1 00:00:14,160 --> 00:00:17,320 Speaker 1: Hello, and welcome to What Goes Up, a Bloomberg weekly 2 00:00:17,400 --> 00:00:20,840 Speaker 1: market podcast. I'm Sara pan Zack, or reporter on the 3 00:00:20,840 --> 00:00:23,840 Speaker 1: Cross Asset team, and I'm Mike Reagan, a senior editor 4 00:00:23,880 --> 00:00:27,040 Speaker 1: on the Markets team. This week on the show, maybe 5 00:00:27,120 --> 00:00:29,560 Speaker 1: it's just me, but this week has felt like a month. 6 00:00:30,080 --> 00:00:32,800 Speaker 1: Stock swings of at least five have become the norm, 7 00:00:32,880 --> 00:00:36,040 Speaker 1: with trading halts going off left and right, bonds aren't 8 00:00:36,080 --> 00:00:39,920 Speaker 1: necessarily providing the hedge that they should, and liquidity is 9 00:00:39,960 --> 00:00:45,160 Speaker 1: being called into question. It's not just you, Sarah. Okay, 10 00:00:45,200 --> 00:00:48,360 Speaker 1: that's good to know. I've got to say I'm exhausted, 11 00:00:48,400 --> 00:00:50,239 Speaker 1: and I think we all are. I will say very 12 00:00:50,280 --> 00:00:52,560 Speaker 1: often it is just you, I think in this case, 13 00:00:53,000 --> 00:00:54,600 Speaker 1: in this case, it's not just you. I think. The 14 00:00:54,640 --> 00:00:56,600 Speaker 1: craziest thing I saw in markets, I'm just gonna get 15 00:00:56,600 --> 00:00:59,120 Speaker 1: it out of the way, was everything this week. It 16 00:00:59,200 --> 00:01:02,600 Speaker 1: was just there's no avoiding it. But I have to 17 00:01:02,680 --> 00:01:05,720 Speaker 1: give an extra special thank you to our guests this 18 00:01:05,760 --> 00:01:08,640 Speaker 1: week for actually making it out into the world during 19 00:01:08,680 --> 00:01:12,040 Speaker 1: this uh, this craziness we're saying and showing up today 20 00:01:12,080 --> 00:01:15,920 Speaker 1: for the podcast. Returning to the show, Lauren Goodwin. She's 21 00:01:15,920 --> 00:01:19,320 Speaker 1: an economist and multi asset portfolio strategist at New York 22 00:01:19,360 --> 00:01:23,000 Speaker 1: Life Investments, Lauren. If I sneeze, it's allergies. I swear 23 00:01:23,040 --> 00:01:26,240 Speaker 1: to God, you know what, My allergies are really bad. 24 00:01:27,280 --> 00:01:29,039 Speaker 1: Every time I have a little tickle in my throat. 25 00:01:29,080 --> 00:01:33,560 Speaker 1: I'm worried about the social ramifications of clearing Well. No, seriously, 26 00:01:33,600 --> 00:01:35,400 Speaker 1: you have to you have to think about if this 27 00:01:35,440 --> 00:01:38,399 Speaker 1: starts running into hay fever season. I mean, God help 28 00:01:38,480 --> 00:01:42,160 Speaker 1: us all. So you get judged on the side of 29 00:01:42,160 --> 00:01:44,880 Speaker 1: the straight now, if you sneeze, if you just look 30 00:01:44,920 --> 00:01:49,440 Speaker 1: a little bit off, people are judging. Yes, I'm judging 31 00:01:49,480 --> 00:01:51,280 Speaker 1: you right now, Sarah, I'm judging everyone. You're all a 32 00:01:51,280 --> 00:01:54,280 Speaker 1: little suspicious to me. Every microphone I sit in front 33 00:01:54,320 --> 00:01:55,920 Speaker 1: of them like, wait a minute, who is that this? 34 00:01:56,000 --> 00:02:00,600 Speaker 1: Before but also joining us on the show, first time 35 00:02:00,640 --> 00:02:04,480 Speaker 1: guest on the show, market Live's own Creaty Goopta Creaty. 36 00:02:04,480 --> 00:02:07,520 Speaker 1: Welcome to the show. Thanks for having me. So you're welcome. 37 00:02:08,040 --> 00:02:11,359 Speaker 1: Learn Let's start with you. Um now, you're a strategist 38 00:02:11,400 --> 00:02:14,679 Speaker 1: and an economist. I feel like the big question is 39 00:02:14,680 --> 00:02:17,040 Speaker 1: is a recession pretty much inevitable right now? I mean, 40 00:02:17,080 --> 00:02:20,440 Speaker 1: is it a done deal by now? Yeah? I think 41 00:02:20,520 --> 00:02:23,880 Speaker 1: so um there, it's it's interesting the way that you 42 00:02:23,919 --> 00:02:27,120 Speaker 1: put it. You're a strategist and an economist, but there's 43 00:02:27,160 --> 00:02:32,520 Speaker 1: no economy and no strategy to work with right now exactly. Yeah. 44 00:02:32,560 --> 00:02:35,680 Speaker 1: You know, look, um, I think that, Um. One of 45 00:02:35,680 --> 00:02:38,480 Speaker 1: the really really interesting things, Um, if we can take 46 00:02:38,480 --> 00:02:41,520 Speaker 1: a step back from everything that's happening right now, is 47 00:02:41,720 --> 00:02:46,359 Speaker 1: just how unreliable signal economic data is going to give 48 00:02:46,400 --> 00:02:50,280 Speaker 1: us upcoming. So recession, no recession, I mean, look around, 49 00:02:50,480 --> 00:02:54,040 Speaker 1: it's it's death. It feels almost certain that we will 50 00:02:54,080 --> 00:02:58,000 Speaker 1: have recession or recession like circumstances here in the US, 51 00:02:58,200 --> 00:03:00,880 Speaker 1: and even if they're transitory, they could they could be 52 00:03:01,000 --> 00:03:03,799 Speaker 1: quite severe. What's going to be really interesting is we're 53 00:03:03,800 --> 00:03:05,800 Speaker 1: not going to be able to tell what the official 54 00:03:05,840 --> 00:03:07,720 Speaker 1: read on that is. I mean, you look at the 55 00:03:07,720 --> 00:03:10,560 Speaker 1: economic data that's come in the amazing jobs report for 56 00:03:10,560 --> 00:03:13,760 Speaker 1: example last week. Who cares it was before the virus. 57 00:03:13,800 --> 00:03:17,040 Speaker 1: But also if you can think to the other side 58 00:03:17,080 --> 00:03:19,240 Speaker 1: of this, because we will come to the other side eventually, 59 00:03:20,040 --> 00:03:23,680 Speaker 1: we're not going to trust bad data because it was oh, 60 00:03:23,760 --> 00:03:26,519 Speaker 1: you know, from before things got better, and we might 61 00:03:26,560 --> 00:03:30,360 Speaker 1: get you know, a really brief, nice big bang of 62 00:03:30,639 --> 00:03:33,200 Speaker 1: pent up demand, but no one will trust that either, 63 00:03:33,240 --> 00:03:34,840 Speaker 1: because it's just the pent up demand. So I think 64 00:03:34,840 --> 00:03:36,880 Speaker 1: it's going to be a year before we get a 65 00:03:36,880 --> 00:03:40,040 Speaker 1: reliable signal from economic data. Doesn't mean that we won't 66 00:03:40,080 --> 00:03:44,280 Speaker 1: still have useful clues. Um, But recession, no recession. I mean, 67 00:03:44,360 --> 00:03:47,120 Speaker 1: the biggest indicator I'm using right now is my eyes 68 00:03:47,640 --> 00:03:50,840 Speaker 1: looking what's going on. And I'll give you a statistic. 