes. 0:14:04.200 --> 0:14:06.880 Yeah, there's a headline out this week the ups the 0:14:06.960 --> 0:14:10.000 new contract. At the end of the drivers will be 0:14:10.000 --> 0:14:12.199 making like one seven hundred and seventy. 0:14:12.280 --> 0:14:13.280 Dollars with benefits. 0:14:13.320 --> 0:14:15.480 Which, hey, it's a hard job and yeah, you know 0:14:15.600 --> 0:14:17.400 they deserve it, but. 0:14:16.920 --> 0:14:19.040 But it is. It is part of so many other 0:14:19.120 --> 0:14:23.360 stories too, like the Yellow Core bankruptcy that partly was 0:14:23.400 --> 0:14:25.760 also triggered by I think union talks. 0:14:25.840 --> 0:14:28.120 Right, that company was like in deep distress for years, 0:14:28.120 --> 0:14:30.400 but that was that did seem to be distray that Finally. 0:14:30.400 --> 0:14:31.640 They definitely blamed it on the union. 0:14:31.720 --> 0:14:32.760 They definitely planned it on the. 0:14:33.080 --> 0:14:43.200 Yeah, all right, another hot button topic. Were you ready? 0:14:43.240 --> 0:14:43.840 What is it? 0:14:43.880 --> 0:14:46.360 Take a deep breath MMT. I want to talk a 0:14:46.400 --> 0:14:47.000 little bit about it. 0:14:47.600 --> 0:14:50.480 Can I just say Tracy is like, even though she 0:14:50.760 --> 0:14:54.560 would claimed to like or disclaim MMT, the MMT ers 0:14:55.080 --> 0:14:58.000 all love many of Tracy's formulations. 0:14:58.160 --> 0:14:59.400 God, Tracy really nailed it. 0:14:59.640 --> 0:15:04.440 Well my okay, here here's my on the record stance 0:15:04.440 --> 0:15:05.000 on MMT. 0:15:05.720 --> 0:15:08.000 First, can you you'll explain it better than I can. 0:15:08.280 --> 0:15:09.920 Let's show explain it a brief. 0:15:10.360 --> 0:15:15.160 I would describe MMT as the simple characterization that a government. 0:15:15.560 --> 0:15:18.600 That a government's constraint is not the same as a 0:15:18.640 --> 0:15:20.320 household constraint where it's like, oh, you're not going to 0:15:20.360 --> 0:15:22.680 have enough income to pay your debts. That a government's 0:15:22.680 --> 0:15:25.360 constraint is the flip, which is that the constraint on 0:15:25.480 --> 0:15:28.360 spending is real resources in the economy, and if you 0:15:28.400 --> 0:15:31.080 spend too much then you get inflation, and that that 0:15:31.440 --> 0:15:33.560 composes some sort of limit on what you can spend. 0:15:33.800 --> 0:15:37.520 But they're trying to gauge a government's spending capacity by 0:15:37.560 --> 0:15:40.400 just looking at things like deficits. The gap between revenue 0:15:40.440 --> 0:15:41.720 and income won't get you very far. 0:15:41.920 --> 0:15:45.920 And I actually I agree with all of that. However, 0:15:46.320 --> 0:15:47.760 my I guess. 0:15:48.240 --> 0:15:50.120 It's like a therapy session for you to hear. 0:15:50.760 --> 0:15:54.400 This is a lot Joe and not yelling at each other. No, 0:15:54.520 --> 0:15:55.200 I agree with that. 0:15:55.480 --> 0:15:58.360 My problem with it is I don't find it that 0:15:58.720 --> 0:16:03.640 useful because in practice it already seems to exist. I mean, 0:16:03.680 --> 0:16:05.840 we've watched the US deficit go up. 0:16:05.680 --> 0:16:06.320 And up and up. 0:16:06.480 --> 0:16:09.040 It wasn't really a problem until we had inflation, and 0:16:09.280 --> 0:16:12.080 MMT has a lot to say about that, and I agree, 0:16:12.120 --> 0:16:15.320 but in practice, viewing it through that framework, I don't 0:16:15.320 --> 0:16:18.840 think leads to different actions. And then the other thing 0:16:18.840 --> 0:16:21.640 I would say is I question its usefulness even more 0:16:21.880 --> 0:16:25.120 for emerging markets. And we've talked about this on our podcast. 0:16:25.400 --> 0:16:28.280 Well, the one thing I'm wondering in this current environment, 0:16:28.480 --> 0:16:32.120 MMT would sort of suggest that the way to beat 0:16:32.200 --> 0:16:36.400 inflation is raised taxes. Right, we're cut spending, I guess, 0:16:36.440 --> 0:16:39.040 but probably raised taxes. And I feel like that's its 0:16:39.080 --> 0:16:43.440 achilles heel in that when could you ever get a politician. 0:16:43.320 --> 0:16:44.160 This is exactly it. 0:16:44.240 --> 0:16:46.760 So it's like, Okay, we're going to shift the conversation 0:16:46.840 --> 0:16:49.200 among politicians from like, oh, we have to worry about 0:16:49.200 --> 0:16:51.480 the deficit, so we can't spend this, or we can't 0:16:52.120 --> 0:16:55.200 enact tax cuts or whatever, and you're supposed to shift 0:16:55.280 --> 0:16:59.720 the conversation to inflation. But talking about inflation and why 0:16:59.760 --> 0:17:02.600 it's happening and the sources of inflation is even more 0:17:02.720 --> 0:17:06.399 difficult in some respects than talking about things from a 0:17:06.400 --> 0:17:08.880 pure budget perspective. And I think we've really seen that 0:17:09.119 --> 0:17:11.359 over the past couple of years. So again I question 0:17:11.480 --> 0:17:12.080 the utility. 0:17:12.240 --> 0:17:14.359 So if you put an automatic trigger in the law 0:17:14.480 --> 0:17:17.520 saying inflations above three percent, taxes go up. 0:17:17.720 --> 0:17:20.359 It's bad enough when politicians argue over, oh this is 0:17:20.400 --> 0:17:22.440 going to cost you know, one billion dollars. It will 0:17:22.440 --> 0:17:24.560 be even worse when they start talking about, oh, this 0:17:24.640 --> 0:17:26.400 is going to cause a you know, zero point two 0:17:26.480 --> 0:17:28.120 percent increase in inflation. 