Speaker 1: Hello, and welcome to What Goes Up a Bloomberg Weekly
Speaker 1: Markets podcast. I'm Sarah Ponzak, a reporter on the cross
Speaker 1: at that team, and I'm Chris Nag, executive editor for Bloomberg.
Speaker 1: Infor Mike Reagan, who is vacationing and we have no
Speaker 1: further information on his whereabouts. Mike's enjoying himself, will leave
Speaker 1: him out of the episode with Thankfully, Chris is here
Speaker 1: with us to take his place. This week on the show,
Speaker 1: though second quarter earning season has officially started, we'll walk
Speaker 1: through how it's shaping up so far and the Trump
Speaker 1: administration keeps mentioning the idea of dollar devaluation, Could the
Speaker 1: US actually intervene and what would that look like? And
Speaker 1: of course we'll close out the episode with our very
Speaker 1: own tradition, the craziest thing I ever saw in markets
Speaker 1: this week. But thankfully we have some great guests to
Speaker 1: join us this week. First, we have Evan Brown. He
Speaker 1: is the head of multi assets Strategy at UBS Asset
Speaker 1: Management and he was also an associate at the New
Speaker 1: York Federal Reserve back in oh six to oh nine.
Speaker 1: So that means you're gonna tell us exactly what's going
Speaker 1: to happen on U. That's right. I know I can
Speaker 1: read J pals. Yeah, no problem at all. And then
Speaker 1: we also have Lennan new In. Thankfully she covers finance
Speaker 1: and Wall Street for Bloomberg News, so she's here in
Speaker 1: a very busy week that she had. That's right. And
Speaker 1: in my past life I was in markets geek too,
Speaker 1: so she can play in and everything dollar devaluation as well. Evan,
Speaker 1: I do want to start with you. I know we
Speaker 1: are not very far along in the earning season at all,
Speaker 1: very early days, but we came into it very low bar.
Speaker 1: From what we've seen so far. What can we actually
Speaker 1: take away from it? So we've mainly seen earnings come
Speaker 1: out for for the banks, and I actually think the
Speaker 1: news on that front talking about the big banks focused
Speaker 1: on the consumer businesses. It's been recentably good um, seeing
Speaker 1: consumer loan growth, business loan growth, The economy generally looks
Speaker 1: decent um and the guidance has been decent. So, like
Speaker 1: you said, it is early days, but a low bar,
Speaker 1: and and right now earnings are coming in. Okay. Bloomberg
Speaker 1: is a story up right now saying that banks are
Speaker 1: undoubtedly the hugest Wall Street banks, They mean are having
Speaker 1: their worst quarter in some like a decade or something
Speaker 1: for trading. Is that meaningful to anyone but a bunch
Speaker 1: of insanely rich New Yorkers. Well it's not. Uh. I
Speaker 1: think it's more comments of the challenging environment for markets
Speaker 1: and the lack of volatility and the lack of trends
Speaker 1: that we're seeing across markets. Just people are not trading
Speaker 1: that much and conviction is low, especially when you have
Speaker 1: the trade tensions and the Lake. So um, that's more
Speaker 1: of a specific comment on how the markets have been
Speaker 1: as opposed to how the economy. Well, why is that true?
Speaker 1: Though the market I've noticed or doing rather well this year?
Speaker 1: Up we're like halfway through the year. What's the problem. Yeah,
Speaker 1: it's just uh, it's it's too easy. No, it's um
Speaker 1: when when every asset goes up and there's not a
Speaker 1: lot of differentiation and and uh, you're not getting kind
Speaker 1: of also the same kind of conviction. Like just as
Speaker 1: as as much as markets are going up, we're seeing
Speaker 1: outflows from investors and a lot of what's being griven
Speaker 1: as corporate buybacks in the Lake and so the client
Speaker 1: flow that you would see on these trading desks has
Speaker 1: just not been that active. Come in here, because I
Speaker 1: know you've been in very early every single day this
Speaker 1: week ahead of each of the big bank earning releases. Yes,
Speaker 1: I have what you sound so happy about that. What
Speaker 1: have been the big standouts, whether that is a company
Speaker 1: or a certain trend, whatever that may be. So Evan
Speaker 1: summed it up, but it's basically main street good trading bad. Um.
