1 00:00:09,880 --> 00:00:13,840 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jay Leye. 2 00:00:14,000 --> 00:00:17,560 Speaker 1: We bring you insight from the best in economics, finance, investment, 3 00:00:18,040 --> 00:00:23,560 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,640 --> 00:00:27,480 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg Join 5 00:00:27,680 --> 00:00:30,040 Speaker 1: us Now. Just had the briefing with pr about what 6 00:00:30,160 --> 00:00:33,199 Speaker 1: you can account talk about, John joins us now Alian's 7 00:00:33,240 --> 00:00:37,000 Speaker 1: Global Investors US investment strategist. I'll just ask you, what 8 00:00:37,080 --> 00:00:39,280 Speaker 1: can you possibly say about what happened last week so 9 00:00:39,320 --> 00:00:42,440 Speaker 1: I keep you out of trouble. Yeah, it's a great 10 00:00:42,520 --> 00:00:45,320 Speaker 1: question on a Monday morning. Look, it was fascinating to 11 00:00:45,360 --> 00:00:48,680 Speaker 1: watch about thirty billion dollars of market cap in a 12 00:00:48,800 --> 00:00:53,599 Speaker 1: fifty trillion dollar US stock market has created really a 13 00:00:53,600 --> 00:00:56,640 Speaker 1: lot of media and attention, and I think in fact 14 00:00:56,640 --> 00:00:58,480 Speaker 1: for some good reason. You know, we are living through 15 00:00:58,560 --> 00:01:01,160 Speaker 1: history here and if you uestions that come to mind 16 00:01:01,720 --> 00:01:04,320 Speaker 1: as we process all of all of these news around 17 00:01:04,360 --> 00:01:07,600 Speaker 1: stocks like game Stop, AMC, etcetera. UM one, you know 18 00:01:07,680 --> 00:01:11,320 Speaker 1: what really drives, uh, the value of an asset is 19 00:01:11,360 --> 00:01:14,000 Speaker 1: it it's fundamental value based on some sort of discount 20 00:01:14,040 --> 00:01:16,760 Speaker 1: of cash flow model or p multiple or is it 21 00:01:16,880 --> 00:01:19,320 Speaker 1: really what an asset owner is willing to pay for it? 22 00:01:19,440 --> 00:01:23,120 Speaker 1: And we see that in places like artwork or collectibles, etcetera. 23 00:01:23,520 --> 00:01:26,479 Speaker 1: Is this really any different? And and really over time 24 00:01:26,520 --> 00:01:29,840 Speaker 1: how does this end? Does game stop or NAMEC come 25 00:01:29,880 --> 00:01:32,600 Speaker 1: back down to its fundamental value, which if you look 26 00:01:32,640 --> 00:01:36,240 Speaker 1: at average price targets by analysts game stop at thirteen fifty, 27 00:01:36,319 --> 00:01:39,280 Speaker 1: a m C at two fifty, or you know, do 28 00:01:39,319 --> 00:01:41,840 Speaker 1: we get some sort of regulation in the introm our market? 29 00:01:41,840 --> 00:01:44,720 Speaker 1: Force is going to dominate? And then finally, you know, 30 00:01:44,760 --> 00:01:46,920 Speaker 1: there's something we've been thinking about as an industry and 31 00:01:46,959 --> 00:01:49,200 Speaker 1: as a financial services firm. M Are we going to 32 00:01:49,280 --> 00:01:52,480 Speaker 1: need a new set of analysts that just kind of 33 00:01:52,680 --> 00:01:56,960 Speaker 1: go through and combe through message boards? Social media? Uh? 34 00:01:57,040 --> 00:01:59,520 Speaker 1: Do we need AI and bots to help us with 35 00:01:59,600 --> 00:02:02,080 Speaker 1: this to kind of figure out where to invest next? 36 00:02:02,120 --> 00:02:05,400 Speaker 1: And so all fascinating questions. I mean, it's really important 37 00:02:05,440 --> 00:02:07,480 Speaker 1: we go through Pharaoh's Twitter feed just to see where 38 00:02:07,520 --> 00:02:10,200 Speaker 1: he is. You know, that's the only way, Yeah, because 39 00:02:10,400 --> 00:02:13,080 Speaker 1: I know you do as well. Uh No, what have 40 00:02:13,200 --> 00:02:15,440 Speaker 1: you changed anything at Alian's I mean, you know it's 41 00:02:15,480 --> 00:02:19,000 Speaker 1: sort of a February first readjust off what was written 42 00:02:19,040 --> 00:02:23,080 Speaker 1: December fifteen for two thousand twenty one. Is it renuance 43 00:02:23,240 --> 00:02:26,960 Speaker 1: in the tone? You know, it's interesting, I mean generally 44 00:02:26,960 --> 00:02:30,800 Speaker 1: speaking beyond what's happening in the retail space, and certainly 45 00:02:30,840 --> 00:02:34,720 Speaker 1: retail investors have become a bigger part of our equation 46 00:02:35,080 --> 00:02:38,120 Speaker 1: of both those clients, but really as drivers of the market, 47 00:02:38,120 --> 00:02:40,320 Speaker 1: and we saw that not only this year, but really 48 00:02:40,360 --> 00:02:43,320 Speaker 1: in Forest last year. I think in you could argue 49 00:02:43,360 --> 00:02:45,720 Speaker 1: the smart money was the retail money who really got 50 00:02:45,760 --> 00:02:48,480 Speaker 1: in post that March low and wrote the market up 51 00:02:49,600 --> 00:02:52,800 Speaker 1: the sp plus on the nastack, and so that was 52 00:02:53,240 --> 00:02:56,160 Speaker 1: fascinating to watch the retail versus the institutional clients that 53 00:02:56,240 --> 00:03:01,400 Speaker 1: we had um But broadly speaking, our outlook for is 54 00:03:01,480 --> 00:03:05,520 Speaker 1: driven by three factors, and that's re accelerating growth and 55 00:03:05,560 --> 00:03:08,120 Speaker 1: we're watching, you know, whether or not that does come 56 00:03:08,120 --> 00:03:10,600 Speaker 1: to question in the second half of this year, a 57 00:03:10,720 --> 00:03:13,040 Speaker 1: FED that continues to remain on the sideline, and we 58 00:03:13,080 --> 00:03:16,880 Speaker 1: would argue that that will remain the case through one 59 00:03:16,960 --> 00:03:19,200 Speaker 1: at least, and then of course what happens with the 60 00:03:19,240 --> 00:03:22,720 Speaker 1: bind administration, stimulus and and physical spending. And I think 61 00:03:23,000 --> 00:03:25,400 Speaker 1: interesting to see this week at one point nine trillion 62 00:03:25,480 --> 00:03:28,960 Speaker 1: met with a six billion package by the Republicans. Perhaps 63 00:03:29,080 --> 00:03:31,080 Speaker 1: the magic numbers in the middle there at one point 64 00:03:31,080 --> 00:03:33,519 Speaker 1: two to one point three trillion at some point, I 65 00:03:33,520 --> 00:03:36,720 Speaker 1: think they both are starting point. So, uh, as long 66 00:03:36,760 --> 00:03:38,600 Speaker 1: as those factors are in place and we don't get 67 00:03:38,640 --> 00:03:42,280 Speaker 1: any exogenous shocks, we do think that this is an 68 00:03:42,280 --> 00:03:45,400 Speaker 1: economy and really in a market that is pretty well supported. 