WEBVTT - Episode 836: Tariffs, Market Volatility, and The Fed

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<v Speaker 1>On this episode of newts World, I'm talking with Anthony Esposito,

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<v Speaker 1>founder and CEO of Island Capital, co host of the

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<v Speaker 1>Policy and Profits podcast about the recent stock market volatility,

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<v Speaker 1>the Federal Reserve, and the tariffs, and as you can imagine,

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<v Speaker 1>it's hard to be more relevant right now than those Anthony,

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<v Speaker 1>welcome and thank you for joining me a newts World.

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<v Speaker 2>Mister speaker, thank you so much for having me. It's

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<v Speaker 2>a pleasure to be here.

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<v Speaker 1>So, given your experienced background, how do you see the

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<v Speaker 1>current situation in the stock market.

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<v Speaker 2>The current situation in the stock market, and I was

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<v Speaker 2>pretty vocal about this back in December and January. I

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<v Speaker 2>write a morning note where I was very vocal about it.

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<v Speaker 2>I was out on some TV hits and out on.

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<v Speaker 3>The podcast as well.

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<v Speaker 2>We were seeing an overextended, over leverage stock market coming

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<v Speaker 2>into December January. My technical model and I run a

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<v Speaker 2>technical top down model here, so I'm not looking at fundamentals,

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<v Speaker 2>I'm not looking at earnings reports. I'm really watching price

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<v Speaker 2>momentum and trend I was watching those indicators in my

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<v Speaker 2>model break down, and for the first time in a while,

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<v Speaker 2>it was breaking down on not only my daily count

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<v Speaker 2>so that would be the quicker trade, but it was

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<v Speaker 2>breaking down on the weekly and the monthly count, so

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<v Speaker 2>the daily count quicker and more active, but also intermediate

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<v Speaker 2>and longer terms. I was seeing what I was started

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<v Speaker 2>to call in January as a topping pattern, which typically

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<v Speaker 2>would occur as bull markets end and bear markets begin.

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<v Speaker 2>That is exactly what we saw now. I know the

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<v Speaker 2>headlines become interchangeable, and tariffs are a major headline, and

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<v Speaker 2>this is a major discussion as it creates a lot

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<v Speaker 2>of questions moving forward for the markets, for earnings, for investments,

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<v Speaker 2>for the economy. But I would say that right now

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<v Speaker 2>we are moving through the beginning phase of a bear market.

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<v Speaker 2>I think we took that twenty one percent down move

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<v Speaker 2>or so in the SMP cash and now we're kind

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<v Speaker 2>of seeing some volatility which is extremely emotional and attached

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<v Speaker 2>to again topics like the tariffs, and we are heading

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<v Speaker 2>into earnings and so on and so forth. But I

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<v Speaker 2>see the market as running its course through a bear

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<v Speaker 2>market which started at a peak of about sixty one

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<v Speaker 2>point fifty, just above sixty one hundred on the S

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<v Speaker 2>and P five hundred, and I see us in a

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<v Speaker 2>process of moving down towards forty two hundred or thirty

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<v Speaker 2>seven hundred on the SMP, in which that process we'll

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<v Speaker 2>see a ton of volatility, very aggressive bear market rallies,

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<v Speaker 2>which is nothing new, and some really heavy selling on

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<v Speaker 2>days where the headlines don't work or where you have

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<v Speaker 2>managers or hedgers just unwinding positions.

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<v Speaker 1>How much of this do you think was sort of

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<v Speaker 1>baked in no matter who won they and how much

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<v Speaker 1>has been made deeper by Trump's activity, particularly on terrifs.

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<v Speaker 3>That's a great question.

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<v Speaker 2>I think, broad stroke, the market was ready and poised

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<v Speaker 2>to fall regardless of who won, and I think a

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<v Speaker 2>lot of that had to do with the policies of

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<v Speaker 2>the previous administration. And what I mean by that is

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<v Speaker 2>we had a GDP growth, a nonfarm payrolls growth, and

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<v Speaker 2>a market that was basically supported by government spending, and

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<v Speaker 2>that in and of itself was a kfab. It was

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<v Speaker 2>a complete smoke screen if you look at the percentage

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<v Speaker 2>of jobs created that were directly or indirectly funded by

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<v Speaker 2>the government, or were direct government jobs.

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<v Speaker 3>If you look at GDP growth.

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<v Speaker 2>As direct payments from the government, you were looking at

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<v Speaker 2>about eighty percent of the jobs created were either funded

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<v Speaker 2>by the government or low paying services jobs. That's not

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<v Speaker 2>where we want to be. And the adjustments down upwards

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<v Speaker 2>of a million jobs at the end of the year

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<v Speaker 2>that were never created that were reported. If you look

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<v Speaker 2>at GDP growth, we were looking at fifty to sixty

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<v Speaker 2>percent of GDP growth directly or indirectly funded by the government.

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<v Speaker 2>That was debt creation, that was tax dollars. So not

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<v Speaker 2>only is that not real growth supporting the market right,

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<v Speaker 2>supporting growth and earnings, but it's also extremely inflationary, which

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<v Speaker 2>is exactly what we saw. You can also go into

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<v Speaker 2>consumer spending, which is a driver of earnings for the

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<v Speaker 2>S and P five hundred, consumer spending was also being

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<v Speaker 2>driven by transfer payments from the government. So we had

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<v Speaker 2>an administration that hid the fact that we were actually

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<v Speaker 2>weakening as.

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<v Speaker 3>Far as GDP growth, that we were.

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<v Speaker 2>Weakening as far as manufacturing jobs, which have been technically

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<v Speaker 2>intercession for two years, and they hid that by spending overspending,

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<v Speaker 2>printing money, taking on more debt, and actually weakening our

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<v Speaker 2>position as they said or tried to present us as

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<v Speaker 2>we were in a stronger position. What that did is

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<v Speaker 2>it created a floor or a put for the market

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<v Speaker 2>and everybody played a long from the twenty twenty two

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<v Speaker 2>lows through the twenty twenty five highs, we saw a

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<v Speaker 2>narrative of AI, a narrative of continued growth. Really pump

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<v Speaker 2>through the markets and keep those models running and keep

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<v Speaker 2>that narrative moving when under the cover, we had really

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<v Speaker 2>seven names that were carrying the entire SMP five hundred,

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<v Speaker 2>and it was on a narrative that was really falling apart.

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<v Speaker 2>So the market, regardless of who one was poised to fall,

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<v Speaker 2>we were overvalued, we were overlevered, and the breadth was

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<v Speaker 2>extremely narrow. Now, what I would say is as we

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<v Speaker 2>come out of the election and we head into this

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<v Speaker 2>tariff conversation, which is the Trump conversation. Remember we had

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<v Speaker 2>that massive rally coming out of the election. Everyone ready

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<v Speaker 2>for President Trump, for America first, for true growth, for

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<v Speaker 2>a restructuring. But it's kind of like you don't realize

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<v Speaker 2>the pain that you may need to go through to restructure.

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<v Speaker 2>We have decades of problems to fix here in our

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<v Speaker 2>trade deficits, which I think is the real tariff conversation.

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<v Speaker 2>Our trade deficit conversation is a fifty sixty seventy year

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<v Speaker 2>old conversation and that takes time to fix. So where

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<v Speaker 2>the market would have fallen anyway with a Harris administration,

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<v Speaker 2>I think it would be falling into a bottomless pit.

