Mike Wilson on Volatility, Policy Shocks & The Real Tariff Endgame
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On the Tape.

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All right. Welcome to the Risk Reversal Podcast. I'm Dan Nathan. I am joined by friend of the pod, Mike Wilson, Chief U.S. Equity Strategist and CIO at Morgan Stanley. Michael, welcome back to the pod. Thanks, Dan. Great to see you. All right. You and I just had a nice, we just got all formal here because the podcast turned on, but you and I were just having a little conversation here. It was a lot of fun. We're going to expand on a bunch of that. I think probably regular listeners know we go back

um you and i i think we go back multiple decades maybe three decades are we that old yeah we are actually we are um we got lots of stuff to talk about you just put out your mid-year outlook um and i think your outlook in the beginning of the year was really interesting you haven't been uh on the pod since january 24th guy and i spoke to you on fast money i want to say the last week down at eye connections um and that was a little interesting week too because we had the deep seek thing and that was like you know

What the volatility it caused was pretty fascinating. We'll take a step back because we're going to talk a lot about volatility. You had some views coming into the year on that. So we're going to talk trade. We're going to talk tariffs. We're going to talk tax, you know, all this sort of stuff. Where do you want to start here? Because, you know, the last month was certainly something that very few people expected. You came into the year very constructive on the back half of the year, but you thought there was going to be a lot of volatility in the first half of the year. How do you know that, Mike?

Well, I mean, it really came down to kind of the difference between Trump one versus Trump two. The person is the same. OK, the agenda is generally the same. They ran on the same platform, but the cycle was very different. OK, so in 2016, as you may recall, we were just coming off a global manufacturing recession. You know, we were fighting secular stagnation. You know, inflation wasn't even in the cards.

And so Trump, when Trump came in, it was like kind of the perfect guy to reflate, basically borrow, spend, and get the thing going. So when he came in in '17, we were very bullish on his first term because we said this is the perfect person to reflate the economy. It's very good for stocks, and it was.

And this time around, it was different because we had no slack in the economy. We had inflation right under the surface. We had basically no output gap. And so I think the administration understood this, at least several members of their cabinet. And so they had to do the growth negative stuff first, which is immigration enforcement. You do the doge or fiscal constraint and then, of course, tariffs. And we also had something you're well aware of. We had AI sort of peaking.

And we talked about that, I think, in January, that there was going to be a deceleration in CapEx, not negative growth, but that those stocks had to kind of reset. So the combination of all that we thought was going to weigh on the market in the first half of the year. And ultimately, we thought they would get to the pro-growth stuff in the second half. And then it became more obvious as they told us that.

As you got through the first quarter, I think most people thought Trump would never let the market go down. I kept hearing that. I'm like, that's kind of crazy to say that. Well, he only let it go down for a few weeks, by the way. So you and I all disagree on that. Well, no, what I'm saying is I think people were just focused on the wrong thing, which is

And then, of course, Besson really laid it out. So Scott Besson, smart guy, obviously, former Wall Street guy, investor, he understands that sequencing dynamic. And so he basically told us, we're not worried about the stock market, we're worried about the bond market, which, by the way, is the right narrative, and we're not going to own this economy for the first nine months. So he set it up in a way that I would do it if I was a new CEO coming in and I want to kitchen sink Besson.

The first half, blame it on the last administration or the last CEO, and then do the growth positive stuff. So I think that all played out. Where we got tripped up a little bit on that narrative is just how dramatic the Liberation Day announcement was. And then we basically crashed.

So like it just happened so quickly. And then, of course, Trump did pivot to caring about the markets, bond and stock markets. And we're back off to the races. So I think our original narrative coming in was right. It just played out much faster and more dramatically than we would expect it. So I'm not surprised that we've rallied back. I am surprised we rallied back this fast. Yeah. I mean, listen, I've heard a lot of that narrative. And, you know, I know you talk to a lot of really smart people and

And I mean, unless I heard that from Besson, you know, in late January, I just don't believe it. I mean, like, I don't believe it. I don't believe what... Knowing what we know, you just said it's the same man, okay? And so when I think about this, and I'm not sure, I mean, like, the intellectual dishonesty I've seen out of this, like, you know, this administration just on the economy, it's just...

I just don't buy it that they were, once you start messing around with the stock market, you know this better than anybody, it's not that easy to kind of get things back under control. And if they said, we don't care about the stock market, we're really focused on the 10-year yield, well, the stock market got killed, okay, so they told us that, but they didn't think it was going to happen like that. And then the 10-year yield rallied. It went to 4.5%, 4.6%. And so for me, the pivot just showed me that,

I just don't agree with that. I just don't think. I mean, so listen, the thing that I got hung up on is that if they had gone for tax first, as they did in the first administration, they would have actually had a pro-growth agenda. They would have gotten the tailwind of the tax cuts, and then they could have gone after trade, and they probably could have done it a bit smarter rather than starting with our allies and our biggest trading partners and then focused on China. So

I guess it's here nor there how it got, I guess at this point though, do you feel that they have their like this under control? Because we do have a 10 year yield at 4.59 right now. That's right. That and that now, uh,

Because it happened more violently in the way, whether it was planned, you know, I don't think it was completely planned. What I'm saying is that sequencing makes sense to me. And the way it got played out, I think, makes sense. The other thing you have to acknowledge, though, is that the economy, something we've talked about for the last two years, is that the private economy hasn't been operating very well, right? It's been a very government-heavy economy. AI theme is played out in some respects. Consumer services, high-end consumers done well.

But most of the private economy has been in a soft recession for two or three years. And that's the other part of the story that I think a lot of people don't appreciate. And so, in other words, now, if we can move forward, and actually, I do think some of the policies on deregulation can liberate some of the private economy. Forget about trade.

The private economy, if they can kind of light that up in the second half and into 26, and some of the AI benefits can actually play through, that's a story that's totally separate from policy. That's just the natural evolution of the cycle. Okay, so now back to rates.

So because it happened more violently and because now they're doing the tax bill that doesn't seem to be cutting much out of the spending, yeah, the bond market is the concern. And 450 is a level we've always identified as where if you go above 450, that's where you get negative impact on multiples. And we're seeing it again here now in the last few days anyways.

