1 00:00:13,760 --> 00:00:17,239 Speaker 1: Hello, and welcome to What Goes Up, a weekly markets podcast. 2 00:00:17,560 --> 00:00:20,560 Speaker 1: I'm Mike Creagan, a senior editor at Bloomberg, and this 3 00:00:20,600 --> 00:00:23,400 Speaker 1: week on the show, the US equity market has almost 4 00:00:23,480 --> 00:00:26,400 Speaker 1: doubled since it's lows during the COVID sell off of 5 00:00:27,880 --> 00:00:30,400 Speaker 1: but the rally is stalled and the SP five hundred 6 00:00:30,440 --> 00:00:33,680 Speaker 1: has basically gone sideways over the last three weeks despite 7 00:00:33,720 --> 00:00:37,240 Speaker 1: what's clearly been a strong earning season. So where does 8 00:00:37,320 --> 00:00:39,680 Speaker 1: that leave us going forward? Has the easy money all 9 00:00:39,720 --> 00:00:42,360 Speaker 1: been made? We'll talk to a strategist who has some 10 00:00:42,400 --> 00:00:45,840 Speaker 1: thoughts on what market stage we're actually in and why 11 00:00:45,880 --> 00:00:49,279 Speaker 1: he's looking across the US border into Mexico and Canada 12 00:00:49,640 --> 00:00:51,840 Speaker 1: for stocks that will benefit the most from the key 13 00:00:51,880 --> 00:00:57,080 Speaker 1: themes of But first, Charlie Pellett tell us who this 14 00:00:57,120 --> 00:01:01,720 Speaker 1: week's mystery co host is. The sweek's mystery co host 15 00:01:01,880 --> 00:01:06,200 Speaker 1: is Diva Baljie. Diva is the team leader for Bloomberg's 16 00:01:06,200 --> 00:01:09,720 Speaker 1: equity market coverage in the America's. She lives in Toronto 17 00:01:09,800 --> 00:01:12,240 Speaker 1: and loves the Raptors, but she is not a fan 18 00:01:12,319 --> 00:01:15,800 Speaker 1: of hockey due to all the fighting. Food and travel 19 00:01:15,840 --> 00:01:18,160 Speaker 1: are her passions, and believe it or not, she says 20 00:01:18,520 --> 00:01:23,600 Speaker 1: that's why she prefers New Jersey over New York. If 21 00:01:23,600 --> 00:01:26,959 Speaker 1: you have, my heart grew three sizes when I heard 22 00:01:27,240 --> 00:01:29,560 Speaker 1: that you preferred New Jersey over New York. Not that 23 00:01:29,600 --> 00:01:32,240 Speaker 1: I have anything against New York, great city, grade state, 24 00:01:32,280 --> 00:01:35,800 Speaker 1: but finally some respect for us here in the Garden State. 25 00:01:35,800 --> 00:01:38,440 Speaker 1: But I got asked, what makes you bullishaw New Jersey? 26 00:01:38,600 --> 00:01:43,000 Speaker 1: Especially the food? I'm curious, you know, I I'm pretty 27 00:01:43,000 --> 00:01:44,959 Speaker 1: sure I'm going to get a lot of hate tweets 28 00:01:45,120 --> 00:01:47,920 Speaker 1: from saying this, but it just kind of feels like 29 00:01:47,960 --> 00:01:51,480 Speaker 1: New York's a bit overrated at this point, and having 30 00:01:51,520 --> 00:01:55,080 Speaker 1: spent a lot of time in Jersey, We've got family there, 31 00:01:55,280 --> 00:01:58,000 Speaker 1: and you know, we just the food is great. You know, 32 00:01:58,160 --> 00:02:01,960 Speaker 1: people are friendly. Um, there's a lot of space. I 33 00:02:02,320 --> 00:02:05,040 Speaker 1: just I really like it. I love to hear it. 34 00:02:05,080 --> 00:02:07,440 Speaker 1: Direct your hate tweets at if you not at mean, actually, 35 00:02:07,440 --> 00:02:09,400 Speaker 1: if you can direct him to me too. I'm curious 36 00:02:10,240 --> 00:02:13,760 Speaker 1: curious what they say about that one. But hey, New 37 00:02:13,840 --> 00:02:17,240 Speaker 1: Jersey just ranked the number one state for pizza by 38 00:02:17,320 --> 00:02:20,800 Speaker 1: Food and Wine magazine. So the respect is finally coming. Finally, 39 00:02:20,880 --> 00:02:24,079 Speaker 1: some some respect for the Garden State. But let's get 40 00:02:24,080 --> 00:02:27,680 Speaker 1: to that Market's Chat. We're well, very happy to welcome 41 00:02:27,720 --> 00:02:29,960 Speaker 1: back to the show. It's actually his third time on 42 00:02:30,000 --> 00:02:31,760 Speaker 1: the show. I think he gets a tote bag or 43 00:02:31,800 --> 00:02:35,480 Speaker 1: something for that. But he is the director of Global 44 00:02:35,520 --> 00:02:39,120 Speaker 1: market Strategy at stone X Financialist. Name is Vincent de 45 00:02:39,200 --> 00:02:42,800 Speaker 1: Luards and welcome back to the show. It to be here, Yeah, 46 00:02:43,120 --> 00:02:45,160 Speaker 1: it's it. I've been reading some of your notes, and uh, 47 00:02:45,280 --> 00:02:48,080 Speaker 1: you've got a pretty interesting, what I consider kind of 48 00:02:48,080 --> 00:02:51,560 Speaker 1: a non consensus view of sort of where we are 49 00:02:51,560 --> 00:02:54,559 Speaker 1: in the market cycle. And correct me if I'm misinterpreting 50 00:02:54,600 --> 00:02:57,640 Speaker 1: you here at all, but you sort of have disregarded 51 00:02:57,720 --> 00:03:01,320 Speaker 1: the very fast bear market of last year as something 52 00:03:01,360 --> 00:03:04,280 Speaker 1: that did not in fact reset the market cycle and 53 00:03:04,400 --> 00:03:07,640 Speaker 1: does not make this a new, younger bull market that's 54 00:03:07,639 --> 00:03:10,800 Speaker 1: only say, a little over a year old. Rather you 55 00:03:10,840 --> 00:03:13,920 Speaker 1: see it as sort of just a continuation of the long, 56 00:03:14,040 --> 00:03:18,440 Speaker 1: decade long post financial crisis bull market. So walk us 57 00:03:18,480 --> 00:03:20,799 Speaker 1: through your thinking on that and sort of what that 58 00:03:20,840 --> 00:03:24,880 Speaker 1: means for returns going forward or volat totally going forward 59 00:03:24,880 --> 00:03:27,079 Speaker 1: if we are kind of late in the cycle of 60 00:03:27,200 --> 00:03:31,519 Speaker 1: a ball market. So the first discrepancy, and I think 61 00:03:31,720 --> 00:03:34,840 Speaker 1: is just the speed of the gains we're looking at 62 00:03:35,120 --> 00:03:38,040 Speaker 1: you know, basically doubling on the SMP five hundred index 63 00:03:38,080 --> 00:03:41,040 Speaker 1: in evening about a year um, which again does not 64 00:03:41,120 --> 00:03:45,400 Speaker 1: happen typically. I mean typically the classical saying is stocks 65 00:03:45,400 --> 00:03:49,200 Speaker 1: stay the edited down and the stairway up right TPP. 66 00:03:49,280 --> 00:03:52,200 Speaker 1: It's when you rally, it takes longer to get there. Here, 67 00:03:52,240 --> 00:03:55,240 Speaker 1: we had such a nice, clean v that is more 68 00:03:55,280 --> 00:03:57,520 Speaker 1: consistent with what we saw you in the Great Depression, 69 00:03:57,560 --> 00:04:00,600 Speaker 1: when we had a lot of these very brutal bear 70 00:04:00,680 --> 00:04:03,600 Speaker 1: market but also bullmarkets. I mean, some of the fastest 71 00:04:03,960 --> 00:04:06,800 Speaker 1: rallies in history happened in the nineteen thirties, but of 72 00:04:06,800 --> 00:04:10,240 Speaker 1: course they were not sustained. UM. Second indication that we 73 00:04:10,280 --> 00:04:14,680 Speaker 1: are still in a in the same cycle as before 74 00:04:15,440 --> 00:04:19,760 Speaker 1: is um the weakness of buybacks. So in in a 75 00:04:19,880 --> 00:04:24,880 Speaker 1: bona fide um bull market, what you see is as 76 00:04:25,000 --> 00:04:28,200 Speaker 1: as as stock valuations are depressed and earnings are coming back, 77 00:04:28,240 --> 00:04:30,440 Speaker 1: cash flow was improving, you see companies buy back more 78 00:04:30,480 --> 00:04:33,880 Speaker 1: of their stocks. This is happening to some extent, but 79 00:04:34,160 --> 00:04:37,200 Speaker 1: we're still about fifty percent off the levels that we 80 00:04:37,200 --> 00:04:40,840 Speaker 1: wear uh pre covid um, and a lot of the 81 00:04:40,880 --> 00:04:42,880 Speaker 1: buy backs that we are seeing are really just coming 82 00:04:42,920 --> 00:04:45,200 Speaker 1: from the tech sector where this is not really a 83 00:04:45,200 --> 00:04:47,960 Speaker 1: buy back, it's a way to offset the delusion from 84 00:04:47,960 --> 00:04:50,400 Speaker 1: stock based compensation. So you see buy backs, but you 85 00:04:50,440 --> 00:04:53,920 Speaker 1: don't see the float drink um. Speaking of float, another 86 00:04:54,120 --> 00:05:00,000 Speaker 1: inconsistency that we've seen is this this