Speaker 1: Hello, and welcome to What Goes Up, a weekly market podcast.
Speaker 1: I'm Mike Reagan, a senior editor at Bloomberg, and this
Speaker 1: week on the show, the Federal Reserve just upgraded its
Speaker 1: assessment of the US economy, but at the same time,
Speaker 1: Jerome pal is not really giving the market many clues
Speaker 1: about when the Central Bank will begin to scale back
Speaker 1: the extraordinary monetary stimulus that's been providing. What does this
Speaker 1: all mean for the outlook for inflation and financial markets. Well,
Speaker 1: we'll get into it with the co chief investment officer
Speaker 1: of the world's biggest hedge fund firm. But first, Charlie
Speaker 1: Pellett let us know who this week's mystery co host is.
Speaker 1: Liz Capo McCormick is a reporter for Bloomberg who began
Speaker 1: her career on a wall screen trading desk before being
Speaker 1: lured into media. She actually he has a degree in physics,
Speaker 1: which means she can spot a Mike Reagan tangent from
Speaker 1: a mile away. She's excited to do the podcast because
Speaker 1: now when Reagan asks her dumb questions about the Fed,
Speaker 1: she can just say, listen to the tape, Mike, Liz,
Speaker 1: I'm not sure, Charlie is right about that. I think
Speaker 1: I'm still gonna be asking you questions about the FED
Speaker 1: on a daily basis, as as is our normal routine. So, uh,
Speaker 1: we can't talk about physics, and God knows I have
Speaker 1: to use my physics in a lifetime. We could, I
Speaker 1: will not as if I know what you're talking about,
Speaker 1: but we better not. But let's bring our guests in.
Speaker 1: I don't know if he has any thoughts on physics,
Speaker 1: but I know he's got some great thoughts on the market. Uh.
Speaker 1: He is, as I said, he's the co chief investment
Speaker 1: officer at Bridgewater Associates. His name is Greg Jetson. Greg,
Speaker 1: welcome to the show. Well, thanks a lot, it's good
Speaker 1: to talk to you guys. Greg. Let's get right into it,
Speaker 1: uh and talk about the FED me eating on Wednesday. Um.
Speaker 1: You know, my impression is the statement itself and the
Speaker 1: press conference from Chairman Pal didn't really move the needle
Speaker 1: much as far as I think what a lot of
Speaker 1: market participants really crave. And that's some clarity on when
Speaker 1: we can expect asset purchases to begin to be tapered
Speaker 1: and eventually after that a normalization of interest rate policy.
Speaker 1: But I'm just curious what your reaction is, UM, Did
Speaker 1: you take away anything any new information from that UH
Speaker 1: statement and discussion from Chairman Palu. Yeah, nothing new, particularly
Speaker 1: in on Wednesday's message. But the basic picture is really
Speaker 1: important and really necessarily to talk about it when you're
Speaker 1: thinking about markets and macro economies, which is that we're
Speaker 1: in a new paradigm of central banking. That if you
Speaker 1: go back over the last fourty years, starting with Vulgar,
Speaker 1: you had an inflation fighting what first phase was a
Speaker 1: monetary policy one what we call kind of managing the
Speaker 1: economy through interest rates and lower interest rates causing more
Speaker 1: private sector debt, higher interest rates causing a debt cycle
Speaker 1: in the opposite direction. You move past the financial crisis.
Speaker 1: In two thousand eight, interest rates get all the way
Speaker 1: to zero, private sector debt hits its peaks that even
Speaker 1: at zero interest rates you can't stimulate, and you move
Speaker 1: into money printing making up for the loss of credit.
Speaker 1: And that's what we'd call monetary policy to where you
Speaker 1: go quee by assets with it. It affects the economy,
Speaker 1: but very indirectly and much more effects asset prices. And
Speaker 1: here we are, and what we consider an MP three
Speaker 1: world where in two thousand eighteen the FED kind of
Speaker 1: learned the final lesson that they don't want to be
Speaker 1: too preemptive. That they started raising interest rates before inflation came.
Speaker 1: It had negative effects and unnecessary negative effects in their mind.
Speaker 1: And so here we're in a world where monetary policies
Speaker 1: mostly supporting fiscal policy. It's not as important as fiscal policy,
Speaker 1: and it is not going to be preemptive that they
Speaker 1: are gonna wait and wait and wait for inflation to rise,
Speaker 1: for bubbles to form, but four than take any action,
Speaker 1: and that that's the big deal here. And in a way,
Speaker 1: this is a dangerous territory, but it's also necessary territory.
Speaker 1: When you look at the conditions that we had coming
Speaker 1: into the COVID pandemic. We thought this movement to MP
Speaker 1: three would take five to ten years. But the reason
Speaker 1: that it was inevitable was there. So was the essentially
Speaker 1: the level of io used in the level of wealth
Speaker 1: can't be paid back through income, so you have to
Speaker 1: print money to support essentially the promises in the economy.
Speaker 1: And there's so much division in the country that stimulative,
Speaker 1: more inflationary policy makes more sense than this forty year
Speaker 1: pro corporate lower and lower inflation environment. So you've gotten
Speaker 1: this shift. The shift is necessary, but now we're in
Speaker 1: a whole new set of risks that you know, most
Speaker 1: market participants haven't really had to deal with because the
Speaker 1: problems of of these types of policies haven't really been
Speaker 1: around for forty years. And in the short term, the
Speaker 1: more easy, the better. The countries that have done more
Speaker 1: fiscal and more mod terry are better off in the
Speaker 1: countries that didn't. That's evident, and and that that is
Speaker 1: going to push itself inevitably until those policies cause problems. Greg.
