1 00:00:05,760 --> 00:00:07,560 Speaker 1: Well kind of trainance. I'm Joel Webber and I'm Eric 2 00:00:07,600 --> 00:00:13,239 Speaker 1: Beltis Eric. Some things are going a little crazy in 3 00:00:13,280 --> 00:00:17,440 Speaker 1: the currency world, and cash is kind of an interesting 4 00:00:17,480 --> 00:00:19,840 Speaker 1: story right now. It has not been interesting for a 5 00:00:19,880 --> 00:00:23,280 Speaker 1: really long time, and now suddenly it's interesting. It's boring 6 00:00:23,560 --> 00:00:26,239 Speaker 1: always to me, and this is a short term debt 7 00:00:26,320 --> 00:00:27,720 Speaker 1: is probably one of the most boring areas of the 8 00:00:27,720 --> 00:00:29,800 Speaker 1: E t F world to cover, But right now it's 9 00:00:29,880 --> 00:00:34,559 Speaker 1: kind of sexy because it's sort of sometimes it is 10 00:00:34,600 --> 00:00:37,400 Speaker 1: performance chasing to go to something so boring. Um, it 11 00:00:37,440 --> 00:00:40,240 Speaker 1: also yields more so there's been thirty one billion dollars 12 00:00:40,240 --> 00:00:43,360 Speaker 1: into ultra short debt ets, which to be one year 13 00:00:43,479 --> 00:00:46,760 Speaker 1: or less maturity. Right, so everybody is just hiding out. 14 00:00:46,840 --> 00:00:48,920 Speaker 1: They've just run into the cave the Fed. The Fed 15 00:00:49,000 --> 00:00:52,040 Speaker 1: scared them away. Yeah, they're on the sidelines, whatever metaphor 16 00:00:52,080 --> 00:00:54,760 Speaker 1: you want to use. They're totally scared. The Fed has 17 00:00:54,800 --> 00:00:57,880 Speaker 1: just wreaked havoc on everybody's brains. And um, this is 18 00:00:57,920 --> 00:00:59,560 Speaker 1: sort of the one eight they pulled on the market. 19 00:00:59,640 --> 00:01:02,080 Speaker 1: So you know, as somebody in one of the articles 20 00:01:02,080 --> 00:01:04,560 Speaker 1: on Bloomberg Today said, um, now is not a time 21 00:01:04,600 --> 00:01:06,440 Speaker 1: to be a hero. Which I think really sums up 22 00:01:06,440 --> 00:01:08,280 Speaker 1: this market. So we're seeing a lot of money to cash, 23 00:01:08,280 --> 00:01:09,640 Speaker 1: but that would be a good idea to sort of 24 00:01:09,640 --> 00:01:11,120 Speaker 1: break down what these E t F s are, what 25 00:01:11,160 --> 00:01:13,600 Speaker 1: they do. They're not exactly cash, but they're really close 26 00:01:13,600 --> 00:01:16,840 Speaker 1: to it. And this also relates to what's happening in 27 00:01:16,880 --> 00:01:20,160 Speaker 1: currency because strength of the dollar globally is just on 28 00:01:20,240 --> 00:01:23,360 Speaker 1: a tear and we're seeing things like the pound this 29 00:01:23,400 --> 00:01:25,839 Speaker 1: week just get hammered. So I'm sure we'll talk about 30 00:01:25,840 --> 00:01:27,800 Speaker 1: that a little bit here too. Joining us going to 31 00:01:27,880 --> 00:01:31,880 Speaker 1: be Katie Grayfield from Bloomberg News and James Shapeer from 32 00:01:31,880 --> 00:01:40,680 Speaker 1: Boomberg Intelligent. This time, I'm Trilliance. Cash is King, Katie, James, 33 00:01:40,760 --> 00:01:43,280 Speaker 1: Welcome back to Trilliance. How are you guys? Thanks for 34 00:01:43,360 --> 00:01:45,119 Speaker 1: having me. Okay, Katie, I want to start with you 35 00:01:45,640 --> 00:01:48,880 Speaker 1: because you and I've been talking about cash as king 36 00:01:49,040 --> 00:01:50,920 Speaker 1: for a second. Got you working on a Business week 37 00:01:50,920 --> 00:01:53,160 Speaker 1: story to that effect. Talk to us. What do you see? 38 00:01:53,440 --> 00:01:55,560 Speaker 1: I'm kind of obsessed with it at this moment. I 39 00:01:55,600 --> 00:01:58,480 Speaker 1: know that Eric just absolutely ripped on it. I think 40 00:01:58,520 --> 00:02:01,880 Speaker 1: it's actually pretty interesting area to cover right now. I mean, 41 00:02:02,040 --> 00:02:03,640 Speaker 1: on our show E t F I Q for weeks 42 00:02:03,640 --> 00:02:06,360 Speaker 1: you've been talking about the safety dance back into cash. 43 00:02:06,480 --> 00:02:09,400 Speaker 1: Clearly a lot of investors agree with me. I do 44 00:02:09,480 --> 00:02:12,320 Speaker 1: think we're at an interesting moment where cash always has 45 00:02:12,400 --> 00:02:16,799 Speaker 1: this connotation of being kind of cowardly, kind of boring 46 00:02:17,000 --> 00:02:20,480 Speaker 1: to Eric's point, but I mean, it yields so much 47 00:02:20,600 --> 00:02:23,880 Speaker 1: right now, a six month treasury bill yields as much 48 00:02:23,919 --> 00:02:28,160 Speaker 1: as a ten uere treasury note with like magnitudes less duration. Well, like, 49 00:02:28,200 --> 00:02:30,400 Speaker 1: why would you not do that, right? Because duration is 50 00:02:30,440 --> 00:02:33,760 Speaker 1: so important when inflations effector right, So, so what do 51 00:02:33,800 --> 00:02:36,920 Speaker 1: you get in that six month uh that you know 52 00:02:37,960 --> 00:02:40,280 Speaker 1: is safer than the tenure bet? Right? Well, you do 53 00:02:40,360 --> 00:02:42,760 Speaker 1: get a place to hang out. You also get the 54 00:02:42,919 --> 00:02:45,360 Speaker 1: peace of mind of knowing that you know, a single 55 00:02:45,520 --> 00:02:49,280 Speaker 1: day's yield movements aren't gonna totally decimate your p ando. 56 00:02:49,840 --> 00:02:52,400 Speaker 1: I mean, you're still on a real basis not keeping 57 00:02:52,480 --> 00:02:55,240 Speaker 1: up with inflation, but you're probably doing a lot better 58 00:02:55,240 --> 00:02:58,200 Speaker 1: than pretty much any other place, unless you're like all 59 00:02:58,240 --> 00:03:00,840 Speaker 1: in on US dollars right now. Well, that's sort of 60 00:03:00,880 --> 00:03:03,280 Speaker 1: my point with this is people must be really scared 61 00:03:03,320 --> 00:03:07,120 Speaker 1: to go into this ultra short term debt because you're right, 62 00:03:07,200 --> 00:03:09,760 Speaker 1: doesn't move as much off off of interest rates, but 63 00:03:09,840 --> 00:03:11,839 Speaker 1: that is where the FED is hiking. They're hiking rate 64 00:03:11,880 --> 00:03:15,040 Speaker 1: in your face, so like SHV and s h Y 65 00:03:15,160 --> 00:03:17,440 Speaker 1: are down. So you could get that three or four 66 00:03:17,480 --> 00:03:19,920 Speaker 1: percent deal, but you are going to lose from the 67 00:03:19,960 --> 00:03:22,320 Speaker 1: price going down because the Fed just hiked again in 68 00:03:22,320 --> 00:03:24,959 Speaker 1: your face. So