Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Hi, Tracy, how are you You're getting getting You're getting worse.
Speaker 3: I'm getting worse.
Speaker 2: Yeah, then the last three months, yes, and the rest
Speaker 2: of the no. No, no, But you must be very
Speaker 2: very relaxed.
Speaker 4: I'm not shaving until the fence starts.
Speaker 2: Cutting, right, Okay, that's coming. So that's that's good.
Speaker 3: I did a dead LFT one.
Speaker 1: Okay, uh barges.
Speaker 4: This isn't after school Special, except.
Speaker 1: I've decided I'm going to base my entire personality going
Speaker 1: forward on campaigning for a strategic pork reserve in the US.
Speaker 3: Where's the best imposta?
Speaker 1: These are the important question? Is that robots taking over
Speaker 1: the world?
Speaker 3: No, I see the like.
Speaker 4: In a couple of years, the AI will do a
Speaker 4: really good job of making the Odd Lounch podcast and
Speaker 4: people to say, I don't really need to listen to
Speaker 4: Joe and Tracy anymore.
Speaker 3: We do have touching the perfect.
Speaker 1: You're listening to lots more where we catch up with
Speaker 1: friends about what's going on right now, because even.
Speaker 3: When the Odd Lots is over, there's always lots more.
Speaker 1: And we really do have the perfect guest. It is
Speaker 1: kind of crazy, so the market is pricing in what
Speaker 1: is it a little over seventy basis points of cuts
Speaker 1: right now, which means like the Fed would need to
Speaker 1: cut every meeting through the end of this year, assuming
Speaker 1: it doesn't do a fifty basis point cut, which seems
Speaker 1: a little extreme.
Speaker 2: Uh yeah, I saying it does. But remember Federal Reserve
Speaker 2: has no visibility. They have no trust in their models.
Speaker 2: That is why they so data dependent. So when people say, well,
Speaker 2: we can roll off fifty, why could you rule out
Speaker 2: if you sing of the governors or the former governors
Speaker 2: only two three months ago they were high for longer.
Speaker 2: Suddenly they've changed their mind. It's no longer high for longer.
Speaker 2: So that's sort of volatility, almost inevitable outcome of highly
Speaker 2: volatile neutral rates. So prima facie, if you just look
Speaker 2: at it, seventy BIPs looks high. But on the other hand,
Speaker 2: I don't think you can necessarily rule it out. And
Speaker 2: if you start looking slightly longer term, let's say, look
Speaker 2: at December twenty twenty five January twenty twenty six, the
Speaker 2: market is still looking at somewhere around four as a
Speaker 2: policy rates. Now for the policy rates to me is
Speaker 2: too high. I think the numbers should be somewhere closer
Speaker 2: to three and a half, maybe even less than that.
Speaker 2: So to answer your question, it looks like it's high
Speaker 2: they but FED has no confidence in their methodology, in
Speaker 2: their models, or a visibility what happens, and therefore it
Speaker 2: is possible that you might.
Speaker 3: End up with it.
Speaker 1: So we are speaking with Victor Schwetz, Corey strategist and
Speaker 1: one of our repeat Odd Thoughts guests. It is, of
Speaker 1: course the week that we have just seen a meeting
Speaker 1: from the Federal Reserve where they opted to hold rates
Speaker 1: as expected, but they definitely telegraphed that that rate cut
Speaker 1: was coming.
Speaker 4: Joe, you know when I so, I didn't watch the
Speaker 4: press conference because I was on a train and I
Speaker 4: had an appointment. I had taken the day off of work.
Speaker 4: But it was nice because then I read the transcript
Speaker 4: this morning without the you know, without the distraction of
Speaker 4: Twitter and all the commentary, and I hadn't read any
Speaker 4: of the various commentary from the strategists. But when I
Speaker 4: read the transcript, I thought of our last conversation with Victor, specifically,
Speaker 4: because it was so clear they, to your point, all
Speaker 4: they just want to see more numbers the models that suggest, Okay,
Speaker 4: unemployment is rising and the feeders are restrictive, and therefore
Speaker 4: inflation should come down, etcetera. All of these theoretical ideas.
