1 00:00:12,840 --> 00:00:16,000 Speaker 1: Hello, and welcome to What Goes Up, a Bloomberg weekly 2 00:00:16,079 --> 00:00:19,600 Speaker 1: market podcast. I'm Sarah Pontac, or porter on the cross 3 00:00:19,640 --> 00:00:23,239 Speaker 1: Set team, and I'm Mike Reagan, a senior editor at Bloomberg. 4 00:00:23,480 --> 00:00:28,520 Speaker 1: And the Shirley to Sarah's Laverne. Maybe, but you're gonna 5 00:00:28,560 --> 00:00:31,840 Speaker 1: go Shirley to Sarah's temple or something. Maybe I'm the Liver. 6 00:00:32,000 --> 00:00:33,680 Speaker 1: I'm the Shirley and you're the Liver, and I don't know. 7 00:00:33,680 --> 00:00:36,520 Speaker 1: We'll work on Wolvern either way. Either way this week 8 00:00:36,560 --> 00:00:39,080 Speaker 1: on the show, agree to disagree with me, but we 9 00:00:39,200 --> 00:00:43,480 Speaker 1: have may just witnessed the best week for crazy things ever. 10 00:00:43,920 --> 00:00:47,720 Speaker 1: Bankruptcy stocks are soaring evidently traders on the robin Hood 11 00:00:47,760 --> 00:00:50,519 Speaker 1: investing app are going all in. Then all of a sudden, 12 00:00:50,640 --> 00:00:54,520 Speaker 1: a five percent stock decline reminiscent of the infamous days 13 00:00:54,920 --> 00:00:58,200 Speaker 1: of March? Is it a sign potentially of market froth? 14 00:00:58,360 --> 00:01:02,400 Speaker 1: Our guests and yes, PLU all guests way in right? Sorry? 15 00:01:02,400 --> 00:01:03,800 Speaker 1: And I I you know, I gotta give you a 16 00:01:03,800 --> 00:01:06,839 Speaker 1: shout out because I think you've covered basically all these 17 00:01:06,880 --> 00:01:10,120 Speaker 1: crazy things by yourself this week. You've been doing some 18 00:01:10,200 --> 00:01:14,320 Speaker 1: amazing reporting in the world of crazy things. Uh. You 19 00:01:14,480 --> 00:01:17,480 Speaker 1: stole my thunder with the bankruptcy stock surging. That was 20 00:01:17,480 --> 00:01:19,399 Speaker 1: gonna be my crazy thing of the week. But as 21 00:01:19,440 --> 00:01:22,000 Speaker 1: you know, I came prepared with a backup, so so 22 00:01:22,040 --> 00:01:26,039 Speaker 1: we're good. I think there there's multiple backups, so many, 23 00:01:26,080 --> 00:01:28,920 Speaker 1: so many crazy things this week, and I thank you, 24 00:01:29,120 --> 00:01:30,800 Speaker 1: thank you for the shout at Mike. But I also 25 00:01:30,880 --> 00:01:33,600 Speaker 1: will admit I'm ready for the weekend. I'm a bit, 26 00:01:33,600 --> 00:01:37,440 Speaker 1: I'm a bit tired. But let's bring in our guests 27 00:01:37,480 --> 00:01:40,120 Speaker 1: to help us break it all down. Uh. Two of 28 00:01:40,160 --> 00:01:43,440 Speaker 1: our favorite Sarah. I'm glad to have them both the 29 00:01:43,480 --> 00:01:46,600 Speaker 1: double header here with us, UH this week, joining us 30 00:01:46,600 --> 00:01:48,960 Speaker 1: for the I don't know how many times it's got 31 00:01:48,960 --> 00:01:51,760 Speaker 1: to be at least five or six. Is the head 32 00:01:51,800 --> 00:01:56,200 Speaker 1: of macro strategy at med League Global Advisors, Mr Ben Emmons. Ben, 33 00:01:56,360 --> 00:02:01,040 Speaker 1: welcome back to the show, a good and also joining us. 34 00:02:01,040 --> 00:02:03,120 Speaker 1: It's been a while, but I'm I'm psyched he's back. 35 00:02:03,240 --> 00:02:07,120 Speaker 1: He's a macro strategist at Bloomberg itself. Uh. He writes 36 00:02:07,200 --> 00:02:11,160 Speaker 1: the Macroman Calm. He's a blogger, UH for the Market's 37 00:02:11,200 --> 00:02:15,760 Speaker 1: Live blog. I believe he holds a doctorate in armchair 38 00:02:15,840 --> 00:02:20,160 Speaker 1: epidemiology from the University of Google. Is that right, Cameron Price, Uh, 39 00:02:20,240 --> 00:02:25,040 Speaker 1: it's actually Google University. That's total, totally separate institutions. Can 40 00:02:25,080 --> 00:02:28,240 Speaker 1: anyone go ahead and get that degree? Cameron, Well, you 41 00:02:28,280 --> 00:02:30,520 Speaker 1: have to put in quite a bit of quite a 42 00:02:30,520 --> 00:02:34,680 Speaker 1: bit of work, I gotta say, with at least thirty 43 00:02:34,680 --> 00:02:39,440 Speaker 1: seconds of search. We need dedicate that was that of course, 44 00:02:39,520 --> 00:02:41,560 Speaker 1: was a great line from one of Cameron's columns, sort 45 00:02:41,560 --> 00:02:43,880 Speaker 1: of making fun of how everyone is an expert in 46 00:02:44,160 --> 00:02:49,120 Speaker 1: infectious diseases these days. UM, so we will not pretend 47 00:02:49,120 --> 00:02:53,120 Speaker 1: to be experts in infectious diseases, but very much experts 48 00:02:53,600 --> 00:02:58,560 Speaker 1: are guests in markets. So but let me start with you. UM. 49 00:02:58,600 --> 00:03:02,360 Speaker 1: I know you've been sort of optimistic about this rebound 50 00:03:02,400 --> 00:03:07,120 Speaker 1: in stocks to some degree. Um. And you know, full disclosure, 51 00:03:07,160 --> 00:03:12,280 Speaker 1: we're recording this podcast here on Thursday, June eleven, the 52 00:03:12,360 --> 00:03:15,440 Speaker 1: markets down about five percent. Who knows what Friday will 53 00:03:15,440 --> 00:03:17,799 Speaker 1: look like or even Monday. Maybe we'll see a bounce back, 54 00:03:17,880 --> 00:03:21,440 Speaker 1: but at the moment, things look like they've turned on 55 00:03:21,480 --> 00:03:24,640 Speaker 1: the dime. Uh. And for one thing, I think it's safe. 56 00:03:24,680 --> 00:03:26,480 Speaker 1: We can all agree that this market was a little 57 00:03:26,520 --> 00:03:30,480 Speaker 1: bit overextended, a little bit overbought, and was due for 58 00:03:30,600 --> 00:03:34,960 Speaker 1: some consolidation. Perhaps this seems a little bit more than consolidation. 59 00:03:35,680 --> 00:03:38,480 Speaker 1: And I'm not sure how much it matters what the 60 00:03:38,560 --> 00:03:42,280 Speaker 1: catalyst is considering how overbought the market was, but I'm 61 00:03:42,280 --> 00:03:44,760 Speaker 1: just curious your take. I mean, it seems to have 62 00:03:44,920 --> 00:03:48,800 Speaker 1: really uh started to roll over a little bit before 63 00:03:48,840 --> 00:03:53,320 Speaker 1: the FED meeting, it accelerated after the Fed announcement and 64 00:03:53,560 --> 00:03:56,960 Speaker 1: the press conference, and then uh Thursday morning, it was 65 00:03:57,080 --> 00:03:59,600 Speaker 1: just off to the races with the selling just a 66 00:03:59,720 --> 00:04:02,760 Speaker 1: nest the tape from the get go. So I'm curious. 