it's not like a clean four percent, 69 00:03:25,040 --> 00:03:28,200 Speaker 1: it's a risky four percent. But again it's better than 70 00:03:28,200 --> 00:03:30,680 Speaker 1: the alternative. I guess, is this the new tina? Is 71 00:03:30,720 --> 00:03:34,040 Speaker 1: this the new tina? I've heard so many tortured new 72 00:03:34,080 --> 00:03:37,200 Speaker 1: acronyms for there is no alternative I've heard there are 73 00:03:37,200 --> 00:03:40,480 Speaker 1: too many alternatives. Now I feel like that that one 74 00:03:40,560 --> 00:03:42,520 Speaker 1: doesn't quite have a ring to it though. What about 75 00:03:43,080 --> 00:03:44,840 Speaker 1: sell the rip is the new by the dip? I know? 76 00:03:44,920 --> 00:03:47,440 Speaker 1: You like that one. That one's just really hard to 77 00:03:47,480 --> 00:03:49,240 Speaker 1: say on the fly. You have to think about the world. Know. 78 00:03:49,280 --> 00:03:51,520 Speaker 1: I screwed that up on air on TV. I I 79 00:03:51,840 --> 00:03:53,200 Speaker 1: got all jumbled in my head right when I was 80 00:03:53,240 --> 00:03:56,480 Speaker 1: about to say it in rehearsal, and then in the 81 00:03:56,480 --> 00:03:57,880 Speaker 1: thing I was like, way is it by the rips? 82 00:03:57,960 --> 00:04:01,280 Speaker 1: I was like, head game, you can't, you can't peek 83 00:04:01,320 --> 00:04:06,400 Speaker 1: and rehearsal I did Okay, so cash is cash as 84 00:04:06,400 --> 00:04:08,960 Speaker 1: an asset class, Katie walk us through the options, because 85 00:04:09,360 --> 00:04:11,360 Speaker 1: sure you can take that six month, but even like 86 00:04:11,400 --> 00:04:15,200 Speaker 1: a savings gount in your bank, looks pretty good right now. Absolutely, 87 00:04:15,280 --> 00:04:17,680 Speaker 1: Let's talk about one of the more interesting funds I 88 00:04:17,680 --> 00:04:20,120 Speaker 1: think is b I L that's one to three month 89 00:04:20,200 --> 00:04:22,560 Speaker 1: Treasury bills, right, and I wrote this story a few 90 00:04:22,600 --> 00:04:25,760 Speaker 1: months ago, but they're actually paying out monthly dividends again, 91 00:04:25,920 --> 00:04:28,800 Speaker 1: and for a lot of investors that's basically the core 92 00:04:28,839 --> 00:04:31,200 Speaker 1: investing thesis. I'm gonna put my money here, I'm going 93 00:04:31,240 --> 00:04:33,919 Speaker 1: to get a reliable fixed income payment. It all starts 94 00:04:33,960 --> 00:04:36,880 Speaker 1: to make sense. For a long time, these weren't paying 95 00:04:36,880 --> 00:04:41,160 Speaker 1: out anything. That all but totally stopped during the pandemic 96 00:04:41,160 --> 00:04:44,359 Speaker 1: when the federal took rates to zero. And again to 97 00:04:44,560 --> 00:04:46,640 Speaker 1: Eric's point, you can still lose out on the price, 98 00:04:46,720 --> 00:04:50,080 Speaker 1: but you are getting pennies again. It was pennies in July. 99 00:04:50,200 --> 00:04:52,520 Speaker 1: That's been steadily increasing. Is the FETE has just been 100 00:04:52,560 --> 00:04:57,720 Speaker 1: absolutely relentless. It's I think it's pretty damgn close. I mean, 101 00:04:57,720 --> 00:04:59,280 Speaker 1: there was a lot a long time where some of 102 00:04:59,279 --> 00:05:02,680 Speaker 1: the haters on Twitter be like the Fed is killing savers, 103 00:05:02,720 --> 00:05:04,600 Speaker 1: Like post world War two, you could always get a 104 00:05:04,600 --> 00:05:06,520 Speaker 1: good yield on your on your like your aunt would 105 00:05:06,560 --> 00:05:09,360 Speaker 1: give you a savings bond. And now they destroyed that. Well, 106 00:05:09,360 --> 00:05:13,280 Speaker 1: now it's back. The problem is the markets are all crushed. Uh, 107 00:05:13,360 --> 00:05:15,520 Speaker 1: this was the cost of doing it. I guess, James, 108 00:05:15,520 --> 00:05:17,240 Speaker 1: what's your take when you think of ultra short term 109 00:05:17,240 --> 00:05:19,080 Speaker 1: debt e T s? Like, what do you think? What 110 00:05:19,120 --> 00:05:21,240 Speaker 1: are you looking for? Think they're boring? Well, I do 111 00:05:21,320 --> 00:05:23,680 Speaker 1: think they're boring. Eric, We'll we'll see these filings. So, 112 00:05:23,680 --> 00:05:25,680 Speaker 1: as you know, we tracked filings for new ets that 113 00:05:25,680 --> 00:05:27,760 Speaker 1: come out, and every like every issue where has a 114 00:05:27,760 --> 00:05:30,080 Speaker 1: short term dead e t F. It's act summer actively manage. 115 00:05:30,120 --> 00:05:32,080 Speaker 1: Many are and he just sends like he'll send a 116 00:05:32,120 --> 00:05:33,880 Speaker 1: link with the filing and just put like a bunch 117 00:05:33,880 --> 00:05:38,839 Speaker 1: of z s nothing else. Um, every single legacy mutual 118 00:05:38,839 --> 00:05:40,520 Speaker 1: fund company that comes to the T space has to 119 00:05:40,520 --> 00:05:42,960 Speaker 1: file an ultra short term dead ETF and then an 120 00:05:42,960 --> 00:05:46,320 Speaker 1: income ETF and G E S G And I'm just like, 121 00:05:46,360 --> 00:05:48,440 Speaker 1: oh my god, I need more espresso too, because I'm 122 00:05:48,440 --> 00:05:52,039 Speaker 1: getting drowsy reading the other side of this is that 123 00:05:52,080 --> 00:05:55,240 Speaker 1: I think rebalancing is another key factor here. So if 124 00:05:55,279 --> 00:05:57,400 Speaker 1: we keep talking on the FED hiking rates, you're crushing 125 00:05:57,400 --> 00:05:59,720 Speaker 1: fixed income. So if you have a sixty forty portfolio 126 00:06:00,040 --> 00:06:02,240 Speaker 1: and your fixed income is going down or whatever whatever 127 00:06:02,800 --> 00:06:04,880 Speaker 1: mix you have in your portfolio, you probably need to 128 00:06:04,880 --> 00:06:07,880 Speaker 1: buy more to maintain that allocations. So rather than going 129 00:06:07,920 --> 00:06:11,200 Speaker 1: into corporates or longer dated things, they're choosing to go 130 00:06:11,480 --> 00:06:13,960 Speaker 1: limited duration, limited credit risk. They're going to these ultra 131 00:06:14,040 --> 00:06:16,360 Speaker 1: short things. They're going to treasuries. So there's all these 132 00:06:16,400 --> 00:06:18,640 Speaker 1: different things that are going they're forcing people into treasuries 133 00:06:18,640 --> 00:06:21,520 Speaker 1: and short term treasury specifically. So what are some tickers 134 00:06:21,520 --> 00:06:24,279 Speaker 1: that are of interest to you? James, Uh, Well, we 135 00:06:24,600 --> 00:06:28,120 Speaker 1: shy Bill sh V. I mean, they're they're pretty standard. 