1 00:00:13,000 --> 00:00:16,280 Speaker 1: Hello, and welcome to What Goes Up, a Bloomberg Weekly 2 00:00:16,360 --> 00:00:20,040 Speaker 1: Markets podcast. I'm Sarah Pontzak, a reporter on the cross 3 00:00:20,040 --> 00:00:22,799 Speaker 1: As Set team, and I'm Mike Reagan, a senior editor 4 00:00:22,880 --> 00:00:25,160 Speaker 1: on the Markets team. This week on the show, we'll 5 00:00:25,200 --> 00:00:28,319 Speaker 1: dig into the data from Google searches to new home 6 00:00:28,440 --> 00:00:32,240 Speaker 1: sizes and discuss what the signs actually mean for markets, 7 00:00:32,680 --> 00:00:36,400 Speaker 1: and the bond rally continues, Why the insatiable demand and 8 00:00:36,520 --> 00:00:41,040 Speaker 1: why is the US Treasury seriously considering issuance of ultra 9 00:00:41,200 --> 00:00:44,559 Speaker 1: long bonds? And as always, will close out the episode 10 00:00:44,600 --> 00:00:47,280 Speaker 1: with our tradition the Craziest Thing I Saw in Markets? 11 00:00:47,320 --> 00:00:51,360 Speaker 1: This week, Sarah tell the people about our hotline. So 12 00:00:52,320 --> 00:00:55,600 Speaker 1: we have this new hotline. It's the Bloomberg Podcast Hotline. 13 00:00:56,040 --> 00:00:58,400 Speaker 1: As you know, we always do our Craziest Thing I 14 00:00:58,480 --> 00:01:00,840 Speaker 1: Ever Saw in Market segment at end of the show, 15 00:01:01,160 --> 00:01:02,720 Speaker 1: but now you can become a part of it too, 16 00:01:02,760 --> 00:01:05,480 Speaker 1: So call us, leave us a message, let us know 17 00:01:06,280 --> 00:01:08,000 Speaker 1: what you saw that you thought was crazy, or even 18 00:01:08,000 --> 00:01:10,680 Speaker 1: just ask us a question that numbers six four six 19 00:01:10,880 --> 00:01:15,119 Speaker 1: three two four three for nine zero and we may 20 00:01:15,200 --> 00:01:18,800 Speaker 1: even play a recording on the show. Sarah, before we 21 00:01:18,840 --> 00:01:21,000 Speaker 1: introduce our guests. I I've got a crack pot theory 22 00:01:21,000 --> 00:01:22,760 Speaker 1: I want to share with you. Youre ready, You're ready 23 00:01:22,800 --> 00:01:24,440 Speaker 1: for a crap I mean I'm ready for it. To 24 00:01:24,520 --> 00:01:26,480 Speaker 1: be sure, I have several crack pots. I know you do, 25 00:01:26,600 --> 00:01:28,679 Speaker 1: but let's hear the one for today. The one today 26 00:01:28,840 --> 00:01:31,680 Speaker 1: is I think the way you make your name on 27 00:01:31,720 --> 00:01:34,679 Speaker 1: Wall Street. I mean, sure, you can beat the market 28 00:01:34,840 --> 00:01:37,760 Speaker 1: with your stock picks, you can be the best trader 29 00:01:38,319 --> 00:01:40,319 Speaker 1: in the world, But the way I think you really 30 00:01:40,360 --> 00:01:42,160 Speaker 1: make your name is if you have to be a 31 00:01:42,160 --> 00:01:45,280 Speaker 1: good writer. I'll give you some example. Warren Buffett, I 32 00:01:45,319 --> 00:01:49,200 Speaker 1: think is famous as much for his catchy writings in 33 00:01:49,280 --> 00:01:53,360 Speaker 1: his his letters to shareholders. Right Uh, Bill Gross, I 34 00:01:53,360 --> 00:01:55,440 Speaker 1: don't know if you've ever read his month monthly commentary 35 00:01:55,520 --> 00:01:58,000 Speaker 1: when he was still writing it, very very catchy stuff. 36 00:01:58,360 --> 00:02:01,840 Speaker 1: Peter Lynch, the great fun manager of the eighties. Excellent writer. 37 00:02:02,520 --> 00:02:05,280 Speaker 1: And this is all way of leading up to me 38 00:02:05,400 --> 00:02:08,600 Speaker 1: saying one of my favorite writers here on, one of 39 00:02:08,639 --> 00:02:11,120 Speaker 1: my favorite Wall Street writers is a guest on our 40 00:02:11,160 --> 00:02:16,000 Speaker 1: show today. He's a veteran of markets. Started out at 41 00:02:16,000 --> 00:02:19,400 Speaker 1: Credit Swiss First Boston covering the auto industry as an analyst. 42 00:02:19,760 --> 00:02:23,160 Speaker 1: Spent a few years with UH, the legendary hedge fund 43 00:02:23,200 --> 00:02:26,560 Speaker 1: manager Steve Cohen. UH for about a decade he was 44 00:02:26,600 --> 00:02:31,480 Speaker 1: the chief market strategist at converge X. But most excitingly, 45 00:02:31,600 --> 00:02:34,720 Speaker 1: he started his own firm about two years ago called 46 00:02:34,840 --> 00:02:38,880 Speaker 1: Data Trek Research. His name is Nick Cholas. Nick, welcome 47 00:02:38,919 --> 00:02:41,800 Speaker 1: to the show, Thanks very much. And another good writer 48 00:02:42,080 --> 00:02:47,919 Speaker 1: on the show today. Good what a great one. Well 49 00:02:47,960 --> 00:02:53,240 Speaker 1: you get your job is primarily writing, so and that 50 00:02:53,400 --> 00:02:56,240 Speaker 1: is Emily Barrett from our Bonds and and f X team, 51 00:02:56,320 --> 00:02:58,919 Speaker 1: And welcome to the show. Thanks for having me and Nick. 52 00:02:58,960 --> 00:03:01,160 Speaker 1: I wanted to start with you. I we have all 53 00:03:01,200 --> 00:03:03,280 Speaker 1: a stack of your research notes from the past month 54 00:03:03,360 --> 00:03:05,359 Speaker 1: or so. We're gonna get into them a little bit, 55 00:03:05,400 --> 00:03:07,799 Speaker 1: but I wanted to start this kind of high level 56 00:03:08,120 --> 00:03:11,960 Speaker 1: of sort of how you're thinking about the market these days. UM, 57 00:03:12,000 --> 00:03:14,559 Speaker 1: I get the sense from some of your recent reports 58 00:03:14,600 --> 00:03:17,920 Speaker 1: that you're I don't want to say barish, but cautious 59 00:03:17,960 --> 00:03:20,080 Speaker 1: about the equity market right now. Is that is that safe? 60 00:03:20,240 --> 00:03:22,640 Speaker 1: That's very fair. You know, we were positive on markets 61 00:03:22,840 --> 00:03:25,399 Speaker 1: through the first part of the year and saw declining 62 00:03:25,480 --> 00:03:28,000 Speaker 1: rates and fairly stable earnings. Is a good backdrop for 63 00:03:28,200 --> 00:03:31,239 Speaker 1: SMP performance and it was the next This month and 64 00:03:31,280 --> 00:03:33,400 Speaker 1: the next couple of months will be a lot tougher though, 65 00:03:33,440 --> 00:03:35,840 Speaker 1: And it's both the matter of seasonality and the basic 66 00:03:35,920 --> 00:03:37,960 Speaker 1: trends going on now and more than anything, and I 67 00:03:38,000 --> 00:03:39,960 Speaker 1: guess we'll talk about this is the fear of recession 68 00:03:40,040 --> 00:03:42,040 Speaker 1: as being factored in by the yel curb and other things. 69 00:03:42,720 --> 00:03:46,240 Speaker 1: So it's gonna be a choppier time, right, So what 70 00:03:46,240 --> 00:03:48,960 Speaker 1: what's that? How could that manifest? Just more up and 71 00:03:49,000 --> 00:03:51,360 Speaker 1: down days like we saw in August? I mean, is 72 00:03:51,360 --> 00:03:53,840 Speaker 1: that the sort of the new normal for the time being? 