1 00:00:12,720 --> 00:00:16,400 Speaker 1: Hello, and welcome to What Goes Up, a weekly markets podcast. 2 00:00:16,560 --> 00:00:19,080 Speaker 1: My name is Mike Reagan. I'm a senior editor at Bloomberg. 3 00:00:20,040 --> 00:00:23,000 Speaker 1: I'm Katie Greifeld. I'm a cross asset reporter at Bloomberg, 4 00:00:23,000 --> 00:00:25,079 Speaker 1: and I'm filling in for Bil Donna Hi Rate and 5 00:00:25,239 --> 00:00:27,960 Speaker 1: this week on the show, Well, there's a big disconnect 6 00:00:28,040 --> 00:00:31,240 Speaker 1: going on right now. The job market is red hot, 7 00:00:31,440 --> 00:00:34,839 Speaker 1: economic growth is strong, and the worst of the pandemic 8 00:00:34,880 --> 00:00:37,839 Speaker 1: seems to be behind us. So why is one popular 9 00:00:37,880 --> 00:00:40,400 Speaker 1: measure of consumer sentiment at the lowest in more than 10 00:00:40,440 --> 00:00:43,400 Speaker 1: a decade. And what does it all mean for markets. 11 00:00:43,920 --> 00:00:46,280 Speaker 1: We'll get into it with an expert on confidence and 12 00:00:46,320 --> 00:00:50,519 Speaker 1: the role that confidence plays in decision making. But first, Katie, 13 00:00:50,960 --> 00:00:53,320 Speaker 1: excited to have you back on the show. Here for 14 00:00:53,360 --> 00:00:55,680 Speaker 1: all the vill Donna fans out there. She's fine, She's 15 00:00:55,720 --> 00:00:58,920 Speaker 1: just vacationing in Portugal. So I'm a little jealous, I 16 00:00:58,960 --> 00:01:03,040 Speaker 1: gotta say, And you know she's I was gonna say. 17 00:01:03,040 --> 00:01:05,920 Speaker 1: She is so funny because two or three weeks ago 18 00:01:06,000 --> 00:01:08,080 Speaker 1: she was like complaining about this trip. She was like, 19 00:01:08,120 --> 00:01:09,800 Speaker 1: I don't even want to go on it. I don't 20 00:01:09,800 --> 00:01:11,560 Speaker 1: know if we should. I was like, what are you 21 00:01:11,600 --> 00:01:14,600 Speaker 1: talking about I picture her in Lisbon like reading all 22 00:01:14,600 --> 00:01:17,920 Speaker 1: the analysts notes on her phone and missing all the sites. 23 00:01:18,920 --> 00:01:22,120 Speaker 1: And she was also like, you know. I started salivating 24 00:01:22,120 --> 00:01:23,760 Speaker 1: when she told me she was going to Portugal there 25 00:01:23,760 --> 00:01:25,200 Speaker 1: because I thought back, I had a trip there a 26 00:01:25,240 --> 00:01:27,360 Speaker 1: couple of years ago, and I must be gained ten 27 00:01:27,400 --> 00:01:30,160 Speaker 1: pounds and I was I was like, filt I had 28 00:01:30,200 --> 00:01:34,520 Speaker 1: theres o. The seafood is incredible. I had this incredible 29 00:01:34,520 --> 00:01:36,399 Speaker 1: steak at this one place. And she's like, yeah, I 30 00:01:36,400 --> 00:01:39,200 Speaker 1: don't eat fish, were meat of any kind And I 31 00:01:39,640 --> 00:01:42,520 Speaker 1: was like, well, they have olives. I think maybe you 32 00:01:42,560 --> 00:01:45,440 Speaker 1: could have some olives. I don't know. You know, she 33 00:01:45,640 --> 00:01:49,280 Speaker 1: loves cauliflower. I rest assured that she probably found some 34 00:01:49,680 --> 00:01:54,120 Speaker 1: delicious cauliflower in Portugal. We can only hope, but in 35 00:01:54,160 --> 00:01:55,880 Speaker 1: any case, I look forward to the day when I 36 00:01:56,000 --> 00:01:59,120 Speaker 1: left the country. Haven't been I haven't been outside the 37 00:01:59,120 --> 00:02:01,760 Speaker 1: borders in a while. It we should probably get to 38 00:02:01,840 --> 00:02:04,160 Speaker 1: the guest and yeah, yeah, why do you bring him in? 39 00:02:04,160 --> 00:02:06,440 Speaker 1: I'm very excited about our guests too, and not only 40 00:02:06,480 --> 00:02:09,680 Speaker 1: because he's a blue hen like me, a professor at 41 00:02:09,680 --> 00:02:11,640 Speaker 1: the University of Delaware and Don William and marry another 42 00:02:11,680 --> 00:02:14,480 Speaker 1: fine school, but also because I feel like he covers 43 00:02:14,840 --> 00:02:17,120 Speaker 1: some angles that we don't get into a lot on 44 00:02:17,160 --> 00:02:21,400 Speaker 1: this show, and that's sort of behavioral finance and psychology 45 00:02:21,400 --> 00:02:23,680 Speaker 1: and that sort of thing. And he's I'm also excited. 46 00:02:23,720 --> 00:02:26,280 Speaker 1: He's from my neck of the woods, down in Chester County, Pennsylvania, 47 00:02:26,280 --> 00:02:27,880 Speaker 1: a beautiful corner of the world. So what do you 48 00:02:27,919 --> 00:02:30,000 Speaker 1: bring him in here? Katie? All right, Well, if you 49 00:02:30,040 --> 00:02:32,840 Speaker 1: were wondering what this man's name is, it is Peter Atwater. 50 00:02:32,960 --> 00:02:35,880 Speaker 1: He is the president of Financial Insights, LLC. He's also 51 00:02:35,919 --> 00:02:38,680 Speaker 1: a finest professor at William and Mary and the University 52 00:02:38,760 --> 00:02:41,760 Speaker 1: of Delaware. I know I get the blue hen reference. 53 00:02:41,800 --> 00:02:43,359 Speaker 1: It was a little lost on me, but here we are. 54 00:02:43,400 --> 00:02:45,760 Speaker 1: But in any case, Peter, welcome to the show. It's 55 00:02:45,800 --> 00:02:48,079 Speaker 1: great to have you with us. Thanks, Katie and Mike. 56 00:02:48,240 --> 00:02:50,720 Speaker 1: Glad to be here. Peter. I wanted to start I 57 00:02:50,840 --> 00:02:53,520 Speaker 1: just sort of if you could give us an idea 58 00:02:53,720 --> 00:02:57,160 Speaker 1: of your approach. Like I said, you know, you sort 59 00:02:57,200 --> 00:03:00,160 Speaker 1: of look a lot at more of the behavior real 60 00:03:00,240 --> 00:03:03,120 Speaker 1: type of finance, and I think it's a really important 61 00:03:03,120 --> 00:03:05,840 Speaker 1: time to talk about that, given this last few years 62 00:03:06,480 --> 00:03:08,880 Speaker 1: have just spent unlike anything we've ever seen before. I 63 00:03:08,880 --> 00:03:12,720 Speaker 1: think as far as um investors, psychology, and then the 64 00:03:12,760 --> 00:03:15,160 Speaker 1: whole meme stock Craze walk Us. There's kind of your 65 00:03:15,200 --> 00:03:18,720 Speaker 1: approach to to how you think about these things. Sure, 66 00:03:18,760 --> 00:03:21,160 Speaker 1: so I I look at things in terms of confidence, 67 00:03:21,160 --> 00:03:24,160 Speaker 1: And when I think of confidence, I don't mean the 68 00:03:24,480 --> 00:03:29,200 Speaker 1: theater of confidence, the self confidence that so often gets discussed. 69 00:03:29,200 --> 00:03:32,280 Speaker 1: I'm I'm really talking about the feelings of certainty and 70 00:03:32,400 --> 00:03:35,400 Speaker 1: control that we have in our lives, because those are 71 00:03:35,440 --> 00:03:39,640 Speaker 1: the real factors and the choices we make. When we're confident, 72 00:03:39,960 --> 00:03:42,800 Speaker 1: we think we know what's coming, and even more so, 73 00:03:42,920 --> 00:03:46,320 Speaker 1: we think that we're capable of handling whatever that is. 74 00:03:47,080 --> 00:03:50,560 Speaker 1: And we don't talk about it this way, but the 75 00:03:50,560 --> 00:03:54,840 Speaker 1: the opposite of confidence is vulnerability, when we feel like 76 00:03:55,040 --> 00:03:58,480 Speaker 1: things are uncertain and we feel powerless, sort of like 77 00:03:58,560 --> 00:04:00,960 Speaker 1: we felt and have been feeling a lot for the 78 00:04:01,040 --> 00:04:05,920 Speaker 1: last two years. And so those feelings of vulnerability play 79 00:04:06,000 --> 00:04:09,560 Speaker 1: into a lot of the choices that we make. And so, Peter, 80 00:04:10,040 --> 00:04:12,840 Speaker 1: I mean, it's it's interesting to hear you, you know, 81 00:04:12,880 --> 00:04:15,880 Speaker 1: talk so much about confidence because I mean, just recently 82 00:04:15,920 --> 00:04:19,440 Speaker 1: we got consumer sentiment data that it was just terrible. 