Speaker 1: I'll jump in something also about the FED, but touching
Speaker 1: on what you were saying, this paradigm shift. I'm curious
Speaker 1: you probably heard Jerome Pale in his press conference this
Speaker 1: week that he was he was asked specifically about, oh,
Speaker 1: the break even inflation rates have risen quite sharply, which
Speaker 1: I know you've noted in your recent research, and but
Speaker 1: he said, no, we're fine, They're about in line given
Speaker 1: the difference between CPI and what they track with about
Speaker 1: two percent, and we want inflation expectations to be really
Speaker 1: anchored at two when they're not there yet. So he
Speaker 1: seemed to really like, he didn't blink that he's at
Speaker 1: all concerned. And when you say this paradigm shift is necessary,
Speaker 1: but it creates risks. Do you think that he might
Speaker 1: by the time he's concerned, they might not be able
Speaker 1: to slow the inflation move or you know, how do
Speaker 1: you read that or are he kind of trying to
Speaker 1: convince that he could do it? Well? Yeah, I think
Speaker 1: that they're the power of tightening monetary stolt policy will
Speaker 1: still be pretty successful when they get to it, So
Speaker 1: we'll see. I think the question is whether they're gonna
Speaker 1: want to given the trade offs. So it's gonna be difficult, right,
Speaker 1: And this is why studying like in retrospect, it looks
Speaker 1: like monetary policy in nineteen seventies was totally foolish to
Speaker 1: allow inflation yet as high as it was, but it
Speaker 1: was dealing with problems, real problems at the time, well,
Speaker 1: oil shortages, etcetera. There's a reason real interest rates were
Speaker 1: kept low for extended period of time till inflation rose. Similarly, today,
Speaker 1: with all the challenges we face socially, there's a chance
Speaker 1: they're gonna purposely be behind the curve for an extended
Speaker 1: period of time because inflation is better than the other
Speaker 1: options UM, which the other options are difficult. If you
Speaker 1: take where asset prices are today and you think about
Speaker 1: how much income needs to be generated to support those
Speaker 1: asset prices. In the end, assets can only be worth
Speaker 1: the cash flows that they generate. To generate enough cash
Speaker 1: flow to support this level of equity market, you need
Speaker 1: either a lot of nominal GDP, which either comes from
Speaker 1: a productivity miracle or inflation and you or a much
Speaker 1: lower asset prices. So what do you want. Do you
Speaker 1: want to collapse in asset prices or do you want
Speaker 1: a general rising and nonled GDP. If you take today's
Speaker 1: asset prices and look at how many years of income
Speaker 1: are required to support those, it's about twenty four years
Speaker 1: of income. The only comparable periods in history there four
Speaker 1: of them. One was UM was right before the tech
Speaker 1: bubble in two thousand two thousand. One. Of course, that
Speaker 1: was resolved through a collapse in asset prices, again collapse
Speaker 1: and asset prises. But on the other hand nine and
Speaker 1: nine five were absorbed by inflation, which is the other
Speaker 1: choice UM where nominal g to be caught up. Real
Speaker 1: asset assetprises did bad in real terms, but did quite well,
Speaker 1: quite fine in nominal terms, and nominal GDP caught up
Speaker 1: to the assets through that process. So we think you're
Speaker 1: gonna face that dilemma that if they withdraw liquidity, that's
Speaker 1: gonna have a big impact on asset prices because asset
Speaker 1: price has been so supported by the liquidity, and if
Speaker 1: they don't withdraw the liquidity, they're gonna have inflation problems.
Speaker 1: And so they'll go back and forth between that challenge
Speaker 1: of how much you wanted to show up in lower
Speaker 1: asset prices and how much you wanted to show up
Speaker 1: that pressure physics put it that way UM to uh
Speaker 1: show up in asset prices, and how much you wanted
Speaker 1: to show up in inflation. But there is no easy
Speaker 1: way out of the current dilemma. That's about all the
Speaker 1: physics I can handle. I think Letzletz can get into
Speaker 1: the co of the coefficients and whatnot. But know, to me,
Speaker 1: I'm I'm sort of in awe and impressed of how
Speaker 1: well pal kind of dodges the question of of are
Speaker 1: you even thinking about talking about thinking about maybe whispering
Speaker 1: about tapering UM? And I think that's very understandable given
Speaker 1: you know the reaction we saw the taper tantrum a
Speaker 1: few years ago that he wants to not sort of
Speaker 1: tip his hand about when and if that might be.
Speaker 1: But I wonder if that, as you're talking about, there
Speaker 1: is gonna probably be a reaction in uset more markets. Um.
Speaker 1: You know, the joke I've been saying is tapering ain't easy.
Speaker 1: I don't I don't see any way to do it easily. Um.
Speaker 1: And I wonder if if this um sort of posture
Speaker 1: that he's taking with it now perhaps could condense the
Speaker 1: time between when they finally signal that it's coming uh
Speaker 1: and when they actually start doing it, and perhaps causes
Speaker 1: the tapering to be more aggressive than what the market's expecting.
Speaker 1: And I wonder, you know, how much does that matter
Speaker 1: to markets? Is it all a matter of sort of
Speaker 1: what the Fed fund futures traders and what the eurodollar
Speaker 1: futures traders are pricing in. Is that basically the the
Speaker 1: main metric that will determine how violent the reaction is
Speaker 1: from the market when when it does finally come time
Speaker 1: to say, yes, we're thinking about tapering, Yeah, well it's
Speaker 1: gonna be a big deal. So I think UM, in
Speaker 1: asset prices. Right, there's and I think there's this important
Speaker 1: separation that's gonna matter and is actually the biggest risk
Speaker 1: for asset prices is the separation between the real economy
Speaker 1: and asset prices. The real economy is about to have
Speaker 1: the biggest boom it's ever had. We're gonna go and
Speaker 1: surging through the level. So if you look at where
Speaker 1: we expect will be to a month from now, you're
Speaker 1: gonna robably have four percent unemployment rate, really hard to
Speaker 1: hire anyone, rising wages growth having been eight nine um.
Speaker 1: And the Fed and what could the Fed mindset that
Speaker 1: if you look out, you know, eighteen months there's only
Speaker 1: twenty five basis points of tightening. Price did barely anything right.
Speaker 1: Yet they're gonna be facing those conditions. So I do
Speaker 1: think we're gonna force their hand. It's gonna force their hand.
Speaker 1: The economic growth isn't going to be driven we're so
Speaker 1: affected by the interest rates, at least in my view,
Speaker 1: because it's so fiscally driven. The checks have been written,
Speaker 1: the wealth is there, um, the the fiscal spending is
Speaker 1: still in the pipeline, so it's not as interest rate
Speaker 1: sensitive as let's say, a normal business cycle created by
Speaker 1: um mainly private sector outcomes. So you have this possibility
Speaker 1: that the economy is continue to surge ahead. The FED
Speaker 1: still has these very low interest rates and they have
Speaker 1: to start reeling back. At the same time, the Treasury
Speaker 1: is going to be issuing for a long time of
Speaker 1: GDP of bonds. Currently the Feds buying half of those,
Speaker 1: and if they buy none of those, the private sector
Speaker 1: has got to come up with the money to buy
Speaker 1: GDP and bonds. Are they going to do that at
Speaker 1: this rate? We don't find a lot of buyers in
Speaker 1: the private sector likely to buy bonds at anywhere near
Speaker 1: these rates to that quantity, right, And that's gonna be
Speaker 1: the first thing that's gonna move, is who's gonna buy
Speaker 1: the bonds when the Fed doesn't. When they face those conditions,
Speaker 1: they are gonna taper, and then you're gonna need to
Speaker 1: fill that gap, and you're gonna find out, hi, how hard,
Speaker 1: how hard it is the FED will find out with us.