0:17:28.280 --> 0:17:31.560 I do think also, I mean to the point, you know, 0:17:31.600 --> 0:17:35.600 you see the fight over even the pause over student 0:17:35.600 --> 0:17:38.200 debt payments and how fraud that is. So I think 0:17:38.280 --> 0:17:41.680 like it is a pretty good critique of MT as 0:17:41.720 --> 0:17:45.680 a sort of like working political theory, the idea that 0:17:45.760 --> 0:17:49.240 like that there are theoretically times in which it makes 0:17:49.280 --> 0:17:52.639 sense to have fiscal constraints and that is difficult. And 0:17:52.640 --> 0:17:54.720 that's arguably like one of the reasons that the FED 0:17:54.840 --> 0:17:58.080 exists because Paul, you know that or why this is 0:17:58.119 --> 0:18:02.120 sort of the current ocean of what FED independence actually 0:18:02.280 --> 0:18:05.120 is was sort of built on this idea that, like, well, 0:18:05.119 --> 0:18:08.240 politicians can't be assumed to do what's right. And I 0:18:08.280 --> 0:18:09.760 would say, the one thing, you know, the one other 0:18:09.800 --> 0:18:12.480 thing is like Tracy came up with the formulation that, 0:18:12.520 --> 0:18:16.400 like any problem that you can solve with money isn't 0:18:16.440 --> 0:18:19.800 really a problem, which all the m M tiers love, 0:18:19.840 --> 0:18:23.040 So even though they've always love Tracy's lying about and 0:18:23.040 --> 0:18:25.480 you probably can solved with money isn't like really a problem. 0:18:25.840 --> 0:18:28.600 So one other thing I would say, just you know, 0:18:28.880 --> 0:18:31.240 out of mutual respect for the m M tiers is 0:18:31.680 --> 0:18:36.199 I am a huge fan of any iconic plastic economist 0:18:36.280 --> 0:18:39.040 who is actually thinking up new ideas for the way 0:18:39.080 --> 0:18:42.680 the world works. So massive respect for Stephaniekelton. I think 0:18:42.720 --> 0:18:46.360 she's done some phenomenal work. I do have questions about it, 0:18:46.400 --> 0:18:48.480 but kudos to her for looking at things in a 0:18:48.560 --> 0:18:49.720 slightly different way and. 0:18:49.680 --> 0:18:55.280 As a description of the current situation m mts it's right. 0:18:55.280 --> 0:18:57.480 Yeah, you know, I leave it there. 0:18:58.560 --> 0:18:58.920 That's good. 0:18:58.960 --> 0:18:59.560 That's good. That's good. 0:19:01.640 --> 0:19:03.800 I will say for a lot of these topics, the 0:19:03.840 --> 0:19:06.640 first time I learn of them, or like really start 0:19:06.720 --> 0:19:09.320 looking into them or become interested in them is because 0:19:09.359 --> 0:19:12.560 you guys are talking about it on Twitter, on x 0:19:12.800 --> 0:19:17.080 on x okay another one, and you guys also did 0:19:17.359 --> 0:19:20.000 a recent episode about this. It's a company most Americans 0:19:20.119 --> 0:19:21.560 don't know anything about. 0:19:21.640 --> 0:19:23.600 Bid the Chinese EV maker. 0:19:23.840 --> 0:19:26.280 Yes, and so EV's in general. Because Tracy, I'm going 0:19:26.320 --> 0:19:30.159 to quote you again, you said, there's this ongoing tension 0:19:30.160 --> 0:19:33.400 between wanting to create a vibrant and competitive EV industry 0:19:33.480 --> 0:19:36.800 and battery making in the US, which BID is in China, 0:19:37.200 --> 0:19:40.399 but also attaching better work conditions for workers. So this 0:19:40.480 --> 0:19:43.440 all sort of ties some of these themes together. 0:19:43.720 --> 0:19:44.040 Yeah. 0:19:44.080 --> 0:19:47.920 Absolutely, And I think we've spoken to some senior officials 0:19:47.920 --> 0:19:50.840 from the Biden administration about this tension. There is a 0:19:50.880 --> 0:19:56.160 desire to create specific industry within the US, like batteries 0:19:56.359 --> 0:20:01.120 like EV's solar panels, maybe at scale and in an 0:20:01.119 --> 0:20:03.600 efficient way, but at the same time, you want to 0:20:03.680 --> 0:20:06.879 create good working conditions. You want to make sure that 0:20:07.000 --> 0:20:09.320 this is a valuable industry for the US, and I 0:20:09.320 --> 0:20:12.240 think there's there's a real tension there between creating an efficient, 0:20:12.680 --> 0:20:18.520 presumably affordable product that Americans can buy and competing with 0:20:18.640 --> 0:20:19.840 other places in the world. 0:20:20.160 --> 0:20:22.240 I mean, I do think this is just this huge 0:20:22.320 --> 0:20:26.400 story how cheap the end, you know, the improving quality 0:20:26.440 --> 0:20:30.159 of Chinese electric vehicles and their competitive price points. It 0:20:30.200 --> 0:20:32.520 seems to be creating all kinds of stress in Europe 0:20:32.600 --> 0:20:34.640 right now or the beginning, more so than the US. 0:20:35.000 --> 0:20:37.520 But I do think it'll be It's interesting. I do 0:20:37.560 --> 0:20:40.879 think like there are some very exciting things happening domestically 0:20:40.960 --> 0:20:43.439 in the US with like our battery investments and the 0:20:43.440 --> 0:20:47.480 Inflation Reduction Act, et cetera. Like every other day there's 0:20:47.560 --> 0:20:50.479 some new announcement of a new plant, and it's just 0:20:50.560 --> 0:20:54.159 like unreal the growth that we're seeing in spending on 0:20:54.359 --> 0:20:59.480 manufacturing facilities. And I'm not convinced necessarily that like the 0:20:59.720 --> 0:21:02.400 level of US wages is going to be a problem, 0:21:02.800 --> 0:21:06.879 but I do think it's highly tbd whether all of 0:21:06.920 --> 0:21:11.399 these facilities end up producing competitive products on a global scale. 0:21:12.280 --> 0:21:14.280 Joe, this reminds me of a tweet I think you 0:21:14.359 --> 0:21:16.639 had this week sometime, and I know you guys have 0:21:16.640 --> 0:21:19.439 had a few guests on talking about the notion of Bidenomics. 0:21:20.080 --> 0:21:23.280 But to me, what's fascinating is this perception of the economy. 0:21:23.520 --> 0:21:27.160 And you tweeted out one of the consumer confidence surveys 0:21:27.200 --> 0:21:30.760 where or maybe it's the National Federation of Small Businesses, 0:21:30.800 --> 0:21:34.160 but one of those surveys where it's like Democrats think 0:21:34.200 --> 0:21:36.439 the economy is great, you know, empirically you look at 0:21:36.480 --> 0:21:41.000 the numbers, it's all great, Republican, but Republicans think we're 0:21:41.040 --> 0:21:46.680 just going to hell, Like what how to explain that that. 0:21:47.160 --> 0:21:48.640 I mean, it does seem. 0:21:48.400 --> 0:21:51.400 Like so many people in the US right now are 0:21:51.480 --> 0:21:56.000 almost in case, and I, you know, the the data suggests. 