1 00:00:00,400 --> 00:00:03,840 Speaker 1: Strap on your parachute. Is time for What Goes Up 2 00:00:04,120 --> 00:00:14,000 Speaker 1: with Sarah Ponzick and Mike Reagan. Hello and welcome to 3 00:00:14,080 --> 00:00:17,880 Speaker 1: What goes Up, a Bloomberg Weekly Markets podcast. I'm Sara Pants, 4 00:00:18,239 --> 00:00:21,080 Speaker 1: a reporter on the Cross Asset team, and I'm Mike Reagan, 5 00:00:21,239 --> 00:00:23,960 Speaker 1: a senior editor at Bloomberg, and you can think of 6 00:00:24,000 --> 00:00:28,160 Speaker 1: me as the Clyde to Sarah's Bannie. You knew that 7 00:00:28,200 --> 00:00:30,560 Speaker 1: Mike had to come with a sidekick this week because 8 00:00:30,600 --> 00:00:32,479 Speaker 1: he was called out on Twitter a couple of times 9 00:00:32,520 --> 00:00:35,920 Speaker 1: by some of our dedicated listeners. Once you start a 10 00:00:35,920 --> 00:00:38,040 Speaker 1: gimmick like that, there's no turning back. You gotta keep 11 00:00:38,040 --> 00:00:41,000 Speaker 1: going with it, no turning back, no turning back. But 12 00:00:41,080 --> 00:00:43,440 Speaker 1: this week on the show, considering Mike and I are 13 00:00:43,440 --> 00:00:45,960 Speaker 1: both based in the US, our guests usually are two, 14 00:00:46,360 --> 00:00:48,519 Speaker 1: so this week we are absolutely thrilled to get the 15 00:00:48,560 --> 00:00:52,040 Speaker 1: perspective of someone overseas. Our guests this week is actually 16 00:00:52,040 --> 00:00:55,360 Speaker 1: out in Sydney, Australia and back in March is Asia focused. 17 00:00:55,400 --> 00:00:58,640 Speaker 1: Macro Strategy Fund ended the month of more than six 18 00:00:59,760 --> 00:01:02,920 Speaker 1: at as always, will close out the episode with our tradition, 19 00:01:02,960 --> 00:01:06,240 Speaker 1: the craziest thing I saw in markets this week, and 20 00:01:06,640 --> 00:01:09,400 Speaker 1: by all means if you see something crazy, then give 21 00:01:09,480 --> 00:01:13,039 Speaker 1: us a call at the Bloomberg Podcast hotline six four 22 00:01:13,200 --> 00:01:17,640 Speaker 1: six three two four three four nine. Oh and leave 23 00:01:17,720 --> 00:01:19,960 Speaker 1: us a message and maybe we'll play it on the show. 24 00:01:20,520 --> 00:01:22,759 Speaker 1: Um and sorry, like you said, our guest this week, 25 00:01:22,800 --> 00:01:27,120 Speaker 1: first time on the show. Really interesting career history. He 26 00:01:27,640 --> 00:01:30,680 Speaker 1: started out of Credit Swiss. He worked at Morgan Stanley 27 00:01:30,760 --> 00:01:33,760 Speaker 1: for a while, then he spent several years at the 28 00:01:34,160 --> 00:01:38,520 Speaker 1: big famous hedge fund shop, Revan Howard Uh before going 29 00:01:38,520 --> 00:01:41,960 Speaker 1: out on his own, founding his own hedge fund called 30 00:01:42,200 --> 00:01:46,160 Speaker 1: Reminiscent Capital, and he is the chief investment officer and 31 00:01:46,280 --> 00:01:49,640 Speaker 1: founder of that firm. His name is David Adams. David, 32 00:01:49,680 --> 00:01:52,640 Speaker 1: welcome to the show. Thanks Sarah, Thanks Mike, thanks for 33 00:01:52,640 --> 00:01:57,040 Speaker 1: having me here. I should just just qualified that that 34 00:01:57,120 --> 00:01:59,160 Speaker 1: performance was over Q one, So I'd love to have 35 00:01:59,200 --> 00:02:02,240 Speaker 1: made that all in one. I have a course of 36 00:02:02,280 --> 00:02:04,880 Speaker 1: the month, but thank you for the introduction. Yeah, so 37 00:02:04,920 --> 00:02:06,480 Speaker 1: let me see if I got this right. Q one 38 00:02:06,640 --> 00:02:10,040 Speaker 1: was up about sixteen and a half percent, but really 39 00:02:10,080 --> 00:02:15,640 Speaker 1: outperformed the SMP by like in March and outperformed in 40 00:02:15,800 --> 00:02:18,960 Speaker 1: February by four to I have those numbers in the 41 00:02:19,040 --> 00:02:22,000 Speaker 1: right ballpark there. Yeah, that's right, there's those gross numbers. 42 00:02:22,000 --> 00:02:25,639 Speaker 1: That's that's correct. Um, this is my fourth crisis, so 43 00:02:25,680 --> 00:02:28,560 Speaker 1: I've been through a few of these things. We'll break 44 00:02:28,560 --> 00:02:30,200 Speaker 1: it down. There are times the charm fourth time you 45 00:02:30,200 --> 00:02:33,640 Speaker 1: get it right, right. Yeah, I know. I keep hearing 46 00:02:33,680 --> 00:02:36,720 Speaker 1: people saying after the last financial crisis, I never thought 47 00:02:36,760 --> 00:02:40,600 Speaker 1: I'd lived for for another one. It's it's crazy. But um, 48 00:02:40,720 --> 00:02:42,639 Speaker 1: we'll just you know, break it down for us. If 49 00:02:42,639 --> 00:02:45,680 Speaker 1: you can give us some insight on some of the trades, 50 00:02:45,760 --> 00:02:48,640 Speaker 1: some of the decisions you made, uh to put up 51 00:02:48,639 --> 00:02:52,239 Speaker 1: those really impressive numbers during all of this. Sure, sure 52 00:02:52,240 --> 00:02:54,440 Speaker 1: we'll do. I mean one thing to sort of around 53 00:02:54,480 --> 00:02:56,240 Speaker 1: about way to answer that is before you even launched 54 00:02:56,240 --> 00:03:01,000 Speaker 1: into that is I'm glad I started humbled and kind 55 00:03:01,000 --> 00:03:02,840 Speaker 1: of honored that I've I've been able to start a 56 00:03:02,880 --> 00:03:05,880 Speaker 1: fund and uh, you know, I'm so glad them in 57 00:03:05,919 --> 00:03:08,040 Speaker 1: my fortiesn't go a little bit of gray here, because 58 00:03:08,639 --> 00:03:11,040 Speaker 1: your experience really does matter. And in fact, you know, 59 00:03:11,320 --> 00:03:12,760 Speaker 1: i'd like laughed about it. But if you look at 60 00:03:12,760 --> 00:03:16,560 Speaker 1: this is actually my fourth crisis, and when you've been through, um, 61 00:03:16,880 --> 00:03:19,760 Speaker 1: you know a few of them. If you look at 62 00:03:19,800 --> 00:03:22,400 Speaker 1: this one. Um, while they're all a little bit different, 63 00:03:22,480 --> 00:03:24,400 Speaker 1: there is a there is a pattern. And I was 64 00:03:24,440 --> 00:03:27,320 Speaker 1: lucky enough to be you know, obviously in London when 65 00:03:27,440 --> 00:03:29,240 Speaker 1: you know, at that time it was it was very interesting. 66 00:03:29,280 --> 00:03:31,720 Speaker 1: You had, you had very low vall, you had lots 67 00:03:31,720 --> 00:03:35,600 Speaker 1: of leverage, and people were moving away from directional and 68 00:03:35,600 --> 00:03:37,800 Speaker 1: and and basically saying, you know, why would you take 69 00:03:37,840 --> 00:03:40,680 Speaker 1: directional risk when you can put on I mean reversion 70 00:03:40,720 --> 00:03:44,520 Speaker 1: strategy in like ten times the size and so back then, 71 00:03:44,600 --> 00:03:46,000 Speaker 1: you know what was happening with people moving more and 72 00:03:46,000 --> 00:03:49,360 Speaker 1: more away from proprietary more and more towards quant and 73 00:03:49,360 --> 00:03:52,280 Speaker 1: of course what what typified that was the guys that 74 00:03:52,320 --> 00:03:55,680 Speaker 1: wrote the book on option pricing as long term capital management. 75 00:03:56,040 --> 00:03:58,120 Speaker 1: And you have a good question, and you've been to 76 00:03:58,200 --> 00:04:00,800 Speaker 1: university and learned from their books. Their HEDGEPHUND was pre 77 00:04:00,840 --> 00:04:03,520 Speaker 1: eminent long term capital. Their returns with thirty five and 78 00:04:03,520 --> 00:04:06,720 Speaker 1: then forty and then and of course, as the system 79 00:04:06,760 --> 00:04:10,720 Speaker 1: often does, it correct and it was pretty spectacular. And 80 00:04:10,760 --> 00:04:12,800 Speaker 1: what happened there was as they imploded at one point 81 00:04:12,800 --> 00:04:14,960 Speaker 1: four trillion dollar exposure, got bailed out by the Fed. 82 00:04:15,200 --> 00:04:18,480 Speaker 1: But what I remember witnessing the most on trading floor 83 00:04:18,520 --> 00:04:21,039 Speaker 1: in London was you know, right when you need it most, 84 00:04:21,120 --> 00:04:25,000 Speaker 1: especially in a leverage portfolio. Um portfolio theory doesn't work. 85 00:04:25,120 --> 00:04:27,520 Speaker 1: People just had to get out. And so things that 86 00:04:27,520 --> 00:04:29,680 Speaker 1: at the start of my career really left an important 87 00:04:29,680 --> 00:04:31,520 Speaker 1: I means I could with confidence to kind of look 88 00:04:31,560 --> 00:04:34,680 Speaker 1: at anyone through the rest of my career and say, 89 00:04:34,720 --> 00:04:36,400 Speaker 1: I don't care kind of what you have to say 90 00:04:36,400 --> 00:04:39,880 Speaker 1: about what could potentially happen your potential correlation offset. You know, 91 00:04:39,920 --> 00:04:42,680 Speaker 1: I want to know what is the max dollars dollars 92 00:04:42,680 --> 00:04:44,800 Speaker 1: and cents I can lose or an investor can lose. 93 00:04:45,400 --> 00:04:47,680 Speaker 1: So why I did aggressed with that preamble was that 94 00:04:48,320 --> 00:04:50,520 Speaker 1: what experiences like that taught me was that I was 95 00:04:50,600 --> 00:04:53,240 Speaker 1: very lucky to learn from some great folks, is that 96 00:04:53,320 --> 00:04:55,200 Speaker 1: you know, when these things come about, there's a pattern, 97 00:04:55,760 --> 00:04:57,800 Speaker 1: and