Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: Hello and welcome to another episode of the Odd Lots podcast.
Speaker 2: I'm Joe Wisenthal and.
Speaker 3: I'm Tracy Alloway.
Speaker 2: Tracy. Every day it feels like stocks and gold go
Speaker 2: up every day, stocks and gold, and stocks and gold,
Speaker 2: and it's just it's relentless.
Speaker 3: I'll tell you what it's good for. Anyone invested in
Speaker 3: an index fund and a bunch of gold coins that
Speaker 3: their dad gave them.
Speaker 2: Yeah, good for you.
Speaker 3: Yeah, thank you.
Speaker 2: The Tracy Alloway portfolio doing very well.
Speaker 3: Yes, No, you're absolutely right. And the big thing about
Speaker 3: this is it's not really supposed to happen, right, Like
Speaker 3: You're not supposed to see stocks shoot up because of
Speaker 3: optimism about the future while gold simultaneously goes up because
Speaker 3: gold traditionally is the sort of dour yellow rock as
Speaker 3: you like to describe it, which usually signals something that
Speaker 3: is about to happen.
Speaker 2: I'm going to relent. I'm going to relent to something.
Speaker 3: Are you a gold bug?
Speaker 4: Now?
Speaker 2: No, Well, I'm going to relent on something. Okay, Right,
Speaker 2: I admit that gold is a medal. This is my
Speaker 2: big cave. I always no longer a rock. Yeah, this
Speaker 2: is my big cave. I used to say, there's yellow rocks.
Speaker 2: You know what, I'll acknowledge it's a medal.
Speaker 3: If it's a medal, Now, will you admit that it
Speaker 3: has industrial applications?
Speaker 2: Yeah, but they're very minor. And this is also I
Speaker 2: will not acknowledge that there is a a. It is
Speaker 2: mainly a store of value, or perceived to be. And
Speaker 2: when people are fearful, when people are mistrustful, and people
Speaker 2: don't TRUSTI had currencies or the governments, and there's all
Speaker 2: kinds of reasons to be skeptical about the governments that
Speaker 2: issue paper currencies. I understand why people want to hold
Speaker 2: this metal that people have used as money for thousands
Speaker 2: of years.
Speaker 3: I'm going to take you back to the jewelry district
Speaker 3: in New York and get you more excited about gold again.
Speaker 2: No, and I'll just say on gold, I loved it.
Speaker 2: And then I wore that big chain when to the
Speaker 2: diamond district, and I wish I'd bought it, like now,
Speaker 2: that's like my bigorite. It was like thirty five thousand
Speaker 2: dollars gold necklace, and that today would probably be a
Speaker 2: forty five or fifty thousand dollars gold.
Speaker 3: Neck Imagine how much that diamond encrusted furbie would be worth.
Speaker 2: This is the thing they don't tell you about gold.
Speaker 2: By the way, if you spend ten thousand this is
Speaker 2: my crank take on gold. That's not crank. If you
Speaker 2: spend ten thousand dollars on a gold necklace, they give
Speaker 2: you a ten thousand dollars gold necklace. Yes, it's free.
Speaker 2: It's like you spend ten thousand dollars, they give you
Speaker 2: something for ten thousand dollars back. In a sense, it's
Speaker 2: a free transaction.
Speaker 3: No, you get two things. You got something to wear
Speaker 3: and an investment.
Speaker 2: Yeah you actually, Yeah. I wish I had had this
Speaker 2: realization when gold was like two hundred dollars an ounce.
Speaker 2: But anyway, it took me a while, and it'll.
Speaker 3: Make a gold bug of you yet, I'm sure.
Speaker 2: So these are really exciting wild times in the market,
Speaker 2: and the last time we talked to this guest was
Speaker 2: another wild time and an exciting time in the market.
Speaker 2: That was, of course April. We do, in fact have
Speaker 2: the perfect guests to try to understand everything that's happening
Speaker 2: all around the world in global macro. We're going to
Speaker 2: be speaking with the vice Chair of Global Macro at
Speaker 2: Deutsche Bank Ozon Tournament Ozon. Thank you so much for
Speaker 2: coming back on odd lots. Last time we talked to you,
Speaker 2: we were in London. This time you're in New York,
Speaker 2: so thank you for coming to visit us.
Speaker 4: Very good to be in New York. I'd love to
Speaker 4: be on this show, I mean, other to be invited again.
Speaker 4: UNGA good inners. This is the highlights. And by the way,
Speaker 4: I was going to bring my United Amamim Jersey Jurally
Speaker 4: looks like him and some Backlaba for Tracy, but couldn't
Speaker 4: find in the airport. Next time.
Speaker 2: That's a good reason to do another future episode. Actually,
Speaker 2: we talked a lot about gold at the beginning, but
Speaker 2: I don't want to first ask about gold is in
Speaker 2: vidious swallowing the entire US or maybe even global economy.
Speaker 4: Almost hand in hand, right, these two questions, I mean,
Speaker 4: they both continue to go higher and higher. Actually, let
Speaker 4: me start with gold, because you did you did put
Speaker 4: such an introy in it. One of the very famous
Speaker 4: memes on the internet, Caricultures, done maybe two three years ago.
