Adam Parker On Deregulation, Sector Rotation & The Inauguration + Navigating Fed Speak with Axios’ Courtenay Brown
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They are also the people behind the alternative investment industries. S largest and most exciting in person events find out more about eye connections events and members only platform visit eye connections to I O. Welcome to the onset pocket.

I'm danny s, and i'm joined by danny moses over here. We have a great show for you today. And to get to our guest right now in a minute, we have some housekeeping here, stick around for a conversation that we had with corti Brown.

SHE is the head economic reporter at axius. We do little fed preview and going to get into a little her background. We know her from C B C. SHE was a producer on the final fast money about ten years ago.

And we're just going to talk about the family and in some of the stuff that's going to be going on into year and in the new year. Also, guy, I spoke with Michael seller, he is the chairman of microstrip. Gy heat lays out his view for bitcoin.

What he's doing with the company. And as IT relates to you know, they become a treasury for a bitcoin is a great conversation that is in the united podcast feed and on our youtube page, go there, reserve media, tuesday, december tenth, ten am, guy adami and myself. We are hosting an A I panel with the city O A fact that are fine partner.

And they actually have the cbo that's a chief business officer of perplexity, a company that we've gonna know really well. The CEO has been on our parties, been on fast money. His name is the metric vel link's.

So tune for that register at risk, sal, that come out. I need to take a break here because that was a lot of how you have like going on. But this is really exciting for us.

First time on the pod, adam Parker, founder, C E O. Try varied research. We knew him back in the day.

Then you go back then, but he's been coming on C, M, B, C. For years. He goes on, our good friends got watter show closing bell all the time .

to help me both you good to see you. Thanks for the .

like to try very and so and now .

i'll give me quick lesson, my middle daughter time is you the different merchants pay for appreciate funny though.

and i'm sure you're cry. I mean, the people who come back every day listen, I mean, your people are clients .

love everybody next right?

Well, for sure to do a poker game, i'll be there played power is a very good poker player member at the same club up in west chest while and now our kids, both at ten universe free gaming for .

a badger of football, the organ yes, I see you a good time. You know the .

market and we get to be together too.

It's nice to steal you .

from you off the desk for a minute to come to with us.

It's really good in right now.

but you have had a really nice calls here. I think you a very thoughtful process to how you look at the street and sectors. And so then I thought the comment right after the election, which was and don't fight IT by the election, potentially Shelly augury in january, which has been the right call lumpur's ous, it's been a few weeks now. Are we pull in ford way too much at this point gives your current.

And so I mean the way I think about IT is um we tag stocks into courteous based equality. So high mid low quality junk, obvious ly junk stocks can go up whatever unk when the growth universe junketing growth stocks have been high quality growth by a huge amount, in fact, in last twenty five years, only two times ever has had been bigger. IT was right after the financial crisis recovery, recovery.

So I don't think the red sweep is exactly the magnitude recovery that you got from those huge events. So it's getting a kind of stretch in terms the amount of performance is said all to say, like the real risk on and thutty stuff. So i'm expecting some kind of rotation. I think most kinds I talk to or whether it's really generate the inauguration ation, which is, I think, the twenty or twenty first or whether it's or whether it's I didn't to count that account returns from the of no IT.

IT is a tough time of year to see anything really changed. Once in a while, we get something happens in december, some big event, we get type of but you're right now feels like we're just kind of gear into the end of the year. You see anything you're happening.

They are I mean, as we record this on a thursday, I mean, to get the jaws report tomorrow. And I guess to extent that this some hawkish interpretation of that and people think the fed pumps of breaks a little that could be a negative. It's hard to create a story where the multiples for equations expand a ton at the same time, you think the fees going to be less accommodate.

So that could be a short term name. I mean, direct or tomorrow, look what are the negatives. It's hard in the next few weeks? I don't know.

I think if I look out in the first six months of next year, I can see with you, you know one would be the single bus negative thing that I can think that happen to us. Equities would be three months of four. Taiwan semi says they can meet in video chip. To me, that will be the single most fundamental .

that they get to. That a little bit may .

be a little too, yes.

you again, or that there is so much demand and is a supply constraint situation that IT goes the opposite way, right? Like so if you think about tawana mi and we into that eighty five percent of the production of high N G P S, we know that NVIDIA has eighty five percent of the market share right there. They've had a lot of pricing power, both of them the fabs right, and the focus in video. So that something, I think that is probably under appreciated. And then you think of the breakout paste that allowed the hyper scales right, have been paying for the G P S, building the servers that go the day center data centers.

There's some I don't think there's a lot of bubble stuff going on personally, but I think that some of the data center financing.

there's some squshy stuff going on. Well then reminds a lot of sun microsystems twenty five years ago, lot of venture financing, you know, NVIDIA has been investing in a lot of these startups, right, that are buying their chips. And then they think about IT. We also have a situation where when microsoft pays ten billion dollars to OpenAI right for access to this technology, a lot of this coming in credits on asia, stuff like that.

So there's what's a big stuff call where you paid in kind way, like I owe you a million bux my and one hundred. And next, there's some squshy financing going on kind of back and up. Just one more point on like what could go wrong.

I think the fed pumping the brakes IT would be worn too, would be obviously get changing in the outlook for high and silicon in some point next year. And I think the third thing is just around inflation, right? Because the number one reason, I think still go up is the growth margins go up. And so it's really hard for small mac companies have expanded gross, what CPI goes up. So to extend that will see there's terf Better and the term reality and there's but if you start believing C P S bottom ing for a little mothered, I think that could also be fundamental.

So bads uh marges go higher and you're a essentially multiple expansion based on that.

There's a pretty nonlinear and tried and tested relationship between multiple groans. I think about games. I revenue side in my brain that just like pricing and mixed rates, if I could sell you guys that we will have nice very son, if I could sell you a higher Price without losing any units that the best way from unit drive hier margin across the market.

We study pricing really carefully. The certain businesses were pricing is not been at sticky um and then where. And so we search everyone is called transcribe, looking for any around the amic pricing competitive.

And we try we're very specific about that, but i'd say there are still businesses that are taking pricing or mix. And then on the cost side of the other side, the general three things are going to gross margins, our appreciation, labor and some sort of materials or logic. You could make an argument that most of those things for most companies are not getting worse.

Obviously, you've got the top ten companies doing massive cab acks or not going to argue for microsoft to whatever there is appreciation burden. But for the average company, there isn't the appreciation is not up for year average company, the inventories is not going up. So three comes on that usually good materials.

Maybe you look at blum ber commodity index, whatever you wanted like you proactive that it's not really becoming A A headwind. And so you're down to like labor. And the question is, what's the dream? The dream is that you want to get crazy.

Bush, how about a real company? And q and A Q two says we would hire five thousand on the past to this were hiring zero. And also every animis like g like three or five years.

And now my own, that could be twenty, thirty, forty percent higher for these comes covering with no net hiring. And you're labor partially. Gm is like totally long. And I still I I believe that it's kind of dream me for me. We spend a lot of trying to identify those companies. But so I say when I look at the the process kind of that, yes, I can believe the media company, the media company can also at the S P.

Five hundred growth margins overall because you just mention before before the markets really dependent on seven.

eight the and fifty thousand five hundred, you two hundred fifty thousand is will have margin expansion.