136 00:06:28,120 --> 00:06:30,040 Speaker 1: There's there's some there's some I shares ones out there 137 00:06:30,080 --> 00:06:33,920 Speaker 1: to jeff and then Jeffy, which is another one that 138 00:06:34,040 --> 00:06:36,880 Speaker 1: there's a lot of things. Jeffy is the income right there. 139 00:06:36,880 --> 00:06:39,280 Speaker 1: You think at jpst O JPSD is what I'm thinking. 140 00:06:39,320 --> 00:06:41,480 Speaker 1: So let's let's take a second to divide the difference 141 00:06:41,520 --> 00:06:44,160 Speaker 1: between Bill, s h V and s h Y, which 142 00:06:44,160 --> 00:06:46,440 Speaker 1: are pure treasuries. Those are probably the closest thing to 143 00:06:46,920 --> 00:06:49,640 Speaker 1: Bill is the only one that I think is that's 144 00:06:49,720 --> 00:06:53,039 Speaker 1: really short y is one one to three year UM. 145 00:06:53,080 --> 00:06:54,640 Speaker 1: So you take a little more risk, you a little 146 00:06:54,640 --> 00:06:59,000 Speaker 1: more yield. Now explain jps T, which is the JP Morgan. 147 00:06:59,080 --> 00:07:02,280 Speaker 1: It's not treasury. I mean this is a little more risky, right. Yeah, 148 00:07:02,279 --> 00:07:04,800 Speaker 1: it's actively managed and they don't just hold treasuries. But 149 00:07:04,839 --> 00:07:08,000 Speaker 1: it's also short term. But JP Morgan is selling it 150 00:07:08,040 --> 00:07:09,840 Speaker 1: pretty well. I mean it's taking in money hand to 151 00:07:09,920 --> 00:07:12,840 Speaker 1: or fist pretty much every day. What are the influs, 152 00:07:12,920 --> 00:07:15,000 Speaker 1: like one billion in a year. So the record I 153 00:07:15,040 --> 00:07:17,480 Speaker 1: believe is around thirty eight billion. We're probably gonna pass it. 154 00:07:17,800 --> 00:07:19,240 Speaker 1: And that was set in two thousand eight, which you 155 00:07:19,240 --> 00:07:21,240 Speaker 1: know was a really rough year, Volmageddon and all that, 156 00:07:21,280 --> 00:07:23,680 Speaker 1: so people ran into cash. So we have probably break 157 00:07:23,720 --> 00:07:26,640 Speaker 1: the record for all time flows here um on JPST 158 00:07:26,840 --> 00:07:29,400 Speaker 1: and MINT. Those are two funds. This is an interesting 159 00:07:29,480 --> 00:07:31,400 Speaker 1: niche that active is found. Actually, you know, past has 160 00:07:31,440 --> 00:07:34,360 Speaker 1: been like ruling the land for a while. People do 161 00:07:34,440 --> 00:07:37,400 Speaker 1: like giving their money to Pimco or JP Morgan and saying, look, 162 00:07:37,600 --> 00:07:40,120 Speaker 1: keep me short duration. So there's no interest, right risk, 163 00:07:40,360 --> 00:07:42,880 Speaker 1: but take little bets. Maybe buy an international bond or 164 00:07:42,960 --> 00:07:45,320 Speaker 1: corporate bond. Try to give me a little more um 165 00:07:45,400 --> 00:07:48,440 Speaker 1: return or yield. Uh so, I almost like their money 166 00:07:48,480 --> 00:07:50,160 Speaker 1: market funds with like a little hot sauce in there. 167 00:07:50,520 --> 00:07:54,080 Speaker 1: But as we know in two they're not cash because 168 00:07:54,080 --> 00:07:57,080 Speaker 1: they did go down quickly. Unlike a money market fund 169 00:07:57,080 --> 00:08:00,280 Speaker 1: where you might have a lot more stability, the can 170 00:08:00,320 --> 00:08:02,560 Speaker 1: go down well. To your point that this has been 171 00:08:02,600 --> 00:08:06,360 Speaker 1: an interesting niche for active to proliferate. I think it's 172 00:08:06,360 --> 00:08:08,400 Speaker 1: a really interesting sign of the sign of the times 173 00:08:08,440 --> 00:08:11,640 Speaker 1: that for much of the last two years, it's starting 174 00:08:11,640 --> 00:08:14,600 Speaker 1: in the pandemic, it was ARC that was the biggest 175 00:08:14,600 --> 00:08:18,040 Speaker 1: active manager. R K was the biggest actively managed fund. 176 00:08:18,400 --> 00:08:21,560 Speaker 1: Now it's jps T I believe, which is again one 177 00:08:21,560 --> 00:08:25,600 Speaker 1: of these short duration boring bond ETFs. Just really sort 178 00:08:25,600 --> 00:08:27,400 Speaker 1: of paints the mood of the market. You're right, that 179 00:08:27,480 --> 00:08:30,400 Speaker 1: is a symbolic move, similar to how the innovation theme 180 00:08:30,480 --> 00:08:34,120 Speaker 1: was the top one now natural resources. Yeah, so, yeah, 181 00:08:34,240 --> 00:08:37,400 Speaker 1: the times are a change until quickly, quickly and all 182 00:08:37,520 --> 00:08:40,360 Speaker 1: took with j PAL making some moves well in inflation, 183 00:08:40,360 --> 00:08:42,880 Speaker 1: prey and inflation. We keep talking about this money markets. 184 00:08:42,880 --> 00:08:44,960 Speaker 1: We brought them up, but they're they're paying almost three percent, 185 00:08:45,040 --> 00:08:47,559 Speaker 1: they're well over two percent. Now. Savings accounts, if you 186 00:08:47,600 --> 00:08:50,439 Speaker 1: have an online savings account they're yielding over two percent. 187 00:08:50,440 --> 00:08:52,520 Speaker 1: They're probably gonna be near three within the next month 188 00:08:52,600 --> 00:08:55,120 Speaker 1: or two. We could be over four percent or near 189 00:08:55,160 --> 00:08:57,319 Speaker 1: four percent in savings accounts by the end of the 190 00:08:57,360 --> 00:09:00,640 Speaker 1: But what's your that's the problem, correct, But I'm saying 191 00:09:01,440 --> 00:09:04,040 Speaker 1: the savings accounts and the money market accounts aren't as 192 00:09:04,080 --> 00:09:06,400 Speaker 1: subject to the risk as some of these other things. 193 00:09:06,440 --> 00:09:08,360 Speaker 1: So I'm kind of surprised so much money is going 194 00:09:08,440 --> 00:09:10,840 Speaker 1: to these e t f s when theoretically, if you're 195 00:09:11,280 --> 00:09:13,120 Speaker 1: I mean, if you're at a brokerage account, you you 196 00:09:13,120 --> 00:09:15,040 Speaker 1: have access to a money market fund, whether it's Vanguard 197 00:09:15,080 --> 00:09:16,400 Speaker 1: or whatever it may be, it's going to be paying 198 00:09:16,480 --> 00:09:18,760 Speaker 1: higher interest rates and obviously going to have a lower 199 00:09:18,840 --> 00:09:21,600 Speaker 1: duration risk. But then obviously the Fed does cut rates, 200 00:09:21,640 --> 00:09:23,760 Speaker 1: you don't get the same upward potential. That sounds like 201 00:09:23,800 --> 00:09:30,560 Speaker 1: you're in cash though, I mean, I don't know, I 202 00:09:30,640 --> 00:09:33,079 Speaker 1: personally don't own any short term treasury e t s. No, 203 00:09:33,200 --> 00:09:41,120 Speaker 1: I do not. I'm going to write that down. There's 204 00:09:41,120 --> 00:09:43,000 Speaker 1: also the option of going with the floating rate notes. 