WEBVTT - Ozan Tarman on What's Driving The Nonstop Rise in Gold and Tech 0:00:02.720 --> 0:00:15.840 Bloomberg Audio Studios, Podcasts, radio News. 0:00:18.800 --> 0:00:21.800 Hello and welcome to another episode of the Odd Lots podcast. 0:00:21.840 --> 0:00:23.120 I'm Joe Wisenthal and. 0:00:23.079 --> 0:00:24.040 I'm Tracy Alloway. 0:00:24.239 --> 0:00:27.800 Tracy. Every day it feels like stocks and gold go 0:00:27.920 --> 0:00:30.480 up every day, stocks and gold, and stocks and gold, 0:00:30.480 --> 0:00:32.760 and it's just it's relentless. 0:00:32.960 --> 0:00:35.040 I'll tell you what it's good for. Anyone invested in 0:00:35.080 --> 0:00:37.199 an index fund and a bunch of gold coins that 0:00:37.240 --> 0:00:38.080 their dad gave them. 0:00:38.159 --> 0:00:38.839 Yeah, good for you. 0:00:39.000 --> 0:00:39.559 Yeah, thank you. 0:00:40.120 --> 0:00:42.239 The Tracy Alloway portfolio doing very well. 0:00:42.360 --> 0:00:45.480 Yes, No, you're absolutely right. And the big thing about 0:00:45.479 --> 0:00:48.800 this is it's not really supposed to happen, right, Like 0:00:48.920 --> 0:00:51.879 You're not supposed to see stocks shoot up because of 0:00:51.920 --> 0:00:56.160 optimism about the future while gold simultaneously goes up because 0:00:56.200 --> 0:00:59.680 gold traditionally is the sort of dour yellow rock as 0:00:59.680 --> 0:01:03.360 you like to describe it, which usually signals something that 0:01:03.640 --> 0:01:04.400 is about to happen. 0:01:04.600 --> 0:01:06.440 I'm going to relent. I'm going to relent to something. 0:01:06.520 --> 0:01:07.280 Are you a gold bug? 0:01:07.319 --> 0:01:07.479 Now? 0:01:08.040 --> 0:01:11.360 No, Well, I'm going to relent on something. Okay, Right, 0:01:11.640 --> 0:01:14.080 I admit that gold is a medal. This is my 0:01:14.120 --> 0:01:17.080 big cave. I always no longer a rock. Yeah, this 0:01:17.200 --> 0:01:19.440 is my big cave. I used to say, there's yellow rocks. 0:01:19.480 --> 0:01:21.880 You know what, I'll acknowledge it's a medal. 0:01:21.959 --> 0:01:24.200 If it's a medal, Now, will you admit that it 0:01:24.240 --> 0:01:26.000 has industrial applications? 0:01:26.080 --> 0:01:28.160 Yeah, but they're very minor. And this is also I 0:01:28.160 --> 0:01:31.000 will not acknowledge that there is a a. It is 0:01:31.160 --> 0:01:34.440 mainly a store of value, or perceived to be. And 0:01:34.680 --> 0:01:37.360 when people are fearful, when people are mistrustful, and people 0:01:37.360 --> 0:01:40.080 don't TRUSTI had currencies or the governments, and there's all 0:01:40.160 --> 0:01:43.240 kinds of reasons to be skeptical about the governments that 0:01:43.360 --> 0:01:46.960 issue paper currencies. I understand why people want to hold 0:01:47.000 --> 0:01:50.520 this metal that people have used as money for thousands 0:01:50.560 --> 0:01:50.960 of years. 0:01:51.040 --> 0:01:52.960 I'm going to take you back to the jewelry district 0:01:53.080 --> 0:01:55.600 in New York and get you more excited about gold again. 0:01:55.720 --> 0:01:57.840 No, and I'll just say on gold, I loved it. 0:01:57.920 --> 0:02:00.480 And then I wore that big chain when to the 0:02:00.520 --> 0:02:03.360 diamond district, and I wish I'd bought it, like now, 0:02:04.080 --> 0:02:06.520 that's like my bigorite. It was like thirty five thousand 0:02:06.560 --> 0:02:09.280 dollars gold necklace, and that today would probably be a 0:02:09.320 --> 0:02:10.959 forty five or fifty thousand dollars gold. 0:02:10.840 --> 0:02:13.880 Neck Imagine how much that diamond encrusted furbie would be worth. 0:02:14.080 --> 0:02:15.760 This is the thing they don't tell you about gold. 0:02:15.800 --> 0:02:18.320 By the way, if you spend ten thousand this is 0:02:18.400 --> 0:02:20.720 my crank take on gold. That's not crank. If you 0:02:20.760 --> 0:02:23.880 spend ten thousand dollars on a gold necklace, they give 0:02:23.919 --> 0:02:27.800 you a ten thousand dollars gold necklace. Yes, it's free. 0:02:27.880 --> 0:02:29.600 It's like you spend ten thousand dollars, they give you 0:02:29.680 --> 0:02:32.359 something for ten thousand dollars back. In a sense, it's 0:02:32.360 --> 0:02:33.200 a free transaction. 