73 00:03:53,880 --> 00:03:55,640 Speaker 1: It absolutely is. You know, we went a very very 74 00:03:55,640 --> 00:03:58,800 Speaker 1: long stretch without seeing even one percent days on the SMP. 75 00:03:59,320 --> 00:04:01,120 Speaker 1: I think we had a having a week stretch going 76 00:04:01,120 --> 00:04:03,040 Speaker 1: in through July and early August where there were no 77 00:04:03,080 --> 00:04:05,560 Speaker 1: one percent days, very unusual. So we'll see a lot 78 00:04:05,600 --> 00:04:08,040 Speaker 1: more of those, a vix closer to normal, a lot 79 00:04:08,040 --> 00:04:10,000 Speaker 1: more surn you know, if you look at the last 80 00:04:10,000 --> 00:04:12,360 Speaker 1: couple of weeks with August, just expect as to continue 81 00:04:12,320 --> 00:04:14,440 Speaker 1: to September and October. And I'll add to that, we've 82 00:04:14,480 --> 00:04:18,039 Speaker 1: seen eleven one percent days just this month. That's now 83 00:04:18,120 --> 00:04:21,000 Speaker 1: more than December. So that just goes to show the 84 00:04:21,080 --> 00:04:23,760 Speaker 1: swings that we have been seeing. Something that really stood 85 00:04:23,760 --> 00:04:25,640 Speaker 1: out to me in your research, Nick, was that you 86 00:04:25,720 --> 00:04:29,320 Speaker 1: look and track on Google trends the amount of searches 87 00:04:29,640 --> 00:04:33,640 Speaker 1: for the word or the two words doubt Jones. Why 88 00:04:33,800 --> 00:04:35,600 Speaker 1: is that, Why do you look for these searches and 89 00:04:35,640 --> 00:04:37,760 Speaker 1: what are the implications for what that could potentially mean 90 00:04:37,800 --> 00:04:40,120 Speaker 1: for the economy and the markets. Yeah, I mean the 91 00:04:40,200 --> 00:04:43,120 Speaker 1: issue with Dow Jones is people don't really google SMP 92 00:04:43,279 --> 00:04:45,440 Speaker 1: five hundred when they want to see what the markets doing. 93 00:04:45,480 --> 00:04:48,880 Speaker 1: When regular main street Americans want to see, hey, why 94 00:04:48,920 --> 00:04:50,960 Speaker 1: is the market down today? They google Dow Jones. And 95 00:04:50,960 --> 00:04:53,600 Speaker 1: it's a wonderful indicator of how much attention the public 96 00:04:53,720 --> 00:04:56,159 Speaker 1: is paying on the volatility in the stock market. And 97 00:04:56,200 --> 00:04:57,800 Speaker 1: we looked at that, and you can do this on 98 00:04:57,839 --> 00:05:00,280 Speaker 1: your own Google trans just plug in Dow Jones, get 99 00:05:00,279 --> 00:05:02,880 Speaker 1: the data. And the troublesome thing is the volatility in 100 00:05:02,880 --> 00:05:07,120 Speaker 1: August is now higher, showing higher Google trend searches for 101 00:05:07,440 --> 00:05:09,360 Speaker 1: dal Jones than back in May when we had the 102 00:05:09,440 --> 00:05:11,600 Speaker 1: last bout of volatility. Isn't quite back to where it 103 00:05:11,640 --> 00:05:13,599 Speaker 1: was in December when we had that huge puke point 104 00:05:13,680 --> 00:05:17,120 Speaker 1: in the year, but definitely people are paying attention to 105 00:05:17,680 --> 00:05:19,960 Speaker 1: this volatility, and that's worrisome because even if you don't 106 00:05:19,960 --> 00:05:22,719 Speaker 1: own stock, you know that if your company's stock prices down, 107 00:05:23,000 --> 00:05:26,040 Speaker 1: your risk of layoff goes up. And going into holiday season, 108 00:05:26,040 --> 00:05:28,320 Speaker 1: that's another kind of worrisome thing. So to me, it's 109 00:05:28,320 --> 00:05:30,960 Speaker 1: a transmission mechanism between the volatility the stock market and 110 00:05:31,000 --> 00:05:33,640 Speaker 1: consumer spending. When these people see people paying attention to 111 00:05:33,640 --> 00:05:36,480 Speaker 1: stock market volatility, you have to start worrying about consumer 112 00:05:36,520 --> 00:05:39,200 Speaker 1: spending going into the fourth quarter. So the searches for 113 00:05:39,279 --> 00:05:43,080 Speaker 1: dal jones recently were even higher than May, and and 114 00:05:43,320 --> 00:05:45,720 Speaker 1: was that almost as high as December. I wonder if 115 00:05:45,720 --> 00:05:48,640 Speaker 1: the clustering of them so close together, you know, is 116 00:05:48,640 --> 00:05:51,640 Speaker 1: is also worrisome. Um. You know, it's one thing to 117 00:05:51,680 --> 00:05:54,520 Speaker 1: have one sort of a correction in a year, but 118 00:05:54,560 --> 00:05:57,039 Speaker 1: to have have a couple back to back to back 119 00:05:57,080 --> 00:06:00,080 Speaker 1: like this, Uh does that sort of sending on a 120 00:06:00,200 --> 00:06:02,279 Speaker 1: sign going forward? It does, because if you look at 121 00:06:02,320 --> 00:06:04,440 Speaker 1: the data from December of last year and then January 122 00:06:04,440 --> 00:06:07,160 Speaker 1: of this year, interest in Dow Jones just plummeted. Once 123 00:06:07,240 --> 00:06:09,640 Speaker 1: the market began to recover, people said, okay, things are fine. 124 00:06:10,240 --> 00:06:12,160 Speaker 1: If you do see another couple of months of volatility 125 00:06:12,200 --> 00:06:14,599 Speaker 1: and still elevated Google searches. To my mind, it's a 126 00:06:14,640 --> 00:06:18,800 Speaker 1: worrisome sign going into holiday because people might rightly think, Okay, 127 00:06:18,839 --> 00:06:20,800 Speaker 1: if the stock markets volitgi and perhaps my jobs at 128 00:06:20,880 --> 00:06:23,360 Speaker 1: risk and we gotta start spending a little bit less money. 129 00:06:23,440 --> 00:06:25,800 Speaker 1: I've got to say, you inspired me, and I looked 130 00:06:25,880 --> 00:06:28,600 Speaker 1: up on Google trends searches for recession too, and I 131 00:06:28,600 --> 00:06:31,680 Speaker 1: found that actually this month we're on pace to see 132 00:06:32,000 --> 00:06:35,280 Speaker 1: the most Google Trends searches for recession since all the 133 00:06:35,320 --> 00:06:37,719 Speaker 1: way back in on nine, which I thought was astounding. 134 00:06:37,760 --> 00:06:40,680 Speaker 1: Did this does Let's go back to the discussion of 135 00:06:40,720 --> 00:06:44,520 Speaker 1: talking yourself into a recession. People get worried, people talk 136 00:06:44,600 --> 00:06:47,760 Speaker 1: themselves into being scared and then not going out and 137 00:06:47,920 --> 00:06:51,680 Speaker 1: spending potentially. Yeah, that is definitely the narrative. I'll tell 138 00:06:51,680 --> 00:06:53,919 Speaker 1: you that I've never actually seen it work, and I 139 00:06:53,920 --> 00:06:56,080 Speaker 1: mean I covered the autos in the nineties, so pickltality 140 00:06:56,200 --> 00:06:58,200 Speaker 1: was a major issue. I mean, you know, sort of 141 00:06:58,200 --> 00:07:01,279 Speaker 1: to cut to the chase about this recession conversation, the 142 00:07:01,360 --> 00:07:03,800 Speaker 1: yield curve is spooking everybody, and I guess we'll talk 143 00:07:03,800 --> 00:07:05,680 Speaker 1: more about that, But to my mind, it's not the 144 00:07:05,680 --> 00:07:08,200 Speaker 1: most important indicator for a future recession, and that the 145 00:07:08,240 --> 00:07:12,000 Speaker 1: real important indicator is gasoline prices and oil prices even 146 00:07:12,000 --> 00:07:13,920 Speaker 1: though we've never had a recession without an inverted y 147 00:07:13,960 --> 00:07:17,480 Speaker 1: occur First, we haven't had a recession without oil prices 148 00:07:17,520 --> 00:07:20,600 Speaker 1: doubling in a year since back in the ninety three. 