1 00:00:13,039 --> 00:00:16,120 Speaker 1: Hello, and welcome to What Goes Up a Bloomberg Weekly 2 00:00:16,200 --> 00:00:19,479 Speaker 1: Markets podcast. I'm Mike Reagan, a senior editor on the 3 00:00:19,480 --> 00:00:22,400 Speaker 1: market scheme at Bloomberg, and I'm Emily Barrett, and markets 4 00:00:22,400 --> 00:00:24,960 Speaker 1: reporter filling in for Pontec this week, who was on 5 00:00:25,079 --> 00:00:28,080 Speaker 1: vacation at this week. On the show, we'll talk about 6 00:00:28,160 --> 00:00:31,320 Speaker 1: how soothing words from the Federal Reserve Chairman Jerome Palell 7 00:00:31,720 --> 00:00:34,600 Speaker 1: sent the SMP five hundred above three thousand for the 8 00:00:34,640 --> 00:00:38,200 Speaker 1: first time, and this record comes despite a rather dismal 9 00:00:38,280 --> 00:00:41,959 Speaker 1: outlook for corporate earnings. Does profit growth even matter when 10 00:00:41,960 --> 00:00:45,240 Speaker 1: the Fed sounds like it's ready to cut rates? Also, 11 00:00:45,360 --> 00:00:49,440 Speaker 1: remember the Winklevoss twins, the bitcoin billionaires and famous nemesses 12 00:00:49,520 --> 00:00:53,080 Speaker 1: of Facebook's Mark Zuckerberg. We'll catch up with what they've 13 00:00:53,120 --> 00:00:55,319 Speaker 1: been up to with a reporter who spent some time 14 00:00:55,360 --> 00:00:58,600 Speaker 1: with them this week. And don't worry, even though Sarah's off, 15 00:00:58,680 --> 00:01:01,960 Speaker 1: We'll continue the tradition of exchanging the craziest things we 16 00:01:02,000 --> 00:01:04,360 Speaker 1: saw in markets. Of course, we would not give up 17 00:01:04,400 --> 00:01:08,040 Speaker 1: that tradition regardless of vacation schedules. Well, we've got some 18 00:01:08,120 --> 00:01:11,280 Speaker 1: great guests here to walk us through the markets this week. 19 00:01:11,319 --> 00:01:14,240 Speaker 1: Emily but I need to ask you grew up in Australia. 20 00:01:14,520 --> 00:01:17,160 Speaker 1: Did anyone listen to Bruce Springstey in Australia or was 21 00:01:17,200 --> 00:01:21,040 Speaker 1: he considered like the poor Man's Men at work? Well, 22 00:01:21,080 --> 00:01:23,640 Speaker 1: you know, between that and what was it Minato, that 23 00:01:23,800 --> 00:01:26,360 Speaker 1: was really where we focused. But Bruce Springsteen, he had 24 00:01:26,360 --> 00:01:31,720 Speaker 1: a little name little definitely. Well, I've got one of 25 00:01:31,800 --> 00:01:35,440 Speaker 1: his classics, Kitty's Back, the song Kitty's Back in my head. 26 00:01:35,480 --> 00:01:39,319 Speaker 1: But instead of Kitty, I keep hearing the name Tina, 27 00:01:39,480 --> 00:01:42,840 Speaker 1: Tina's Back. And that's because of that famous acronym. You know, 28 00:01:42,880 --> 00:01:45,399 Speaker 1: if you're a stock market pundent, you really need to 29 00:01:45,560 --> 00:01:48,279 Speaker 1: coin an acronym to make a name for yourself. And Tina, 30 00:01:48,320 --> 00:01:51,240 Speaker 1: of course is there is no alternative, which I feel 31 00:01:51,240 --> 00:01:54,760 Speaker 1: like is back this week with all this focus on 32 00:01:54,800 --> 00:01:58,920 Speaker 1: the Federal Reserve and this hypothetical interest rate cut will 33 00:01:58,920 --> 00:02:02,640 Speaker 1: get so hopefully our guests here can shed some light 34 00:02:02,680 --> 00:02:06,720 Speaker 1: on that. Joining the show first off, Bloomberg columnist former 35 00:02:06,760 --> 00:02:09,880 Speaker 1: Big Han show at the Financial Times. I think, um, 36 00:02:10,560 --> 00:02:14,360 Speaker 1: London and England's biggest Red Sox fan there is, is that? Right? 37 00:02:14,560 --> 00:02:17,160 Speaker 1: John Author's welcome to the show. Possibly, thank you very much. 38 00:02:17,240 --> 00:02:20,880 Speaker 1: I thought Tina was went back to Margaret Thatching ran 39 00:02:21,720 --> 00:02:28,040 Speaker 1: my home country throughout my entire youth. Okay, the tina's 40 00:02:28,040 --> 00:02:30,959 Speaker 1: in the eye of the beholders though. John the Red 41 00:02:31,000 --> 00:02:35,800 Speaker 1: Sox just played the first baseball game MLB game in London. 42 00:02:36,200 --> 00:02:39,400 Speaker 1: There were like thirty some runs scored. What happened there 43 00:02:39,440 --> 00:02:41,440 Speaker 1: was the game before a game was it was that 44 00:02:41,520 --> 00:02:45,079 Speaker 1: the metrics system of scoring runs in London what well? 45 00:02:45,600 --> 00:02:48,920 Speaker 1: My best theory. Obviously, it wasn't a huge ground, although 46 00:02:48,960 --> 00:02:52,639 Speaker 1: the dimensions weren't particularly weird. There was a big final 47 00:02:52,720 --> 00:02:54,959 Speaker 1: territory which you would have thought would have diminished runs. 48 00:02:54,960 --> 00:02:57,360 Speaker 1: It would have been easier to catch foul pop ups. 49 00:02:57,400 --> 00:03:02,519 Speaker 1: My best guess is that the organizers followed their instructions 50 00:03:02,520 --> 00:03:05,160 Speaker 1: a little too scrupulously, with the result that the the 51 00:03:05,360 --> 00:03:10,120 Speaker 1: area blacked up behind the pitchers um was bigger and 52 00:03:10,360 --> 00:03:14,480 Speaker 1: blacker than it is in the average um MLB stadium, 53 00:03:14,480 --> 00:03:17,080 Speaker 1: with the result that the the hitters really could see 54 00:03:17,520 --> 00:03:19,880 Speaker 1: the ball much more clearly than they were accustomed to. 55 00:03:19,960 --> 00:03:24,720 Speaker 1: That's my best Yes, it certainly looked much more prominent 56 00:03:24,840 --> 00:03:26,840 Speaker 1: and blacker as far as I could see then it 57 00:03:26,919 --> 00:03:30,399 Speaker 1: normally does in a in a Major League park. That's 58 00:03:30,400 --> 00:03:34,720 Speaker 1: a great theory. I I buy it completely. And John's analysis. 59 00:03:35,880 --> 00:03:38,640 Speaker 1: John's market analysis is even better than his baseball analysis. 60 00:03:38,720 --> 00:03:40,680 Speaker 1: We'll get to We'll get to that soon. But also 61 00:03:40,760 --> 00:03:44,040 Speaker 1: joining the show is another reporter from our markets team, 62 00:03:44,200 --> 00:03:48,640 Speaker 1: Veldana Hirich. She covers all sorts of things, stocks, a 63 00:03:48,680 --> 00:03:51,160 Speaker 1: lot of bitcoin. She's our reporter who who talked to 64 00:03:51,200 --> 00:03:53,880 Speaker 1: the Winklevoss Twins this week, and she's also done a 65 00:03:53,920 --> 00:03:57,080 Speaker 1: lot of reporting on the outlook for earning. So Voldana, 66 00:03:57,120 --> 00:03:58,880 Speaker 1: welcome to the show. Thank you, thanks for having me. 67 00:03:59,040 --> 00:04:04,160 Speaker 1: Absolutely great of you. Now, John, let's let's start with you. Um. Obviously, 68 00:04:04,840 --> 00:04:09,080 Speaker 1: the entire equity markets fixation has returned to the Federal Reserve, 69 00:04:09,160 --> 00:04:12,600 Speaker 1: this notion that we're going to get an interest rate cut. Um, 70 00:04:12,640 --> 00:04:16,240 Speaker 1: and you had an interesting column out recently and basically 71 00:04:16,279 --> 00:04:21,000 Speaker 1: discussing the way you can't really