¿La economía en forma de K destruirá Estados Unidos?

[0:00] The job of the Fed is to boil us alive
[0:02] without us hopping out of the pot. If we
[0:04] hop out of the pot, then we have
[0:05] financial stability concerns and then we
[0:07] have all sorts of issues that cause
[0:08] problems in the real economy and asset
[0:10] markets at the Fed that will be worse
[0:11] than just having, you know, sticky above
[0:13] target inflation. And so, you know, this
[0:15] is the lesser of two evils in the
[0:17] context of the fiscal dynamics that we
[0:18] continue to highlight uh in the US
[0:19] economy. What's going on, guys? Today,
[0:21] we got a great conversation with Darius
[0:22] Dale. He's here in person and we talk
[0:24] about what's going on at the Federal
[0:25] Reserve. Kevin War stepping into the
[0:27] leadership role. How you should think
[0:28] about inflation expectations in
[0:30] relationship to actual inflation. What
[0:32] does this mean for your portfolio for
[0:34] public stocks or how should you actually
[0:36] think about the impact of AI? On top of
[0:37] that, we dig into the affordability
[0:39] crisis that is hitting millions and
[0:40] millions of Americans. We talk about
[0:42] some anecdotal examples of exactly what
[0:44] it means. I literally look up live some
[0:47] prices of items that are going to shock
[0:48] you. And Darius explains some of his
[0:50] life experience and where he's actually
[0:52] started to meet people and what he's
[0:53] learned from them. All of that much
[0:55] more. in this conversation with Darius
[0:56] Dale. All right, Darius. Uh Kevin Worst
[0:58] now has taken over the control of the
[1:00] Federal Reserve. He's the big dog at the
[1:02] uh central bank and he seems to be want
[1:04] to run the place a little bit different.
[1:05] What's your take on his original press
[1:07] conference and kind of what he's doing
[1:08] differently than his predecessor?
[1:10] >> Yeah, look, before we even get started,
[1:12] man, I just want to say thanks for
[1:13] having me. Love this set, man. This
[1:15] studio is gorgeous. Uh I feel like I
[1:18] feel like I'm part of history in here,
[1:19] man. So, let's make some history today.
[1:21] Um, I'll say the first thing I'll tell
[1:23] you is that, you know, we think Kevin
[1:25] Walsh is a dove in Hawk's clothing.
[1:29] >> What does that mean?
[1:30] >> A dove invest clothing. Someone who
[1:32] ultimately wants to have easier monetary
[1:34] policy. Uh, maybe because of his
[1:37] relationship with the administration,
[1:38] but I I doubt it. I think he genuinely
[1:40] believes that AI is has massive
[1:42] dissolationary potential. However, he
[1:44] has to wear the armor of a hawk in order
[1:48] to create the scope, the landing space
[1:50] for the Fed to get to that outcome. Um,
[1:52] and so ultimately what we think we're
[1:54] going to have to do here over the next,
[1:55] let's call it two to three quarters
[1:57] perhaps, uh, is the Fed has to either
[2:00] tighten monetary policy or use this
[2:02] communication tool to signal to the
[2:03] markets that it may tighten monetary
[2:05] policy or both in order to create that
[2:07] scope for much of
[2:08] >> why do you think it needs tighter
[2:09] monetary policy? like if you look at uh
[2:11] inflation expectations maybe over the
[2:13] last couple weeks has it started to come
[2:14] down do you think that that changes uh
[2:16] that need for them?