69 00:03:51,200 --> 00:03:53,600 Speaker 1: This week, we put out a story, um, and it's 70 00:03:53,640 --> 00:03:56,880 Speaker 1: just some food for thought. Since the SMP five hundreds inception, 71 00:03:57,280 --> 00:03:59,920 Speaker 1: there have been thirteen bear markets, So thirteen times when 72 00:03:59,920 --> 00:04:02,960 Speaker 1: we fell from a record too below as we have 73 00:04:03,240 --> 00:04:07,200 Speaker 1: this week, and and only two of those experiences did 74 00:04:07,240 --> 00:04:11,240 Speaker 1: a recession not come after. Um. So sure markets sell off, 75 00:04:11,280 --> 00:04:13,360 Speaker 1: we get corrections a lot, but it's pretty rare to 76 00:04:13,400 --> 00:04:17,160 Speaker 1: actually get this bear market and na see a recession. 77 00:04:17,200 --> 00:04:19,279 Speaker 1: And with that, Lauren, I saw in your notes that 78 00:04:19,320 --> 00:04:21,719 Speaker 1: you sent over to us, you had a line and 79 00:04:21,760 --> 00:04:24,120 Speaker 1: you said, by the dip is dead. And it sure 80 00:04:24,160 --> 00:04:27,680 Speaker 1: feels that way. Um, We've just had day after day 81 00:04:27,880 --> 00:04:30,760 Speaker 1: of extreme pressure. But but why do you say that 82 00:04:30,839 --> 00:04:32,880 Speaker 1: and why do you think we feel that way right now? 83 00:04:34,200 --> 00:04:39,080 Speaker 1: I think that one of the really really interesting developments 84 00:04:39,080 --> 00:04:42,800 Speaker 1: in markets right now is um or changes perhaps is 85 00:04:42,920 --> 00:04:45,279 Speaker 1: just in the last ten years we've gotten really used 86 00:04:45,279 --> 00:04:46,960 Speaker 1: to buy the dip, just the idea that if you 87 00:04:47,000 --> 00:04:50,560 Speaker 1: had a really bad week, UM, that there was always 88 00:04:50,560 --> 00:04:53,119 Speaker 1: a reason to think positively as long as things weren't 89 00:04:53,160 --> 00:04:56,280 Speaker 1: going really really badly. Right, We've had monetary policy almost 90 00:04:56,279 --> 00:05:01,680 Speaker 1: always stepping in when we've hit roadblocks, UM mid cycle slowdowns, 91 00:05:01,680 --> 00:05:06,159 Speaker 1: we can always justify markets moving down. Meanwhile, over the 92 00:05:06,160 --> 00:05:09,680 Speaker 1: course of that ten years, profit conditions have been decelerating, 93 00:05:09,680 --> 00:05:13,960 Speaker 1: if not deteriorating. We are late cycle, and so when 94 00:05:14,000 --> 00:05:16,400 Speaker 1: I'm looking at you know, let's say three weeks ago, 95 00:05:16,839 --> 00:05:19,560 Speaker 1: valuations are really high. All these late cycle dynamics are 96 00:05:19,560 --> 00:05:23,760 Speaker 1: in play. We've been defensively positioned in our portfolio for 97 00:05:23,800 --> 00:05:26,360 Speaker 1: six months saying, look, it's probably worth it even if 98 00:05:26,360 --> 00:05:29,080 Speaker 1: we're a year early, because at some point we'll get 99 00:05:29,080 --> 00:05:31,920 Speaker 1: a catalyst. I did not know that coronavirus was going 100 00:05:31,960 --> 00:05:35,920 Speaker 1: to be the catalyst, but I'm not I'm not a 101 00:05:35,960 --> 00:05:40,640 Speaker 1: buyer until I see a real reason for durable upside, 102 00:05:41,040 --> 00:05:44,880 Speaker 1: and you know, case volumes still rising, UM credit markets 103 00:05:44,880 --> 00:05:49,440 Speaker 1: still figuring this out. I don't that catalyst will certainly come, 104 00:05:49,600 --> 00:05:52,480 Speaker 1: but it's it's not right now. Well, it was fascinating 105 00:05:52,640 --> 00:05:56,880 Speaker 1: on Thursday. UM, you know, so much stress has been 106 00:05:56,920 --> 00:06:00,760 Speaker 1: centered in the dollar funding markets UM, as well as 107 00:06:00,800 --> 00:06:02,919 Speaker 1: the credit markets. But but really a lot of stress 108 00:06:02,960 --> 00:06:05,920 Speaker 1: in the in the dollar uh you know cruss uh 109 00:06:06,120 --> 00:06:08,920 Speaker 1: currency basis swap type of thing which don't ask me 110 00:06:08,960 --> 00:06:11,039 Speaker 1: to even explain them, but I know there's stress there. 111 00:06:11,040 --> 00:06:13,599 Speaker 1: I can't I've I've have it on good authority that 112 00:06:13,640 --> 00:06:15,600 Speaker 1: they're stressed there, even though I can't quite explain it. 113 00:06:16,160 --> 00:06:18,039 Speaker 1: And then you see the FED come out with really 114 00:06:18,080 --> 00:06:21,960 Speaker 1: this surprise bazooka, a five hundred billion dollars worth of 115 00:06:22,240 --> 00:06:28,160 Speaker 1: REPO operations UM effective the same day and spread out 116 00:06:28,200 --> 00:06:30,920 Speaker 1: across the curve. So we can finally put that is 117 00:06:30,960 --> 00:06:32,960 Speaker 1: a QI or is it not QI? Debates sort of 118 00:06:32,960 --> 00:06:35,279 Speaker 1: a bed. I mean, I think this is much more 119 00:06:35,360 --> 00:06:37,680 Speaker 1: like QUI than than what they're doing before. And you 120 00:06:37,720 --> 00:06:39,600 Speaker 1: did see a pop in the smp F. I found 121 00:06:39,600 --> 00:06:41,560 Speaker 1: it was like six percent off the lows, but then 122 00:06:41,600 --> 00:06:44,800 Speaker 1: immediately for ten minutes ten minutes, and then you see 123 00:06:45,200 --> 00:06:49,080 Speaker 1: headlines from Italy with a dramatic increases of cases and 124 00:06:49,160 --> 00:06:52,640 Speaker 1: deaths and and right back down and I you know, 125 00:06:53,040 --> 00:06:54,839 Speaker 1: I feel like the government in some ways, that the 126 00:06:54,880 --> 00:06:57,520 Speaker 1: FED at least is getting a bad rap because there's 127 00:06:57,520 --> 00:06:59,360 Speaker 1: only so much they can do. I mean, you can't 128 00:06:59,600 --> 00:07:02,840 Speaker 1: repair this economic damage with monetary policy right now. I mean, 129 00:07:02,880 --> 00:07:05,640 Speaker 1: is there you know, and and and the same as 130 00:07:05,680 --> 00:07:07,760 Speaker 1: to some degree I think true of the federal government. 