Speaker 1: And then what are the implications. I actually think the
Speaker 1: implications for markets will be pretty important. The implications for
Speaker 1: the economy will be less set. At which point the
Speaker 1: Fed's gonna face the second elements. Do they react the
Speaker 1: asset prices. Everybody in asset markets is so used to
Speaker 1: them reacting with a trigger finger to asset prices. But
Speaker 1: the reason is that the market the economy has been
Speaker 1: so tied to asset prices, where if the economy is
Speaker 1: being reduced by fiscal policy, all of a sudden, you've
Speaker 1: got two different worlds going on, and you've got the
Speaker 1: possibility that FED won't backstop the liquidity coming out of
Speaker 1: asset prices, and asset prices can fall while the economy rises.
Speaker 1: That's actually a reasonable outcome, in a normal outcome in
Speaker 1: a world where fiscal policies driving the economy rather than
Speaker 1: the interest rate cycle. And so that's really where the
Speaker 1: risks are getting to be really big. And then the
Speaker 1: worst thing for the markets in a sense would be
Speaker 1: a very strong economy that doesn't require this much of
Speaker 1: liquidity while the asset prices required this much liquidity. And
Speaker 1: that's the world I think we're heading too over the
Speaker 1: next six months or so. In that world, it seems
Speaker 1: like somewhere there's got And I'm not a stock girl,
Speaker 1: Mike's the expert on that, but it just obviously I
Speaker 1: watch it, and if if the markets less interest rate sensitive.
Speaker 1: You know, for a while we were thinking, oh my god,
Speaker 1: where the tenure was going, even though it wasn't too
Speaker 1: high relative to history, was going to up end the
Speaker 1: stock market and it hasn't. And with what you just
Speaker 1: laid out, Greg, does that mean we have some more
Speaker 1: glide paths for yields to go higher before the asset
Speaker 1: prices really start going. But obviously there's a point, right,
Speaker 1: And it makes it seem to me, is it harder
Speaker 1: to know when that point is um and is that
Speaker 1: global demand going to come in which it kind of
Speaker 1: has over the last couple of years to kind of
Speaker 1: tamp those yields down or you know, That's what I
Speaker 1: think is tricky. It's a new paradigm. Like you said,
Speaker 1: where where does the cracking point? Yeah, well, but you
Speaker 1: can still look at the quantities, right, So the quantity
Speaker 1: is much more than it has been in those past
Speaker 1: episodes of foreign investors just are unlikely to feel that
Speaker 1: type of hole. So the main question is will the
Speaker 1: Fed continued to hold it for how long? But when
Speaker 1: they don't, it's going to be very hard. But I
Speaker 1: agree again I want to separate. I think there are
Speaker 1: a lot of assets that will be quite vulnerable to
Speaker 1: arise in rates, but the economy won't be as vulnerable,
Speaker 1: and that difference is the difference just thinking. Oftentimes we're
Speaker 1: thinking the economy and assets too much as a as
Speaker 1: being tied together, where obviously COVID christ is a perfect
Speaker 1: example of where the economy and the markets can go
Speaker 1: radically different directions than they did, and the reverse the reverse,
Speaker 1: where the liquidity comes out more money is spent in
Speaker 1: the real economy rather than financial markets. The most extreme
Speaker 1: example is the retail bubble stocks as an example where
Speaker 1: people had nothing to do with COVID. Household savings reached
Speaker 1: record levels, the money goes into certain types of stocks
Speaker 1: and whatever. Now things are opening up, those savings rates
Speaker 1: are declining, there's less liquidity there, and those assets come
Speaker 1: down that we're so unhinged from the real economy anyway.
Speaker 1: So differentiating what we think the real thing is going
Speaker 1: to be in the future globally is differentiating between the
Speaker 1: assets that require the liquidity in the very low real
Speaker 1: interest rates to make sense economically, with those that can
Speaker 1: benefit from the nominal GDP cash flows in the real economy,
Speaker 1: and separating between those the things that really benefit from
Speaker 1: higher dominal GDP will do well. The things that UM
Speaker 1: get hurt by less liquidity that have high duration, those
Speaker 1: assets are in in a lot more trouble. So that'll
Speaker 1: be the kind of the differentiation that I think you'll
Speaker 1: start seeing. Greg. I'm gonna get a little greedy here
Speaker 1: and ask you a two part question. Uh, but you
Speaker 1: should be grateful. I I've been known to ask like
Speaker 1: twelve part questions. I'm gonna take it easy, just try
Speaker 1: to try to keep it to two. But I wanted
Speaker 1: to go back to something you said earlier, and I
Speaker 1: know you've you've done some work on this and given
Speaker 1: it a lot of thought, and that it's that idea
Speaker 1: of the FED being behind the economy and how inevitably
Speaker 1: that's likely to cause some excesses in markets or perhaps
Speaker 1: an inflation. I'm just curious. So so the first part is,
Speaker 1: I'm curious if you're seeing that anywhere. I mean, obviously
Speaker 1: you mentioned the meme stocks. I think that's a clear example.
Speaker 1: But are you ain't it anywhere else? Uh yet? And
Speaker 1: if that where, where are the sort of corners of
Speaker 1: the markets that you would look first? And then on
Speaker 1: top of that, UM, to me, I think bubbles are
Speaker 1: very strange phenomenon because the risk reward relationship is so interesting.
Speaker 1: It almost seems that as an investor you have to
Speaker 1: participate in bubbles because so many people will will call
Speaker 1: the top early and think it's a bubble too early,
Speaker 1: that that you really missed the best parts of them.
Speaker 1: So I'm just wondering, you know, with all the brain
Speaker 1: power at Bridgewater, uh, if you guys are any better
Speaker 1: than us average mortals and trying to figure out sort
Speaker 1: of when the music is about to stop, when to
Speaker 1: once to get out of a clearly overvalued market, and
Speaker 1: all along the bridge waters history we've been systematic, you know,
Speaker 1: so we've taken very like the kind discussion we're having now,
Speaker 1: very qualitative view of the world, but translated into ways
Speaker 1: to measure. So you take something like a bubble, right,
Speaker 1: bubbles a classic qualitative thing. How do you what do
Speaker 1: you mean bubble? How do you measure that it's a bubble?