massive increase inequity issuance. UM. 87 00:05:00,000 --> 00:05:04,000 Speaker 1: We had the biggest month quarter on record, much much 88 00:05:04,080 --> 00:05:06,719 Speaker 1: higher than what we had during the Internet bubble, as 89 00:05:06,760 --> 00:05:11,240 Speaker 1: companies have been really just taking advantage of these extraorminity 90 00:05:11,240 --> 00:05:13,920 Speaker 1: evaluations to raise equity. Again, not something that you would 91 00:05:13,920 --> 00:05:16,520 Speaker 1: see at the bottom. UM. The same thing with inside 92 00:05:16,520 --> 00:05:20,159 Speaker 1: the selling. I mean typically at a major market bottom 93 00:05:20,200 --> 00:05:23,680 Speaker 1: you see you know, insiders sell less and buy more. 94 00:05:23,720 --> 00:05:26,240 Speaker 1: When we see the opposite we see especially among big 95 00:05:26,240 --> 00:05:31,480 Speaker 1: tech company mas lack insiders as just cashing it out. UM. 96 00:05:31,480 --> 00:05:35,160 Speaker 1: And then the last part that's um not consistent with 97 00:05:35,320 --> 00:05:38,280 Speaker 1: a new ball market is the behavior of retail. So 98 00:05:38,360 --> 00:05:40,440 Speaker 1: typically at the DNT of a new bull market, you 99 00:05:40,480 --> 00:05:43,040 Speaker 1: know there's a lot of distrust, there's a lot of fear, 100 00:05:43,720 --> 00:05:46,640 Speaker 1: so the money is more like players like one buffet 101 00:05:46,640 --> 00:05:49,120 Speaker 1: long term investors that are you know, brave enough to 102 00:05:49,520 --> 00:05:53,800 Speaker 1: dip their toes UM. Here it's exact opposite, right, you see. Um. 103 00:05:53,920 --> 00:05:56,320 Speaker 1: You know, obviously cash level at at Berkshire is a 104 00:05:56,400 --> 00:05:58,680 Speaker 1: closer record high. And on the other hand, we had 105 00:05:58,720 --> 00:06:02,760 Speaker 1: the largest inflow UH for the in eats ever for 106 00:06:02,800 --> 00:06:06,599 Speaker 1: the past uh eight weeks. So we are seeing basically 107 00:06:06,640 --> 00:06:10,080 Speaker 1: corporations and inside of s catching out retail buy me in, 108 00:06:10,440 --> 00:06:13,560 Speaker 1: which is typically what you see at major market tops 109 00:06:13,800 --> 00:06:15,880 Speaker 1: or at least at the end of the ball market, 110 00:06:16,000 --> 00:06:18,920 Speaker 1: not at the beginning. So Vincent, I guess, you know, 111 00:06:19,600 --> 00:06:22,120 Speaker 1: I might be a bit more skeptical about this. I mean, 112 00:06:22,279 --> 00:06:24,400 Speaker 1: there's a lot of things that play here, right, I mean, 113 00:06:25,200 --> 00:06:28,839 Speaker 1: this market is so different from anything we've ever seen 114 00:06:29,120 --> 00:06:33,599 Speaker 1: in the past. Um. You know, obviously there are companies 115 00:06:33,640 --> 00:06:37,200 Speaker 1: that could possibly be cautious about doing buy backs right now. 116 00:06:37,240 --> 00:06:39,800 Speaker 1: They might be waiting for just a little bit more 117 00:06:39,880 --> 00:06:44,880 Speaker 1: normal fee um, you know, and from that buybacks perspective 118 00:06:44,920 --> 00:06:48,320 Speaker 1: as well, US banks also just recently got the okay 119 00:06:48,440 --> 00:06:51,360 Speaker 1: to buy shares or the purchase shares that should help 120 00:06:51,360 --> 00:06:55,000 Speaker 1: with the comeback as well. UM. And also the retail 121 00:06:55,120 --> 00:06:59,400 Speaker 1: buying that we've seen is also pretty unprecedented given the 122 00:06:59,480 --> 00:07:02,680 Speaker 1: environment that we've been in. Um, how do you sort of, 123 00:07:03,520 --> 00:07:06,159 Speaker 1: you know, say, okay, I'm looking at this and you know, 124 00:07:06,480 --> 00:07:09,440 Speaker 1: not really this is why this we're coming to the 125 00:07:09,560 --> 00:07:11,280 Speaker 1: end of the bull parking. I mean there's also the 126 00:07:11,600 --> 00:07:14,880 Speaker 1: option of, like Tina, where what are your other opportunities 127 00:07:14,880 --> 00:07:18,800 Speaker 1: out there to actually put your money in? Yeah? These 128 00:07:18,800 --> 00:07:24,920 Speaker 1: are good old, very fair points. UM. I agree with 129 00:07:24,960 --> 00:07:28,840 Speaker 1: you that this is unprecedented. Obviously it is. And in 130 00:07:28,880 --> 00:07:31,000 Speaker 1: a way it makes me feel like we should even 131 00:07:31,040 --> 00:07:36,160 Speaker 1: discard everything that happened, uh, you know between Mars and today. 132 00:07:36,240 --> 00:07:38,320 Speaker 1: And this is what makes me think that we are 133 00:07:38,400 --> 00:07:41,640 Speaker 1: still in that same cycle. I mean you mentioned the world, Tina. 134 00:07:41,760 --> 00:07:46,880 Speaker 1: I mean this was the mentra of the past ten years. UM. 135 00:07:47,040 --> 00:07:51,800 Speaker 1: So yes, the same thing with their investors. UM, Sarah 136 00:07:51,840 --> 00:07:55,880 Speaker 1: whom I you know, after I'm sure we all regret 137 00:07:56,000 --> 00:07:57,880 Speaker 1: that she's no longer here. You know, she she had 138 00:07:58,120 --> 00:08:00,120 Speaker 1: she used to run these stories very early on the 139 00:08:00,240 --> 00:08:03,640 Speaker 1: on the retail manua. UM. And I remember in this 140 00:08:03,720 --> 00:08:05,840 Speaker 1: conversation with her like saying, well, oh no, these guys 141 00:08:05,840 --> 00:08:08,920 Speaker 1: are gonna go away. You know it's retail investors the weekends. 142 00:08:09,720 --> 00:08:12,480 Speaker 1: I mean, this has been a big surprise. How sustainable? 143 00:08:13,080 --> 00:08:18,200 Speaker 1: Um did this has been? Um? I still think again 144 00:08:18,240 --> 00:08:21,120 Speaker 1: I have been wrong on this before. And I may 145 00:08:21,160 --> 00:08:24,480 Speaker 1: still be wrong, but I think eventually this this is 146 00:08:24,520 --> 00:08:27,920 Speaker 1: not the ingredients for sustainable ballmarket. I mean, you don't 147 00:08:28,000 --> 00:08:32,280 Speaker 1: build economic prosperity on on doogh coin and game stop 148 00:08:32,360 --> 00:08:35,079 Speaker 1: and and mimes tongs. I mean, it's so fun, everybody 149 00:08:35,120 --> 00:08:38,840 Speaker 1: is having a good time now, but um you know, 150 00:08:39,000 --> 00:08:42,080 Speaker 1: you really don't have the ingredients for for sustainable economic 151 00:08:42,120 --> 00:08:46,000 Speaker 1: growth on this. On the banks, I thought you raised 152 00:08:46,120 --> 00:08:53,480 Speaker 1: a very interesting question, um um so, and it's key 153 00:08:53,600 --> 00:08:57,200 Speaker 1: to me for the debate on on the inflation and 154 00:08:57,240 --> 00:08:59,680 Speaker 1: the nature of the recovery. One thing that is stunning 155 00:09:00,280 --> 00:09:02,760 Speaker 1: is that we've seen a collapse in the loan to 156 00:09:02,800 --> 00:09:06,000 Speaker 1: deposit ratio. So typically, you know, we're learning school loan 157 00:09:06,679 --> 00:09:10,559 Speaker 1: deposits make loan loans make deposit um the not. Usually 158 00:09:10,559 --> 00:09:13,120 Speaker 1: there is about a one to one loan to deposit ratio. 159 00:09:13,720 --> 00:09:17,360 Speaker 1: And with COVID, what we've seen is that that loan 160 00:09:17,400 --> 00:09:19,680 Speaker 1: to deposit ratio has collapse to less than zero point 161 00:09:19,720 --> 00:09:21,920 Speaker 1: five for the big four banks in some cases well 162 00:09:21,960 --> 00:09:23,720 Speaker 1: as far Ago for example, it's because they are not 163 00:09:23,720 --> 00:09:27,800 Speaker 1: allowed to but even the other the other big three, um, 164 00:09:27,840 --> 00:09:31,199 Speaker 1: just there has been this lagging in loan insurance and 165 00:09:32,280 --> 00:09:35,600 Speaker 1: there's the question is what happens next. And we can 166 00:09:35,640 --> 00:09:39,600 Speaker 1: go with with your your your theory that you know 167 00:09:40,040 --> 00:09:42,000 Speaker 1: now that banks are making money again, they're going to 168 00:09:42,080 --> 00:09:45,040 Speaker 1: do buy backs again and that's that's where this extra 169 00:09:45,160 --> 00:09:48,480 Speaker 1: capital is going to be returned, or um, we can 170 00:09:48,520 --> 00:09:50,520 Speaker 1: go with what I think is more likely, which is 171 00:09:50,559 --> 00:09:53,200 Speaker 1: inflacial review, which is we have all these kind of 172 00:09:53,240 --> 00:09:56,960 Speaker 1: trapped kinetic energy in the banking sector. I calculately, if 173 00:09:56,960 --> 00:09:58,719 Speaker 1: you just look at the Big four and if we 174 00:09:58,800 --> 00:10:01,600 Speaker 1: wanted to go back to normal loan to deposit ratio, 175 00:10:01,840 --> 00:10:05,360 Speaker 1: not not even pretty thousand eight, let's go post GFC, 176 00:10:05,640 --> 00:10:08,120 Speaker 1: meaning with with all the new potential regulations. So if 177 00:10:08,120 --> 00:10:09,480 Speaker 1: we were if we were to go from zero point 178 00:10:09,480 --> 00:10:12,120 Speaker 1: five to zero point eight on the loan to deposit ratio, 179 00:10:12,520 --> 00:10:14,360 Speaker 1: the big four bags will have to issue more than 180 00:10:14,400 --> 00:10:17,760 Speaker 1: two point five chillion in new loans. So I think 181 00:10:17,760 --> 00:10:21,439 Speaker 1: that's something that again the market is not really discounting. 