1 00:00:03,720 --> 00:00:07,080 Speaker 1: Scrap on your parachute. It's time for What Goes Up 2 00:00:07,360 --> 00:00:13,960 Speaker 1: with Sarah Ponzick and Mike Reagan. Hello and welcome to 3 00:00:14,040 --> 00:00:17,720 Speaker 1: What Goes Up, a Bloomberg weekly market podcast. I'm Sarah Post, 4 00:00:17,920 --> 00:00:20,880 Speaker 1: a reporter on the Cross Asset team, and I'm Mike Reagan, 5 00:00:21,079 --> 00:00:26,040 Speaker 1: a senior editor at Bloomberg and Sarah's faithful sidekick. So 6 00:00:26,079 --> 00:00:30,920 Speaker 1: we're bringing that back now, new year, back to the old. 7 00:00:30,920 --> 00:00:33,879 Speaker 1: We'll call it a game that's right, That's right this 8 00:00:33,920 --> 00:00:36,600 Speaker 1: week on the show. It may seem cold, but in 9 00:00:36,600 --> 00:00:40,080 Speaker 1: the COVID nineteen era, the stock market has rewarded companies 10 00:00:40,080 --> 00:00:42,880 Speaker 1: that are labor light, that focused on intangible asset growth 11 00:00:43,200 --> 00:00:46,680 Speaker 1: and digitization, at times at the expense of the human worker. 12 00:00:46,840 --> 00:00:49,480 Speaker 1: In part, it's a fact that helps so the disconnect 13 00:00:49,520 --> 00:00:51,919 Speaker 1: between the stock market and the economy of late a 14 00:00:51,960 --> 00:00:54,520 Speaker 1: divide that was again on display this week as stocks 15 00:00:54,600 --> 00:00:57,960 Speaker 1: rally to records while the US capital was being ambushed. 16 00:00:58,240 --> 00:01:00,120 Speaker 1: Today we bring you a guest who really has been 17 00:01:00,160 --> 00:01:02,960 Speaker 1: at the forefront of this type of analysis over the 18 00:01:03,040 --> 00:01:06,440 Speaker 1: last year, and as always, will close out the episode 19 00:01:06,480 --> 00:01:10,000 Speaker 1: with our tradition, the craziest thing I saw in markets 20 00:01:10,040 --> 00:01:12,800 Speaker 1: this week, Um Sarah, I think we can all agree 21 00:01:12,959 --> 00:01:15,959 Speaker 1: on what the craziest thing we all witnessed was this week. 22 00:01:16,800 --> 00:01:18,959 Speaker 1: Whether or not the market reaction was crazy or not, 23 00:01:19,040 --> 00:01:21,840 Speaker 1: I don't know. I don't know. This week was full 24 00:01:22,000 --> 00:01:26,600 Speaker 1: of crazy things that is beginning in a very mike, 25 00:01:28,480 --> 00:01:31,200 Speaker 1: God help us all, but anyway to help us make 26 00:01:31,240 --> 00:01:35,199 Speaker 1: sense of it all. We're very happy to welcome back 27 00:01:35,200 --> 00:01:39,479 Speaker 1: to the show. He's the director of Global macro Strategy 28 00:01:39,720 --> 00:01:44,199 Speaker 1: at stone X Group. His name is Vincent de Luard. Vincent, 29 00:01:44,240 --> 00:01:47,520 Speaker 1: welcome back to the show. Thanks hing me. It's always 30 00:01:47,520 --> 00:01:50,320 Speaker 1: a pleasure to to see you and I love your podcast, 31 00:01:50,360 --> 00:01:54,520 Speaker 1: so thank you, thank you, thank you. We're blushing, well 32 00:01:54,560 --> 00:01:58,680 Speaker 1: you can't see we are, you can see ash. Whatever 33 00:01:58,720 --> 00:02:00,960 Speaker 1: the sound of blushing is will We'll get the producer 34 00:02:00,960 --> 00:02:03,320 Speaker 1: to add some sound effects. But uh, you know, if 35 00:02:03,320 --> 00:02:06,960 Speaker 1: it's an UM yes, Sarah pointed out. Sarah and I 36 00:02:07,000 --> 00:02:10,239 Speaker 1: are both sort of fascinated with this uh notion who 37 00:02:10,240 --> 00:02:11,880 Speaker 1: came up with this year that how it's a it's 38 00:02:11,880 --> 00:02:16,000 Speaker 1: a bear market for humans UM based basically on how 39 00:02:16,360 --> 00:02:19,840 Speaker 1: the stocks of companies that do not really rely as 40 00:02:19,919 --> 00:02:23,280 Speaker 1: much on their human employees did so well this year 41 00:02:23,360 --> 00:02:27,280 Speaker 1: compared UM to the rest of the market, and you know, 42 00:02:27,320 --> 00:02:31,639 Speaker 1: specifically companies that that are much more reliant on human capital. 43 00:02:32,639 --> 00:02:36,600 Speaker 1: I I'm fascinated with this because I think it has 44 00:02:36,720 --> 00:02:41,560 Speaker 1: ramifications well beyond the stock market. Um and Sarah will 45 00:02:41,560 --> 00:02:43,880 Speaker 1: tell you. That means I'm I'm winding up here for 46 00:02:43,919 --> 00:02:48,240 Speaker 1: like a twelve part question for you. But I know, yes, yes, 47 00:02:48,440 --> 00:02:50,440 Speaker 1: actually I won't make it a question. I'm just gonna 48 00:02:50,480 --> 00:02:53,600 Speaker 1: monologue like like a supervillain in a hero in a movie. 49 00:02:54,040 --> 00:02:56,760 Speaker 1: And uh, and you tell me, yeah, even better, you 50 00:02:56,800 --> 00:02:58,639 Speaker 1: tell me where I'm right and wrong about this. But 51 00:02:59,840 --> 00:03:02,600 Speaker 1: I do think we can connect this back to the 52 00:03:02,639 --> 00:03:05,960 Speaker 1: events of the week, um and and hear me out, 53 00:03:06,000 --> 00:03:11,200 Speaker 1: because obviously, the whole history of economic progress is littered 54 00:03:11,240 --> 00:03:15,119 Speaker 1: with examples of what appeared to be very barish elements 55 00:03:15,120 --> 00:03:17,320 Speaker 1: for for labor in the short term, you know, whether 56 00:03:17,360 --> 00:03:20,800 Speaker 1: it be the printing press back in the fourteen hundreds 57 00:03:20,919 --> 00:03:23,800 Speaker 1: or the cotton gin in the eighteen hundreds, all of 58 00:03:23,840 --> 00:03:28,280 Speaker 1: this stuff seemed to, you know, basically disrupt a big 59 00:03:28,320 --> 00:03:32,359 Speaker 1: source of the way people work, you know, their jobs, 60 00:03:32,400 --> 00:03:36,640 Speaker 1: their labor. Um the last twenty years, I gotta say, 61 00:03:36,800 --> 00:03:41,880 Speaker 1: um feels like that issue. But on steroids. Um, just 62 00:03:41,960 --> 00:03:46,320 Speaker 1: with the the continued automation of everything that continued, you know, uh, 63 00:03:46,960 --> 00:03:51,360 Speaker 1: move to retail online, on and on and on. And 64 00:03:51,400 --> 00:03:52,960 Speaker 1: I wonder, you know, and this might take you a 65 00:03:53,000 --> 00:03:56,320 Speaker 1: little bit out of your your comfort zone, but um, 66 00:03:56,360 --> 00:03:58,600 Speaker 1: I wonder if if the events of this week and 67 00:03:58,600 --> 00:04:00,800 Speaker 1: even of the last four year, is this sort of 68 00:04:01,520 --> 00:04:05,960 Speaker 1: this embrace of economic nationalism is part of that story. 69 00:04:06,240 --> 00:04:08,440 Speaker 1: You know, I know it's not a market story itself, 70 00:04:08,480 --> 00:04:12,920 Speaker 1: but uh, you know, people blame sort of the economic 71 00:04:13,000 --> 00:04:17,200 Speaker 1: anxiety on what's created economic nationalism. You know, I don't 72 00:04:17,200 --> 00:04:20,479 Speaker 1: want to mix that up with sort of the other 73 00:04:20,520 --> 00:04:26,839 Speaker 1: motivations that are are you know, uh, sort of scarier, 74 00:04:26,880 --> 00:04:29,839 Speaker 1: whether it be racism or xenophobia and that sort of thing. 75 00:04:29,880 --> 00:04:33,560 Speaker 1: But I do think the you know, this notion that 76 00:04:33,640 --> 00:04:38,560 Speaker 1: the the opportunity set for the sort of average American 77 00:04:38,640 --> 00:04:41,800 Speaker 1: labor feels like it's gone down a lot in recent years. 78 00:04:43,120 --> 00:04:45,560 Speaker 1: Am I crazy to sort of connect those two dots 79 00:04:45,600 --> 00:04:49,520 Speaker 1: that this this sweeping nationalism we've seen um and the 80 00:04:49,560 --> 00:04:51,760 Speaker 1: bear market for humans are are sort of joined at 81 00:04:51,800 --> 00:04:55,520 Speaker 1: the hip, are sort of the same story in some way. No, absolutely, 82 00:04:55,760 --> 00:04:57,960 Speaker 1: I'm actually glad you burned that out. And I mean 83 00:04:59,600 --> 00:05:01,960 Speaker 1: a st from the day to day market, but I 84 00:05:02,000 --> 00:05:06,159 Speaker 1: think it's externally important. I actually I remember writing that 85 00:05:06,200 --> 00:05:10,320 Speaker 1: piece at the Trump election looking at the percentage of 86 00:05:10,400 --> 00:05:14,719 Speaker 1: drivers truck drivers in the in the counties versus the 87 00:05:14,760 --> 00:05:18,320 Speaker 1: Trump vote, and that was a you know, people had 88 00:05:18,320 --> 00:05:20,200 Speaker 1: come up with like a bunch of indicators. I think 89 00:05:20,200 --> 00:05:24,560 Speaker 1: one of them was like whole foods, whether the county 90 00:05:24,560 --> 00:05:28,840 Speaker 1: at the whole foods versus a cracker barrel, as as 91 00:05:28,839 --> 00:05:31,680 Speaker 1: a predictor of Democrat versus Republican. Another one that that 92 00:05:31,760 --> 00:05:34,440 Speaker 1: showed really well was two of them which I think 93 00:05:34,440 --> 00:05:36,479 Speaker 1: are relevant to a point, how many truck drivers you 94 00:05:36,520 --> 00:05:41,800 Speaker 1: had and the percentage