so you know, we have like a five step process, 98 00:04:58,080 --> 00:05:01,960 Speaker 1: and what happens is there's a huge informational value in 99 00:05:02,080 --> 00:05:04,400 Speaker 1: the front end of the dollar curve. If you think 100 00:05:04,440 --> 00:05:07,719 Speaker 1: about the worlds debts and dollars, and so that dollar market, 101 00:05:07,800 --> 00:05:10,000 Speaker 1: especially the front end of the curve, you know, really 102 00:05:10,080 --> 00:05:12,719 Speaker 1: knows what's going on pretty much before anything else. And 103 00:05:12,760 --> 00:05:14,400 Speaker 1: what's also really interesting One of the kind of edges 104 00:05:14,400 --> 00:05:19,040 Speaker 1: of what we do is that interestingly, the dollar complex Australia, 105 00:05:19,080 --> 00:05:22,320 Speaker 1: New Zealand, Canada in the US for whatever reasons, and 106 00:05:22,360 --> 00:05:24,040 Speaker 1: part of that geographical part of that is because we 107 00:05:24,080 --> 00:05:27,080 Speaker 1: have much much more simple mortgage markets. If you look 108 00:05:27,080 --> 00:05:30,040 Speaker 1: at Australia New Zealand, you know, our banks predominantly fund 109 00:05:30,040 --> 00:05:32,279 Speaker 1: in the US markets. A lot of issues, a lot 110 00:05:32,320 --> 00:05:35,760 Speaker 1: of our housing market is funded by Australian banks um 111 00:05:35,920 --> 00:05:39,760 Speaker 1: in doing USCP and the US debt in the US markets. 112 00:05:39,800 --> 00:05:43,000 Speaker 1: So we start to get a sense of funding pressure 113 00:05:43,160 --> 00:05:44,880 Speaker 1: quite early as a bit of a warning sign out 114 00:05:44,920 --> 00:05:47,280 Speaker 1: here in Asia through those markets. What's more is if 115 00:05:47,279 --> 00:05:50,680 Speaker 1: it's come from China, if it's a coronavirus that's on 116 00:05:50,720 --> 00:05:52,760 Speaker 1: our doorstep. You know, we started to see it spreading 117 00:05:52,800 --> 00:05:55,280 Speaker 1: from cities getting shut down in China to tourism and 118 00:05:55,480 --> 00:05:58,440 Speaker 1: such getting affected over here, and then our funding markets 119 00:05:58,480 --> 00:06:00,760 Speaker 1: start to pick that up. Meant that you could do 120 00:06:00,800 --> 00:06:03,000 Speaker 1: the following. You know, that gave us the signal that 121 00:06:03,000 --> 00:06:04,960 Speaker 1: there was going to be a problem. And the five 122 00:06:04,960 --> 00:06:08,240 Speaker 1: step process is the playbook for these crisis is you 123 00:06:08,279 --> 00:06:10,880 Speaker 1: do rates so just quickly to run through its bonds 124 00:06:11,720 --> 00:06:14,000 Speaker 1: so you do rates in front end trades bonds and bonds, 125 00:06:14,240 --> 00:06:16,279 Speaker 1: and then you do VOL, so you'll buy some ex bolus, 126 00:06:16,279 --> 00:06:19,640 Speaker 1: some equity bowl and then you go into downsides across 127 00:06:19,640 --> 00:06:23,440 Speaker 1: effex you know, OSSI en qb en nick A SMP 128 00:06:23,600 --> 00:06:26,120 Speaker 1: five and and then as you know, by this stage 129 00:06:26,160 --> 00:06:28,479 Speaker 1: rates have really started to move. Involves picking up an 130 00:06:28,480 --> 00:06:31,200 Speaker 1: equity markets starting to crack, and then you go into credit. 131 00:06:31,240 --> 00:06:33,200 Speaker 1: He was amazing to us even about three weeks in 132 00:06:33,520 --> 00:06:37,719 Speaker 1: equities are off fift give or take, and the credit 133 00:06:37,720 --> 00:06:39,480 Speaker 1: markets are barely moved. Now we're not a credit fund, 134 00:06:39,480 --> 00:06:42,400 Speaker 1: but we do credit proxies, so things like swap spreads 135 00:06:42,920 --> 00:06:46,400 Speaker 1: um from os wideners um. So you've done bonds, you've 136 00:06:46,400 --> 00:06:49,120 Speaker 1: done vol, you do downside trades, and then you do 137 00:06:49,600 --> 00:06:52,320 Speaker 1: you know, uh, you do credit trades. And then as 138 00:06:52,320 --> 00:06:54,360 Speaker 1: you saw towards the end of the moves, it's phenomenally 139 00:06:54,440 --> 00:06:56,880 Speaker 1: large days both up and down, twelve cent down days 140 00:06:56,880 --> 00:06:59,039 Speaker 1: and equities the long end of the bond market moves 141 00:06:59,080 --> 00:07:01,839 Speaker 1: sift and the trade you do there is in the 142 00:07:01,880 --> 00:07:04,760 Speaker 1: margin trade. And this is quite staggering because what happens 143 00:07:04,839 --> 00:07:08,160 Speaker 1: is when that Volve episode occurs. The first one we 144 00:07:08,200 --> 00:07:11,040 Speaker 1: all know about equity markets, raise exchange margins. You know, 145 00:07:11,400 --> 00:07:14,160 Speaker 1: people get margined and you have to post U s dollars. Again, 146 00:07:14,440 --> 00:07:16,480 Speaker 1: most margin in the world is in US dollars. But 147 00:07:16,520 --> 00:07:18,040 Speaker 1: the thing people don't see as much of When you've 148 00:07:18,040 --> 00:07:20,320 Speaker 1: been at a bank, you really understand this and to 149 00:07:20,840 --> 00:07:24,680 Speaker 1: an extent, especially rates hedge fund as well. Um, there's 150 00:07:24,760 --> 00:07:27,600 Speaker 1: fifty sixty bit moves in the long end of US curves, 151 00:07:27,600 --> 00:07:31,320 Speaker 1: Aussie curves, Sterling curves. I mean, all the big cross 152 00:07:31,320 --> 00:07:34,040 Speaker 1: currency swap books around the world. All the banks have 153 00:07:34,160 --> 00:07:36,720 Speaker 1: got huge market markets and they physically have to come 154 00:07:36,800 --> 00:07:39,000 Speaker 1: up with with dollars. So if you're National Australia Bank, 155 00:07:39,240 --> 00:07:40,640 Speaker 1: you've got to come up with a hundred and thirty 156 00:07:40,640 --> 00:07:42,880 Speaker 1: one point five million dollars to play to bab JP 157 00:07:42,960 --> 00:07:46,000 Speaker 1: Morgan teap US two. So that's where assets get sold. 158 00:07:46,000 --> 00:07:48,559 Speaker 1: That's why gold comes off, That's why assets get sold, 159 00:07:48,920 --> 00:07:50,920 Speaker 1: and then currencies get sold. They then have to go 160 00:07:50,960 --> 00:07:54,240 Speaker 1: and sell Ausy dollar, sell Korean one to raise us 161 00:07:54,280 --> 00:07:57,160 Speaker 1: to post that margin. So we had margin. There's margin 162 00:07:57,160 --> 00:07:59,080 Speaker 1: trades on the and they tend to work very quickly. 163 00:07:59,520 --> 00:08:00,800 Speaker 1: And then I've of that. You want to get out, 164 00:08:00,840 --> 00:08:02,880 Speaker 1: you want to sweep all of your investors money safely 165 00:08:03,520 --> 00:08:06,960 Speaker 1: to kind of a safe shore custodian oil pv UM. 166 00:08:07,000 --> 00:08:09,080 Speaker 1: So that's sort of a fine step thing that if 167 00:08:09,120 --> 00:08:10,800 Speaker 1: you look through the last few crisis that kind of 168 00:08:10,840 --> 00:08:13,640 Speaker 1: works vary informed time and time again. So we're lucky 169 00:08:13,720 --> 00:08:16,280 Speaker 1: enough to have learned that um. And that's kind of 170 00:08:16,320 --> 00:08:35,559 Speaker 1: just the playbo we rolled out. It almost sounds like 171 00:08:35,600 --> 00:08:39,160 Speaker 1: a domino effect and it's fascinating. But when was it, actually, 172 00:08:39,160 --> 00:08:42,200 Speaker 1: I'm really curious when you guys started picking up on 173 00:08:42,880 --> 00:08:46,160 Speaker 1: stress through funding markets. I mean, it almost seems as 174 00:08:46,160 --> 00:08:49,080 Speaker 1: though the reaction was delayed in the US. Obviously you 175 00:08:49,120 --> 00:08:51,080 Speaker 1: had the virus coming out of China that it's spread 176 00:08:51,160 --> 00:08:53,559 Speaker 1: through Asia, it spread through Europe, but it's made its 177 00:08:53,559 --> 00:08:56,920 Speaker 1: way over to the US, but we didn't feel it 178 00:08:57,000 --> 00:08:59,560 Speaker 1: until a couple of months into the year. I mean, 179 00:08:59,600 --> 00:09:03,040 Speaker 1: one was it that you started actually picking up on this? Right? 