Speaker 1: Hello, and welcome to What Goes Up, a Bloomberg Weekly
Speaker 1: Markets podcast. I'm Sarah Pontzak, a reporter on the cross
Speaker 1: As Set team, and I'm Mike Reagan, a senior editor
Speaker 1: on the Markets team. This week on the show, we'll
Speaker 1: dig into the data from Google searches to new home
Speaker 1: sizes and discuss what the signs actually mean for markets,
Speaker 1: and the bond rally continues, Why the insatiable demand and
Speaker 1: why is the US Treasury seriously considering issuance of ultra
Speaker 1: long bonds? And as always, will close out the episode
Speaker 1: with our tradition the Craziest Thing I Saw in Markets?
Speaker 1: This week, Sarah tell the people about our hotline. So
Speaker 1: we have this new hotline. It's the Bloomberg Podcast Hotline.
Speaker 1: As you know, we always do our Craziest Thing I
Speaker 1: Ever Saw in Market segment at end of the show,
Speaker 1: but now you can become a part of it too,
Speaker 1: So call us, leave us a message, let us know
Speaker 1: what you saw that you thought was crazy, or even
Speaker 1: just ask us a question that numbers six four six
Speaker 1: three two four three for nine zero and we may
Speaker 1: even play a recording on the show. Sarah, before we
Speaker 1: introduce our guests. I I've got a crack pot theory
Speaker 1: I want to share with you. Youre ready, You're ready
Speaker 1: for a crap I mean I'm ready for it. To
Speaker 1: be sure, I have several crack pots. I know you do,
Speaker 1: but let's hear the one for today. The one today
Speaker 1: is I think the way you make your name on
Speaker 1: Wall Street. I mean, sure, you can beat the market
Speaker 1: with your stock picks, you can be the best trader
Speaker 1: in the world, But the way I think you really
Speaker 1: make your name is if you have to be a
Speaker 1: good writer. I'll give you some example. Warren Buffett, I
Speaker 1: think is famous as much for his catchy writings in
Speaker 1: his his letters to shareholders. Right Uh, Bill Gross, I
Speaker 1: don't know if you've ever read his month monthly commentary
Speaker 1: when he was still writing it, very very catchy stuff.
Speaker 1: Peter Lynch, the great fun manager of the eighties. Excellent writer.
Speaker 1: And this is all way of leading up to me
Speaker 1: saying one of my favorite writers here on, one of
Speaker 1: my favorite Wall Street writers is a guest on our
Speaker 1: show today. He's a veteran of markets. Started out at
Speaker 1: Credit Swiss First Boston covering the auto industry as an analyst.
Speaker 1: Spent a few years with UH, the legendary hedge fund
Speaker 1: manager Steve Cohen. UH for about a decade he was
Speaker 1: the chief market strategist at converge X. But most excitingly,
Speaker 1: he started his own firm about two years ago called
Speaker 1: Data Trek Research. His name is Nick Cholas. Nick, welcome
Speaker 1: to the show, Thanks very much. And another good writer
Speaker 1: on the show today. Good what a great one. Well
Speaker 1: you get your job is primarily writing, so and that
Speaker 1: is Emily Barrett from our Bonds and and f X team,
Speaker 1: And welcome to the show. Thanks for having me and Nick.
Speaker 1: I wanted to start with you. I we have all
Speaker 1: a stack of your research notes from the past month
Speaker 1: or so. We're gonna get into them a little bit,
Speaker 1: but I wanted to start this kind of high level
Speaker 1: of sort of how you're thinking about the market these days. UM,
Speaker 1: I get the sense from some of your recent reports
Speaker 1: that you're I don't want to say barish, but cautious
Speaker 1: about the equity market right now. Is that is that safe?
Speaker 1: That's very fair. You know, we were positive on markets
Speaker 1: through the first part of the year and saw declining
Speaker 1: rates and fairly stable earnings. Is a good backdrop for
Speaker 1: SMP performance and it was the next This month and
Speaker 1: the next couple of months will be a lot tougher though,
Speaker 1: And it's both the matter of seasonality and the basic
Speaker 1: trends going on now and more than anything, and I
Speaker 1: guess we'll talk about this is the fear of recession
Speaker 1: as being factored in by the yel curb and other things.
