1 00:00:08,280 --> 00:00:12,960 Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast. 2 00:00:13,560 --> 00:00:17,400 Speaker 1: Once again, sadly Tracy Alloway is not here, so I 3 00:00:17,480 --> 00:00:20,880 Speaker 1: have to do uh soul hosting duties. The good news 4 00:00:21,000 --> 00:00:24,120 Speaker 1: is I have too fabulous guests in the studio with me. 5 00:00:24,520 --> 00:00:29,560 Speaker 1: So last week we talked about themes the big stories 6 00:00:29,640 --> 00:00:32,800 Speaker 1: that we saw over the last year, and so we 7 00:00:32,840 --> 00:00:36,159 Speaker 1: have the same two guests on this week, Chris and 8 00:00:36,240 --> 00:00:39,520 Speaker 1: ag and Matt Bosler of Bloomberg News, and this time 9 00:00:39,560 --> 00:00:43,239 Speaker 1: we're going to look forward and try to see what 10 00:00:43,400 --> 00:00:46,639 Speaker 1: we're going to be talking about. Chris and Matt, Thank 11 00:00:46,640 --> 00:00:53,680 Speaker 1: you very much for joining us. Chris, let's start with you. 12 00:00:54,840 --> 00:00:59,640 Speaker 1: What's your spat is the same as it would be 13 00:00:59,720 --> 00:01:02,600 Speaker 1: every which is that the SMP will rise approximately nine 14 00:01:02,600 --> 00:01:06,880 Speaker 1: point three percent. My actual prediction, though, is that nine 15 00:01:07,200 --> 00:01:09,680 Speaker 1: is the average. Actually I'm making that it's roughly that, 16 00:01:09,959 --> 00:01:11,760 Speaker 1: but I just feel like that's the one thing that 17 00:01:12,000 --> 00:01:14,800 Speaker 1: you should predict when asked that question. I feel like 18 00:01:14,959 --> 00:01:18,360 Speaker 1: there's a possibility in two thousand and eighteen that even 19 00:01:18,400 --> 00:01:21,240 Speaker 1: if you get the ten percent roughly gained in the SMP, 20 00:01:22,040 --> 00:01:25,480 Speaker 1: the sentiment towards the stock market seems to me to 21 00:01:25,560 --> 00:01:28,280 Speaker 1: be on the cusp of souring in a weird way. 22 00:01:28,480 --> 00:01:30,920 Speaker 1: You have Donald Trump associating himself with the run up, 23 00:01:31,319 --> 00:01:34,120 Speaker 1: and you have the tax bill that just passed, and 24 00:01:34,160 --> 00:01:37,040 Speaker 1: a lot of sort of populous offense is being taken 25 00:01:37,080 --> 00:01:39,800 Speaker 1: towards the tax bill. The way they're framing their objection 26 00:01:39,880 --> 00:01:41,800 Speaker 1: to it is that it's essentially a gift for the 27 00:01:41,840 --> 00:01:45,839 Speaker 1: one percent or two big corporate donation. And I feel 28 00:01:45,880 --> 00:01:49,560 Speaker 1: like if you see the things that the Trump critics 29 00:01:49,600 --> 00:01:53,440 Speaker 1: are predicting actually happen, particularly if you see companies take 30 00:01:53,480 --> 00:01:56,680 Speaker 1: their windfall and basically shower it on their shareholders, and 31 00:01:56,760 --> 00:01:59,160 Speaker 1: that causes a kind of melt up in the stock market. 32 00:02:00,160 --> 00:02:02,520 Speaker 1: The stock market is a kind of political whipping boy 33 00:02:02,760 --> 00:02:05,040 Speaker 1: that tame I could see take off. I really like this. 34 00:02:05,160 --> 00:02:08,840 Speaker 1: So the just being Trump tweets about the stock market 35 00:02:08,880 --> 00:02:12,720 Speaker 1: all the time. It's obviously doing phenomenally well, but ownership 36 00:02:12,800 --> 00:02:16,480 Speaker 1: and participation in the stock market is not that widespread. 