I can believe that isn't IT safe to say though that that's being Priced in. The margin expansion is being Priced in. You look at twenty two to twenty three times now, two thousand twenty five numbers that were starting to trade that if we started think about. Two sixty five, two sixty nine number kind of for two thousand twenty five.

So I guess I you to that question this way, you know knowing that like saying you guys don't know, but I don't think evaluation is a very helpful predict for market level returns within a six to twelve moths zon. I think IT has some value in year three and maybe more in years five or ten. So the problem with like a premium based darts or value like they're just not helpful at the market level in the short term view.

And the reason that's the case is because, no, I ve had people push back at me. Panel restarted. You think of double coming, but i'm not because high grow smarter are proxy for something. There are proxy for a business that has a sustainable model, that there's a mode that there's something that's going to make their earnings in twenty seven and twenty and twenty nine higher. So you're right, I obvious ly get the ten of your question to any like obviously, it's not up to we cheap on next years numbers.

But the question is, do you have a reasonable belief in a probability distribution that the numbers are going to decent and twenty twenty nine or whatever is if you really get some AI proof cases on the on the earning side, not in the revenue side, maybe four, four hundred four, twenty five earnings and twenty thirty, maybe a pay twenty two times that you're at ten thousand S P, six thousand, sixty, one hundred, whatever as we chat. So as sixty, that's a Normal ten or twenty two percent per and return over next five years. Recent, I think that's a decent probability happening.

Do you guys put out targets in S B, S, S? okay. Because you saw, like a lot of folks know, there were six thousand six months ago, then they kind of went up to sixty, fifty. And now we have with an S P, where IT is right now, just below sixty one hundred of those targets, six hundred and six. They don't look .

like prety achieve, I know. And so to say I understand how it's done is I made the sausage forget, okay. like.

So i'll shed a little light on that process, right? So the processes, fifty people around the world are on three three hours zs three weeks apart. First like the economist go, there's like forty four of them.

And then the next week, it's like the rates and the and the currency and know the create guys. In the third way, it's like the equity guys. So like if we embed into our forecasts, everything I want to set in the previous two weeks, I had to fight every single quarter of every year I work there.

And I would say this a lot, almost every time. I think this a chance were all wrong, but there's no chance were all right, right? Like you just do you have by the time of the last one, you like, you know there's no way that this consequence away.

So I think you have to just kind of publish what you believe when you are at those firms. You also have remember that if there's a private wealth network at that firm, there's such a type point type to error differential. Like if you're barish and wrong, you're fired or its its heart locker, right? If you're bosh and wrong, it's like about all the people optimistic may be early like you.

It's harder when you had a big firm of a giant prior network to crap on your advisors every monday with a no saying I think the markets on to twenty person or like that, it's not helpful because you those people want their quite to be feel invested and they are right. They should be full, invest over time, can groan. And I student quite so generates to like nobody pays .

me for my like market view .

on a Price target yeah .

no double then I spent is we've dealt with a lot of folks who there's a lot more nuance than their sop target. And you know that's what thing that's about, you know and we always found that like really interest we you know some of these folks and we don't have to named in the names, have fifty six hundred targets or whatever. Like I don't really guss IT two things.

One is all that matters is when they change your mind. Yeah, I love talk because I, I, I, I love mike Wilson, I think is a great dode is a silos, is integrity. He's smart.

It's like two years genus a smart guy like, you know, if you do that job, you can can boss besh right and wrong is four quality. If you have any intelligent integer, you should live in each of those great party, your career unless you're always the bull guy of the Better guy, he didn't magically get stupid, right? There's a set of things you're looking at d and you're wrong like you.

So my point is I think I think somebody like that who is really smart experience changes their mind. That's a good time to calm. Say what you look at that, may you think it's worth training?

One other last thought is, and IT does worry me a little bit. I think this so resent. I know you guys been great traders twenty five years, but it's like, well.

maybe four.

My point is just .

like two years ago, all the guys on the Price target setting, guys are tired about, no, november of twenty two. They do their target. They are negative for twenty three. No, you could romanticize you, a contrarian about last year, november of twenty three.

There generally not that boy, twenty four, you can remember the size you contribute nothing Better than a table and being right now throw all out and their kind like ten percent return seven thousand so you can really the size you like contrary bonn in more. In fact, you're a little bit word why these people are now blish after a fifty percent move for forty five percent move in two years in the market when they were burning. It's a little bit more worrisome. So if you kind of say iron enterprise am a drin, it's a little IT harder to be bold up in and that part .

worries me a little bit. That does well, to be fair, it's not the target of the asp that matters, but it's all but that just scared people that the sentiment within those targets, there's so many caveats. It's my target is based upon the fed continues to cut inflation, continues to trade tower two percent.

We know those are the types things are in there. So then it's like, oh, well, if I had known that rates were going to be higher and I know that no, no, no, but i'm saying, but I totally good. I was on the cell side as long as I was on the bright side, I know the game long and wrong of a job. Short wrong, right? No, you don't gain anything by coming out saying five thousand and my launch .

coverage is trades and sale, which was january second or thirty two thousand eleven. I had a Price target for year and twenty eleven IT was below where the market was trading. And I could see the cell is a room just like, like what in the name.

I didn't change my target all year on december three of the three pm, IT traded IT exactly my Price target. I'll never be more right. My compass down thirty percent.

I was barge rect and everyone hate me. So my learning lesson, wow, this is an worth day. Yeah, I think you want to run bosh seventy, eighty percent of time and you know your ability to make one month market calls.

I've study this really carefully. It's impossible. okay. So I think you do want to be constructed on equity when I see this was a was out like a ten equity. And I was say I was like, I think was like three singing like you must be want to retire like what is happening you first, I mean, is a smart guy, but i'm saying you've got like powerful and smart why you try on the way you can you you you say, hey, the junk, I think he's going to be rotation. That's my personal belief.

You you can hide IT that way hey, I don't really know if I should be buying a ton of super micro to come pick pick proxy are probably up too much, right? But like that's different thing. Equity want to work for decade? Yeah yes.

So we try to explain to people that professional money managers get paid on our performance of whatever index are targeted. Ub I onder IT is our job to overweight certain secker, underweight certain secker.

And you've a very good sense for where things are overboard and overall excess or so as we go into two thousand twenty five here know, and you had to start fresh, you had to reallocate entering because we know the chases on right now, we that the managers are holding on right here OK right now they do IT. So what do you see to set up going in? Because this is is really interesting set up going to.

Two thought came, as you're saying, and I forgot to mention this area when I was, I was eating.

The reason we do are you at how a january six tibert is because if you do that too, before thanksgiving, you can all like you said, you can already be wrong by january, you can already have to change your Price target and then you look with A A bit silly because it's supposed be for the year after, no, I supposed be the year and twenty I target have to change. So I at least guarantee myself not being wrong. We've even only have a target just unlike bush bird.

But in that outlook, I see one of things will address is, is what your specific question but kind of answering IT. Now I think last sunday, ten days ago, we did. And I guess you could always do this.

We did. What's up a lot, we think is make sense. What's up a lot, we don't think makes sense.

What's down a lot, we think is kind of silly and what's down a lot that we still think so like because been so much since the red. So I kind of ideas on all side that and i'll just give me you one of time. You can go let me crap on IT or or not.