83 00:04:19,480 --> 00:04:21,240 Speaker 1: I mean, if you look at the consumer. They're still 84 00:04:21,240 --> 00:04:23,560 Speaker 1: spending a lot of money, but it looks like they're 85 00:04:23,839 --> 00:04:26,480 Speaker 1: miserable about it. And I'm curious how you take inputs 86 00:04:26,520 --> 00:04:28,760 Speaker 1: such as that, how you think about that in relation 87 00:04:28,800 --> 00:04:32,599 Speaker 1: to confidence and how that feeds into markets. Yeah, so 88 00:04:32,640 --> 00:04:34,680 Speaker 1: I think in a couple of ways. One, I think 89 00:04:34,680 --> 00:04:38,400 Speaker 1: we need to recognize that there is no single level 90 00:04:38,440 --> 00:04:42,800 Speaker 1: of confidence, particularly today, and you know, as the person 91 00:04:42,839 --> 00:04:45,520 Speaker 1: who coined the term the case shaped recovery, to me, 92 00:04:45,640 --> 00:04:49,280 Speaker 1: there there are two extremes to confidence. Those that are 93 00:04:49,360 --> 00:04:52,839 Speaker 1: closest to the financial markets have one level that is 94 00:04:52,880 --> 00:04:56,840 Speaker 1: distinct from those particularly individuals who have worked throughout the 95 00:04:56,839 --> 00:05:00,680 Speaker 1: pandemic out in the real world. And so I think 96 00:05:00,720 --> 00:05:04,880 Speaker 1: what you're seeing is a lot of vulnerability being expressed 97 00:05:04,880 --> 00:05:08,280 Speaker 1: in the consumer sentiment numbers, and and vulnerability from any 98 00:05:08,360 --> 00:05:11,560 Speaker 1: number of factors. It could be economic. It could be 99 00:05:12,080 --> 00:05:15,040 Speaker 1: the fact that they're paying more at the pipe at 100 00:05:15,040 --> 00:05:19,839 Speaker 1: the pump, inflation food prices. But what is also interesting 101 00:05:19,920 --> 00:05:22,400 Speaker 1: is where we see in a lot of these sentiment 102 00:05:22,480 --> 00:05:27,400 Speaker 1: figures the impact of political vulnerability. And so when you 103 00:05:27,400 --> 00:05:32,039 Speaker 1: know after the election, you could see where Republican economic 104 00:05:32,160 --> 00:05:37,800 Speaker 1: confidence fell dramatically while Democrats confidence improved. So I think 105 00:05:37,800 --> 00:05:40,440 Speaker 1: we need to recognize that these measures are picking up 106 00:05:40,520 --> 00:05:43,640 Speaker 1: much more than just how we feel about the economy. 107 00:05:43,640 --> 00:05:47,080 Speaker 1: It's it's really how how vulnerable or confident we feel? 108 00:05:47,279 --> 00:05:50,200 Speaker 1: More broadly, And can we just talk about how good 109 00:05:50,200 --> 00:05:52,400 Speaker 1: of a call that was the case shaped recovery? Could 110 00:05:52,440 --> 00:05:54,480 Speaker 1: you explain just a little bit about that? As I remember, 111 00:05:54,520 --> 00:05:57,360 Speaker 1: it's that, you know, the upper tiers, the upper income 112 00:05:57,400 --> 00:06:00,880 Speaker 1: thresholds of society would recover from the pandemic more quickly. 113 00:06:00,920 --> 00:06:04,560 Speaker 1: Where is the lower income sectors of you know, society? 114 00:06:04,560 --> 00:06:06,640 Speaker 1: They would have a harder time doing that. I bet Peter, 115 00:06:06,680 --> 00:06:08,520 Speaker 1: I bet you wish you could have trademarked to that 116 00:06:08,560 --> 00:06:11,520 Speaker 1: and gotten some royalties on that, because it was everywhere 117 00:06:11,920 --> 00:06:14,719 Speaker 1: there for a while. Yeah, And and to be honest 118 00:06:14,720 --> 00:06:18,160 Speaker 1: with you, it had nothing to do with economic factors. 119 00:06:18,200 --> 00:06:20,640 Speaker 1: To me, those were going to follow. But I could 120 00:06:20,680 --> 00:06:25,560 Speaker 1: immediately see in March when those who worked in the 121 00:06:25,600 --> 00:06:30,120 Speaker 1: service economy quickly pivoted to working from home, and the 122 00:06:30,279 --> 00:06:34,640 Speaker 1: boost and confidence that that gave people relative to the 123 00:06:34,720 --> 00:06:38,800 Speaker 1: doctors and the nurses and the folks who were taking 124 00:06:38,800 --> 00:06:43,000 Speaker 1: care of the supermarket that didn't have that as a choice. 125 00:06:43,600 --> 00:06:47,560 Speaker 1: And so you could see this real stark bifurcation and 126 00:06:47,600 --> 00:06:50,720 Speaker 1: confidence that I felt that ultimately would play through into 127 00:06:50,760 --> 00:06:53,520 Speaker 1: the economy, which is sort of what's happened. Where do 128 00:06:53,520 --> 00:06:56,160 Speaker 1: you suppose we are now in that recovery? I mean, 129 00:06:56,200 --> 00:06:58,840 Speaker 1: have had the has the upstroke and the downstroke of 130 00:06:58,839 --> 00:07:01,520 Speaker 1: that k gotten close together, they're getting further apart. Do 131 00:07:01,560 --> 00:07:03,480 Speaker 1: you think, what what's sort of the status of it? 132 00:07:04,440 --> 00:07:08,240 Speaker 1: So I actually took the view that the real popularity 133 00:07:08,279 --> 00:07:12,440 Speaker 1: of that term marked the extreme of it um. You know, 134 00:07:12,480 --> 00:07:15,239 Speaker 1: as somebody who watches narratives for a living, I've learned 135 00:07:15,280 --> 00:07:20,480 Speaker 1: that that correlations break down the moment everybody's talking about them, 136 00:07:21,160 --> 00:07:23,920 Speaker 1: and I felt that this was just another one. And 137 00:07:23,920 --> 00:07:26,280 Speaker 1: and in many ways we're starting to see that. You're 138 00:07:26,320 --> 00:07:30,640 Speaker 1: seeing those at the bottom becoming much more strident about 139 00:07:30,920 --> 00:07:34,760 Speaker 1: you know, getting wage gains and pressing to unionize. You know, 140 00:07:35,000 --> 00:07:39,240 Speaker 1: you're seeing a lot of activity where folks, you know, 141 00:07:39,360 --> 00:07:42,520 Speaker 1: in the in the lower economics sphere, are are doing 142 00:07:42,560 --> 00:07:46,000 Speaker 1: things to address the vulnerability that they're experiencing. And at 143 00:07:46,000 --> 00:07:49,080 Speaker 1: the same time, you know, beginning a year ago, you 144 00:07:49,080 --> 00:07:54,560 Speaker 1: could start to see sentiment decline within the financial markets themselves, 145 00:07:54,640 --> 00:07:57,200 Speaker 1: and you know, so so I do think that that 146 00:07:57,320 --> 00:08:00,640 Speaker 1: the two lines are beginning to to convert urge. The 147 00:08:01,000 --> 00:08:04,440 Speaker 1: question in my mind is, ultimately, do those at the 148 00:08:04,480 --> 00:08:07,960 Speaker 1: bottom are they lifted? You are more than those at 149 00:08:07,960 --> 00:08:21,600 Speaker 1: the top begin to feel vulnerable. Let's talk a little 150 00:08:21,600 --> 00:08:24,000 Speaker 1: bit more about the financial markets and drill in there. 151 00:08:24,000 --> 00:08:26,280 Speaker 1: Because you sent us a ton of notes. They were 152 00:08:26,360 --> 00:08:29,400 Speaker 1: extremely helpful, so thank you for that. And you send 153 00:08:29,400 --> 00:08:31,239 Speaker 1: in one of your emails that you know you see 154 00:08:31,560 --> 00:08:35,520 Speaker 1: a lady or the tiger potential to markets, and I 155 00:08:35,559 --> 00:08:38,360 Speaker 1: would love to hear exactly what you mean by that. 156 00:08:39,400 --> 00:08:42,800 Speaker 1: But the setup is this. We we've had a year 157 00:08:43,880 --> 00:08:48,640 Speaker 1: in which the most abstract, wild and crazy stocks have 158 00:08:48,800 --> 00:08:54,199 Speaker 1: really suffered, and at the same time we have sentiment, 159 00:08:54,320 --> 00:08:58,559 Speaker 1: consumer sentiment that's really lousy. Consumer sentiment is so bad 160 00:08:58,640 --> 00:09:00,800 Speaker 1: that you go back to October two thousand and eleven 161 00:09:00,840 --> 00:09:03,280 Speaker 1: and and what do you see While you saw occupy 162 00:09:03,360 --> 00:09:07,839 Speaker 1: wal Street, you saw riots in London. Um. So, so 163 00:09:07,920 --> 00:09:12,480 Speaker 1: we know that when sentiment is this low, we behave 164 00:09:12,559 --> 00:09:16,440 Speaker 1: badly as as people, and not surprising, you're seeing things 165 00:09:16,440 --> 00:09:19,280 Speaker 1: like the trucker's strike up in Canada. So so we 166 00:09:19,360 --> 00:09:24,040 Speaker 1: express our shared vulnerability in a in an active social way, 167 00:09:24,600 --> 00:09:27,320 Speaker 1: and so part of me says, well, if this is 168 00:09:27,400 --> 00:09:30,559 Speaker 1: like two thousand and eleven, this is a low, this 169 00:09:30,640 --> 00:09:33,800 Speaker 1: is a meaningful load that we should bounce from. And 170 00:09:33,880 --> 00:09:37,599 Speaker 1: that's the lady scenario that the powder puff, as I 171 00:09:37,679 --> 00:09:41,000 Speaker 1: call it, where where you start people start to feel better, 172 00:09:41,320 --> 00:09:46,120 Speaker 1: Inflation comes down, the bond market eases, equities rise, um, 173 00:09:46,280 --> 00:09:49,920 Speaker 1: you could see popularity of Joe Biden begin to improve. 