149 00:07:21,160 --> 00:07:23,360 Speaker 1: So in order to see a recession, and this is 150 00:07:23,400 --> 00:07:25,720 Speaker 1: a more logical conduit for me, in order to see 151 00:07:25,760 --> 00:07:27,360 Speaker 1: a recession of believing recession, I think you've got to 152 00:07:27,360 --> 00:07:30,040 Speaker 1: see gas prices spike, and they obviously haven't. So if 153 00:07:30,040 --> 00:07:32,400 Speaker 1: we see Google searches for cheap gas, and then I'll 154 00:07:33,080 --> 00:07:36,600 Speaker 1: look out. Believe it or not, we do that. We 155 00:07:36,680 --> 00:07:40,680 Speaker 1: do look at that cheap gas, coupons, ammunition and can goods. 156 00:07:40,680 --> 00:07:44,640 Speaker 1: And it's funny, prepping has actually declined in popularity in 157 00:07:44,640 --> 00:07:47,040 Speaker 1: the last two years. Oh, you've been tracking that. We 158 00:07:47,160 --> 00:07:51,800 Speaker 1: track everything. That's great. Well. Emily as Nick said that 159 00:07:51,880 --> 00:07:55,600 Speaker 1: the yield curve has a lot of people spooked avid 160 00:07:55,640 --> 00:07:58,080 Speaker 1: listeners to this podcast. No, we've sort of beaten that 161 00:07:58,200 --> 00:08:03,280 Speaker 1: topic to death. But um, you know, especially low long 162 00:08:03,400 --> 00:08:07,400 Speaker 1: end yields. Uh this week, uh ten year yielded a 163 00:08:07,520 --> 00:08:10,280 Speaker 1: little more than one and a half percent. I think Nick. 164 00:08:10,480 --> 00:08:13,560 Speaker 1: According to one year reports, it's only been something like 165 00:08:13,720 --> 00:08:17,160 Speaker 1: forty days in the past since the sixties that we've 166 00:08:17,200 --> 00:08:19,800 Speaker 1: seen a lower yield than this. I mean, it's crazy. 167 00:08:20,120 --> 00:08:24,120 Speaker 1: And Emily, you've been writing about UM and reporting on 168 00:08:24,160 --> 00:08:27,720 Speaker 1: this issue of the Treasury actually looking at long ultra 169 00:08:27,800 --> 00:08:31,760 Speaker 1: long bonds now, so either fifty year or hundred year 170 00:08:32,200 --> 00:08:36,200 Speaker 1: UH maturity treasuries. Tell us about that reporting is it? 171 00:08:36,440 --> 00:08:39,920 Speaker 1: Does this sound like something that could possibly happen? Well, look, 172 00:08:39,960 --> 00:08:41,720 Speaker 1: it would make a lot of sense for the Treasury 173 00:08:41,760 --> 00:08:44,920 Speaker 1: to try and lock in record low funding for you know, 174 00:08:44,960 --> 00:08:47,000 Speaker 1: a fifty or a hundred year bond at this point. 175 00:08:47,000 --> 00:08:49,600 Speaker 1: And surely, I mean some people have said, look, everybody's 176 00:08:49,600 --> 00:08:51,760 Speaker 1: doing it, why wouldn't the US do it as well? Right? 177 00:08:52,160 --> 00:08:55,079 Speaker 1: But I think that there are I mean, first of all, 178 00:08:55,240 --> 00:08:57,439 Speaker 1: this is the second time this administration that this idea 179 00:08:57,480 --> 00:09:00,120 Speaker 1: has been floated. So it was floated back in and 180 00:09:00,160 --> 00:09:02,160 Speaker 1: at that point tea back, which are kind of the 181 00:09:02,559 --> 00:09:05,120 Speaker 1: whispers to the Treasury about what the market wants and 182 00:09:05,120 --> 00:09:08,040 Speaker 1: what the market can take. UM was very cool on 183 00:09:08,080 --> 00:09:10,520 Speaker 1: the idea, and they don't seem to have really changed 184 00:09:10,600 --> 00:09:12,680 Speaker 1: their tone that much at this point. Although it's hard 185 00:09:12,720 --> 00:09:15,320 Speaker 1: to say until we see them actually gather and comment 186 00:09:15,360 --> 00:09:17,520 Speaker 1: on it. Um. But you know we've done some of 187 00:09:17,520 --> 00:09:19,560 Speaker 1: my colleagues have done some fantastic reporting on this. Lea's 188 00:09:19,600 --> 00:09:22,960 Speaker 1: Kevin McCormick, um, Alex Harris as well as written about this. 189 00:09:23,400 --> 00:09:26,000 Speaker 1: It's um. You know what we need to see is 190 00:09:26,040 --> 00:09:28,800 Speaker 1: despite the fact that there is this global Hunger Federation 191 00:09:29,160 --> 00:09:31,840 Speaker 1: and for yield wherever it shows up, you just still 192 00:09:31,880 --> 00:09:33,800 Speaker 1: find that people are saying, well, we don't need to 193 00:09:33,840 --> 00:09:38,359 Speaker 1: disrupt kind of the regular and reliable performance of Treasury issuance. 194 00:09:38,720 --> 00:09:40,960 Speaker 1: We don't want to see the Treasury doing something that 195 00:09:41,080 --> 00:09:44,400 Speaker 1: is kind of opportunistic um to try and hit a 196 00:09:44,400 --> 00:09:46,560 Speaker 1: low yield at this point in time that might end 197 00:09:46,640 --> 00:09:48,560 Speaker 1: up being disruptive for the rest of the market. Well, 198 00:09:48,800 --> 00:09:52,679 Speaker 1: you know, I can only imagine uh, groups of pension 199 00:09:52,679 --> 00:09:56,200 Speaker 1: fund managers and insurance companies, you know, hiring a marching 200 00:09:56,240 --> 00:09:59,360 Speaker 1: band ago performed at Stephen Nutchem's house to say we 201 00:09:59,520 --> 00:10:01,679 Speaker 1: want the right I mean, so what what would be 202 00:10:01,720 --> 00:10:06,000 Speaker 1: the downside? Why? Why would the Treasury not necessarily want 203 00:10:06,040 --> 00:10:08,840 Speaker 1: to provide these securities I mean and correct me if 204 00:10:08,840 --> 00:10:10,960 Speaker 1: I'm wrong. Wouldn't wouldn't you assume the pensions and the 205 00:10:11,000 --> 00:10:12,920 Speaker 1: and the insurance companies would be would be all over 206 00:10:12,960 --> 00:10:15,000 Speaker 1: an ultra law. I mean you would to a certain 207 00:10:15,040 --> 00:10:17,200 Speaker 1: extent because their buy and hold investors, they want to 208 00:10:17,240 --> 00:10:19,360 Speaker 1: match their liabilities. They want to make sure that they 209 00:10:19,360 --> 00:10:21,120 Speaker 1: have enough money to pay out when people retire. And 210 00:10:21,120 --> 00:10:23,280 Speaker 1: obviously PIMCO did a great piece not so long ago 211 00:10:23,720 --> 00:10:26,840 Speaker 1: about that being a driver of negative yields globally. Right, 212 00:10:26,920 --> 00:10:30,160 Speaker 1: this insane demand the Treasury wants to I mean, look, 213 00:10:30,720 --> 00:10:33,319 Speaker 1: you can't really say that. There was a great interview 214 00:10:33,400 --> 00:10:35,439 Speaker 1: by by one of our colleagues and in d C 215 00:10:35,600 --> 00:10:39,280 Speaker 1: Sila who actually spoke to munition and uh and you know, 216 00:10:39,320 --> 00:10:42,920 Speaker 1: they say they're seriously considering this, and but it's clear 217 00:10:43,000 --> 00:10:46,000 Speaker 1: that the Treasury wants to keep raising this as an issue. Right. 