of Chinese imports from that county. Um. 95 00:05:42,760 --> 00:05:44,880 Speaker 1: And I think, you know, looking at the Trump phenomenon 96 00:05:44,920 --> 00:05:48,560 Speaker 1: for these lands of fear about automation, fear that you know, 97 00:05:48,640 --> 00:05:51,839 Speaker 1: and I think that's you know, it's not expressed correctly, 98 00:05:52,320 --> 00:05:55,480 Speaker 1: but a lot of the fears are we is there 99 00:05:55,520 --> 00:05:57,880 Speaker 1: a place in this country for me? Is there something 100 00:05:57,920 --> 00:06:00,040 Speaker 1: that I can do? And if we've been everything on 101 00:06:00,240 --> 00:06:02,240 Speaker 1: to race and to being a soul loser. And I'm 102 00:06:02,240 --> 00:06:04,080 Speaker 1: not saying these things are not there, because it definitely are. 103 00:06:04,560 --> 00:06:07,800 Speaker 1: But we also need to not miss what I think 104 00:06:08,400 --> 00:06:10,400 Speaker 1: trumps Um truly was about, which was, you know, the 105 00:06:10,400 --> 00:06:14,640 Speaker 1: forgotten man and the prospects for for you know, I 106 00:06:14,680 --> 00:06:17,839 Speaker 1: guess for them became as a as a light of hope. 107 00:06:18,360 --> 00:06:21,040 Speaker 1: And four years in we had this pandemic which further 108 00:06:21,080 --> 00:06:25,360 Speaker 1: accelerated these trends that we talked about, automation, artificial intelligence, 109 00:06:25,520 --> 00:06:28,600 Speaker 1: demise of human bear market for humans. And I think 110 00:06:28,600 --> 00:06:32,560 Speaker 1: this was some sort of a curious apathosis of this movement, 111 00:06:34,480 --> 00:06:38,640 Speaker 1: the curious events that happened. Do you suppose there's any 112 00:06:38,720 --> 00:06:41,560 Speaker 1: chance of this sort of rebounding ricocheting back into the 113 00:06:41,600 --> 00:06:44,919 Speaker 1: markets itself. You know, it's kind of hard to identify 114 00:06:45,000 --> 00:06:48,800 Speaker 1: tipping points in real time, but to me, this week 115 00:06:48,880 --> 00:06:52,479 Speaker 1: kind of feels like a tipping point at least culturally, politically, 116 00:06:52,839 --> 00:06:55,159 Speaker 1: um in a lot of other ways. And I wonder, 117 00:06:55,320 --> 00:06:58,240 Speaker 1: you know, I wonder if there are if there is 118 00:06:58,279 --> 00:07:01,960 Speaker 1: the potential for sort of a backlash UM, whether be 119 00:07:02,040 --> 00:07:07,040 Speaker 1: amongst the E. S G. Prone type of investors, regulators 120 00:07:07,520 --> 00:07:10,080 Speaker 1: looking at Amazon sort of running rough shot over over 121 00:07:10,640 --> 00:07:14,680 Speaker 1: the retail industry. Right, Okay, I think the regulation is 122 00:07:14,760 --> 00:07:19,440 Speaker 1: far far, you know, regulators is far does not understand 123 00:07:19,480 --> 00:07:22,400 Speaker 1: these issues UH and and the SG movement I think 124 00:07:22,400 --> 00:07:27,240 Speaker 1: contributes to that. I actually had a piece following the 125 00:07:27,440 --> 00:07:29,600 Speaker 1: work with Donald Sarah on the on the Bare Market 126 00:07:29,640 --> 00:07:33,840 Speaker 1: for Humans, on how E s G makes the problem worse. UH. 127 00:07:34,520 --> 00:07:36,720 Speaker 1: So what I did is I looked at the I 128 00:07:36,760 --> 00:07:40,840 Speaker 1: think the largest thirty E s D funds equity funds 129 00:07:40,840 --> 00:07:44,320 Speaker 1: in the US, and I compare their holdings UH to 130 00:07:44,680 --> 00:07:46,720 Speaker 1: the rest of free thousand. And I look at the 131 00:07:46,800 --> 00:07:51,040 Speaker 1: number of employees UH and the the average eh D company, 132 00:07:51,440 --> 00:07:53,800 Speaker 1: so that the one the highest eh ranking, he's about 133 00:07:53,840 --> 00:07:56,600 Speaker 1: thirty percent smaller than the average restauran three thousand. In 134 00:07:56,680 --> 00:07:59,360 Speaker 1: spite far the biggest difference. I mean there are other 135 00:07:59,440 --> 00:08:02,200 Speaker 1: small different and is like they're more profitable. Uh. They 136 00:08:02,200 --> 00:08:04,880 Speaker 1: generally have better balance sheet, so there's a quality tilt 137 00:08:04,920 --> 00:08:08,080 Speaker 1: which has helped them in But by and large they 138 00:08:08,120 --> 00:08:10,520 Speaker 1: are companies that trans human. And again, think about how 139 00:08:10,560 --> 00:08:12,920 Speaker 1: E s G works, Right, I mean that the carbony, 140 00:08:13,040 --> 00:08:15,680 Speaker 1: the corbon impact of these our master card is is zero. Right, 141 00:08:15,680 --> 00:08:18,280 Speaker 1: it's a financial network or the same throw Microsoft. The 142 00:08:18,320 --> 00:08:20,560 Speaker 1: whole which companies can afford to be good to their 143 00:08:20,560 --> 00:08:23,080 Speaker 1: workers is going to be Again, things like Microsoft that 144 00:08:23,120 --> 00:08:26,840 Speaker 1: are very profitable big tech monopolies. So structurally here she 145 00:08:27,120 --> 00:08:31,240 Speaker 1: is actually biased against humans and rewards the company that 146 00:08:31,280 --> 00:08:33,920 Speaker 1: are already benefiting from all the strengths. So as we 147 00:08:34,040 --> 00:08:36,360 Speaker 1: she more capital towards e h G phone, I think 148 00:08:36,360 --> 00:08:39,080 Speaker 1: we are making the problem a lot worse. And if 149 00:08:39,120 --> 00:08:40,960 Speaker 1: I were, you know, running an E s G company, 150 00:08:41,000 --> 00:08:43,360 Speaker 1: I would really focus on the S and s is. 151 00:08:43,480 --> 00:08:46,200 Speaker 1: You know, before you can worry about how good your 152 00:08:46,240 --> 00:08:49,240 Speaker 1: governance is and and you know labor issues. Do you 153 00:08:49,320 --> 00:08:51,400 Speaker 1: have workers? I think the first good thing you can 154 00:08:51,440 --> 00:08:54,079 Speaker 1: do for for humans is to give them jobs. Uh. 155 00:08:54,200 --> 00:08:57,600 Speaker 1: And so far sc IS is actually challenging companies towards 156 00:08:58,400 --> 00:09:03,760 Speaker 1: companies that either have future to join. Yeah, it's certainly 157 00:09:03,800 --> 00:09:06,760 Speaker 1: a contrarian view right now in a way to view 158 00:09:06,800 --> 00:09:09,559 Speaker 1: E s G at a time when so many are 159 00:09:09,600 --> 00:09:13,840 Speaker 1: pushing behind it. So thanks to you, Vincent, I've written 160 00:09:13,880 --> 00:09:16,320 Speaker 1: a lot about this topic over the last year, and 161 00:09:16,679 --> 00:09:19,600 Speaker 1: you created this factor where you look at intangible assets 162 00:09:19,800 --> 00:09:23,360 Speaker 1: versus the amount of employees that are hired at a company, 163 00:09:23,480 --> 00:09:25,599 Speaker 1: and at the end of the year, uh, around the 164 00:09:25,640 --> 00:09:28,440 Speaker 1: numbers for me and the spread between companies that rely 165 00:09:28,559 --> 00:09:33,040 Speaker 1: more untangible assets versus human labor versus those that rely 166 00:09:33,200 --> 00:09:36,719 Speaker 1: more on human capital was twenty seven percentage points. And 167 00:09:37,000 --> 00:09:40,439 Speaker 1: I want to turn to how you're viewing where markets 168 00:09:40,440 --> 00:09:42,560 Speaker 1: go from here. I'm looking at your outlook right now 169 00:09:42,559 --> 00:09:46,520 Speaker 1: for one, and I'll read part of this for our listeners. Um, 170 00:09:46,640 --> 00:09:50,480 Speaker 1: you expect demand for returns to real goods, so well 171 00:09:50,480 --> 00:09:53,000 Speaker 1: that demand will return to real goods. And you say 172 00:09:53,040 --> 00:09:55,360 Speaker 1: the great disinflation of the past decade was at least 173 00:09:55,360 --> 00:09:58,680 Speaker 1: partially attributable to the rise of digital goods. Contrary to 174 00:09:58,720 --> 00:10:01,800 Speaker 1: their real world counter parts, digital goods have almost no 175 00:10:01,880 --> 00:10:05,120 Speaker 1: marginal cost and their consumption is non exclusive. And then 176 00:10:05,200 --> 00:10:06,959 Speaker 1: you go on to say that the vaccine will surely 177 00:10:07,000 --> 00:10:12,079 Speaker 1: invert this trend, at least temporarily. So I'm curious this 178 00:10:12,360 --> 00:10:15,640 Speaker 1: reversion of the trend, what's it actually going to look like? 179 00:10:15,679 --> 00:10:17,920 Speaker 1: And you say at least temporarily, how long does it 180 00:10:17,960 --> 00:10:20,200 Speaker 1: actually last? Wait? Sorry, sorry, I got a butt in 181 00:10:20,240 --> 00:10:22,600 Speaker 1: a minute here. You left out the funniest line in 182 00:10:22,720 --> 00:10:26,080 Speaker 1: his report that that followed that I couldn't read it. 183 00:10:26,200 --> 00:10:30,680 Speaker 1: You read it, he says. He says the money which 184 00:10:30,720 --> 00:10:35,000 Speaker 1: was spent on Netflix subscriptions, premium accounts, on Headspace, and 185 00:10:35,080 --> 00:10:39,520 Speaker 1: don't donations on only fans. We'll go back to bars, restaurants, 186 00:10:39,679 --> 00:10:42,800 Speaker 1: strip clubs, and the other venues where humans can numb 187 00:10:43,160 --> 00:10:47,280 Speaker 1: their ex exstential angst. Wow, Vincent, that's a that's a 188 00:10:47,400 --> 00:10:49,160 Speaker 1: very French way of looking at things, I would have 189 00:10:49,200 --> 00:10:51,880 Speaker 1: to say. I'll also point out the fact that every 190 00:10:51,880 --> 00:10:54,400 Speaker 1: time I tried to forward your notes, Vincent to Mike, 191 00:10:54,840 --> 00:11:01,160 Speaker 1: I got flagged on Bloomer and I kept clicking send anyway. Anyway, 192 00:11:02,720 --> 00:11:05,400 Speaker 1: But but talk to us about that that this you know, 193 00:11:05,440 --> 00:11:10,000 Speaker 1: you're expecting a obviously, this snap back into spending on 194 00:11:10,080 --> 00:11:14,400 Speaker 1: real world stuff, you know, less on digital whatever, whatever, 195 00:11:14,440 --> 00:11:20,520 Speaker 1: your favorite digital time waster of choices. But before we 196 00:11:20,559 --> 00:11:22,480 Speaker 1: get to that, you're expecting a real SOFTS patch and 197 00:11:22,600 --> 00:11:25,480 Speaker 1: the soft spot in the economy in the first quarter, 198 00:11:25,720 --> 00:11:28,480 Speaker 1: possibly even a double dip recession. So talk us through 199 00:11:28,520 --> 00:11:30,800 Speaker 1: that whole outlook. And sorry to button there, Sorry, but 200 00:11:30,840 --> 00:11:32,440 Speaker 1: I had to get that. I had to get that 201 00:11:32,480 --> 00:11:37,120 Speaker 1: part in you're forgetting. Yeah, yeah, So I'm I'm gonna 202 00:11:37,160 --> 00:11:39,599 Speaker 1: do the the outlook and then then we got to 203 00:11:39,640 --> 00:11:43,000 Speaker 1: go into the stars question. So on the outlook at 204 00:11:43,600 --> 00:11:45,599 Speaker 1: I think what we're looking at today is kind of 205 00:11:45,640 --> 00:11:48,559 Speaker 1: the mirror opposite of of the late seventies, early eighties 206 00:11:49,040 --> 00:11:50,880 Speaker 1: where it's a it's a period of transition, so in 207 00:11:50,920 --> 00:11:54,640 Speaker 1: the early late seventies, early eighties or transition from inflation 208 00:11:54,760 --> 00:11:58,600 Speaker 1: to disinflation, um. And this year is a transipent from 209 00:11:58,640 --> 00:12:02,400 Speaker 1: disinflation or even after a deflation to inflation secular inflation. 210 00:12:02,440 --> 00:12:04,880 Speaker 1: So that's kind of like the seculdar. You Now, if 211 00:12:04,880 --> 00:12:08,640 Speaker 1: you remember eight eight one eighty two, there were a 212 00:12:08,679 --> 00:12:10,600 Speaker 1: couple of inflation scares, like if you look at the 213 00:12:10,600 --> 00:12:14,280 Speaker 1: Fed funds rate, it really got jacked up almost needlessly 214 00:12:14,800 --> 00:12:18,200 Speaker 1: to do I think close to eighteen percent uh in 215 00:12:18,360 --> 00:12:21,640 Speaker 1: ain eighty one, and that triggered an economic recession. So 216 00:12:21,840 --> 00:12:25,040 Speaker 1: it's not uncommon as as you reach the end of 217 00:12:25,080 --> 00:12:29,480 Speaker 1: a cycle to one last year, So in the seventh 218 00:12:29,520 --> 00:12:32,320 Speaker 1: and the early eighties it was inflation fears uh. And 219 00:12:32,360 --> 00:12:34,880 Speaker 1: I think this year we're gonna have think could be 220 00:12:34,920 --> 00:12:36,920 Speaker 1: I don't know, it's not looking that way right now, 221 00:12:36,960 --> 00:12:39,640 Speaker 1: but we we could see maybe my expectation would would 222 00:12:39,679 --> 00:12:42,760 Speaker 1: see some some deflation fears again in H one because 223 00:12:42,840 --> 00:12:46,560 Speaker 1: the impact of the lockdowns is still going to be felt, 224 00:12:47,240 --> 00:12:50,640 Speaker 1: especially if you look at at cernaal commodities market like oil. Yes, 225 00:12:50,679 --> 00:12:52,719 Speaker 1: it's greatly. We're adding at fifty one. But I mean, 226 00:12:52,800 --> 00:12:55,480 Speaker 1: if you have all of Europe under lockdown, if you 227 00:12:55,559 --> 00:12:57,720 Speaker 1: have you know, we had a record record deaf Again, 228 00:12:57,760 --> 00:13:00,560 Speaker 1: I think yesterday. It's going to take some time for 229 00:13:00,640 --> 00:13:03,200 Speaker 1: the vaccines to be rolled out, and in that time 230 00:13:03,240 --> 00:13:06,199 Speaker 1: the economic destruction to create the illusion that we are 231 00:13:06,240 --> 00:13:09,560 Speaker 1: still in that own environment of more deflation, more constuption 232 00:13:09,600 --> 00:13:12,880 Speaker 1: online and things like that. And then my guess is 233 00:13:12,920 --> 00:13:15,600 Speaker 1: at by maybe q Q two already Q three, then 234 00:13:15,600 --> 00:13:18,559 Speaker 1: acceleration really starts popping up, and then accelerats or second 235 00:13:18,600 --> 00:13:21,200 Speaker 1: inflation in the second half and then towards and at 236 00:13:21,040 --> 00:13:24,560 Speaker 1: the end of the decade. UM. Now, let me let 237 00:13:24,600 --> 00:13:27,560 Speaker 1: me answer Sarah's question on on digital overs is really good. 238 00:13:27,920 --> 00:13:31,280 Speaker 1: So one of the reasons why I look at it 239 00:13:31,440 --> 00:13:35,640 Speaker 1: is um because I view the consumption of digital goods 240 00:13:35,679 --> 00:13:39,560 Speaker 1: as deflationary. So when your marginal dollar goes to digital goods, 241 00:13:39,679 --> 00:13:42,160 Speaker 1: which have no marginal costs, you can just you know, 242 00:13:42,200 --> 00:13:45,160 Speaker 1: the normal laws of supplant demand on the plant, right, 243 00:13:45,160 --> 00:13:47,559 Speaker 1: you can keep consuming. You know, it doesn't matter how 244 00:13:47,559 --> 00:13:49,720 Speaker 1: many people are watching the same movie on Netflix at 245 00:13:49,760 --> 00:13:52,320 Speaker 1: the same time that there is no cost. Now, if 246 00:13:52,320 --> 00:13:54,440 Speaker 1: people go to the movie there. Instead, you need to 247 00:13:54,440 --> 00:13:57,360 Speaker 1: be more theaters, you need to hire more workers, and 248 00:13:57,400 --> 00:14:02,440 Speaker 1: that creates inflation because you you're consuming really real goods. Um. 249 00:14:02,600 --> 00:14:05,480 Speaker 1: The reason why I expect that shift is just just 250 00:14:05,559 --> 00:14:08,800 Speaker 1: what what we saw in Europe this summer. Europe was 251 00:14:08,840 --> 00:14:11,560 Speaker 1: a really good, good death case in my opinion, because 252 00:14:11,559 --> 00:14:15,320 Speaker 1: we had you know, very nasty uh lockdowns in in 253 00:14:15,400 --> 00:14:18,240 Speaker 1: Q one twenty and then by Q two it was 254 00:14:18,320 --> 00:14:22,400 Speaker 1: over and then most things opened. Uh. Europe was opened 255 00:14:22,400 --> 00:14:24,760 Speaker 1: for vacation this summer. I mean the Americans couldn't get there, 256 00:14:24,800 --> 00:14:28,240 Speaker 1: but everywhere everyone else at a great time. Uh. And 257 00:14:28,640 --> 00:14:31,800 Speaker 1: you look at the restaurant's booking, for example, in Germany, 258 00:14:31,840 --> 00:14:34,920 Speaker 1: they were twenty percent over the prior year, so we 259 00:14:34,960 --> 00:14:37,760 Speaker 1: actually had a better tourism season. And who would have 260 00:14:37,760 --> 00:14:40,640 Speaker 1: thought that? Uh? And I think that talks to that 261 00:14:40,640 --> 00:14:44,320 Speaker 1: that desire somewhat natural right after being cooked up in 262 00:14:44,360 --> 00:14:47,360 Speaker 1: your house, you want to experience thing again. No, you 263 00:14:47,400 --> 00:14:49,200 Speaker 1: don't want to do another Netflix and shield, you want 264 00:14:49,200 --> 00:14:51,120 Speaker 1: to go to the movie. You want to go to 265 00:14:51,280 --> 00:14:55,120 Speaker 1: two two restaurants, um or you know other venue where 266 00:14:55,160 --> 00:14:57,840 Speaker 1: you can numb the existent cell of tanks stuff of 267 00:14:57,920 --> 00:15:11,280 Speaker 1: being a human. I love that line. So, like you said, 268 00:15:11,280 --> 00:15:13,000 Speaker 1: I mean, there's plenty of pent up demand. We hear 269 00:15:13,040 --> 00:15:14,680 Speaker 1: this all the time. The savings right in the US 270 00:15:14,800 --> 00:15:17,360 Speaker 1: is extraordinarily high right now. But how long does this 271 00:15:17,400 --> 00:15:20,120 Speaker 1: trend last? I asked, just because it's underpinning what seems 272 00:15:20,200 --> 00:15:23,160 Speaker 1: like a consensus understanding of where the barkets are going 273 00:15:23,160 --> 00:15:24,880 Speaker 1: to go from here, and that being the fact that 274 00:15:24,920 --> 00:15:27,760 Speaker 1: we're going to see cyclical assets rally. We're going to 275 00:15:27,840 --> 00:15:31,760 Speaker 1: see old economy, real world assets lead this market higher. 