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Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm pim Fox.

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Speaker 1: Along with my co host Lisa Abramowitz. Each day we

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Speaker 1: bring you the most important, noteworthy, and useful interviews for

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Speaker 1: you and your money, whether you're at the grocery store

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Speaker 1: or the trading floor. Find the Bloomberg p m L

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Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot Com. I

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Speaker 1: wonder bring to Eric Beltuna, senior et F analysts for

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Speaker 1: Bloomberg Intelligence, what are you seeing with respect to e

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Speaker 1: t F flows and how instructive are they with respect

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Speaker 1: to just how panicked investors have gotten? Yes, so I'm

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Speaker 1: seeing a lot of red naturally. Um, you know, maybe

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Speaker 1: you could call it a blood bath. In terms of Spy,

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Speaker 1: Spy has lost about twenty three billion in a week. Um,

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Speaker 1: you know, in a couple of days of eight bill

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Speaker 1: I in. So what this tells me is a lot

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Speaker 1: of this sort of trading crowd, the hot money, as

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Speaker 1: I call it, is really spooked. And Spy took in

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Speaker 1: about twenty million in January, which helps ets blows go

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Speaker 1: bonkers in the on the inside. But when the sell

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Speaker 1: off started, Spy got hit hard as usual. Um, what

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Speaker 1: I look for is deeper than spy. What are the

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Speaker 1: allocators doing? And that's why I look for I v V.

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Speaker 1: I v V is the cheap version that advisors love

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Speaker 1: right of the smpts. And it's starting to see a

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Speaker 1: little trickle of red. It see it saw inflows hunt

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Speaker 1: on Monday, believe it or not, and it is like

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Speaker 1: a machine of inflows. But even it is starting to

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Speaker 1: see a little red And to me, that's almost more

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Speaker 1: would make me more nervous is when you see something

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Speaker 1: like that or Vanguard ets start to see outflows, that

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Speaker 1: is a that's a whole bigger issue. Because spies used

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Speaker 1: like just like futures contract for a lot of people.

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Speaker 1: They go in and out all the time. It's like

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Speaker 1: a hotel. But when you see it on the more

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Speaker 1: buy and hold ets, I think it's a little more concerning. Well,

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Speaker 1: so do you come on in here, because I'm wondering

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Speaker 1: and you are there other gauges of flows that sort

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Speaker 1: of indicate whether or not uh there is mass selling

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Speaker 1: or whether this is just uh sort of around the

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Speaker 1: edges macro bets. I mean there's a difference, Yeah, there is,

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Speaker 1: and certainly there are plenty of numbers around that point.

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Speaker 1: In that direction. Bank of America Merrill Lynch had their

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Speaker 1: weekly update out today. You know, they're talking about thirty

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Speaker 1: point six billion dollar outflow from equity funds. Now they're

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Speaker 1: relying I think on data from ep f R to

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Speaker 1: do that, uh, and they're talking about half a billion

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Speaker 1: dollars coming out of gold, which is particularly interesting because,

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Speaker 1: let's face it, you know, when you've seen these sort

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Speaker 1: of upheaval that markets and have gone through the past,

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Speaker 1: especially when you look at stocks, I mean, people have

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Speaker 1: tended to run to areas where they see relative safety,

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Speaker 1: and gold has been among them. And gold have been

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Speaker 1: down this week, which is really saying something about how

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Speaker 1: people are looking at the precious metal and you're seeing

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Speaker 1: outflows on top of that, I'll just point out that

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Speaker 1: they tracked four billion dollars going into bonds. So even

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Speaker 1: with the higher yields that we're seeing, uh, it hasn't

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Speaker 1: really deterred investors from sort of moving money in there,

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Speaker 1: because remember, those higher yields mean bonds have been falling

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Speaker 1: in value. Eric, can you explain the technical process that

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Speaker 1: takes place during the trading day that causes most screens

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Speaker 1: to light up like Christmas trees at the end of

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Speaker 1: trading and the relationship between exchange traded funds in their positions. Well, look,

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Speaker 1: I mean at the end of the day, you have

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Speaker 1: a lot of trading going on UM and some ets