I think it's okay if rates stay around this level. If they go towards 5%, then we're probably looking at another 5%, 6%, 7% correction of some kind. I don't think it's a 20% correction because growth now is pointing up. So this is probably the most important thing that's happened. The rate of change

And all the growth things that we look at has bottomed out. It doesn't mean we're roaring. It just means the deceleration is now behind us. So that's helpful. I mean, in other words, if rates are higher and growth is accelerating, that's okay. If rates are above 450 and growth is decelerating still, then we have an issue. Which was the story of 2023 and 2024 because you had better growth than expected and you were able to deal with higher rates, right? That's right.

But you know, like going back to the private sector versus the public sector, if you think of the largest names that were contributing to that CapEx cycle, they were obviously big weights in the major indices. They're obviously huge contributors to S&P 500 earnings. So you make the argument that actually the private sector was doing

a lot of the heavy lifting. Couldn't you do that? Because without that, go back to March of 23 in the regional banking crisis. If we did not have this secular boom as it relates to, you know, generative AI, we might've had a little bit of a financial crisis. I don't mean anything to the extent of what we saw 15, 16 years ago, but like, it just didn't feel like the economy was on great footing. And it feels like that cycle really changed things to some degree. Well, I think there's two things, you go back to 23, right. And, uh,

Ironically, I think if you hadn't had the regional banking crisis, you probably would have found lower lows because you wouldn't have injected $500 billion into the BTFP.

And so you had two things happen in 23 that was very powerful. You had this massive liquidity injection, okay, for the banking crisis. And then you had a new theme that was very appealing. So you had a place to put the money. And that's where the money went. So as you know, 23 was kind of when the MAG-7, whatever you want to call it, they really did dominate. It was really 7 versus 495 stocks or 493 stocks because there was nothing else to do.

Yeah. And then 24 is a little bit more balanced, but still not. No, you're right. It was a lot more balanced in 24 because, you know, Nvidia's performance, and I know it's the economy versus the stock market, you know, was 25% of the gains of the S&P 500. That's right. Their earnings gains, you know, were a huge participation in that earnings growth and stuff.

All right, explain to me like an idiot because I think that 4.5% is that sort of level in the 10-year yield. If we get towards 5%, you could see a 6%, 7% correction, right? It might overshoot. We might have a 10%. Who knows, right? Talk to me about...

Japanese yields. Okay. Because like, explain to me why, okay, you can say, well, the rate in which we've gone back up to four, five, five or whatever it worked, we're good. Like it's things are okay. It's just, if it explodes to 5%, that's a problem. What's going on in Japan and why is that important to our, you know, our treasury market here? And then also, if you just want to kind of expand it to, you know, risk assets like stocks.

Yeah, I mean, I think this is just a problem we have globally. All the developed countries have a debt problem, right? You know, and Japan's problem is 30 years in the making. You know, ours is probably more like 20 years in the making or 15 years in the making.

So I think there's two avenues where this could be disruptive for equity markets. Number one, it is a global bond market. So as rates go up in Japan, you could see Japanese investors repatriate dollars away from treasuries back home because they're saying, hey, if I can get 4% on a 30-year in Japan, I don't have the currency risk, I'll take it.

The second thing it's going to do is it's going to drive the yen up, right? So we all, you know, not that long ago, people worried about the yen carry trade unwind last summer. I mean, you know, if the yen goes to 140 quickly or 130, you know, that could unwind more leverage that is in all kinds of assets. Forget stocks, it's in virtually everything. I mean,

People have been borrowing in yen for 10 years or, you know, whatever. And so like that, that to me is where the contagion could evolve. To be honest with you, I'm a little surprised that we can have this kind of a move in the rates market in Japan. And it hasn't been more disruptive to either the currency market or the treasury market. I mean, it's having a little bit of effect, but like,

I don't know. I mean, the move in JGBs is a lot more alarming than the move in treasuries. Yeah. So explain to me, though, the dollar, the U.S. dollar is not far off the lows from a few weeks ago, yet yields are a bit higher. I mean, they're back to those levels, too. So what's changed in your mind? Because we saw what just happened in Japan, right? So we're having 10-year yields moving higher. We're seeing Fed funds rate, you know, at least cuts being pushed out a

bit. I heard you somewhere over the last week, you said, okay, well, we might get a little bit September, you know, that sort of thing. But you guys at Morgan Stanley are expecting seven cuts. Is that correct? Next year, which is, you know, a whole host of things have to happen. Some really good. Yeah.

And some really bad. Do you know what I mean? That's right. So explain to me how you're thinking about here. Dollar index is back towards 99-ish, right? And I think it was 98 at the lows a month ago. And then we're back in yields back at the same levels. So what's got to give here? What happened in some ways? Because those major risk assets...

are really back at those levels and stocks are up 20%. Yeah. So, I mean, to me, if it's gradual, it's been somewhat gradual. Like, I don't feel like there's people panicking about the bond market yet. Like maybe in fall of 23 was probably the last time we saw kind of a real panic. And the Treasury did intervene. OK, they basically announced they were going to do less coupon issuance. And then and then the Fed came in on top of that and said, hey, we're thinking about cutting rates. And they allowed, I think, nine cuts to get price into the market.

So I guess I think where the markets are now is they have been trained, Dan, you know this. They've been trained to think, oh, well, if rates go to 5%, I know what they're going to do. They're going to intervene. So maybe markets are being a little bit complacent or maybe the markets are right that...

that at 5%, I'd probably get more bullish on risk assets because I do think they'll intervene. They're not going to allow rates to get out above 5%. And if you don't think they have tools, they have tools. All right, explain the tools because that's one of the things that this is a unique situation. In times past, when you have economic weak

this or you're worried about global growth, they get easier. They start cutting interest rates, right? But we haven't, in my lifetime, I have to go back 25 years or something to remember when Fed funds was at 4.5%-ish, right? Isn't that fair to say? And the 10-year, you know what I mean, right there with it. And so the tools from the toolbox that I remember don't seem to be that useful in the sort of environment we're in right now. Yeah. Well, think about...

Last fall, the Fed cut 100 basis points because there was a real labor cycle concern. Now, there are a lot of people who will say that the Fed was doing insurance cuts last summer. That's a bunch of BS. The SOM rule got triggered. They were paying attention. They did a 50 basis point cut to start. They never do that unless they're worried about the labor market. So they were worried about the labor market. Turned out there was a false alarm. They cut two more times. And the back end of the market went up

100 basis points from the time the Fed started cutting interest rates. So, like, what's going on there? Well, that was weird. That's something we haven't seen in a long time. It's one of two things. Either the Fed was...

probably not cutting rates in a time they shouldn't have been cutting rates and the bond market started worrying about inflation again, or there's just the supply issue again. To me, the back end of the bond market is a function of supply and inflation expectations relative to what's priced with the Fed's on hold. That's where we are today. The question I think you have to ask yourself, is the back end moving because the market's worried about inflation again or they're worried about all this supply?

