1 00:00:13,480 --> 00:00:16,240 Speaker 1: Hello, and welcome to What Goes Up of Bloomberg Weekly 2 00:00:16,360 --> 00:00:19,800 Speaker 1: Markets Podcast. I'm Mike Reagan, a senior editor of Bloomberg, 3 00:00:20,160 --> 00:00:23,239 Speaker 1: and I'm Emily Barrett, a bonds and currencies reporter, and 4 00:00:23,280 --> 00:00:26,239 Speaker 1: I'm filling in for a vacationing Theraponte this week on 5 00:00:26,280 --> 00:00:29,040 Speaker 1: the show, has the trade war turned into a currency ward? 6 00:00:29,680 --> 00:00:32,520 Speaker 1: On Monday, China led its currency weakened by the most 7 00:00:32,520 --> 00:00:36,159 Speaker 1: since two thousand and fifteen, and that triggered volatility across 8 00:00:36,159 --> 00:00:38,840 Speaker 1: all markets, and it's sent US stocks to their worst 9 00:00:38,840 --> 00:00:42,479 Speaker 1: losses of the year. Then on Thursday, President Trump weighed in, 10 00:00:42,560 --> 00:00:45,320 Speaker 1: putting more pressure on the Federal Reserve to take measures 11 00:00:45,400 --> 00:00:49,360 Speaker 1: to weaken the US dollar. So why is everyone fixated 12 00:00:49,440 --> 00:00:52,519 Speaker 1: on foreign exchange rates this week? And what exactly can 13 00:00:52,560 --> 00:00:55,200 Speaker 1: Trump do about it? We've got some smart guests on 14 00:00:55,240 --> 00:00:57,160 Speaker 1: the show to unpack it all for us, and then 15 00:00:57,200 --> 00:00:59,640 Speaker 1: we'll close out the episode without tradition. The craziest thing 16 00:00:59,680 --> 00:01:02,200 Speaker 1: I saw our markets this week, and Mike, I believe 17 00:01:02,240 --> 00:01:05,679 Speaker 1: that we've got now what goes Up hotline? Indeed we do, 18 00:01:06,080 --> 00:01:09,840 Speaker 1: and that number again is six four six three to 19 00:01:10,040 --> 00:01:13,960 Speaker 1: four three four nine. Oh, so please do give us 20 00:01:13,959 --> 00:01:16,080 Speaker 1: a call and tell us the craziest thing you saw 21 00:01:16,120 --> 00:01:18,440 Speaker 1: in markets this week, and if you have a question 22 00:01:18,640 --> 00:01:20,720 Speaker 1: for the hosts of the show, uh drop it on 23 00:01:20,720 --> 00:01:23,800 Speaker 1: our voicemail as well, and we may even play your 24 00:01:23,880 --> 00:01:27,920 Speaker 1: voicemail on the podcast. But Emily, let's introduce the guests here. 25 00:01:28,240 --> 00:01:30,720 Speaker 1: The first guest, now, this is a guy who started 26 00:01:30,720 --> 00:01:33,120 Speaker 1: out in the pits in Chicago back in the nineties 27 00:01:33,120 --> 00:01:36,440 Speaker 1: making those crazy hand gestures. But he's had a variety 28 00:01:36,440 --> 00:01:39,760 Speaker 1: of buying sell side market rolls over the last quarter century. 29 00:01:39,800 --> 00:01:43,360 Speaker 1: He's a macro portfolio manager at Graham Capital in the 30 00:01:43,480 --> 00:01:46,920 Speaker 1: US and Nylon Capital in London, but we're lucky now 31 00:01:46,959 --> 00:01:49,720 Speaker 1: to have him here at Bloomberg. He's a market strategist, 32 00:01:49,880 --> 00:01:52,560 Speaker 1: he's the author of the Macroman column, and he's a 33 00:01:52,560 --> 00:01:56,880 Speaker 1: blogger for Bloomberg Markets Live Blog. Cameron Christ Welcome to 34 00:01:56,920 --> 00:01:59,880 Speaker 1: the show. Always a pleasure. Also joining us this we 35 00:02:00,360 --> 00:02:04,160 Speaker 1: Katie Greifeld. She's a rising star reporter on the bonds 36 00:02:04,160 --> 00:02:07,200 Speaker 1: and FX team here at Bloomberg. Katie, nice to have you, 37 00:02:07,760 --> 00:02:09,960 Speaker 1: Thanks for having me and Katie, I wanted to start 38 00:02:10,040 --> 00:02:14,919 Speaker 1: with you because obviously f X is the story of 39 00:02:14,960 --> 00:02:18,240 Speaker 1: the week by far, and you've done some some very 40 00:02:18,280 --> 00:02:21,440 Speaker 1: interesting reporting. Yet a Business Week story a couple of 41 00:02:21,480 --> 00:02:24,480 Speaker 1: weeks ago, I just want to read the headline. Chaotic 42 00:02:24,560 --> 00:02:28,320 Speaker 1: messaging makes it hard to decode Trump's dollar policy. I 43 00:02:28,320 --> 00:02:30,799 Speaker 1: gotta say I think President Trump may have read that story, 44 00:02:31,040 --> 00:02:35,400 Speaker 1: because on Thursday then he tweeted this quote. As your president, 45 00:02:35,680 --> 00:02:37,520 Speaker 1: one would think that I would be thrilled with our 46 00:02:37,600 --> 00:02:41,040 Speaker 1: very strong dollar. I am not exclamation point. Yeah, he 47 00:02:41,080 --> 00:02:43,560 Speaker 1: definitely answered the question for us, So we would have 48 00:02:43,600 --> 00:02:46,320 Speaker 1: to tweak that headline if I wanted to write again today. 49 00:02:46,480 --> 00:02:48,720 Speaker 1: But I kind of heard it from the horse's mouth 50 00:02:48,720 --> 00:02:51,680 Speaker 1: there that he doesn't like this strong dollar. You know, 51 00:02:51,720 --> 00:02:53,760 Speaker 1: that's echoing things we've heard before, but now we have 52 00:02:53,800 --> 00:02:56,560 Speaker 1: the added twist where he's starting to take action. I mean, 53 00:02:56,600 --> 00:02:59,600 Speaker 1: he labeled China currency manipulator. That's why I wanted to ask, 54 00:02:59,639 --> 00:03:01,680 Speaker 1: if you get the currency market. There wasn't a huge 55 00:03:01,720 --> 00:03:04,880 Speaker 1: reaction to that tweet. Um. You've also reported about how 56 00:03:04,880 --> 00:03:07,040 Speaker 1: there is a lot of speculation in the market that 57 00:03:07,120 --> 00:03:10,680 Speaker 1: the US will intervene and try to weaken the dollar. 58 00:03:11,200 --> 00:03:15,040 Speaker 1: What exactly can President Trump do to accomplish that, other 59 00:03:15,080 --> 00:03:18,560 Speaker 1: than to continue to put pressure on the federal reserve. Well, 60 00:03:18,600 --> 00:03:23,200 Speaker 1: exactly that the US could intervene. I mean Trump complaining 61 00:03:23,240 --> 00:03:26,160 Speaker 1: about the dollar strength, tweeting about it, you know, attacking 62 00:03:26,160 --> 00:03:29,200 Speaker 1: the Federal Reserve. We've seen all of that. Now what 63 00:03:29,320 --> 00:03:31,560 Speaker 1: markets are really waiting for is to see if you 64 00:03:31,560 --> 00:03:35,960 Speaker 1: actually put some muscle behind that and directs Treasury to intervene, 65 00:03:36,240 --> 00:03:39,520 Speaker 1: which would involve selling dollars to try to drive down 66 00:03:39,560 --> 00:03:42,080 Speaker 1: the price. It's like, Kelly, my question to that quickly 67 00:03:42,240 --> 00:03:45,320 Speaker 1: is you've written before, I think that investors have every 68 00:03:45,360 --> 00:03:47,440 Speaker 1: intention of trying to buy up the dollar if there 69 00:03:47,520 --> 00:03:50,280 Speaker 1: is a sign of the US heading to an intervention. 