look at equity valuations 72 00:04:21,040 --> 00:04:23,640 Speaker 1: in isolation. You all have to also consider the level 73 00:04:23,680 --> 00:04:26,400 Speaker 1: of interest Race, and you, especially you, you looked at 74 00:04:26,440 --> 00:04:31,080 Speaker 1: the famous Schiller cape ratio, which values stocks based on 75 00:04:31,160 --> 00:04:35,040 Speaker 1: trailing ten years earnings rather than just uh one year's 76 00:04:35,360 --> 00:04:39,560 Speaker 1: forward or backwards. So tell us how you're thinking about 77 00:04:39,920 --> 00:04:44,200 Speaker 1: the equity market now, particularly with these really elevated UH 78 00:04:44,320 --> 00:04:49,360 Speaker 1: Schiller Cape valuations as they're called UH. Juxtaposed to this, 79 00:04:49,880 --> 00:04:52,840 Speaker 1: this idea that rates are are going to be rock 80 00:04:52,880 --> 00:04:56,359 Speaker 1: bottom going forward longer than we perhaps thought at the 81 00:04:56,400 --> 00:04:59,240 Speaker 1: beginning of the year. Well thanks, Yes, I am in 82 00:04:59,360 --> 00:05:04,240 Speaker 1: the very long term, very long suffering supporter of the 83 00:05:04,279 --> 00:05:07,280 Speaker 1: Schiller Cape. I do actually think it makes a lot 84 00:05:07,360 --> 00:05:11,400 Speaker 1: of sense, even though it has suggested that the markets 85 00:05:11,440 --> 00:05:14,360 Speaker 1: are very expensive for a very long time, even as 86 00:05:14,400 --> 00:05:18,680 Speaker 1: the markets have continued to rise. Now, what is important, 87 00:05:18,760 --> 00:05:21,800 Speaker 1: I don't think anybody has ever said about anything that 88 00:05:21,920 --> 00:05:24,320 Speaker 1: it is a silver bullet. Plenty of people make the 89 00:05:24,360 --> 00:05:29,160 Speaker 1: point correctly that the CAPE isn't a silver bullet. Schiller himself, 90 00:05:29,560 --> 00:05:34,200 Speaker 1: on his website presents his calculation for CAPE, along with 91 00:05:34,440 --> 00:05:38,320 Speaker 1: his measure of long term interest rates these days is 92 00:05:38,360 --> 00:05:41,479 Speaker 1: a simple tenure treasury yield, and he does some very 93 00:05:41,480 --> 00:05:44,119 Speaker 1: clever historical numbers to come up with long term interest 94 00:05:44,200 --> 00:05:48,080 Speaker 1: rates that cohered in eighteen seventy um. He's got continuous 95 00:05:48,200 --> 00:05:52,080 Speaker 1: data series for both ever since then. What I think 96 00:05:52,560 --> 00:05:54,919 Speaker 1: is important about the CAPE is that many people have 97 00:05:54,960 --> 00:05:58,440 Speaker 1: said it we can ignore it, and their argument for 98 00:05:58,480 --> 00:06:00,279 Speaker 1: saying that they can ignore it is that there was 99 00:06:00,320 --> 00:06:04,920 Speaker 1: this epic earnings recession in two thousand and seven, two 100 00:06:05,279 --> 00:06:10,440 Speaker 1: and nine, which means that the the denominator the earnings 101 00:06:10,560 --> 00:06:14,800 Speaker 1: is artificially reduced, meaning that the cape looks artificially high. 102 00:06:15,279 --> 00:06:17,800 Speaker 1: So sorry, John, what's brought us back to this idea 103 00:06:17,880 --> 00:06:21,320 Speaker 1: that this is now a really good measure to consider 104 00:06:21,400 --> 00:06:24,880 Speaker 1: what's brought the renaissance? Now? I think, well, the Renaissance 105 00:06:24,880 --> 00:06:27,359 Speaker 1: in my mind, I'm trying to I'm trying to spark 106 00:06:27,400 --> 00:06:31,800 Speaker 1: a renaissance. Yeah, Johnny created the Renaissance. Yes, exactly as 107 00:06:31,839 --> 00:06:37,800 Speaker 1: we say Renaissance and Renaissance Australian English upbringings. They have 108 00:06:37,960 --> 00:06:42,720 Speaker 1: terrible effects on your on your fronance station. Um. Basically, 109 00:06:42,760 --> 00:06:46,719 Speaker 1: the big criticism has been that the ten years of 110 00:06:46,800 --> 00:06:51,960 Speaker 1: earnings that you are comparing prices to include earnings from 111 00:06:52,279 --> 00:06:55,479 Speaker 1: the Great earnings recession that accompanied the Lehman Crisis, the 112 00:06:55,480 --> 00:07:00,520 Speaker 1: Great Recession, and therefore the argument was that once those 113 00:07:00,600 --> 00:07:04,920 Speaker 1: numbers started to drop out of the ten year number, 114 00:07:05,520 --> 00:07:10,120 Speaker 1: you would see the cape begin to reduce, because the 115 00:07:10,200 --> 00:07:13,480 Speaker 1: earnings rose a lot for no good reason other than 116 00:07:13,480 --> 00:07:15,840 Speaker 1: that those numbers were dropping out from ten years ago. 117 00:07:16,440 --> 00:07:21,280 Speaker 1: Now we are are now just past the point past 118 00:07:21,360 --> 00:07:24,000 Speaker 1: just we've just passed the tenth anniversary of the bottom 119 00:07:24,080 --> 00:07:28,360 Speaker 1: of that earnings recession. So all the earnings as we 120 00:07:28,400 --> 00:07:31,200 Speaker 1: went from top to bottom have now dropped out of 121 00:07:31,240 --> 00:07:34,280 Speaker 1: the calculation and low and behold, the CAPE is actually 122 00:07:34,360 --> 00:07:38,280 Speaker 1: higher than it was at the tenth anniversary of the 123 00:07:38,320 --> 00:07:42,640 Speaker 1: peak before the recession started. Also, quite remarkably, it has 124 00:07:42,680 --> 00:07:48,360 Speaker 1: actually risen more over that time than the prospective pe has. 125 00:07:48,440 --> 00:07:51,800 Speaker 1: So the idea that this would show itself to be 126 00:07:52,280 --> 00:07:57,040 Speaker 1: a pointless indicator that was obviously not relevant has actually 127 00:07:57,080 --> 00:08:00,840 Speaker 1: been disproved. Now. I don't think that should be too 128 00:08:00,880 --> 00:08:03,760 Speaker 1: surprising if you stop to think about it, because earnings 129 00:08:03,760 --> 00:08:09,080 Speaker 1: were artificially inflated by the by artificially cheap credit before 130 00:08:09,120 --> 00:08:12,960 Speaker 1: the crash. Everybody knows about kitchen sinking by companies, They 131 00:08:12,960 --> 00:08:17,160 Speaker 1: were artificially low at the bottom, and then the recovery 132 00:08:17,200 --> 00:08:21,320 Speaker 1: again involved artificially manipulating the Cruel's accounting to make them 133 00:08:21,360 --> 00:08:24,160 Speaker 1: look good over ten years. It's actually quite difficult to 134 00:08:24,280 --> 00:08:27,360 Speaker 1: manipulate a Cruels accounting. You really got to create commit 135 00:08:27,560 --> 00:08:30,880 Speaker 1: pretty serious fraud for the ten year number not to 136 00:08:30,920 --> 00:08:34,880 Speaker 1: be a fairly good number. And over ten years, basically 137 00:08:35,120 --> 00:08:37,800 Speaker 1: the trend has been remarkably steady. There was the biggest 138 00:08:37,840 --> 00:08:40,520 Speaker 1: blip we've had since the war for the earnings recession, 139 00:08:40,640 --> 00:08:45,280 Speaker 1: but beyond that, the trend has continued, absolutely enforced. That's 140 00:08:45,320 --> 00:08:47,400 Speaker 1: what people could tell when they were making their numbers. 