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Speaker 1: have to re balance. UM. In that whole horrible Vick

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Speaker 1: situation that happened earlier this week, that's where a lot

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Speaker 1: of that happened on the rebalance. But a stock ets

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Speaker 1: are they don't own all that much and they don't rebalance,

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Speaker 1: They rebound quarterly. So it's the Vics ones rebound Bailey,

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Speaker 1: So UM, it's I don't think it's that big of

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Speaker 1: a deal. I just think you have a lot of

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Speaker 1: trading at Didner day across the board. One thing I

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Speaker 1: just want to comment on what Da've just said in gold,

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Speaker 1: which I find fascinating, is you know gold is zero

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Speaker 1: correlation to the market, not negative or inverse, and so

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Speaker 1: it might it like just does its marches could have

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Speaker 1: beat of its own drummer, and it was going up

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Speaker 1: a lot during the past year, even when stocks are rallying,

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Speaker 1: and now you have the opposite where we are seeing

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Speaker 1: flows that I think also contributes to nervous investors. Is

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Speaker 1: SHV the one to three month Treasury ETF and Bill.

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Speaker 1: I mean these are the shortest of this. This is

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Speaker 1: a mattress. Basically, those two funds have taken in some money.

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Speaker 1: They're rarely on the top ten lists and they are

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Speaker 1: yesterday and t LT saw some money. So I do

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Speaker 1: think treasuries are where most people go. And it's really panic.

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Speaker 1: Gold is a little more performance based. That's really fascinating

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Speaker 1: to me. And it makes a lot of sense if

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Speaker 1: you think about it. Uh, And this morning I was thinking,

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Speaker 1: you know, if everything re prices down, that's awesome for

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Speaker 1: true bond investors because that means you can actually buy

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Speaker 1: stuff with higher yields. I mean, it's like, this is

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Speaker 1: a good thing if you are sort of continuing to

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Speaker 1: rotate money in so all of a sudden cash might

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Speaker 1: start paying. Fascinating. Dave Wilson, Bloomberg SAX editor, columnist and

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Speaker 1: blocker at M Live go on the Bloomberg Thank you

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Speaker 1: so much. Eric Valcinas, thank you so much for joining

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Speaker 1: a senior et F analyst for Bloomberg Intelligence. Well, it

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Speaker 1: seems like the lessons learned are of dubious quality. Right now,

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Speaker 1: I'm just looking at one of the funds, the short

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Speaker 1: Volatility funds that blew up or lost a lot of

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Speaker 1: its value in the recent turmoil. Well, people are pouring

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Speaker 1: money back in. Here to talk about it is Nick Colas,

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Speaker 1: co founder of Data Check Research LLC, which is based

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Speaker 1: in New York, also a Bloomberg prophet. Nick, what's going

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Speaker 1: on here? If people just not learn their lesson the

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Speaker 1: short answers, No, they apparently have not. The longer answer is,

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Speaker 1: I guess you know, if you liked shorting volatility at ten,

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Speaker 1: you've gotta love shorting volatility at thirty on the VIX.

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Speaker 1: And so you're right. Money is just poured back into

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Speaker 1: this fund. Obviously the x I V went away or

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Speaker 1: is closing, so there's fewer funds in which to focus

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Speaker 1: this money in. S v X Y is really getting

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Speaker 1: the benefit um, But you know it worked for a

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Speaker 1: few minutes this morning at least s v X I

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Speaker 1: was up. No, we're talking about the pro shares short

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Speaker 1: VIX short term futures fund s v X Why so,

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Speaker 1: what are you looking at? Is this really really just

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Speaker 1: a purely technical driven sell off in the stock market

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Speaker 1: due to a number of different factors that will just

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Speaker 1: sort of stop at some point and everybody will go

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Speaker 1: back about their business or is there something more here? No,

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Speaker 1: there's probably something more here. It's a it's a combination

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Speaker 1: of two factors. The first is obviously fundamental and where

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Speaker 1: whereas in action going this year? Where a long term

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Speaker 1: rates going this year? And what effect does that have evaluation?