182 00:10:21,520 --> 00:10:23,599 Speaker 1: I mean, well, we have our eyes on all the 183 00:10:23,880 --> 00:10:26,960 Speaker 1: infrastructure spending plan, the family Plan, the COVID PLANEL, all 184 00:10:27,040 --> 00:10:29,000 Speaker 1: these there seems to be a new one every week, 185 00:10:29,040 --> 00:10:31,440 Speaker 1: a new two trillion dollar panel. I would add, there's 186 00:10:31,440 --> 00:10:34,440 Speaker 1: a hidden banking steamers, and I could see it happen 187 00:10:34,480 --> 00:10:37,360 Speaker 1: in te one with a perfect storm for banks, right, 188 00:10:37,400 --> 00:10:39,440 Speaker 1: because you have steeper yeld curve, so now it's profitable 189 00:10:39,480 --> 00:10:42,840 Speaker 1: against the issue loans. They have generally over provisioned the losses. 190 00:10:43,480 --> 00:10:45,520 Speaker 1: You saw that in the earnings of JP Morgan, right, 191 00:10:45,559 --> 00:10:47,600 Speaker 1: I mean they were able to release some of these 192 00:10:47,800 --> 00:10:50,280 Speaker 1: extra provisions. Some of that they can. They have too 193 00:10:50,360 --> 00:10:54,280 Speaker 1: much capital, so you know, why keep that capital earning 194 00:10:54,400 --> 00:10:56,840 Speaker 1: zero as excess visits and the FED when you have 195 00:10:57,000 --> 00:10:59,760 Speaker 1: you know, an economy that's booming, a consumer that's very 196 00:10:59,880 --> 00:11:03,040 Speaker 1: good out really really state sector that's on fire, steep 197 00:11:03,080 --> 00:11:07,480 Speaker 1: heel curves, um, so that could add to these inflationary pressure. 198 00:11:07,520 --> 00:11:12,000 Speaker 1: And again inflationary pressure should not be an early stage. 199 00:11:12,600 --> 00:11:14,839 Speaker 1: Typically at the early stage of a rally. Yeah, you 200 00:11:14,960 --> 00:11:18,440 Speaker 1: see some some pick up in commodity prices, right because 201 00:11:18,440 --> 00:11:21,440 Speaker 1: they you know, they're the most cyclical, But the stickier 202 00:11:21,480 --> 00:11:24,640 Speaker 1: parts of inflasion, whether it's wages or rents or bank lending, 203 00:11:24,679 --> 00:11:26,480 Speaker 1: do not pick up quite yet. And I think this 204 00:11:26,559 --> 00:11:28,199 Speaker 1: is what we're going to see, which is again more 205 00:11:28,240 --> 00:11:38,200 Speaker 1: consistent with the late cycle dynamic than an early cycle one. 206 00:11:40,200 --> 00:11:43,040 Speaker 1: I think that point about share supply is interesting. I 207 00:11:43,040 --> 00:11:45,720 Speaker 1: mean that is often the I p O mania of 208 00:11:46,040 --> 00:11:50,040 Speaker 1: sated is often pointed to is kind of the pin 209 00:11:50,120 --> 00:11:52,679 Speaker 1: that that topped the bubble, that just over supply of 210 00:11:52,880 --> 00:11:56,120 Speaker 1: chairs into the market. And um, you know, on the 211 00:11:56,160 --> 00:12:00,160 Speaker 1: flip side, though you've you've written pretty eloquently about you 212 00:12:00,200 --> 00:12:03,240 Speaker 1: call this big blob of money that's kind of chasing 213 00:12:03,280 --> 00:12:05,480 Speaker 1: bubbles from place to place. I just want to read 214 00:12:05,800 --> 00:12:07,960 Speaker 1: read a quote from the report because I think it's 215 00:12:08,040 --> 00:12:11,240 Speaker 1: it's true and it's interesting. Uh you write, quote, the 216 00:12:11,240 --> 00:12:14,240 Speaker 1: blob has created a rotating bubble from long bonds to 217 00:12:14,320 --> 00:12:19,680 Speaker 1: big tech work from home stocks, three opening sectors, electrical vehicles, 218 00:12:19,760 --> 00:12:24,360 Speaker 1: two spacts and obviously we could add doage coin and 219 00:12:24,360 --> 00:12:27,360 Speaker 1: and whatever else n f T s to to that list, 220 00:12:27,400 --> 00:12:30,560 Speaker 1: I imagine. So to me, I guess the play is, 221 00:12:31,000 --> 00:12:34,800 Speaker 1: you know, it's almost impossible to to identify the top 222 00:12:34,840 --> 00:12:36,800 Speaker 1: of a bubble and and to say short of bubble 223 00:12:36,880 --> 00:12:39,200 Speaker 1: right before it pops. But it seems to me like 224 00:12:39,280 --> 00:12:41,280 Speaker 1: the play for you is more kind of you know, 225 00:12:41,360 --> 00:12:44,199 Speaker 1: getting ahead of where that blob is going to go next, right. 226 00:12:44,240 --> 00:12:48,200 Speaker 1: I mean, there's swollen savings accounts in the US because 227 00:12:48,200 --> 00:12:54,199 Speaker 1: of the government stimulus, the unemployment benefit enhancements, uh, you know, 228 00:12:54,480 --> 00:12:56,960 Speaker 1: and just the lack of places to spend your money 229 00:12:57,080 --> 00:13:00,720 Speaker 1: last year, your disposed lincome. So is that is at it? Vincent? 230 00:13:00,800 --> 00:13:03,679 Speaker 1: Is it is the best move now not trying to 231 00:13:03,960 --> 00:13:07,560 Speaker 1: time the pop of the bubbly parts of the market, 232 00:13:07,559 --> 00:13:09,480 Speaker 1: but try to get in early on the on the next, 233 00:13:10,040 --> 00:13:13,520 Speaker 1: the next bubbles in the making. Absolutely, yeah for your 234 00:13:13,559 --> 00:13:17,120 Speaker 1: point on on the difficulty of of timing. Timing bubbles 235 00:13:17,200 --> 00:13:19,920 Speaker 1: is impossible at the best of time. And now we 236 00:13:19,960 --> 00:13:22,400 Speaker 1: have the situation on the bubbles don't don't burst like 237 00:13:22,440 --> 00:13:26,320 Speaker 1: the blob just moves, but it leaves whether it was 238 00:13:26,640 --> 00:13:29,080 Speaker 1: in a similar state of evaluation like you look at 239 00:13:29,080 --> 00:13:32,680 Speaker 1: the r k TF. So clearly you know, this story 240 00:13:32,720 --> 00:13:35,200 Speaker 1: to me is kind of over. But we haven't had 241 00:13:35,240 --> 00:13:37,920 Speaker 1: the big you know, eighty to nine draw down that 242 00:13:38,000 --> 00:13:40,079 Speaker 1: would have expected, you know, the way it paid out 243 00:13:40,080 --> 00:13:42,360 Speaker 1: in with the Nazlak stops and in the two thousand, right, 244 00:13:42,440 --> 00:13:45,920 Speaker 1: just kind of stays there. Um So, I would not 245 00:13:46,040 --> 00:13:49,000 Speaker 1: try to shot it, but I would try to guess 246 00:13:49,000 --> 00:13:53,439 Speaker 1: whether blob is going to move next. Um So, I 247 00:13:53,480 --> 00:13:58,160 Speaker 1: would think there are three areas that have not been 248 00:13:58,200 --> 00:14:02,960 Speaker 1: touched by the blob and are quickly um um talk 249 00:14:03,000 --> 00:14:04,840 Speaker 1: about each one of them. So let me start with 250 00:14:04,840 --> 00:14:07,880 Speaker 1: the one that I don't believe in, which is garb 251 00:14:08,000 --> 00:14:11,520 Speaker 1: stock growth at a reasonable price, the quality names. I've 252 00:14:11,520 --> 00:14:13,960 Speaker 1: seen a lot of strategies and you know, get into 253 00:14:13,960 --> 00:14:18,240 Speaker 1: this stuff or you know, consumer staples, some healthcare stocks 254 00:14:18,240 --> 00:14:19,920 Speaker 1: for example. These are these are the last parts of 255 00:14:19,960 --> 00:14:22,680 Speaker 1: the market that the tech obviously was over value to 256 00:14:22,680 --> 00:14:25,040 Speaker 1: start with. Then we had the reopened small care that 257 00:14:25,360 --> 00:14:28,160 Speaker 1: so real? What leads it leads you with, like, you know, 258 00:14:28,200 --> 00:14:30,880 Speaker 1: a handful of stock and consumer staples and and healthcare. 