205 00:09:43,040 --> 00:09:46,440 Speaker 1: So like UM, Wisdom Tree, USFAR and T Flow have 206 00:09:46,600 --> 00:09:49,280 Speaker 1: also taken in a ton of money. UM again boring 207 00:09:49,360 --> 00:09:51,800 Speaker 1: but they would float with the interest rates, and so 208 00:09:51,840 --> 00:09:53,839 Speaker 1: that's been a popular trade and senior loans are like 209 00:09:53,880 --> 00:09:56,360 Speaker 1: a high yield version of that. So if we think 210 00:09:56,400 --> 00:10:00,360 Speaker 1: about this being this flight to safety and just like 211 00:10:00,520 --> 00:10:02,920 Speaker 1: chill on the sidelines, how long do you think this 212 00:10:02,920 --> 00:10:04,920 Speaker 1: sticks around? For what what our investor is going to 213 00:10:04,960 --> 00:10:08,880 Speaker 1: be looking forward before they go from from these moves elsewhere. 214 00:10:09,440 --> 00:10:11,880 Speaker 1: So so I sit next to Ira Jersey, who has 215 00:10:11,880 --> 00:10:14,240 Speaker 1: a rate strategist. He's been on the podcast before. So 216 00:10:14,360 --> 00:10:16,160 Speaker 1: right now, the market is pricing for the FED to 217 00:10:16,280 --> 00:10:20,800 Speaker 1: hike basically seventy five basis points, then fifty in December November, 218 00:10:20,840 --> 00:10:23,240 Speaker 1: fifty in December, and a little bit more through March, 219 00:10:23,360 --> 00:10:25,240 Speaker 1: and then the market is basically pricing for them to 220 00:10:25,280 --> 00:10:28,520 Speaker 1: start cutting rates pretty quickly in the spring. Ira, the 221 00:10:28,600 --> 00:10:32,280 Speaker 1: fed um our economist team believe that we're going to 222 00:10:32,320 --> 00:10:34,920 Speaker 1: stay flat at that higher plateau for much longer than 223 00:10:34,960 --> 00:10:38,000 Speaker 1: the market is pricing. Obviously, the market can change things. 224 00:10:38,240 --> 00:10:39,760 Speaker 1: I mean, if you talk to anyone, if they asked you, 225 00:10:39,800 --> 00:10:41,079 Speaker 1: wherefore we thought we were gonna be a three or 226 00:10:41,120 --> 00:10:43,320 Speaker 1: four percent by the fall. Uh, No one would have 227 00:10:43,320 --> 00:10:46,160 Speaker 1: said that. But basically, our Bloomberg intelligence team thinks that 228 00:10:46,160 --> 00:10:48,320 Speaker 1: we're going to get above that four percent level and 229 00:10:48,440 --> 00:10:51,520 Speaker 1: sit there for a good chunk of and that will 230 00:10:51,559 --> 00:10:54,960 Speaker 1: impact everything. Well, that theoretically bodes well for cash. If 231 00:10:55,000 --> 00:10:57,480 Speaker 1: the FED sits at terminal for a while and rates 232 00:10:57,520 --> 00:11:01,360 Speaker 1: just sort of stay at this very relatively very high plateau, 233 00:11:01,480 --> 00:11:03,720 Speaker 1: that would mean your T bills continue to pay out 234 00:11:03,960 --> 00:11:08,120 Speaker 1: pretty lofty yields. Yeah, which means maybe this wasn't the 235 00:11:08,160 --> 00:11:10,040 Speaker 1: place to be a year ago as race went up. 236 00:11:10,080 --> 00:11:12,760 Speaker 1: But if this is where rates stay, then being there 237 00:11:12,960 --> 00:11:16,240 Speaker 1: now could be good for a while, especially if inflation 238 00:11:16,280 --> 00:11:18,960 Speaker 1: does especially if the FED does get inflation under control. 239 00:11:19,000 --> 00:11:21,360 Speaker 1: That's I would agree. Here's the thing with the inflation number, 240 00:11:21,360 --> 00:11:23,280 Speaker 1: which is confusing, and I've worked this out with us 241 00:11:23,280 --> 00:11:25,559 Speaker 1: a little bit. The month over month has been pretty 242 00:11:25,640 --> 00:11:27,360 Speaker 1: nice for the past couple of months. It's hasn't like 243 00:11:27,360 --> 00:11:30,080 Speaker 1: shown a huge move, but again year over year still 244 00:11:30,120 --> 00:11:32,719 Speaker 1: like eight percent, right, eight nine? Well, the year over 245 00:11:32,800 --> 00:11:34,760 Speaker 1: year was I think the first jump was what six 246 00:11:34,760 --> 00:11:37,199 Speaker 1: seven months ago? Was that when the first print hit. 247 00:11:37,640 --> 00:11:39,840 Speaker 1: Don't we have to go twelve months to go back 248 00:11:39,880 --> 00:11:42,240 Speaker 1: to where the high water mark is now? Where then 249 00:11:42,280 --> 00:11:45,280 Speaker 1: it's under two percent, So it would seem to me, 250 00:11:45,400 --> 00:11:48,240 Speaker 1: nothing will get resolved until a whole year passes from 251 00:11:48,280 --> 00:11:52,079 Speaker 1: that shock print. So you're asking me to do some 252 00:11:52,200 --> 00:12:00,600 Speaker 1: math right here, we're talking about you. Yeah, she messed 253 00:12:00,600 --> 00:12:03,199 Speaker 1: with the dot plot. The dot plot crowd, they were 254 00:12:03,240 --> 00:12:05,760 Speaker 1: not happy, but some people were on your side. Some 255 00:12:05,760 --> 00:12:07,640 Speaker 1: people enjoy it was a joke. I said that the 256 00:12:07,679 --> 00:12:10,360 Speaker 1: dot plot is a meaningless image. It's so silly. And 257 00:12:10,440 --> 00:12:14,280 Speaker 1: someone said, you're a financial journalist, how did this mean 258 00:12:14,320 --> 00:12:17,960 Speaker 1: nothing to you? Okay, but the best comment that someone 259 00:12:18,000 --> 00:12:20,720 Speaker 1: gave to me was a line is a dot that 260 00:12:20,760 --> 00:12:24,160 Speaker 1: went for a walk. M h spoken like an artist. 