openpolitics.com

Transcript

00:00

[Music]

00:08

alright thanks for staying with us here

00:11

this is the third one in a row again

00:13

it’s my pleasure actually it’s the first

00:14

time that I’ll have Jim Bianco on edge

00:16

ITV so it’s a real pleasure to have you

00:18

here Jim thanks for thanks for making

00:19

the time to do it yeah thank you for

00:21

having me looking forward to it you have

00:23

a you have a lot of fans on both Wall

00:25

Street and on Twitter and I think you’re

00:27

one of the guys that can can merge the

00:29

gap you know if you will between the

00:31

real world and the economy and and what

00:33

Wall Street would maybe like to see

00:35

sometimes so I certainly appreciate that

00:37

there’s been a lot of comments back and

00:39

forth on free market capitalism a lot of

00:41

people are kind of concerned that that’s

00:43

been last year but I know that you have

00:45

a lot of different thoughts on that and

00:46

that’s really the first topic that I

00:47

want to start with was you know the

00:49

legality of what the Fed has done or

00:52

purports to be to be doing and just

00:55

generally how you think about that it is

00:59

legal what the Fed is doing the 13-3

01:02

provisions that the Fed has that were

01:04

revised in the dodd-frank bill give them

01:06

the ability to do this and here’s an

01:09

important caveat provided that the

01:11

Treasury secretary approves of it and

01:14

that’s been what I’ve been trying to

01:17

hammer along was that what effectively

01:19

has happened is we’ve merged the Federal

01:22

Reserve with the Department of Treasury

01:24

and that what’s effectively happened is

01:27

is that the Fed is not buying corporate

bonds or ETFs or commercial paper or now

municipal securities as of last Thursday

it is the Treasury it is the government

that’s buying it the Fed is just

providing the financing and when I hear

Fed officials say to me well we’ll get

01:45

out of this when the time is appropriate

01:46

no you have to get the Treasury

01:49

secretary to approve of you getting out

01:51

of it and that means you need Donald

Trump to say I think you guys are done

money printing I think you guys are done

ramping markets up higher and I have a

hard time believing especially in an

election year that that’s going to

happen anytime soon so getting into

these programs is easy getting out is

going to be the real tough part I think

02:10

and that’s to come and the problems

02:13

associated with that yep oh and we’ll

02:15

get into like you have an explicit

02:16

opinion on whether

02:17

not that this creates a new version of

02:19

economic gravity or not but just you

02:22

know is the beginning of that I mean

02:23

that that isn’t that essentially what at

least phase one its Trump we probably

call it of mmt looks like when you merge

the Treasury fiscal spending with money

printing I think that’s exactly right

I’ve been actually causing calling this

mmt version 1.0 is what we’re doing look

all in all the stimulus is something

02:46

along the lines of four or five years of

02:47

tax receipts and I think a lot of people

02:50

have asked a question of if the Fed and

02:52

the Treasury believes that this works

02:54

that they can print five years worth of

02:56

tax receipts and not have any

02:58

consequence then why do we have a tax

03:01

why do we have a dir S can we just give

03:03

it the IRS then at that point and just

03:04

have them print all the money that they

03:06

need of course not I think that there’s

03:08

going to probably be somewhere down the

03:10

line some kind of consequence to all of

03:13

this money printing what and how we can

03:17

debate but I have a hard time believing

03:19

that we could print several trillion

03:21

dollars for up to a trillion dollars

03:23

right now and it will have only pleasure

03:26

and no pain because if it did then we’ll

03:29

print another a trillion and then we’ll

03:31

print another a trillion until we go to

03:33

the point that it becomes too much well

03:35

isn’t it doesn’t that just mean that

03:36

your and thanks for simplifying it that

03:38

by the way not not many people can do

03:39

that in 30 seconds or less

03:41

but again you isn’t that just at the

03:44

pleasure of the people deciding to pay

03:46

their taxes uh yeah I think that there’s

03:50

a lot of that right now although tax

03:52

payment is not at the pleasure of people

03:54

you know as the great economist Walter

03:57

Williams says you know if you don’t pay

03:58

your taxes they’ll kill you what he said

04:01

go ahead try and barricade yourself in

04:02

your house and not pay your pay taxes

04:04

and see how long that works eventually

04:05

guys what guns will come through the

04:06

front door looking for their taxes so it

04:09

isn’t not quite at the pleasure of the

04:11

people but there will be an argument to

04:13

be made at some point that if it’s not

04:15

let’s do away with taxes it would be why

04:18

do we have to end the money printing why

04:20

do we have to end this stimulus or the

04:22

bailouts or whatever we’re calling it

04:24

this week if there is no consequence to

04:27

it why is it only in a crisis we can

04:29

print

04:31

and borrow a trillion dollars to try and

04:33

get us over the hump but not in a crisis

04:35

why can’t we keep doing it then – that

04:37

will be a debate and a discussion we’ll

04:39

have to have at that point well I mean

04:41

there’s there are plenty of academics

04:43

obviously you and I that’s not that’s

04:45

that’s not where we live day to day it’s

04:48

certainly not where I want to go I think

04:50

I’d be pretty bored but I mean people

04:51

always say hey look can you give me a

04:53

white paper on why use the base effects

04:55

– to predict their use your now Cass I’m

04:57

like here’s the white paper the back

04:58

test it’s like one piece of white paper

05:00

have at it go for it but no stephanie

05:02

kelton for example I mean what do you

05:04

think about that I mean she obviously

05:06

feels like she’s got one step in the

05:08

door on this and maybe Trump or whoever

05:10

beats Trump or if Trump wins and both

05:12

would quite like that yeah I think so I

05:15

think you know to put the Calton in the

05:17

MMT argument you know – a simple task

they believe that you can print money or

borrow and you know increase government

spending pay for college pay for health

care pay for whatever you want to pay

for without inflation until you hit the

end point of inflation their argument is

we can borrow a lot more before we hit

inflation I think my argument would be I

don’t think we’re gonna be borrowed

nearly as much as you think we can

before we get to the inflation point the

emmab tiers do have a point they say

when you get to inflation then you

you’ve gone too far and they they’re

their remedy for that by the way is to

raise taxes and that’s the way you

remove money out of the system good luck

with that

you know it’s trying to turn over turn

over – they want to have tax rates be

like the Fed Funds rate where it goes up

and down with the right level of

inflation set by a bureaucrat like the

Federal Reserve I’m not so sure that

society is quite ready for tax rates to

kind of go along those lines but to the

