WEBVTT - Silver Breaks Out. Oil Breaks Down. Markets Hold Their Breath.

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, Radio News. Welcome to Marrin Drugs

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<v Speaker 1>Money Market's Wrap, where we talk about the biggest moves

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<v Speaker 1>in the markets this week and what is driving them.

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<v Speaker 1>I'm Marin Zum's, a Web editor at Large for Bloomberg.

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<v Speaker 2>UK Wealth, and I'm joined Stevic, Senior report at Bloomberg

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<v Speaker 2>and the author of the multi award winning Money Distilled newsletter.

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<v Speaker 1>And the audience rolls their eyes as one.

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<v Speaker 2>That's what I like to hear.

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<v Speaker 1>Ah Now, John listen, I was supposed to be talking about

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<v Speaker 1>the biggest moves in the markets, and this week there

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<v Speaker 1>really is one. I know you watched Silver very closely.

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<v Speaker 1>You love silver, and it's sixty dollars. Sixty dollars is

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<v Speaker 1>what's happening.

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<v Speaker 2>It was funny because earlier today I was looking at

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<v Speaker 2>it and I was like, oh, my goodness, silver's above

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<v Speaker 2>sixty dollars announce And it was also it was actually

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<v Speaker 2>me and my wife's twenty fifth went anniversary this year.

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<v Speaker 1>Oh is that silver?

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<v Speaker 2>It was silver eye. And the thing is I bought

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<v Speaker 2>or something silver for the anniversary and it was back

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<v Speaker 2>in the first half of the year and I realized

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<v Speaker 2>that silver has basically doubled since I bought that anniversary presence,

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<v Speaker 2>and then I wonder how I can ask her if

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<v Speaker 2>we can pull it.

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<v Speaker 1>She's probably done it already.

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<v Speaker 2>Jump that's roightly. I was like, oh, your here's looking nice. Ah,

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<v Speaker 2>that'll be wow.

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<v Speaker 1>Trust me, if you bought something nice, you got a

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<v Speaker 1>lot more for it than you had.

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<v Speaker 2>Maybe not, but yees. So it's been quite the suge

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<v Speaker 2>for silver, and obviously gold to the Great Year as well.

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<v Speaker 2>But yeah, Silver's just the one that keeps blowing my

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<v Speaker 2>mind slightly because it's never been above fifty dollars announced

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<v Speaker 2>for a sustained period of time, and now it seems

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<v Speaker 2>to be.

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<v Speaker 1>Oh, that'd be fat. Gold never been about four thousand

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<v Speaker 1>dollars for a sustame period of time, So we're all

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<v Speaker 1>in the zone here.

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<v Speaker 2>Well this is true. But silver's get that thing where

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<v Speaker 2>it actually did hit fifty or nearly hit fifty and

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<v Speaker 2>ninety far back is innineteen eighty and you always think, okay,

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<v Speaker 2>now we're going to come to the point where it

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<v Speaker 2>all collapses. But it seems we're in a new paradigm,

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<v Speaker 2>and basically I think that's because we are back to

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<v Speaker 2>inflationary environment, and it keeps gradually driveling into the market's

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<v Speaker 2>consciousness that this isn't just going to go away, this

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<v Speaker 2>is the new normal for the foreseeable future. Really that

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<v Speaker 2>the backdrop is more of an inflation risk than a

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<v Speaker 2>deflation risk.

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<v Speaker 1>Okay, this controversy that isn't there, and there's some people

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<v Speaker 1>at that who think we're moving into a new deflationary environment.

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<v Speaker 1>But you and I were natural inflation is somewhere because

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<v Speaker 1>we can't see any way out of the global DT problem.

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<v Speaker 2>I think there are individual things that could happen to

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<v Speaker 2>trigger bouts of deflation, and obviously every session is sort

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<v Speaker 2>of deflationary. But I think the overall where we are

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<v Speaker 2>it dictates that politics is going to be inflationary, and

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<v Speaker 2>I think that is fundamentally why I would expect more

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<v Speaker 2>inflation going forward rather than less. And I do think

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<v Speaker 2>that one issue or one problem at the moment is

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<v Speaker 2>that governments are simultaneously so governments are very indebted. They're

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<v Speaker 2>aware at some level that the best way to get

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<v Speaker 2>rid of the debt is to have nominal GDP growth

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<v Speaker 2>which is high, so that you you know, even if

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<v Speaker 2>real GDP growth is low, it doesn't matter. The main

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<v Speaker 2>thing is that you're growing fast enough to pay back

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<v Speaker 2>the debt faster than it's building up.