67 00:04:02,760 --> 00:04:04,760 Speaker 1: You know, some people are blaming it on sort of 68 00:04:04,800 --> 00:04:09,560 Speaker 1: this resurgeon in the virus um. Others talking about how 69 00:04:09,600 --> 00:04:12,520 Speaker 1: the you know, POW is not exactly optimistic about the 70 00:04:12,560 --> 00:04:16,719 Speaker 1: economy and the economic projections sort of backed that up. Again, 71 00:04:16,760 --> 00:04:18,520 Speaker 1: I'm not sure how much it matters. I feel like 72 00:04:18,560 --> 00:04:20,280 Speaker 1: it's a market that was due for a little bit 73 00:04:20,320 --> 00:04:23,960 Speaker 1: of a calm down. But walk us through what you're 74 00:04:24,000 --> 00:04:26,240 Speaker 1: thinking about the state of the market right now. What 75 00:04:26,440 --> 00:04:30,599 Speaker 1: caused this nasty dip on Thursday? And um, is it 76 00:04:30,760 --> 00:04:34,599 Speaker 1: just a a sort of correction in an overbought market 77 00:04:34,720 --> 00:04:36,800 Speaker 1: or is it the beginning of some more weakness? Do 78 00:04:36,839 --> 00:04:39,880 Speaker 1: you think, yes, A certainly. I can. So what I 79 00:04:40,000 --> 00:04:44,840 Speaker 1: noticed on Monday, actually Monday evening, um those news out 80 00:04:45,080 --> 00:04:48,279 Speaker 1: that koreation he cut off communication with Soft Korea, and 81 00:04:48,320 --> 00:04:51,360 Speaker 1: the end dropped like almost two big things, like really quick, 82 00:04:51,440 --> 00:04:54,720 Speaker 1: like roundies I think against the dollar, and I spinkings 83 00:04:54,800 --> 00:04:56,599 Speaker 1: to a friend of mine over in Asia, and I 84 00:04:56,680 --> 00:04:59,760 Speaker 1: was kinda trying to figure out, like, why is suddenly happening, right, 85 00:04:59,839 --> 00:05:01,960 Speaker 1: And you know, that was the only news that we 86 00:05:02,040 --> 00:05:05,120 Speaker 1: thought that was the case, because the Japanese government actually 87 00:05:05,120 --> 00:05:08,680 Speaker 1: came out I think I can forty five minutes later 88 00:05:08,720 --> 00:05:11,400 Speaker 1: after that news broke, which apparently broke already over the weekend, 89 00:05:11,400 --> 00:05:13,640 Speaker 1: but I guess it came in the market on Monday, 90 00:05:13,839 --> 00:05:15,760 Speaker 1: and this is Monday night Asia, by the way, that 91 00:05:15,880 --> 00:05:18,960 Speaker 1: so our time, you know, specific time, like six year time, 92 00:05:19,080 --> 00:05:23,279 Speaker 1: nine at night something like that, And and I was 93 00:05:23,520 --> 00:05:25,960 Speaker 1: the Japanese government kind of responded like, you know, we're 94 00:05:25,960 --> 00:05:28,640 Speaker 1: watching this carefully, the situation. And so I think that 95 00:05:28,760 --> 00:05:32,080 Speaker 1: was a bit of a geopolitical tension. That's that that 96 00:05:32,240 --> 00:05:35,279 Speaker 1: started a bit of this flight to safety idea. I 97 00:05:35,320 --> 00:05:39,160 Speaker 1: think the treasuries from there took that on as well 98 00:05:39,160 --> 00:05:42,760 Speaker 1: as usual Golden and Swizz Frank, but it's nothing to 99 00:05:42,800 --> 00:05:46,240 Speaker 1: do but what we're actually seeing today maybe that indeed, 100 00:05:46,279 --> 00:05:51,800 Speaker 1: people have reassessed a bit that the reopening euphoria, as 101 00:05:51,839 --> 00:05:55,279 Speaker 1: you say, it was pretty exuberant, and it's taken somewhat 102 00:05:55,320 --> 00:05:57,960 Speaker 1: out of the off the table. People points still point 103 00:05:58,000 --> 00:06:01,279 Speaker 1: too that the fat yesterday delivered the exact message that 104 00:06:01,320 --> 00:06:03,680 Speaker 1: the market was looking for. It's a v shape for 105 00:06:03,720 --> 00:06:05,960 Speaker 1: coffee on the short term, but a long road. I 106 00:06:06,000 --> 00:06:10,440 Speaker 1: had rates state low quee stage in place, and it's 107 00:06:10,480 --> 00:06:12,960 Speaker 1: sort of a message like, you know, not much more 108 00:06:12,960 --> 00:06:15,480 Speaker 1: euphoria behind that, right, And I think that and the 109 00:06:15,520 --> 00:06:19,039 Speaker 1: acknowledgement that the job or report was strong but not 110 00:06:19,240 --> 00:06:21,039 Speaker 1: like you know, we need to see a lot more 111 00:06:21,040 --> 00:06:22,400 Speaker 1: of it. We would like to see a lot more 112 00:06:22,440 --> 00:06:24,880 Speaker 1: of it. As I think that tone was kind of 113 00:06:24,920 --> 00:06:28,400 Speaker 1: added to the simmering view political little tension with North 114 00:06:28,480 --> 00:06:32,000 Speaker 1: Korea in the background that that triggered what we're seeing 115 00:06:32,040 --> 00:06:35,640 Speaker 1: now today. The people then start liquidating maybe some of 116 00:06:35,680 --> 00:06:37,680 Speaker 1: these trades that was so popular that you know that 117 00:06:38,080 --> 00:06:41,720 Speaker 1: Sarah and actually written about on the retail side. I 118 00:06:41,800 --> 00:06:43,880 Speaker 1: was a little skeptical on that part, thinking that that 119 00:06:43,880 --> 00:06:46,400 Speaker 1: actually came early to the party these times of late right, 120 00:06:46,440 --> 00:06:49,200 Speaker 1: and tends to be when they're late retail investors, they 121 00:06:49,240 --> 00:06:51,240 Speaker 1: tend to be then the ones that really drive that 122 00:06:51,440 --> 00:06:54,720 Speaker 1: we pushed the market b down and start overreacting. But 123 00:06:54,800 --> 00:06:55,880 Speaker 1: you know, at the end of the day, I think 124 00:06:55,920 --> 00:06:58,440 Speaker 1: this is kind of the sequence of events that that 125 00:06:58,520 --> 00:07:01,599 Speaker 1: we're dealing with. Added to that, perhaps also that I 126 00:07:01,600 --> 00:07:04,520 Speaker 1: think what people are looking at though as a background 127 00:07:04,600 --> 00:07:08,240 Speaker 1: story is I think two other stories you want to highlight. 128 00:07:08,839 --> 00:07:12,720 Speaker 1: Um One, the story around Hong Kong continues to be 129 00:07:13,520 --> 00:07:15,960 Speaker 1: something to be able to carefully watch. So what I've 130 00:07:16,000 --> 00:07:18,480 Speaker 1: noted was that this and the swings in the ad 131 00:07:18,680 --> 00:07:21,600 Speaker 1: rs right that are on the exchanges here is huge, right, 132 00:07:21,760 --> 00:07:24,440 Speaker 1: and and that indicated that there's a lot of speculation, 133 00:07:24,440 --> 00:07:26,840 Speaker 1: a lot of Chinese company looking to move away from 134 00:07:26,880 --> 00:07:30,280 Speaker 1: US markets and go listen in Hong Kong. The flood 135 00:07:30,320 --> 00:07:32,720 Speaker 1: of IBOs has picked up quite a bit in Hong Kong. 136 00:07:33,560 --> 00:07:37,120 Speaker 1: There's been a fair bit of dollar demands in Hong Kong, 137 00:07:37,120 --> 00:07:40,040 Speaker 1: like as in people holding dollars to deposits and banks 138 00:07:40,040 --> 00:07:43,000 Speaker 1: have risen quite a bit, right as in it's not 139 00:07:43,040 --> 00:07:45,800 Speaker 1: the capital flight system mind, people that kept I guess 140 00:07:45,880 --> 00:07:48,880 Speaker 1: hoarding the dollar instead of the Hong Kong dollar. So 141 00:07:48,920 --> 00:07:50,880 Speaker 1: it sounds like there's a there's plenty of reasons to 142 00:07:50,880 --> 00:07:53,440 Speaker 1: be concerned. You just gotta take your pick. But I 143 00:07:54,560 --> 00:07:56,400 Speaker 1: want to I want to focus on the reopening, though, 144 00:07:56,400 --> 00:08:00,440 Speaker 1: because something I've heard from a fair amount of investors 145 00:08:00,560 --> 00:08:03,720 Speaker 1: this week that I just personally do not understand at 146 00:08:03,720 --> 00:08:08,040 Speaker 1: all is them saying that a second wave of the 147 00:08:08,040 --> 00:08:11,360 Speaker 1: coronavirus is priced into markets. So even though we're seeing 148 00:08:11,920 --> 