69 00:03:45,840 --> 00:03:47,880 Speaker 1: Have we already passed mona the time where we can 70 00:03:47,880 --> 00:03:51,400 Speaker 1: say that Reddit traders will not necessarily be the exogenous 71 00:03:51,400 --> 00:03:55,720 Speaker 1: shock that causes a deeper sell off. You know, thus far, 72 00:03:55,920 --> 00:03:59,440 Speaker 1: we haven't seen signals that that, uh, these trades will 73 00:03:59,600 --> 00:04:03,200 Speaker 1: will spark any systemic risk UM, as we noted earlier 74 00:04:03,560 --> 00:04:07,520 Speaker 1: as a percent of total market cap very diminimous, probably 75 00:04:07,600 --> 00:04:10,840 Speaker 1: less than maybe even point one percent of overall market 76 00:04:10,880 --> 00:04:14,120 Speaker 1: cap UM. And so we think while they could cause 77 00:04:14,280 --> 00:04:18,560 Speaker 1: ripples in how the financial services industry operates broadly, we 78 00:04:18,600 --> 00:04:21,599 Speaker 1: don't think that it will cause um any major shocks 79 00:04:21,640 --> 00:04:23,960 Speaker 1: that would would really put a dent in the overall 80 00:04:24,000 --> 00:04:26,680 Speaker 1: financial services system. And so that to us is important. 81 00:04:27,560 --> 00:04:29,880 Speaker 1: I do think we're watching for shocks that are beyond 82 00:04:30,080 --> 00:04:32,920 Speaker 1: just you know, the reddit type traders, which include things, 83 00:04:32,920 --> 00:04:36,359 Speaker 1: as you mentioned earlier, variants of the virus, whether or 84 00:04:36,360 --> 00:04:39,960 Speaker 1: not we can win this race between vaccines versus variants. 85 00:04:39,960 --> 00:04:42,960 Speaker 1: How the rollouts going, and we're encouraged on that front 86 00:04:43,040 --> 00:04:45,600 Speaker 1: in particular, not only here in the US, but quite globally. 87 00:04:45,760 --> 00:04:47,760 Speaker 1: If the pandemic copy got a looking last week, did 88 00:04:47,760 --> 00:04:51,479 Speaker 1: it great a catch up? It's fantastic to catch up. 89 00:04:51,560 --> 00:04:57,719 Speaker 1: Sty Well, this is not that David Axelrod of Obama 90 00:04:57,760 --> 00:05:02,400 Speaker 1: administration claim. It's a David axel Rod of Ballard Spark law. 91 00:05:02,640 --> 00:05:05,839 Speaker 1: What you need to know is we know on surveillance 92 00:05:05,880 --> 00:05:07,960 Speaker 1: the length of the resume, the length of the bio 93 00:05:08,040 --> 00:05:12,520 Speaker 1: is in for inversely proportional to the skill. Except axel 94 00:05:12,640 --> 00:05:17,200 Speaker 1: Rod is a wild, wild exception to that. His cases 95 00:05:17,360 --> 00:05:21,159 Speaker 1: are extraordinary, both in private practice and his work with 96 00:05:21,200 --> 00:05:24,360 Speaker 1: the Securities and Exchange Commission. And we're thrilled to bring 97 00:05:24,360 --> 00:05:27,400 Speaker 1: you this voice on surveillance this morning. David, thank you 98 00:05:27,480 --> 00:05:29,400 Speaker 1: so much, really honored that you could be with us, 99 00:05:29,839 --> 00:05:33,080 Speaker 1: uh this morning. You did an insider trader thing at 100 00:05:33,120 --> 00:05:36,320 Speaker 1: the at the Williams Court there in Washington years and 101 00:05:36,440 --> 00:05:39,480 Speaker 1: years ago. If you were speaking to a body of 102 00:05:39,520 --> 00:05:44,160 Speaker 1: attorneys today about what is to come in this uproar, 103 00:05:44,760 --> 00:05:47,599 Speaker 1: what would you say to them. You know, listen, I'd 104 00:05:47,600 --> 00:05:49,440 Speaker 1: say that you know, in the in the in the 105 00:05:49,440 --> 00:05:52,040 Speaker 1: wake of this, everyone's looking for a boogeyman. But I 106 00:05:52,080 --> 00:05:55,480 Speaker 1: think we're gonna find out that nothing really has changed. Um, 107 00:05:55,520 --> 00:05:58,520 Speaker 1: not really much was done wrong here. The rules are 108 00:05:58,520 --> 00:06:02,160 Speaker 1: gonna work. Fine, may see other examples of this going forward. 109 00:06:02,560 --> 00:06:04,760 Speaker 1: But I think the market's going to shake out. I mean, 110 00:06:05,160 --> 00:06:09,279 Speaker 1: the small retail traders saw and saw an inefficiency here, 111 00:06:09,360 --> 00:06:12,640 Speaker 1: saw a window to do something, um, and and they 112 00:06:12,680 --> 00:06:14,640 Speaker 1: and they did, and they made some money. But you know, 113 00:06:15,080 --> 00:06:17,360 Speaker 1: all that the stock is gonna go back down probably 114 00:06:17,839 --> 00:06:20,159 Speaker 1: and I think it's probably all gonna shake out. How 115 00:06:20,240 --> 00:06:23,159 Speaker 1: do you is a lawyer? You've you've been You've been 116 00:06:23,160 --> 00:06:25,760 Speaker 1: with sec against Cooperman, You've had men, you've been on 117 00:06:25,800 --> 00:06:28,760 Speaker 1: both sides of the fence practicing the law. How do 118 00:06:28,839 --> 00:06:33,000 Speaker 1: you treat the silicon val tone that we get from 119 00:06:33,120 --> 00:06:37,520 Speaker 1: Robin Hood and others? How do you candle the behavioral 120 00:06:37,560 --> 00:06:42,480 Speaker 1: and cultural millennial tone that we observe. Well, listen, there 121 00:06:42,480 --> 00:06:44,840 Speaker 1: are very smart people at the hedge funds, at an 122 00:06:44,880 --> 00:06:49,279 Speaker 1: institutional investors. They've been scraping social media for years already, 123 00:06:49,400 --> 00:06:51,520 Speaker 1: that this is nothing new to them. It may be 124 00:06:51,640 --> 00:06:54,240 Speaker 1: new to us in the general public scene this, but 125 00:06:54,320 --> 00:06:56,080 Speaker 1: you know, it's it's they're gonna have to build into it. 126 00:06:56,080 --> 00:06:58,040 Speaker 1: They're gonna build it into their models. They're gonna end 127 00:06:58,080 --> 00:07:00,479 Speaker 1: up probably taking advantage of it, and of ways that 128 00:07:00,600 --> 00:07:03,159 Speaker 1: I wish I could contemplate because I'd be not working 129 00:07:03,200 --> 00:07:05,440 Speaker 1: in the law. Um, but you know, they're gonna deal 130 00:07:05,480 --> 00:07:07,200 Speaker 1: with it, and it's gonna all be built into how 131 00:07:07,200 --> 00:07:11,280 Speaker 1: they operate. What illegal issues here, David, You know, I'm 132 00:07:11,280 --> 00:07:13,360 Speaker 1: not sure there are you know, as I said, a 133 00:07:13,440 --> 00:07:15,520 Speaker 1: lot of people are looking for something wrong here, but 134 00:07:15,600 --> 00:07:18,080 Speaker 1: this isn't the case where you see deception on Reddit. 