I personally, I'm not a bond strategist, but I think it's more about the supply concerns. Okay, I don't think the bond market is as worried about inflation as much as the Fed seems to be worried about inflation.

So what does that mean? It means the Fed probably can cut or they can intervene with other tools to help out the back of the bond market if they so choose. That's why. Couldn't it be both, though? Couldn't it be like the supply? But also this tax bill suggests, right, because it's going to be front end loaded. The tax cuts go into effect like almost immediately. And then the things that they're going to cut to pay for it, that happens later. You know what I mean? So, you know, it's a supply problem. Yeah. So, well, yeah.

Yes, but then we have all this debt that is rolling, right? So that needs to be...

you know, that's an issue, right? And so we have yields much higher than the Fed would like it to be, or excuse me, the Treasury would like it to be, right? But then if this stokes inflation, we have a protracted trade war. You know, isn't that the sort of thing that keeps the Fed on the sideline? Well, think about it this way. If rates really go to 5% and they stay there, that's disinflationary, okay? I mean, anything interest rate sensitive is basically we're back into the soup again. There's no recovery, and then you have a growth problem.

So I think it's self-correcting. You know, I mean, if you think about last fall, the reason why inflation came back at the beginning of the year is because they basically loosened financial conditions too much. You got animal spirits going at the end of last year. It was crazy, right? Into January. You get the stock market up at $6,100, $6,200. Crypto's going bananas. People are making money in their personal accounts and they're spending it. So they're kind of working against themselves. If they really cared about inflation, they probably wouldn't have cut rates last fall.

So look, my bottom line on all this stuff is central bankers, politicians, central planners, whatever you want to call them, they continue to meddle in the economy, in the financial markets. And they started this process really at a high level 25 years ago. And the problem is that they've meddled for so much, they have to keep meddling. They can't just allow the markets to clear. And I think that they're kind of a victim of their own trappings.

right so the clearing that took place in april is that a significant event like is that the low you know we're at 58 50 we're at 48 50 um you know we got there kind of quickly also um like the way you see it like like barring some stagflationary environment that none of us have seen probably in our lifetimes or at least are in careers you know that sort of thing um the lows are in you think that's exactly how we think about it which is

Because of the shock of Liberation Day and the way it was done, you had one of the most significant deleveragings we've ever seen, the way we measure it, with mostly our institutional clients. It was similar to COVID in that regard. So think about that. So that was a clearing event for the markets today.

even if it wasn't a clearing event from an economic standpoint. And essentially with the market, we can prove this empirically, with the market basically priced in a mild recession, not a full-blown stagflationary, you know, financial contagion type recession. It did not price in the GFC. It did not price in an elongated two-year recession where you have inflation, the Fed can't cut. Okay. It priced in a mild recession, which is what we think the kind of recession we're going to get if we get one. And I would...

Look, I would still argue, okay, and we don't know the answer to this. With all the revisions that we've seen in payroll, it's just crazy, the labor data, how it gets revised. If I go back and look at all the other recessions in the last 40 years, when the NBER comes in and declares, this is when the recession started, they go back and they look at when the unemployment rate first started going up.

That was last summer. That was when the Psalm rule got triggered, which by the way, people dismissed. Well, she's dismissed it too. I know, but that's questionable. I mean, the point is it's a rule, it's worked. And that does not get revised, by the way, unemployment rate. So I wouldn't rule out

that we wake up a year from now and they say, oh yeah, we actually had a very mild recession in that period. Unemployment keeps going up for the next year. It goes to 6%. It's not like catastrophic.

the market kind of looks through it. The Fed will be cutting at some point. The Fed, I think, will cut specifically if unemployment goes back through like four or five, four, six, four, seven, somewhere in that range. Like we make new highs and it does it over a course of one or two months. I think the Fed will be cutting in that scenario.

And there's no way we're going back to 4,800. We're probably not even going back to 5,200. Where's Fed Funds stopped to the downside? Like, what's the floor there? Like, if we just take, for example, you know, the last 25 years, you know, it took the financial crisis and COVID to go to zero, basically. But, you know, the idea that we stuck around too long at zero, there was obviously a lot of fiscal there, too.

But this goes to the meddling that you just talked about. You know what I mean? So I'm just curious, like if you have seven cuts and we're four and a half percent, I can kind of do that math. We're getting back towards that two and a half sort of level. Right. And so is that, you know, it depends where growth is, you know. So, again, the average prior to COVID, I think we averaged about two point two percent GDP growth. So if we have we get to the Fed's target inflation around two percent.

we have two-ish percent sort of growth. Is that the sort of thing where you can have Fed funds at two and a half, it doesn't go much lower, and is that all suitable? - I hope so. I mean, that would be a win. Like if you could get-- - That's a soft landing in your opinion? - That's like, they actually landed the plane from 20 years of meddling, where like, if we go back to zero, then this whole thing's been a failure.

OK, if we go if we can go to two percent in the next down cycle and not have to go below that. And that's probably at that level. We're probably talking about real rates at zero, not negative real rates. If we need negative real rates again, you know, like the thing's broken. You know what I'm saying? So I'm hoping that we only go to two percent. Let me ask you this. OK, so you said, you know, the administration comes in and Besson's a smart guy and they want to do like they want to fix things. You know what I mean? And they wanted to give it like nine months or a year or something like that.

That's not fixing anything. Let's be honest with what just happened with this tariff trade war. We put a bunch of retaliatory. We put the fentanyl tax on, and then we put the retaliatory tax on, and now it's basically back to where we were on February 1st. So nothing's going to get fixed on trade. You can make the argument that

there wasn't anything to really fix. We can't convince, you know, these other countries to buy more of our shit. You know what I mean? Like it doesn't work that way, especially when we're trying to pull back from globalization. I mean, that's the thing that I like. None of this makes any sense, right? Like, like, like, does it make any sense? Let me give you let me give you maybe an angle. Maybe this is true. Maybe it's not true, but I think it makes sense. Okay.

So let's assume that what we're driving towards is if at the end of the day, we're going to end up as a 10% import tax, a sales tax, essentially. And even on China, that the fentanyl thing comes off because they agree to curtail some of that trafficking. Fine, that's great. It's a win. And like with the UK. So we negotiated with the UK. They have a surplus or a deficit with us. We still kept the 10% tariff on. So it's basically an import tax.