37 00:02:16,960 --> 00:02:19,480 Speaker 1: And so what you then get is this contingent of 38 00:02:19,520 --> 00:02:23,200 Speaker 1: people who resent the rising stock market and this feeling 39 00:02:23,280 --> 00:02:25,440 Speaker 1: like all these people are getting rich or other people 40 00:02:25,560 --> 00:02:27,600 Speaker 1: I mean, and the stock market, if you think about it, 41 00:02:27,600 --> 00:02:29,959 Speaker 1: it stands for a lot of things that already annoy 42 00:02:30,080 --> 00:02:33,240 Speaker 1: people a lot. It stands for like the margin impact 43 00:02:33,280 --> 00:02:36,720 Speaker 1: of automation and sort of the monopolistic powers of companies 44 00:02:36,760 --> 00:02:40,320 Speaker 1: like Amazon and the outsourcing of labor. I think there's 45 00:02:40,320 --> 00:02:43,240 Speaker 1: a general consensus or there's a feeling that basically pays 46 00:02:43,280 --> 00:02:45,160 Speaker 1: off in the stock market. So there's already a kind 47 00:02:45,160 --> 00:02:50,480 Speaker 1: of approaching critical mass for sort of vilification of equity. 48 00:02:50,520 --> 00:02:52,280 Speaker 1: I mean it's hard to imagine. I mean everyone always 49 00:02:52,280 --> 00:02:55,239 Speaker 1: said big thermometer of US well being is the stock market. 50 00:02:55,480 --> 00:02:57,800 Speaker 1: This could be completely wrong and maybe everyone will be happy, 51 00:02:57,880 --> 00:03:00,680 Speaker 1: but yeah, I really like that. So it any seventeen, 52 00:03:00,760 --> 00:03:04,120 Speaker 1: the theme was the stock market is boring, and the 53 00:03:05,080 --> 00:03:08,680 Speaker 1: theme is everyone's angry at the stock market. Matt Chris 54 00:03:08,760 --> 00:03:14,000 Speaker 1: mentioned the tax bill and the perception that, you know, 55 00:03:14,080 --> 00:03:17,400 Speaker 1: it's largely a gift of corporations and the wealthy, and 56 00:03:17,600 --> 00:03:21,240 Speaker 1: something that I've been really struck by interviewing people mostly 57 00:03:21,320 --> 00:03:24,200 Speaker 1: on TV, is I have yet to hear from a 58 00:03:24,240 --> 00:03:28,520 Speaker 1: single economics person or even a market person who is 59 00:03:28,520 --> 00:03:31,240 Speaker 1: not associated with administration who thinks that this is really 60 00:03:31,240 --> 00:03:34,600 Speaker 1: going to ignite a real spark in the economy. Have 61 00:03:34,680 --> 00:03:36,600 Speaker 1: you talked to anyone who thinks it's actually going to 62 00:03:36,880 --> 00:03:39,360 Speaker 1: move the needle on the economy. No. I mean, the 63 00:03:39,400 --> 00:03:41,960 Speaker 1: only thing we've seen, you know, in that regard is 64 00:03:42,000 --> 00:03:44,640 Speaker 1: the fed's latest round of forecasts, which they weren't really 65 00:03:44,680 --> 00:03:47,520 Speaker 1: able to fully explain why, you know, they're expecting such 66 00:03:47,560 --> 00:03:50,280 Speaker 1: a big bump to growth next year. But it's interesting 67 00:03:50,320 --> 00:03:52,440 Speaker 1: because at the same time, we have these sort of 68 00:03:52,440 --> 00:03:56,520 Speaker 1: cyclical forces where nine years into this expansion, it looks 69 00:03:56,520 --> 00:03:59,120 Speaker 1: like we might actually be on the cusp of a 70 00:03:59,160 --> 00:04:03,480 Speaker 1: pickup in productivity, growth in een and the types of 71 00:04:03,520 --> 00:04:07,520 Speaker 1: things that would lead businesses to spend more and invest more. 72 00:04:07,680 --> 00:04:10,440 Speaker 1: And so just thinking about that in terms of the 73 00:04:10,520 --> 00:04:13,040 Speaker 1: likely Trump tweets that we're going to see, it's kind 74 00:04:13,080 --> 00:04:15,800 Speaker 1: of interesting because again, that might turn out to be 75 00:04:15,840 --> 00:04:18,760 