0:02:33.320 --> 0:02:35.200 No, you get two things. You got something to wear 0:02:35.280 --> 0:02:36.040 and an investment. 0:02:36.120 --> 0:02:38.240 Yeah you actually, Yeah. I wish I had had this 0:02:38.360 --> 0:02:40.840 realization when gold was like two hundred dollars an ounce. 0:02:40.919 --> 0:02:43.280 But anyway, it took me a while, and it'll. 0:02:43.080 --> 0:02:44.919 Make a gold bug of you yet, I'm sure. 0:02:45.240 --> 0:02:48.520 So these are really exciting wild times in the market, 0:02:48.639 --> 0:02:51.919 and the last time we talked to this guest was 0:02:51.960 --> 0:02:54.239 another wild time and an exciting time in the market. 0:02:54.400 --> 0:02:56.920 That was, of course April. We do, in fact have 0:02:56.960 --> 0:03:00.440 the perfect guests to try to understand everything that's happening 0:03:00.480 --> 0:03:02.960 all around the world in global macro. We're going to 0:03:02.960 --> 0:03:05.120 be speaking with the vice Chair of Global Macro at 0:03:05.120 --> 0:03:08.000 Deutsche Bank Ozon Tournament Ozon. Thank you so much for 0:03:08.000 --> 0:03:10.000 coming back on odd lots. Last time we talked to you, 0:03:10.080 --> 0:03:11.959 we were in London. This time you're in New York, 0:03:12.000 --> 0:03:13.480 so thank you for coming to visit us. 0:03:13.560 --> 0:03:15.440 Very good to be in New York. I'd love to 0:03:15.480 --> 0:03:17.840 be on this show, I mean, other to be invited again. 0:03:18.480 --> 0:03:23.040 UNGA good inners. This is the highlights. And by the way, 0:03:23.080 --> 0:03:26.600 I was going to bring my United Amamim Jersey Jurally 0:03:26.639 --> 0:03:30.120 looks like him and some Backlaba for Tracy, but couldn't 0:03:30.120 --> 0:03:31.120 find in the airport. Next time. 0:03:31.919 --> 0:03:34.440 That's a good reason to do another future episode. Actually, 0:03:34.480 --> 0:03:36.680 we talked a lot about gold at the beginning, but 0:03:36.720 --> 0:03:39.240 I don't want to first ask about gold is in 0:03:39.400 --> 0:03:44.400 vidious swallowing the entire US or maybe even global economy. 0:03:44.400 --> 0:03:46.600 Almost hand in hand, right, these two questions, I mean, 0:03:47.080 --> 0:03:49.920 they both continue to go higher and higher. Actually, let 0:03:49.960 --> 0:03:52.960 me start with gold, because you did you did put 0:03:52.960 --> 0:03:55.760 such an introy in it. One of the very famous 0:03:55.760 --> 0:03:59.480 memes on the internet, Caricultures, done maybe two three years ago. 0:04:00.360 --> 0:04:03.600 This gentleman or lady running a big macro h fund 0:04:04.000 --> 0:04:06.680 looks around. I run very complicated products, but at the end, 0:04:06.840 --> 0:04:10.840 I buy gold, and these days that resonates even more, 0:04:11.360 --> 0:04:15.480 mentioned even more and more in these roundtables in TV 0:04:15.520 --> 0:04:19.320 studios like this. Normally that jin thinks, but it doesn't 0:04:19.400 --> 0:04:21.640 because at the moment it works in risk on and 0:04:21.760 --> 0:04:24.479 risk of. Last time you were around again, you called 0:04:24.480 --> 0:04:28.280 me at a very relevant time questioning US exceptionalism. I'm 0:04:28.320 --> 0:04:31.520 sure we'll go into that. What's going on with US institutions, 0:04:32.000 --> 0:04:35.120 those question marks, all those question marks against the dollars 0:04:35.680 --> 0:04:39.360 help gold FX is about stories against the dollar. I'm 0:04:39.400 --> 0:04:40.840 sure we'll go into this as well. Some of the 0:04:40.880 --> 0:04:44.520 stories are now having a less easy time. Then people 0:04:44.680 --> 0:04:48.560 like to go into gold and we maybe going into 0:04:48.560 --> 0:04:52.440 a rate cut period cycle or not. Whether you're Miran 0:04:52.520 --> 0:04:56.240 or Hammock, that differs, but gold works in that as well. 0:04:56.279 --> 0:04:59.000 So for the moment, I always feel, you know, when 0:04:59.040 --> 0:05:02.000 it's the top three on TVs on my round tables, 0:05:02.120 --> 0:05:04.800 I put the orangsign on. But at the moment it 0:05:04.880 --> 0:05:07.560 works for a reason. Now, Nimdia, yeah, I mean if 0:05:07.560 --> 0:05:09.440 he had this show a year ago as well, you 0:05:09.480 --> 0:05:12.320 could have said all done as of this morning. One 0:05:12.320 --> 0:05:15.640 of my partners in success Sarrevelos. His piece is already viral. 