Speaker 1: So it's gonna be a choppier time, right, So what
Speaker 1: what's that? How could that manifest? Just more up and
Speaker 1: down days like we saw in August? I mean, is
Speaker 1: that the sort of the new normal for the time being?
Speaker 1: It absolutely is. You know, we went a very very
Speaker 1: long stretch without seeing even one percent days on the SMP.
Speaker 1: I think we had a having a week stretch going
Speaker 1: in through July and early August where there were no
Speaker 1: one percent days, very unusual. So we'll see a lot
Speaker 1: more of those, a vix closer to normal, a lot
Speaker 1: more surn you know, if you look at the last
Speaker 1: couple of weeks with August, just expect as to continue
Speaker 1: to September and October. And I'll add to that, we've
Speaker 1: seen eleven one percent days just this month. That's now
Speaker 1: more than December. So that just goes to show the
Speaker 1: swings that we have been seeing. Something that really stood
Speaker 1: out to me in your research, Nick, was that you
Speaker 1: look and track on Google trends the amount of searches
Speaker 1: for the word or the two words doubt Jones. Why
Speaker 1: is that, Why do you look for these searches and
Speaker 1: what are the implications for what that could potentially mean
Speaker 1: for the economy and the markets. Yeah, I mean the
Speaker 1: issue with Dow Jones is people don't really google SMP
Speaker 1: five hundred when they want to see what the markets doing.
Speaker 1: When regular main street Americans want to see, hey, why
Speaker 1: is the market down today? They google Dow Jones. And
Speaker 1: it's a wonderful indicator of how much attention the public
Speaker 1: is paying on the volatility in the stock market. And
Speaker 1: we looked at that, and you can do this on
Speaker 1: your own Google trans just plug in Dow Jones, get
Speaker 1: the data. And the troublesome thing is the volatility in
Speaker 1: August is now higher, showing higher Google trend searches for
Speaker 1: dal Jones than back in May when we had the
Speaker 1: last bout of volatility. Isn't quite back to where it
Speaker 1: was in December when we had that huge puke point
Speaker 1: in the year, but definitely people are paying attention to
Speaker 1: this volatility, and that's worrisome because even if you don't
Speaker 1: own stock, you know that if your company's stock prices down,
Speaker 1: your risk of layoff goes up. And going into holiday season,
Speaker 1: that's another kind of worrisome thing. So to me, it's
Speaker 1: a transmission mechanism between the volatility the stock market and
Speaker 1: consumer spending. When these people see people paying attention to
Speaker 1: stock market volatility, you have to start worrying about consumer
Speaker 1: spending going into the fourth quarter. So the searches for
Speaker 1: dal jones recently were even higher than May, and and
Speaker 1: was that almost as high as December. I wonder if
Speaker 1: the clustering of them so close together, you know, is
Speaker 1: is also worrisome. Um. You know, it's one thing to
Speaker 1: have one sort of a correction in a year, but
Speaker 1: to have have a couple back to back to back
Speaker 1: like this, Uh does that sort of sending on a
Speaker 1: sign going forward? It does, because if you look at
Speaker 1: the data from December of last year and then January
Speaker 1: of this year, interest in Dow Jones just plummeted. Once
Speaker 1: the market began to recover, people said, okay, things are fine.
Speaker 1: If you do see another couple of months of volatility
Speaker 1: and still elevated Google searches. To my mind, it's a
Speaker 1: worrisome sign going into holiday because people might rightly think, Okay,
Speaker 1: if the stock markets volitgi and perhaps my jobs at
Speaker 1: risk and we gotta start spending a little bit less money.
Speaker 1: I've got to say, you inspired me, and I looked
Speaker 1: up on Google trends searches for recession too, and I
Speaker 1: found that actually this month we're on pace to see
Speaker 1: the most Google Trends searches for recession since all the
Speaker 1: way back in on nine, which I thought was astounding.
Speaker 1: Did this does Let's go back to the discussion of
Speaker 1: talking yourself into a recession. People get worried, people talk
Speaker 1: themselves into being scared and then not going out and
Speaker 1: spending potentially. Yeah, that is definitely the narrative. I'll tell
Speaker 1: you that I've never actually seen it work, and I
Speaker 1: mean I covered the autos in the nineties, so pickltality
Speaker 1: was a major issue. I mean, you know, sort of
Speaker 1: to cut to the chase about this recession conversation, the
Speaker 1: yield curve is spooking everybody, and I guess we'll talk
Speaker 1: more about that, But to my mind, it's not the
Speaker 1: most important indicator for a future recession, and that the
Speaker 1: real important indicator is gasoline prices and oil prices even
Speaker 1: though we've never had a recession without an inverted y
Speaker 1: occur First, we haven't had a recession without oil prices
Speaker 1: doubling in a year since back in the ninety three.