Speaker 1: So we've seen that the big main street banks, the
Speaker 1: ones that have a big presence and then sumer side
Speaker 1: of the market have done really well. Um. The Bank
Speaker 1: of America, the bank that I cover, reach record profits
Speaker 1: for five quarters in a row. Um. So generally banks
Speaker 1: that have a big consumer facing business are doing extremely well.
Speaker 1: The question is when that's going to turn around, when
Speaker 1: the guidance is going to roll over. Um. You know,
Speaker 1: we did hear some warnings about that this week throughout
Speaker 1: the consumer banks, so JP Morgan whilst Fargo City, But
Speaker 1: for the time being they're doing pretty well. One area
Speaker 1: that has been a little bit softer has been net
Speaker 1: interest income net interest margins. JP Diamond came out and
Speaker 1: basically described it as blowing in the way. You can't
Speaker 1: know which way it's going to go right, well, it's
Speaker 1: blowing against them right now, right right. So when you
Speaker 1: actually look at this unit, this entry into the bank's
Speaker 1: balance sheets, how big of an example, how big of
Speaker 1: an effect has it actually been. It's their main revenue driver,
Speaker 1: so it's very, very important, and Jamie Diamond is kind
Speaker 1: of diminishing it's importance. But at the same time, it's
Speaker 1: a key and put people are looking at. And again
Speaker 1: we're gonna have to bring it all back to j
Speaker 1: Powell because if rates are cut on July thirty one,
Speaker 1: and that's going to really squeeze those margins for banks.
Speaker 1: So they're watching that very closely, and analysts ask them
Speaker 1: about this multiple times on every call this week, so
Speaker 1: it's a huge focus. How does the whole calculus work.
Speaker 1: I mean, I get that the profitability of the loans
Speaker 1: goes down, doesn't the volume go up potentially or at
Speaker 1: least to sustained because the lower rates keep the economy
Speaker 1: potentially potentially, And they did make this point as well,
Speaker 1: which is that you know, the even if they're squeezed
Speaker 1: on one side, potentially act activity in the economy goes
Speaker 1: up elsewhere. But I think generally it's not seen as
Speaker 1: a good thing. Interest rates are the input here, and
Speaker 1: that brings us to the FED over at EUB seven.
Speaker 1: What is your guys take on what's going to happen
Speaker 1: at the end of the month that we're gonna get
Speaker 1: a twenty basis point cut fifty basis points are nothing
Speaker 1: at all. I think we will get a cut. That
Speaker 1: seems quite clear after last week's uh Ja Palace testimony
Speaker 1: where he essentially focus st on every potential negative thing
Speaker 1: and downplay at anything positive going on in the economy,
Speaker 1: and so he wants to cut. There will be a cut. So,
Speaker 1: as you say, the question is between twenty basis points
Speaker 1: and fifty basis points, And to be honest, we're really
Speaker 1: not sure at this point. It seems that there there
Speaker 1: are arguments for doing fifty basis points. If you are
Speaker 1: concerned about the economy, why not uh do it in
Speaker 1: one go and and kind of shock the market and
Speaker 1: and uh um try to steep in the yield curve.
Speaker 1: That's that's something that is being discussed at the FED
Speaker 1: and markets in general. Um. On the other hand, you
Speaker 1: do have other members of the FED who do don't
Speaker 1: think there's a case for a ray cut. At all. Um,
Speaker 1: we're we're we're hearing from a few names, uh Kaplan
Speaker 1: and Boss Stitch and in a few of the regional
Speaker 1: FED presidents. And so it's gonna have to be a
Speaker 1: consensus building exercise. And and usually the the the the
Speaker 1: chair is able to to get their their way. Um.
Speaker 1: But but it is notable that you you do have
Speaker 1: people who just don't even think a cut is necessary
Speaker 1: on the FED. Right now, I can sort of see
Speaker 1: where they're coming from. I mean, you can you can
Speaker 1: easily form form arguments on on both sides of the
Speaker 1: on both sides of the art. Um. One thing that
Speaker 1: somebody mentioned to me today, I don't even know how
Speaker 1: legitimate this is, but his point was that what they
Speaker 1: don't want to be what they want to avoid. Ultimately,
Speaker 1: it's not a recession they want to avoid, seeming like
Speaker 1: they were Ben bernankey, like they were sort of fiddling
Speaker 1: as the economy fell into the UH into a hole.