We have $4 trillion a year of imports. A 10% tax is $400 billion of tax revenue. Yeah, but somebody eats that. Hold on. So that's real money. Now, I'm not saying it'll be carve-outs, it'll be the 232 stuff. Okay, fine. But my point is, let's say you get $250 billion of revenue per year from tariffs. That's a tax. But he doesn't have to tell people he's taxed. It's political. He says, okay, we're doing it. It's tariffs. We're going after the bad guys.

and we're going to make this fair trade. Okay, it's a, I guess, a saleable thing. And the tax itself is shared by exporters. They'll eat some. Importers will eat some, and consumers will have to pay some. I don't know what the ratio is, but it's, you know, three, four percent tax probably for each, something like that. I mean, that's not a bad outcome if you're actually going to raise revenues, and you didn't have to go through the legislative process to do that. That will help

the funding problem that we do have. That makes sense to me. And you do it through an EO, right? You do it through an EO under the guise of a tariff, but really it's just a tax on consumption, which by the way, we do need to consume less as Americans. As you know, we were discussing this. Yeah, because the American dream is not private or it's not flat screen TVs from China. That's what Besson said. Which is a great line, by the way.

It's not let them eat cake. This is behavior. How do you, you know how you change that consumer behavior? You go through a protracted bear market or something that literally is on the cusp of a depression. And like this is my issue though, because I just think they're meddling with things like you talk about, you know, the Fed, the Treasury meddling or whatever.

if they start meddling with our consumer behavior, our consumption, you know, just in general, I think it might go somewhere where they don't really want it to go. You know what I mean? And you tell me like $250 billion a year, it's a rounding error. You know what I mean? Like, isn't it or no? It pays for the tax cuts. It just is. It's $2.5 trillion over 10 years. So look, you asked me the question, does it make sense? I'm trying to give you a hypothesis as to how it might at least kind of make sense

Because the on again, off again, the back and forth, that I agree, it doesn't make sense because that erodes confidence both in corporates and consumers. And then you have something that is kind of hard to regain. So fortunately, they did backtrack quickly because I think we were probably weeks. I mean, I can say that I think weeks from having a bad recession because it's basically a trade embargo.

So the fact that we walked that back quickly, I think was a good thing. Maybe we shouldn't have been there in the first place. That's beside the point. But I'm just trying to make sense. Like I'm an investor and I'm trying to figure, okay, does this make sense? And what's the landing point? Like where does this end up?

And I do think it ends up somewhere around a 10% import tax with carve outs and special, you know, areas that have to be protected. I mean, you know how it works, but I mean, my point is, is that that's the only way that it makes sense to me. Yeah. And by the way, the listener, if you, you think that Mike's getting sick of me already, just wait, this is a, this is Thursday into the close. Mike and I are going to be going up to the NASDAQ and doing fast money for an hour together. And then we're going to go downtown. We're gonna have dinner together. Uh,

I'm sure you're going to be ready to jump off the train by the time you're heading home. Yeah, well, we'll see. Yeah, I mean, listen, you know, by the way, Mike and I go back, as I said earlier, and, you know, these are the sort of punchy conversations that people have on trading desks, you know, and you go into, you know, big hedge funds, big pension funds, you know, you're kind of laying it out. I'm sure there's tons of pushback.

Right. And it makes you better at what you do. So if you said we were not far away from, you know, something that would have been more severe than the run of the mill sort of recession, it would have taken a while to figure it out. Like given all the volatility that we're seeing and, you know, the economy and the data and what's going on in risk assets. When you're in a place like Morgan Stanley, we could make the argument that you're one of the 10 most important financial institutions on the planet. Does that make sense? 10, 20, whatever. Sure.

what's going on internally? You know what I'm saying? Like, and without like naming names or this and that, whatever, like, is it like getting all the, you know, the geniuses together and try to figure out like that you're not on the wrong side of stuff.

Well, first of all, there's no geniuses, okay, when the markets are moving like that. There were a lot of phone calls. I mean, the place collaborates and communicates really, really well, which is why I think we do a good job for clients. I will say this, I don't think this is talking out of turn, that we had basically a crash in the S&P 500 and a lot of assets in three or four days.

and the plant, okay, and the markets really behaved extremely well, okay, meaning no circuit breakers, okay, credit markets were functioning. - Isn't that funny? So people ask all the time, what is the down limits and stuff like that? And when you were in the late 90s, it was like two and a half, wasn't it? Like they would scale, I think it was like a few percent, then another few percent. Now you can make the argument they're just too wide, is that, I don't know. - Seven and a half percent, I think, is the first trigger, and then they scale back from there.

i don't know i mean like we didn't even we didn't even get close to that um it felt like it you know parts of the day but my point is is that what i learned in april i think i learned is that the financial markets aren't nearly as fragile as i was maybe thinking or worrying about a year ago okay that that actually there aren't there's always hidden things out there that you can come to the come to the surface in a bad market but like

I didn't really see much of that. And so that tells me that the credit markets are pretty good, which is the one I really worry about the most. Funding markets and credit markets is where things become really disorderly, and you can have this domino effect, contagion. So that's why I feel better today, actually, that if we have a recession or we have another shock of something, a gross scare, or a bond market that goes to 5% on U.S. Treasuries, I think we will weather it

better than I might have thought a year ago. Right. All right. Let's go back a few years when you started doing the pod with us in 2022 or probably late 21. I remember that you were one of very few bears heading into that year. You also called a couple big, these were like trading calls. You know, I think one was maybe in June of 22 and then there was another one in the fall, but you remain structurally bearish with making these, I think you call them tactical calls. Sure.

You just said we kind of crashed in April, at least the stock market. You know, 2022 was a very orderly sell off. Right. And so I'm just curious, like how you think about that if we were to go into a period where, you know, the way you kind of described yields are doing OK and, you know, like, you

you know, inflation's not going to the moon and all that sort of stuff. You know, like, wouldn't it kind of be healthy to have like a little bit of an earnings recession? I want to get to your S&P earnings estimates, that sort of thing, because from here on out, I was looking at your mid quarter, you know, you're expecting like high single digits, maybe double digit, your earnings growth for the next few years. Is that correct? Like through, um, so, um,

like don't you want some excess to be taken out a little rather than one month of fear? You know what I mean? Like just have like a period where we have to go back and forth and say, Hey, how does this end? You know what I mean? Like, you know, I'm just curious, like, like give me a sense. Well, 22, I mean, it was a, you know, it was a, it was a fairly protracted nine, 10 months bear market. You know, it never got disorderly, but it, you know, we had some big kind of nasty weeks, you know, where it felt pretty bad if a proper bear market happened.