larger point I don’t think they’re gonna

they’re gonna find we’re gonna find

they’re printing and borrowing to the

extent that we are is going to have a

consequence a lot sooner than we think

it’s going to be the mmm tears thinks

it’s like 10 20 30 trillion dollars we

could do before we hit that level I

06:36

don’t think it’s gonna be nearly that

06:37

much before we start seeing problems

06:39

well what if the consequence is the one

06:41

that we’ve already seen in o8 and again

06:43

it’s not a wait I just don’t

06:44

want to make sure that everybody knows

06:45

that I don’t think it so late I think

06:46

it’s 2020 and it’s quite different it

06:48

could be worse but again you know what

06:50

if the consequence is that people don’t

06:51

believe the bullshit and asset prices

06:53

just go straight back down that is if

06:56

that is a big consequence I think right

06:58

now because it’s a flip side of this

07:00

story is we are going to take you know

07:03

what the Fed is doing in supporting

07:05

markets let me go back to my first

07:07

argument what the Treasury is doing

07:09

through the Fed is nationalizing the

07:10

markets right they are basically taking

07:13

them over and by the way and I’ll give

you the names to Wall Street is cheering

this as loud as they can Bob Michael

07:21

this chief CIO fixed-income of JPMorgan

07:23

Investment Management he’s thinks they

07:26

haven’t gone far enough he wants them to

07:27

set the price of every bond in the

07:30

country

07:31

Rick reader at Black’s Black Rock has

07:33

been cheering this program as well Mike

07:36

Wilson at Morgan Stanley

07:37

David constant at Goldman Sachs has

07:40

abandoned his 2000s a peak all because

money printing is good and what the Fed

and the Treasury are doing is good well

07:50

we’re going to put that to a test right

07:51

now and here’s the simple question you

07:53

have to ask yourself is the market near

07:56

fair value is the market somewhere where

07:59

it would naturally be and I like to say

08:02

if if a red headline came across my

08:04

Bloomberg and it said Jay Powell

08:06

changed his mind cancelled all the

08:07

programs with the market go down a lot

08:10

yeah what because we supported it an

08:12

artificial level I think the Fed can do

08:15

that for a while support a market at an

08:17

artificial level but not forever

08:19

eventually the weight of where the

08:22

market should be will come to bear on it

08:24

and it will fall and it will fall down

08:26

so we’re gonna put this money printing

08:29

thing to a test the difference in o.9

08:31

was they started it after the market was

08:34

down 50 percent and two years later so

08:37

they got if you will lucky or maybe they

08:40

got smart they started it when the

08:42

market was somewhere near a fair value

08:44

level anyway this time around they

08:46

started it two weeks after the all-time

08:49

high and then kept ramping it up all the

08:51

way to last week and continue to ramp it

08:55

up and the question is if the markets

08:57

near

08:58

would have been anyway then this will

09:00

appear to work if it’s if the market

09:02

should be severely lower and that’s what

09:04

my fear is is then it won’t work over

09:07

the long term and work for a while it’s

09:09

it’s a it’s amazing thing I mean I was

09:11

back and forth with Danielle DiMartino

09:14

booth on this there’s this and and you

09:16

you probably could empathize with this I

09:18

think I’m probably barking up the right

09:19

tree if I’m not then too bad but you

09:22

know this this whole discussion you and

09:24

I have discussions with the same types

09:25

of people don’t forget the JP Morgan

09:27

gentleman that you that you named he

09:29

doesn’t quite want to talk to me and I’m

09:30

not completely surprised why JP Morgan’s

09:33

a client to be clear in terms of

09:35

independent research they pay for a lot

09:37

in independent research but again the

09:39

whole haha you didn’t get it you didn’t

09:42

know that you shouldn’t fight the Fed

09:43

like that discussion tell you Jim that

09:46

tries to mean bananas like that that

09:49

tries to be bananas like all you great

09:50

fundamental investors who only talk to

09:52

me about how good the cycle is and how

09:54

it’s different this time as soon as it

09:56

turns fundamentally you turn tail to

09:58

that and you tell me I’m the idiot III

10:01

have a hard time with it you know let me

10:04

let me jump in and say I agree because

10:06

what you’re saying is and let’s let’s

10:08

not mince words here what we’re saying

10:10

is all this analysis we do is bullshit

10:12

right because he works it enough where

10:14

it works in the op but then in the down

10:16

you can forget everything you’ve learned

10:18

about how finance works don’t worry

10:21

the printing press will just bail you

10:23

out well why don’t we even need analysts

10:25

why do we even need anything if that’s

10:27

the way the markets going to work that

10:29

it always is going to be supported by

10:31

some artificial force on the way down

10:34

you know if you believe in free markets

10:37

free markets is remember what free

10:39

markets are supposed to be let’s not

10:40

forget what we were talking about here

10:42

we have an a finite source of capital we

10:45

don’t have is all the money in the world

10:47

you think we did with the Fed and we’re

10:49

trying to efficiently allocate it we’re

10:51

trying to give it to good ideas and take

10:54

it away from bad ideas if we continue to

10:56

go down this road where I’m going to use

10:58

an Austrian term we’re gonna create

11:00

malinvestment we’re gonna just give

11:01

everybody you know Bob Michael JPMorgan

11:04

he wants to fix the price of every

11:07

corporate bond at 2% he said that last

11:10

week on Bloomberg TV

11:12

okay if you fix the price of every

11:14

single corporate bond at 2% there’s no

11:16

point in doing credit analysis everybody

11:18

gets the same price whether it’s

11:20

Carnival Cruise or it’s Amazon whether

11:23

it’s a disastrous business model or a

11:25

great business model everybody’s going

11:27

to get funded and you’re going to create

11:29

an all kind of dislocations and problems

11:32

in the economy because you’re not being

11:34

efficient with getting rid of bad ideas

11:36

and rewarding good ideas well you’re

11:39

being you’re being you know completely

11:41

conflicted and compromised for your own

11:43

interests I mean you know that Bob

11:44

Michael I don’t know who that it now I

11:46

know but his son if he has a son named

11:49

Billy Bob Michael isn’t gonna work on

11:50

Wall Street because like he said there’s

11:52

no job to do right exactly and I think

11:55

you know you know this is what this is

11:58

what the the idea is supposed to be I

12:00

mean in in theory if you believe that

12:03

the market was overreacting in March

12:07

because the what’s happening with the

12:09

virus is not nearly as bad as the market

12:12

was saying then bring it on give me

12:15

great opportunities to make money but if

12:18

you’re going to arrest it before we get

12:21

to some kind of a settling out in the

12:24

market you’re just gonna create more

12:25

problems in the long run I think at that

12:27