Speaker 1: Is it enough to say prices are high relative to history?
Speaker 1: Or what's the actual measure? And then how reliable is it?
Speaker 1: And you know, we have six gages of a bubble
Speaker 1: that we use all over the world, right that you
Speaker 1: could apply it to cryptocurrency. You can apply it to
Speaker 1: anything you wanted in the world, the stocks, two bonds,
Speaker 1: and anything that. You know that our basic scoreboard is
Speaker 1: our prices high relative to traditional measures, are prices discounting
Speaker 1: unsustainable conditions. So as an example today, um, you know,
Speaker 1: there's something like ten percent of stocks that are pricing
Speaker 1: in more than revenue growth and margin expangeon. Right. If
Speaker 1: you look at history, two percent of stocks actually achieve that.
Speaker 1: That's an extremely hard thing to do. Everybody's going to
Speaker 1: be the next Amazon. Right. If Amazon was priced today
Speaker 1: as those ten percent of stocks are, if they I mean,
Speaker 1: if it was priced ten years ago as those stocks were,
Speaker 1: the the annual return on Amazon would have been like
Speaker 1: eight percent a year because it would already have priced
Speaker 1: in this incredible outcome that not every company does. Growing
Speaker 1: revenue you're faster, Um, so very very hard. It's not
Speaker 1: not counting the base effects from right, No, No, I'm
Speaker 1: talking about right, ongoing growth rates. Without the base effect,
Speaker 1: it doesn't happen. That's very very unlikely to happen. Right.
Speaker 1: Potentially with inflation or something you might but but in
Speaker 1: a normal kind of forward looking picture, you don't get
Speaker 1: that two percent of stocks actually achieve them. So that's
Speaker 1: an example of discounting unsustainable conditions and not they can't
Speaker 1: as a group actually achieve that condition. The fact that
Speaker 1: new another now I'm on the third thing is new
Speaker 1: buyers entering the market. How many new buyers are there,
Speaker 1: how big a part of the market they are. There's
Speaker 1: the broad sentiment measures, there's purchases being financed by leverage,
Speaker 1: and buyers and businesses sort of extending making extended forward purchases.
Speaker 1: That's our checklist for a bubble. We measure all the
Speaker 1: different things. And you see today a fair amount of
Speaker 1: the equity market in the US in the bubble, but
Speaker 1: not the aggregate. So the aggregate, we would say is,
Speaker 1: you know, short of a bubble, but um, there are
Speaker 1: definitely pockets that meet those standards and um, and that's dangerous.
Speaker 1: And then you said, well, what do you want to
Speaker 1: do buy or sell them? Well, that's a whole other
Speaker 1: dangerous thing. And that's where when we survived surviving two thousand,
Speaker 1: two thousand one, we had to draw down in two thousand,
Speaker 1: two thous and one associated with the bubble, both the
Speaker 1: dollar and the equity market and how that was playing
Speaker 1: out at the time, and that really forced us to
Speaker 1: get into flows, which is basically how we measure bubbles
Speaker 1: today is well, how where's the money coming from? Who
Speaker 1: are the buyers and sellers? What are their balance sheets?
Speaker 1: Like how much more money can they put into this
Speaker 1: bubble versus how much um income they're getting and when
Speaker 1: does that start to flip? Right? And so for us,
Speaker 1: that process of being able to look at the balance
Speaker 1: sheets of the buyers and sellers think about when they've
Speaker 1: been stretched to an extreme where they won't have the money,
Speaker 1: where there's more supply coming than possible demand. So you
Speaker 1: look at the I p O pipeline, you look at
Speaker 1: the creation of of new instruments, those things relative to
Speaker 1: that how fast those balance sheets are growing, And that's
Speaker 1: how we try to measure that, cris Cross. And it's
Speaker 1: still a very very dangerous game, like you're saying. So
Speaker 1: the third part is be careful and be conservative in
Speaker 1: your thinking around the ability to time those things, because,
Speaker 1: like you said, that's kind of the easiest place to
Speaker 1: die in asset prises is trying to be short a
Speaker 1: bubble too early. Um. So I think that's the kind
Speaker 1: of the way that we um we go about trying
Speaker 1: to think about it and deal with it, and you're in.
Speaker 1: What I would say is there's areas that look quite
Speaker 1: bubble like, are quite dangerous, but you also have the
Speaker 1: ingredients for bubbles that it's nowhere near as bigger bubble
Speaker 1: yet as it was in ninety nine. So we know
Speaker 1: bubbles can get bigger. And it's um and you have
Speaker 1: the perfect storm for bubbles, access liquidity, a very easy
Speaker 1: central bank at a pickup in growth and a pick
Speaker 1: up in um new wealth. New Wealth tends to get
Speaker 1: spent fast, tends to get over extrapolated, and and so
Speaker 1: you have a lot of the conditions for an ongoing bubble.
Speaker 1: Now I think the trigger will be man. There's so
Speaker 1: much supply. The supply is coming at the market very
Speaker 1: quickly in those areas, and when the liquidity starts to
Speaker 1: get drained out, that's where you'll see that criss cross
Speaker 1: of probably in more of those bubble areas. No, I
Speaker 1: was what I was going to ask Greg, is that
Speaker 1: one of the offshoots of the risks I've read that
Speaker 1: you mentioned of this MP three policy is that could
Speaker 1: be in the currency. I assume you're meeting a week
Speaker 1: or dollar and I wondered if you could talk a
Speaker 1: little bit about that. We haven't seen that too much yet,
Speaker 1: but you know what's the likelihood of that? Well, I
Speaker 1: think in the end, right, if you take the base,
Speaker 1: there's the destiny of the path that we're on. Right,
Speaker 1: that we have learned that you could spend a tremendous
Speaker 1: amount of money every time the economy goes down, and
Speaker 1: you can print the money to pay for that. That
Speaker 1: the destiny here is that you'll keep doing that one
Speaker 1: way or the other. The politics are go in that direction,
Speaker 1: whether it's Republicans through tax cuts or Democrats through spending.
Speaker 1: Either way, that is likely to continue and and until
Speaker 1: you can't do it anymore. So what is the actual wall?
Speaker 1: The wall is inflation. The wall is where a dollar
Speaker 1: risk or bubbles that becomes so problematic. Right, those are
Speaker 1: the walls that will prevent this from going on forever
Speaker 1: and um and the dollar risk is particularly important to consider,
Speaker 1: but it is worth focusing on the fact that it's
Speaker 1: a differential. Um So it's relative. So the dollar, how
Speaker 1: much of the dollar going to go down versus the Euro? Well,
Speaker 1: Europe's printing money as well, So what's the what's the
Speaker 1: relative risk. So for US, the courtesy thing is looking
Speaker 1: at those differentials and the dollar. The US is on
Speaker 1: a path so many countries have saved in dollars. They
Speaker 1: recognize if you take China or others that you can
Speaker 1: never get richer than the country that prints the money.