You know, I want to go back to the last year. I mean, we measure this. We look at the market a lot of different ways. OK. And as you know, I think, you know, Stan Druckenmiller says, and obviously he knows a lot, you know, that the internals of the equity market are your best economists, you know, your best strategists. And I took those words to heart 20 years ago. I created baskets to kind of help me navigate. And we look at a lot of different baskets. And one basket in particular is cyclical stocks versus defensive stocks, just the ratio there.

And end of last year, we were very overweight defensive stocks coming into this year. And it worked really, really well. But the point of telling you this is that ratio peaked in April of 2024, a year ago.

and was on a pretty good downswing even into the fall. And then it rallied with the Fed cutting rates. And then we obviously, the ratio literally crashed from the inauguration into April. And what I'm trying to say is that the markets, they do a lot of work internally. Everybody quotes S&P 500 or their favorite index. And they usually are quoting the good indices.

But if you look at the crappy indices or these lower quality stocks, I mean, my goodness. Well, small caps is a great example. Exactly. Russell 2000 is such a low quality index. It's just like the gift that keeps giving. I mean, it's trading below where it was four or five years ago. Well, you made the point in 2022, actually, that we had recessions in some of these sectors, right? Rolling recessions. Yes. And I thought that was a very unique call. It was nuanced that I didn't hear at other places on the street.

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You just mentioned Stan Drucker-Miller. And this is one thing. We asked some listeners and some viewers for some questions for you. And so this is a really good one. This is, I heard earlier in the week on one of our shows, but it was reiterated. They wanted somebody smarter than us to answer the question. So this is from Clark Kemp.

Which I like. Why are the great hedge fund managers like Cohen and Dalio saying, we retest the April lows, but you go to Wall Street bets and people are only buying spy calls? That's a great question because in the last two weeks, we've had Dalio, we've had Lee Cooperman, we had Druckenmiller, we had Paul Tudor Jones, and I'm probably missing one other. Oh, did I say Steve Cohen also? Yes. The owner of the Mets. Yes. And so-

Like, explain that to me also because these, you know the culture. It's a great comment. It's a great question. So, you know, somebody's been doing this for 30 years. So I learned the trade, you know, the craft, okay, the same time you did. And I learned technicals as a mechanism because you have to have technicals in addition to the fundamental view. You try to marry the two.

And the way that I learned it and it worked for a long time is that whenever you have a major correction, like 20%, you usually get what we call as a momentum low. Okay. Where the stochastics are like really, really low levels and April 7th and 8th qualified as a capitulatory low when looked at in like McKellen oscillator or the RSI's MACD's. I mean, these are like on the floor. Okay. So that is, and then we said this at the time, so that's your own momentum low. Typically,

What happens is you'll then retest the lows. You'll make a new low in price, but you'll make a higher low in momentum. And that's your positive divergence, which is your buy signal. I will tell you this, okay? Since 2018, that has not worked very well. It's worked 50% of the time. And I'll give you a couple of examples. So in December 24th, Christmas Eve of 2018,

Really bad fourth quarter. Big pivot. And we had that. We had that 18 call really, really good. Like we made a, we were very bullish in 17 and we were very bearish in 18. And we're like, oh, we're feeling really good about ourselves. And we had, you know, it's Christmas Eve and have a little eggnog. I'm like, yeah, not nailed that one again. And that's the momentum low. And then I was like, yeah, it'll be a retest. And then there never was because it, you know, Powell pivoted like a week later and there was never a retest. And we saw the same thing in COVID. Yeah.

And so in COVID, I learned my lesson. On March 23rd, we called the low to that day. It was momentum low and it was a price low. And so it's just that technique has not worked as well as it used to. And it's probably because of things like Wall Street bets or other types of investors who are now as important as what I would call your more sophisticated. And by the way,

I don't say anything bad about retail investors. They were the ones buying. They managed this better than... Isn't that kind of scary, though, that they've been just trained to buy? It's interesting, the point you just made. So we just went through all these very sophisticated hedge fund guys who've made billions and billions and billions, probably hundreds of billions of dollars collectively for investors. And I make a lot of the same mistakes. I don't get bearish at Lowe's.

I just don't get bullish enough, right? So in this last month, I was like, you know, Guy and I, we're doing this stuff every day, right? So we're podcasting, we're interviewing really smart people or having conversations with them. Then we're going on fast money. We're trying to be very measured, you know what I mean? Like when you think about that, because the last thing we want people to do is get too geeked up at a relative high or the same thing at relative lows. But the mistake I make all the time is that, okay, I'm not pressing lows, right?

Okay. You can go back to the tape. You can see it. You know, the market's down 15%. I'm not there pressing those. I learned that from trading. But what I do is I get too bearish on whatever the narrative has been. COVID was a great example. This one, I don't, for some reason, I forget.

what the fed or the treasury or whatever might do. And then it's off to the races. And then I'm still playing for that retest or some sort of retracement of the move, you know, like, is that something that you would just associate with some of these folks like that? We're just talking about it because they changed their mind pretty quickly. Also, you know, I was just going to say, I mean, my guess is they're not calling for a retest now because they're smart and they're great traders. I mean, they're way better than me. So they've learned this lesson too. And, um,

I don't know what they were exactly saying about this particular incidence, but I mean, when it first happened, I thought we were going to retest. And then two weeks later, I was like, nah, I don't think we are because they really did pivot on this. And, and by the way, the, we're not seeing any deterioration in some of the other things we look at, particularly credit spreads and funding markets. So, so you just have to be flexible, you know, we get plenty of things wrong. We get plenty of things right. And, you know, best you can do is, you know,

cut your losses and really pressure winners. So I think what you said a minute ago, though, is something I've learned over time, too, is that

You know, when something plays out, both on the upside and the downside, you have to be disciplined about, which is why these other guys are so much better than me. I mean, that's why they're so much wealthier. I mean, they're just, they're masters at taking profits, you know, at not getting, you know, emotionally attached to like some idea. And I think...