141 00:08:48,120 --> 00:08:51,320 Speaker 1: Does that mean that the stock market should not be 142 00:08:51,600 --> 00:08:56,200 Speaker 1: this high? No, because interest rates, as Chilla himself and 143 00:08:56,200 --> 00:08:59,960 Speaker 1: everybody else are knowledges, are very important to the valuation 144 00:09:00,040 --> 00:09:02,960 Speaker 1: you put on stocks. Does it mean, however, that without that, 145 00:09:03,040 --> 00:09:05,680 Speaker 1: if interest rates did what everybody was expecting until a 146 00:09:05,679 --> 00:09:09,280 Speaker 1: few months ago and rise, plainly, the cape is a 147 00:09:09,320 --> 00:09:13,079 Speaker 1: clear indicator that stocks have a long way to fall 148 00:09:13,600 --> 00:09:18,120 Speaker 1: should rates rise. We are utterly dependent at this point, 149 00:09:18,559 --> 00:09:22,040 Speaker 1: particularly with anxiety about where endings are going in the future. 150 00:09:22,280 --> 00:09:27,160 Speaker 1: We are utterly dependent on low interest rates. And you know, 151 00:09:27,240 --> 00:09:29,880 Speaker 1: you make a great point there in that we came 152 00:09:29,880 --> 00:09:33,520 Speaker 1: into this year everyone expecting higher rates all year, higher 153 00:09:33,600 --> 00:09:36,319 Speaker 1: rates from the Fed. The knock on effect of higher 154 00:09:36,360 --> 00:09:41,480 Speaker 1: treasury rates, Emily, is everyone assuming now that it's it's 155 00:09:41,520 --> 00:09:43,679 Speaker 1: lower forever? Now? You know, you talked to a lot 156 00:09:43,720 --> 00:09:47,040 Speaker 1: of fixed income by bond market people. Is there a 157 00:09:47,080 --> 00:09:49,840 Speaker 1: consensus towards that way, and is there a danger that whoops, 158 00:09:49,880 --> 00:09:52,400 Speaker 1: they they the consensus might be wrong again. Yeah, it's 159 00:09:52,440 --> 00:09:54,959 Speaker 1: really hard to see at this point anyone who actually 160 00:09:55,000 --> 00:09:58,880 Speaker 1: thinks that a hike is coming any time really, for 161 00:09:59,040 --> 00:10:01,440 Speaker 1: as far as the Ken see. I mean, it seems 162 00:10:01,480 --> 00:10:04,160 Speaker 1: like the debate we're now having, which is actually different 163 00:10:04,160 --> 00:10:06,400 Speaker 1: to what we had yesterday, is whether or not we 164 00:10:06,440 --> 00:10:08,560 Speaker 1: get a fifty basis point or a twenty five basis 165 00:10:08,559 --> 00:10:10,920 Speaker 1: point cut, rather than whether the Fed will actually cut 166 00:10:11,000 --> 00:10:13,920 Speaker 1: rates at all in July. So we it seems as 167 00:10:13,920 --> 00:10:16,840 Speaker 1: if you know, market expectations are ramping back up again. 168 00:10:17,280 --> 00:10:19,960 Speaker 1: We've got We've definitely got that fifty basis points back 169 00:10:20,000 --> 00:10:21,920 Speaker 1: on the table. It's just a matter of whether or 170 00:10:21,920 --> 00:10:24,400 Speaker 1: not the Fed takes that kind of action. And I 171 00:10:24,400 --> 00:10:27,120 Speaker 1: guess in a way that the rates outlook goes hand 172 00:10:27,160 --> 00:10:29,560 Speaker 1: in hand with the earnings outlook, which is l DONA 173 00:10:29,640 --> 00:10:32,520 Speaker 1: is pretty dismal right now, um, along with some of 174 00:10:32,559 --> 00:10:35,560 Speaker 1: the softer economic data we've seen. So you've done a 175 00:10:35,559 --> 00:10:39,120 Speaker 1: lot of reporting on what we can expect for the 176 00:10:39,200 --> 00:10:42,480 Speaker 1: upcom coming earning season. I talked to a lot of investors, 177 00:10:42,480 --> 00:10:45,320 Speaker 1: looked at the data. What are you expecting basically, and 178 00:10:45,360 --> 00:10:48,719 Speaker 1: how our investors sort of bracing for this earning season. Yeah, well, 179 00:10:48,720 --> 00:10:51,840 Speaker 1: like you mentioned, there is just so much uncertainty out there, 180 00:10:52,000 --> 00:10:55,240 Speaker 1: which has been around for all year basically when it 181 00:10:55,240 --> 00:10:58,720 Speaker 1: comes to trade and higher dollar and higher input costs 182 00:10:58,720 --> 00:11:01,440 Speaker 1: and all those things. But expectations for the second quarter 183 00:11:01,480 --> 00:11:05,480 Speaker 1: are negative to negative three percent in terms of earnings 184 00:11:05,480 --> 00:11:09,480 Speaker 1: and flat for the third quarter, and then we're supposed 185 00:11:09,520 --> 00:11:11,319 Speaker 1: to see a pick up again and later in the 186 00:11:11,400 --> 00:11:13,199 Speaker 1: year in the fourth quarter. But out of all the 187 00:11:13,240 --> 00:11:17,800 Speaker 1: companies that have been revising UM guidance either higher or lower, 188 00:11:18,040 --> 00:11:21,800 Speaker 1: are actually revising lower. And we had Gina Martin Adams 189 00:11:21,840 --> 00:11:24,560 Speaker 1: of Bloomberg Intelligence, who I know is um has been 190 00:11:24,600 --> 00:11:28,559 Speaker 1: on the show before. She said, um two que expectations 191 00:11:29,000 --> 00:11:32,240 Speaker 1: companies are cutting them to the bone, and when it 192 00:11:32,280 --> 00:11:36,400 Speaker 1: comes to forecasts, they might not actually be cutting enough. 193 00:11:36,920 --> 00:11:40,160 Speaker 1: So how much Filana is the actual macro backdrop factoring 194 00:11:40,200 --> 00:11:42,280 Speaker 1: into this, I mean a trade concerns, the things that 195 00:11:42,320 --> 00:11:46,320 Speaker 1: people are assigning when they're talking about lower expectations. Does 196 00:11:46,679 --> 00:11:49,160 Speaker 1: FED policy playing into kind of any hopes there of 197 00:11:49,280 --> 00:11:52,320 Speaker 1: improvemental Yeah, well, we'll see what happens now that we 198 00:11:52,400 --> 00:11:56,680 Speaker 1: have a bit more clarity from what we can expect 199 00:11:56,679 --> 00:11:59,600 Speaker 1: from the FED, but certainly trade has played a part 200 00:11:59,679 --> 00:12:02,880 Speaker 1: in us We we've seen a lot of reports on 201 00:12:02,960 --> 00:12:04,839 Speaker 1: companies that have been citing trade. We had B A. 202 00:12:05,040 --> 00:12:08,559 Speaker 1: S F earlier in the week saying it's it's due 203 00:12:08,559 --> 00:12:10,880 Speaker 1: to trade that we have to cut our profit um 204 00:12:11,040 --> 00:12:15,760 Speaker 1: forecasts by thirty percent. So it really it does seem 205 00:12:15,800 --> 00:12:19,640 Speaker 1: to be making its way into what companies are saying. Yeah, 206 00:12:19,640 --> 00:12:22,440 Speaker 1: that B A. S F was a lot bigger cut 207 00:12:22,480 --> 00:12:25,240 Speaker 1: than than I think people were expecting. John, what do 208 00:12:25,280 --> 00:12:27,920 Speaker 1: you think is this? Is this a risky setup that 209 00:12:27,960 --> 00:12:30,560 Speaker 1: we're in right now going into this sarning season, or 210 00:12:30,600 --> 00:12:33,640 Speaker 1: I wonder if it with rates so low, it'll be 211 00:12:33,640 --> 00:12:37,079 Speaker 1: the type of situation where, uh, you might see some 212 00:12:37,559 --> 00:12:41,000 Speaker 1: rotation in and out of different sectors and companies that 213 00:12:41,440 --> 00:12:44,440 Speaker 1: are at risk uh to trade, but not really a 214 00:12:44,440 --> 00:12:47,040 Speaker 1: full on abandonment of the stock market as a whole. 