Speaker 1: So if if they want to save in dollars, the
Speaker 1: FED can tomorrow print more dollars than China could ever
Speaker 1: accumulate by selling US um stuff. Right, So eventually you're seeing,
Speaker 1: just from a geopolitical thing, that saving in dollars is
Speaker 1: risky for anybody that's competitive with the US, and that
Speaker 1: the fact that over time you're likely to see a
Speaker 1: change and where money will be saved at the same
Speaker 1: time you're likely to see more money printed. That's the
Speaker 1: picture that eventually will lead to a decline in the dollar.
Speaker 1: That could take a while as a reserve currency and
Speaker 1: clide in the dollar, But in the short term, focusing
Speaker 1: on those differentials and the most extreme differentials are not
Speaker 1: within the developed currencies. It's really a lot of the
Speaker 1: emerging world. Ironically, if you take a cuntry like Mexico,
Speaker 1: you think of them as a kind of a monetary
Speaker 1: basket case. Meanwhile, there's so much more conservative monetarily than
Speaker 1: the than the US is running much lower budget deficits
Speaker 1: and much less easy monetary policy into this. So you
Speaker 1: have these emergent currencies that are actually the ones following
Speaker 1: what would be traditional type monetary policy standards through a crisis,
Speaker 1: and the developed world doing something very different. So I
Speaker 1: think you'll likely, for a variety of reasons, have strengthened
Speaker 1: some of those emerging currencies, particularly the ones that are
Speaker 1: going to benefit from this growth surgeon in the US
Speaker 1: that don't require very much you s dollar liquidity and
Speaker 1: so um. So I think that's the place you'll see
Speaker 1: the first really wave of strength, and more long term,
Speaker 1: the issue you face is the is the fact that
Speaker 1: the dollar reserve currency status is naturally changing, and the
Speaker 1: printing of money and using the dollar as a weapon
Speaker 1: geo politically is leading to a more rapid transition. So
Speaker 1: those are the things certainly something that the FED will
Speaker 1: be watching, but like you said, we're a long way
Speaker 1: from the dollar being a problem with anything. The FED
Speaker 1: would be happy to get a falling dollar from years.
Speaker 1: So that's a longer term concern, not a shorter term concern,
Speaker 1: but it will be a measure of whether we pushed
Speaker 1: too hard. You know, Greg, I keep hearing a lot
Speaker 1: of people talking about the notion of peak growth, that
Speaker 1: this quarter may may possibly be the peak of GDP growth,
Speaker 1: the peak of earnings growth, UM, if not this one
Speaker 1: next quarter, UH, large part because of the base effects
Speaker 1: from last year. And I guess for a lot of people,
Speaker 1: the same thing applies to inflation, and the the notion
Speaker 1: that UH any bump and inflation we see in the
Speaker 1: middle of this year will be likely either UH caused
Speaker 1: by the supply chain disruptions or the base effects from
Speaker 1: last year. I think there's a little bit of recency
Speaker 1: bias at work to UM. You know, everybody was so
Speaker 1: worried about inflation during the first phase of chewey and
Speaker 1: it didn't come to pass UH that people are kind
Speaker 1: of assuming that's going to be the case UH this
Speaker 1: time as well in the long run. I know you've
Speaker 1: You've given a lot of thoughts to inflation, done a
Speaker 1: lot of work on it, UH, specifically the role that
Speaker 1: technology plays as a deflationary force, technology and automation and
Speaker 1: that sort of thing. So I'm just kind of wondering
Speaker 1: what your overall sense of inflation is this year. I mean,
Speaker 1: is there a risk that that kind of consensus that
Speaker 1: this is just a transitory hot period for inflation service
Speaker 1: that that that's wrong, that this time is different from
Speaker 1: the first phase of quity, and maybe that technology effect
Speaker 1: on inflation will not be as strong as it used
Speaker 1: to be. Well, there's a lot in there, so let
Speaker 1: let me go backwards to the mechanics of That was
Speaker 1: one of the twelve part questions. So let me go
Speaker 1: backwards here for the the first part you said is, hey,
Speaker 1: a lot of people thought that the first quit in
Speaker 1: two thousand nine was going to be inflationary. To be clear,
Speaker 1: we didn't. And let me talk about the mechanics of
Speaker 1: why when you use quantitative easing to buy assets, and
Speaker 1: you're doing that largely because there's a credit contraction, they
Speaker 1: were off setting a correct credit contraction with money. The
Speaker 1: credit contraction was massively deflationary, and the money off set that,
Speaker 1: and when into asset prices, it only marginally went into
Speaker 1: the real economy very different. So you saw a big
Speaker 1: asset price move, but you didn't see a big move
Speaker 1: in CPI. You come to this policy where you're writing
Speaker 1: checks two people on the lower end of the income
Speaker 1: spectrum um and you're doing a lot of infrastructure, and
Speaker 1: you're printing the money to do those things. Totally different.
Speaker 1: This is all of a sudden creating demand in the
Speaker 1: real economy without creating supply. So there's no supply associated
Speaker 1: with those checks, there's no new production, etcetera. It just
Speaker 1: comes in. So you have this this mismatch. So the
Speaker 1: belief that it's going to play out like post two
Speaker 1: dozen tend I think is is wrong and that it
Speaker 1: is being underestimated. How big a turning point we are
Speaker 1: now if they pull back hard on fiscal and let's
Speaker 1: say the Republicans win in two or whatever, and you
Speaker 1: come back to the other direction on fiscal maybe that's
Speaker 1: a different story. But if you go down this path
Speaker 1: of printing money to spend in the real economy or
Speaker 1: to get checks to people who have lower savings rates
Speaker 1: in the highest end, there's very different than putting the
Speaker 1: money into asset prices in terms of inflation in a
Speaker 1: good way, like that's a good redistributed and there's a
Speaker 1: lot of good in that, but it is different mechanically
Speaker 1: from the effect on on prices. So that I make
Speaker 1: that point first. So I do think there's a big
Speaker 1: risk the market and the federal underestimating how fast this
Speaker 1: will happen. And everything is happening in warp speed. If
Speaker 1: you take the downturn in the Great Depression, right, it
Speaker 1: took essentially um seven years to get to the bottom
Speaker 1: of the economy and seven years to get back up.