In your role, you're public facing and you're on TV and you do your podcast and your media, and I'm the same way. So it's much harder. It does make it hard. It makes it harder when you have to be public with your views. When you're trading, when you were trading, you can change your mind. Nobody cares. This is the business that we chose. You know what I mean? And I get it. In the last 10 years or even longer doing Fast Money, there's certain priorities

problems that it presents. You know what I mean? For me, like you have to be transparent, you know, that sort of thing. And you don't want to be one of these guys who's like flip flop. And, and, you know, some folks in the financial media have gotten really good at talking out of both sides of their mouth. I mean, you know that and strategists are that way too, you know? So, um, you know, I get that like, all right, I want to go to like some pockets of,

of risk that might not be appreciated. You know, Jamie Dimon earlier in the week said, you know, talked about complacency in the market. He's not ruling out stagflation. You know, he sees a lot of stuff, right? So let's talk about, and this was another question from

This is from Wavy McFly. He's always with us. We appreciate Wavy. Please explain how dislocations in the private equity market can lead to volatility in the public equity markets. And I think we'll also throw in private credit there.

So a lot of banks like yours and JP Morgan and like this has been a boon for them. They've been lending to a lot of these private credit folks. And so talk to me a little bit about how you're thinking about there. Are there pockets of risk that are lurking? Because I can make the argument on private equity or venture. Like we have companies in the private markets that have been able to raise untold.

holds about a money, you know, and like OpenAI is a $300 billion market cap in the private markets. They can literally raise hundreds. You know what I mean? So I'm just curious, what are you thinking about these risks that are not in the public markets right now? Yeah, so I think the way I think about, I mean, the biggest risk from private equity is that they need liquidity, right? They have to do distributions to their LPs. And a lot of these LPs, particularly endowments, need that money now. They haven't seen distributions for quite a while.

There's two things going on. First, the vintage of, say, the post-COVID vintage, 2020 to 2022. We know that a lot of capital will be destroyed because there was too much of it and the prices were silly. So there's a lot of stuff that's probably trading at a level that nobody wants to sell at.

Now, eventually they have to sell because they need liquidity. They got to pay their LP. So the way it weighs on public markets is if they decide to do IPOs and you just say, you know, we got to get it out. We got to we just got to get this stuff out. And yeah, it's 40, 50 percent below our cost, but we need liquidity. OK, the other way is that they some of these funds are also publicly traded stocks.

So they sell their publicly traded stocks to provide liquidity. That's another way. Have we seen secondaries like that? And there's secondaries between them. Or what happens is, and we're seeing this now with some of the endowments, they're willing to sell their direct ownership in these private companies at a major discount. That's not really a problem. That's just somebody getting a bargain because somebody needs liquidity. I don't think this is like we measure this pretty...

It'll create pockets of volatility. I don't think this is like some big, this is like the housing market. There's no private credit blow up that you foresee in the not so distant. Because every week, there was an article the other day in the FT. There was one in the Wall Street Journal two weeks ago. There was one in Bloomberg. You know, like real publications. They're doing real work. And it sounds like there's some worries about private credit.

there's always worries because nobody knows what's there, right? So when it's kind of a black box and people are like scared of it because they don't know what's in the box, okay? But at the end of the day, and I just had a major get together from major allocators in Europe and to a person, I mean, like private credit still looks much better, right?

because the way the covenants have been written, usually when you're going with the larger ones, they've got this thing screwed down pretty good where they have control of these companies. So you're somewhat more protected now. The public equity markets, some of the high yield and some of these areas where the covenants are pretty covenant-lighted.

Those are areas where I think there could be more pressure on equity markets. So it's funny what you mentioned, not funny, but the idea that this money needs to be recycled because it also needs to be more money raised so they can do more deals and they can take more fees. And I keep hearing this, that the fundraising environment is really hard right now.

like funds that in private equity that have raised, you know, the first fund was a billion and the next fund was three and then they got to eight and now they're doing a $20 billion fund, like fund seven, that sort of thing. They're going over to Qatar, they're going over to Saudi, they're going to similar and they're having a hard time, like, you know, kind of rounding out some of these. Are you hearing anything like that? And what does it say to you if I'm telling you that and you believe it? But that's good. I mean, that just means that, you know, they're now we're going to digest a bit.

And I think no different than the loan market and that's like always extend and pretend. It's no different. It's just who's the loser in all of this? It's the LPs, but it's not like they're just going to get lower returns. So they don't make a 15% IRR. They make a 5% IRR in this vintage. It's not like the end of the world. You know what I'm saying? Like the stuff will eventually create some kind of value. And it's just a cycle.

and we'll have this elongated cycle. The last, the one that, the worst credit cycle of my career was 1998 to 2002. You probably remember this. So that was right after long-term capital.

Like there was a negative credit cycle through, remember the bubble in 99, 2000 in stocks? Of course you do, you were there. And that bubble in stocks, credit traded terribly. And then it traded for another two years, a four year. Were you focused on that dislocation back then? Because you and I were talking every day. You know what I mean? You were a strategist. You were, you know, well, you were a tech salesman. I'm sorry. We called you a tech strategist for all intents and purposes. You know, you're also making calls, you know, you should buy this, you should sell that. You were buy, buy, buy.

There was no selling. I mean, were you focused on that back then or no? I was not nearly as focused on the credit markets as I should have been. I knew shit about it. Yeah. Like seriously, I was like a bull market baby. I mean, it was, I mean, we all were in the late nineties, but even in like a one or two or three, I was, and look, that's, you learn all these things through time. But, but my point is, is that,

That's not what the credit markets look like to me right now. I don't see a credit market that is going to go into distress for two, three, four years. Now, we do have a big refunding cycle coming up. Forget about the Treasury refunding cycle, which is going to crowd out a lot of capital. You have all the post-COVID refinancings that have to happen now over the next two to three years. So it's another reason why rates need to come lower. What if they don't come?

That's to me like we have a window here where I think the rate of change is turned positive now for earnings revision breadth, for policy, potentially for the Fed. Okay, dollar now is a tailwind. Some of the D-reg is potential positive tailwind from a rate of change standpoint. But that's only on a six to 12 month basis. Okay.

then after that cycle is kind of through, then we have to deal with some of these bigger things again. So like I'm here to help our clients think about the next six to 12 months. Okay. I'm not here to think about the next five to 10 years for them because nobody invests like that. I mean, something, I mean, you know, the private guys do whatever, but my point is like they,

Day to day, people have to be putting capital to work every day. And I need to be thinking in kind of these three, six, 12 month buckets, not two, three, four, and worrying about the next crisis. All right, let's drill down on the stock market here because we've talked about a lot of other stuff here. So coming into the year,

you had a $6,500 price target on the S&P 500. We got as low as 4850. You're saying you think that is the low for this year. Here we are at 5850 or so. You got some runway to your number. You also thought, again, just to reiterate what we started talking about, that the first half was going to be a bit volatile, a bit rocky, but you're going to get the payback in the back half of the year. You just mentioned S&P earnings revision. So you're about $270. And coming into the year, I think consensus was like 278,000.