point but you know what if you look at

12:29

Wall Street and if you look at policy

12:31

makers no one’s thinking about the long

12:33

run one of the things I’ve really been

12:35

railing against is everybody talks about

12:38

well what’s the second quarter gonna be

12:40

like and what’s the third quarter gonna

12:41

be like when’s the restart gonna start

12:43

and I’ll use some some technical terms

12:46

for you here the second quarter is gonna

12:47

be a shit show the third quarter is

12:49

gonna be less so of a shit show that’s

12:51

all the analysis you need to know what

12:53

we really need to discuss is when this

12:56

is over the virus and it will end what’s

12:59

the long-term consequences of it are

13:02

there going to be changes in social

13:04

behavior are there going to be changes

13:06

in the way we conduct business is there

13:09

going to be some kind of de

13:10

globalization as well and those 17

13:14

million Americans that have been

13:15

unemployed in the last three weeks if

13:17

you believe tomorrow’s numbers supposed

13:19

to be another five million added to that

13:21

role 22 million how many millions of

13:24

those people

13:26

don’t get their job back or have lost

13:28

their businesses because of that what

13:30

kind of anger resentment does that bring

13:32

up to boy these are questions everybody

13:34

looks at their shoes and says point

13:35

let’s just not go there let’s just talk

13:37

about how bad the second quarter is

13:39

going to be so we could talk about how

13:40

much less bad the third quarter is going

13:42

to be and that seems to be the extent as

13:45

far as they want to take it right now

13:47

well I and Wall Street just voted on

13:49

that I think like if you even if I look

13:51

at my own client base which is you know

13:53

hedge funds mutual funds I think we have

13:55

actually the same client base so you

13:57

probably had the same feedback there’s

13:59

this like super super short-term panic

14:02

obviously the pressure on people to

14:03

perform on a very short-term basis at

14:06

the hedge fund level in a quote-unquote

14:07

neutral environments never been higher

14:09

so people are just flat-out you know

14:11

running in fear of their own job but

14:13

yesterday JP Morgan was quote-unquote up

14:15

on the bad news and I’m like just chill

14:18

out I mean let let gravity play out I

14:20

don’t think that people are gonna

14:21

actually believe Jamie diamonds loan

14:23

loss reserves here I don’t think that

14:24

they’re gonna believe his outlook and by

14:26

the way I do believe in economic gravity

14:28

so the credit cycle exists gravity

14:30

exists and we’re gonna go through it so

14:32

I agree you’re gonna have to go through

14:33

the shit show and look at what the

14:34

financials have done in the last 24

14:37

hours

14:37

I mean they’ve led the market lower and

14:39

they’re the first ones to report their

14:41

version of reality which I don’t know if

14:42

you agree or disagree whether you call

14:44

it a shit show or not they have no idea

14:46

yeah I know not only that they have no

14:49

idea but if you look at what they’ve

14:51

done is they just made a guess as to

14:53

what their loan loss reserves are gonna

14:55

be exact yes it’s on those long lost

14:58

reserves are much larger than the

15:00

analysts to cover these companies

15:01

thought that they were going to be as

15:03

well so there is just a guess so far cuz

15:07

for the moment no one has really

15:10

defaulted on a loan if you stop paying

15:11

at three weeks ago it’s not in default

15:13

yet it will be soon but it isn’t there

15:15

just yet and so we have no idea you know

15:19

where this ultimately is going to go and

15:21

that’s what we’re what we’re trying to

15:23

guess and stuff but I ultimately think

15:26

it really comes down to that long-term

15:28

question that no one wants to touch

15:30

right what happens on the back side when

15:33

this is over do we want to have a more

15:36

conservative attitude do we want to

15:38

de-risk

15:39

we wanted to globalize away from China

15:41

do we want to reward to use a Mohamed

15:44

el-erian term do we want to reward

15:46

resiliency in a company’s business plan

15:48

/ efficiency in a company’s business

15:51

plan right now it’s closed everything

15:54

and send it to China cuz it’s cheaper

15:56

but now we’re might say in the bet and

15:58

on the other side we might say how is

16:01

your company going to respond when we

16:03

have to close again for three months are

16:05

you gonna be able to survive and are we

16:06

going to reward companies that set

16:08

themselves up like that well that means

16:10

that we’re going to have a slower growth

16:13

less aggressive attitude than we did

16:16

have say in January of this year now

16:18

Wall Street wants to believe there’s

16:20

going to be none of that that it were

16:23

just it’s gonna be right back to January

16:24

2020 as soon as we’re done with the mass

16:26

graves on Hart island it’s right back to

16:28

2020 and everything’s going to be okay I

16:31

tend to think that that’s not going to

16:33

be the case there is gonna be changes in

16:35

how we do things I may be wrong on what

16:37

the changes are but what would shocked

16:39

me is if the answer is nothing changed

16:42

by the end of the year now we’re just

16:45

back to the way it used to be less

16:48

25,000 dead people yeah that’s I say

16:51

that sarcastically it kind of men you

16:53

know emphasize my point no it’s it’s

16:57

it’s classic actually and predictable

16:59

proactively predictable indeed you know

17:01

that’s how Wall Street thinks they think

17:03

linear and on a linear basis they think

17:05

you go down to one side of the Vienna

17:08

linear basis you could go right back the

17:09

other side of the vena Bob can mark all

17:11

the prices at the top end of the V you

17:13

never have to worry about having any

17:14

double use in between so it’s like it’s

17:16

a that is a shitshow in my mind I mean I

17:19

wonder what you think about this

17:20

framework because you know on the fly

17:22

I’m trying to go from depression to

17:24

what’s the recovery into some version of

17:26

a recession to an actual recovery

17:28

there’s a the work out period you know

17:30

of unemployment what that means and the

17:33

credit cycle which is one in the same

17:34

thing you lose your job if the company

17:36

loses their cash flows liquidity is not

17:38

solvency you know so again that’s one

17:40

two is behaviorally like to your point I

17:43

don’t know point number three is

17:45

actually the one we start talking on a

17:47

research call about a little bit more in

17:48

the last couple days which which is the

17:50

regulatory environment like you know

17:52

what is the new America in terms of how

17:54

you’re allowed to operate how you’re

17:56

allowed to have your liberties or civil

17:58

liberties and your consumption versus

18:00

the prior like this a whole new world so

18:03

those three things to me like and that’s

18:05

that’s starting with a lot you know have

18:08

I left anything big out that I need to

18:10

think about from a from a intermediate

18:12

to longer term cycle perspective no I

18:14