Speaker 4: This gentleman or lady running a big macro h fund
Speaker 4: looks around. I run very complicated products, but at the end,
Speaker 4: I buy gold, and these days that resonates even more,
Speaker 4: mentioned even more and more in these roundtables in TV
Speaker 4: studios like this. Normally that jin thinks, but it doesn't
Speaker 4: because at the moment it works in risk on and
Speaker 4: risk of. Last time you were around again, you called
Speaker 4: me at a very relevant time questioning US exceptionalism. I'm
Speaker 4: sure we'll go into that. What's going on with US institutions,
Speaker 4: those question marks, all those question marks against the dollars
Speaker 4: help gold FX is about stories against the dollar. I'm
Speaker 4: sure we'll go into this as well. Some of the
Speaker 4: stories are now having a less easy time. Then people
Speaker 4: like to go into gold and we maybe going into
Speaker 4: a rate cut period cycle or not. Whether you're Miran
Speaker 4: or Hammock, that differs, but gold works in that as well.
Speaker 4: So for the moment, I always feel, you know, when
Speaker 4: it's the top three on TVs on my round tables,
Speaker 4: I put the orangsign on. But at the moment it
Speaker 4: works for a reason. Now, Nimdia, yeah, I mean if
Speaker 4: he had this show a year ago as well, you
Speaker 4: could have said all done as of this morning. One
Speaker 4: of my partners in success Sarrevelos. His piece is already viral.
Speaker 4: He's claiming, tongue in cheek that Nimdia is almost keeping
Speaker 4: us away from a recession. All that Chip story, all
Speaker 4: that capex spending. If it wasn't for that, maybe we
Speaker 4: could either question or be in a recession.
Speaker 3: I'm not sure he's saying it that tongue in cheek.
Speaker 4: There agreed, and also others are joining him again. I'm
Speaker 4: hearing from my dear France clients this day morning Baine claims,
Speaker 4: and Lake's revenues quickly catch up with all this aikpex spend,
Speaker 4: we may be in big trouble. All of this bill
Speaker 4: bursts by twenty thirty, and we'll go into recession before that.
Speaker 4: Now we can say a lot can happen before twenty thirty,
Speaker 4: but warning signs are there. Last night's the big headlines
Speaker 4: the reason why again does that close on the ice
Speaker 4: n media investing into open Ai. That also becomes almost circular.
Speaker 4: I mean this is not to Oracle invest in open ai,
Speaker 4: open a I invest in ni Media, Back and forth,
Speaker 4: back and forth. Is this a closed circle? I hear
Speaker 4: all the skepticism also mainly coming from those who haven't
Speaker 4: caught this big rally.
Speaker 2: Since a bubble is a is a bull market that
Speaker 2: I called golden bubble. Tracy calls it a boom because
Speaker 2: of the difference. Exact inherited a bunch of exactly.
Speaker 3: I should just mention we're recording this on September twenty, I.
Speaker 4: Like that, right before, right before Power speech, right before
Speaker 4: Trump speech.
Speaker 3: So just on AI and the sort of self dealing
Speaker 3: circle is circuitous, incestuous relationships. Perhaps one of the reasons
Speaker 3: we like talking to you is because you talk to
Speaker 3: a lot of clients and so you hear a lot
Speaker 3: of feedback from the byside as well, What are people
Speaker 3: looking out for in terms of saying, okay, this is
Speaker 3: a bubble, because it seems like, all right, people have
Speaker 3: been talking about high valuations for a really long time.
Speaker 3: The stock just goes up. Is there something else that
Speaker 3: people are like watching for, in which case they might say, actually,
Speaker 3: we're going to start cutting back positions.
Speaker 4: Excellent question. Almost like two months ago, I was hearing more.
Speaker 4: I'm skeptical, but flat cuts are also coming. You can't
Speaker 4: fight this now, especially from the pros who've been around
Speaker 4: nineties and beyond. I do hear, Look, this does feel
Speaker 4: a bit like end of nineties, beginning of two thousands.
Speaker 4: By the way, the year your peak is very important there,
Speaker 4: but we may still run. That's one thing that more
Speaker 4: seasoned equity beyond macro pros are saying. I also it
Speaker 4: was a bit the beginning of my career, but I
Speaker 4: was around in late nineties, early two thousands. Then the
Speaker 4: denominator almost didn't exist in this valuation discussion. There was
Speaker 4: hardly any cash around. Everybody stuck Joe dot Com. It's
Speaker 4: excellent in B two, be even better in B B
Speaker 4: two C. And of course Hindsight is the world's top
Speaker 4: page one, but you could feel it. Whereas this time
Speaker 4: around you can question one hundred billions thrown around in
Speaker 4: a circle, but you cannot question much the revenue the
Speaker 4: cash Jensen Nividia open Ai is bringing to the table,
Speaker 4: you cannot question much. Let's go beyond Nividia a bit
Speaker 4: into Magnificent seven, Microsoft's Apple alphabet. They have customers. All
Speaker 4: of us are are their customers. They make money. So
Speaker 4: and in a way called talking about circle more posted
Speaker 4: way of more glass, helpful way of looking at it.
Speaker 4: Nidia is the big champ. Okay, but take ni Media aside.
Speaker 4: All of a sudden, oracle became a story for reason.
Speaker 4: From oracle, we go to alphabet because for this time
Speaker 4: around Judge decided favorably on chrome. The story continues, move
Speaker 4: from one I said to another. Also, yeah, Nividia is
Speaker 4: doing great. We'll talk about how Nasdak the Heracules is
Speaker 4: catching up with my blue head Mega. But it's a
Speaker 4: leave spinning like NI Media is not the top stock
Speaker 4: in SMP today, talking about waiting for Godo. Finally, small
Speaker 4: caps rolls up since the famous now jacksonvill and another
Speaker 4: famous jacksonall Dowis speech. So it's not just one one
Speaker 4: one guy is very important November nineteen me media earnings
Speaker 4: are very important, but it's not just one stock.