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<v Speaker 2>The market falling with the Trump administration is kind of

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<v Speaker 2>the grime through the cleanup of the problems left to him.

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<v Speaker 2>And I've made this joke and I'll say it because

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<v Speaker 2>I think it makes sense. You know, clean up on

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<v Speaker 2>Aisle seven. We're trying to get from the Biden administration

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<v Speaker 2>over to the Trump administration policies. So the process of

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<v Speaker 2>fixing and changing policy to seeing the effect of the

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<v Speaker 2>policy is messy, and the risk markets the stock market,

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<v Speaker 2>that's the mop. So as you're cleaning up the mess,

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<v Speaker 2>all the dirt, all the grime, all the chaos is

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<v Speaker 2>going to be in the markets. You're going to see

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<v Speaker 2>it every day on the headlines. You're going to see

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<v Speaker 2>it in the newspapers, You're going to hear it on

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<v Speaker 2>the news.

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<v Speaker 3>But at the end of the.

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<v Speaker 2>Day, we're heading to a better spot under the Trump administration,

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<v Speaker 2>whereas the Harris administration, I think we would have been

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<v Speaker 2>heading into a bigger mess, and we would you did

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<v Speaker 2>quite a few moths, so the sell off was coming,

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<v Speaker 2>But I think the pain that we're going through will

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<v Speaker 2>be productive in the end.

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<v Speaker 1>I'm curious to get your reactions. I tell all of

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<v Speaker 1>my friends, don't look at your stocks until August of

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<v Speaker 1>twenty twenty six. You're just gonna have turmoil and you're

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<v Speaker 1>gonna get heartburn. But sometime around the summer of twenty six,

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<v Speaker 1>my personal belief is that the investment boom and the

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<v Speaker 1>various things will all begun to hit and all of

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<v Speaker 1>a sudden, my guess is the end of the bear

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<v Speaker 1>market will be in the spring an early summer of

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<v Speaker 1>twenty six. What's your reaction just to that observation.

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<v Speaker 3>I think that you're pretty much spot on.

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<v Speaker 2>I love your thought on the investments actually starting to

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<v Speaker 2>take off.

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<v Speaker 3>So I've said previously that.

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<v Speaker 2>The investments that were the onsharing of manufacturing, the onshuring

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<v Speaker 2>of investments, and we've seen trillions of dollars coming in

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<v Speaker 2>and be committed. Those, if you notice, those became the

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<v Speaker 2>secondary tertiary headlines and everything became the tarre corf.

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<v Speaker 3>President Trump is crazy.

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<v Speaker 2>We're kind of reverting back to the same old tantrums

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<v Speaker 2>that we had. But what I believe will happen to

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<v Speaker 2>your point, mister speaker is as we come through the

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<v Speaker 2>mess of the cleanup and the clouds kind of clear,

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<v Speaker 2>we're going to realize that there is a massive amount

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<v Speaker 2>of reinvestment on sharing and new investment in the country.

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<v Speaker 2>And what that will do is that will create a

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<v Speaker 2>v spike recovery and economic growth in this country, in

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<v Speaker 2>jobs growth in this country. I think the market will

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<v Speaker 2>be absolutely on fire now. I say that, I think

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<v Speaker 2>super insightful. I love the point you're making. I say

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<v Speaker 2>that as an individual who's running a portfolio here under

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<v Speaker 2>Island Capital, we are actually up thirty eight percent year

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<v Speaker 2>to date as of this minute. I've been ahead of

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<v Speaker 2>this and I'm really happy being short or long.

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<v Speaker 3>For me, I don't care which way the market goes.

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<v Speaker 2>My model doesn't care, which is kind of why I'm

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<v Speaker 2>a technician and a CMT, and I like to look

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<v Speaker 2>at my models, my signals. I can basically work in

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<v Speaker 2>a vacuum and the price and price action, along with

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<v Speaker 2>trend and momentum, will tell me what's going on. I

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<v Speaker 2>know if the news is good or bet or if

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<v Speaker 2>the market looks at it as good or bad.

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<v Speaker 1>Are you significantly into gold? I have.

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<v Speaker 2>Gold is one of my five main areas or sectors

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<v Speaker 2>of investment.

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<v Speaker 1>Yes, it's good because that has really gone way up.

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<v Speaker 3>It has it has.

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<v Speaker 2>I actually had a call out in gold to just

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<v Speaker 2>be perfectly upfront on December twenty seventh, as gold was

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<v Speaker 2>breaking above twenty six hundred, I put out in my

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<v Speaker 2>morning note, which is typically just the S and P

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<v Speaker 2>five hundred. I keep it very simple. It's not my

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<v Speaker 2>full model or my full universe. Everyone watches the stock market,

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<v Speaker 2>so I write on the S and P five hundred.

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<v Speaker 2>I put out a strong buying gold and called for

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<v Speaker 2>three thousand. It's been an absolute charm of the contribution,

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<v Speaker 2>the attribution in the portfolio.

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<v Speaker 3>As far as gold goes, I can't complain about.

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<v Speaker 2>It has gone way beyond three thousand and way faster

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<v Speaker 2>than I expected. But it's kind of worked with negative

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<v Speaker 2>correlation to the market right as we've seen this fear really.

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<v Speaker 3>Flow into the market quickly.

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<v Speaker 2>With this massive draw down, we've seen a real rush

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<v Speaker 2>into gold and into not only individuals buying gold and

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<v Speaker 2>funds buying gold and retail buying gold, but more importantly,

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<v Speaker 2>the sovereigns have been all over the gold purchase and

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<v Speaker 2>chasing it up. So phenomenal move, and I think for

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<v Speaker 2>all intents and purposes, we could seek some consolidation lower

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<v Speaker 2>to the three thousand level, but I think it actually

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<v Speaker 2>has more room to go to the upside.

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<v Speaker 1>One of the things I did notice is that the

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<v Speaker 1>ten year treasury got to four point four to one percent,

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<v Speaker 1>which I think partly tells you how much challenge they

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<v Speaker 1>have in placing all the bonds. But how do you

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<v Speaker 1>interpret where the trail renoes are at and what the

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<v Speaker 1>federal reserves should be doing.

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<v Speaker 2>So the move in the treasuries is interesting. I'm not

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<v Speaker 2>sure whether it's a structural change in the debt market

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<v Speaker 2>or whether it was part of a bigger unwind of

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<v Speaker 2>what's called a basis trade in fixed income and in

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<v Speaker 2>the treasury. So the basis trade, essentially is you have

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<v Speaker 2>a trade which is trying to make money, and it's

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<v Speaker 2>a massively levered trade on Wall Street, and some of

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<v Speaker 2>the largest multistret funds are in the trade. Significantly, you

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<v Speaker 2>are essentially trading the basis of the ten year or

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<v Speaker 2>the bond versus the futures out on the curve, and

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<v Speaker 2>you're trying to make very little spread on a massive

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<v Speaker 2>amount of investment and that's where the leverage comes from,

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<v Speaker 2>and that's where the trade unwind becomes that important. We've

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<v Speaker 2>seen the tenuere now spike from four percent back up

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<v Speaker 2>towards four point four.