I like the drug dirigo tors, but not the drug companies. So really think this, like my cain cora cardinal complex, make sense. What's my dream? My dream is the most year. This is mean, I know this, but the is a three hundred fifty billion revenue company with one percent net margin. If they could just get slightly and bore efficient and Better at knowing how many people need status .

and G O P ones or whatever, never geography or they .

can be more efficient. Predicting the coast and .

employee is the use case. I mean that we so much use about the hyper scales and the chip provider and the server makers and like to me, that is actually the next leg. So you as. You know a strategies, if you can identify the next five industries that are gona benefit.

that is one of them, right? okay. And I think on the drug side is hard. Like pfizer chart acts like they sell drugs, okay, like and as bad, but I still don't like them because I think you need to see what happens with r you and you need to see what happens with some vaccine.

I think this is going to be some ligation is going to be able to stuff. And so I like the distributors for this dream of margin expansion. And I just about at some point will stop being a big far at this point.

Dit seems too early. We didn't know a couple weeks ago, actually last week saying twelve times very cheap, but six times isn't right because the market when to get too cheap to markets telling on. And um so I like that trade a lot.

And in prior point, I love businesses that have lots of employees, lots of revenue but low net income per employee because if you and I was sitting on top of we be like be more fishing, what pretty list can we use? So like that, a second trade I like is um shorting restaurants. I know if you .

guys applied A U S R or .

you looked like eat at that chart, like they sell in videos like that. It's crazy cheesecake. I think these things are up way too much.

Now I get there is a small cap consumer optimism, girls going to be Better, red sweet, no moment. But um I don't believe their fundamental will come through and support that in the first quarter to next year like seasonally. So those are good short ideas to me.

They are pretty liquid, and I don't see a reasonable chance that there above average margin expanding businesses like just anyone is plot E A T. You can't believe like you think they literally he looks like they sell A S M is the charge. So I like shorting us.

I still we've been very negative for three years plus on physical U S. retails. So those are things that are down that I think should be a general stock active bit.

And I thought I was on the news, but we've been recommending like targeting calls as I got favorite or ideas for three years and know times were hurt you. But generally, I think they're impaired. Business is their subscale. And I think I said on the show .

of six six calls was obviously was obvious.

Yeah but I, I, I, I love going on the show. And so I think the physical retails are down IT should be short. I think the restaurants are are up and be shorts.

You know, i'm pretty convicted that the number one rotation that will be happening will be out of this kind of low quality grow stuff s like the stuff. I think that's where people gna sell. You've got made lots of money.

Ra, yeah. And and that stuff gona get sold for back to someone of the higher quality trade. You saw that a little bit yesterday.

maybe. IT happened a little. You started. Maybe I should buy some of the max, even, even Better businesses. But I also kind of think the software trades up too much. I see sales force .

and they beat like a tiy.

Not great. Not sure the world needs what they do in five to ten years. Not totally convinced that lots of businesses benefit that their A I kind of dream is that dream to me. We use the product that that make any sense.

And unless you have like know millions of customers, I don't need to make eighteen three revenue, 03 revenue know you know so less convinced that I know the world can't replace time on semi or what you I know there can be around twenty thirty and like you sure sales forces and where thirty forty percent less than twenty thirty like i'm not。 So whenever I see software beat sammis by this much, I can't want to dig a little way just because I know the world need semis. Now I used to be a semis, and so story checks out, model bus on. But like, I still think this software moves, but too big. I rather want small makeup software and be deals.

Yeah I would that the deregulation part of IT and these folks have not been making strategic, you know, ma, in a very long time. And you know the other point to save you look at the age we know that know thirty seven percent of IT is taiwan semi and NVIDIA. And it's really good sideways.

I mean, you talk about that software out performance in the last few months. I mean, that has actually been a big story. Yeah, i'm in tech. And I think you also make a great point is like microsoft plane, a little catch up right now. I mean, so some of the next seven that we're under performing, you know some of their peers what tesla has done in the last month or show, but that's a real contributor, right, as you think to the formats in the lake was begin.

Q 3， even before the .

to talk about that, that all by the election of, you know, one of the things, and I find that pretty interesting, is that this supposed like red wave Mandate IT actually isn't. When you think about IT, like the popular was pretty narrow, you could say, well, is the first republican to do this. You know, if ten million people in california in new york voted, he probably loses the popular.

You look at the house, IT is about a slim it's ever been. And there's a good chance they lose that in two years, right? The senate, that's fine. I guess my point is here, it's not that wide of a Mandate.

There's going to be some, some stuff pushing pull on the social front, right, that might not give the political capital, let's say that the trump thinks that he might have. So my question, we got terrorists. We get tax cuts.

How much is that you think he gets done? Because I think that has to a great deal of the excitement in the last month. So right about the economy and about the markets because to me, i'm not sure they get everything that, that they're gonna get to kind of keep powering risk as as higher.

Yeah, totally. So I kind had like one last patrica that more right into your question, which was I like longing the stuff is going to do the deals like all ten investor banks and that shorting the regional banks. My logic on the regional banks is in participate in the deals and the rate vironment people think they can rother loans.

And I think there are the stuff that I think get rotation out of and IT falls, right? To your argument, everyone is a very beni interpretation of what trump and his policies are are gonna mean. And so I think the reality is there won't be as much impact on the earnings and the growth trajectory as is currently in the Price.

And that's why I focus on like what's up that thing will be some fundamental directional support versus what's up that won as my logic. I I I tree you I think in two years, maybe less, he's dead man walking anyway. You don't need the money in his affirmation for the for the next elections and the world chance it's going to be like what can to get done the first year, what has by persons support? What can be jammed through all the kind of stuff? Everyone has a very beni institutional.

All have like a very bind interpretation. I'd argue without asking people individually, that intends to run a little bit right of center as a crowd. So I think people are happy to shake stuff up other than the treasury.

And I think genre people, we're quite happy with best and as as a as a choice that I talk to you. But here, here's the view that everyone has, and this could be worrisome, is trump looks at the stock market as one of his major kind of school cards for wherever is being successful. And so he wanted to go up and go a lot.

He's gona break a lot of things and if something makes sock mark down ten cities to fire that person and stop doing IT. And so you have like a trump put that everyone kind of thinks is there and and so that I think is a an interpretation. I I think it's possible. And if you said sign of probability that there is a chunky probability, but it's not a one hundred percent, and I worry about that. I mean, I ask people about china specific because the story people have generally is like pretty beene ind.

It's like you will go to more lag cake triple, say you buy a train treasuries right and it'll say, okay, uh, you will say, uh, you can't care to find ninety two items and will say, OK I T seven and I can go on T V and say some crazy stuff and and you just let me do that cool, right? Okay, great. Like that.

Maybe I don't, but that's people. Things gna happen. And we're all, I guess, story checks out.

Like, I don't know. Like in the reality, he's poke in mexico. He's poking canada. He's poking europe. Like going to break a little bit. And so that is so you want I just feel like the whole small cap trade is the biggest car because like they don't have the pricing power and they don't have the ability to really benefit. And in the end, like the big companies that have to take pricing, you know, I was going to pick a night at health after was absolutely orrible yesterday. Like that's a business that is as me, whatever pick one that you you like and it's like use nine health for health care and they just take pricing of ten percent every year and us.