Speaker 1: a red herring, but it's gonna be. I'm just I'm 76 00:04:18,800 --> 00:04:23,000 Speaker 1: already imagining how furious his critics and detractors are going 77 00:04:23,040 --> 00:04:26,600 Speaker 1: to be when the economy starts taking off, because if 78 00:04:26,600 --> 00:04:28,680 Speaker 1: we hit a certain point in the cycle, that would 79 00:04:28,720 --> 00:04:33,080 Speaker 1: cause greater capital investment, and Trump and all his fans 80 00:04:33,120 --> 00:04:35,840 Speaker 1: are deciding the tax cuts, yeah exactly. You know, like 81 00:04:35,920 --> 00:04:39,240 Speaker 1: the reality is wage growth has been muted in this expansion, 82 00:04:39,279 --> 00:04:41,559 Speaker 1: but it's been rising for several years, and we're getting 83 00:04:41,600 --> 00:04:44,440 Speaker 1: to the point where just naturally businesses are starting to 84 00:04:44,480 --> 00:04:47,480 Speaker 1: invest more in labor saving technology, that sort of thing. 85 00:04:47,520 --> 00:04:51,039 Speaker 1: That's kind of exactly what you would expect. Chris, on 86 00:04:51,160 --> 00:04:53,719 Speaker 1: the matter of the tax cuts, you know, it's funny 87 00:04:53,720 --> 00:04:56,800 Speaker 1: we're recording this just so everyone knows before they've technically 88 00:04:56,839 --> 00:04:59,120 Speaker 1: passed it, we're assuming they're going to pass it because 89 00:04:59,120 --> 00:05:01,680 Speaker 1: it doesn't look like there's any ambiguity. We've had this 90 00:05:01,839 --> 00:05:05,599 Speaker 1: discussion a lot about what is so called like priced in, 91 00:05:05,760 --> 00:05:07,919 Speaker 1: and you know, we've had this incredible rally in the 92 00:05:07,960 --> 00:05:12,000 Speaker 1: stock market this year. What is your best view on 93 00:05:12,040 --> 00:05:16,360 Speaker 1: how much can be attributed to the presumption of tax relief. Well, 94 00:05:16,480 --> 00:05:18,360 Speaker 1: we ran a story this morning that runs down all 95 00:05:18,400 --> 00:05:21,279 Speaker 1: of the strategisies. Wall Street pundits were basically paid to 96 00:05:21,279 --> 00:05:24,479 Speaker 1: advertise for stocks, and they a lot of them break 97 00:05:24,520 --> 00:05:26,960 Speaker 1: out a separate impact for if and when the tax 98 00:05:27,120 --> 00:05:30,279 Speaker 1: cuts are passed, and generally it's in the ten to 99 00:05:30,360 --> 00:05:34,120 Speaker 1: fifteen bucks per share for the SMP realm. So if 100 00:05:34,400 --> 00:05:37,839 Speaker 1: SMP earnings are about thirty bucks to share, so it 101 00:05:37,880 --> 00:05:41,000 Speaker 1: could add seven or eight percent to the SMPS earnings, 102 00:05:41,040 --> 00:05:43,440 Speaker 1: which that sounds if you look at that relative to 103 00:05:43,440 --> 00:05:46,679 Speaker 1: the gains this year, that's not implausible. Then basically maybe 104 00:05:47,000 --> 00:05:49,440 Speaker 1: a quarter or third of the gains that came through 105 00:05:49,480 --> 00:05:52,760 Speaker 1: this year were related to the tax break. That strikes 106 00:05:52,839 --> 00:05:55,360 Speaker 1: me as I mean all of it's the imprecisely. I 107 00:05:55,560 --> 00:05:58,880 Speaker 1: think that really strikes me though, in this discussion, is 108 00:05:59,160 --> 00:06:02,919 Speaker 1: all the idea that Trump is unleashed something and investors 109 00:06:03,000 --> 00:06:06,279 Speaker 1: really want tax cuts. Is that from basically two thousand 110 00:06:06,320 --> 00:06:09,240 Speaker 1: and ten through the end of two thousands sixteen, we 111 00:06:09,240 --> 00:06:12,719 Speaker 1: had this extraordinary market, really without