Speaker 1: And only, you know, six months later, did anyone realize
Speaker 1: doesn't have any residents. I think that that certainly this
Speaker 1: is a risk management cut, right. It's a tremendous uncertainty
Speaker 1: we know about about trade tensions and so they acknowledge
Speaker 1: that maybe the economy doesn't look so bad right now,
Speaker 1: but just in case, let's air on the side of
Speaker 1: being a little easier, and uh, you know, we're like,
Speaker 1: we can do that because inflation is relatively low. John Williams,
Speaker 1: New York Fed President, he kind of made his voice
Speaker 1: known this week as well. He put out a speech
Speaker 1: on Thursday and it was called Living Life near the
Speaker 1: zero lower Bound, and my inbox had been flooded with
Speaker 1: analysts and commentary basically saying that now John Williams is
Speaker 1: setting the stage for a rate cut. This is huge
Speaker 1: because he has a lot of influence on the board
Speaker 1: as well. Lynnon coming back to you, if we get
Speaker 1: a fifty basis point rate cut or even twenty five, say,
Speaker 1: is that actually good or bad for the banks? I've
Speaker 1: heard some people make the case, alright, you have lower
Speaker 1: interest rates, that's bad for the banks. But at the
Speaker 1: same time, theoretically you could see the yield curve steep
Speaker 1: in because on the short end you'll have rates go down,
Speaker 1: and then on the long end you could potentially hopefully
Speaker 1: is the inflation pick up a bit? I think generally
Speaker 1: it's being read as a bad thing for banks, But
Speaker 1: again these implications are lumpy. A lot of the banks
Speaker 1: on the earnings calls this week did mention, Okay, if
Speaker 1: we get an x basis point cut, this is how
Speaker 1: much it will affect our new So from a pure
Speaker 1: numbers perspective, that is a downside. However, the banks were
Speaker 1: also talking about the fact that clients have been on
Speaker 1: the sidelines. We heard sidelines like million times this week
Speaker 1: because people are unsure about the interest rate environment. They're
Speaker 1: unsure about how much the FED is going to cut,
Speaker 1: you know, if at all, and so they've been waiting
Speaker 1: for that certainty. So perhaps when certainty comes and when
Speaker 1: the Fed makes it more clear what they're gonna do,
Speaker 1: clients will start to reposition their portfolios and we might
Speaker 1: see some of that activity that's been waiting on the
Speaker 1: sidelines come back into the game. Is things like credit
Speaker 1: quality and stuff like that. Does that is that a
Speaker 1: factor for banks at all at this point or is
Speaker 1: they just just it's just rock solid, it's pristine, it's wonderful.
Speaker 1: Right now, no one has said anything bad about credit
Speaker 1: quality this week. In fact, Bank of America actually made
Speaker 1: fewer provisions for loan losses this quarter, so right now
Speaker 1: it's just looking pretty good. Another thing that could potentially
Speaker 1: gave cover for more rate cuts. You love to hear
Speaker 1: pristine than when it comes to credit quality from Ladan Evan.
Speaker 1: I know over at U b S, you guys brought
Speaker 1: down your recommendation, brought down your rating on US equities
Speaker 1: to neutral. What's really the reasoning behind this? Is it
Speaker 1: just the fact that we've seen such a crazy gain
Speaker 1: already this year and you might as well wait and
Speaker 1: see what happens. So we took our exposure to equities
Speaker 1: down mainly because we just think a lot of the
Speaker 1: good news is in the price we've we've seen. It's
Speaker 1: not so much that we've had such a great year
Speaker 1: of equities, it's that the year and equities has all
Speaker 1: been driven by a multiple expansion as opposed to expectations
Speaker 1: of earnings rising. And so a lot of that is
Speaker 1: based on a more devish fed and we think that's
Speaker 1: in large part priced in at this point. Uh And
Speaker 1: and we think that, you know, the global environment is
Speaker 1: still a little bit murky. We we do. And we
Speaker 1: came out of the G twenty, and there was euphoria
Speaker 1: out of the out of the G twenty that we
Speaker 1: we didn't get fresh teriffs. But when you look around,
Speaker 1: not much has has changed. I mean, maybe there's a
Speaker 1: cease fire, but uh, there doesn't seem to be at
Speaker 1: this point clear signs of dialogue or any kind of
Speaker 1: movement towards towards any kind of deal at this point.
Speaker 1: And so I think there's some downside risk to to
Speaker 1: business investment. Uh and and UH still China, Europe, some
Speaker 1: of the data is a little bit a little bit murky.
Speaker 1: So UM, in general equities, we've we've taken down a
Speaker 1: little bit, having been overweight for most of this year.