70 00:03:50,560 --> 00:03:52,560 Speaker 1: Is it even a realistic proposition right now for the 71 00:03:52,640 --> 00:03:56,400 Speaker 1: dollar weaken much on that basis? Probably not. I mean, 72 00:03:56,440 --> 00:03:59,080 Speaker 1: that was one of the most fun stories I've written 73 00:03:59,120 --> 00:04:00,960 Speaker 1: in the past few weeks, is that if the US 74 00:04:01,120 --> 00:04:03,800 Speaker 1: did actually try to enter the market try to sell dollars, 75 00:04:03,880 --> 00:04:06,840 Speaker 1: that would just create a great by the dip opportunity. 76 00:04:07,000 --> 00:04:11,760 Speaker 1: Because the foreign exchange market trades over five trillion a day, 77 00:04:11,840 --> 00:04:15,840 Speaker 1: so it's pretty huge, and the US and the Treasuries 78 00:04:15,920 --> 00:04:21,520 Speaker 1: Exchange Stabilization Fund only has about ninety billion or something, 79 00:04:21,600 --> 00:04:24,720 Speaker 1: so that's a drop in the bucket. Uh, And especially 80 00:04:24,720 --> 00:04:26,960 Speaker 1: when you compare that to the reserves of China they 81 00:04:26,960 --> 00:04:30,000 Speaker 1: have over three trillion. Uh, there's just not a lot 82 00:04:30,040 --> 00:04:32,840 Speaker 1: of firepower on the U. S side. O Cameron, if 83 00:04:32,839 --> 00:04:35,520 Speaker 1: you were back in your seat as a trader, I 84 00:04:35,560 --> 00:04:37,680 Speaker 1: don't think you're a fan of this type of tweeting 85 00:04:37,720 --> 00:04:42,120 Speaker 1: by our president. Uh, you know, can you trade on this? Um? 86 00:04:42,240 --> 00:04:44,240 Speaker 1: How do you sort of get through this type of 87 00:04:44,560 --> 00:04:49,680 Speaker 1: environment where the president is sort of unprecedentedly trying to 88 00:04:49,720 --> 00:04:53,040 Speaker 1: force markets to to bend to his will. Well, it's yeah, 89 00:04:53,120 --> 00:04:56,120 Speaker 1: I mean, it's the whole thing is broken. It's so depressing. 90 00:04:56,640 --> 00:04:58,520 Speaker 1: It's like every day I come in and I've got 91 00:04:58,520 --> 00:05:01,960 Speaker 1: a new rent about how the market. You know, markets 92 00:05:02,000 --> 00:05:04,599 Speaker 1: don't clear anymore, they're not allowed to clear anymore because 93 00:05:04,600 --> 00:05:08,680 Speaker 1: of politicians and central bankers and what have you. How 94 00:05:08,720 --> 00:05:11,200 Speaker 1: do you trade it, Well, you don't really until they 95 00:05:11,200 --> 00:05:15,159 Speaker 1: demonstrate that there's actually an action behind the words. All 96 00:05:15,160 --> 00:05:18,280 Speaker 1: it is is kind of empty rhetoric, and as we know, 97 00:05:18,520 --> 00:05:24,680 Speaker 1: the President sort of likes to hold mutually incompatible views simultaneously. 98 00:05:25,160 --> 00:05:27,760 Speaker 1: You know, this is the greatest economy ever, but it's 99 00:05:27,800 --> 00:05:31,080 Speaker 1: being killed by the Fed because interest rates are too high, 100 00:05:31,160 --> 00:05:33,520 Speaker 1: the dollars too high, what have you. I mean, at least, 101 00:05:33,560 --> 00:05:35,800 Speaker 1: at the very least you can say that the preference 102 00:05:35,800 --> 00:05:39,719 Speaker 1: for a weaker dollar is consistent with his preference for 103 00:05:39,920 --> 00:05:44,359 Speaker 1: narrowing the trade deficit with China, because I think, broadly speaking, 104 00:05:45,120 --> 00:05:49,000 Speaker 1: it's fair to say that extreme currency strength or extreme 105 00:05:49,040 --> 00:05:54,920 Speaker 1: currency weakness does lead to a decline or an improvement 106 00:05:55,320 --> 00:06:00,000 Speaker 1: in export growth moving forward. Um, but let's face it again, 107 00:06:00,279 --> 00:06:03,640 Speaker 1: certainly against developed market currencies, dollars not doing anything. I mean, 108 00:06:03,680 --> 00:06:05,559 Speaker 1: we've been in what seems like a three big figure 109 00:06:05,680 --> 00:06:10,359 Speaker 1: range against the Euro all year, so kind of what's 110 00:06:10,400 --> 00:06:12,680 Speaker 1: the what's the point? Trump's had a pop at Mario 111 00:06:12,800 --> 00:06:15,520 Speaker 1: drug and unfairness. Druggy does like to play his own 112 00:06:15,560 --> 00:06:18,880 Speaker 1: little games. But we're not going anywhere on that point though. 113 00:06:18,920 --> 00:06:20,880 Speaker 1: I mean, when we're talking about invoking the FED and 114 00:06:20,920 --> 00:06:23,120 Speaker 1: how we know that Trump has obviously bashed the Fed 115 00:06:23,120 --> 00:06:25,640 Speaker 1: an awful lot, um, do you see this being a 116 00:06:25,680 --> 00:06:28,680 Speaker 1: sort of a counter productive effect. Do you think that 117 00:06:28,720 --> 00:06:30,760 Speaker 1: it's possible. I've heard some people say, for instance, that 118 00:06:31,240 --> 00:06:34,760 Speaker 1: you know Trump has actually possibly averted a deeper cut 119 00:06:34,880 --> 00:06:36,720 Speaker 1: because of his attacks on the FED and the wish 120 00:06:36,760 --> 00:06:39,719 Speaker 1: for the FED to stay independent. Well, the problem is 121 00:06:39,760 --> 00:06:42,920 Speaker 1: we you know, we we never know the counterfactuals. Um. Certainly, 122 00:06:43,400 --> 00:06:48,760 Speaker 1: the FED has changed course pretty dramatically this year from 123 00:06:48,760 --> 00:06:51,720 Speaker 1: where they were at the end of last year, and 124 00:06:51,760 --> 00:06:56,520 Speaker 1: it has had a demonstrable impact on financial conditions. Obviously, 125 00:06:56,720 --> 00:06:59,320 Speaker 1: yields have gone down, equities have gone up, and I 126 00:06:59,400 --> 00:07:01,799 Speaker 1: think you could argued that that, in turn has given 127 00:07:01,839 --> 00:07:05,440 Speaker 1: Trump a platform upon which to keep sort of re 128 00:07:05,640 --> 00:07:09,160 Speaker 1: upping the trade war rhetoric. And I suppose there's an 129 00:07:09,240 --> 00:07:12,640 Speaker 1: argument to be made that if the FED sort of 130 00:07:13,720 --> 00:07:16,840 Speaker 1: didn't deliver what Trump wanted, which is easier montary conditions, 131 00:07:16,840 --> 00:07:20,440 Speaker 1: than Trump wouldn't have the wherewithal to keep sort of 132 00:07:20,480 --> 00:07:23,120 Speaker 1: tweeting every few months that he wants to put more 133 00:07:23,160 --> 00:07:26,840 Speaker 1: tariffs on China. So it's it's you know, it's it's 134 00:07:26,840 --> 00:07:30,840 Speaker 1: it's it's a very difficult environment in which to operate 135 00:07:30,920 --> 00:07:34,960 Speaker 1: because there's so many political levers that are that are 136 00:07:35,000 --> 00:07:38,800 Speaker 1: being pulled, and it's not an easy thing to