think that that’s exactly right I mean

18:16

those are going to be the things and

18:17

you’re right about the third one which

18:19

doesn’t get which gets talked least of

18:21

all is going to be the regulatory

18:24

environment look what a lot of these

18:26

states have done has been nothing more

18:28

than turn their state into a police

18:30

state now I get it

18:31

there’s a virus out there and we need

18:34

the social distance in hand wash and

18:36

what are we hearing from the White House

18:38

right now hey it’s not gonna be a

18:40

hundred to two hundred thousand dead or

18:41

two million if we did nothing but it

18:44

might be far less than that because

18:46

everybody understood and I was like you

18:49

know you don’t trust people why don’t

18:51

you just lay out the case here’s a virus

18:53

this what you need to do stand six feet

18:54

apart wash your hands wear a mask and

18:56

McDonald’s you can stay open but figure

18:59

out how to work within that framework

19:01

instead of just some merrily closing

19:03

everything right and then deciding when

19:05

we’re gonna open or doing like the the

19:07

governor of Michigan has decided big-box

19:10

retailers have to close their garden

19:12

department but can keep their grocery

19:13

Department open so if you so if you go

19:15

to Target and you buy groceries it’s

19:17

okay but if you go to Target and buy a

19:19

garden hose you’re gonna be arrested I

19:20

mean they’re coming down to that level

19:22

of detail right now in terms of what

19:25

they’re doing with a lot of these

19:27

companies I don’t think they’re going to

19:28

give that back so easily and I do think

19:31

that there’s going to be some anger and

19:32

resentment as they are very very slow to

19:35

give that back and they’ll use the

19:37

argument of reinfection way and when

19:40

months come one week’s come in two

19:42

months which come in two quarters of

19:44

having these restrictions it’s going to

19:47

weigh not only on the economy but on

19:49

society in general

19:50

well that work out period I mean if you

19:53

only use economic never mind

19:55

shallow recessions which we had a very

19:58

long work up

19:59

of corporate leverage come you know in

20:00

as you guys could throw up the history

20:02

of it all guys if you can on slide 33

20:05

we’re just showing Jim what you know

20:06

obviously on the back side of your hand

20:09

what’s happened economically across

20:11

cycles but you know you can look at some

20:13

of the the most actually slide 34 the

20:16

shallowest recession which was again a

20:18

corporate credit bubble in 2001 you know

20:21

the work out period was nine months the

20:23

similarity was that you had an economic

20:24

shock at precisely the wrong time in the

20:26

cycle I think a lot of people screw that

20:28

up too

20:28

they’re like nobody could see this

20:29

coming that’s total bullshit just like

20:32

you know one the economy was slowing in

20:33

2019 and then it just made the virus and

20:36

in that case 9/11 made it slow faster

20:38

but again the work out period was at

20:40

least nine months for the corporate

20:41

credit cycle you know and in terms of

20:44

the economy actually bottom Dazz you

20:46

know in oh one before

20:48

actually the stock market did and and

20:50

that’s that was back that took them till

20:52

Oh – so I don’t even know like where

20:54

people are going when they think like if

20:56

they only studied economic history I

20:57

know it’s never the same but even if you

20:59

took the 44 months of the depression in

21:01

the nine months of oh one you know it’s

21:02

not two months no exactly if you could

21:05

put that slide back up I’d also point

21:07

out something else too if you look at

21:09

the Oh 8 December December December oh

21:13

seven oh nine period peak to trough

21:15

decline was five percent right we’re

21:18

expected in the second quarter to have a

21:21

decline and a total decline in the US

21:24

economy is six percent just in the

21:26

second quarter the second quarter alone

21:28

will be worse than the entire Great

21:32

Recession will be and you know I’ve

21:35

heard people say this without

21:36

understanding some of these numbers

21:38

they’ll talk to me about China and

21:40

they’ll say well China’s 80% of the way

21:42

back to where it was as if that’s a

21:43

bullish argument you mean they’re 20%

21:45

off the top

21:46

you mean that the Great Recession was

21:48

five percent off the top dates four

21:50

times worse that’s it that’s a

21:51

depression it’s what you’re in if you’re

21:53

20 percent in the way the time you have

21:55

to get back to 98 99 percent of what we

21:59

were in January in order to say that

22:02

there’s really no impact if we get back

22:05

to 90 percent of where we were in

22:07

January it would be devastating for I

22:11

think a lot of people keep him

22:12

– at the bottom of the Great Depression

22:14

in 1934

22:16

we still had 75% of the economic

22:19

activity we had at the top and we had

22:22

78% of people still had their jobs that

22:25

means moving 25 percent off the top we

22:27

had 22 percent unemployment so I think

22:29

what you need to understand is it

22:32

doesn’t take much for this to upset the

22:35

applecart as well as where we’re gonna

22:37

go and people are not ready to go there

22:40

they’re all mean reverting thinkers they

22:42

all have their model that’s pre virus

22:45

and they think that the virus is just a

22:47

temporary interruption so we can go back

22:49

to that model and we revert back to that

22:52

mean but what I’m worried is they’re not

22:55

really understanding that this is a new

22:57

era and that we need a new model of

23:00

where we’re gonna go it doesn’t have to

23:01

be a disaster

23:04

Madonn handle it right we’re gonna make

23:07

it a lot worse than it needs to be god

23:09

I’m a amazing disconnects between what

23:12

you just said and where our friend Bob

23:14

wants to mark the price or the valuation

23:17

ever you want to you know contend it

23:19

should be there of markets it it’s just

23:22

that is the disconnect and I guess to me

23:24

if that’s what you’re saying is if the

23:26

if there’s a widening disconnect between

23:28

where the officialdom wants the market

23:30

to be priced you know again centrally

23:32

planned in price versus where the actual

23:34

economic gravity is everything in

23:36

between last price to where that washes

23:40

out is the risk I mean that right so

23:42

like have at it I mean it’s a I don’t I

23:46

don’t I don’t I don’t know how else to

23:48

think about that and the answer isn’t

23:49

buy stocks right you know I’ll give you

23:52

an giving an example of what we’re

23:54

talking about with the disconnect if

23:57

something interesting has been happening

23:59

in the bond market which has not been

24:01

appreciated so on march 13th the Fed

24:04

ended this not QE QE argument by saying

24:07

okay we’re going to do a QE we’re gonna

24:09

buy out two 30-year bond and they ramp

24:12

that up to two weeks ago they were

24:14

buying six hundred billion dollars a

24:16

week a week in bonds that since March

24:19

13th they fought over one and a half

24:22

trillion dollars worth of bonds now