261 00:12:24,720 --> 00:12:26,960 Speaker 1: I do think you know one thing I will say 262 00:12:27,400 --> 00:12:29,640 Speaker 1: to your point, and I think ramp Capital was the 263 00:12:29,640 --> 00:12:32,320 Speaker 1: one who said yes, because it's meaningless because these people 264 00:12:32,400 --> 00:12:34,200 Speaker 1: don't really know what they're talking about. They're always wrong, 265 00:12:34,760 --> 00:12:37,240 Speaker 1: um and they have missed a lot. Nobody called this, 266 00:12:37,320 --> 00:12:39,199 Speaker 1: as James just pointed out. The other thing that kind 267 00:12:39,200 --> 00:12:42,120 Speaker 1: of annoys me is the cell side research people who 268 00:12:42,160 --> 00:12:44,680 Speaker 1: come out like it's like Goldman now has an S 269 00:12:44,720 --> 00:12:46,760 Speaker 1: and P outlook and they just revised it down because 270 00:12:46,760 --> 00:12:50,040 Speaker 1: the market had a rough week. I'm like, well, you 271 00:12:50,080 --> 00:12:52,040 Speaker 1: can't do that. You pick it at the beginning of 272 00:12:52,080 --> 00:12:54,760 Speaker 1: the year and stick to it, Like I don't understand 273 00:12:54,760 --> 00:12:57,760 Speaker 1: that prediction based on what just happened. I get I 274 00:12:57,800 --> 00:12:59,880 Speaker 1: get why they do it, but it just seems like, 275 00:13:00,000 --> 00:13:01,360 Speaker 1: why am I going to listen at all? Then I'll 276 00:13:01,400 --> 00:13:04,560 Speaker 1: just look at past performance and extrapolate that forward and 277 00:13:04,559 --> 00:13:06,840 Speaker 1: go That's what the sull side thinks. Well, the FED, 278 00:13:06,920 --> 00:13:09,240 Speaker 1: to their credit, I feel like they try to stress 279 00:13:09,320 --> 00:13:13,640 Speaker 1: that these are not forecasts necessarily or this this is 280 00:13:13,679 --> 00:13:15,880 Speaker 1: not like up set in stone policy. They're going to 281 00:13:15,920 --> 00:13:18,280 Speaker 1: react where it happens. Yeah, they do try to get 282 00:13:18,280 --> 00:13:20,360 Speaker 1: the message across, but everyone just takes it like their 283 00:13:20,440 --> 00:13:26,040 Speaker 1: data dependent exactly. Well, Um, when I was lucky enough 284 00:13:26,040 --> 00:13:28,959 Speaker 1: to guest host the Clothes, yeah, we had the White 285 00:13:28,960 --> 00:13:31,920 Speaker 1: House person on, you know, the economic advisor, So I 286 00:13:32,000 --> 00:13:33,920 Speaker 1: never get to ask these non et F questions, but 287 00:13:33,960 --> 00:13:36,080 Speaker 1: I did, and I was sort of like talking about 288 00:13:36,080 --> 00:13:39,040 Speaker 1: the election because inflation is by far the number one 289 00:13:39,080 --> 00:13:42,679 Speaker 1: issue with voters. It took COVID's place. Voter say it's 290 00:13:42,679 --> 00:13:45,280 Speaker 1: the number one issue. COVID is not one percent completely 291 00:13:45,320 --> 00:13:49,559 Speaker 1: flop flip flopped, and so I think the FED has 292 00:13:49,559 --> 00:13:52,520 Speaker 1: a political pressure as well because this is the biggest 293 00:13:52,559 --> 00:13:55,360 Speaker 1: issue for the election. So I do wonder if we 294 00:13:55,400 --> 00:13:57,720 Speaker 1: have this election, the mid terms, if there might be 295 00:13:57,760 --> 00:13:59,400 Speaker 1: a little bit of the foot off the gas just 296 00:13:59,440 --> 00:14:01,840 Speaker 1: because there's the political pressure might die down a little 297 00:14:01,840 --> 00:14:03,600 Speaker 1: bit because there's no election coming up. I don't think 298 00:14:03,640 --> 00:14:06,240 Speaker 1: it's political pressure. I think it's part of the mandate. Right, 299 00:14:06,320 --> 00:14:08,880 Speaker 1: they have a mandate, and this is part of the mandate. 300 00:14:09,840 --> 00:14:13,120 Speaker 1: But it's hard to untangle politics from the mandate in 301 00:14:13,160 --> 00:14:15,520 Speaker 1: my opinion. But I suppose you're right. I just I 302 00:14:15,520 --> 00:14:17,520 Speaker 1: don't know. I just can't see the FED is completely 303 00:14:17,559 --> 00:14:19,640 Speaker 1: a political I just can't know. I'm with you, but 304 00:14:19,680 --> 00:14:21,560 Speaker 1: that they do have a mandate. They're they're targeting a 305 00:14:21,560 --> 00:14:24,240 Speaker 1: specific amount of inflation, and they've basically said they expect 306 00:14:24,280 --> 00:14:28,080 Speaker 1: to hip. What's interesting into more higher unemployment. What's interesting 307 00:14:28,160 --> 00:14:30,240 Speaker 1: me becomes if if they actually say two percent is 308 00:14:30,280 --> 00:14:32,880 Speaker 1: unrealistic anymore and like become the new two percent. But 309 00:14:32,920 --> 00:14:34,840 Speaker 1: we'll see where that ends up. It is amazing that 310 00:14:34,840 --> 00:14:37,520 Speaker 1: they've stuck to it. But again, if if your goal 311 00:14:37,600 --> 00:14:40,080 Speaker 1: is to go not over two percent from when like okay, 312 00:14:40,160 --> 00:14:42,560 Speaker 1: jumped eight percent, so we'll call that the new normal, 313 00:14:43,200 --> 00:14:45,520 Speaker 1: you're saying, no, two percent from where the new high 314 00:14:45,560 --> 00:14:49,200 Speaker 1: water mark is so all they've actually accomplished that to 315 00:14:49,240 --> 00:14:51,200 Speaker 1: a degree because the month over month hasn't gone up, 316 00:14:51,360 --> 00:14:52,920 Speaker 1: so all they gotta do is wait a year. So 317 00:14:53,000 --> 00:14:55,960 Speaker 1: I do sometimes wonder why they're continuing to hike given 318 00:14:56,000 --> 00:14:57,680 Speaker 1: that all they gotta they're not trying to get the 319 00:14:57,680 --> 00:14:59,840 Speaker 1: eight percent down back down to where it was. That 320 00:15:00,080 --> 00:15:02,360 Speaker 1: chip has sailed. It's just a matter of keeping that 321 00:15:02,440 --> 00:15:04,880 Speaker 1: eight percent year over year where it is, which they're 322 00:15:04,920 --> 00:15:07,360 Speaker 1: doing right. Yeah, Well, for the most part of you 323 00:15:07,400 --> 00:15:09,000 Speaker 1: can break out core CPI, we can get into the 324 00:15:09,000 --> 00:15:12,720 Speaker 1: real details of inflation numbers. Um. But we can get 325 00:15:12,760 --> 00:15:14,640 Speaker 1: into the details inflation, which I don't think we should 326 00:15:14,680 --> 00:15:16,800 Speaker 1: really necessarily do in this podcast. But if you look 327 00:15:16,800 --> 00:15:18,840 Speaker 1: at inflation, one of the things that's baked in is 328 00:15:18,840 --> 00:15:21,800 Speaker 1: is rent and homeowner's equivalent rent, those things, it takes 329 00:15:21,840 --> 00:15:23,880 Speaker 1: It's like a lagging indicator. So that's going to take 330 00:15:23,880 --> 00:15:26,320 Speaker 1: time to filter through the inflation numbers. So we're basically 331 00:15:26,360 --> 00:15:29,360 Speaker 1: guaranteed to get higher inflation to some extent. It's so 332 00:15:29,400 --> 00:15:31,520 Speaker 1: the problem is is the FED looking at leading indicators 333 00:15:31,560 --> 00:15:33,800 Speaker 1: are lagging indicators, and that's what they're trying to wrestle 334 