WEBVTT - Investing, ETFs, And The Economy 0:00:00.120 --> 0:00:06.640 Geopolitics blot Today, let's step back. Every business day we 0:00:06.720 --> 0:00:11.559 bring new interviews from CEO market crows, Bloomberg experts, along 0:00:11.560 --> 0:00:17.239 with essential market moves news bloom Market podcast or wherever 0:00:17.880 --> 0:00:22.200 podcast dot com or slash Podcast. Capital Management located in 0:00:22.320 --> 0:00:27.560 some third rate hamlet called Chapel Hill, North Carolina. I mean, 0:00:27.600 --> 0:00:30.200 I guess you couldn't find any office space in. Mark 0:00:30.240 --> 0:00:33.480 Paul's a duke guy in Durham, North Carolina. But we'll 0:00:33.560 --> 0:00:36.240 check in with Mark anyway. Mark, what are you telling 0:00:36.479 --> 0:00:39.680 your clients here as they kind of raise all some 0:00:39.840 --> 0:00:42.760 of these you know, these bricks in this wall of 0:00:42.800 --> 0:00:46.639 worry here. No, it's a great, great point. And uh, 0:00:47.000 --> 0:00:49.479 you know, congrats to the boys at University of New 0:00:49.560 --> 0:00:54.360 Jersey at Durham down the road. Very good. Um, But look, 0:00:54.520 --> 0:00:58.360 we we are cautious in the current environment. You know, 0:00:58.480 --> 0:01:01.959 we were living in a world of financial repression. As 0:01:02.000 --> 0:01:04.600 to me is the biggest problem. Savers are just being 0:01:04.720 --> 0:01:08.600 punished with these low interest rates. And although the Feds 0:01:08.640 --> 0:01:11.600 making noises about raising I actually don't think they can. 0:01:11.880 --> 0:01:15.520 So that'll cause that'll take one of the stressors away 0:01:15.600 --> 0:01:17.720 when they finally do what I'll call the Powell pivot 0:01:18.160 --> 0:01:20.360 and he finally admits that he really can't raise rates. 0:01:21.080 --> 0:01:24.399 You you mentioned that economic growth is slowing very dramatically. 0:01:25.000 --> 0:01:27.560 We're just gonna see negative growth in Europe in the 0:01:27.640 --> 0:01:32.000 first quarter, could possibly see little zero growth in the US. 0:01:32.800 --> 0:01:36.040 And then corporate profits are rolling over, Earnings estimates are 0:01:36.040 --> 0:01:38.959 being slashed, so we feel that you should be hedged 0:01:39.280 --> 0:01:42.520 with a capital duh, and hedge funds are are likely 0:01:42.600 --> 0:01:44.360 to have a much better year this year than they 0:01:44.400 --> 0:01:48.240 did last year. We still do like one area, which 0:01:48.320 --> 0:01:52.000 is oil. We think energy is an interesting place to be. 0:01:52.360 --> 0:01:55.720 Things like MLPs good place to hide. They're just very, 0:01:55.880 --> 0:01:58.880 very cheap. Because even if everybody wants an e v 0:01:59.160 --> 0:02:01.360 it will take a third years to everyone to have 0:02:01.440 --> 0:02:03.920 an EVY. So it's going to take a while before 0:02:04.040 --> 0:02:09.040 oil is not necessary wants one. That what's true, that's 0:02:09.080 --> 0:02:10.320 that's the only thing that you know, some of us 0:02:10.360 --> 0:02:13.760 have range anxiety, right, we like to travel long distances. Um. 0:02:14.760 --> 0:02:16.720 But but then I think the last thing we're telling 0:02:16.800 --> 0:02:21.600 people is, uh, don't really stress too much about the 0:02:22.120 --> 0:02:26.840 noise of geopolitics, really focus on the signal, and um, 0:02:27.320 --> 0:02:30.200 you know, we think there's lower risk of some big event, 0:02:30.960 --> 0:02:35.120 and then I think many in the DC area would 0:02:35.120 --> 0:02:39.520 have us believe but um, you know, we're we're cautious, 0:02:39.880 --> 0:02:42.840 but but not completely out of markets. So why do 0:02:42.880 --> 0:02:45.600 you think we've seen such an outperformance of you know, 0:02:45.760 --> 0:02:50.720 we were just graphing oil. Um, since the pandemic against 0:02:50.880 --> 0:02:54.359 the producers and the underlying commodity has done so much better. 