So like IT doesn't matter. Doesn't ai okay on on this guy and you know immediately suppose on social people kept on hitting me. You know this is a heated industry because of taking Price because of, I just found .

that. So I think that support that people like, but they have a lot of pricing power is kind of an open alty. There's a lot of political will on either side to resolve that. Nobody can do the thirty year united health plot, but if they y'd D A Y, so they should focus less on rugs is a small business owner.

We noticed IT when if you're married with kids and you live in new york, can you have like the second, third best planet of the five is four hundred and a month? It's like a real it's a real number and then they just called and say it's october. The my point is lots of businesses that are pressing power next year.

And I think the thing I think is most attractive market road of sentiment is the health care sector. And that's why I put to distributors on you. But this tons of places where they're gonna more efficient, they are the proof case for I. And why would quest is always business? Why would they have any net hiring at all the next five years?

You bring up a great point that i've set all along for last few years. If you don't have your house in order right now as a company, you ve got the benefit ton's liquidity, get the benefits ong economy. Now you get the the fed taken the foot off of the breaks or gas, how we want to look at them not raising rates anymore.

And the companies that have gotten through all of this, and I always listen, and i'm sure you do, on these calls and really transcripts when anyone ever blames the fed or whenever buy the stock because think this is a part of cycles of what companies do. Names like disney, names like at and t companies are really transforming themselves and adapting to of the new, to your point about the rusal and something smaller, names which don't have the pricing power, don't have baLances, which don't have the ability kind of change on the light IT. Feels like if the market were to go up, the disparity between the have that happened not is even going to grow more next year.

I'm not sure exactly how play that in one other sector I got to ask you about because airlines in general, right? Just a great trading vehicles, right? You never say, oh, take that and put IT away forever.

That's a rare right thing to do. Give you a thousand airlines. And i'm curious what how the airlines pricing power and what it's kind of telling you, are we at maximum thrust upon intended on .

in the first step that I agree on the small caps that a lot of people, it's really fashion not to get on the air. So you like small caps, they were whatever, but the doubles in the details. When you really look at the businesses and smoke values, a lot of banks and youth and read small cap growth is a lot of profile's biotech and have Better have short of security. So it's like easy to plot and say they look cheap and and adverse the large cap.

But there's a reason .

yeah there's a reason in the worse the reason is the worse and I get when you get psych about growth. So they typically work when you're the body of recession or close the by recession, you know it's going to be a blot of policy. And they ripped in march to doing twenty, but for them to sustainable work.

Now we didn't have a recession, but they are going to work for the recovery from recession. We didn't have like it's it's a lot. So I get you know taxes are good to get regulations good, but it's been a huge move on a roof basis.

And they're not going to fundamental show that, especially if we're kind of getting all like worried about T, P, I all stop. So why I think you sell the russia, you sell you know hyper growth junk stuff and you going to vote in a Better businesses probably in january. That's I guess, in terms of the airlines.

Look, they put a prety good numbers. I I always think this years ago I was an analyst hired back at the book of the an alphanet. And I can't if he was a senator other of just a comedian, you might have been aspiring.

And they we had this dog pony show where the debate in the guy that was great, they obviously were in, in, in sink and Frank and talk for, like twenty minutes. Awesome economy was bill clinton. And dell banner had this amazing answer.

He's like, gp, so I love on the beach and I wake up every day sunrise, and I walk my dog on the beach and my dog and I we watch the sun rise together. I just don't get my dog credit for him. I love that line of like things cycle, like independent of who's in charge the treasure more the president, the presidents will blame or accept whatever happens.

And I think the airline is a little bit about cousin of that of like post cover. You just had like capacity totally change, right? And so then as I came back, you didn't have all the excess capacity.

And so you know, all the start, you can look at the present cases, that stuff to seat mile stuff. And like, I got really optimal, I would say, like six months ago, right? People like you and I probably over in the extra expensive life because are trying to buy the blue from summer.

That's still probably a tougher ask. But if you go the country, pricing has peaked in and roll over action. So I would say the best of its slightly behind us for that industry.

Now will the trough coming up as bad as previous? Probably not. And so I think you can make an argument that some of these are like real companies may be in the trough, but we're being very general now. You know elliots in southwest, you know americans get yeah but you I think in aggregate, the industry .

slightly improved and serve and IT looks like today. I mean, the airlines look like that. I think so as we're speaking on thursday afternoon into the cloth, I mean, american airlines, they kind of rather out little a little bit. It's up twenty percent in sympathy with that delta and IT or up four, five percent.

So when you talk about some of this behavior IT, does that seem sort of peak? And when you look at what's going on in the stock market, I could this over the last week, some crazy lose marvel tech, a company that you probably know was twenty four percent on wednesday after the result. I mean, snowflake big later, right, was up thirty five percent after they released their earnings.

I could probably rattle off another five. That to me, is not particularly bullish action. I get IT if you're long and you feel great about that sort of stuff, but IT feels a little bubbly to me.

One is I think IT really depends on the stocks in industry. Stocks like they are super trip companies and value doesn't work as we talked about. It's hard to buy stuff that he is an arrogant to buy a value like, you know, stuff that nobody else does.

What everyone seems cheap, right? So when they show a fundamental inflection or some improvement, like you ve seen a delta, united and american IT kind of make sense me, that would go from five, six, seven times eight, nine times three in the market. twenty.

That one almost seems more married to me because in a way you're saying the public bankrupcy is party lesson. I was in a play a bit more. I think that's different than your comments about some of the tech companies are up that much where I don't really think that they are totally gonna showing the fundamental that, that argue for that much to move.

So why is that? I think our vintage of people and take all roughly the same intakes. Maybe your Younger.

he's Younger, you can may not look at, but he's unger.

Yes, I R era would definitely head and degree in sympathy. So one to the other side, they look what's different now is there are, take one multistate, one of the biggest four. They're the same there, three, five or forty eight teams.

The quality teams run fifty, two hundred fifty million each book, they run at six twelve growth, they run with several hundred thousand and shorts and they run three hours to two holding period in most of the strategy. See you have thirty billion dollars being run at each multistate four, five or six this way. Um they sometimes a lot of them are not involved purposely before in the afterburners.

So once sometimes you'll see what you're talking, but where stuck was up on the and then IT goes on every single day for the next ten days, africa as a counter back in or vice vera. And there are guys are specifically only play the quarters that you get a lot more fall like you're talking about. And then you you find a lot of named IT bleeds of all afterward in both directions. So I think some of the answers of what we're talking about, the huge wall in the moves afterward is just the way money is being run.

Now so much different than you. I form our right and most of the U. S. Airlines don't head oil southwest, I believe does they're getting the benefit of kind of loyal yeah well of of course and I passing IT on to the extremity. But let's move to a geopolitical landscape and I can throw oil into that. Obviously, that doesn't feel like we're pricing anything in for something that there's a lot going wrong and hopefully even just kind of stays obey. But how do you how do you figure that stuff into .

do try this rise stuff, right? Like we have lots people will send portfolio customer resort. We do a chief risk fs day are try to get paid of a lot of institution is the risk department.

And you know this type comes up a lot at a lot of mds. And I think the general consensus, which is probably mess up, is that it's really hard to preposition a portfolio to al risk. You know, like all those trades that we've all put on where you put a hedge on and then you lose all the money you hope to make.

If you're right, by the time that happens, you you got to put hedge on the exact right time. And I think that's a chAllen with the opposite. al.