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<v Speaker 1>Yeah, well they just speA clear real GDP matters to

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<v Speaker 1>real people people.

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<v Speaker 2>Yeah, we'll talk just government. Yeah, how the government can

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<v Speaker 2>soft default on its debt basically, so encouraging a higher

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<v Speaker 2>level inflation is a good thing for them, put their

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<v Speaker 2>point of view. At the same time, they know the

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<v Speaker 2>cost of living a noise voters, and I think the

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<v Speaker 2>trade off there is, and we're already starting to see

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<v Speaker 2>it is going to be something basically price controls. Not

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<v Speaker 2>over price controls necessarily, but more and more things slipping

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<v Speaker 2>in Like I mean, like for example, Rachel Reeves freezing

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<v Speaker 2>the kind of the train tickets and the budget and

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<v Speaker 2>various other kind of minor moves that are short tail

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<v Speaker 2>moves to make inflation look lower than as for the

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<v Speaker 2>next year, say like the Bank of England thinks it

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<v Speaker 2>will cut about half a percentage point off headline inflation.

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<v Speaker 2>But that's only for next year.

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<v Speaker 1>But it's interesting, isn't it. Because one thing we do

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<v Speaker 1>know about price controls is that they don't work.

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<v Speaker 2>Yeah, they don't work.

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<v Speaker 1>Longirl, you can't make prices stay down. And there was

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<v Speaker 1>a very interesting article by old friend of the podcast,

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<v Speaker 1>Simon French a little while ago, I don't know if

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<v Speaker 1>you read it, where he explained that the problem with

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<v Speaker 1>the UK is it one of the many problems with

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<v Speaker 1>the u K is it effectively runs a system of

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<v Speaker 1>price controls across the economy. Everything is controlled one way

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<v Speaker 1>or another.

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<v Speaker 2>Yeah, and it's extremely striking. Now, I think you know,

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<v Speaker 2>it's been going on for a while, but like so

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<v Speaker 2>many things at Index, and I think in the wages

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<v Speaker 2>market particularly, they kind of just rolentless rise in the

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<v Speaker 2>minimum wage specifically. And you do also have the benefits

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<v Speaker 2>system kind of playing a big part in this, but

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<v Speaker 2>a less clear one. But you've almost we've almost kind

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<v Speaker 2>of simultaneously put a floor under wages, but it's so

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<v Speaker 2>high that it's putting a cap or on wages at

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<v Speaker 2>the other end of the spectrum. So really the relationship

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<v Speaker 2>between reward and effort is being being very disrupted, and

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<v Speaker 2>that's extremely bad for productivity because people's incentives are not

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<v Speaker 2>designed properly.

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<v Speaker 1>Yeah, so are effectively our wage and price controls baking

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<v Speaker 1>fleshing in rather than the other way around.

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<v Speaker 2>Yeah, which is really bad. So there's so many things

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<v Speaker 2>that need to be unwound and dismantled if we want

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<v Speaker 2>to get the UK back into a good place. But

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<v Speaker 2>I don't say that happening any time soon.

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<v Speaker 1>And you wrote this week when you were writing about

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<v Speaker 1>central banks and interest rates and political pressure to keep

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<v Speaker 1>right down and obviously we feel that in the US,

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<v Speaker 1>not seeing that in the US, and there's a lot

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<v Speaker 1>of political pressure in the UK as well to keep

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<v Speaker 1>right slow even though we feel there is this inflationary backdrop. Yeah.

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<v Speaker 2>I mean it was interesting because Rachel Reeves was in

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<v Speaker 2>front of the Treasury Select Committee yesterday of the day before.