24:24

these numbers are hard to understand

24:26

that you bought a trillion and a half

24:28

dollars worth of bonds you know if you

24:31

watch mutual fund flows if you had like

24:32

a two hundred billion dollar year that

24:35

would be a big you know this is a

24:36

trillion and a half in a week so now if

24:39

you look at yields you go okay

24:41

but they haven’t moved much in the last

24:43

two weeks and I’ve argued if this market

24:45

was anywhere near normal with that kind

24:47

of borrowing the 10-year yield would

24:49

have opened at zero and it would have

24:50

been on its way to negative why hasn’t

24:53

it moved because if you look at bun

24:55

flows from ETF’s for mutual funds from

24:58

households from central banks you can

25:00

measure six hundred billion plus of

25:03

selling that has been going on and

25:06

that’s just from the finite set of

25:08

measures we have there’s four other

25:09

metrics that we haven’t seen so when you

25:12

add it up what is happening is official

25:15

term has been buying bonds at the rate

25:17

of trillion plus a month and everybody

25:20

else has been saying you’re holding it

25:22

this at the wrong price and if you’re

25:24

gonna do that I’m selling it to you and

25:27

they’re selling it to their their

25:28

massively liquidating to the central

25:31

banks in a big way they’re making a

25:33

powerful statement that when all of this

25:35

is done I think interest rates are going

25:37

to be a lot higher than they are right

25:39

now either it’s a combination of

25:41

inflation is returning or it’s finally

25:45

that supply is going to crowd out the

25:48

market I started in the bond market in

25:49

1987 and for 33 years I’ve heard people

25:53

say to me that we’re gonna have these

25:55

massive budget deficits that are gonna

25:57

crowd out and drive up interest rates

25:58

and for 33 years that wasn’t the thing

26:01

because we were playing child’s games

26:04

between a 1 or 2 or 3 percent deficit

26:06

maybe 4 or 5 in the middle of a

26:09

recession now we’re talking 15 to 20 is

26:11

what we’re talking now you’re gonna

26:13

finally start to see that crowding out

26:16

so the bond market is trying to tell you

26:18

that the that the fair value is probably

26:22

a far lower price or a much higher yield

26:26

and the only reason you’re not seeing

26:28

that is you’re getting astronomical

26:30

types of buying out of the Federal

26:32

Reserve through their quantitative

26:34

easing program that’s all holding it up

26:36

but eventually like I said they can’t do

26:39

that

26:39

forever and I think that that will

26:41

eventually give away to higher interest

26:43

rates as we move forward from here well

26:46

if you look at them and when you come on

26:47

and people like to talk about the other

26:49

side the other side could also be

26:50

stagflation a recessionary stagflation

26:53

and to get that in the way that my model

26:56

works my 4 quadrant model is that the

26:58

the faster and deeper you go and what I

27:00

call call quad for both inflation and

27:03

growth slowing at the same time quite

27:05

clearly that’s happening despite

27:07

president pump on oil you know to the

27:10

point that you get deep enough you can

27:12

only reflect from there so it doesn’t

27:14

take much you know for that switch to

27:16

turn for you to go from deflation to

27:19

reflation and you know given the

27:21

economic conditions I mean that to me

27:23

every single time I make a call on

27:24

reflation it’s not like german-style

27:26

reflate it’s reflation or inflation and

27:28

i don’t know who knows it could be

27:30

anything to me I don’t I care but I do

27:33

more what the markets doing that’s the

27:35

point

27:35

and it isn’t it amazing that you know I

27:38

call net I think just because it’s got

27:40

some good alliteration and he’s a good

27:41

marketer so I mean I think that wheat

27:43

you and I can do some good marketing to

27:44

president pump did everything that he

27:46

could he made up quite literally the

27:47

barrels per day on one day of tweets

27:49

because he saw that you know he saw he

27:51

was having some impact in the equity

27:52

market and look what our oil does today

27:54

I mean oil the feds not buying oil the

27:56

feds not buying Jamie Dimon stock you

27:58

know so they’re free to fall you know

28:00

and and at some point they’re gonna stop

28:03

falling I guess right you know oil oil

28:06

what’s happened when oil by the way I’ll

28:09

tweet this out for anybody’s watching

28:11

after I get off this call with you is

28:13

the DIA the energy and information is

28:16

association put out there implied

28:18

gasoline demand numbers lowest ever yeah

28:21

down 50% in a down 50% in three weeks in

28:26

other words think a gasoline demand as a

28:29

metric for economic demand and it’s half

28:32

it’s half in three weeks yes man that it

28:36

means it if there is a world of hurt out

28:38

there but to the inflation argument yes

28:41

for the next couple of quarters the big

28:43

story is going to be deflation as we

28:45

deflate the economy but if you’re gonna

28:48

print and borrow trillions of dollars in

28:50

hand 22 million people unemployed

28:53

an extra 600 bucks a week and maybe

28:55

paycheck protection loans and try and

28:58

support these markets you’re gonna

28:59

support demand as best you can but

29:03

supply company’s not working going out

29:06

of business they’re gonna produce less

29:07

stuff higher demand less supply on your

29:10

prices more inflation that seems to be

29:13

where we’re gonna go after we go down

29:16

because I think what we’re doing when

29:18

people ask me what letter we’re gonna

29:19

have I used to say we’re gonna both avi

29:21

in and out we’re gonna have a V which

29:23

means we’re gonna have a big sharp to

29:24

contraction we’re gonna recover some

29:26

after the ricotta after the virus passes

29:29

but we’re not gonna go all the way back

29:31

to the high so that’s your L and if

29:33

you’re going to artificially support

29:35

demand even though you don’t have that

29:37

supply going on you know that we’re

29:39

making things you’re going to have

29:42

higher prices at the end of the day

29:44

you’re going to have some lower prices

29:47

in the form of commodity prices gasoline

29:49

and other things are going to be

29:51

demanded less but people are gonna be

29:53

out there going well I got some money

29:55

here I might as well go buy a

29:57

Playstation or I might as well go buy an

29:59

iPhone because the government’s been

30:01

giving me money they’re not gonna be

30:02

making as many of them because the

30:04

D’Amico’s the supply constraints are

30:06

going to be on them as well – you’re

30:08

gonna have all kind of distortions in

30:09

the economy of course so yeah you can

30:11

have both deflation and then inflation

30:13

be coming out of this both at the same

30:16

time I think I mean that that’s classic

30:18

what the market the market stocks and

30:21

credit which have had you know basically

30:23

a hundred different w’s in terms of

30:25

expectations into it since the market

30:27

crash you know the bond markets got that

30:30

they had that right deflation that’s

30:31