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Speaker 1: We started see that discussion shape up just two weeks ago,

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Speaker 1: and then we kind of had it squared or cubed

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Speaker 1: when we saw the inverse volatility funds blow up and

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Speaker 1: that became more of a market structure issue. But the

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Speaker 1: combination has obviously been very damaging. And the one thing

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Speaker 1: I'd say is, you know, the VIX is often a

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Speaker 1: good indicator of fear, but it's not a great indicator

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Speaker 1: of market bottoms if you look back at prior cycles.

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Speaker 1: When the VIX bottoms, you've got to wait a month

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Speaker 1: or two or three before the market actually turns. So

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Speaker 1: to the direction of the VIX that actually matters the

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Speaker 1: stocks more than just raw fear. So too late to sell,

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Speaker 1: too early to buy. Yes, that was the way we

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Speaker 1: headed off our client note last night, and that's very

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Speaker 1: much the way it feels, all right, And when it

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Speaker 1: does become time to buy any particular areas you'd be

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Speaker 1: focused on. Yeah, technology and financials two areas that we

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Speaker 1: think do definitely still hold up. The one thing I'm

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Speaker 1: really waiting for in terms a market flush is technology

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Speaker 1: to really sell off. I mean, tech has held up

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Speaker 1: extremely well in a rising rate environment and there's no

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Speaker 1: reason why it should. High pea stocks should sufferers interest

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Speaker 1: rates rise, and they really haven't. So that'll, for me,

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Speaker 1: will be the sign of a bottom, but also a

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Speaker 1: good entry point. So what do you look at every

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Speaker 1: day as kind of a key leading indicator as to

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Speaker 1: how equity markets are going to behave? The one thing

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Speaker 1: I look at, which I don't see a lot of

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Speaker 1: other people looking at yet, is something very simple Google Trends,

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Speaker 1: which is a free tool online that allows you to

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Speaker 1: see how many people are searching for a given term,

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Speaker 1: And in this case, the term stock market is a

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Speaker 1: very useful term because it tells you how much retail

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Speaker 1: is paying attention to the current market volatility. In particular,

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Speaker 1: it tells you how you might open the next day. So,

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Speaker 1: for example, yesterday we didn't get anywhere near the amount

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Speaker 1: of attention on the stock market from Google searches that

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Speaker 1: we did back on Monday, Less than half actually, which

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Speaker 1: told me that retail for whatever reason, was not tuned

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Speaker 1: into the market coming down yesterday, and sure enough we

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Speaker 1: had a very good it open. What I do fear

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Speaker 1: is that as you see market termino will continue, those

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Speaker 1: numbers will go higher and higher, and retail will eventually

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Speaker 1: sell in that tradition is what creates the bottom. Can

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Speaker 1: you talk a little bit about how you deploy capital

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Speaker 1: at a time when perhaps you believe that the market

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Speaker 1: is near a bottom, and I'm talking about not being

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Speaker 1: a hero here, Yeah, I mean, the one thing I'll

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Speaker 1: say is I mean in this business thirty years and

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Speaker 1: I've had good friends get fired at the bottom of

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Speaker 1: every cycle because they thought they knew better than the market.

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Speaker 1: So my key takeaway is you're right, don't be a hero.

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Speaker 1: Allocate capital very sparsely as markets go through these churned

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Speaker 1: phases and downward moves, because remember that a capital allocated

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Speaker 1: anywhere near bottom is very high velocity capital, and it

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Speaker 1: can really help or it can kill you. So that

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Speaker 1: key takeaway is be extremely careful, do not try to

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Speaker 1: time and bottom edge into positions over time, take off

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Speaker 1: risk if you're overexposed, and live for the long term.

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Speaker 1: So if your sense is that tail investors are not

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Speaker 1: the ones panicking right now, who is I mean other

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Speaker 1: than the you know, sort of short vix funds. We

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Speaker 1: did see the biggest ever weekly withdrawal from US equity funds.

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Speaker 1: Who's pulling their money? I think it is basically everybody

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Speaker 1: in retail is definitely definitely pulling some of it um.