Speaker 1: So in order to see a recession, and this is
Speaker 1: a more logical conduit for me, in order to see
Speaker 1: a recession of believing recession, I think you've got to
Speaker 1: see gas prices spike, and they obviously haven't. So if
Speaker 1: we see Google searches for cheap gas, and then I'll
Speaker 1: look out. Believe it or not, we do that. We
Speaker 1: do look at that cheap gas, coupons, ammunition and can goods.
Speaker 1: And it's funny, prepping has actually declined in popularity in
Speaker 1: the last two years. Oh, you've been tracking that. We
Speaker 1: track everything. That's great. Well. Emily as Nick said that
Speaker 1: the yield curve has a lot of people spooked avid
Speaker 1: listeners to this podcast. No, we've sort of beaten that
Speaker 1: topic to death. But um, you know, especially low long
Speaker 1: end yields. Uh this week, uh ten year yielded a
Speaker 1: little more than one and a half percent. I think Nick.
Speaker 1: According to one year reports, it's only been something like
Speaker 1: forty days in the past since the sixties that we've
Speaker 1: seen a lower yield than this. I mean, it's crazy.
Speaker 1: And Emily, you've been writing about UM and reporting on
Speaker 1: this issue of the Treasury actually looking at long ultra
Speaker 1: long bonds now, so either fifty year or hundred year
Speaker 1: UH maturity treasuries. Tell us about that reporting is it?
Speaker 1: Does this sound like something that could possibly happen? Well, look,
Speaker 1: it would make a lot of sense for the Treasury
Speaker 1: to try and lock in record low funding for you know,
Speaker 1: a fifty or a hundred year bond at this point.
Speaker 1: And surely, I mean some people have said, look, everybody's
Speaker 1: doing it, why wouldn't the US do it as well? Right?
Speaker 1: But I think that there are I mean, first of all,
Speaker 1: this is the second time this administration that this idea
Speaker 1: has been floated. So it was floated back in and
Speaker 1: at that point tea back, which are kind of the
Speaker 1: whispers to the Treasury about what the market wants and
Speaker 1: what the market can take. UM was very cool on
Speaker 1: the idea, and they don't seem to have really changed
Speaker 1: their tone that much at this point. Although it's hard
Speaker 1: to say until we see them actually gather and comment
Speaker 1: on it. Um. But you know we've done some of
Speaker 1: my colleagues have done some fantastic reporting on this. Lea's
Speaker 1: Kevin McCormick, um, Alex Harris as well as written about this.
Speaker 1: It's um. You know what we need to see is
Speaker 1: despite the fact that there is this global Hunger Federation
Speaker 1: and for yield wherever it shows up, you just still
Speaker 1: find that people are saying, well, we don't need to
Speaker 1: disrupt kind of the regular and reliable performance of Treasury issuance.
Speaker 1: We don't want to see the Treasury doing something that
Speaker 1: is kind of opportunistic um to try and hit a
Speaker 1: low yield at this point in time that might end
Speaker 1: up being disruptive for the rest of the market. Well,
Speaker 1: you know, I can only imagine uh, groups of pension
Speaker 1: fund managers and insurance companies, you know, hiring a marching
Speaker 1: band ago performed at Stephen Nutchem's house to say we
Speaker 1: want the right I mean, so what what would be
Speaker 1: the downside? Why? Why would the Treasury not necessarily want
Speaker 1: to provide these securities I mean and correct me if
Speaker 1: I'm wrong. Wouldn't wouldn't you assume the pensions and the
Speaker 1: and the insurance companies would be would be all over
Speaker 1: an ultra law. I mean you would to a certain
Speaker 1: extent because their buy and hold investors, they want to
Speaker 1: match their liabilities. They want to make sure that they
Speaker 1: have enough money to pay out when people retire. And
Speaker 1: obviously PIMCO did a great piece not so long ago
Speaker 1: about that being a driver of negative yields globally. Right,
Speaker 1: this insane demand the Treasury wants to I mean, look,
Speaker 1: you can't really say that. There was a great interview
Speaker 1: by by one of our colleagues and in d C
Speaker 1: Sila who actually spoke to munition and uh and you know,
Speaker 1: they say they're seriously considering this, and but it's clear
Speaker 1: that the Treasury wants to keep raising this as an issue. Right.