0:21:56.000 --> 0:21:58.159 I think it is a little bit more extreme for Republicans, 0:21:58.480 --> 0:22:01.680 but I actually think quote on both sides, there is 0:22:01.800 --> 0:22:05.280 extreme level of inability to sort of view the economy 0:22:05.320 --> 0:22:08.760 outside of the partisan lens. And if the president is 0:22:08.840 --> 0:22:12.240 not your party, it is pretty dramatic how much that 0:22:12.400 --> 0:22:15.600 will swigh your view on what is going on. 0:22:15.800 --> 0:22:17.640 And it's sort of like, do you think I tell 0:22:17.640 --> 0:22:18.000 you what. 0:22:17.960 --> 0:22:20.280 It's a partly media consumption. Do you think if you're. 0:22:20.480 --> 0:22:24.359 Sure media or the sort of that would not be 0:22:24.440 --> 0:22:26.520 surprise me at all? You know, I feel sorry for 0:22:26.560 --> 0:22:29.120 people like that. I actually like do I like the 0:22:29.160 --> 0:22:31.760 inability of we all know them too in real life 0:22:31.840 --> 0:22:34.879 right the inability of people to like think clearly and 0:22:34.920 --> 0:22:37.720 critically outside of the lens of is this a Democrat 0:22:37.720 --> 0:22:38.640 thing or Republican thing? 0:22:39.000 --> 0:22:39.080 Like? 0:22:39.119 --> 0:22:40.919 Of course it's sort of annoying, but I actually like 0:22:40.960 --> 0:22:43.919 feel sorry for people whose minds are caught in that trap. 0:22:44.480 --> 0:22:47.560 I think partisanship is a huge aspect of this, and 0:22:47.600 --> 0:22:49.640 there's a lot of noise in the surveys right now, 0:22:49.680 --> 0:22:52.719 and some of it is due to media consumption. And 0:22:53.200 --> 0:22:55.440 we're not the only ones who have said this. Paul 0:22:55.480 --> 0:22:58.360 Donovan over at UBS has talked about this. The other 0:22:58.400 --> 0:23:01.239 thing I would say is, I do think there is 0:23:01.480 --> 0:23:05.040 a real segmentation in the economy now between people who 0:23:05.080 --> 0:23:07.840 earn less and people who earn more. And for people 0:23:07.880 --> 0:23:11.600 who earn more, you know, higher inflation is probably something 0:23:11.600 --> 0:23:13.600 that they can deal with. For people who earn less, 0:23:13.640 --> 0:23:18.199 it might actually be that they're not seeing the benefits 0:23:18.240 --> 0:23:19.800 of a lot of the things that we're talking about, 0:23:19.800 --> 0:23:21.560 the things that are showing up in the hard numbers. 0:23:21.600 --> 0:23:24.639 I think both those things can be simultaneously true. 0:23:25.280 --> 0:23:29.400 You're very humbly name dropped talking to a White House official, 0:23:31.480 --> 0:23:34.360 But you guys did talk to Jared Bernstein recently, and 0:23:34.920 --> 0:23:37.520 I think the topic was bidens right, And it does 0:23:37.520 --> 0:23:39.280 seem like the White House is trying to. 0:23:41.040 --> 0:23:43.320 Wait, let me name drop something like that. You know, 0:23:43.400 --> 0:23:46.520 Joe Biden guest lectured my college economics class. 0:23:47.480 --> 0:23:49.800 I thought you were about to say, well done. I 0:23:49.800 --> 0:23:50.760 booked Joe Biden for US. 0:23:53.400 --> 0:23:54.879 I can't remember. If I would have known he was 0:23:55.040 --> 0:23:56.320 to be president, I would have taken. 0:23:56.920 --> 0:23:58.120 You have the inside scoop on Biden. 0:23:58.800 --> 0:23:59.960 I think we're all like, are we going to be 0:24:00.320 --> 0:24:02.040 tested on this? And they said no, and we all 0:24:02.119 --> 0:24:02.960 just kind of tuned out. 0:24:03.880 --> 0:24:05.040 Did you miss that class? 0:24:05.760 --> 0:24:05.840 No? 0:24:05.960 --> 0:24:09.520 I was. But anyway, well, maybe talk about some of 0:24:09.520 --> 0:24:11.680 the highlights from that Jared Bernstein conversation. 0:24:11.920 --> 0:24:15.520 What's really interesting to me is that they've chosen this 0:24:15.680 --> 0:24:18.280 moment to say like, actually, we're happy with the economy, 0:24:18.280 --> 0:24:20.679 We're proud of this economy. And I think that's really 0:24:20.720 --> 0:24:24.200 telling because like the economy in you know, summer twenty 0:24:24.280 --> 0:24:27.280 twenty three, inflation has come down a bit, but like 0:24:28.000 --> 0:24:30.359 you know, it's not it's still high, right or it 0:24:30.400 --> 0:24:32.400 still seems to be high core inflation. I guess it's 0:24:32.400 --> 0:24:34.880 cooling a fair amount, it's still high, and I think 0:24:34.880 --> 0:24:37.960 there and consumer sentiment numbers are not great. They some 0:24:38.040 --> 0:24:40.360 of them have bounced back a little bit, but what's 0:24:40.400 --> 0:24:43.320 in the unemployment rate's very low, but it's not that 0:24:43.560 --> 0:24:46.159 different than the economy several months ago. So it is 0:24:46.240 --> 0:24:48.720 sort of notable to me that at some point this 0:24:48.800 --> 0:24:51.360 summer the Biden administration was like, you know what, we're 0:24:51.400 --> 0:24:54.280 gonna pivot and rather than sort of like sort of 0:24:54.280 --> 0:24:56.879 distract from the economy. We're actually gonna like claim ownership 0:24:56.960 --> 0:25:00.000 of this economy, which I think in itself is pretty interesting. 0:25:00.760 --> 0:25:04.720 And I think, like, you know, I do think that 0:25:04.800 --> 0:25:08.520 there is like a feeling among the staffers to the 0:25:08.560 --> 0:25:11.840 Biden administration that they've done a better job of coming 0:25:11.880 --> 0:25:14.679 out of disaster than the Obama administration did, because like 0:25:14.720 --> 0:25:18.080 both Biden and Obama came out of like kind of 0:25:18.080 --> 0:25:21.399 like economic disasters of one sort or another. And I 0:25:21.440 --> 0:25:23.320 think that there is like a feeling I was like, yeah, 0:25:23.359 --> 0:25:24.800 this was the better way. 0:25:24.560 --> 0:25:25.640 Maybe there was an. 0:25:25.560 --> 0:25:29.440 Overshoot of spending or stimulus or something, but or there's 0:25:29.480 --> 0:25:31.720 a lot being done, there's a lot of domestic investment, 0:25:31.720 --> 0:25:33.199 and it's actually like has some teeth. 