[2:17] >> Uh yeah so uh what I'll say on inflation
[2:19] expectations we've done a big
[2:20] statistical analysis on on the drivers
[2:22] of inflation the things that lead and
[2:24] lag inflation and inflation expectations
[2:26] have very little you know statistical
[2:28] relationship with future inflation
[2:29] outcomes. Uh what has a meaningful
[2:31] impact on future inflation outcomes uh
[2:34] are uh things like the monetary drivers
[2:36] of inflation. So the rate of change of
[2:38] of money supply, the uh expansion andor
[2:42] contraction of the money velocity that's
[2:44] important. Uh there are policy drivers
[2:45] of inflation most notably uh deficit
[2:48] spending uh the Fed's monetization and
[2:50] then to the extent that there's um you
[2:52] know uh meaningful deregulation in the
[2:54] banking sector which there currently is
[2:56] uh the credit growth uh cycle can be a
[2:58] leading indicator of inflation. And then
[3:00] there's ultimately these sort of you
[3:01] know I don't necessarily agree with them
[3:03] u there's these sort of like output gap
[3:05] drivers of inflation to the extent that
[3:07] the economy is growing above potential
[3:08] or uh the unemployment rate is below uh
[3:11] the inu the non inflation accelerating
[3:13] rate of unemployment those are all the
[3:15] kinds of things that kind of lead
[3:16] inflation nothing perfectly leads
[3:18] inflation but when you put all those
[3:19] things together on net they are sending
[3:22] a very hawkish signal uh to policy
[3:24] makers and to the markets that the Fed
[3:26] has to do at least a little bit of
[3:28] something to get this you because these
[3:30] signals you're basically saying these
[3:31] signals are saying hey inflation is
[3:32] going higher according to these uh
[3:34] different data points and therefore if
[3:35] inflation goes higher then they're going
[3:36] to have to act.
[3:37] >> Yeah. Well, what it's saying is is two
[3:39] things. So uh it was saying inflation is
[3:40] going higher. It may be saying inflation
[3:42] starting to peak but peak at very
[3:44] uncomfortable levels and trend at very
[3:46] uncomfortable levels. What they're
[3:47] currently saying is that that we are no
[3:49] we are not at all on a credible path
[3:51] towards disinflation and certainly not
[3:53] on a path towards achieving the Fed's 2%
[3:55] target anytime soon. So, let's unpack
[3:57] some of those drivers of inflation. Like
[3:58] we just started, we'll start with the uh
[4:00] out, you know, output gap nu that output
[4:02] gaps at about 110 basis points, usually
[4:05] at about 200 basis points. You're
[4:06] talking about a Fed that has to tighten
[4:07] the economy into recession. So, we're
[4:09] halfway there, basically, a little bit
[4:10] more than halfway there. Uh Nou, we've
[4:13] seen the unemployment rate get
[4:14] meaningfully more meaningfully below
[4:16] NAU. It's currently about 20 basis
[4:17] points below NEU. you know, you get it
[4:19] to about 100 basis points below
[4:20] neighbor, which I'm not sure we're going
[4:21] to do in the context of AI, but that's
[4:23] when the Fed typically has to tighten
[4:25] the business cycle into a into into a
[4:27] downturn. Uh on the policy drivers of
[4:30] inflation, uh you look at the
[4:31] year-over-year rate of change of FedE um
[4:34] uh uh de uh deficit spending, uh that's
[4:36] growing at about 8% well above trend.
[4:38] You look at the year-over-year rate of
[4:39] change of Fed uh monetization, that's
[4:42] growing at about uh 8 7 8%
[4:44] year-over-year, well above trend. And
[4:46] then you look at bank credit growth uh
[4:48] which is also growing at about 7%
[4:49] year-over-year well above trend. These
[4:50] these the growth rates of these
[4:52] statistics are very inconsistent with a
[4:54] 2% inflation environment. Um and so
[4:57] ultimately and you also have the lagged
[4:58] impact of 175 basis points of of rate
[5:01] cuts that are flowing through the
[5:02] economy right now based on our uh uh uh
[5:05] business cycle model which confirms that
[5:06] there's about an 18-month lag between
[5:08] changes in the policy rate and outcomes
[5:09] in the economy.
[5:10] >> You think they've given up on the 2%.
[5:12] >> Oh for sure. You and I have been talking
[5:13] about this for almost half a decade at
[5:14] least. you know, at least 6 years
[5:16] almost. Uh, yeah. Now, the Fed doesn't
[5:17] want 2% inflation, but the Fed has to
[5:19] signal to the bond market that it wants
[5:20] 2% inflation, otherwise it's going to
[5:22] lose control of the long end of the
[5:24] curve in a way that will be
[5:25] counterproductive to their uh dual uh
[5:27] their, you know, maximum employment and
[5:29] price stability mandates. Uh, so
[5:31] ultimately, you know, we've been saying
[5:32] for for years at our company 42 macro,
[5:35] that to our to our global investor
[5:36] community that look, we're all frogs
[5:38] being boiled alive in a pot of financial
[5:40] oppression and monetary debasement. Mhm.