Speaker 1: It's true that we're up a ton in two thousand nineteen.
Speaker 1: I saw someone else saying a couple of days ago
Speaker 1: that if you sort of annualize it over the last
Speaker 1: two years, it's not that huge Martin. We're basically about
Speaker 1: where we were, well maybe a little few percentage point
Speaker 1: above where we were at the beginning of two thousand
Speaker 1: and eighteen. Isn't that strange given that we just had
Speaker 1: the biggest tax cut in the history of America. I mean,
Speaker 1: you would think that earnings would have driven something a
Speaker 1: little bit more significant than that by now. So it's
Speaker 1: a great question I think what the point is is
Speaker 1: that the tax cut, which took effect in two thousand eighteen,
Speaker 1: really got priced into markets in two thousand seventeen, such
Speaker 1: that you you come into the start of two thousand
Speaker 1: eighteen and it's basically priced in at that point, and
Speaker 1: then President Trump starts the trade wars, right and so
Speaker 1: uh Ever, since the trade wars started, we've basically been
Speaker 1: flat in the smp um. You know, maybe a little
Speaker 1: bit higher, but but that gives some contact. It's interesting
Speaker 1: what the turn of the year does to people's opinion
Speaker 1: of the market. Everyone's walking around like we're having this
Speaker 1: drake energy better than here, and we're not that far
Speaker 1: above where we began in the beginning of what fourth quarters.
Speaker 1: You go from one government policy, though the tax plan,
Speaker 1: to another, and that is potentially currency manipulation at this point.
Speaker 1: President Chump tweeted earlier this month about Europe and China
Speaker 1: how they have been manipulating their currency and saying that
Speaker 1: the US should match it, and Evan, I know you've
Speaker 1: been looking a lot into this. Is this even possible
Speaker 1: if the US were to come in and manipulate the dollar,
Speaker 1: what would that actually look like? Well, manipulate as a
Speaker 1: strong word, I think someone else's words when I just
Speaker 1: use the President can authorize the Treasury to intervene in
Speaker 1: foreign exchange markets. It's a Treasury department that does own
Speaker 1: foreign exchange policy. And if you add up UH dollar
Speaker 1: liquidity SDRs which can be converted into dollars, and then
Speaker 1: for an exchange reserves that can be swapped into dollars,
Speaker 1: it's about billion dollars worth of mm oh. They have
Speaker 1: to intervene in foreign exchange markets, and then the treasure
Speaker 1: the FED actually has the same amount, and traditionally on
Speaker 1: on its own balance sheet, the SOMMA balance sheet. Traditionally
Speaker 1: the Treasury and the Fed have acted in concert to intervene.
Speaker 1: The big question right now is well, if the Treasury
Speaker 1: does decide to intervene, will the Fed necessarily follow Because
Speaker 1: typically to justify intervention, it's it's based on disorderly markets,
Speaker 1: and it's hard to argue that FX is disorderly at
Speaker 1: this point. In fact, it's barely moving, so calm, everyone's
Speaker 1: complaining about how common actually is. So if somehow the
Speaker 1: Treasury Department did decide that they were going to move
Speaker 1: on this, and in a hypothetical scenario in a hypothetical world,
Speaker 1: the FEDS said, okay, we'll match it. Does this pose
Speaker 1: any risks? I mean, what would be the fallout from this?
Speaker 1: I do think markets would initially be unsettled. Um, you know,
Speaker 1: we've had a long time, about twenty five years of
Speaker 1: a strong dollar policy, or at least a las fair
Speaker 1: dollar policy, and then all of a sudden that's changing,
Speaker 1: and that will shake markets a bit. I do think
Speaker 1: that once the dust settles, maybe a slightly weaker dollar,
Speaker 1: it's gonna be good for US equities, it's gonna be
Speaker 1: good for emerging markets, and and you go from there. Um,
Speaker 1: what I think would be really interesting, and something we're
Speaker 1: talking about, is if there's not just intervention, which there's
Speaker 1: more or less two hundred billion of AMMO, which is
Speaker 1: decent but but not huge given the size of foreign
Speaker 1: exchange markets five trillion dollars exchange during during a given day.