Speaker 4: I don't get the impression they have any confidence. They
Speaker 4: just want to see more numbers.
Speaker 2: That's it. That's absolutely right, And there was a reason
Speaker 2: for them. And the reason is that we live in
Speaker 2: the world of abundance. We have too much of everything,
Speaker 2: We have too much of capital, we have too much
Speaker 2: of most of the products. Technology keeps reducing marginal costs.
Speaker 2: There was a perception for a period of time that
Speaker 2: certain areas are in deficit or constrained, such as some
Speaker 2: of the metal, also labor, but even that is proving
Speaker 2: to be not true. So if you live in a
Speaker 2: world of abundance rather than scarcity, economic models do not work.
Speaker 2: Because all economic models and investment model are predicated on
Speaker 2: constrained outcomes, that you're choosing the best possible outcome out
Speaker 2: of variety. If there is abundance, prices don't work. Prices
Speaker 2: don't signal the same impact, neither do they have the
Speaker 2: same impact on underlying economy.
Speaker 1: Wit So Powell is definitely I feel like he's aware
Speaker 1: of the criticism that the FED is maybe too data
Speaker 1: dependent at this point, and in fact, in the press
Speaker 1: conference he was kind of at pains to emphasize that
Speaker 1: they're not data dependent or sorry, what was it? Data
Speaker 1: dependency doesn't mean data point dependency, which is kind of funny,
Speaker 1: especially since we're recording this on Thursday, and we have
Speaker 1: had some very interesting single data points, including initial jobless
Speaker 1: claims rising to the highest level in nearly a year.
Speaker 1: But what does it mean to be data dependent but
Speaker 1: not data point dependent?
Speaker 2: It means I have no clue. And essentially what it
Speaker 2: says is that, look, I don't know what I'm going
Speaker 2: to do because I don't understand why financial conditions are
Speaker 2: not tightening more than they should have. I don't understand
Speaker 2: why unemployment is where it is. Yes, employment cost numbers,
Speaker 2: for example, yesterday've come out point nine percent was really
Speaker 2: the lowest for about three or almost four years. So
Speaker 2: there is no evidence there is a wage spiral. If
Speaker 2: you sing of goods inflation, it's continued to disinflate. Service
Speaker 2: inflation is coming back. Even idiosyncratic numbers like imaginary orner
Speaker 2: occupied rent, or differences between insurance policies in the market
Speaker 2: and what CPI numbers have or use car prices, all
Speaker 2: of those DA synchrisis also going away. So you could
Speaker 2: argue a legitimate question, what are you waiting for? And
Speaker 2: the answer is they don't want to be Arthur Burns.
Speaker 2: They don't want to be in a position that they're
Speaker 2: revisiting sort of nineteen seventies all over again. And so
Speaker 2: he's basically saying anything is possible, anything is probable, and
Speaker 2: I cannot guide you in any meaningful way forward. The
Speaker 2: only thing I can say is that it looks like
Speaker 2: we're going to cut beyond that. We're either data dependent
Speaker 2: or data point dependent, or maybe we're not data point dependent,
Speaker 2: but we certainly not forward looking the way we should be.
Speaker 4: So Tracy mentioned this recording this August. First, there's a
Speaker 4: non firm payrolls report that will come out tomorrow, probably
Speaker 4: by the time people listen to this. I just want
Speaker 4: to talk about some of the data that we've seen.
Speaker 4: Tracy mention it initial jobless claims around the highest in
Speaker 4: the year. The ISM manufacturing number came in Glubbalo expectations.
Speaker 4: The employment sub index of ISM outside of the COVID period.
Speaker 4: This is the worst since two thousand and nine, which
Speaker 4: Bloomberg's Cameron Christ pointed out ADP, I don't know if
Speaker 4: anyone actually pays that close attention to it. It came
Speaker 4: in lower than expectations. Today we've got unit labor costs.