d C being able 112 00:06:12,760 --> 00:06:15,719 Speaker 1: to deliver anything because we've been a total gridlock, and 113 00:06:15,800 --> 00:06:18,320 Speaker 1: so the idea that, like, suddenly investors that need to 114 00:06:18,320 --> 00:06:21,240 Speaker 1: see tax cuts to continue this extraordinary rally always seemed 115 00:06:21,240 --> 00:06:23,159 Speaker 1: a little It is, But by the same token, I 116 00:06:23,200 --> 00:06:25,159 Speaker 1: think that if you look at the people designing the 117 00:06:25,200 --> 00:06:27,680 Speaker 1: tax cut, they were aiming at a pretty squarely at 118 00:06:27,680 --> 00:06:29,800 Speaker 1: the stock market. It's part it seems like it's part 119 00:06:29,839 --> 00:06:32,000 Speaker 1: of their trickle down philosophy. They wanted something that would 120 00:06:32,000 --> 00:06:36,000 Speaker 1: be easily identifiable and appreciated by stock investors at least, 121 00:06:36,520 --> 00:06:38,680 Speaker 1: and I feel like, for better or worse, they've done 122 00:06:38,720 --> 00:06:41,080 Speaker 1: something that basically it's going to achieve that. It's hard 123 00:06:41,120 --> 00:06:42,880 Speaker 1: to argue that the last couple of weeks haven't been 124 00:06:42,920 --> 00:06:48,680 Speaker 1: a slightly higher velocity rally than we'd seen previously. Matt Boler, 125 00:06:48,720 --> 00:06:51,640 Speaker 1: I want to turn to you, what is, in your view, 126 00:06:51,680 --> 00:06:54,440 Speaker 1: going to be the big economic story of I think 127 00:06:54,440 --> 00:06:57,159 Speaker 1: the big economic story of teen is going to be 128 00:06:57,240 --> 00:06:59,800 Speaker 1: how little changes in terms of the trends that we're 129 00:07:00,160 --> 00:07:03,400 Speaker 1: in the economy, and specifically, I think we're going to 130 00:07:03,440 --> 00:07:06,560 Speaker 1: continue to see a solid decline in the unemployment rate 131 00:07:06,600 --> 00:07:10,600 Speaker 1: without much inflation. And I think the way that those 132 00:07:10,640 --> 00:07:12,320 Speaker 1: two are going to fit together is we're going to 133 00:07:12,360 --> 00:07:15,840 Speaker 1: finally see that pick up in productivity growth that has 134 00:07:15,880 --> 00:07:18,680 Speaker 1: been missing for a long time, and I think we're 135 00:07:18,760 --> 00:07:21,120 Speaker 1: finally starting to get to that point. Well, this has 136 00:07:21,160 --> 00:07:23,440 Speaker 1: been one of the funny questions to me. So you know, 137 00:07:23,520 --> 00:07:28,160 Speaker 1: like unemployment has been plunging all year, and people are like, Okay, 138 00:07:28,160 --> 00:07:31,040 Speaker 1: we're really getting close to full employment now. We must be, 139 00:07:31,040 --> 00:07:33,400 Speaker 1: because it's going down so fast, and so wages are 140 00:07:33,400 --> 00:07:35,520 Speaker 1: going to pick up. What always struck me is that 141 00:07:35,560 --> 00:07:38,080 Speaker 1: you could take the same data and make the opposite argument, 142 00:07:38,120 --> 00:07:41,760 Speaker 1: which is that if unemployment is falling faster than people 143 00:07:41,880 --> 00:07:45,000 Speaker 1: expect without a pick up in wage growth or inflation, 144 00:07:45,440 --> 00:07:47,560 Speaker 1: that maybe it could just fall a lot further, because 145 00:07:47,600 --> 00:07:49,200 Speaker 1: you know, it sort of gets to what we're talking 146 00:07:49,200 --> 00:07:51,840 Speaker 1: about on the last episode. Maybe just the whole premise 147 00:07:51,920 --> 00:07:54,920 Speaker 1: of there being some point where inflation and wage growth 148 00:07:55,040 --> 00:07:58,360 