0:25:33.640 --> 0:25:34.400 I agree with that. 0:25:34.480 --> 0:25:36.560 The one other thing I would say is it's going 0:25:36.600 --> 0:25:39.600 to be really interesting to see whether this sort of 0:25:39.800 --> 0:25:45.080 more interventionist style of economic policy sticks around and for 0:25:45.119 --> 0:25:48.119 how long, because I remember, I think in twenty twenty, 0:25:48.200 --> 0:25:51.280 I wrote an article called the Choke Point Economy, basically 0:25:51.280 --> 0:25:53.480 about how the pandemic had revealed all. 0:25:53.359 --> 0:25:55.640 These choke points within the global economy. 0:25:55.680 --> 0:25:58.919 You know, we discovered that we couldn't get enough semiconductors 0:25:59.200 --> 0:26:03.000 or goods being shipped from China took a lot longer, 0:26:03.080 --> 0:26:07.040 and infrastructure at the ports was lacking things like that, 0:26:07.640 --> 0:26:10.960 and the governments were becoming more attuned to these issues 0:26:11.000 --> 0:26:13.440 and more willing to invest in them. And I think 0:26:13.480 --> 0:26:15.800 that's certainly a thesis that's been born out by the 0:26:15.880 --> 0:26:20.119 past couple of years, however, with the ensuing inflation, with 0:26:20.359 --> 0:26:22.879 the fact that despite a lot of the hard numbers 0:26:22.880 --> 0:26:25.560 showing the economy is still going well, but some of 0:26:25.600 --> 0:26:29.959 the messaging not necessarily sticking with voters. Is that attitude 0:26:30.040 --> 0:26:32.920 going to be around the next time, you know, five 0:26:33.040 --> 0:26:35.960 or ten years, let's say. And I think to Joe's point, 0:26:36.280 --> 0:26:38.720 there is a lot of agreement that the more active 0:26:38.840 --> 0:26:43.520 fiscal intervention in twenty twenty was massively helpful. But I'm 0:26:43.640 --> 0:26:46.760 kind of interested in seeing whether or not that conclusion 0:26:46.880 --> 0:26:50.399 sticks in say, a decade. Are people going to remember 0:26:50.400 --> 0:26:51.720 it for that or are they going to learn the 0:26:51.720 --> 0:26:54.399 wrong lessons that inflation was really high and it was 0:26:54.400 --> 0:26:57.520 still a struggle to convince people that we had successfully 0:26:57.560 --> 0:27:01.240 managed one of the worst global pandemics in one hundred years. 0:27:01.320 --> 0:27:04.320 Yeah, I think, Well, in addition to having a podcast, 0:27:04.359 --> 0:27:07.560 you too have a very well edited. I would say newsletter. 0:27:11.240 --> 0:27:12.120 He does it excellent. 0:27:13.680 --> 0:27:16.679 People are saying it's very very well. 0:27:16.280 --> 0:27:17.960 You're the one reader we can always count. 0:27:19.320 --> 0:27:22.040 Are saying it's the best I've heard that. 0:27:22.119 --> 0:27:25.879 Yeah, tears in their eyes. But you've gotten into some 0:27:26.000 --> 0:27:28.919 very interesting topics, and I recommend everyone to subscribe if 0:27:28.920 --> 0:27:31.040 they haven't already. But it's a great way to sort 0:27:31.040 --> 0:27:34.919 of get your undistilled thoughts on these things. Tracy. You 0:27:34.960 --> 0:27:37.520 had one recently, a Brave New World Built on bonds, 0:27:37.560 --> 0:27:40.439 basically talking about, well, here we go. We had another 0:27:40.920 --> 0:27:44.359 credit rating cut on the US sovereign rating. Does it 0:27:44.480 --> 0:27:48.080 matter that? Has the bond market moved away from credit ratings? 0:27:48.359 --> 0:27:51.000 This week we saw Moodies come out and just sort 0:27:51.000 --> 0:27:53.680 of dump all over all the bank banks, plant slam 0:27:53.720 --> 0:27:56.080 all all the banks. And you had another one talking 0:27:56.080 --> 0:27:59.240 about the extended pretend idea, you know, a throwback to 0:27:59.320 --> 0:28:02.880 the financial crisis where there's a lot of commercial real 0:28:02.960 --> 0:28:05.840 estate loan workouts being done right now, I'll try to 0:28:05.880 --> 0:28:08.439 sort of do whatever you can to adjust the terms 0:28:08.440 --> 0:28:12.960 to avoid companies going bankrupt. I feel like people here 0:28:13.000 --> 0:28:15.560 extend and pretend and think of it as in a 0:28:15.640 --> 0:28:17.320 derogatory Yeah, yeah, is it. 0:28:17.960 --> 0:28:22.480 I mean, it's only bad if it fails. But seriously, 0:28:22.520 --> 0:28:23.800 I think this is one of the things, you know, 0:28:23.840 --> 0:28:26.000 when we talk about at the beginning of this conversation 0:28:26.160 --> 0:28:29.280 the big risks from two thousand and eight, there was 0:28:29.320 --> 0:28:32.320 a lot of extend and pretend. Post two thousand and eight, 0:28:32.760 --> 0:28:37.000 the economy recovered, albeit slowly and gradually. A lot of 0:28:37.040 --> 0:28:42.200 those workouts did, in fact, you know, reach their intended goal. 0:28:42.360 --> 0:28:45.560 We saw mark to market accounting suspended on bank balance sheets, 0:28:45.600 --> 0:28:48.480 and a lot of those assets ended up recovering. 0:28:48.560 --> 0:28:50.040 And so I think we've. 0:28:49.920 --> 0:28:53.840 Actually written about this together that the big plank of 0:28:53.960 --> 0:28:57.640 financial stability is in fact economic growth. And so if 0:28:57.680 --> 0:29:01.600 you see people extend and ten for the foreseeable future, 0:29:01.680 --> 0:29:04.880 but the economy remains strong, maybe some of those office 0:29:04.880 --> 0:29:08.360 buildings get transformed into something else, maybe more people are 0:29:08.360 --> 0:29:11.640 called back into work, then it's a strategy that could 0:29:11.640 --> 0:29:13.160 be perfectly tenable. 