135 00:07:18,440 --> 00:07:20,520 Speaker 1: It's not people aren't mining about what they're gonna do. 136 00:07:20,640 --> 00:07:22,360 Speaker 1: They're saying, I'm going to buy this stock because I 137 00:07:22,360 --> 00:07:24,760 Speaker 1: wanted to go up. People have been doing this for years, 138 00:07:25,000 --> 00:07:27,400 Speaker 1: So I don't see anything wrong there. You know, for 139 00:07:27,520 --> 00:07:29,120 Speaker 1: robin Hood, you know, you need to look at the 140 00:07:29,200 --> 00:07:32,040 Speaker 1: terms of contracts they have with their with their actual customers. 141 00:07:32,400 --> 00:07:34,520 Speaker 1: But I haven't seen anything that indicates there's a problem 142 00:07:34,520 --> 00:07:37,160 Speaker 1: for robin Hood either. There's a larger question here, David, 143 00:07:37,280 --> 00:07:40,960 Speaker 1: especially as social media takes on an increasing presence in markets. 144 00:07:41,000 --> 00:07:45,440 Speaker 1: What's the line which it crosses into market manipulation. Yeah, 145 00:07:45,480 --> 00:07:47,400 Speaker 1: I mean, that's that's gonna be the difficult thing, right. 146 00:07:47,520 --> 00:07:50,080 Speaker 1: I mean, usually in situations like this, you see people 147 00:07:50,120 --> 00:07:52,440 Speaker 1: crossing the line, and the line is line, the line 148 00:07:52,520 --> 00:07:55,000 Speaker 1: is deception, the line is the pump is part of 149 00:07:55,000 --> 00:07:57,680 Speaker 1: the pump and dump. Um. So once you see people 150 00:07:57,760 --> 00:08:01,280 Speaker 1: kind of exaggerating, fabricating what's going to happen, you'll see 151 00:08:01,280 --> 00:08:04,640 Speaker 1: the SEC get very active, very quickly. But if that 152 00:08:04,680 --> 00:08:07,280 Speaker 1: line hasn't been crossed, if you just have Dave x 153 00:08:07,360 --> 00:08:09,840 Speaker 1: Rod sitting in front of his computer trading stock, it's 154 00:08:10,240 --> 00:08:13,320 Speaker 1: the line is not there. I don't think hedge funds 155 00:08:13,320 --> 00:08:15,280 Speaker 1: need me to protect them David, But I will ask this, 156 00:08:16,160 --> 00:08:19,200 Speaker 1: does intent matter? Does the objective matter? If I go 157 00:08:19,240 --> 00:08:21,240 Speaker 1: on a forum and say this is what I like, 158 00:08:21,320 --> 00:08:22,760 Speaker 1: this is why I like it, and the objective is 159 00:08:22,800 --> 00:08:25,640 Speaker 1: just to make money. What if the objective is to 160 00:08:25,760 --> 00:08:29,400 Speaker 1: hurt or cause someone else paines, does that matter? I 161 00:08:29,440 --> 00:08:32,679 Speaker 1: mean no, uh, in our system and our you know, 162 00:08:32,880 --> 00:08:34,920 Speaker 1: hedge funds has been doing this year for years. I mean, 163 00:08:35,400 --> 00:08:37,320 Speaker 1: the intent is to make money. They don't care whether 164 00:08:37,320 --> 00:08:39,240 Speaker 1: a business gets put out of business. I mean, which 165 00:08:39,240 --> 00:08:41,800 Speaker 1: is the very possibility of the of the put options 166 00:08:42,120 --> 00:08:44,720 Speaker 1: in this case. So no, you know, if retail investors 167 00:08:44,760 --> 00:08:47,160 Speaker 1: want to hurt hedge funds, that's the way. Our system 168 00:08:47,240 --> 00:08:50,760 Speaker 1: doesn't doesn't capture intent. Our system is as long as 169 00:08:50,800 --> 00:08:53,240 Speaker 1: you're honest, as long as you're not deceiving someone, you 170 00:08:53,240 --> 00:08:56,600 Speaker 1: can your intent really is irrelevant. What did you think? 171 00:08:56,640 --> 00:09:00,680 Speaker 1: What was your response when you saw trading shut down 172 00:09:01,160 --> 00:09:04,720 Speaker 1: on Thursday or Friday? Do you just assume that somebody 173 00:09:04,760 --> 00:09:09,280 Speaker 1: got out front of those announcements? Yeah, I I always 174 00:09:09,280 --> 00:09:11,520 Speaker 1: assume that if there's going to be a big shift 175 00:09:11,600 --> 00:09:14,560 Speaker 1: in the way that the markets operating, that someone with 176 00:09:14,880 --> 00:09:17,720 Speaker 1: information and balance is taking advantage. How do you how 177 00:09:17,760 --> 00:09:21,720 Speaker 1: do you discover that? How how does the prosecution discover 178 00:09:21,880 --> 00:09:25,720 Speaker 1: that malfeasance? Really simply, I mean, if it happened, I 179 00:09:25,800 --> 00:09:28,720 Speaker 1: suspect that the SEC and perhaps the Department of Justice 180 00:09:29,360 --> 00:09:33,640 Speaker 1: will send subpoenas for testimony for emails for Bloomberg. I 181 00:09:33,679 --> 00:09:37,040 Speaker 1: am chats uh exactly had to throw that pitching for you, 182 00:09:37,120 --> 00:09:40,160 Speaker 1: But I mean it's it's always in the records. So 183 00:09:40,200 --> 00:09:42,760 Speaker 1: I mean, if some hedge fund knew that bloom that 184 00:09:42,920 --> 00:09:45,080 Speaker 1: Robin Hood was going to take action and knew that 185 00:09:45,080 --> 00:09:48,000 Speaker 1: would harm the stock. Um that information is probably going 186 00:09:48,080 --> 00:09:50,000 Speaker 1: to be there, and the SEC or the d O 187 00:09:50,120 --> 00:09:52,000 Speaker 1: J as I said, because this could be a criminal event, 188 00:09:52,240 --> 00:09:55,960 Speaker 1: we'll find that David as a formal former SEC official. 189 00:09:56,360 --> 00:09:59,840 Speaker 1: Given the politicization of this issue, the fact that ao 190 00:10:00,040 --> 00:10:03,280 Speaker 1: See and Senator Ted Cruz came out and sided on 191 00:10:03,320 --> 00:10:05,160 Speaker 1: the on the side of the robin Hood traders, this 192 00:10:05,280 --> 00:10:08,840 Speaker 1: became a populist versus the system kind of debate. What 193 00:10:08,920 --> 00:10:12,640 Speaker 1: are the long term consequences for the supposedly a political 194 00:10:12,720 --> 00:10:17,240 Speaker 1: regulatory agencies like the SEC. You know, from a policy perspective, 195 00:10:17,800 --> 00:10:19,600 Speaker 1: I don't know. I could go millions of different ways. 196 00:10:19,679 --> 00:10:23,120 Speaker 1: I mean from from AOC's perspective, UM, I mean, they 197 00:10:23,120 --> 00:10:25,280 Speaker 1: could attack what hedge funds were doing in the first place. 