0:02:56.000 --> 0:02:59.080 It's great, great, great point. And I think that the challenges, 0:02:59.280 --> 0:03:02.280 particularly the US, we had a lot of producers that 0:03:02.480 --> 0:03:05.960 were over levered and a whole bunch of them went 0:03:06.040 --> 0:03:10.320 out of business, So that clearly impacts the indices that 0:03:10.480 --> 0:03:14.000 that you know, the broad baskets of those producers. There 0:03:14.040 --> 0:03:17.320 are some individual companies, you know, my favorite, Diamondback Energy. 0:03:17.320 --> 0:03:22.560 I would say Fang has outperformed Fang, Facebook, Amazon, Netflix, 0:03:22.639 --> 0:03:25.720 Google over the past year. Again this year, we think 0:03:25.720 --> 0:03:28.240 it all out performed for a while. Uh. And then 0:03:28.240 --> 0:03:32.600 there's a other company like ovent Iv and Marathon Oxy 0:03:32.760 --> 0:03:36.080 which have done really really well, outperformed oil. But you're right, 0:03:36.160 --> 0:03:39.560 the basket has underperformed because there's just a lot of 0:03:39.640 --> 0:03:42.880 companies that uh, this across all industries. You know, we 0:03:43.520 --> 0:03:48.480 we extended credit to not so credit worthy businesses. UM. 0:03:48.560 --> 0:03:51.640 I say we, I mean the economy, and some of 0:03:51.720 --> 0:03:55.680 those went out of business. I guess in in the 0:03:55.760 --> 0:03:59.400 lockdowns after the pandemic, and it's it's really been tough. 0:03:59.480 --> 0:04:01.440 And I think one of the reasons oil prices surged 0:04:01.480 --> 0:04:06.080 so much is so much supply came offline. So mark 0:04:06.360 --> 0:04:10.040 in the fixed income space, do you guys see opportunities there? Again? 0:04:10.120 --> 0:04:13.640 We have a federal reserve that is clearly signaled a 0:04:13.760 --> 0:04:15.760 rising interest rates and if you look at the w 0:04:15.960 --> 0:04:18.000 I r P function on the Bloomberg terminal, could be 0:04:18.000 --> 0:04:21.040 as many seven hikes. How do you think about that 0:04:21.080 --> 0:04:25.000 as a rates to fixed income opportunities? Yeah, I'm gonna 0:04:25.000 --> 0:04:27.680 take the under. I'm gonna take the way under on that. 0:04:28.880 --> 0:04:31.400 I don't think there'll be anywhere close to seven. I 0:04:31.440 --> 0:04:33.719 don't even think there'll be, you know, three or four. 0:04:34.360 --> 0:04:38.440 I think they probably will try to hike here in March. 0:04:39.440 --> 0:04:42.520 I think they'll probably wimp out and not do fifty 0:04:42.560 --> 0:04:45.960 basis points. Um. You know, the challenges have been behind 0:04:46.040 --> 0:04:49.640 the curve since two thousand, uh for a hundred and 0:04:49.880 --> 0:04:54.799 something years, the average short term rate roughly equal nominal 0:04:54.880 --> 0:04:58.800 GDP growth, and you know that hasn't been true for 0:04:59.600 --> 0:05:03.880 a years, and I think they should get back to 0:05:03.960 --> 0:05:08.400 a normal functioning interest rate environment. Uh, because that's what 0:05:08.600 --> 0:05:11.200 capitalism is predicated on. That you know, you can put 0:05:11.240 --> 0:05:13.360 your capital at work and get and get paid for it. 0:05:14.279 --> 0:05:16.800 Think about being in Europe or Japan, you have to 0:05:17.000 --> 0:05:20.200 pay banks to keep your money. At least here you 0:05:20.279 --> 0:05:24.320 get zero point five. That's why we actually came up 0:05:24.360 --> 0:05:27.720 with this thing csh new e t F that takes 0:05:27.760 --> 0:05:32.360 advantage of spack arbitrage to give people something, you know, 0:05:32.480 --> 0:05:36.120 we think low single digits on their their savings because 0:05:36.160 --> 0:05:39.560 we think traditional bonds, high yield bonds aren't very high. 0:05:40.080 --> 0:05:43.400 Taking credit risk, you're taking duration risks, both of which 0:05:43.520 --> 0:05:47.360 look kind of dicey in this market. So having at 0:05:47.400 --> 0:05:49.840 least something on your your savings leaving makes a lot 0:05:49.880 --> 0:05:52.680 of sense. All right, Mark, thank you so much. We 0:05:52.800 --> 0:05:56.600 appreciate checking in with you. Mark. Yes goo uh. He 0:05:56.960 --> 0:06:00.280 