131 00:07:07,800 --> 00:07:09,680 Speaker 1: I mean, they're going to throw everything they can at it, 132 00:07:09,760 --> 00:07:14,559 Speaker 1: presumably that we have this really dysfunctional political situation which 133 00:07:14,840 --> 00:07:20,120 Speaker 1: might make that impossible. I mean, it's just all hope 134 00:07:20,160 --> 00:07:22,920 Speaker 1: loss basically as far as the putting a floor under 135 00:07:23,440 --> 00:07:29,080 Speaker 1: equities with either monetary or fiscal policy, no, no, no, Um, 136 00:07:29,120 --> 00:07:31,280 Speaker 1: it might feel that way for another few weeks. And 137 00:07:31,320 --> 00:07:33,160 Speaker 1: I think that what we will get in the next 138 00:07:33,160 --> 00:07:36,720 Speaker 1: few weeks is exactly what you're describing policy and and 139 00:07:36,720 --> 00:07:40,320 Speaker 1: and hopefully in certain cases, really good policy, coordinated policy 140 00:07:40,680 --> 00:07:44,400 Speaker 1: will reach the market in a way that is positive. 141 00:07:44,800 --> 00:07:48,160 Speaker 1: And until we see geographic spread and case members of 142 00:07:48,160 --> 00:07:50,960 Speaker 1: this virus decline, it just won't meet anything. And I 143 00:07:50,960 --> 00:07:53,720 Speaker 1: think we actually need both of those things, um to 144 00:07:53,840 --> 00:07:56,600 Speaker 1: go right to start to put a floor. And again, 145 00:07:56,600 --> 00:07:58,800 Speaker 1: I think it will take a couple of weeks, if 146 00:07:58,840 --> 00:08:00,960 Speaker 1: not longer, but but we will. We will get there. 147 00:08:00,960 --> 00:08:03,160 Speaker 1: All hope is not lost in the short term though. 148 00:08:03,160 --> 00:08:06,640 Speaker 1: We're playing this market very tactically. Um. It's interesting someone 149 00:08:06,720 --> 00:08:09,800 Speaker 1: asked me earlier today, you know what's if you're talking 150 00:08:09,840 --> 00:08:12,200 Speaker 1: to a long term investor, what do you tell them? 151 00:08:12,200 --> 00:08:15,200 Speaker 1: And it's just honker down. You know, you gotta you 152 00:08:15,200 --> 00:08:16,720 Speaker 1: have to take what you got, and what we have 153 00:08:16,840 --> 00:08:18,960 Speaker 1: for now is is going to be these ebbs and flows, 154 00:08:18,960 --> 00:08:21,600 Speaker 1: and if you're getting eight percent swings within a day, 155 00:08:22,160 --> 00:08:24,640 Speaker 1: that's that's what you have to work with. Now. When 156 00:08:24,680 --> 00:08:29,280 Speaker 1: we do see that decline in case volume, declining, geographic 157 00:08:29,320 --> 00:08:33,520 Speaker 1: spread and policy that's meant to sustain that positive outcome, 158 00:08:33,920 --> 00:08:35,800 Speaker 1: that's when we're we'll get back into the markets, but 159 00:08:35,840 --> 00:08:38,400 Speaker 1: it'll probably still be in a really targeted way, looking 160 00:08:38,400 --> 00:08:41,640 Speaker 1: at cyclicals for example, to to capture that upside, and 161 00:08:41,679 --> 00:08:44,160 Speaker 1: it might not last long. We're just there's so much 162 00:08:44,240 --> 00:08:47,079 Speaker 1: uncertainty around every element of this market that you've got 163 00:08:47,080 --> 00:08:49,839 Speaker 1: to play a day by day. Yeah, everyone's already wondering, well, 164 00:08:49,880 --> 00:08:51,720 Speaker 1: maybe it will subside a little bit in the summer, 165 00:08:51,760 --> 00:08:53,679 Speaker 1: but then you have to worry about a reoccurrence in 166 00:08:53,720 --> 00:09:13,439 Speaker 1: the fall. I guess obviously, you know, events last weekend 167 00:09:14,000 --> 00:09:16,880 Speaker 1: really accelerated this sell off as far as the this 168 00:09:17,000 --> 00:09:19,960 Speaker 1: oil price war that we've seen. Um, you know, Saudi 169 00:09:20,000 --> 00:09:23,079 Speaker 1: Arabia came out over the weekend and drastically lowered their 170 00:09:23,120 --> 00:09:27,080 Speaker 1: selling prices, said they were gonna, you know, pump a 171 00:09:27,120 --> 00:09:30,559 Speaker 1: tremendous amount of oil. Russia kind of responding, Uh, curty, 172 00:09:30,600 --> 00:09:32,080 Speaker 1: I wanted to ask you about the center you you 173 00:09:32,080 --> 00:09:34,480 Speaker 1: follow this pretty closely. I mean, to me, this feels 174 00:09:34,559 --> 00:09:39,959 Speaker 1: like a game of chicken between Saudi Arabia and Russia. Um, 175 00:09:40,320 --> 00:09:42,320 Speaker 1: is that a good way to look at it? And 176 00:09:42,679 --> 00:09:44,319 Speaker 1: I gotta say, you know, as we get near the 177 00:09:44,360 --> 00:09:46,520 Speaker 1: end of the week here, it doesn't seem like anyone's blinking. 178 00:09:46,559 --> 00:09:50,920 Speaker 1: I mean, is there any sign of when this you know, 179 00:09:51,320 --> 00:09:56,240 Speaker 1: tremendous price war in oil could sort of end. Well, 180 00:09:56,400 --> 00:09:58,520 Speaker 1: this has happened before, and that's what you really need 181 00:09:58,559 --> 00:10:00,640 Speaker 1: to keep in mind here when you're talking about time 182 00:10:00,679 --> 00:10:05,240 Speaker 1: frame and the sort of thing. Looking back, when we 183 00:10:05,240 --> 00:10:07,440 Speaker 1: saw the U S. Shail market really boom, and and 184 00:10:07,520 --> 00:10:11,400 Speaker 1: these players overseas face the same fears and have to 185 00:10:11,440 --> 00:10:13,520 Speaker 1: go and try to flood the market and then cut 186 00:10:13,559 --> 00:10:15,400 Speaker 1: once again to try to eliminate these players. So I 187 00:10:15,400 --> 00:10:17,400 Speaker 1: would look to history for that. As far as the 188 00:10:17,440 --> 00:10:19,560 Speaker 1: time frame goes, it doesn't look like this is going 189 00:10:19,600 --> 00:10:22,800 Speaker 1: to end anytime soon. Once again, this is that second 190 00:10:22,840 --> 00:10:25,240 Speaker 1: punch in the one to punch we saw for markets 191 00:10:25,280 --> 00:10:28,120 Speaker 1: this week. This is really a key as we're going 192 00:10:28,160 --> 00:10:31,560 Speaker 1: into just kind of an already recessionary period, already seeing 193 00:10:31,600 --> 00:10:35,280 Speaker 1: a demand really drop anyways, and to see this price 194 00:10:35,280 --> 00:10:37,480 Speaker 1: war potentially last for two or three months, which is 195 00:10:37,480 --> 00:10:39,880 Speaker 1: what I'm hearing from strategist and traders, that could change 196 00:10:39,880 --> 00:10:41,839 Speaker 1: the game. And it seems like, you know that, as 197 00:10:41,880 --> 00:10:43,560 Speaker 1: you say, the show patch in the US is just 198 00:10:43,600 --> 00:10:46,720 Speaker 1: caught in the middle. Um, it doesn't seem like there's 199 00:10:46,760 --> 00:10:49,160 Speaker 1: anything they can do to punch back. I mean even 200 00:10:49,240 --> 00:10:53,000 Speaker 1: President Trump politically, Uh, you know, he's got so much 201 00:10:53,000 --> 00:10:55,680 Speaker 1: else on his plate that how can he push back 202 00:10:55,720 --> 00:10:58,000 Speaker 1: at at both Russian and Saudi Arabia. Just seems like, 203 00:10:58,400 --> 00:11:01,600 Speaker 1: you know, asking too much, even from someone like him 204 00:11:01,640 --> 00:11:04,040 Speaker 1: who's not afraid to mix it up geo politically, right, 205 00:11:04,040 --> 00:11:06,120 Speaker 1: And when we were seeing these headlines, I believe this 206 00:11:06,200 --> 00:11:09,360 Speaker 1: really Our colleague Xavier Blasso around the Energy team actually 207 00:11:09,360 --> 00:11:11,280 Speaker 1: tweeted this out and said that the real start of 208 00:11:11,320 --> 00:11:14,320 Speaker 1: this price war was when Energy Minister Novak walked out 209 00:11:14,320 --> 00:11:17,320 Speaker 1: of the OPEC meeting and said all OPEC producers are 210 00:11:17,320 --> 00:11:19,440 Speaker 1: free to pump at will starting April first. I was 211 00:11:19,480 --> 00:11:22,400 Speaker 1: really when all this sparked, really angered the saudis UH 212 00:11:22,440 --> 00:11:25,360 Speaker 1: And the original reasoning for all of this was to 213 00:11:25,400 --> 00:11:28,839 Speaker 1: attack the U S shale market, which has anyway kind 214 00:11:28,840 --> 00:11:31,800 Speaker 1: of threatened market share and certainly threatened prices as well. 215 00:11:32,320 --> 00:11:35,320 Speaker 1: So what we're seeing here is not just a term 216 00:11:35,440 --> 00:11:37,440 Speaker 1: of kind of we need to flush out the US 217 00:11:37,480 --> 00:11:39,839 Speaker 1: policy market, but there are geopolitics that play in the U. S. 218 00:11:39,920 --> 00:11:41,520 Speaker 1: Is still very much a part of it. When those 219 00:11:41,520 --> 00:11:44,920 Speaker 1: headlines came out, we were expecting a policy response from 220 00:11:45,120 --> 00:11:48,440 Speaker 1: the US and and we didn't get much. Lauren, what's 221 00:11:48,480 --> 00:11:50,960 Speaker 1: the effect of this oil price shock actually on the 222 00:11:51,000 --> 00:11:53,679 Speaker 1: stock market and on the economy, Because sure, we had 223 00:11:53,840 --> 00:11:57,079 Speaker 1: the worst day in the oil market since go for 224 00:11:57,480 --> 00:12:00,520 Speaker 1: But then you think about energy companies a share of 225 00:12:00,520 --> 00:12:02,840 Speaker 1: the SMP five hundred being at a record low around 226 00:12:02,880 --> 00:12:06,040 Speaker 1: three per cent or so. But also at the same time, 227 00:12:06,240 --> 00:12:08,959 Speaker 1: does don't oil companies make up a pretty large amount 228 00:12:09,000 --> 00:12:11,760 Speaker 1: of capex spending? Like, how do you think about filtering 229 00:12:11,760 --> 00:12:15,600 Speaker 1: with oil price shock into examining not just the equity markets, 230 00:12:15,600 --> 00:12:17,959 Speaker 1: but also the economy at large. Well, we'll start with 231 00:12:18,000 --> 00:12:20,440 Speaker 1: the economy. This is a net negative for the U 232 00:12:20,520 --> 00:12:23,760 Speaker 1: S economy period um. I think normally, when you think 233 00:12:23,800 --> 00:12:27,160 Speaker 1: about oil prices falling, you think about boost to the 234 00:12:27,160 --> 00:12:29,840 Speaker 1: consumer through lower gas prices, especially in the in the 235 00:12:29,920 --> 00:12:34,000 Speaker 1: U S where lots of people drive. But right now, 236 00:12:34,080 --> 00:12:37,880 Speaker 1: when economic activity is already under stress from the virus, 237 00:12:38,120 --> 00:12:40,760 Speaker 1: that positive impact can't really make its way through the 238 00:12:40,760 --> 00:12:42,480 Speaker 1: way it normally would. If if half of us aren't 239 00:12:42,480 --> 00:12:44,880 Speaker 1: going to work, then you're you don't get that benefit, 240 00:12:45,200 --> 00:12:47,160 Speaker 1: if you don't have a job, then you then that 241 00:12:47,240 --> 00:12:49,960 Speaker 1: that's just just such a small impact relative to some 242 00:12:50,000 --> 00:12:53,560 Speaker 1: of the bigger picture things going on. Meanwhile, as you're mentioning, 243 00:12:53,600 --> 00:12:58,040 Speaker 1: we have the energy sector under stress, especially energy services. 244 00:12:58,559 --> 00:13:02,520 Speaker 1: You and and this, as you mentioned, is such a 245 00:13:02,559 --> 00:13:05,040 Speaker 1: sector that's already taken such a beating. You know that 246 00:13:05,280 --> 00:13:08,160 Speaker 1: of of everyone that was struggling before, this energy has 247 00:13:08,200 --> 00:13:11,200 Speaker 1: had has such had such a hard couple of years. 248 00:13:11,559 --> 00:13:14,400 Speaker 1: You don't have the business capex, you have the drag 249 00:13:14,520 --> 00:13:18,160 Speaker 1: on confidence, and you have this depends on the day 250 00:13:18,200 --> 00:13:22,480 Speaker 1: but seeming correlation and assets being drawn down that makes 251 00:13:22,520 --> 00:13:25,000 Speaker 1: the equity market sell offs feel so much worse. It 252 00:13:25,360 --> 00:13:29,440 Speaker 1: just to me seems like a clear indicator that we 253 00:13:29,520 --> 00:13:32,319 Speaker 1: won't have the rebound in Q three that people were 254 00:13:32,360 --> 00:13:36,160 Speaker 1: hoping for, even if the virus does improve a little bit. Yeah, 255 00:13:36,160 --> 00:13:37,840 Speaker 1: I wanted to ask you about that. That's sort of 256 00:13:38,559 --> 00:13:41,240 Speaker 1: odd correlations that we're saying. You know, there's some points 257 00:13:41,320 --> 00:13:44,600 Speaker 1: during this week where you know, treasure yields actually started 258 00:13:44,679 --> 00:13:47,880 Speaker 1: rising off the lows. Gold has been really hit hard. 259 00:13:48,400 --> 00:13:51,760 Speaker 1: I mean, I guess the sort of easy way to 260 00:13:51,760 --> 00:13:55,360 Speaker 1: to theorize about it is that again it's that dollar 261 00:13:55,559 --> 00:14:00,320 Speaker 1: funding stress. There's margin calls being made. That's sort of thing. 