Speaker 4: They're expected to grow one point seven percent. They only
Speaker 4: grew zero point nine percent. I guess the question is, Okay,
Speaker 4: is there a risk of a policy mistake? Could things
Speaker 4: be slowing down more rapidly than the FED things? And
Speaker 4: even with the concerns that they have that actually this
Speaker 4: is the moment and maybe things are going to get rolling.
Speaker 2: There is there is a possibility of that. And you
Speaker 2: can also add to that quit rates. Quit rates basically
Speaker 2: return to normality. So everything is pointing to the fact
Speaker 2: that labor market is getting noticed. Height everything points to
Speaker 2: direction of a less robust wage increases coming through. There
Speaker 2: is no wage spiral. Now, could you commit a policy era,
Speaker 2: Of course you could. But one of the things I
Speaker 2: keep highlighting policy errors are important when you got scarcity.
Speaker 2: If you have abundance, you can reverse a policy era
Speaker 2: in thirty seconds. In fact, even less than thirty second,
Speaker 2: one word potentially could reverse almost the entire impact of
Speaker 2: your policy era. So one of the things I've been
Speaker 2: highlighting is that there is a strong possibility of committing
Speaker 2: policy era if you're backward looking rather than if you're
Speaker 2: forward looking. But the fact that we have too much capital,
Speaker 2: the fact that we reprising things, and a split second,
Speaker 2: the fact that central banks have unlimited toolkit that is
Speaker 2: growing on a daily basis. Even if you commit a
Speaker 2: policy era, you probably cannot perpetuated, So in other words,
Speaker 2: you will be able to reverse it quite quickly in
Speaker 2: my view.
Speaker 1: I saw an interesting thing from Nick Collis over at
Speaker 1: Data Track this morning where he was talking about or
Speaker 1: asking if labor market normalization, which is how Powell couched
Speaker 1: it on Wednesday, whether or not normalization is the new
Speaker 1: transitory in the sense that they might be focusing on that,
Speaker 1: and the market starts to focus on it too, and
Speaker 1: then it turns out that, well, it's not really normalizing,
Speaker 1: it's in a downturn, and the Fed is making a mistake.
Speaker 1: But just on the idea of abundance, I mean, you
Speaker 1: say repricing can happen very quickly, but going back to
Speaker 1: the transitory idea, that's not what we saw when we
Speaker 1: saw prices begin to go up.
Speaker 2: That's because essentially what you had at the time is
Speaker 2: Federal Reserve insisting on transitory when it wasn't transitory. So
Speaker 2: in other words, if fed a Reserve wants to commit
Speaker 2: a policy era, they can. If they insist on perpetuating
Speaker 2: policy era, they can do that too. If they want
Speaker 2: to put the economy into recession, they capable of doing it.
Speaker 2: My point is none of it is necessary because even
Speaker 2: if you commit a era and you quickly realize you have,
Speaker 2: you can unwind it incredibly fast. Whereas say, if you
Speaker 2: look at Paul Walker, if you look at greenspand they
Speaker 2: had nowhere near the same capability of achieving that outcome.
Speaker 4: So there is a risk of an error, there is
Speaker 4: a risk of a recession. But your view is that
Speaker 4: the rate tool is powerful enough such that even if
Speaker 4: we were to go into a downturn, that that one
Speaker 4: lever for what various reasons, is powerful enough to reverse
Speaker 4: it fairly quickly.