00:08:17,600 Speaker 1: numbers starting to increase in the likes of California, Texas, Florida, 149 00:08:17,760 --> 00:08:21,320 Speaker 1: where I personally am right now a little bit nervous, um, 150 00:08:21,360 --> 00:08:23,280 Speaker 1: they're saying, you know, it shouldn't really matter all that 151 00:08:23,400 --> 00:08:27,800 Speaker 1: much because markets are expecting a second wave. It is 152 00:08:27,840 --> 00:08:30,880 Speaker 1: that the truth, like, should that? Should we buy into 153 00:08:30,920 --> 00:08:34,200 Speaker 1: that narrative? I don't. I don't buy that. I don't 154 00:08:34,200 --> 00:08:36,839 Speaker 1: buy that. I don't get it at all. But then 155 00:08:36,880 --> 00:08:39,920 Speaker 1: I have investors at certain firms which I won't name, 156 00:08:40,440 --> 00:08:43,840 Speaker 1: saying this to me before the five percent decline on Thursday, 157 00:08:43,840 --> 00:08:46,520 Speaker 1: that is, and it just doesn't make any sense to me. Um, 158 00:08:46,559 --> 00:08:48,400 Speaker 1: So if anyone can make sense of it, I would 159 00:08:48,400 --> 00:08:51,800 Speaker 1: love to. I would love to hear that so so well. 160 00:08:51,840 --> 00:08:54,360 Speaker 1: I looked at it said we're going to get the 161 00:08:54,360 --> 00:08:57,880 Speaker 1: second wave, because it was actually communicated already in March 162 00:08:58,000 --> 00:09:01,719 Speaker 1: by Fauci that look what when we're doing today, we're 163 00:09:01,720 --> 00:09:05,600 Speaker 1: gonna prepare for the second wave. Right, So the fact 164 00:09:05,679 --> 00:09:07,880 Speaker 1: that the second wave will becoming is there, and and 165 00:09:07,920 --> 00:09:12,120 Speaker 1: the dreadful story about that, this eighteen Spanish flu scenario 166 00:09:12,240 --> 00:09:15,120 Speaker 1: of like the second wave is worse than the first wave, right, 167 00:09:15,200 --> 00:09:18,200 Speaker 1: And I'm not sure if that plays are roll here today. 168 00:09:18,720 --> 00:09:21,360 Speaker 1: But what I do think matters to markets mostly is 169 00:09:21,400 --> 00:09:25,400 Speaker 1: that if we get the second wave, that indeed picts 170 00:09:25,440 --> 00:09:28,720 Speaker 1: are quite quite requite a momentum that there would be 171 00:09:28,720 --> 00:09:31,840 Speaker 1: a governor or a mayor or anyone right that's in 172 00:09:31,920 --> 00:09:34,480 Speaker 1: charge of a city, county. Then support suddenly says, okay, 173 00:09:34,600 --> 00:09:37,280 Speaker 1: I'm going to close this thing down, and it starts 174 00:09:37,320 --> 00:09:40,480 Speaker 1: with one and a bunch of others followed because they're 175 00:09:40,480 --> 00:09:44,480 Speaker 1: getting worried politically that they may be responsible for more fatalities, right, 176 00:09:44,679 --> 00:09:47,720 Speaker 1: and they're making a decision on we gotta shut things 177 00:09:47,800 --> 00:09:50,839 Speaker 1: again down. That would be I think very negative for 178 00:09:51,000 --> 00:09:54,040 Speaker 1: markets because think about what's priced in in that sense, 179 00:09:54,040 --> 00:09:56,800 Speaker 1: in that V shape idea is that the reopening when 180 00:09:56,800 --> 00:10:01,160 Speaker 1: you reopen eCOM tiki United States economy, you get immediately recovery. 181 00:10:01,200 --> 00:10:02,840 Speaker 1: And that's that's kind of what it's shown, right the 182 00:10:02,920 --> 00:10:05,880 Speaker 1: data when you look at mobility data or in kind 183 00:10:05,880 --> 00:10:08,680 Speaker 1: of like real time data, sales or whatnot of people 184 00:10:08,720 --> 00:10:11,640 Speaker 1: can be hired, that's all jumping really quickly, with the 185 00:10:11,679 --> 00:10:15,600 Speaker 1: capacity of airlines jumping quickly. So I think that the 186 00:10:15,640 --> 00:10:17,840 Speaker 1: market is really nervous if the if the second wave 187 00:10:17,920 --> 00:10:21,480 Speaker 1: leads to another lockdown. I think my personal view, it's 188 00:10:21,559 --> 00:10:24,880 Speaker 1: politically not possible, like we would really push ourselves into 189 00:10:24,880 --> 00:10:27,319 Speaker 1: a depression, right, I think that's in this season of 190 00:10:27,360 --> 00:10:30,800 Speaker 1: political season, not possible. But I do think there's worries 191 00:10:30,800 --> 00:10:32,840 Speaker 1: in the market that certain parts of the country may 192 00:10:32,960 --> 00:10:36,240 Speaker 1: end up that way simply because the local governor or 193 00:10:36,360 --> 00:10:41,200 Speaker 1: mayor who's in in charge is putting her or her 194 00:10:41,320 --> 00:10:58,920 Speaker 1: or his feet on the ground. Kevin, I wanted to 195 00:10:58,960 --> 00:11:01,200 Speaker 1: bring you in here at a bit um. Both you 196 00:11:01,240 --> 00:11:04,800 Speaker 1: and Sarah have written really well this week about this 197 00:11:04,840 --> 00:11:09,080 Speaker 1: whole retail trader phenomenon. You know, you had a column 198 00:11:09,120 --> 00:11:11,960 Speaker 1: talking about what you call this is the phase of 199 00:11:11,960 --> 00:11:15,480 Speaker 1: the market where garbage starts to float. Floating garbage. I 200 00:11:15,520 --> 00:11:19,359 Speaker 1: love it. Floating garbage A great line. Now, I obviously, 201 00:11:20,040 --> 00:11:25,160 Speaker 1: you know, these retail traders uh their home, their board, 202 00:11:25,280 --> 00:11:27,320 Speaker 1: there's not a lot of entertainment. They might have some 203 00:11:27,679 --> 00:11:31,240 Speaker 1: spare cash from their stimulus checks, or that the extra 204 00:11:31,360 --> 00:11:34,400 Speaker 1: unemployment benefits, whatever, it is not a lot of options 205 00:11:34,440 --> 00:11:37,800 Speaker 1: to sort of blow your money foolishly on gambling or 206 00:11:38,320 --> 00:11:42,000 Speaker 1: expensive trips whatever you otherwise do. So I think, I mean, 207 00:11:42,720 --> 00:11:47,120 Speaker 1: it's obvious that these traders have puffed up some ridiculous stocks, 208 00:11:47,160 --> 00:11:50,320 Speaker 1: like the the bankruptcy stocks that you both have written about, 209 00:11:50,360 --> 00:11:55,559 Speaker 1: you know, Hurts, chess, Peak Energy, arguably the surgeon inflows 210 00:11:55,600 --> 00:11:59,000 Speaker 1: in the jets, the air travel etf is A is 211 00:11:59,040 --> 00:12:02,560 Speaker 1: another example. I think the debate though, and where it 212 00:12:02,600 --> 00:12:06,839 Speaker 1: gets sort of I get greeted with skepticism is when 213 00:12:06,840 --> 00:12:10,800 Speaker 1: I suggest to people that they're also maybe part of 214 00:12:10,840 --> 00:12:13,680 Speaker 1: what lifted the entire market over the past couple of months. 215 00:12:13,960 --> 00:12:16,720 Speaker 1: And I know, from from sort of an a U M. Standpoint, 216 00:12:16,760 --> 00:12:21,080 Speaker 1: even all these retail traders together are a a sort 217 00:12:21,080 --> 00:12:24,600 Speaker 1: of drop in the ocean compared to institutional investors. But 218 00:12:24,760 --> 00:12:27,559 Speaker 1: is it possible that their exuberance is kind of set 219 00:12:27,559 --> 00:12:30,840 Speaker 1: off signals that that has has helped the rest of 220 00:12:30,840 --> 00:12:33,360 Speaker 1: the market sort of float higher than it it should 221 00:12:33,360 --> 00:12:35,920 Speaker 1: have in the last couple of months. Well, I think 222 00:12:35,920 --> 00:12:39,520 Speaker 1: we need to acknowledge that this is not a regular market. 