0:29:13.240 --> 0:29:15.600 Yeah. Yeah, I've come at some point. 0:29:15.760 --> 0:29:19.360 I came to the realization, like I don't know, in 0:29:19.440 --> 0:29:22.080 the early twenty ten, it's just all it's can kicking 0:29:22.120 --> 0:29:25.400 for forever. You just keep kicking that can, And people 0:29:25.400 --> 0:29:27.080 say it is a pejorative. It's like No, we're going 0:29:27.160 --> 0:29:29.840 to be can kicking till it works. And then my 0:29:29.920 --> 0:29:31.880 kids are going to be kicking the can because it's 0:29:31.880 --> 0:29:34.760 like it's kicking the can. No, you just keep kicking it, 0:29:34.840 --> 0:29:37.120 and then the kids, our kids and grandchildren, they'll just 0:29:37.120 --> 0:29:39.400 be keep kicking that can. And I sort of think 0:29:39.440 --> 0:29:43.160 that like that sort of you know, taking our lumps 0:29:43.200 --> 0:29:44.880 now has this like good feeling. We're going to like, 0:29:44.920 --> 0:29:47.000 you know, solve our problems. We're gonna like take the pain. 0:29:47.440 --> 0:29:49.400 And I just sort of think like, now you just 0:29:49.520 --> 0:29:51.280 keep finding a way to muddle through, and that that 0:29:51.480 --> 0:29:55.000 actually is how sort of the economy and humanity just 0:29:55.040 --> 0:29:56.400 sort of keeps keeps going through. 0:30:12.480 --> 0:30:15.040 Okay, Joe, I have a new question. Okay, shot this 0:30:15.120 --> 0:30:17.440 is super interesting to me, and I think actually Matt 0:30:17.520 --> 0:30:20.640 Lewen ended up writing about this this idea of yours 0:30:21.040 --> 0:30:24.080 as well. You said betting on downturns has been really 0:30:24.120 --> 0:30:28.240 costly for companies. So for instance, right now, maybe we're 0:30:28.280 --> 0:30:31.880 not seeing as many companies letting people go because you know, 0:30:32.280 --> 0:30:33.600 they think the downturn is coming. 0:30:33.840 --> 0:30:34.040 Yeah. 0:30:34.080 --> 0:30:37.120 I mean I think, like, you know, the twenty twenties 0:30:37.120 --> 0:30:39.640 in many ways feel like the very reverse of the 0:30:39.680 --> 0:30:41.240 twenty ten. So in the twenty tens, the it's like 0:30:41.280 --> 0:30:43.560 double dipper sessions when they're coming, it didn't come. But 0:30:43.680 --> 0:30:46.240 like companies were so scared to invest and they're so 0:30:46.400 --> 0:30:47.240 scared to hire. 0:30:47.800 --> 0:30:49.040 But for the first. 0:30:48.680 --> 0:30:51.920 Time ever in like twenty twenty one, in twenty twenty two, 0:30:52.200 --> 0:30:53.640 or maybe not the first time ever, but for the 0:30:53.680 --> 0:30:57.280 first time in decades, really, I think companies suddenly are like, oh, 0:30:57.320 --> 0:31:00.280 we do not have an unlimited supply of workers, which 0:31:00.280 --> 0:31:03.280 is I don't think that many managers of corporations ever 0:31:03.360 --> 0:31:07.120 contemplated that idea, even in boom time's late nineties whatever, 0:31:07.160 --> 0:31:09.800 that like what if we just can't open our store 0:31:10.320 --> 0:31:12.800 because we can't hire? And I think that really had 0:31:12.840 --> 0:31:15.600 like a deep like scarring effect on a lot of 0:31:15.760 --> 0:31:19.520 managers and management teams at companies. And I think that's 0:31:19.560 --> 0:31:23.280 a good potentially portend's good news like down the road, 0:31:24.000 --> 0:31:26.840 which is that okay, that like they don't want to 0:31:26.840 --> 0:31:29.520 ever be back there again, and so they'll be slower 0:31:29.560 --> 0:31:32.120 to fire going forward, even if they see some signs 0:31:32.120 --> 0:31:35.680 of softness. And what's interesting is I always love one 0:31:35.720 --> 0:31:39.200 of my favorite things every month is when the Dallas 0:31:39.200 --> 0:31:42.360 Fed Manufacturing report comes out once a month. I always 0:31:42.400 --> 0:31:45.440 jumped to the anecdotal section because like Texas, like business managers, 0:31:45.480 --> 0:31:47.920 you know, they're super swaggery and cocky and all that stuff, 0:31:48.000 --> 0:31:50.360 and so they always have very colorful things. But there's 0:31:50.640 --> 0:31:53.280 in recent months some of them have been talking about 0:31:53.320 --> 0:31:56.880 how I'm looking forward to the next recession because I'm 0:31:56.880 --> 0:31:59.840 going to expand my investment and take market share for 0:32:00.440 --> 0:32:02.840 my opponents. But what's interesting about that is if everyone 0:32:02.880 --> 0:32:04.800 goes into the recession with that attitude, you're not going 0:32:04.880 --> 0:32:07.040 to get a recession, because recession, you know. 0:32:07.200 --> 0:32:08.200 You're waiting to buy the dip. 0:32:08.600 --> 0:32:10.920 So this is like the psychology you want to engender, 0:32:11.000 --> 0:32:13.520 I think for the long boom, which is that if 0:32:13.560 --> 0:32:16.680 everyone yeah, it's right, if everyone wants is excited to 0:32:16.720 --> 0:32:18.360 buy the dip, and we saw this in the twenty tens, 0:32:18.400 --> 0:32:20.600 you don't get the dip. If everyone is excited about 0:32:20.640 --> 0:32:23.520 the downturn because they're going to steal employees from the 0:32:23.520 --> 0:32:26.520 other company or steal market share, you can sustain an 0:32:26.520 --> 0:32:27.720 expansion for a long time. 0:32:27.880 --> 0:32:29.760 I agree with this, and I would also just add 0:32:29.760 --> 0:32:32.600 that we've seen some FED officials start to talk about 0:32:32.600 --> 0:32:36.120 that recently, including Tom Barkin, at the Richmond FED recently. 0:32:36.440 --> 0:32:38.280 The one thing I would say, with my sort of 0:32:38.360 --> 0:32:41.800 like risk officer hat on is a really really bad 0:32:41.800 --> 0:32:44.920 thing for the economy would be something that causes everyone 0:32:45.000 --> 0:32:48.880 to wake up and go, oh, actually, I have massively 0:32:48.920 --> 0:32:52.800 overinflated my labor force for like business activity. A sort 0:32:52.800 --> 0:32:56.960 of Minski moment in employment would be very, very bad. 0:32:57.120 --> 0:32:59.200 But I don't see anything. 