259 00:14:31,520 --> 00:14:33,800 Speaker 1: I'm not excited about that, mostly because of my belief 260 00:14:33,840 --> 00:14:36,200 Speaker 1: that inflation is gonna come here, and that's he's gonna 261 00:14:36,240 --> 00:14:39,480 Speaker 1: come stronger and longer than people think. And you really 262 00:14:39,480 --> 00:14:42,320 Speaker 1: don't want to be in these kind of stocks. Um. 263 00:14:42,360 --> 00:14:45,840 Speaker 1: So the post that I'm more excited about our um 264 00:14:45,880 --> 00:14:52,040 Speaker 1: in order playing some reopening trade in Europe, Mexico, which 265 00:14:52,120 --> 00:14:54,760 Speaker 1: is by far my favorite short term call. And then 266 00:14:54,800 --> 00:14:57,680 Speaker 1: precious metal. Um, do you want me to start with 267 00:14:58,720 --> 00:15:02,000 Speaker 1: any any in new particular order? Yeah, you know, I was. 268 00:15:02,120 --> 00:15:04,040 Speaker 1: I was gonna ask you about Mexico. I think that's 269 00:15:04,040 --> 00:15:07,080 Speaker 1: an interesting one. I mean obviously a very sort of 270 00:15:07,080 --> 00:15:11,720 Speaker 1: cyclical oriented benchmark, uh stock index, I mean a lot 271 00:15:11,760 --> 00:15:16,000 Speaker 1: of commodity producers, energy producers. That's not all. But though 272 00:15:16,040 --> 00:15:18,480 Speaker 1: I know you, you're one of the few strategists I've 273 00:15:18,520 --> 00:15:22,000 Speaker 1: seen actually use the big MAC index and and uh 274 00:15:22,160 --> 00:15:24,520 Speaker 1: the determined that the pace SO is undervalued. So I 275 00:15:24,560 --> 00:15:26,560 Speaker 1: know that's part of it. But get into Mexico a 276 00:15:26,600 --> 00:15:28,960 Speaker 1: little bit for us about what what are all the 277 00:15:29,040 --> 00:15:31,440 Speaker 1: sort of book cases for for Mexican stocks? For you, 278 00:15:32,240 --> 00:15:34,920 Speaker 1: what I think about Mexico, it's really an intersection of 279 00:15:34,920 --> 00:15:39,160 Speaker 1: what I think are the four big stories. Uh. One 280 00:15:39,400 --> 00:15:44,040 Speaker 1: is um this studying commodity rally, which you know, for Mexico, 281 00:15:44,080 --> 00:15:46,880 Speaker 1: the biggest Achilles heal has always been Panics, which you 282 00:15:46,920 --> 00:15:52,200 Speaker 1: know is horridly run, structural decline and difficult ordination the government. 283 00:15:52,280 --> 00:15:54,080 Speaker 1: And you know this is this was an accident in 284 00:15:54,120 --> 00:15:55,880 Speaker 1: the making, right, I mean, people thought, Okay, this is 285 00:15:55,920 --> 00:15:58,520 Speaker 1: gonna hit in one and like it's like a lifeline, 286 00:15:58,520 --> 00:16:01,840 Speaker 1: It's like a gift from heaven. With all prices above sixty, 287 00:16:01,880 --> 00:16:03,640 Speaker 1: these guys are gonna they're not gonna be great, They 288 00:16:03,640 --> 00:16:06,120 Speaker 1: will never be great. But at least that's the probably 289 00:16:06,120 --> 00:16:08,800 Speaker 1: we don't have to worry about UH. And in general, 290 00:16:08,840 --> 00:16:12,440 Speaker 1: you know, Mexico, the you know, energy and all is 291 00:16:12,440 --> 00:16:14,720 Speaker 1: a huge part of Mexican GDP, so that they benefit 292 00:16:14,760 --> 00:16:17,920 Speaker 1: from that. Second theme is the U S consumer, which 293 00:16:18,840 --> 00:16:21,040 Speaker 1: you keep surprising to the upside. I mean, we saw 294 00:16:21,080 --> 00:16:24,200 Speaker 1: it again with the lader's job numbers. Consumers, I mean 295 00:16:24,640 --> 00:16:28,760 Speaker 1: just just keeps getting better and better. Um, and that 296 00:16:28,840 --> 00:16:32,200 Speaker 1: benefits Mexico. I mean fifty percent of Mexican GDP is 297 00:16:32,320 --> 00:16:34,600 Speaker 1: exposed to the US, so it's probably the kind of 298 00:16:34,680 --> 00:16:37,000 Speaker 1: the single the economy has a single most leverage on 299 00:16:37,040 --> 00:16:40,600 Speaker 1: the US consumer. It also plays out via remittancies. So 300 00:16:40,640 --> 00:16:43,760 Speaker 1: we have all these Mexican workers that are working the 301 00:16:43,920 --> 00:16:47,040 Speaker 1: US and they'll all be collecting the stimulus checks um 302 00:16:47,160 --> 00:16:49,680 Speaker 1: and and you know, back home, you know, things are 303 00:16:49,680 --> 00:16:51,920 Speaker 1: still pretty bad. I mean, Mexican economy suffered a lot 304 00:16:52,000 --> 00:16:53,720 Speaker 1: last year, so you'll see a lot of money come 305 00:16:53,760 --> 00:16:56,640 Speaker 1: back from the U S to Mexico, creating flaw setting 306 00:16:56,640 --> 00:17:00,360 Speaker 1: the lola buying the paesel. I think it's already twenty 307 00:17:00,360 --> 00:17:03,280 Speaker 1: five percent you over year, and as we get more stimulus, 308 00:17:03,320 --> 00:17:06,080 Speaker 1: I expect that to continue, especially as a construction sector. 309 00:17:06,080 --> 00:17:09,119 Speaker 1: Construction sector improves in the US, you could see this 310 00:17:09,240 --> 00:17:13,840 Speaker 1: money flow back in UH. Third big big narrative for 311 00:17:14,720 --> 00:17:18,080 Speaker 1: one is steeper yield curves which benefit financial Again, you 312 00:17:18,080 --> 00:17:21,399 Speaker 1: look at the Mexican Index, huge weight of banks and 313 00:17:21,440 --> 00:17:24,240 Speaker 1: financial which is typical of emerging markets which tend to 314 00:17:24,280 --> 00:17:30,080 Speaker 1: benefit from steeper yield curve and rising yields um. And 315 00:17:30,119 --> 00:17:32,880 Speaker 1: then the last theme is more kind of a secular theme, 316 00:17:32,920 --> 00:17:39,440 Speaker 1: but it's this um ongoing competition or outright cold war 317 00:17:39,480 --> 00:17:42,000 Speaker 1: between the U S and China, which means that you'll 318 00:17:42,040 --> 00:17:47,399 Speaker 1: see a preference for shorter supply chain, more regionalization of trade. 319 00:17:47,400 --> 00:17:49,960 Speaker 1: And of course Mexico, which has suffered so much from 320 00:17:50,000 --> 00:17:54,000 Speaker 1: the rise of Asia, the makilga sector certainly is very 321 00:17:54,000 --> 00:17:56,800 Speaker 1: competitive again in large part because people don't want to 322 00:17:56,800 --> 00:17:59,040 Speaker 1: have these long supply chains, and also because the Paso, 323 00:17:59,080 --> 00:18:00,840 Speaker 1: as you mentioned, is the area and the value. If 324 00:18:00,880 --> 00:18:02,240 Speaker 1: you look at the Big MAC Index, it's in the 325 00:18:02,280 --> 00:18:04,600 Speaker 1: value by about six And if you look at the 326 00:18:04,600 --> 00:18:06,879 Speaker 1: current account deficit of Mexico, I mean Mexico has been 327 00:18:06,880 --> 00:18:10,159 Speaker 1: a deficit country for ever since I was born. For 328 00:18:10,200 --> 00:18:12,800 Speaker 1: the first time in I think thirty five years now, 329 00:18:13,040 --> 00:18:15,119 Speaker 1: Mexico as a current account surplus. So here you go 330 00:18:15,480 --> 00:18:20,440 Speaker 1: very in the valued currency uh, perfectly aligned with with 331 00:18:20,640 --> 00:18:25,679 Speaker 1: energy with the US consumer with steeper yield curves uh. 332 00:18:25,720 --> 00:18:27,840 Speaker 1: And then also a lot of pessimism or in Mexico, 333 00:18:27,960 --> 00:18:32,240 Speaker 1: like people are very negative about amno. And you know, 334 00:18:32,240 --> 00:18:33,840 Speaker 1: I don't think you could get any worse than that. 335 00:18:35,480 --> 00:18:38,160 Speaker 1: So you know, as usual, you want to buy the stories. 