223 00:12:39,720 --> 00:12:44,920 Speaker 1: And while it's always tempting to point to catalysts as 224 00:12:44,960 --> 00:12:49,960 Speaker 1: to why things are moving, fundamental catalyst or whatever, um, 225 00:12:50,080 --> 00:12:52,840 Speaker 1: the fact is is that it takes a lot less 226 00:12:53,080 --> 00:12:56,360 Speaker 1: flow to move the price than it used to. I've 227 00:12:56,400 --> 00:13:00,800 Speaker 1: got a measure of market liquidity, and it's off of 228 00:13:00,800 --> 00:13:05,439 Speaker 1: its lows, but it's basically still shows worse stock market 229 00:13:05,480 --> 00:13:09,240 Speaker 1: liquidity than at any point uh in the last quarter century, 230 00:13:09,280 --> 00:13:13,920 Speaker 1: other than the very nid deer of the financial crisis. UM. 231 00:13:13,960 --> 00:13:17,559 Speaker 1: At the same time, you see a lot more sort 232 00:13:17,559 --> 00:13:21,640 Speaker 1: of student body left, student body right price act. If 233 00:13:21,640 --> 00:13:25,040 Speaker 1: you look at the TICK index the New York Stock Exchange, 234 00:13:25,120 --> 00:13:29,800 Speaker 1: Sarah pointed out that it hit an all time low Thursday, 235 00:13:30,040 --> 00:13:33,920 Speaker 1: having hit an all time high last month. And indeed, 236 00:13:33,960 --> 00:13:35,640 Speaker 1: if you look at a long term chart, you can 237 00:13:35,679 --> 00:13:38,719 Speaker 1: see the amplitude in terms of highs and lows of 238 00:13:38,800 --> 00:13:43,240 Speaker 1: the TICK index is unparalleled in the history of that index, 239 00:13:43,280 --> 00:13:46,720 Speaker 1: which is suggests that everybody seems to be moving the 240 00:13:46,760 --> 00:13:50,160 Speaker 1: same way at the same time at the same time 241 00:13:50,600 --> 00:13:54,720 Speaker 1: that there's not really much liquidity. So if Davy day 242 00:13:54,720 --> 00:13:59,760 Speaker 1: Trader says, I'm buying Spirit Airlines, well guess what Davy 243 00:13:59,840 --> 00:14:07,800 Speaker 1: day Trader has two? Well whatever, I'm not, I'm not 244 00:14:07,880 --> 00:14:10,959 Speaker 1: one of them, right whatever. Anyway, he's got this this 245 00:14:11,120 --> 00:14:14,680 Speaker 1: legion of people hanging on his on his sort of 246 00:14:14,720 --> 00:14:17,840 Speaker 1: every word, and if every if each one of them, 247 00:14:18,120 --> 00:14:21,800 Speaker 1: you know, if a million people each by five thousand 248 00:14:21,880 --> 00:14:24,080 Speaker 1: dollars worth of stock, that's all of a sudden, a 249 00:14:24,160 --> 00:14:26,600 Speaker 1: five billion dollar trade that's going to move the price. 250 00:14:27,000 --> 00:14:31,240 Speaker 1: Right Um, And Okay, that's that's an exaggeration, but I 251 00:14:31,240 --> 00:14:35,760 Speaker 1: think it does speak to the dynamic of what's going 252 00:14:35,800 --> 00:14:39,360 Speaker 1: on here. For those who don't know Davy Day Trader, 253 00:14:39,480 --> 00:14:43,760 Speaker 1: that is Dave Portnoy. He's the founder of the website 254 00:14:43,800 --> 00:14:48,480 Speaker 1: bar stool Sports. This guy was most famous recently for 255 00:14:48,840 --> 00:14:51,960 Speaker 1: his reviews of pizza. He would go to pizza joints, 256 00:14:52,400 --> 00:14:55,320 Speaker 1: take one bite, and give you a review. And that's 257 00:14:55,360 --> 00:14:58,080 Speaker 1: that's what made him famous. Well, what happened was he 258 00:14:58,200 --> 00:15:02,400 Speaker 1: sold part of his business to this uh this Penn 259 00:15:02,520 --> 00:15:07,000 Speaker 1: National Gaming, got paid in stock. The stock went up, 260 00:15:07,280 --> 00:15:10,680 Speaker 1: then it collapsed and it came back. And so you 261 00:15:10,760 --> 00:15:12,560 Speaker 1: know he also got some cash. It was a pretty 262 00:15:12,560 --> 00:15:16,480 Speaker 1: wealthy guy, right, and he can't gamble on sports because 263 00:15:16,480 --> 00:15:20,640 Speaker 1: there is no sports. So he started trading stocks basically 264 00:15:20,960 --> 00:15:24,120 Speaker 1: and coincidentally more or less about it at the time 265 00:15:24,160 --> 00:15:26,760 Speaker 1: of the low And guess what, you know, a blind 266 00:15:26,800 --> 00:15:30,560 Speaker 1: monkey throwing dart in a newspaper trading from the longside 267 00:15:30,640 --> 00:15:33,320 Speaker 1: was gonna make money over the last two and a 268 00:15:33,360 --> 00:15:36,200 Speaker 1: half months. And that's uh, you know, and that's what 269 00:15:36,280 --> 00:15:38,280 Speaker 1: he's done. I'll give it to him. I mean, it's 270 00:15:38,280 --> 00:15:42,080 Speaker 1: been great marketing on his behalf. Everything going on right 271 00:15:42,160 --> 00:15:44,480 Speaker 1: now in him day trading and people following along. But 272 00:15:44,840 --> 00:15:49,360 Speaker 1: it feels like in the year of the anecdotes are endless. Okay, 273 00:15:49,400 --> 00:15:53,080 Speaker 1: you have Davy day Trader, as he's called one. My 274 00:15:53,240 --> 00:15:56,400 Speaker 1: colleague vill Donna this past week was talking to a 275 00:15:56,480 --> 00:15:59,080 Speaker 1: strategist over at bat t I G who was telling 276 00:15:59,080 --> 00:16:02,120 Speaker 1: her how all of a sudden, his eye doctor's son 277 00:16:02,520 --> 00:16:06,400 Speaker 1: is asking her which stocks he should be buying. At 278 00:16:06,440 --> 00:16:09,960 Speaker 1: the same time, I've been spending my days just watching 279 00:16:10,640 --> 00:16:14,800 Speaker 1: Robin Tracks, which watches Rob Tracks, Robin Hood uh and 280 00:16:15,080 --> 00:16:18,440 Speaker 1: on Wall Street bets once again, and I think of 281 00:16:18,600 --> 00:16:21,520 Speaker 1: Luke Cowell'll say r I p no longer with the 282 00:16:21,560 --> 00:16:26,400 Speaker 1: step Bloomberg, but wishing him the best. No, wishing him 283 00:16:26,400 --> 00:16:29,360 Speaker 1: the best. Missed him very much. But he wrote this 284 00:16:29,400 --> 00:16:34,320 Speaker 1: almost infamous story back in February, right before everything blew up. Uh, 285 00:16:34,320 --> 00:16:37,480 Speaker 1: And it was about the Wall Street Bets crowd and 286 00:16:37,640 --> 00:16:42,200 Speaker 1: Robin Hood traders and kind of speculating that there could 287 00:16:42,320 --> 00:16:46,880 Speaker 1: be some type of dot com bubble out and about, 288 00:16:47,040 --> 00:16:49,840 Speaker 1: and all of a sudden, it feels like it's back. 289 00:16:50,000 --> 00:16:53,920 Speaker 1: Yet we're in the midst of a recession. We just 290 00:16:54,320 --> 00:17:01,400 Speaker 1: experienced this extremely fast bear market and fast rebound. But 291 00:17:01,480 --> 00:17:05,320 Speaker 1: in a way it feels very speculative. I mean, what 292 00:17:05,320 --> 00:17:08,199 Speaker 1: what do you make of that type of environment that 293 00:17:08,240 --> 00:17:11,440 Speaker 1: we're in right now? Well, yeah, I mean it is 294 00:17:11,600 --> 00:17:16,480 Speaker 1: in many ways