Speaker 1: That's how long it took for policy, etcetera. In the
Speaker 1: financial crisis, you had eighteen months to the bottom, eighteen
Speaker 1: months to come back up. In this crisis, you had,
Speaker 1: you know, such an extreme policy response that within a
Speaker 1: month and a half of the equity market collapse, you
Speaker 1: were two months later. You're back essentially to the old highs.
Speaker 1: Incredibly fast policy response, incredibly powerful, and the real economic
Speaker 1: effect will be slower than that, but could be much
Speaker 1: faster than what we're used to. And so I think
Speaker 1: that there's a real risk that the inflation could be
Speaker 1: stronger and more permanent, and that it's largely a big
Speaker 1: part of the permanence will be the power of labor.
Speaker 1: Here we're gonna be facing such a shortage of labor.
Speaker 1: You're already seeing it all over the place, their shortages
Speaker 1: of goods and stuff. But there'll be a shortage of
Speaker 1: labor coming fast in the US and m that's a
Speaker 1: big deal. And you've gotten now a big shift in
Speaker 1: the philosophy of government, certainly for now in the US,
Speaker 1: that you went forty years in a cycle of very
Speaker 1: pro government policy, pro corporate policies and pretty much anti
Speaker 1: labor policies for forty years, you have this turn, you know,
Speaker 1: almost with the hilarious ending of like the president, the
Speaker 1: last president checking stock prices and tweeting about them every
Speaker 1: five minutes, um. As like the extreme of this very
Speaker 1: pro corporate environment, all of a sudden shifting to a
Speaker 1: different type of environment where regulation and taxes and um
Speaker 1: likely eventually minimum wage and these things are going the
Speaker 1: other direction from an extreme right and naturally will come
Speaker 1: back to some degree in the other direction. So all
Speaker 1: of those things are pointing in my mind to a
Speaker 1: more inflationary and not just transitory, but a pretty big shift, um.
Speaker 1: And then it will be it'll be hidden in the
Speaker 1: transitory nature, much like inflation was in the seventies. When
Speaker 1: the weal shot comes, is it going to go? Is
Speaker 1: it going to stay? Of course, you don't want to
Speaker 1: tighten into an oil shock if you don't have to
Speaker 1: for good reasons. Similarly, the Fed's gonna look at this
Speaker 1: year and say, do we really want to tighten into
Speaker 1: a balance out of the virus, Like does that make sense?
Speaker 1: But that's how inflation gets hardened, and and so I
Speaker 1: do think you'll see that argument, the transitory versus not
Speaker 1: argument be the big deal, as inflation is rising and
Speaker 1: I do think we're stuck with more of it for
Speaker 1: good reason. Now on the technology question that you ask, Yeah,
Speaker 1: technology has been a major deflationary force. So if you
Speaker 1: take the five major forces, the first most important turning
Speaker 1: point force was central bank Pulsey high real yields drove
Speaker 1: inflation down, vulcor driving real real high and letting the
Speaker 1: economy go down until inflation came down. Big deal. So
Speaker 1: first there was the change of monetary policy in starts
Speaker 1: driving it. Then there's globalization so much taking advantage of
Speaker 1: cheaper wages. There's also lower lower interest rates at tax
Speaker 1: policy that allowed a pro corporate environment that constrained wages
Speaker 1: so anti union um, and a very low regulatory environment
Speaker 1: generally particularly in the US, but generally global um. Most
Speaker 1: of those are changed, so you're left with technology as
Speaker 1: the deflationary force, and two points about it. It's certainly
Speaker 1: been significantly deflationary. The literal semiconductor impact of inflation is
Speaker 1: starting to turn. It's getting harder and harder. We have
Speaker 1: more concentrated semiconductor industry than ever in the world. It's
Speaker 1: a big flashpoint in the world in terms of danger
Speaker 1: that there's a risk to supplies from a geopolitical perspective.
Speaker 1: So you went from let's say twenty years ago, where
Speaker 1: you had you know, five firms competing to make the
Speaker 1: cheapest semiconductors to now give three and it's not much
Speaker 1: of a competition anymore. It's more of an oligopoly uh
Speaker 1: and UM and a dangerous supply point where people are
Speaker 1: turning to the sustainability rather than the cheapest possible supply chain.
Speaker 1: So you've got a big deal thing there now. More generally,
Speaker 1: I think tech will be deflationary. There's still great inventions
Speaker 1: in AI and whatever they are coming, so there's deflationary forces,
Speaker 1: and to some extent, policy wise, you want to take
Speaker 1: technological deflation which goes to very few people the benefits
Speaker 1: of it, and transfer it to all of society, or
Speaker 1: else you're gonna end up in a dystopian kind of situation.
Speaker 1: So that's sort of the best way to look at
Speaker 1: the policy today as well. Let's take the technological deflation
Speaker 1: and let's use it for society is good through um
Speaker 1: monterary policy three, through essentially investing in the in the
Speaker 1: economy and using printed money to do that to offset
Speaker 1: the deflationary force. Now where we are on that, it
Speaker 1: would look to me like we're pushing that to an extreme,
Speaker 1: and you could do way too much of that. A
Speaker 1: little bit of that is the right move, but you
Speaker 1: get addicted on that, and too much of that more
Speaker 1: than offset the technological deflation, which when I look at
Speaker 1: the quantities, I would guess that's the case unless technological
Speaker 1: deflation accelerates massively from here. Greg One follow up to
Speaker 1: that is one of the things that a lot of
Speaker 1: people have said to me is part of the reason
Speaker 1: for the kind of secular low inflation environment was demographics
Speaker 1: and low yields. Right, demographics. Somebody said to me the
Speaker 1: other day, oh, ten thousand baby boomers are still retiring
Speaker 1: all the time for the next decade. They needs to save.
Speaker 1: And I think there are some folks who did like
Speaker 1: theories that that that has kind of moved the the
Speaker 1: bias towards future consumption over currently, I just want to
Speaker 1: ask you about demographics. How do you think that weighs in?