336 00:18:38,359 --> 00:18:40,600 Speaker 1: You know, you want to buy things going from You 337 00:18:40,640 --> 00:18:42,240 Speaker 1: make most of your money when things are going from 338 00:18:42,720 --> 00:18:45,399 Speaker 1: very bad to a little bit better. Not you know 339 00:18:45,480 --> 00:18:47,439 Speaker 1: this this is the best time to invest in in 340 00:18:47,480 --> 00:18:50,280 Speaker 1: an emerging market. Well, can we talk a little bit 341 00:18:50,320 --> 00:18:53,240 Speaker 1: about North of the border as well? Not an emerging market, 342 00:18:53,359 --> 00:18:57,960 Speaker 1: but you know, has a lot of similarities to Mexico 343 00:18:58,040 --> 00:19:01,679 Speaker 1: from a cyclical perspective. Um. And given the fact that 344 00:19:01,720 --> 00:19:04,159 Speaker 1: I set up in Canada. You know why why do 345 00:19:04,200 --> 00:19:06,600 Speaker 1: you like Canada so much? Is it the stock market? 346 00:19:06,720 --> 00:19:08,560 Speaker 1: Is it also the looney which I believe is one 347 00:19:08,560 --> 00:19:11,720 Speaker 1: of the best performing currencies this year. Yeah, I think 348 00:19:11,920 --> 00:19:14,920 Speaker 1: everything I said about Mexico applies to Canada. I would 349 00:19:14,920 --> 00:19:18,760 Speaker 1: say to a lesser extent. I mean, I'm personally I 350 00:19:18,800 --> 00:19:20,440 Speaker 1: prefer in Mexico, which is I think you have more 351 00:19:20,520 --> 00:19:24,119 Speaker 1: more leverage, uh than you do in Canada. You also 352 00:19:24,160 --> 00:19:29,600 Speaker 1: have less of a risk cover. You know, Canada. The 353 00:19:29,600 --> 00:19:32,680 Speaker 1: big problems, of course a realistate bubble, which seemed again 354 00:19:32,960 --> 00:19:35,000 Speaker 1: it's postponed year after year. I mean people have been 355 00:19:35,000 --> 00:19:37,320 Speaker 1: calling for these two burst for ten years now and 356 00:19:37,359 --> 00:19:39,760 Speaker 1: they've been wrong every year. So maybe it doesn't burst. 357 00:19:39,800 --> 00:19:42,919 Speaker 1: But still, I mean in Canada you have this lingering question. 358 00:19:43,560 --> 00:19:47,640 Speaker 1: Um but again, and I think you can play either way. Um. 359 00:19:49,200 --> 00:19:51,760 Speaker 1: For you know, more conservative investors. Clearly Canada is a 360 00:19:51,800 --> 00:19:55,000 Speaker 1: little bit less risky than Mexico, but I think in 361 00:19:55,080 --> 00:19:59,080 Speaker 1: terms of risk reward, I prefer in Mexico. Yeah. So 362 00:19:59,240 --> 00:20:03,040 Speaker 1: that's if if I'm a listener sort of a a 363 00:20:03,080 --> 00:20:05,480 Speaker 1: retail trader at home trying to figure out, well, how 364 00:20:05,480 --> 00:20:07,520 Speaker 1: do I play Mexico? How do I play Canada? I 365 00:20:07,720 --> 00:20:11,119 Speaker 1: feel like a lot of us, say non institutional investors, 366 00:20:11,160 --> 00:20:15,159 Speaker 1: get get a little nervous looking overseas at companies. Is it, 367 00:20:15,760 --> 00:20:17,200 Speaker 1: you know, is this something you would play with E 368 00:20:17,320 --> 00:20:21,240 Speaker 1: T F S or some somehow a sector based strategy? 369 00:20:21,280 --> 00:20:23,960 Speaker 1: How would how would I is like Joe Schmo listening 370 00:20:24,000 --> 00:20:28,960 Speaker 1: at home play Mexico under Canada. Yeah, so one of 371 00:20:29,000 --> 00:20:31,960 Speaker 1: the issue with the Mexican e t F. The main 372 00:20:32,040 --> 00:20:36,080 Speaker 1: one is the you know, the index is very UM 373 00:20:36,359 --> 00:20:42,440 Speaker 1: skewed towards UH Didcom company and and Walmart, which may 374 00:20:42,440 --> 00:20:46,919 Speaker 1: not be the best bet for for what I'm describing UM. 375 00:20:46,960 --> 00:20:49,720 Speaker 1: I think it's mostly honestly, it's the currency play, even 376 00:20:49,720 --> 00:20:52,879 Speaker 1: a fixed income play as well. UM. You know, one 377 00:20:52,920 --> 00:20:58,159 Speaker 1: of the issues that UM investors are facing in one 378 00:20:58,200 --> 00:21:00,560 Speaker 1: and even before is you know, the sixty four portfolio 379 00:21:00,640 --> 00:21:03,439 Speaker 1: is dead, right, I mean, especially that that fully segment 380 00:21:03,600 --> 00:21:05,000 Speaker 1: is dead, Like what are you gonna do with your 381 00:21:05,000 --> 00:21:07,920 Speaker 1: fixed income on location? And you have very few places 382 00:21:07,920 --> 00:21:10,760 Speaker 1: in the world where you can replace you know, US versialis. 383 00:21:10,800 --> 00:21:12,199 Speaker 1: I would say Mexico is one of them. I mean 384 00:21:12,240 --> 00:21:15,320 Speaker 1: I like Asian fixed income and I like Mexico especially 385 00:21:15,320 --> 00:21:17,199 Speaker 1: on the short term. I mean, you have everything that 386 00:21:17,200 --> 00:21:19,560 Speaker 1: I can play out. You can see the spreads compress, 387 00:21:20,160 --> 00:21:22,080 Speaker 1: you can see the currency strengthened, and then you have 388 00:21:22,119 --> 00:21:24,800 Speaker 1: a very nice coupon in Mexico. You know, yel curves 389 00:21:24,840 --> 00:21:28,840 Speaker 1: are very even in the short term, they're they're quite high. UM. 390 00:21:28,920 --> 00:21:31,960 Speaker 1: So maybe you played fixed income and then if you 391 00:21:31,960 --> 00:21:35,040 Speaker 1: wanted to, I have a way around it, which I 392 00:21:35,080 --> 00:21:37,760 Speaker 1: like is to play with Spanish banks. UM. If you 393 00:21:37,800 --> 00:21:40,080 Speaker 1: look at the major Spanish banks, they make more money 394 00:21:41,240 --> 00:21:45,720 Speaker 1: from Mexico than they do Spain UM. And that's the 395 00:21:45,760 --> 00:21:51,720 Speaker 1: way to maybe get UM less of country specific risk 396 00:21:51,960 --> 00:21:54,600 Speaker 1: and also with the Spanish banks. And that brings me 397 00:21:54,640 --> 00:21:58,040 Speaker 1: to my um an next idea, which is you get 398 00:21:58,040 --> 00:22:00,760 Speaker 1: a play on the reopening of Europe, the reopening of 399 00:22:00,760 --> 00:22:05,159 Speaker 1: the tourism sector UM, which is going to happen this summer, 400 00:22:05,200 --> 00:22:08,320 Speaker 1: and you can get them. I mean we're talking. You know, 401 00:22:08,359 --> 00:22:10,480 Speaker 1: most banks in Spain trade at zero point. Fact is 402 00:22:10,520 --> 00:22:13,919 Speaker 1: the open seven book value nine times earnings, so you 403 00:22:13,960 --> 00:22:16,399 Speaker 1: get you get about a fifty percent discount compared to 404 00:22:16,800 --> 00:22:20,919 Speaker 1: US banks. And you get a play on Latin America reflation, 405 00:22:21,400 --> 00:22:25,000 Speaker 1: the week Dallar, the reopening of Europe, steeper curves, which 406 00:22:25,040 --> 00:22:44,960 Speaker 1: to me are all going to be the themes of Alright, 407 00:22:45,000 --> 00:22:48,840 Speaker 1: so Vincent, We've we've been to Mexico, we've been in Canada. Uh, 408 00:22:48,960 --> 00:22:51,240 Speaker 1: we're devious. Even though she doesn't like hockey. I don't 409 00:22:51,240 --> 00:22:54,640 Speaker 1: know they you might get more h streets about that. Actually, Vous, 410 00:22:55,480 --> 00:22:58,440 Speaker 1: that's actually true. I feel like I feel like I've 411 00:22:58,440 --> 00:23:03,600 Speaker 1: now put out a lot of negative so tweet tweet, 412 00:23:03,880 --> 00:23:07,760 Speaker 1: there's just too much fighting hockey fans tweet at if 413 00:23:07,800 --> 00:23:11,480 Speaker 1: you at. Uh, but let's let's stop now. Next port 414 00:23:11,480 --> 00:23:14,160 Speaker 1: of call. Vincent is in Europe, um, and I want 415 00:23:14,160 --> 00:23:17,200 Speaker 1: to read another line from one of your reports, Gredded. 