is with CEO, c I O and founder Morgan Creek 0:06:00.440 --> 0:06:04.000 Capital Management based in Chapel Hill, North Carolina, which is 0:06:04.080 --> 0:06:08.599 actually a very very beautiful community there despite the University 0:06:08.600 --> 0:06:10.120 of North Carolina, and you want to see such a 0:06:10.160 --> 0:06:13.320 great school and they have such a great basketball history. Yeah, 0:06:13.520 --> 0:06:16.360 just not quite as great as their friends down route 0:06:16.400 --> 0:06:19.920 fifteen five oh one at the Duke University. But yeah, 0:06:20.800 --> 0:06:23.599 we all respect the UNC Chapel Hill there. You're good, 0:06:23.720 --> 0:06:31.560 good hoops and we love playing against them. This Federal 0:06:31.600 --> 0:06:34.240 Reserve is gonna be looking clearly at some of the 0:06:34.320 --> 0:06:36.040 economic data coming up, and we want to check in 0:06:36.120 --> 0:06:39.960 with Michael McKee covers all things economics for us here, Michael, 0:06:40.080 --> 0:06:43.719 as you think about this Federal Reserve, we're talking about 0:06:44.000 --> 0:06:48.640 hiking rates. W I r P is saying seven rate 0:06:48.760 --> 0:06:51.760 hikes this year. What do you think the Federal Reserve 0:06:51.880 --> 0:06:54.240 is really looking at in terms of data? Can I 0:06:54.279 --> 0:06:57.440 also say the word function looks better than ever you 0:06:57.520 --> 0:07:01.640 I know, we're on radio see it. But it's so 0:07:01.960 --> 0:07:05.640 improved to the old word function, So I highly recommend 0:07:05.640 --> 0:07:07.480 people check it out. The thing that's interesting is that 0:07:07.960 --> 0:07:11.160 we consider one rate hike to be twenty five basis points. 0:07:11.240 --> 0:07:15.080 That always is that just the standard rate hike measurement. Well, 0:07:15.160 --> 0:07:18.160 it became that under Alan Greenspan the years before they 0:07:18.320 --> 0:07:21.400 used to announce what was going on, they would raise 0:07:21.480 --> 0:07:24.200 it by all kinds of numbers, fifteen or ten or 0:07:24.280 --> 0:07:27.600 thirty five, whatever they thought was necessary, particularly in the 0:07:27.680 --> 0:07:31.080 Vulcar years when they were doing UH monetary aggregates as 0:07:31.120 --> 0:07:32.960 a guide, so they were trying to figure out how 0:07:33.080 --> 0:07:36.720 much money they'd be creating. But um, at this point 0:07:37.040 --> 0:07:41.040 the Fed is UH looking at to answer your question, 0:07:41.160 --> 0:07:45.920 inflation and unemployment. Unemployment, they noted in the Minutes yesterday 0:07:46.040 --> 0:07:48.280 had pretty much gotten to where they wanted it to be. 0:07:48.720 --> 0:07:52.720 It's inflation they're worried about. So the Fed is at 0:07:52.800 --> 0:07:56.320 this point planning on moving in March. By the way, 0:07:56.320 --> 0:07:58.360 has an employment changed that much or did they just 0:07:58.400 --> 0:08:00.840 start to get worried enough about inflation that they felt 0:08:00.880 --> 0:08:04.640 like it was we changed a huge amount. I mean, 0:08:04.720 --> 0:08:09.080 it's it's already down basically to almost where it was 0:08:10.040 --> 0:08:13.000 before the pandemic. We were at three point five, three 0:08:13.040 --> 0:08:15.440 point six, and now we're at three, while we're at four, 0:08:15.600 --> 0:08:18.160 but we were at three point nine. As more people 0:08:18.240 --> 0:08:21.160 come back, so pretty much at full employment, we're not 0:08:21.200 --> 0:08:23.320 going to get the same statistics that we got before 0:08:23.520 --> 0:08:27.240 the pandemic because people have not come back into the 0:08:27.320 --> 0:08:30.200 labor force, so that great resignation start. Yeah, well, we're 0:08:30.240 --> 0:08:32.280 all working, so I don't I don't see any of it. 0:08:35.080 --> 0:08:38.560 But but you're right, man, it's basis points become the standard. 0:08:38.640 --> 0:08:41.000 And now they don't even do it by basis points. 