262 00:14:00,320 --> 00:14:02,280 Speaker 1: I mean, is it that simple? Do you think? You know? 263 00:14:02,320 --> 00:14:04,840 Speaker 1: Because it really, in a way it feels like markets 264 00:14:04,880 --> 00:14:08,440 Speaker 1: just aren't functioning the way they should be. I think 265 00:14:08,480 --> 00:14:12,719 Speaker 1: it could be that simple. Hindsight will be on this one. 266 00:14:12,840 --> 00:14:15,320 Speaker 1: I mean, there's there's there's a lot going on. I 267 00:14:15,360 --> 00:14:19,120 Speaker 1: think not all of these we talk about cross currents 268 00:14:19,160 --> 00:14:21,760 Speaker 1: such strong cross currents. Not everything is going to be 269 00:14:21,800 --> 00:14:23,960 Speaker 1: a one to one. But you have fear, which is 270 00:14:24,120 --> 00:14:26,840 Speaker 1: of course a big sell off. I think you probably 271 00:14:26,840 --> 00:14:31,760 Speaker 1: do have some financial deleveraging where investment companies that are 272 00:14:31,840 --> 00:14:35,920 Speaker 1: under stress or trying to make sales without making a 273 00:14:35,920 --> 00:14:38,240 Speaker 1: big deal of things. And and so you're seeing some 274 00:14:38,840 --> 00:14:43,560 Speaker 1: of what would normally be uncorrelated assets all moved down together. Um. 275 00:14:43,760 --> 00:14:46,800 Speaker 1: But but for example, in the Wednesday of this week, 276 00:14:46,840 --> 00:14:48,760 Speaker 1: that was very much the case, like the only things 277 00:14:48,840 --> 00:14:52,160 Speaker 1: that did. Okay, we're orange juice, you know, in terms 278 00:14:52,200 --> 00:14:55,240 Speaker 1: of financial assets, um, other days there has been a 279 00:14:55,280 --> 00:14:58,040 Speaker 1: little bit more of what we would call normal market 280 00:14:58,040 --> 00:15:02,320 Speaker 1: activityor normal risk off behavior. I don't know. To me, 281 00:15:02,400 --> 00:15:05,000 Speaker 1: it seems that that financial de leveraging piece has to 282 00:15:05,000 --> 00:15:07,080 Speaker 1: be a part of the story, otherwise we would see 283 00:15:07,120 --> 00:15:10,640 Speaker 1: something consistent across these days. Orange juice, baby vitamin C is. 284 00:15:10,640 --> 00:15:16,640 Speaker 1: The other one was CoCom which, yeah, maybe you're hungering 285 00:15:16,640 --> 00:15:21,480 Speaker 1: down and need to feel better, so pretty I'm curious, 286 00:15:21,640 --> 00:15:23,720 Speaker 1: is you know, you read a lot of the research 287 00:15:23,760 --> 00:15:27,080 Speaker 1: and the news in the oil patch. Is anyone predicting 288 00:15:27,120 --> 00:15:29,560 Speaker 1: sort of what the bottom in oil prices will be 289 00:15:30,000 --> 00:15:32,200 Speaker 1: or you know, I know a lot depends on where 290 00:15:32,280 --> 00:15:35,120 Speaker 1: what the sort of break even prices for the Saudi 291 00:15:35,600 --> 00:15:38,480 Speaker 1: government's budget and the Russian government's budget. I mean, can 292 00:15:38,520 --> 00:15:41,720 Speaker 1: we depend on those sort of break even levels of 293 00:15:41,760 --> 00:15:44,480 Speaker 1: the budget to act as a floor. So we've dropped 294 00:15:44,560 --> 00:15:46,720 Speaker 1: way past those. And what's key here to note is 295 00:15:46,760 --> 00:15:49,080 Speaker 1: that the Saudis have been really struggling with this and 296 00:15:49,160 --> 00:15:51,200 Speaker 1: why this is why they were trying to bring the 297 00:15:51,280 --> 00:15:53,800 Speaker 1: Russians and and other OPEC members really to the table here, 298 00:15:53,840 --> 00:15:56,720 Speaker 1: because they need that eighty dollar price level to just 299 00:15:56,840 --> 00:15:59,360 Speaker 1: balance their budget. Uh and then of course for their 300 00:15:59,520 --> 00:16:01,440 Speaker 1: RAMCO uh I p O as well, that's a big 301 00:16:01,480 --> 00:16:04,320 Speaker 1: part of the story. The Russians can have a little 302 00:16:04,320 --> 00:16:06,280 Speaker 1: bit more room to play with here because forty is 303 00:16:06,280 --> 00:16:08,600 Speaker 1: their price limit, forty to forty two, depending on how 304 00:16:08,600 --> 00:16:11,960 Speaker 1: you calculate. For U shale producers, that number before we 305 00:16:12,040 --> 00:16:14,480 Speaker 1: hit bankruptcy. And I remember the U S shale patch 306 00:16:14,600 --> 00:16:17,800 Speaker 1: is a private kind of sector, not necessarily a state 307 00:16:17,840 --> 00:16:20,120 Speaker 1: owned one. Uh So when you're looking at the U 308 00:16:20,120 --> 00:16:23,960 Speaker 1: S shale sector, those numbers were forty fifty, were way 309 00:16:24,000 --> 00:16:25,960 Speaker 1: past them. And now the strategists and the traders I'm 310 00:16:26,000 --> 00:16:27,600 Speaker 1: talking to her saying it could go down as low 311 00:16:27,640 --> 00:16:30,040 Speaker 1: as ten dollars a barrel, which really puts all three 312 00:16:30,080 --> 00:16:33,200 Speaker 1: players in troubles. So it's a matter of everyone's feeling pain. 313 00:16:33,280 --> 00:16:36,000 Speaker 1: It's just who can who can who who kind of 314 00:16:36,360 --> 00:16:40,120 Speaker 1: calls for mercy first? Right, right? Honestly, the only saving 315 00:16:40,440 --> 00:16:42,360 Speaker 1: grace that I see in what's going on in the 316 00:16:42,360 --> 00:16:45,880 Speaker 1: oil sector is that because we've experienced this rapid decline 317 00:16:45,880 --> 00:16:48,240 Speaker 1: in oil prices so recently, you know, it's only been 318 00:16:48,280 --> 00:16:50,440 Speaker 1: three or four years since we were experiencing this, we've 319 00:16:50,440 --> 00:16:53,440 Speaker 1: tested these levels a little bit. We know that shale 320 00:16:53,560 --> 00:16:56,480 Speaker 1: really starts to hurt before forty below forty five dollars barrel. 