174 00:09:50,040 --> 00:09:52,600 Speaker 1: Because presidents are only as good as we feel. So 175 00:09:52,679 --> 00:09:55,200 Speaker 1: there are a lot of things that in this moment, 176 00:09:55,679 --> 00:09:58,160 Speaker 1: I feel like they have the makings of a of 177 00:09:58,200 --> 00:10:03,160 Speaker 1: a major sentiment up. That's challenged a little bit in 178 00:10:03,280 --> 00:10:07,199 Speaker 1: terms of equity valuations. That valuations are nothing like they 179 00:10:07,200 --> 00:10:10,720 Speaker 1: did in two thousand eleven, but but okay, I'll live 180 00:10:10,760 --> 00:10:15,880 Speaker 1: with that. The downside is the more troubling one to me, 181 00:10:16,440 --> 00:10:20,200 Speaker 1: which is to say, if this isn't a low and 182 00:10:20,280 --> 00:10:25,240 Speaker 1: sentiment really deteriorates, well, then you're getting into Lehman Brothers 183 00:10:25,280 --> 00:10:32,080 Speaker 1: like moments where trust broad trust issues become a disconcerting 184 00:10:32,120 --> 00:10:34,640 Speaker 1: factor to people. And so I think we need to 185 00:10:34,720 --> 00:10:40,079 Speaker 1: be cognizant of those two potential scenarios, not wishing for trouble, 186 00:10:40,679 --> 00:10:44,000 Speaker 1: but I know that as somebody who's focuses on confidence. 187 00:10:44,400 --> 00:10:48,880 Speaker 1: If confidence really drops further, we're gonna become much more 188 00:10:48,880 --> 00:10:53,400 Speaker 1: aggressive about addressing the vulnerability we feel. And Katie, this 189 00:10:53,440 --> 00:10:56,400 Speaker 1: isn't a political statement, but Joe Biden another Blue Hen, 190 00:10:56,520 --> 00:10:59,480 Speaker 1: I don't know, if you know that a lot of 191 00:10:59,520 --> 00:11:02,280 Speaker 1: us out there, well, it seems like a tough time 192 00:11:02,280 --> 00:11:05,600 Speaker 1: for Blue Hens. Then I don't know, like administration is 193 00:11:05,840 --> 00:11:09,560 Speaker 1: really worried about inflation. I mean kind of to that point. 194 00:11:09,640 --> 00:11:13,760 Speaker 1: I mean to think about what could bring confidence lower. 195 00:11:14,200 --> 00:11:16,080 Speaker 1: I mean, would it be inflation or what else do 196 00:11:16,080 --> 00:11:20,120 Speaker 1: you have in mind? So it could be inflation. I 197 00:11:20,160 --> 00:11:25,000 Speaker 1: tend to think that things like gas prices become a 198 00:11:25,080 --> 00:11:29,360 Speaker 1: really important test to to consumer sentiment at this point, 199 00:11:29,360 --> 00:11:31,720 Speaker 1: the same thing with food prices, the things that you 200 00:11:31,720 --> 00:11:35,800 Speaker 1: you can't control the quantity that you buy. So I 201 00:11:36,040 --> 00:11:39,400 Speaker 1: I I do think that some of the the the 202 00:11:39,440 --> 00:11:43,200 Speaker 1: basics could be factors. But you know, don't forget we 203 00:11:43,280 --> 00:11:46,520 Speaker 1: have in the backdrop to your political risk in Europe. 204 00:11:47,040 --> 00:11:51,880 Speaker 1: I tend to look less at the specific triggers then 205 00:11:52,080 --> 00:11:55,280 Speaker 1: our vulnerability to them, how we're how we would be 206 00:11:55,360 --> 00:11:58,400 Speaker 1: likely to react. I mean put it this way. You know, 207 00:11:58,480 --> 00:12:03,079 Speaker 1: if you had said to the crowd that Tom Hanks 208 00:12:03,080 --> 00:12:07,240 Speaker 1: getting COVID would create a collapse and sentiment. We we'd 209 00:12:07,240 --> 00:12:11,800 Speaker 1: all laugh. But that just happened to be the tipping 210 00:12:11,880 --> 00:12:17,320 Speaker 1: point that coalesced the vulnerability that we were feeling. And 211 00:12:17,320 --> 00:12:19,360 Speaker 1: so I think that's that's the kind of risk that 212 00:12:19,400 --> 00:12:22,560 Speaker 1: we face here today. But to me, Peter, it sounds 213 00:12:22,600 --> 00:12:25,200 Speaker 1: like your base case is more sort of the lady 214 00:12:25,280 --> 00:12:27,760 Speaker 1: of in the analogy, that that we have kind of 215 00:12:27,760 --> 00:12:30,360 Speaker 1: reached the bottom in in sentiment and it's bound to 216 00:12:30,400 --> 00:12:32,920 Speaker 1: perk up, and that you know, a deterioration is more 217 00:12:33,000 --> 00:12:35,560 Speaker 1: of a maybe not quite a te risk, but but 218 00:12:35,600 --> 00:12:38,320 Speaker 1: not quite the base cases that that sound right well, 219 00:12:38,559 --> 00:12:42,920 Speaker 1: I think broadly speaking, as I said, I think consumer 220 00:12:43,000 --> 00:12:46,120 Speaker 1: sentiment is a low, but I think it's also important 221 00:12:46,160 --> 00:12:50,920 Speaker 1: like to recognize how bifurcated that is, and so you 222 00:12:50,960 --> 00:12:54,840 Speaker 1: could see those at the bottom begin to feel much 223 00:12:54,880 --> 00:12:59,160 Speaker 1: better at the expense of those at the top. It 224 00:12:59,280 --> 00:13:02,560 Speaker 1: would be reflect did in higher overall consumer sentiment just 225 00:13:02,640 --> 00:13:07,920 Speaker 1: based on the numbers and how how extraordinarily concentrated wealth 226 00:13:08,040 --> 00:13:11,960 Speaker 1: is today, but you could see where confidence would rise 227 00:13:13,280 --> 00:13:16,079 Speaker 1: and in a situation where the markets are not happy 228 00:13:16,120 --> 00:13:19,000 Speaker 1: about that because it means that the pendulum has swung 229 00:13:19,120 --> 00:13:25,360 Speaker 1: from owners of capital two employees. And in this conversation, 230 00:13:25,400 --> 00:13:29,000 Speaker 1: I'm curious where you see the fixed income markets factoring in, 231 00:13:29,040 --> 00:13:30,439 Speaker 1: because if I look at the yield on a ten 232 00:13:30,520 --> 00:13:33,079 Speaker 1: year treasury right now, I mean, give or take, it's 233 00:13:33,120 --> 00:13:35,960 Speaker 1: around two per cent, which we haven't seen in a while. 