0:08:41.000 --> 0:08:46.640 They're doing it by range of now and then it 0:08:46.720 --> 0:08:50.360 will be fifty. And what the market is doing, and 0:08:50.720 --> 0:08:53.040 this is your w I. R. P. Lesson is looking 0:08:53.360 --> 0:08:56.360 at what the effective FED funds rate is likely to be, 0:08:56.920 --> 0:09:00.120 which is right now around seven basis points. So if 0:09:00.160 --> 0:09:01.679 you look at the next move and you see that 0:09:01.760 --> 0:09:04.319 the implied rate is thirty two basis points, then that's 0:09:04.360 --> 0:09:08.760 a basis point move. So uh, it's it's a little complicated, 0:09:08.880 --> 0:09:11.760 but once you get used to it, YouTube like it. 0:09:12.400 --> 0:09:18.920 You know, in terms of that um uh measured policy 0:09:20.120 --> 0:09:23.920 behavior and the transparency that the Fed wants to I mean, 0:09:24.080 --> 0:09:26.440 are we gonna stick with that throughout the pal Fed? 0:09:26.520 --> 0:09:28.959 Will we ever get back to them saying, you know what, 0:09:29.040 --> 0:09:30.800 let's have an emergency meeting and you know what, we'll 0:09:30.880 --> 0:09:33.840 raise my fifty basis points now at five, Well, they've 0:09:33.840 --> 0:09:37.040 had emergency meetings. They had an emergency meeting, But they 0:09:37.080 --> 0:09:39.600 can only do an emergency meeting to cuts, right, because 0:09:39.760 --> 0:09:42.720 the cold do an emergency meeting to raise if they 0:09:42.800 --> 0:09:46.280 felt it was necessary. It's it's hard to do because 0:09:46.440 --> 0:09:51.000 I doubt you're legally they can do it, but you're right, 0:09:51.120 --> 0:09:53.839 it's it would be a shock to markets. Uh. And 0:09:53.960 --> 0:09:56.679 it was pretty obvious when we hit the pandemic and 0:09:57.000 --> 0:09:59.240 market seized up and weren't working that they had to 0:09:59.280 --> 0:10:03.520 cut rate. So the meeting, the emergency meeting they held 0:10:03.720 --> 0:10:05.679 was not a bad thing. But do you know he 0:10:05.840 --> 0:10:07.920 was saying this yesterday? Actually I was struggling to remember 0:10:07.960 --> 0:10:13.439 because I'm getting it was Daniel D. Martino booth Um, 0:10:13.800 --> 0:10:16.120 And to be fair, her book was titled fed Up, 0:10:16.240 --> 0:10:18.599 so you can tell where she's coming from. But she 0:10:18.760 --> 0:10:21.679 was saying yesterday, you know, this isn't cool because the 0:10:21.760 --> 0:10:24.080 Fed is so careful when it comes to markets, right, 0:10:24.160 --> 0:10:27.080 they don't want to spoot the markets, but they don't 0:10:27.120 --> 0:10:30.520 care about the common man paying five dollars at the pump. 0:10:31.760 --> 0:10:34.079 If they wanted to tackle inflation right now, she was 0:10:34.400 --> 0:10:36.960 she was saying, and Paul made a great counter argument 0:10:37.000 --> 0:10:39.360 that really about the supply chain. If they wanted to 0:10:39.720 --> 0:10:42.559 fight inflation, they would just have an emergency meeting and 0:10:42.720 --> 0:10:46.760 raise fifty basis points now and maybe six eight months 0:10:46.840 --> 0:10:49.680 from now. That would slow start to slow business activity. 0:10:50.160 --> 0:10:53.880 Policy working with a lag, So it's not really going 0:10:53.960 --> 0:10:56.679 to help. I mean, we were surprised by retail sales 0:10:56.800 --> 0:10:59.040 yesterday and how good they were, and we've been surprised 0:10:59.040 --> 0:11:02.760 by how strong uh consumer credit has been. People want 0:11:02.880 --> 0:11:06.240 to spend money. Well, retail sales disappointed the last two reports. 0:11:06.320 --> 0:11:08.120 Think about how bad it was in December, and that 0:11:08.280 --> 0:11:12.240 was Christmas, but that was because October was better, So 0:11:12.559 --> 0:11:15.800 I mean we pulled it forward. That's you're just basically 0:11:15.840 --> 0:11:18.240 outlining that why it's so hard for anyone to do 0:11:18.400 --> 0:11:21.160 monetary policy these days, especially when you're working with a 0:11:21.200 --> 0:11:25.440 blunt instrument like one interest rate. Well, and to Paul's point, 0:11:25.600 --> 0:11:29.920 if you're if it's supply constraints that are causing inflation. 