198 00:10:25,320 --> 00:10:28,160 Speaker 1: They could attack large put options that you know, some 199 00:10:28,200 --> 00:10:31,160 Speaker 1: people argue have no economic benefit in the beginning, Um, 200 00:10:31,240 --> 00:10:33,600 Speaker 1: others they could attack robin Hood and make sure that 201 00:10:33,679 --> 00:10:36,760 Speaker 1: market access is in place for everyone. But really it's 202 00:10:36,800 --> 00:10:38,840 Speaker 1: hard to talk and the politics of this are really weird. 203 00:10:39,040 --> 00:10:41,640 Speaker 1: As anytime you have AOC and Ted Cruz lining up 204 00:10:41,640 --> 00:10:42,960 Speaker 1: on the same side of an issue, you know one 205 00:10:42,960 --> 00:10:45,560 Speaker 1: should expect UM. So I don't know it. It can 206 00:10:45,600 --> 00:10:48,440 Speaker 1: go a million different different ways. That's certainly a good 207 00:10:48,480 --> 00:10:51,080 Speaker 1: way of putting it. David, great to catch. Yeah, thank you. 208 00:10:51,320 --> 00:10:54,319 Speaker 1: David actually wrote the film sec Supervise Street Trial Council 209 00:10:54,679 --> 00:11:02,960 Speaker 1: Now without a SPA law help Corta droutsa bank for 210 00:11:03,160 --> 00:11:06,800 Speaker 1: years writing most read twelve page papers that always had 211 00:11:06,800 --> 00:11:09,480 Speaker 1: not one, not two, but three charts where you would 212 00:11:09,520 --> 00:11:12,360 Speaker 1: stop and actually have to read the report and read 213 00:11:12,360 --> 00:11:14,679 Speaker 1: the captions under the charts. That's how good he is. 214 00:11:15,000 --> 00:11:18,319 Speaker 1: He was snagged by Apollo Management as their chief economists 215 00:11:18,480 --> 00:11:22,000 Speaker 1: or thrilled it. Mr Slock could join us uh this morning, Torston. 216 00:11:22,080 --> 00:11:24,400 Speaker 1: I want to cut to the chase, which is the 217 00:11:24,480 --> 00:11:30,280 Speaker 1: idea of long term inflation expectations. No one cares commodities 218 00:11:30,360 --> 00:11:33,680 Speaker 1: lift and it's real simple on the Central Bank watch. 219 00:11:34,400 --> 00:11:39,120 Speaker 1: Should Mr Powell pay attention to Dr Copper? I mean, 220 00:11:39,160 --> 00:11:41,240 Speaker 1: this is a very important issue in races, markets and 221 00:11:41,280 --> 00:11:44,400 Speaker 1: therefore and everything fixed income I mean placed expectations in 222 00:11:44,440 --> 00:11:46,400 Speaker 1: the long ends or tenia break evens have gone up 223 00:11:46,920 --> 00:11:50,840 Speaker 1: almost on a linear trend since much I've been a 224 00:11:50,840 --> 00:11:53,040 Speaker 1: few mos here and there, but this is certainly something 225 00:11:53,040 --> 00:11:55,280 Speaker 1: that's very important for the fit. Then, of course the 226 00:11:55,360 --> 00:11:58,160 Speaker 1: question becomes, well, why is it that the market suddenly 227 00:11:58,200 --> 00:12:01,439 Speaker 1: expects inflation in ten years high to be higher? And 228 00:12:01,440 --> 00:12:03,400 Speaker 1: there's a number of different explanations. The first one, as 229 00:12:03,400 --> 00:12:07,480 Speaker 1: you mentioned TOWM, is that commodity prices are almost mechanically 230 00:12:07,520 --> 00:12:10,400 Speaker 1: correlated with long term inflationing incputations, so commodity prices going 231 00:12:10,480 --> 00:12:13,000 Speaker 1: up it is a very important driver. But another very 232 00:12:13,000 --> 00:12:16,240 Speaker 1: important driver is to fit changed the framework from just 233 00:12:16,360 --> 00:12:20,320 Speaker 1: normal inflation targeting to and reflectible inflation targeting, and therefore 234 00:12:20,440 --> 00:12:22,760 Speaker 1: the fit saying will allow OLMOS shooting has been pushing 235 00:12:23,000 --> 00:12:25,400 Speaker 1: long term inflation infectations. Stuff that's good here and now, 236 00:12:25,760 --> 00:12:28,360 Speaker 1: but it's certainly a very critical thing to monitor if 237 00:12:28,360 --> 00:12:30,200 Speaker 1: we do get that strong growth in the second half 238 00:12:30,200 --> 00:12:32,559 Speaker 1: this year that you guys have covered so well. Do 239 00:12:32,640 --> 00:12:34,960 Speaker 1: you think that markets right now towards in our underpricing 240 00:12:35,080 --> 00:12:38,600 Speaker 1: or overpricing inflation so they I mean, if I look 241 00:12:38,640 --> 00:12:41,200 Speaker 1: at Bloomberg screen today, there is really no inflation in 242 00:12:41,280 --> 00:12:45,440 Speaker 1: TRIM means, in code PC, in co CPI. No matter 243 00:12:45,520 --> 00:12:50,000 Speaker 1: what fit measure or be a measure that you look 244 00:12:50,040 --> 00:12:52,760 Speaker 1: at for inflation, there's just no actual inflation. So all 245 00:12:52,800 --> 00:12:55,680 Speaker 1: of this has to do with what expectations, of course, 246 00:12:55,720 --> 00:12:58,680 Speaker 1: both in the next few quarters, but also what expectations 247 00:12:58,679 --> 00:13:00,720 Speaker 1: if you look several years out. So for now, I 248 00:13:00,760 --> 00:13:03,080 Speaker 1: think the market is a little bit get ahead of 249 00:13:03,080 --> 00:13:05,600 Speaker 1: itself in the sense that we will not get that 250 00:13:05,679 --> 00:13:07,680 Speaker 1: much inflation. We will get some base effects of course 251 00:13:07,880 --> 00:13:09,920 Speaker 1: in the next few months, as we all know, but 252 00:13:10,120 --> 00:13:12,160 Speaker 1: going into two thousand twenty two, still we have a 253 00:13:12,160 --> 00:13:14,360 Speaker 1: lot of slag in the economy. We therefore, as as 254 00:13:14,360 --> 00:13:16,080 Speaker 1: you also just spoke about the lago, market is not 255 00:13:16,160 --> 00:13:19,120 Speaker 1: great on Friday with the numbers that we get for January. 