218 00:10:46,040 --> 00:10:50,280 Speaker 1: This is there's it's compelling um for investors in it. 219 00:10:50,480 --> 00:10:53,120 Speaker 1: You know, it seems like it would be a great match. 220 00:10:53,160 --> 00:10:54,839 Speaker 1: It seems like you would see global investors want to 221 00:10:54,880 --> 00:10:58,160 Speaker 1: pour and global investors don't tend to be huge participants 222 00:10:58,400 --> 00:11:01,800 Speaker 1: and sort of uh US long duration you know that 223 00:11:01,880 --> 00:11:03,679 Speaker 1: they're kind of a portion of the buyers, but they 224 00:11:03,720 --> 00:11:06,920 Speaker 1: also have to satisfy asset managers here in the US. 225 00:11:07,040 --> 00:11:09,120 Speaker 1: Which is a sort of a compelling market as well, 226 00:11:09,640 --> 00:11:11,560 Speaker 1: and so you know why it might be great for 227 00:11:11,760 --> 00:11:15,560 Speaker 1: buying hold investors, it's just difficult to always rely on 228 00:11:15,720 --> 00:11:17,760 Speaker 1: you know, for instance, they may have their funding levels 229 00:11:17,800 --> 00:11:19,560 Speaker 1: sorted out at this point in time, but they're not 230 00:11:19,640 --> 00:11:23,040 Speaker 1: later on. There's this cyclicality element that might sort of 231 00:11:23,080 --> 00:11:25,600 Speaker 1: disturb demand and make it less different. And the problem 232 00:11:25,800 --> 00:11:28,439 Speaker 1: is if there isn't demand sufficient demand for this, it 233 00:11:28,520 --> 00:11:30,840 Speaker 1: ends up on dealer balance sheets. Dealer balance sheets don't 234 00:11:30,840 --> 00:11:32,440 Speaker 1: have a lot of room on them at the moment. 235 00:11:32,880 --> 00:11:34,760 Speaker 1: And it also means that you know, sort of costs 236 00:11:34,800 --> 00:11:38,560 Speaker 1: across the curve could rise for taxpayers. So you know 237 00:11:38,600 --> 00:11:40,280 Speaker 1: that's one thing. I mean, where yet to see We're 238 00:11:40,280 --> 00:11:42,600 Speaker 1: doing some reporting to time and see what what global 239 00:11:42,640 --> 00:11:46,520 Speaker 1: investors really think about this um, you know, so we'll 240 00:11:46,520 --> 00:11:52,400 Speaker 1: see what happens neck you buying Well obviously personally, no, 241 00:11:56,480 --> 00:11:59,800 Speaker 1: it is an interesting question because opportunistically it does make 242 00:11:59,840 --> 00:12:02,079 Speaker 1: it kind of sense. But you know, the dollars reserve 243 00:12:02,160 --> 00:12:05,560 Speaker 1: currency for a reason. It's because this system is extremely 244 00:12:05,640 --> 00:12:07,560 Speaker 1: stable and if you look at the folks that have 245 00:12:07,600 --> 00:12:13,280 Speaker 1: done hundred year bonds, not exactly a great set of cops. Well, 246 00:12:13,320 --> 00:12:15,280 Speaker 1: I have to ask. You mentioned the dollar, and I 247 00:12:15,280 --> 00:12:17,360 Speaker 1: want to bring it to actually dollar price action that 248 00:12:17,400 --> 00:12:19,760 Speaker 1: we have seen. And I feel like we discussed this 249 00:12:19,840 --> 00:12:23,120 Speaker 1: every single week because it seems like everyone is or 250 00:12:23,200 --> 00:12:25,760 Speaker 1: many people are always calling to find a bump in 251 00:12:25,800 --> 00:12:27,680 Speaker 1: the dollar rally. But yet again this week you see 252 00:12:27,760 --> 00:12:31,280 Speaker 1: the dollar rallying, the Bloomberg Dollar Spot Index touching the hyacinth. 253 00:12:32,960 --> 00:12:38,040 Speaker 1: Do you see this relentless dollar rally just continuing from here? Yes? 254 00:12:38,200 --> 00:12:40,760 Speaker 1: The short answer is yes, there's no reason why it shouldn't. 255 00:12:40,760 --> 00:12:42,760 Speaker 1: If the economies of the world are slowing down and 256 00:12:42,800 --> 00:12:46,040 Speaker 1: you're looking for risk free assets or a more stable 257 00:12:46,080 --> 00:12:48,760 Speaker 1: place to invest, the U S is it, The dollar 258 00:12:49,000 --> 00:12:51,680 Speaker 1: is it? And the reserve currency status at lea seems 259 00:12:51,760 --> 00:12:54,680 Speaker 1: rock solid and there's no viable competitor for the next 260 00:12:54,720 --> 00:12:57,480 Speaker 1: ten years at least, So yes, no reason why not. 261 00:13:13,400 --> 00:13:15,840 Speaker 1: N I wanted to run through a few of some 262 00:13:15,960 --> 00:13:19,040 Speaker 1: of the factulids from some of your recent research because 263 00:13:19,240 --> 00:13:21,360 Speaker 1: some some really fascinating stuff and I love the way 264 00:13:21,400 --> 00:13:25,680 Speaker 1: you sort of look at uh data points that the 265 00:13:25,720 --> 00:13:28,160 Speaker 1: rest of us, the rest of us have missed. The 266 00:13:28,440 --> 00:13:31,680 Speaker 1: one I'm really fascinated with is you look at the 267 00:13:31,720 --> 00:13:36,120 Speaker 1: proportion of households in the country that are one person households, 268 00:13:36,840 --> 00:13:41,440 Speaker 1: and how it affects then the average home size being built. 269 00:13:41,600 --> 00:13:44,120 Speaker 1: Walk us through this research and sort of how you 270 00:13:44,200 --> 00:13:49,600 Speaker 1: apply what you found out in these stats to investment ideas. Yeah, 271 00:13:49,640 --> 00:13:52,320 Speaker 1: so this is a very long term kind of analysis, 272 00:13:52,320 --> 00:13:54,600 Speaker 1: and it basically those like this. The beginning anything sixties, 273 00:13:54,600 --> 00:13:57,160 Speaker 1: the average household America had roughly three point three people 274 00:13:57,160 --> 00:14:00,160 Speaker 1: according to the Census, and the average household size was 275 00:14:00,240 --> 00:14:03,560 Speaker 1: roughly seventeen hundred square feet a little bit less. And 276 00:14:03,600 --> 00:14:06,360 Speaker 1: over the last fifty sixty years, the number of people 277 00:14:06,360 --> 00:14:09,120 Speaker 1: per household has declined from three point three to two 278 00:14:09,160 --> 00:14:12,720 Speaker 1: point five, the biggest single factor being people who live alone. 279 00:14:13,040 --> 00:14:15,280 Speaker 1: It used to be thirteen percent back in the sixties. 