when bond yields go down obviously it’s

30:33

where the Fed panics it’s what the

30:34

commodities markets told you it’s what

30:36

the foreign currency markets have told

30:37

you it’s just this this this this

30:39

incessant debate about the stock market

30:41

that can drive can drive human beings

30:43

mad okay I’m gonna start – if you don’t

30:47

mind gonna start to knock out some of

30:48

these questions here in the queue

30:49

because sure you have a lot of like I

30:51

said wide following and some there’s

30:54

some really good questions here on on

30:57

the first one you know why why why there

31:00

seems to be no movement or revolution

31:02

away from the Fed I think that this is

31:05

like you know why are in bay

31:06

who the question is why are Americans

31:07

fine with this I don’t know if they are

31:10

they’re fun they’re fine with it because

31:13

they think it’s gonna work

31:14

they’re like wall street at the end of

31:16

the day you know Wall Street can say

31:19

this is how the world works this is what

31:21

I believe but all they want is they want

31:24

prices to go up

31:25

and if they think this is gonna work

31:27

there’s going to be no pushback on it

31:30

right now and their argument is going to

31:32

be has it worked the last time they

31:34

tried it which was in o8 and so I think

31:38

the pushback comes at the failure of it

31:41

to work at the failure of it who to come

31:46

to pass and I’ll give you if you want a

31:48

statistic to look at in fact I was just

31:50

writing this a few minutes ago I think

31:53

right now the most important economic

31:55

statistic everybody watches his initial

31:57

claims how many people lost their jobs

31:58

this week

31:59

remember that’s initial how many people

32:01

filed this week for unemployment

32:04

insurance there’s another statistic

32:05

called continuing claims how many people

32:07

are staying on unemployment next week in

32:10

the week after the week after that

32:12

number is expected in the next two weeks

32:15

to go above 20 million well if the

32:17

Paycheck protection plan loans and the

32:20

Fed is going to work that 20 million 25

32:24

million of people on unemployment claims

32:27

should start to follow fast because not

32:30

because the economy is recovering but

32:32

because the assistance programs are

32:34

getting them back in their jobs even

32:36

though they’re getting paid to do

32:37

nothing I’m a fear it’s not gonna happen

32:40

that they’re gonna stay unemployed and

32:43

then at the end of the day all this talk

32:46

about this program and that program and

32:49

the Fed did this and the Fed did that

32:50

I’m gonna look at continuing claims

32:52

you’re gonna look at continuing claims

32:54

I’m going to go there’s tens of millions

32:56

of people that have lost their jobs yeah

32:58

it nurse that is going to then feed that

33:01

resentment that we’ll see look we could

33:04

be wrong and maybe that 20 million of

33:06

Continuing claims will quickly become 8

33:10

million or 7 million of Continuing

33:13

claims because remember if a company

33:15

takes out a personal a paycheck

33:17

protection a ppthey alone they have to

33:19

hire bad

33:20

everybody and then they have to apply at

33:22

the end of the summer to show that they

33:24

still are they still have everybody

33:26

didn’t lay off of anybody and then that

33:28

loan is forgiven and they get to keep

33:30

the money so if we see that continuing

33:35

claims dwindle away to very little

33:37

numbers then these programs work if we

33:40

don’t they didn’t work and if they

33:42

didn’t work then you’re going to see the

33:44

resentment right now no one’s mad

33:46

because they think that these things may

33:50

work they’re waiting to see whether or

33:52

not they work or not but if they don’t I

33:55

don’t think you’ll see that resentment

33:56

well that’s that’s another way to talk

33:58

about like the short-term panic by both

34:00

the Fed and the fiscal is that it’s

34:02

trying to get it all done now in the

34:04

absence of having the time for it to

34:06

actually play out and the way that I’ve

34:08

looked at that is that it finds its way

34:10

into market volatility so the market

34:12

volatility shows you that markets are I

34:14

think there are equity markets and parts

34:16

of high-yield are uninvested but again

34:19

until the volatility goes away the

34:20

volatility goes away when the economic

34:21

circumstances become clear that

34:23

generally is a function of cash flows

34:25

coming back people getting their jobs

34:26

back but on slide 78 guys just so that

34:29

people can see what Jim means because

34:31

III think I said this every meeting that

34:33

I had for the last year because US

34:35

economy as you know peaked at the end of

34:37

q3 of 2018 you know initial claims in a

34:40

recession is weekly number the number

34:42

one causal factor to be watching in

34:45

terms of the pace of the economy this

34:46

thing is way off the chart like there’s

34:49

no like if you and I like bean counters

34:52

like we can’t analyze it I can’t believe

34:55

that all these people are so certain in

34:57

their grand central plans that you can

34:58

knock out essentially don’t forget to do

35:00

not you’re gonna knock out depending on

35:02

what this number is on the right side

35:03

there the cumulative employment gains

35:06

you’re gonna knock up 90 percent of the

35:08

cycle that’s a hundred and twenty nine

35:09

month economic cycle and then

35:11

everybody’s just gonna magically come

35:13

back I mean our our you know we’re

35:15

saying that at least two-thirds of the

35:17

jobless claims are permanent right and I

35:20

think that that’s going to be the real

35:22

fear is that the officialdom is hoping

35:25

that these plans are going to get

35:26

everybody back to their job and that

35:29

their you’re going to get paid to do

35:30

nothing but you’re going to be there for

35:32

the restart is what they’re going to

35:33

want

35:34

to do right um but if you’re right

35:37

two-thirds of it is permanent there’s

35:40

gonna be a big backlash that’s going to

35:41

be considered a gigantic failure on the

35:45

part of official demand if that happens

35:48

and at the same time those markets are

35:52

perceived to have not fallen apart which

35:55

is for the moment where the authorial is

35:58

on this 50% retracement of the decline

36:00

you’re right back to the anger that you

36:02

had in late oh nine with the Tea Party

36:06

movement in Occupy Wall Street that the

36:08

rich and connected got bailed out

36:09

through artificially supporting in their

36:12

their asset prices at high levels but

36:14

everybody else didn’t get bailed out as

36:17

well too so that’s going to be a real

36:19

problem I think you’re right that

36:21

ultimately the thing that’s going to

36:24

matter the most is going to be that

36:26

initial claims which becomes continuing

36:28

claims yeah how many of those people get

36:30

their jobs back because if not enough of

36:33

them get their jobs back then this

36:35

didn’t work this being these bailout

36:37

plans and everything else to try and

36:39

support the economy didn’t work and if

36:42

the stock market decides to have you