Speaker 1: kicks in is just flaw. Yeah, that's what policymakers are 149 00:07:58,480 --> 00:08:00,720 Speaker 1: kind of starting to entertain. Right. So, this idea of 150 00:08:00,720 --> 00:08:04,320 Speaker 1: full employment as this level of employment that would trigger 151 00:08:04,400 --> 00:08:07,440 Speaker 1: runaway inflation was born in the nineteen eighties, right, and 152 00:08:07,440 --> 00:08:09,760 Speaker 1: that was coming right off the heels of a high 153 00:08:09,800 --> 00:08:13,480 Speaker 1: inflation environment in the nineteen seventies that was fairly unique. 154 00:08:13,760 --> 00:08:16,440 Speaker 1: And then as you go forward into the nineteen nineties, 155 00:08:17,080 --> 00:08:19,360 Speaker 1: we had a very strong labor market at the end 156 00:08:19,400 --> 00:08:21,800 Speaker 1: of the nineteen nineties, a very low unemployment rate, but 157 00:08:21,880 --> 00:08:24,840 Speaker 1: it didn't really manifest itself in higher inflation. It manifests 158 00:08:24,880 --> 00:08:28,680 Speaker 1: itself in higher productivity growth. And so if anything, you know, 159 00:08:28,720 --> 00:08:31,680 Speaker 1: you're kind of weighing, does the experience of forty years 160 00:08:31,720 --> 00:08:35,199 Speaker 1: ago seemed more likely to reoccur or does the experience 161 00:08:35,200 --> 00:08:37,480 Speaker 1: of twenty years ago seemed more likely to reoccur? And 162 00:08:37,520 --> 00:08:40,720 Speaker 1: given you know, all the big global changes that we've 163 00:08:40,720 --> 00:08:42,960 Speaker 1: talked about, you know, over the last several decades, it 164 00:08:43,000 --> 00:08:45,920 Speaker 1: seems like maybe the first one to reach for it 165 00:08:45,960 --> 00:08:49,840 Speaker 1: would be the most recent experience, Chris. If Matt is right, 166 00:08:50,000 --> 00:08:52,600 Speaker 1: and we sort of continue to see this economy that 167 00:08:52,720 --> 00:08:56,040 Speaker 1: homes along, but none of the inflation pressures that pick 168 00:08:56,160 --> 00:08:59,480 Speaker 1: up that Again, it just sounds like a great recipe 169 00:08:59,520 --> 00:09:01,560 Speaker 1: for Stoff. It's hard to imagine that being a problem 170 00:09:01,559 --> 00:09:06,240 Speaker 1: for your typical infestor how dominant is fears of the 171 00:09:06,280 --> 00:09:10,400 Speaker 1: FED as the entity that could kill this rally. If 172 00:09:10,440 --> 00:09:13,280 Speaker 1: you ask people what could end this incredible market run, 173 00:09:13,320 --> 00:09:15,760 Speaker 1: we've seen how many people would put that as their 174 00:09:15,760 --> 00:09:17,719 Speaker 1: first thing. I would say a fair number. One thing 175 00:09:17,760 --> 00:09:20,439 Speaker 1: that's true, though, is that you have a dwindling population 176 00:09:20,480 --> 00:09:22,959 Speaker 1: of people who even remember the FED killing a stock 177 00:09:23,000 --> 00:09:25,400 Speaker 1: market rally. I feel like it probably should be the 178 00:09:25,400 --> 00:09:28,240 Speaker 1: first thing that cursed everyone, because that's typically how it happens. 179 00:09:28,280 --> 00:09:30,600 Speaker 1: I mean, but there there may not be that many 180 00:09:30,640 --> 00:09:34,400 Speaker 1: people left. We have to admit that even I have 181 00:09:34,480 --> 00:09:38,040 Speaker 1: a hard time imagining the FED actually killing a market rally. 