necessarily 137 00:07:38,880 --> 00:07:41,640 Speaker 1: predict when the President is going to come out with 138 00:07:41,800 --> 00:07:45,520 Speaker 1: some six pm tweet that now sends your beautiful trade 139 00:07:46,000 --> 00:07:48,240 Speaker 1: down in you know, in flame. So you're really missing 140 00:07:48,280 --> 00:07:51,400 Speaker 1: being a trader right now. I take it. Well, Um, 141 00:07:51,440 --> 00:07:53,240 Speaker 1: I mean, I sleep a heck of a lot better 142 00:07:53,240 --> 00:07:55,880 Speaker 1: than I would if I still run a portfolio, that's 143 00:07:55,880 --> 00:07:59,480 Speaker 1: for sure. Katie. You also had an interesting story recently 144 00:08:00,160 --> 00:08:03,960 Speaker 1: that you helped report. Um. Obviously, a lot of people 145 00:08:04,640 --> 00:08:09,520 Speaker 1: sort of we're maybe not expecting, but speculating, worrying that 146 00:08:09,640 --> 00:08:13,040 Speaker 1: China would take a step like this with its currency, 147 00:08:13,280 --> 00:08:15,560 Speaker 1: and the other shoe that people are waiting to drop 148 00:08:15,760 --> 00:08:19,680 Speaker 1: is uh, China's holdings of US treasuries. Tell us about 149 00:08:19,720 --> 00:08:24,280 Speaker 1: that story. Are people worried that China could eventually unload 150 00:08:24,600 --> 00:08:28,360 Speaker 1: its massive pile of treasuries? Would that backfire on them 151 00:08:28,400 --> 00:08:30,680 Speaker 1: if they did? Um? You know, they call it the 152 00:08:30,760 --> 00:08:35,000 Speaker 1: nuclear option, mutual assured destruction. What is sort of the 153 00:08:35,160 --> 00:08:38,840 Speaker 1: thinking about that issue from the people you talked to, Well, 154 00:08:38,880 --> 00:08:41,720 Speaker 1: it's definitely still seen as that nuclear option. It would 155 00:08:41,800 --> 00:08:44,480 Speaker 1: hurt a lot for both sides, maybe more for China 156 00:08:44,559 --> 00:08:47,440 Speaker 1: because uh, you know, if they sold a whole bunch 157 00:08:47,480 --> 00:08:50,719 Speaker 1: of their treasuries holdings, that would sort of erode the 158 00:08:50,800 --> 00:08:53,840 Speaker 1: value of whatever they had over But I mean talking 159 00:08:53,880 --> 00:08:56,400 Speaker 1: to people on Monday after you know, we got in 160 00:08:56,480 --> 00:09:00,360 Speaker 1: and saw that you wanted really screamed through seven the 161 00:09:00,400 --> 00:09:03,960 Speaker 1: people we were speaking to said, if they let that happen, 162 00:09:04,040 --> 00:09:06,640 Speaker 1: if they decided to stop holding the line at seven, 163 00:09:07,000 --> 00:09:10,480 Speaker 1: you really can't rule out the treasuries option because I mean, 164 00:09:10,480 --> 00:09:12,840 Speaker 1: there's a lot of pain that could come with a 165 00:09:12,880 --> 00:09:17,280 Speaker 1: big devaluation in the currency. And uh, clearlyly there there 166 00:09:17,320 --> 00:09:20,640 Speaker 1: was some calculus that they were willing to withstand that pain. 167 00:09:20,760 --> 00:09:24,520 Speaker 1: So that's what people were applying that same logic to 168 00:09:24,600 --> 00:09:27,600 Speaker 1: that huge pile of treasuries. It would still hurt, but 169 00:09:27,720 --> 00:09:29,959 Speaker 1: it would send a pretty big message to the U 170 00:09:30,040 --> 00:09:32,320 Speaker 1: S too. So, Katie, the trends that we've seen in 171 00:09:32,400 --> 00:09:35,520 Speaker 1: terms of treasury auctions recently, there's been Uh, I know 172 00:09:35,559 --> 00:09:37,040 Speaker 1: that you've been following a little bit of kind of 173 00:09:37,040 --> 00:09:39,760 Speaker 1: the TIC data and that sort of stuff as well. Um, 174 00:09:39,840 --> 00:09:42,520 Speaker 1: how can we sort of draw a line between China's 175 00:09:42,559 --> 00:09:46,520 Speaker 1: behavior and actually buying versus holding treasuries. I mean, it 176 00:09:46,600 --> 00:09:48,560 Speaker 1: does seem as if they've stepped back from auctions a 177 00:09:48,600 --> 00:09:50,280 Speaker 1: little bit. That seems to be the theory, although it's 178 00:09:50,280 --> 00:09:52,080 Speaker 1: hard to trace. What what kind of clarity do we 179 00:09:52,120 --> 00:09:55,400 Speaker 1: have on that? Well, we spoke to Sebastian Gallle at 180 00:09:55,400 --> 00:09:57,720 Speaker 1: NORDAIA and he said he will be watching the US 181 00:09:57,760 --> 00:10:01,160 Speaker 1: treasury auctions for any signs of back. Of course, it's 182 00:10:01,160 --> 00:10:04,800 Speaker 1: a little murky there because China can bid directly indirectly. 183 00:10:05,280 --> 00:10:06,920 Speaker 1: But I mean, even with that in mind, if you 184 00:10:06,960 --> 00:10:09,120 Speaker 1: just look at the bid for treasuries over the past week, 185 00:10:09,320 --> 00:10:12,320 Speaker 1: clearly there's been demand. Maybe it's not from China, but 186 00:10:12,720 --> 00:10:15,679 Speaker 1: people are really looking to scoop up treasuries here, Cameroon, 187 00:10:15,760 --> 00:10:17,800 Speaker 1: let's bring you in on sort of both of the 188 00:10:17,880 --> 00:10:20,440 Speaker 1: things Katie was just talking about. You know, A, is 189 00:10:20,480 --> 00:10:24,880 Speaker 1: this nuclear option science fiction? Uh? And be talk about 190 00:10:24,920 --> 00:10:28,600 Speaker 1: that level of seven you want to the US dollar? Um? 191 00:10:28,760 --> 00:10:31,960 Speaker 1: Was it actually that sort of magic number being crossed 192 00:10:32,040 --> 00:10:34,480 Speaker 1: or was it more basically that big rate of change 193 00:10:34,840 --> 00:10:37,080 Speaker 1: in the weakening that we saw on Monday that sort 194 00:10:37,080 --> 00:10:39,520 Speaker 1: of spooked out the rest of the markets? Well, the 195 00:10:39,600 --> 00:10:43,000 Speaker 1: treasury sales stories nonsense, um. And people have been talking 196 00:10:43,040 --> 00:10:47,320 Speaker 1: about this sort of thing happening for a dozen years. UM. 197 00:10:47,320 --> 00:10:49,520 Speaker 1: We do have a little evidence of it happening in 198 00:10:49,520 --> 00:10:53,440 Speaker 1: the past with Russia, who basically completely pulled out of 199 00:10:53,520 --> 00:10:56,400 Speaker 1: the US fixed income market um, and really ran down 200 00:10:56,440 --> 00:11:00,760 Speaker 1: their holdings of treasuries a couple of years when they 201 00:11:00,760 --> 00:11:03,000 Speaker 1: had some sanctions apply to them. But the thing is 202 00:11:03,120 --> 00:11:06,200 Speaker 1: that China's stock of treasuries is so big there's literally 203 00:11:06,200 --> 00:11:08,920 Speaker 1: nowhere else they can put it. Okay, they can't put 204 00:11:08,920 --> 00:11:11,280 Speaker 1: it in European fixed income A because the Payson negative 205 00:11:11,360 --> 00:11:14,520 Speaker 