0:05:16.200 --> 0:05:19.680 He's claiming, tongue in cheek that Nimdia is almost keeping 0:05:19.880 --> 0:05:23.000 us away from a recession. All that Chip story, all 0:05:23.040 --> 0:05:26.560 that capex spending. If it wasn't for that, maybe we 0:05:26.640 --> 0:05:29.800 could either question or be in a recession. 0:05:29.960 --> 0:05:32.000 I'm not sure he's saying it that tongue in cheek. 0:05:32.040 --> 0:05:36.920 There agreed, and also others are joining him again. I'm 0:05:36.960 --> 0:05:40.279 hearing from my dear France clients this day morning Baine claims, 0:05:40.800 --> 0:05:45.880 and Lake's revenues quickly catch up with all this aikpex spend, 0:05:46.520 --> 0:05:48.440 we may be in big trouble. All of this bill 0:05:48.600 --> 0:05:51.680 bursts by twenty thirty, and we'll go into recession before that. 0:05:51.880 --> 0:05:55.360 Now we can say a lot can happen before twenty thirty, 0:05:55.440 --> 0:05:59.880 but warning signs are there. Last night's the big headlines 0:06:00.080 --> 0:06:02.440 the reason why again does that close on the ice 0:06:03.200 --> 0:06:06.719 n media investing into open Ai. That also becomes almost circular. 0:06:06.920 --> 0:06:10.440 I mean this is not to Oracle invest in open ai, 0:06:10.560 --> 0:06:13.640 open a I invest in ni Media, Back and forth, 0:06:13.640 --> 0:06:16.280 back and forth. Is this a closed circle? I hear 0:06:16.320 --> 0:06:20.320 all the skepticism also mainly coming from those who haven't 0:06:20.360 --> 0:06:21.320 caught this big rally. 0:06:21.400 --> 0:06:25.039 Since a bubble is a is a bull market that 0:06:27.040 --> 0:06:29.839 I called golden bubble. Tracy calls it a boom because 0:06:29.880 --> 0:06:32.920 of the difference. Exact inherited a bunch of exactly. 0:06:32.880 --> 0:06:36.040 I should just mention we're recording this on September twenty, I. 0:06:36.000 --> 0:06:38.480 Like that, right before, right before Power speech, right before 0:06:38.520 --> 0:06:39.080 Trump speech. 0:06:39.360 --> 0:06:42.080 So just on AI and the sort of self dealing 0:06:42.560 --> 0:06:48.960 circle is circuitous, incestuous relationships. Perhaps one of the reasons 0:06:48.960 --> 0:06:51.440 we like talking to you is because you talk to 0:06:51.480 --> 0:06:53.200 a lot of clients and so you hear a lot 0:06:53.240 --> 0:06:56.440 of feedback from the byside as well, What are people 0:06:56.480 --> 0:06:59.280 looking out for in terms of saying, okay, this is 0:06:59.320 --> 0:07:01.320 a bubble, because it seems like, all right, people have 0:07:01.400 --> 0:07:03.680 been talking about high valuations for a really long time. 0:07:03.760 --> 0:07:06.240 The stock just goes up. Is there something else that 0:07:06.279 --> 0:07:10.120 people are like watching for, in which case they might say, actually, 0:07:10.200 --> 0:07:11.760 we're going to start cutting back positions. 0:07:11.960 --> 0:07:15.800 Excellent question. Almost like two months ago, I was hearing more. 0:07:16.600 --> 0:07:19.720 I'm skeptical, but flat cuts are also coming. You can't 0:07:19.720 --> 0:07:23.960 fight this now, especially from the pros who've been around 0:07:24.360 --> 0:07:27.920 nineties and beyond. I do hear, Look, this does feel 0:07:27.960 --> 0:07:30.600 a bit like end of nineties, beginning of two thousands. 