215 00:12:47,440 --> 00:12:51,600 Speaker 1: It's difficult to see how I mean, cards on the table. 216 00:12:51,640 --> 00:12:54,320 Speaker 1: I've I've been a long term bear for quite a while. 217 00:12:54,360 --> 00:12:58,440 Speaker 1: I'm very I find the current valuations very hard to justify. 218 00:12:59,400 --> 00:13:02,360 Speaker 1: In the short term. It's difficult to see how anything 219 00:13:02,520 --> 00:13:04,760 Speaker 1: too bad can happen to the stock market. I think 220 00:13:04,800 --> 00:13:09,520 Speaker 1: the likelihood that companies that managed to play the earnings 221 00:13:09,520 --> 00:13:13,679 Speaker 1: management game well and deliver a beat in heavily and 222 00:13:13,720 --> 00:13:17,959 Speaker 1: inverted commas gets rewarded with much of a pop in 223 00:13:18,000 --> 00:13:19,960 Speaker 1: the share price that day, that that's pretty low, And 224 00:13:19,960 --> 00:13:23,520 Speaker 1: I suspect anybody with a truly bad surprise is really 225 00:13:23,520 --> 00:13:25,959 Speaker 1: going to get punished. That's been, in fact pattern we've 226 00:13:25,960 --> 00:13:28,559 Speaker 1: seen in quite a number of earning season seasons over 227 00:13:28,600 --> 00:13:33,520 Speaker 1: the last year or two. But while we have a 228 00:13:33,600 --> 00:13:38,160 Speaker 1: situation where it looks as though the FED is heading 229 00:13:38,320 --> 00:13:42,120 Speaker 1: lower and people are still merrily discounting four or five 230 00:13:42,480 --> 00:13:44,640 Speaker 1: rate cuts between now and the end of next year, 231 00:13:44,679 --> 00:13:47,880 Speaker 1: which is what they are, and while the ECB appears 232 00:13:47,920 --> 00:13:50,920 Speaker 1: to be locked down, and obviously the poor old Bank 233 00:13:50,960 --> 00:13:54,319 Speaker 1: of England has to contend with the prospect of a 234 00:13:54,360 --> 00:13:57,320 Speaker 1: no deal Brexit and really can't do anything hawkish, whether 235 00:13:57,360 --> 00:14:00,240 Speaker 1: it wants to or not. While we're in that minds 236 00:14:00,280 --> 00:14:06,440 Speaker 1: of locked forced dubbish stance, it's difficult to see how 237 00:14:06,480 --> 00:14:08,959 Speaker 1: we can get a major market break. We've had major 238 00:14:09,000 --> 00:14:12,559 Speaker 1: market brakes. Well, we had two major market breakes last year, 239 00:14:12,720 --> 00:14:15,640 Speaker 1: both of which one one of which was prompted by 240 00:14:15,679 --> 00:14:18,000 Speaker 1: a very sharp rise in the bond market, and one 241 00:14:18,120 --> 00:14:21,680 Speaker 1: was prompted by a very sharp rise in perceptions of 242 00:14:21,840 --> 00:14:25,560 Speaker 1: Fed hawkishness. I doubt that is what we need in 243 00:14:25,600 --> 00:14:27,480 Speaker 1: this this day and age to get a market break, 244 00:14:27,680 --> 00:14:30,400 Speaker 1: and at the moment that looks unlikely. So does this 245 00:14:30,480 --> 00:14:33,320 Speaker 1: put the Tina point front and center? Then that we're 246 00:14:33,360 --> 00:14:35,800 Speaker 1: not really getting anywhere away from the US at this 247 00:14:35,840 --> 00:14:38,920 Speaker 1: point is does anything globally in terms of emerging markets 248 00:14:39,360 --> 00:14:42,160 Speaker 1: start to look more attractive at that point or in general, 249 00:14:42,200 --> 00:14:44,640 Speaker 1: if you look back to seen, which was one of 250 00:14:44,680 --> 00:14:49,480 Speaker 1: the you know, the most least volatile, calmest years if 251 00:14:49,480 --> 00:14:52,520 Speaker 1: you go by sharp ratios, it was possibly the best 252 00:14:52,640 --> 00:14:55,960 Speaker 1: year for world stock markets ever because it was so 253 00:14:56,080 --> 00:14:58,600 Speaker 1: calm on the way upwards. That was a year when 254 00:14:58,640 --> 00:15:01,360 Speaker 1: the US did actually lose to the rest of the 255 00:15:01,400 --> 00:15:06,520 Speaker 1: world and emerging markets did somewhat better than developed and 256 00:15:06,640 --> 00:15:09,960 Speaker 1: logically you would expect something similar to that. Again, I 257 00:15:10,000 --> 00:15:13,760 Speaker 1: suppose the one wild card there is also trade. If 258 00:15:14,680 --> 00:15:17,360 Speaker 1: what's bad for China on trade will also be bad 259 00:15:17,400 --> 00:15:20,640 Speaker 1: for a lot of the emerging world. But in essence, 260 00:15:21,200 --> 00:15:24,440 Speaker 1: if we are looking at a weakening dollar and lower 261 00:15:24,640 --> 00:15:31,000 Speaker 1: US rates, that relieves pressure on some very cheap emerging markets. Interesting, 262 00:15:31,080 --> 00:15:35,479 Speaker 1: they might actually be the performer in this environment. Logically 263 00:15:35,560 --> 00:15:55,960 Speaker 1: they really ought to be. Now you mentioned John being 264 00:15:56,160 --> 00:15:59,320 Speaker 1: a long term bear. Looking at the fun flows this year, 265 00:15:59,360 --> 00:16:01,160 Speaker 1: I don't think you're a loan. I mean there's been 266 00:16:01,200 --> 00:16:06,680 Speaker 1: this exodus of cash from equity funds, a massive impouring 267 00:16:06,720 --> 00:16:09,600 Speaker 1: in the in the fixed income funds. Phildano, you talked 268 00:16:09,600 --> 00:16:12,720 Speaker 1: to a lot of investors every day. I mean this, 269 00:16:13,320 --> 00:16:18,640 Speaker 1: do you get sort of a consensus? Are people UM 270 00:16:18,720 --> 00:16:21,000 Speaker 1: leaning towards the bearers side even though we keep seeing 271 00:16:21,040 --> 00:16:23,040 Speaker 1: these these new highs or you know what are the 272 00:16:23,280 --> 00:16:27,240 Speaker 1: people you you talked to really focusing on right now? Yeah, 273 00:16:27,480 --> 00:16:30,320 Speaker 1: they certainly are. UM. If you look at all of 274 00:16:30,360 --> 00:16:34,240 Speaker 1: the strategies that that Bloomberg tracks, Um, the majority of 275 00:16:34,280 --> 00:16:37,320 Speaker 1: them are saying that the SMP will end the year 276 00:16:38,120 --> 00:16:40,360 Speaker 1: at a lower point than where we are. Where we 277 00:16:40,400 --> 00:16:42,800 Speaker 1: are now, and I mean we did see the SMP 278 00:16:42,840 --> 00:16:44,880 Speaker 1: across the three thousand mark for the very first time 279 00:16:44,920 --> 00:16:49,360 Speaker 1: this week, and um, it's again going back to actually 280 00:16:49,480 --> 00:16:52,720 Speaker 1: a few factors. One the uncertainty and trade is what 281 00:16:52,760 --> 00:16:54,960 Speaker 1: a lot of people are citing. So even after we 282 00:16:55,040 --> 00:16:59,440 Speaker 1: had the trade truths from UM from the g twenty meeting, 283 00:16:59,640 --> 00:17:03,040 Speaker 1: we strategies at RBC coming out and saying this doesn't 284 00:17:03,040 --> 00:17:07,119 Speaker 1: really change the game for us. It's it's we're reiterating 285 00:17:07,119 --> 00:17:11,920 Speaker 1: our SMP target of UM similarly at a few other shops. 