180 00:09:03,400 --> 00:09:06,200 Speaker 1: The process we have is is essentially, I think there's 181 00:09:06,200 --> 00:09:07,679 Speaker 1: three steps. I can go through it a little bit later, 182 00:09:07,679 --> 00:09:08,880 Speaker 1: but the first part of that when we look for 183 00:09:08,880 --> 00:09:11,040 Speaker 1: a change in narrative. So you look for a change 184 00:09:11,040 --> 00:09:13,200 Speaker 1: in narrative and there you know you want to be 185 00:09:13,520 --> 00:09:15,280 Speaker 1: you know, fairly kind of humble on open mind into 186 00:09:15,320 --> 00:09:17,400 Speaker 1: all of your avenues. So we'll look at micro data, 187 00:09:17,720 --> 00:09:19,920 Speaker 1: look at macro data, and we'll look at price data. 188 00:09:20,200 --> 00:09:21,640 Speaker 1: We talked to our network. You know, you have to 189 00:09:21,640 --> 00:09:23,840 Speaker 1: look out the window as well sometimes and then where 190 00:09:23,880 --> 00:09:27,320 Speaker 1: reminiscence a little bit different is or another another lens 191 00:09:27,360 --> 00:09:29,839 Speaker 1: we have, hence the name we quite up to look 192 00:09:29,920 --> 00:09:34,319 Speaker 1: through historical precedent, historic analogs. You're going further back than 193 00:09:34,360 --> 00:09:37,000 Speaker 1: just the sort of five seven year business cycle. I 194 00:09:37,040 --> 00:09:39,839 Speaker 1: know one of your podcasts actually used that word several 195 00:09:39,840 --> 00:09:41,480 Speaker 1: times reminiscent. I think you guys have had one in 196 00:09:41,559 --> 00:09:43,280 Speaker 1: June where you're talking about this sort of the market 197 00:09:43,360 --> 00:09:46,120 Speaker 1: meltdown that that word came up a lot um. But 198 00:09:46,400 --> 00:09:47,840 Speaker 1: so when we're going with us, when we were looking 199 00:09:47,840 --> 00:09:50,760 Speaker 1: through the process of those different avenues, it was very 200 00:09:50,760 --> 00:09:52,480 Speaker 1: clear some of those things were If you look at 201 00:09:52,520 --> 00:09:56,640 Speaker 1: just the sort of macro data, it was dramatic entire 202 00:09:56,679 --> 00:09:59,320 Speaker 1: city shut down, flights, etcetera. So it's taking a lot 203 00:09:59,360 --> 00:10:01,000 Speaker 1: of the boxes. I think a lot of people are 204 00:10:01,040 --> 00:10:04,120 Speaker 1: kind of almost in denial because you weren't getting the 205 00:10:04,120 --> 00:10:07,360 Speaker 1: confirmation just yet with regards to price action. Um so 206 00:10:07,559 --> 00:10:10,080 Speaker 1: some staggering things happening, but the market was very benign. 207 00:10:10,400 --> 00:10:12,200 Speaker 1: So for us, I think one of the one thing 208 00:10:12,280 --> 00:10:13,920 Speaker 1: that sort of really starts to tip us over was 209 00:10:13,960 --> 00:10:16,280 Speaker 1: once again back to our roots, was that first step 210 00:10:16,320 --> 00:10:19,080 Speaker 1: in the process was where fixed income was starting to crack, 211 00:10:19,880 --> 00:10:21,720 Speaker 1: and it was also the nature by which it was cracking. 212 00:10:21,800 --> 00:10:24,240 Speaker 1: So what you find it get's very interesting to us 213 00:10:24,320 --> 00:10:27,840 Speaker 1: is when you find, for example, um, the front end prices, 214 00:10:28,559 --> 00:10:30,920 Speaker 1: the volumes and how they're trading. So if you have 215 00:10:31,000 --> 00:10:33,760 Speaker 1: like ten thousand, for example, on the beard and a 216 00:10:33,840 --> 00:10:37,240 Speaker 1: thousand on the offer and it gets taken, and then 217 00:10:37,240 --> 00:10:39,560 Speaker 1: there's another ten thousand on the bard and offers just 218 00:10:39,640 --> 00:10:41,880 Speaker 1: keep getting taken. So so I feel like the distribution 219 00:10:41,920 --> 00:10:46,880 Speaker 1: of heavy hands wanting to own those contracts with no pullbacks, 220 00:10:47,440 --> 00:10:49,400 Speaker 1: it's just one input, but it's the market is telling 221 00:10:49,400 --> 00:10:51,920 Speaker 1: you something. When you've got this very very kind of 222 00:10:52,000 --> 00:10:56,520 Speaker 1: unrelenting heavy handed officers getting lifted, very very very kind 223 00:10:56,520 --> 00:10:58,960 Speaker 1: of strong based to a fixed income market across quite 224 00:10:58,960 --> 00:11:01,880 Speaker 1: a few markets. So you're seeing in New Zealand, seeing Australia, 225 00:11:01,960 --> 00:11:04,440 Speaker 1: seeing in the US all at the same time, coupled 226 00:11:04,480 --> 00:11:07,080 Speaker 1: with all those other factors, started to really kind of 227 00:11:07,080 --> 00:11:09,400 Speaker 1: print my attention. So it's a little clues like that 228 00:11:09,920 --> 00:11:12,400 Speaker 1: just can sometimes be the tipping point over above, over 229 00:11:12,440 --> 00:11:15,520 Speaker 1: and above kind of a robust process underneath it. UM. 230 00:11:15,600 --> 00:11:18,760 Speaker 1: And so once we saw that it became interesting to 231 00:11:18,840 --> 00:11:20,920 Speaker 1: us too. Then you roll out some of these trades. 232 00:11:21,480 --> 00:11:23,920 Speaker 1: And of course what we then do is you start 233 00:11:23,960 --> 00:11:26,080 Speaker 1: with the most skewed trades where if you're wrong, it's 234 00:11:26,080 --> 00:11:28,200 Speaker 1: not going to be a problem, and that was front 235 00:11:28,280 --> 00:11:30,679 Speaker 1: end fixed income. There was some fantastic trades where you 236 00:11:30,720 --> 00:11:32,840 Speaker 1: were to give you an example, we put on across 237 00:11:32,840 --> 00:11:35,920 Speaker 1: about four different countries where you're risking about a basis 238 00:11:35,960 --> 00:11:39,520 Speaker 1: point to make twenty five to fifty UM. So even 239 00:11:39,559 --> 00:11:41,800 Speaker 1: if you were wrong, you know you weren't losing too much, 240 00:11:42,600 --> 00:11:45,360 Speaker 1: you know, Sarah. He he makes it sound easy, as 241 00:11:45,440 --> 00:11:48,839 Speaker 1: David says, he said his forty with gray hair. I'm 242 00:11:48,840 --> 00:11:50,520 Speaker 1: in my forties with gray hair. But I don't have 243 00:11:50,559 --> 00:11:53,200 Speaker 1: these type of returns to to talk about or this 244 00:11:53,280 --> 00:11:56,800 Speaker 1: type of this type of experience to the leverage. But David, 245 00:11:56,840 --> 00:11:59,560 Speaker 1: a lot of UM, what you're describing is you know 246 00:11:59,600 --> 00:12:02,520 Speaker 1: that action that real funding stress in the short end 247 00:12:02,520 --> 00:12:06,200 Speaker 1: of the curve very on in sort of the cross 248 00:12:06,200 --> 00:12:10,000 Speaker 1: Asset followed Sildy. We saw I guess you know from 249 00:12:10,040 --> 00:12:12,880 Speaker 1: your experience, and any observer would guess that, well, the 250 00:12:12,880 --> 00:12:15,800 Speaker 1: FED was going to step in soon, right and solve 251 00:12:15,880 --> 00:12:19,320 Speaker 1: what it can with these massive liquidity injections. We've seen, 252 00:12:19,360 --> 00:12:22,120 Speaker 1: you know, a variety stuff. Walk us through how you 253 00:12:22,160 --> 00:12:24,280 Speaker 1: were thinking about that? You you must have known the 254 00:12:24,320 --> 00:12:26,360 Speaker 1: FED was about to come in big and it was 255 00:12:26,400 --> 00:12:28,280 Speaker 1: it just a matter of getting in and out quick 256 00:12:28,679 --> 00:12:31,520 Speaker 1: before that happens. Or do you even sort of tempt 257 00:12:31,520 --> 00:12:33,440 Speaker 1: fate and wait for the announcement or is it is 258 00:12:33,480 --> 00:12:35,840 Speaker 1: it too late by then once the FED starts rolling 259 00:12:35,880 --> 00:12:39,720 Speaker 1: out these programs. Good quest, great question, Incianni done, mure. 260 00:12:39,720 --> 00:12:41,160 Speaker 1: It is appropriate for this show that I'm gonna do 261 00:12:41,160 --> 00:12:45,040 Speaker 1: it anything. We'll take anything on this show. We're easy going. 262 00:12:45,520 --> 00:12:50,400 Speaker 1: My mciote for you, as follows UM. At that time 263 00:12:50,640 --> 00:12:52,560 Speaker 1: it was actually interesting because I forget the name of 264 00:12:52,559 --> 00:12:55,640 Speaker 1: the FED speaker, but at that time the FED, this 265 00:12:55,760 --> 00:12:58,280 Speaker 1: is very kind of early on UM and and then 266 00:12:58,320 --> 00:13:00,280 Speaker 1: who's to blame? And it wasn't obvious to them at 267 00:13:00,440 --> 00:13:02,120 Speaker 1: that stage. It wasn't obviously to anyone really at that 268 00:13:02,160 --> 00:13:05,199 Speaker 1: stage in its full entirety. But the Fed actually came 269 00:13:05,240 --> 00:13:07,560 Speaker 1: out with, you know, we're not going to be doing anything. 270 00:13:07,559 --> 00:13:09,760 Speaker 1: We're not going to move rates. This is very very 271 00:13:09,760 --> 00:13:11,640 Speaker 1: early in the piece, before equities had really started to 272 00:13:11,640 --> 00:13:13,560 Speaker 1: move too much. The actually announced, you know, we're not 273 00:13:13,720 --> 00:13:16,800 Speaker 1: we no intention to move interest rates. And I think 274 00:13:16,800 --> 00:13:19,040 Speaker 1: it was pretty much that next morning. You know, my 275 00:13:19,120 --> 00:13:21,640 Speaker 1: daughters got these little bunny rabbits, and the little bunny 276 00:13:21,679 --> 00:13:23,520 Speaker 1: rabbits they tend to chew my books. So we had 277 00:13:23,520 --> 00:13:25,440 Speaker 1: some books down in the lower shelf which have subsequently 278 00:13:25,520 --> 00:13:27,640 Speaker 1: been moved to the higher shells. But Mr Bunny, and 279 00:13:27,640 --> 00:13:30,000 Speaker 1: we call him Mr Bunny. Mr Bunny had gone into 280 00:13:30,200 --> 00:13:32,600 Speaker 1: his book for that night. He'd torn apart. I came 281 00:13:32,679 --> 00:13:34,360 Speaker 1: up the next World Cup next morning, torn apart of 282 00:13:34,360 --> 00:13:36,240 Speaker 1: the look. And I looked down. I'm staring straight at 283 00:13:36,320 --> 00:13:39,680 Speaker 1: Mr Greenspan and it was the age of two. There 284 00:13:39,800 --> 00:13:42,480 Speaker 1: is a sign. That is a sign. It was. It 285 00:13:42,520 --> 00:13:44,240 Speaker 1: was this is not how we invested, by the way 286 00:13:44,280 --> 00:13:46,839 Speaker 1: we were already positioned. But but but look, I did 287 00:13:46,840 --> 00:13:48,680 Speaker 1: do a few extra contracts, I will admit, But so 288 00:13:48,720 --> 00:13:50,520 Speaker 1: I looked, I'm staring at Mr Bunny. I'm staring at 289 00:13:50,600 --> 00:13:53,040 Speaker 1: Mr Greenspan and at the age of Turbulence. And I 290 00:13:53,120 --> 00:13:55,200 Speaker 1: remember reading that book a couple of times many years 291 00:13:55,200 --> 00:13:58,120 Speaker 1: before actually um and you know, I remember called I 292 00:13:58,120 --> 00:13:59,160 Speaker 1: think it was one of the one of the pieces 293 00:13:59,200 --> 00:14:02,000 Speaker 1: of that book where Green's himself talked about how central 294 00:14:02,040 --> 00:14:05,000 Speaker 1: bankers will will will guide us in a certain direction, 295 00:14:05,200 --> 00:14:06,480 Speaker 1: you know, for a long period of time, and then 296 00:14:06,480 --> 00:14:08,160 Speaker 1: when it when it is time to turn, they turn 297 00:14:08,280 --> 00:14:11,320 Speaker 1: very quickly. And so part of that anecdote was, you know, 298 00:14:11,559 --> 00:14:13,120 Speaker 1: you know, it was a little bit humorous to see 299 00:14:13,120 --> 00:14:14,520 Speaker 1: that book, but it did it did it didn't make 300 00:14:14,559 --> 00:14:17,640 Speaker 1: me think a little bit about what was in those chapters. 