1: yield and be because there's just not enough bonds for 206 00:11:14,559 --> 00:11:16,360 Speaker 1: them to buy. So where are they going to put 207 00:11:16,360 --> 00:11:18,680 Speaker 1: the dough? Are they gonna you know, get one of 208 00:11:18,720 --> 00:11:22,240 Speaker 1: their diggers there that they're using to dig holes, uh 209 00:11:22,280 --> 00:11:25,600 Speaker 1: for for infrastructure and just put a trillion dollars in 210 00:11:25,640 --> 00:11:27,720 Speaker 1: a hole and hire some guys, you know, hire some 211 00:11:27,800 --> 00:11:29,720 Speaker 1: guys to to guard it. Now, of course not well, 212 00:11:29,760 --> 00:11:32,000 Speaker 1: but yeah, but say hypothetically they didn't unload it all 213 00:11:32,040 --> 00:11:35,679 Speaker 1: at once, they sold a couple hundred billion, you know, 214 00:11:35,960 --> 00:11:39,600 Speaker 1: big block trade one day at at a market. Would uh, 215 00:11:39,880 --> 00:11:41,920 Speaker 1: you know, wouldn't that be enough to sort of get 216 00:11:41,960 --> 00:11:45,480 Speaker 1: Donald Trump's attention? I mean, yeah, I theoretically, I suppose. 217 00:11:45,559 --> 00:11:48,040 Speaker 1: But if it also were to submarine the value of 218 00:11:48,080 --> 00:11:51,360 Speaker 1: their existing holdings, and let's fay, I mean, let's let's 219 00:11:51,360 --> 00:11:55,280 Speaker 1: remember that a lot of these holdings are kind of 220 00:11:55,320 --> 00:11:57,640 Speaker 1: they're trying to make some money off of it. Uh, 221 00:11:57,720 --> 00:12:00,400 Speaker 1: you know, it's kind of cutting off your nose to 222 00:12:00,440 --> 00:12:02,760 Speaker 1: despite your face a little bit in terms of seven 223 00:12:02,760 --> 00:12:04,319 Speaker 1: of you want. Yeah, I mean it's a it was 224 00:12:04,360 --> 00:12:07,600 Speaker 1: a big psychological level. I mean, people in the West, 225 00:12:07,679 --> 00:12:10,199 Speaker 1: we all like to think of the function and all 226 00:12:10,240 --> 00:12:14,439 Speaker 1: the sort of the mystical Chinese cultural things, but apparently 227 00:12:14,520 --> 00:12:20,320 Speaker 1: eight is the real mystical number. Seven seven seven doesn't 228 00:12:20,320 --> 00:12:25,280 Speaker 1: really hold much numerological allure, so there's no sort of 229 00:12:25,360 --> 00:12:29,520 Speaker 1: hidden messages there. Um. Yeah, they did defend that level. Well, 230 00:12:29,559 --> 00:12:32,040 Speaker 1: it's not so so much defending it as they just 231 00:12:32,080 --> 00:12:34,880 Speaker 1: didn't you know, they didn't put the fix close enough 232 00:12:34,880 --> 00:12:38,640 Speaker 1: to it that, um, the freely traded market would would 233 00:12:38,640 --> 00:12:42,160 Speaker 1: push through it. That's obviously change, and it is a 234 00:12:42,240 --> 00:12:46,120 Speaker 1: rational response to the tariff threat. The way that China 235 00:12:46,160 --> 00:12:48,280 Speaker 1: can offset some of the impact of tariffs is to 236 00:12:48,320 --> 00:12:51,440 Speaker 1: make the currency, um, make the currency more competitive, and 237 00:12:51,440 --> 00:12:54,480 Speaker 1: if it comes in a context where it's not so 238 00:12:54,520 --> 00:12:59,400 Speaker 1: severe that encourages capital flight. Um. Then for their perspective, 239 00:12:59,440 --> 00:13:02,320 Speaker 1: it's a it's sort of a winning strategy. And you know, 240 00:13:02,360 --> 00:13:05,719 Speaker 1: ask for the United States labeling them a currency manipulator. 241 00:13:06,240 --> 00:13:08,640 Speaker 1: It's kind of like you've seen the movie Team America 242 00:13:09,040 --> 00:13:11,679 Speaker 1: where Hans Blix is there in North Korea and he 243 00:13:11,760 --> 00:13:13,839 Speaker 1: said we're very angry with you, and we're gonna write 244 00:13:13,840 --> 00:13:16,600 Speaker 1: you an angry letter that essentially all that it entails 245 00:13:17,160 --> 00:13:24,720 Speaker 1: is the US from Tea America. This is a family podcast. Uh, 246 00:13:24,800 --> 00:13:28,000 Speaker 1: you know, it's essentially wagons. It's an angry wagging, an 247 00:13:28,000 --> 00:13:32,240 Speaker 1: angry finger, um and and and nothing else. Um. But 248 00:13:32,320 --> 00:13:36,560 Speaker 1: what is interesting actually is that the one has not 249 00:13:36,679 --> 00:13:38,839 Speaker 1: only fixed too in sort of a new low against 250 00:13:38,840 --> 00:13:41,560 Speaker 1: the dollar, but on his broad basket, and that has 251 00:13:41,600 --> 00:13:44,319 Speaker 1: impact throughout the rest of the world. And we've already 252 00:13:44,360 --> 00:13:48,080 Speaker 1: seen this week some of this impact materialized with sort 253 00:13:48,120 --> 00:13:52,120 Speaker 1: of surprising rape cuts in a number of central banks 254 00:13:52,559 --> 00:13:55,680 Speaker 1: in in the Asian region. The Kiwis did fifty instead 255 00:13:55,679 --> 00:13:59,760 Speaker 1: of the expected rb I, preserved Bankiviny at thirty five 256 00:13:59,760 --> 00:14:03,640 Speaker 1: by the expected, and Bank of Thailand out of sort 257 00:14:03,640 --> 00:14:08,319 Speaker 1: of thin air that no one expected. So it's, you know, unfortunately, 258 00:14:08,360 --> 00:14:11,160 Speaker 1: going back to the original question, Mike, we are kind 259 00:14:11,160 --> 00:14:14,199 Speaker 1: of seeing the shots fired in a currency war. And 260 00:14:14,240 --> 00:14:17,839 Speaker 1: the problem is is that if everyone cuts rates to 261 00:14:17,960 --> 00:14:21,160 Speaker 1: weaken their currency, when you know, we're not on the 262 00:14:21,200 --> 00:14:24,200 Speaker 1: gold standard, the whole world can't devalue against sort of 263 00:14:24,240 --> 00:14:27,520 Speaker 1: a central peg. If everybody wants a weaker currency and 264 00:14:27,600 --> 00:14:30,720 Speaker 1: cuts rates to deliver it. All you're gonna end up 265 00:14:31,160 --> 00:14:34,160 Speaker 1: is essentially right back where you started on a relative basis, 266 00:14:34,520 --> 00:14:38,920 Speaker 1: except with less ammunition in terms of conventional rate cuts 267 00:14:39,280 --> 00:14:42,840 Speaker 1: to fight against the next global recession. So it's it's 268 00:14:42,840 --> 00:15:00,320 Speaker 1: a pretty stupid policy in my opinion, just if we 269 00:15:00,360 --> 00:15:03,080 Speaker 1: can backtrack to slightly, because I think this currency manipulator 270 00:15:03,120 --> 00:15:06,880 Speaker 1: label is is interesting just from a political standpoint. Clearly 271 00:15:07,280 --> 00:15:11,120 Speaker 1: the criteria aren't quite there right now, nowhere near there. 