416 00:23:17,240 --> 00:23:20,080 Speaker 1: I'm reading this mainly because I find it hilarious, so 417 00:23:20,200 --> 00:23:22,040 Speaker 1: let me just read it here. And you're you're talking 418 00:23:22,119 --> 00:23:24,479 Speaker 1: about you took a trip to see some family in 419 00:23:24,520 --> 00:23:27,280 Speaker 1: France and not too long ago, I guess it was April, 420 00:23:27,359 --> 00:23:31,080 Speaker 1: maybe maybe late March, and uh kind of sounded like 421 00:23:31,160 --> 00:23:35,119 Speaker 1: full on lockdown conditions were still in effect, and you 422 00:23:35,240 --> 00:23:41,639 Speaker 1: write quote restaurants, cafes, bars, bookshops, museums, and theaters were closed, 423 00:23:42,200 --> 00:23:48,119 Speaker 1: making Paris as blurring as Geneva. But so Vincent is 424 00:23:48,119 --> 00:23:50,280 Speaker 1: gonna get some hate tweets from the from the Swiss 425 00:23:50,280 --> 00:23:52,359 Speaker 1: as well, so direct them to Vincent. You can copy 426 00:23:52,400 --> 00:23:54,119 Speaker 1: me on those two because I'm tying to trying to 427 00:23:54,160 --> 00:23:57,240 Speaker 1: see those. But you refer to with the Vincent as 428 00:23:57,280 --> 00:24:01,040 Speaker 1: what you call peak COVID despair meeting. Uh boy, everyone 429 00:24:01,160 --> 00:24:03,919 Speaker 1: was just sick of lockdowns. There were starting to be 430 00:24:04,000 --> 00:24:07,479 Speaker 1: conspiracy theories flying much like here in the US, and 431 00:24:07,520 --> 00:24:10,439 Speaker 1: just kind of a dangerous situation. But to me is 432 00:24:10,480 --> 00:24:13,359 Speaker 1: that that kind of contrarian instinct picks in and makes 433 00:24:13,359 --> 00:24:16,040 Speaker 1: me think that sounds like the time to buy the 434 00:24:16,080 --> 00:24:19,160 Speaker 1: reopening sectors, the you know, maybe the hotels, the airlines, 435 00:24:19,720 --> 00:24:22,520 Speaker 1: that sort of thing. The banks, as you mentioned, uh, 436 00:24:22,560 --> 00:24:26,640 Speaker 1: you know, the Spanish banks, European banks, which boy talked 437 00:24:26,640 --> 00:24:30,040 Speaker 1: about something that went from radioactive not too long ago. 438 00:24:30,160 --> 00:24:32,199 Speaker 1: So it's it's interesting to hear a bullish take on 439 00:24:32,240 --> 00:24:34,280 Speaker 1: it now. But I mean, is it as simple as 440 00:24:34,320 --> 00:24:38,080 Speaker 1: that that you know, when things look like they're at 441 00:24:38,080 --> 00:24:40,000 Speaker 1: their worst in Europe, that that's the time to really 442 00:24:40,000 --> 00:24:43,560 Speaker 1: get bullish on the reopening. Yes. By the way, I 443 00:24:43,600 --> 00:24:46,760 Speaker 1: don't think this is something that Americans understand about how 444 00:24:46,840 --> 00:24:49,119 Speaker 1: bad the lockdowns have been in Europe. Like it always 445 00:24:49,160 --> 00:24:52,119 Speaker 1: amuses me when I see Americans like, you know, so 446 00:24:52,560 --> 00:24:58,560 Speaker 1: like dantrums the mask on, like you know, try going 447 00:24:58,600 --> 00:25:01,280 Speaker 1: to Europe. Why really, Like you're stuck in your home 448 00:25:01,760 --> 00:25:04,280 Speaker 1: and you know if you go out without the right 449 00:25:04,280 --> 00:25:06,440 Speaker 1: piece of paper, you know that you're gonna get a 450 00:25:06,480 --> 00:25:08,240 Speaker 1: hard and fifty year of find. I mean, if only 451 00:25:08,359 --> 00:25:11,520 Speaker 1: find cured COVID friends would totally lead the world. Like 452 00:25:11,880 --> 00:25:14,880 Speaker 1: if we could have you know, we couldn't produce vaccines 453 00:25:14,960 --> 00:25:19,120 Speaker 1: but paperwork and finds. I mean we were leaders there, 454 00:25:19,680 --> 00:25:23,960 Speaker 1: um and and yeah, it's been very frustrating in Europe 455 00:25:23,960 --> 00:25:26,600 Speaker 1: because it's like lockdown number three or four, right, I 456 00:25:26,640 --> 00:25:29,800 Speaker 1: mean it's like I do think it's the last, right, 457 00:25:29,880 --> 00:25:32,800 Speaker 1: but you know, people have you know, it's almost like 458 00:25:32,800 --> 00:25:36,880 Speaker 1: a hope management strategy. They they just keep noticed, this 459 00:25:36,920 --> 00:25:38,919 Speaker 1: is gonna keep going because so many times they've been 460 00:25:38,920 --> 00:25:40,840 Speaker 1: told okay, and now we're going back to normal, only 461 00:25:40,920 --> 00:25:44,080 Speaker 1: to shut down two months later. Uh, I do think 462 00:25:44,080 --> 00:25:47,280 Speaker 1: this is the last. Uh. Yes, you're a bunch the 463 00:25:47,320 --> 00:25:51,320 Speaker 1: vaccination program at the beginning, so it Canada by the way, Uh, 464 00:25:51,359 --> 00:25:54,240 Speaker 1: you know we were late. Uh and that costs a 465 00:25:54,280 --> 00:25:56,040 Speaker 1: lot of lives and that you know, that allowed the 466 00:25:56,119 --> 00:25:59,040 Speaker 1: variants to spread. And this was a horrible policy mistake, 467 00:25:59,080 --> 00:26:02,359 Speaker 1: no questions about that. But you know we went two 468 00:26:02,359 --> 00:26:05,200 Speaker 1: months behind the US vaccine. Stop you look at infection 469 00:26:05,200 --> 00:26:06,960 Speaker 1: in the US. This is when they started going down 470 00:26:06,960 --> 00:26:09,919 Speaker 1: the cliff. So now we you know, all the vulnerable, 471 00:26:10,040 --> 00:26:13,360 Speaker 1: all elderly sick population is now vaccinated. In Europe, they're 472 00:26:13,359 --> 00:26:16,240 Speaker 1: getting to people in my age group. Then you'll get 473 00:26:16,240 --> 00:26:18,879 Speaker 1: the weather. You know, same thing that happened last year. Right, 474 00:26:18,880 --> 00:26:22,520 Speaker 1: we had a big outbreak in March April, and then 475 00:26:22,600 --> 00:26:24,880 Speaker 1: we had a very normal summer because people started going 476 00:26:24,920 --> 00:26:28,240 Speaker 1: out the viruses and spread as much. And then just 477 00:26:28,240 --> 00:26:31,480 Speaker 1: just politically, I think the reason why we had the 478 00:26:31,480 --> 00:26:34,919 Speaker 1: lockdown in Europe in in April is so that we 479 00:26:34,920 --> 00:26:40,000 Speaker 1: could open in May June. Like you know, Macro and Druggy, 480 00:26:40,080 --> 00:26:43,600 Speaker 1: there's smart people. They know the importance of tourism for 481 00:26:43,680 --> 00:26:46,480 Speaker 1: the for the European economy, and they basically needed to 482 00:26:46,480 --> 00:26:48,879 Speaker 1: get that curve to look like it's going down a 483 00:26:48,920 --> 00:26:51,160 Speaker 1: little bit so that they could say, okay, fine, now 484 00:26:51,160 --> 00:26:53,760 Speaker 1: we reopened, let's up a normal summer because we cannot 485 00:26:53,800 --> 00:26:57,040 Speaker 1: afford another summer of lockdown. So um, we'll have the 486 00:26:57,080 --> 00:26:59,639 Speaker 1: same dynamic and it will be magnified because in Europe, 487 00:26:59,680 --> 00:27:03,879 Speaker 1: you know, occasions are a religion. Uh people, people have 488 00:27:03,920 --> 00:27:07,200 Speaker 1: been cooked up inside. Um even last even last summer, 489 00:27:07,240 --> 00:27:09,399 Speaker 1: the tourism season for the places that were open, what 490 00:27:09,680 --> 00:27:14,000 Speaker 1: was actually very good. We saw higher bookings are normal. Um. 491 00:27:14,040 --> 00:27:16,440 Speaker 1: So yeah, what is the conclusion you played the reopened 492 00:27:16,480 --> 00:27:19,800 Speaker 1: in Europe In the US, it's done like it's more stuff. 493 00:27:20,040 --> 00:27:23,480 Speaker 1: You look at the hotels, the airlines, the restaurants. It's 494 00:27:23,520 --> 00:27:26,920 Speaker 1: it's it's more expensive than it was before COVID. It's 495 00:27:26,920 --> 00:27:31,000 Speaker 1: insane and sometimes about a lot. Uh. While in Europe 496 00:27:31,119 --> 00:27:32,640 Speaker 1: if you look at the major airlines, I would say 497 00:27:32,640 --> 00:27:35,320 Speaker 1: we still a fifty percent below PRECOVID high if you 498 00:27:35,359 --> 00:27:39,160 Speaker 1: look at the hotels, about thirty. Um. So we had 499 00:27:39,160 --> 00:27:42,720 Speaker 1: this sketch up. Um that's you know, I think could 500 00:27:42,720 --> 00:27:45,680 Speaker 1: happen in the the next couple of months. Um. I you know, 501 00:27:45,720 --> 00:27:48,120 Speaker 1: we talked about Europe, we talked about US or North America, 502 00:27:48,200 --> 00:27:51,720 Speaker 1: we talked about Mexico. Um, where does Asia stand in 503 00:27:51,800 --> 00:27:54,520 Speaker 1: all of this? For you know, you mentioned Japanese Um, 504 00:27:54,760 --> 00:27:58,440 Speaker 1: the Japanese stock market in your report, But um, where 505 00:27:58,480 --> 00:28:01,320 Speaker 1: does Asia stand or where should Asia be in a 506 00:28:01,359 --> 00:28:05,600 Speaker 1: person's portfolio at this point in general? Um? And maybe 507 00:28:05,600 --> 00:28:07,800 Speaker 1: you can get into that later. But my view is 508 00:28:07,840 --> 00:28:12,240 Speaker 1: Asia should be that fixed income of fixed income should 509 00:28:12,240 --> 00:28:17,520 Speaker 1: be reallocated towards Asia because of the different policy response, 510 00:28:17,600 --> 00:28:20,639 Speaker 1: because of the demography, because of the potential for currency appreciation. 