00:15:33,800 --> 00:15:35,600 Speaker 1: with and so you have people on both sides arguing 335 00:15:35,600 --> 00:15:37,760 Speaker 1: that the Fed's hiking too much now because most of 336 00:15:37,760 --> 00:15:40,120 Speaker 1: the inflation is behind us, like you're kind of arguing, Eric, 337 00:15:40,200 --> 00:15:42,040 Speaker 1: And then people are saying, well, they're still supply chain 338 00:15:42,080 --> 00:15:43,680 Speaker 1: issues as other issues, So we need to make sure 339 00:15:43,720 --> 00:15:45,320 Speaker 1: that we don't let it get out of control, because 340 00:15:45,320 --> 00:15:48,480 Speaker 1: once inflation starts going, it'll keep going. I have a 341 00:15:48,560 --> 00:15:51,320 Speaker 1: question about ETFs to bring it back to e t 342 00:15:51,440 --> 00:15:55,040 Speaker 1: F So the Fed, Jerome Pal obviously has made it 343 00:15:55,120 --> 00:15:58,600 Speaker 1: very clear that they're going to hike into inflation even 344 00:15:58,600 --> 00:16:01,000 Speaker 1: if it tips the economy into session. And with that 345 00:16:01,040 --> 00:16:03,120 Speaker 1: in mind, I think it's interesting. In addition to all 346 00:16:03,160 --> 00:16:05,880 Speaker 1: of the short term flows we've seen into these cash 347 00:16:05,920 --> 00:16:07,920 Speaker 1: like e t f s, you're also seeing t LT 348 00:16:08,560 --> 00:16:10,840 Speaker 1: get a lot of love recently, a lot more love 349 00:16:11,000 --> 00:16:13,400 Speaker 1: for duration. It feels like it's just the middle of 350 00:16:13,440 --> 00:16:17,040 Speaker 1: the belly, if you will. That isn't seeing a lot 351 00:16:17,080 --> 00:16:19,040 Speaker 1: of sparkle right now. I don't know what you guys 352 00:16:19,040 --> 00:16:21,120 Speaker 1: think about that. Yes, So the way I look at it, 353 00:16:21,160 --> 00:16:22,680 Speaker 1: there's like a whole bunch of reasons why Treasury e 354 00:16:22,760 --> 00:16:24,240 Speaker 1: t F are getting because it's not even just t 355 00:16:24,400 --> 00:16:26,400 Speaker 1: LT on the long end, those are twenty plus yours. 356 00:16:26,720 --> 00:16:29,040 Speaker 1: It's it's the middle of the curve. Every all treasuries 357 00:16:29,040 --> 00:16:31,000 Speaker 1: are taking in money. And if you talk to people, 358 00:16:31,000 --> 00:16:32,440 Speaker 1: a lot of people think the Fed is going to 359 00:16:32,480 --> 00:16:34,040 Speaker 1: hike us into our session and then they're going to 360 00:16:34,120 --> 00:16:36,560 Speaker 1: get cold feet, and then a're gonna start cutting rates again. 361 00:16:36,760 --> 00:16:38,480 Speaker 1: So if they start cutting rates and you're you're in 362 00:16:38,520 --> 00:16:41,040 Speaker 1: these high duration treasuries, you're gonna shoot off like a 363 00:16:41,120 --> 00:16:43,360 Speaker 1: rocket ship, like we saw t LT do numerous times 364 00:16:43,360 --> 00:16:45,400 Speaker 1: when the FED starts cutting rates. I agree. I think 365 00:16:45,400 --> 00:16:47,920 Speaker 1: t l T is a recession play. It's it's betting 366 00:16:47,920 --> 00:16:50,280 Speaker 1: the Fed has gone too far, Whereas I think the 367 00:16:50,320 --> 00:16:53,120 Speaker 1: cash is more of a hiding out. I think TLT 368 00:16:53,240 --> 00:16:54,720 Speaker 1: is more of a bet. I would agree with James 369 00:16:54,760 --> 00:16:56,720 Speaker 1: on that. Yes, that is not it's not a really 370 00:16:56,960 --> 00:16:59,560 Speaker 1: safe place to be. TALT does do a good job 371 00:16:59,560 --> 00:17:02,640 Speaker 1: buffering stocks typically, but not this time. I mean also, 372 00:17:02,680 --> 00:17:05,280 Speaker 1: the duration, like we talked about, I don't know, fifteen 373 00:17:05,320 --> 00:17:08,280 Speaker 1: minutes ago, you can get your face ripped off. Oh yeah, 374 00:17:08,320 --> 00:17:10,760 Speaker 1: t l T s uh pretty pretty vaultlight, I think, 375 00:17:11,280 --> 00:17:13,840 Speaker 1: you know. But you're to James's point. That's why I 376 00:17:13,880 --> 00:17:17,000 Speaker 1: like I like geo vt This is the eye shares. 377 00:17:17,000 --> 00:17:19,040 Speaker 1: It goes. It just buys the whole curve in one shot. 378 00:17:19,080 --> 00:17:21,320 Speaker 1: So you own everything to get a little recession bed, 379 00:17:21,359 --> 00:17:23,240 Speaker 1: a little cash, a little you know. Uh. And that 380 00:17:23,280 --> 00:17:25,400 Speaker 1: one I think might be the top ten most successful 381 00:17:25,440 --> 00:17:34,600 Speaker 1: et F s of the year, maybe top fifteen. Okay, 382 00:17:34,600 --> 00:17:37,320 Speaker 1: so we've talked about cash, We've talked about some debt. 383 00:17:37,560 --> 00:17:39,960 Speaker 1: Let's talk about what's happening in the currency e t 384 00:17:40,240 --> 00:17:43,440 Speaker 1: s sticks out to you, I guess you up. That's 385 00:17:43,440 --> 00:17:46,960 Speaker 1: Investco's Bullish Dollar fund. It's absolutely crushing it this year. 386 00:17:46,960 --> 00:17:51,040 Speaker 1: It's up at a record high and then some. But 387 00:17:51,119 --> 00:17:53,360 Speaker 1: I keep looking for a size and scope to write 388 00:17:53,359 --> 00:17:55,359 Speaker 1: about beyond the fact that it's at a record high. 389 00:17:55,359 --> 00:17:59,920 Speaker 1: But the flows just haven't really matched that performance. Yeah, 390 00:18:00,000 --> 00:18:02,359 Speaker 1: and let's be clear, eight percent for a currency ETF 391 00:18:02,480 --> 00:18:05,480 Speaker 1: is ridiculous. That that's not a lot for a growth 392 00:18:05,480 --> 00:18:07,480 Speaker 1: fund or whatever, but for currency, that is an absurd 393 00:18:07,520 --> 00:18:11,040 Speaker 1: amount of return. Um. What's interesting about currency ETF that 394 00:18:11,160 --> 00:18:13,840 Speaker 1: just you know, straight bet on currencies. They've never really 395 00:18:13,880 --> 00:18:15,400 Speaker 1: had a market in the e t F world. They've 396 00:18:15,800 --> 00:18:19,119 Speaker 1: real small, they've never got gone mainstream. My theory is 397 00:18:19,160 --> 00:18:23,000 Speaker 1: that people regular people just don't do currency betting. They 398 00:18:23,040 --> 00:18:25,600 Speaker 1: just don't need it. There long the dollar plenty with 399 00:18:25,640 --> 00:18:27,760 Speaker 1: all their other investments, there's no reason. So I think 400 00:18:27,800 --> 00:18:30,040 Speaker 1: it appeals to a certain kind of trading crowd, maybe 401 00:18:30,040 --> 00:18:32,320 Speaker 1: an institutional who wants to quickly put on this trade. 