256 00:13:19,160 --> 00:13:21,080 Speaker 1: So at this point it is a little bit it's 257 00:13:21,080 --> 00:13:23,719 Speaker 1: still too premature to worry about inflation, not to get 258 00:13:23,720 --> 00:13:26,960 Speaker 1: philosophical about this torson. But as we see higher commodity prices, 259 00:13:27,000 --> 00:13:29,480 Speaker 1: and as the prices of goods goes up as a 260 00:13:29,520 --> 00:13:33,640 Speaker 1: result of supply chain disruptions and other COVID related issues, 261 00:13:33,920 --> 00:13:36,959 Speaker 1: how much could we see some sort of not disinflation 262 00:13:37,040 --> 00:13:39,800 Speaker 1: but stagnation. This idea that people's wages are saying the 263 00:13:39,840 --> 00:13:42,600 Speaker 1: same or going down, the employment picture is weak, and 264 00:13:42,640 --> 00:13:44,600 Speaker 1: they are forced to pay more for the goods that 265 00:13:44,600 --> 00:13:47,480 Speaker 1: they need. That's right, and that's that's that's that's the 266 00:13:47,520 --> 00:13:50,000 Speaker 1: environment we have today, I mean commodity prices going up, 267 00:13:50,240 --> 00:13:52,520 Speaker 1: and at the same time we have also had very 268 00:13:52,520 --> 00:13:55,040 Speaker 1: little employment growth, and unfortunately we still have as you 269 00:13:55,080 --> 00:13:57,920 Speaker 1: know that the employment situation that we have ten million 270 00:13:57,960 --> 00:14:01,880 Speaker 1: people less working today relative to a Fipruary two thousands winning. 271 00:14:02,080 --> 00:14:04,120 Speaker 1: So the label argut is indeed still very weak while 272 00:14:04,240 --> 00:14:06,920 Speaker 1: commodity prices are going up. If you look further out, 273 00:14:07,120 --> 00:14:10,720 Speaker 1: then of course it becomes more almost a philosophical issue, 274 00:14:10,760 --> 00:14:13,840 Speaker 1: whether you think that it is the level of capacity 275 00:14:13,880 --> 00:14:16,400 Speaker 1: utilization that matters. In other words, in the Philip scripture 276 00:14:16,440 --> 00:14:18,480 Speaker 1: were about the level of the outpro gap or the 277 00:14:18,600 --> 00:14:20,720 Speaker 1: change in the outpro gap. That's a sophisticated way of 278 00:14:20,760 --> 00:14:24,040 Speaker 1: saying that should we worry about at growth spurit potentially 279 00:14:24,040 --> 00:14:26,320 Speaker 1: giving some inflation in the second half of this year, 280 00:14:26,520 --> 00:14:28,280 Speaker 1: or should we say, oh, that's not a problem because 281 00:14:28,280 --> 00:14:30,520 Speaker 1: the unemployer is still so high. So there's a lot 282 00:14:30,560 --> 00:14:33,080 Speaker 1: of thinking around this issue, and I'm sure that FED 283 00:14:33,240 --> 00:14:36,880 Speaker 1: is looking very carefully this potential risk that we could 284 00:14:36,880 --> 00:14:39,680 Speaker 1: have that the growth bursts we get in the second 285 00:14:39,680 --> 00:14:42,560 Speaker 1: half this year does lift in particular services pricing, and 286 00:14:42,640 --> 00:14:45,560 Speaker 1: tossed and talked to me about financial stability risks, and 287 00:14:45,560 --> 00:14:47,400 Speaker 1: we've gone through the labor market. There are very clear 288 00:14:47,440 --> 00:14:49,680 Speaker 1: reasons why this fat wants to keep right slow for 289 00:14:49,720 --> 00:14:52,280 Speaker 1: a long long time. Do you see them doing that 290 00:14:52,320 --> 00:14:55,440 Speaker 1: at the sacrifice of really making sure that financial stability 291 00:14:55,480 --> 00:14:58,400 Speaker 1: risk don't build. That's really important, Jonathan. There is a 292 00:14:58,520 --> 00:15:01,040 Speaker 1: very critical paper, reasonably by there on sim Sect that 293 00:15:01,120 --> 00:15:03,760 Speaker 1: try to look at exactly why is it that stock 294 00:15:03,800 --> 00:15:07,960 Speaker 1: prices are so seemingly disconnected from fundamentals, And what they 295 00:15:07,960 --> 00:15:09,840 Speaker 1: are arguing, which makes a lot of sense, is that 296 00:15:09,840 --> 00:15:12,560 Speaker 1: it is actually the optimal strategy for the fit to say, 297 00:15:12,600 --> 00:15:15,760 Speaker 1: if we know that this shock is of limited nature, 298 00:15:15,760 --> 00:15:17,400 Speaker 1: in other words, it will be all at some point, 299 00:15:17,760 --> 00:15:21,320 Speaker 1: then we should be easing financial conditions as much as possible. 300 00:15:21,320 --> 00:15:25,160 Speaker 1: We should be creating a disconnect between stock prices and 301 00:15:25,240 --> 00:15:28,760 Speaker 1: credit spreads and the real economy because that does accelerate 302 00:15:29,080 --> 00:15:31,920 Speaker 1: the expansion later on. So in that sense, I think 303 00:15:31,920 --> 00:15:34,080 Speaker 1: the Fate looks at this it says, yeah, we do 304 00:15:34,200 --> 00:15:36,360 Speaker 1: know that stock prices might seem reads if you're high. 305 00:15:36,360 --> 00:15:39,200 Speaker 1: We know that credit spreads are very tight depressive to fundamentals. 306 00:15:39,440 --> 00:15:41,440 Speaker 1: But this is the best strategy for us in terms 307 00:15:41,480 --> 00:15:43,600 Speaker 1: of getting the economy as quickly back as possible, and 308 00:15:43,720 --> 00:15:46,360 Speaker 1: that's the objective. They've been successful, Toulson. I can pick 309 00:15:46,400 --> 00:15:50,160 Speaker 1: example after example where they've managed to divorce financial conditions 310 00:15:50,160 --> 00:15:52,280 Speaker 1: from economic fundamentals. Do you think we can have a 311 00:15:52,320 --> 00:15:56,120 Speaker 1: reconcund that. Yes, So now the question of course becomes, well, 312 00:15:56,240 --> 00:15:59,360 Speaker 1: what once we then get to the pandemic being over, 313 00:15:59,600 --> 00:16:01,040 Speaker 1: what is the well then going to look like? And 314 00:16:01,080 --> 00:16:03,320 Speaker 1: in particularly if this is associated with rates going up, 315 00:16:03,600 --> 00:16:05,080 Speaker 1: and this is where you get a little bit worried 316 00:16:05,080 --> 00:16:08,840 Speaker 1: about what sexes and this most vulnerable to higher rates. 317 00:16:08,840 --> 00:16:10,520 Speaker 1: And that's of course those sexts that I'm all along 318 00:16:10,600 --> 00:16:13,000 Speaker 1: duration and that's of course in particular tech. So if 319 00:16:13,000 --> 00:16:15,120 Speaker 1: we do have a move higher in rates in the 320 00:16:15,120 --> 00:16:16,960 Speaker 1: second half this year, both in the front end with 321 00:16:16,960 --> 00:16:19,160 Speaker 1: FED expectations and also in the long end, then those 322 00:16:19,200 --> 00:16:22,840 Speaker 1: parts of the fun that a most sensitive to high 323 00:16:22,840 --> 00:16:24,880 Speaker 1: at discount rate and in this case in particularly the 324 00:16:24,920 --> 00:16:28,280 Speaker 1: tech sector would also become more vulnerable. So you're right, Jonathan, 325 00:16:28,320 --> 00:16:31,320 Speaker 1: that if we do have much high level of valuations 326 00:16:31,360 --> 00:16:34,120 Speaker 1: once the pandemic it is over, then we do begin 327 00:16:34,160 --> 00:16:36,920 Speaker 1: to in particular, as I says, become more vulnerable to 328 00:16:37,120 --> 00:16:41,960 Speaker 1: rates moving up within the system. Torsten Slark of Apollo Management, 329 00:16:42,160 --> 00:16:47,240 Speaker 1: do you see effervescence? Is it an effervescence? I don't 330 00:16:47,240 --> 00:16:50,160 Speaker 1: mean bubble in an amateur sense like that, but do 331 00:16:50,240 --> 00:16:53,440 Speaker 1: you just see a ferment there from all this gross accommodation. 