Rest of mean, when you kind of look at the world and you say, like all these terrible things are happening in sudan and russia, ukraine and the dle east, and you know this always this fear that china could do something with the three fs in taiwan, and you mentioned earlier, whatever. But I think what people have sort of programmed themselves too. I can't preposition for that.

I'm gonna lose a lot of money. And so is everybody that day. And you know, preposition port is going to cost me too much, right? And I could be wrong. I I thought that was everything. I didn't a little dinner maybe two, three weeks ago.

And i've been doing this for fairly long time, you know, since the nineties, and I had never heard the words japanese Carry trade used in a row in my life until August of this year. I I do equity. I feel more with a Carry trade, the word japanese.

I just never heard of a row. We search every earnings call transcript, the top three thousand thousand years every quarter back to two thousand and eleven. For the to three thousand years, those words had never been used in a row, in a call, transcribe ever before.

And then sun, the reason the stock market got a iolaus never thing in the fixed one, up a gazillion percent, was because of something called the japanese Carry trade. So I asked at my dinner a couple of to these guys, chief officers, a huge firms. Hey, have you like was a june and like, should I.

That a the guy like, what does that mean that was like that again. Like, okay, I don't maybe right. But like that one seems like I could be people put the same back current train.

That one feels almost rescue preposition. So the answer of question is the dumb, stupid american answer, animal man. And i'm not recommend people preposition for IT because, you know.

yeah, world.

all I do is under perform until that happens. I hope to ask we perform when IT does happen and probably be right.

So tied I am. So let's finish with this a little bit. You um IT seems like you're optimistic. You talk to a lot of really smart money. You just mention that that you quite capital is driving a lot of so so when you think about this, I can't believe that microsoft and google and amazon in q one, q two maybe under performing, let's say the broader racy see this branding out a little bit. Our investors that you talk to focus on the idea and that you started this conversation now is like industry like health care or industries like financial services getting the benefit right of, let's say, the vi and renting the compute and having that margin expansion. Lets say for some of the reason you just mention is that the next g of this bull market or other other things that lead you to believe that we're unlikely to see, uh, multiple expansion because of companies .

be able to take Price. I think that's the biggest bulk for the first six months this year coming up five. A real company, walmart flashed all at all on this a couple quarters ago and said, hey, we've gone so an analytics little bit Better but a big revenue company with low margin like walmart, if they can, to tell you, hey, look, all millions of employees loye five or ten years or the anal start believing that the growth way of employees will be ay way less than the growth way of their margins go, you know up fifty BBS like fifty bps on seven hundred hundred and revenue the s can be a most. Now I that giving a trades thirty five times, I do think that's the ball case.

I think it's that's why costco o got to fifty times only with people saying, hey, you then stop using the same card when you check to tize the netflix thing at the door, right? So so I think that is the real bulcke I pick mechanism because I love the drug distributors. And I just think if they can get us believing that there is going to be margin expansion coming from efficiency, I I like that's a serious broadcast for next year and that's how do you know expensive to sixty five then you're like, yeah but doesn't look expensive on three hundred and twenty or whatever whatever people extra.

I mean, you guys know so that I think that's a legit case, to be honest. And if i'm a probability, it's pretty big. I think it's a much hired probability than microsoft comes as our bad capex was done or shaving five b court around like that's not going to happen next.

yeah. But I mean, the likelihood like the percentage of the beat on capex is getting smaller and smaller from those folks.

you know I mean, like the hiper and we use try a year ago, years ago, I thought merc class video ten genes for IT is out only Q I X and a date new jery. I pay about five hundred box a months. The baby at the chip, you can't believe how facility is.

If you say to me, hey, i'm wondering in if any company has mentioned example stuff we do all the time is part of research. I read the news like you said here, we said search pricing for burgers at unch was that's where when i'm used to search pricing going on a little Christmas, I used to search Price went rains and they are gone on uber. But not like the baconator.

I don't want between one and a guy. I am a tried because i'm trying to get any more, trying to have my incremental fatness. No, but my point is I search every earnings culture, looking for everything around the word pricing, dynamic, competitive, every question of every earnings call, every consumer company back to two thousand eleven, forecasting margins multiple 2。 In two hours, as I we do than two hours in hundreds of companies, hundreds of transcripts, I can do all that work, can give you a chart. The companies that make Prices three years ago.

five years ago.

about month, if I mess IT and i'm one little guy, really.

but it's you're very unique because you build that yourself. A lot of you multistory at head fund s are doing this matter resources. I think about this.

I'm just put out the thing that we're doing on tuesday with there are great partners about they've been investing in the same story tools. So it's going to be generated. They are for the rest of the people out there, right? Because they're doing some of the same things within transcripts and that things you're yeah.

And so to me, I just find that really interesting. By the way, december ten, this will be tuesday ten. I am we have the CTO o up fax set on a web an hour that's go to reversal dot com.

We also have the chief business officer, a plexi. I use perplexity all day alone. When i'm sitting on the fast money desk and somebody says something that I think is stupid across the desk, i'll go in there and try to know kind of get some real time date on that sort.

And that is fast. One of things that i've am trying to get Better at is not having a look on my face that indicates that I think the person said some are stupid, as I actually do think they did when i'm on T V. Because people to say things that like factually wrong yeah and I feel like I don't know how to like.

well, I play poker with you. You're pretty good. I don't think you have .

a big time to .

say I went all in you .

like sky all this I think had a we really appreciate .

any time I lot. Thanks for me to do IT and I see you on T, V all the time with good from scot. You know, like, I think that what you just said is really interesting.

You know, people go on T, V, and they say things with a sense of certainty. And you know a lot of don't have the sophistic tion that sort of us. Have we've doing in a long time. And I think that, you know, this is the .

democratization of a lot of information running money like you don't want your clients like deciding to take money out equity willingly, but you have to keep their own kids. So I get what they're trying to do. But the part that is harder, like somebody who is sitting on top of some motivation and doesn't actually running money and nobody who works their listening them at all. But the company has to get like their brand on the two months a while and things like a world of time that's hard and link you like I know you bought users because like you have with seven in common with mine, only institutional vectors that are real. So I know is that kind of person .

that this happens.

I get Better Better at the k .

and before mother and park with any time try varied if people want to go check on .

our site and be great hundred try very research .

um and then a little housekeeping again at a great war to drop on the we also have a very interesting conversation that's on our youtube paid right now with Michael seller of microstrip and stick around for our conversation with court Brown. We do all things fed adam, thanks again.

thanks.

Yeah, thanks where we be. Mabe really good.

Thanks so much. Take care. thanks.

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Is that fair and fair enough? What corny Brown is one of those people she's now in economics, reported xiu. I thought you were with us at see and we see in like two thousand and eighteen.

You corrected me before and you said, no, no, no. There guy IT was two thousand and fourteen. So more than ten years ago you are our page on fast money.

So the people understand fast money probably gets four or five pages a year from the nbc patrol c program, which is one of the most difficult jobs to get. So that's attribute to you in the first place. You are at the top in terms of the people that you know, i'm proud of, I remember made an impact on me personally.

But now, ten years later, here you are. So you just said kindly that the reason your business reporter is because of our show, I find that hard to believe. But please, corny, the mike is by the by the way, well.

comes to the podcast.

Thank you think .

that I mean not you.