234 00:13:36,160 --> 00:13:40,160 Speaker 1: You haven't really seen that overall haven bid for treasuries 235 00:13:40,200 --> 00:13:42,360 Speaker 1: that you know, one might expect to see listening to 236 00:13:42,440 --> 00:13:45,640 Speaker 1: this conversation. Yeah, and I think that's what's so weird 237 00:13:45,720 --> 00:13:49,440 Speaker 1: about the past year. Um. You know, one of the 238 00:13:49,480 --> 00:13:53,480 Speaker 1: things that I noticed was at the same time, you 239 00:13:53,559 --> 00:13:59,400 Speaker 1: had meme stocks soaring, but we had negative yielding sovereign 240 00:13:59,440 --> 00:14:02,560 Speaker 1: debts it and so you would say that's not a 241 00:14:02,600 --> 00:14:05,959 Speaker 1: combination that I think goes hand in hand. You know. 242 00:14:06,679 --> 00:14:09,119 Speaker 1: Now those are those who would say, well, free money 243 00:14:09,360 --> 00:14:12,839 Speaker 1: pumping the market, you know, But but let's get away 244 00:14:12,840 --> 00:14:17,079 Speaker 1: from those issues. I think that the broader question is, 245 00:14:17,600 --> 00:14:21,840 Speaker 1: you know, what does it mean if we've seen bond 246 00:14:21,920 --> 00:14:27,480 Speaker 1: prices and stock prices peak simultaneously and and there I 247 00:14:27,520 --> 00:14:32,160 Speaker 1: think that the nineteen seventies are an interesting parallel because 248 00:14:32,280 --> 00:14:35,600 Speaker 1: you saw the end of a low interest rate environment 249 00:14:36,040 --> 00:14:40,440 Speaker 1: simultaneous to a peaking in the in the equity market 250 00:14:40,880 --> 00:14:45,800 Speaker 1: and the consequences of rising bond yields and and rising 251 00:14:46,080 --> 00:14:49,800 Speaker 1: stock yields or stock prices or falling stock prices. One 252 00:14:49,800 --> 00:14:52,040 Speaker 1: of the things that we also saw in that environment, 253 00:14:52,800 --> 00:14:58,760 Speaker 1: we're concerns about systemic stability, trust in the system, you know, 254 00:14:58,760 --> 00:15:02,280 Speaker 1: whether it's watergate, so were the changing the dramatic changing 255 00:15:02,280 --> 00:15:04,720 Speaker 1: of the guard at the FED. You know that the 256 00:15:04,880 --> 00:15:09,080 Speaker 1: question will be how to investors interpret what this rise 257 00:15:09,120 --> 00:15:13,240 Speaker 1: in rates signifies. Right now, it's pretty clear we're associating 258 00:15:13,320 --> 00:15:16,600 Speaker 1: with inflation, but it becomes a very different story if 259 00:15:16,640 --> 00:15:20,960 Speaker 1: the signal means something different to the crowd. I'm glad 260 00:15:21,000 --> 00:15:23,320 Speaker 1: you brought up meme stocks, Peter. I know you've you've 261 00:15:23,360 --> 00:15:26,280 Speaker 1: thought about them a lot. That whole phenomenon we saw, 262 00:15:26,360 --> 00:15:29,160 Speaker 1: and I think it's especially interesting from your perspective as 263 00:15:29,200 --> 00:15:32,040 Speaker 1: a university professor. You know, I I just pictured all 264 00:15:32,080 --> 00:15:34,440 Speaker 1: your students coming up to you like you know, shot 265 00:15:34,560 --> 00:15:38,480 Speaker 1: by game stop or Shebau or what it seems to 266 00:15:38,520 --> 00:15:42,560 Speaker 1: me almost like nothing we've ever seen before, that that mania. 267 00:15:43,480 --> 00:15:45,120 Speaker 1: What was it like as a professor? I mean, is 268 00:15:45,120 --> 00:15:47,200 Speaker 1: it was everyone trading on Robin Hood in the middle 269 00:15:47,200 --> 00:15:49,440 Speaker 1: of class, and what's kind of the climate there now? 270 00:15:49,560 --> 00:15:51,760 Speaker 1: Is it all worn off as the fever broke. It 271 00:15:51,800 --> 00:15:54,080 Speaker 1: seems like it has based on the prices. But yeah, 272 00:15:54,080 --> 00:15:57,160 Speaker 1: they were trading in class and they were trading, you know, 273 00:15:57,200 --> 00:16:01,000 Speaker 1: initially the stocks, and they were moving into options. You know, 274 00:16:01,040 --> 00:16:04,240 Speaker 1: my my head just about exploded when students came up 275 00:16:04,240 --> 00:16:06,480 Speaker 1: to me and said, professor, I'm not making enough in 276 00:16:06,520 --> 00:16:10,720 Speaker 1: call options. What do you think about futures? And it's like, okay, 277 00:16:10,760 --> 00:16:15,440 Speaker 1: I think we're It's it's pretty clear that everybody is in. 278 00:16:15,520 --> 00:16:17,920 Speaker 1: Who's who's going to get in? And they were They 279 00:16:17,920 --> 00:16:22,720 Speaker 1: were unconvincible that they were wrong, which is another behavioral 280 00:16:22,760 --> 00:16:26,160 Speaker 1: trait that I that I always look for, is the 281 00:16:26,160 --> 00:16:30,720 Speaker 1: inability to consider the other side. No sentiment is clearly changed, 282 00:16:31,320 --> 00:16:34,040 Speaker 1: you know. I think there is still a sub segment 283 00:16:34,320 --> 00:16:38,640 Speaker 1: of the population that is fixated on the movement in 284 00:16:38,720 --> 00:16:42,760 Speaker 1: cryptocurrencies and n f t s, But the mania stage 285 00:16:42,840 --> 00:16:47,040 Speaker 1: is gone. And I think the moment Elon Musk get 286 00:16:47,120 --> 00:16:50,040 Speaker 1: walked onto the stage of Saturday Night Live, we sort 287 00:16:50,040 --> 00:16:54,400 Speaker 1: of saw the simultaneous peaking and culture and finance that 288 00:16:54,400 --> 00:16:58,320 Speaker 1: that marked the top. That was definitely the top of 289 00:16:58,440 --> 00:17:01,000 Speaker 1: so many things in our society, so many things that 290 00:17:01,040 --> 00:17:04,320 Speaker 1: we don't even know yet. But I'm curious to hear 291 00:17:04,320 --> 00:17:07,040 Speaker 1: a little bit more about your perspective as a professor, 292 00:17:07,080 --> 00:17:09,520 Speaker 1: because something I wonder about, and I've talked about a 293 00:17:09,520 --> 00:17:12,840 Speaker 1: little bit with various people, is that, you know, on 294 00:17:12,600 --> 00:17:16,240 Speaker 1: the on the the tail end of this roller coaster 295 00:17:16,880 --> 00:17:19,359 Speaker 1: of me Mania, coming down from those highs, you know, 296 00:17:19,400 --> 00:17:21,879 Speaker 1: a lot of people probably lost a lot of money, 297 00:17:21,880 --> 00:17:24,720 Speaker 1: probably a lot of people who were completely new to 298 00:17:24,800 --> 00:17:27,760 Speaker 1: markets and new to investing. And I mean the hope 299 00:17:27,840 --> 00:17:30,719 Speaker 1: is that, you know, perhaps I mean the optimistic view 300 00:17:30,800 --> 00:17:33,320 Speaker 1: is that perhaps they got involved in investing in trading 301 00:17:33,680 --> 00:17:38,280 Speaker 1: with me Mania, and they graduated onto maybe some more 302 00:17:38,720 --> 00:17:41,640 Speaker 1: types of wealth building. You know, maybe hopefully they bought 303 00:17:41,720 --> 00:17:44,280 Speaker 1: some index funds and put some cash there. But then 304 00:17:44,400 --> 00:17:46,719 Speaker 1: the more pessimistic view was, you know, perhaps a lot 305 00:17:46,760 --> 00:17:49,320 Speaker 1: of these people were burned and they've become a little 306 00:17:49,320 --> 00:17:53,280 Speaker 1: bit disenchanted with the stock market, with investing. I would 307 00:17:53,280 --> 00:17:55,720 Speaker 1: love to hear your perspective on that, especially someone who 308 00:17:55,800 --> 00:17:57,480 Speaker 1: you know, probably talks to a lot of people who 309 00:17:57,800 --> 00:18:02,240 Speaker 1: did get involved during one. Yeah, I think that the 310 00:18:02,680 --> 00:18:05,280 Speaker 1: novice and naive are always the last of the party, 311 00:18:05,280 --> 00:18:07,320 Speaker 1: and it's a it's a trend that I it's a 312 00:18:07,320 --> 00:18:10,600 Speaker 1: pattern I look for, um just in terms of broad 313 00:18:10,600 --> 00:18:15,400 Speaker 1: measures of sentiment. I worry about the migration that we've seen, 314 00:18:15,520 --> 00:18:19,600 Speaker 1: particularly among young people, is out of the stock market 315 00:18:20,200 --> 00:18:26,200 Speaker 1: and into online gambling. That the gamification that we saw 316 00:18:26,400 --> 00:18:32,040 Speaker 1: taking place in in online stock trading platforms has moved 317 00:18:32,359 --> 00:18:35,960 Speaker 1: to an environment that's even more familiar to young people, 318 00:18:36,440 --> 00:18:40,119 Speaker 1: more resonant with young people. And you know, you just 319 00:18:40,320 --> 00:18:44,640 Speaker 1: cannot talk to population of young people, particularly young men, 320 00:18:45,200 --> 00:18:48,399 Speaker 1: without quickly getting swept up into what are you what 321 00:18:48,480 --> 00:18:51,440 Speaker 1: are you betting on? You know this week? In whatever 322 00:18:51,520 --> 00:18:56,880 Speaker 1: the gamer event is. Yeah, that's