very reminiscent of the dot com era. Um, 295 00:17:16,520 --> 00:17:20,600 Speaker 1: you know, the the Wall Street bets, the reddits of 296 00:17:20,640 --> 00:17:24,040 Speaker 1: today were the sort of the Yahoo message boards of 297 00:17:24,200 --> 00:17:27,880 Speaker 1: twenty long years ago. To some extent, I suppose it's 298 00:17:27,920 --> 00:17:30,960 Speaker 1: difficult to square this idea that there's a zillion people 299 00:17:30,960 --> 00:17:34,520 Speaker 1: out of work and struggling with this notion that people 300 00:17:34,520 --> 00:17:37,960 Speaker 1: have all the spare cash to play with the market. Uh. 301 00:17:38,000 --> 00:17:42,000 Speaker 1: You know, there's a sort of cliche there's caricature that 302 00:17:42,000 --> 00:17:45,119 Speaker 1: that sort of the millennials living at home took their 303 00:17:45,119 --> 00:17:48,760 Speaker 1: stimulus checks and opened robin hood account of Yeah, maybe 304 00:17:48,760 --> 00:17:51,240 Speaker 1: there's maybe there's something to it. I'm sure that some 305 00:17:51,320 --> 00:17:54,840 Speaker 1: of the some of the individuals involved with this are 306 00:17:54,880 --> 00:17:58,560 Speaker 1: are are professionals or software engineers or whatever. You know, 307 00:17:58,720 --> 00:18:02,159 Speaker 1: people who can work from home do have disposable income, 308 00:18:02,160 --> 00:18:04,280 Speaker 1: in fact, more disposable income than they used to because 309 00:18:04,280 --> 00:18:06,480 Speaker 1: they don't go out anymore. Yeah, I mean, I think 310 00:18:06,480 --> 00:18:09,200 Speaker 1: there there is something to it, and you know, it's 311 00:18:09,200 --> 00:18:10,919 Speaker 1: almost enough to make me when I take off my 312 00:18:10,920 --> 00:18:12,760 Speaker 1: flip pops, put on a pair of shoes and go 313 00:18:12,840 --> 00:18:14,840 Speaker 1: get them shine so I can get some stock tips. 314 00:18:19,680 --> 00:18:23,560 Speaker 1: I do wonder about this all coincides with sort of 315 00:18:23,760 --> 00:18:27,600 Speaker 1: universal commission free trading to you know it. It's you know, 316 00:18:27,960 --> 00:18:29,760 Speaker 1: it's one thing if you have a few hundred bucks 317 00:18:29,760 --> 00:18:32,240 Speaker 1: to invest in the market, but a trade costs ten 318 00:18:32,320 --> 00:18:34,600 Speaker 1: or fifteen bucks, you're gonna be sort of a little 319 00:18:34,640 --> 00:18:36,680 Speaker 1: more gunshy than if you can do it for free. 320 00:18:36,760 --> 00:18:39,439 Speaker 1: To some degree. But Ben, let's let's bring you in 321 00:18:39,440 --> 00:18:42,000 Speaker 1: on this. What do you make of all this is? 322 00:18:42,000 --> 00:18:47,119 Speaker 1: Is this a uh sort of a sustainable effect that 323 00:18:47,160 --> 00:18:49,040 Speaker 1: we're gonna have to deal with in the market now, 324 00:18:49,080 --> 00:18:53,439 Speaker 1: these davy day traders, or is it, you know, something 325 00:18:53,480 --> 00:18:57,320 Speaker 1: that a real institutional investor should just kind of forget about. 326 00:18:57,960 --> 00:18:59,800 Speaker 1: I don't think so, Mike. I think that you do 327 00:19:00,040 --> 00:19:04,439 Speaker 1: to keep the retail traders in mind because as you know, 328 00:19:04,440 --> 00:19:07,480 Speaker 1: as camera point camera points out right, people are at home, 329 00:19:08,040 --> 00:19:10,000 Speaker 1: they have other time, they have more spare time. I 330 00:19:10,040 --> 00:19:12,440 Speaker 1: guess like it's a different work environments you said of 331 00:19:12,520 --> 00:19:14,280 Speaker 1: work doing this right, because you deal with a lot 332 00:19:14,320 --> 00:19:16,160 Speaker 1: of people around you work. So I think I think 333 00:19:16,200 --> 00:19:18,600 Speaker 1: that may play a hole that you have less distraction 334 00:19:19,240 --> 00:19:21,919 Speaker 1: besides the money that you may have access and you know, 335 00:19:22,000 --> 00:19:24,040 Speaker 1: let's not forget you have the savings right now thirty 336 00:19:24,119 --> 00:19:26,240 Speaker 1: three percent, right, so there's a lot of people have 337 00:19:26,280 --> 00:19:28,399 Speaker 1: a lot of money. I think just sitting on the 338 00:19:28,400 --> 00:19:31,760 Speaker 1: sideline and then looking for new opportunities, right which this 339 00:19:31,840 --> 00:19:34,399 Speaker 1: would become again the next opportunity. We were getting a 340 00:19:34,440 --> 00:19:37,800 Speaker 1: decent dip here and people come back, right. So I 341 00:19:37,800 --> 00:19:40,280 Speaker 1: wouldn't add to that is that this this dot com 342 00:19:40,320 --> 00:19:43,359 Speaker 1: bubble air that we went through late nineties. Think about 343 00:19:43,440 --> 00:19:47,480 Speaker 1: the stocks on that that are working on vaccines for 344 00:19:47,560 --> 00:19:49,720 Speaker 1: this crisis, right, Like you know, some of those are 345 00:19:49,760 --> 00:19:53,280 Speaker 1: just also completely through the roof. Other than this hurts 346 00:19:53,320 --> 00:19:56,000 Speaker 1: and other like stocks. This another kind of bubble kind 347 00:19:56,000 --> 00:19:58,360 Speaker 1: of environment in the background, right, and one of them 348 00:19:58,359 --> 00:20:01,080 Speaker 1: will become the true winner, right and has to vaccine 349 00:20:01,080 --> 00:20:04,080 Speaker 1: and that there's the magic ocean, ocean if you will. 350 00:20:04,160 --> 00:20:06,679 Speaker 1: But but there's a lot of speculation there, right, So 351 00:20:06,720 --> 00:20:08,920 Speaker 1: I think the temple will continue. People will continue to 352 00:20:08,960 --> 00:20:12,199 Speaker 1: come back in seeking out those types of opportunities as 353 00:20:12,240 --> 00:20:15,880 Speaker 1: well then just buying Apple and Google and you and Test. 354 00:20:15,960 --> 00:20:18,840 Speaker 1: I guess right, you know you standard trades. I think 355 00:20:18,840 --> 00:20:22,480 Speaker 1: that that's gonna stay here, just kind of tactical retail 356 00:20:22,560 --> 00:20:26,320 Speaker 1: style trading here until the path of the economy is 357 00:20:26,320 --> 00:20:28,679 Speaker 1: more clear. Obviously it's really hard to know in the 358 00:20:28,680 --> 00:20:30,879 Speaker 1: short term. But you said, I mean people will come back. 359 00:20:31,320 --> 00:20:34,800 Speaker 1: Do you get the sense that, like Mike said, we 360 00:20:34,840 --> 00:20:36,800 Speaker 1: are recording on a Thursday, we don't know what will 361 00:20:36,840 --> 00:20:39,480 Speaker 1: happen on Friday, but that people will be willing to 362 00:20:39,560 --> 00:20:42,680 Speaker 1: come back and and step in at these levels. I mean, 363 00:20:42,960 --> 00:20:46,399 Speaker 1: if I just use a benchmark as an example, ensure 364 00:20:46,440 --> 00:20:49,840 Speaker 1: that might be skewed because you have much more leniency 365 00:20:49,880 --> 00:20:53,120 Speaker 1: towards your mega cap names like Google and Microsoft for example. 