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Speaker 1: But it is also hedge funds are a manage money,

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Speaker 1: financial advisor, manage money. It's everybody that got way too

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Speaker 1: exposed to risk in the first part of the year,

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Speaker 1: uh and basically got caught offsides and has to reduce risk.

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Speaker 1: So if you are a veteran of markets, can you

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Speaker 1: share with us the maybe behavioral characteristics, so the things

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Speaker 1: you do that will mitigate that kind of emotional response

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Speaker 1: to when things are not going the way you want.

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Speaker 1: I keep thinking of Phil Fisher, uh, long time you know,

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Speaker 1: expert in the world of bonds, and he would always

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Speaker 1: say that, you know, when you see market turmoil, go

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Speaker 1: out to the movies, because that keeps you away from

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Speaker 1: the desire to keep doing something. Sometimes the idea is

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Speaker 1: just step away. Stepping away is excellent advice. And I'll

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Speaker 1: tell you a little story many years ago. I work

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Speaker 1: for Stevie Cohen, from whom I learned a tremendous amount,

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Speaker 1: and when things weren't going his way, he would ask

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Speaker 1: his wife to bring his kids in for lunch, and

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Speaker 1: he would just take an hour, hour and a half break,

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Speaker 1: sit in the cafeteria downstairs and have lunch with his

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Speaker 1: kids and his family. And that I got the sense

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Speaker 1: that that really kind of resentered him and took him

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Speaker 1: away from the screen, even though he was obviously a

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Speaker 1: very active trader. So I have seen that process work

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Speaker 1: in the past with very successful people. I'm trying to

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Speaker 1: understand the dynamic. What is driving the selling right now?

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Speaker 1: I mean, you say everyone, and I understand that people

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Speaker 1: got over exposed, but there really is not that much.

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Speaker 1: I mean, there was one unexpectedly good payrolls number after

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Speaker 1: that one, is it? Yeah? So here's the thing, you know,

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Speaker 1: the narrative around inflation has been floating around for the

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Speaker 1: better part of a year. The narrative around central banks

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Speaker 1: pulling back quantitative easing and doing quantitative tiding has been

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Speaker 1: around for well over a year. And since literacy rates

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Speaker 1: are so high in the US, I think we all

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Speaker 1: assume that people understood those topics, but we everybody had

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Speaker 1: this nagging feeling like there was going to be a reckoning.

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Speaker 1: And so while there was capital coming into the market,

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Speaker 1: it wasn't comfortable capital, wasn't confident capital. It was capital

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Speaker 1: that was there because everybody else was there. And you know,

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Speaker 1: like all the best parties in nightclubs, when they start

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Speaker 1: to clear out, they clear out really fast, and when

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Speaker 1: they turn on the lights, it's not pretty. No, you

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Speaker 1: never want to be there when the turn lights start

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Speaker 1: get turned on. All right, Who you think is most

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Speaker 1: at risk right now in terms of equities or in

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Speaker 1: terms of investors, well either way. So in terms of equities,

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Speaker 1: tech is code and most exposed. I mean, I can't

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Speaker 1: reiterate that enough. This is supposed to be a higher

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Speaker 1: than one beta group. It has huge valuations and you

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Speaker 1: can send that all the way into venture cap. But

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Speaker 1: all if we continue to see market turmoil, venture capital

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Speaker 1: is going to have a really tough time getting I

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Speaker 1: p o s out of the door, getting deals done,

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Speaker 1: and you're gonna see a lot of down rounds. That's

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Speaker 1: the biggest area in terms of investors. I worry that

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Speaker 1: investors that have coming in the past five years. Younger investors,

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Speaker 1: millennial investors who have never seen it down in market.

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Speaker 1: They're gonna be brave for a little while, but you know,

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Speaker 1: it's always that new money that creates the bottom, and

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Speaker 1: they will do it just like every other generation has

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Speaker 1: done it. Thanks very much sharing your insight and your experience.

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Speaker 1: Nikola's co founder Data trakt Research, and I want to

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Speaker 1: congratulate you on the creation of Data tract Research and

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Speaker 1: of your new company. Now let's get informed about the

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Speaker 1: world of logistics and shipping. We have Lee Classgow He's

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Speaker 1: our senior transport logistics and shipping analyst for Bloomberg Intelligence.