Speaker 2: By the way, Ozon was regaling us or showing off
Speaker 2: his make Europe Great Again hat, it's signed by Mario Draghi.
Speaker 2: If I own that, I'm very jealous. I would not
Speaker 2: be carrying it around. I would be carrying it at
Speaker 2: a glass case. I'm selling it maybe for eBay.
Speaker 3: You'd have it in the vault along with your gold coins.
Speaker 2: I would have it in the vault along with my goal.
Speaker 4: But I thatsk how much I did respect my clients.
Speaker 4: I want to show.
Speaker 2: Off before we can go further. Actually, for listeners who
Speaker 2: maybe didn't hear previous episode with you in April, can
Speaker 2: you just give us a little back. You talk to everyone,
Speaker 2: you have these dinners, you afford you an incredible perspective
Speaker 2: on what a range of people on the street are
Speaker 2: thinking about. Just so that people can understand your perspective
Speaker 2: and where you're coming from. What do you do like
Speaker 2: on a day to day basis, Who are the range
Speaker 2: of people that you talk to and how do you
Speaker 2: interact with them?
Speaker 4: My job is to talk to my bank's top institution clients.
Speaker 4: He funds real money, but also because of experience, talented relationships,
Speaker 4: going going deep. This also includes now sotore on wealth funds,
Speaker 4: key private banking institutions, and I love as you know,
Speaker 4: I'm a person who tries to bring things together. So
Speaker 4: in these roundtables, small or bag, it's not just edge funds,
Speaker 4: it's not just real money, it's not just sorro and
Speaker 4: wealth funds. All of said classes, credit rates, efs, emerging
Speaker 4: Marcus my proud Terro equity of course, so they learn
Speaker 4: from each other as well. Because we talked about in
Speaker 4: these shows and equity perspective can be very different to
Speaker 4: a race perspective. Right as we speak again, we're in
Speaker 4: one of these doll drums on if you define macro
Speaker 4: just as rates and fcs, it's almost like a magnet.
Speaker 4: Four to twelve. Okay, we try we on us tanyar.
Speaker 4: We tried below for pard for twelve, four thirteen, four
Speaker 4: to fourteen. As Stacy said, we are recording this on
Speaker 4: September twenty three at nine am. In three hours, share
Speaker 4: Power will speak. Let's see if he changes tone or
Speaker 4: six to his so called Howkish presser. Some people hope
Speaker 4: that may again ignite a little bit of the other
Speaker 4: stronger rates, higher tone. Otherwise, volatility in effects and rates
Speaker 4: are struggling. Meanwhile, equity is continue to do better and better.
Speaker 4: And back to your question. Different sets of clients coming
Speaker 4: to my roundtables, coming to my realm, learn from each
Speaker 4: other on why differents classes act different.
Speaker 3: So you mentioned the dollar just then, and of course
Speaker 3: you have a very international group of clients that you're
Speaker 3: talking to. Can we talk about the dollar drop this year?
Speaker 3: Because I think it's really important and even though it
Speaker 3: gets some attention, it's nowhere near enough because we're talking
Speaker 3: about stocks rallying, US stocks rallying. Things look a lot
Speaker 3: different when you start to adjust for currencies. How are
Speaker 3: people thinking about US assets in light of the dollar drum?
Speaker 4: Very fair, I'm tim Odlass. So I also remember last
Speaker 4: time we met is April sixteen in London, so just
Speaker 4: a week before the big fear You're dollar was right
Speaker 4: around one eleven. We were beginning to sense that this
Speaker 4: could be a historic here in terms of this dedorization.
Speaker 4: He fund ratio is changing, but we swift the mood
Speaker 4: beyond one fifteen as well. Now looking at the picture,
Speaker 4: two things are very important. First of all, the flows
Speaker 4: back to our friend Nividia, back to our friend magnificent seven.
Speaker 4: Because one pushback from some of my especially fast money friends,
Speaker 4: who all either smell, want, or wish a dollar squeeze
Speaker 4: after such a soft dollar move is what will the
Speaker 4: flows do? World continues to buy Nividia's and Microsoft's do
Speaker 4: they buy it hashed? So I was a little bit
Speaker 4: skeptic on that. By the way, flows are back, so
Speaker 4: a big difference to Aple sixteen. I'll talk we can
Speaker 4: talk about that as well. Retail led rally. Look where
Speaker 4: we are all time high my research reports and claims
Speaker 4: again George Servelos that in the last recent thirty forty
Speaker 4: five days or so, those laws almost eighty percent of
Speaker 4: them are heged, so people are buying their Nidia haged
Speaker 4: so believe it or not, eighty percent is a big number,
Speaker 4: say seventies eighty sixty. That definitely helps the soft dollar
Speaker 4: side of things. What continues to help is, of course
Speaker 4: institutionists decreasing their exposure to US. Like hindsight I said
Speaker 4: rightly on that April sixteen, nothing to end the US
Speaker 4: private site exceptionalism. Nidia's microsofts so far are fighting back
Speaker 4: the tests of deep sick, even though champion of the
Speaker 4: year is China Tech in terms of performance, but from
Speaker 4: Asia so Nordics big funds are reducing their dollar exposure
Speaker 4: a little bit seven to sixty five, sixty to fifty five.
Speaker 4: That makes a difference. That made a difference.