276 00:15:32,320 --> 00:15:35,040 Speaker 1: But what I'm really curious about is how long does 277 00:15:35,080 --> 00:15:38,080 Speaker 1: that last? For? I mean, eventually do we turn back 278 00:15:38,200 --> 00:15:40,880 Speaker 1: to this world that we've been living in where people 279 00:15:40,920 --> 00:15:44,160 Speaker 1: continue to pour into companies and assets that rely on 280 00:15:44,240 --> 00:15:48,280 Speaker 1: digitization and automation. Uh. And just this this trend that 281 00:15:48,320 --> 00:15:51,360 Speaker 1: we've seen for years now and was just accelerated this 282 00:15:51,440 --> 00:15:55,280 Speaker 1: year during COVID, And that's the next question. And I 283 00:15:55,320 --> 00:15:57,840 Speaker 1: think that kind of helps us um deal with what 284 00:15:57,880 --> 00:16:01,280 Speaker 1: I called the Schrodinger's market. You know, Shroddinger's cat, right, 285 00:16:01,280 --> 00:16:04,360 Speaker 1: it's both dead and life at the same time. UM. 286 00:16:04,400 --> 00:16:06,280 Speaker 1: I feel that about the market today. We have a 287 00:16:06,280 --> 00:16:08,480 Speaker 1: Shroddinger market where if you look at the work from 288 00:16:08,480 --> 00:16:11,880 Speaker 1: home in DF since November it's up thirty percent. And 289 00:16:11,920 --> 00:16:14,640 Speaker 1: if you look at the reopening stops there are fully percent. 290 00:16:14,960 --> 00:16:18,920 Speaker 1: So both things seem to be going at the same time. Um, 291 00:16:19,640 --> 00:16:22,840 Speaker 1: and I think that that's a timeframe matter, right. I mean, 292 00:16:22,880 --> 00:16:25,680 Speaker 1: if you just look at the next year, I think, 293 00:16:25,800 --> 00:16:27,800 Speaker 1: you know, reopen easy office one. But then you can 294 00:16:27,840 --> 00:16:29,840 Speaker 1: make the case as you do that maybe it's just 295 00:16:29,920 --> 00:16:31,440 Speaker 1: a blip, like a flash in the pan, and then 296 00:16:31,440 --> 00:16:33,960 Speaker 1: everything will go back to normal. I'm not in that. 297 00:16:34,560 --> 00:16:37,080 Speaker 1: I'm not in that camp. I think that once you 298 00:16:37,160 --> 00:16:41,200 Speaker 1: start a political transformation or secular transformation, like we are 299 00:16:42,080 --> 00:16:44,720 Speaker 1: a lot of the ideas that that came up during 300 00:16:44,720 --> 00:16:47,720 Speaker 1: the pandemic, the overtoned window if you want, as as 301 00:16:47,800 --> 00:16:51,320 Speaker 1: as opened universal basic income, I think this is going 302 00:16:51,360 --> 00:16:53,600 Speaker 1: to be it's going to have to happen. I mean 303 00:16:53,640 --> 00:16:55,800 Speaker 1: we see the Stamish check. You know it's six No 304 00:16:55,880 --> 00:16:58,360 Speaker 1: two thousand and after that there's going to be need 305 00:16:58,360 --> 00:17:00,760 Speaker 1: to be more a student non council a s, a 306 00:17:00,800 --> 00:17:02,640 Speaker 1: start at home, like the idea to pay a thick 307 00:17:02,680 --> 00:17:04,879 Speaker 1: in thousand people so people can buy home, so that 308 00:17:04,960 --> 00:17:07,960 Speaker 1: the notion that the government should use the central bank 309 00:17:08,000 --> 00:17:12,440 Speaker 1: in order to achieve social and economic objectives explicitly, which 310 00:17:12,520 --> 00:17:15,800 Speaker 1: is basically m MT. I think this is happening UM, 311 00:17:16,520 --> 00:17:19,240 Speaker 1: and that's what that will keep the trend going. I 312 00:17:19,280 --> 00:17:21,480 Speaker 1: really doubt that a year from now will go back 313 00:17:21,480 --> 00:17:24,960 Speaker 1: to austerity. I do not see, you know, a key 314 00:17:25,000 --> 00:17:28,520 Speaker 1: party movement arise from the ashes in in UH for 315 00:17:28,640 --> 00:17:32,040 Speaker 1: the next mid term. We are, I think at a 316 00:17:32,119 --> 00:17:36,760 Speaker 1: secular transition in terms of monetory versus fistical, in terms 317 00:17:36,800 --> 00:17:40,560 Speaker 1: of wealth concentration versus wealth distribution UH, and in terms 318 00:17:40,560 --> 00:17:45,119 Speaker 1: of inflate inflation to inflation well universal basic in the 319 00:17:45,200 --> 00:17:48,359 Speaker 1: Revenge of the Yang Gang, I haven't heard about that 320 00:17:48,359 --> 00:17:50,960 Speaker 1: in a while, but it makes sense. Listen. I don't 321 00:17:51,000 --> 00:17:54,240 Speaker 1: think Sarah has any existential angst. I think she's all 322 00:17:54,359 --> 00:17:59,480 Speaker 1: existential joy Sarah's are right. My exist state central angst 323 00:17:59,560 --> 00:18:01,280 Speaker 1: right now is I don't know if you can see 324 00:18:01,359 --> 00:18:04,800 Speaker 1: what My puppy behind me is eating everything in sight 325 00:18:04,880 --> 00:18:06,560 Speaker 1: and I'm just trying to make sure that my apartment 326 00:18:06,600 --> 00:18:10,959 Speaker 1: doesn't cover. But we all have our own existential angst 327 00:18:10,960 --> 00:18:13,480 Speaker 1: that we we struggle with. But if it's so, I 328 00:18:13,520 --> 00:18:16,200 Speaker 1: want to get UH. Speaking of angst, I I feel 329 00:18:16,200 --> 00:18:20,040 Speaker 1: like the word inflation UM is such a sort of 330 00:18:20,080 --> 00:18:24,199 Speaker 1: red flag word for the markets. Obviously, it's spooks stock 331 00:18:24,280 --> 00:18:28,840 Speaker 1: market investors to think about the prospect of secular inflation 332 00:18:28,880 --> 00:18:32,000 Speaker 1: like you're describing. Um. You know, you wrote in one 333 00:18:32,000 --> 00:18:34,880 Speaker 1: note that and how and and this has been observed 334 00:18:34,880 --> 00:18:37,359 Speaker 1: by a lot of people obviously that valuations tend to 335 00:18:37,960 --> 00:18:40,480 Speaker 1: compress in periods of high inflation. You know, I think 336 00:18:40,520 --> 00:18:43,680 Speaker 1: back of the Peter Lynch roll a twenty thing, which 337 00:18:43,720 --> 00:18:47,520 Speaker 1: is maybe an oversimplified idea, but basically that the the 338 00:18:47,600 --> 00:18:52,040 Speaker 1: P plus the cp I rate should equal twenty in 339 00:18:52,119 --> 00:18:54,879 Speaker 1: sort of a fair market. Obviously, we're way past that 340 00:18:54,920 --> 00:18:58,159 Speaker 1: point now. I mean we're peas you know, in the 341 00:18:58,280 --> 00:19:02,480 Speaker 1: in the thirties, uh on the indexes. UM. But I'm 342 00:19:02,520 --> 00:19:06,040 Speaker 1: curious how you see it's shaping out with equities this 343 00:19:06,119 --> 00:19:09,760 Speaker 1: year specifically, because UM, that is a tried and true 344 00:19:09,800 --> 00:19:15,200 Speaker 1: relationship that that high inflationary regimes tend to compress multiples. UM. 345 00:19:15,840 --> 00:19:18,920 Speaker 1: But I wonder is it inflation itself that compresses the 346 00:19:19,000 --> 00:19:21,680 Speaker 1: multiple or is it the assumption that interest rates are 347 00:19:21,680 --> 00:19:23,960 Speaker 1: going to rise and that the Fed is gonna sort 348 00:19:23,960 --> 00:19:27,200 Speaker 1: of remove the punch bowl that that does it to 349 00:19:27,560 --> 00:19:31,080 Speaker 1: two valuations? And and in the scenario this year where 350 00:19:31,119 --> 00:19:34,240 Speaker 1: the FED has indicated it's it's willing to let inflation 351 00:19:34,320 --> 00:19:37,960 Speaker 1: run a little bit hot. Um. Is it sort of 352 00:19:38,320 --> 00:19:43,160 Speaker 1: a different regime this year, a change from that relationship? Um? 353 00:19:43,240 --> 00:19:45,040 Speaker 1: And I suppose a lot of it will depend on 354 00:19:45,160 --> 00:19:47,920 Speaker 1: how much clarity we get from the FED about exactly 355 00:19:47,960 --> 00:19:51,400 Speaker 1: how hot they'll let inflation go and for how long. 356 00:19:51,760 --> 00:19:56,080 Speaker 1: But but how are you sort of viewing that whole issue? 357 00:19:56,800 --> 00:20:00,560 Speaker 1: I think here and that's the only way I can 358 00:20:00,600 --> 00:20:04,200 Speaker 1: make sense of this rally is I think most people 359 00:20:04,240 --> 00:20:06,960 Speaker 1: by now, I figured that inflasion. You know, I made 360 00:20:07,000 --> 00:20:09,720 Speaker 1: that invasion call, you know, eight months ago, and I 361 00:20:09,760 --> 00:20:12,159 Speaker 1: look crazy. Now It's it's everywhere, right, you see, you 362 00:20:12,240 --> 00:20:14,000 Speaker 1: see in copper prices, you see a big corner with 363 00:20:14,160 --> 00:20:18,040 Speaker 1: your gold even inflasion, expectation break events rightly rising about 364 00:20:18,080 --> 00:20:22,320 Speaker 1: two percent dollar index breaking Biddle ninety or at fifty. 