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Speaker 1: Lee always a pleasure tell us about Amazon. Is Amazon

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Speaker 1: really a threat to FedEx and ups? A threat might

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Speaker 1: be a little overkilled. Maybe on the margin, UM, they could,

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Speaker 1: you know, take some share away from FedEx neups, But

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Speaker 1: the longer term, we don't see it as a systemic

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Speaker 1: risk to the parcel industry. There was an announcement today

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Speaker 1: UM following a report in the Wall Street Journal that

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Speaker 1: notes that that the Amazon was going to do a

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Speaker 1: parcel deliver delivery in the l A area UM for

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Speaker 1: people in companies that are not on Amazon's network. UM.

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Speaker 1: Some might view this as competition for UPS and FedEx,

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Speaker 1: and some also might view it as Amazon looking for

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Speaker 1: ways to get more companies into their Fulfillment by Amazon program.

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Speaker 1: How expensive is this type of program the Amazon is proposing, Well,

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Speaker 1: that's a great question. Um, there are really no answer

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Speaker 1: because they're not throwing much money at this is at

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Speaker 1: least as it seems, and it looks like they're looking

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Speaker 1: to do an asset light model, meaning that they're not

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Speaker 1: going to own the trucks and the drivers, um, they'll

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Speaker 1: outsource that that type of work and where they'll do

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Speaker 1: the sorting. Um. So it's really unclear on you know,

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Speaker 1: what the costs would be for them, because I would

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Speaker 1: assume that they're going to leverage their current facilities that

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Speaker 1: they have for their for their for their fulfillment businesses

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Speaker 1: um and just kind of a delivered deliver out of there.

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Speaker 1: So it's going to cost people. But you know, you're

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Speaker 1: also going to have more technology, You're gonna have to

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Speaker 1: have relationships with these uh contracted drivers, and you need

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Speaker 1: you know, a steady flow of drivers and and and

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Speaker 1: with the labor market tightening, um, that's probably not going

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Speaker 1: to be uh, it's probably gonna be easier said than done.

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Speaker 1: I would could this end up being beneficial for say

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Speaker 1: FedEx and UPS because at some point Amazon may have

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Speaker 1: to come back to them at least their drivers and

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Speaker 1: their trucks. Yeah, and that's that's a great question. I mean,

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Speaker 1: you have are are kind of thought, is that you know,

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Speaker 1: Amazon is two and a half percent call it of

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Speaker 1: UPS as sales, maybe two of their sales, and a

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Speaker 1: less than one percent of FedEx, so they're not there.

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Speaker 1: They're a huge customer of both FedEx and UPS. But

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Speaker 1: if Amazon went away tomorrow, it wouldn't be you know,

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Speaker 1: the end of the world for those companies because to

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Speaker 1: the growth of e commerce. But but Amazon, you know,

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Speaker 1: needs to to kind of tread lightly here because you know,

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Speaker 1: if they if fed X and NEUPS see that Amazon

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Speaker 1: is going head to head with them, they might not

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Speaker 1: you know, want to necessarily carry their products during the

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Speaker 1: peak season, which you know, Amazon really needs the parcel

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Speaker 1: industry for help when it comes to they can't just

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Speaker 1: rely on the US Postal Service lead. Just to put

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Speaker 1: this into context, I understand that FedEx operates about six

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Speaker 1: hundred and fifty aircraft and UPS has a fleet of

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Speaker 1: over two hundred and forty aircraft. That's pretty substantial. That's

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Speaker 1: not something you can just put together in a week, right.