Speaker 2: This is really important. I think we should just continue
Speaker 2: on the specific line because what it sounds like is
Speaker 2: all around the world you have to have dollars to
Speaker 2: buy in video, and video is a stock that's sold
Speaker 2: in dollars. It's profits are denominated in dollars. It's sales.
Speaker 2: It sells things in dollars, and that's the same for
Speaker 2: all of the mag seven include Microsoft and Apple, and
Speaker 2: all of them are doing phenomenally well. They have real profits,
Speaker 2: real earnings and so forth. They're very excellent businesses. And
Speaker 2: it sounds like basically all around the world people want
Speaker 2: exposure to a handful of extraordinary US companies. They just
Speaker 2: don't want to take the risk that the denominator and
Speaker 2: this time we're not talking about earning but that or
Speaker 2: that the dollar that they trade in or selling, et cetera,
Speaker 2: is going to go down further. So they want everything
Speaker 2: about this. They just basically don't want the US sovereign
Speaker 2: exposure that's connected to these American domicile companies.
Speaker 4: Completely correct, and honestly, I was a little bit skeptic.
Speaker 4: I wasn't sure. If you told me Osan this year,
Speaker 4: this big surgeon back in NI media Microsoft won't happen,
Speaker 4: then I would feel even more comfortable with the short
Speaker 4: dolar position. But Magnificent seven roads it may even pass
Speaker 4: Mega despite that is also remaining sort so whether I
Speaker 4: was skeptical or not, what you explained is happening. But
Speaker 4: I think for the next legs are included. A lot
Speaker 4: of biensy site are calling for one twenty one, twenty
Speaker 4: two light levels. You need now the European side of
Speaker 4: the story or whoever you want to talk about Japan, China,
Speaker 4: the lagger side of the story FX is too legged.
Speaker 4: We talked about why the dollar side of short dollar worked.
Speaker 4: We need now a bit more help from our European
Speaker 4: story Tersea.
Speaker 2: You know what strikes me is interesting about this, which
Speaker 2: is that when we think about countries where there's political
Speaker 2: risk and so forth, we don't often associate them with
Speaker 2: the most impressive enterprises in the world, right, And it
Speaker 2: strikes me that that's the tension we're talking about here,
Speaker 2: is that there's all this anxiety about the US as
Speaker 2: a sovereign for all kinds of reasons. That's not unusual.
Speaker 2: Other countries have sovereign risk. They're just usually not home
Speaker 2: to literally the most impressive companies in the world.
Speaker 3: No, and it is true that most of the investor
Speaker 3: nervousness around the US has shown up on the sovereign.
Speaker 2: Yeah, not the corporate sete, rather than the corporate.
Speaker 3: Side, which we've been writing about in the auth Loots newsletter.
Speaker 2: Which everyone should subscribe.
Speaker 3: To it, Yes, seamless plug just then. Okay. One of
Speaker 3: the other I guess big questions about the market right
Speaker 3: now is there's clearly nervousness about fiscal dominance and Federal
Speaker 3: Reserve independence, and that is playing into the drop in
Speaker 3: the dollar too. And yet at the same time stocks
Speaker 3: seem to be taking off and a lot of investors
Speaker 3: don't seem to be that nervous, at least on the
Speaker 3: equity side. What accounts for the discrepancy there the two.
Speaker 4: Different roles pluging about plugging. I also love the New
Speaker 4: York Times piece. I think you guys deserve all the
Speaker 4: trust me, all those trans clients, they listen, they are
Speaker 4: very excited when I'm on now. Tracy definitely hit the
Speaker 4: right point. Deed organization is one key big team going
Speaker 4: into the end of the year. Fiscal dominance or not
Speaker 4: and the famous fed independence. Those are my second and
Speaker 4: third key topics. By the way, where where are tariffs?
Speaker 4: All the way down to four? I forgot about dominance,
Speaker 4: So we talk right. I love brainstorming with you guys.
Speaker 4: Remember what I said in August as well summer everybody
Speaker 4: was everybody like some key investors, especially fast money. We're
Speaker 4: gunning for from my deer islands. Four key trust moments
Speaker 4: in four countries at the same time. What does that mean?
Speaker 4: I mean trust moments. We said, you know what I'm
Speaker 4: talking about, long hands getting out of control for people's
Speaker 4: For Marcus.
Speaker 2: Big fisical, US, UK, Japan was the four for the.
Speaker 4: Right Reasons Europe book for Right Reasons because ramp up
Speaker 4: the German span will come at the end of the
Speaker 4: at the end of the year, et cetera. Some key
Speaker 4: investors were asking, well, one trust moment, we know how
Speaker 4: we handled chance. Later down prime minister goes different sets
Speaker 4: of policies. What happens if four goes at the same time.
Speaker 4: And we tried this on talking about dates September two,
Speaker 4: when you guys came back from wherever you came back
Speaker 4: from on the long final fine and final, long location,
Speaker 4: long weekend, UK Gild's big move, followed by France because
Speaker 4: the Prime Minister was about to go in six days,
Speaker 4: joined Tracy. How long did it last? Four hours? That
Speaker 4: long hand sell off lasted four hours And I'm not
Speaker 4: trying to be funny. Basically since then US thirty years, Europe,
Speaker 4: even UK has been much more under control. Up until
Speaker 4: the Hawkish presser almost threatening below four percent, even more
Speaker 4: than short dollars Tracy over the summer and inter fal
Speaker 4: what were the real money and dhe funds common fail
Speaker 4: with trade steepeners, steepeners, steepeners Europe, US, everybody and their
Speaker 4: brother had steepeners first for different reasons. On Us more
Speaker 4: due to the short end that sooner or later will
Speaker 4: come to the Fed independence, the Trump side of the
Speaker 4: equation would win more. Finally, the powerwood caving cuts would
Speaker 4: come in and on the European side even more popular
Speaker 4: because of the long end German spending coming through in
Speaker 4: October November, and people believed in their steepeners. First, US
Speaker 4: got hurt to nfp's myths, long hand moved big flatteners,
Speaker 4: hurt gold aside whenever you say, or Nividia side, whenever
Speaker 4: you say, somebody says a trade is untouchable, watch out.