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<v Speaker 2>The whole point was about the budget, and they run

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<v Speaker 2>up to the budget, but one of the Conservative MPs

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<v Speaker 2>in the Select Committee asked her a question that you know,

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<v Speaker 2>she wasn't particularly keen on, and then she kind of

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<v Speaker 2>laughingly pointed to the fact that they'd managed to have

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<v Speaker 2>five interest rate cuts under the Labor government, as if

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<v Speaker 2>that was an achievement of the government. And it is

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<v Speaker 2>this thing where you've got the government realizing that it

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<v Speaker 2>wants interest rates to go down and having pinned its

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<v Speaker 2>kind of reputation on creating an environment in which the

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<v Speaker 2>bank of anyone can cut rates, and even if it's

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<v Speaker 2>doing nothing else, that's there's an element of pressure there

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<v Speaker 2>on the management of the central bank to meet the

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<v Speaker 2>government's expectations regardlessly you know which government is that it's

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<v Speaker 2>all part of the state apparatus. Ultimately, an independence is

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<v Speaker 2>really just you know, it's just a fig leaf.

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<v Speaker 1>It's a mirage.

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<v Speaker 2>Yeah, exactly, So you're always whenever you've got even get

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<v Speaker 2>politicians don't built like that. I mean, obviously Trump is

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<v Speaker 2>very overt about it. You know, it's like, I think

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<v Speaker 2>the FED cut into streets by a quarter point yesterday,

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<v Speaker 2>and he just puts it a tweet immediately the equivalent

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<v Speaker 2>in a tweet saying that this is a waste of time,

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<v Speaker 2>you know how it was useless and you know, I

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<v Speaker 2>can't wait to get somebody proper running this thing. And

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<v Speaker 2>so that's very overt. But the same sort of pressure

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<v Speaker 2>is there from kind of across the board.

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<v Speaker 1>Mm hmm. And you also mentioned in the same piece

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<v Speaker 1>or but that you talk fair energy and oil press.

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<v Speaker 1>We both we both read the same article, didn't we

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<v Speaker 1>have the gab cal daily on one are Today's contrarian

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<v Speaker 1>trades and one of the contrarian trades that you could

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<v Speaker 1>take at the moment is oil, and that it's been

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<v Speaker 1>sort of remarkable how cheap oil is stayed all the

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<v Speaker 1>way through this year.

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<v Speaker 2>Oil started the year around about eighty and it's down

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<v Speaker 2>to almost sixty now, And I mean, I think you've

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<v Speaker 2>got to think about how much that's also played into

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<v Speaker 2>the fairly calm inflationary environment this year, because one thing

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<v Speaker 2>you can usually say for sure is oil going up

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<v Speaker 2>is inflationary. In the longer run, it's deflation because it

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<v Speaker 2>acts as a tax. But in terms of your headline prices,

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<v Speaker 2>you know they're going to go up with the oil

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<v Speaker 2>prices going up, because that feeds through everything else. So

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<v Speaker 2>I think that that, Yes, I think one of the

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<v Speaker 2>surprises for next year might be oil coming back more

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<v Speaker 2>sharply than anyone expects in the moment, because everyone's talking

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<v Speaker 2>about who there's a supply glut. And also I was

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<v Speaker 2>looking at that piece and I thought it was an

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<v Speaker 2>interesting piece. But of the four contrarian trades he suggested,

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<v Speaker 2>I definitely thought the energy was the most kind of

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<v Speaker 2>paling one because you can see how it could happen

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<v Speaker 2>more dreadily than the other ones.

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<v Speaker 1>He suggested, we need to get somebody on to talk

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<v Speaker 1>at length about the possibility of a new commodity Supersnycher.

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<v Speaker 1>We're going to do that, and then I'll talk about

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<v Speaker 1>the commodities, but spectrum as a whole. We haven't done

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<v Speaker 1>that phrases, so stand by we'll be doing that in

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<v Speaker 1>January or February. But the last thing I want to

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<v Speaker 1>talk about today was Howard Marx. We have had on

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<v Speaker 1>the podcast before and he writes these great letters and

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<v Speaker 1>another one out this week, and this is about the

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<v Speaker 1>AI bubble or not? Is there a bubble? Isn't there

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<v Speaker 1>a bubble? Did you read the note? I read it briefly,

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<v Speaker 1>but you know I did read.

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<v Speaker 2>Yeah. I thought it was It was good. It was

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<v Speaker 2>very sensible, which is always slightly galling because you want

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<v Speaker 2>something it'll be yeah. But I don't know. I think

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<v Speaker 2>if if Marx is kind of coming out and seeing

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<v Speaker 2>because he does noise bubbles at the dot com bubble

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<v Speaker 2>and at the you know, the financial crisis bubble, he

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<v Speaker 2>wasn't like, what's it coming forward? It wasn't particularly equivocal.