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<v Speaker 3>The investors that were in or the traders.

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<v Speaker 2>In that trade were long the bond and they were

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<v Speaker 2>shortening the curve out and trying to make that spread.

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<v Speaker 2>So now to unwind that trade, they need to sell

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<v Speaker 2>the bond. As they sell the bonds, that spikes yields

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<v Speaker 2>higher because there's an inverse relationship between price and yield.

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<v Speaker 2>So I think part of the spike we've seen back

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<v Speaker 2>up from four to four point four to four point

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<v Speaker 2>three today has been the unwind of that trade. I

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<v Speaker 2>think that that will settle back in and the ideas

0:12:19.440 --> 0:12:21.640
<v Speaker 2>it'll stay between four and four and a half percent,

0:12:21.760 --> 0:12:24.400
<v Speaker 2>I think it'll actually come in lower. I think with

0:12:24.520 --> 0:12:27.679
<v Speaker 2>a change in some regulations and a change in the

0:12:27.720 --> 0:12:31.440
<v Speaker 2>offering of the duration by the Treasury, I think that

0:12:31.480 --> 0:12:34.280
<v Speaker 2>we will probably get more demand into the ten year

0:12:34.640 --> 0:12:37.000
<v Speaker 2>and will pull that ten year yield down, which is

0:12:37.000 --> 0:12:39.839
<v Speaker 2>something that Secretary Besson has spoken about and I was

0:12:39.880 --> 0:12:42.280
<v Speaker 2>actually very happy to hear him speak about a month

0:12:42.400 --> 0:12:45.920
<v Speaker 2>or two ago closer to two months ago.

0:12:45.280 --> 0:12:47.080
<v Speaker 3>Because the real cost.

0:12:46.760 --> 0:12:50.520
<v Speaker 2>Of borrowing in this country is not correlated or directly

0:12:50.559 --> 0:12:53.520
<v Speaker 2>related to the FED and the FED funds rate. That's

0:12:53.559 --> 0:12:56.199
<v Speaker 2>the headline number. That's the thing that the stock market

0:12:56.240 --> 0:12:59.160
<v Speaker 2>is constantly chasing, and the FED has been very happy

0:12:59.160 --> 0:13:02.480
<v Speaker 2>to be somewhat artificially supportive of the market, and which

0:13:02.559 --> 0:13:06.800
<v Speaker 2>is not their role. The tenure yield will determine more

0:13:06.840 --> 0:13:10.400
<v Speaker 2>directly the cost of the thirty year fixed the cost

0:13:10.440 --> 0:13:12.600
<v Speaker 2>of a car loan, what you pay on your credit

0:13:12.640 --> 0:13:14.800
<v Speaker 2>card bills, what you can go and get a loan

0:13:14.840 --> 0:13:17.160
<v Speaker 2>at the bank, a personal loan at So this is

0:13:17.240 --> 0:13:18.680
<v Speaker 2>really should be the focus.

0:13:18.720 --> 0:13:19.440
<v Speaker 3>In my opinion.

0:13:19.800 --> 0:13:22.920
<v Speaker 2>Secretary Besson is the first Treasury secretary of the first

0:13:23.559 --> 0:13:26.920
<v Speaker 2>member of any administration to speak about the tenure yield

0:13:27.320 --> 0:13:31.480
<v Speaker 2>in realistic terms versus the FED funds rate. So I

0:13:31.520 --> 0:13:33.800
<v Speaker 2>think that the tenure yield will come in. I think

0:13:33.840 --> 0:13:36.720
<v Speaker 2>there will be more support for the bonds, and I think,

0:13:36.920 --> 0:13:39.120
<v Speaker 2>in my view, we'll see the tenure yield closer to

0:13:39.160 --> 0:13:42.240
<v Speaker 2>three and a half percent, which will be beneficial for

0:13:42.360 --> 0:13:45.960
<v Speaker 2>everyone as far as economic growth, and also benefit the

0:13:46.040 --> 0:13:48.880
<v Speaker 2>refinancing of debt for the government, which is a major

0:13:48.920 --> 0:13:51.960
<v Speaker 2>issue the FED right now, if you'd like me to

0:13:52.160 --> 0:13:54.760
<v Speaker 2>kind of shift gears and go to the FED, I'm

0:13:54.760 --> 0:13:57.880
<v Speaker 2>not happy with and I've been vocal for whoever's listening

0:13:57.880 --> 0:14:01.080
<v Speaker 2>with mister Powell. The idea of him being independent or

0:14:01.120 --> 0:14:04.000
<v Speaker 2>not independent, or an independent FED or not an independent

0:14:04.000 --> 0:14:06.480
<v Speaker 2>FED has nothing to do with President Trump. I think

0:14:06.600 --> 0:14:10.120
<v Speaker 2>mister Powell has shown himself to be very politicized and

0:14:10.240 --> 0:14:13.640
<v Speaker 2>very biased. He has not performed well in his role.

0:14:13.800 --> 0:14:16.480
<v Speaker 2>And I can go back to twenty eighteen and speak

0:14:16.520 --> 0:14:19.400
<v Speaker 2>about some of his rate decisions and asset purchasing decisions,

0:14:19.440 --> 0:14:24.239
<v Speaker 2>balance sheet decisions which have been very questionable, but most pointedly,

0:14:24.760 --> 0:14:27.720
<v Speaker 2>to cut rates by fifty basis points, which was almost

0:14:27.760 --> 0:14:31.840
<v Speaker 2>an emergency measure in September heading into an election, and

0:14:31.880 --> 0:14:35.000
<v Speaker 2>then two more cuts of twenty five basis points was

0:14:35.200 --> 0:14:38.000
<v Speaker 2>clearly political. There was no reason to do that for

0:14:38.120 --> 0:14:41.840
<v Speaker 2>a FED that's quote unquote data dependent. We saw a

0:14:41.960 --> 0:14:46.160
<v Speaker 2>chair that was really making decisions that was a contrary

0:14:46.200 --> 0:14:49.280
<v Speaker 2>to what a lot of members of the committee were saying,

0:14:49.960 --> 0:14:53.360
<v Speaker 2>and b made no sense. And now that President Trump

0:14:53.400 --> 0:14:56.480
<v Speaker 2>is in office, he came out on the sixteenth and

0:14:56.520 --> 0:14:58.880
<v Speaker 2>said he is not supportive of rate cuts. They don't

0:14:58.920 --> 0:15:01.440
<v Speaker 2>see any issues there on their hands. They have nothing

0:15:01.440 --> 0:15:07.520
<v Speaker 2>to do like his view and his actions are so

0:15:08.000 --> 0:15:13.920
<v Speaker 2>illogical and so badly timed that the idea that he's

0:15:14.000 --> 0:15:17.280
<v Speaker 2>not political or should still be in that role is

0:15:17.320 --> 0:15:20.240
<v Speaker 2>actually crazy to me, To be perfectly honest, in.