321 00:16:56,480 --> 00:16:58,240 Speaker 1: It's not everybody. The range for u S show is 322 00:16:58,240 --> 00:17:00,840 Speaker 1: really right. It's like between seven and eighty or something 323 00:17:00,880 --> 00:17:04,119 Speaker 1: where companies are solvent, but at forty five level is 324 00:17:04,359 --> 00:17:07,840 Speaker 1: really sensitive. We also know which countries start to really hurt, 325 00:17:08,119 --> 00:17:11,880 Speaker 1: and so I think, while that's not good news that 326 00:17:12,000 --> 00:17:15,760 Speaker 1: those dynamics are coming up again, it is a slightly 327 00:17:15,840 --> 00:17:19,840 Speaker 1: more known unknown than the virus. I think if we 328 00:17:19,840 --> 00:17:22,400 Speaker 1: were experiencing this for the first time like we did 329 00:17:22,400 --> 00:17:25,439 Speaker 1: through or four years ago, our first times of recent memory, 330 00:17:25,760 --> 00:17:28,520 Speaker 1: this would this would be even feel even more pandemic 331 00:17:28,560 --> 00:17:31,679 Speaker 1: pandemonium than it does right now. And then before we 332 00:17:31,720 --> 00:17:33,280 Speaker 1: get to the craziest thing, I have to ask you, 333 00:17:33,359 --> 00:17:35,800 Speaker 1: Lauren about the credit markets, because it did feel like 334 00:17:35,840 --> 00:17:38,800 Speaker 1: that was where we really saw a large change this week. 335 00:17:38,840 --> 00:17:41,640 Speaker 1: I mean you think of Boeing drawing down a full 336 00:17:41,680 --> 00:17:43,880 Speaker 1: amount of its thirteen point eight billion dollar credit line, 337 00:17:43,960 --> 00:17:45,960 Speaker 1: Hilton drawing down its credit line. Then you have the 338 00:17:46,000 --> 00:17:49,119 Speaker 1: likes of Blackstone and other firms telling their companies to 339 00:17:49,200 --> 00:17:51,359 Speaker 1: draw down their credit lines to high old t d 340 00:17:51,600 --> 00:17:55,440 Speaker 1: X breads jumping. I mean, what's the credit market telling 341 00:17:55,440 --> 00:17:57,800 Speaker 1: you at this point? Is this at the point where 342 00:17:57,800 --> 00:18:00,560 Speaker 1: people have to truly start worrying more because we are 343 00:18:00,640 --> 00:18:04,720 Speaker 1: now seeing some signs of credit stress. I I'd say, so, um, 344 00:18:04,800 --> 00:18:09,639 Speaker 1: we're not jumping yet. Um from a portfolio management perspective. 345 00:18:09,760 --> 00:18:12,639 Speaker 1: And when it comes to are we truly in a 346 00:18:12,680 --> 00:18:14,840 Speaker 1: credit event, I think we're three to four weeks away. 347 00:18:15,119 --> 00:18:17,240 Speaker 1: But what we've seen and and this week was the 348 00:18:17,320 --> 00:18:20,800 Speaker 1: first time we've started to see that pressure in the 349 00:18:20,840 --> 00:18:24,440 Speaker 1: public markets, but in private credit and private equity markets, 350 00:18:24,920 --> 00:18:28,920 Speaker 1: deal flow or the pipeline flow has dried up. It's 351 00:18:28,920 --> 00:18:31,399 Speaker 1: been a couple of weeks. Makes sense, right, You can't 352 00:18:31,400 --> 00:18:34,680 Speaker 1: travel to do due diligence. No one's gonna lend in 353 00:18:34,840 --> 00:18:37,440 Speaker 1: this environment when you're not really sure what's going on. 354 00:18:37,520 --> 00:18:40,160 Speaker 1: And so I think three to four weeks from now, 355 00:18:40,240 --> 00:18:42,840 Speaker 1: we'll be looking at companies saying we're not going to 356 00:18:42,880 --> 00:18:45,320 Speaker 1: be able to do deal flow until the fall. And 357 00:18:45,640 --> 00:18:50,560 Speaker 1: that's when we start to be much more concerned about 358 00:18:50,600 --> 00:18:53,000 Speaker 1: the knock on effects of this virus to the economy. 359 00:18:53,040 --> 00:18:57,480 Speaker 1: Because if you can keep credit markets stable and secure, 360 00:18:57,600 --> 00:19:00,080 Speaker 1: and you can and you can keep small busines, this 361 00:19:00,320 --> 00:19:03,520 Speaker 1: is afloat to sort of wade through a couple of months. 362 00:19:03,680 --> 00:19:06,200 Speaker 1: You're fine. If we're looking at four months of stress, 363 00:19:06,359 --> 00:19:08,359 Speaker 1: stress and six months of defaults, that it's a different, 364 00:19:08,400 --> 00:19:11,680 Speaker 1: different scenario. I love how relaxed you said, Oh, we're 365 00:19:11,720 --> 00:19:16,560 Speaker 1: three or three or four weeks away from PRIMI major credit. Okay, 366 00:19:16,600 --> 00:19:18,920 Speaker 1: but I do wonder. You know, there's been so many 367 00:19:18,920 --> 00:19:22,199 Speaker 1: reforms put in place in the banking system, and we 368 00:19:22,280 --> 00:19:25,760 Speaker 1: also you know, in the global financial crisis of of 369 00:19:25,800 --> 00:19:29,919 Speaker 1: a two eight, the whole credit default swap market was 370 00:19:29,960 --> 00:19:33,760 Speaker 1: this giant gorilla in the room that had uh grown, 371 00:19:34,040 --> 00:19:36,240 Speaker 1: you know, way out of proportion to the point there, 372 00:19:36,280 --> 00:19:39,320 Speaker 1: you know, there was much more default swaps out on 373 00:19:39,840 --> 00:19:42,160 Speaker 1: certain types of debt than there was actually the debt. 374 00:19:42,280 --> 00:19:44,840 Speaker 1: You know, it's like ensuring your house for ten times 375 00:19:44,840 --> 00:19:47,280 Speaker 1: what it's worth. So I do feel like we've sort 376 00:19:47,280 --> 00:19:51,240 Speaker 1: of eliminated some of those risks, you know the banking system. Uh, 377 00:19:51,480 --> 00:19:54,399 Speaker 1: for all the complaints about all the uh, you know, 378 00:19:54,720 --> 00:19:59,320 Speaker 1: liquidity requirements and reserves they've had to maintain. UM, I 379 00:19:59,400 --> 00:20:02,920 Speaker 1: do feel like, you know, they're in a better shape 380 00:20:02,920 --> 00:20:05,600 Speaker 1: to handle a stress. I don't think anyone had ever 381 00:20:05,640 --> 00:20:09,200 Speaker 1: stress test for exactly what we're being faced with. I mean, 382 00:20:10,400 --> 00:20:14,800 Speaker 1: when do we start worrying about the banks? You know, 383 00:20:15,119 --> 00:20:18,480 Speaker 1: like five or six weeks my my father, My father 384 00:20:18,600 --> 00:20:20,720 Speaker 1: called and asked me this question this morning, which I 385 00:20:20,760 --> 00:20:24,280 Speaker 1: think is perhaps telling UM really interesting because you know 386 00:20:25,240 --> 00:20:27,800 Speaker 1: Dad's and I tend to we were on the same wavelength. Well, 387 00:20:28,480 --> 00:20:30,920 Speaker 1: that's not what I meant that people laugh at my job. 388 00:20:33,880 --> 00:20:35,919 Speaker 1: Nobody said, Look, I have X number of months of 389 00:20:35,960 --> 00:20:38,600 Speaker 1: payroll in the bank. I was feeling really good about that. 390 00:20:38,640 --> 00:20:40,359 Speaker 1: Do I need to be really worried about that? And 391 00:20:40,400 --> 00:20:42,520 Speaker 1: I think because of the regulations that have been put 392 00:20:42,560 --> 00:20:45,040 Speaker 1: into place, the answer to that question is probably not. 393 00:20:45,119 --> 00:20:46,800 Speaker 1: I think. I think that the banks are in a 394 00:20:46,840 --> 00:20:50,520 Speaker 1: really good spot now where what that regulation has done 395 00:20:50,680 --> 00:20:54,560 Speaker 1: is shift some of that activity into the private credit markets, 396 00:20:54,560 --> 00:20:57,920 Speaker 1: which is why we're monitoring that space so closely. So UM. 397 00:20:57,960 --> 00:21:00,720 Speaker 1: Where you did have leverage in the banking system, now 398 00:21:00,800 --> 00:21:03,760 Speaker 1: you have leverage in in private credit and private equity. 399 00:21:03,800 --> 00:21:06,760 Speaker 1: Now that doesn't mean every private equity or private credit 400 00:21:06,760 --> 00:21:08,960 Speaker 1: provider is in bad shape. Quite the contrary. If you've 401 00:21:09,000 --> 00:21:13,639 Speaker 1: been investing all along in UM, perhaps you know sectors 402 00:21:13,680 --> 00:21:16,280 Speaker 1: that are less cyclical or less vulnerable to shocks, or 403 00:21:16,960 --> 00:21:21,359 Speaker 1: just defineable value creation, then this is probably okay because 404 00:21:21,400 --> 00:21:23,359 Speaker 1: those aren't going to be the companies that lose all 405 00:21:23,359 --> 00:21:26,080 Speaker 1: of their cash flow and default in two months. UM 406 00:21:26,119 --> 00:21:28,520 Speaker 1: companies that were struggling to create that casual in the 407 00:21:28,520 --> 00:21:30,840 Speaker 1: first place. That that's where you start to have defaulse 408 00:21:30,960 --> 00:21:33,919 Speaker 1: rise and so it's not going to be every credit 409 00:21:33,960 --> 00:21:37,320 Speaker 1: provider out there but that, but that leverage has shifted 410 00:21:37,640 --> 00:21:40,160 Speaker 1: outside of the banking system to other areas. That's where 411 00:21:40,160 --> 00:21:43,480 Speaker 1: we need to be focused on from a crisis perspective. Sarah, 412 00:21:43,520 --> 00:21:46,080 Speaker 1: what is the craziest thing you saw in markets this week? 413 00:21:46,720 --> 00:21:49,960 Speaker 1: I have to say the craziest thing things that I 414 00:21:50,040 --> 00:21:52,000 Speaker 1: have seen this week, or just all the trading halls. 415 00:21:52,080 --> 00:21:54,480 Speaker 1: I mean, I'll get all my my days straight here, 416 00:21:54,520 --> 00:21:57,800 Speaker 1: but Sunday night futures go limit down. Monday night futures 417 00:21:57,800 --> 00:22:01,679 Speaker 1: go limit up. Then we have uh CAST trading circuit 418 00:22:01,680 --> 00:22:04,840 Speaker 1: breaker on Monday. Then Wednesday night futures go limit down. 419 00:22:04,840 --> 00:22:07,560 Speaker 1: On Thursday, we have another circuit breaker and cast trading 420 00:22:07,600 --> 00:22:11,119 Speaker 1: session too, and it's just been NonStop and it's crazy 421 00:22:11,200 --> 00:22:15,159 Speaker 1: because these huge, huge moves have become such the norm. 422 00:22:15,359 --> 00:22:18,280 Speaker 1: And and for me, I mean over the weekend, the 423 00:22:18,400 --> 00:22:21,080 Speaker 1: last weekend, I was the one who had to sit 424 00:22:21,119 --> 00:22:25,119 Speaker 1: around on Saturday and prepare a story just in case 425 00:22:25,600 --> 00:22:28,560 Speaker 1: futures actually traded limit down, not thinking they actually would. 426 00:22:28,880 --> 00:22:31,679 Speaker 1: And then Sunday night I was in working and helping 427 00:22:31,720 --> 00:22:34,639 Speaker 1: cover Asia TV when they did go limit down, and 428 00:22:34,640 --> 00:22:37,240 Speaker 1: it was just all it was all really just so surreal, 429 00:22:37,720 --> 00:22:40,120 Speaker 1: um and I think it was just really eye opening 430 00:22:40,280 --> 00:22:43,160 Speaker 1: as to what we were truly at for this week. Yeah, 431 00:22:43,280 --> 00:22:45,800 Speaker 1: I'd say i'd be interesting for someone to study, you know, 432 00:22:45,880 --> 00:22:48,200 Speaker 1: if these circuit breakers helped in any way. I mean 433 00:22:48,400 --> 00:22:52,520 Speaker 1: at some point, you know, you know when the market 434 00:22:52,600 --> 00:22:57,000 Speaker 1: is actually acting rationally irrational response to just a very 435 00:22:57,080 --> 00:23:01,600 Speaker 1: irrational situation. Uh boy, it's it is a surreal feeling, 436 00:23:02,200 --> 00:23:04,760 Speaker 1: all right. That's pretty good, Sarah. I'll give you. I'll 437 00:23:04,760 --> 00:23:07,159 Speaker 1: give you high points for that one. I couldn't avoid it. 438 00:23:07,720 --> 00:23:09,879 Speaker 1: Creat how about you? What do you have? So oil 439 00:23:09,920 --> 00:23:12,600 Speaker 1: has been my my big one, seeing almost at de 440 00:23:12,640 --> 00:23:15,280 Speaker 1: client in oil prices and then trading sideways and oil 441 00:23:15,400 --> 00:23:17,520 Speaker 1: for the rest of the week, just on any potential 442 00:23:17,880 --> 00:23:19,960 Speaker 1: news out of the Saudias, in the Russians despite those 443 00:23:20,200 --> 00:23:22,520 Speaker 1: kind of limit downs, the limit up news that Sarah 444 00:23:22,640 --> 00:23:25,280 Speaker 1: was talking about, and of course the FED and all 445 00:23:25,440 --> 00:23:29,400 Speaker 1: REAP operations. Oil not budging after that massive moved. That's 446 00:23:29,400 --> 00:23:32,400 Speaker 1: pretty good too. That's pretty good, Lauren. Are you come prepared? 447 00:23:33,400 --> 00:23:38,520 Speaker 1: Did I have high hopes? So this has been a 448 00:23:38,560 --> 00:23:42,080 Speaker 1: week where I'm not I'm not even asking could that 449 00:23:42,160 --> 00:23:44,480 Speaker 1: number be real? When I flipped through numbers on my iPhone. 