182 00:09:38,080 --> 00:09:39,960 Speaker 1: And I don't know whether that's because of my experience 183 00:09:40,280 --> 00:09:42,000 Speaker 1: or because I just sort of think of the FED 184 00:09:42,120 --> 00:09:43,880 Speaker 1: is in this mode where it doesn't want to do 185 00:09:43,960 --> 00:09:46,559 Speaker 1: any harm. But even even though it seems kind of 186 00:09:46,559 --> 00:09:48,760 Speaker 1: obvious that could be a risk, it's hard for me 187 00:09:48,800 --> 00:09:51,439 Speaker 1: to remember, well, right, it's hard for me to believe. Yeah, 188 00:09:51,559 --> 00:09:55,920 Speaker 1: this has been a unique experience of federal reserve policy experimentation. So, 189 00:09:56,960 --> 00:10:00,600 Speaker 1: but the corollary is that for many history like the 190 00:10:00,600 --> 00:10:03,240 Speaker 1: FED is sort of caused recessions and so or it's 191 00:10:03,240 --> 00:10:07,440 Speaker 1: sort of like FED tightening proceeded a recession in our minds, 192 00:10:07,760 --> 00:10:10,120 Speaker 1: I think, probably because we're still doing with the scars 193 00:10:10,200 --> 00:10:13,440 Speaker 1: of the Great Recession and the financial crisis. We think 194 00:10:13,440 --> 00:10:17,120 Speaker 1: of recessions, is these like cataclysmic events, But it's not. 195 00:10:17,320 --> 00:10:19,120 Speaker 1: You know, it wouldn't be that weird for the FED 196 00:10:19,160 --> 00:10:21,240 Speaker 1: to tighten and you get to slow down for a 197 00:10:21,280 --> 00:10:25,160 Speaker 1: few quarters and then you sort of go back to normal. Yeah. No, 198 00:10:25,280 --> 00:10:27,560 Speaker 1: that's absolutely right. And I mean, to some extent, you 199 00:10:27,559 --> 00:10:29,640 Speaker 1: could argue that's what we've seen over the last two 200 00:10:29,720 --> 00:10:33,280 Speaker 1: years or so. Right, So, before the FED started raising rates, 201 00:10:33,320 --> 00:10:37,680 Speaker 1: you saw investors starting pricing that in coming in the 202 00:10:37,720 --> 00:10:41,760 Speaker 1: global currency markets, and we had a big appreciation in 203 00:10:41,800 --> 00:10:46,200 Speaker 1: the dollar alongside that crash and oil prices in and 204 00:10:46,280 --> 00:10:48,920 Speaker 1: that really did lead to a large slowdown, not only 205 00:10:48,960 --> 00:10:52,079 Speaker 1: because the US has become such a big oil exporting country, 206 00:10:52,400 --> 00:10:54,880 Speaker 1: but also because of the effect it had on manufacturing, 207 00:10:55,280 --> 00:10:57,680 Speaker 1: and so to some extent, we're just still kind of 208 00:10:57,720 --> 00:10:59,920 Speaker 1: seeing that work through the system. I remember that grow 209 00:11:00,040 --> 00:11:03,000 Speaker 1: it's scared. So how much at the time did people 210 00:11:03,160 --> 00:11:05,880 Speaker 1: see that as sort of like fear of like, Okay, 211 00:11:05,880 --> 00:11:07,760 Speaker 1: the FED is getting ready to make its move, time 212 00:11:07,840 --> 00:11:11,680 Speaker 1: for some shifts. Well, yeah, absolutely, And at the same time, 213 00:11:11,679 --> 00:11:14,000 Speaker 1: what you had was, you know, the European Central Bank 214 00:11:14,040 --> 00:11:17,199 Speaker 1: in the Bank of Japan notably also shifting towards an 215 00:11:17,200 --> 00:11:21,119 Speaker 1: easier monetary policy, starting to launch their quantitative easing programs. 216 00:11:21,400 --> 00:11:24,080 Speaker 1: They were so far behind the FED with that that 217 00:11:24,160 --> 00:11:26,080 Speaker 1: it just came at a time when you know, both 218 00:11:26,120 --> 00:11:27,959 Speaker 1: were going in different directions for the first time in 219 00:11:28,000 --> 00:11:30,240 Speaker 1: a long time. That that really had a powerful impact. 