Speaker 4: European steepeners were supposed to be untouchable. Two days after
Speaker 4: that flattening washout in US, Europe also got reduced and
Speaker 4: since Tropkish pressure, we're more balanced onto Fed independence again.
Speaker 4: Justice Morning of the Press mattter raskin my head of
Speaker 4: US race strategy previously from the FED. Very respectable analyst
Speaker 4: wrote about this FED independence sphere not being in the price,
Speaker 4: not in the break evens, not in the term premiere.
Speaker 4: Why I think a little bit, because so far, let's
Speaker 4: die right into it if you wish. I think this
Speaker 4: cut is justified in my mind. Even if they cut
Speaker 4: fifty a week ago, it could have been justified talking
Speaker 4: about some deer clients friends public So I may say
Speaker 4: Reek reader publicly on TV and on his writing set,
Speaker 4: they may and they should cut fifty because I think
Speaker 4: if they sold the revisions in June and July, they
Speaker 4: probably would have cut in June and July and going forward. Okay,
Speaker 4: they cut twenty five. Not only they cut twenty five.
Speaker 4: Miran did this thing probably that's the dot. But Waller
Speaker 4: Woman stuck to twenty five. Even some of the previous
Speaker 4: FED governors racing for the job. Bullard says they should
Speaker 4: have done twenty five. So people are thinking and hoping
Speaker 4: that there's still some fading dependence. Powell, even though he's
Speaker 4: the past man, has some control over the situation. That's
Speaker 4: why you're not getting any fading dependence.
Speaker 3: Feed on the long ends, Joe, it is interesting and
Speaker 3: I would not have expected this earlier in the year.
Speaker 3: But if you look at the move index, so the
Speaker 3: index of non market volatility, it's going down. It's gone
Speaker 3: down quite a bit, which is not exactly what you
Speaker 3: might expect to happen when we're talking about things like
Speaker 3: physical dominance and federal reserve independence. But there you go.
Speaker 2: That is a good chart I haven't looked at in
Speaker 2: a long time. I want to go back to the
Speaker 2: gold conversation because we've kind of been dancing around to
Speaker 2: We're like, oh, political volatility in the US and sovereign
Speaker 2: risk in the US, et cetera. But like, let's talk
Speaker 2: about like gold in the US or gold and the dollar.
Speaker 2: Like when you talk to clients, setting aside that it's
Speaker 2: a good trade, people want to ride a good trade,
Speaker 2: et cetera, how much fear anxiety, et cetera is there
Speaker 2: about US political constability? And what are the and I
Speaker 2: mean a prominent political commentator got assassinated recently in the
Speaker 2: United States. Sadly, what are people at your geners maybe
Speaker 2: inside the US or outside dinners saying about the US
Speaker 2: when they look at our country.
Speaker 4: That's why more and more countries are building up their
Speaker 4: reserves in gold shying away from a dollar more. My
Speaker 4: motherland Turkey is an example, again publicly known in terms
Speaker 4: of reserves. Also, let's remember what is still going on
Speaker 4: versus Ukraine and Russia, the sanctions that Russia faced or
Speaker 4: may face, so different countries are also because of that
Speaker 4: leaning more towards gold. So besides our macro discussions ups
Speaker 4: and downs of rates, that's uncertainty, that question mark over
Speaker 4: US policy, that question mark over geopolitics leads central banks
Speaker 4: to accumulate more gold. Joe for gold to go down.
Speaker 4: The game should change. Like this year, my plan is
Speaker 4: going all right. Again, I was on air. I thought
Speaker 4: these big sipner transformans long aans crushing everything wouldn't happen.
Speaker 4: I didn't expect this much of a comeback. But again
Speaker 4: I said there would be a comeback, especially retail, much
Speaker 4: more than pros belied in this nimdia gold go hand
Speaker 4: in hand together. There should be something off the left field,
Speaker 4: for example, maybe on tariffs. All of a sudden, tariffs
Speaker 4: tongue in cheek, Tracy are a bit too good boy revenues.
Speaker 4: They raise a lot of revenues. Twitter talks about the
Speaker 4: TV's talk about the Torton Stock talks about it if
Speaker 4: Supreme Court at whatever time, and that's also very key
Speaker 4: when they make the decision Walt's against. I'm sure they may.
Speaker 4: I know, they may use S three oh one, et cetera,
Speaker 4: but will be all of the big that's the question mark. Now,
Speaker 4: what will the Trump administration do? What will best send
Speaker 4: to long aance can get going again, And even though
Speaker 4: it's got nothing to do with necessarily Nimidia and gold,
Speaker 4: the year's path may change and things like that can
Speaker 4: take us off the.
Speaker 2: What about a big handshake with Chision and a new
Speaker 2: I mean, I don't know what it would be. And
Speaker 2: you know, my dream obviously is for a by D
Speaker 2: factory in Tennessee one day, show me factory, et cetera.