interesting. There is such 323 00:18:56,920 --> 00:19:00,040 Speaker 1: an overlap, it seems like, you know, between the the 324 00:19:00,200 --> 00:19:03,320 Speaker 1: risk taking in in the meme stocks and gambling. It's 325 00:19:03,640 --> 00:19:07,160 Speaker 1: it's you can see people flipping between the same apps 326 00:19:07,200 --> 00:19:09,439 Speaker 1: and every day. I would imagine and think back, I 327 00:19:09,480 --> 00:19:12,280 Speaker 1: mean to the start of it and the whole the 328 00:19:12,320 --> 00:19:14,480 Speaker 1: whole reason that we were given for why we saw 329 00:19:14,600 --> 00:19:17,000 Speaker 1: such a flood into robin Hood and other apps is 330 00:19:17,040 --> 00:19:19,960 Speaker 1: because there weren't any live sports that people are looking 331 00:19:19,960 --> 00:19:24,000 Speaker 1: for an outlet. That's true. Yeah, I mean we we've 332 00:19:24,000 --> 00:19:27,439 Speaker 1: sort of merged Wall Street, Las Vegas, the metaverse, and 333 00:19:27,560 --> 00:19:33,879 Speaker 1: social media into this phenomenon of betting on everything, and 334 00:19:33,880 --> 00:19:37,159 Speaker 1: and some of that I think you can attribute to 335 00:19:37,920 --> 00:19:42,119 Speaker 1: sort of the pandemic nihilism that that we've seen elsewhere. 336 00:19:42,680 --> 00:19:46,760 Speaker 1: But but it's to me, it's a really troubling intersection 337 00:19:47,440 --> 00:19:52,200 Speaker 1: because of it what it all of the iconic figures 338 00:19:52,200 --> 00:19:54,639 Speaker 1: that have now been swept up into it, from sports 339 00:19:54,680 --> 00:19:58,800 Speaker 1: figures to Hollywood figures to political figures. We we've monetized 340 00:19:58,840 --> 00:20:03,000 Speaker 1: celebrity is such an extreme that there's there's a lot 341 00:20:03,040 --> 00:20:06,320 Speaker 1: more riding on this than just you know, housing prices. 342 00:20:06,920 --> 00:20:09,000 Speaker 1: We're in two thousand and five. This is this is 343 00:20:09,040 --> 00:20:13,879 Speaker 1: a big cultural phenomenon that transcends the markets and cuts 344 00:20:13,880 --> 00:20:17,160 Speaker 1: across all of American in many ways. I don't think 345 00:20:17,160 --> 00:20:20,080 Speaker 1: we yet understand, you know, Piterre, One thing I wanted 346 00:20:20,080 --> 00:20:21,840 Speaker 1: to unpack a little bit you You had a great 347 00:20:21,840 --> 00:20:24,840 Speaker 1: point in your email to us before the show about 348 00:20:25,040 --> 00:20:27,080 Speaker 1: how you're watching gold and I just want to read 349 00:20:27,080 --> 00:20:28,399 Speaker 1: a little bit of your email because I thought it 350 00:20:28,400 --> 00:20:30,320 Speaker 1: was a good line. He said. Even with the recent 351 00:20:30,440 --> 00:20:33,000 Speaker 1: rallying commodities, if you have found a reason to buy 352 00:20:33,040 --> 00:20:36,600 Speaker 1: precious metals. It's the buick in a sea of e vs. 353 00:20:36,880 --> 00:20:39,399 Speaker 1: Which I took my hat. That's a good line, But 354 00:20:39,440 --> 00:20:41,880 Speaker 1: I wonder what's going on there. I mean, obviously crypto 355 00:20:42,040 --> 00:20:46,400 Speaker 1: has been pitched as sort of digital gold. Um, it's 356 00:20:46,400 --> 00:20:50,600 Speaker 1: debatable whether it plays the same sort of role as 357 00:20:50,680 --> 00:20:53,040 Speaker 1: gold would in a portfolio, but I do think a 358 00:20:53,119 --> 00:20:55,280 Speaker 1: lot of people are subscribing to that idea. Is that 359 00:20:55,680 --> 00:20:57,280 Speaker 1: is that part of what's going on with gold, do 360 00:20:57,320 --> 00:20:59,840 Speaker 1: you think? Or is it? Is it something else? Yeah, 361 00:21:00,040 --> 00:21:02,159 Speaker 1: And just to be clear to listeners, I am not 362 00:21:02,240 --> 00:21:04,800 Speaker 1: a goldbug. I am not a you know, I'm a 363 00:21:04,840 --> 00:21:09,840 Speaker 1: pretty agnostic observer of things. And and what's been so 364 00:21:10,200 --> 00:21:13,760 Speaker 1: startling to me is that you look at the commodity space, 365 00:21:14,320 --> 00:21:17,159 Speaker 1: and you know, from from lumber to oil to iron 366 00:21:17,240 --> 00:21:21,680 Speaker 1: arts and you you name it, those commodity prices have exploded. 367 00:21:21,760 --> 00:21:25,639 Speaker 1: So this is this is a a product, an investment 368 00:21:25,640 --> 00:21:29,760 Speaker 1: that has been left out of every every mania we've 369 00:21:29,800 --> 00:21:35,120 Speaker 1: seen in the last three or four years. And and 370 00:21:35,160 --> 00:21:40,240 Speaker 1: we can attribute it to its old. It's stodgy, it's 371 00:21:40,280 --> 00:21:47,240 Speaker 1: the antithesis of cool. And until it reacts, people don't 372 00:21:47,240 --> 00:21:49,520 Speaker 1: know what to make of it. And and It's been 373 00:21:49,560 --> 00:21:52,600 Speaker 1: a fascinating thing to watch because we've had this enormous 374 00:21:52,680 --> 00:21:56,359 Speaker 1: multi year coil in gold. You know, I don't know 375 00:21:56,400 --> 00:21:59,000 Speaker 1: if it will resolve up or down, but what I've 376 00:21:59,400 --> 00:22:03,520 Speaker 1: learned avior release coils are like an enormous tug of 377 00:22:03,560 --> 00:22:09,639 Speaker 1: war where energy is expanded in vast amounts between the 378 00:22:09,680 --> 00:22:12,840 Speaker 1: bulls and the bears until one side finally let slots. 379 00:22:13,560 --> 00:22:15,840 Speaker 1: And so, as I said, I don't know which direction 380 00:22:15,880 --> 00:22:18,800 Speaker 1: it's going to be, but gold is going to give 381 00:22:18,920 --> 00:22:21,840 Speaker 1: us some science as to what is happening. As far 382 00:22:21,880 --> 00:22:39,359 Speaker 1: as sentiment, Peter, I wanted to quickly also go back to, 383 00:22:39,680 --> 00:22:41,320 Speaker 1: you know, a point you made that this could be 384 00:22:41,400 --> 00:22:44,439 Speaker 1: like the nineteen seventies and we might see, you know, 385 00:22:44,840 --> 00:22:48,000 Speaker 1: stock and bond prices peak at the same time. And 386 00:22:48,040 --> 00:22:50,199 Speaker 1: I have to admit I wasn't close to alive in 387 00:22:50,200 --> 00:22:52,840 Speaker 1: the nineteen seventies, so I'd love to hear you know, 388 00:22:52,920 --> 00:22:56,720 Speaker 1: where was the hiding place? Then what was the haven asset? Then? 389 00:22:57,520 --> 00:23:03,280 Speaker 1: So the haven asset was gold, behaving asset were real assets, 390 00:23:03,960 --> 00:23:08,120 Speaker 1: and I think that's real assets. I think of as 391 00:23:08,160 --> 00:23:12,680 Speaker 1: a as a counter point to all of the abstraction 392 00:23:13,359 --> 00:23:18,520 Speaker 1: that we have. So eagerly embraced in this cycle. And 393 00:23:18,520 --> 00:23:22,600 Speaker 1: and that abstraction is in many ways a mirror of 394 00:23:22,680 --> 00:23:25,879 Speaker 1: the kinds of abstractions we saw in the in the 395 00:23:26,000 --> 00:23:30,040 Speaker 1: nineteen sixties. You know, we've got space again, We've got 396 00:23:30,359 --> 00:23:33,360 Speaker 1: you know, in this case, it's social media, not television, 397 00:23:33,480 --> 00:23:37,439 Speaker 1: and and you know, the internet, not you know, telephone. 398 00:23:38,000 --> 00:23:43,640 Speaker 1: But there's a clear series of behavioral parallels leading up 399 00:23:43,680 --> 00:23:48,280 Speaker 1: to what's happening now that we saw in the nineteen sixties. 