Speaker 1: This is there's it's compelling um for investors in it.
Speaker 1: You know, it seems like it would be a great match.
Speaker 1: It seems like you would see global investors want to
Speaker 1: pour and global investors don't tend to be huge participants
Speaker 1: and sort of uh US long duration you know that
Speaker 1: they're kind of a portion of the buyers, but they
Speaker 1: also have to satisfy asset managers here in the US.
Speaker 1: Which is a sort of a compelling market as well,
Speaker 1: and so you know why it might be great for
Speaker 1: buying hold investors, it's just difficult to always rely on
Speaker 1: you know, for instance, they may have their funding levels
Speaker 1: sorted out at this point in time, but they're not
Speaker 1: later on. There's this cyclicality element that might sort of
Speaker 1: disturb demand and make it less different. And the problem
Speaker 1: is if there isn't demand sufficient demand for this, it
Speaker 1: ends up on dealer balance sheets. Dealer balance sheets don't
Speaker 1: have a lot of room on them at the moment.
Speaker 1: And it also means that you know, sort of costs
Speaker 1: across the curve could rise for taxpayers. So you know
Speaker 1: that's one thing. I mean, where yet to see We're
Speaker 1: doing some reporting to time and see what what global
Speaker 1: investors really think about this um, you know, so we'll
Speaker 1: see what happens neck you buying Well obviously personally, no,
Speaker 1: it is an interesting question because opportunistically it does make
Speaker 1: it kind of sense. But you know, the dollars reserve
Speaker 1: currency for a reason. It's because this system is extremely
Speaker 1: stable and if you look at the folks that have
Speaker 1: done hundred year bonds, not exactly a great set of cops. Well,
Speaker 1: I have to ask. You mentioned the dollar, and I
Speaker 1: want to bring it to actually dollar price action that
Speaker 1: we have seen. And I feel like we discussed this
Speaker 1: every single week because it seems like everyone is or
Speaker 1: many people are always calling to find a bump in
Speaker 1: the dollar rally. But yet again this week you see
Speaker 1: the dollar rallying, the Bloomberg Dollar Spot Index touching the hyacinth.
Speaker 1: Do you see this relentless dollar rally just continuing from here? Yes?
Speaker 1: The short answer is yes, there's no reason why it shouldn't.
Speaker 1: If the economies of the world are slowing down and
Speaker 1: you're looking for risk free assets or a more stable
Speaker 1: place to invest, the U S is it, The dollar
Speaker 1: is it? And the reserve currency status at lea seems
Speaker 1: rock solid and there's no viable competitor for the next
Speaker 1: ten years at least, So yes, no reason why not.
Speaker 1: N I wanted to run through a few of some
Speaker 1: of the factulids from some of your recent research because
Speaker 1: some some really fascinating stuff and I love the way
Speaker 1: you sort of look at uh data points that the
Speaker 1: rest of us, the rest of us have missed. The
Speaker 1: one I'm really fascinated with is you look at the
Speaker 1: proportion of households in the country that are one person households,
Speaker 1: and how it affects then the average home size being built.
Speaker 1: Walk us through this research and sort of how you
Speaker 1: apply what you found out in these stats to investment ideas. Yeah,
Speaker 1: so this is a very long term kind of analysis,
Speaker 1: and it basically those like this. The beginning anything sixties,
Speaker 1: the average household America had roughly three point three people
Speaker 1: according to the Census, and the average household size was
Speaker 1: roughly seventeen hundred square feet a little bit less. And
Speaker 1: over the last fifty sixty years, the number of people
Speaker 1: per household has declined from three point three to two
Speaker 1: point five, the biggest single factor being people who live alone.
Speaker 1: It used to be thirteen percent back in the sixties.