366 00:20:53,720 --> 00:20:55,959 Speaker 1: But I mean, if you look at the valuation for 367 00:20:56,000 --> 00:20:58,399 Speaker 1: the SMP right now, it's still well above what it 368 00:20:58,600 --> 00:21:01,520 Speaker 1: was back in Februar. Werey on a forward basis, So 369 00:21:01,560 --> 00:21:04,600 Speaker 1: do you think people will be as willing to come 370 00:21:04,640 --> 00:21:08,840 Speaker 1: back in and quote unquote catch a falling knife so easily? Look, 371 00:21:08,880 --> 00:21:11,600 Speaker 1: I do think there's optimism out there that we're going 372 00:21:11,640 --> 00:21:13,400 Speaker 1: to see the end of the of the tunnel here 373 00:21:13,520 --> 00:21:15,440 Speaker 1: right It's just not going to stay this way. It's 374 00:21:15,440 --> 00:21:18,960 Speaker 1: in a contagious virus, but it's not gonna dictate our 375 00:21:18,960 --> 00:21:22,119 Speaker 1: lives forever because there's such a political pressure on getting 376 00:21:22,119 --> 00:21:25,000 Speaker 1: this vaccine and therapeutics, and we've made a huge amount 377 00:21:25,040 --> 00:21:28,879 Speaker 1: of investment in in the personal protective equipment and the 378 00:21:28,920 --> 00:21:31,159 Speaker 1: system is more flooded with that now that there is 379 00:21:31,200 --> 00:21:34,560 Speaker 1: a formal comfort, I think compared to the February situation 380 00:21:35,359 --> 00:21:37,359 Speaker 1: that that was not in place. Therefore we have to 381 00:21:37,359 --> 00:21:39,960 Speaker 1: go to the lockdown. And so the lockdown scenario, my view, 382 00:21:40,440 --> 00:21:43,520 Speaker 1: is a is a scenario that's not as likely maybe localized, 383 00:21:43,560 --> 00:21:47,239 Speaker 1: but not nationwide or globally. So it remains really I 384 00:21:47,280 --> 00:21:52,080 Speaker 1: think an opportunity of this future rebound of the economy 385 00:21:52,119 --> 00:21:54,760 Speaker 1: that you do want to play why you want to 386 00:21:54,800 --> 00:21:57,600 Speaker 1: come back and take opportunity here as you have these 387 00:21:57,720 --> 00:21:59,800 Speaker 1: like this, you know that I am more on the 388 00:22:00,000 --> 00:22:03,280 Speaker 1: domistic side that way, as opposed to those who really 389 00:22:03,320 --> 00:22:06,840 Speaker 1: think that we know, the pandemic was just really what 390 00:22:07,000 --> 00:22:10,000 Speaker 1: pushed the new normal into a into a new depression, 391 00:22:10,280 --> 00:22:12,720 Speaker 1: and we're going to get a new normal triple like 392 00:22:12,800 --> 00:22:15,280 Speaker 1: it's really really, really bad. If we're gonna get deflation 393 00:22:15,400 --> 00:22:17,800 Speaker 1: and we're gonna not grow much of all of all, 394 00:22:17,840 --> 00:22:20,800 Speaker 1: I'm gonna have to army unemployed people out there, and 395 00:22:20,800 --> 00:22:22,600 Speaker 1: we're just not going to get out of it. That 396 00:22:22,760 --> 00:22:25,680 Speaker 1: I don't firmly don't believe in that, because there's been 397 00:22:26,160 --> 00:22:29,439 Speaker 1: a tremendous amount of effort done here to actually not 398 00:22:29,520 --> 00:22:31,399 Speaker 1: be in that scenario, and I think the market is 399 00:22:31,480 --> 00:22:34,639 Speaker 1: right to not buy that that that depression scenario. But 400 00:22:34,720 --> 00:22:37,760 Speaker 1: staying on the optimistic side, hence there's gonna be de 401 00:22:37,840 --> 00:22:41,520 Speaker 1: buying again here coming in. If not not tomorrow, it 402 00:22:41,560 --> 00:22:44,239 Speaker 1: will be in the next weeks or so, you know, 403 00:22:44,320 --> 00:22:46,720 Speaker 1: driven my data and driven by just what I said, 404 00:22:46,760 --> 00:22:48,600 Speaker 1: like the optimism of that we can get out of us. 405 00:22:48,920 --> 00:22:51,360 Speaker 1: I would disagree in the sense that you don't have 406 00:22:51,520 --> 00:22:54,400 Speaker 1: to think that there's going to be depression to think 407 00:22:54,400 --> 00:22:56,920 Speaker 1: that stocks or allow the investment here. I mean, paying 408 00:22:56,920 --> 00:22:58,920 Speaker 1: a dollar in time cents for a dollar is never 409 00:22:58,960 --> 00:23:01,800 Speaker 1: a good idea. It doesn't matter what the economy is doing. 410 00:23:01,840 --> 00:23:03,840 Speaker 1: And I think if you buy stocks here, essentially you're 411 00:23:03,840 --> 00:23:06,520 Speaker 1: paying a dollar in a quarter for five cents. If 412 00:23:06,560 --> 00:23:10,040 Speaker 1: you look at the ratio of US market cap to 413 00:23:10,080 --> 00:23:13,320 Speaker 1: the size of the economy, even taking out the Corona 414 00:23:13,440 --> 00:23:16,479 Speaker 1: hit UH in the first quarter, we're basically at all 415 00:23:16,560 --> 00:23:20,320 Speaker 1: time highs. That implies an expected return over the next 416 00:23:20,359 --> 00:23:24,840 Speaker 1: decade it's negative. So personally, I have no interest in 417 00:23:24,960 --> 00:23:29,240 Speaker 1: hopping in here, and I wouldn't have interest for many 418 00:23:29,280 --> 00:23:52,280 Speaker 1: many percents. H since both you guys are macro focused, 419 00:23:52,320 --> 00:23:54,879 Speaker 1: I didn't want to ask a little bit about the dollar. 420 00:23:55,200 --> 00:23:59,200 Speaker 1: I feel like the dollar bears are out in force 421 00:23:59,359 --> 00:24:01,919 Speaker 1: these days, and I know there's been I don't know 422 00:24:01,920 --> 00:24:04,560 Speaker 1: if it's quite consensus or maybe just the loudest voices 423 00:24:04,600 --> 00:24:06,680 Speaker 1: have been the dollar bears over the years, and they've 424 00:24:06,760 --> 00:24:11,240 Speaker 1: kind of not necessarily been right. Um. Something really caught 425 00:24:11,280 --> 00:24:15,000 Speaker 1: my eye today is is uh. One Goldman strategist has 426 00:24:15,440 --> 00:24:19,879 Speaker 1: a call for something like a depreciation in the dollar 427 00:24:19,960 --> 00:24:22,320 Speaker 1: over the next few years. I don't know exactly how 428 00:24:22,320 --> 00:24:25,760 Speaker 1: many years, but um, oh, Kvin, I gotta wonder, you know. 429 00:24:25,880 --> 00:24:27,199 Speaker 1: And I'm kind of putting you on the spot here 430 00:24:27,240 --> 00:24:28,879 Speaker 1: because I know you haven't written about the dollar in 431 00:24:28,880 --> 00:24:31,399 Speaker 1: a while, but if you do have an outlook for 432 00:24:31,440 --> 00:24:34,480 Speaker 1: the dollar, and also I feel like if we go 433 00:24:35,040 --> 00:24:37,960 Speaker 1: if the dollar weakens as much as in the next 434 00:24:38,240 --> 00:24:40,719 Speaker 1: couple of years, the narrative will switch from sort of 435 00:24:40,760 --> 00:24:43,320 Speaker 1: a oh a week, dollar is good for the economy 436 00:24:43,359 --> 00:24:46,520 Speaker 1: to uh, wait a second, this is this is bad. Um. 437 00:24:47,240 --> 00:24:49,239 Speaker 1: What's your outlook for the dollar? And am I right 438 00:24:49,320 --> 00:24:51,840 Speaker 1: that that sort of that much of a weakness would 439 00:24:51,840 --> 00:24:57,800 Speaker 1: be not necessarily a bullish economy story. Well, you know, 440 00:24:57,880 --> 00:25:01,440 Speaker 1: it's an interesting question. And in so far as we 441 00:25:01,760 --> 00:25:05,960 Speaker 1: are kind of reliving in two thousand parallel in the 442 00:25:06,000 --> 00:25:10,280 Speaker 1: stock market, maybe the follow