We brother had very little .

to as lovely as you were when I walked into c nbc in twenty fourteen. First of all, you I should know no one wants to see N B C. Assignment because it's an angle with clips. New age, you have .

to get on a weird shut name.

yo. So I only .

took the .

assignment because I was desperate for any assignment. A lot of pages come into the program, and they love working on esl. You know, the late nights res, I hated IT, so I wanted to get on assignment as soon as possible.

So I interview for the C, N, B, C. Assignment, and I got IT. And I had no idea what a stock was, had no idea how do we explain to someone what the fed does.

And I worked on fast money. And, you know, you guys call me everything. Every time I would collect your final trades, I would look up the company, then I would listen to the way you talk about the company. And IT really got me curious about corporate amErica and earnings calls. My mind was blown when I learned that once a quarter, nearly all companies like reveal their secrets to wall street, which is a very, we need you to think .

sometimes they like to wall street, pretty.

I come to learn that.

but that's one of the things that like shows like cars were meant to dismissed fy some of that right. And the strategy on the other day and he was talking about her ctab for A I spending cap acks and what that means for the sector and the leg and she's like and I kind of push back and said, well, that's what the companies are telling us. And I was like, really do believe companies all the time, guy, haven't we learned to be a little skeptical.

to be skeptical and we're going to talk about that, and we going to talk about all your writings. And now you are sort of alignment with fed and fed policy. But you said something that really resonates with me.

When I speak to groups, I tell them that natural curiosity takes you a long way in life. Most people in a similar situation would take down those stock stickers, put him in a book reporting back and never look at them again. But you took IT on yourself to be curious about, okay, why is then picking this stock? Why is carrot picking that stock and doing your research and then you see how quickly you get up the curve.

So that's attribute to you. And it's probably my senses that served you extraordinary. Ly well in life. So speak to that.

I need to come out on this podcast not often so many compliments. Um yeah I think I I figured while I was going to be at C, N, B, C, I Better learn what the hell guys were talking about. And never did I imagine that I would spend the rest of my career, basically a Jason, to some of the things that you are all were talking about on the show with not directly related.

I thought I was going to be a politics reporter, and i'm so glad i'm not. I'm so glad I, you know, deal with politics. When is relevant to the economy, to monetary policy and fiscal policy, I opposed, but I think I chose the right, right. I think there are not a lot of women, you know, talking about the things that I talk about. There are certainly a lot, a lot of black people going, but the things I talk about so I am glad that I landed in cnbc even though IT was the worst assignment, worst .

assignment. But be honest, fast money is a fun show to work on. You know.

it's very fast pace and you guys have good personalities, guy, and you guys funny yeah I mean, you know, I enjoy getting .

your coffees. You did more than that and we are, again, IT was a throat having you on. So now fast forward to today. You've obviously gotten yourself up the curve in an extraordinary fashion. And now is then we'll tell you, I mean, you one of the voices that we read, listen to one thing about the fed, about the economy come up in your world. X so talk about that art because again, it's pretty big jump from, as you said, writing down final trades to being an economic reporter.

Ask us. Certainly didn't happen overnight. I think over the course of the past ten years I was a producer at scene B C. After my fast money assignment, I got hired almost immediately on uh the morning show on C N B C squad box and I produced there for four years before um becoming a reporter my own right at ayo which at the time was a baby company.

I would call up sources that I had from C N B C on wall street and they be like, you're reporting for who what's that? I would never get that response anymore. I think axiom has grown so fast and so quickly, and I think our reporting has impressed people.

Um and I started at IOS as a financial markets reporter and then I realized in covering financial markets, I was really interested in the fed. I was really interested in this idea that a bunch of unelected officials get in a room two days every sixty eight weeks, and they basically decide what to do about the U. S.

economy. They basically hold the reins to the U. S. economy. And I was just very interesting, like the secrecy and the war of that.

And I started reading more about the fed and covering the fed. Obviously, at the time, he was a trumped administration in the first time around, and he always had something to say about the fed. So I left ax us for a few months, decided to return immediately. And I started focusing squarely on the fed about two years ago.

It's unna. Twenty years ago, our guy, when we started in the business, they were not fed, beat reporters know they just didn't exist. There wasn't just this focus on monetary policy because really up until I want to see the late nineties, there wasn't a lot of activity. You only mean that was is fair to say, guy, a little bit like they kind of set IT and forget IT and that's thing.

So they even announce when they can change the interesting.

And it's like, you know, so twenty years ago would like people weren't glued to what the fed was saying. That thing I I bet, still listen I say differently. But one of one of the moments I thought was really funny is like I was watching one of the fed presses, I say, a couple of years ago, and, you know, we just lost touch.

I stood out as, like, holly shit that's courtly, asking future paul access question at the pressure, like that was really cool ool, you know, so good on you for for making that. There s let me go to this, and we're going to get to you know what you're expecting for the for the meeting next week and feature power just spoke at with and rest worker at the deal book and I didn't seem like there was a all going on there maybe something saving his best stuff for next week. What of the things that you've learned about the fed is somebody you know you are producing before, right? You are kind of at the the wms, if you will, of, let's say, the the folks that were you on screen that what are some of the things that you've learned that you think most market don't understand .

about the fan is are Normal people? Yeah right. Which just blew my mind because they're so powerful. And I think that's the other thing I learned was just how powers powerful this institution is now and important in how much of a footprint they have in markets, which i'm sure financial participle know. But as you say, it's very different than a couple of decades ago.

I think for a fed reporter, I really feel like i'm in the good golden age of covering monetary policy because, I mean you think back to twenty, twenty and the pandemic. I mean the fed along with the treasury really think objectively you can say they save the economy um and we've rebounded faster and stronger than any other which nation on the planet um and the fed had a big hand in that. I think there's questions um and fair questions to ask about how much power the fed does have. Given what I said earlier that these are unelected officials.

what guy would argue how much they should have?

right? So that's fair. No one hundred percent fair to say. I'm curious your thoughts on this. I've been very outspoken about IT. Not that my voice matters at all, but I think the wealth gap in this country is probably never been wider, and it's been growing pretty consistently over the last decade or so, which goes hand in hand to a certain extent with fed policy. Zero interest rates helps people with assets and helps people that can buy things.

The people who get hurt or the middle lower class, when inflation and inevitably comes and IT will come as we found out, doesn't hurt the rich IT hurts the same people that zero interest rates hurt in the first place. So for the ultra rich and wealthy, how much they pay for gasoline is a sort of a joke at a cocktail party on a saturday night. It's not a joke for most people though. So speak to that because my senses you've done some work on the wealth gap and the causes of said wealth gap.

Yeah, you're right. So if you are a lower income, gas Prices and food Prices make up the bigger percentage of your overall budgets. So if those Prices go up, you you notice IT and you feel IT.

And um you know I think we're going to live with the consequences of that for years to come. I know IT was a big factor in reelecting president elect trump even though inflation has. Come down quite a bit. The rate of Prices going up has slowed, right? So but the Price level is still quite high.

And I think people want Prices to go back to the way they were before the pandemic and they're not going to um and I said, so I think there's going to be this discomfort with high Prices for a long time. One thing that's interesting to me is that the fed has gotten some new voices on its board of governors in recent years. It's gotten more diverse.