511 00:28:20,680 --> 00:28:24,679 Speaker 1: So I think as as people really retold the sixty 512 00:28:24,720 --> 00:28:27,840 Speaker 1: four look at Asia for your forty percent and look 513 00:28:27,880 --> 00:28:31,760 Speaker 1: at look at Asian government bonds. Um in terms of equities. Um, yeah, 514 00:28:31,760 --> 00:28:36,120 Speaker 1: I mentioned Japan. I I like Japan for I think 515 00:28:36,119 --> 00:28:40,280 Speaker 1: I viewed as the anti US trade. Um. You know, 516 00:28:40,360 --> 00:28:44,000 Speaker 1: if if you buy the US or even a um 517 00:28:44,200 --> 00:28:47,480 Speaker 1: just a world m MSCI world, you end up with 518 00:28:47,600 --> 00:28:49,800 Speaker 1: so much weight into these you know, six or seven 519 00:28:49,920 --> 00:28:51,960 Speaker 1: U S tech stocks, right, you're no longer getting any 520 00:28:51,960 --> 00:28:55,680 Speaker 1: sort of diversification. While Japan is a lot more diversified 521 00:28:55,720 --> 00:29:00,640 Speaker 1: because it's much higher weight in industrial much higher weight 522 00:29:01,160 --> 00:29:03,960 Speaker 1: in a consumer discretion is stock, so you know it 523 00:29:04,000 --> 00:29:07,280 Speaker 1: doesn't have that concentration problem. Um. The second reason why 524 00:29:07,360 --> 00:29:10,200 Speaker 1: like Japan is again the supply and demand argument, which 525 00:29:10,240 --> 00:29:13,600 Speaker 1: is exact opposite as that of the US, where you know, 526 00:29:13,640 --> 00:29:16,480 Speaker 1: in the US we are seeing an increasing float because 527 00:29:16,560 --> 00:29:19,440 Speaker 1: bar backs are which new offerings are very high, and 528 00:29:19,560 --> 00:29:21,680 Speaker 1: right now is being absorbed by retail flow. But my 529 00:29:21,760 --> 00:29:24,840 Speaker 1: concern is that this retail flour will eventually dry up. Um. 530 00:29:24,880 --> 00:29:27,479 Speaker 1: In Japan, I think we'll eventually we're gonna run out 531 00:29:27,480 --> 00:29:31,880 Speaker 1: of Japanese assets. Like the Bank of Japan has already 532 00:29:31,920 --> 00:29:34,840 Speaker 1: monetized half of the public debt, So I mean the 533 00:29:34,920 --> 00:29:38,840 Speaker 1: JGB market is structurally shrinking. Same thing on the equity side. 534 00:29:38,840 --> 00:29:41,440 Speaker 1: You know, they buy e t f s every month. 535 00:29:41,760 --> 00:29:43,640 Speaker 1: I think right now the Bank of Japan owns something 536 00:29:43,680 --> 00:29:47,240 Speaker 1: like ten percent on the Japanese stock market. There's zero 537 00:29:47,320 --> 00:29:50,600 Speaker 1: new instruants, there's bar backs because Japanese firm. There big 538 00:29:50,640 --> 00:29:53,000 Speaker 1: government movement for a couple of governments re from in Japan. 539 00:29:53,400 --> 00:29:56,440 Speaker 1: So you just see a structurally shrinking float um and 540 00:29:56,480 --> 00:29:59,160 Speaker 1: as a result, prices are writing. I mean, no one cares, 541 00:29:59,160 --> 00:30:02,000 Speaker 1: no one cares about PAM. But if you look at 542 00:30:02,400 --> 00:30:06,360 Speaker 1: the performance of the topics since Albano Mix, since UM 543 00:30:06,640 --> 00:30:08,760 Speaker 1: two thousand twelve, I mean this has just been straight up. 544 00:30:09,600 --> 00:30:12,600 Speaker 1: We've also remarkably little correlation with the rest of the world, 545 00:30:12,600 --> 00:30:15,520 Speaker 1: which is something else that I like because I think 546 00:30:15,560 --> 00:30:19,200 Speaker 1: that's again as sixty or four in portfil guys. One 547 00:30:19,240 --> 00:30:21,200 Speaker 1: thing that we're gonna see is, and I think we're 548 00:30:21,200 --> 00:30:23,880 Speaker 1: seeing that already, is that negative correlation between stocks and bonds. 549 00:30:23,920 --> 00:30:25,800 Speaker 1: Like back in the days, it was very easy, right 550 00:30:25,800 --> 00:30:27,840 Speaker 1: if you had stocks, you just put thirty percent of 551 00:30:27,920 --> 00:30:30,200 Speaker 1: your money long term treasuries. Even though the yell was 552 00:30:30,240 --> 00:30:33,680 Speaker 1: not great because the diversification was so wonderful, it didn't 553 00:30:33,680 --> 00:30:35,680 Speaker 1: improve your sharp ratio. So that's all you need to do. 554 00:30:35,720 --> 00:30:38,600 Speaker 1: You only needed to buy treasuries to diversify the portfolio. 555 00:30:39,600 --> 00:30:42,240 Speaker 1: This I think is not gonna happen if we see 556 00:30:42,320 --> 00:30:45,720 Speaker 1: high invasion, if we see you know, stocks and bonds 557 00:30:45,760 --> 00:30:47,520 Speaker 1: going down the same time. So you have to be 558 00:30:47,600 --> 00:30:50,560 Speaker 1: smarter about diversification. And one of the markets with the 559 00:30:50,640 --> 00:30:52,600 Speaker 1: least correlation in the rest of the world is Japan 560 00:30:52,800 --> 00:30:55,200 Speaker 1: precisely for the supply and demand reason. I was describing 561 00:30:56,000 --> 00:30:59,560 Speaker 1: stand clearer of the craziest things we saw in markets 562 00:30:59,600 --> 00:31:02,720 Speaker 1: this week. All right, well, you we're going to drill 563 00:31:02,760 --> 00:31:05,520 Speaker 1: into the craziest things we saw in markets this week 564 00:31:05,560 --> 00:31:08,800 Speaker 1: that I know. This is a favorite segment of years 565 00:31:08,840 --> 00:31:11,360 Speaker 1: as well. Uh, I'm gonna put you on the spot. 566 00:31:11,440 --> 00:31:13,240 Speaker 1: Let's start with you. What's the craziest thing you saw 567 00:31:13,240 --> 00:31:15,240 Speaker 1: in markets this week? You know, I have to say, 568 00:31:15,280 --> 00:31:17,960 Speaker 1: it's really hard to figure out what the craziest thing 569 00:31:18,080 --> 00:31:20,280 Speaker 1: is on any given week. I mean, we are in 570 00:31:20,280 --> 00:31:25,400 Speaker 1: a world of Reddit traders in George coin, that equities 571 00:31:25,440 --> 00:31:28,000 Speaker 1: team leader, you haven't seen anything crazy all year? I 572 00:31:28,080 --> 00:31:32,880 Speaker 1: think nothing ever surprises me anymore. Um, here's something wild. 573 00:31:33,040 --> 00:31:36,959 Speaker 1: A bottle of wine that was aged for fourteen months 574 00:31:37,480 --> 00:31:40,440 Speaker 1: in space at the International Space Station is now up 575 00:31:40,480 --> 00:31:43,960 Speaker 1: for sale, and it could fetch up to a million 576 00:31:44,360 --> 00:31:49,000 Speaker 1: dollars um. This bottle is being bundled with an Earth 577 00:31:49,200 --> 00:31:52,480 Speaker 1: aged wine so that the buyer can taste test both 578 00:31:52,520 --> 00:31:56,520 Speaker 1: of them and decide which one tastes better. A billion 579 00:31:56,600 --> 00:31:59,240 Speaker 1: bucks for spacewine. I dig it, I like it. I 580 00:31:59,280 --> 00:32:02,000 Speaker 1: don't know. Hey, hats off to the astronauts who didn't 581 00:32:02,040 --> 00:32:03,840 Speaker 1: drink that while it was up there. You know, I 582 00:32:03,840 --> 00:32:06,040 Speaker 1: I would have. I think I would have downed that 583 00:32:06,080 --> 00:32:08,480 Speaker 1: thing about the second night in space. I don't know, 584 00:32:08,680 --> 00:32:10,920 Speaker 1: so it'd be very hard not to. They must have 585 00:32:11,040 --> 00:32:14,680 Speaker 1: hit it somewhere, you know. They think it was in 586 00:32:14,800 --> 00:32:18,760 Speaker 1: like some kind of steelcase cylinder, so no one could 587 00:32:18,800 --> 00:32:22,120 Speaker 1: get to it anyway. Yeah, you don't want drunk astronauts 588 00:32:22,160 --> 00:32:24,160 Speaker 1: find the station of the space station. I guess that 589 00:32:24,280 --> 00:32:27,000 Speaker 1: that could get that could get ugly. But alright, vet, 590 00:32:27,040 --> 00:32:29,480 Speaker 1: so that's pretty good one. That's a tough competition. You 591 00:32:29,600 --> 00:32:32,680 Speaker 1: got a anything that can top a million dollar bottle 592 00:32:32,680 --> 00:32:35,120 Speaker 1: of space mine. It is a red I guess it's 593 00:32:35,120 --> 00:32:42,600 Speaker 1: a porto, right, a space bordo. I don't think anything 594 00:32:42,680 --> 00:32:47,720 Speaker 1: in the space board. No, I actually went outside of markets, 595 00:32:47,920 --> 00:32:52,240 Speaker 1: because you know, the markets in general are crazy, right. 