0:07:30.640 --> 0:07:32.520 By the way, the year your peak is very important there, 0:07:33.040 --> 0:07:36.400 but we may still run. That's one thing that more 0:07:36.480 --> 0:07:40.680 seasoned equity beyond macro pros are saying. I also it 0:07:40.720 --> 0:07:42.200 was a bit the beginning of my career, but I 0:07:42.240 --> 0:07:44.880 was around in late nineties, early two thousands. Then the 0:07:44.960 --> 0:07:49.080 denominator almost didn't exist in this valuation discussion. There was 0:07:49.120 --> 0:07:53.080 hardly any cash around. Everybody stuck Joe dot Com. It's 0:07:53.120 --> 0:07:55.200 excellent in B two, be even better in B B 0:07:55.280 --> 0:07:58.520 two C. And of course Hindsight is the world's top 0:07:58.560 --> 0:08:01.720 page one, but you could feel it. Whereas this time 0:08:01.760 --> 0:08:04.960 around you can question one hundred billions thrown around in 0:08:04.960 --> 0:08:10.800 a circle, but you cannot question much the revenue the 0:08:10.880 --> 0:08:15.560 cash Jensen Nividia open Ai is bringing to the table, 0:08:15.640 --> 0:08:18.400 you cannot question much. Let's go beyond Nividia a bit 0:08:18.720 --> 0:08:24.760 into Magnificent seven, Microsoft's Apple alphabet. They have customers. All 0:08:24.800 --> 0:08:27.360 of us are are their customers. They make money. So 0:08:28.000 --> 0:08:31.000 and in a way called talking about circle more posted 0:08:31.040 --> 0:08:33.240 way of more glass, helpful way of looking at it. 0:08:34.160 --> 0:08:36.640 Nidia is the big champ. Okay, but take ni Media aside. 0:08:36.679 --> 0:08:39.040 All of a sudden, oracle became a story for reason. 0:08:39.280 --> 0:08:42.839 From oracle, we go to alphabet because for this time 0:08:42.880 --> 0:08:48.439 around Judge decided favorably on chrome. The story continues, move 0:08:48.559 --> 0:08:52.520 from one I said to another. Also, yeah, Nividia is 0:08:52.559 --> 0:08:55.559 doing great. We'll talk about how Nasdak the Heracules is 0:08:55.600 --> 0:08:59.800 catching up with my blue head Mega. But it's a 0:09:00.120 --> 0:09:02.480 leave spinning like NI Media is not the top stock 0:09:02.520 --> 0:09:06.360 in SMP today, talking about waiting for Godo. Finally, small 0:09:06.400 --> 0:09:10.480 caps rolls up since the famous now jacksonvill and another 0:09:10.559 --> 0:09:14.040 famous jacksonall Dowis speech. So it's not just one one 0:09:14.120 --> 0:09:17.000 one guy is very important November nineteen me media earnings 0:09:17.040 --> 0:09:18.920 are very important, but it's not just one stock. 0:09:19.240 --> 0:09:23.480 By the way, Ozon was regaling us or showing off 0:09:23.480 --> 0:09:27.320 his make Europe Great Again hat, it's signed by Mario Draghi. 0:09:27.400 --> 0:09:29.480 If I own that, I'm very jealous. I would not 0:09:29.600 --> 0:09:31.560 be carrying it around. I would be carrying it at 0:09:31.600 --> 0:09:34.080 a glass case. I'm selling it maybe for eBay. 0:09:34.120 --> 0:09:36.400 You'd have it in the vault along with your gold coins. 0:09:36.400 --> 0:09:38.120 I would have it in the vault along with my goal. 0:09:38.320 --> 0:09:41.320 But I thatsk how much I did respect my clients. 0:09:41.320 --> 0:09:42.120 I want to show. 0:09:41.920 --> 0:09:45.360 Off before we can go further. Actually, for listeners who 0:09:45.400 --> 0:09:49.240 maybe didn't hear previous episode with you in April, can 0:09:49.280 --> 0:09:51.440 you just give us a little back. You talk to everyone, 0:09:51.800 --> 0:09:56.239 you have these dinners, you afford you an incredible perspective 0:09:56.320 --> 0:09:58.360 on what a range of people on the street are 0:09:58.360 --> 0:10:01.319 thinking about. Just so that people can understand your perspective 0:10:01.360 --> 0:10:02.840 and where you're coming from. What do you do like 0:10:03.320 --> 0:10:05.520 on a day to day basis, Who are the range 0:10:05.559 --> 0:10:07.120 of people that you talk to and how do you 0:10:07.120 --> 0:10:08.120 interact with them? 0:10:08.880 --> 0:10:14.160 My job is to talk to my bank's top institution clients. 