And I think as a result, I can't say for sure, but my hunch is that the fed has started to started to think about lower income americans in in assessing the economy. I don't think it's they're thinking about IT in setting monetary policy. But even today, we heard people say, while the overall economy is strong, he pointed out that corporate amErica and the earnings calls are mentioning kind of winning demand on the part of lower and consumers.

And I think for the first time, at least in the past decade, something like that got ta mention in the fed minutes. I only say the past decade because that's as far as I went back before I went at the time, I thought I was fascinating that they in their meeting they called out specifically this divergence between um the economic confidence of rich people versus lower income people. So I think it's .

on the radar. I mean, you can do the counter fact. I ve said the number of times.

But you know if you go back and look, the wealth creation on the back of fed policy has helped a very few very small percentage of people. It's probably hurt more than itself than fact that they come in with some acknowledgement around that. You know maybe zero interest rates aren't the south for the entire economy in some ways. And all IT is is just an accelerant for the ultra rich.

And i'm getting on a bit of a pedestal here, but i'm glad you brought that up because one of the things you said about inflation going down, and I think this current administration, the mistake that they made, was trying to convince people that the inflation that they were feeling and they weren't really feeling IT, yes, the rate of growth is slowed, but it's still growing at a slower pace. Your point, I think people intuitive know that because they're buying things. And I think you know, when you do your work on the fed, I think they've come to the realization and a way to second, although whole, we're getting this gene back in the bottle wall or said something like he feels like an M M M, A fighter who has inflation in a chocolat, but they keep escaping.

Speak to I wonder what's gona play out in the months ahead, governor Chris waller, as you say, gave the comparison to a being in the ring as an M M, A fighter. But he did mention the possibility that the kind of hotter inflation prints that we've gotten in recent months could be sort of a heads ke the way that I was in the beginning of the year when I looked like inflation was reacclimatise.

I think the question is, is this a bump in the road? Or is this kind of a true problem where inflation is going to be sticky and kind of remain elevated above that two percent target that they that they look for? I think you can enter that question right now because we have an incoming administration that seems to have a lot of economic policies that could be inflationary, and we don't know exactly what those policies will be and the feed that will have to grapple with that, what those policies are dealing with the fall out. So if president elect trump is as serious as he has set on the campaign trail that he wants to implement tariff s across the board, I mean, I think that's going to have an economic impact as will his fiscal tax tax bill stuff.

Yeah, it's funny because the fed is probably in that too different of spot is most market participants right now when you think about the uncertainty about these policies, he said, it's not as easy as some would think. And you know, like they think they have a big Mandate when they came in here, like they have a narrow leave in the house. Then y've had one hundred years, right? He only won the popular vote by two million.

And me, I think about all the folks didn't vote new york in california if they come out and vote, that's quite ten million voters. He probably doesn't win that. So my only point is like you only have so much political capital to get so many things done even when you have the house in the senate.

So I find that pretty ching. One thing I was says guy and I we differ or we disagree on this quite often. You know a lot of his I think his views about fed policy, I think he's being very empathetic to lower earners that everything and I agree with the the wealth gap.

But when I think about what has happened, not just, you know, in the in the financial crisis or the depth of the pandemic, but go back to march of twenty twenty three, you know, when we had banks fail, I mean, I look and see how quickly they can move monetary policy, how quickly if you had a coordinated sort of fiscal response to, I mean, there's no doubt about IT in feed. Your pol said this today, you know, the the world shut down. No one knew what was going to happen.

They kept, we didn't lose a single bank in twenty and twenty. We didn't have a major bankrupcy, the citizens who are locked in their homes, they had ppp. Again, I think we're dealing with the aftermath of that with inflation, with lower savings rates and and like here, but volunteer purposes.

And again, guys is right. You cannot prove a counterfactual, but this has been a relatively strong economy. Me, despite what's happened on the lower end.

is that fair? I think that's fair. And power has a reputation for wanting to keep the economic expansion going as long as possible.

You might remember in twenty thousand, that was his reason behind cutting grades. And they have a similar reason. Now they know the economy is strong. IT doesn't need there doesn't need to be these red cuts. I mean, I think, you know, when I first learned about the fed, I thought red cuts were kind of an emergency matter if there's a recession .

and what's the key quiver in there, you know, like policy. You know like if if you want to put IT that way, I mean, that was what they did. You know, they went to zero. And many times, I just really didn't help the whole cover .

that if you didn't have the fiscal right, right there, IT seems like they're not going to go to zero. Seems like erp is over recent the near term. But I do think there is this instinct among fed policymakers to not getting the way of the economic expansion.

And what of the things that power said over and over in two thousand thousand is, you know, the expansion that had been been ongoing hadn't reached all of all of the workers. There is this idea of last hired, first fired, and he wanted to keep the economic expansion going, to pull in workers, marginalized workers who hadn't felt the the good times. As you know, Richard, people may have to feel .

round thanksgiving, you put out an article, five economic trends to be thankful for, and a mostly painless, disinflation, fair, real wage is arising, which is true. Companies aren't firing people, many people. Th Epace o f t echnology i nnovation, without question, entrepreneur ship is driving all true.

The one sort of monkey wrench potentially, is that employment picture. And you know, we talked about the sam rule, and i'm sure you've looked that up of your time at the fed that was triggered earlier this year. Cody, some has walked IT back a little bit, but there is no doubt that the move from, I think, three four d are lowest to four three was significant.

I think there's a hope that they can somehow they be the federal reserve can contain IT at a level that they're hopeful with. The flip side of that coin is historically the unemployment rate. Once IT hits escape velocity, things start to move a lot faster. Yeah what are your thoughts on the employment picture into twenty twenty five? And given what you know and given the work that you've done.

something really annoying as a student of history is IT seems like all the things that have happened historically, like all those rules broke. You know, I spoke to quality assam and he admitted, as you say, that IT is possible that that rule does not work in this business cycle. Some other recession indicated indicators also look to be broken.

For instance, usually when you see you sharp movement in temporary workers, team workers, when company start shutting those workers, it's kind of like a precursor to them a shrinking all of their workforce, but that doesn't happen. So I wonder how or which indicators will tell us when we do get to that point of the unemployed sing so high that they just keeps going in going, going? And will that happen this time?

I mean, the peak unemployment of this cycle, IT is already fAllen back. I want to say that IT looks like the fed can do this, but I I don't know know that be great fed power would go down in the history is a great fetch chair. But I mean, it's no guarantee the .

threatened the needle right now. It's one of those things. As long as nobody moves, everybody will will get out on skate until like a rock falls and jaws, everybody and all the sudden that trigger a series of events.

It's like is that zones we all stay calm will get through this together, but something inevitably happens in. You know what you're speaking to is it's different this time. I'm not saying you're saying that, but that's been this that's been the theory out there that you know there are many things that make a different this time.

But all the things you look at me, we do even mention the fact that the inversion in the yield curve, which when we got to march of this year was historic in terms of the duration, obviously, we surpass that. We recently recently and only to see a flat. And again, I don't even know what that means to disappoint you.

I'm sure you've done work on that as well. But you know one has to wonder what the bond market is trying to tell us. I mean, if you think about IT, when the fed cut rates fifty basis points in september, since that point, all we saw our interest strates go higher.

So there are lot of odd things going on that the stock market says, you know what? Don't worry about IT. We're fine thoughts on that.

Yeah I think this conflicting message between the bond market and the stock market is confounding, if you will. The effect of the fed lowering interest rates in part was to push obviously easier monetary policy through the economy. And one of the ways you do that is.