Speaker 2: But could that be a oh, this charge is in
Speaker 2: a new direction, something that is like a real let's
Speaker 2: reset this relationship. I'm not optimistic, but would that be
Speaker 2: the type of thing that could reset the trajectory of
Speaker 2: certain markets?
Speaker 4: You talked like my Joe, like a globalist Tennessee factory
Speaker 4: by D. I mean that's not the pulse at the moment,
Speaker 4: but sure if that happens, my gut feels still says
Speaker 4: a short lived correction. But yes, that's that's what did
Speaker 4: I say. That's not too pulse, That's not the New
Speaker 4: York pulse at the moment. It would be a positive spice,
Speaker 4: a little bit less scared of things spies and yeah,
Speaker 4: it could see that eating.
Speaker 3: So I know it's number four on your list now.
Speaker 3: But we should talk about tariffs a little more. And
Speaker 3: I take the point that it could be a revenue
Speaker 3: generator for the US and maybe that provides some support
Speaker 3: on the bond side of things. But on the other hand,
Speaker 3: I think most people would argue that it would slow
Speaker 3: economic growth, which should be a drag on the equity side.
Speaker 3: But we haven't really seen that. How are people talking
Speaker 3: about the actual impact of tariffs right now? And I
Speaker 3: gotta say, Joe, I got my first customs bill over
Speaker 3: the weekend. It wasn't too bad. I think it was
Speaker 3: like sixteen dollars or something, But I feel them personally
Speaker 3: very fair.
Speaker 4: Comeback. I yess, especially fast money crowds hasn't necessarily given
Speaker 4: up on ceculation. My takes for part of the reason
Speaker 4: why all these new media gold long end calls have
Speaker 4: been correct. I like to fade the inflation hulks, and
Speaker 4: I like to fait the big recession bears, who are
Speaker 4: much more quite these days anyway. But yes, if continues
Speaker 4: to stick to them, even though on one hand they
Speaker 4: generate revenue and keep the long end under under control,
Speaker 4: there may be a growth impact on the other side,
Speaker 4: accompanied by splice side immigration effects. And the jury is
Speaker 4: out there on dear mister Waller, whether led by him,
Speaker 4: whether this is the famous world the words, whether this
Speaker 4: is transitory or not. More and more some clients start
Speaker 4: to say, my binkie, the famous chief global economists start
Speaker 4: to saying, maybe this tariff effect wasn't as bad, both
Speaker 4: on growth side and on inflation side. These people immediately
Speaker 4: get a pushback early days, early days. Let's wait, so
Speaker 4: will companies continue to eat them and not pass that
Speaker 4: much to the traces of the world to the customer,
Speaker 4: especially when we talk of beyond ten percent terrists which
Speaker 4: most countries face next year. Your country faces are very
Speaker 4: key midterm elections. So I think Trump and Bessent know
Speaker 4: that they got elected because of inflation. So the moment
Speaker 4: the tacflation camp starts to look like they are proving correct,
Speaker 4: even look like a bit of a climb on inflation
Speaker 4: more so down on growth. I think we may we
Speaker 4: may get more and more taco because they want to
Speaker 4: win those midterm elections, then they will take more and
Speaker 4: more steps over on race. But if they prove correct,
Speaker 4: if it's not reflected on the customer, if inflation continues
Speaker 4: to remain Okay, I know it's not two percent, but
Speaker 4: below three percent, maybe this statistical continues.
Speaker 3: Sorry, did you just call pinky Chata my pinky?
Speaker 1: You have?
Speaker 4: Even like when we there's a lot of preparation going
Speaker 4: for these macrodners as well. Trust me, when he sends
Speaker 4: his questions and his keybouet points, he tells me to
Speaker 4: start with my binki.
Speaker 2: I don't think we've ever heard him on the party.
Speaker 2: We Gotta Yeah. I talked to him a couple of
Speaker 2: times on TV. A big fan of his. We Gotta
Speaker 2: make that happen. When you think about the US economy
Speaker 2: and maybe the European economy too, but I think it's
Speaker 2: US and you think about growth prospects. This is something
Speaker 2: I've been asking a lot of people about, like how
Speaker 2: much do you think the US economy as a just
Speaker 2: the forward momentum of the US economy, especially over the
Speaker 2: course of your career, how much has it become dependent
Speaker 2: on this perpetual rise in asset values And you think, like,
Speaker 2: do we need a booming market year after year just
Speaker 2: to keep that sort of like consumption demand engine, investment
Speaker 2: engine going.
Speaker 4: Well, yes, it's the short answer. I think the details
Speaker 4: are even more complicated a bit sad. I think you
Speaker 4: need you we need in this game that's eating it.
Speaker 4: The next thing it was B to B B two
Speaker 4: C three decades ago, three D. Now of course AI
Speaker 4: AI AI the past three years. And also US, I
Speaker 4: mean again as the country that gain my education right
Speaker 4: in more open times, for that relies on growth, relies
Speaker 4: on animal spirits, relies on those classes to go higher
Speaker 4: and higher. And that's why the Tacy question from like
Speaker 4: ten minutes ago. It's very key whether we're at you know,
Speaker 4: we're getting their stage of the bubble or we're at
Speaker 4: the bubble, because if that bursts, economy can get effected
Speaker 4: as well. Also, Joe, I'm a big believer in the
Speaker 4: k economy, the whole terminology of that. So I said
Speaker 4: this again before on your shows. World may be more
Speaker 4: okay for whatever we define ourselves as one percent, five
Speaker 4: percent point one percent. There's a much bigger part who
Speaker 4: are struggling, definitely on us, but globally as well. Some
Speaker 4: again it's a statistics thrown out there. These days, ten
Speaker 4: percent of the US consumers accumulate almost fifty percent of
Speaker 4: the consumption and the rest much less. Valve effect is
Speaker 4: getting bigger and bigger. When I was in college running
Speaker 4: around in this country, again, we were talking about the
Speaker 4: valve gap. But now this becomes relevant, even macrorelevant. That's
Speaker 4: why people like me are okay with the Rade cuts,
Speaker 4: risk management or not.