Speaker 1: But if the Treasury starts moving in a direction of
Speaker 1: a strategic recalibration of its reserves, if they say, hey,
Speaker 1: we've only got forty billion dollars worth of foreign exchange
Speaker 1: reserves and Europe has three fifty billion dollars in Japan
Speaker 1: has over a trillion dollars. We should have more foreign
Speaker 1: exchange reserves. We're gonna make that argument. It's only fair,
Speaker 1: it's only it makes sense to modernize our our for
Speaker 1: an for an exchange portfolio, and that sends a very
Speaker 1: powerful signal to the market that that the Treasury is
Speaker 1: looking to UH to weaken the dollar over the medium term.
Speaker 1: Is this a thing that you actually take into account
Speaker 1: the idea that this could be possible going forwards when
Speaker 1: you try to come up with the target for the
Speaker 1: dollar and other currencies. I think what you have to
Speaker 1: do is is probability weighted? So is it our base
Speaker 1: case that there's going to be intervention? No, we think
Speaker 1: ultimately probably UH Secretary Minution and others are successful and
Speaker 1: advising the President not to to move in that in
Speaker 1: that direction. But I would say there's given that President
Speaker 1: Trump has been tweeting about this, given that there was
Speaker 1: a report that he had actually tasked AIDS to look
Speaker 1: into how to weaken the dollar, we have to take
Speaker 1: it seriously. So maybe there's a twenty risk of it
Speaker 1: of it happening, and so we have to embed that
Speaker 1: into our our our views and way that when we
Speaker 1: consider going long dollars and in an FX portfolio. Bloomberg
Speaker 1: has had some reports out saying that behind the scenes,
Speaker 1: when President Trump has been interviewing potential FED candidates, but
Speaker 1: he's been asking them about what they think about the
Speaker 1: dollar as well. So that's pretty interesting. But even besides,
Speaker 1: you put manipulation that strong word aside, intervention aside. Is
Speaker 1: the path of least resistance still down for the dollar?
Speaker 1: It seems like people have been talking about that for
Speaker 1: a while, but now we're in this holding pattern. Yes,
Speaker 1: we think so, we think. We think it's it's not
Speaker 1: just based on potential intervention, it's based on the US
Speaker 1: economy catching down to to the rest of the world. Right.
Speaker 1: We remember we had that big fiscal stimulus which is
Speaker 1: really rolling off as we speak right now, and the
Speaker 1: rest of the world is is hanging in US economy
Speaker 1: decelerating FED cutting over time that should lead to to
Speaker 1: a week er dollar. But you guys are positive on
Speaker 1: European equities, correct, We we actually we yes, we we
Speaker 1: like European equities. Um, we think is just too much
Speaker 1: negativity on Europe. You're the only person I've heard was
Speaker 1: actually Bullis on European thoughts. Yeah, I mean, any anything
Speaker 1: you read about Europe, it's always very negative about the
Speaker 1: economy and and and the outlook. And I don't mean
Speaker 1: to downplay there's plenty of structural and political issues that
Speaker 1: that always seemed to come up in Europe. But when
Speaker 1: you look at the economic data, it's just not that bad.
Speaker 1: You know, the consumer has held in well. You would
Speaker 1: have expected investment to take a much bigger hit given
Speaker 1: the trade tensions, and investments has held up well too. So, um,
Speaker 1: we think a lot of the bad news is in
Speaker 1: the price and the European economy is actually in reasonably
Speaker 1: good shape and you can see some outperformance there. They
Speaker 1: should be benefiting from some stimulus, one would argue, it
Speaker 1: seems like it seems like they actually pull that off
Speaker 1: fairly well over there at the moment. Yea, So we've
Speaker 1: got likely some monetary stimulus coming from the e C
Speaker 1: b uh, and we have a little bit of fiscal
Speaker 1: stimulus happening, and in Europe at least not fiscal restraints.
Speaker 1: You know, for the first time in a while, Italy,
Speaker 1: France expanding fiscal and even Germany doing a little bit
Speaker 1: uh here. So, so there is some policy support there
Speaker 1: in Europe. As well. With that said, Chris, uh, you
Speaker 1: know what time it is? Though in the podcast, I
Speaker 1: believe I do, but remind me what we call it
Speaker 1: the craziest thing I ever saw in markets this week.
Speaker 1: I'm so excited taking Mike always brings it. So I
Speaker 1: really hope that you're gonna step up to Matt. I
Speaker 1: would have to bring anything. Like we said, every week
Speaker 1: we reach out on Twitter, we ask around see what
Speaker 1: people are noticing. So I'll start with a couple of
Speaker 1: the things that we have seen out in the Twitter sphere.