220 00:11:30,280 --> 00:11:34,440 Speaker 1: So that exacerbates this sort of tightening financial conditions, that 221 00:11:34,520 --> 00:11:38,080 Speaker 1: surging dollar, that monetary policy gap exactly. So it's kind 222 00:11:38,080 --> 00:11:40,720 Speaker 1: of like the tightening was extremely front loaded, you could say, 223 00:11:40,720 --> 00:11:42,240 Speaker 1: in this cycle, and at least in terms of the 224 00:11:42,320 --> 00:11:46,360 Speaker 1: economic effects Chris in terms of other risks to the 225 00:11:46,400 --> 00:11:49,120 Speaker 1: market besides the fed like what would be the number 226 00:11:49,160 --> 00:11:51,920 Speaker 1: two things people would say, just to take it slightly 227 00:11:51,960 --> 00:11:54,199 Speaker 1: out of the realm of economics. I feel like one 228 00:11:54,200 --> 00:11:55,760 Speaker 1: of the big stories of the market this year has 229 00:11:55,800 --> 00:11:59,040 Speaker 1: been boring lye the rise of passive investing, and along 230 00:11:59,080 --> 00:12:02,160 Speaker 1: with that the weird thing we're covering the stock market 231 00:12:02,200 --> 00:12:06,040 Speaker 1: has become this kind of weird science experiment. You're sort 232 00:12:06,040 --> 00:12:07,600 Speaker 1: of have to be. You have to be in an 233 00:12:08,120 --> 00:12:10,560 Speaker 1: prepared to deal with financial economics. I remember there was 234 00:12:10,600 --> 00:12:13,760 Speaker 1: that day that the Anomaly study came out and saying 235 00:12:13,760 --> 00:12:16,480 Speaker 1: that all of these stock market patterns and academic papers 236 00:12:16,480 --> 00:12:19,079 Speaker 1: were a little off, and everyone has absolutely freaked out 237 00:12:19,120 --> 00:12:23,400 Speaker 1: about it. I feel like there's so much quant underpinning 238 00:12:23,440 --> 00:12:26,280 Speaker 1: of the market right now that it's not out of 239 00:12:26,320 --> 00:12:29,040 Speaker 1: the realm of possibility that some kind of jam, not 240 00:12:29,160 --> 00:12:33,080 Speaker 1: a meltdown, but somehow those underpinnings get jammed up somehow 241 00:12:33,160 --> 00:12:35,839 Speaker 1: next year, and right like every little blip, now people 242 00:12:36,120 --> 00:12:38,720 Speaker 1: if there's some quant explanation, right like you got half 243 00:12:38,720 --> 00:12:41,480 Speaker 1: a percent, like people are selling winners, which is in 244 00:12:41,520 --> 00:12:43,480 Speaker 1: another way of saying, no matter what happens, we will 245 00:12:43,480 --> 00:12:46,800 Speaker 1: say it was a quantel You're not supposed to do 246 00:12:47,160 --> 00:12:51,000 Speaker 1: not really. Yeah, well I think that about does it. 247 00:12:51,520 --> 00:12:54,400 Speaker 1: Chris and ag Mad Bosler, Bloomberg News, thank you so 248 00:12:54,480 --> 00:12:57,640 Speaker 1: much for joining us looking ahead. I think there's are 249 00:12:57,640 --> 00:13:01,640 Speaker 1: great themes for ther twenty eighteen. That does it for 250 00:13:01,679 --> 00:13:05,040 Speaker 1: odd lots for We'll be back in the new year. 251 00:13:05,080 --> 00:13:08,120 Speaker 1: Tracy will be back with a full suite of shows 252 00:13:08,160 --> 00:13:12,080 Speaker 1: looking at the random, odd lots corners of the financial markets. 253 00:13:12,520 --> 00:13:15,480 Speaker 1: In the meantime, you can follow Chris on Twitter at 254 00:13:15,559 --> 00:13:18,720 Speaker 1: Chris and a g One. You could follow Matt Bosler 255 00:13:18,920 --> 00:13:22,679 Speaker 1: on Twitter at Bows Underscore. You can follow me on 256 00:13:22,720 --> 00:13:25,440 Speaker 1: Twitter at the Stalwart, and you can follow Tracy on 257 00:13:25,480 --> 00:13:28,760 Speaker 1: Twitter at Tracy Elloway. Thanks for listening.