0:15:20.200 --> 0:15:22.840
<v Speaker 1>The old days, the job of the Fed was to

0:15:22.840 --> 0:15:26.600
<v Speaker 1>protect the dollar. We then passed the Humphrey Hawkins Bill,

0:15:27.040 --> 0:15:28.640
<v Speaker 1>which said, oh, and they also was supposed to worry

0:15:28.640 --> 0:15:33.120
<v Speaker 1>about unemployment, which I think made them schizophrenic. And I

0:15:33.120 --> 0:15:35.360
<v Speaker 1>think we'd be much better off to go back and say,

0:15:35.760 --> 0:15:38.000
<v Speaker 1>your number one job is to create a stable dollar

0:15:38.520 --> 0:15:41.520
<v Speaker 1>and to take the steps necessary so that if I

0:15:41.560 --> 0:15:43.920
<v Speaker 1>have a dollar this year, it'll be worth a dollar

0:15:43.960 --> 0:15:46.960
<v Speaker 1>in ten years, and that would be a very dramatic

0:15:47.040 --> 0:15:48.040
<v Speaker 1>change from where we've been.

0:15:48.280 --> 0:15:50.280
<v Speaker 2>I agree with that, and I think that they are

0:15:50.320 --> 0:15:54.080
<v Speaker 2>a major piece of that puzzle. I think that the Treasury,

0:15:54.280 --> 0:15:57.720
<v Speaker 2>the amount of debt that was created under again Janet

0:15:57.800 --> 0:16:02.520
<v Speaker 2>Yellen's watch, where Powell was completely silent. He had nothing

0:16:02.560 --> 0:16:05.360
<v Speaker 2>to say about it, and in fact he said when asked,

0:16:05.400 --> 0:16:08.200
<v Speaker 2>I don't comment on fiscal policy. Well, that stance has

0:16:08.240 --> 0:16:11.000
<v Speaker 2>now changed since the administration has changed, but we'll leave

0:16:11.040 --> 0:16:15.280
<v Speaker 2>that be for him to watch Janet Yellen create upwards

0:16:15.320 --> 0:16:19.000
<v Speaker 2>of sixteen trillion dollars in debt under her watch and

0:16:19.080 --> 0:16:22.720
<v Speaker 2>not have any idea where inflation came from, and then

0:16:22.960 --> 0:16:25.840
<v Speaker 2>say as President Trump takes office, oh, I know where

0:16:25.880 --> 0:16:28.720
<v Speaker 2>inflation comes from. Now it's President Trump and the tariffs.

0:16:28.720 --> 0:16:31.400
<v Speaker 2>This is the problem. As Janet Yellen waved on the

0:16:31.440 --> 0:16:33.320
<v Speaker 2>way out the door and said, hey, you guys might

0:16:33.320 --> 0:16:36.280
<v Speaker 2>have a debt issue like these are the things that

0:16:36.360 --> 0:16:39.720
<v Speaker 2>make me laugh. I think the FED would be better served, yes,

0:16:40.080 --> 0:16:43.720
<v Speaker 2>focusing on price stability, and the idea would be that

0:16:43.760 --> 0:16:48.040
<v Speaker 2>with price stability, employment will follow. The system does work,

0:16:48.480 --> 0:16:52.240
<v Speaker 2>the ecosystem works. I think the FED is confused in

0:16:52.640 --> 0:16:56.480
<v Speaker 2>their role overall and how to accomplish their goal. And

0:16:56.600 --> 0:16:59.160
<v Speaker 2>I would add to that, mister speaker, that when I

0:16:59.280 --> 0:17:03.520
<v Speaker 2>listened to mister Powell and miss Yellen speak about the

0:17:03.640 --> 0:17:08.520
<v Speaker 2>environment the ozone equity in their deliveries, not that those

0:17:08.560 --> 0:17:10.920
<v Speaker 2>things are are not important to me. I won't get

0:17:10.920 --> 0:17:13.640
<v Speaker 2>into that, but it's not part of your mandate. This

0:17:13.720 --> 0:17:16.240
<v Speaker 2>is not the ball that you need your eye on.

0:17:16.720 --> 0:17:19.159
<v Speaker 2>I think they really have lost their way. So a

0:17:19.200 --> 0:17:22.840
<v Speaker 2>Secretary Bessett now at the Treasury is a great change

0:17:22.840 --> 0:17:25.960
<v Speaker 2>of pace. I think that the FED, to your point,

0:17:25.960 --> 0:17:28.840
<v Speaker 2>would be well served to focus on price stability and

0:17:28.880 --> 0:17:29.240
<v Speaker 2>the dollar.

0:17:29.800 --> 0:17:33.840
<v Speaker 1>I think Bessett is far and away both the most

0:17:33.920 --> 0:17:38.360
<v Speaker 1>technically competent and the most stable member of Trump's team,

0:17:38.400 --> 0:17:41.440
<v Speaker 1>and I think that he probably will carry us through

0:17:42.000 --> 0:17:46.119
<v Speaker 1>all the tariff negotiations and all the challenges with remarkable skill.

0:17:46.359 --> 0:17:48.520
<v Speaker 1>He strikes me as a very, very competent person.

0:17:48.920 --> 0:17:49.639
<v Speaker 3>There's no question.

0:17:49.680 --> 0:17:54.280
<v Speaker 2>I've actually referred to him often, most recently with poise.

0:17:54.760 --> 0:17:57.480
<v Speaker 2>I'm from his world, and I understand what he's trying

0:17:57.480 --> 0:18:00.240
<v Speaker 2>to accomplish and how he's trying to accomplish. Its a

0:18:00.280 --> 0:18:04.240
<v Speaker 2>massive amount of knowledge, and he has superb poise, which

0:18:04.280 --> 0:18:07.440
<v Speaker 2>is something that we've been missing certainly in the last administration.

0:18:07.560 --> 0:18:10.280
<v Speaker 3>I mean, called a free for all is probably kind.

0:18:10.760 --> 0:18:14.040
<v Speaker 2>His poise and his expertise are just exactly what we

0:18:14.119 --> 0:18:21.879
<v Speaker 2>need here, and I'm very very happy.

0:18:32.240 --> 0:18:36.399
<v Speaker 1>The big bold challenge of all this is the effort

0:18:36.480 --> 0:18:38.800
<v Speaker 1>on tariff's what's your reading on that?

0:18:39.600 --> 0:18:43.000
<v Speaker 2>So the broad stroke for me on tariffs is it

0:18:43.080 --> 0:18:47.560
<v Speaker 2>is a conversation well overdue. We have a massive trade

0:18:47.600 --> 0:18:50.399
<v Speaker 2>deficit issue, and I think that's more the issue than

0:18:50.440 --> 0:18:52.119
<v Speaker 2>the actual tariff conversation.

0:18:52.720 --> 0:18:54.639
<v Speaker 3>I think it's a very difficult.

0:18:54.160 --> 0:18:56.960
<v Speaker 2>Problem to fix, as is any problem that's developed on

0:18:57.000 --> 0:19:01.800
<v Speaker 2>a global stage over decades. But I think that all

0:19:01.840 --> 0:19:04.560
<v Speaker 2>of the efforts being put forth by the Trump administration

0:19:04.840 --> 0:19:08.439
<v Speaker 2>are certainly well thought out and well planned, regardless of

0:19:08.480 --> 0:19:11.439
<v Speaker 2>how they appear, and we'll put the United States in

0:19:11.440 --> 0:19:14.840
<v Speaker 2>a better position as we move through the resolution. I

0:19:14.840 --> 0:19:18.320
<v Speaker 2>don't know exactly what the tariff rates become, but I

0:19:18.400 --> 0:19:21.360
<v Speaker 2>do know that with our trade deficit at negative three

0:19:21.359 --> 0:19:24.879
<v Speaker 2>to four percent of GDP, what we're essentially doing and

0:19:25.119 --> 0:19:28.800
<v Speaker 2>have continued to do, is we've transferred our economy from

0:19:28.880 --> 0:19:33.080
<v Speaker 2>a manufacturing economy to a consumption economy, and by doing that,

0:19:33.480 --> 0:19:38.040
<v Speaker 2>we're sending US dollars overseas. So that trade deficit is important.