0:33:00.080 --> 0:33:02.280 Margins go down, and they yeah. 0:33:01.960 --> 0:33:03.400 Something along those lines. 0:33:03.600 --> 0:33:07.760 But I think I think you shouldn't underestimate the sort 0:33:07.760 --> 0:33:10.960 of psychological effects here. And I do think it's true 0:33:10.960 --> 0:33:13.680 that people have been more scarred by not being able 0:33:13.720 --> 0:33:17.000 to ramp up capacity than by having too much capacity 0:33:17.080 --> 0:33:18.160 in the previous crisis. 0:33:18.400 --> 0:33:21.240 But so Joe, while you know, Tracy and I are 0:33:21.240 --> 0:33:24.240 looking at the economy in markets wondering what could go wrong. 0:33:24.280 --> 0:33:27.120 As I said, I like how you're always looking for 0:33:27.120 --> 0:33:30.760 the next big thing, the next big opportunity. You were 0:33:30.800 --> 0:33:33.440 the first one I think that I heard the words 0:33:33.760 --> 0:33:34.920 room temperature. 0:33:36.840 --> 0:33:38.360 Apparently it's not happening. 0:33:38.520 --> 0:33:42.680 Well, explain it and explain why it's important and what 0:33:42.720 --> 0:33:43.480 we need to know about you. 0:33:44.920 --> 0:33:48.080 First of all, as of an hour ago, some university 0:33:48.080 --> 0:33:49.960 put out there's like this is there's no room temperature. 0:33:50.520 --> 0:33:52.040 It's actually just floating rocks. 0:33:52.080 --> 0:33:53.400 It's just a floating rock so hot. 0:33:53.520 --> 0:33:55.800 My dad, by the way, is a physicist, and I 0:33:55.800 --> 0:33:58.719 saw him this past weekend and I was like, will 0:33:58.760 --> 0:34:00.840 you come on, people will love it so cool? I haven't, 0:34:01.040 --> 0:34:03.680 and he's like, no, I'm not. But he did explain that, 0:34:03.720 --> 0:34:07.200 like you know, super conductivity, obviously, this idea that you 0:34:07.240 --> 0:34:11.320 could like transmit energy across two things or across distances 0:34:11.360 --> 0:34:14.480 with no loss would be really powerful, and it exists currently. 0:34:14.520 --> 0:34:15.200 The problem is you. 0:34:15.200 --> 0:34:18.480 Need such high pressure or such cold temperatures to do 0:34:18.520 --> 0:34:21.520 it that there are very few actual like applications of it, 0:34:21.560 --> 0:34:24.719 like apparently MRI technology is one. But he said that, 0:34:24.840 --> 0:34:27.879 like were the holy grail to be found of where 0:34:27.880 --> 0:34:29.440 you didn't that it would create all kinds of like 0:34:29.520 --> 0:34:33.799 new consumer gadgets and certain like energy things. And I 0:34:33.800 --> 0:34:37.200 get you know, I'm literally just repeating what my my 0:34:37.280 --> 0:34:39.920 dad said. Hit all these stuff about like bosons and 0:34:39.960 --> 0:34:41.399 things like that that I was getting get too much. 0:34:41.440 --> 0:34:43.120 I didn't. It would have been a great episode. 0:34:43.120 --> 0:34:51.160 I'm really annoyed that. 0:34:48.560 --> 0:34:50.400 What goes up. But you know, actually the the the 0:34:50.480 --> 0:34:50.839 thing that. 0:34:50.840 --> 0:34:52.640 Was sort of interesting to me about it is like 0:34:53.160 --> 0:34:57.200 the idea of energy loss over some distance is very 0:34:57.200 --> 0:35:00.319 intuitive because there's no free lunches in the world, right, Like, 0:35:00.400 --> 0:35:03.000 if you get something, it's like, okay, it's like you're 0:35:03.000 --> 0:35:04.960 going to transmit energy, but you're gonna have some laws, 0:35:05.080 --> 0:35:07.000 or you can have no energy laws, but then it 0:35:07.000 --> 0:35:08.759 has to be a negative five hundred cells. It's like 0:35:08.880 --> 0:35:11.719 it wasn't like pay the price somehow. So I asked him, like, 0:35:12.040 --> 0:35:16.000 why do scientists even think room temperature super conductivity is 0:35:16.320 --> 0:35:19.680 theoretically possible if we know that there's no like sort 0:35:19.680 --> 0:35:21.680 of like free lunch in the universe. And what he 0:35:21.800 --> 0:35:25.200 suspected was that were there ever to be a substance 0:35:25.400 --> 0:35:29.640 that was found that had this property of room temperature superconductivity, 0:35:30.160 --> 0:35:33.080 his guess is that it would be very costly to synthesize, 0:35:33.120 --> 0:35:35.560 to make, and so you would pay the price not 0:35:35.760 --> 0:35:37.960 in the application layer, but in the creation of the 0:35:37.960 --> 0:35:41.000 material layer. So you'd still like have this, there'd be 0:35:41.080 --> 0:35:44.080 no free lunch. Nonetheless, he does think were it to 0:35:44.080 --> 0:35:47.279 be found, which he's not totally dismissive of the possibility 0:35:47.280 --> 0:35:49.600 that one day it would be that it would open 0:35:49.680 --> 0:35:52.080 up new things, but it would still be like difficult 0:35:52.200 --> 0:35:53.640 to synthesize in large. 0:35:53.400 --> 0:35:55.640 Back interesting because this was one of the things about 0:35:55.680 --> 0:35:58.640 the LK ninety nine formulation, which was like, actually, it 0:35:58.680 --> 0:36:02.600 wasn't that difficult to do. So people were simultaneously excited 0:36:02.640 --> 0:36:06.080 about the potential for a room temperature superconductor, but also 0:36:06.320 --> 0:36:08.040 that it wasn't that difficult to make. 0:36:08.080 --> 0:36:10.919 I guess, I guess it turns out it's easy to make. 0:36:11.000 --> 0:36:12.800 It's just it's just very magnetic. 