- Yeah, we've trimmed that since. - So where are you now? - Like 260, 260. - Okay, I mean do you think that's gonna end up being low? - No, I think it could be low now, yeah. Because if the retroactive tax breaks, that's worth like four to five percent right there. - Is it really? So just retroactively going back, and how far is it, Gen one? Is that what it is? - January first.

And is that similar to what we saw in 2017, 18? No, no. That was an actual statute. Oh, that was a brand new one. This is the incentives for bonus depreciation, bonus depreciation and research and development right up and then manufacturing capacity in the United States. Okay. And so you're down at 260. What were your major takeaways from this earnings season? Right. So here we are. We're almost at the end of Q2. I,

I think, you know, we quote John Butters at FactSet. We watch him week over week and this stuff. It seems like the amount of companies in the S&P, I think the number was like 36, and there's 500 stocks, as you know, in the S&P 500. 36 pulled forward guidance. That's it, okay? And then it was like a number, I don't know, and I'm just, maybe I'm quoting it wrong. We'll put this in the show notes. Maybe...

guided down, you know what I mean? And the rest, it was just like kind of right in the zone. So was that a big surprise to you? And I'm just curious, like what your mood was coming out of the Q1 earnings. So the first quarter, as you probably know, I mean, the earnings forecast came down even more than normal. I mean, the word was getting out, like companies were telling folks to cut the numbers, not just for tariffs, but a lot of other things that were going on.

And a lot of it was Mag 7, quite frankly. So those numbers came down and then there was this pull forward of demand because people knew the tariffs were coming. Not just companies restocking to get ahead of the tariffs, but also consumers

buying stuff. Like I bought a car on March 31st. I didn't really even need a car. I mean, I knew I was going to need one like in six months. You're good over there. Yeah, whatever. I just, whatever. Cars way. Yeah. But I mean, I'm just saying like there were, there were a lot of people hate the personal anecdotes, but that's one. No, but people, I actually heard that by a lot of people. Yeah. So, so what ended up happening then was first quarter results ended up being way better. Like they beat by 8%, which is double the normal beat rate.

So now the risk is that there's payback in 2Q, right? That there's this air pocket where companies don't order as much because they got a little excess inventory. And oh, by the way, the consumer isn't buying as much. Here's the rub. Because we did the 4,800 shot and everybody got scorched out, okay? I just, I think the market now is in look through it mode. Here's a stat you probably, you may know because you still talked to a lot of people in the business, but like our work suggests that right now,

retail is buying $5 billion a day, steady state. Systematic strategies, CTAs, are buying about $5 to $6 billion a day for the next 30 days, because unless the market really falls out of bed, they're trend following. And corporates are buying about $5 billion a day. So you have $15 billion a day of demand in S&P type products, NASDAQ 100, whatever, the big stuff. I mean, it's hard to imagine that

You're going to get much. Like today's a good example. I mean, like, okay, so treasury debt downgraded last week. Then JGBs go wild. They pass a tax deal that's not really, you know, friendly for the bond market. And what do we sell? 1%? Yeah.

Yeah. We rallied. Yeah, the market was down in the morning, and now it's up 45 basis points. That's that $15 billion of demand. Yeah, but I guess, you know, the 10 years, yeah, I guess it's coming to a few basis points, too. So, like, yeah, you're saying it's kind of benign. When you think about those sorts of inflows, okay, like, is it the sort of thing that, is that normal? You know what I mean? Like, is that, yeah, no? I think it's one of the things that's changed a lot in the last 20 years, the systematics especially. Yeah.

And retail now, I mean, they've built up a lot of wealth. And they've been trained.

You buy every dip. - All right, so here's one. In 1718, we had a trillion and a half dollar tax cut, and you know how much corporates bought back in stock over the next two years? - A trillion and a half. - A trillion and a half dollars, yeah. So is that gonna be a massive tailwind for the stock market, assuming everything's kinda staying put here? - Even without the tax cuts, that's steady state, that's kinda steady state because these S&P companies are generating so much cash. And by the way, the trillion and a half dollars, I mean 80% of it is probably like 50 companies. So it's very concentrated.

We talked, I want to get into some sectors, some geographies. But in late January, you actually, I don't mean actually, you had a great call about the rate of change of capbacks for the hyperscalers was slowing. And, you know, you were on the Fast Money Show with us down in Miami from iConnections. And it was the day that a couple of that was Jan 31, I think. And we just had earlier in the week this massive disconnect with DeepSeek. And that was like the first real panic, like a lot of these names sold off.

And maybe investors were just feeling a little bit queasy because the numbers were so big, like the CapEx numbers, and they were kind of already leaking out. And those stocks got absolutely nailed. I mean, like if the S&P was down 15%, like most of them were down 30% or so. So now from what you heard about CapEx, and I know NVIDIA is next week, but let's assume there's no huge surprises. Jensen's been all over it.

literally all over the world telling the story in the last two weeks or so. Is that going to be the leadership? If we like, if we're going to 6,500, the S and P 500 for the next, you know, let's call it seven months. Does, does the prior leadership lead to your number to 6,500?

No, I think it's going to be more balanced. I mean, the two sectors I like the most right now are financials and industrials because you have tailwinds from the DRAG, which I know is coming in the second half of the year from a banking standpoint. I mean, that's pretty clear that Scott Besson has been saying that. Secondly, for industrials, I mean, like the

Whether it's reshoring or retooling, this is not a U.S.-only phenomenon. This is Germany spending money again. By the way, yeah, they're spending money on defense, but there's a lot of infrastructure that has to go in around that. There's also energy infrastructure that has to go in all over the world to power these data centers. So those are the two sectors I kind of feel— Are you worried about energy right now? Because when you think about it, I keep reading stuff that they keep making these data centers where there's not a lot of water.

You know what I mean? Like, are you reading the same stuff? It's just like, and there's this huge NIMBY thing. Like, no, people don't want these things because like for all intents and purposes, there's not a lot of people working in those things. No, it's, I mean, nobody wants the nuclear either. That's the other one. So like, I'm very bullish on the natural gas kind of supply chain.

whether it's the pipelines that deliver stuff, the producers themselves, the processing of the natural gas, and then the building of the plants, because that's the answer. We're going to have to have natural gas-fired plants. By the way, it's not a surprise that Saudi Arabia and the Middle East is basically building these things now. They have excess natural gas.