0:10:14.400 --> 0:10:18.840 He funds real money, but also because of experience, talented relationships, 0:10:18.880 --> 0:10:21.840 going going deep. This also includes now sotore on wealth funds, 0:10:21.920 --> 0:10:25.280 key private banking institutions, and I love as you know, 0:10:25.360 --> 0:10:27.480 I'm a person who tries to bring things together. So 0:10:27.559 --> 0:10:30.640 in these roundtables, small or bag, it's not just edge funds, 0:10:30.679 --> 0:10:32.559 it's not just real money, it's not just sorro and 0:10:32.640 --> 0:10:36.079 wealth funds. All of said classes, credit rates, efs, emerging 0:10:36.120 --> 0:10:40.800 Marcus my proud Terro equity of course, so they learn 0:10:40.840 --> 0:10:44.720 from each other as well. Because we talked about in 0:10:44.760 --> 0:10:47.000 these shows and equity perspective can be very different to 0:10:47.000 --> 0:10:50.400 a race perspective. Right as we speak again, we're in 0:10:50.440 --> 0:10:53.080 one of these doll drums on if you define macro 0:10:53.320 --> 0:10:56.120 just as rates and fcs, it's almost like a magnet. 0:10:56.200 --> 0:10:58.559 Four to twelve. Okay, we try we on us tanyar. 0:10:58.880 --> 0:11:01.800 We tried below for pard for twelve, four thirteen, four 0:11:01.800 --> 0:11:04.920 to fourteen. As Stacy said, we are recording this on 0:11:04.960 --> 0:11:08.360 September twenty three at nine am. In three hours, share 0:11:08.400 --> 0:11:11.200 Power will speak. Let's see if he changes tone or 0:11:11.240 --> 0:11:14.319 six to his so called Howkish presser. Some people hope 0:11:14.360 --> 0:11:16.400 that may again ignite a little bit of the other 0:11:16.440 --> 0:11:21.160 stronger rates, higher tone. Otherwise, volatility in effects and rates 0:11:21.200 --> 0:11:24.720 are struggling. Meanwhile, equity is continue to do better and better. 0:11:24.840 --> 0:11:28.320 And back to your question. Different sets of clients coming 0:11:28.320 --> 0:11:32.000 to my roundtables, coming to my realm, learn from each 0:11:32.000 --> 0:11:33.800 other on why differents classes act different. 0:11:49.760 --> 0:11:51.720 So you mentioned the dollar just then, and of course 0:11:51.760 --> 0:11:54.360 you have a very international group of clients that you're 0:11:54.400 --> 0:11:57.360 talking to. Can we talk about the dollar drop this year? 0:11:57.400 --> 0:11:59.480 Because I think it's really important and even though it 0:11:59.520 --> 0:12:02.880 gets some attention, it's nowhere near enough because we're talking 0:12:02.920 --> 0:12:06.920 about stocks rallying, US stocks rallying. Things look a lot 0:12:07.000 --> 0:12:10.319 different when you start to adjust for currencies. How are 0:12:10.320 --> 0:12:14.000 people thinking about US assets in light of the dollar drum? 0:12:14.240 --> 0:12:17.120 Very fair, I'm tim Odlass. So I also remember last 0:12:17.120 --> 0:12:20.280 time we met is April sixteen in London, so just 0:12:20.960 --> 0:12:24.240 a week before the big fear You're dollar was right 0:12:24.240 --> 0:12:27.880 around one eleven. We were beginning to sense that this 0:12:27.960 --> 0:12:30.439 could be a historic here in terms of this dedorization. 0:12:30.920 --> 0:12:34.040 He fund ratio is changing, but we swift the mood 0:12:34.160 --> 0:12:37.480 beyond one fifteen as well. Now looking at the picture, 0:12:37.559 --> 0:12:40.880 two things are very important. First of all, the flows 0:12:41.040 --> 0:12:43.959 back to our friend Nividia, back to our friend magnificent seven. 0:12:44.720 --> 0:12:48.000 Because one pushback from some of my especially fast money friends, 0:12:48.040 --> 0:12:51.720 who all either smell, want, or wish a dollar squeeze 0:12:51.760 --> 0:12:54.439 after such a soft dollar move is what will the 0:12:54.480 --> 0:12:58.800 flows do? World continues to buy Nividia's and Microsoft's do 0:12:58.920 --> 0:13:02.240 they buy it hashed? So I was a little bit 0:13:02.280 --> 0:13:04.400 skeptic on that. By the way, flows are back, so 0:13:04.520 --> 0:13:06.800 a big difference to Aple sixteen. I'll talk we can 0:13:06.880 --> 0:13:09.200 talk about that as well. Retail led rally. Look where 0:13:09.240 --> 0:13:13.680 we are all time high my research reports and claims 0:13:13.720 --> 