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Speaker 1: And you know Amazon has been in the new with

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Speaker 1: with you know, leasing of a bunch of aircraft, and

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Speaker 1: you know that's really more for their linehole business, so

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Speaker 1: meaning that you know, they're willing to take more the

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Speaker 1: logistics in house, which is completely normal for retailer or

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Speaker 1: consumer products company. You know, Walmart and PepsiCo, for example,

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Speaker 1: have the largest trucking fleets in the United States, you know,

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Speaker 1: larger than many public trucking companies. UM, so that's kind

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Speaker 1: of a normal part of their business. You know, they

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Speaker 1: want to rely as less as they possibly can on

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Speaker 1: the outside world for their supply chain UM and then

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Speaker 1: leverage the great networks of FedEx ups have built over

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Speaker 1: the decades. UH. And the UPS is a case over

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Speaker 1: a hundred years UM to UH to deliver packages for

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Speaker 1: the final final mile and and maybe a little longer

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Speaker 1: than that as well. Really real quick, do you have

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Speaker 1: a sense of timing with this type of program, the

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Speaker 1: timing of the program of when Amazon could could roll

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Speaker 1: this kind of thing. Oh, it's gonna it's I mean

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Speaker 1: we're talking they're just opening in in l A. So

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Speaker 1: it's one city. Uh, it's going to take probably a

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Speaker 1: year to really be fully ramped up to cover a

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Speaker 1: city of that large. Uh. And we'll see, you know,

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Speaker 1: where the other pilot programs go from there. Um and

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Speaker 1: if they're really successful kind of migrating more UH retailers

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Speaker 1: onto their fulfillment platform. Lee Glasgow, thank you so much

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Speaker 1: for joining us. Lee Glasgow, Senior Transport Logistics and shipping

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Speaker 1: analysts for Bloomberg Intelligence. There are many popular narratives about

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Speaker 1: this week's sell off in US equities, among them jitters

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Speaker 1: concerns over the deepening US deficit. But is this really

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Speaker 1: truly what's behind the scenes going on here? Ward McCarthy

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Speaker 1: joins us right now. He's chief financial economist at Jefferies

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Speaker 1: and Co. In New York. Ward, thank you so much

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Speaker 1: for being with us. So about this deepening deficit? How

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Speaker 1: much is that what's behind all of the activity this week?

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Speaker 1: I think it's part of there a big picture that

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Speaker 1: is changing in material ways from what we've had for

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Speaker 1: a number of years. Here. What we're seeing is that

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Speaker 1: monetary policy accommodation is being withdrawn. It's being replaced with

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Speaker 1: fiscal accommodation to try to support the economy. But one

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Speaker 1: of the consequences of both the fiscal accommodation and the

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Speaker 1: withdrawal of monetary accommodation is that the Treasury is going

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Speaker 1: to have to borrow a whole lot more money. We

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Speaker 1: estimate in fiscaleen For example, the Treasury is going to

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Speaker 1: have to raise an additional four hundred and fifty billion

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Speaker 1: over what it did last year, So that will mean

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Speaker 1: we'll have to raise about nine hundred and fifty billion dollars. So, uh,

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Speaker 1: that's going to put some stresses on the bond market

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Speaker 1: and we're already seeing that. Well four and fifty billion ward.

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Speaker 1: Isn't that sort of the amount that the Federal Reserve

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Speaker 1: is drawing down its balance sheet? Well, that's part of

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Speaker 1: the part of what the Fed is um driving down.

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Speaker 1: Accounts for this increase in borrowing, but keep in mind,

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Speaker 1: the Treasury also needs to fund the tax cuts that

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Speaker 1: were passed in December, and they also have to fund

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Speaker 1: the increased spending from the budget that was passed. Uh, well,

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Speaker 1: I guess early, really early this morning. So that's the

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Speaker 1: draw down in the Fed balance sheet is part of

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Speaker 1: that four and fifty billion. It's not all of it, okay,

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Speaker 1: So where can you clear up something for me? A

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Speaker 1: lot of people are saying that if we don't get inflation,

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Speaker 1: yields can't rise that far. Is that a fallacy? Can

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Speaker 1: we see yields rise substantially due to the supply demand

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Speaker 1: dynamic regardless of inflation. Oh, you can see rates rise.