36:44

know bubble fever again and make a run

36:46

at 3,000 on the S&P and you’ve got CNBC

36:50

and Bloomberg and Fox Business telling

36:51

you the markets are okay but you lost

36:54

your job you lost your life savings in

36:56

your restaurant yeah that’s not gonna

36:58

sit well those two things are not gonna

37:00

that’s oil and water trying to put those

37:02

two things together at the same time

37:04

yeah that’s that’s correct that’s

37:06

Batsuit crazy I mean to think that

37:07

that’s all gonna work on a linear basis

37:09

right the another question here and this

37:12

is this is an important one as well and

37:14

and you know Trump being as

37:16

chameleon-like as he always is as most

37:18

likely and already has moved towards the

37:19

new narrative like calling it the Wuhan

37:21

crisis one of our clients the other day

37:23

called it the China 19 you could see how

37:26

people go there on the blame game but as

37:28

US companies reassess their reliance on

37:31

China or wanting to do with them at all

37:33

is there a possibility of another China

37:35

trade deal follow up before the election

37:37

oh I think that there’s very little

37:40

chance of a China trade deal before the

37:42

election at this point I do think

37:46

the thing about whether or not you think

37:48

China was at fault or not the fact of

37:51

the matter is it started there and it

37:52

came out of there and so we know that

37:54

when you start hearing rick scott

37:57

senator from florida last week on TV

38:01

getting very emotional and angry and

38:03

saying something along the lines of

38:05

anybody that buys a product made in

38:07

china is immoral now 60 days ago he

38:10

would have been mocked and laughed at as

38:12

a kook for saying that today who’s gonna

38:15

support china who is McCrone gonna

38:18

support china he’s got 17,000 dead

38:20

people in his country is italy gonna

38:22

support China is Boris Johnson go to

38:24

support China he nearly died himself

38:26

from this as well so anybody that’s

38:29

gonna want to push on China and say

38:32

they’re at fault remember it came out of

38:34

there and it’s your fault and we need to

38:36

punish you there’s gonna be no natural

38:39

constituency that’s gonna push back

38:40

again is Biden gonna push back against

38:43

it does he think that that’s going to be

38:44

a winning strategy to defend China after

38:47

what everybody has gone through so there

38:50

is going to be the scapegoating from

38:53

China now maybe it’s not skipper maybe

38:54

it is appropriately assigning blame

38:56

because of the way that they’ve

38:58

mishandled it as well too and I think

39:00

Trump opened the door for that yesterday

39:03

with his I’m not gonna fund who anymore

39:06

the World Health Organization that is

39:09

almost by definition saying that who got

39:12

it wrong because China told them to get

39:15

it wrong and that’s what we’re gonna go

39:17

so there’s gonna be a lot of anxiety

39:19

let’s put it that way with China I don’t

39:21

know if I I’d be shocked if we’re gonna

39:23

be looking at more trade deals look over

39:26

the weekend Larry Kudlow who signed off

39:29

his shelf for 10 years I believe free

39:31

market capitalism is the best way to

39:33

prosperity said the government should

39:36

pay the moving costs of American

39:38

companies to relocate back to China

39:40

that’s not very free-market capitalist

39:42

but it might be something that will get

39:45

a lot of play and a lot of understanding

39:48

in the country as well too so in that

39:51

environment no there’s gonna be no trade

39:53

deal Trump I think is you know he keeps

39:57

saying the Chinese are gonna buy all

39:59

these soy bean

39:59

from us and we’ll see whether they do it

40:01

I think he’s waiting for them to not do

40:03

it and then he’s gonna unleash on them

40:05

as well – funny – do it

40:09

the cuddler thing just cracked me up but

40:11

I mean I remember going on Kudlow and

40:15

company for probably as long and not as

40:17

long as you did you’ve been doing it for

40:18

longer than I have but I’m 45 years old

40:20

I was he would start every show with you

40:23

know like you said free market

40:24

capitalism King dollar Jim King dog you

40:28

know right and cash flows are the

40:31

Mother’s Milk of the stock market now

40:35

you have cash flows pre virus that it’s

40:37

loads of 0% growth in the US he doesn’t

40:39

say jack shit about the dollar at all it

40:43

got this part which is just like I mean

40:46

I yeah yeah some of these questions – in

40:48

the queue and maybe you know I don’t

40:50

know if you want to address it just

40:51

generally but people are apoplectic

40:54

watching like these discussions saying

40:57

how can these the kinds of discussions

41:00

that that you and I are having right now

41:01

how can this not be had in America you

41:04

know as in the face of the establishment

41:07

like you have any ideas on that because

41:09

I’m certainly a game for it if there’s a

41:11

way to do it right I mean these

41:13

discussions again I think they really

41:15

come down to this giant hope that that

41:19

official term whether it’s the Treasury

41:22

it’s Washington it’s the Federal Reserve

41:24

it’s the foreign entities that are the

41:27

equivalent of them all together can fix

41:30

this problem and that’s what they’re

41:32

really hoping for is that they can fix

41:35

this problem this problem really being

41:38

that my portfolio has lost a lot of

41:41

money and that’s really what’s untenable

41:43

and I need that to go back up they don’t

41:46

believe in the Schumpeter creative

41:48

destruction for every decline in every

41:51

change there’s an opportunity and if you

41:53

let the if you let the organism of free

41:57

market capitalism exist it will bend and

42:00

fold and change itself into something

42:02

else that’s better we don’t want to

42:04

change anything right now we want the

42:07

status quo and that’s what they’re

42:09

really pushing on is the status quo to

42:12

hold

42:13

print all this money hold the market up

42:15

at these levels as well too if you want

42:19

to look at a good example is you know

42:22

the the auto bailouts of ten years ago

42:24

we couldn’t allow because everybody’s

42:27

got this perception that when a company

42:29

goes out of business it goes away it

42:32

doesn’t go away it restructures is what

42:35

it does it changes in what it is and

42:38

that we didn’t allow the auto companies

42:40

to restructure and change to the point

42:44

that we allowed a Tesla to become the

42:47

bubble that it became because everybody

42:48

looked at Tesla and said they’re leading

42:51

the way to where autos can go now maybe

42:54

the evaluations became insane and

42:57

ridiculous but what we also are saying

42:59

at the same time is for GM Chrysler and

43:01

the rest of you you can’t you are

43:03

incapable of leading us to where we need

43:06

to go so we look to these messiahs like

43:09

the Tesla’s of the world and say they’re

43:11

going to show us where we need to go

43:13

with these industries because we don’t

43:15

allow them to change because change

43:17

means somebody might lose a job but

43:20