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<v Speaker 2>You could read it and say the stuff he wrote

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<v Speaker 2>then and say, no, he's saying this is a bubble

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<v Speaker 2>and it's probably in the bus quite soon. Where there's

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<v Speaker 2>this one. He's very much more equivocal, And that's one

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<v Speaker 2>reason I kind of thought, well, he's a weird one,

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<v Speaker 2>because simultaneously it doesn't feel as if we've got quite

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<v Speaker 2>enough frenzy. Everyone's a bit too skeptical still about it.

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<v Speaker 1>Not in California. Oh yeah, and we heard a lot

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<v Speaker 1>of skeptical stuff. But people who are people who are

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<v Speaker 1>in the bubble are really in the bubble. Yeah. Yeah,

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<v Speaker 1>she's the optimistic, incredibly excited, vaguely worried about the you know,

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<v Speaker 1>existential threats at the end of the world and the

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<v Speaker 1>possible sentience of AI and that kind of thing, but

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<v Speaker 1>generally very very excited.

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<v Speaker 2>Well yeah, I mean, yeah they are, and that's true, and.

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<v Speaker 1>Yeah, maybe maybe how it's been having lunch in California.

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<v Speaker 1>One of the things he says things, he says it

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<v Speaker 1>is worth mentioning, is it? He says, you know, in

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<v Speaker 1>every bubble, people say this time, it's different, and then

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<v Speaker 1>the rest of us say, it's never different. It's never different.

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<v Speaker 1>But a small percentage of the time it is different,

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<v Speaker 1>maybe twenty percent of the time it really is different,

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<v Speaker 1>and you're gonna look at AI and say to you

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<v Speaker 1>know what, this kind of is different. Products exist, people

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<v Speaker 1>buy them, Revenues are going up, maybe not quite enough,

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<v Speaker 1>but you know it exists, it can make money. There's

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<v Speaker 1>a path to profitability for real.

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<v Speaker 2>Yeah, I mean, I think that's so true. I'm not

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<v Speaker 2>sure that even means it's different. There's time more. I mean,

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<v Speaker 2>the Internet was different and it didn't money, but it

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<v Speaker 2>was still a bubble. I think, I mean, I do.

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<v Speaker 2>I think it's maybe checkular at this point to tan

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<v Speaker 2>and look at the bits of it that are definitively bubbles,

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<v Speaker 2>because I mean, obviously in the vedeas that kind of

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<v Speaker 2>the pexx and shovels stop and everyone's actually it's only

0:12:03.280 --> 0:12:06.079
<v Speaker 2>going up twenty percent this year, having gone up about

0:12:06.080 --> 0:12:09.640
<v Speaker 2>two hundred percent last year. But you don't have the

0:12:09.640 --> 0:12:12.760
<v Speaker 2>same sort of stocks that were around in the dot

0:12:13.160 --> 0:12:16.439
<v Speaker 2>com boom, at least not they don't have the profile.

0:12:16.800 --> 0:12:19.880
<v Speaker 2>There's not a lot of companies kind of suddenly coming

0:12:19.880 --> 0:12:22.880
<v Speaker 2>that we fleeky sounding EI products that are then going

0:12:22.920 --> 0:12:25.440
<v Speaker 2>to the moon. But then again, a lot of that's

0:12:25.480 --> 0:12:28.480
<v Speaker 2>maybe in the private credit area where we are not

0:12:28.760 --> 0:12:33.200
<v Speaker 2>looking so much you're not looking, so I sally, Yeah.