332 00:16:54,840 --> 00:16:56,360 Speaker 1: So I think that the FIT and d C be 333 00:16:56,600 --> 00:16:59,480 Speaker 1: NDS would be to say we have done what we 334 00:16:59,520 --> 00:17:01,480 Speaker 1: can do with the tools we have. And that's why 335 00:17:01,520 --> 00:17:04,520 Speaker 1: the debate, as you also have talking about earlier today, 336 00:17:04,720 --> 00:17:07,359 Speaker 1: is that now we're switching from monetary policy having done 337 00:17:07,400 --> 00:17:09,879 Speaker 1: whatever they can, and that results in high as surprises. 338 00:17:10,119 --> 00:17:12,360 Speaker 1: But that's why the fiscal discussion is now so aftertely 339 00:17:12,440 --> 00:17:14,480 Speaker 1: critical that it's small the issue that we haven't really 340 00:17:14,480 --> 00:17:16,439 Speaker 1: spoken about yet. And stuff course that the number of 341 00:17:16,480 --> 00:17:19,520 Speaker 1: cases is coming down quite quickly from the US, also 342 00:17:19,560 --> 00:17:22,280 Speaker 1: in Europe, also in the UK. And I mean think 343 00:17:22,280 --> 00:17:23,560 Speaker 1: about a few weeks ago in the US to have 344 00:17:23,600 --> 00:17:25,520 Speaker 1: about three hundred thousand new cases every day. Now we 345 00:17:25,560 --> 00:17:28,440 Speaker 1: have about a hundred fifty thousand. If you put admittedly 346 00:17:28,520 --> 00:17:30,439 Speaker 1: very simple you rule it down and ask the question, 347 00:17:30,600 --> 00:17:33,000 Speaker 1: if I type c V I D on my Bloomberg screen, 348 00:17:33,359 --> 00:17:35,320 Speaker 1: when will we actually get that the number of new 349 00:17:35,320 --> 00:17:37,520 Speaker 1: cases will be close to zero. You get and I 350 00:17:37,560 --> 00:17:39,480 Speaker 1: know this is a been extreme thinking both about the 351 00:17:39,560 --> 00:17:42,320 Speaker 1: strings from Latin America and South Africa and set up. 352 00:17:42,320 --> 00:17:44,600 Speaker 1: But you can that we get to sero new cases 353 00:17:44,640 --> 00:17:47,760 Speaker 1: sometimes yet potentially already in much so that's why the 354 00:17:47,840 --> 00:17:50,720 Speaker 1: speedless which the number of cases is coming down. That's 355 00:17:50,720 --> 00:17:52,480 Speaker 1: something that we should not under is the mate that 356 00:17:52,520 --> 00:17:54,359 Speaker 1: we could potentially have the growth, but not only the 357 00:17:54,359 --> 00:17:56,639 Speaker 1: second half this year. You could potentially already come in 358 00:17:56,680 --> 00:17:58,240 Speaker 1: the second quarter of this year, and that of course 359 00:17:58,240 --> 00:18:01,600 Speaker 1: will be an upside surprise to market, the upside surprise. 360 00:18:01,720 --> 00:18:04,680 Speaker 1: So would you suggest that this bull market valuing out 361 00:18:04,760 --> 00:18:09,480 Speaker 1: six months, valuing out a year is fairly priced, so 362 00:18:09,560 --> 00:18:12,000 Speaker 1: that that's why that comes to whene we will begin 363 00:18:12,040 --> 00:18:14,879 Speaker 1: to see inflation and therefore the fit dovishness. Will that 364 00:18:15,040 --> 00:18:17,680 Speaker 1: be sticking or will the fit the having to turn 365 00:18:17,720 --> 00:18:19,760 Speaker 1: around quite quickly as you know, the fate is at 366 00:18:19,760 --> 00:18:21,480 Speaker 1: the moment saying we will not high rates on to 367 00:18:21,480 --> 00:18:24,600 Speaker 1: two twenty three. This is almost the premise for the 368 00:18:24,680 --> 00:18:27,879 Speaker 1: hunt for yield. People buying first the duration and treasuries, 369 00:18:27,920 --> 00:18:30,760 Speaker 1: then i G then high yield and in equities. If 370 00:18:30,760 --> 00:18:34,199 Speaker 1: we do begin to see that growth comes faster and quicker, 371 00:18:34,280 --> 00:18:37,240 Speaker 1: and the catch up effect, if you will, is much 372 00:18:37,720 --> 00:18:41,080 Speaker 1: more speedy than what we all expect at the moment. 373 00:18:41,400 --> 00:18:43,840 Speaker 1: Then the f it would certainly have to pedal back 374 00:18:43,880 --> 00:18:46,200 Speaker 1: and and to talk about rate packs coming to know. 375 00:18:46,320 --> 00:18:48,560 Speaker 1: But the question therefore is is the FED going to 376 00:18:48,640 --> 00:18:51,040 Speaker 1: state dovish Clarita has said that we will do que 377 00:18:51,280 --> 00:18:53,679 Speaker 1: meaning by a d building and treasuries forty building in 378 00:18:53,680 --> 00:18:56,520 Speaker 1: mortgages throughout the end of this year. If we have 379 00:18:56,640 --> 00:18:59,840 Speaker 1: three very strong quarters of growth here in the next nine, 380 00:19:00,400 --> 00:19:03,399 Speaker 1: then we could have that defect could be potential being 381 00:19:03,400 --> 00:19:05,879 Speaker 1: to the table already sometime in the second half of 382 00:19:05,920 --> 00:19:08,120 Speaker 1: this year, Towarsten, one thing that you did so well 383 00:19:08,160 --> 00:19:09,880 Speaker 1: when you were at Deutsche Bank was put out these 384 00:19:09,960 --> 00:19:12,800 Speaker 1: charts showing the divide in the labor markets, showing the 385 00:19:12,840 --> 00:19:16,120 Speaker 1: divide in the economy between halves and have nots. From 386 00:19:16,160 --> 00:19:19,000 Speaker 1: your seat now at Apollo, there is a question when 387 00:19:19,080 --> 00:19:22,199 Speaker 1: does this divide and have and have not affect markets 388 00:19:22,240 --> 00:19:25,000 Speaker 1: which have been relatively divorced from it and moving on 389 00:19:25,119 --> 00:19:28,280 Speaker 1: very different factors, in part because they're dominated largely by 390 00:19:28,320 --> 00:19:31,280 Speaker 1: the bigger, more resilient companies. When does it become a 391 00:19:31,359 --> 00:19:33,840 Speaker 1: real problem that you have a two track economy with 392 00:19:33,880 --> 00:19:36,920 Speaker 1: a two track labor market. I know the's and as 393 00:19:37,000 --> 00:19:38,879 Speaker 1: it is a case shaped recovery, and as you have 394 00:19:38,960 --> 00:19:41,200 Speaker 1: covered so well, this is creating all kinds of issues. 