286 00:17:12,480 --> 00:17:14,240 Speaker 1: And then the other part of it is that we're 287 00:17:14,320 --> 00:17:17,679 Speaker 1: up for the year. Half halfway through a year, we're up. 288 00:17:18,280 --> 00:17:20,640 Speaker 1: That's pretty good. So it's sort of a conundrum where 289 00:17:21,000 --> 00:17:24,840 Speaker 1: where investors are thinking about, well, what happens next, what 290 00:17:24,880 --> 00:17:27,399 Speaker 1: happens for the next six months, considering that we've been 291 00:17:27,480 --> 00:17:29,960 Speaker 1: up so much. I think I think a lot of 292 00:17:30,000 --> 00:17:32,800 Speaker 1: that is the base effect that we had a screeching 293 00:17:32,880 --> 00:17:35,720 Speaker 1: correction that came to a that came to to finale 294 00:17:35,720 --> 00:17:41,080 Speaker 1: on Christmas Eve, so once we're still not much above 295 00:17:41,240 --> 00:17:46,760 Speaker 1: the peak from October. It's it's just an example of 296 00:17:46,760 --> 00:17:50,520 Speaker 1: the willow willow the whisper. If you can tactically time 297 00:17:50,920 --> 00:17:54,400 Speaker 1: market moves like this, you would be very very rich, indeed, 298 00:17:55,520 --> 00:17:57,679 Speaker 1: But if you're on a on a more realistic way 299 00:17:57,720 --> 00:18:00,439 Speaker 1: where we're not just looking at the calendar this this 300 00:18:00,480 --> 00:18:03,760 Speaker 1: is an unusual point where the calendar year really makes 301 00:18:03,800 --> 00:18:07,560 Speaker 1: the returns, really flatters the returns, and we're flat for 302 00:18:07,600 --> 00:18:10,520 Speaker 1: the past eighteen months, right, Ever since that melt up 303 00:18:10,560 --> 00:18:12,320 Speaker 1: at the beginning of two thousand eighteen, we're not much 304 00:18:12,359 --> 00:18:15,200 Speaker 1: higher than that, So I guess a correction can occur 305 00:18:15,640 --> 00:18:19,480 Speaker 1: over time as well as price more or less. I'm 306 00:18:19,480 --> 00:18:22,240 Speaker 1: thinking about that comment that you made about conundrum the Vilvanna. 307 00:18:22,320 --> 00:18:24,840 Speaker 1: It does raise sort of concerns about, you know, where 308 00:18:24,840 --> 00:18:27,240 Speaker 1: do we start to get worried about where surprises are headed? 309 00:18:27,320 --> 00:18:29,400 Speaker 1: Right right? But I guess that's something in the dead 310 00:18:29,440 --> 00:18:31,520 Speaker 1: markets that people are thinking about all the time, financial 311 00:18:31,520 --> 00:18:34,760 Speaker 1: stability being a part of the Fed mandate. Well, I 312 00:18:34,760 --> 00:18:37,440 Speaker 1: had to mention one of the one of the maddest, 313 00:18:37,840 --> 00:18:40,399 Speaker 1: one of the candidates I considered for my maddest thing 314 00:18:40,440 --> 00:18:42,000 Speaker 1: I saw in the market this week is that there 315 00:18:42,040 --> 00:18:44,800 Speaker 1: is there is such a thing in Europe now as 316 00:18:44,880 --> 00:18:55,280 Speaker 1: a negative yielding high yielding bonds, which he is. I'm 317 00:18:55,280 --> 00:18:57,600 Speaker 1: crest falling out because I worked so hard to think 318 00:18:57,600 --> 00:19:00,200 Speaker 1: of spoiler spoiler alert. I've got a few where I 319 00:19:00,200 --> 00:19:02,760 Speaker 1: can lend you later on. But but but but that 320 00:19:02,760 --> 00:19:05,440 Speaker 1: that would be one of the that would be one 321 00:19:05,600 --> 00:19:09,440 Speaker 1: sign that perhaps perhaps the the rate story has been 322 00:19:09,440 --> 00:19:12,000 Speaker 1: taking the tats too far. All right, If you ask 323 00:19:12,080 --> 00:19:15,159 Speaker 1: me British on the statements. I think clearly everyone is 324 00:19:15,200 --> 00:19:18,520 Speaker 1: itching to get to that craziest thing they saw this week. 325 00:19:18,560 --> 00:19:21,040 Speaker 1: In fact, Vildanna, my sources tell me you're you're very 326 00:19:21,080 --> 00:19:24,760 Speaker 1: much a connoisseur of crazy things you've seen in markets. Okay, 327 00:19:24,800 --> 00:19:26,920 Speaker 1: but first I we have to talk about the Winkle Boss, 328 00:19:26,920 --> 00:19:30,399 Speaker 1: because I'm I'm fascinated with these two guys. Um. Obviously, 329 00:19:30,440 --> 00:19:35,320 Speaker 1: they won a settlement against Mark Zuckerberg years ago for 330 00:19:35,359 --> 00:19:38,719 Speaker 1: their role in basically creating Facebook. Then they went on 331 00:19:38,760 --> 00:19:42,120 Speaker 1: to become sort of the biggest cheerleaders for bitcoin out there. 332 00:19:42,160 --> 00:19:45,479 Speaker 1: They're trying to create a bitcoin ETF. What are they 333 00:19:45,520 --> 00:19:47,600 Speaker 1: up to now? What's the latest in sort of the 334 00:19:47,720 --> 00:19:50,919 Speaker 1: the Winkel Boss soap opera? After after your meeting with them, 335 00:19:51,000 --> 00:19:54,720 Speaker 1: that's a that's a good way to predict. Um. Yeah, 336 00:19:54,720 --> 00:19:58,520 Speaker 1: I met them um earlier this week. And and so 337 00:19:59,200 --> 00:20:02,240 Speaker 1: again this is another interesting thing that's happening where a 338 00:20:02,240 --> 00:20:05,119 Speaker 1: lot of people are saying, well, Zuckerberg came in and 339 00:20:05,119 --> 00:20:10,080 Speaker 1: sort of bested them at Facebook. They were early bitcoin backers. 340 00:20:10,080 --> 00:20:12,640 Speaker 1: In fact, it's been reported that they own about one 341 00:20:12,720 --> 00:20:15,679 Speaker 1: percent of all the bitcoins that are out there, which 342 00:20:15,800 --> 00:20:20,880 Speaker 1: is a huge sum by today's UM dollars. But then 343 00:20:20,880 --> 00:20:24,520 Speaker 1: we had Facebook come out and with its own cryptocurrency, 344 00:20:24,560 --> 00:20:29,320 Speaker 1: Libra project, and given how many users Facebook has and um, 345 00:20:29,359 --> 00:20:34,120 Speaker 1: just how much hype there's been around Facebook's Libre project, 346 00:20:34,600 --> 00:20:37,720 Speaker 1: a lot of people are asking, well, is Zuckerberg sort 347 00:20:37,760 --> 00:20:41,040 Speaker 1: of swooping in again and taking the spotlight even though 348 00:20:41,720 --> 00:20:45,680 Speaker 1: you guys have been around for uh in the cryptosphere 349 00:20:46,000 --> 00:20:48,480 Speaker 1: for a much longer time. Yeah, is that you think 350 00:20:48,480 --> 00:20:51,479 Speaker 1: there's any credence that? I mean, obviously Zuckerberg might have 351 00:20:52,119 --> 00:20:56,040 Speaker 1: completely unrelayed motivations to get into crypto, But I love 352 00:20:56,119 --> 00:20:58,400 Speaker 1: the conspiracy theory element of it, is that you think 353 00:20:58,440 --> 00:21:01,560 Speaker 1: the tensions between those you're so so bad that Zuckerberg 354 00:21:01,680 --> 00:21:06,560 Speaker 1: might be uh looking for revenge. UM. So they they 355 00:21:06,600 --> 00:21:09,240 Speaker 1: spoke on a panel in New York earlier this week 356 00:21:09,240 --> 00:21:12,240 Speaker 1: and the moderator asked them what would you say to 357 00:21:12,320 --> 00:21:14,760 Speaker 1: Zuckerberg if you were to see him at a party, 358 00:21:14,800 --> 00:21:17,119 Speaker 1: and they said, we'd say, welcome to the party. What 359 00:21:17,359 --> 00:21:20,560 Speaker 1: took you so long to get here? So? And did 360 