Speaker 1: I'll say, this isn't breaking the rules. Bloomer's own Dave Wilson,
Speaker 1: he's a stock market columnists, very frequent person who appears
Speaker 1: on radio on TV. He tweeted it and he said,
Speaker 1: maybe I'm not eligible, but I said, there's no rules here.
Speaker 1: It's the crazy this thing. Iri was on markets this week,
Speaker 1: So he said, trucking stocks rise one day because JB.
Speaker 1: Hunt's results go over well, and then railroad shares decline
Speaker 1: the next day because cs x's figures are disappointing. That's
Speaker 1: some contrast is supposed to do when that happen? What
Speaker 1: are you supposed to do? Normally? Such a license to
Speaker 1: print money down theory, Evan, when it comes to you guys,
Speaker 1: how you guys actually go about evaluating the economy. How
Speaker 1: much do you guys actually take into account earnings reports
Speaker 1: from some of these big transport names. We definitely look
Speaker 1: at them, and we look at the certainly look at
Speaker 1: the guidance. And you know, one thing in particular that
Speaker 1: we like to do is we're using natural language processing
Speaker 1: to to dive into the qualitative comments of all these
Speaker 1: earnings reports, and so we can we can really detect
Speaker 1: and see how the language is is shifting, and that
Speaker 1: in many ways can be actually more useful because it's
Speaker 1: more forward looking than the than the backward looking earnings reports.
Speaker 1: So it's a little bit early for us to make
Speaker 1: a strong judge tamens right now on that. But but
Speaker 1: that's what we'll be doing over the course of this
Speaker 1: earning season alright, Lenan, I think you're up. So initially
Speaker 1: I was going to talk about the dollar and the
Speaker 1: prospects of dollar intervention, but we have covered that that
Speaker 1: that is actually something crazy that started last August with
Speaker 1: the note by Michael Thoroli from JP Morgan and it
Speaker 1: made a big splash at the time because everyone thought
Speaker 1: this is crazy town. It's now part of the mainstream
Speaker 1: lexicon and part of people's thinking. Obviously I haven't looking
Speaker 1: into it and everyone is thinking about it, so that's wild.
Speaker 1: But secondly, because we've already discussed that, I wanted to
Speaker 1: raise a report that our colleague Natasha Doff in London
Speaker 1: wrote about, which was intelligent dictators are more attractive to
Speaker 1: foreign investors. So this this is a report that basically
Speaker 1: says that dictators or authoritarian rulers who are well educated,
Speaker 1: who maybe worked in business, are viewed favorably by investors.
Speaker 1: I guess because they'll kind of keep things on and
Speaker 1: even keel. Things are calm, Yeah, people are happy, yeah,
Speaker 1: which we've seen in markets. Sometimes there are people in
Speaker 1: certain regimes, you know, maybe Evan can cite something who
Speaker 1: are um you know, maybe you'r you don't agree with
Speaker 1: them in terms of their politics, but because they have
Speaker 1: have a strong hand, it keeps the nation fairly stable,
Speaker 1: means that you can invest there. Who knew. Maybe it's
Speaker 1: just come across well on TV. It almost doesn't matter
Speaker 1: how unbelievably evil you are. At this point, unbelievably evil
Speaker 1: you are. Christy got uh so this isn't that weird.
Speaker 1: But there was a story in a rival publication pointing
Speaker 1: out that right now the SMP is a couple points away,
Speaker 1: a couple of percentage points away from doubling from its
Speaker 1: high of the last Bowl market. So that's October of
Speaker 1: two thousand seven. So in other words, if you bought
Speaker 1: stocks at absolutely the worst time you could pick with
Speaker 1: hindsight over the last twenty years, you're now up about
Speaker 1: nine annualized. So it's kind of a stock stock journalists
Speaker 1: geek out because this is what happens at all virtually
Speaker 1: any longer horizon that you get to about nine eventually
Speaker 1: when you even it all out, except for one period,
Speaker 1: which is this is really interesting. If you bought at
Speaker 1: the top of the Internet bubble, if you made the
Speaker 1: mistake of buying in March of two thousand, your annualize
Speaker 1: gain is five percent at this point. It's like one
Speaker 1: of the big anomalies of that entire series going back
Speaker 1: a hundred years, that that long of a period would
Speaker 1: have that poor return. And just as we've discussed sendlessly
Speaker 1: or I have basically forced everyone to discuss our team,
Speaker 1: markets go up, Yeah, markets go up constantly, but the
Speaker 1: dot com bubble is really the big artifact of the
Speaker 1: stock market over the last half century. Everything, Evan, I
Speaker 1: think that means it's your turn. So the craziest thing
Speaker 1: that I've seen this week Thursday morning, Treasury Secretary Minution
Speaker 1: coming in and saying that the dollar policy of the
Speaker 1: United States is not going to be changed as of now.