Speaker 1: Now it's well over twenty and you're more likely to
Speaker 1: walk into a house in Americans see one person than
Speaker 1: four people, which is sort of the traditional nuclear family
Speaker 1: versus the person living alone. At the same time, the
Speaker 1: size of houses has increased from seventeen hundred square feet
Speaker 1: to twenty seven hundred square feet at the peak in
Speaker 1: two thousand fifteen, And to me, it's like the American
Speaker 1: consumption story. Bigger houses, lower household densities, and since people
Speaker 1: living together tend to share assets, the less sharing, the
Speaker 1: more consumption we need. So it's been a huge tail
Speaker 1: went for the American consumer in the American economy for
Speaker 1: the last fifty sixty years, basically the entire post World
Speaker 1: War two expansion. But now it's beginning to change because
Speaker 1: land prices have gotten so high that new houses are
Speaker 1: now actually getting smaller again, and they typically only gets
Speaker 1: smaller in recessions as home builders shift to smaller homes.
Speaker 1: But if you think about the aging the population, this
Speaker 1: propensity to live alone, and a bunch of other factors,
Speaker 1: to me, it's kind of a cautionary tale about what
Speaker 1: the American economy can grow at over the next ten
Speaker 1: twenty thirty years if we no longer have this tail
Speaker 1: wind of fewer people in bigger houses. Right, And that's
Speaker 1: a trend that you think should keep going for a while,
Speaker 1: is homes, you know, fewer, fewer people in the household.
Speaker 1: If you look at populations in Europe and Japan, for example,
Speaker 1: there are a couple of years of us in terms
Speaker 1: of average age of a citizen, they're already seeing higher
Speaker 1: levels in Japan. I think a thirty five percent of
Speaker 1: households or one person households, and it's about I want
Speaker 1: to say, thirty five in Europe, both trending higher. So
Speaker 1: we're a little bit behind, but seems like we're going
Speaker 1: to catch up if for another reason than the average
Speaker 1: mortality of a man is five years less than every
Speaker 1: mortality of woman. Something I find really interesting to that point, though,
Speaker 1: is that this year we've seen home builder stocks really
Speaker 1: just take off. I mean, you look at the SMP
Speaker 1: home Building Index, It's up something like this year, and yes,
Speaker 1: a large part of that is due to falling interest
Speaker 1: rates as well. Would you say that people who are
Speaker 1: really buying into this story or maybe missing out on
Speaker 1: a big part of the picture now, because I think
Speaker 1: the you know, you have to look at what the
Speaker 1: fundamentals are, and for home bowlders, it's interest rates, and
Speaker 1: that's totally fine. And that group got creamed over the
Speaker 1: past couple of years, so it should have had a
Speaker 1: bounce back. Look, there still will always be a home
Speaker 1: building industry, and I think that industry has done a
Speaker 1: good job more than anything of managing their cost structures
Speaker 1: and managing their buying of land to be sustainably profitable
Speaker 1: because they obviously got destroyed during the crisis. And so
Speaker 1: the number one thing that that's those companies have to
Speaker 1: do to improve their valuations, which are so quite low,
Speaker 1: is proved profitability through a downturn. And they're doing a
Speaker 1: very good job of managing cost structures and building plans
Speaker 1: and growth plans so that when the next recession comes,
Speaker 1: they don't have to, um, you know, go to banks
Speaker 1: or go to the credit markets. They can stell be
Speaker 1: self sustaining and over time that I'll earn a higher
Speaker 1: valuation as a cyclical as analyst, that really resonates with me.
Speaker 1: That's how you earn a higher valuation over the next ten, fifteen,
Speaker 1: twenty years. Yea, Emily. It all gets back to the
Speaker 1: interest rates, doesn't it. And absolutely when did you refinance?
Speaker 1: I wish, I wish I had just done this. I
Speaker 1: know it's getting temping again. So you you talked to
Speaker 1: UH fixed income investors all day? Um, what is the
Speaker 1: mood out there? Are people coming around to the idea
Speaker 1: that rates are low forever? Now? I mean, the whole
Speaker 1: market seemed to be on the wrong foot when the
Speaker 1: year began. Everyone was expecting the Fed to hike and
Speaker 1: rates to be you know, ten year yield to be
Speaker 1: above three percent. Maybe what's sort of the temperature on
Speaker 1: the street now. I mean, I'm kind of really interested.
Speaker 1: We always see this very different sort of glass off empty,
Speaker 1: glass of full full attitude between equities and fixed income investors.
Speaker 1: And I have to say a lot of the people
Speaker 1: I speak to are very down in the mouth about
Speaker 1: what's happening at the moment in terms of the prospect
Speaker 1: of high yields, of volatility, like volatility is obviously coming
Speaker 1: back in the market, but they just don't see that
Speaker 1: much opportunity for yields to lift from where they are now.