00:21:20,680 --> 00:21:22,440 Speaker 1: did they have any update on the ETF is that's 361 00:21:22,520 --> 00:21:25,000 Speaker 1: that's still in limbo. I guess it is in limbo 362 00:21:25,080 --> 00:21:27,600 Speaker 1: for a few of the other UM companies that have 363 00:21:27,680 --> 00:21:31,280 Speaker 1: been trying to issue one. I think we're supposed to 364 00:21:31,320 --> 00:21:34,560 Speaker 1: be hearing from the SEC soon again, and for those, 365 00:21:34,640 --> 00:21:37,960 Speaker 1: but not not for theirs. Uh, there's was rejected a 366 00:21:38,000 --> 00:21:40,720 Speaker 1: little while right, right right, that was officially rejected. I 367 00:21:40,760 --> 00:21:43,920 Speaker 1: think so, yeah, I am thinking this. This sounds almost 368 00:21:43,960 --> 00:21:47,080 Speaker 1: like the Hunt Brothers and silver. Imagine somebody getting cornery 369 00:21:47,240 --> 00:21:50,040 Speaker 1: one per cent of all the available gold or silver 370 00:21:50,160 --> 00:21:52,520 Speaker 1: on the planet. There are people who really got big 371 00:21:52,600 --> 00:21:55,800 Speaker 1: point is a similar kind of resources like something I 372 00:21:55,840 --> 00:21:59,840 Speaker 1: think Mr t did that in the eighties and Neck 373 00:22:00,400 --> 00:22:04,160 Speaker 1: the twins were the first bitcoin billionaires, are reportedly one 374 00:22:04,200 --> 00:22:07,240 Speaker 1: of the first bitcoin billionaires, which is what's gained them 375 00:22:07,359 --> 00:22:16,520 Speaker 1: some more fame again recently with with bitcoins renaissance renaissance, John, 376 00:22:16,520 --> 00:22:18,040 Speaker 1: do you follow the crypto? We're all at all? I 377 00:22:18,080 --> 00:22:22,160 Speaker 1: mean that does this? Uh? Is this another world compared 378 00:22:22,200 --> 00:22:24,760 Speaker 1: with what we grew up trying to think of investment 379 00:22:24,760 --> 00:22:29,840 Speaker 1: as I have a line on this. My my own 380 00:22:29,880 --> 00:22:33,160 Speaker 1: opinion on this is is, I'm afraid to say, somewhat 381 00:22:33,200 --> 00:22:36,880 Speaker 1: close to consensus, which is that blockchain per se might 382 00:22:36,920 --> 00:22:40,480 Speaker 1: be a bit overhyped, but there is plainly something there 383 00:22:40,960 --> 00:22:43,120 Speaker 1: the same way as the laser and the Internet came out, 384 00:22:43,160 --> 00:22:45,199 Speaker 1: and at first everybody could see they were wonderful, but 385 00:22:45,240 --> 00:22:48,280 Speaker 1: weren't quite sure how they were going to use them. Similarly, 386 00:22:48,359 --> 00:22:52,960 Speaker 1: blockchain and the concept of cryptocurrencies will have great use, 387 00:22:53,000 --> 00:22:55,560 Speaker 1: particularly once they've worked out ways not to use quite 388 00:22:55,560 --> 00:23:00,919 Speaker 1: so much computing para electricity to to operate them. Bitcoin, 389 00:23:01,040 --> 00:23:05,200 Speaker 1: per se, and particularly all the me too digital currencies 390 00:23:05,960 --> 00:23:12,400 Speaker 1: seem very alarmingly to me like a classic speculative bubble. Okay, 391 00:23:12,440 --> 00:23:15,560 Speaker 1: they've had several speculative bubbles. If you look at bitcoin 392 00:23:15,640 --> 00:23:19,359 Speaker 1: on a lock scale, it's quite startling. I still don't 393 00:23:19,440 --> 00:23:24,840 Speaker 1: really see how it can function as a currency while 394 00:23:25,280 --> 00:23:30,680 Speaker 1: its value is so variable. It's just it just cannot 395 00:23:30,840 --> 00:23:36,200 Speaker 1: be this store of value, this speculative mine if it's 396 00:23:36,240 --> 00:23:39,240 Speaker 1: also going to try to be a means of exchange, 397 00:23:39,400 --> 00:23:41,000 Speaker 1: and those are the those are the critical things the 398 00:23:41,080 --> 00:23:44,399 Speaker 1: currency can do it If it achieves one, it fails 399 00:23:44,440 --> 00:23:47,080 Speaker 1: the other. At this point, right, I would go out 400 00:23:47,119 --> 00:23:50,120 Speaker 1: on all them, will say, bitcoins the craziest thing I've 401 00:23:50,119 --> 00:23:54,600 Speaker 1: ever seen in my career. Possibly, And we had Powell 402 00:23:54,680 --> 00:23:58,560 Speaker 1: getting questions about Libra during the testimony. Yeah, what did 403 00:23:58,600 --> 00:24:00,840 Speaker 1: I miss that. What did he What did he answer? Well, 404 00:24:00,880 --> 00:24:03,080 Speaker 1: he said that we really need to be cautious. It 405 00:24:03,520 --> 00:24:05,960 Speaker 1: can't be a sprint forward, and that there's a lot 406 00:24:05,960 --> 00:24:09,680 Speaker 1: of concerns money wandering a little less hip than Connie 407 00:24:09,800 --> 00:24:12,560 Speaker 1: was when people started talking about bitcoin a while ago. 408 00:24:12,640 --> 00:24:14,440 Speaker 1: It sounds like the Bank of England government was kind 409 00:24:14,440 --> 00:24:16,359 Speaker 1: of out there and trying to show his cred failure 410 00:24:16,359 --> 00:24:18,760 Speaker 1: early on. But uh, well, those Brits are always hipper 411 00:24:18,760 --> 00:24:21,080 Speaker 1: than us. I mean it's we're we've grown, We've we've 412 00:24:21,119 --> 00:24:29,600 Speaker 1: gotten used to that. Anyway, go from the craziest thing 413 00:24:29,600 --> 00:24:32,520 Speaker 1: I've ever seen in my career, Uh, let's go to 414 00:24:32,560 --> 00:24:34,280 Speaker 1: the craziest thing we've seen this week. And I have 415 00:24:34,359 --> 00:24:37,520 Speaker 1: to warrant you three, there's some tough competition from Twitter. 416 00:24:37,640 --> 00:24:40,600 Speaker 1: We've asked Twitter to to weigh in on the craziest 417 00:24:40,640 --> 00:24:42,640 Speaker 1: thing they've seen this week. And let me just say, 418 00:24:42,680 --> 00:24:45,199 Speaker 1: Twitter see some crazy stuff, as we all know. I'm 419 00:24:45,200 --> 00:24:48,800 Speaker 1: gonna quote someone named Twiggy Sunday on Twitter. I'm assuming 420 00:24:48,840 --> 00:24:51,600 Speaker 1: that's a real name. Twiggy Sunday gotta be right, and 421 00:24:51,760 --> 00:24:54,080 Speaker 1: he's saying the craziest thing he's ever seen, and he 422 00:24:54,160 --> 00:24:57,639 Speaker 1: refers to a treat a tweet by at Gregor Hunter, 423 00:24:58,200 --> 00:25:00,720 Speaker 1: who points out, John, I think you'll like this one. 424 00:25:02,040 --> 00:25:06,760 Speaker 1: The Argentinian yield curve has inverted. But not just any curve. 