through will be a sort 443 00:25:10,280 --> 00:25:15,760 Speaker 1: of mid two thousand's um episode with the dollar um. 444 00:25:15,800 --> 00:25:20,800 Speaker 1: Insofar as if US demand comes back and you have 445 00:25:20,960 --> 00:25:24,399 Speaker 1: this massive pent up demand and part of consumers, whether 446 00:25:24,440 --> 00:25:28,800 Speaker 1: it emerges this year or next year, two, I don't 447 00:25:28,800 --> 00:25:32,440 Speaker 1: know what that could very easily entail. Would be an 448 00:25:32,480 --> 00:25:36,000 Speaker 1: extraordinary rise in the trade deficit at the same time 449 00:25:36,080 --> 00:25:40,239 Speaker 1: that monetary policy is committed to being super easy and 450 00:25:40,320 --> 00:25:44,439 Speaker 1: fiscal policy is obviously a mess. So if you have 451 00:25:44,480 --> 00:25:47,639 Speaker 1: the current account deficit blowing out to five six of 452 00:25:47,680 --> 00:25:51,399 Speaker 1: GDP at the same time that you still have a 453 00:25:51,440 --> 00:25:55,800 Speaker 1: tremendously large budget deficit, you could see suddenly US moving 454 00:25:56,080 --> 00:25:58,639 Speaker 1: and the rest of the world recovers a bit and 455 00:25:58,640 --> 00:26:01,760 Speaker 1: and and risk sentiment and proves on a more structural basis. 456 00:26:02,240 --> 00:26:05,040 Speaker 1: You could move from this environment where there's been this 457 00:26:05,080 --> 00:26:08,359 Speaker 1: sort of structural shortage of dollars for for years, to 458 00:26:08,920 --> 00:26:11,400 Speaker 1: reverting back to where we were starting and say two 459 00:26:11,400 --> 00:26:14,360 Speaker 1: thousand three, where there was a structural surplus of dollars. 460 00:26:14,760 --> 00:26:17,119 Speaker 1: Is it going to happen? There's a chance. I'm not 461 00:26:17,160 --> 00:26:21,119 Speaker 1: convinted to base case, but if this this individual is 462 00:26:21,119 --> 00:26:25,520 Speaker 1: going to be right about a tremendous declined the dollar, 463 00:26:25,680 --> 00:26:29,679 Speaker 1: that's probably what what it will look like. UM. I 464 00:26:29,720 --> 00:26:33,960 Speaker 1: would say as an addendum that there's certainly an argument 465 00:26:34,000 --> 00:26:35,800 Speaker 1: to be made to be want to want to be 466 00:26:35,880 --> 00:26:40,080 Speaker 1: long sort of real assets versus every currency, because none 467 00:26:40,119 --> 00:26:43,400 Speaker 1: of these currencies pay you a dime, and the fiscal situation, 468 00:26:43,520 --> 00:26:47,399 Speaker 1: all these countries is terrible, and we know that we 469 00:26:47,440 --> 00:26:50,639 Speaker 1: can't trust the price of financial assets because for various 470 00:26:50,640 --> 00:26:52,560 Speaker 1: reasons that we've talked about, and I'm sure there's a 471 00:26:52,560 --> 00:26:55,760 Speaker 1: crazy thing we'll talk about talk about some more. Uh, 472 00:26:55,840 --> 00:26:57,879 Speaker 1: there's an argument to be made for owning something that 473 00:26:57,960 --> 00:27:01,040 Speaker 1: hurts when it falls on you. You know, Era Cameron 474 00:27:01,040 --> 00:27:03,119 Speaker 1: gave us the perfect segue two crazy things there, and 475 00:27:03,160 --> 00:27:05,159 Speaker 1: I totally dropped the ball on it. You're grabbing it, 476 00:27:05,160 --> 00:27:07,160 Speaker 1: You're grabbing it and running with it. Now that's my bed. 477 00:27:07,400 --> 00:27:09,240 Speaker 1: Why don't you get us, get us started. What's the 478 00:27:09,280 --> 00:27:12,000 Speaker 1: craziest thing you've I know you've written about twenty crazy 479 00:27:12,000 --> 00:27:14,280 Speaker 1: things stories this week, So what's your what's your top? 480 00:27:14,600 --> 00:27:17,880 Speaker 1: So there there are so many, Uh, it's really hard 481 00:27:17,920 --> 00:27:22,320 Speaker 1: to choose one that I will go with. UM. On Monday, 482 00:27:22,480 --> 00:27:26,640 Speaker 1: the day that the SMP turned positive for what at 483 00:27:26,680 --> 00:27:29,120 Speaker 1: the close and also in the middle of the day, 484 00:27:29,240 --> 00:27:31,639 Speaker 1: if you were to look at the members of the 485 00:27:31,800 --> 00:27:36,480 Speaker 1: SMP since March, every single one of them was positive. 486 00:27:36,520 --> 00:27:40,000 Speaker 1: And I know Cameron then took it a step further, uh, 487 00:27:40,040 --> 00:27:43,560 Speaker 1: and he ransom programs and found that was the first 488 00:27:43,600 --> 00:27:45,879 Speaker 1: time that we've ever seen every single stock move higher 489 00:27:45,880 --> 00:27:50,560 Speaker 1: together over an eleven week period, which is pretty crazy. Um, 490 00:27:50,760 --> 00:27:52,800 Speaker 1: pretty crazy. And then one more just for you, Mike, 491 00:27:52,840 --> 00:27:57,800 Speaker 1: because I know you love leveraged et s so so 492 00:27:58,080 --> 00:28:01,639 Speaker 1: um hate them. Yeah dat. I've actually been spending my 493 00:28:01,720 --> 00:28:05,080 Speaker 1: days just sitting on robin track dot net, which tracks 494 00:28:05,160 --> 00:28:09,199 Speaker 1: what users on robin hood are doing. And on Thursday, 495 00:28:09,359 --> 00:28:13,360 Speaker 1: as stocks are selling off, what were they adding up? 496 00:28:13,480 --> 00:28:17,440 Speaker 1: What was number three on the most popular most increased 497 00:28:17,480 --> 00:28:20,000 Speaker 1: interest list while it was t vix So let me 498 00:28:20,560 --> 00:28:25,280 Speaker 1: products just for you, Mike, what could possibly go wrong 499 00:28:25,320 --> 00:28:30,119 Speaker 1: with that trip? Nothing? All right, Cameron? Cameron told me 500 00:28:30,160 --> 00:28:32,879 Speaker 1: he has a doozy for the crazy Things segments, so 501 00:28:33,400 --> 00:28:37,280 Speaker 1: expectations are high. Well, I mean this is coming from 502 00:28:37,800 --> 00:28:41,680 Speaker 1: finance geek, so my definition of crazy interesting might not 503 00:28:41,720 --> 00:28:45,640 Speaker 1: be the same as year. So you know, we know 504 00:28:45,840 --> 00:28:49,920 Speaker 1: that the robin Hood folks love bankrupt companies. We know 505 00:28:50,480 --> 00:28:55,840 Speaker 1: that they love companies named after inventors. Obviously, Tesla has 506 00:28:55,920 --> 00:29:00,280 Speaker 1: been a darling for years, and as I'm sure you know, 507 00:29:00,720 --> 00:29:05,160 Speaker 1: last week saw the debut of Nicola U, named after 508 00:29:05,200 --> 00:29:08,640 Speaker 1: the same scientists first name, and I've already looked he 509 00:29:08,640 --> 00:29:14,040 Speaker 1: didn't have a middle name. My next career move so 510 00:29:14,360 --> 00:29:17,200 Speaker 1: as I'm sure you saw, or as you may have seen, 511 00:29:17,240 --> 00:29:21,360 Speaker 1: at one point, uh Nicola had a market cap greater 512 00:29:21,400 --> 00:29:25,120 Speaker 1: than four despite having zero revenues, which is crazy enough 513 00:29:25,160 --> 00:29:28,800 Speaker 1: as it is, right, But here's my crazy thing. The 514 00:29:28,840 --> 00:29:34,480 Speaker 1: option market for Nicola is the wildest thing I have 515 00:29:34,720 --> 00:29:39,000 Speaker 1: ever seen in my life. So the issue is that 516 00:29:39,040 --> 00:29:42,760 Speaker 1: there's no because it's a new stock, you can't borrow it, 517 00:29:42,840 --> 00:29:44,720 Speaker 1: so if you want to short it, you can't. So 518 00:29:44,840 --> 00:29:48,280 Speaker 1: the only way you can you can bet against it 519 00:29:48,360 --> 00:29:51,600 Speaker 1: is to buy putts. So the structure of the option 520 00:29:51,640 --> 00:29:57,440 Speaker 1: market is Bologny. So the stock is UH sixty, give 521 00:29:57,520 --> 00:30:00,320 Speaker 1: or take. So I'm looking at the July options, the 522 00:30:00,400 --> 00:30:03,880 Speaker 1: July sixty calls, So the at the money calls trade 523 00:30:03,960 --> 00:30:09,440 Speaker 1: at a two and are priced around eight dollars. That's 524 00:30:09,440 --> 00:30:12,920 Speaker 1: crazy enough as it is. The sixty puts are trading 525 00:30:12,920 --> 00:30:18,960 Speaker 1: a two eight and are priced at twenty eight dollars, 526 00:30:19,320 --> 00:30:21,880 Speaker 1: So the at the money put is worth twenty dollars 527 00:30:21,960 --> 00:30:25,040 Speaker 1: more than the at the money call, which is crazy, 528 00:30:25,360 --> 00:30:27,719 Speaker 1: but that's not But that's still not the craziest thing 529 00:30:27,760 --> 00:30:30,280 Speaker 1: I've seen. I got this one from a friend. In 530 00:30:30,400 --> 00:30:33,400 Speaker 1: Nicola options, there's a option traders will know, there's a 531 00:30:33,400 --> 00:30:36,120 Speaker 1: thing called a box where you can sell it call spread, 532 00:30:36,720 --> 00:30:39,760 Speaker 1: say forty fifty call spread, uh, and then you sell 533 00:30:39,800 --> 00:30:41,920 Speaker 1: it put spread against it. The thing can only ever 534 00:30:42,000 --> 00:30:44,600 Speaker 1: be worth ten dollars. A forty fifty box can only 535 00:30:44,640 --> 00:30:47,120 Speaker 1: ever be worth ten vols. Well, I've been a friend 536 00:30:47,560 --> 00:30:53,080 Speaker 1: who sold the Nicola July call spread for eight dollars 537 00:30:53,120 --> 00:30:57,280 Speaker 1: and eighty cents. He sold the fifty forty Nicola put 538 00:30:57,280 --> 00:31:01,000 Speaker 1: spread for eight dollars. So we sold something that could 539 00:31:01,000 --> 00:31:05,960 Speaker 1: only ever be worth uh, ten dollars for sixteen dollars 540 00:31:06,160 --> 00:31:09,920 Speaker 1: and eighty cents. And that, my friends, is the craziest 541 00:31:09,960 --> 00:31:14,360 Speaker 1: thing I've seen this week. That's that's pretty good, Ben, Ben, 542 00:31:14,400 --> 00:31:17,000 Speaker 1: You've got some tough competition with that one. Oh, that's tough. 543 00:31:17,360 --> 00:31:20,520 Speaker 1: That's good stuff. Wow. You know that I have a 544 00:31:20,560 --> 00:31:22,840 Speaker 1: financial one I have and I have one for Sarah 545 00:31:22,880 --> 00:31:25,280 Speaker 1: actually that I want to mention. It's that kind of 546 00:31:25,320 --> 00:31:28,120 Speaker 1: local thing for Sarah. Actually, I've been tracking this Hong 547 00:31:28,160 --> 00:31:31,200 Speaker 1: Kong situation. Um, so you know, the A d R 548 00:31:31,280 --> 00:31:33,680 Speaker 1: swings were pretty dramatic, like if you take you know, 549 00:31:33,760 --> 00:31:36,600 Speaker 1: like companies that you never heard of of, a Jian 550 00:31:36,760 --> 00:31:40,080 Speaker 1: Group or Wins Finance whould just swing like nine hundred 551 00:31:40,120 --> 00:31:43,680 Speaker 1: eight on a d R A d R s by 552 00:31:43,720 --> 00:31:46,720 Speaker 1: the way, like our you know, the most liquid things 553 00:31:46,720 --> 00:31:48,960 Speaker 1: he can trade, right, that's I mean, I think that's 554 00:31:49,040 --> 00:31:52,760 Speaker 1: really really locally traded on on our exchanges here. I 555 00:31:52,800 --> 00:31:55,760 Speaker 1: think that just again speaks to this tension that's there, 556 00:31:55,920 --> 00:32:00,160 Speaker 1: right as a real tension building from money coming of 557 00:32:00,560 --> 00:32:04,520 Speaker 1: adugunized stage back to Hong Kong. That that these that 558 00:32:04,760 --> 00:32:09,800 Speaker 1: these ad R prices show aside from their their extraordinary swings, 559 00:32:09,880 --> 00:32:13,400 Speaker 1: right which again back to the herds and other American 560 00:32:13,400 --> 00:32:16,080 Speaker 1: airline step swings, it's kind of similar, right, So there's 561 00:32:16,120 --> 00:32:20,640 Speaker 1: this really awkward phenomenon, so that that that is unusual, 562 00:32:20,720 --> 00:32:24,200 Speaker 1: if not crazy. And then I guess the local one. 563 00:32:24,560 --> 00:32:28,040 Speaker 1: I popped up some website, you know, legitimate website, I thinks, 564 00:32:28,240 --> 00:32:31,280 Speaker 1: U P I is, I guess the trending website. I 565 00:32:31,320 --> 00:32:33,200 Speaker 1: clicked on a few things and I read here the 566 00:32:33,240 --> 00:32:39,240 Speaker 1: following a python hunter in Florida known as the Python Cowboy, 567 00:32:39,520 --> 00:32:42,080 Speaker 1: might have had a new records as by bagging in 568 00:32:42,240 --> 00:32:46,080 Speaker 1: sixteen seventeen foot snake by putting up a fierce fight. 569 00:32:46,280 --> 00:32:50,480 Speaker 1: And that this is in Martin County, trapping Wildflife Rescue 570 00:32:50,560 --> 00:32:54,360 Speaker 1: owner Mike Kimmel. That's the Python cowboy in Florida. I 571 00:32:54,360 --> 00:33:01,320 Speaker 1: thought of, I can't, I can't, I can't say I'm surprised. Well, actually, um, 572 00:33:01,560 --> 00:33:05,880 Speaker 1: funny story, not funny. Actually supposedly the last week or 573 00:33:05,920 --> 00:33:09,600 Speaker 1: so there was a seven foot alligator found in the 574 00:33:09,640 --> 00:33:13,240 Speaker 1: water right outside my house. So safe to say, I'm 575 00:33:13,240 --> 00:33:16,960 Speaker 1: not going in the water anytime soon. So python's alligators. 576 00:33:16,960 --> 00:33:20,440 Speaker 1: That's what you get down here, Ben Emmons and Kevin Christ. 577 00:33:20,480 --> 00:33:21,880 Speaker 1: We will have to leave it there. Thank you so 578 00:33:21,960 --> 00:33:32,880 Speaker 1: much for coming on the show today. There's always What 579 00:33:33,080 --> 00:33:36,160 Speaker 1: Goes Up. We'll be back next week. Until then, you 580 00:33:36,200 --> 00:33:38,920 Speaker 1: can find us on the Bloomberg Terminal website and app, 581 00:33:39,080 --> 00:33:41,880 Speaker 1: or wherever you get your podcasts. We love it if 582 00:33:41,880 --> 00:33:43,800 Speaker 1: you took the time to rate interview the show on 583 00:33:43,840 --> 00:33:47,160 Speaker 1: Apple Podcasts, so more listeners can find us. And you 584 00:33:47,200 --> 00:33:50,560 Speaker 1: can find us on Twitter. Follow me at Sara pont Sec, 585 00:33:50,960 --> 00:33:54,200 Speaker 1: Mike is at Reagan Anonymous, and Cameron christ Is at 586 00:33:54,360 --> 00:33:58,520 Speaker 1: Fifth Rule. You can also follow Bloomberg Podcasts at Podcasts. 587 00:33:59,400 --> 00:34:02,320 Speaker 1: What Goes Up is produced by Jordan Gospore. The head 588 00:34:02,360 --> 00:34:05,920 Speaker 1: of Bloomberg podcast is Francesca Levie. Thanks for listening, See 589 00:34:05,960 --> 00:34:06,560 Speaker 1: you next time.