Speaker 1: And so there's been more and more of that sort
Speaker 1: of drumbeat of well, how low can it go? You
Speaker 1: keep asking this question. It keeps breaking through every single
Speaker 1: barrier that people have been talking about. But the interesting
Speaker 1: thing about this is, you know, now we've got the
Speaker 1: FED cutting rates again, you would think people would be emboldened,
Speaker 1: you know, heading out into Okay, we've got some yielding
Speaker 1: stuff out there, we've got some emerging markets, and I'm
Speaker 1: really interested to hear so many people saying, yeah, it's
Speaker 1: close to the end of the cycle, and it's been
Speaker 1: close to the end of cycle for the last it's
Speaker 1: it is really hard I think for a lot of
Speaker 1: investors out of bits and a where to step next? Nick,
Speaker 1: what's your view? Obviously it's very difficult to time the markets.
Speaker 1: And as Emily said, many people are looking at this saying, well,
Speaker 1: it has to come to an end sometime soon. We're
Speaker 1: at the end of the cycle. Do you believe that? Well,
Speaker 1: the way I look at it is just you know.
Speaker 1: So I'll give you an example. Look at what the
Speaker 1: ten year bond has done for the last year. As
Speaker 1: of last week, it was about three teaen point three
Speaker 1: percent after inflation over the last since n the treasury,
Speaker 1: then your treasury has returned two after inflation on average
Speaker 1: through that time frame, and the sanentiviation of those returns
Speaker 1: is roughly nine points. So we are well above one
Speaker 1: senor viation in terms of trailing one year returns and
Speaker 1: that inflation and typically, and if you go back and
Speaker 1: look at the history, you don't make much more money
Speaker 1: than that over the next year. So if you're buying
Speaker 1: treasuries here statistically historically says you're not going to make
Speaker 1: a whole lot more going forward. And there have been
Speaker 1: rafts of people that have died on the hill of
Speaker 1: calling the you know, the top and the treasury markets.
Speaker 1: I'm not trying to do that, but just statistically speaking,
Speaker 1: if you own long bonds here, history says you are
Speaker 1: not going to make a whole lot more for the
Speaker 1: next twelve months. You might not lose very much. But
Speaker 1: this has been a dot com size rally in treasuries,
Speaker 1: and you have to sort of put that in perspective,
Speaker 1: and and and and really respect the fact that if
Speaker 1: you're hanging on here, your best case scenario is flat, right,
Speaker 1: especially when you look at money market funds are practically
Speaker 1: yielding more than the thirty year right now, It's like,
Speaker 1: why wouldn't you hang out in cash basically and see
Speaker 1: what happens I guess or dumbbell it and say the
Speaker 1: SMP deals more than the right right and and by
Speaker 1: the way, dividends never go negative, right right? Good. I
Speaker 1: wanted to ask you Nick Lasts as a segue into
Speaker 1: our craziest thing I ever saw on markets. Earlier on
Speaker 1: in the show, you said that you guys pretty much
Speaker 1: track everything. What would be the craziest thing that you
Speaker 1: guys say that you track? Well, we do a quarterly
Speaker 1: thing we call off the Great Economic Indicators, where we
Speaker 1: try to go as far afield as possible. And I'd
Speaker 1: say that two or three that sort of get the
Speaker 1: most attention. One is our Bacon Cheeseburger Index, which looks
Speaker 1: at the price through the CPI data of how much
Speaker 1: it costs to make the bacon cheeseburger, and it's actually
Speaker 1: been a kind of a reliable leading indicator of where
Speaker 1: inflation goes, and it does actually point to some deflation
Speaker 1: coming up, so does support that basic narrative. Um. The
Speaker 1: other one is pickup truck sales large pickup trucks, and
Speaker 1: those are bought by mostly small businesses and some individuals
Speaker 1: and heavily reliant on gasolene prices. But when you see
Speaker 1: that start to roll over, you know that there's some
Speaker 1: worry among small businesses about capital investments, and thankfully, so
Speaker 1: far small you know, large pickup truck sales have been
Speaker 1: pretty good. So you know, one of those things that
Speaker 1: tells us we could talk ourselves into our recession, as
Speaker 1: we talked about earlier, but the actual data doesn't support
Speaker 1: that we're about to roll over, you know, into the
Speaker 1: next recession. Well, I think that brings us to our
Speaker 1: traditional segment. The craziest thing I saw in markets this week. Unfortunately,
Speaker 1: Emily had to run. She's got a hot scoop she's
Speaker 1: working on, So stand by your terminal to find out
Speaker 1: what that is. But Sarah, let's start with you. I
Speaker 1: trust that you have surely seen something crazy this week.