301 00:14:18,160 --> 00:14:21,000 Speaker 1: And you know, funny enough, it turned out that the FED, 302 00:14:21,280 --> 00:14:25,240 Speaker 1: you know, seven days later emergency cut fifty. So you 303 00:14:25,280 --> 00:14:28,360 Speaker 1: really didn't get the proper warnings from there. Not to 304 00:14:28,480 --> 00:14:30,040 Speaker 1: not to blame, not to point things in any way, 305 00:14:30,080 --> 00:14:32,280 Speaker 1: shape or form, but you know, again, if you've been 306 00:14:32,320 --> 00:14:34,520 Speaker 1: around long enough, you know, I mean, you've been around 307 00:14:34,520 --> 00:14:36,680 Speaker 1: long enough, you know they don't know, they don't know themselves, 308 00:14:37,240 --> 00:14:38,920 Speaker 1: and you have to remember that they you know, they 309 00:14:38,920 --> 00:14:41,480 Speaker 1: can they can turn very quickly and never the they 310 00:14:41,480 --> 00:14:43,600 Speaker 1: have a precedent of doing that, and that's also the 311 00:14:43,680 --> 00:14:45,520 Speaker 1: right thing for the FED to do. To give us 312 00:14:45,520 --> 00:14:48,520 Speaker 1: confidence until such time as you know it's time to 313 00:14:48,600 --> 00:14:51,160 Speaker 1: then to go there. And it's very very important for 314 00:14:51,200 --> 00:14:53,840 Speaker 1: the for for the likes of the FED to then, 315 00:14:54,200 --> 00:14:57,200 Speaker 1: you know, once they've decided that something is afoot to 316 00:14:57,360 --> 00:14:59,800 Speaker 1: then change quickly and be very forceful on that change. 317 00:15:00,080 --> 00:15:02,000 Speaker 1: That then instills in us that they're you know, they're 318 00:15:02,000 --> 00:15:03,640 Speaker 1: they're on the job, and they're paying attention to it 319 00:15:03,720 --> 00:15:06,440 Speaker 1: and they're they're they're coming into help. So do you 320 00:15:06,440 --> 00:15:08,160 Speaker 1: buy when they say that they won't go negative? Then? 321 00:15:08,280 --> 00:15:10,520 Speaker 1: Is is that something that you guys have to seriously 322 00:15:10,520 --> 00:15:12,320 Speaker 1: think about? Are you waiting for another sign from your 323 00:15:12,360 --> 00:15:16,160 Speaker 1: daughter's buddies on that one? That's right? Yeah, Well I 324 00:15:16,280 --> 00:15:19,640 Speaker 1: got the bunny on the next podcast. I think we'll 325 00:15:19,640 --> 00:15:21,440 Speaker 1: get my bunch of box to truth through. See if 326 00:15:21,480 --> 00:15:25,080 Speaker 1: you know Graham and Dad, we'll give him whatever it takes. Well, 327 00:15:25,120 --> 00:15:26,640 Speaker 1: I should. I've got one. I've got one. I'll show 328 00:15:26,680 --> 00:15:28,520 Speaker 1: you in a minute. I've got I've got the best 329 00:15:28,640 --> 00:15:30,960 Speaker 1: hundred Internet stocks to own, which I bought after the 330 00:15:31,000 --> 00:15:32,920 Speaker 1: dot com crash. And there's a lovely page and they're 331 00:15:32,960 --> 00:15:35,760 Speaker 1: called Amazon, and it talks about you know, we think 332 00:15:35,800 --> 00:15:41,280 Speaker 1: this business might work out we think. We think, yeah, so, um, 333 00:15:41,360 --> 00:15:45,240 Speaker 1: there's a two dollars fifty that book cost um. So yeah, 334 00:15:45,280 --> 00:15:50,000 Speaker 1: your question was negative rates, etcetera, etcetera. So my thoughts 335 00:15:50,080 --> 00:15:53,240 Speaker 1: on that are that anything that's being said currently, Um, 336 00:15:53,280 --> 00:15:55,880 Speaker 1: you know, all bets are off, they can easily change 337 00:15:55,920 --> 00:15:58,200 Speaker 1: their mind. Um, what do I think in that regard 338 00:15:58,600 --> 00:16:00,440 Speaker 1: the market's kind of telling us something as well? A 339 00:16:00,440 --> 00:16:01,880 Speaker 1: little bit if you look at already of the likes 340 00:16:01,880 --> 00:16:04,920 Speaker 1: of the sterling market and you know, starting to go negative, etcetera, etcetera. 341 00:16:05,240 --> 00:16:07,200 Speaker 1: And if if things, if you let's look at the 342 00:16:07,200 --> 00:16:10,280 Speaker 1: elasticity we've had since the March lows over the past 343 00:16:10,280 --> 00:16:14,560 Speaker 1: four months, very substantial equity rally and rates have barely 344 00:16:14,560 --> 00:16:18,120 Speaker 1: been able to move higher. That tells me elasticity to 345 00:16:18,280 --> 00:16:21,560 Speaker 1: kind of bad news, etcetera, etcetera. The market will, I 346 00:16:21,600 --> 00:16:24,840 Speaker 1: think price will force kind of at least a pricing 347 00:16:24,880 --> 00:16:27,560 Speaker 1: for for negative rates in a lot of countries, including 348 00:16:27,600 --> 00:16:30,360 Speaker 1: the US. Whether the Fed does and it doesn't, it's 349 00:16:30,400 --> 00:16:34,800 Speaker 1: probably a tough question, and there's obviously some plumbing issues, 350 00:16:34,800 --> 00:16:36,560 Speaker 1: and there's a lot of important stuff to get your 351 00:16:36,560 --> 00:16:38,120 Speaker 1: head around it to whether that's actually a good or 352 00:16:38,120 --> 00:16:40,960 Speaker 1: a bad thing, And how that gets implemented. But as 353 00:16:40,960 --> 00:16:43,960 Speaker 1: far as making money for our investors goes, UM, the 354 00:16:44,040 --> 00:16:46,600 Speaker 1: market will almost certainly price for it. If we get 355 00:16:46,640 --> 00:16:50,120 Speaker 1: a very bad kind of vol event, equity markets going 356 00:16:50,200 --> 00:16:53,520 Speaker 1: down and and there's very skewed, skewed payout trades that 357 00:16:53,520 --> 00:16:55,960 Speaker 1: you can have on to benefit from that. So I 358 00:16:55,960 --> 00:16:58,360 Speaker 1: think that the market will will certainly price for it, 359 00:16:58,760 --> 00:17:01,360 Speaker 1: and I suspect that, um, you can make money off 360 00:17:01,360 --> 00:17:03,400 Speaker 1: of that. Whether they actually do or they don't. It's 361 00:17:03,440 --> 00:17:05,640 Speaker 1: probably a bit more complicated than a lot of other countries, 362 00:17:06,080 --> 00:17:08,040 Speaker 1: just as as you all know that dollars being the 363 00:17:08,080 --> 00:17:10,120 Speaker 1: reserve currency of the world comes with a bit more 364 00:17:10,160 --> 00:17:12,199 Speaker 1: a bit more issues there may be some of the 365 00:17:12,200 --> 00:17:14,960 Speaker 1: smaller open economies. Um. So that's what I would say, 366 00:17:14,960 --> 00:17:17,120 Speaker 1: is I think we can make money for investors on that. 367 00:17:17,520 --> 00:17:20,399 Speaker 1: We'll end up doing it, not sure, I suspect they 368 00:17:20,440 --> 00:17:40,480 Speaker 1: probably would have things got very bad. You know, when 369 00:17:40,480 --> 00:17:44,280 Speaker 1: you sort of survey the landscape of of Asia, where 370 00:17:44,280 --> 00:17:47,800 Speaker 1: are you seeing some good opportunities? You know, is the 371 00:17:47,920 --> 00:17:51,879 Speaker 1: sort of tempest of political back and forth between the 372 00:17:51,960 --> 00:17:56,760 Speaker 1: US and China a major risk for China or are 373 00:17:56,800 --> 00:18:00,040 Speaker 1: you sort of looking through that? Sure? So? So the 374 00:18:00,040 --> 00:18:02,160 Speaker 1: opportunity we see in the next weeks month. It's quite exciting. 375 00:18:02,160 --> 00:18:03,840 Speaker 1: I think that there's a lot to talk about. But 376 00:18:03,840 --> 00:18:05,480 Speaker 1: if we just nut down to maybe one or two 377 00:18:05,480 --> 00:18:08,159 Speaker 1: things that are simple to describe. If you look at 378 00:18:08,200 --> 00:18:10,440 Speaker 1: the pendulum of risk with regard to that equity rally 379 00:18:10,480 --> 00:18:12,399 Speaker 1: we've spoken about, you know, there's a lot of the 380 00:18:12,440 --> 00:18:14,760 Speaker 1: internals will show you that you've got to price data, 381 00:18:14,880 --> 00:18:18,879 Speaker 1: daily sentiment, moving averages, positioning, all the robin Hood sort 382 00:18:18,880 --> 00:18:21,760 Speaker 1: of anecdotes, etcetera, etcetera, a sort of telling someone like 383 00:18:21,800 --> 00:18:25,040 Speaker 1: myself it's getting quite full. It's probably starting to get 384 00:18:25,040 --> 00:18:27,000 Speaker 1: towards the point where it probably needs some sort of 385 00:18:27,040 --> 00:18:30,280 Speaker 1: pull back and maybe some sort of correction. But you know, 386 00:18:30,359 --> 00:18:32,680 Speaker 1: trying to trying to pick that is a dangerous game, 387 00:18:32,720 --> 00:18:34,840 Speaker 1: so we're not going to do that. Um So we're 388 00:18:34,840 --> 00:18:36,680 Speaker 1: not gona trying to pick some sort of top inequities. 