You lower morga rates, margate rates have at least the last of my chat only gone up. And you know is that a statement on where the bond market thinks the fed will ultimately end up? Is that a response to what president electrum might do on the fiscal front and what happens to the deficit? I would believe either story.

I guess I could IT does not have to be either. I could be both. But I think you know someone like you. I mean, which do you believe do you believe the bond market? Do you believe the soft?

Well, it's i'm glad you ask me that question because I tend to look to the bond market for a guide. But quite Frankly, over the last couple years, if you've done that, you've missed a lot in the stock market. When I say a lot a considerable move in the broader indexes.

And obviously, some of these these individual names have been historic in terms of the move. So it's frustrating when you go when you try to use historic norms in today's world because they haven't worked. But I also doesn't think IT doesn't mean they won't work.

It's just taking a lot longer for some reason that haven't really been able to put my finger on other than the fact that is still a lot of liquidity to sort of making its way through the system and maybe it's just sort of this delayed thing. And still we're feeling the remnants of cove IT in all the overstimulation on the bed. That's really the only .

explanation that I have. I also think that the the shock that the pandemic brought on and fall out from the russian invasion of ukraine, I mean, these were all the types of shocks that we as americans were not used to having with these are supply side shocks. It's not to be inside shocks.

And I think when the fed was initially thinking about how to respond to the pandemic to inflation, IT had to realize that this is not a question of domain public demand. IT was a question of too little supply. And as a central bank, I mean, what you do with that, you don't really have the tools to deal with that.

But I also think that we don't really understand how this will all play out because it's been a long time since we've had a supply shock like the one we had, you know, when the pandemic is. So maybe that's part of the explanation of the economy kind of bucking historical trend, which makes IT no difficult for people like you. People like power to figure out how do we just policy and what to do next?

Lot of analogues out there. I mean, people will go back to the early one thousand nine hundred and seventies went, theoretically, they thought they attend. Inflation only need to have to come raging back.

You know, people will point to again the dead com bubble in the financial. There's something for everybody over the last fifty years. So years, and we're trying to struggle to figure out.

But let me ask you this question. Understanding the genie is completely out of the bottle. Do you think we hear too much from feed officials? Do you think in trying to message to the market by over messaging their painting themselves in a bit of a concurrent? Is your .

thoughts this one? You can ask a reporter that.

and well, you obviously love you love the fact that you have access totally. Again, I said i'll say again, no, we're well beyond that point. But there was a historical point time where if you could name the fed chair, you were one of maybe the top one percent. Now that's obviously much different being that they're seemingly in .

the news every day. Yeah and I think if i'm trying to make sense of the feds reaction of the function, the fed's message, I mean, yeah, it's a lot of voices to instead that I am particularly grateful for all of these voices again because i'm a .

son by nature, right? I think it's good. You know, it's interesting. There's part of me that thinks it's a great transparency is always a good thing.

There's another part of me that thinks if they've overdone IT on the messaging side of things and maybe if there is some, if we could put that pendula back closer to the middle, we'd all be Better. I don't know the answer, but I also know that you know once it's out, it's out and is really no turning back. But you on any given week, you'll hear from five or six different feed finals.

I mean, I think that's fair at all. Different things. And IT becomes difficult to sort of figure out what IT all means. I guess from my vantage point.

I think you're right. I think it's IT must be difficult to on the one hand here, fed governor Chris waller, who we know is a pretty influential policymaker, you say that yeah we are apply gonna cut rates in december in quite a straight forward way, but also raise concerns about inflation and raise the possibility that inflation progress might be starting out and then a few hours later, you hear from the new york ed president, john Williams, also pretty influential. He doesn't seem to be worried about inflation progress at all. And it's what are .

you looking at like you're looking at the same set of data and coming to completely different conclusions.

I yeah and the the part that is difficult for me and i'm sure i'm not alone here, is wala said something to the effective you know, i'm going to be looking at the the next few reports, the C P. R. Report that comes out between now and the fed policy meeting in a few weeks. And you know, if i'm disappointed by that, I mean, we will see. And like, well, what would you take to disappoint you? How many you know how how fast the CPI derives to change your mind, you know, is IT point to point?

I know fair. I don't think you quite Frankly, i'm not sure they know when they say things like that. I mean, they understand the reason why, but I don't necessarily know if they know the exact data point that's going to change their point of view.

IT is fascinating to hear and to understand. They realize how important, literally, each word they say, the impact of potentially could have, and how close to the vest they sort of play things in. Every once in a wall, you get a candid moment.

And in those Candy moments is when our world seeing that goes haywire. Now let me ask you this question before we started to get add here. You obviously focused on U. S. Central bank, the fellow reserve.

If you think about the world now, there are a lot of other things going on in terms of politics that are, in a large ways, been influenced by their central banks. I mean, I can look at the bank of japan to a certain extent would be going on in france right now. There are lot of things in the world that are taking place on the back of central bank policy. Can you speak to that?

Yeah, I think maybe maybe i'm biased here. I think what's happening in europe is way more interesting than what's happening in the us. Right now just because, first of all, they say they've achieved a soft landing where they're close to you anyway.

But it's not like their economy is booming the way the U. S. Economy is.

And is that like this stuff? Maybe, but IT also looks like structural issues. They just have horrible productivity, the U.

S. S, and have that problem. innovation. Not not great over there. And so watching how they're going to fix these problems and having someone like E C B. President Christina guard agreeing that europe has some work to do, I mean, that's gone to be pretty interesting to watch.

I also think that when you think about what's going on across the atlantic, they've had pretty sharp blow back on the part of investors to the unfunded tax cuts and high deficits. I mean, what's happening in france right now is absolute chaos. I mean, europe, second largest economy, just its political chaos in all stems from the fact that, you know, this prime minister, that's that's now but IT was trying to get the deficit after control.

Think about think about what happening in england. Yeah, a gear. So right, I get my dates off.

But you know the same thing. It's playing at the same way and it's fascinating. You know you're obviously focused on IT and you're right to be focused on IT.

But you know we're here in united states and you understand that people are very U S. Centric for Better, for worse on that. But you know they're like doesn't really matter what's happening in europe.

Bank japan seemingly blowing up, that's fine. That's their problem. Russia, ukraine, these are not our problems here, and maybe not today, but they all at some point impact what goes on the united states. And I think people should be, I don't want to be, say, more sympathetic to that, but they should be more aware, I think, what's going on around the world.

absolutely. I traveled with a treasury secretary genet yell, into china earlier this year and the by administration has been very concerned about this overcapacity issue um all of the goods that china is pushing out into global markets at lower Prices, the way like in a way that countries like germany are having a hard time competing with on the on the automobile ile front.

So I think what happens across the world, globalization is still a thing. It's not like we are Operating in a vacuum. I mean, there are going to be spillway vers.

To the extent that we feel the spill vers, I mean, I don't know it's anybody's gas, but I do think this shift towards protectionism that happened and trump one point now continued underbidding to a certain extent and looks set to continue under trump t two point. Now what how does that look? What is that due to our economy, other economies, it's to be question .

yet to be determined according you have to come back. It's been and it's great. I'm so proud. I mean, sincerely, i'm really proud of everything you've done. More importantly, everything you've going to do.

So thanks for joining supporting. Thank you guys.