0:36:12.960 --> 0:36:15.799 I was sure that tungsten cubes would be involved some 0:36:15.840 --> 0:36:16.319 one day. 0:36:16.680 --> 0:36:19.319 This one day, the tungsten cube that I have. 0:36:19.320 --> 0:36:21.120 In the bin, but I remember you brought it in 0:36:21.160 --> 0:36:22.840 and then everybody was like, if you want to go 0:36:22.920 --> 0:36:24.320 see it, you got to go to Joe's. 0:36:24.560 --> 0:36:27.560 Yeah, yeah, community community cube. 0:36:27.960 --> 0:36:30.360 Anyway, it's that time, bil Donna. It is for the 0:36:30.440 --> 0:36:33.160 craziest things we saw in markets this week. I hope 0:36:33.160 --> 0:36:36.160 you too came prepared. This is this is a big reveal. 0:36:36.920 --> 0:36:38.960 Wait wait, I'm going to go first, just on the 0:36:39.320 --> 0:36:41.719 chance that we chose the same one. But mine is 0:36:41.719 --> 0:36:45.080 connected to the superconductor stuff, which is last week when 0:36:45.120 --> 0:36:48.960 there was all this excitement over the potential LK ninety 0:36:49.000 --> 0:36:52.880 nine breakthrough, in South Korea, we saw shares of a 0:36:52.920 --> 0:36:58.960 company called American Superconductor shoot to the proverbial moon, a 0:36:59.040 --> 0:37:01.719 company that, as far as I could tell, had absolutely 0:37:01.760 --> 0:37:04.799 nothing to do with the South Korean researchers. It just 0:37:04.880 --> 0:37:08.560 had a superconductor in its name. And fast forward to 0:37:08.560 --> 0:37:11.520 this week and it is down a lot. 0:37:13.440 --> 0:37:15.759 The thing that still weirds me out, or this thing 0:37:15.800 --> 0:37:19.640 that I still don't get, is like why US investors 0:37:19.640 --> 0:37:23.080 got really weirded out, freaked out by like the Bank 0:37:23.080 --> 0:37:25.920 of Japan ending your oield curve controllers. It's like, who 0:37:26.000 --> 0:37:29.600 cares suddenly, Like I'm going to like sell my like 0:37:29.960 --> 0:37:32.799 portfolio of US equities because like the Bank of Japan did, 0:37:32.840 --> 0:37:34.719 like their million of tweak to like the shape of 0:37:34.719 --> 0:37:37.600 the old curve. Like I'm sorry, I I mean, maybe 0:37:37.600 --> 0:37:39.680 I'm missing something. And like if like the stock market 0:37:39.680 --> 0:37:42.600 crashes from here, then this will be embarrassing. It's just 0:37:42.600 --> 0:37:44.239 hard for me to get excited about that one. So 0:37:44.280 --> 0:37:46.799 the fact that some people manage to get excited about 0:37:46.840 --> 0:37:48.919 that I can consider. 0:37:48.600 --> 0:37:49.240 To be impressive. 0:37:49.320 --> 0:37:51.560 The only thought I had is maybe the carry trade. 0:37:51.560 --> 0:37:54.120 But I don't think you buy equities with the carry 0:37:54.120 --> 0:37:55.440 trade really, maybe do I don't. 0:37:55.320 --> 0:37:57.440 Know if you're if you want to sell your stock 0:37:57.520 --> 0:37:59.560 to me because of the carry trade or something I'll 0:37:59.560 --> 0:37:59.960 pick about. 0:37:59.960 --> 0:38:01.920 It wasn't the argument that it was going to take 0:38:01.920 --> 0:38:05.080 it like a big chunk of bond buyers like move 0:38:05.160 --> 0:38:09.480 them away, and that bonds are the underpinning for equities 0:38:09.480 --> 0:38:11.040 and a lot of other things. 0:38:10.880 --> 0:38:12.560 It did seem like an overreaction though. 0:38:12.560 --> 0:38:15.080 I agree it's going to be really embarrassing in a 0:38:15.200 --> 0:38:16.800 week when where market. 0:38:17.680 --> 0:38:20.120 I can't wait to point it out by soon. Yeah, 0:38:20.120 --> 0:38:22.120 I'm going to say, listen to this episode where Joe 0:38:22.120 --> 0:38:26.480 embarrasses himself. Okay, mine is about Zoom, the company we 0:38:26.560 --> 0:38:27.720 all use to zoom. 0:38:27.840 --> 0:38:29.880 You know, I think I know what this one is, 0:38:29.920 --> 0:38:31.560 and if it is this, it's a good one. 0:38:31.640 --> 0:38:35.200 It is good because they're asking their employees to come 0:38:35.520 --> 0:38:36.680 work from the office. 0:38:37.520 --> 0:38:40.120 I don't do you think they still zoom each other 0:38:40.160 --> 0:38:41.080 in the office though. 0:38:42.640 --> 0:38:44.680 So they go to the office and then also zoom 0:38:44.719 --> 0:38:45.120 each other. 0:38:45.320 --> 0:38:46.400 That wouldn't be unheard of. 0:38:48.920 --> 0:38:52.279 But it's just it's funny because they're Zoom, but they're 0:38:52.320 --> 0:38:53.960 asking you to be in person. 0:38:54.120 --> 0:38:56.120 You would think they'd be like everyone stay at home. 0:38:56.800 --> 0:38:59.319 You know, you never another pandemic could be coming. 0:38:59.800 --> 0:39:03.680 You is read the last Zoom conference call about you 0:39:03.680 --> 0:39:05.600 should read it. It's from about a month and a 0:39:05.640 --> 0:39:09.400 half ago, and it's like the ultimate like flavor of them. 0:39:09.600 --> 0:39:14.719 Every question was about their AI strategy. I don't know, 0:39:14.719 --> 0:39:16.759 it's like they make a video thing, right they had 0:39:17.280 --> 0:39:19.080 They did have good answer, but talk about like the 0:39:19.160 --> 0:39:21.800 degree to which like analysts all like sort of school 0:39:21.800 --> 0:39:22.240 of fish. 0:39:22.440 --> 0:39:24.560 Yeah, they're swimming. It's a very funny ring. 0:39:24.719 --> 0:39:29.240 Next call it'll be what Superconductor is doing with energy transfer. 0:39:29.880 --> 0:39:33.520 But there is there's a meme on the former Twitter 0:39:33.960 --> 0:39:36.719 on X where it's just a picture of like a 0:39:36.840 --> 0:39:39.560 Zoom office of like a Zoom skyscraper and then somebody 0:39:39.560 --> 0:39:43.160 being like they have offices. Why would they have offices 0:39:43.600 --> 0:39:44.120 their Zoom? 0:39:44.560 --> 0:39:47.400 All right, I got I got Mine. Mine is a 0:39:47.400 --> 0:39:50.040 game show. Actually, I'm so excited to actually have three 0:39:50.040 --> 0:39:52.120 contestants on it. It makes me feel like a real 0:39:52.160 --> 0:39:55.440 game show host when there's three. Because it's sort of 0:39:55.440 --> 0:39:57.600 a price is right, we call it the prices precise. 0:39:57.880 --> 0:40:03.000 We can't call it prices right, Ye, So all right. 