[5:42] >> The job of the Fed, you know, Kevin
[5:44] Walsh, in my opinion, I think he's a
[5:46] pretty credible Fed chair in terms of
[5:47] doing this particular job of this aspect
[5:49] of the job. The job of the Fed is to
[5:52] boil us alive without us hopping out of
[5:54] the pot.
[5:54] >> If we hop out of the pot, then we have
[5:56] financial stability concerns and then we
[5:58] have all sorts of issues that cause
[5:59] problems in the real economy and asset
[6:01] markets that the Fed that will be worse
[6:02] than just having, you know, sticky above
[6:04] target inflation. And so, you know, this
[6:06] is the lesser of two evils in the
[6:07] context of the fiscal dynamics that we
[6:09] continue to highlight in the US economy.
[6:11] Now, when we look at uh the Fed right
[6:14] now, inflation, it's hanging in there,
[6:16] right? It's higher for sure, but it's
[6:18] not like it's significantly uh at least
[6:21] some of the signals telling us it's
[6:22] going to accelerate from here. PCE came
[6:24] in though, and I think people are
[6:25] looking at that and they're saying,
[6:26] "Wait a second, this is a little bit
[6:27] higher than I thought it was going to
[6:27] be." And market sells off and there's
[6:29] some concerns there. So, it almost feels
[6:31] like there's different data points
[6:32] telling us different things, which means
[6:33] that it's complex. It's confusing for a
[6:35] lot of folks. Is that why the Fed is
[6:37] just saying we're not going to do
[6:38] anything? We're not going to hike, we're
[6:38] not going to cut, just keep kicking the
[6:40] can down the road. Let the complexity
[6:42] work itself out and let us get a clearer
[6:44] picture before we make a decision.
[6:45] >> Yeah, I think that's part of it. Um, and
[6:47] you're spot on about the complexity
[6:48] theory and and you've seen our you you
[6:50] get our research. You know, it's it's
[6:52] never one data point. I've been doing
[6:53] this for almost two decades and tried to
[6:54] build every model like like if there was
[6:56] an AAMS razor way to pinpoint to the
[6:58] decimal what inflation was going to be
[7:00] at every print or what the non-farm
[7:01] payrolls point uh print would be at
[7:03] every print, then we'd have figured that
[7:05] out by now. I mean if we can build AI we
[7:06] can certainly figure out what the
[7:07] non-farm payrolls number is from a
[7:09] statistical standpoint but the problem
[7:10] is is that the variance and the standard
[7:12] error on all these time series uh is
[7:15] these often revised time series is is is
[7:17] too wide. So you have to have a mosaic
[7:20] approach when you're approaching
[7:21] financial markets and and and modeling
[7:22] the economy. It's never just one data
[7:24] point. What it is is an amalgamation of
[7:26] data points that are sort of moving
[7:28] together like a swim of fish or or or a
[7:30] bird a pattern, you know, a flock of
[7:33] birds.
[7:33] >> Yeah. Yeah. Swim of fish. Yeah.
[7:34] >> Yeah. Totally 100%. And so that sum of
[7:36] fish in my opinion is sending a message
[7:38] to the Fed uh alongside the financial
[7:40] markets that hey your policy is not
[7:42] restrictive. Certainly you know stop
[7:44] thinking your policy is restrictive.
[7:46] That was step one. I think the Fed has
[7:47] gotten that message. We know the Fed has
[7:48] gotten that message according to the
[7:50] latest summary of economic projections
[7:51] and the dot plot. Uh the next step in
[7:53] our opinion and this is you know not
[7:55] consensus yet. The next step in our
[7:56] opinion is that the Fed it might have to
[7:58] um take a step further than that in
[8:00] terms of actually tightening monetary
[8:02] policy or signaling that they're going
[8:03] to tighten monetary policy in a
[8:05] meaningful way, i.e. making a a big
[8:07] pivot with their balance sheet, which we
[8:08] can talk about, or um you know, kind of
[8:10] ratcheting up for guidance through the
[8:12] dot plot because we know Kevin Wars
[8:13] doesn't like the actual um talking.