400 00:23:48,320 --> 00:23:51,600 Speaker 1: And and you know, again not surprising to see the 401 00:23:51,680 --> 00:23:56,159 Speaker 1: same kinds of social tensions political tensions playing out now 402 00:23:56,920 --> 00:24:03,280 Speaker 1: because we're we're feeling the same way from a confidence perspective, right, Katie, 403 00:24:03,280 --> 00:24:05,760 Speaker 1: I'm glad he brought up space. That's a good teaser 404 00:24:05,800 --> 00:24:08,960 Speaker 1: for my craziest thing of the week. But we're not 405 00:24:09,040 --> 00:24:10,719 Speaker 1: there yet, because I do want to I do want 406 00:24:10,720 --> 00:24:13,320 Speaker 1: to rewind a little bit, Peter and ask you um 407 00:24:13,440 --> 00:24:16,240 Speaker 1: to elaborate on a little something you just mentioned about 408 00:24:16,240 --> 00:24:21,000 Speaker 1: sort of this uneasiness that especially the political nature of confidence. 409 00:24:21,040 --> 00:24:26,159 Speaker 1: You know, you mentioned the Republican confidence sank, Democratic confidence 410 00:24:26,359 --> 00:24:29,960 Speaker 1: uh went higher after the auction, and that's not you know, 411 00:24:30,000 --> 00:24:33,800 Speaker 1: I I've looked at the University of Michigan Partisan Confidence Indexes. 412 00:24:34,040 --> 00:24:36,560 Speaker 1: It's not any unusual thing for that to happen, but 413 00:24:36,760 --> 00:24:39,560 Speaker 1: the extent that had happened, I think he's off the charts, 414 00:24:39,640 --> 00:24:42,280 Speaker 1: like like nothing, nothing we've ever seen. And you know, 415 00:24:42,280 --> 00:24:44,719 Speaker 1: all of a sudden, you see protesters from the right 416 00:24:44,760 --> 00:24:47,159 Speaker 1: side of the aisle, you know, January six and the 417 00:24:47,240 --> 00:24:50,800 Speaker 1: and the truckers protests in Canada. You know, something new 418 00:24:50,800 --> 00:24:53,719 Speaker 1: that we You know, I've never remember anything like this 419 00:24:53,760 --> 00:24:56,080 Speaker 1: in my lifetime, you know, I don't. I don't remember 420 00:24:56,080 --> 00:24:58,520 Speaker 1: anyone hitting the streets after Bill Clinton was elected or 421 00:24:58,560 --> 00:25:01,960 Speaker 1: anything like that. But I'm serious. What you think two things? 422 00:25:02,000 --> 00:25:04,119 Speaker 1: What do you think's driving that? I mean, to me, 423 00:25:04,160 --> 00:25:06,479 Speaker 1: as from my perspective in the media, it seems like 424 00:25:06,520 --> 00:25:10,879 Speaker 1: this this really bifurcated media atmosphere we have with you know, 425 00:25:10,960 --> 00:25:13,639 Speaker 1: right wing news and left wing news and really seems 426 00:25:13,640 --> 00:25:17,320 Speaker 1: to be you know, getting further and further apart and suckily. 427 00:25:17,320 --> 00:25:20,199 Speaker 1: I like, how does this resolve itself in markets? Is 428 00:25:20,200 --> 00:25:23,000 Speaker 1: it is it at play as as a sort of 429 00:25:23,119 --> 00:25:25,119 Speaker 1: driver of anything in markets, do you think? Or is 430 00:25:25,160 --> 00:25:28,800 Speaker 1: it just a sideshow? So a couple of things, you know, 431 00:25:29,600 --> 00:25:34,199 Speaker 1: the way I think of politics and confidence relates to 432 00:25:34,960 --> 00:25:38,080 Speaker 1: a broader thought, which is, when I don't have confidence, 433 00:25:38,280 --> 00:25:40,200 Speaker 1: the only thing I care about is me here now. 434 00:25:41,200 --> 00:25:43,679 Speaker 1: You know, if I'm vulnerable, if I'm under attack, I 435 00:25:43,720 --> 00:25:46,320 Speaker 1: don't care about you or anywhere else or any time 436 00:25:46,359 --> 00:25:49,800 Speaker 1: in the future. On the other hand, when I'm really confident, 437 00:25:50,400 --> 00:25:54,919 Speaker 1: it's about us. It's about you know, a broad you know, 438 00:25:55,000 --> 00:25:57,600 Speaker 1: expansive world and will into the future. We can we 439 00:25:57,600 --> 00:26:01,159 Speaker 1: can afford to be generous. And so what we've seen 440 00:26:01,960 --> 00:26:06,760 Speaker 1: is an environment of extraordinary political generosity in the United States, 441 00:26:06,800 --> 00:26:09,240 Speaker 1: in Europe, you know, the coming together of the Eurozone. 442 00:26:09,600 --> 00:26:14,679 Speaker 1: You know, Bill Clinton being all but indistinguishable from Georgie W. Bush. 443 00:26:14,720 --> 00:26:18,600 Speaker 1: I mean, we we had and an environment of us 444 00:26:18,640 --> 00:26:22,760 Speaker 1: everywhere forever politics, and there's a great Time magazine cover, 445 00:26:23,280 --> 00:26:24,720 Speaker 1: you know, from a couple of years ago, you know, 446 00:26:24,800 --> 00:26:26,760 Speaker 1: the center of the place to be, which is hard 447 00:26:26,800 --> 00:26:32,639 Speaker 1: to imagine today. And as confidence falls, we naturally come apart, 448 00:26:33,600 --> 00:26:38,280 Speaker 1: We balkanize, We become about the people that are most 449 00:26:38,359 --> 00:26:40,960 Speaker 1: familiar to me, that feel the same way that I do. 450 00:26:41,640 --> 00:26:45,680 Speaker 1: You know, the the is m ng of of the population. 451 00:26:45,760 --> 00:26:47,720 Speaker 1: And I think that's one of the things that confuses 452 00:26:47,800 --> 00:26:50,000 Speaker 1: people is we want to be very clear that it's 453 00:26:50,080 --> 00:26:53,160 Speaker 1: left versus right or up versus down, and and that's 454 00:26:53,200 --> 00:26:56,879 Speaker 1: not how we skis them. It's never a clean break 455 00:26:56,960 --> 00:27:00,520 Speaker 1: like that, and we it becomes more of my enemies 456 00:27:00,560 --> 00:27:04,439 Speaker 1: my enemy sort of a mindset. And so if I 457 00:27:04,480 --> 00:27:09,280 Speaker 1: think about politics in its current version, which you know 458 00:27:09,320 --> 00:27:12,840 Speaker 1: we would think of as left versus right, a more 459 00:27:13,119 --> 00:27:17,840 Speaker 1: capitalist versus a more socialists market environment, and I think 460 00:27:17,920 --> 00:27:21,800 Speaker 1: that we could see things play out that way. I'm 461 00:27:21,880 --> 00:27:25,560 Speaker 1: more interested not left and right, but how to up 462 00:27:25,600 --> 00:27:29,160 Speaker 1: and down resolve because that's that, to me, is where 463 00:27:29,200 --> 00:27:35,400 Speaker 1: the greatest differences in American culture today. You know, there's 464 00:27:35,440 --> 00:27:39,280 Speaker 1: a lot that potentially could unify and coalesce those at 465 00:27:39,280 --> 00:27:44,280 Speaker 1: the bottom, that that is underappreciated today, that that would 466 00:27:44,280 --> 00:27:47,919 Speaker 1: make those at the top feel far more vulnerable. I 467 00:27:48,080 --> 00:27:52,560 Speaker 1: tend to look at where do we see small groups 468 00:27:52,600 --> 00:27:57,639 Speaker 1: coming together, because what's likely to happen is you'll see 469 00:27:57,680 --> 00:28:04,840 Speaker 1: these big goliaths being upended by small, grassroots groups that resonate. 470 00:28:05,400 --> 00:28:08,080 Speaker 1: We saw that eighteen months ago with the Black Lives 471 00:28:08,080 --> 00:28:11,600 Speaker 1: Matter movement. You know, there was no centralized figger, but 472 00:28:11,760 --> 00:28:17,040 Speaker 1: there was this spontaneous feeling of shared voicelessness and vulnerability 473 00:28:17,440 --> 00:28:22,080 Speaker 1: that all of a sudden spread across city after city. 474 00:28:23,200 --> 00:28:25,879 Speaker 1: And I mean, while we're on the subject of politics, 475 00:28:25,960 --> 00:28:27,679 Speaker 1: I feel like we have to mention the fact that, 476 00:28:27,720 --> 00:28:31,240 Speaker 1: you know, you do have mid term elections coming up somehow. 