425 00:25:06,880 --> 00:25:11,760 Speaker 1: It's the nine year ninety eight year yield curve in 426 00:25:11,800 --> 00:25:17,960 Speaker 1: the Argentinian depth market family. Uh. You know, classically the 427 00:25:18,040 --> 00:25:20,720 Speaker 1: YELD curve inversion three months, five year or three month 428 00:25:20,800 --> 00:25:24,840 Speaker 1: ten year, uh, foreshadows a recession. What does this foreshadow? Like? 429 00:25:24,880 --> 00:25:27,960 Speaker 1: An alien invasion? Yeah, I mean it's a little hard 430 00:25:27,960 --> 00:25:30,760 Speaker 1: to call it for Argentina really, they've been so stable 431 00:25:30,760 --> 00:25:33,720 Speaker 1: for so long. Um. Yeah, I think basically an alien 432 00:25:33,760 --> 00:25:36,000 Speaker 1: invasion is probably the best way to put that, hopefully 433 00:25:36,000 --> 00:25:39,040 Speaker 1: hopefully not too soon. And I think it's implying that 434 00:25:39,080 --> 00:25:42,280 Speaker 1: the pampases will still be there and the herds of 435 00:25:42,320 --> 00:25:45,000 Speaker 1: cattle will be still still be there ninety eight years 436 00:25:45,040 --> 00:25:47,440 Speaker 1: from now. But Lord alone knows what's going to happen 437 00:25:47,440 --> 00:25:50,600 Speaker 1: in the next few Maybe that maybe that off the 438 00:25:50,640 --> 00:25:53,080 Speaker 1: top of my head, I've never ever thought of the 439 00:25:53,160 --> 00:25:59,520 Speaker 1: dynamics of nine versus before. So all right, well, John, 440 00:25:59,520 --> 00:26:01,760 Speaker 1: no press, but can you top Twiggy Sunday with the 441 00:26:01,800 --> 00:26:09,000 Speaker 1: medest thing? Um? Okay to from Europe Both intimately linked 442 00:26:09,040 --> 00:26:13,520 Speaker 1: to politics. One is Greece elected a new prime minister 443 00:26:14,240 --> 00:26:19,160 Speaker 1: this weekend, the third Greek prime minister this century, who 444 00:26:19,240 --> 00:26:22,439 Speaker 1: is the son of a previous Greek prime minister. The 445 00:26:22,520 --> 00:26:26,400 Speaker 1: country that gave the whole world the concept of democracy 446 00:26:26,560 --> 00:26:29,520 Speaker 1: seems to be quite keen on heredity when it comes 447 00:26:29,520 --> 00:26:32,360 Speaker 1: to choosing their prime ministers. Anyway, in the response to that, 448 00:26:33,000 --> 00:26:37,560 Speaker 1: the yields on ten year Greek bonds briefly dropped below 449 00:26:37,960 --> 00:26:40,720 Speaker 1: the yields on tenure treasuries. That is pretty amazing. That's 450 00:26:40,720 --> 00:26:45,679 Speaker 1: pretty amazing. And then just because I feel like although 451 00:26:46,520 --> 00:26:49,399 Speaker 1: every everybody and Emily cracked me up, I'm wrong, everyone 452 00:26:49,520 --> 00:26:52,879 Speaker 1: will lecture that, well, you can't compare yields on bonds 453 00:26:52,880 --> 00:26:55,480 Speaker 1: and different currencies. You have to look at the swapouts. 454 00:26:57,320 --> 00:27:00,119 Speaker 1: And then just stop the need to be that guy 455 00:27:00,200 --> 00:27:07,800 Speaker 1: someone doesn't win along cruel history at school, where you've 456 00:27:07,840 --> 00:27:11,520 Speaker 1: been that guy who makes that. Okay, that is a 457 00:27:11,560 --> 00:27:14,800 Speaker 1: little competitive with the I can say. You can see 458 00:27:15,359 --> 00:27:17,720 Speaker 1: now that the other point which I don't think, which 459 00:27:17,720 --> 00:27:20,480 Speaker 1: I think is not crazy in one level but is 460 00:27:20,800 --> 00:27:24,080 Speaker 1: utterly nuts at another level, is if you look at 461 00:27:24,080 --> 00:27:27,800 Speaker 1: the predicted market, the chances if you want to get 462 00:27:27,840 --> 00:27:31,520 Speaker 1: a Boris Johnson to be UK Prime Minister by the 463 00:27:31,640 --> 00:27:35,680 Speaker 1: end of next month future, you will have to pay 464 00:27:35,800 --> 00:27:39,360 Speaker 1: ninety nine cents on the dollar. It is rating him 465 00:27:39,359 --> 00:27:44,760 Speaker 1: as a certain to be the next Prime Minister of Britain. 466 00:27:45,080 --> 00:27:48,199 Speaker 1: I actually think the prediction market is roughly accurate in 467 00:27:48,240 --> 00:27:51,359 Speaker 1: its odds. I find the fact that there is a 468 00:27:52,440 --> 00:27:55,639 Speaker 1: chance that Boris Johnson will shortly be my prime minister 469 00:27:56,160 --> 00:28:01,119 Speaker 1: is the craziest thing I have seen in markets in 470 00:28:01,200 --> 00:28:05,000 Speaker 1: a long time. Are you applying for financialization now so 471 00:28:05,040 --> 00:28:07,760 Speaker 1: that I can come somewhere with a really sensible choice 472 00:28:07,760 --> 00:28:12,240 Speaker 1: of presidents with somebody, somebody who has a really good 473 00:28:12,320 --> 00:28:19,000 Speaker 1: haircuts the certainly the craziest hair we've seen in markets. 474 00:28:19,040 --> 00:28:21,240 Speaker 1: I think it probably means we all have to emigrate 475 00:28:21,320 --> 00:28:23,240 Speaker 1: to New Zealand if we're going to go with with 476 00:28:23,320 --> 00:28:28,200 Speaker 1: prime ministers who have a certain degree of cachet. But anyway, alright, headily, 477 00:28:28,320 --> 00:28:31,480 Speaker 1: Unfortunately John front ran your craziest thing. You were looking 478 00:28:31,520 --> 00:28:34,720 Speaker 1: at negative yielding corporate that now well, yeah, so I 479 00:28:34,760 --> 00:28:36,879 Speaker 1: actually got some figures on this, Thanks John. I was 480 00:28:36,880 --> 00:28:39,480 Speaker 1: going to dig into it right now, but we now 481 00:28:39,560 --> 00:28:41,920 Speaker 1: have I can actually put the details around his beautifully 482 00:28:41,920 --> 00:28:44,920 Speaker 1: pitched point, which was we went from zero to fourteen 483 00:28:45,520 --> 00:28:49,080 Speaker 1: high yield European bonds and now traveling like below zero 484 00:28:49,120 --> 00:28:52,720 Speaker 1: in terms of yield, which is pretty horrific in many ways. 485 00:28:53,120 --> 00:28:55,960 Speaker 1: Now people will pay a high yield issuer to look 486 00:28:56,000 --> 00:28:58,560 Speaker 1: after their money for them. Is it? Is it really 487 00:28:58,680 --> 00:29:02,600 Speaker 1: quote unquote high yield? When we need a new name 488 00:29:02,680 --> 00:29:06,320 Speaker 1: for this stuff? All right, well I'll give you mine 489 00:29:06,320 --> 00:29:08,280 Speaker 1: because I think I think Vildan is going to really 490 00:29:08,280 --> 00:29:10,240 Speaker 1: bring it. I'm gonna save her for last. I think 491 00:29:10,280 --> 00:29:12,760 Speaker 1: she's pressure. I think she's going to bring it with 492 00:29:12,800 --> 00:29:15,960 Speaker 1: the crazy thing. Even though I started off saying there's 493 00:29:15,960 --> 00:29:18,680 Speaker 1: no alternative, I'm gonna once again look into the alternative 494 00:29:18,720 --> 00:29:23,680 Speaker 1: asset markets for my craziest thing. So the baseball gloves 495 00:29:24,080 --> 00:29:26,840 Speaker 1: used to record the final out in Game seven of 496 00:29:26,880 --> 00:29:30,560 Speaker 1: the Chicago Cubs two thousand and sixteen World Series. They're 497 00:29:30,640 --> 00:29:34,160 Speaker 1: up for auction, John Without without looking at my notes here, 498 00:29:34,320 --> 00:29:37,520 Speaker 1: what would you guess the the bottom wrong prices in 499 00:29:37,560 --> 00:29:40,680 Speaker 1: that auction for the two gloves used to record the 500 00:29:40,760 --> 00:29:43,200 Speaker 1: final out in the two thousand and sixteen World I 501 00:29:43,240 --> 00:29:46,080 Speaker 1: don't remember it was so this was from the picture 502 00:29:46,120 --> 00:29:48,640 Speaker 1: to first or was there these infield gloves or the 503 00:29:48,720 --> 00:29:53,440 Speaker 1: nice big outfield gloves. It was it was used third basement. 