[8:15] >> Yeah. What's interesting to me is he got
[8:17] rid of forward guidance, which you might
[8:18] as well just said, hey, we're going to
[8:19] stop bullshitting, right?
[8:21] >> You said it, not me.
[8:23] And by the way, like that
[8:24] that's okay because the market was like,
[8:26] "Hey, everyone kind of sort of knows
[8:27] this isn't real. It's a, you know,
[8:29] guidance, but uh we got to listen to
[8:31] them because it's another data point
[8:32] they're giving us." And so almost in a
[8:34] weird way by subtracting that data point
[8:37] from the market, they're trying to be
[8:38] additive, I get the sense of, and clear
[8:41] up some of the complexity because
[8:42] they're taking away a thing that really
[8:44] had no standing in terms of accuracy.
[8:46] And so by taking it away, does that help
[8:47] investors?
[8:48] >> Uh, it it won't in the medium term. I
[8:51] think over the long term it will. In the
[8:53] medium term, removing the fans
[8:55] handholding of the bond market, you're
[8:56] essentially taking off the trading
[8:58] reels. And so ultimately, what that
[8:59] means is that there's going to be a
[9:01] wider range of probable outcomes with
[9:03] respect to the expected path of the
[9:04] policy rate, which should push up the uh
[9:06] um term premia. And there's going to be
[9:08] a wider and as a function of that wider
[9:09] range of of outcomes, the the bond
[9:11] market's also not going to know how
[9:13] serious the Fed is on inflation to some
[9:15] degree. It's going to pull back on that.
[9:16] And so ultimately, you wind up with a
[9:18] higher real term premia, a slightly
[9:20] higher inflation risk premium. So it
[9:22] should inflate term premium in the bond
[9:23] market. But the benefit of that of of
[9:26] going through that pain because this is
[9:27] not a costless exercise but ultimately
[9:29] there is some good on the other side of
[9:30] this. The benefit of that as Kevin Walsh
[9:32] alluded to uh last Wednesday is or in in
[9:35] that in that FOMC statement is the the
[9:38] once you were take the training wheels
[9:40] off of the bond market the financial
[9:41] markets get back to do what they're
[9:42] supposed to be doing which is pricing
[9:44] risk and and and and assigning units of
[9:47] risk and return. Uh, and so once the
[9:49] financial markets get back to doing
[9:50] that, then the Fed can actually start to
[9:52] lean on financial markets as a
[9:54] forwardlooking signal of what they
[9:57] should be doing from a policy
[9:58] standpoint. Right now, if you're sitting
[10:00] at the you're one of the 19 members of
[10:01] the FOMC, you have to be sitting there
[10:04] going,
[10:04] >> should I tighten monetary policy cuz the
[10:06] 2-year went up or is the two-year going
[10:09] up because it expects me to start
[10:10] talking more honkish. Like right now,
[10:12] you don't know what the chicken or the
[10:13] egg is. And so if you cut off the
[10:15] communications channel, you be you
[10:17] create more of a clear distinction
[10:18] between what the markets are signaling
[10:20] and what the Fed may or may not do,
[10:22] which allows the Fed to then tap into
[10:24] the collective wisdom of the crowd,
[10:25] which we all know is much better than
[10:27] any committee.
[10:28] >> What about energy prices? Like those
[10:29] spiked obviously, now they've come back
[10:31] down. We even saw below $70 a barrel uh
[10:34] for a few hours, I think, in the last
[10:35] couple of days. um if energy keeps
[10:38] staying somewhat muted or even falls
[10:40] further, does that put less pressure on
[10:42] inflation and therefore that would be
[10:43] good for uh for the American consumer?