0:13:18.160 again George Servelos that in the last recent thirty forty 0:13:18.160 --> 0:13:21.600 five days or so, those laws almost eighty percent of 0:13:21.640 --> 0:13:25.920 them are heged, so people are buying their Nidia haged 0:13:26.200 --> 0:13:28.840 so believe it or not, eighty percent is a big number, 0:13:28.840 --> 0:13:32.880 say seventies eighty sixty. That definitely helps the soft dollar 0:13:33.080 --> 0:13:35.720 side of things. What continues to help is, of course 0:13:36.240 --> 0:13:41.640 institutionists decreasing their exposure to US. Like hindsight I said 0:13:41.720 --> 0:13:45.640 rightly on that April sixteen, nothing to end the US 0:13:45.679 --> 0:13:52.320 private site exceptionalism. Nidia's microsofts so far are fighting back 0:13:52.400 --> 0:13:54.839 the tests of deep sick, even though champion of the 0:13:54.920 --> 0:13:59.040 year is China Tech in terms of performance, but from 0:13:59.360 --> 0:14:05.319 Asia so Nordics big funds are reducing their dollar exposure 0:14:05.320 --> 0:14:08.360 a little bit seven to sixty five, sixty to fifty five. 0:14:08.600 --> 0:14:11.199 That makes a difference. That made a difference. 0:14:11.640 --> 0:14:13.640 This is really important. I think we should just continue 0:14:13.679 --> 0:14:16.160 on the specific line because what it sounds like is 0:14:16.760 --> 0:14:19.760 all around the world you have to have dollars to 0:14:19.760 --> 0:14:22.040 buy in video, and video is a stock that's sold 0:14:22.040 --> 0:14:25.120 in dollars. It's profits are denominated in dollars. It's sales. 0:14:25.480 --> 0:14:27.640 It sells things in dollars, and that's the same for 0:14:27.720 --> 0:14:30.840 all of the mag seven include Microsoft and Apple, and 0:14:30.920 --> 0:14:34.760 all of them are doing phenomenally well. They have real profits, 0:14:34.840 --> 0:14:39.240 real earnings and so forth. They're very excellent businesses. And 0:14:39.320 --> 0:14:42.440 it sounds like basically all around the world people want 0:14:42.920 --> 0:14:47.320 exposure to a handful of extraordinary US companies. They just 0:14:47.360 --> 0:14:51.880 don't want to take the risk that the denominator and 0:14:51.880 --> 0:14:53.640 this time we're not talking about earning but that or 0:14:53.680 --> 0:14:57.480 that the dollar that they trade in or selling, et cetera, 0:14:57.680 --> 0:14:59.400 is going to go down further. So they want everything 0:14:59.440 --> 0:15:02.440 about this. They just basically don't want the US sovereign 0:15:02.520 --> 0:15:06.360 exposure that's connected to these American domicile companies. 0:15:06.520 --> 0:15:09.960 Completely correct, and honestly, I was a little bit skeptic. 0:15:10.040 --> 0:15:13.200 I wasn't sure. If you told me Osan this year, 0:15:13.600 --> 0:15:17.280 this big surgeon back in NI media Microsoft won't happen, 0:15:17.680 --> 0:15:19.840 then I would feel even more comfortable with the short 0:15:19.880 --> 0:15:24.320 dolar position. But Magnificent seven roads it may even pass 0:15:24.360 --> 0:15:27.880 Mega despite that is also remaining sort so whether I 0:15:27.920 --> 0:15:31.560 was skeptical or not, what you explained is happening. But 0:15:31.920 --> 0:15:35.000 I think for the next legs are included. A lot 0:15:35.000 --> 0:15:38.320 of biensy site are calling for one twenty one, twenty 0:15:38.360 --> 0:15:41.280 two light levels. You need now the European side of 0:15:41.320 --> 0:15:44.200 the story or whoever you want to talk about Japan, China, 0:15:44.280 --> 0:15:46.840 the lagger side of the story FX is too legged. 0:15:47.120 --> 0:15:50.760 We talked about why the dollar side of short dollar worked. 0:15:51.440 --> 0:15:54.440 We need now a bit more help from our European 0:15:54.480 --> 0:15:55.480 story Tersea. 