280 00:14:15,320 --> 00:14:17,800 Speaker 1: Now it's well over twenty and you're more likely to 281 00:14:17,840 --> 00:14:20,400 Speaker 1: walk into a house in Americans see one person than 282 00:14:20,480 --> 00:14:23,120 Speaker 1: four people, which is sort of the traditional nuclear family 283 00:14:23,200 --> 00:14:25,800 Speaker 1: versus the person living alone. At the same time, the 284 00:14:25,880 --> 00:14:28,720 Speaker 1: size of houses has increased from seventeen hundred square feet 285 00:14:28,760 --> 00:14:30,920 Speaker 1: to twenty seven hundred square feet at the peak in 286 00:14:30,960 --> 00:14:34,080 Speaker 1: two thousand fifteen, And to me, it's like the American 287 00:14:34,080 --> 00:14:39,240 Speaker 1: consumption story. Bigger houses, lower household densities, and since people 288 00:14:39,240 --> 00:14:42,280 Speaker 1: living together tend to share assets, the less sharing, the 289 00:14:42,320 --> 00:14:44,640 Speaker 1: more consumption we need. So it's been a huge tail 290 00:14:44,680 --> 00:14:46,680 Speaker 1: went for the American consumer in the American economy for 291 00:14:46,720 --> 00:14:49,240 Speaker 1: the last fifty sixty years, basically the entire post World 292 00:14:49,240 --> 00:14:53,160 Speaker 1: War two expansion. But now it's beginning to change because 293 00:14:53,360 --> 00:14:55,400 Speaker 1: land prices have gotten so high that new houses are 294 00:14:55,400 --> 00:14:58,240 Speaker 1: now actually getting smaller again, and they typically only gets 295 00:14:58,280 --> 00:15:01,120 Speaker 1: smaller in recessions as home builders shift to smaller homes. 296 00:15:01,440 --> 00:15:03,640 Speaker 1: But if you think about the aging the population, this 297 00:15:03,760 --> 00:15:06,320 Speaker 1: propensity to live alone, and a bunch of other factors, 298 00:15:06,320 --> 00:15:08,160 Speaker 1: to me, it's kind of a cautionary tale about what 299 00:15:08,240 --> 00:15:10,440 Speaker 1: the American economy can grow at over the next ten 300 00:15:10,520 --> 00:15:13,000 Speaker 1: twenty thirty years if we no longer have this tail 301 00:15:13,040 --> 00:15:15,880 Speaker 1: wind of fewer people in bigger houses. Right, And that's 302 00:15:15,880 --> 00:15:18,000 Speaker 1: a trend that you think should keep going for a while, 303 00:15:18,120 --> 00:15:21,240 Speaker 1: is homes, you know, fewer, fewer people in the household. 304 00:15:21,280 --> 00:15:23,720 Speaker 1: If you look at populations in Europe and Japan, for example, 305 00:15:23,720 --> 00:15:25,200 Speaker 1: there are a couple of years of us in terms 306 00:15:25,200 --> 00:15:28,720 Speaker 1: of average age of a citizen, they're already seeing higher 307 00:15:28,800 --> 00:15:30,920 Speaker 1: levels in Japan. I think a thirty five percent of 308 00:15:30,960 --> 00:15:33,880 Speaker 1: households or one person households, and it's about I want 309 00:15:33,880 --> 00:15:37,360 Speaker 1: to say, thirty five in Europe, both trending higher. So 310 00:15:37,400 --> 00:15:39,360 Speaker 1: we're a little bit behind, but seems like we're going 311 00:15:39,400 --> 00:15:41,400 Speaker 1: to catch up if for another reason than the average 312 00:15:41,440 --> 00:15:43,600 Speaker 1: mortality of a man is five years less than every 313 00:15:43,640 --> 00:15:47,600 Speaker 1: mortality of woman. Something I find really interesting to that point, though, 314 00:15:47,600 --> 00:15:49,840 Speaker 1: is that this year we've seen home builder stocks really 315 00:15:49,840 --> 00:15:51,400 Speaker 1: just take off. I mean, you look at the SMP 316 00:15:51,520 --> 00:15:55,360 Speaker 1: home Building Index, It's up something like this year, and yes, 317 00:15:55,560 --> 00:15:58,840 Speaker 1: a large part of that is due to falling interest 318 00:15:59,000 --> 00:16:01,280 Speaker 1: rates as well. Would you say that people who are 319 00:16:01,400 --> 00:16:05,000 Speaker 1: really buying into this story or maybe missing out on 320 00:16:05,000 --> 00:16:07,240 Speaker 1: a big part of the picture now, because I think 321 00:16:07,280 --> 00:16:08,680 Speaker 1: the you know, you have to look at what the 322 00:16:08,680 --> 00:16:10,800 Speaker 1: fundamentals are, and for home bowlders, it's interest rates, and 323 00:16:10,840 --> 00:16:13,400 Speaker 1: that's totally fine. And that group got creamed over the 324 00:16:13,400 --> 00:16:14,880 Speaker 1: past couple of years, so it should have had a 325 00:16:14,920 --> 00:16:17,160 Speaker 1: bounce back. Look, there still will always be a home 326 00:16:17,200 --> 00:16:18,880 Speaker 1: building industry, and I think that industry has done a 327 00:16:18,880 --> 00:16:21,960 Speaker 1: good job more than anything of managing their cost structures 328 00:16:22,000 --> 00:16:25,320 Speaker 1: and managing their buying of land to be sustainably profitable 329 00:16:25,360 --> 00:16:28,760 Speaker 1: because they obviously got destroyed during the crisis. And so 330 00:16:28,800 --> 00:16:30,960 Speaker 1: the number one thing that that's those companies have to 331 00:16:30,960 --> 00:16:33,080 Speaker 1: do to improve their valuations, which are so quite low, 332 00:16:33,440 --> 00:16:36,120 Speaker 1: is proved profitability through a downturn. And they're doing a 333 00:16:36,200 --> 00:16:38,720 Speaker 1: very good job of managing cost structures and building plans 334 00:16:38,720 --> 00:16:40,880 Speaker 1: and growth plans so that when the next recession comes, 335 00:16:41,320 --> 00:16:43,960 Speaker 1: they don't have to, um, you know, go to banks 336 00:16:44,040 --> 00:16:45,680 Speaker 1: or go to the credit markets. They can stell be 337 00:16:45,720 --> 00:16:48,120 Speaker 1: self sustaining and over time that I'll earn a higher 338 00:16:48,200 --> 00:16:50,600 Speaker 1: valuation as a cyclical as analyst, that really resonates with me. 339 00:16:50,680 --> 00:16:53,040 Speaker 1: That's how you earn a higher valuation over the next ten, fifteen, 340 00:16:53,040 --> 00:16:55,520 Speaker 1: twenty years. Yea, Emily. It all gets back to the 341 00:16:55,520 --> 00:17:00,600 Speaker 1: interest rates, doesn't it. And absolutely when did you refinance? 342 00:17:00,800 --> 00:17:02,480 Speaker 1: I wish, I wish I had just done this. I 343 00:17:02,480 --> 00:17:05,800 Speaker 1: know it's getting temping again. So you you talked to 344 00:17:06,359 --> 00:17:09,840 Speaker 1: UH fixed income investors all day? Um, what is the 345 00:17:09,880 --> 00:17:14,119 Speaker 1: mood out there? Are people coming around to the idea 346 00:17:14,200 --> 00:17:17,960 Speaker 1: that rates are low forever? Now? I mean, the whole 347 00:17:17,960 --> 00:17:19,840 Speaker 1: market seemed to be on the wrong foot when the 348 00:17:19,880 --> 00:17:22,800 Speaker 1: year began. Everyone was expecting the Fed to hike and 349 00:17:23,160 --> 00:17:25,560 Speaker 1: rates to be you know, ten year yield to be 350 00:17:25,600 --> 00:17:29,800 Speaker 1: above three percent. Maybe what's sort of the temperature on 351 00:17:29,800 --> 00:17:31,639 Speaker 1: the street now. I mean, I'm kind of really interested. 352 00:17:31,640 --> 00:17:34,399 Speaker 1: We always see this very different sort of glass off empty, 353 00:17:34,400 --> 00:17:38,160 Speaker 1: glass of full full attitude between equities and fixed income investors. 