402 00:18:32,640 --> 00:18:34,679 Speaker 1: I just think it's a niche area and it always 403 00:18:34,720 --> 00:18:37,920 Speaker 1: will be um um. But James, let's tell people what 404 00:18:37,960 --> 00:18:39,919 Speaker 1: does u P do? Like, how does it give you 405 00:18:39,960 --> 00:18:43,399 Speaker 1: exposure to quote long the dollar? Yes, so it's it's 406 00:18:43,440 --> 00:18:45,280 Speaker 1: kind of confusing because you think I'll just hold the dollar, 407 00:18:45,359 --> 00:18:46,879 Speaker 1: but that's not going to give you this performance that 408 00:18:46,960 --> 00:18:49,240 Speaker 1: we're seeing. So the way up does it? Or anyone 409 00:18:49,280 --> 00:18:50,919 Speaker 1: hedges in the market. So in this case they go, 410 00:18:51,080 --> 00:18:53,000 Speaker 1: they go long dollar futures and then they share at 411 00:18:53,000 --> 00:18:56,359 Speaker 1: the euro the end, the Great British pound, the Canadian dollar, 412 00:18:56,480 --> 00:18:58,840 Speaker 1: the Swedish corona, and the Swiss franc. So it's usually 413 00:18:58,880 --> 00:19:01,040 Speaker 1: long whatever the current see as you're talking about and that, 414 00:19:02,480 --> 00:19:04,560 Speaker 1: and then short of basket of other currency. It's literally 415 00:19:04,600 --> 00:19:07,040 Speaker 1: like a long short fund. Yeah yeah, it's not just 416 00:19:07,160 --> 00:19:09,439 Speaker 1: holding a dollar bill in a bank. Boy, that is 417 00:19:09,440 --> 00:19:12,040 Speaker 1: the perfect strategy for this year. It is. But the 418 00:19:12,200 --> 00:19:14,439 Speaker 1: other issuers have different takes on this trade, Like wisdom 419 00:19:14,480 --> 00:19:17,600 Speaker 1: Tree has us DU. This one goes long the dollar, 420 00:19:17,720 --> 00:19:20,480 Speaker 1: but then it shorts emerging market currencies as well as 421 00:19:20,560 --> 00:19:24,159 Speaker 1: the developed international so you get a broader short. But 422 00:19:24,520 --> 00:19:26,960 Speaker 1: the emerging market currencies haven't been as as bad. So 423 00:19:27,119 --> 00:19:29,159 Speaker 1: UP is outperforming this year, but that could change. But 424 00:19:29,800 --> 00:19:32,200 Speaker 1: I think there has been great innovation in this space, 425 00:19:32,240 --> 00:19:34,879 Speaker 1: but again not a ton of buyers. Now. Where we 426 00:19:34,920 --> 00:19:37,160 Speaker 1: have seen buyers over the years is currency hedgetts, which 427 00:19:37,200 --> 00:19:41,840 Speaker 1: go long say Japanese stocks or developed international stocks, and 428 00:19:41,840 --> 00:19:44,600 Speaker 1: then they neutralize the currency effect. Those e t f 429 00:19:44,640 --> 00:19:46,479 Speaker 1: s had their day back in the day, but now 430 00:19:46,480 --> 00:19:48,800 Speaker 1: they're coming back because the stronger the dollar is, the 431 00:19:48,840 --> 00:19:51,399 Speaker 1: better the currency hedge gtfs are. But no one is 432 00:19:51,440 --> 00:19:53,880 Speaker 1: buying them. It's like the second time around, no one cares. 433 00:19:53,920 --> 00:19:56,000 Speaker 1: Why do you think that is? Yeah? So I think 434 00:19:56,080 --> 00:19:58,320 Speaker 1: we we've we often debate this on our team multiple 435 00:19:58,359 --> 00:19:59,639 Speaker 1: times because we thought this is going to be the 436 00:19:59,680 --> 00:20:01,560 Speaker 1: year for erncy hedge gtfs with the dollar really does 437 00:20:01,680 --> 00:20:04,240 Speaker 1: go strong, and I mean the performance has been incredible. 438 00:20:04,480 --> 00:20:07,000 Speaker 1: I mean all of the currency edge versions, whether it's Europe, 439 00:20:07,000 --> 00:20:10,080 Speaker 1: whether it's Global Japan, all of the above they've crushed 440 00:20:10,080 --> 00:20:13,800 Speaker 1: their unhedged counterparts, and still they have taken in virtually 441 00:20:13,840 --> 00:20:15,680 Speaker 1: no money. I mean it's not no money, but it's 442 00:20:15,760 --> 00:20:18,159 Speaker 1: it's almost non existent compared to what it was. You 443 00:20:18,160 --> 00:20:20,840 Speaker 1: look at a chart, it's just billions flowing out for years. 444 00:20:21,240 --> 00:20:24,000 Speaker 1: The outflow has stopped and there's been a trickle of inflows, 445 00:20:24,000 --> 00:20:26,359 Speaker 1: but there the fish just aren't biting. Here's my theory, 446 00:20:26,400 --> 00:20:28,840 Speaker 1: jol and this at least, why is that? Because Eric, 447 00:20:28,840 --> 00:20:31,080 Speaker 1: I actually remember this was like how you and I 448 00:20:31,119 --> 00:20:34,160 Speaker 1: got to meet each other, was talking about the currency 449 00:20:34,560 --> 00:20:37,479 Speaker 1: hedge GTF effect. It was like of this, you know, 450 00:20:37,520 --> 00:20:40,480 Speaker 1: you would think this would be that moment for the strategy. 451 00:20:40,800 --> 00:20:43,240 Speaker 1: And wisdom Tree, as I recall, was a big player 452 00:20:43,240 --> 00:20:47,680 Speaker 1: and it's still still the big ones. Yeah, Wisdom Tree, UM, dws, 453 00:20:47,720 --> 00:20:50,080 Speaker 1: and I shares are all the big ones. But here's 454 00:20:50,080 --> 00:20:53,200 Speaker 1: my theory on this, which is that when currency ETFs 455 00:20:53,240 --> 00:20:57,399 Speaker 1: happened back in was a craze. D x J was 456 00:20:57,440 --> 00:20:59,639 Speaker 1: the number one inflow getter for a year. I think 457 00:20:59,680 --> 00:21:01,720 Speaker 1: it's the personally time was in Vanguard black Rock. I 458 00:21:01,720 --> 00:21:04,720 Speaker 1: mean that's insane. Um. I think people got on it 459 00:21:04,760 --> 00:21:07,360 Speaker 1: like a ride at the amusement park surfboard with which 460 00:21:07,480 --> 00:21:10,400 Speaker 1: the surfboard and then ran out. Yeah, and then they 461 00:21:10,560 --> 00:21:13,080 Speaker 1: the dollar got weaker and the trades sort of didn't 462 00:21:13,080 --> 00:21:15,560 Speaker 1: work as well, and people soured on it and said, oh, 463 00:21:15,640 --> 00:21:17,040 Speaker 1: that wasn't as fun as I thought it was. They 464 00:21:17,040 --> 00:21:19,959 Speaker 1: got out, and now that it's working, people are like, 465 00:21:20,119 --> 00:21:22,320 Speaker 1: you know, what, been there, done that. I think I'll 466 00:21:22,359 --> 00:21:25,040 Speaker 1: pass this time. I'll do the cash, sit in the 467 00:21:25,040 --> 00:21:29,320 Speaker 1: cash and boring like. This is why I'm barish E 468 