272 00:15:11,240 --> 00:15:14,120 Speaker 1: So does this leave us in a really strange position 273 00:15:14,160 --> 00:15:16,560 Speaker 1: where the government is now in the US is now 274 00:15:16,680 --> 00:15:19,640 Speaker 1: kind of faced with a year of testing and and 275 00:15:20,320 --> 00:15:21,960 Speaker 1: you know, thinking about whether or not this is a 276 00:15:22,040 --> 00:15:25,720 Speaker 1: viable thing. What is the actual practical implication If it's 277 00:15:25,720 --> 00:15:27,240 Speaker 1: possible that they're not going to be found to be 278 00:15:27,280 --> 00:15:30,720 Speaker 1: a currency manipulator, what's the what's the upshot of Well, 279 00:15:31,120 --> 00:15:34,400 Speaker 1: they they were found. Obviously I don't have insight information, 280 00:15:34,440 --> 00:15:39,080 Speaker 1: but I'm strongly suspect that the state of play was 281 00:15:39,120 --> 00:15:42,680 Speaker 1: that Donald Trump called up Steve Manusian and said, we're 282 00:15:42,720 --> 00:15:46,240 Speaker 1: calling the most currency manipulator. And that was that because 283 00:15:46,320 --> 00:15:49,240 Speaker 1: certainly on the basis of the criteria that the Treasury 284 00:15:49,240 --> 00:15:52,520 Speaker 1: has been using in their semi annual report China. The 285 00:15:52,640 --> 00:15:55,480 Speaker 1: level of intervention that China conduct which has basically been 286 00:15:55,600 --> 00:15:58,040 Speaker 1: zero over the last several years on a net basis, 287 00:15:58,800 --> 00:16:01,040 Speaker 1: is nowhere near where it needs to be, which I 288 00:16:01,040 --> 00:16:03,480 Speaker 1: think is two percent of gdp UM to be called 289 00:16:03,480 --> 00:16:06,720 Speaker 1: a currency manipulator. So I think Trump had tweeted out 290 00:16:06,720 --> 00:16:09,960 Speaker 1: earlier that day that China was manipulating its currency isn't 291 00:16:10,000 --> 00:16:12,040 Speaker 1: as awful, and I think he just rang up monutions 292 00:16:12,040 --> 00:16:14,440 Speaker 1: said alright, bang, let's yeah, let's do it. Let's do 293 00:16:14,520 --> 00:16:17,200 Speaker 1: this thing. Um. In terms of the practical implications, as 294 00:16:17,240 --> 00:16:19,760 Speaker 1: I said, it's kind of just writing an angry letter 295 00:16:19,760 --> 00:16:23,360 Speaker 1: of waving of finger and in in in disgust. The 296 00:16:23,480 --> 00:16:26,480 Speaker 1: literal interpretation of the law is that they are supposed 297 00:16:26,520 --> 00:16:29,440 Speaker 1: to consult with the I m F and with China 298 00:16:29,520 --> 00:16:34,040 Speaker 1: hold talks about fixing this bilateral misalignment. But as we know, 299 00:16:34,360 --> 00:16:37,680 Speaker 1: China and the United States are already engaged in sporadic 300 00:16:37,760 --> 00:16:40,040 Speaker 1: trade talks of which the currency is one of the 301 00:16:40,680 --> 00:16:44,040 Speaker 1: one of the issues. I don't think anyone expects Donald 302 00:16:44,040 --> 00:16:46,160 Speaker 1: Trump to call him the I m F to adjudicate 303 00:16:46,560 --> 00:16:50,600 Speaker 1: a dispute, because he's a master negotiator. So other than 304 00:16:51,960 --> 00:16:54,320 Speaker 1: let's said about that the better, but but other than 305 00:16:54,360 --> 00:16:57,720 Speaker 1: a diplomatic sort of chip that's now been kind of 306 00:16:57,800 --> 00:16:59,800 Speaker 1: handed those. Yeah, that's the thing. Yeah, that the I 307 00:17:00,000 --> 00:17:03,160 Speaker 1: and it is that it's now been played. And insofar 308 00:17:03,240 --> 00:17:07,000 Speaker 1: as China was worried about weakening the currency so they could, 309 00:17:07,119 --> 00:17:09,280 Speaker 1: you know, because I didn't want to be called a manipulator, 310 00:17:09,359 --> 00:17:11,399 Speaker 1: Well now they've been called a manipulator. So what's to 311 00:17:11,440 --> 00:17:16,720 Speaker 1: stop them from weakening the currency even further? There really 312 00:17:16,760 --> 00:17:19,800 Speaker 1: isn't it. I wanted to get back to something you 313 00:17:20,000 --> 00:17:23,400 Speaker 1: mentioned earlier, which was these shock rate cuts we saw 314 00:17:23,440 --> 00:17:26,720 Speaker 1: this week. Well maybe not shocked, but India, Thailand, New 315 00:17:26,800 --> 00:17:30,600 Speaker 1: Zealand all cut a little bit more than what the 316 00:17:30,960 --> 00:17:35,080 Speaker 1: markets were expecting. We saw this uh, ferocious rally in 317 00:17:35,280 --> 00:17:39,200 Speaker 1: bonds the world over in the wake of that. Now 318 00:17:40,320 --> 00:17:45,040 Speaker 1: we're having people openly discussed and with a straight face, seriously, 319 00:17:45,080 --> 00:17:48,760 Speaker 1: the idea of negative treasury yields in the US. You know, 320 00:17:48,800 --> 00:17:52,000 Speaker 1: I know you've written before. Eventually people are going to 321 00:17:52,119 --> 00:17:54,600 Speaker 1: just dig a hole and put their money in a hole. 322 00:17:55,400 --> 00:17:57,800 Speaker 1: I mean, is there a real risk of sort of 323 00:17:57,840 --> 00:18:00,760 Speaker 1: a major banking crisis if that, if if rates are 324 00:18:00,800 --> 00:18:03,680 Speaker 1: to get too low, and especially say deposit rates on 325 00:18:03,680 --> 00:18:07,439 Speaker 1: on savings accounts get deeply negative. I mean, how do 326 00:18:07,480 --> 00:18:11,120 Speaker 1: you see this all going? If people predicting negative rates 327 00:18:11,160 --> 00:18:15,800 Speaker 1: in the US are correct, well, I mean, we're all 328 00:18:15,840 --> 00:18:20,040 Speaker 1: gonna have to find new jobs because frankly, there won't 329 00:18:20,080 --> 00:18:22,359 Speaker 1: be very many Bloomberg terminal silver because a lot of 330 00:18:22,400 --> 00:18:23,879 Speaker 1: a lot of people in our industry will be out 331 00:18:23,920 --> 00:18:28,959 Speaker 1: of work. Um, the US is a very highly financialized economy. 