0:11:30.400 --> 0:11:32.480 You know, if if I'm paying so much more for 0:11:32.600 --> 0:11:37.400 my GMC yukon a T four because they just can't 0:11:37.480 --> 0:11:40.520 make enough, it doesn't matter if the Fed raises rates. 0:11:40.679 --> 0:11:44.720 Does the Feds going to raise rates on March sixteenth 0:11:44.800 --> 0:11:46.959 and on March seventeenth. We aren't going to suddenly have 0:11:47.120 --> 0:11:49.079 a big supply of semi conductors that all of a 0:11:49.120 --> 0:11:53.320 sudden show up. So the car problem is going to continue. 0:11:53.640 --> 0:11:56.440 And that's the issue is we bought. I mean, we've 0:11:56.480 --> 0:11:59.800 had several separate issues that get rolled into one. The 0:12:00.320 --> 0:12:04.319 semiconductors issue was a result of a number of factory problems, 0:12:04.840 --> 0:12:10.079 and then the car issues, uh flowed from that. But 0:12:10.200 --> 0:12:12.400 then we have other supply chain issues where we ordered 0:12:12.480 --> 0:12:15.280 so many goods that they couldn't keep up with the 0:12:15.679 --> 0:12:20.120 shipping of the mall. And that's slowly beginning to rationalize. 0:12:20.280 --> 0:12:22.480 But we're not there yet. Yeah, we just had the 0:12:22.640 --> 0:12:25.080 lead class go on from Bloomberg Intelligence. He covers all 0:12:25.120 --> 0:12:28.199 the ocean shipping companies, the railroads, the truck and companies. 0:12:28.240 --> 0:12:30.560 He sees it all, and he says he consisted going 0:12:30.640 --> 0:12:32.839 to stretch into next year. You know, he kind of 0:12:32.880 --> 0:12:35.120 thought it might be at mid event where we get 0:12:35.640 --> 0:12:38.319 some meaningful improvement in supply chain. But now he's pushing 0:12:38.400 --> 0:12:42.800 that out even further so that I have took a 0:12:42.880 --> 0:12:47.360 great Canadian Pacific investor trip through the Canadian rockies. It 0:12:47.600 --> 0:12:49.840 was awesome and three day trip, a lot of fun. 0:12:49.920 --> 0:12:53.080 You know, I bet written the rails what Greg Jared? Yeah, 0:12:53.280 --> 0:12:56.240 I'm sure he hasn't as a whole boat, you know 0:12:56.400 --> 0:12:59.240 out in the West. You know, God knows doing what, alright, 0:12:59.280 --> 0:13:01.720 Michael McKeith, They you so much for joining us giving 0:13:01.720 --> 0:13:05.200 an update on our federal reserve and how they're looking 0:13:05.280 --> 0:13:08.000 to move this year. But it just seems like this week, Matt, 0:13:08.000 --> 0:13:10.520 as we've pointed out the you know, we're really talking 0:13:10.559 --> 0:13:13.120 about geopolitical issues here, we've got the market off about 0:13:13.160 --> 0:13:20.160 one point to five percent. Here, we have our e 0:13:20.280 --> 0:13:21.880 t S. She wants to talk E t F S 0:13:22.160 --> 0:13:26.480 dying to talk ETFs. I was gonna say, Maestro Macetratra, 0:13:26.840 --> 0:13:29.719 maybe has taken there's already an e t F s 0:13:29.840 --> 0:13:32.120 R here E t F S arena in the house 0:13:32.520 --> 0:13:36.400 right now. Um, And we were talking about an e 0:13:36.480 --> 0:13:39.760 t F fund earlier, weren't we um E s H 0:13:39.920 --> 0:13:42.120 hre we talking about E S H earlier? Which is 0:13:42.880 --> 0:13:48.079 um No, I think those are the sutures. No, it 0:13:48.280 --> 0:13:52.600 was it was some e t F fund that somehow 0:13:52.880 --> 0:13:56.920 dealt with SPACs in a way to that's leverage on 0:13:57.080 --> 0:14:00.439 leverage there, Katie, what do you got for us? Let's ETFs. 0:14:00.600 --> 0:14:02.600 We can talk about spack ets, we can talk about 0:14:02.640 --> 0:14:05.400 fixed income et s because it doesn't sound exciting, but 0:14:05.480 --> 0:14:09.360 there have been a ton of really interesting launches when 0:14:09.400 --> 0:14:11.560 it comes to fix income ets this week. I mean, 0:14:11.920 --> 0:14:15.480 just today you had State Street and Blackstone launch and 0:14:15.640 --> 0:14:18.040 e t F that will be half high yield, half 0:14:18.320 --> 0:14:21.680 clos and they're trying to really appeal to the retail 0:14:21.720 --> 0:14:24.080 crowd there, which caught my eye. You also have a 0:14:24.200 --> 0:14:28.840 bunch of black black Rock alumni debuting UH seven junk 0:14:28.880 --> 0:14:31.560 bond e t f s just today, and then earlier 0:14:31.640 --> 0:14:35.000 this week you also had a CDs e t F debut, 0:14:35.120 --> 0:14:38.160 So it's been a really fascinating week for just bond 0:14:38.240 --> 0:14:42.680 ETFs in general. Speaking of leverage on leverage, Yeah, who 0:14:42.840 --> 0:14:45.320 buys e t s these days? Is it retail? Is 0:14:45.360 --> 0:14:48.480 it institutional? Is it hedge funds? These things? It's a 0:14:48.600 --> 0:14:52.400 really interesting mix of both. I mean, institutional and professional 0:14:52.720 --> 0:14:55.680 traders love et s because the liquidity there is so 0:14:55.840 --> 0:14:58.200 much greater than you would get in buying any sort 0:14:58.200 --> 0:15:01.800 of individual bond, So they use them often as liquidity sleeves. 0:15:01.840 --> 0:15:06.120 But you also have a very sleeve liquidity sleeve that 0:15:06.480 --> 0:15:09.120 I do too. I try to put that in stories 0:15:09.120 --> 0:15:11.800 whenever I can. But I mean they do appeal to 0:15:11.920 --> 0:15:14.040 retail because some of the products or some of the 0:15:14.120 --> 0:15:16.240 asset classes you can get exposure to through an e 0:15:16.360 --> 0:15:18.680 t F. I mean, if you're a retail trader. You're 0:15:18.720 --> 0:15:22.080 never going to be buying, you know, Russian debt, You're 0:15:22.120 --> 0:15:25.040 never going to be buying oil futures, those types of 0:15:25.400 --> 0:15:28.640 asset classes that you really can't get exposure to. But 0:15:28.840 --> 0:15:30.320 now you can through an e t F. You can 0:15:30.400 --> 0:15:33.120 buy it on any sort of brokerage platform. So it's 0:15:33.120 --> 0:15:35.760 Tony from UBS ever calls me and pitches in e 0:15:35.920 --> 0:15:37.360 t F to me. That might be the end of 0:15:37.400 --> 0:15:39.880 our Oh no, are you not in e t F. 0:15:40.000 --> 0:15:42.800 I don't know. Yeah, I guess I can. I mean 0:15:42.840 --> 0:15:46.480 that the low fees, I guess they're targeted, which is 0:15:46.520 --> 0:15:49.520 pretty cool. I don't know, it just feels a little 0:15:49.720 --> 0:15:55.320 I'd love to see h C S mark Yusco. Right, yes, 0:15:55.480 --> 0:15:59.160 exactly exactly. So we were talking mark Yusco about and 0:15:59.280 --> 0:16:00.680 by the way, you know how I found that I 0:16:00.720 --> 0:16:02.880 couldn't remember what I had typed in, and I just 0:16:03.000 --> 0:16:05.520 typed an h I S t go And it shows 0:16:05.520 --> 0:16:08.440 you the history of all the commands that you've typed 0:16:08.440 --> 0:16:11.640 in on the Bloombergs. You can scroll back. That is 0:16:11.680 --> 0:16:15.000 a very that is a good another function. You know, 0:16:15.160 --> 0:16:17.440 I was reading about this fund and I was so 0:16:17.640 --> 0:16:20.000 mad that I didn't write about it, because it's really 0:16:20.080 --> 0:16:23.640 interesting basically that UM it feels like he's pitching this 0:16:23.760 --> 0:16:25.360 e t F as you can use it almost as 0:16:25.400 --> 0:16:27.920 a money market fund, like just store your cash here. 0:16:27.920 --> 0:16:31.000 You're probably going to get a few basis points above treasuries. 0:16:31.040 --> 0:16:35.680 Not very exciting, but you know it should work all right, 0:16:35.760 --> 0:16:38.920 So the new issue market for e t f s, 0:16:39.440 --> 0:16:41.640 where are we kind of over the last twelve months? 0:16:41.760 --> 0:16:45.800 Is it accelerating and we kind of peaked on fire? 0:16:47.120 --> 0:16:49.560 As they say, yeah, no, you saw a record number 0:16:49.600 --> 0:16:52.280 of e t f s launched last year, which is 0:16:52.600 --> 0:16:55.440 interesting to me because they've all been mostly active and thematic. 