395 00:19:41,240 --> 00:19:45,560 Speaker 1: In particular will leverage in companies that have very little learnings, 396 00:19:45,720 --> 00:19:48,280 Speaker 1: not only because of COVID, but have not had earnings 397 00:19:48,320 --> 00:19:50,640 Speaker 1: for three years in a row, the so called sumpie companies. 398 00:19:50,840 --> 00:19:52,840 Speaker 1: And what this is also opening up is of course 399 00:19:52,880 --> 00:19:55,919 Speaker 1: that there's a number of, if you will, unintended consequence 400 00:19:56,040 --> 00:19:59,280 Speaker 1: of the very very quick reaction that the FED had 401 00:19:59,480 --> 00:20:03,080 Speaker 1: during this rise. It's normally a recession cleans out balance sheets. 402 00:20:03,119 --> 00:20:05,000 Speaker 1: In two thousand six, it was cleaning out energies in 403 00:20:05,080 --> 00:20:07,720 Speaker 1: the housing sector. It was cleaning out benergies the banking sector, 404 00:20:07,760 --> 00:20:10,679 Speaker 1: cleaning up penergies in the household sector, meaning consumers. This 405 00:20:10,760 --> 00:20:14,560 Speaker 1: time around, the FED and the fiscal policy makers came 406 00:20:14,600 --> 00:20:18,120 Speaker 1: to the rescue so quickly. So therefore normally we then say, okay, 407 00:20:18,160 --> 00:20:20,160 Speaker 1: we had a recession, we can now have another cycle. 408 00:20:20,160 --> 00:20:22,000 Speaker 1: In the last ten years. The issue is that this 409 00:20:22,040 --> 00:20:24,879 Speaker 1: recession really didn't clean up much, and therefore many of 410 00:20:24,880 --> 00:20:28,000 Speaker 1: the problems that we had pre COVID, most importantly leverage 411 00:20:28,200 --> 00:20:30,480 Speaker 1: in the lower rated companies and a lot of companies 412 00:20:30,520 --> 00:20:32,800 Speaker 1: that are much more at risk. That problem is still here. 413 00:20:32,960 --> 00:20:35,399 Speaker 1: So that says many of the vulnerabilities that you normally 414 00:20:35,440 --> 00:20:38,760 Speaker 1: clean out with the recession, those vulnerabilities are still here. 415 00:20:39,000 --> 00:20:41,320 Speaker 1: That's why going into this new cycle that we're literally 416 00:20:41,440 --> 00:20:44,119 Speaker 1: entering here as we speak, it does raise some questions 417 00:20:44,160 --> 00:20:46,400 Speaker 1: about well, but this cycle starts out on a very 418 00:20:46,480 --> 00:20:48,920 Speaker 1: vulnerable footing, and that is a problem when you think 419 00:20:48,920 --> 00:20:51,280 Speaker 1: about how long this cycle actually can end up being 420 00:20:51,960 --> 00:20:54,520 Speaker 1: serious issues. I have to say that, Tusten, I just 421 00:20:54,600 --> 00:20:57,119 Speaker 1: love the Apollo. Just allow just a little bit of stubble, 422 00:20:57,560 --> 00:21:01,120 Speaker 1: just a little bit. It's COVID. I mean now, it's 423 00:21:01,160 --> 00:21:03,920 Speaker 1: that you talked about the Deutsche Bank Apollo transition. I'm 424 00:21:03,960 --> 00:21:06,199 Speaker 1: just taking it seriously to the next level. You've got 425 00:21:06,200 --> 00:21:08,720 Speaker 1: a little stubble, Yeah, I'm not. It's allowed here too. 426 00:21:09,280 --> 00:21:20,640 Speaker 1: That's why, thanks Slock of Apollo Management. I'm looking at 427 00:21:20,680 --> 00:21:24,159 Speaker 1: this shark Tom and the peak of sober back on 428 00:21:24,200 --> 00:21:26,720 Speaker 1: the Bloomberg was back like two thousand elevens. Let's let's 429 00:21:26,760 --> 00:21:29,640 Speaker 1: get some perspective here. We can do that with Mike mcgloane. 430 00:21:29,720 --> 00:21:34,200 Speaker 1: He covers all that commodity stuff for Bloomberg Intelligence. Mike, 431 00:21:34,359 --> 00:21:37,359 Speaker 1: what do you make of what's going on with silver 432 00:21:37,520 --> 00:21:42,000 Speaker 1: here this morning? Up ten percent, pushing up the thirty dollars. Hello, Tom, 433 00:21:42,000 --> 00:21:43,600 Speaker 1: imply I was thinking of you this weekend and two 434 00:21:43,640 --> 00:21:45,879 Speaker 1: time when I was trying to ice skate in my 435 00:21:46,000 --> 00:21:48,440 Speaker 1: neighbor's pond, but the ice wasn't think enough yet. But 436 00:21:48,480 --> 00:21:50,359 Speaker 1: we're getting to that pon hockey let weather just too 437 00:21:50,440 --> 00:21:54,160 Speaker 1: much snow now, but that's very cool. Yeah, the keeping 438 00:21:54,240 --> 00:21:57,439 Speaker 1: about silver, it's a fundamentally bullish mark. In fact, before 439 00:21:57,480 --> 00:22:00,399 Speaker 1: this issues with Robin Hood and stuff is it's the 440 00:22:00,440 --> 00:22:03,040 Speaker 1: most likely commodity I view that was really going to 441 00:22:03,119 --> 00:22:04,720 Speaker 1: get to the old time highs or even double in 442 00:22:04,800 --> 00:22:07,120 Speaker 1: value this year, which is around fifty. It's in a 443 00:22:07,119 --> 00:22:11,160 Speaker 1: perfect spot as far as electrification macro economic it's being 444 00:22:11,240 --> 00:22:14,800 Speaker 1: half industrial, half pressures. But what's happening now with you 445 00:22:14,840 --> 00:22:17,120 Speaker 1: know the Reddit stuff is this is a really deep 446 00:22:17,200 --> 00:22:20,720 Speaker 1: market institutions in terms of future is already very much long. 447 00:22:20,800 --> 00:22:23,480 Speaker 1: I think it's you manage money net positions, I e. Hedghunes, 448 00:22:23,520 --> 00:22:27,280 Speaker 1: there of open interest net long ready. So this is 449 00:22:27,320 --> 00:22:29,920 Speaker 1: just adding a little fuel to the bullish narrative and 450 00:22:30,000 --> 00:22:32,439 Speaker 1: silver the way I see it, so it's kind of 451 00:22:32,440 --> 00:22:34,040 Speaker 1: a do you view this is kind of a short 452 00:22:34,160 --> 00:22:38,040 Speaker 1: term trading I guess, you know, just a short term 453 00:22:38,040 --> 00:22:41,600 Speaker 1: blip here, Mike, Or is this something that the bulls 454 00:22:41,640 --> 00:22:44,560 Speaker 1: can build upon going forward more than the latter? It's 455 00:22:44,560 --> 00:22:46,400 Speaker 1: short term and this is a good way for traders 456 00:22:46,440 --> 00:22:48,600 Speaker 1: to lose money. I I look at the best way 457 