389 00:18:36,920 --> 00:18:39,359 Speaker 1: So insteady circuit, you're given that, you know, how can 390 00:18:39,440 --> 00:18:42,040 Speaker 1: one make money for investors? And it's as follows as 391 00:18:42,040 --> 00:18:44,280 Speaker 1: I'm it described earlier rates have not been able to 392 00:18:44,280 --> 00:18:47,280 Speaker 1: go higher at all despite all of that, and kind 393 00:18:47,280 --> 00:18:49,520 Speaker 1: of experience tells us that should you get any turned 394 00:18:49,520 --> 00:18:52,120 Speaker 1: down in that pendulum, rates probably start to price lower. 395 00:18:53,040 --> 00:18:54,760 Speaker 1: So what we've done is we've put on you know, 396 00:18:54,800 --> 00:18:58,600 Speaker 1: some some portfolio, some trades in front ends of faious 397 00:18:58,680 --> 00:19:02,800 Speaker 1: curves whereby you've got very little you're risking an investing 398 00:19:02,840 --> 00:19:05,880 Speaker 1: capital that any other scenario, you know, a moderate downturn 399 00:19:05,920 --> 00:19:08,440 Speaker 1: and risk a medium downtown or a large downturn and 400 00:19:08,560 --> 00:19:12,119 Speaker 1: riskue and have commensurate p and LUM for investors in 401 00:19:12,240 --> 00:19:14,000 Speaker 1: sort of front end rates. So we've got those on. 402 00:19:14,200 --> 00:19:16,080 Speaker 1: I suspect they probably don't do a lot, maybe they 403 00:19:16,119 --> 00:19:18,399 Speaker 1: decay out and die. We're not risking too much capital 404 00:19:18,480 --> 00:19:20,800 Speaker 1: on those um. But should you get any of those 405 00:19:20,800 --> 00:19:23,800 Speaker 1: other three outcomes, which I think the probability of at 406 00:19:23,840 --> 00:19:25,800 Speaker 1: least some sort of blip between out now and your 407 00:19:25,880 --> 00:19:30,639 Speaker 1: end is reasonable, let alone maybe a reasonable move higher 408 00:19:30,640 --> 00:19:33,080 Speaker 1: in bold and risk. So so so I think that's 409 00:19:33,200 --> 00:19:34,919 Speaker 1: the first stepisode I think it's supposed to have those 410 00:19:34,960 --> 00:19:37,840 Speaker 1: sorts of trades on number one. Number two would be 411 00:19:37,920 --> 00:19:40,880 Speaker 1: we've got to China and the US, etcetera, etcetera. It's 412 00:19:40,920 --> 00:19:42,840 Speaker 1: been interesting to see that if you look at the 413 00:19:42,880 --> 00:19:45,560 Speaker 1: Chinese with trade getting tricky and trickier for them, with 414 00:19:45,640 --> 00:19:49,040 Speaker 1: various countries around the world with their economy slowing down 415 00:19:49,560 --> 00:19:52,320 Speaker 1: and with it being increasingly harden them to continue to 416 00:19:52,400 --> 00:19:55,560 Speaker 1: prop up property markets and infrastructure. Well, infrastructure they can, 417 00:19:55,600 --> 00:19:59,280 Speaker 1: but the property market that it leaves them with. It's 418 00:19:59,280 --> 00:20:03,280 Speaker 1: been exciting to see this past month. Uh their equity market. 419 00:20:03,480 --> 00:20:05,840 Speaker 1: You know, they can effectively weaponize the equity market, or 420 00:20:05,840 --> 00:20:07,920 Speaker 1: maybe that's an aggressive word. They can really kind of 421 00:20:07,960 --> 00:20:11,560 Speaker 1: try and help support consumer confidence and etcetera, etcetera by 422 00:20:11,600 --> 00:20:14,480 Speaker 1: keeping the equity market very well supported and essentially trying 423 00:20:14,480 --> 00:20:18,359 Speaker 1: to engineer a US style equity rally. And the thing 424 00:20:18,400 --> 00:20:20,360 Speaker 1: about the Chinese is two things. One is they've still 425 00:20:20,400 --> 00:20:22,280 Speaker 1: got three hundred basis points out there in the ten 426 00:20:22,359 --> 00:20:25,439 Speaker 1: years of rates that they can collapse down to zero. 427 00:20:26,200 --> 00:20:27,800 Speaker 1: And this day and age you've seen from what happened 428 00:20:27,800 --> 00:20:29,439 Speaker 1: in the rest of the world, that's a huge amount 429 00:20:29,480 --> 00:20:33,680 Speaker 1: of pe expansion and kind of support they can provide 430 00:20:33,680 --> 00:20:36,840 Speaker 1: through collapsing rates over time. And of course just the 431 00:20:36,920 --> 00:20:39,560 Speaker 1: Chinese themselves and the retail community there, you know, they 432 00:20:39,560 --> 00:20:41,760 Speaker 1: can do a rally like no one else. I think 433 00:20:41,760 --> 00:20:43,879 Speaker 1: you could see a bit of a handover where you 434 00:20:43,960 --> 00:20:48,399 Speaker 1: get Chinese equities doing quite well relative to US. And 435 00:20:48,440 --> 00:20:50,920 Speaker 1: maybe you know, for especially for a portfolio that wants 436 00:20:50,920 --> 00:20:53,399 Speaker 1: to maybe be a bit defensive, that could potentially actually 437 00:20:53,400 --> 00:20:56,520 Speaker 1: come about through at some stage the US equities coming 438 00:20:56,560 --> 00:21:00,000 Speaker 1: off and China maybe not even coming off, maybe even 439 00:21:00,040 --> 00:21:02,640 Speaker 1: rallying over the medium terms. So you know, I wouldn't 440 00:21:02,640 --> 00:21:05,360 Speaker 1: be completely surprised if eighteen months from now we find 441 00:21:05,359 --> 00:21:07,840 Speaker 1: that US equities are maybe here or lower, possibly know 442 00:21:07,880 --> 00:21:10,639 Speaker 1: a lot lower, and Chinese equities are here or higher, 443 00:21:10,720 --> 00:21:13,359 Speaker 1: and that's you know, we're in marking. You could maybe 444 00:21:13,359 --> 00:21:15,520 Speaker 1: have as much as the north of a fifty move 445 00:21:15,600 --> 00:21:18,920 Speaker 1: in that in that sort of relative performance. So that's 446 00:21:18,960 --> 00:21:21,479 Speaker 1: that's kind of exciting to us before we even need 447 00:21:21,520 --> 00:21:24,199 Speaker 1: to kind of go into Trump China tensions and the 448 00:21:24,240 --> 00:21:26,679 Speaker 1: election um that that that we think it's kind of 449 00:21:26,680 --> 00:21:29,639 Speaker 1: interesting and that firepower that Chinese has got their kind 450 00:21:29,640 --> 00:21:31,520 Speaker 1: of rates. If you just look at the rest of 451 00:21:31,520 --> 00:21:33,960 Speaker 1: the world, just roll out that playbook and the rest 452 00:21:34,000 --> 00:21:36,320 Speaker 1: of the world and it's you know, people have been 453 00:21:36,359 --> 00:21:37,840 Speaker 1: up to in Europe, they've done it in the UK, 454 00:21:37,960 --> 00:21:40,760 Speaker 1: they've done in the US, and it's kind of there 455 00:21:40,800 --> 00:21:42,720 Speaker 1: for the taking in China for the Chinese want to. 456 00:21:42,800 --> 00:21:45,080 Speaker 1: So we're watching that really carefully do you even bother 457 00:21:45,160 --> 00:21:48,359 Speaker 1: trying to predict U S China relations and Trump and 458 00:21:48,520 --> 00:21:50,480 Speaker 1: the outcome of the election. I mean, I think about 459 00:21:50,640 --> 00:21:52,520 Speaker 1: when we were going through Phase one trade talk, so 460 00:21:52,760 --> 00:21:54,800 Speaker 1: you knew what we were moving towards. But now all 461 00:21:54,800 --> 00:21:57,959 Speaker 1: of a sudden, it seems like the possibilities are are 462 00:21:58,080 --> 00:22:00,920 Speaker 1: much more up of the air. And hear the US 463 00:22:00,960 --> 00:22:03,880 Speaker 1: talk about sanctions or retaliation or whatever it might be, 464 00:22:04,560 --> 00:22:06,880 Speaker 1: but it seems like the playing field is much larger 465 00:22:06,960 --> 00:22:09,439 Speaker 1: right now, right yea. So we we come with the 466 00:22:09,440 --> 00:22:10,879 Speaker 1: way we look at it is we come from the 467 00:22:10,920 --> 00:22:13,680 Speaker 1: Asian lens. So if you look at say last year, 468 00:22:13,680 --> 00:22:16,960 Speaker 1: even as you're good at anecdote, there's some fantastic folks 469 00:22:17,000 --> 00:22:19,679 Speaker 1: out there's a lot of great research firms trying to 470 00:22:19,720 --> 00:22:22,760 Speaker 1: compete with other funds on getting an edge on the 471 00:22:22,840 --> 00:22:25,480 Speaker 1: US election. I think is full hardy for us. We're 472 00:22:25,480 --> 00:22:29,199 Speaker 1: a fairly small firmtims of headcount and still capital at 473 00:22:29,200 --> 00:22:31,119 Speaker 1: the stage because we're growing. So what we did we 474 00:22:31,160 --> 00:22:33,640 Speaker 1: can complete. Other side, we look at the Asian perspective 475 00:22:33,640 --> 00:22:35,800 Speaker 1: and there if you take a bit of time and 476 00:22:35,880 --> 00:22:38,280 Speaker 1: you've reasonable network where you just even you just even 477 00:22:38,400 --> 00:22:40,640 Speaker 1: listen to the authorities in the central banks in Asia, 478 00:22:40,720 --> 00:22:43,920 Speaker 1: the Japanese and Chinese, they're very good at telegraphing and 479 00:22:44,080 --> 00:22:45,800 Speaker 1: telling you what they're intending to do, and you should 480 00:22:45,840 --> 00:22:48,800 Speaker 1: listen to it. Very often. I found, um being out 481 