354 00:17:38,160 --> 00:17:40,120 Speaker 1: And I have to say a lot of the people 355 00:17:40,160 --> 00:17:42,600 Speaker 1: I speak to are very down in the mouth about 356 00:17:42,640 --> 00:17:45,080 Speaker 1: what's happening at the moment in terms of the prospect 357 00:17:45,119 --> 00:17:48,520 Speaker 1: of high yields, of volatility, like volatility is obviously coming 358 00:17:48,560 --> 00:17:51,040 Speaker 1: back in the market, but they just don't see that 359 00:17:51,119 --> 00:17:53,920 Speaker 1: much opportunity for yields to lift from where they are now. 360 00:17:53,960 --> 00:17:55,880 Speaker 1: And so there's been more and more of that sort 361 00:17:55,880 --> 00:17:57,760 Speaker 1: of drumbeat of well, how low can it go? You 362 00:17:57,840 --> 00:18:00,600 Speaker 1: keep asking this question. It keeps breaking through every single 363 00:18:00,640 --> 00:18:03,359 Speaker 1: barrier that people have been talking about. But the interesting 364 00:18:03,400 --> 00:18:05,600 Speaker 1: thing about this is, you know, now we've got the 365 00:18:05,600 --> 00:18:08,520 Speaker 1: FED cutting rates again, you would think people would be emboldened, 366 00:18:08,520 --> 00:18:10,719 Speaker 1: you know, heading out into Okay, we've got some yielding 367 00:18:10,760 --> 00:18:13,320 Speaker 1: stuff out there, we've got some emerging markets, and I'm 368 00:18:13,320 --> 00:18:15,600 Speaker 1: really interested to hear so many people saying, yeah, it's 369 00:18:15,680 --> 00:18:17,080 Speaker 1: close to the end of the cycle, and it's been 370 00:18:17,119 --> 00:18:20,600 Speaker 1: close to the end of cycle for the last it's 371 00:18:20,640 --> 00:18:22,560 Speaker 1: it is really hard I think for a lot of 372 00:18:22,560 --> 00:18:24,680 Speaker 1: investors out of bits and a where to step next? Nick, 373 00:18:24,720 --> 00:18:27,600 Speaker 1: what's your view? Obviously it's very difficult to time the markets. 374 00:18:27,600 --> 00:18:30,480 Speaker 1: And as Emily said, many people are looking at this saying, well, 375 00:18:30,480 --> 00:18:32,320 Speaker 1: it has to come to an end sometime soon. We're 376 00:18:32,320 --> 00:18:35,919 Speaker 1: at the end of the cycle. Do you believe that? Well, 377 00:18:36,080 --> 00:18:37,679 Speaker 1: the way I look at it is just you know. 378 00:18:37,840 --> 00:18:39,720 Speaker 1: So I'll give you an example. Look at what the 379 00:18:39,920 --> 00:18:41,800 Speaker 1: ten year bond has done for the last year. As 380 00:18:41,800 --> 00:18:43,880 Speaker 1: of last week, it was about three teaen point three 381 00:18:43,920 --> 00:18:49,320 Speaker 1: percent after inflation over the last since n the treasury, 382 00:18:49,520 --> 00:18:54,120 Speaker 1: then your treasury has returned two after inflation on average 383 00:18:54,160 --> 00:18:56,840 Speaker 1: through that time frame, and the sanentiviation of those returns 384 00:18:56,880 --> 00:18:59,560 Speaker 1: is roughly nine points. So we are well above one 385 00:18:59,560 --> 00:19:01,840 Speaker 1: senor viation in terms of trailing one year returns and 386 00:19:01,880 --> 00:19:04,600 Speaker 1: that inflation and typically, and if you go back and 387 00:19:04,600 --> 00:19:07,119 Speaker 1: look at the history, you don't make much more money 388 00:19:07,160 --> 00:19:10,040 Speaker 1: than that over the next year. So if you're buying 389 00:19:10,080 --> 00:19:13,719 Speaker 1: treasuries here statistically historically says you're not going to make 390 00:19:13,760 --> 00:19:16,159 Speaker 1: a whole lot more going forward. And there have been 391 00:19:16,280 --> 00:19:18,720 Speaker 1: rafts of people that have died on the hill of 392 00:19:18,800 --> 00:19:20,879 Speaker 1: calling the you know, the top and the treasury markets. 393 00:19:20,920 --> 00:19:23,480 Speaker 1: I'm not trying to do that, but just statistically speaking, 394 00:19:23,720 --> 00:19:26,600 Speaker 1: if you own long bonds here, history says you are 395 00:19:26,600 --> 00:19:27,840 Speaker 1: not going to make a whole lot more for the 396 00:19:27,880 --> 00:19:30,199 Speaker 1: next twelve months. You might not lose very much. But 397 00:19:30,400 --> 00:19:34,199 Speaker 1: this has been a dot com size rally in treasuries, 398 00:19:34,600 --> 00:19:36,760 Speaker 1: and you have to sort of put that in perspective, 399 00:19:36,760 --> 00:19:38,760 Speaker 1: and and and and really respect the fact that if 400 00:19:38,760 --> 00:19:42,400 Speaker 1: you're hanging on here, your best case scenario is flat, right, 401 00:19:42,720 --> 00:19:45,280 Speaker 1: especially when you look at money market funds are practically 402 00:19:45,400 --> 00:19:47,280 Speaker 1: yielding more than the thirty year right now, It's like, 403 00:19:47,960 --> 00:19:50,720 Speaker 1: why wouldn't you hang out in cash basically and see 404 00:19:50,760 --> 00:19:53,000 Speaker 1: what happens I guess or dumbbell it and say the 405 00:19:53,119 --> 00:19:56,840 Speaker 1: SMP deals more than the right right and and by 406 00:19:56,880 --> 00:20:01,159 Speaker 1: the way, dividends never go negative, right right? Good. I 407 00:20:01,200 --> 00:20:03,359 Speaker 1: wanted to ask you Nick Lasts as a segue into 408 00:20:03,359 --> 00:20:05,600 Speaker 1: our craziest thing I ever saw on markets. Earlier on 409 00:20:05,600 --> 00:20:07,680 Speaker 1: in the show, you said that you guys pretty much 410 00:20:07,680 --> 00:20:10,720 Speaker 1: track everything. What would be the craziest thing that you 411 00:20:10,760 --> 00:20:13,960 Speaker 1: guys say that you track? Well, we do a quarterly 412 00:20:14,080 --> 00:20:16,600 Speaker 1: thing we call off the Great Economic Indicators, where we 413 00:20:16,640 --> 00:20:18,760 Speaker 1: try to go as far afield as possible. And I'd 414 00:20:18,760 --> 00:20:20,720 Speaker 1: say that two or three that sort of get the 415 00:20:20,760 --> 00:20:24,600 Speaker 1: most attention. One is our Bacon Cheeseburger Index, which looks 416 00:20:24,640 --> 00:20:27,920 Speaker 1: at the price through the CPI data of how much 417 00:20:27,960 --> 00:20:30,080 Speaker 1: it costs to make the bacon cheeseburger, and it's actually 418 00:20:30,080 --> 00:20:33,040 Speaker 1: been a kind of a reliable leading indicator of where 419 00:20:33,080 --> 00:20:36,680 Speaker 1: inflation goes, and it does actually point to some deflation 420 00:20:36,760 --> 00:20:40,000 Speaker 1: coming up, so does support that basic narrative. Um. The 421 00:20:40,000 --> 00:20:43,359 Speaker 1: other one is pickup truck sales large pickup trucks, and 422 00:20:43,440 --> 00:20:47,440 Speaker 1: those are bought by mostly small businesses and some individuals 423 00:20:47,480 --> 00:20:49,920 Speaker 1: and heavily reliant on gasolene