365 00:20:22,480 --> 00:20:25,280 Speaker 1: I mean, there's so many, so many triggers, even though 366 00:20:25,320 --> 00:20:27,399 Speaker 1: the tenure rising about one. I mean, in two thousand 367 00:20:27,400 --> 00:20:30,240 Speaker 1: and twenty one, we had so many key level that broke, 368 00:20:31,080 --> 00:20:33,560 Speaker 1: which kind of just you know, go go go towards 369 00:20:33,600 --> 00:20:36,840 Speaker 1: my direction of a high inflasion. Um. Of course, you 370 00:20:36,880 --> 00:20:39,040 Speaker 1: know the part that I would have expected is the 371 00:20:39,080 --> 00:20:41,600 Speaker 1: multiple compression is not happening. And I think that's precisely 372 00:20:41,600 --> 00:20:44,040 Speaker 1: what you're saying, is why do multiple compress when you 373 00:20:44,119 --> 00:20:46,640 Speaker 1: have inflation? Because you know people expect the fat to titan. Well, 374 00:20:46,720 --> 00:20:48,679 Speaker 1: what if we have inflasion and the fat does not 375 00:20:48,840 --> 00:20:53,200 Speaker 1: tighten um and it's surprised. There's a shocking amount of 376 00:20:53,720 --> 00:20:56,479 Speaker 1: if we follow through, if you really read the speech 377 00:20:56,560 --> 00:20:59,479 Speaker 1: by by power, by events, what you see behind it 378 00:20:59,560 --> 00:21:02,840 Speaker 1: is an ocean and GDP nominal GDP targeting. Uh, the 379 00:21:02,960 --> 00:21:05,080 Speaker 1: idea that the facts you kind of dropped the inflation 380 00:21:05,119 --> 00:21:07,359 Speaker 1: target and instead of focused on on on on the 381 00:21:07,440 --> 00:21:09,920 Speaker 1: level of nominal GDP. Depending on how you said that, 382 00:21:10,320 --> 00:21:13,240 Speaker 1: And I just ran an experiment. If you assume that 383 00:21:13,400 --> 00:21:17,640 Speaker 1: trend growth for was nominal GP between seven and then 384 00:21:17,680 --> 00:21:19,800 Speaker 1: you would have to you would have kept going linearly 385 00:21:19,880 --> 00:21:23,520 Speaker 1: like that GDP today would be fifty percent higher. So 386 00:21:23,880 --> 00:21:26,040 Speaker 1: they can actually, I mean, if you really want to 387 00:21:26,080 --> 00:21:29,240 Speaker 1: push it like crazy, you could say, well, we need 388 00:21:29,320 --> 00:21:34,560 Speaker 1: a decade of seven percent inflation to get back to 389 00:21:34,720 --> 00:21:37,479 Speaker 1: where we should have been absent on the financial crisis, 390 00:21:37,560 --> 00:21:40,440 Speaker 1: absent COVID. So if the FED is really serious about 391 00:21:40,480 --> 00:21:44,760 Speaker 1: this um, it's possible that that that inflation ran much 392 00:21:44,800 --> 00:21:49,359 Speaker 1: harder than people expect for much longer um. And then 393 00:21:49,400 --> 00:21:51,160 Speaker 1: that really gives us an in person on the situation. 394 00:21:51,200 --> 00:21:53,000 Speaker 1: I mean, the analysis that you refer to is based 395 00:21:53,000 --> 00:21:55,120 Speaker 1: on the seventies. Went back in the seventies, I think 396 00:21:55,160 --> 00:21:57,920 Speaker 1: Burns was the the Thatch chairman. He actually raised rates. 397 00:21:57,920 --> 00:22:00,399 Speaker 1: I mean real rates were positive, the rates get up 398 00:22:00,400 --> 00:22:03,080 Speaker 1: within flash. In the seventies, we may have something completely 399 00:22:03,080 --> 00:22:05,240 Speaker 1: different where you see in fashion pick up and rate 400 00:22:05,320 --> 00:22:07,919 Speaker 1: stay low. Now, my expectation is that what happens is 401 00:22:07,920 --> 00:22:10,879 Speaker 1: occurs will eventually stephen. So that's to me, that is 402 00:22:10,920 --> 00:22:13,920 Speaker 1: the trade. If you bet on that eventually the curves stephens, 403 00:22:13,960 --> 00:22:16,840 Speaker 1: and then eventually I think at some time there would 404 00:22:16,880 --> 00:22:18,720 Speaker 1: be some sort of a shadow cost of capital that 405 00:22:18,720 --> 00:22:21,600 Speaker 1: would be reflected into equities variation. If if really insist 406 00:22:21,640 --> 00:22:25,399 Speaker 1: on on financial repression everywhere, I doubt that maybe the 407 00:22:25,400 --> 00:22:28,040 Speaker 1: equity market ends up playing the role of the bond 408 00:22:28,080 --> 00:22:30,640 Speaker 1: market vigilantes wha was I think, No, this is not possible. 409 00:22:30,960 --> 00:22:33,560 Speaker 1: The cost of capital is not zero. By the way, 410 00:22:33,680 --> 00:22:36,600 Speaker 1: another fund that point I noticed in Denmark you can 411 00:22:36,640 --> 00:22:40,000 Speaker 1: borrow for twenty years at zero percent um. You know, 412 00:22:40,119 --> 00:22:44,359 Speaker 1: this is at some point, some some part of the 413 00:22:44,400 --> 00:22:46,679 Speaker 1: market is going to start to realize that this is 414 00:22:46,720 --> 00:22:50,480 Speaker 1: not feasible. That's why we like this guy on the podcast. 415 00:22:50,520 --> 00:22:53,080 Speaker 1: He just called out one of the crazy things that 416 00:22:53,080 --> 00:22:55,440 Speaker 1: that a Twitter user had sent to us the Denmark 417 00:22:55,920 --> 00:22:58,440 Speaker 1: uh was a T. T. J. Bellers that that the 418 00:22:58,480 --> 00:23:02,080 Speaker 1: Twitter that was the one that you think, alike, mortgage 419 00:23:02,119 --> 00:23:05,640 Speaker 1: rates at aer precent in Denmark. It's just it's mind boggling. 420 00:23:06,080 --> 00:23:08,959 Speaker 1: But you know, Vincent, it's it's interesting because you know, 421 00:23:09,280 --> 00:23:11,400 Speaker 1: there's this function on the terminal that we have that 422 00:23:11,560 --> 00:23:13,840 Speaker 1: lets you see what people are reading over the last 423 00:23:13,840 --> 00:23:16,200 Speaker 1: say five minutes or ten minutes, and I I tend 424 00:23:16,240 --> 00:23:19,000 Speaker 1: to check it obsessively to see kind of like, you know, 425 00:23:19,040 --> 00:23:22,080 Speaker 1: what everyone's focused on from minutes a minute. And it 426 00:23:22,160 --> 00:23:26,920 Speaker 1: was amazing because on Wednesday here it looked like democracy 427 00:23:27,040 --> 00:23:31,080 Speaker 1: was dying, that the capital was overrun by protesters. I mean, 428 00:23:31,080 --> 00:23:32,960 Speaker 1: it just was the most surreal thing I think any 429 00:23:32,960 --> 00:23:35,480 Speaker 1: of us have ever seen in the world. I checked 430 00:23:35,480 --> 00:23:38,919 Speaker 1: this function. The most dread story at that time was 431 00:23:38,960 --> 00:23:42,640 Speaker 1: the was about the FED minutes, not not the death 432 00:23:42,640 --> 00:23:46,240 Speaker 1: of Jeffersonian democracy, but the FED minutes and I wonder 433 00:23:46,480 --> 00:23:51,000 Speaker 1: you know it. It doesn't sound like, Okay, we don't 434 00:23:51,040 --> 00:23:53,160 Speaker 1: have to worry about a rate increase any time soon. 435 00:23:53,240 --> 00:23:56,439 Speaker 1: But it doesn't necessarily sound like tapering is off the 436 00:23:57,000 --> 00:24:00,240 Speaker 1: off the table. Tapering of the Fed's acid purchase says 437 00:24:00,280 --> 00:24:04,679 Speaker 1: the years is off the table. We all know what 438 00:24:04,760 --> 00:24:08,960 Speaker 1: happened last time, the taper tantrum. Um, how do you 439 00:24:09,119 --> 00:24:11,600 Speaker 1: have any idea of how you see that that happening 440 00:24:11,960 --> 00:24:15,160 Speaker 1: uh going this year? If there is sort of even 441 00:24:15,640 --> 00:24:18,359 Speaker 1: uh concerns about tapering, let alone if they actually do 442 00:24:18,560 --> 00:24:21,280 Speaker 1: taper the purchases of treasuries and age. I mean, I'm 443 00:24:21,320 --> 00:24:23,840 Speaker 1: gonna go I'm gonna go m empty on you and 444 00:24:23,840 --> 00:24:26,040 Speaker 1: and say that it's at this point it's a public 445 00:24:26,040 --> 00:24:29,439 Speaker 1: finance problem. Um. And that's why I don't believe we 446 00:24:29,440 --> 00:24:32,000 Speaker 1: can have we cannot have a I don't think we 447 00:24:32,000 --> 00:24:33,360 Speaker 1: can have a taper A don trum because I don't 448 00:24:33,359 --> 00:24:36,600 Speaker 1: think I can have a taper. I think I I 449 00:24:36,640 --> 00:24:39,600 Speaker 1: need to check the number. But I think for the January, 450 00:24:39,640 --> 00:24:43,719 Speaker 1: February March, we have were the Treasury needs to roll 451 00:24:43,840 --> 00:24:47,600 Speaker 1: up one point five trillion in debt for each one 452 00:24:47,680 --> 00:24:50,800 Speaker 1: of these months. Uh, so that that you know, to 453 00:24:50,800 --> 00:24:53,159 Speaker 1: all that four and a half trillion that needs to 454 00:24:53,160 --> 00:24:56,240 Speaker 1: be rolled out, rolled over in three months. On top 455 00:24:56,320 --> 00:24:59,120 Speaker 1: of presumably I don't even know where we stand the stimulus, 456 00:24:59,160 --> 00:25:02,040 Speaker 1: but you it looks like the Georgia race is being marked. 