Speaker 2: Well, not so much, not so much raids, but Rada
Speaker 2: communication strategy. So the essence of Federal Reserve or any
Speaker 2: central bank these days Israeli communications strategy coupled with macro
Speaker 2: and micro prudential controls and coupled with specific policies designed
Speaker 2: to tailor circumstances that beyond your control that suddenly arises,
Speaker 2: whether it's Silicon Valley Bank or something else. That's the essence,
Speaker 2: not so much rates, because in the world of a
Speaker 2: buve Lounden's price doesn't work as well because there is
Speaker 2: no scarcity. So all Federal Reserve needs to do is
Speaker 2: to change communication strategy, to change some of the liquidity positions,
Speaker 2: and that could be enough now. Ultimately, if you start
Speaker 2: looking really longer term, there is no doubt that rates
Speaker 2: at some point in time do work. And that's what
Speaker 2: I'm saying that if Federal Reserve wants to commit a
Speaker 2: policy era, wants to perpetuate policy era and place the
Speaker 2: US economy or any other economy inter recession, they're capable
Speaker 2: of doing it. Just there is no reason for that.
Speaker 1: Victor. Do you remember two years ago, I think it
Speaker 1: was also in the summertime, when the Fed said they
Speaker 1: basically like ruled out the possibility of a seventy five
Speaker 1: basis point hike, and then they went ahead and did it,
Speaker 1: and they sort of abandoned forward guidance, which had been
Speaker 1: this principle that they had been using post two thousand
Speaker 1: and eight financial crisis to guide the markets and damp
Speaker 1: and bond market volatility.
Speaker 4: I don't know.
Speaker 1: I've been thinking about that moment for a while now.
Speaker 1: It feels like we're sort of having a repeat on
Speaker 1: the data dependency thing, like it's another shift in the
Speaker 1: emphasis of the central banks communication policy.
Speaker 2: Yeah, it is. It is. And again if you go back,
Speaker 2: if you go back to those times, the reason we
Speaker 2: shifted is because j Pill quite correctly, was saying that
Speaker 2: neutral rates are becoming very unstable. You know, I can't
Speaker 2: see the stars he keept highlighting. He'd been highlighting it
Speaker 2: for years now. And what he basically saying, I don't
Speaker 2: know where neutral rate is in the nominal terms. Is
Speaker 2: it more like three three and a half percent that
Speaker 2: people currently expect or is it closer to four four
Speaker 2: and a half. And if it is four four and
Speaker 2: a half, is it possible that in the next six
Speaker 2: or twelve months is going to drop to two and
Speaker 2: a half three percent. And so he has no visibility
Speaker 2: exactly where neutral rate is. He doesn't know what's going
Speaker 2: up or coming down. He is not even sure what
Speaker 2: forces actually are driving it so quickly up and down.
Speaker 2: I mean, we can talk about a number of forces,
Speaker 2: one of them election and electoral cycles. We can talk
Speaker 2: about geopolitics, we can talk about climate, we can talk
Speaker 2: about healthcare. There is a number of sayings that outside
Speaker 2: the economic system that drives you. So in the past
Speaker 2: mostly what you had is economic cycles and capital market cycle.
Speaker 2: We're driving everything today. It's a force us outside the system. Now,
Speaker 2: what is the ability of Federal Reserve to estimate and
Speaker 2: anticipate any of these things outside macroeconomic system? The answer
Speaker 2: is zero. The ability to predict, the ability to anticipate,
Speaker 2: the ability to price is zero. But these are the
Speaker 2: factors that are capable of swinging neutral rates quite quite considerably.
Speaker 1: Well, you mentioned one thing just then, which is political uncertainty,
Speaker 1: And this is something I wanted to ask you, which
Speaker 1: is Okay, markets are pricing in roughly a little over
Speaker 1: seventy basis points worth of cuts at the moment for
Speaker 1: the rest of the year. How much of that pricing
Speaker 1: is due to uncertainty stemming from the political situation right now?
Speaker 1: How much of it is basically risk off getting priced
Speaker 1: into that market.
Speaker 2: None. I don't believe anybody can price political outcomes, either
Speaker 2: with a Trump or Harris wins, or whether the Republicans
Speaker 2: swip and control the House and Senate and the presidency
Speaker 2: with a Democrat swip and to have it at full trifecta.