Speaker 1: Is that changing or how how will that affect kind
Speaker 1: of the inflationary forces and yield. Well, I think it's
Speaker 1: different for different um for different types of items. But
Speaker 1: I agree, I agree demographics are part of the deflationary force. Now,
Speaker 1: the demographics in different places are changing a different degrees,
Speaker 1: and so if you take the emerging world in India, whatever,
Speaker 1: you've got different things going on that an aggregate, I
Speaker 1: don't think it's quite as deflationary as it was when
Speaker 1: you see the shift in the demand towards the emerging
Speaker 1: world from the developed world. But but um, you're right,
Speaker 1: although that's shrinking the labor force relative to the consuming
Speaker 1: bodies now to the extent of shrinks consumption more. That's
Speaker 1: one thing. But as you age, you're shrinking the labor
Speaker 1: force relative to everybody that has to be supported by
Speaker 1: that labor force, and so it cuts both ways. The
Speaker 1: thing it certainly doesn't real estate if you take the
Speaker 1: Japan example, is like the classic is that you've got
Speaker 1: a lot of real estate built up for one level
Speaker 1: of population, you're shrinking that population, you have extra capacity.
Speaker 1: Um So, so I think it's a mixed bag, and
Speaker 1: it's a slow driving force of the disinflation pressures that
Speaker 1: could easily be offset by these policies. And a lot
Speaker 1: of times we get the question, the Japan question or whatever,
Speaker 1: where well, then they run big deficits, and didn't they
Speaker 1: print a lot money? They did nothing like this, Just
Speaker 1: to be clear, while they ran somewhat big deficits, they
Speaker 1: were largely due to low tax revenue, not due to
Speaker 1: high standing huge difference in what the source of the
Speaker 1: budget deficits it is. And then the second thing is
Speaker 1: while they printed money, they didn't print anywhere the money
Speaker 1: that were we printed recently until recently Japan starting to
Speaker 1: print a fair amount of money. But so the actual
Speaker 1: policies were muted relative to the inflationary forces and were
Speaker 1: nowhere near as huge as these policies shifts on. So
Speaker 1: it's easy to get lost in while it's a trillion dollars,
Speaker 1: there are a trillion dollars there, the magnitude of what
Speaker 1: is going on is you know, for the US is
Speaker 1: nothing like this since World War Two. And similarly for
Speaker 1: Japan and other countries, they didn't do anything like this.
Speaker 1: While they had some of the same language, they weren't
Speaker 1: doing the magnitude anywhere near these levels. You know, Greg,
Speaker 1: this whole discussion, uh makes me think that it's it's
Speaker 1: a very tricky time to allocate assets and decide where
Speaker 1: you're gonna put your money to work. Listen and I
Speaker 1: were joking earlier. She said she she feels like she
Speaker 1: wants to put all her money under the mattress. I
Speaker 1: can't do that because my kids will find it. Liz,
Speaker 1: I'm afraid my kids will find it. But before we
Speaker 1: got to the crazy things, I'm just wondering if quickly
Speaker 1: you could give us sort of your big picture thoughts
Speaker 1: on what proper asset class allocation looks like these days. Well,
Speaker 1: maybe you should let your kids decide with to buy.
Speaker 1: That says, that's been the right move for a while.
Speaker 1: But but but the on the thing is, what we
Speaker 1: certainly wouldn't do is put cash under the mattress. Like
Speaker 1: the basic policy is to make cash be terrible, and
Speaker 1: so cash is not safe. So the money under the
Speaker 1: mattress is potentially the worst thing you could do, because
Speaker 1: the policy is to make that money worthless or worth
Speaker 1: less than it is today at least, And so what
Speaker 1: do you do? I mean, this is an interesting world, right.
Speaker 1: We have this conversation with our clients a lot, and
Speaker 1: I'd say the big thing is realized. Not all the
Speaker 1: world is the US. Not all the world is pursuing
Speaker 1: these policies this way. So one of the things that's
Speaker 1: missing in most portfolios is appropriate global diversification. Try is
Speaker 1: facing other challenges, but very different than the US. Europe
Speaker 1: is facing different challenges as well. So a globally diversified
Speaker 1: portfolio that hasn't helped. In the last fifteen years, the
Speaker 1: US has been dominant, and but if you look at
Speaker 1: how those things rotate over time, almost always the best
Speaker 1: country over the last decade is usually near the bottom
Speaker 1: in the next decade. And so a that's first thing
Speaker 1: is thinking about that. I think it's particularly important for
Speaker 1: what who will benefit from a growth surge but less
Speaker 1: liquidity The US has benefited. The assets in the US
Speaker 1: particularly benefit from a high liquidity environment, and they benefit
Speaker 1: less they have less essentially cyclical variability associated with the
Speaker 1: nonl GDP. So look at who the marginal suppliers are. Anyway,
Speaker 1: that all pushes you to a much more global allocation.
Speaker 1: The second point would be environmental diversification. Are you prepared
Speaker 1: for stagflation? It's the real risk, which is they push
Speaker 1: hard to get the inflation and they can no longer
Speaker 1: bail out asset prises. Do you have enough assets that
Speaker 1: will be acceptable in that environment? And there's argument about
Speaker 1: what those assets are, but but some mix of assets
Speaker 1: that will do well in a stagflationary environment would be
Speaker 1: really important. And generally nobody has those assets. Um So
Speaker 1: those are um you know, those are the kind of
Speaker 1: the big things that would come to mind in our
Speaker 1: view of what that outset allocation should be. So more
Speaker 1: global diversification and more assets that can protect you. And
Speaker 1: probably the worst case is that stagflationary environment. Stand clear
Speaker 1: of the craziest things we saw in markets this week, Well,
Speaker 1: we're gonna diversify ourselves here into the craziest things we
Speaker 1: saw in markets this week. Uh this is a offend
Speaker 1: a listener favorite, Greg So uh So, no pressure, but
Speaker 1: I hope, I hope you came with something good. But
Speaker 1: let's let's start with you. What's the craziest thing you
Speaker 1: saw this week in markets? Well? I think not that
Speaker 1: we've never seen it before, but the Treasury Department today
Speaker 1: sold four week bills at zero percent. So this kind
Speaker 1: of speaks to all the liquidity in the market and
Speaker 1: displite all the angst in the long end and whatever.
Speaker 1: You know, the government is just selling treasuries at nothing.
Speaker 1: So it's pretty mind bending to me. So do what
Speaker 1: do you guys think? Where's the demand that's causing that?
Speaker 1: I noticed a lot more money is going back into
Speaker 1: money market funds. Do you think it's that Well? I
Speaker 1: think yeah. I mean at that level, I think it's
Speaker 1: known that the Fed's not tightening anytime soon, so there's
Speaker 1: a bunch of buyers at that level for that period
Speaker 1: of time. And so you see that, and you see
Speaker 1: the need for different entities, banks and others to actually
Speaker 1: hold those assets that way given the regulatory environment. So
Speaker 1: you've got that it's gonna be a lot harder to
Speaker 1: get the very long duration supply field, but at the
Speaker 1: very short end, where you know you have the Feds
Speaker 1: back um, is much easier to fill in. All right, Greig,
Speaker 1: can you stop zero percent treasury bills for your crazy thing? Well,
Speaker 1: just back to like buying the thing as your kids
Speaker 1: would want to do with your money, I'd say the
Speaker 1: you know, just an example. It's a little stretch from markets.