0:12:32.720 --> 0:12:35.079
<v Speaker 1>Well, I suppose the thing that he does say that

0:12:35.320 --> 0:12:38.600
<v Speaker 1>the thing that worries me, and we've talked about before,

0:12:38.800 --> 0:12:42.360
<v Speaker 1>is that, you know, until very recently, all of the

0:12:42.400 --> 0:12:46.640
<v Speaker 1>investment in AI came from cash. Yeah it was, it

0:12:46.800 --> 0:12:51.680
<v Speaker 1>was it was equity cash flow, but not anymore. Now

0:12:51.679 --> 0:12:54.760
<v Speaker 1>there's a lot of debt in here, and that changes

0:12:55.280 --> 0:12:57.920
<v Speaker 1>the whole dynamic. I think in the back to private credit,

0:12:58.679 --> 0:13:00.720
<v Speaker 1>there's a lot of debt knocking around in the big

0:13:00.720 --> 0:13:03.960
<v Speaker 1>AI companies. Now we've seen that compression of credit spreads

0:13:04.000 --> 0:13:06.560
<v Speaker 1>as well, which suggests that people are very much aware

0:13:06.600 --> 0:13:08.520
<v Speaker 1>at the level of debt that the big AI companies

0:13:09.080 --> 0:13:11.319
<v Speaker 1>are coming on now. I mean, as Mark says, that

0:13:11.520 --> 0:13:13.280
<v Speaker 1>doesn't have to be a problem. It's not a good

0:13:13.320 --> 0:13:15.440
<v Speaker 1>thing or a bad thing in itself. It just comes

0:13:15.440 --> 0:13:17.160
<v Speaker 1>down to how much day you have, the quality of

0:13:17.160 --> 0:13:18.920
<v Speaker 1>the answers, the cash flaws you're lending again, and all

0:13:18.920 --> 0:13:21.640
<v Speaker 1>that kind of thing. But nonetheless, it's a shift from look,

0:13:21.640 --> 0:13:22.960
<v Speaker 1>we've got a part of cash. We made a part

0:13:23.000 --> 0:13:24.480
<v Speaker 1>of cash because we're a great tach companies, so we're

0:13:24.480 --> 0:13:26.559
<v Speaker 1>going to spend on this new thing to this new

0:13:26.600 --> 0:13:29.800
<v Speaker 1>thing is so competitive and requires so much money that

0:13:29.880 --> 0:13:31.360
<v Speaker 1>we no longer have enough catch and we're going to

0:13:31.360 --> 0:13:35.040
<v Speaker 1>go borrow a big part of money. It's a big change. Yeah,

0:13:35.120 --> 0:13:36.679
<v Speaker 1>and it's relatively recent.

0:13:36.559 --> 0:13:40.079
<v Speaker 2>And it is also really your peaque Yeah. And I

0:13:40.120 --> 0:13:44.559
<v Speaker 2>am noticing more articles even when the Bloomberg say actually

0:13:45.120 --> 0:13:49.679
<v Speaker 2>and generally just talking about the role of the banks

0:13:49.800 --> 0:13:54.040
<v Speaker 2>in funding things that sound very much like the sorts

0:13:54.040 --> 0:13:56.400
<v Speaker 2>of products that ended up getting them any trouble in

0:13:56.480 --> 0:14:00.520
<v Speaker 2>two thousand and eight. So, you know, lots off balance

0:14:00.559 --> 0:14:03.480
<v Speaker 2>sheet stuff that looks as if the risk is all

0:14:04.160 --> 0:14:07.400
<v Speaker 2>on one group of people, but fundamentally, if it does

0:14:07.400 --> 0:14:09.120
<v Speaker 2>blow up, you're the one that's going to own it.

0:14:10.600 --> 0:14:13.600
<v Speaker 2>And I don't know how long it takes before, you know,

0:14:13.720 --> 0:14:17.640
<v Speaker 2>Significant risk transfers or SRTs are kind of you know,

0:14:17.679 --> 0:14:21.400
<v Speaker 2>featuring the equivalent of a kind of whoever Robert Peston

0:14:21.720 --> 0:14:24.800
<v Speaker 2>is these days, sort of like report on the BBC.

0:14:26.360 --> 0:14:29.040
<v Speaker 2>But it does it does feel as if we are

0:14:29.200 --> 0:14:34.520
<v Speaker 2>are nudging towards something like that. You know, whether it'll

0:14:34.520 --> 0:14:37.120
<v Speaker 2>ever get to that point is a slightly separate issue,

0:14:37.520 --> 0:14:39.520
<v Speaker 2>but I do, Yeah, there is I think there is

0:14:39.560 --> 0:14:44.320
<v Speaker 2>a problem with visibility in this particular bubble that we

0:14:45.480 --> 0:14:47.440
<v Speaker 2>certainly bugged that you certainly didn't have in the dot

0:14:47.480 --> 0:14:50.840
<v Speaker 2>com bubble because all of that funding was done through

0:14:50.920 --> 0:14:51.680
<v Speaker 2>I p os.