Speaker 2: What's going to happen at state election levels, because remember
Speaker 2: forty four states also have elections, sixteen governors or something
Speaker 2: running for elections. On top of that, I don't think
Speaker 2: anybody can predict, including investors. So right now, I don't
Speaker 2: think anything is reflected. People are trying to do Trump
Speaker 2: trades and they have Harris trades. To me, it's not relevant.
Speaker 2: First of all, it's not clear what the trades are
Speaker 2: because one of the sayings, it's been very clear in
Speaker 2: European elections and increasingly US as well, that if you
Speaker 2: on extreme right want to take control and govern, people
Speaker 2: will force you to abandon your most extreme views. This
Speaker 2: is what happened to Brothers of Italy, That's what happened
Speaker 2: to RNN, that's what happened to Urn in some ways,
Speaker 2: that's even happening to AfD in Germany. On top of that,
Speaker 2: the same happening with Republicans. They no longer want to
Speaker 2: cut welfare payments. They've abundant Project twenty twenty five if
Speaker 2: you say, with Kamala Harris, she's now saying fracking is
Speaker 2: going to go forward. So the good thing I sing
Speaker 2: right now globally is that electorate is not mad enough,
Speaker 2: is not angry enough to go to the extreme. So
Speaker 2: if you want to have an opportunity to govern, you
Speaker 2: must abundant your most extreme views and extreme policies. And
Speaker 2: if you do abandon them, then really, how much of
Speaker 2: a real difference is there between the Harris trade or
Speaker 2: don't Trump trade or any other trade? So right now,
Speaker 2: to answer you a question, I don't think anything is embedded.
Speaker 2: I think people are trying to trade and anticipate certain sayings,
Speaker 2: but at the end of the day, it's pretty useless
Speaker 2: because there is no way you will know that, and
Speaker 2: we might not even know that until January, because more
Speaker 2: than likely there's going to be quite a lot of litigation,
Speaker 2: often the vemby elections.
Speaker 4: It's always striking to me how badly various political electoral
Speaker 4: themed baskets or trade ideas. Do you know that the
Speaker 4: Mexican peso was a Trump trade in twenty sixteen and
Speaker 4: was getting hammered every time he did well in the
Speaker 4: polls turned out to be one of the best performing
Speaker 4: currencies during his years of presidency.
Speaker 1: Do you remember, Joe in twenty sixteen, after Trump won,
Speaker 1: every single cell side piece of research that came out
Speaker 1: was like Trump will make whatever great again. And it
Speaker 1: was everything from like energy stocks to the most esoteric,
Speaker 1: like asset backed securities. It was amazing.
Speaker 2: Yeah, people, including cryptocurrency.
Speaker 4: There's still other than the one in our in the
Speaker 4: studio right now, many lazy titlers of cell side notes,
Speaker 4: with the exception of the person we're talking to. But
Speaker 4: you know, the energy is a good example because energy
Speaker 4: did really badly under Trump, and then it did really
Speaker 4: well under Biden, even though the Biden baskets in twenty
Speaker 4: twenty would have said to all buy solar stocks, which
Speaker 4: have all done extremely mediocre. Actually, you also mentioned geopolitics,
Speaker 4: and I get that you can't really put together a
Speaker 4: compelling electoral trade. Would you see any fingerprints of either
Speaker 4: of the geopolitical situation or the election on either the
Speaker 4: economy or markets right now? Is it showing up anywhere?
Speaker 2: No? Non, I would argue, even Europe, where we've gone
Speaker 2: through quite a number of cycles because quite a few
Speaker 2: countries head elections and European Union parliament head elections. You
Speaker 2: don't actually see a great deal of fingerprints at all,
Speaker 2: either or an economy or ECB policies, or the market,
Speaker 2: whether it's equity of fixing of any other market. So
Speaker 2: to me, and again, I think part of the reason
Speaker 2: these I keep coming back to that people not yet
Speaker 2: met enough, they are not yet angry enough, and so
Speaker 2: the extremes did not have the same pool as they
Speaker 2: otherwise would have.