0:40:02.840 --> 0:40:05.120 This is occur to see the Wall Street Journal. I'm 0:40:05.200 --> 0:40:07.719 saddened we did not have this story. Silicon Valley Bank 0:40:07.920 --> 0:40:10.080 went out of business. We all know that went into 0:40:10.239 --> 0:40:14.279 FDIC receivership. So what happens in that process is the 0:40:14.320 --> 0:40:18.920 FDIC sells off all the assets of the bank. One 0:40:18.920 --> 0:40:22.320 of the more interesting assets they're selling off is SVB 0:40:22.560 --> 0:40:27.280 had a huge wine collection. They had nineteen hundred bottles 0:40:27.320 --> 0:40:30.760 of wine one nine hundred boles. Well I was runnering 0:40:30.800 --> 0:40:33.200 the same thing, and there's an old Wall Street Journal 0:40:33.200 --> 0:40:36.279 story that explains it. Being in Silicon Valley. They do 0:40:36.360 --> 0:40:39.960 a lot of business with the wine growers in northern California. 0:40:40.040 --> 0:40:42.680 This guy, there's some guy who actually pitched them on 0:40:42.760 --> 0:40:47.920 starting a wine business. Wine lend, you know, lending money. 0:40:48.680 --> 0:40:50.360 I'm dying to know if any of these were actual 0:40:50.400 --> 0:40:52.560 collateral on some of these loans, but it was something 0:40:52.600 --> 0:40:56.360 like four percent of their loan book was to wine 0:40:56.360 --> 0:40:59.920 makers in northern California. So let me give you a 0:41:00.000 --> 0:41:02.840 little bit more details here before we play the prices 0:41:02.920 --> 0:41:07.960 precise nineteen hundred bottles of fine wine, four hundred bottles 0:41:07.960 --> 0:41:10.240 in the Santa Clara branch, three hundred in the Menlo 0:41:10.400 --> 0:41:14.080 Park branch where they were quote meticulously racked and kept 0:41:14.120 --> 0:41:17.160 in climate controlled environment. The rest were in a private 0:41:17.320 --> 0:41:21.919 wine vault in domain NAPA. Now I'll give you one hint. 0:41:22.960 --> 0:41:26.640 They were auctioned off at a sixty percent discount in 0:41:26.719 --> 0:41:30.800 the appraised value. So time to play prices precise? 0:41:31.000 --> 0:41:32.240 How many bottles in total? 0:41:32.360 --> 0:41:33.520 Nineteen hundred bottles? 0:41:33.719 --> 0:41:37.160 Okay, at a sixty percent discount? 0:41:37.200 --> 0:41:40.640 Sixty percent? Oh, you're right, forty percent discount. They sold 0:41:40.640 --> 0:41:44.640 at sixty percent of the appraised value. So it's California wine. 0:41:44.640 --> 0:41:47.960 So it's tricky. You know, it's not known for superintensive wine. 0:41:48.920 --> 0:41:50.720 And they've had lots of wildfires. 0:41:50.920 --> 0:41:51.480 That's true. 0:41:51.640 --> 0:41:53.200 Well I didn't think nineteen hundred. 0:41:53.480 --> 0:41:56.719 I mean I drink one for me. 0:41:57.120 --> 0:41:58.359 Well, well, you got a. 0:41:58.640 --> 0:42:03.320 Gosh, usually I have like idea. Okay, two hundred thousand, 0:42:03.440 --> 0:42:05.000 two hundred and fifty thousand dollars. 0:42:05.160 --> 0:42:07.799 That's a quick answer, Like how quick that a sor? Right, 0:42:07.840 --> 0:42:10.759 I'm gonna write these down. Okay, data bids two hundred 0:42:10.760 --> 0:42:14.239 fifty thousand. Now the rules of that other game show 0:42:14.239 --> 0:42:16.480 are in place, so you could bid one dollar. 0:42:16.640 --> 0:42:19.200 Oh, I think I'm going to go higher. I'm going 0:42:19.239 --> 0:42:23.000 to say one point six million. 0:42:23.239 --> 0:42:26.120 One point six millions. Now we don't kind of wind 0:42:26.160 --> 0:42:26.759 Tracy drinks. 0:42:27.280 --> 0:42:29.240 Are we talking about nineteen. 0:42:28.719 --> 0:42:34.719 Hundred nineteen California wine? Remember soon, remember the rules. Now, 0:42:36.800 --> 0:42:38.600 don't give him head lower. 0:42:38.640 --> 0:42:40.680 I'm going to go one hundred and twenty thousand. 0:42:41.280 --> 0:42:43.920 My god, it's pretty close. One hundred and thirty thousand. 0:42:44.200 --> 0:42:46.200 Oh, come on, this is bad, Joe. 0:42:46.239 --> 0:42:50.480 When's the well you figure? I mean, one hundred dollars 0:42:50.480 --> 0:42:52.680 a bottle will get you to one hundred and ninety thousand. 0:42:52.760 --> 0:42:57.839 So that's basically this is bad collateral collateral and maybe 0:42:57.840 --> 0:42:58.880 I should have liquidity. 0:42:59.040 --> 0:43:00.400 So we recently did an. 0:43:00.280 --> 0:43:03.280 Episode of the podcast with the CFO of core Weave, 0:43:03.360 --> 0:43:06.200 which is building a GPU cloud. A week later, there's 0:43:06.239 --> 0:43:08.759 a really good story. They borrowed two and a half 0:43:08.800 --> 0:43:12.160 billion and they put up in video chips. Yeah, so 0:43:12.400 --> 0:43:15.040 it came out after the episode. But chips is the 0:43:15.040 --> 0:43:16.239 new collateral. 0:43:15.840 --> 0:43:18.240 So you can just pull those chips out of the server, 0:43:18.360 --> 0:43:19.000 I guess apparently. 0:43:19.080 --> 0:43:19.799 Yeah, it's still work. 0:43:20.040 --> 0:43:23.240 That's crazy. Well, Tru and Tracy, what a great. 0:43:23.040 --> 0:43:23.680 Thank you so much. 0:43:23.680 --> 0:43:28.359 We thank you. It was very fun. 0:43:28.600 --> 0:43:30.640 I know that's just a lot of. 0:43:38.520 --> 0:43:41.560 What goes up. We'll be back next week. Until then, 0:43:41.600 --> 0:43:44.520 you can find us on the Bloomberg terminal website and app, 0:43:45.120 --> 0:43:48.120 or wherever you get your podcasts. We'd love it if 0:43:48.160 --> 0:43:50.200 you took the time to rate and review the show 0:43:50.320 --> 0:43:53.120 so more listeners can find us. You can find us 0:43:53.200 --> 0:43:57.840 on Twitter, follow me at Wildona Hiring. Mike Reagan is 0:43:57.920 --> 0:44:02.840 at read Anonymous. You can also follow Bloomer Podcasts at podcasts. 0:44:03.560 --> 0:44:06.319 What Goes Up is produced by Stacey Long and our 0:44:06.320 --> 0:44:09.719 head of podcasts is Sage Pauman. Thanks for listening. We'll 0:44:09.719 --> 0:44:13.399 see you next week.