450 00:23:44,480 --> 00:23:47,680 Speaker 1: It's just everything's crazy. Um. One of the things that 451 00:23:48,000 --> 00:23:51,040 Speaker 1: y'all mentioned on the podcast last week is that, um, 452 00:23:51,080 --> 00:23:53,840 Speaker 1: you know, look at purel on Amazon or whatever, and 453 00:23:53,880 --> 00:24:02,000 Speaker 1: it's three Um a white belt just like airs seven 454 00:24:03,400 --> 00:24:07,960 Speaker 1: seven dollars, seven dollars can be yours. That seems about 455 00:24:08,000 --> 00:24:11,120 Speaker 1: seven dollars over price, right, That's the craziest thing I've 456 00:24:11,160 --> 00:24:13,080 Speaker 1: seen in the market this week, that it costs. So 457 00:24:13,119 --> 00:24:17,240 Speaker 1: no one wants belts, or maybe more people want white belts. Alla, 458 00:24:17,320 --> 00:24:20,320 Speaker 1: Luke Cava more than we expect. Yeah, you're so so 459 00:24:20,440 --> 00:24:23,679 Speaker 1: obviously that belt was priced lower before the podcast, and 460 00:24:23,720 --> 00:24:27,440 Speaker 1: so you have boosted demand for white belts. Amazing. I 461 00:24:27,960 --> 00:24:29,960 Speaker 1: think you win the craziest thing of the year with 462 00:24:30,000 --> 00:24:33,680 Speaker 1: that one. That is you gotta love the paying attention 463 00:24:33,720 --> 00:24:37,359 Speaker 1: to the podcast and the poor Luke he's not here 464 00:24:37,400 --> 00:24:39,800 Speaker 1: to defend himself, but that's all right, that's right. This 465 00:24:39,880 --> 00:24:42,640 Speaker 1: is going to make his month though. That is fantastic. 466 00:24:42,680 --> 00:24:46,720 Speaker 1: Guess and uh, sir, remind the people about our hotline 467 00:24:46,760 --> 00:24:48,800 Speaker 1: if if they've seen something crazy in the markets, they 468 00:24:48,800 --> 00:24:52,240 Speaker 1: can call us. Do you have that number? I have 469 00:24:52,359 --> 00:24:54,320 Speaker 1: that number handy is always um. You can always give 470 00:24:54,359 --> 00:24:56,840 Speaker 1: us a call. That number is six four six three 471 00:24:56,880 --> 00:25:00,040 Speaker 1: two four three four zero. And if you you have have 472 00:25:00,160 --> 00:25:02,960 Speaker 1: seen anything crazy in this last week, because we're all 473 00:25:03,000 --> 00:25:05,480 Speaker 1: sure that you have, or you have any questions, feel 474 00:25:05,480 --> 00:25:07,120 Speaker 1: free to leave us a message and maybe we'll played 475 00:25:07,119 --> 00:25:09,720 Speaker 1: on the show. Absolutely and feel free to call and 476 00:25:10,000 --> 00:25:12,400 Speaker 1: tell us the craziest thing you saw. Lukawa where too. 477 00:25:12,480 --> 00:25:15,040 Speaker 1: That's that's acceptable. Let me give you a couple of 478 00:25:15,040 --> 00:25:18,040 Speaker 1: tweets from some of the listeners about the craziest things 479 00:25:18,040 --> 00:25:21,400 Speaker 1: they've seen this week one guy at I'm assuming it's 480 00:25:21,400 --> 00:25:25,560 Speaker 1: a guy at t J Beller on Twitter. Uh. The 481 00:25:25,680 --> 00:25:28,040 Speaker 1: craziest thing he saw is that almost two thirds of 482 00:25:28,080 --> 00:25:31,399 Speaker 1: all high yield energy issues are now trading at a 483 00:25:31,480 --> 00:25:35,240 Speaker 1: thousand basis points over US treasuries. That is pretty amazing. 484 00:25:35,720 --> 00:25:38,640 Speaker 1: So two thirds of the of the junk energy complex 485 00:25:38,720 --> 00:25:42,000 Speaker 1: is trading at a full ten percentage points above treasuries. 486 00:25:42,520 --> 00:25:45,160 Speaker 1: And then we had a couple of requests, uh from 487 00:25:45,200 --> 00:25:47,440 Speaker 1: some other long time listeners. The head of the Chris 488 00:25:47,480 --> 00:25:51,480 Speaker 1: Nag fan club, Eli Panamy, wrote in to say better yet, 489 00:25:51,560 --> 00:25:55,119 Speaker 1: what has been saying this week? And then uh, a 490 00:25:55,240 --> 00:26:00,280 Speaker 1: response came to him from j Y Squall at Twitter. Yeah, 491 00:26:00,280 --> 00:26:02,880 Speaker 1: maybe this week it would be different to do what 492 00:26:02,920 --> 00:26:05,879 Speaker 1: went fine good in the market. We got nothing for you, guys. 493 00:26:05,880 --> 00:26:08,000 Speaker 1: I'm sorry. Don't forget the orange juice. The orange juice 494 00:26:08,040 --> 00:26:12,480 Speaker 1: that's pretty good. Yeah. I have one one other thing. 495 00:26:12,520 --> 00:26:17,080 Speaker 1: There's a down Jones long short market neutral portfolio of 496 00:26:17,160 --> 00:26:20,280 Speaker 1: quality stacks um having its best streaks since two thousand 497 00:26:20,359 --> 00:26:25,720 Speaker 1: and nine. That's pretty good. Yeah, so something Yeah, Well, 498 00:26:25,760 --> 00:26:28,639 Speaker 1: finally the long short hedge funds are having their day, 499 00:26:28,680 --> 00:26:32,520 Speaker 1: I guess yeah, um yet not not too much great 500 00:26:32,560 --> 00:26:34,879 Speaker 1: in the market. Hopefully by next week maybe we can 501 00:26:34,880 --> 00:26:38,640 Speaker 1: share some positive things for you, I hope so yeah. 502 00:26:39,040 --> 00:26:42,960 Speaker 1: Um but with that, hopefully things are looking up from here. Um. 503 00:26:42,960 --> 00:26:45,440 Speaker 1: But Lauren Goodwin, pretty Gupta, thanks so much for coming 504 00:26:45,440 --> 00:26:55,280 Speaker 1: on the show today What Goes Up. We'll be back 505 00:26:55,400 --> 00:26:57,600 Speaker 1: next week. Until then, you can find it's on the 506 00:26:57,600 --> 00:27:01,439 Speaker 1: Blueberg Terminal website and app or ever you get your podcasts. 507 00:27:01,880 --> 00:27:03,600 Speaker 1: We'd love it if you took the time to rate 508 00:27:03,600 --> 00:27:06,439 Speaker 1: interview the show on Apple Podcasts so more listeners can 509 00:27:06,440 --> 00:27:09,280 Speaker 1: find us, and you can find us on Twitter. Follow 510 00:27:09,320 --> 00:27:12,800 Speaker 1: me at at Sara Ponzack, Mike is a prey anonymous, 511 00:27:12,960 --> 00:27:15,919 Speaker 1: and Kretty Koopta is at Kretty Kopta News. You can 512 00:27:15,960 --> 00:27:19,960 Speaker 1: also follow Bloomberg Podcasts at podcasts. What Goes Up is 513 00:27:20,000 --> 00:27:22,840 Speaker 1: produced by tober Foreheads. The head of Bloomberg podcast is 514 00:27:22,880 --> 00:27:25,720 Speaker 1: Francesca Levie. Thanks for listening, See you next time.