0:19:38.200 --> 0:19:40.240
<v Speaker 2>It's not that it's not important, and we're part of

0:19:40.280 --> 0:19:44.200
<v Speaker 2>this beautiful global world trade organization where we're all happy

0:19:44.200 --> 0:19:44.760
<v Speaker 2>and healthy.

0:19:45.119 --> 0:19:46.440
<v Speaker 3>When you send.

0:19:46.280 --> 0:19:52.240
<v Speaker 2>Dollars overseas, you're basically handing over our wealth to foreign nations.

0:19:52.359 --> 0:19:56.119
<v Speaker 2>You're giving them investment funds in the United States for

0:19:56.200 --> 0:19:59.720
<v Speaker 2>them to come back and buy us assets, whether those

0:19:59.720 --> 0:20:03.080
<v Speaker 2>are art assets in real estate, whether those are treasuries,

0:20:03.119 --> 0:20:05.919
<v Speaker 2>whether that's interest in our stock markets or our companies.

0:20:06.480 --> 0:20:09.960
<v Speaker 2>We are essentially transferring wealth away at a rate that's

0:20:10.000 --> 0:20:12.720
<v Speaker 2>not healthy. A three to four percent of GDP trade

0:20:12.720 --> 0:20:14.960
<v Speaker 2>deficit is not where we want to be, and we

0:20:15.040 --> 0:20:19.240
<v Speaker 2>don't want to be purely a consumption economy. If we

0:20:19.240 --> 0:20:21.639
<v Speaker 2>look at China on the other hand, which is really

0:20:21.840 --> 0:20:25.919
<v Speaker 2>a manufacturing economy and not a consumption they're not consuming

0:20:26.119 --> 0:20:29.600
<v Speaker 2>nearly what they manufacture and send out. I think the

0:20:29.640 --> 0:20:33.040
<v Speaker 2>point to the entire trade deficit tariff conversation brings us

0:20:33.080 --> 0:20:36.640
<v Speaker 2>to a place where we're reducing our trade deficit. We're

0:20:36.720 --> 0:20:40.320
<v Speaker 2>raining US dollars back into the country, and to your point,

0:20:40.440 --> 0:20:43.919
<v Speaker 2>mister speaker, strengthens the dollar. We don't want a slush

0:20:43.960 --> 0:20:47.680
<v Speaker 2>of dollars out across the globe or within the domestic

0:20:47.800 --> 0:20:50.760
<v Speaker 2>United States. That's not healthy for the dollar. That doesn't

0:20:50.800 --> 0:20:53.640
<v Speaker 2>create a stronger dollar, creates a weeker dollar. We want

0:20:53.640 --> 0:20:56.240
<v Speaker 2>to rain dollars in, and we like a country like

0:20:56.359 --> 0:21:00.600
<v Speaker 2>China to balance their economy with ours if they become

0:21:00.640 --> 0:21:03.920
<v Speaker 2>a little bit more of a consumer and reduce manufacturing,

0:21:03.960 --> 0:21:07.040
<v Speaker 2>because we've now on short manufacturing and we become a

0:21:07.080 --> 0:21:10.080
<v Speaker 2>little bit more manufacturing, which is where we should be

0:21:10.240 --> 0:21:13.280
<v Speaker 2>and what we are good at, we are the best.

0:21:14.080 --> 0:21:17.080
<v Speaker 2>That starts to create more of a balance. And I

0:21:17.080 --> 0:21:19.639
<v Speaker 2>would say that if not to pick on China, but

0:21:19.640 --> 0:21:23.040
<v Speaker 2>if countries like China abided by the rules of the

0:21:23.160 --> 0:21:26.040
<v Speaker 2>WTO and actually played a fair game as far as

0:21:26.080 --> 0:21:30.320
<v Speaker 2>intellectual property, as far as barriers, we would be globally

0:21:30.440 --> 0:21:34.160
<v Speaker 2>in a better place. I think that not only globally

0:21:34.240 --> 0:21:36.760
<v Speaker 2>in a better place, but the United States would be

0:21:36.800 --> 0:21:38.840
<v Speaker 2>in a stronger, better place, which is the goal of

0:21:38.880 --> 0:21:42.000
<v Speaker 2>the administration and the goal of the conversation. It's not

0:21:42.160 --> 0:21:48.600
<v Speaker 2>a random argument, it's not random numbers. The tariff conversation

0:21:48.760 --> 0:21:51.879
<v Speaker 2>and the trade def as a conversation for President Trump

0:21:51.920 --> 0:21:54.639
<v Speaker 2>is something he's been talking about for forty years, and

0:21:54.680 --> 0:21:57.359
<v Speaker 2>it's part of a bigger puzzle, and it's part of

0:21:57.359 --> 0:22:01.000
<v Speaker 2>a solution to a bigger problem which ties right back

0:22:01.000 --> 0:22:06.919
<v Speaker 2>into fiscal policy, monetary policy. What our manufacturing levels are,

0:22:06.920 --> 0:22:11.120
<v Speaker 2>our consumptions levels are, the strength of the dollar, inflationary pressures,

0:22:11.119 --> 0:22:13.720
<v Speaker 2>They're all connected. I think the conversation is a hard one,

0:22:14.119 --> 0:22:15.800
<v Speaker 2>but one that we need to have, and we need

0:22:15.840 --> 0:22:20.119
<v Speaker 2>to work through this process to become truly strong and

0:22:20.160 --> 0:22:22.480
<v Speaker 2>truly better and see real growth here once again.

0:22:23.040 --> 0:22:25.920
<v Speaker 1>As it struck you that we're seeing a lot more

0:22:26.000 --> 0:22:31.680
<v Speaker 1>coverage of tariffs and almost no coverage of the scale

0:22:31.720 --> 0:22:35.640
<v Speaker 1>of the announced investments. There are two Swiss pharmaceutical companies

0:22:35.960 --> 0:22:40.199
<v Speaker 1>between them have announced ninety billion dollars in investments in

0:22:40.240 --> 0:22:42.800
<v Speaker 1>the US, just those two companies, And every time you

0:22:42.880 --> 0:22:45.800
<v Speaker 1>turn around there's either an auto company or there's in

0:22:45.920 --> 0:22:48.919
<v Speaker 1>videos now putting hundreds of billions in. It seems to

0:22:48.960 --> 0:22:52.359
<v Speaker 1>me that that in the long run may actually be

0:22:52.440 --> 0:22:53.920
<v Speaker 1>a bigger story than the tariffs.