332 00:18:29,440 --> 00:18:32,640 Speaker 1: The money mark in industry by itself still runs three 333 00:18:32,720 --> 00:18:37,639 Speaker 1: trillion dollars. If you basically impose negative yields at the 334 00:18:37,640 --> 00:18:39,840 Speaker 1: short end of the curve, and that's the only place 335 00:18:39,880 --> 00:18:43,520 Speaker 1: that these money market funds can operate, then why would 336 00:18:43,560 --> 00:18:46,840 Speaker 1: I pay somebody you know a dollar today to get 337 00:18:47,160 --> 00:18:49,080 Speaker 1: cents back in a year's time because he might get 338 00:18:49,160 --> 00:18:51,679 Speaker 1: less otherwise? Well, no, I'll dig a hole. I mean literally, 339 00:18:52,520 --> 00:18:55,960 Speaker 1: I'll buy a safe and dig a hole in the ground. Um, 340 00:18:56,040 --> 00:18:59,119 Speaker 1: it's uh, let me, let me, Let me ask you 341 00:18:59,160 --> 00:19:03,880 Speaker 1: guys a question. Let's turn the tables around. You make 342 00:19:03,920 --> 00:19:07,760 Speaker 1: the okay, all right, So let's say, Um, we're just 343 00:19:07,760 --> 00:19:10,720 Speaker 1: gonna I'm not I don't know what your wealth aspirations are. 344 00:19:11,000 --> 00:19:13,160 Speaker 1: But let's say that you wanted to have a million 345 00:19:13,160 --> 00:19:16,440 Speaker 1: dollars in twenty years. Whatever your income is. UH, say 346 00:19:16,480 --> 00:19:18,960 Speaker 1: you make a hunder grand a year, and you've got whatever, 347 00:19:19,720 --> 00:19:23,320 Speaker 1: kids and mortgages and all body body bob um and you. 348 00:19:23,359 --> 00:19:25,320 Speaker 1: So you save a little bit every every you know, 349 00:19:25,600 --> 00:19:27,919 Speaker 1: every month. You want to have a million dollars in 350 00:19:28,080 --> 00:19:31,720 Speaker 1: twenty years time. If interest rates are five percent, consider 351 00:19:31,760 --> 00:19:34,520 Speaker 1: how much money you would have to save every month 352 00:19:34,800 --> 00:19:38,199 Speaker 1: for twenty years to get that million dollars. Now, consider 353 00:19:38,240 --> 00:19:40,680 Speaker 1: how much you have to save if rates were minus one. 354 00:19:41,480 --> 00:19:44,600 Speaker 1: Would you save more or would you save less? Would 355 00:19:44,600 --> 00:19:47,359 Speaker 1: you spend more? Would you spend less? I would argue 356 00:19:47,840 --> 00:19:50,960 Speaker 1: very strongly that you would spend less and save more 357 00:19:51,480 --> 00:19:55,119 Speaker 1: because you aren't gonna get capital returns, or you're not 358 00:19:55,160 --> 00:19:59,000 Speaker 1: gonna get returns interest returns um from that you would 359 00:19:59,040 --> 00:20:03,440 Speaker 1: have had if you if ray where I say five um. 360 00:20:03,600 --> 00:20:06,520 Speaker 1: So I think this idea that negative rates are going 361 00:20:06,600 --> 00:20:11,440 Speaker 1: to sort of spur consumption and reflate the economy. There's 362 00:20:11,480 --> 00:20:14,199 Speaker 1: been no empirical evidence that's happened in Japan. There's been 363 00:20:14,200 --> 00:20:17,000 Speaker 1: no empirical evidence that's happened in Switzerland. There's been no 364 00:20:17,119 --> 00:20:19,840 Speaker 1: empirical evidence that's happened in Europe. So the idea that 365 00:20:19,880 --> 00:20:22,760 Speaker 1: it's somehow a good idea in the United States it's 366 00:20:22,800 --> 00:20:25,479 Speaker 1: frankly absurd. Look at the banks in Europe, look at 367 00:20:25,480 --> 00:20:27,800 Speaker 1: the banks in Japan, and look at the banks in 368 00:20:27,800 --> 00:20:30,159 Speaker 1: the United States. One of these things is not like 369 00:20:30,240 --> 00:20:34,600 Speaker 1: the other. Uh. The U S banks have done demonstrably 370 00:20:34,640 --> 00:20:37,000 Speaker 1: better than banks in other parts of the world. I've 371 00:20:37,040 --> 00:20:40,879 Speaker 1: had negative interest rates. Ask yourself why. Well, on that note, 372 00:20:41,040 --> 00:20:44,760 Speaker 1: I think it's time to talk about the craziest things 373 00:20:44,880 --> 00:20:48,520 Speaker 1: we've all seen this week in markets, and I'm gonna 374 00:20:48,560 --> 00:20:50,760 Speaker 1: start with a call we got into the hotline from 375 00:20:51,240 --> 00:20:55,359 Speaker 1: a character on Twitter known as Twiggy Sunday. Let's listen 376 00:20:55,560 --> 00:20:57,600 Speaker 1: to what he believed to be the craziest thing he 377 00:20:57,640 --> 00:20:59,640 Speaker 1: saw in markets this week, because I got amit. It's 378 00:20:59,640 --> 00:21:02,960 Speaker 1: pretty goo. The tip of the hat goes to Tracy Alloway, 379 00:21:03,040 --> 00:21:07,439 Speaker 1: who quoted at Quantaine stating that the biggest TTF in 380 00:21:07,440 --> 00:21:10,600 Speaker 1: the world, s p Y, is organized around a secret 381 00:21:10,640 --> 00:21:15,040 Speaker 1: list of eleven individuals age to twenty nine, and upon 382 00:21:15,080 --> 00:21:18,119 Speaker 1: their death, the trust will be forced to delist liquid 383 00:21:18,160 --> 00:21:21,520 Speaker 1: date and distributed its assets. I have no idea whether 384 00:21:21,600 --> 00:21:24,280 Speaker 1: this is true. But if it's my definition of bonkers, 385 00:21:26,080 --> 00:21:28,560 Speaker 1: that really does fit a definition of bonkers, I have 386 00:21:28,600 --> 00:21:31,119 Speaker 1: to agree with Twiggy on that, and he's wondering if 387 00:21:31,160 --> 00:21:33,360 Speaker 1: it's true and in fact is true. I asked our 388 00:21:33,760 --> 00:21:36,800 Speaker 1: et F guru here, Eric Valcunas, about this, and he said, 389 00:21:37,200 --> 00:21:40,119 Speaker 1: it is technically true with a lot of E T 390 00:21:40,240 --> 00:21:42,360 Speaker 1: F s um, but it has to do with some 391 00:21:42,680 --> 00:21:46,360 Speaker 1: arcane nuances of securities laws. But let me just read 392 00:21:46,400 --> 00:21:49,400 Speaker 1: you the documents here. The trust is scheduled to terminate 393 00:21:49,480 --> 00:21:54,879 Speaker 1: on the first to occur of a January or b 394 00:21:55,560 --> 00:21:58,080 Speaker 1: the date twenty years after the death of the last 395 00:21:58,080 --> 00:22:01,159 Speaker 1: survivor of eleven persons named in the trust agreement, the 396 00:22:01,160 --> 00:22:03,240 Speaker 1: oldest of whom was born in nineteen ninety and the 397 00:22:03,280 --> 00:22:07,480 Speaker 1: youngest of whom was born in ninete. So I imagine 398 00:22:07,560 --> 00:22:11,000 Speaker 1: they'll fix that when eighteen were the death of those 399 00:22:11,040 --> 00:22:15,000 Speaker 1: people approaches. But I don't think anyone knows who these 400 00:22:15,000 --> 00:22:18,840 Speaker 1: people are. It's a very very bizarre thing in the 401 00:22:18,840 --> 00:22:23,080 Speaker 1: weeds of the spy, the biggest et F in the land. Um, 402 00:22:23,280 --> 00:22:26,960 Speaker 1: So good work Twiggy Sunday on that anyway, kemeron that 403 00:22:26,960 --> 00:22:29,960 Speaker 1: one's gonna be hard to top. But let's hear what 404 00:22:30,000 --> 00:22:31,960 Speaker 1: you've seen this week. What's the craziest thing you've seen 405 00:22:32,000 --> 00:22:36,480 Speaker 1: this week? Oh man, I'm in I'm sorry, this is boring. 406 00:22:37,119 --> 00:22:42,399 Speaker 1: I mean, twenty year Danish mortgage bonds offering a negative yield, 407 00:22:42,560 --> 00:22:46,800 Speaker 1: you know, issued in a negative yield um. The yield 408 00:22:46,880 --> 00:22:51,560 Speaker 1: on the European UM investment Grade Aggregate index went negative. 