And that's what they're going to do. They're not going to power with nuclear. OK, I can assure you that they're building these things in Texas now for the same reason. So so I think I think the natural gas supply chain, that whole sort of infrastructure apparatus, if you will, very bullish on oil. On the other hand, you know, I'm not that bullish on.

There's a lot of excess supply. I'm hopeful that the Russia-Ukraine war will eventually come to an end. It's clear that Trump is working with the Middle East to pump more oil. So I think we're going to have plenty of oil. Yeah.

but natural gas are probably short. All right. So geographies. Yeah. Um, you know, Trump was just in Saudi. He was in UAE. He was in Qatar. He went to Qatar. Qatar. What do you, what do you think? Qatar for us Americans. Okay. Um, and so, you know, the, the numbers that they're throwing out there and it's not just Trump being there. It's Jensen Wong. It's, you know, a bunch of other major like CEOs. Um,

Is there a way to invest in the Middle East? Do you keep getting asked this question because, or do you just do it through NVIDIA or some of these other kind of hyperscalers? Well, I mean, it does appear, for better or worse, I mean, I think Trump's first presidency, one of his biggest wins was the Abraham Accords. And I do sense that the Middle East maybe becomes more cohesive when he's in power versus the last administration, at least at a minimum, whether that last passed him, we'll see.

But there's no doubt that that region knows they have to transition from oil and gas to other things. So I do think what they're doing makes sense. And they're investing in other parts of their developing other parts of their economy. Those stock markets are very underdeveloped.

I mean, I'm not an expert in the region, but I got to believe that from an equity standpoint, there's going to be some pretty big investment opportunities as they invest in these different parts of their economy that have been underdeveloped. Yeah, absolutely. It's pretty fascinating that we also, you know, we often say, well, you know,

Microsoft, Apple, Nvidia are the largest market cap companies in the world. Well, Ramco, you know what I mean? It has been, but there's nothing else going on. There's nothing else to invest in. All right, so before we get out of here, there was a lot of talk about sell America, buy,

EU or you know that sort of thing or Asia was really cheap and that sort of thing how do you feel about the sell America just let's talk about from an equity standpoint relative to some of these other regions yeah we kind of flipped back to pro-America early but before the liberation day actually because the move had been so dramatic like we like the German DAX had outperformed the S&P 500 by 40 percent in US dollar terms between you know whatever December and early March or late March and

And like that's a decade of performance. So so I'm not I would sit here and say, oh, the DAX has to go down a bunch. But I think I think there are things that can work in Europe now if they finally are starting to help themselves. You know, the MAGA is really mega. OK, right. Make Europe great again. But I mean, at the end of the day, I mean, the U.S. still has the best companies, the best rule of law, the most pro kind of capitalist power.

Do we still? I think it's, I mean, I think that from an investment standpoint, you can't say, oh, the U.S. is going into a 10-year slide against Europe or. No, no. But when you have the White House, you know, tweeting at Walmart, which we could all agree

is one of our national champions. Let's be frank, you know what I mean? And retailers all over the world have tried to copy what they do. I mean, Amazon tried to copy what they do. And the whole idea that you could be told to keep prices low, and I could say administration after administration in difficult times, they talk about price gouging, they're right. Of course.

But, you know, the idea of having Walmart that already has really slim margins eat a bunch of this is probably not a good thing. You know what I mean? The fact that none of the regulatory stuff for the big tech has slowed up. You know what I mean? So when you tell me that we're going to get dereg, you know, for financials. Well, every time you do that for financials during my career, a disaster ends up happening. And let's be frank about that. You know what I mean? Like the Silicon Valley thing was clunky.

clearly a result of deregulation in 2018. So as far as I'm concerned, fine. Don't break up Google or Amazon or Apple because they are monopolies. There's nothing that any government can do to break those things up. Is that fair to say or no? Yeah, well, I mean, the question is, and I think this is a fair question, over the last 20 years, okay, has the average American

done well? And I think the answer unequivocally is it hasn't done as well as the economy. So the way I like to think about the economy is, oh, the economy is doing good or bad. Okay. The only way to measure an economy's success is how is it serving its people? And in that score, I think our economy has failed miserably in the last 20 to 20 years. But does that have to do more with technological innovation? And is that about to be hypercharged over the next few years with general demand? Think about how many small businesses have been destroyed by

of these larger businesses, whether it's Walmart or Amazon. And by the way, I'm not saying that they shouldn't have done that. I mean, they're capitalist businesses and they're doing what they're supposed to be doing. They work for shareholders. What I'm saying is the way the system has been set up with the crowding out, the government crowding out basically through higher interest rates, you can't really compete unless you have global scale anymore.

And I think this is something that Treasury Secretary Besson's talked about, which is like it's Main Street's turn now. We've got to figure out how to get Main Street going again. Yeah, it's called universal basic income. But my point is it's going in a direction you can't stop this. Do you know what I mean? Think of these companies. So we want to be anti-capitalistic and we want to break them apart and we want to kind of- Well, I wouldn't say breaking them apart, but I would say we need to feed the-

you know, the flowers bloom a little bit under the surface. Like I do, I do think there's been some anti-competitive behavior that's been going on where either they acquire these competitors or they squash them somehow. And it's not just in tech, by the way. So I'm saying it's across the entire economy. Scale matters everywhere. Okay. And, and, and so if you can get capital into small entrepreneur businesses and, and deregulate that, the deregulation on them, uh,

then you might have a chance at having a broadening out of not only the economy, but also the wealth. Like that's a healthy way to redistribute wealth. OK, not universal basic income. It's through the wage channel. It's through the entrepreneur channel. That's way more productive in my view. It's also the average American would rather have it that way, too. They don't want to hand out. People really I think people want to have their, you know, their hands into something and make that make it their own.

All right. That's for another podcast because we can debate that for a while here. I mean, listen, you did a lot of heavy lifting. This was longer than the average podcast we do. We're getting a little warmed up for fast money. Hopefully you'll get to talk a little less, I guess, with big mouths like me on that desk. Mike Wilson, really appreciate you being back. I know our listeners love it. I certainly do. So thanks a lot. We'll do it again, hopefully in a few months. Sounds great, Dan. Thanks.