477 00:28:31,280 --> 00:28:34,680 Speaker 1: You know, a lot of predictions are for a divided 478 00:28:34,720 --> 00:28:37,520 Speaker 1: Congress coming out of those elections. What do you think 479 00:28:37,520 --> 00:28:40,680 Speaker 1: that would do to you know, confidence and sentiment and 480 00:28:41,120 --> 00:28:45,920 Speaker 1: the markets largely. So, I think election outcomes are a 481 00:28:45,960 --> 00:28:49,800 Speaker 1: reflection of it rather than a contributor to it. So 482 00:28:50,200 --> 00:28:53,560 Speaker 1: I what what we tend to find is that it's 483 00:28:53,600 --> 00:28:57,000 Speaker 1: the mood going into the polls that matters, not the 484 00:28:57,040 --> 00:29:01,560 Speaker 1: mood coming out of the polls. So I tend to 485 00:29:01,640 --> 00:29:04,320 Speaker 1: think that a lot of what we think of as 486 00:29:04,360 --> 00:29:11,920 Speaker 1: being causal conditions are really consequences of how we felt 487 00:29:12,280 --> 00:29:14,760 Speaker 1: leading up to them. For example, you know, we think 488 00:29:14,760 --> 00:29:18,400 Speaker 1: of nine eleven is causing American confidence to fall. Well, 489 00:29:18,440 --> 00:29:20,880 Speaker 1: if you look at the confidence across the Middle East 490 00:29:20,880 --> 00:29:24,200 Speaker 1: in that moment, it becomes pretty clear that that would 491 00:29:24,240 --> 00:29:28,840 Speaker 1: be a contributor to terrorist attacks, you know, the the 492 00:29:28,960 --> 00:29:34,160 Speaker 1: food inflation contributing to the the Arab spring. You know, 493 00:29:34,400 --> 00:29:37,400 Speaker 1: a couple of years later, so I tend to look 494 00:29:37,400 --> 00:29:40,720 Speaker 1: at a lot of social behavior as a consequence of 495 00:29:40,760 --> 00:29:44,400 Speaker 1: the feelings that then just gets reported on a on 496 00:29:44,440 --> 00:29:49,120 Speaker 1: a tally board. So if we see confidence rise between 497 00:29:49,160 --> 00:29:54,360 Speaker 1: now and November, you should expect incumbents and those on 498 00:29:54,400 --> 00:29:59,480 Speaker 1: the left doing better. If confidence were to fall, then 499 00:30:00,040 --> 00:30:03,480 Speaker 1: that's an environment where we are where the view out, 500 00:30:03,640 --> 00:30:06,800 Speaker 1: the incumbents, get rid of the people in office give 501 00:30:07,200 --> 00:30:09,960 Speaker 1: we vote people out when confidence is low. We don't 502 00:30:09,960 --> 00:30:13,080 Speaker 1: care who we vote in. It's it's the action of 503 00:30:13,080 --> 00:30:16,840 Speaker 1: of destruction and elimination that that we become fixated on. 504 00:30:17,280 --> 00:30:19,080 Speaker 1: That's that's when we I guess we should get ready 505 00:30:19,120 --> 00:30:21,640 Speaker 1: for truckers to show up in the Holland Tunnel or something, 506 00:30:21,800 --> 00:30:25,760 Speaker 1: or you know, in the beltway around d C. Yeah. That, 507 00:30:25,880 --> 00:30:29,440 Speaker 1: and and social protest is a great indicator of where 508 00:30:29,480 --> 00:30:32,680 Speaker 1: mood is going well, whether it's you know, the yellow 509 00:30:32,760 --> 00:30:37,000 Speaker 1: vests in France or the Arab springer, the trucker striking 510 00:30:37,640 --> 00:30:41,840 Speaker 1: in Canada today. Fascinating stuff, Peter. You know Katie as 511 00:30:41,880 --> 00:30:44,400 Speaker 1: the father of our prospective college student. I gotta tell you, 512 00:30:44,480 --> 00:30:46,440 Speaker 1: normally you have to spend a fortune for insights like 513 00:30:46,520 --> 00:30:48,320 Speaker 1: this from a from a good professor like this, so 514 00:30:48,360 --> 00:30:51,720 Speaker 1: we we we appreciate it. The twih and free uh 515 00:30:51,800 --> 00:30:54,680 Speaker 1: download from Peter this week really interesting. Hopefully a lot 516 00:30:54,720 --> 00:30:58,440 Speaker 1: of college students are listening to this podcast right now. Yeah, 517 00:30:58,560 --> 00:31:02,560 Speaker 1: they got a free one. It tiden up your straight jackets. 518 00:31:02,680 --> 00:31:06,920 Speaker 1: It's time for the craziest things we saw in markets 519 00:31:07,160 --> 00:31:10,040 Speaker 1: this week. Before we let them go, we have to 520 00:31:10,520 --> 00:31:13,800 Speaker 1: uh continue one with our tradition of the craziest things 521 00:31:14,080 --> 00:31:17,680 Speaker 1: we saw this week. Katie. I always have high hopes 522 00:31:17,720 --> 00:31:20,360 Speaker 1: for you. I know, you come with something good for 523 00:31:20,440 --> 00:31:23,040 Speaker 1: the craziest thing you're You're grimacing there a little bit. 524 00:31:23,520 --> 00:31:25,520 Speaker 1: You might be under prepared this week. I don't know. 525 00:31:25,680 --> 00:31:27,480 Speaker 1: Bill Doota will let you know. We'll let you hear 526 00:31:27,480 --> 00:31:29,960 Speaker 1: about it if you do not deliver. I know, I know, well, 527 00:31:30,040 --> 00:31:32,520 Speaker 1: I I do feel like I'm flying a little bit 528 00:31:32,560 --> 00:31:33,840 Speaker 1: by the seat of my pants when it comes to 529 00:31:33,880 --> 00:31:37,600 Speaker 1: the crazy thing this market. But I'm gonna go straight 530 00:31:37,680 --> 00:31:41,120 Speaker 1: to a story from Joe wisen Vall. The headline says 531 00:31:41,160 --> 00:31:45,320 Speaker 1: it all. Hilton has now nearly outperformed Zoom Video since 532 00:31:45,400 --> 00:31:48,600 Speaker 1: the pandemic hit. Both of those docks are up about 533 00:31:48,720 --> 00:31:52,560 Speaker 1: a hundred and forty percent since the depths of March, 534 00:31:53,440 --> 00:31:56,720 Speaker 1: which I just think is a really neat encapsulation of 535 00:31:56,840 --> 00:31:59,200 Speaker 1: you know, you know, all of the steam that has 536 00:31:59,200 --> 00:32:01,560 Speaker 1: come out of some of these pandemic favorites. I mean, 537 00:32:01,560 --> 00:32:05,120 Speaker 1: you saw that with Shopify and Roadblocks earnings just this week. 538 00:32:05,440 --> 00:32:08,520 Speaker 1: That signal anything to you, Peter? Are people gaining confidence 539 00:32:08,600 --> 00:32:13,080 Speaker 1: that this pandemics the worst is behind us? Well? You know, 540 00:32:13,160 --> 00:32:16,200 Speaker 1: I for a long time I've been using Carnival Cruise 541 00:32:16,280 --> 00:32:21,280 Speaker 1: lines as my main street sentiment indicator, and you know 542 00:32:21,360 --> 00:32:26,160 Speaker 1: that one still leaves me thinking that we're we're still unresolved, 543 00:32:26,520 --> 00:32:29,280 Speaker 1: that that there is a there's a coil of of 544 00:32:29,400 --> 00:32:33,440 Speaker 1: tension between you know, can we believe this to be true, 545 00:32:33,480 --> 00:32:35,920 Speaker 1: that the worst is behind us? Or do we still 546 00:32:35,960 --> 00:32:38,360 Speaker 1: feel like we have one foot on the banana? Yeah? Interesting? 547 00:32:38,360 --> 00:32:41,160 Speaker 1: I mean that talk about ground zero of the COVID 548 00:32:41,200 --> 00:32:44,400 Speaker 1: in the market. That's it. That's pretty good. Alright, good 549 00:32:44,400 --> 00:32:47,200 Speaker 1: one to watch. Yeah, I forgot about them. How about you, Peter, 550 00:32:47,280 --> 00:32:49,080 Speaker 1: you see anything crazy this week? I know that's a 551 00:32:49,080 --> 00:32:51,840 Speaker 1: silly question. We probably should switch it. Have you seen 552 00:32:51,920 --> 00:32:54,960 Speaker 1: seen anything rational this week? But what's what's the craziest 553 00:32:55,000 --> 00:32:57,200 Speaker 1: thing you saw? So so, one of the things that's 554 00:32:57,200 --> 00:33:00,560 Speaker 1: really caught my attention. And this is the former treasure 555 00:33:00,600 --> 00:33:04,760 Speaker 1: in me who's always interested in in mismatches. Is the 556 00:33:05,240 --> 00:33:10,800 Speaker 1: private equity fascination now with with overnight rental, you know, 557 00:33:10,840 --> 00:33:16,440 Speaker 1: whether it's buying homes or vacation properties. And we've gone 558 00:33:16,480 --> 00:33:21,320 Speaker 1: from you know, buying homes to buying homes for for 559 00:33:21,600 --> 00:33:25,800 Speaker 1: long term rentals, to now short term rentals to now 560 00:33:25,880 --> 00:33:30,360 Speaker 1: overnight and and I I struggle with that just because 561 00:33:30,960 --> 00:33:35,560 Speaker 1: you know, the liquidity difference, the mismatch. If we see 562 00:33:35,560 --> 00:33:39,600 Speaker 1: any sort of deflation, it just boggles my mind at 563 00:33:39,640 --> 00:33:44,240 Speaker 1: our our willingness to ignore long term assets that we're 564 00:33:44,280 --> 00:33:48,080 Speaker 1: pricing overnight. It's basically funding a bank with commercial paper 565 00:33:48,760 --> 00:33:52,680 Speaker 1: in my books, which you just never do. I forgot 566 00:33:52,720 --> 00:33:54,800 Speaker 1: about your bank your days. You were bank one, right, 567 00:33:55,440 --> 00:33:58,000 Speaker 1: bank Lie and JP Morgan a long time before the 568 00:33:58,080 --> 00:34:03,000 Speaker 1: roll up. Interesting, Well, that's a banker's instinct. Is probably 569 00:34:03,000 --> 00:34:05,400 Speaker 1: a good way to a good thing to keep in 570 00:34:05,560 --> 00:34:08,160 Speaker 1: mind whenever looking at the market. So that's uh, that's 571 00:34:08,160 --> 00:34:09,839 Speaker 1: a smart way to do it. And I'm gonna give 572 00:34:09,840 --> 00:34:12,640 Speaker 1: you my craziest thing, as I teased it, it is 573 00:34:12,680 --> 00:34:17,160 Speaker 1: space related, Katie Um. And this is courtesy of stories 574 00:34:17,200 --> 00:34:21,160 Speaker 1: both Bloomberg, Forbes, probably some others had it. But apparently 575 00:34:21,880 --> 00:34:27,080 Speaker 1: among the cryptocurrency millionaires out there, another asset class has 576 00:34:27,120 --> 00:34:32,319 Speaker 1: become very popular too. So you spend your crypto millions on, 577 00:34:32,520 --> 00:34:38,399 Speaker 1: and that is meteorites. So Christie's recently had a meteorite 578 00:34:38,520 --> 00:34:44,560 Speaker 1: auction several meteorites and meteorite related items, including and this 579 00:34:44,640 --> 00:34:48,359 Speaker 1: is the craziest one, a doghouse that was hit by 580 00:34:48,360 --> 00:34:51,239 Speaker 1: a meteorite and the meteorite went right through the roof 581 00:34:51,280 --> 00:34:54,800 Speaker 1: of it almost killed the German shepherd named Rokey who's 582 00:34:54,960 --> 00:34:58,920 Speaker 1: sleeping inside. Yeah, as regular listeners will know, it's time 583 00:34:58,960 --> 00:35:03,160 Speaker 1: to play prices right on what Christie's expects. This meteorite 584 00:35:03,320 --> 00:35:06,680 Speaker 1: hit doghouse well self ware at auction, and I will 585 00:35:06,719 --> 00:35:09,279 Speaker 1: tell you it's nothing to brag about this doghouse. I 586 00:35:09,520 --> 00:35:12,000 Speaker 1: saw a picture of it. It was basically made out 587 00:35:12,000 --> 00:35:16,360 Speaker 1: of old shipping palettes and like corrugated sheet metal, but 588 00:35:16,400 --> 00:35:19,640 Speaker 1: obviously pretty starry doghouse. I mean it survived a meteorite strike. 589 00:35:20,360 --> 00:35:22,160 Speaker 1: Does it come with an n f T. It's not, 590 00:35:22,239 --> 00:35:24,399 Speaker 1: it's it's how you hat an n f T. I'm 591 00:35:24,440 --> 00:35:27,400 Speaker 1: sure we'll be soon. What do you think Christie's expected 592 00:35:27,560 --> 00:35:30,560 Speaker 1: price sales price, and it's a range, so you can 593 00:35:30,560 --> 00:35:32,840 Speaker 1: give me a range. I don't know if this helps, 594 00:35:32,880 --> 00:35:35,000 Speaker 1: but the actual meteor right that went through the roof 595 00:35:35,040 --> 00:35:37,960 Speaker 1: of it is only expected to go for sixty. But 596 00:35:38,040 --> 00:35:40,279 Speaker 1: the doghouse is the real star of the auction. So 597 00:35:40,480 --> 00:35:43,000 Speaker 1: I'm maybe given away too much information here, Katie. What's 598 00:35:43,000 --> 00:35:48,040 Speaker 1: your bid on a doghouse with a hole in the 599 00:35:48,120 --> 00:35:51,000 Speaker 1: roof from a meteorite? Keeping in mind that, uh, and 600 00:35:51,000 --> 00:35:53,320 Speaker 1: I'll give you a great quote from the Ford story 601 00:35:53,560 --> 00:35:55,960 Speaker 1: on it. A personal Christie said, last year a lot 602 00:35:56,000 --> 00:35:58,799 Speaker 1: of people were cashing out crypto and going into meteorites. 603 00:35:59,320 --> 00:36:01,840 Speaker 1: So it's a hot asset class right now among the 604 00:36:01,920 --> 00:36:04,719 Speaker 1: laser rides set out there. Okay, so I mean I 605 00:36:04,760 --> 00:36:08,400 Speaker 1: have to knock a couple hundred thousand off because it's 606 00:36:08,400 --> 00:36:10,480 Speaker 1: it's a physical object and it's not in en f 607 00:36:10,560 --> 00:36:13,120 Speaker 1: T that's true n f T four and would probably 608 00:36:13,160 --> 00:36:15,960 Speaker 1: double or triple it for sure, Yeah, exactly, Okay, Okay, 609 00:36:16,080 --> 00:36:18,600 Speaker 1: so it's the range. I'm gonna say eight hundred thousand 610 00:36:18,680 --> 00:36:22,600 Speaker 1: to a million dollars, all right, I'm keeping my poker face. Peter, 611 00:36:22,719 --> 00:36:26,799 Speaker 1: what's your what's your bid on this doghouse. Prices right, 612 00:36:26,880 --> 00:36:30,200 Speaker 1: rules are in effect, so take that for what it's worth. 613 00:36:30,360 --> 00:36:32,799 Speaker 1: So I'm gonna go five hundred to seven fifty. I'm 614 00:36:32,800 --> 00:36:35,520 Speaker 1: gonna I'm gonna go the low end. You know, today, 615 00:36:35,560 --> 00:36:39,440 Speaker 1: anything's possible. I will say Christie's would love to have 616 00:36:39,480 --> 00:36:41,719 Speaker 1: both of you in the audience of this auction. They're 617 00:36:41,840 --> 00:36:44,560 Speaker 1: estimating two hundred to three hundred thousand. I could see 618 00:36:44,560 --> 00:36:46,120 Speaker 1: it going for more, though, I think we'll have to 619 00:36:46,200 --> 00:36:47,839 Speaker 1: check back on this. I think when you guys could 620 00:36:47,840 --> 00:36:53,960 Speaker 1: be could be in the right, that's value stock. You 621 00:36:54,000 --> 00:36:57,360 Speaker 1: should be able to get much more for that. But 622 00:36:57,400 --> 00:36:59,200 Speaker 1: the problem is you you let your dogs sleep in there, 623 00:36:59,239 --> 00:37:00,560 Speaker 1: and it's got a hole in the roof. He's gonna 624 00:37:00,600 --> 00:37:02,640 Speaker 1: get rained on. So I don't know. It's uh. But 625 00:37:03,080 --> 00:37:05,359 Speaker 1: with that said, that is the craziest thing I saw 626 00:37:05,400 --> 00:37:07,799 Speaker 1: this week, and I think that's all we have time for. 627 00:37:08,000 --> 00:37:11,680 Speaker 1: But Peter, great to catch up with you. Fascinating conversation 628 00:37:11,680 --> 00:37:14,200 Speaker 1: and I hope we can have you back someday. And Katie, 629 00:37:14,200 --> 00:37:17,640 Speaker 1: you know, I'll always be coming to when Bilbonna is 630 00:37:17,680 --> 00:37:20,560 Speaker 1: off galvanning around the world whenever she wants to go 631 00:37:20,640 --> 00:37:24,400 Speaker 1: to Portugal, I'm right here eating cauliflower on all the 632 00:37:24,440 --> 00:37:28,560 Speaker 1: world's Thanks Black, Thanks Katie, thanks so much, guys, Thanks peer, 633 00:37:37,320 --> 00:37:39,440 Speaker 1: What Goes Up. We'll be back next week AND's so 634 00:37:39,560 --> 00:37:41,960 Speaker 1: then you can find us on the Bloomberg Terminal website 635 00:37:42,000 --> 00:37:45,319 Speaker 1: and app or wherever you get your podcast. We love 636 00:37:45,360 --> 00:37:47,000 Speaker 1: it if you took the time to rate and review 637 00:37:47,040 --> 00:37:50,000 Speaker 1: the show on Apple podcast so more listeners can find us. 638 00:37:50,640 --> 00:37:53,359 Speaker 1: And you can find us on Twitter follow me at Reaganonymous. 639 00:37:53,760 --> 00:37:57,399 Speaker 1: Katie Greifeld is at k Greifeld. You can also follow 640 00:37:57,400 --> 00:38:01,000 Speaker 1: Bloomberg Podcasts at podcasts and thank you to Charlie Pellet 641 00:38:01,040 --> 00:38:04,719 Speaker 1: to Bloomberg Radio. What Goes Up is produced by Laura Carlson. 642 00:38:04,880 --> 00:38:08,400 Speaker 1: The head of Bloomberg Podcasts is Francesco Leavie. Thanks for listening, 643 00:38:08,600 --> 00:38:09,359 Speaker 1: See you next time.