prices. But when you see 424 00:20:49,920 --> 00:20:52,080 Speaker 1: that start to roll over, you know that there's some 425 00:20:52,119 --> 00:20:55,520 Speaker 1: worry among small businesses about capital investments, and thankfully, so 426 00:20:55,560 --> 00:20:57,639 Speaker 1: far small you know, large pickup truck sales have been 427 00:20:57,640 --> 00:20:59,399 Speaker 1: pretty good. So you know, one of those things that 428 00:20:59,400 --> 00:21:02,080 Speaker 1: tells us we could talk ourselves into our recession, as 429 00:21:02,080 --> 00:21:05,199 Speaker 1: we talked about earlier, but the actual data doesn't support 430 00:21:05,280 --> 00:21:06,879 Speaker 1: that we're about to roll over, you know, into the 431 00:21:06,880 --> 00:21:09,480 Speaker 1: next recession. Well, I think that brings us to our 432 00:21:09,560 --> 00:21:13,879 Speaker 1: traditional segment. The craziest thing I saw in markets this week. Unfortunately, 433 00:21:13,880 --> 00:21:16,200 Speaker 1: Emily had to run. She's got a hot scoop she's 434 00:21:16,240 --> 00:21:19,360 Speaker 1: working on, So stand by your terminal to find out 435 00:21:19,359 --> 00:21:21,359 Speaker 1: what that is. But Sarah, let's start with you. I 436 00:21:21,359 --> 00:21:24,600 Speaker 1: trust that you have surely seen something crazy this week. 437 00:21:24,640 --> 00:21:27,159 Speaker 1: I'll try to make it crazy enough for both me 438 00:21:27,320 --> 00:21:30,399 Speaker 1: and Emily, and I do think it is pretty crazy. 439 00:21:30,520 --> 00:21:33,400 Speaker 1: So it went viral in certain areas of the Internet. 440 00:21:33,920 --> 00:21:37,760 Speaker 1: But this week there was a Steve Jobs look alike 441 00:21:37,880 --> 00:21:41,160 Speaker 1: found in Egypt and someone took a picture of him. 442 00:21:41,680 --> 00:21:43,760 Speaker 1: They posted it on the Internet, and they put it 443 00:21:43,840 --> 00:21:47,320 Speaker 1: next to a picture of Steve Jobs himself from back 444 00:21:47,320 --> 00:21:52,000 Speaker 1: in the glory days, and they actually look very much alike. 445 00:21:52,200 --> 00:21:56,639 Speaker 1: And people are really spewing conspiracy theories saying, oh my gosh, 446 00:21:56,720 --> 00:22:00,119 Speaker 1: is Steve Jobs back? Is he alive? Now? Obvious as 447 00:22:00,359 --> 00:22:03,480 Speaker 1: all conspiracy theories on the internet. Um, but if you 448 00:22:03,520 --> 00:22:05,960 Speaker 1: google it, you look it up, you will certainly find 449 00:22:06,000 --> 00:22:08,199 Speaker 1: some of them, and they're very interesting. That is that 450 00:22:08,320 --> 00:22:11,960 Speaker 1: is my favorite place for conspiracy theories the Internet. Yeah, 451 00:22:12,040 --> 00:22:14,560 Speaker 1: I'm'm surprised Apple didn' rise like five that then they're 452 00:22:14,560 --> 00:22:16,760 Speaker 1: actually up this week now. I mean we could say 453 00:22:16,760 --> 00:22:19,200 Speaker 1: that it's correlated. All right, Dick, that's toff the top, 454 00:22:19,280 --> 00:22:21,040 Speaker 1: you guys, can you top that one for the craziest 455 00:22:21,040 --> 00:22:22,800 Speaker 1: thing you saw on markets this week? I did see 456 00:22:22,800 --> 00:22:26,760 Speaker 1: a guy that looked like Elvis in Cairo about a 457 00:22:26,800 --> 00:22:30,199 Speaker 1: decade ago. Well, a lot of people are joking around 458 00:22:30,280 --> 00:22:32,520 Speaker 1: because supposedly in the back of the photo there was 459 00:22:32,560 --> 00:22:34,560 Speaker 1: someone that looks like Elvis. And now they're saying, Oh, 460 00:22:34,600 --> 00:22:37,320 Speaker 1: they're in cahoots, They're in this together in Egypt, Steve 461 00:22:37,400 --> 00:22:41,000 Speaker 1: Jobs and Elvis. Anything's possible. No, my my weirdest thing 462 00:22:41,080 --> 00:22:43,800 Speaker 1: is prosaic, But I really I think it merits it. 463 00:22:44,000 --> 00:22:48,080 Speaker 1: This rally and treasuries is something absolutely historic, like we 464 00:22:48,080 --> 00:22:50,760 Speaker 1: are going to look back on this period and either 465 00:22:50,800 --> 00:22:52,880 Speaker 1: say it was literally the beginning of the end because 466 00:22:52,960 --> 00:22:55,360 Speaker 1: rates are all going to zero and this is when 467 00:22:55,359 --> 00:22:57,840 Speaker 1: the world realized it, or we're gonna look back in 468 00:22:57,840 --> 00:22:59,800 Speaker 1: a couple of years and say, what the hell were 469 00:22:59,840 --> 00:23:05,560 Speaker 1: we thinking? I I think that's a safe safe only 470 00:23:05,600 --> 00:23:09,240 Speaker 1: two extremes nowhere in the middle. No, they're not staying here, 471 00:23:10,960 --> 00:23:13,160 Speaker 1: I think. And we did get a call into the hotline. 472 00:23:13,240 --> 00:23:16,160 Speaker 1: I believe from our pal lup Kawa on the Cross 473 00:23:16,160 --> 00:23:18,960 Speaker 1: Asset team, Let's hear what he had to say. We 474 00:23:18,960 --> 00:23:22,040 Speaker 1: we all know that Jerome Powell, he's he faces a 475 00:23:22,040 --> 00:23:25,120 Speaker 1: lot of critics both punching up and punching down when 476 00:23:25,119 --> 00:23:27,000 Speaker 1: it comes to the job he's doing at the FED. 477 00:23:27,560 --> 00:23:29,960 Speaker 1: I might interest you to know that he's not the 478 00:23:30,000 --> 00:23:33,320 Speaker 1: only person in his household that feels this way. His 479 00:23:33,400 --> 00:23:37,080 Speaker 1: wife is actually the chair of the Chevy Chase Village 480 00:23:37,359 --> 00:23:40,360 Speaker 1: and right now is The Washington Post reports there's a very, 481 00:23:40,480 --> 00:23:44,560 Speaker 1: very fierce debate over the dog park there, and apparently 482 00:23:44,960 --> 00:23:48,600 Speaker 1: Alyssa Leonard, which is the name of Powell's wife, is 483 00:23:48,640 --> 00:23:51,840 Speaker 1: just getting it from all sides, from neighbors who are 484 00:23:51,880 --> 00:23:54,959 Speaker 1: on the adjacent to the park and are just seeing 485 00:23:55,600 --> 00:23:58,680 Speaker 1: that the dogs are there too early barking. They're having 486 00:23:58,800 --> 00:24:02,400 Speaker 1: meeting after meeting over it, and there's really no solution 487 00:24:02,480 --> 00:24:04,720 Speaker 1: of this problem that fits all side. So you know, 488 00:24:04,760 --> 00:24:07,359 Speaker 1: when the Powells are sitting around the dinner table, they've 489 00:24:07,400 --> 00:24:10,639 Speaker 1: got a lot of complaints, uh, pretty much coming at 490 00:24:10,640 --> 00:24:14,800 Speaker 1: them from all sides on how they're doing their jobs. 491 00:24:15,160 --> 00:24:17,240 Speaker 1: This is a couple that has to have skin that's 492 00:24:17,320 --> 00:24:19,639 Speaker 1: right that's right. Jay pals like you wouldn't believe what 493 00:24:19,680 --> 00:24:21,560 Speaker 1: Trump said to me today, and she's like you wouldn't 494 00:24:21,560 --> 00:24:24,840 Speaker 