Speaker 1: I'll try to make it crazy enough for both me
Speaker 1: and Emily, and I do think it is pretty crazy.
Speaker 1: So it went viral in certain areas of the Internet.
Speaker 1: But this week there was a Steve Jobs look alike
Speaker 1: found in Egypt and someone took a picture of him.
Speaker 1: They posted it on the Internet, and they put it
Speaker 1: next to a picture of Steve Jobs himself from back
Speaker 1: in the glory days, and they actually look very much alike.
Speaker 1: And people are really spewing conspiracy theories saying, oh my gosh,
Speaker 1: is Steve Jobs back? Is he alive? Now? Obvious as
Speaker 1: all conspiracy theories on the internet. Um, but if you
Speaker 1: google it, you look it up, you will certainly find
Speaker 1: some of them, and they're very interesting. That is that
Speaker 1: is my favorite place for conspiracy theories the Internet. Yeah,
Speaker 1: I'm'm surprised Apple didn' rise like five that then they're
Speaker 1: actually up this week now. I mean we could say
Speaker 1: that it's correlated. All right, Dick, that's toff the top,
Speaker 1: you guys, can you top that one for the craziest
Speaker 1: thing you saw on markets this week? I did see
Speaker 1: a guy that looked like Elvis in Cairo about a
Speaker 1: decade ago. Well, a lot of people are joking around
Speaker 1: because supposedly in the back of the photo there was
Speaker 1: someone that looks like Elvis. And now they're saying, Oh,
Speaker 1: they're in cahoots, They're in this together in Egypt, Steve
Speaker 1: Jobs and Elvis. Anything's possible. No, my my weirdest thing
Speaker 1: is prosaic, But I really I think it merits it.
Speaker 1: This rally and treasuries is something absolutely historic, like we
Speaker 1: are going to look back on this period and either
Speaker 1: say it was literally the beginning of the end because
Speaker 1: rates are all going to zero and this is when
Speaker 1: the world realized it, or we're gonna look back in
Speaker 1: a couple of years and say, what the hell were
Speaker 1: we thinking? I I think that's a safe safe only
Speaker 1: two extremes nowhere in the middle. No, they're not staying here,
Speaker 1: I think. And we did get a call into the hotline.
Speaker 1: I believe from our pal lup Kawa on the Cross
Speaker 1: Asset team, Let's hear what he had to say. We
Speaker 1: we all know that Jerome Powell, he's he faces a
Speaker 1: lot of critics both punching up and punching down when
Speaker 1: it comes to the job he's doing at the FED.
Speaker 1: I might interest you to know that he's not the
Speaker 1: only person in his household that feels this way. His
Speaker 1: wife is actually the chair of the Chevy Chase Village
Speaker 1: and right now is The Washington Post reports there's a very,
Speaker 1: very fierce debate over the dog park there, and apparently
Speaker 1: Alyssa Leonard, which is the name of Powell's wife, is
Speaker 1: just getting it from all sides, from neighbors who are
Speaker 1: on the adjacent to the park and are just seeing
Speaker 1: that the dogs are there too early barking. They're having
Speaker 1: meeting after meeting over it, and there's really no solution
Speaker 1: of this problem that fits all side. So you know,
Speaker 1: when the Powells are sitting around the dinner table, they've
Speaker 1: got a lot of complaints, uh, pretty much coming at
Speaker 1: them from all sides on how they're doing their jobs.
Speaker 1: This is a couple that has to have skin that's
Speaker 1: right that's right. Jay pals like you wouldn't believe what
Speaker 1: Trump said to me today, and she's like you wouldn't
Speaker 1: believe what happened at the dog park. As a frequenter
Speaker 1: of dog parks, I I will say there's there can
Speaker 1: be a lot of drama there, maybe because my dog's
Speaker 1: at Jark and he's always picking fights, but there there's
Speaker 1: certainly a lot of trauma. Maybe Bill Dudley has a
Speaker 1: point of view on the dog park and he'll be
Speaker 1: very vocal about it. Yes, that's right. No one brought
Speaker 1: up Bill Dudley basically saying the Fed should try to
Speaker 1: stop President Trump and getting reed. That is a crazy
Speaker 1: thing for the ages, I think. Let me just give
Speaker 1: you two of the submissions of her Twitter for the
Speaker 1: craziest thing of the week. Uh one is uh this
Speaker 1: character Tweegy Sunday Sarah. He's a avid listener of the podcast.