457 00:25:02,080 --> 00:25:05,399 Speaker 1: We're gonna get the checks. And then you know it 458 00:25:05,480 --> 00:25:07,960 Speaker 1: was always in the Democrats. It's as always stepping stone 459 00:25:07,960 --> 00:25:11,719 Speaker 1: for an augustimulus after the election. So um, the amount 460 00:25:11,720 --> 00:25:14,040 Speaker 1: of insurance that there will be is just so enormous 461 00:25:14,040 --> 00:25:16,679 Speaker 1: that I really don't see the fat being able to taper, 462 00:25:16,720 --> 00:25:18,879 Speaker 1: and I don't see the kount of of You know, 463 00:25:19,760 --> 00:25:22,760 Speaker 1: in prior decades you had excess savings for other countries 464 00:25:22,760 --> 00:25:24,960 Speaker 1: that could be deployed to finance U S depicits. I 465 00:25:24,960 --> 00:25:28,320 Speaker 1: mean typically the Chinese accumulation of of of U S 466 00:25:28,359 --> 00:25:32,760 Speaker 1: treasuries conversing the current count surplaces UH into treasury holding 467 00:25:33,119 --> 00:25:35,119 Speaker 1: or all pack doing the same thing. Well, this is 468 00:25:35,119 --> 00:25:36,719 Speaker 1: not happening this time. I mean, if you'll get all 469 00:25:36,720 --> 00:25:39,720 Speaker 1: the all exploring countries, they have big, big trouble of 470 00:25:39,800 --> 00:25:42,119 Speaker 1: their own. You know, if anything, there are more you know, 471 00:25:42,359 --> 00:25:45,560 Speaker 1: disbursing than than saving. And then China does that record 472 00:25:45,600 --> 00:25:48,000 Speaker 1: current counserpaces. But it certainly not investing in U S. Treasury, 473 00:25:48,119 --> 00:25:51,639 Speaker 1: So it seems just by default that the FED needs 474 00:25:51,640 --> 00:25:55,040 Speaker 1: to do basically nationalized the treasury market. And that's that's 475 00:25:55,040 --> 00:25:56,480 Speaker 1: going to be the reality we're going to live in 476 00:25:56,520 --> 00:26:17,240 Speaker 1: for the next outsaid decade. So I want to ask 477 00:26:17,240 --> 00:26:18,920 Speaker 1: you before we get to sharing our crazy things, because 478 00:26:18,960 --> 00:26:21,080 Speaker 1: one of your reports is titled how the perpetual motion 479 00:26:21,119 --> 00:26:24,280 Speaker 1: stock Market will break? How does that happen if all 480 00:26:24,280 --> 00:26:26,679 Speaker 1: of a sudden, I mean, the Fed's kind of stuck 481 00:26:26,680 --> 00:26:28,760 Speaker 1: the Fed. The FED can't go about doing anything. At 482 00:26:28,760 --> 00:26:31,199 Speaker 1: the same time, we're looking at m m T, the 483 00:26:31,240 --> 00:26:34,119 Speaker 1: possibility of universal basic income. I mean, how does the 484 00:26:34,119 --> 00:26:38,440 Speaker 1: stock market break in an environment that is almost suited 485 00:26:38,520 --> 00:26:46,240 Speaker 1: for its needs? I would have I think inflation eventually 486 00:26:46,440 --> 00:26:49,600 Speaker 1: is the key risk you have to worry about, because 487 00:26:49,600 --> 00:26:53,080 Speaker 1: that will eventually remove the Fed's ability to just, you know, 488 00:26:53,240 --> 00:26:56,520 Speaker 1: keep bading out of the market every time. Another thing 489 00:26:56,600 --> 00:27:00,880 Speaker 1: that inflation will do is that it will invert the 490 00:27:00,920 --> 00:27:04,240 Speaker 1: negative cooration between stops and bonds, causing havoc for respiraty 491 00:27:04,240 --> 00:27:11,200 Speaker 1: strategies and also traditional sixty four portfolios. Once saturn, including 492 00:27:11,240 --> 00:27:15,800 Speaker 1: that report, which I felt was was insane is if 493 00:27:15,840 --> 00:27:19,680 Speaker 1: you go on on Vanguard's website. You know they sell 494 00:27:19,680 --> 00:27:23,359 Speaker 1: the starting date phones who very popular, and I've actually 495 00:27:23,480 --> 00:27:26,000 Speaker 1: reversed engineer their the return assumption and they say that, 496 00:27:26,040 --> 00:27:28,600 Speaker 1: you know, fixed income is gonna return five close to 497 00:27:28,680 --> 00:27:31,280 Speaker 1: five percent a year until the day you retired. Now, 498 00:27:31,280 --> 00:27:33,560 Speaker 1: I look at the v b t i X, the 499 00:27:33,600 --> 00:27:36,199 Speaker 1: Vengar Total Bond Market Index fond, and I found that 500 00:27:36,280 --> 00:27:38,800 Speaker 1: ninety nine p nine percent of the funds of the 501 00:27:38,800 --> 00:27:41,879 Speaker 1: holdings of the securities in that fond yield less than 502 00:27:41,880 --> 00:27:44,680 Speaker 1: two one a half percent. So you promise five and 503 00:27:44,720 --> 00:27:46,639 Speaker 1: then ninety nine per time year less than two an 504 00:27:46,640 --> 00:27:49,240 Speaker 1: a half. I mean, at some point this line is 505 00:27:49,280 --> 00:27:52,719 Speaker 1: going to be exposed. People are going to stop questioning. 506 00:27:52,720 --> 00:27:54,679 Speaker 1: I'm going to start realizing that, you know, this is 507 00:27:54,720 --> 00:27:57,399 Speaker 1: just impossible, and maybe inflation is the one that does that. 508 00:27:58,200 --> 00:28:00,600 Speaker 1: As I realize it, it's like, well, why my buying 509 00:28:00,760 --> 00:28:02,920 Speaker 1: you know securities that yield like, you know, zero point 510 00:28:02,960 --> 00:28:07,119 Speaker 1: five percent even though on promised five. Um. So I 511 00:28:07,119 --> 00:28:09,200 Speaker 1: think infaction is the biggest risk if at the second 512 00:28:09,280 --> 00:28:13,400 Speaker 1: race that I would mention insure mentioned professional emotion engine Um. 513 00:28:13,680 --> 00:28:15,119 Speaker 1: You know, one of the reasons you can't build a 514 00:28:15,119 --> 00:28:18,399 Speaker 1: perpetual motion engine the physical world is because their energy leaks, right, 515 00:28:18,440 --> 00:28:20,840 Speaker 1: It's the first stor thermodynamics. You know, every time you 516 00:28:20,960 --> 00:28:23,560 Speaker 1: convert something into something else, you have a little bit 517 00:28:23,560 --> 00:28:26,520 Speaker 1: of energy left, whether it's heat or friction. I think 518 00:28:26,560 --> 00:28:28,879 Speaker 1: in the financial markets the equivalent to that would be 519 00:28:28,920 --> 00:28:31,919 Speaker 1: bitcoin on gold. These are leaks from the system, right, 520 00:28:32,200 --> 00:28:34,320 Speaker 1: These are ways that people can you know that the 521 00:28:34,680 --> 00:28:36,560 Speaker 1: you know, money is being injected in it, and then 522 00:28:36,640 --> 00:28:39,360 Speaker 1: it leaks from goal and bitcoin and obviously we see 523 00:28:39,400 --> 00:28:42,160 Speaker 1: that the leaks are making becoming bigger and bigger by 524 00:28:42,240 --> 00:28:44,920 Speaker 1: the day. Um. And then the third and last point, 525 00:28:44,960 --> 00:28:47,520 Speaker 1: which we only the spoke plenty about, is I think 526 00:28:47,560 --> 00:28:49,960 Speaker 1: that the rise of a new political agenda that becomes 527 00:28:50,040 --> 00:28:54,160 Speaker 1: much more focused on humans, on infrastructure, spending, on on deficits, 528 00:28:54,240 --> 00:28:57,840 Speaker 1: on real distribution, on anti trust. And we are thinking 529 00:28:57,840 --> 00:28:59,520 Speaker 1: at the very early days of that. But as the 530 00:28:59,600 --> 00:29:01,440 Speaker 1: decade progress is a thing, this is going to be 531 00:29:01,800 --> 00:29:04,400 Speaker 1: a shift kind of like the progressive shift in in 532 00:29:04,800 --> 00:29:09,120 Speaker 1: early twentieth century until the out in the late sixties 533 00:29:09,120 --> 00:29:13,320 Speaker 1: in the US, which which I think is again Donald 534 00:29:13,360 --> 00:29:17,080 Speaker 1: this new year. That target date return works. If if 535 00:29:17,120 --> 00:29:24,080 Speaker 1: you're planning to retire, I think right, that was that 536 00:29:24,280 --> 00:29:28,120 Speaker 1: was the time to retire generation. That was that was 537 00:29:28,160 --> 00:29:30,080 Speaker 1: it when we missed the boat, just put it on 538 00:29:30,200 --> 00:29:34,880 Speaker 1: the fixed income and uh wow, can you imagine. Well, 539 00:29:36,000 --> 00:29:38,880 Speaker 1: with all that existential lengths out of the way, Sarah, 540 00:29:39,240 --> 00:29:42,960 Speaker 1: it's time for the crazy things. Angst stand clearer of 541 00:29:43,040 --> 00:29:47,680 Speaker 1: the craziest things we saw in markets this week. Let's 542 00:29:47,720 --> 00:29:49,440 Speaker 1: start with you, Sarah. I'd like to start with you. 543 00:29:49,640 --> 00:29:52,200 Speaker 1: I like to just put you right on the hot seat. 544 00:29:53,360 --> 00:29:55,720 Speaker 1: So nice of you. I actually came with a couple 545 00:29:55,840 --> 00:29:59,880 Speaker 1: this week just because when I was getting ready for 546 00:30:00,080 --> 00:30:02,160 Speaker 1: this recording, I was just looking around and I was like, 547 00:30:02,240 --> 00:30:04,239 Speaker 1: you know what, there's too much crazy going on right now. 548 00:30:04,280 --> 00:30:08,640 Speaker 1: So I'm gonna I'm gonna use a couple. So one, um, 549 00:30:08,760 --> 00:30:12,960 Speaker 1: I'll go to Wednesday. So Wednesday crazy crazy day for 550 00:30:13,440 --> 00:30:17,040 Speaker 1: obvious reasons, essentially when the U S. Capital is being attacked. 551 00:30:17,360 --> 00:30:21,239 Speaker 1: I looked at total call options volume, uh more than 552 00:30:21,320 --> 00:30:24,320 Speaker 1: twenty nine million call options traded in the stock market. 