00:22:48,600 --> 00:22:51,240 Speaker 1: to look at silver and precious medals and bitcoin, it's 458 00:22:51,280 --> 00:22:53,040 Speaker 1: just buy and forget about it. And the best way 459 00:22:53,080 --> 00:22:56,159 Speaker 1: to lose money is to try to trade it. So 460 00:22:56,520 --> 00:22:58,280 Speaker 1: silver is known as the Devil's medal for a reason 461 00:22:58,320 --> 00:23:00,680 Speaker 1: because it's rip your it will make will make the 462 00:23:00,720 --> 00:23:02,520 Speaker 1: valil is amazing, I'll make you lose your hair, as 463 00:23:02,520 --> 00:23:05,440 Speaker 1: you've seen. I used to have here. But and it's 464 00:23:05,520 --> 00:23:07,600 Speaker 1: but it's at these levels, I think it just adds 465 00:23:07,600 --> 00:23:09,159 Speaker 1: to there. But that's the big difference with things like 466 00:23:09,200 --> 00:23:11,639 Speaker 1: game stock. It's a fundamentally bare stock when I had 467 00:23:11,680 --> 00:23:14,520 Speaker 1: too many shorts. This is fundamentally bullish, a really deep 468 00:23:14,560 --> 00:23:16,879 Speaker 1: market that silberty long and it has a lot of 469 00:23:16,920 --> 00:23:19,040 Speaker 1: reasons to just do what gold did. Gold made a 470 00:23:19,040 --> 00:23:21,880 Speaker 1: new high last year. Silver the gold ratio right now 471 00:23:21,960 --> 00:23:24,560 Speaker 1: is below the twenty year average, which is quite rare. 472 00:23:24,640 --> 00:23:26,680 Speaker 1: So to me, the whole space is just moving higher. 473 00:23:26,800 --> 00:23:29,359 Speaker 1: Just silver has the has the attention at the moment, 474 00:23:29,520 --> 00:23:33,320 Speaker 1: Mike A Man. The statistic from us GS, a government agency. 475 00:23:33,560 --> 00:23:36,359 Speaker 1: If you walk a hundred and eighty feet, folks, which 476 00:23:36,359 --> 00:23:38,560 Speaker 1: is like what Tom Brady will pass on the first 477 00:23:38,600 --> 00:23:42,119 Speaker 1: down on the Super Bowl. If you walk a hundred 478 00:23:42,119 --> 00:23:45,560 Speaker 1: and eighty feet and you make a cube of that size, 479 00:23:46,240 --> 00:23:49,560 Speaker 1: that's all the silver in the world. Mike. I think 480 00:23:49,600 --> 00:23:53,639 Speaker 1: all of us have an intuitive understanding of gold. Is 481 00:23:53,680 --> 00:23:57,840 Speaker 1: silver constrained? Is it rare? Is it is it something 482 00:23:57,840 --> 00:24:01,920 Speaker 1: where they're not mining it anymore? It's been constrained for 483 00:24:01,920 --> 00:24:04,520 Speaker 1: a while. COVID reduced production, and you know prices have 484 00:24:04,560 --> 00:24:07,760 Speaker 1: been down since that peak in two thousand and eleven, 485 00:24:07,840 --> 00:24:10,720 Speaker 1: so obviously you expect to pull back in all the 486 00:24:10,960 --> 00:24:13,680 Speaker 1: all but the most productive minds. But the big difference 487 00:24:13,720 --> 00:24:17,480 Speaker 1: is twenty years ago, maybe eighty or six, it was 488 00:24:17,520 --> 00:24:20,920 Speaker 1: really used for precious purposes and for jewelry and thing. 489 00:24:20,920 --> 00:24:25,760 Speaker 1: Now it's fift is industrial solar panels and things and electrification, 490 00:24:26,000 --> 00:24:29,080 Speaker 1: and the other fifty percent is for coinage. And jewelry 491 00:24:29,080 --> 00:24:30,879 Speaker 1: and things. So to me, that's why it's so unique 492 00:24:30,880 --> 00:24:34,040 Speaker 1: in this space, and it's just not as rare as gold. 493 00:24:34,080 --> 00:24:35,800 Speaker 1: The thing is, if prices get high enough, you can 494 00:24:35,840 --> 00:24:42,359 Speaker 1: bring on silver supply quite rapidly. Gold it's much Where 495 00:24:42,520 --> 00:24:44,639 Speaker 1: where do you get silver? Where do you mind silver? 496 00:24:44,880 --> 00:24:48,919 Speaker 1: Like South America, Mexico, Peru, Chili, it's almost all South America. 497 00:24:48,960 --> 00:24:54,320 Speaker 1: Would just think of the conquistadors and that's just say 498 00:24:54,359 --> 00:25:01,880 Speaker 1: the fourth flor Tiffany. But there, Michael, Bitcoin, let's get 499 00:25:01,880 --> 00:25:05,640 Speaker 1: your thirty seconds on bitcoin. Tom. Tom just lives for this. Well. 500 00:25:05,640 --> 00:25:07,879 Speaker 1: It's the thing about bitcoin is just the fact is 501 00:25:08,400 --> 00:25:12,440 Speaker 1: the old school precious metal holders of centuries now no, 502 00:25:12,680 --> 00:25:15,040 Speaker 1: they have to have some bitcoin in their portfolos, and 503 00:25:15,040 --> 00:25:17,840 Speaker 1: they might be missing out. Now that's not only anecdotal, 504 00:25:17,880 --> 00:25:19,800 Speaker 1: it's a fact in terms of funds. And it makes 505 00:25:19,840 --> 00:25:22,800 Speaker 1: sense from what you're seeing from the narrative is you 506 00:25:22,840 --> 00:25:24,719 Speaker 1: probably need to add maybe a portion of what I 507 00:25:24,760 --> 00:25:26,360 Speaker 1: was going to put in gold, or what I did 508 00:25:26,359 --> 00:25:28,480 Speaker 1: put in gold into bitcoin. So now I analyzed the 509 00:25:28,520 --> 00:25:30,280 Speaker 1: two together, and if you lead a bitcoin of gold 510 00:25:30,320 --> 00:25:34,000 Speaker 1: together combine, the act has been lower than the stock 511 00:25:34,000 --> 00:25:36,800 Speaker 1: market on as you know we could get the forty 512 00:25:36,840 --> 00:25:39,840 Speaker 1: five people Paul we've had on against mcgloan. It could 513 00:25:39,840 --> 00:25:45,120 Speaker 1: be mcglowan against the first one. He was the first 514 00:25:45,160 --> 00:25:48,240 Speaker 1: one to tell me about bitcoin being a store of value, 515 00:25:48,280 --> 00:25:53,080 Speaker 1: so that that hey, hey moon shot, Um Mike, I learned. 516 00:25:53,200 --> 00:25:55,080 Speaker 1: I hate what he's on because I have to take notes. 517 00:25:55,119 --> 00:25:57,880 Speaker 1: I learned so much. Michael mcgloan, Thank you so much, 518 00:25:57,880 --> 00:26:02,080 Speaker 1: Bloomberg Intelligence. Thanks for listening to the Bloomberg Surveillance podcast. 519 00:26:02,480 --> 00:26:07,480 Speaker 1: Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or 520 00:26:07,560 --> 00:26:11,879 Speaker 1: whichever podcast platform you prefer. I'm on Twitter at Tom 521 00:26:11,960 --> 00:26:15,840 Speaker 1: Keene before the podcast. You can always catch us worldwide. 522 00:26:16,280 --> 00:26:17,399 Speaker 1: I'm Bloomberg Radio.