0:22:54.840 --> 0:22:58.640
<v Speaker 2>I absolutely agree with that, and definitely in the long run. Right,

0:22:58.680 --> 0:23:01.160
<v Speaker 2>So this is what we were talking about before, where

0:23:01.200 --> 0:23:05.879
<v Speaker 2>the pain of fixing our trade deals and fixing the

0:23:05.880 --> 0:23:09.719
<v Speaker 2>policies that were in place prior will end. But then

0:23:09.760 --> 0:23:12.480
<v Speaker 2>we're going to see this massive spike in real growth

0:23:12.600 --> 0:23:15.560
<v Speaker 2>in this economy, in real growth in the market. It

0:23:15.600 --> 0:23:19.320
<v Speaker 2>does not surprise me that the focus has been on

0:23:20.160 --> 0:23:23.000
<v Speaker 2>the negatives of tariffs. It does not surprise me that

0:23:23.040 --> 0:23:26.200
<v Speaker 2>there's a pylon the idea that there are so many

0:23:26.320 --> 0:23:31.040
<v Speaker 2>in the world, but more specifically in this country, that

0:23:31.080 --> 0:23:34.760
<v Speaker 2>would rather see the negative headline and a failure on

0:23:34.800 --> 0:23:38.119
<v Speaker 2>the part of the Trump administration rather than see the

0:23:38.160 --> 0:23:41.840
<v Speaker 2>Trump administration because of the fact that it's President Trump's

0:23:41.880 --> 0:23:45.760
<v Speaker 2>administration succeed is a said commentary on where we stand

0:23:45.760 --> 0:23:49.600
<v Speaker 2>as a nation. If this were flipped and it was

0:23:49.880 --> 0:23:54.480
<v Speaker 2>the Harris administration creating all this turmoil, but working towards

0:23:54.520 --> 0:23:57.880
<v Speaker 2>what they say is a better economy and more productive

0:23:57.920 --> 0:24:01.119
<v Speaker 2>growth and fairer trade deals, we would see complaints, but

0:24:01.200 --> 0:24:04.400
<v Speaker 2>we would not be seeing such lopsided reporting on what's

0:24:04.440 --> 0:24:08.080
<v Speaker 2>going on. Again, there's a bigger picture here, and I

0:24:08.160 --> 0:24:10.840
<v Speaker 2>give President Trump a lot of credit for ignoring a

0:24:10.880 --> 0:24:13.040
<v Speaker 2>lot of the noise and grinding through, because at the

0:24:13.080 --> 0:24:17.920
<v Speaker 2>end of the day, they are reporting negatively on everything

0:24:17.960 --> 0:24:19.520
<v Speaker 2>that's going on, and we don't.

0:24:19.320 --> 0:24:21.359
<v Speaker 3>See the positive reports that are there.

0:24:21.760 --> 0:24:24.040
<v Speaker 2>What will end up nipping them in the butt, as

0:24:24.040 --> 0:24:27.600
<v Speaker 2>it always does, is when the tide goes out and

0:24:27.640 --> 0:24:30.240
<v Speaker 2>we see what's really there, we will be in a

0:24:30.240 --> 0:24:33.440
<v Speaker 2>better position. GDP growth will be stronger, the dollar will

0:24:33.480 --> 0:24:37.439
<v Speaker 2>be stronger, the markets will be healthier, and employment numbers

0:24:37.440 --> 0:24:40.240
<v Speaker 2>will be better. And this is why the country voted

0:24:40.240 --> 0:24:42.919
<v Speaker 2>for President Trump and brought him back into office. The

0:24:42.960 --> 0:24:45.679
<v Speaker 2>negative reporting, I can go one further for you. The

0:24:45.680 --> 0:24:50.680
<v Speaker 2>negative reporting just on Tesla's earnings alone was absolutely insane,

0:24:51.280 --> 0:24:54.080
<v Speaker 2>even from Wall Street analysts calling for the company. Now,

0:24:54.280 --> 0:24:56.560
<v Speaker 2>all of a sudden, Tesla is they're in a make

0:24:56.640 --> 0:24:59.560
<v Speaker 2>or break spot. There are red flags everywhere. This is

0:24:59.600 --> 0:25:02.600
<v Speaker 2>a reb old story, a rebuilt story. This is a

0:25:02.640 --> 0:25:05.639
<v Speaker 2>company that made nineteen billion dollars in the first quarter.

0:25:06.240 --> 0:25:09.240
<v Speaker 2>This is a company they're the only fully US made

0:25:09.240 --> 0:25:13.199
<v Speaker 2>car company in the world. Premiere technology, premiere electric vehicle.

0:25:13.480 --> 0:25:16.240
<v Speaker 2>Five years ago, Elon Musk was going to put civilization

0:25:16.359 --> 0:25:19.920
<v Speaker 2>on Mars. He was the darling of the left and

0:25:19.960 --> 0:25:22.120
<v Speaker 2>then came out and said, hey, I believe in free speech,

0:25:22.440 --> 0:25:25.760
<v Speaker 2>I believe in the Constitution, I believe in a strong border,

0:25:26.320 --> 0:25:28.800
<v Speaker 2>and I'm a patriot, And all of a sudden he

0:25:28.880 --> 0:25:32.920
<v Speaker 2>became the red headed stepchild. So even there, the negative

0:25:33.000 --> 0:25:37.280
<v Speaker 2>coverage of Tesla by analysts that have had buy and

0:25:37.359 --> 0:25:40.800
<v Speaker 2>outperform ratings for five years on the stock was so

0:25:40.920 --> 0:25:43.639
<v Speaker 2>biased and so transparent it's illogical.

0:25:43.680 --> 0:25:45.439
<v Speaker 3>I just don't know what to say about it anymore.

0:25:45.440 --> 0:25:46.359
<v Speaker 3>It's just noise.

0:25:46.920 --> 0:25:49.359
<v Speaker 2>Doesn't surprise me that they want everything to look bad.

0:25:49.720 --> 0:25:51.720
<v Speaker 2>But at the end of the day, President Trump, the

0:25:51.720 --> 0:25:53.280
<v Speaker 2>administration of doing the right things.

0:25:53.720 --> 0:25:56.960
<v Speaker 1>What struck me watching Tesla over the years, is Tesla's

0:25:57.040 --> 0:26:02.760
<v Speaker 1>actually an information company with because the sheer volume of

0:26:02.840 --> 0:26:06.760
<v Speaker 1>data they're generating is so enormous that as you get

0:26:06.800 --> 0:26:11.440
<v Speaker 1>into artificial intelligence and you're looking for databases on which

0:26:11.480 --> 0:26:15.240
<v Speaker 1>your new artificial intelligence can train itself, Testa is going

0:26:15.280 --> 0:26:18.280
<v Speaker 1>to have an enormous advantage and just the sheer volume

0:26:18.520 --> 0:26:21.720
<v Speaker 1>of real data about the real world because their data

0:26:21.760 --> 0:26:23.879
<v Speaker 1>is not just theoretical. I don't know if that fits

0:26:23.880 --> 0:26:25.919
<v Speaker 1>at all your vision. I think of them as a

0:26:26.200 --> 0:26:29.200
<v Speaker 1>very interesting and very different long term play.