409 00:22:51,640 --> 00:22:54,639 Speaker 1: And that's the next that includes yes, government bonds, but 410 00:22:54,720 --> 00:22:59,120 Speaker 1: also investment grade corporate bonds. If you look at the list, 411 00:22:59,200 --> 00:23:01,960 Speaker 1: I looked at the stuff. Every single bond in the 412 00:23:02,000 --> 00:23:07,159 Speaker 1: European corporate universe, there's like hundred bonds more than the 413 00:23:07,200 --> 00:23:12,960 Speaker 1: thousand of them have negative yields. It's I mean, it's 414 00:23:13,000 --> 00:23:17,560 Speaker 1: not even it's not even Wonderland or Oz because uh 415 00:23:17,880 --> 00:23:21,480 Speaker 1: that those those countries are too normal for the for 416 00:23:21,920 --> 00:23:23,960 Speaker 1: what's going on here. I'm not, and I know it's 417 00:23:23,960 --> 00:23:27,480 Speaker 1: not exactly new, but it's just it's just every every 418 00:23:27,560 --> 00:23:29,720 Speaker 1: day I come in and I feel like I've dropped 419 00:23:29,720 --> 00:23:33,280 Speaker 1: an anvil in my foot. You'll get desensitized the anvil. Though, 420 00:23:34,200 --> 00:23:36,680 Speaker 1: I got to say, the Danish mortgage bonds, I don't 421 00:23:36,680 --> 00:23:40,480 Speaker 1: think I would ever have guessed that mortgage bonds, mortgage 422 00:23:40,520 --> 00:23:43,040 Speaker 1: bonds would would go next. Now I did get I 423 00:23:43,080 --> 00:23:45,200 Speaker 1: wrote something about this, and I did get feedback from 424 00:23:45,200 --> 00:23:49,439 Speaker 1: a Danish reader who said that the mortgages themselves I 425 00:23:49,520 --> 00:23:52,000 Speaker 1: was gonna, I was wondering, are the effective right? And 426 00:23:52,040 --> 00:23:57,159 Speaker 1: the mortgages themselves are not zero or negative because there's 427 00:23:57,200 --> 00:24:02,280 Speaker 1: a fee here and h you know, um punitive little 428 00:24:02,359 --> 00:24:06,480 Speaker 1: thing there. So it still makes sense for the banks 429 00:24:06,520 --> 00:24:10,479 Speaker 1: to issue these these these bonds at negative yield. Uh. 430 00:24:10,520 --> 00:24:14,280 Speaker 1: And they're getting snapped up by European and Japanese investors 431 00:24:15,000 --> 00:24:17,720 Speaker 1: because you know, I can get zero here minus five 432 00:24:17,800 --> 00:24:23,520 Speaker 1: days was point here versus minus eighty there? Well minus 433 00:24:23,560 --> 00:24:27,720 Speaker 1: five Emily, can you top negative yielding Danish mortgage bond? 434 00:24:28,040 --> 00:24:31,440 Speaker 1: I can't even say it, Danish, Katie, can you say 435 00:24:31,520 --> 00:24:37,640 Speaker 1: Danish seven times? I feel like I'm the Swedish chef? 436 00:24:38,560 --> 00:24:40,640 Speaker 1: Oh that would be great? Um well, funny enough, mine 437 00:24:40,640 --> 00:24:43,480 Speaker 1: also has a negative flavor. But this one is just 438 00:24:43,560 --> 00:24:48,040 Speaker 1: about this bump that the German tenure bunt yield got. 439 00:24:48,359 --> 00:24:51,000 Speaker 1: And this was from some sort of a misleading headline 440 00:24:51,040 --> 00:24:54,200 Speaker 1: that was saying the government was considering raising more debt, 441 00:24:54,480 --> 00:24:57,440 Speaker 1: which it obviously does very little love um to fund 442 00:24:57,520 --> 00:25:01,040 Speaker 1: efforts to tackle climate change, and so the tenure went 443 00:25:01,200 --> 00:25:04,520 Speaker 1: from negative fifty eight basis points to negative fifty three. 444 00:25:05,040 --> 00:25:06,840 Speaker 1: And that kind of begs the question that if you 445 00:25:06,880 --> 00:25:08,919 Speaker 1: could do it for that, why wouldn't you then start 446 00:25:09,000 --> 00:25:11,600 Speaker 1: raising some money. And that's right, Why if you can 447 00:25:11,800 --> 00:25:15,600 Speaker 1: raise money and get paid for it, why not I agree, 448 00:25:15,760 --> 00:25:17,520 Speaker 1: and I would put out that headline I think said 449 00:25:17,680 --> 00:25:20,520 Speaker 1: the government in Germany was mulling something. I you know, 450 00:25:20,720 --> 00:25:22,879 Speaker 1: I hate. I don't think we're allowed to give trading advice, 451 00:25:22,960 --> 00:25:25,600 Speaker 1: but personally I would never trade on any story about 452 00:25:25,640 --> 00:25:28,879 Speaker 1: someone mulling anything. Yeah, that's that's the word to the wise. 453 00:25:28,880 --> 00:25:30,919 Speaker 1: The other the other quick one that I have is 454 00:25:31,200 --> 00:25:34,399 Speaker 1: UM is an interesting headline based one as well. UM 455 00:25:34,480 --> 00:25:37,560 Speaker 1: that there was a story out from this zero hedge 456 00:25:38,119 --> 00:25:42,399 Speaker 1: UM saying that they had been contacted urgently like this 457 00:25:42,480 --> 00:25:45,120 Speaker 1: was in the subject line by a FED researcher who 458 00:25:45,119 --> 00:25:46,840 Speaker 1: was looking for a piece of analysis as a cell 459 00:25:46,880 --> 00:25:50,199 Speaker 1: side analysis that they quoted in a story earlier that day. 460 00:25:50,359 --> 00:25:53,120 Speaker 1: And the analysis was on the possibility of the FED 461 00:25:53,240 --> 00:25:55,960 Speaker 1: needing to launch QUI as soon as the fourth quarter 462 00:25:56,400 --> 00:25:58,480 Speaker 1: to show up liquidity in the market. And so this 463 00:25:58,600 --> 00:26:01,600 Speaker 1: caused a bit of a stir and they said, you know, actually, 464 00:26:01,600 --> 00:26:04,560 Speaker 1: probably if the fit needs to find sell side analysis, 465 00:26:04,600 --> 00:26:10,040 Speaker 1: they can find it somewhere out of Okay, not bad, Katie. 466 00:26:10,080 --> 00:26:11,720 Speaker 1: What do you have first? So I'm going to take 467 00:26:11,840 --> 00:26:13,439 Speaker 1: us on a bit of a tangent, but I'm going 468 00:26:13,480 --> 00:26:16,280 Speaker 1: to bring it back to market. So just buckle up. 469 00:26:16,640 --> 00:26:18,520 Speaker 1: So this is a story that's near and dear to 470 00:26:18,600 --> 00:26:23,000 Speaker 1: my heart since I grew up in Westfield, New Jersey. 471 00:26:23,040 --> 00:26:26,159 Speaker 1: Oh yeah, but there's this great article Thursday on the 472 00:26:26,280 --> 00:26:29,720 Speaker 1: terminal and the headline is NJ couple spooked by watcher. 473 00:26:30,119 --> 00:26:33,760 Speaker 1: So one point four million home at loss. Oh I 474 00:26:33,800 --> 00:26:38,480 Speaker 1: know the watcher. Do you know who he is? No 475 00:26:38,760 --> 00:26:40,800 Speaker 1: one knows who he is, But go on, go on, 476 00:26:41,000 --> 00:26:44,760 Speaker 1: I want to hear your So in this idyllic neighborhood 477 00:26:44,760 --> 00:26:47,560 Speaker 1: in Westfield, this there's this beautiful house. It looks to 478 00:26:47,600 --> 00:26:52,000 Speaker 1: be yellow, and the family bought the home in and 479 00:26:52,200 --> 00:26:55,880 Speaker 1: has just been getting creepy, spooky letters from a man 480 00:26:55,960 --> 00:26:58,720 Speaker 1: who calls I assume it's a man I shouldn't by 481 00:26:58,840 --> 00:27:02,800 Speaker 1: someone who calls himself the watcher, talking about the couple's kids, 482 00:27:02,800 --> 00:27:05,120 Speaker 1: how he's just been watching them. As you can tell 483 00:27:05,160 --> 00:27:09,560 Speaker 1: from the name, and they tried to sue the previous homeowners. 