0:14:52.000 --> 0:14:53.560
<v Speaker 1>Yeah, that was much more transparent.

0:14:54.800 --> 0:14:58.760
<v Speaker 2>What about his bit on jobs, Did you read the

0:14:58.800 --> 0:15:00.720
<v Speaker 2>PS because almost felt.

0:15:00.520 --> 0:15:02.320
<v Speaker 1>As if, no, I didn't read that bit.

0:15:02.960 --> 0:15:05.200
<v Speaker 2>Well, No, I almost felt as if because I'd say

0:15:05.240 --> 0:15:07.280
<v Speaker 2>one thing I found a little bit disappointing. But the

0:15:07.280 --> 0:15:09.080
<v Speaker 2>memo is that obviously he's a credit guy, and I

0:15:09.120 --> 0:15:11.200
<v Speaker 2>was kind of hoping he would say more about the

0:15:11.240 --> 0:15:14.560
<v Speaker 2>credit side up beyond you know, okay, well that's not

0:15:14.640 --> 0:15:16.800
<v Speaker 2>always a bad thing, and that it's all getting a

0:15:16.840 --> 0:15:19.040
<v Speaker 2>bit speculative. But I don't know, you know, where we

0:15:19.080 --> 0:15:21.240
<v Speaker 2>are on the cycle. But the thing he was talking

0:15:21.280 --> 0:15:23.240
<v Speaker 2>about and maybe and actually, to be fair, this probably

0:15:23.240 --> 0:15:25.920
<v Speaker 2>does lean into perhaps he's seeing it as being too different,

0:15:27.400 --> 0:15:30.320
<v Speaker 2>was kind of stressing about basically the number of job

0:15:30.360 --> 0:15:33.760
<v Speaker 2>losses that it's going to cause, you know, it's going

0:15:33.800 --> 0:15:37.720
<v Speaker 2>to kind of wipe out whole tiers of industry and

0:15:37.840 --> 0:15:40.320
<v Speaker 2>the end what will happen, And he was sort of

0:15:40.560 --> 0:15:42.520
<v Speaker 2>making I mean, it's an argument you've heard before from

0:15:42.560 --> 0:15:44.840
<v Speaker 2>other people, But the idea is that we'll live in

0:15:44.840 --> 0:15:48.440
<v Speaker 2>I can almost tech feudalism where you can get Silicon

0:15:48.520 --> 0:15:51.360
<v Speaker 2>Valley millionaires and then everyone else is on universal basic

0:15:51.400 --> 0:15:53.640
<v Speaker 2>income or you know something like that.

0:15:54.400 --> 0:15:57.280
<v Speaker 1>Yeah, well, I do accept that this is the kind

0:15:57.280 --> 0:16:00.440
<v Speaker 1>of thing that happens slowly and then incredibly fast. So

0:16:00.800 --> 0:16:03.480
<v Speaker 1>you know, we're in the foothills of the whole. How

0:16:03.520 --> 0:16:05.520
<v Speaker 1>many jobs can AI do? Whill it take your job?

0:16:05.560 --> 0:16:07.400
<v Speaker 1>How many jobs will it take? And everyone's going, oh,

0:16:07.480 --> 0:16:09.720
<v Speaker 1>that haven't really happened yet. You know, a bit of

0:16:09.760 --> 0:16:14.360
<v Speaker 1>an increase in the productivity of customer services representatives, bit

0:16:14.400 --> 0:16:16.880
<v Speaker 1>of this, bit of that, but it's not a flood yet,

0:16:17.040 --> 0:16:22.040
<v Speaker 1>but there will come a point when it's much quicker. Yeah,

0:16:22.080 --> 0:16:24.440
<v Speaker 1>and it's maybe not that far off. But we're not

0:16:24.440 --> 0:16:26.560
<v Speaker 1>going to talk about that because it's only Christmas.

0:16:27.760 --> 0:16:31.080
<v Speaker 2>Yea, let's not put it down on the readers before Christmas.

0:16:31.080 --> 0:16:32.520
<v Speaker 2>We don't. We don't normally do that.