[10:45] >> Uh yeah, of course it is and we saw we
[10:47] saw that uh in some modest uh resilience
[10:49] in the PC report today. I think we
[10:51] accelerated uh we have a weak positive
[10:52] impulse and real personal consumption
[10:54] expenditures to a slightly below trend
[10:56] rate of 2.1%. Trend is about 2.5%. So uh
[10:59] but again this is coming at the context
[11:01] of having a massive inflationary uh
[11:03] surge and and ultimately in the context
[11:04] of real disposable personal income down
[11:06] about 1.5% through monthual eyes well
[11:08] below trend. So you know the fact that
[11:10] the consumption is slight only slightly
[11:12] lower than trend uh and we have a a
[11:15] sharp decline uh sharp contraction in in
[11:17] in the income real income tells you that
[11:20] the consumer is being very resilient
[11:21] which is something you know I first
[11:22] called out I think on your program in
[11:24] the summer of 2022 when everybody was
[11:25] talking about recession. Recall that on
[11:27] this program in the fall of 2021, I
[11:31] said, "Hey, there's going to be
[11:32] something that nobody's talking about
[11:33] that everyone's going to start to talk
[11:35] about over the next, let's call it 12
[11:36] months." I said, "The Rword." And then
[11:38] by the summer, by the fall of 2022. I
[11:40] said, "Everyone needs to stop talking
[11:41] about the Rword because the economy is
[11:42] going to be resilient. They're talking
[11:43] about the wrong Rword." And so, um, you
[11:45] know, we think all this data really does
[11:46] support our resilient US economy theme,
[11:48] which ultimately gives the Fed a little
[11:50] bit more scope to tighten monetary
[11:51] policy. Not meaningfully, but but but
[11:53] they can. Today's episode is brought to
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[12:58] >> Now, when we go and we look at what's
[13:00] happening in the economy, obviously
[13:01] asset prices have taken off once again.
[13:03] The American consumer is resilient, yet
[13:06] they're all complaining, saying that
[13:07] everything's unaffordable. And my take
[13:09] is that all three of those things are
[13:10] true. Like, it is unaffordable because
[13:12] of how much price appreciation's
[13:13] happened over the last five or six
[13:14] years. But we live in an economy where,
[13:16] oh, the Knicks are going to the finals,
[13:18] like I get a ticket, right? Oh, this is
[13:20] person on Instagram just bought this
[13:21] thing. I need two of them. Uh, oh, this
[13:23] trip is going, "Yeah, that looks cool.
[13:24] Let me get the photo." Right? Like, that
[13:26] is the economy that we live in. And so,
[13:28] then the question kind of becomes, do we
[13:30] just live in a world where everything is
[13:32] about output? As a consumer, I want to
[13:35] output capital into investments. I want
[13:37] to put output into consuming material
[13:39] goods. Like, is that just the new
[13:41] normal? Uh it's been the normal since we
[13:43] outlined that resilience economy theme
[13:45] back in the uh fall in September of
[13:46] 2022. Pomp, you're a parent of four
[13:49] beautiful children, you and Bolina. Um
[13:51] tell me this, is there a median or
[13:54] average statistic that you could use to
[13:56] describe and set policy for all four of
[13:58] your children?
[13:59] >> No, of course not.