00:22:48,880 --> 00:22:50,920 Speaker 1: in Sydney and when I worked in Hong Kong, you'd 482 00:22:50,920 --> 00:22:54,200 Speaker 1: have offshore quite often offer investment quite often sort of 483 00:22:54,400 --> 00:22:56,160 Speaker 1: trying to be a little bit too cute and sort 484 00:22:56,200 --> 00:22:59,560 Speaker 1: of counter trade um the domestic markets, and you're really 485 00:22:59,560 --> 00:23:01,439 Speaker 1: supposed to listen to them. So if you look at 486 00:23:01,560 --> 00:23:04,359 Speaker 1: last year was an example where the Chinese were starting 487 00:23:04,440 --> 00:23:07,600 Speaker 1: to describe to us both you know, publicly and through 488 00:23:07,680 --> 00:23:10,800 Speaker 1: think tanks, and you know, if you were just to 489 00:23:10,840 --> 00:23:13,520 Speaker 1: read what they were saying, Yeah, they were explaining how 490 00:23:13,600 --> 00:23:15,840 Speaker 1: I mean, even I was staggered at the time, you know, 491 00:23:16,000 --> 00:23:18,320 Speaker 1: sort of around June as it were, if you spoke 492 00:23:18,359 --> 00:23:20,080 Speaker 1: to sort of some think tanks and you're sort of 493 00:23:20,119 --> 00:23:22,479 Speaker 1: Chinese network. They actually had a name for it. They 494 00:23:22,520 --> 00:23:25,040 Speaker 1: were talking about a staircase depreciation for c n H. 495 00:23:25,200 --> 00:23:27,439 Speaker 1: This was back over a year ago. By staircase, they 496 00:23:27,480 --> 00:23:30,719 Speaker 1: meant allowed dolice H to go higher, holding in They 497 00:23:30,760 --> 00:23:32,960 Speaker 1: don't want capital flights, so they hold it in and 498 00:23:33,000 --> 00:23:34,280 Speaker 1: then allow it to go higher. So it looks like 499 00:23:34,280 --> 00:23:36,080 Speaker 1: a staircase. Because I had a name, you kind of 500 00:23:36,119 --> 00:23:38,000 Speaker 1: had a timing window, you kind of had the trade 501 00:23:38,080 --> 00:23:41,120 Speaker 1: laid out. And of course, sure enough in August dolice 502 00:23:41,240 --> 00:23:43,639 Speaker 1: H did it exactly exploded up towards seven twenty was 503 00:23:43,720 --> 00:23:46,399 Speaker 1: held in etcetera, etcetera. Um, So, what I'm trying to 504 00:23:46,480 --> 00:23:48,879 Speaker 1: say there is that we come more from the Asian 505 00:23:48,960 --> 00:23:50,680 Speaker 1: lens and listen to what they're saying and some of 506 00:23:50,680 --> 00:23:53,000 Speaker 1: the guidelines. It's far less looked at, you know, kind 507 00:23:53,000 --> 00:23:56,560 Speaker 1: of far more opportunities and far ass granular than the 508 00:23:56,640 --> 00:23:59,040 Speaker 1: US market. Instead, I was trying to compete in that sphere. 509 00:23:59,080 --> 00:24:00,920 Speaker 1: We we we come from that, from the from that 510 00:24:01,040 --> 00:24:05,080 Speaker 1: Asian Asian perspective. Does the messaging out of China seem 511 00:24:05,080 --> 00:24:07,600 Speaker 1: a little mixed to these days? You know? I remember, 512 00:24:07,600 --> 00:24:09,560 Speaker 1: I guess it was, I don't know, in in mid 513 00:24:09,720 --> 00:24:14,320 Speaker 1: late June when there was state media editorial out of 514 00:24:14,400 --> 00:24:18,600 Speaker 1: China basically suggesting that the government was was looking to 515 00:24:19,800 --> 00:24:23,560 Speaker 1: help the equity market, uh sort of enter a bull phase, 516 00:24:23,640 --> 00:24:26,320 Speaker 1: and and sure enough that Chinese equities just went crazy 517 00:24:26,359 --> 00:24:29,640 Speaker 1: there for for a few weeks. Now they're coming back 518 00:24:29,800 --> 00:24:33,280 Speaker 1: off of the boil a little bit. Um. You know 519 00:24:33,400 --> 00:24:36,480 Speaker 1: how in control of the equity market. Do you think 520 00:24:36,600 --> 00:24:39,920 Speaker 1: is the signaling from China Chinese state media and what 521 00:24:40,000 --> 00:24:42,560 Speaker 1: would they do um to sort of cool it off? 522 00:24:42,640 --> 00:24:45,359 Speaker 1: I mean, is it uh sort of suppress the margin 523 00:24:45,560 --> 00:24:48,320 Speaker 1: accounts in the country or is it is it more 524 00:24:48,359 --> 00:24:51,080 Speaker 1: of an open mouth operation type of thing where they 525 00:24:51,119 --> 00:24:54,040 Speaker 1: would sort of suggest, you know, some sort of restrictions 526 00:24:54,080 --> 00:24:57,280 Speaker 1: on security firms that would would cool things off. You know, 527 00:24:57,359 --> 00:24:59,040 Speaker 1: when you look at Asia and you've got to have 528 00:24:59,119 --> 00:25:03,320 Speaker 1: that slightly different lengths Asian Asian markets just are that 529 00:25:03,440 --> 00:25:06,600 Speaker 1: much higher voal. And so if you send a process 530 00:25:06,640 --> 00:25:07,960 Speaker 1: after this, I can send you a great charge if 531 00:25:07,960 --> 00:25:10,520 Speaker 1: you come back with a slightly reliniscently wider lens, a 532 00:25:10,560 --> 00:25:12,440 Speaker 1: bit more of a historical precedent, give yourself more of 533 00:25:12,480 --> 00:25:15,760 Speaker 1: a wider lens. If you look at the Shanghai comp uh, 534 00:25:15,960 --> 00:25:18,360 Speaker 1: it's a great chart. It can send you the move 535 00:25:18,440 --> 00:25:20,040 Speaker 1: we've started. It looks like a lot. But if the 536 00:25:20,080 --> 00:25:22,320 Speaker 1: move we've started to have even before you know last night, 537 00:25:22,400 --> 00:25:26,760 Speaker 1: with the pullbacks we've had recently, um, it's a blip 538 00:25:27,600 --> 00:25:30,280 Speaker 1: in terms of the larger moves that we've had. So 539 00:25:30,600 --> 00:25:33,400 Speaker 1: if you take it face value, that that that your 540 00:25:33,400 --> 00:25:36,439 Speaker 1: potentially going to see UM on a relative basis anyway, 541 00:25:36,520 --> 00:25:40,359 Speaker 1: like an engineering of an appreciation in their market. UM, 542 00:25:40,520 --> 00:25:44,040 Speaker 1: it's really only just beginning. Number one and so and 543 00:25:44,080 --> 00:25:45,520 Speaker 1: so number two is when we do see these quite 544 00:25:45,560 --> 00:25:48,359 Speaker 1: scene if pullbacks six seven eight cent pullbacks and just 545 00:25:48,440 --> 00:25:50,760 Speaker 1: give yourself some breathing room. That kind of in their 546 00:25:50,800 --> 00:25:53,920 Speaker 1: eyes and the Chinese investors kind of eyes, and unlike 547 00:25:53,960 --> 00:25:56,520 Speaker 1: say the US markets, especially in the past few months, 548 00:25:56,520 --> 00:25:58,359 Speaker 1: with US marketing very sort of tame in terms of 549 00:25:58,640 --> 00:26:02,119 Speaker 1: daily moves, UM, allowing yourself much more breathing room. So 550 00:26:02,200 --> 00:26:04,280 Speaker 1: I think that we could we can potentially see the 551 00:26:04,720 --> 00:26:08,639 Speaker 1: decent appreciation equities. We've got to specific comments on how 552 00:26:08,720 --> 00:26:10,240 Speaker 1: they can cool and manage that. I think they've got 553 00:26:10,280 --> 00:26:12,639 Speaker 1: a lot better than twosan fourteen and fifteen. And it 554 00:26:12,840 --> 00:26:16,359 Speaker 1: is exactly what you described as various leavers like margin accounts, 555 00:26:16,720 --> 00:26:18,920 Speaker 1: you know, potentially encouraging some of the larger you know, 556 00:26:19,000 --> 00:26:21,560 Speaker 1: kind of almost like state owned firms, but certainly like 557 00:26:21,640 --> 00:26:24,760 Speaker 1: the very great kind of in the loop large money 558 00:26:24,800 --> 00:26:27,080 Speaker 1: managers that kind of know when they're going to put 559 00:26:27,080 --> 00:26:29,840 Speaker 1: the accelerator and the breaks onto kind of um work 560 00:26:29,920 --> 00:26:31,920 Speaker 1: with what they call the national team, and of course 561 00:26:31,960 --> 00:26:35,080 Speaker 1: the national team themselves kind of buying and selling. I 562 00:26:35,119 --> 00:26:38,960 Speaker 1: think that will be better at managing some of the 563 00:26:40,240 --> 00:26:43,280 Speaker 1: volatility that was present in two thousand fifteen. But even there, 564 00:26:43,280 --> 00:26:45,240 Speaker 1: I think, especially if the market gets very exuberant to 565 00:26:45,320 --> 00:26:48,119 Speaker 1: the upside, they'll still have their hands for It's almost 566 00:26:48,119 --> 00:26:52,720 Speaker 1: like a different world. Yeah, but Mike, I really do 567 00:26:52,840 --> 00:26:55,520 Speaker 1: wish that we could talk for hours and hours more. 568 00:26:55,560 --> 00:26:57,679 Speaker 1: I know you're just starting your morning over in Sydney, 569 00:26:57,720 --> 00:26:59,760 Speaker 1: so I know you'd be able to um, but I 570 00:26:59,800 --> 00:27:02,600 Speaker 1: think gets that time, Mike. Yeah, that's pretty well, that's 571 00:27:02,600 --> 00:27:05,080 Speaker 1: pretty good for early morning. David. I'm not ever that 572 00:27:05,200 --> 00:27:07,520 Speaker 1: coherent at what is it six or seven in the 573 00:27:07,640 --> 00:27:09,760 Speaker 1: morning morning. As you are very impressive. We'll have to 574 00:27:09,800 --> 00:27:12,879 Speaker 1: have you have you back sometime when when the world's 575 00:27:12,880 --> 00:27:16,040 Speaker 1: back to normal and uh and and talk again. But 576 00:27:16,200 --> 00:27:19,439 Speaker 1: as Sarah said, well, let's let Charlie Pellett tell