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Speaker 1: It's always just a question of how much we are

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Speaker 1: seeing signs that inflation is going to creep. I we've

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Speaker 1: been in and one and a half to two percent

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Speaker 1: inflation range. I think this year we're going to find

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Speaker 1: ourselves by the third quarter in the two and a

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Speaker 1: half to three percent inflation range. But the increases in

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Speaker 1: the auction sizes over a period of time, which is

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Speaker 1: what the Treasury is going to do, is going to

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Speaker 1: start to strain the the market's resources, and that alone

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Speaker 1: will result in higher rates because higher rates are going

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Speaker 1: to be required to attract the investor. Bit what if

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Speaker 1: you were to look into the future, into the world

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Speaker 1: of people perhaps not born or just the young adults

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Speaker 1: right now, what do you think the picture looks like

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Speaker 1: in about ten years. Well, I think that we are

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Speaker 1: seeing some important structural changes in the economy that I

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Speaker 1: think will make for a better labor market than we

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Speaker 1: have seen over the past ten years, even though it

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Speaker 1: has been improving quite substantially. My primary concern is that

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Speaker 1: the US fiscal situation is in the process of deteriorating

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Speaker 1: so much that ten years from now it could be

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Speaker 1: a significant impediment to the us UH. To date, the

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Speaker 1: US has been, you know, profligate on the fiscal side,

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Speaker 1: but we have looked relatively good compared with some of

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Speaker 1: the competitors, like say Europe, for example. But if You're

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Speaker 1: continues to get his act together, um, then we are

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Speaker 1: not going to get the free pass that we've had

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Speaker 1: for such a long time here. Or where do you

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Speaker 1: expect ten your yields in the US to be at

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Speaker 1: the end of the year. Well, I think they're going

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Speaker 1: to be higher. You know. Trying to figure out exactly

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Speaker 1: how much higher they're going to be is is somewhat

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Speaker 1: difficult to say, um, but I think that we'll probably

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Speaker 1: see them up around somewhere between three and a quarter

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Speaker 1: and three and a half percent. Okay, So what's the

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Speaker 1: line in the sand for stocks, for riskier credit, What's

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Speaker 1: what's the level at which people say, you know, what

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Speaker 1: I'm getting paid for for putting my money in cash.

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Speaker 1: I'm getting paid for putting my money in government bonds.

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Speaker 1: I'm not gonna be in credit anymore. Well, the I

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Speaker 1: think what we'll see is that there will be more

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Speaker 1: of a differentiation in the type of credit. High credit

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Speaker 1: should continue to do really well because the economy is

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Speaker 1: doing very well, so that they'll still be appeal and

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Speaker 1: appeal to them the more credit credit worthy issues. I

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Speaker 1: think that what we might see is that investors that

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Speaker 1: to become a little bit more discerning in the types

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Speaker 1: of credits that they want, because it's the lower credit

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Speaker 1: types of companies that are going to struggle more as

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Speaker 1: the interest rates ries. So Ward McCarthy give you about

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Speaker 1: thirty seconds, what kind of credit paper and would you

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Speaker 1: not touch right now? Well, that's really not my area

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Speaker 1: of expertise. Um. I just think that you're better off

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Speaker 1: being in at some of the higher graded types of

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Speaker 1: issues than the lower graded types of issues. And it's

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Speaker 1: really not my place to pick specific issues. You know.

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Speaker 1: It's interesting, pim. I was looking at Teva Pharmaceuticals, which

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Speaker 1: just gave a pretty bleak forecast for the rest of

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Speaker 1: the year, and they have more than thirty billion dollars

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Speaker 1: of debt, and their bond prices are plummeting. They got

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Speaker 1: downgraded to junk uh and they're having to really pay up.

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Speaker 1: So they're going to have some some bonds I've got

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Speaker 1: to refinance this year. Will be interesting to see how

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Speaker 1: that goes. Yeah, and rates are higher and with exacparate

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Speaker 1: tax overhaul, that means that debt may not be as

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Speaker 1: profitable to issue from issuers. Thank you very much. Ward

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Speaker 1: McCarthy used financial economist Forecast Jeff. You can subscribe and

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Speaker 1: listen to interviews at Apple Podcasts, SoundCloud, or whatever podcast

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Speaker 1: platform you prefer. I'm pim Fox. I'm on Twitter at

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Speaker 1: pim Fox. I'm on Twitter at Lisa Abramo. It's one

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Speaker 1: before the podcast. You can always catch us worldwide on

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Speaker 1: Bluebirg Radio Katt the bo