Speaker 4: Can we just go back to it? I would just
Speaker 4: like to go back to the US in the FED specifically. Again,
Speaker 4: so setting aside, you know, one of the concerns about
Speaker 4: a policy mistake or waiting too long is this notion.
Speaker 4: And this is sort of the implied insight of the
Speaker 4: some rule, for example, is that unemployment feeds on itself.
Speaker 4: I lose my job, I spend less, I spend less
Speaker 4: at your business, you layoff workers, your workers lose income,
Speaker 4: they spend less.
Speaker 3: Et cetera.
Speaker 4: That intuitively makes a lot of sense to me that
Speaker 4: unemployment contained its own momentum that builds on itself. But
Speaker 4: your view seems to be that it can be short
Speaker 4: circuited in a fairly short period of time. Can you
Speaker 4: reconcile that for me, and like, why you have this
Speaker 4: belief that, Okay, maybe it is a mistake to wait
Speaker 4: to September, or maybe the Fed should signal more forcefully
Speaker 4: than a rate cut cycle that begins in September will
Speaker 4: be aggressive. But can you sort of reconcile this for me,
Speaker 4: why you believe that they can reverse a policy or
Speaker 4: fairly quickly.
Speaker 2: And a saying Clodia sum yes, actually pulling back from
Speaker 2: your rule, and for a very good reason. For a
Speaker 2: very good reason. First of all, we had a massive
Speaker 2: dislocation of demodern supply curves for goods and services and
Speaker 2: labor over the last three to four years. Secondly, we're
Speaker 2: getting very tremendous changes in the structure of the labor
Speaker 2: market itself, so increasingly Bureau of Labor Statistics is not
Speaker 2: really capturing the labor market. And well, the labor market does,
Speaker 2: whether it's a gig jobs, whether it's a multiple jobs.
Speaker 2: There are many studies of we're done over the last
Speaker 2: five six years which basically shows that methodology that Bureau
Speaker 2: of Labor Statistics employees understate labor participation by at least
Speaker 2: two percentage points, which means all of this law labor
Speaker 2: participations aren't actually true. They also significantly therefore are understating
Speaker 2: the hours work and overstating wages per hour. So it's
Speaker 2: a structural shift that are occurring right now in a
Speaker 2: labor market, combined with a gradual volatility of the modern
Speaker 2: supply curves that we have experienced that really blonds that rule.
Speaker 2: It doesn't really allow that rule to function. But beyond that,
Speaker 2: and that's something as including it doesn't address. Beyond that
Speaker 2: is sort of my pet idea of abundance rather than scarcity.
Speaker 4: But just understand, regardless of whether the rule holds firm
Speaker 4: and I get that because no rule is going to
Speaker 4: be ironclad.
Speaker 3: And you know that talked.
Speaker 1: About it in the pressor yesterday. He was like, this
Speaker 1: is something that has happened throughout history, but it doesn't
Speaker 1: mean it's always going to in the future.
Speaker 4: It's absolutely not an iron law at all. And you
Speaker 4: know there are others.
Speaker 3: Not a law of nature, it's not a law.
Speaker 4: Neither is the curve inversion a law of incoming recession,
Speaker 4: as we've seen over the last couple of years. Nonetheless,
Speaker 4: just the insight, just the core intuition of negative momentum
Speaker 4: building on itself does that concern.
Speaker 2: Yes, yeah, it is because ultimately people do need to consume.
Speaker 2: Ultimately people do need to spend. We have a problem
Speaker 2: measuring exactly where we are. But the intuitive reaction what
Speaker 2: you've just said, Joe is absolutely correct. So that's why
Speaker 2: I keep saying, can we have committed policy era? Yes?
Speaker 3: Okay.
Speaker 2: Can we wait too long? Yes? Could there be a
Speaker 2: price that will be exacted from the economists and the
Speaker 2: market because we waited too long? The answer is yes.
Speaker 2: Can you quantify it right now? The answer the answer
Speaker 2: is no, okay. And the only twist I have that
Speaker 2: we have a capability of reversing it faster than what
Speaker 2: we did fifteen years ago, twenty thirty years ago.