00:21:29,480 --> 00:21:32,320 Speaker 1: s G versus the hype. I believe now this year 469 00:21:32,320 --> 00:21:34,920 Speaker 1: that we're seeing E s G underperformed generally because oil 470 00:21:35,000 --> 00:21:37,200 Speaker 1: is up and oil stocks are up. I think any 471 00:21:37,240 --> 00:21:39,760 Speaker 1: tourists that come in and have that experience, they go 472 00:21:39,760 --> 00:21:42,639 Speaker 1: in with a little too much like starry eyes, and 473 00:21:42,680 --> 00:21:45,560 Speaker 1: they they're not really careful what they're doing. They just 474 00:21:45,600 --> 00:21:47,600 Speaker 1: went bought it because it went up. They get that 475 00:21:47,680 --> 00:21:50,720 Speaker 1: sort of feeling of like um seller's remorte buyer's remorse 476 00:21:50,840 --> 00:21:53,520 Speaker 1: rather and they don't They will not take a second 477 00:21:53,560 --> 00:21:55,440 Speaker 1: bite at that apple. So when E s G starts 478 00:21:55,440 --> 00:21:57,800 Speaker 1: out performing next time tech is up, I don't. So 479 00:21:57,800 --> 00:21:59,560 Speaker 1: that's why I think E s G is limited, and 480 00:21:59,560 --> 00:22:01,840 Speaker 1: that's why and currency GTPs are having the problems they 481 00:22:01,880 --> 00:22:04,560 Speaker 1: do um, which is simply because you know, people have 482 00:22:04,600 --> 00:22:07,520 Speaker 1: been there, done that, and they're just not interested this time. Yeah, 483 00:22:07,520 --> 00:22:09,320 Speaker 1: And I think like the round trip trade, so people 484 00:22:09,359 --> 00:22:10,840 Speaker 1: went in and I think a lot of people just 485 00:22:10,880 --> 00:22:12,800 Speaker 1: didn't take money out initially, Like you look at it. 486 00:22:12,800 --> 00:22:15,320 Speaker 1: The performance went down really bad and money didn't really 487 00:22:15,320 --> 00:22:16,760 Speaker 1: come out. They just kind of sat in there and 488 00:22:16,760 --> 00:22:19,960 Speaker 1: it lost its value. It's lost its assets of your performance. 489 00:22:20,119 --> 00:22:21,640 Speaker 1: So I think people just saw that in the round 490 00:22:21,680 --> 00:22:23,080 Speaker 1: trip trade in staid if they had just stayed in 491 00:22:23,080 --> 00:22:25,359 Speaker 1: the other thing for an extended period of time, they 492 00:22:25,359 --> 00:22:27,639 Speaker 1: would have been the same. Because currencies just fluctuate, they 493 00:22:27,640 --> 00:22:29,840 Speaker 1: go up and down specifically and equities it's not as critical. 494 00:22:30,080 --> 00:22:31,840 Speaker 1: So if you're gonna currency hedge, it's more like you 495 00:22:31,880 --> 00:22:33,760 Speaker 1: have to market time essentially. I think people a lot 496 00:22:33,800 --> 00:22:35,520 Speaker 1: of people just give up on market timing. You know, 497 00:22:35,560 --> 00:22:37,520 Speaker 1: the people who sell currency ig tips make a great 498 00:22:37,560 --> 00:22:39,840 Speaker 1: case or like, look, everything you have is long the dollar, 499 00:22:40,320 --> 00:22:43,679 Speaker 1: your house, everything you know, your bank account, all your funds, 500 00:22:43,840 --> 00:22:47,080 Speaker 1: all your stocks. Why not hedge in this case to 501 00:22:47,119 --> 00:22:50,520 Speaker 1: have something that isn't exposed to the dollar? Um. Now, 502 00:22:50,840 --> 00:22:54,240 Speaker 1: someone like Bogel, they would argue you would you shouldn't 503 00:22:54,280 --> 00:22:57,160 Speaker 1: do it because you should always belong the dollar. That's 504 00:22:57,160 --> 00:22:59,359 Speaker 1: your whole lifestyle, so why bother with that? So I 505 00:22:59,400 --> 00:23:01,439 Speaker 1: get both, But I think ms C I had a study. 506 00:23:01,760 --> 00:23:03,760 Speaker 1: I'll probably get called out for this, but I think 507 00:23:03,840 --> 00:23:06,359 Speaker 1: as my recollection, they did look at the heads then 508 00:23:06,400 --> 00:23:08,720 Speaker 1: unheedged over like a long period and it wasn't that 509 00:23:08,760 --> 00:23:11,880 Speaker 1: big of a difference. Um. But there are times when 510 00:23:11,880 --> 00:23:14,520 Speaker 1: obviously one is going to be outperforming and then it 511 00:23:14,560 --> 00:23:17,040 Speaker 1: will underperform. And this is sort of the problem with 512 00:23:17,359 --> 00:23:19,199 Speaker 1: E T F that veer from a benchmark. You have 513 00:23:19,280 --> 00:23:21,080 Speaker 1: your heyday and then you have your under performance. And 514 00:23:21,359 --> 00:23:23,480 Speaker 1: the people who typically should go into the strategy of 515 00:23:23,520 --> 00:23:26,960 Speaker 1: people who really understand what they're doing and can stomach 516 00:23:27,040 --> 00:23:29,800 Speaker 1: that period of of drawdowns. So anybody listening, that's my 517 00:23:30,119 --> 00:23:32,639 Speaker 1: advice for anybody on all of this, and especially E 518 00:23:32,720 --> 00:23:34,760 Speaker 1: s G. I'm like, look, if you're hardcore and you 519 00:23:34,800 --> 00:23:37,080 Speaker 1: live in E s G lifestyle and this is your thing, 520 00:23:37,560 --> 00:23:39,439 Speaker 1: you're probably fine for E s G because you can 521 00:23:39,440 --> 00:23:42,680 Speaker 1: stomach when it doesn't work. Um, But a tourist, I'd 522 00:23:42,680 --> 00:23:45,879 Speaker 1: be very careful because sometimes people just don't like tunderperform, 523 00:23:45,960 --> 00:23:48,960 Speaker 1: and they usually sell at the wrong time and by 524 00:23:49,000 --> 00:23:51,280 Speaker 1: at the wrong time, and that's you know where bad 525 00:23:51,280 --> 00:23:55,320 Speaker 1: behavior comes from. And for everybody else, there's cash. Yeah, 526 00:23:55,359 --> 00:23:57,959 Speaker 1: back to cash, Katie James, thanks for joining in Centralia, 527 00:23:58,200 --> 00:24:00,920 Speaker 1: Thank you for having me, Thanks for having to m H. 528 00:24:04,680 --> 00:24:07,679 Speaker 1: Thanks for listening to Trillions. Until next time. You can 529 00:24:07,680 --> 00:24:12,560 Speaker 1: find us on the Bloomberg Terminal, Bloomberg dot com, Apple podcast, Spotify, 530 00:24:13,160 --> 00:24:15,639 Speaker 1: or wherever else you'd like to listen. We'd love to 531 00:24:15,680 --> 00:24:19,000 Speaker 1: hear from you. We're on Twitter, I'm at Joel Webber's show. 532 00:24:19,400 --> 00:24:24,040 Speaker 1: He's at Eric Baltunas. This episode of Trillions was produced 533 00:24:24,040 --> 00:24:32,480 Speaker 1: by Magnus Hendrickson. Bye.