504 00:29:53,760 --> 00:29:58,280 Speaker 1: I like how it depends on what they are. John 505 00:29:58,280 --> 00:30:01,280 Speaker 1: would clearly pay more for a a catcher's if it's 506 00:30:01,280 --> 00:30:04,480 Speaker 1: a catcher's mit, you know, obviously that's got more of it. 507 00:30:04,640 --> 00:30:08,960 Speaker 1: Was the throw from third base. Third baseman Chris Bryant 508 00:30:09,320 --> 00:30:13,880 Speaker 1: stilled the ball to Anthony Rizzo on first base. Yeah, um, okay, 509 00:30:13,960 --> 00:30:17,440 Speaker 1: so they're both people we've heard of quite famous. I 510 00:30:17,440 --> 00:30:18,760 Speaker 1: don't know that. Does that mean it's a left and 511 00:30:18,840 --> 00:30:20,680 Speaker 1: right club so you could wear them as a pair. Yes, 512 00:30:20,840 --> 00:30:24,320 Speaker 1: I guess that's true. You look a little ridiculous baseball 513 00:30:24,320 --> 00:30:27,160 Speaker 1: glove on each, John get getting this right. By the way, 514 00:30:27,200 --> 00:30:31,840 Speaker 1: this would maybe ten maybe ten grand each. Two hundred 515 00:30:31,880 --> 00:30:35,360 Speaker 1: and fifty thousand is the nm mum bid. Wow, So 516 00:30:35,640 --> 00:30:39,760 Speaker 1: a hundred thousand for each glove? How much? Does how 517 00:30:39,800 --> 00:30:44,800 Speaker 1: does that compare with Steve Bartman's walkman? That's a good question, 518 00:30:45,960 --> 00:30:52,440 Speaker 1: the previous most important item in in cubs anyway? Carry on, right, 519 00:30:52,920 --> 00:30:55,480 Speaker 1: So what's that? What's that? So that's ten bitcoin each? 520 00:30:56,680 --> 00:30:59,720 Speaker 1: It sounds cheap and bitcoin Actually that's not bad. Good point, 521 00:30:59,760 --> 00:31:02,600 Speaker 1: good point, um, all right, Valdanna show us up here. 522 00:31:02,760 --> 00:31:04,320 Speaker 1: I know you've got something good for us. What's the 523 00:31:04,320 --> 00:31:06,200 Speaker 1: craziest thing you saw in markets? Well, the first thing 524 00:31:06,240 --> 00:31:08,600 Speaker 1: I found, I thought was so strange that I was 525 00:31:08,680 --> 00:31:10,560 Speaker 1: certain one of you would also find it. So I 526 00:31:10,600 --> 00:31:12,800 Speaker 1: found a second thing as well. Backup you would you 527 00:31:12,960 --> 00:31:15,440 Speaker 1: are not messing around, but I didn't because I know 528 00:31:15,480 --> 00:31:18,560 Speaker 1: you crown a winner last week, so I am aiming 529 00:31:18,600 --> 00:31:22,640 Speaker 1: for that this week. Um, but uh, we actually had 530 00:31:22,880 --> 00:31:26,200 Speaker 1: um some reports the Taco Bell has a shortage of 531 00:31:26,280 --> 00:31:31,200 Speaker 1: ten inch tortillas, which are used in Burrito's quesadillas in 532 00:31:31,320 --> 00:31:33,600 Speaker 1: just about everything and a lot of their breakfast items 533 00:31:33,600 --> 00:31:35,520 Speaker 1: as well. And Bank of America came out with a 534 00:31:35,600 --> 00:31:39,640 Speaker 1: note saying, look at this Taco Bell is suffering with 535 00:31:40,200 --> 00:31:47,800 Speaker 1: tortillas shortage. I forget what some people call it on Twitter, tortillas. Yeah, 536 00:31:47,920 --> 00:31:50,560 Speaker 1: but they raised their price target on on Young Brands, 537 00:31:50,560 --> 00:31:53,360 Speaker 1: which is which owns the Taco Bell brand because of 538 00:31:53,400 --> 00:31:55,959 Speaker 1: the shortage of you know, even in spite of it, 539 00:31:56,040 --> 00:31:59,640 Speaker 1: in spite of it is the biggest Mexican tortiam manufacturer 540 00:31:59,680 --> 00:32:04,200 Speaker 1: is called Groom. Right, and they mentioned yeah, they mentioned, uh, 541 00:32:04,520 --> 00:32:06,360 Speaker 1: that's why you should be long then, right that sounds 542 00:32:06,360 --> 00:32:08,959 Speaker 1: like it's a very interesting investment. But couldn't they just 543 00:32:09,000 --> 00:32:12,520 Speaker 1: have trimmed a twelve inch tortilla or use a six 544 00:32:12,600 --> 00:32:18,640 Speaker 1: inch and a four inch? Yea, all right, that's pretty good. 545 00:32:19,280 --> 00:32:23,400 Speaker 1: You're going for gold and silver. Yes. Now in select cities, 546 00:32:23,400 --> 00:32:26,040 Speaker 1: in about forty cities, you can actually request that your 547 00:32:26,160 --> 00:32:29,360 Speaker 1: Uber driver stay silent during your ride, and you have 548 00:32:29,400 --> 00:32:33,440 Speaker 1: to pay about more per ride. Worth it totally. I 549 00:32:33,480 --> 00:32:35,600 Speaker 1: think it's totally worth it worth I don't go to 550 00:32:35,640 --> 00:32:37,440 Speaker 1: talk about it, but this is something I would definitely 551 00:32:37,800 --> 00:32:43,360 Speaker 1: plenty of good journalists would be deprived of stories. Guys. 552 00:32:43,360 --> 00:32:45,440 Speaker 1: I hate to say it, I think I think Theldonna 553 00:32:45,480 --> 00:32:51,680 Speaker 1: tied herself for first place. First. Yeah, first first, We're 554 00:32:51,680 --> 00:32:54,600 Speaker 1: all distant third on that. But I will have to 555 00:32:54,640 --> 00:32:57,320 Speaker 1: get you back for some more crazy market observations in 556 00:32:57,360 --> 00:33:00,200 Speaker 1: the future. Those were really good. But I think that's 557 00:33:00,200 --> 00:33:02,440 Speaker 1: our time for this week. Emily, thank you for filling 558 00:33:02,600 --> 00:33:05,280 Speaker 1: Sarah Shoes, thanks for having me up, and Sarah will 559 00:33:05,320 --> 00:33:07,680 Speaker 1: be back next week. I'll actually be off, but Luke 560 00:33:07,760 --> 00:33:09,960 Speaker 1: Kawa from the Cross SA team will be filling in 561 00:33:10,040 --> 00:33:13,160 Speaker 1: for me, so I'm sure his ratings will be much higher. 562 00:33:13,760 --> 00:33:16,600 Speaker 1: Vil Donna John Thanks so much for joining us this week. 563 00:33:16,640 --> 00:33:22,560 Speaker 1: We hope you come back. Thank you. What Goes Up 564 00:33:22,600 --> 00:33:25,480 Speaker 1: We'll be back next week. Until then, you can find 565 00:33:25,560 --> 00:33:29,320 Speaker 1: us on the Bloomberg Terminal website and app, or wherever 566 00:33:29,360 --> 00:33:32,040 Speaker 1: you get your podcasts. We'd love it if you took 567 00:33:32,040 --> 00:33:34,440 Speaker 1: the time to rate and review the show on Apple 568 00:33:34,480 --> 00:33:38,200 Speaker 1: Podcasts so more listeners can find us. You can find 569 00:33:38,240 --> 00:33:42,840 Speaker 1: us on Twitter, follow me at Reaganonymous, Sarah Ponzac is 570 00:33:43,000 --> 00:33:47,240 Speaker 1: at Sarah Ponzac, Emily Barrett is at not That a 571 00:33:47,400 --> 00:33:51,400 Speaker 1: e c. B VIL, Donna Hirich is at Vildata Hirich, 572 00:33:51,800 --> 00:33:55,600 Speaker 1: and John Authors is at John Author's. You can also 573 00:33:55,600 --> 00:34:00,600 Speaker 1: follow Bloomberg Podcasts at at podcasts. What Goes Up is 574 00:34:00,600 --> 00:34:04,320 Speaker 1: produced by Tofur Foreheads. The head of Bloomberg Podcasts is 575 00:34:04,400 --> 00:34:07,840 Speaker 1: Francesco lev Thanks for listening. I hope we see you 576 00:34:07,880 --> 00:34:08,279 Speaker 1: next time.