553 00:30:24,440 --> 00:30:26,480 Speaker 1: That is the fourth most in history. And then of 554 00:30:26,560 --> 00:30:30,360 Speaker 1: course the other three happened. Um so just in a 555 00:30:30,520 --> 00:30:33,840 Speaker 1: day in which I mean, you can't believe what you're 556 00:30:33,840 --> 00:30:38,480 Speaker 1: seeing on your television screens twenty nine million call options, 557 00:30:38,560 --> 00:30:42,080 Speaker 1: which is stunning, and then on Thursday we get bitcoin 558 00:30:42,240 --> 00:30:45,680 Speaker 1: fort and at the same time you have Tesla rawling 559 00:30:45,760 --> 00:30:48,080 Speaker 1: for a temph day, which is the longest winning streak 560 00:30:48,120 --> 00:30:50,440 Speaker 1: on record, and now Elon Musk is the richest man 561 00:30:50,480 --> 00:30:54,120 Speaker 1: in the world, overtaking Jeff Bezos. So mind blowing stuff 562 00:30:54,160 --> 00:30:56,000 Speaker 1: going on this week to kick off the new year. 563 00:30:56,200 --> 00:30:58,719 Speaker 1: It is a strange new world. I agree. I agree, 564 00:31:00,080 --> 00:31:04,160 Speaker 1: that's stimmy. All the robin Hood traders and they're they're 565 00:31:04,200 --> 00:31:07,680 Speaker 1: buying calls. Vincent, how about you? Did you see anything 566 00:31:07,800 --> 00:31:11,040 Speaker 1: crazy this week? Yes? Yes, And by the way, first one, 567 00:31:11,080 --> 00:31:12,680 Speaker 1: I want to give a shout out to too, Sarah 568 00:31:12,800 --> 00:31:17,240 Speaker 1: for you know covering this this retailed frenzy option trading 569 00:31:17,280 --> 00:31:20,000 Speaker 1: insanity and now you were one of the first journalists 570 00:31:20,040 --> 00:31:21,680 Speaker 1: to do it, and you know, at first people were 571 00:31:21,720 --> 00:31:23,680 Speaker 1: looking at it skeptically and it turned out to be 572 00:31:23,800 --> 00:31:26,920 Speaker 1: I think one of the driving forces of and you 573 00:31:27,000 --> 00:31:28,960 Speaker 1: call it it early saw a good job, so I 574 00:31:29,000 --> 00:31:30,840 Speaker 1: appreciate it. I mean, I'll be the first to admit 575 00:31:30,920 --> 00:31:32,800 Speaker 1: the first time I wrote about it was right after 576 00:31:32,920 --> 00:31:34,960 Speaker 1: we got first quarter earning statements from the brokers, and 577 00:31:35,000 --> 00:31:37,040 Speaker 1: you just saw the account openings, and I was like, 578 00:31:37,080 --> 00:31:39,840 Speaker 1: you know, I think we have something here. And I 579 00:31:40,040 --> 00:31:43,400 Speaker 1: started speaking with retail investors who are new to it 580 00:31:43,560 --> 00:31:45,600 Speaker 1: opening up new accounts. And then I mean, at that 581 00:31:45,680 --> 00:31:47,240 Speaker 1: point in time, I don't think I could have imagined 582 00:31:47,280 --> 00:31:50,760 Speaker 1: what would have turned into. But I believe let me, 583 00:31:50,840 --> 00:31:52,560 Speaker 1: let me go to my crazy thing, which which I 584 00:31:52,760 --> 00:31:56,000 Speaker 1: know is not something that you're familiar with, or I'd 585 00:31:56,040 --> 00:32:02,200 Speaker 1: be very surprised because about strip clubs actually existential answer. Yeah, 586 00:32:02,320 --> 00:32:05,440 Speaker 1: So as as part of that existential angstraight, I was 587 00:32:05,480 --> 00:32:08,280 Speaker 1: actually looking at a strip club and whether there was 588 00:32:08,280 --> 00:32:10,120 Speaker 1: any stock on that because I thought, hey, you know, 589 00:32:10,280 --> 00:32:12,360 Speaker 1: pandemic is over, maybe maybe people want to have a 590 00:32:12,400 --> 00:32:15,120 Speaker 1: good time. So that it turns out there is actually 591 00:32:15,200 --> 00:32:18,920 Speaker 1: a small gap. It's called r CI Hospitality Holdings UM 592 00:32:19,480 --> 00:32:23,040 Speaker 1: and again at background, we had a pandemic last year. 593 00:32:23,400 --> 00:32:26,840 Speaker 1: What was the twelve month return for our CEI of 594 00:32:26,920 --> 00:32:30,560 Speaker 1: Spetality Holdings, which is a strip club operator mostly out 595 00:32:30,600 --> 00:32:37,120 Speaker 1: of Texas. Settle, give me a guess. I'll say, I 596 00:32:37,200 --> 00:32:40,280 Speaker 1: know it's gonna be counterintuitive or you wouldn't be mentioning it, 597 00:32:40,360 --> 00:32:45,240 Speaker 1: So I'll say, plus Sarah, I'll take the over on that. 598 00:32:45,360 --> 00:32:50,520 Speaker 1: So I'll be smart and say any one so you'll 599 00:32:50,560 --> 00:32:53,400 Speaker 1: have a year with a global pandemic and meant that 600 00:32:53,480 --> 00:32:56,720 Speaker 1: they social distancing and lockdown, and a strip club operator 601 00:32:57,160 --> 00:33:00,280 Speaker 1: doubles in that year all time high at any trades 602 00:33:00,280 --> 00:33:04,320 Speaker 1: for a hundred times, a hundred times earnings, highest valuation 603 00:33:04,400 --> 00:33:06,840 Speaker 1: on record, and so forth, and h The reason I 604 00:33:07,160 --> 00:33:10,640 Speaker 1: bring that up, I think is is also to to highlight, um, 605 00:33:11,160 --> 00:33:13,560 Speaker 1: how crazy the rally and small caps have been. I 606 00:33:13,880 --> 00:33:15,960 Speaker 1: felt two months ago there was an opportunity on smoke 607 00:33:16,000 --> 00:33:18,440 Speaker 1: caps actually compared to the you know, the big tech companies. 608 00:33:18,920 --> 00:33:21,320 Speaker 1: But since November, I mean the Russell's two thousand has 609 00:33:21,360 --> 00:33:24,040 Speaker 1: been on fire and pretty much every name, including strip 610 00:33:24,080 --> 00:33:27,280 Speaker 1: club operators, that really increased dramatical in value, which kind 611 00:33:27,280 --> 00:33:29,720 Speaker 1: of brings me to my my reopening trade. I think, 612 00:33:29,840 --> 00:33:31,760 Speaker 1: you know, I still like the reopening trade. I just 613 00:33:31,840 --> 00:33:33,600 Speaker 1: don't like it in the US. I think people need 614 00:33:33,640 --> 00:33:35,560 Speaker 1: to look outside of the US, especially look at the 615 00:33:35,560 --> 00:33:37,880 Speaker 1: country explain. I mean, to miss, Spain is like the 616 00:33:37,960 --> 00:33:40,520 Speaker 1: perfect on tie COVID country, right, I mean, it's a 617 00:33:40,640 --> 00:33:45,479 Speaker 1: beach bodies, clubs, restaurants, so tourism. So if you want 618 00:33:45,520 --> 00:33:47,560 Speaker 1: to bet on things. Coming back to normal you buy 619 00:33:47,600 --> 00:33:50,360 Speaker 1: the IBEX verty five index and here you see actually 620 00:33:50,440 --> 00:33:52,760 Speaker 1: valuation by not are much lower than they work with 621 00:33:52,840 --> 00:33:56,120 Speaker 1: pandemic what in the US, even the most exposed name 622 00:33:56,240 --> 00:33:59,200 Speaker 1: of you know, are very expensive. So that's the case 623 00:33:59,280 --> 00:34:01,280 Speaker 1: for international is the U S which I think he's 624 00:34:01,360 --> 00:34:03,000 Speaker 1: kind of the one of these trends that he's a 625 00:34:03,160 --> 00:34:06,720 Speaker 1: that he's already changing from the you know one to 626 00:34:06,800 --> 00:34:10,160 Speaker 1: the cry day k Well that that strip club operator is. 627 00:34:10,440 --> 00:34:12,640 Speaker 1: I guess it's the exception to your bear market for 628 00:34:12,800 --> 00:34:15,120 Speaker 1: humans thesis. There's that one. You know, it's hard to 629 00:34:15,120 --> 00:34:17,960 Speaker 1: automate that that profession. We're in the midst of the 630 00:34:18,080 --> 00:34:24,440 Speaker 1: return to real assets. That's temporary. So many comments, I'm 631 00:34:24,480 --> 00:34:28,160 Speaker 1: not gonna make uh for good reasons. All right, Well, 632 00:34:28,200 --> 00:34:29,759 Speaker 1: that's a good one. That's a good one. I'm I 633 00:34:30,280 --> 00:34:32,120 Speaker 1: don't know, sorry. I think we gotta give it to Vincent, 634 00:34:32,440 --> 00:34:35,759 Speaker 1: but I'll give you mine anyway. Just in case. Our 635 00:34:35,840 --> 00:34:39,279 Speaker 1: colleague vill Donna had interesting right up of a some 636 00:34:39,440 --> 00:34:43,000 Speaker 1: commentary from none other than Bill Miller, you know, one 637 00:34:43,040 --> 00:34:47,120 Speaker 1: of the most famous value investors of the twentieth century, 638 00:34:48,160 --> 00:34:53,960 Speaker 1: and he sounds very very bullish on bitcoin um And 639 00:34:54,040 --> 00:34:56,040 Speaker 1: the reason is he thinks, you know, there's been a 640 00:34:56,080 --> 00:34:58,719 Speaker 1: few companies that are actually sort of keeping their cash 641 00:34:58,760 --> 00:35:02,080 Speaker 1: reserves least a small portion of them on their balance 642 00:35:02,120 --> 00:35:05,279 Speaker 1: sheet in bitcoin. Um, and he thinks that trend is 643 00:35:05,320 --> 00:35:08,320 Speaker 1: going to accelerate. I think the quote was a torrent 644 00:35:08,440 --> 00:35:11,680 Speaker 1: of corporate cash into bitcoin. And the reason I think 645 00:35:11,719 --> 00:35:14,839 Speaker 1: this is crazy is I'm not saying he's he's wrong. 