[14:00] >> Exactly. And so when you think about
[14:02] that from the perspective of the broader
[14:03] macroeconomy, you have to recognize that
[14:05] this is, you know, we look at aggregate
[14:07] statistics because they are useful for
[14:09] forecasting financial markets and and
[14:10] policy responses, but there's really
[14:12] nothing, you know, homogeneous about
[14:14] those aggregate statistics, you know,
[14:16] and you know, they're very heterogeneous
[14:17] when you start to break it down. So, you
[14:19] know, our analysis um you in terms of
[14:21] the research we've published to our our
[14:22] global investor community highlights the
[14:24] K-shaped nature of the economy through
[14:26] two channels. On the low end of the K,
[14:28] we see that uh delinquency rates, 90-day
[14:30] plus delinquency rates, you know,
[14:32] heading for charge off for credit cards,
[14:34] autos, student loans are either
[14:36] exceeding or right near the peak rates
[14:39] that we saw, you know, at the at the
[14:41] height of the global financial crisis
[14:42] and great recession. Like right now,
[14:44] right now, even with, you know,
[14:46] reasonable consumption growth, stock
[14:48] market booming, you know, economy
[14:50] growing well above trend on a nominal
[14:51] basis and earnings growing at a level
[14:53] that's, you know, historically
[14:54] unprecedented in a in an economic
[14:56] expansion, uh, a multi-year economic
[14:58] expansion, we have basically global
[15:00] financial crisis level delinquency rates
[15:02] on an aggregate basis, which tells you
[15:04] how bad it is for the households. At the
[15:06] bottom of the K, at the top of the K,
[15:09] we, you know, we obviously, you can
[15:10] very, we're killing it. Look, I hate to
[15:12] say it, we're killing it. Um, and one of
[15:14] the core drivers of that is something we
[15:15] talked about last time I was in your
[15:16] program. Uh, the West Village Monttok
[15:18] effect, uh, thesis. You and I have some
[15:21] remind people about this,
[15:22] >> some boots, some boots on the ground
[15:24] knowledge on that. Uh, so uh, the the
[15:26] the kind of the key takeaway from the
[15:28] thesis is when you have a high stock of
[15:31] savings, uh, you don't need to save as
[15:33] much as uh, you don't need to save as
[15:36] much of your of income. Uh so you have a
[15:38] low flow of savings from a savings rate
[15:40] perspective because you already have a
[15:41] high stock of savings. And how we how I
[15:43] arrived at that conclusion was just
[15:44] boots on the ground research out in
[15:47] Montalk and West Village over the you
[15:48] know the past you know 10 20 years. Uh
[15:50] what I noticed is that the people at
[15:53] these establish you know well
[15:54] established places you know hard to get
[15:55] in places like a surf lodge or a common
[15:57] ground you know they the people who
[15:59] spend the most money at those places
[16:01] aren't necessarily the people with you
[16:02] know gray hair balding hair and folks
[16:04] like you and me. It's the people who are
[16:06] in their mid to late 20s who have rich
[16:09] parents. Uh and it's not it's not
[16:11] pjorative. I'm not saying this in a
[16:12] pjorative manner, but what I'm saying is
[16:13] that because they don't have to save for
[16:15] retirement, for a rainy day to take care
[16:18] of their parents like many people do,
[16:20] they then can go spend a greater share,
[16:22] greater proportion of their income into
[16:25] the economy month after month because
[16:27] they don't need to save. And so taking
[16:28] that that that same lesson from my you
[16:31] know from my personal experience and
[16:33] applying that to the macro economy, we
[16:35] see that the stock of cash checkable
[16:37] deposits plus money market fund exposure
[16:40] on the aggregated household sector
[16:41] balance sheet in the US economy is up to
[16:43] just shy of 12 trillion from a starting
[16:46] point of $3.5 trillion just prior to co.
[16:50] So we've grown about $8 trillion in
[16:53] cash.
[16:53] >> It's crazy. basic more than tripled in
[16:55] terms of the amount of cash on the
[16:57] household sector balance sheet since
[16:58] just prior to co and so you apply that
[17:00] same West Village Monto effect thesis to
[17:02] the whole economy now the folks at the
[17:05] the households at the top part of the K
[17:06] have all this cash they're sitting on on
[17:08] an aggregated basis which means they can
[17:10] take the personal savings rate down and
[17:12] down and down so no matter what happens
[17:14] to income they can always dip into those
[17:15] savings to continue to support
[17:17] consumption that's exactly what we've
[17:18] seen we have a strong negative impulse
[17:20] in the personal savings rate I think the
[17:21] three-month average uh rate on that is
[17:23] somewhere close to 3.5%. The pre-COVID
[17:25] trend was somewhere north of five, maybe
[17:27] 6%. And so that's exactly what's
[17:29] happening. That's exactly what we
[17:30] continue to see.