Speaker 1: He says the Buys Chicken sandwich is the craziest thing
Speaker 1: he's seen. Like, I gotta agree, that's pretty crazy to
Speaker 1: hype over that thing. It is pretty unbelievable. I have
Speaker 1: to say. I I know many people who have gone
Speaker 1: out and bought both Popeye chicken sandwiches and Chick fil
Speaker 1: A chicken sandwiches over the past weeks. They can actually
Speaker 1: do a taste test themselves. Next, probably got some kind
Speaker 1: of chicken sandwich. And I like the bacon cheese in
Speaker 1: indicator though it's more diverse than the big Mac indicator
Speaker 1: because you got you got your hot prices. Chicken is
Speaker 1: a huge issue. The average American eats a chicken every
Speaker 1: two weeks. I think about that. So think about how
Speaker 1: many chickens you know are slaughter for food in the
Speaker 1: US every year. There's three, There's three Americans. Do the math.
Speaker 1: That's seven hundred million chickens a month. Usually, we talked
Speaker 1: about vegan meat on the show a lot of beyond
Speaker 1: meat lately, so we're really going the opposite direction this time.
Speaker 1: One more from Twitter Keian Salahida um and I hope
Speaker 1: I'll pronouncing that right. But he says it's a close
Speaker 1: tie between Trump calling Drome pal and enemy of the
Speaker 1: state and the SMP yield beating the thirty year yield.
Speaker 1: And I that to your point, that is pretty crazy
Speaker 1: that the SMP dividend yield is is higher than the
Speaker 1: thirty year treasury yield. UM. So a good, good contribution
Speaker 1: there from Keian and I'll give you mine, Uh, Sarah,
Speaker 1: we we have to confess that both of our craziest
Speaker 1: things came from our friend, uh Bill Donna Hirich, whose
Speaker 1: girl stays up at night looking for crazy. I'm convinced. Yeah,
Speaker 1: we're gonna have to have her back on the show
Speaker 1: for just an all craziest thing we've seen in markets episode.
Speaker 1: But she points out the story Tracy Alloway wrote, she
Speaker 1: found these holders of hundred year old Chinese debt uh
Speaker 1: that was defaulted upon. I think these were issued in
Speaker 1: like nineteen eleven, so before the founding of the Communist
Speaker 1: People's Republic of China. UM. Something like a trillion dollars
Speaker 1: worth of this debt was in the market. UM, and
Speaker 1: it's defaulted on. But there are holders of these old
Speaker 1: certificates who are lobbying the Trump White House to make
Speaker 1: trying to pay up on this hundred year old von certificates. UM.
Speaker 1: I don't think I a lot of much luck, but
Speaker 1: they certainly had luck in getting into the craziest thing
Speaker 1: of the week. We'll bring it up in the next call,
Speaker 1: in the next talk. That'll be a point of contention.
Speaker 1: But With that said, so many crazy things this week.
Speaker 1: Nic Pole is thank you so much for joining the show,
Speaker 1: and of course we have to thank our very own
Speaker 1: Emily Barrett as well What Goes Out. We'll be back
Speaker 1: next week. Until then, you can find us on the
Speaker 1: Bloomberg Terminal website and app, or wherever you get your podcasts.
Speaker 1: We love it if you took the time to rate
Speaker 1: interview the show on Apple Podcasts, so more listeners can
Speaker 1: find us, and you can find us on Twitter, follow
Speaker 1: me at at Sara Pontzack, Mike is at Rea Anonymous,
Speaker 1: Data Trek Research is at data trek MB, and Emily
Speaker 1: Barrett is at not That ECB. You can also follow
Speaker 1: Bloomberg Podcasts at podcasts. What Fills Up is produced by
Speaker 1: Tobrah Foreheads. The head of Bloomberg podcast is Francesca Levi.
Speaker 1: Thanks for listening, See you next time.