1: believe what happened at the dog park. As a frequenter 495 00:24:24,880 --> 00:24:26,959 Speaker 1: of dog parks, I I will say there's there can 496 00:24:26,960 --> 00:24:29,359 Speaker 1: be a lot of drama there, maybe because my dog's 497 00:24:29,359 --> 00:24:31,560 Speaker 1: at Jark and he's always picking fights, but there there's 498 00:24:31,600 --> 00:24:33,960 Speaker 1: certainly a lot of trauma. Maybe Bill Dudley has a 499 00:24:34,000 --> 00:24:36,840 Speaker 1: point of view on the dog park and he'll be 500 00:24:36,920 --> 00:24:39,160 Speaker 1: very vocal about it. Yes, that's right. No one brought 501 00:24:39,240 --> 00:24:41,879 Speaker 1: up Bill Dudley basically saying the Fed should try to 502 00:24:41,880 --> 00:24:46,400 Speaker 1: stop President Trump and getting reed. That is a crazy 503 00:24:46,440 --> 00:24:48,680 Speaker 1: thing for the ages, I think. Let me just give 504 00:24:48,680 --> 00:24:51,359 Speaker 1: you two of the submissions of her Twitter for the 505 00:24:51,440 --> 00:24:54,080 Speaker 1: craziest thing of the week. Uh one is uh this 506 00:24:54,160 --> 00:24:58,240 Speaker 1: character Tweegy Sunday Sarah. He's a avid listener of the podcast. 507 00:24:58,800 --> 00:25:02,000 Speaker 1: He says the Buys Chicken sandwich is the craziest thing 508 00:25:02,040 --> 00:25:04,520 Speaker 1: he's seen. Like, I gotta agree, that's pretty crazy to 509 00:25:04,640 --> 00:25:06,600 Speaker 1: hype over that thing. It is pretty unbelievable. I have 510 00:25:06,640 --> 00:25:08,600 Speaker 1: to say. I I know many people who have gone 511 00:25:08,600 --> 00:25:11,360 Speaker 1: out and bought both Popeye chicken sandwiches and Chick fil 512 00:25:11,359 --> 00:25:13,879 Speaker 1: A chicken sandwiches over the past weeks. They can actually 513 00:25:13,880 --> 00:25:16,520 Speaker 1: do a taste test themselves. Next, probably got some kind 514 00:25:16,520 --> 00:25:20,800 Speaker 1: of chicken sandwich. And I like the bacon cheese in 515 00:25:21,520 --> 00:25:24,480 Speaker 1: indicator though it's more diverse than the big Mac indicator 516 00:25:24,480 --> 00:25:26,359 Speaker 1: because you got you got your hot prices. Chicken is 517 00:25:26,400 --> 00:25:29,080 Speaker 1: a huge issue. The average American eats a chicken every 518 00:25:29,160 --> 00:25:35,080 Speaker 1: two weeks. I think about that. So think about how 519 00:25:35,119 --> 00:25:37,040 Speaker 1: many chickens you know are slaughter for food in the 520 00:25:37,080 --> 00:25:40,320 Speaker 1: US every year. There's three, There's three Americans. Do the math. 521 00:25:40,359 --> 00:25:43,360 Speaker 1: That's seven hundred million chickens a month. Usually, we talked 522 00:25:43,359 --> 00:25:45,440 Speaker 1: about vegan meat on the show a lot of beyond 523 00:25:45,480 --> 00:25:48,080 Speaker 1: meat lately, so we're really going the opposite direction this time. 524 00:25:49,040 --> 00:25:54,480 Speaker 1: One more from Twitter Keian Salahida um and I hope 525 00:25:54,520 --> 00:25:56,560 Speaker 1: I'll pronouncing that right. But he says it's a close 526 00:25:56,560 --> 00:25:59,119 Speaker 1: tie between Trump calling Drome pal and enemy of the 527 00:25:59,160 --> 00:26:03,000 Speaker 1: state and the SMP yield beating the thirty year yield. 528 00:26:03,080 --> 00:26:05,119 Speaker 1: And I that to your point, that is pretty crazy 529 00:26:05,160 --> 00:26:07,600 Speaker 1: that the SMP dividend yield is is higher than the 530 00:26:07,600 --> 00:26:11,480 Speaker 1: thirty year treasury yield. UM. So a good, good contribution 531 00:26:11,520 --> 00:26:14,719 Speaker 1: there from Keian and I'll give you mine, Uh, Sarah, 532 00:26:14,720 --> 00:26:17,080 Speaker 1: we we have to confess that both of our craziest 533 00:26:17,080 --> 00:26:20,480 Speaker 1: things came from our friend, uh Bill Donna Hirich, whose 534 00:26:20,600 --> 00:26:24,600 Speaker 1: girl stays up at night looking for crazy. I'm convinced. Yeah, 535 00:26:24,720 --> 00:26:26,080 Speaker 1: we're gonna have to have her back on the show 536 00:26:26,119 --> 00:26:30,359 Speaker 1: for just an all craziest thing we've seen in markets episode. 537 00:26:30,600 --> 00:26:33,720 Speaker 1: But she points out the story Tracy Alloway wrote, she 538 00:26:33,880 --> 00:26:40,680 Speaker 1: found these holders of hundred year old Chinese debt uh 539 00:26:40,800 --> 00:26:43,600 Speaker 1: that was defaulted upon. I think these were issued in 540 00:26:43,600 --> 00:26:48,560 Speaker 1: like nineteen eleven, so before the founding of the Communist 541 00:26:48,720 --> 00:26:53,159 Speaker 1: People's Republic of China. UM. Something like a trillion dollars 542 00:26:53,240 --> 00:26:55,840 Speaker 1: worth of this debt was in the market. UM, and 543 00:26:55,880 --> 00:26:59,000 Speaker 1: it's defaulted on. But there are holders of these old 544 00:26:59,000 --> 00:27:03,480 Speaker 1: certificates who are lobbying the Trump White House to make 545 00:27:03,520 --> 00:27:07,680 Speaker 1: trying to pay up on this hundred year old von certificates. UM. 546 00:27:07,720 --> 00:27:09,240 Speaker 1: I don't think I a lot of much luck, but 547 00:27:09,880 --> 00:27:12,280 Speaker 1: they certainly had luck in getting into the craziest thing 548 00:27:12,720 --> 00:27:14,440 Speaker 1: of the week. We'll bring it up in the next call, 549 00:27:14,800 --> 00:27:17,639 Speaker 1: in the next talk. That'll be a point of contention. 550 00:27:19,880 --> 00:27:22,480 Speaker 1: But With that said, so many crazy things this week. 551 00:27:22,640 --> 00:27:25,000 Speaker 1: Nic Pole is thank you so much for joining the show, 552 00:27:25,040 --> 00:27:26,560 Speaker 1: and of course we have to thank our very own 553 00:27:26,600 --> 00:27:36,760 Speaker 1: Emily Barrett as well What Goes Out. We'll be back 554 00:27:36,840 --> 00:27:39,280 Speaker 1: next week. Until then, you can find us on the 555 00:27:39,280 --> 00:27:43,320 Speaker 1: Bloomberg Terminal website and app, or wherever you get your podcasts. 556 00:27:43,760 --> 00:27:45,440 Speaker 1: We love it if you took the time to rate 557 00:27:45,480 --> 00:27:48,520 Speaker 1: interview the show on Apple Podcasts, so more listeners can 558 00:27:48,560 --> 00:27:51,359 Speaker 1: find us, and you can find us on Twitter, follow 559 00:27:51,400 --> 00:27:55,199 Speaker 1: me at at Sara Pontzack, Mike is at Rea Anonymous, 560 00:27:55,520 --> 00:27:59,479 Speaker 1: Data Trek Research is at data trek MB, and Emily 561 00:27:59,520 --> 00:28:03,000 Speaker 1: Barrett is at not That ECB. You can also follow 562 00:28:03,000 --> 00:28:06,879 Speaker 1: Bloomberg Podcasts at podcasts. What Fills Up is produced by 563 00:28:06,960 --> 00:28:10,320 Speaker 1: Tobrah Foreheads. The head of Bloomberg podcast is Francesca Levi. 564 00:28:10,600 --> 00:28:12,200 Speaker 1: Thanks for listening, See you next time.