another job might be created along the

43:22

way so we are really trying to really

43:26

recreate January 2020 that’s what we’re

43:29

really what we don’t want anything to

43:31

change from that but it’s going to

43:33

change from that and that doesn’t

43:35

necessarily again that doesn’t mean it

43:38

has to be a disaster it can just be

43:41

different but we don’t even want

43:43

different we want January 2020 and

43:46

that’s why we’re printing all this money

43:48

and doing all this stuff to try and go

43:50

right back to there and you know the

43:52

political establishment Trump he wants

43:54

twenty twenty more January twenty twenty

43:57

more than anybody else

43:58

remember he famously tweeted in January

44:00

twenty twenty the stock market’s up

44:02

ninety percent since I got elected

44:04

you’re not up for ninety percent what

44:05

did you do wrong that’s what he wants he

44:08

based his whole election strategy on the

44:10

Dow going higher and higher and higher

44:13

and and so we’ll see right now there’s a

44:17

big hope especially among the JP

44:20

Morgan’s of the world and the Goldman

44:23

Sachs’s of the world that this will work

44:25

in

44:25

them back to where they were in January

44:28

but when the reality comes in that they

44:30

can’t get us back to January then we

44:33

have to start asking a hard question

44:34

okay we don’t have no economy we have a

44:38

different economy and how is it

44:39

different and who are the winners and

44:41

losers in the new economy we’re not

44:44

ready to go there just yet yeah that’s a

44:46

that’s a good wind up here man that’s

44:49

that’s that’s a lot and it’s and it’s

44:51

the truth and and maybe my last question

44:53

on that is you go back to January and I

44:55

mean not withstanding when it was

44:58

shortly thereafter that Robin hoodie

44:59

accounts for driving Tesla to 925 bucks

45:02

I mean there’s you know people couldn’t

45:03

see any of this coming of course we had

45:05

we work we had plenty of imbalances the

45:06

biggest corporate credit credit bubble

45:08

in US history but I remember and I’ll

45:11

never forget I live in the great state

45:13

of Connecticut which sure certainly is

45:15

in a Republican state I’m not a

45:16

Republican or a Democrat I’m a Canadian

45:17

guy I just don’t like politicians

45:20

generally but my most raging Democrat

45:25

clients let’s just say in you know

45:27

institutional money managers they were

45:29

kind of okay with Trump you know they

45:31

they’re okay because it was working

45:33

right they’re getting paid markets going

45:35

up they’re levered long they say yeah

45:37

you know he’s clever he’s gonna keep it

45:39

going you know I don’t know how much of

45:40

that you’ve got in your neck of the

45:43

woods but man they’re gonna be quick to

45:45

turn if that if if what was getting em

45:47

paid through the lens of dig they were

45:49

willing to ignore it but now they’re

45:52

certain ask the questions was he telling

45:53

the truth it’s just like the words

45:56

turning pretty quickly here you know

45:59

everybody that’s listening to this

46:00

podcast isn’t is interested in the

46:02

investment markets in one way or another

46:04

has their in the history of the world

46:06

ever been anybody to bitch and complain

46:08

that they made money whether or not it

46:11

was they made it by luck or they made it

46:13

by smart or they fell into it or they

46:16

saw it coming if they bought something

46:18

and it won up they’re good with it and

46:20

you know don’t don’t start telling me

46:22

that I got lucky or I maybe I did and

46:24

I’m I’m good with the president good

46:27

with every if this guy keeps tweeting

46:29

every three days that he’s causing the

46:31

stock market to go off even though I

46:33

might believe he didn’t it’s going up

46:36

and I’m making money and there’s no

46:38

complaints here

46:39

and then the minute thought stops going

46:41

up this one everybody then starts asking

46:43

the real hard questions yeah that’s a

46:45

real hard questions it’s getting harder

46:47

I mean he had a tough trade their

46:48

president pump on that oil trade right

46:53

you know it’s it’s it’s an amazing thing

46:56

that what’s happening with the with the

46:58

oil trade is Trump has you know he might

47:01

not be wrong on it but he’s he’s decided

47:04

that the energy sector is as important

47:08

as the consumer sector now from an

47:10

economic standpoint that’s actually

47:12

right if you look at the amount of GD

47:14

the energy sector puts out and the

47:17

amount of GDP would that would be

47:19

enhanced by an oil price cut it’s about

47:22

50/50 and so he’s not entirely wrong on

47:25

that but boy he does really come off as

47:28

is trying to say that he doesn’t want

47:30

anybody to have a cut of gasoline prices

47:32

they should if the economy is gonna go

47:34

down this hard then that should be the

47:36

natural consequence of it is one dollar

47:38

gasoline is what it would be um gasoline

47:41

is supposed to represent some measure of

47:44

economic prosperity in the country too

47:46

because it’s its demand will move up and

47:49

down with it and if we are unemployed

47:52

remember the biggest reason you drive is

47:54

to go to work and if you are unemployed

47:57

then you get the gasoline demand numbers

47:59

we got today the lowest ever cuz

48:01

everybody’s sitting around talking to

48:03

people on skype like we are right now

48:06

and we’re not in our car yeah and that’s

48:08

going to continue to be the case as we

48:10

move forward yeah if you haven’t looked

48:11

at it which I’m sure you have maybe

48:13

others haven’t the mannheim index you

48:15

know used cars just complete collapse

48:18

and that that index used cars has been a

48:20

pretty good leading indicator for a long

48:22

time but it’s it’s episodic and

48:24

generally not trending but when it

48:25

crashes it crashes for for a reason and

48:28

adjust it again so that’s kind of sad

48:30

there’s a lot if there’s a lot of about

48:31

this Jim that’s that’s just set and you

48:33

know I appreciate that you’ve been open

48:37

and honest about it I think there’s a

48:38

there’s an analytical weaponry to that

48:40

but there’s also a courage

48:42

you know not everybody to your point on

48:44

Wall Street’s willing to again we’re not

48:47

making shit up here this is the truth

48:48

and you’ve been illuminating suffice to

48:51

say and

48:51

educational in terms of laying it out

48:53

there so thanks for thanks for taking

48:55

the time to do that with me

48:56

thank you I appreciate it he’s Jim

48:59

Bianco you can actually find him on

49:01

Twitter he’s a great contributor to the

49:03

debate out there and I think he’ll be on

49:04

the front lines of it I think you’ve met

49:06

three people in particular today that

49:08

that will be I think courage is a big

49:10

part of leadership and I’m gonna you

49:12

know it depends on what people wanted to

49:13

find Americas but that’s how I’m gonna

49:15

define mine thanks for joining us today

49:17

we will be right back at it tomorrow for

49:19

the final day of the investing summit

49:21

[Music]

49:28

you

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