0:15:55.520 --> 0:15:58.000 You know what strikes me is interesting about this, which 0:15:58.080 --> 0:16:01.960 is that when we think about countries where there's political 0:16:02.040 --> 0:16:05.440 risk and so forth, we don't often associate them with 0:16:05.800 --> 0:16:08.000 the most impressive enterprises in the world, right, And it 0:16:08.040 --> 0:16:10.200 strikes me that that's the tension we're talking about here, 0:16:10.400 --> 0:16:12.400 is that there's all this anxiety about the US as 0:16:12.400 --> 0:16:15.640 a sovereign for all kinds of reasons. That's not unusual. 0:16:15.800 --> 0:16:18.680 Other countries have sovereign risk. They're just usually not home 0:16:18.720 --> 0:16:20.800 to literally the most impressive companies in the world. 0:16:20.880 --> 0:16:22.840 No, and it is true that most of the investor 0:16:23.040 --> 0:16:25.800 nervousness around the US has shown up on the sovereign. 0:16:25.600 --> 0:16:27.880 Yeah, not the corporate sete, rather than the corporate. 0:16:27.560 --> 0:16:30.320 Side, which we've been writing about in the auth Loots newsletter. 0:16:29.960 --> 0:16:31.560 Which everyone should subscribe. 0:16:31.160 --> 0:16:35.160 To it, Yes, seamless plug just then. Okay. One of 0:16:35.200 --> 0:16:38.120 the other I guess big questions about the market right 0:16:38.160 --> 0:16:42.800 now is there's clearly nervousness about fiscal dominance and Federal 0:16:42.840 --> 0:16:45.640 Reserve independence, and that is playing into the drop in 0:16:45.680 --> 0:16:49.200 the dollar too. And yet at the same time stocks 0:16:49.200 --> 0:16:51.560 seem to be taking off and a lot of investors 0:16:51.600 --> 0:16:53.520 don't seem to be that nervous, at least on the 0:16:53.560 --> 0:16:58.440 equity side. What accounts for the discrepancy there the two. 0:16:58.280 --> 0:17:00.840 Different roles pluging about plugging. I also love the New 0:17:00.920 --> 0:17:03.680 York Times piece. I think you guys deserve all the 0:17:03.720 --> 0:17:06.600 trust me, all those trans clients, they listen, they are 0:17:06.680 --> 0:17:09.760 very excited when I'm on now. Tracy definitely hit the 0:17:09.840 --> 0:17:13.920 right point. Deed organization is one key big team going 0:17:13.920 --> 0:17:17.720 into the end of the year. Fiscal dominance or not 0:17:18.480 --> 0:17:21.439 and the famous fed independence. Those are my second and 0:17:21.440 --> 0:17:23.919 third key topics. By the way, where where are tariffs? 0:17:23.960 --> 0:17:26.840 All the way down to four? I forgot about dominance, 0:17:26.880 --> 0:17:30.840 So we talk right. I love brainstorming with you guys. 0:17:31.240 --> 0:17:34.760 Remember what I said in August as well summer everybody 0:17:34.960 --> 0:17:38.280 was everybody like some key investors, especially fast money. We're 0:17:38.359 --> 0:17:43.200 gunning for from my deer islands. Four key trust moments 0:17:43.240 --> 0:17:45.439 in four countries at the same time. What does that mean? 0:17:45.480 --> 0:17:47.400 I mean trust moments. We said, you know what I'm 0:17:47.400 --> 0:17:50.520 talking about, long hands getting out of control for people's 0:17:50.600 --> 0:17:51.720 For Marcus. 0:17:51.480 --> 0:17:54.000 Big fisical, US, UK, Japan was the four for the. 0:17:53.960 --> 0:17:59.000 Right Reasons Europe book for Right Reasons because ramp up 0:17:59.200 --> 0:18:01.000 the German span will come at the end of the 0:18:02.359 --> 0:18:05.160 at the end of the year, et cetera. Some key 0:18:05.800 --> 0:18:09.240 investors were asking, well, one trust moment, we know how 0:18:09.280 --> 0:18:12.240 we handled chance. Later down prime minister goes different sets 0:18:12.280 --> 0:18:14.720 of policies. What happens if four goes at the same time. 0:18:15.200 --> 0:18:17.840 And we tried this on talking about dates September two, 0:18:17.880 --> 0:18:20.320 when you guys came back from wherever you came back 0:18:20.320 --> 0:18:23.639 from on the long final fine and final, long location, 0:18:24.240 --> 0:18:29.600 long weekend, UK Gild's big move, followed by France because 0:18:30.000 --> 0:18:32.240 the Prime Minister was about to go in six days, 0:18:32.840 --> 0:18:36.800 joined Tracy. How long did it last? Four hours? That 0:18:37.000 --> 0:18:39.000 long