[17:30] >> And I guess part of that is not only are
[17:32] they spending on, you know, uh, all
[17:34] goods, but you can only spend so much
[17:36] money on groceries. You can only spend
[17:38] so much money on gas, right? What ends
[17:40] up happening is you have that excess
[17:42] savings that you're going to use for
[17:43] consumption. It starts to trickle
[17:45] towards things that you frankly don't
[17:46] need. And so that's where you see luxury
[17:48] prices exploding, experience is
[17:49] exploding. Um, I mean it's just crazy to
[17:52] see I use sports um affordability as a
[17:56] very weird dynamic. I saw uh Frank
[17:58] Michael Smith recently had a a video
[18:00] that he put out and he talked about the
[18:02] idea of like private equity now starting
[18:04] to participate in these uh different
[18:05] sports leagues. What do they do? They
[18:07] need to flip this thing in 3 to seven
[18:08] years. So guess what they're going to
[18:10] do? They're going to start to degrade
[18:11] quality and increase cost so they can
[18:13] extract more profits. And as they do
[18:16] that, that means that valuations go up
[18:17] and that's how they make money. whether
[18:19] you like private equity or not that
[18:20] they've been doing this for decades and
[18:22] decades and decades
[18:23] >> at the same exact time the pool of
[18:26] people who have capital I mean when the
[18:29] Knicks finals happen in Madison Square
[18:31] Garden you have a city full of 9 million
[18:34] people that doesn't even include Knicks
[18:35] fans all around the world who then say
[18:37] wait a second I think uh MSG's got like
[18:39] 20,000 seats there are 20,000 seats that
[18:42] go to this thing let's say that there's
[18:43] a couple thousand that are not going to
[18:44] be sold they're going to give them away
[18:45] or whatever okay so maybe you got I
[18:48] don't know 15,000 seats.
[18:49] >> Yep.
[18:50] >> You put them in front of 9 million
[18:52] people, some who have been waiting 50
[18:54] years, 50 plus.
[18:56] >> No wonder the get in ticket price is
[18:57] $7,000 for the nosebleleed seats.
[19:00] >> Shocked it wasn't higher.
[19:02] >> I'm actually shocked it wasn't higher.
[19:03] >> And so you look at this dynamic of you
[19:05] you have so much capital that is trying
[19:06] to chase these things. Now that's sports
[19:08] and somewhat unique scarce live events,
[19:10] you know, etc. But that's playing out
[19:12] all across the economy and that's why
[19:13] you start to see some of these price
[19:14] points of different items that come out
[19:16] is crazy. You know, I've even talked
[19:18] about diapers. I mean, you you uh uh are
[19:21] in the heart of being a a parent of a
[19:24] young child,
[19:24] >> changing them every day.
[19:26] >> And
[19:27] I talked to Plenty. She's like, "Yeah, I
[19:29] spent you I bought two boxes of diapers
[19:30] off Amazon. 150 bucks."
[19:32] >> I don't know how people buy diapers like
[19:34] like you and I.
[19:35] >> It's crazy.
[19:35] >> They're sticker shock to us and we make
[19:37] tons of money. And no offense, but like
[19:38] like they're it's ridiculous. How do
[19:40] people afford to have kids in this
[19:42] country? It's horrible.
[19:43] >> That's the whole thing is they're
[19:44] they're not. And then the other piece
[19:45] that I I saw recently is uh you know one
[19:47] of the data points they're now pointing
[19:49] to as to why people aren't having a
[19:50] third kid. Got to get a new car,
[19:53] right? So if all of a sudden you got to
[19:55] get a new car, then go look at car
[19:58] prices. If you go look at
[20:00] >> pick 10 cars that have been around for a
[20:03] while and go look at how much they cost,
[20:05] it's crazy. They make it. It's insane.
[20:08] And go to the luxury side of the market.
[20:10] So, if you're a family and you say, "Uh,
[20:12] okay, I want to have something that's
[20:14] super nice and I want to be able to put
[20:17] my kids in it." So, if you go and you
[20:18] look in New York, there there's all
[20:20] these private drivers all the time. They
[20:21] got Escalades. It's probably one of the
[20:23] most popular cars, right? If you go
[20:25] look, a brand new Escalade is like $130
[20:27] to $150,000.
[20:29] Wait, what?
[20:31] It was crazy, right?
[20:33] I without exaggeration, I'm pretty sure
[20:37] that when I was in like elementary
[20:38] school, middle school, a Ferrari was
[20:41] like 200k.