0:16:33.000 --> 0:16:34.160
<v Speaker 1>Not, No, we don't do that.

0:16:34.920 --> 0:16:37.720
<v Speaker 2>Keep calling your readers, sorry, your listeners.

0:16:37.360 --> 0:16:40.800
<v Speaker 1>Yeah, listeners. And it's so John anders On something positive

0:16:40.880 --> 0:16:42.880
<v Speaker 1>you read earlier this week about how everything was just

0:16:42.920 --> 0:16:43.920
<v Speaker 1>fine in the guilts market.

0:16:44.600 --> 0:16:47.680
<v Speaker 2>Say, yeah, let's wait to the local elections. But between

0:16:47.720 --> 0:16:50.240
<v Speaker 2>now and then, there's probably not going to be many

0:16:50.360 --> 0:16:52.760
<v Speaker 2>kind of firewoks in the coat market. And I say

0:16:52.800 --> 0:16:55.720
<v Speaker 2>this year that actually were on it felt like that

0:16:55.880 --> 0:16:58.600
<v Speaker 2>way out. But the goats goats had can like ten

0:16:58.680 --> 0:17:01.280
<v Speaker 2>years that end in rough in fact a little bit

0:17:01.440 --> 0:17:04.400
<v Speaker 2>below with your ten year yield is roughly a bit

0:17:04.440 --> 0:17:08.840
<v Speaker 2>below where it started you're at. So overall, for all that,

0:17:09.000 --> 0:17:13.040
<v Speaker 2>it's been a kind of fairly grim and chaotic year politically.

0:17:14.880 --> 0:17:18.159
<v Speaker 2>You know, all the hype about the guilts market has

0:17:18.200 --> 0:17:22.680
<v Speaker 2>company nothing. And I think given that the UK still

0:17:22.680 --> 0:17:24.679
<v Speaker 2>has one of the highest base rates, in fact it

0:17:24.720 --> 0:17:26.600
<v Speaker 2>is the high space rate and the developed world at

0:17:26.600 --> 0:17:29.520
<v Speaker 2>this point, they're still room for the Bank England to

0:17:29.520 --> 0:17:32.280
<v Speaker 2>come down. And if it turns out that the economy

0:17:32.359 --> 0:17:35.439
<v Speaker 2>is even worse than expected next year, then maybe the

0:17:35.440 --> 0:17:39.160
<v Speaker 2>Bank England comes down a little bit more than everyone's expecting.

0:17:39.600 --> 0:17:42.120
<v Speaker 2>So that would probably mean that kind of guilty would

0:17:42.119 --> 0:17:44.720
<v Speaker 2>to go down a bit, and therefore gilts perform okay

0:17:44.920 --> 0:17:45.400
<v Speaker 2>next year.

0:17:46.880 --> 0:17:49.320
<v Speaker 1>So here we are straight into the dynamic that you

0:17:49.359 --> 0:17:51.639
<v Speaker 1>and I've worked with for so many years. Bad news

0:17:52.040 --> 0:17:57.720
<v Speaker 1>is good news, excellent economy suffers, and your guilt too fine.

0:17:58.440 --> 0:18:02.159
<v Speaker 1>So let's end on that. That's a cheery note.

0:18:01.960 --> 0:18:06.159
<v Speaker 2>Shall we Yeah, I'd say marry Christmas. But there's more,

0:18:06.160 --> 0:18:09.159
<v Speaker 2>at least one more of these, isn't it before we raie?

0:18:09.480 --> 0:18:12.280
<v Speaker 1>No one's getting No one's getting off that lightly. It's

0:18:12.320 --> 0:18:20.800
<v Speaker 1>only the eleventh. Thanks for listening to this week's Maren

0:18:20.800 --> 0:18:23.120
<v Speaker 1>Talks Money, Marcus Dee Brief. If you like a show,

0:18:23.200 --> 0:18:25.680
<v Speaker 1>rate review, and subscribe where ever you listen to podcasts,

0:18:25.720 --> 0:18:27.919
<v Speaker 1>Also be shure follow me and John on ex or Twitter.

0:18:28.320 --> 0:18:31.479
<v Speaker 1>I'm at marins w and John is John Underscore Stepic.

0:18:31.560 --> 0:18:34.479
<v Speaker 1>This episode was produced by Summersidi and Moses and