0:16:55.520 --> 0:16:56.960 But if you look at where the money is going, 0:16:57.040 --> 0:16:59.920 it's all too pretty vanilla funds. It's all SMP five 0:17:00.040 --> 0:17:03.560 hundred index tracking funds. So you're seeing this huge surge 0:17:04.040 --> 0:17:07.000 in issuance. But I mean, those new funds are attracting 0:17:07.080 --> 0:17:09.359 very little of the actual money that's flowing into the 0:17:09.440 --> 0:17:11.840 e t F market, which is largely just dominated by 0:17:11.960 --> 0:17:15.840 Vanguard and black Rock UM and Vanguard has been the 0:17:16.160 --> 0:17:19.439 boss of e t s really since their inceptions. Right, 0:17:19.480 --> 0:17:22.320 they own they own this market. They well, okay, this 0:17:22.520 --> 0:17:25.520 is the storyline that you have to watch very closely. 0:17:25.840 --> 0:17:28.359 Black or Vanguard's share of the E t F market 0:17:28.400 --> 0:17:31.560 has grown every single year for twenty years straight. Black 0:17:31.720 --> 0:17:33.920 Rock is still your incumbent. I think they control about 0:17:34.240 --> 0:17:37.320 thirty four percent of all U S E t F assets, 0:17:37.560 --> 0:17:41.880 Vanguards at twenty nine per cent, So that flippening it's 0:17:41.880 --> 0:17:43.720 going to happen one day. Maybe it's not this year. 0:17:43.760 --> 0:17:46.320 But I also just think because of you know, the 0:17:46.840 --> 0:17:50.040 uh the legend of Jack Bogel and to me, E 0:17:50.160 --> 0:17:54.080 t F s fits so well with that passive investing legend. 0:17:54.160 --> 0:17:56.800 But of course they probably have active investing e t 0:17:56.960 --> 0:17:59.320 f s there as well. They do, and Vanguard will 0:17:59.320 --> 0:18:01.160 be quick to tell you that they do have active ETFs. 0:18:01.200 --> 0:18:02.800 But if you look at their AD two product and 0:18:03.160 --> 0:18:05.240 they just have a T two products, which is also 0:18:05.320 --> 0:18:08.560 mind blowing, it's mostly passive. That's where all the money is. 0:18:08.840 --> 0:18:12.080 And I space E t F gets all the Bloomberg 0:18:12.160 --> 0:18:16.080 News written stuff on E t F and E t 0:18:16.200 --> 0:18:18.720 F E t F and b I E t f 0:18:18.920 --> 0:18:28.000 s to get the research there. All right, let's talk 0:18:28.600 --> 0:18:32.879 global oil. Brent crude ninety cents. We were on I 0:18:32.920 --> 0:18:35.040 guess we still are on a one watch. I'm hearing 0:18:35.119 --> 0:18:37.240 some hundred dollar numbers coming out of Wall Street. But 0:18:37.280 --> 0:18:41.160 when we want to talk oil or commodities, pork bellies, crypto, 0:18:41.600 --> 0:18:45.920 we go to Mike McLane. He's from Bloomberg Intelligence Commodities. Uh. Analysts, 0:18:46.080 --> 0:18:49.879 they're uh, Mike, You're in a Bloomberg Interactive broker studio. 0:18:50.080 --> 0:18:52.440 He's here, Folks. Usually is down in Miami Beach, kicking 0:18:52.480 --> 0:18:55.040 back at the pool with a cocktail with an umbrella 0:18:55.119 --> 0:18:56.680 in it, but he is here in New York working 0:18:57.320 --> 0:18:59.720 this week. Mike, what do you make a crude oil? Here? 0:18:59.720 --> 0:19:02.720 Are going to see that handle? I think it's part 0:19:02.800 --> 0:19:04.879 of the process that it did in two thousand and eight. 0:19:05.560 --> 0:19:08.879 Elevator escalator up, elevator down. So right now we're in 0:19:08.960 --> 0:19:11.159 that upstage. Today is not so great, but it's factoring 0:19:11.200 --> 0:19:14.879 a pretty significant armed conflict between you know, in Europe 0:19:14.920 --> 0:19:17.840 with a large exporter of crudel and a large exporter 0:19:17.920 --> 0:19:21.120 of grains. To me, that's otherwise, once we get through 0:19:21.160 --> 0:19:23.760 this period, it happens or not, crudel is going back 0:19:23.760 --> 0:19:27.239 to fifty and that is are below and because two 0:19:27.720 --> 0:19:30.000 and two thousand and eight it's peaked at one and 0:19:30.040 --> 0:19:33.080 then dropped the forty um the next year, and then 0:19:33.200 --> 0:19:35.080 what happened was that we went up to a hundred 0:19:35.080 --> 0:19:36.840 for till two thousand eleven. Then the whole U s 0:19:36.880 --> 0:19:40.800 Shell revolution happened, oil sands in Canada. That's happening again. Now. 0:19:40.840 --> 0:19:43.680 The differences Matt loves is the evs are really kicking in. 0:19:43.800 --> 0:19:47.040 That's it's and our consumption in North America peaked in 0:19:47.119 --> 0:19:49.760 two thousand eighteen, and so it's starting to head lower. 