0:26:30.000 --> 0:26:31.800
<v Speaker 2>I agree with you one hundred percent, and I think

0:26:31.840 --> 0:26:33.879
<v Speaker 2>that's a great view and another angle to look at

0:26:33.880 --> 0:26:36.600
<v Speaker 2>the company. I mean not only an information company, as

0:26:36.600 --> 0:26:38.800
<v Speaker 2>you said, or a data company. But you're looking at

0:26:38.840 --> 0:26:43.720
<v Speaker 2>the battery technology, You're looking at reusable renewable technology. Now,

0:26:43.720 --> 0:26:46.800
<v Speaker 2>you're looking at AI robotics. Like the company is just

0:26:47.560 --> 0:26:48.600
<v Speaker 2>beyond exceptional.

0:26:48.640 --> 0:26:48.840
<v Speaker 3>Now.

0:26:48.920 --> 0:26:51.679
<v Speaker 2>I don't invest here in individual names. I'm in the

0:26:51.680 --> 0:26:55.439
<v Speaker 2>future space and I am macro top down, but I

0:26:55.480 --> 0:26:59.320
<v Speaker 2>would say that Tesla as the street has turned negative

0:26:59.359 --> 0:27:03.399
<v Speaker 2>and had been pressing the name for clearly political issues,

0:27:03.400 --> 0:27:06.240
<v Speaker 2>which is insane to me. I think Tesla right now

0:27:06.320 --> 0:27:09.600
<v Speaker 2>is probably at one of the most attractive levels. It's

0:27:09.640 --> 0:27:13.080
<v Speaker 2>a very attractive entry level for the name, and ironically

0:27:13.480 --> 0:27:16.040
<v Speaker 2>it's when the street has turned and is calling the name,

0:27:16.119 --> 0:27:18.520
<v Speaker 2>you know, on the brink of extinction. It's just insane

0:27:18.560 --> 0:27:20.760
<v Speaker 2>to me. But the company has a lot going for it.

0:27:20.840 --> 0:27:25.560
<v Speaker 2>And look Elon Musk, he's so highly functioning that this

0:27:25.680 --> 0:27:27.880
<v Speaker 2>whole play was to pull him from Doge.

0:27:28.280 --> 0:27:30.639
<v Speaker 3>They wanted him out because they feel like he is

0:27:30.800 --> 0:27:31.520
<v Speaker 3>the tip of the.

0:27:31.480 --> 0:27:35.920
<v Speaker 2>Spear in uncovering the waste, fraud and abuse. So maybe

0:27:35.920 --> 0:27:38.280
<v Speaker 2>they accomplish their goals. As he announced it in the

0:27:38.320 --> 0:27:41.359
<v Speaker 2>earnings culture as of May, he would be stepping back.

0:27:41.720 --> 0:27:43.760
<v Speaker 2>I think he leaves a capable team in place, and

0:27:43.800 --> 0:27:47.240
<v Speaker 2>I think that that's irrelevant. The company, yes, to your point,

0:27:47.359 --> 0:27:51.439
<v Speaker 2>is multifaceted. There's a ton there, led by one of

0:27:51.440 --> 0:27:52.960
<v Speaker 2>the all time geniuses in history.

0:27:53.080 --> 0:27:54.680
<v Speaker 3>You can't really argue that point.

0:27:54.920 --> 0:27:59.479
<v Speaker 1>People don't notice. But SpaceX continues to grow and evolve,

0:28:00.119 --> 0:28:04.160
<v Speaker 1>Starlink continues to grow and become more profitable. Neuralink may

0:28:04.200 --> 0:28:07.159
<v Speaker 1>have breakthroughs that are extraordinary within the next year. I

0:28:07.200 --> 0:28:10.119
<v Speaker 1>tell people he's sort of a cross between Henry Ford

0:28:10.119 --> 0:28:12.919
<v Speaker 1>and Thomas Edison. I mean, the sheer scale of his

0:28:13.359 --> 0:28:16.919
<v Speaker 1>ability to think things through is really pretty bizarre. You

0:28:16.960 --> 0:28:19.480
<v Speaker 1>don't see these things more than once or twice in

0:28:19.520 --> 0:28:20.160
<v Speaker 1>a century.

0:28:20.560 --> 0:28:20.919
<v Speaker 3>Agreed.

0:28:21.119 --> 0:28:23.840
<v Speaker 2>I love the fact to that point exactly, that the

0:28:24.160 --> 0:28:27.280
<v Speaker 2>analysts are saying, well, he's taking too much time on Doge,

0:28:27.520 --> 0:28:29.159
<v Speaker 2>he's not paying attention to Tesla.

0:28:29.480 --> 0:28:33.879
<v Speaker 3>He's running five five massive companies. No one has a

0:28:33.880 --> 0:28:34.560
<v Speaker 3>problem with it.

0:28:34.880 --> 0:28:38.160
<v Speaker 2>But he steps into Doge and he's working with President Trump.

0:28:38.160 --> 0:28:40.200
<v Speaker 2>All of a sudden, he can't do that. That one

0:28:40.240 --> 0:28:41.960
<v Speaker 2>ship was one too many on the board. He's not

0:28:41.960 --> 0:28:42.840
<v Speaker 2>going to be able to handle this.

0:28:43.560 --> 0:28:46.360
<v Speaker 1>In general, what are you telling your clients about the

0:28:46.400 --> 0:28:47.280
<v Speaker 1>markets right now?

0:28:47.920 --> 0:28:52.160
<v Speaker 2>My clients understand that my view for the intermediate term

0:28:52.200 --> 0:28:55.200
<v Speaker 2>and longer term here is that we have lower lows

0:28:55.240 --> 0:28:58.080
<v Speaker 2>to make before we recover and start to move higher

0:28:58.120 --> 0:29:02.200
<v Speaker 2>from our previous peak. With that said, my technical model

0:29:02.280 --> 0:29:04.520
<v Speaker 2>is giving me a positive, a neutral, or a negative

0:29:04.600 --> 0:29:07.240
<v Speaker 2>on all of my asset classes in the universe. The

0:29:07.920 --> 0:29:11.800
<v Speaker 2>investors know that we may not be participating on these

0:29:12.000 --> 0:29:15.880
<v Speaker 2>rallies as we're seeing today, but I am more inclined

0:29:15.920 --> 0:29:19.640
<v Speaker 2>to be selling my negative calls because that's the greater.

0:29:19.480 --> 0:29:22.200
<v Speaker 3>Move for me. These moves will reverse quickly.