us 577 00:27:19,480 --> 00:27:22,639 Speaker 1: what time it is. Stand clear of the craziest things 578 00:27:22,760 --> 00:27:26,720 Speaker 1: we saw in markets this week? All right, Sarah, let's 579 00:27:26,760 --> 00:27:29,160 Speaker 1: start with you. What is the craziest thing you saw 580 00:27:29,200 --> 00:27:31,359 Speaker 1: in markets this week? All right? Well, this might be 581 00:27:31,440 --> 00:27:34,240 Speaker 1: an obvious one, but I have to go with the 582 00:27:34,320 --> 00:27:37,600 Speaker 1: Twitter hack that we saw Twitter hack first of all, 583 00:27:37,760 --> 00:27:41,800 Speaker 1: just for a bitcoin scam, but the breadth and the 584 00:27:41,880 --> 00:27:46,560 Speaker 1: amount of accounts that we saw on Twitter hacked. I mean, 585 00:27:46,600 --> 00:27:50,480 Speaker 1: you're talking about Obama, You're talking about Biden, Ward Buffett, 586 00:27:50,560 --> 00:27:52,960 Speaker 1: Elon Musk, Kanye West, who, by the way, did end 587 00:27:53,000 --> 00:27:55,760 Speaker 1: his presidential bid. I have to say because we mentioned 588 00:27:55,800 --> 00:28:00,440 Speaker 1: it on one of the recent episodes, but just the 589 00:28:00,640 --> 00:28:06,240 Speaker 1: idea that someone is so almost easily able to get 590 00:28:06,359 --> 00:28:11,200 Speaker 1: access to such high profile accounts is is amazing, and 591 00:28:11,280 --> 00:28:13,119 Speaker 1: it makes you think about what else they could have 592 00:28:13,200 --> 00:28:16,480 Speaker 1: done if they wanted to. Yeah, it is pretty crazy 593 00:28:16,720 --> 00:28:19,960 Speaker 1: and scary and very scary and scary, very scary. I 594 00:28:20,040 --> 00:28:24,120 Speaker 1: mean bitcoin scam. Supposedly they raised about a hundred twenty 595 00:28:24,119 --> 00:28:26,240 Speaker 1: thous dollars, but I'd imagine that the damage that they 596 00:28:26,280 --> 00:28:31,280 Speaker 1: could have done could have been way way worse than that. David, 597 00:28:31,320 --> 00:28:33,160 Speaker 1: that's a good question. Does a guy like you even 598 00:28:33,240 --> 00:28:35,720 Speaker 1: think about bitcoin? Is that just a lane you'd stay 599 00:28:35,760 --> 00:28:40,200 Speaker 1: out of. So with regards to crypto and bitcoin, one 600 00:28:40,200 --> 00:28:42,280 Speaker 1: thing I would say is that when you look at 601 00:28:42,320 --> 00:28:45,560 Speaker 1: these sorts of crisis that we've had through history. Very 602 00:28:45,640 --> 00:28:49,560 Speaker 1: often the authorities will kind of throw scraps at the mob. 603 00:28:49,640 --> 00:28:51,520 Speaker 1: And I don't mean that in a deromtory way. I 604 00:28:51,600 --> 00:28:54,400 Speaker 1: think it's somewhat disgusting that will probably come out of 605 00:28:54,440 --> 00:28:56,640 Speaker 1: this in the top one ten percent will be even richer. 606 00:28:57,240 --> 00:28:58,960 Speaker 1: So what they do to keep kind of things to 607 00:28:59,080 --> 00:29:00,600 Speaker 1: keep thinking. If you look at the SPOSI, income in 608 00:29:00,600 --> 00:29:03,560 Speaker 1: the US actually gone up, um, and that's these cash handouts. 609 00:29:04,160 --> 00:29:06,000 Speaker 1: But what happens, you know, once they kind of quell 610 00:29:06,040 --> 00:29:08,880 Speaker 1: the initial fire, what happens is you look a little 611 00:29:08,880 --> 00:29:10,760 Speaker 1: bit further down the pipe. You're probably you're probably in 612 00:29:10,760 --> 00:29:12,360 Speaker 1: certain countries around them to pay for all this, you 613 00:29:12,440 --> 00:29:14,760 Speaker 1: might start to see things like a one off wealth tax, 614 00:29:15,440 --> 00:29:18,680 Speaker 1: inheritance taxes going up. So they're super wealthy want to 615 00:29:18,760 --> 00:29:21,040 Speaker 1: start getting some of their money off the grid. And 616 00:29:21,120 --> 00:29:23,400 Speaker 1: so I can actually see a very big move in 617 00:29:23,480 --> 00:29:26,600 Speaker 1: things like some of the cryptos like bitcoin as as 618 00:29:26,640 --> 00:29:28,640 Speaker 1: people want to take some incoming years get a little 619 00:29:28,640 --> 00:29:30,240 Speaker 1: bit of money off the grid to avoid some of 620 00:29:30,280 --> 00:29:32,560 Speaker 1: these taxes. So I can see a very very large 621 00:29:32,680 --> 00:29:35,480 Speaker 1: rally potentially fundamentals and all that sort of stuff, and 622 00:29:35,920 --> 00:29:37,400 Speaker 1: you know, try to get fundamentals and then all that 623 00:29:37,400 --> 00:29:38,640 Speaker 1: sort of stuff I think is is not what I 624 00:29:38,680 --> 00:29:42,160 Speaker 1: would get into, but I could see that from that perspective. Yes, No, 625 00:29:42,320 --> 00:29:44,360 Speaker 1: you have to think shady when you think bitcoin, and 626 00:29:44,400 --> 00:29:47,080 Speaker 1: I think that's the absolute way to that's the absolute way, 627 00:29:47,160 --> 00:29:49,600 Speaker 1: the right way to approach it. That's that's pretty fascinating, Sara. 628 00:29:49,600 --> 00:29:52,480 Speaker 1: I wanna I wouldna remember that. I wouldna remember a 629 00:29:52,520 --> 00:29:55,239 Speaker 1: big bitcoin rally. I think that when bitcoin starts up 630 00:29:55,680 --> 00:29:57,840 Speaker 1: surging like four years from No, I'm like, remember that 631 00:29:57,960 --> 00:30:00,600 Speaker 1: time that we talked to David about people wanted to 632 00:30:00,640 --> 00:30:03,480 Speaker 1: get their money offshore. Yeah, but just so so just 633 00:30:03,520 --> 00:30:05,240 Speaker 1: one thing just on that because there are some hard, 634 00:30:05,360 --> 00:30:08,000 Speaker 1: hardworking men and women in so I do. I think 635 00:30:08,320 --> 00:30:10,360 Speaker 1: it's much like the Internet twenty years ago. Is is 636 00:30:10,880 --> 00:30:12,280 Speaker 1: and maybe Biggoin is one of them. But if you 637 00:30:12,320 --> 00:30:15,440 Speaker 1: look at like you is cryptocurrency and digital assets, you know, 638 00:30:15,520 --> 00:30:17,760 Speaker 1: is that very sensible? Could that be very efficient going forward? Yeah? 639 00:30:17,760 --> 00:30:19,600 Speaker 1: I mean some of this stuff, you know, the banks 640 00:30:19,800 --> 00:30:22,040 Speaker 1: thinking about adopting for payment systems, lights or stuff. So 641 00:30:22,080 --> 00:30:24,880 Speaker 1: I don't have any issues with digital currencies. Just to 642 00:30:25,080 --> 00:30:27,640 Speaker 1: just to qualify there that you know, my comment there 643 00:30:27,720 --> 00:30:30,160 Speaker 1: was that there might be some elements of people wanting 644 00:30:30,200 --> 00:30:32,040 Speaker 1: to go off grid, but there might be some bonafied 645 00:30:32,160 --> 00:30:35,440 Speaker 1: kind of benefits of digital currency, et cetera. Yeah, he's 646 00:30:35,440 --> 00:30:37,760 Speaker 1: being much more diplomatic about it than me. I'm my 647 00:30:38,160 --> 00:30:40,680 Speaker 1: Twitter hacks. My Twitter is probably gonna get hacked instantly 648 00:30:40,680 --> 00:30:44,040 Speaker 1: after this episode. But anyway, but how about David, have 649 00:30:44,120 --> 00:30:47,000 Speaker 1: you seen anything crazy in markets this week? Not really? Look, 650 00:30:47,040 --> 00:30:49,520 Speaker 1: the only thing I'll say just was just in preparing 651 00:30:49,560 --> 00:30:51,280 Speaker 1: for this podcast was listening to a few of the 652 00:30:51,320 --> 00:30:54,240 Speaker 1: ones you folks have done. Was I forget that the name, 653 00:30:54,240 --> 00:30:56,600 Speaker 1: I should recall it. But one of your fund managers, 654 00:30:56,680 --> 00:30:59,720 Speaker 1: I think a c I was mentioning that he was 655 00:31:00,080 --> 00:31:02,160 Speaker 1: that close to just putting down his whole process and 656 00:31:02,160 --> 00:31:04,480 Speaker 1: all his research, putting on a pair of shoes and 657 00:31:04,520 --> 00:31:06,960 Speaker 1: getting his shoes shined to figure out the stop tip 658 00:31:07,000 --> 00:31:08,960 Speaker 1: of what the what the market? What the markets doing? 659 00:31:09,280 --> 00:31:10,840 Speaker 1: It seems to think that his twenty one year olds 660 00:31:10,840 --> 00:31:13,160 Speaker 1: making more money than he is. That's true, So that's 661 00:31:13,640 --> 00:31:15,200 Speaker 1: that might tell you where we are in the cycle. 662 00:31:15,680 --> 00:31:17,719 Speaker 1: I'd get my shoes shined, but sorry, I left all 663 00:31:17,760 --> 00:31:19,600 Speaker 1: my good shoes at work. I leave him in under 664 00:31:19,640 --> 00:31:21,320 Speaker 1: my desk at work. And I wear sneakers work, so 665 00:31:21,320 --> 00:31:25,000 Speaker 1: I'd have to get like my flip flip flaps. I'm 666 00:31:25,040 --> 00:31:27,360 Speaker 1: also not sure would he be able to go get 667 00:31:27,440 --> 00:31:29,440 Speaker 1: your shoes signed anyways, even if you did have your 668 00:31:29,440 --> 00:31:32,480 Speaker 1: shoes nowadays. Probably not. I'll go get my I'll go 669 00:31:32,600 --> 00:31:35,840 Speaker 1: get my flip flops shined. Uh next week, I guess. 