484 00:27:09,560 --> 00:27:13,080 Speaker 1: Since the Watchers followed the house around, they apparently got 485 00:27:13,160 --> 00:27:18,080 Speaker 1: letters as well, and the lawsuit was dismissed and they 486 00:27:18,080 --> 00:27:20,080 Speaker 1: had to sell the home. They never moved in, and 487 00:27:20,119 --> 00:27:22,720 Speaker 1: they sold it for less than a million dollars after 488 00:27:22,800 --> 00:27:26,359 Speaker 1: buying it at one point four million five years ago. 489 00:27:26,560 --> 00:27:29,439 Speaker 1: So they knocked off half a million dollars off the price. 490 00:27:29,600 --> 00:27:32,600 Speaker 1: They sure did. I suspect whoever bid on that house 491 00:27:32,680 --> 00:27:37,600 Speaker 1: is the Watchers. Yeah, this email them. But so my 492 00:27:37,720 --> 00:27:41,119 Speaker 1: point is, if that's all it takes to knock half 493 00:27:41,160 --> 00:27:43,920 Speaker 1: a million dollars off the houses price, I don't think 494 00:27:43,960 --> 00:27:46,520 Speaker 1: that's pretty bad for the real estate market. It's that 495 00:27:46,640 --> 00:27:49,159 Speaker 1: easy to drive down the value. And if you're worried 496 00:27:49,200 --> 00:27:51,679 Speaker 1: bonds are ever priced, maybe send some spooky letters to 497 00:27:51,960 --> 00:27:54,000 Speaker 1: the Treasury Department. You never know. It's kind of a 498 00:27:54,040 --> 00:27:57,399 Speaker 1: Scooby Doo kind of plot, right, Yeah, get away with 499 00:27:57,440 --> 00:28:00,679 Speaker 1: that one. You guys should read about it though, because, um, 500 00:28:00,760 --> 00:28:02,920 Speaker 1: you know, if you look at the court filing, you 501 00:28:02,960 --> 00:28:06,560 Speaker 1: can see the letters themselves, and they're they're pretty it is. 502 00:28:06,640 --> 00:28:09,159 Speaker 1: It's an amazing story that New York Magazine had a 503 00:28:09,200 --> 00:28:11,439 Speaker 1: story I think three or four years ago about it, 504 00:28:11,520 --> 00:28:14,639 Speaker 1: so so google that it's a crazy story. These crazy 505 00:28:14,680 --> 00:28:16,600 Speaker 1: things are all very hard to top. I'm not even 506 00:28:16,720 --> 00:28:18,720 Speaker 1: going to attempt a crazy thing this week. I'll be 507 00:28:18,720 --> 00:28:20,920 Speaker 1: back next week with my craziest things maybe of the 508 00:28:21,000 --> 00:28:23,720 Speaker 1: last two weeks. I will also point out Emily that 509 00:28:23,840 --> 00:28:27,119 Speaker 1: Sarah pon Zac, my co host who you're filling in for, 510 00:28:27,359 --> 00:28:30,640 Speaker 1: is on vacation this week. She actually called the hotline 511 00:28:31,040 --> 00:28:35,320 Speaker 1: to offer the craziest thing she's seen on vacation. It 512 00:28:35,359 --> 00:28:36,960 Speaker 1: was We're going to play it, but I think it's 513 00:28:36,960 --> 00:28:40,320 Speaker 1: a scheme for her to put her whole vacation on 514 00:28:40,480 --> 00:28:43,080 Speaker 1: her expense account, so we better not play it. But 515 00:28:43,200 --> 00:28:46,000 Speaker 1: we'll see Sarah next week, and uh we hope to 516 00:28:46,040 --> 00:28:48,200 Speaker 1: see you all next week as well. Katie Gray felt 517 00:28:48,280 --> 00:28:50,760 Speaker 1: can Christ thanks for joining the show, Thanks for having 518 00:28:50,760 --> 00:28:53,840 Speaker 1: me and Emily, thanks for co hosting. Oh thanks having 519 00:29:00,560 --> 00:29:03,120 Speaker 1: what Goes Up. Will be back next week. Until then, 520 00:29:03,200 --> 00:29:05,560 Speaker 1: you can find us on the Bloomberg Terminal, website and 521 00:29:05,640 --> 00:29:09,040 Speaker 1: app where wherever you get your podcasts. We'd love it 522 00:29:09,080 --> 00:29:10,880 Speaker 1: if you took the time to rate us and review 523 00:29:10,920 --> 00:29:14,080 Speaker 1: the show on Apple Podcasts so more listeners can find us. 524 00:29:14,840 --> 00:29:17,320 Speaker 1: And you can find us on Twitter follow me at 525 00:29:17,400 --> 00:29:22,560 Speaker 1: reag Anonymous, Emily Barrett is at Not That ECB, Cameron 526 00:29:22,640 --> 00:29:26,560 Speaker 1: christ is at Fifth Rule, and Katie Greifeld is at 527 00:29:26,640 --> 00:29:30,800 Speaker 1: k Greifeld. You can also follow Bloomberg Podcasts at at 528 00:29:30,960 --> 00:29:34,880 Speaker 1: podcasts and that hotline number again is six or six 529 00:29:35,080 --> 00:29:38,680 Speaker 1: three to four three f nine Oh. What Goes Up 530 00:29:38,760 --> 00:29:42,680 Speaker 1: is produced by topur Foreheads. The head of Bloomberg Podcasts 531 00:29:42,760 --> 00:29:46,040 Speaker 1: is Francesco Levy. Thanks for listening. I hope to see 532 00:29:46,040 --> 00:29:56,880 Speaker 1: you next time. Hey guys, it's there upon Zack. I'm 533 00:29:56,920 --> 00:29:59,880 Speaker 1: trying to reach What goes Up. I figure since I'm 534 00:29:59,880 --> 00:30:01,920 Speaker 1: a way on vacation, maybe I would shay the craziest 535 00:30:01,920 --> 00:30:04,680 Speaker 1: thing I've seen while here. So I'm up in the 536 00:30:04,720 --> 00:30:06,840 Speaker 1: Canadian rockies and our first I was going to say 537 00:30:06,920 --> 00:30:09,360 Speaker 1: the lakes, because they're all crazy blue and pretty much 538 00:30:09,680 --> 00:30:11,480 Speaker 1: glow when you look at them. But then I was 539 00:30:11,520 --> 00:30:14,640 Speaker 1: actually thinking, as we were driving along one of the roads, 540 00:30:14,840 --> 00:30:17,280 Speaker 1: we actually saw a couple of black bears, and that 541 00:30:17,320 --> 00:30:19,320 Speaker 1: wasn't the crazy part. The crazy part was that there 542 00:30:19,360 --> 00:30:22,640 Speaker 1: were some families actually getting out of their cars holding 543 00:30:22,680 --> 00:30:25,320 Speaker 1: their kids and their babies next to them, standing about 544 00:30:25,400 --> 00:30:28,960 Speaker 1: five ten feet away from the Bears. So that was 545 00:30:29,240 --> 00:30:32,239 Speaker 1: pretty crazy, maybe a little bit dangerous. Um, But I 546 00:30:32,280 --> 00:30:35,360 Speaker 1: know I'm missing a pretty crazy week back in markets 547 00:30:35,360 --> 00:30:38,440 Speaker 1: as well, and President Trump about field curve, so I'm 548 00:30:38,480 --> 00:30:40,720 Speaker 1: sure when i'm back next week's games will be just 549 00:30:41,000 --> 00:30:42,160 Speaker 1: it's crazy. You have a good show.