hand sell off lasted four hours And I'm not 0:18:39.000 --> 0:18:43.120 trying to be funny. Basically since then US thirty years, Europe, 0:18:43.560 --> 0:18:47.160 even UK has been much more under control. Up until 0:18:47.200 --> 0:18:51.760 the Hawkish presser almost threatening below four percent, even more 0:18:51.800 --> 0:18:55.360 than short dollars Tracy over the summer and inter fal 0:18:55.480 --> 0:19:00.000 what were the real money and dhe funds common fail 0:19:00.040 --> 0:19:04.640 with trade steepeners, steepeners, steepeners Europe, US, everybody and their 0:19:04.680 --> 0:19:09.520 brother had steepeners first for different reasons. On Us more 0:19:09.640 --> 0:19:13.320 due to the short end that sooner or later will 0:19:13.320 --> 0:19:15.639 come to the Fed independence, the Trump side of the 0:19:15.680 --> 0:19:20.000 equation would win more. Finally, the powerwood caving cuts would 0:19:20.040 --> 0:19:23.080 come in and on the European side even more popular 0:19:23.680 --> 0:19:28.679 because of the long end German spending coming through in 0:19:28.720 --> 0:19:32.920 October November, and people believed in their steepeners. First, US 0:19:33.000 --> 0:19:37.199 got hurt to nfp's myths, long hand moved big flatteners, 0:19:37.240 --> 0:19:40.560 hurt gold aside whenever you say, or Nividia side, whenever 0:19:40.600 --> 0:19:43.480 you say, somebody says a trade is untouchable, watch out. 0:19:43.840 --> 0:19:46.920 European steepeners were supposed to be untouchable. Two days after 0:19:46.960 --> 0:19:50.960 that flattening washout in US, Europe also got reduced and 0:19:51.040 --> 0:19:56.040 since Tropkish pressure, we're more balanced onto Fed independence again. 0:19:56.240 --> 0:20:01.159 Justice Morning of the Press mattter raskin my head of 0:20:01.320 --> 0:20:05.680 US race strategy previously from the FED. Very respectable analyst 0:20:05.880 --> 0:20:10.000 wrote about this FED independence sphere not being in the price, 0:20:10.280 --> 0:20:12.760 not in the break evens, not in the term premiere. 0:20:14.080 --> 0:20:17.560 Why I think a little bit, because so far, let's 0:20:17.640 --> 0:20:19.480 die right into it if you wish. I think this 0:20:19.560 --> 0:20:22.440 cut is justified in my mind. Even if they cut 0:20:22.480 --> 0:20:25.840 fifty a week ago, it could have been justified talking 0:20:25.880 --> 0:20:28.120 about some deer clients friends public So I may say 0:20:28.520 --> 0:20:32.520 Reek reader publicly on TV and on his writing set, 0:20:33.119 --> 0:20:35.640 they may and they should cut fifty because I think 0:20:35.640 --> 0:20:38.400 if they sold the revisions in June and July, they 0:20:38.440 --> 0:20:42.600 probably would have cut in June and July and going forward. Okay, 0:20:42.640 --> 0:20:44.639 they cut twenty five. Not only they cut twenty five. 0:20:44.840 --> 0:20:49.760 Miran did this thing probably that's the dot. But Waller 0:20:49.960 --> 0:20:53.399 Woman stuck to twenty five. Even some of the previous 0:20:53.480 --> 0:20:56.240 FED governors racing for the job. Bullard says they should 0:20:56.280 --> 0:20:59.400 have done twenty five. So people are thinking and hoping 0:20:59.800 --> 0:21:02.880 that there's still some fading dependence. Powell, even though he's 0:21:02.920 --> 0:21:06.120 the past man, has some control over the situation. That's 0:21:06.119 --> 0:21:08.960 why you're not getting any fading dependence. 0:21:09.000 --> 0:21:12.159 Feed on the long ends, Joe, it is interesting and 0:21:12.200 --> 0:21:14.640 I would not have expected this earlier in the year. 0:21:14.720 --> 0:21:16.560 But if you look at the move index, so the 0:21:16.600 --> 0:21:21.440 index of non market volatility, it's going down. It's gone 0:21:21.440 --> 0:21:23.840 down quite a bit, which is not exactly what you 0:21:23.920 --> 0:21:26.240 might expect to happen when we're talking about things like 0:21:26.280 --> 0:21:29.800 physical dominance and federal reserve independence. But there you go. 0:21:30.160 --> 0:21:32.119