646 00:35:15,000 --> 00:35:17,279 Speaker 1: He very well could be right. But to me, what's 647 00:35:17,320 --> 00:35:20,040 Speaker 1: crazy he's just how far the pendulum swung in terms 648 00:35:20,160 --> 00:35:24,200 Speaker 1: of sort of old school equity and investor types who 649 00:35:24,400 --> 00:35:27,800 Speaker 1: used to just roll their eyes completely at bitcoin, so 650 00:35:27,960 --> 00:35:31,160 Speaker 1: this year going you know, the opposite way and and 651 00:35:31,320 --> 00:35:34,000 Speaker 1: really making a case for making a bowl case where 652 00:35:34,560 --> 00:35:37,960 Speaker 1: But it so I gotta wonder. You know, people love 653 00:35:38,040 --> 00:35:42,360 Speaker 1: bitcoin allegedly for where it's non correlation to other assets, 654 00:35:42,440 --> 00:35:47,520 Speaker 1: but you start loading up corporate balance sheets with bitcoin. Uh, 655 00:35:48,120 --> 00:35:51,520 Speaker 1: that doesn't sound like a recipe for non correlated assets 656 00:35:51,560 --> 00:35:54,000 Speaker 1: to me anymore? Is uh, where do you see that 657 00:35:54,080 --> 00:35:56,480 Speaker 1: trend going? Do you think this is uh, you know, 658 00:35:57,120 --> 00:36:00,080 Speaker 1: something that more companies could could get on the bus with, 659 00:36:00,520 --> 00:36:02,359 Speaker 1: or is it you know we'll wake up one day 660 00:36:02,400 --> 00:36:05,560 Speaker 1: to a negative bitcoin day and that that's where is 661 00:36:05,560 --> 00:36:08,640 Speaker 1: just gonna go away. Well wait wait, wait you go 662 00:36:08,760 --> 00:36:13,080 Speaker 1: to bitcoin day. I mean it happened before, and you 663 00:36:13,160 --> 00:36:18,920 Speaker 1: know hasn't ready hasn't ready done much for uh for 664 00:36:19,280 --> 00:36:23,520 Speaker 1: for bitcoin. Um, I think what your point is an 665 00:36:23,560 --> 00:36:28,279 Speaker 1: interesting thing is is the institutional adoption of bitcoin is 666 00:36:28,320 --> 00:36:31,600 Speaker 1: something that really impresses me and and basically turning it 667 00:36:31,640 --> 00:36:34,960 Speaker 1: into an asset class. And I mean it's probably not 668 00:36:35,040 --> 00:36:39,840 Speaker 1: the answer you expect, but for me that the question 669 00:36:39,960 --> 00:36:44,560 Speaker 1: I think is one for regulators. Um. I mean, I'm 670 00:36:44,600 --> 00:36:47,759 Speaker 1: convinced that at the end of the day, Um, you 671 00:36:47,880 --> 00:36:51,200 Speaker 1: know there will be some something will be done. As 672 00:36:51,239 --> 00:36:53,640 Speaker 1: Bitcoin it's too much or the threat to the existing 673 00:36:53,800 --> 00:36:57,920 Speaker 1: infrastructure the financial system to be let alone and to 674 00:36:58,040 --> 00:37:00,319 Speaker 1: be like but but the more it grows, the harder 675 00:37:00,400 --> 00:37:03,800 Speaker 1: it is going to be too to underline it. Especially 676 00:37:03,840 --> 00:37:06,359 Speaker 1: if we see you know, those things actually saying open 677 00:37:06,400 --> 00:37:08,640 Speaker 1: bound sheet or even like minuture fronts or you know, 678 00:37:08,760 --> 00:37:11,080 Speaker 1: an accentuary product that that a little bit coins, then 679 00:37:11,160 --> 00:37:13,760 Speaker 1: I mean, you know, it won't just be like cracking 680 00:37:13,800 --> 00:37:16,360 Speaker 1: down on a crazy on a bunch of crazy loonies 681 00:37:16,480 --> 00:37:18,680 Speaker 1: that are you know, day trading from their basement. But 682 00:37:19,000 --> 00:37:21,480 Speaker 1: if it coin becomes like something that people actually use 683 00:37:21,560 --> 00:37:24,040 Speaker 1: and invest in. Um, I think it will make the 684 00:37:24,200 --> 00:37:26,839 Speaker 1: the unfolding which I think will need to happen again. 685 00:37:27,040 --> 00:37:29,920 Speaker 1: I don't think governments can allow a parallel currency to 686 00:37:30,239 --> 00:37:32,600 Speaker 1: develop and that they watch. I mean, it's an essential 687 00:37:32,680 --> 00:37:36,920 Speaker 1: part of serenity. Uh. And I would really wish to 688 00:37:37,000 --> 00:37:40,319 Speaker 1: know what regulators are thinking of doing. And the more 689 00:37:40,719 --> 00:37:43,759 Speaker 1: the more they wait, the bigger problem grows. Yeah. I 690 00:37:43,840 --> 00:37:47,200 Speaker 1: think everyone's hyped up about possibly getting that ETF this year, 691 00:37:47,280 --> 00:37:49,799 Speaker 1: and maybe that could be the one, the one sort 692 00:37:49,840 --> 00:37:51,680 Speaker 1: of pushback we get. I don't know, I don't know 693 00:37:51,920 --> 00:37:53,400 Speaker 1: hard to say. I guess we have to hear who 694 00:37:53,480 --> 00:37:57,240 Speaker 1: the SEC chairman is. Certainly, I mean, it's been unbelievable 695 00:37:57,280 --> 00:37:59,440 Speaker 1: to watch. But before we let you go, Vincent, I 696 00:37:59,520 --> 00:38:01,160 Speaker 1: have one more are from Twitter, and I've got to 697 00:38:01,200 --> 00:38:04,400 Speaker 1: read this. This is from John Luca Sagretto and he 698 00:38:04,480 --> 00:38:07,040 Speaker 1: did some serious reporting here, so I'm just gonna read 699 00:38:07,080 --> 00:38:09,960 Speaker 1: this for you. Around one month ago, a post on 700 00:38:10,000 --> 00:38:12,040 Speaker 1: Wall Street Bets was made regarding the fact that if 701 00:38:12,080 --> 00:38:14,359 Speaker 1: everyone on Wall Street Bets bought at least twenty five 702 00:38:14,400 --> 00:38:16,560 Speaker 1: shares of game Stop, they could end up owning the 703 00:38:16,719 --> 00:38:20,080 Speaker 1: entire float force a short squeeze and also paying themselves 704 00:38:20,160 --> 00:38:23,360 Speaker 1: out with a free PS five once they became quote 705 00:38:23,400 --> 00:38:26,839 Speaker 1: owners of the company said the next day the stock 706 00:38:26,960 --> 00:38:28,840 Speaker 1: was up around six percent and closed of two percent. 707 00:38:28,960 --> 00:38:30,719 Speaker 1: The stock was then up for the week around two 708 00:38:30,760 --> 00:38:34,920 Speaker 1: point four percent before crashing in just five days between 709 00:38:35,000 --> 00:38:37,040 Speaker 1: the eighth and the fourteenth of December, which is the 710 00:38:37,040 --> 00:38:39,919 Speaker 1: most he points out. Then he goes on, he says, 711 00:38:40,239 --> 00:38:43,359 Speaker 1: and here is where things get interesting. Dators in Wall 712 00:38:43,400 --> 00:38:45,800 Speaker 1: Street bet didn't give up. Since then, the stock is 713 00:38:45,880 --> 00:38:49,600 Speaker 1: up fort and people in Wall Street bets are celebrating 714 00:38:49,640 --> 00:38:52,320 Speaker 1: their gains in the classics style. Uh. And then he 715 00:38:52,440 --> 00:38:57,040 Speaker 1: sent a fun video to that's some serious reporting. Uh 716 00:38:57,560 --> 00:39:00,600 Speaker 1: see the deepest crazy thing message I ever got in 717 00:39:00,760 --> 00:39:03,319 Speaker 1: and just goes back to the retail story of the year. 718 00:39:03,360 --> 00:39:06,680 Speaker 1: I mean, it's what It's unbelievable. I feel like Reddit 719 00:39:06,880 --> 00:39:09,600 Speaker 1: is to the stock market what the Trump's supporters are 720 00:39:09,719 --> 00:39:12,920 Speaker 1: to the Capitol. You know, they just storming the thing, 721 00:39:13,280 --> 00:39:17,520 Speaker 1: running rock shot, sitting in the big comfy chair at 722 00:39:17,560 --> 00:39:20,640 Speaker 1: the front of the room, doing whatever they want. I'll 723 00:39:20,719 --> 00:39:23,960 Speaker 1: let you run with that analogy, Mike, Okay, let did happen? 724 00:39:25,960 --> 00:39:29,279 Speaker 1: But Vincent Delawart It's always such a pleasure to speak 725 00:39:29,320 --> 00:39:31,960 Speaker 1: with you, to get your thoughts, always thought provoking, and 726 00:39:32,120 --> 00:39:34,120 Speaker 1: we're so happy that we could have you on one 727 00:39:34,160 --> 00:39:36,880 Speaker 1: of our first podcasts of the year. Thank you so much. 728 00:39:36,920 --> 00:39:38,960 Speaker 1: Always a pleasure to keep up the great work, and 729 00:39:39,400 --> 00:39:41,480 Speaker 1: I'm sure you have many more crazy things to report 730 00:39:41,680 --> 00:39:50,919 Speaker 1: this year What Goes Up We'll be back next week. 731 00:39:51,239 --> 00:39:53,720 Speaker 1: Until then, you can find us on the Bloomberg Terminal, 732 00:39:53,880 --> 00:39:57,560 Speaker 1: website and app, or wherever you get your podcasts. We'd 733 00:39:57,600 --> 00:39:59,239 Speaker 1: love it if you took the time to rate and 734 00:39:59,360 --> 00:40:02,239 Speaker 1: review the show on Apple podcast so more listeners can 735 00:40:02,280 --> 00:40:04,800 Speaker 1: find us as You can find us on Twitter, follow 736 00:40:04,880 --> 00:40:08,440 Speaker 1: me at Sara pont Sec, Mike is Avery Anonymous, and 737 00:40:08,560 --> 00:40:12,680 Speaker 1: you can also follow Bloomberg Podcasts at podcasts. Also thank 738 00:40:12,719 --> 00:40:14,839 Speaker 1: you to Charlie Pellett of Bloomberg Radio and the voice 739 00:40:14,880 --> 00:40:17,400 Speaker 1: of the New York City Subway System. What Goes Up 740 00:40:17,480 --> 00:40:20,200 Speaker 1: is produced by Doph Forehas. The head of Bloomberg Podcast 741 00:40:20,320 --> 00:40:23,239 Speaker 1: is Francesco Levie. Thanks for listening. See you next time.