596 00:32:52,280 --> 00:32:59,880 Speaker 1: So my my anecdote is more about healthcare. And I 597 00:33:00,360 --> 00:33:04,320 Speaker 1: saw that Americans took one and a half found for 598 00:33:04,480 --> 00:33:09,440 Speaker 1: every month since the start of COVID. UH. So I 599 00:33:09,440 --> 00:33:13,440 Speaker 1: think on average, people have put on twenty pounds UH 600 00:33:13,800 --> 00:33:15,960 Speaker 1: since the start of COVID, which which I thought was 601 00:33:16,000 --> 00:33:18,080 Speaker 1: pretty crazy because it's not like we started from a 602 00:33:18,080 --> 00:33:23,400 Speaker 1: healthy base. UM. And it kind of brings me uh 603 00:33:23,680 --> 00:33:26,720 Speaker 1: jokes aside to to kind of like my secular call 604 00:33:26,960 --> 00:33:29,720 Speaker 1: on healthcare and also to some exciting FASI and I 605 00:33:29,720 --> 00:33:32,400 Speaker 1: think you know, as we come out of COVID, there's 606 00:33:32,440 --> 00:33:36,160 Speaker 1: been damages to the bodies and the minds of of people. 607 00:33:36,160 --> 00:33:40,160 Speaker 1: I mean, this has been extrolling hard um. And we'll 608 00:33:40,160 --> 00:33:43,080 Speaker 1: be dealing with the loan I mean long COVID for 609 00:33:43,080 --> 00:33:45,600 Speaker 1: the people who are COVID, but also for the long lockdowns, 610 00:33:45,600 --> 00:33:48,200 Speaker 1: if you will. The consequences of that, well, we'll play 611 00:33:48,240 --> 00:33:50,000 Speaker 1: out over the next ten years. I think you'll see 612 00:33:50,120 --> 00:33:52,600 Speaker 1: much higher healthcare spending because of the issues that we've 613 00:33:52,640 --> 00:33:58,120 Speaker 1: acummenated with COVID UM and also potentially infasion UM. One 614 00:33:58,160 --> 00:34:02,000 Speaker 1: of the big debates UM. But the FED is UM. 615 00:34:02,040 --> 00:34:04,120 Speaker 1: You know we can push in our proment rate below 616 00:34:04,120 --> 00:34:06,640 Speaker 1: four percent because participation is low. Right, that's the Elkosh 617 00:34:06,680 --> 00:34:10,840 Speaker 1: Cary argument, that you have this reserved army of workers 618 00:34:10,840 --> 00:34:12,920 Speaker 1: that I dropped out lay before we could come back anytime. 619 00:34:13,280 --> 00:34:16,160 Speaker 1: I think COVID is actually shrunk that reserve army, and 620 00:34:16,160 --> 00:34:18,800 Speaker 1: and we have like how much higher structural and employment 621 00:34:19,000 --> 00:34:21,879 Speaker 1: due to mental and physical health issues as a result 622 00:34:21,880 --> 00:34:24,200 Speaker 1: of COVID, And that to me increases the risk and 623 00:34:24,239 --> 00:34:28,080 Speaker 1: the FED he's gonna mess up um, and it's gonna 624 00:34:28,080 --> 00:34:30,960 Speaker 1: be too late because they don't understand the level of 625 00:34:30,960 --> 00:34:36,120 Speaker 1: slack um in the economy labor market. Well, I will 626 00:34:36,160 --> 00:34:38,680 Speaker 1: say that, Um, I am guilty of that pound and 627 00:34:38,719 --> 00:34:41,160 Speaker 1: a half per per month. I think I I've probably 628 00:34:41,200 --> 00:34:44,239 Speaker 1: put on sporting myself, but I've been trying desperately to 629 00:34:44,280 --> 00:34:45,840 Speaker 1: take it off because I think we're coming back to 630 00:34:45,880 --> 00:34:48,920 Speaker 1: the office soon and I I can't wear the sweatpants 631 00:34:48,920 --> 00:34:51,200 Speaker 1: to work if Yeah, I gotta get back in the 632 00:34:51,200 --> 00:34:54,239 Speaker 1: soup pants eventually, so desperately trying to take it off. 633 00:34:54,239 --> 00:34:57,319 Speaker 1: But I I resemble that story a little a little 634 00:34:57,360 --> 00:34:59,719 Speaker 1: too much for my comfort. So two good ones there, 635 00:34:59,760 --> 00:35:02,040 Speaker 1: I I applaud both of you, I'll give you my 636 00:35:02,120 --> 00:35:06,200 Speaker 1: mind's courtesy of the Wall Street Journal, And uh, this 637 00:35:06,280 --> 00:35:09,640 Speaker 1: is I think the real sort of market plumbing walks 638 00:35:09,640 --> 00:35:14,080 Speaker 1: out there will appreciate this the most um. Berkshire Hathaway's 639 00:35:14,160 --> 00:35:18,560 Speaker 1: Class A share price has gotten so high that the 640 00:35:18,640 --> 00:35:21,720 Speaker 1: NASDAC can't quote it anymore on some of its popular 641 00:35:21,800 --> 00:35:24,880 Speaker 1: data feeds, and actually the newer exchange i X had 642 00:35:24,920 --> 00:35:28,879 Speaker 1: a similar issue. So here's the sort of wonky explanation, again, 643 00:35:28,920 --> 00:35:32,000 Speaker 1: courtesy of the Wall Street Journal. NASTAC and some other 644 00:35:32,080 --> 00:35:36,320 Speaker 1: market operators record stock prices in a compact computer format 645 00:35:36,400 --> 00:35:40,600 Speaker 1: that uses thirty two bits or ones and zeros. Stock 646 00:35:40,640 --> 00:35:44,360 Speaker 1: prices are frequently stored using four decimal places to the 647 00:35:44,440 --> 00:35:47,480 Speaker 1: right of the dollar signs, so, in other words, subpennies. 648 00:35:48,160 --> 00:35:51,319 Speaker 1: So the highest possible price you can quote Berkshire at 649 00:35:51,480 --> 00:35:56,160 Speaker 1: is four nine thousand, four hundred and ninety six dollars 650 00:35:56,680 --> 00:35:59,560 Speaker 1: point seven to nine five. So I don't know why 651 00:35:59,640 --> 00:36:03,440 Speaker 1: you need to quote a four nine thousand dollars stock 652 00:36:03,640 --> 00:36:07,040 Speaker 1: in subpenny increments, But I guess there's some market maker 653 00:36:07,120 --> 00:36:10,280 Speaker 1: out there making a quitter penny on these trades. So so, uh, 654 00:36:11,120 --> 00:36:12,719 Speaker 1: I don't know what the solution is they have some 655 00:36:12,840 --> 00:36:15,160 Speaker 1: kind of bug fix in the work that they can 656 00:36:15,880 --> 00:36:19,320 Speaker 1: begin to quoting Berkshire again. But I don't know, Vincent, 657 00:36:19,360 --> 00:36:21,440 Speaker 1: maybe a stock split or something. Maybe it's time for 658 00:36:21,480 --> 00:36:24,000 Speaker 1: Warring to consider a stock split. He always said it 659 00:36:24,040 --> 00:36:31,040 Speaker 1: was against it, so it's it's a great story point. Michael. Well, 660 00:36:31,080 --> 00:36:34,160 Speaker 1: you guys have not disappointed me. Really appreciate your time. 661 00:36:34,800 --> 00:36:38,840 Speaker 1: If you good luck with those tweets, I'm definitely going 662 00:36:38,880 --> 00:36:41,480 Speaker 1: to need them. Yeah, you might want to just log 663 00:36:41,520 --> 00:36:43,040 Speaker 1: off for a couple of weeks. I don't know. I 664 00:36:43,040 --> 00:36:45,600 Speaker 1: don't know. Uh, and Vincent always great to catch up with. 665 00:36:45,640 --> 00:36:48,680 Speaker 1: You appreciate your time and hopefully we can do it again. 666 00:36:49,120 --> 00:36:58,959 Speaker 1: Thank you. What goes up, We'll be back next week. 667 00:36:59,400 --> 00:37:01,480 Speaker 1: Until then, he can find us on the Bloomberg Terminal 668 00:37:01,560 --> 00:37:05,520 Speaker 1: website and app or wherever you get your podcasts. We'd 669 00:37:05,520 --> 00:37:07,040 Speaker 1: love it if you took the time to rate and 670 00:37:07,080 --> 00:37:09,880 Speaker 1: review the show on Apple Podcasts so more listeners can 671 00:37:09,920 --> 00:37:12,760 Speaker 1: find us. And you can find us on Twitter follow 672 00:37:12,800 --> 00:37:17,560 Speaker 1: me at Reaganonymous. Debbia Balgie is at Dibia Balgie. You 673 00:37:17,600 --> 00:37:22,080 Speaker 1: can also follow Bloomberg Podcasts at at podcasts. I thank 674 00:37:22,120 --> 00:37:24,160 Speaker 1: you to Charlie pall of Bloomberg Radio and the voice 675 00:37:24,200 --> 00:37:26,880 Speaker 1: of the New York City subway system. What Goes Up 676 00:37:26,960 --> 00:37:30,320 Speaker 1: is produced by topur Foreheads. The head of Bloomberg Podcast 677 00:37:30,480 --> 00:37:33,640 Speaker 1: is Francesco Levy. Thanks for listening, See you next time.