0:19:50.119 --> 0:19:53.240 So also the key thing is war. Okay, war keeps 0:19:53.280 --> 0:19:55.639 it elevated and the shorter term, but the big picture 0:19:55.760 --> 0:19:58.120 is higher prices bring up more supply, and it's worse 0:19:58.240 --> 0:20:00.520 this time. So here's what that part. At that part, 0:20:00.560 --> 0:20:02.760 I don't we don't see happening yet, right. We don't 0:20:02.880 --> 0:20:06.800 see the shale guys recounts pulling more oil out of 0:20:06.800 --> 0:20:09.359 the ground. We don't see Texas pulling the trigger. They 0:20:09.600 --> 0:20:11.960 just don't seem to be done at Why why lagging? 0:20:12.200 --> 0:20:14.320 So what are we doing right now? We're the reciprocal 0:20:14.520 --> 0:20:17.960 negative prices. We're going to do the exact opposite within 0:20:18.040 --> 0:20:20.520 the next year. Might be three months high prices now 0:20:20.960 --> 0:20:23.159 back to the more enduring trend. So let's give you 0:20:23.240 --> 0:20:26.440 this fact. Crude picked at one in July m July 0:20:26.560 --> 0:20:29.200 two eight. If it would catch up to pp i'd 0:20:29.200 --> 0:20:32.840 be two. So that's a bear market that's bouncing within 0:20:32.880 --> 0:20:34.440 a range. So, yes, it's a lot of fear, but 0:20:35.280 --> 0:20:37.159 this is just the facts of the market. If you can, 0:20:37.520 --> 0:20:39.600 you can create more of it. We use less of it. 0:20:39.760 --> 0:20:41.800 And you know, I came from a corn melt background. 0:20:41.800 --> 0:20:44.040 Twelve percent of our gasoline is from ethanol, which I 0:20:44.119 --> 0:20:47.359 know you love. I'm against that. Well, I'm not against 0:20:47.440 --> 0:20:49.399 it if you don't care about your motor, you know, 0:20:50.160 --> 0:20:52.080 but it's not good. I don't want to put that 0:20:52.200 --> 0:20:55.360 in my I will drive the extra mile to get 0:20:55.520 --> 0:21:00.680 pure gasoline. Really, I don't want And yes you do, 0:21:01.480 --> 0:21:04.200 I don't care, do I you don't care? I don't care. No, alright, 0:21:04.280 --> 0:21:09.480 so alright. So but supply and demand here OPEC has 0:21:09.720 --> 0:21:14.640 remained pretty disciplined. Is that something you expect to continue it? Does? 0:21:14.800 --> 0:21:17.439 Does OPEC really have that much spare capacity? Well, one 0:21:17.480 --> 0:21:19.040 of the things we've been hearing from the guests we 0:21:19.160 --> 0:21:21.840 bring on is okay, Saudi does, and you can see 0:21:21.880 --> 0:21:24.000 it with OPEC go. It's a really cool chart for 0:21:24.119 --> 0:21:27.760 spare capacity. Um. But the guests that we have on 0:21:28.000 --> 0:21:31.600 lately have been doubtful that other countries really have that 0:21:31.720 --> 0:21:34.680 much spare capacity. And actually you don't see anything on 0:21:34.800 --> 0:21:39.160 OPEC go besides Saudi Arabia and the UAE. Don't underestimate 0:21:39.240 --> 0:21:43.280 how prices bring on supply and commodities used to have hair. 0:21:43.400 --> 0:21:46.800 It's just exactly, it's just so there, detaining to hear 0:21:46.840 --> 0:21:48.880 it because I remember how we were gonna have peak 0:21:48.920 --> 0:21:51.720 oil ten years ago, what really peaked consumption in North America? 0:21:52.119 --> 0:21:54.760 So that will come the disciplines impressive. Iran could come 0:21:54.800 --> 0:21:56.840 back and look at Venezuela. They have as much oils crude. 0:21:56.840 --> 0:21:59.000 At some point that comes back in higher prices bringing 0:21:59.040 --> 0:22:00.639 that on. But I think what's happy now is more 0:22:00.720 --> 0:22:03.240 than macro. I think we're beginning part of the great 0:22:03.320 --> 0:22:08.040 reversion of this massive period of economic fiscal, monetary stimulus. 0:22:08.520 --> 0:22:10.240 And so if if we don't have the war, we 0:22:10.320 --> 0:22:12.000