Speaker 2: When you encounter Americans in London, or Americans in Europe
Speaker 2: or anywhere outside the English many in Europe, do they
Speaker 2: bad mouth US policy? Do they like talk about how
Speaker 2: terrible and like how much our institutions are deteriorating, and
Speaker 2: how we need to get back to that sort of
Speaker 2: like good old fashioned IMF orthodox economics of the good
Speaker 2: old days.
Speaker 4: Okay, let me get the past from Kobe and do
Speaker 4: a bit of a shack look they do, especially if
Speaker 4: they have liked me born and read emerging markets, but
Speaker 4: now trading the whole wide world, and if they are
Speaker 4: Americans during my beautiful, beautiful world, they are affected like
Speaker 4: when they hear conversations like this, they understand when they
Speaker 4: traded Turkey are hungry Argentina and say, okay, because of
Speaker 4: this politics financial repression, I don't believe it. That's why
Speaker 4: I'm selling the currency. It was easier to do for
Speaker 4: somebody else's land and currency. Now both it's hurt them
Speaker 4: a bit. And also it becomes a bit of a dilemma. Right.
Speaker 4: They may continue to criticize some of the things that
Speaker 4: are going on, but for the arguments that I laid out,
Speaker 4: risk parity at least depart continues to do okay, and
Speaker 4: US ten years still is not going to six percent.
Speaker 4: It frustrates them. This brings me to not in the
Speaker 4: mine are big, big ones, but big thematics A key
Speaker 4: point going forward, much beyond the fourth quarter. What's going
Speaker 4: to win the trust moments my symbolic way of saying,
Speaker 4: fiscal dominance or financial repression. Again, somebody who's experienced in
Speaker 4: these Turkeys, hungry Argentina's of the world, what does their
Speaker 4: mister bestan say? As a former client friend tell a
Speaker 4: friend banding the curve, he literally said, I'll bend the turf.
Speaker 4: We will take care of the curve. You know yet
Speaker 4: banned even not take care of maybe true like they do,
Speaker 4: being very watchful over the auctions, making sure auctions go
Speaker 4: very well, which they have been. One tips auction a side,
Speaker 4: maybe through buying much more on the short end vice
Speaker 4: versa buying more on the on the long end, to
Speaker 4: make sure that those rates stay under control. Operation twists
Speaker 4: are eleven twelve. They may win over majority. Is taught
Speaker 4: that fiscal dominance women, my god feel continued to say,
Speaker 4: don't necessarily bet against whether you like it or not.
Speaker 4: FED and Treasury working more closely together on this ala
Speaker 4: us financial repression. Going back to your questions, some clients
Speaker 4: that Americans I meet in New York, London or Saint
Speaker 4: Paulo are a bit taken aback by saying, AREIC becoming
Speaker 4: a bit emergent marketized? What do you mean by Treasury
Speaker 4: and FED working even closely together? This is not two
Speaker 4: thousand and eight two thousand and nine, But so far
Speaker 4: those to bet towards that tols to bet with, mister
Speaker 4: bethsand did better on their longan US views.
Speaker 3: Speaking of the wide world, what are your clients saying
Speaker 3: about China in particular? Because you know I'm looking at
Speaker 3: a very good Bloomberg story on my screen right now.
Speaker 3: China floods the world with cheap exports after Trump's tariffs,
Speaker 3: and I think they just posted a record trades surplus.
Speaker 2: And there was another good article is from More Worrying
Speaker 2: China wanting to be a gold storage hub was really straight.
Speaker 4: He did become a gold goldic.
Speaker 3: Doing a Switzerland.
Speaker 4: Yeah.
Speaker 2: Yeah, and the free point.
Speaker 3: But on the other hand, you know, growth has been
Speaker 3: slowing in China and there is deflation, but if you
Speaker 3: look at something like the Shanghai composite, it feels like
Speaker 3: people are starting to get a little bit more optimistic.
Speaker 3: What are you hearing?
Speaker 4: Three parts of that. First of all, China as an
Speaker 4: asset class, we have it here as alongside Golden emerging
Speaker 4: Marcus Champion of the Year in December, November, January earlier.
Speaker 4: Everybody and their brother a bit like this, not a
Speaker 4: bit like the steepener trade of this August early September,
Speaker 4: it was the top trade going long dollar CNH. These
Speaker 4: tariffs lightisers, they will be the toughest on China. There
Speaker 4: is no way. All the dollar CNCH calls were both
Speaker 4: starting with seven and a half flights at eight all
Speaker 4: of that didn't materialize. Okay, we didn't go to six
Speaker 4: ninety six eighty, but the NH is appreciating talking about
Speaker 4: the day we made April sixteen. On April nine, the
Speaker 4: big fear was on that morning when we questioned the
Speaker 4: system April nine morning, China would devalue big time, big bank.