Speaker 1: He did not have to say that, and he said
Speaker 1: even that's something we could consider in the future. All
Speaker 1: things that that did not need to be said, but
Speaker 1: he went ahead and said them. And words matter, and
Speaker 1: central bankers, sovereign wealth funds around the world that that
Speaker 1: are using uh, the dollar as as the main store
Speaker 1: of value and reserve currency. Listening to that, that's really
Speaker 1: really stunning. I do think there has to be some
Speaker 1: risk premier placed in the dollar, given that US dollar
Speaker 1: policy may be changed. Even Lenna are really on the
Speaker 1: same wavelength here, currency geeks. When I say he said no,
Speaker 1: but it was really it is stunning, And I think
Speaker 1: that's um something that really was very very very much
Speaker 1: of an outside chance. And even when I was reporting
Speaker 1: on it last summer, everyone was like, this is crazy.
Speaker 1: But now we're actually having to look at it and
Speaker 1: now everyone is looking at it. So it's um, it's
Speaker 1: a really spectacular change. See what happens in the next
Speaker 1: six months here? Who knows? So Evan and you and
Speaker 1: Lenon are clearly having a connection. Here. While at a
Speaker 1: connection with a Twitter follower of the podcast this week
Speaker 1: and he tweeted his handles J D scotty d Y,
Speaker 1: he said, in a word, Neuralink. Do you guys know
Speaker 1: what this is? So it's one of Elon Musk's startups.
Speaker 1: He is very heavily invested in it and this company, Neuralink,
Speaker 1: they're now saying that they are able to do brain
Speaker 1: surgery and they're approaching the f d A to see
Speaker 1: if they can go in and get approval to do
Speaker 1: surgery on human beings as soon as next year. Now,
Speaker 1: what they do and what they're hoping to do in
Speaker 1: the future is they drill these really really tiny holes
Speaker 1: in your skull, four holes, and then they put these
Speaker 1: extremely small wires that they call threads into your brain
Speaker 1: that have electrodes. And the idea is that they're supposed
Speaker 1: to admit these neurons so that you can communicate with
Speaker 1: the computer without Africa actually having to say anything. All
Speaker 1: you have to do is think so you can think,
Speaker 1: all right, I want to send this text message, I
Speaker 1: want to send this email and it will go. And
Speaker 1: they hope that in the future maybe telepathy will be
Speaker 1: a thing. You can read other people's thoughts, and you
Speaker 1: can also download languages into your brain, and on and
Speaker 1: on and on. It's pretty crazy cats right now. Supposedly
Speaker 1: they've been doing this on rats, and there were rumors
Speaker 1: that they were doing it on primates, and supposedly Elon
Speaker 1: must come out and said, yeah, I'm addressing the quote
Speaker 1: unquote monkey in the room. There's a monkey that's communicated
Speaker 1: with the computer. This does refresh my memory. And apparently
Speaker 1: it's like the same way that you would mount a
Speaker 1: flat panel TV to a wall, is the way to
Speaker 1: stick wires into the brain. I guess it sounds like
Speaker 1: the same thing. Pretty easy, although I would happily volunteered
Speaker 1: for it. At this point's been going we're going to
Speaker 1: the clinical trial next year if they get approve of
Speaker 1: If they do, that would be um pretty crazy. But
Speaker 1: I had never heard something like that, So there we go.
Speaker 1: With that said, though, Evan Brown, Lyn and new and
Speaker 1: thank you so much for coming on, and Chris Angie,
Speaker 1: thanks so much for stepping into film Mike's shoes. Thank you,
Speaker 1: Thanks What Goes Up. We'll be back next week. Until then,
Speaker 1: you can find us on the Bloomberg Terminal, website and app,
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Speaker 1: on Apple Podcasts so more listeners can find us. And
Speaker 1: you can find us on Twitter. Follow me at at
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Speaker 1: Chris nag One, and Lenan Newen is at Lenan T. Newan.
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