Speaker 1: But one of the interesting phenomenons that is near and
Speaker 1: dear to my youth is the bubble and baseball cards
Speaker 1: it's going and so seeing a well this is how
Speaker 1: football card is even more stretch. It's like the silver
Speaker 1: to the gold here and uh Tom Brady carter that
Speaker 1: sold for one point seven million dollars interesting enough, but
Speaker 1: but sold in white coin. Um was a good example
Speaker 1: of what's going on in terms of there's all this
Speaker 1: new wealth, whether it's a cryptocurrency or new wealth created
Speaker 1: by tech companies and such, and the money is pouring
Speaker 1: from them, selling them selling those assets into the things
Speaker 1: they want to buy. And so it's been a kind
Speaker 1: of joke about it's like a bubble and everything nerdy.
Speaker 1: So if you've got baseball cards, if you've got comic books,
Speaker 1: if you've got old video games, I mean, it is
Speaker 1: unbelievable what the market cap of those things are doing.
Speaker 1: And that's part of what's happening. The new wealth gets
Speaker 1: spent and it's where that money goes, and there's almost
Speaker 1: no limit you have, you know, billions of dollars of
Speaker 1: market captain dog going and like like they get buy
Speaker 1: anything real in massive amounts. And that's what you're starting
Speaker 1: to see is the people that held those assets starting
Speaker 1: to cash out of those and buy something real. Where
Speaker 1: there's the new phenomenon of recent buyers coming into those assets,
Speaker 1: given cash to the people that are really originally produced them,
Speaker 1: and that money is flooding everywhere, um and and realizing
Speaker 1: what are those things that that money is gonna go by?
Speaker 1: That's really been the the play recently. I I am.
Speaker 1: I share your fascination with that. I love these crazy
Speaker 1: collectibles that self for God knows what. I would love
Speaker 1: to know from what city the person who bought the
Speaker 1: Tom Brady card came from. I don't think it was Philadelphia,
Speaker 1: New York list, but I probably probably Boston, I'm guessing.
Speaker 1: But uh, but Greg, Mine's mine's in that same vein.
Speaker 1: And one of my favorite things is, uh, collectible sneakers,
Speaker 1: Not that I have any of myself. None of the
Speaker 1: sneakers I've worn are collectible to trust me on that.
Speaker 1: You you want to throw them away instantly. But two
Speaker 1: pairs of Air Jordan's up for auction recently. One hasn't
Speaker 1: gone auction yet, so we only know what the expected
Speaker 1: value is. One has already gone to auction. The first
Speaker 1: pair we're Air Jordan's, the very first pair of Air Jordan's,
Speaker 1: or the first edition of them, weren't by Michael Jordan himself. Uh,
Speaker 1: they're up for auction. The other pair was Kanye Wests
Speaker 1: has a set of Air Jordan's out uh called I
Speaker 1: believe they're called Yeasys. So the Air Jordan's ones and
Speaker 1: the Air Easy ones. I want to make us a
Speaker 1: quiz show for a little bit here. What do you guys,
Speaker 1: which which pair do you think is more valuable? Kanye's
Speaker 1: Jordan's were Jordan's, Jordan's Rookie Year, Jordan's Jordan's I think
Speaker 1: you're asking because Kanye Is Jordan's are better. I'm just
Speaker 1: going based on my judgment of you're asking the question.
Speaker 1: It's the beha, it's the behavioral finance aspect that you
Speaker 1: really have to get right, and and Greg got it
Speaker 1: right that time. You're absolutely right. But the the spread
Speaker 1: in prices is amazing. Granted, the Jordan the Air Jordan's
Speaker 1: haven't gone on sale yet, but they're expected to get
Speaker 1: as much as a hundred and sixty four thousand. The
Speaker 1: air easies are already sold for one point eight million,
Speaker 1: so ten times the price of Jordan's rookie sneakers. But
Speaker 1: here's the crazy part. I haven't even gotten to the
Speaker 1: real crazy part. The air easies weren't bought by a collector.
Speaker 1: They're actually bought by a company called Rares and their
Speaker 1: plan is to cut them up and sell fractional shares
Speaker 1: of the air easies as investments to other people. So, uh, Greg,
Speaker 1: I don't know if Bridgewaters in the market for say
Speaker 1: the laces from from the air easies for for the portfolio.
Speaker 1: My guess is no, Yeah, that's not quite our area
Speaker 1: of expertise, but it is a good example of what's
Speaker 1: going on. And when you have so much money in
Speaker 1: financial assets, it will see go home in something and
Speaker 1: um and that that shift is happening and that those
Speaker 1: are those are good examples, and that's that's gonna be
Speaker 1: the big phenomenon. And when there isn't enough money coming
Speaker 1: into the financial assets, you're still going to have some
Speaker 1: of that money coming out. And so that's gonna be
Speaker 1: the kind of turning point because those people that have
Speaker 1: accumulated wealth. What was the purpose of it other than
Speaker 1: to do something with it at some point and so um,
Speaker 1: So I think you'll see a lot more of crazy
Speaker 1: stuff as people cash in this extreme amount of wealth
Speaker 1: it's been accumulated recently. Absolutely reminds me of the old
Speaker 1: movie Brewster's Million. Remember what h Richard Pryor was just
Speaker 1: had to spend all the money. He bought a priceless
Speaker 1: postage stamp and medal letter with it. You know, it
Speaker 1: almost feels like that's what's going on when they're like,
Speaker 1: if you can't keep it as an investment, so he
Speaker 1: used it to mail you had to use. Um, maybe
Speaker 1: I'll buy the easies and wearing arind. I can't afford
Speaker 1: the easy the air easies, so I could. But anyway,
Speaker 1: I think that is all our time. Liz McCormick, Greg Jensen,
Speaker 1: such a great conversation. Thank you so much, fear time
Speaker 1: and hopefully we can do it again. Thank you. What
Speaker 1: goes up. We'll be back next week. Until then, you
Speaker 1: can find us on the Bloomberg Terminal, website and app
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Speaker 1: Apple Podcasts, so more listeners can find us, and you
Speaker 1: can find us on Twitter follow me at Reaganonymous, and
Speaker 1: Liz McCormick is at at McCormick Liz. You can also
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