670 00:31:35,920 --> 00:31:37,680 Speaker 1: But that's a good one, David. And I'll give you, 671 00:31:37,760 --> 00:31:40,400 Speaker 1: I'll give you my craziest thing. Um. So, as you know, 672 00:31:40,480 --> 00:31:43,760 Speaker 1: I like to sort of bend the the asset classes 673 00:31:43,840 --> 00:31:47,200 Speaker 1: we're talking about, expand them into. And I I'm a 674 00:31:47,280 --> 00:31:49,200 Speaker 1: big fan of the art market, not that I know 675 00:31:49,440 --> 00:31:52,200 Speaker 1: really know anything about the art market, and I'm no 676 00:31:52,520 --> 00:31:54,320 Speaker 1: no expert in the art market, but I am an 677 00:31:54,360 --> 00:31:57,800 Speaker 1: expert on crazy thing so that the art market contains 678 00:31:57,880 --> 00:32:02,920 Speaker 1: plenty of thosey absolutely and again no expert here. But 679 00:32:03,120 --> 00:32:05,360 Speaker 1: one of my favorite art artists in the world is 680 00:32:05,440 --> 00:32:07,920 Speaker 1: this guy Banksy. Have you heard of this This guy Banksy, 681 00:32:08,720 --> 00:32:11,920 Speaker 1: very great sense of humor on this guy. Um. He 682 00:32:12,080 --> 00:32:17,440 Speaker 1: sold a painting of the British Parliament, except they were 683 00:32:17,480 --> 00:32:20,800 Speaker 1: all portrayed as monkeys. He sold that one last year 684 00:32:20,840 --> 00:32:25,000 Speaker 1: for like twelve million dollars. I had no, Wiggs, I 685 00:32:25,040 --> 00:32:26,800 Speaker 1: don't think they did, but maybe I don't have to 686 00:32:26,840 --> 00:32:28,280 Speaker 1: go back and look at it. I don't think so though, 687 00:32:28,320 --> 00:32:31,640 Speaker 1: but um, but good sense of humor. So this past 688 00:32:31,680 --> 00:32:33,560 Speaker 1: week what he did, and he the guy started out 689 00:32:33,600 --> 00:32:37,440 Speaker 1: as a street artist, you know, tagging walls and subways 690 00:32:37,480 --> 00:32:40,040 Speaker 1: and that sort of thing. So this week he snuck 691 00:32:40,160 --> 00:32:45,280 Speaker 1: onto the London Underground and graffitied up the inside of 692 00:32:45,360 --> 00:32:49,920 Speaker 1: a London subway car with a bunch of pictures of rats. 693 00:32:50,760 --> 00:32:54,040 Speaker 1: And they were like it was meant to give a 694 00:32:54,160 --> 00:32:57,120 Speaker 1: message about the virus and how you should wear a mask. 695 00:32:57,320 --> 00:33:00,360 Speaker 1: So some of the mice I guess had were either 696 00:33:00,440 --> 00:33:06,960 Speaker 1: holding masks or wearing them. And then he he's scrawled 697 00:33:07,000 --> 00:33:10,400 Speaker 1: the words I get locked down on one train door 698 00:33:10,480 --> 00:33:11,960 Speaker 1: and then you open it up and it says but 699 00:33:12,040 --> 00:33:15,120 Speaker 1: I get up again anyway. So here's the guy this 700 00:33:15,920 --> 00:33:18,719 Speaker 1: subway car. I don't know, David, but you you put 701 00:33:18,760 --> 00:33:21,200 Speaker 1: this up for auction in Connecticut or somewhere in London, 702 00:33:21,640 --> 00:33:23,800 Speaker 1: this subway car. I I would love to know what 703 00:33:23,920 --> 00:33:27,040 Speaker 1: it would go for, probably twenty If one painting went 704 00:33:27,080 --> 00:33:29,080 Speaker 1: for twelve million, this thing might go for twenty million. 705 00:33:29,560 --> 00:33:32,000 Speaker 1: Where would someone even keep it? Though, right, Well, if 706 00:33:32,040 --> 00:33:33,320 Speaker 1: you got a big enough of state, I mean, you 707 00:33:33,360 --> 00:33:35,040 Speaker 1: throw it out back and you know, I don't know, 708 00:33:36,000 --> 00:33:38,840 Speaker 1: subway car back up by the pool, a pool house 709 00:33:38,960 --> 00:33:41,920 Speaker 1: or something. Yeah, so the you know, the London or 710 00:33:41,960 --> 00:33:44,160 Speaker 1: the London subway could have put it on exhibits somewhere 711 00:33:44,280 --> 00:33:46,320 Speaker 1: charged people I don't know attend twenty quids to get 712 00:33:46,360 --> 00:33:49,000 Speaker 1: in and see it. But here's what happened. The guys 713 00:33:49,040 --> 00:33:52,040 Speaker 1: who cleaned the subway cars came and wiped it all 714 00:33:52,160 --> 00:33:55,160 Speaker 1: off and basically got rid of all this this artwork, 715 00:33:55,240 --> 00:33:58,440 Speaker 1: this graffiti. They thought it was some random, some random 716 00:33:58,480 --> 00:34:02,080 Speaker 1: graffiti by ran him uh person on the subway, so 717 00:34:02,160 --> 00:34:05,120 Speaker 1: they wiped it off. I mean tens of I'm guessing 718 00:34:05,200 --> 00:34:08,759 Speaker 1: tens of millions dollars worth of artwork were wiped off 719 00:34:08,880 --> 00:34:11,560 Speaker 1: by some maintenance guy, which you know, and the guy 720 00:34:11,640 --> 00:34:13,759 Speaker 1: probably felt good about himself getting home at the end 721 00:34:13,800 --> 00:34:16,080 Speaker 1: of a hard day. We're cleaning up the subway cars 722 00:34:16,160 --> 00:34:18,160 Speaker 1: and then they said, you know what you just wiped 723 00:34:18,200 --> 00:34:21,399 Speaker 1: wiped off there? He just ruined that that that could 724 00:34:21,440 --> 00:34:25,600 Speaker 1: that could be your little green Span moment for euss, 725 00:34:26,200 --> 00:34:29,480 Speaker 1: not of money, not a bunny biting through a green 726 00:34:29,560 --> 00:34:32,040 Speaker 1: Span book but rather someone washing off the mural of 727 00:34:32,160 --> 00:34:37,200 Speaker 1: rats for the virus in a in a subway, Mike. 728 00:34:37,280 --> 00:34:40,439 Speaker 1: We actually got a good one on on Twitter though, 729 00:34:40,840 --> 00:34:43,720 Speaker 1: from Ben Emmons, who has been on the podcast before, 730 00:34:43,760 --> 00:34:46,759 Speaker 1: and I have to point it out. It's kind of hilarious. Um, 731 00:34:46,800 --> 00:34:49,080 Speaker 1: he actually ripped one out of your playbook and he 732 00:34:49,200 --> 00:34:52,160 Speaker 1: looked at ni Odd on the Bloomberg terminal. What we 733 00:34:52,239 --> 00:34:54,520 Speaker 1: know you like to do best function on the terminal. 734 00:34:54,560 --> 00:34:57,600 Speaker 1: It's worth a subscription price alone for for an I odd. Yeah, 735 00:34:57,800 --> 00:35:01,000 Speaker 1: it's all the oddest stories from a the world. So 736 00:35:01,520 --> 00:35:04,279 Speaker 1: just listen to this headline. It's bad Breath offers a 737 00:35:04,440 --> 00:35:08,560 Speaker 1: rare payoff and Listerine Royalties steakes sale. And I'll just 738 00:35:08,640 --> 00:35:10,520 Speaker 1: read you one of the paragraphs. Basically, it says bids 739 00:35:10,520 --> 00:35:13,680 Speaker 1: are being taken through this past Tuesday on a share 740 00:35:13,719 --> 00:35:17,800 Speaker 1: of royalties backed by Listerine mouth wash sales. They stem 741 00:35:17,880 --> 00:35:21,520 Speaker 1: from contracts signed one hundred forty years ago by its 742 00:35:21,600 --> 00:35:25,200 Speaker 1: inventor and still cited in business law classes that require 743 00:35:25,280 --> 00:35:28,799 Speaker 1: the maker who's currently Johnson and Johnson to base shareholders 744 00:35:28,920 --> 00:35:34,160 Speaker 1: in perpetuity. So basically, as long as people are buying Listerine, 745 00:35:34,840 --> 00:35:38,719 Speaker 1: they have to pay out these bond coupons and in 746 00:35:38,800 --> 00:35:42,520 Speaker 1: perpetuity forever bad breath bonds. That's what I love it 747 00:35:44,400 --> 00:35:48,279 Speaker 1: in the lockdown and quarantine world. Wren, who's I don't know, 748 00:35:48,320 --> 00:35:52,160 Speaker 1: I don't whose cares about their breath? About fresh breath? 749 00:35:52,239 --> 00:35:55,640 Speaker 1: Maybe this could short those listerine bonds. I have not 750 00:35:55,719 --> 00:36:00,560 Speaker 1: bought any listering through this quarantine to know what. I'm 751 00:36:00,560 --> 00:36:02,719 Speaker 1: gonna hand it to Ben Emmons. I'm gonna give him 752 00:36:02,719 --> 00:36:05,080 Speaker 1: the win for this week's craziest Thing. That's pretty good. 753 00:36:05,440 --> 00:36:09,880 Speaker 1: Great controtributions this time around. But seriously, David, we are 754 00:36:10,000 --> 00:36:12,799 Speaker 1: so appreciative of you waking up so early to join 755 00:36:12,920 --> 00:36:14,920 Speaker 1: us on the podcast. So, David Adams, it was so 756 00:36:15,080 --> 00:36:17,200 Speaker 1: great having you on the show this week. Thank you, 757 00:36:18,200 --> 00:36:29,439 Speaker 1: Thanks very much. What goes up? We'll be back next week. 758 00:36:29,719 --> 00:36:32,200 Speaker 1: Until then, you can find us on the Bloomberg Terminal 759 00:36:32,280 --> 00:36:35,799 Speaker 1: website and app or wherever you get your podcasts. We'd 760 00:36:35,840 --> 00:36:37,760 Speaker 1: love it if you took the time to rate interview 761 00:36:37,800 --> 00:36:40,840 Speaker 1: the show on Apple Podcasts so more listeners can find us. 762 00:36:41,239 --> 00:36:43,799 Speaker 1: And you can find us on Twitter, follow me at 763 00:36:44,200 --> 00:36:47,480 Speaker 1: Sarah pant Seck, Mike is that reaganonymous, and you can 764 00:36:47,600 --> 00:36:52,200 Speaker 1: also follow Bloomberg Podcasts at podcast. Also a special thank 765 00:36:52,239 --> 00:36:54,720 Speaker 1: you to Charlie Pellett of Bloomberg Radio and the voice 766 00:36:54,800 --> 00:36:58,000 Speaker 1: of the New York City subway system. What Goes Up 767 00:36:58,080 --> 00:37:01,440 Speaker 1: is produced by Jordan Gospore. The head of Bloomberg Podcast 768 00:37:01,520 --> 00:37:04,520 Speaker 1: is Francescalivie. Thanks for listening, See you next time.