0:29:22.240 --> 0:29:24.920
<v Speaker 2>For as aggressive and attractive as they are, they will

0:29:24.960 --> 0:29:28.360
<v Speaker 2>reverse quickly to the downside. So they understand that we

0:29:28.440 --> 0:29:32.280
<v Speaker 2>are basically playing the market flat to short until our

0:29:32.320 --> 0:29:35.520
<v Speaker 2>downside targets are achieved, and then we'll start to play

0:29:35.560 --> 0:29:38.120
<v Speaker 2>the market on the recovery. And again with that v

0:29:38.240 --> 0:29:41.200
<v Speaker 2>spiked recovery, where those investments are now acknowledged and starting

0:29:41.240 --> 0:29:43.600
<v Speaker 2>to take hold, I'll start to turn and I'll see

0:29:43.640 --> 0:29:46.960
<v Speaker 2>my intermediate and long term signals start to flatten out

0:29:47.000 --> 0:29:49.600
<v Speaker 2>and become more bullish, and then I can start playing

0:29:49.640 --> 0:29:52.880
<v Speaker 2>the daily trades higher. I've been playing the market flat

0:29:52.920 --> 0:29:55.960
<v Speaker 2>to short since December, and I can tell you that

0:29:56.240 --> 0:29:58.920
<v Speaker 2>for the year to date, we're up going on forty

0:29:58.960 --> 0:30:02.719
<v Speaker 2>percent now, So the investors are happy. I'm happy, and

0:30:02.800 --> 0:30:04.760
<v Speaker 2>I think that there's a way to make money in

0:30:04.800 --> 0:30:07.280
<v Speaker 2>both directions as long as you can look at the

0:30:07.320 --> 0:30:10.720
<v Speaker 2>market objectively and have a process that works, which thankfully

0:30:10.760 --> 0:30:14.440
<v Speaker 2>I do. The problem that investors run into and funds

0:30:14.480 --> 0:30:17.719
<v Speaker 2>run into is they're trying to manage on a fundamental

0:30:17.760 --> 0:30:20.760
<v Speaker 2>model which is broken, so then they grasp at straws

0:30:20.760 --> 0:30:23.360
<v Speaker 2>because there is no earnings growth. You don't know what

0:30:23.440 --> 0:30:25.040
<v Speaker 2>the numbers are going to be. You don't know what

0:30:25.080 --> 0:30:29.040
<v Speaker 2>the guidances and the model falls apart. So for me,

0:30:29.800 --> 0:30:33.480
<v Speaker 2>investors understand right now, I am neutral to varish. I'm

0:30:33.480 --> 0:30:36.120
<v Speaker 2>not chasing these rallies. I'm a seller of these rallies.

0:30:36.560 --> 0:30:39.080
<v Speaker 2>But when my model tells me, Okay, the dust is

0:30:39.120 --> 0:30:41.960
<v Speaker 2>cleared and we've bottomed, and I may be in a

0:30:42.040 --> 0:30:44.400
<v Speaker 2>month to a quarter behind that, I may not jump

0:30:44.400 --> 0:30:47.440
<v Speaker 2>in as soon as there's a turn. But they realize

0:30:47.480 --> 0:30:50.240
<v Speaker 2>they'll start to see on the monthly quarterly statements to

0:30:50.400 --> 0:30:53.760
<v Speaker 2>long exposure as this thing bottoms out and my model's

0:30:53.760 --> 0:30:56.480
<v Speaker 2>telling me it's time to start to take some long exposure.

0:30:56.920 --> 0:30:59.920
<v Speaker 1>You're certainly very smart and you certainly know a man

0:31:00.200 --> 0:31:04.720
<v Speaker 1>some mount about the economy. How can people get your newsletter?

0:31:05.640 --> 0:31:10.200
<v Speaker 2>So my newsletter is out at Islandcapitalinvestments dot com.

0:31:10.560 --> 0:31:11.640
<v Speaker 3>It's a free newsletter.

0:31:11.680 --> 0:31:15.240
<v Speaker 2>You can see all of my deck, my investment process,

0:31:15.800 --> 0:31:18.360
<v Speaker 2>and you can sign up for free for the newsletter there.

0:31:18.680 --> 0:31:24.120
<v Speaker 2>I'm also on exit at CMT Underscore Anthony, that's Charted

0:31:24.120 --> 0:31:27.719
<v Speaker 2>Market Technician Underscore Anthony. I have all of my media

0:31:27.760 --> 0:31:30.720
<v Speaker 2>out there. I have the podcast out there with Ejantoni

0:31:30.800 --> 0:31:34.840
<v Speaker 2>Policy and profits. The newsletters posted every morning and then

0:31:34.880 --> 0:31:37.000
<v Speaker 2>as I see something during the day, I may throw

0:31:37.040 --> 0:31:39.240
<v Speaker 2>something out just to give a heads up, but I'm

0:31:39.240 --> 0:31:42.560
<v Speaker 2>definitely out there. The information is free. I like to

0:31:42.600 --> 0:31:45.800
<v Speaker 2>share that information and be open with it. I'm actually,

0:31:46.120 --> 0:31:48.800
<v Speaker 2>mister Speaker going through a cap raise effort now and

0:31:48.880 --> 0:31:52.080
<v Speaker 2>a restructuring of the fund, so hopefully in the next

0:31:52.560 --> 0:31:55.360
<v Speaker 2>three to four months, I'll be launched in a different form,

0:31:55.400 --> 0:31:58.400
<v Speaker 2>potentially with a different name, but it'll all flow back

0:31:58.440 --> 0:32:02.120
<v Speaker 2>towards Island Capital Investments DO and at CMT Underscore.

0:32:02.160 --> 0:32:05.720
<v Speaker 1>Anthony, I must say this has been very impressive. I mean,

0:32:05.760 --> 0:32:09.960
<v Speaker 1>I really appreciate your knowledge of the market and your

0:32:10.000 --> 0:32:13.080
<v Speaker 1>candor and the model that you use. I want to

0:32:13.120 --> 0:32:15.960
<v Speaker 1>thank you for joining me. I do encourage our listeners

0:32:16.200 --> 0:32:20.040
<v Speaker 1>to check out your website at Islandcapitlinvestments dot com, which

0:32:20.040 --> 0:32:21.840
<v Speaker 1>I'll tell you flatly I am going to sign up

0:32:21.880 --> 0:32:25.480
<v Speaker 1>for this afternoon because I very much agree with your

0:32:25.520 --> 0:32:28.920
<v Speaker 1>general approach to the economy and thank you for joining us.

0:32:29.520 --> 0:32:31.400
<v Speaker 3>Thank you for having me as an absolute pleasure.

0:32:35.000 --> 0:32:37.760
<v Speaker 1>Thank you to my guest, Anthony Esposito. You can get

0:32:37.760 --> 0:32:41.719
<v Speaker 1>a link to his company website, Islandcapital investments on our

0:32:41.760 --> 0:32:45.560
<v Speaker 1>show page at newtsworld dot com. Newsworld is produced by

0:32:45.560 --> 0:32:50.120
<v Speaker 1>Gaglish three sixty and iHeartMedia. Our executive producer is Guarnsey Sloan.

0:32:50.680 --> 0:32:54.200
<v Speaker 1>Our researcher is Rachel Peterson. The artwork for the show

0:32:54.240 --> 0:32:57.440
<v Speaker 1>was created by Steve Penley. Special thanks to the team

0:32:57.440 --> 0:33:00.880
<v Speaker 1>at Ginglishtree sixty. If you've been enjoying new World, I

0:33:00.920 --> 0:33:03.640
<v Speaker 1>hope you'll go to Apple Podcast and both rate us

0:33:03.640 --> 0:33:06.960
<v Speaker 1>with five stars and give us a review so others

0:33:06.960 --> 0:33:10.160
<v Speaker 1>can learn what it's all about. Right now, listeners of

0:33:10.200 --> 0:33:14.280
<v Speaker 1>Newtsworld can sign up for my three free weekly columns

0:33:14.520 --> 0:33:18.840
<v Speaker 1>at gingrichree sixty dot com slash newsletter. I'm newt Gingrich.

0:33:19.200 --> 0:33:20.160
<v Speaker 1>This is Newtsworld.