Speaker 1: Joe wanted to go back to the FED. I want
Speaker 1: to go back to politics because I opened up one
Speaker 1: of your recent research notes and I had a minor
Speaker 1: heart attack because one of the things in it it
Speaker 1: asks the question what links us to the nineteen thirties
Speaker 1: and the nineteen seventies. So the idea here is that
Speaker 1: in nineteen sixty eight, investors, as you say, did not
Speaker 1: know they were going to face a devastating decade where
Speaker 1: basically they wouldn't make back their losses on stocks until
Speaker 1: like the nineteen eighties or the nineteen nineties. As an
Speaker 1: elder millennial who has only just started building wealth in
Speaker 1: the stock market, I came to it kind of late.
Speaker 1: This is a very frightening prospect to me. What was
Speaker 1: your conclusion.
Speaker 2: Yeah, absolutely, anybody who was investing in nineteen twenty eight,
Speaker 2: twenty nine would have spent until nineteen fifties getting at
Speaker 2: least real value of the investment. Everybody in nineteen sixty
Speaker 2: eight would have waited until early nineteen nineties again to
Speaker 2: get the real value. The conclusion was that they stum around.
Speaker 2: There rare some differences compared to twenty thirties or late
Speaker 2: sixties seventies. One of the key differences is that at
Speaker 2: this stage, volatility of economic and inflationary outcomes are much
Speaker 2: less pronounced than what we had in those periods. The
Speaker 2: other difference is that the policy makers have a much
Speaker 2: wider set of tools that they available to them or
Speaker 2: to offset any extreme volatility that is likely to emerge.
Speaker 2: And I guess the third area is nineteen thirties have
Speaker 2: their nick nifty fifties, you know, nineteen seventies have their
Speaker 2: own nifty fifties, but those were fairly conventional companies that
Speaker 2: just happened to have the right positioning in the time,
Speaker 2: and they provided some degree of stability. Today, the equivalent
Speaker 2: of the old nifty fifty is actually driven by incredibly
Speaker 2: strong structural and circular drivers, mostly technology, but not just technology,
Speaker 2: anything productivity driven, which we really didn't have in nineteen thirties,
Speaker 2: and we really didn't have in nineteen seventies. This way
Speaker 2: relatively technologically benign areas compared to what we have today.
Speaker 2: So theoretic our equivalent of nifty fifty, and by the way,
Speaker 2: composition could change. It doesn't have to be a Magnificent
Speaker 2: seven or Magnificent four or you know, fang or granola.
Speaker 2: That composition will change, what constitute that basket will change.
Speaker 2: But the basic principle that we now have companies capable
Speaker 2: of growing and growing productivity almost irrespective of the environment
Speaker 2: that they're facing. That's quite different compared to what we
Speaker 2: had in nineteen seventies. So my conclusion was, yes, there
Speaker 2: is a lot of similarities between the two political geopolitical
Speaker 2: lack of consistent commonly greed business economic, social political model
Speaker 2: on a global basis. That's why other people propagating other models.
Speaker 2: So there is a lot of commonalities, but there are
Speaker 2: differences which should result in better outcomes. If you're a millennium,
Speaker 2: just investing should result in a better outcome than those generally.
Speaker 1: I guess, on the plus side, even if I experience
Speaker 1: like three decades of wealth building, I guess I'll be
Speaker 1: doing odd lots for the next thirty Literally, what I.
Speaker 4: Was gonna say is, literally, you took it out of
Speaker 4: my if neither of us accumulate enough savings to retire,
Speaker 4: and it means we're doing odd lots until our eighties. Tracy,
Speaker 4: I am happy to keep doing it. I enjoy that.
Speaker 4: I'm happy to be here in the year twenty sixty four,
Speaker 4: still recording podcasts with you.
Speaker 3: I commit to that now.
Speaker 2: I want to be here, but you can carry on.
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Speaker 1: Like really random, it's so funny.