Speaker 4: They didn't do any of that. And currently my head
Speaker 4: of Greater China Trading ten who named drop nice to
Speaker 4: call this China Take and nah Rally thinks that and
Speaker 4: with his research, RMB strength has more legs to go
Speaker 4: because whenever they go around the world, Peru ports Brazil
Speaker 4: amazon forests following the China corpus. Back to our discussion,
Speaker 4: these guys are full of dollars out of their ears
Speaker 4: and now for discussions for the points that you mentioned,
Speaker 4: they want to hage a little bit, so they want
Speaker 4: to sell their dollars a little bit and that's a
Speaker 4: big factor. So that's I think China Take will continue
Speaker 4: to be the champion asset class. Gone to my head,
Speaker 4: maybe not going to six ninety six eighty, but I
Speaker 4: am still betting with CNH and R and B strength
Speaker 4: over the dollar strength. One of these leggers of the
Speaker 4: year will do better to the world effect. You guys
Speaker 4: actually bloomberg at a great piece this very morning, like
Speaker 4: Tracy said, on exporting this inflation. So two big countries
Speaker 4: in this world are American are China. Mister Trump is
Speaker 4: doing what he's doing on the tariff side. These other
Speaker 4: big countries of the world don't necessarily fight with the
Speaker 4: other big giant in the world stage. So those cheap
Speaker 4: cars are coming into Europe than beyond and that is
Speaker 4: a macro factor. Why because ECB back to blue hat.
Speaker 4: Now they're done. Madame la Guarde very definedly says they're
Speaker 4: done for now. Madame Schnabel for now is winning the discussion.
Speaker 4: Even Lane is sounding a bit more like her, more hawkish.
Speaker 4: Let's see they don't we maybe we don't have an
Speaker 4: inflation problem painting below two percent if anything, my Mark
Speaker 4: World Chief European Economist thinks it may go lower to
Speaker 4: one point six to one point five. If that happens,
Speaker 4: Let's see what their twenty is come December, come January.
Speaker 4: If this China contries to export to this inflation, maybe,
Speaker 4: even though they don't say it now, they may have
Speaker 4: to end up cutting. So that's that's a big factor
Speaker 4: for the European story.
Speaker 3: Joe, we should have asked Ozon to wear his europe
Speaker 3: hat for this entire interview.
Speaker 2: I know it's a cool hat. It was a time
Speaker 2: advice y of Global Macro at Deutsche Bank. Always a
Speaker 2: pleasure meeting up with you. Always seems to be an
Speaker 2: exciting times in the market. Also, if we like talking
Speaker 2: to you because it's just a list of deutsch Bank analysts,
Speaker 2: is like, oh yeah, we need to talk to that guy.
Speaker 2: We need to talk to that guy. Yeah right, good
Speaker 2: sales anyway, Thank you so much.
Speaker 4: This was great. Thank you so much.
Speaker 2: I love catching upon for all kinds. Always really fun.
Speaker 2: He's a great read on one of the popular trades
Speaker 2: for right now.
Speaker 3: It's just the talking points, right, and the talking points
Speaker 3: this idea that you know, we we don't talk.
Speaker 2: About the Chinese market that much in terms of the
Speaker 2: stock market. We do a little bit. But the idea
Speaker 2: that from his perspective, long China is up there right
Speaker 2: now with all the big ones in Nvidia and Gold
Speaker 2: and up until recently the steepener, maybe that's fallen off
Speaker 2: a little bit because it hasn't worked as well. That
Speaker 2: this is one of the sort of top tier consensus
Speaker 2: trades right now, something that we should probably talk about further.
Speaker 3: I also find it interesting that tariffs have fallen from
Speaker 3: like number one on the list of concerns to like
Speaker 3: number four.
Speaker 2: If that no, that's totally right. I mean when we
Speaker 2: talked to him, that was middle of April in London
Speaker 2: or early April, I think, and so it was all
Speaker 2: about tariffs. And yet despite the fact that tariffs are
Speaker 2: not top of mind for a lot of traders apparently
Speaker 2: right now, it is interesting that still this idea too,
Speaker 2: we don't really want to have exposure to the US
Speaker 2: per se. We want to have exposure to US companies,
Speaker 2: but not the US per se. That's all part of
Speaker 2: the story.
Speaker 3: Speaking of which, another really good chart to look at
Speaker 3: right now is gold versus real rates. So you can
Speaker 3: bring up like tip yields or something like that, and
Speaker 3: you can see there used to be a really strong,
Speaker 3: almost one for one correlation and that's broken now.
Speaker 2: It's very interesting, right because it suggests that there's something
Speaker 2: else going right right, because it's very easy to say, okay,
Speaker 2: real raids, et cetera, they're going down. You want to like,
Speaker 2: I think it's that sovereign's sovereign concern. It's like something deeper,
Speaker 2: and it may be deeper to a lot of different
Speaker 2: sort of you know, Western governments and Fiat currencies and
Speaker 2: so forth. A lack of trust. Maybe something that doesn't
Speaker 2: show up in a traditional market showing up in gold.
Speaker 2: I do think that's really important.
Speaker 3: Yeah, all right, shall we leave it there.
Speaker 2: Let's leave it there.
Speaker 3: This has been another episode of the Odd Lots podcast.
Speaker 3: I'm Tracy Alloway. You can follow me at Tracy Alloway and.
Speaker 2: I'm Joe Wisenthal. You can follow me at the Stalwart.
Speaker 2: Follow our producers Kerman Rodriguez at Kerman armand desh O
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