[20:42] >> Yeah.
[20:43] >> Right. Maybe 175 to 225. Somewhere in
[20:46] that range was probably 20ish 25 years
[20:49] ago. That was a Ferrari.
[20:52] >> A Escalade, a SUV. These things are
[20:54] super super nice, right? But even if you
[20:56] go on the lower end of a large vehicle
[20:58] for a family that's got, you know,
[20:59] multiple kids, etc., you're still
[21:01] talking about 70 to 100 grand for a
[21:04] brand new car. And so you start to look
[21:06] at this and you say to yourself like,
[21:08] "Dude, what is going on? This is crazy."
[21:11] >> Yeah. To thanks for sharing that cuz
[21:13] that breaks my heart. Uh I mean, I think
[21:15] I've tal I'm sure I've talked about this
[21:16] on your program. You know, my very
[21:18] humble beginnings, you know, spend many
[21:20] of a year in homeless shelters and
[21:24] waiting in food bank lines and and you
[21:25] know, that was I had a rough, you know,
[21:27] 0.001 001 percentile uh uh kind of
[21:30] upbringing uh prior to going to Yale.
[21:32] And that breaks my heart what you just
[21:34] said, man. I think the greatest sin that
[21:36] we've seen was the policy makers
[21:40] convincing us that the Fed's $7 trillion
[21:42] balance sheet is not inflationary.
[21:44] >> Mhm.
[21:44] >> Like I what a sin. I mean, if you here I
[21:46] have I've I've long had this this core
[21:48] principle um which allows me to kind of
[21:50] see the world from a political
[21:51] standpoint and a social standpoint and
[21:53] ultimately an economic standpoint uh at
[21:55] a very high level. And I'm about to
[21:56] share this with you guys. If I strongly
[22:00] believe that all money is is just a
[22:02] transferable unit of human time.
[22:04] >> And so you think about the devaluation
[22:07] of money of purchasing power. What
[22:09] you're really doing is you're devaluing
[22:12] someone's lifetime, their time, their
[22:14] their precious time that they have here
[22:16] on this earth. You're devaluing that.
[22:19] And so you have to work more and more
[22:21] hours just to be able to afford a car
[22:22] that can fit you and your wife and your
[22:24] three kids in just to make your ends
[22:26] meet. Um, you know, and and it breaks my
[22:28] heart. You know, obviously the
[22:29] government's been, you know, highly
[22:30] incentivized to under reportport
[22:32] inflation um in terms of the cost of
[22:34] living adjustments for things like
[22:35] Social Security and Medicare. So, you
[22:37] know, we know they're under
[22:37] reportporting inflation. Uh but we can
[22:39] just see going back to those statistics
[22:40] that I highlighted, we have all-time
[22:43] high delinquency rates at credit card,
[22:47] auto, and student loan all-time high.
[22:49] The same kind of levels that we saw in
[22:51] the height of the great recession and
[22:53] global financial crisis on an aggregated
[22:55] basis. So we must be twice as high if
[22:57] you're thinking only focusing on the uh
[22:59] uh lower end of that K. And so, you
[23:01] know, this goes back to where we started
[23:02] the conversation, which is we don't
[23:04] ultimately think the Federal Reserve is
[23:07] serious about 2% inflation, but they
[23:09] have to at least pretend that they're
[23:11] serious about 2% inflation for two
[23:13] reasons. One, you're going to lose the
[23:14] long end of the curve in terms of the
[23:16] bond market. Uh, if you don't, and more
[23:18] importantly,
[23:20] come on, can we give the folks on the
[23:21] bottom of the K a break? No. You want to
[23:24] know why? Why? I just looked up what do
[23:26] you think a 2026 Honda Civic costs? I
[23:29] hope not more than 15 20 grand.
[23:31] >> Okay. 29 to $32,000.
[23:34] >> Wow.
[23:34] >> For a 2026 Honda Civic. Now, they got,
[23:37] you know, hatchback sport, sedan sport,
[23:39] all these kind of different variations,
[23:40] but 29 to $32,000 what I'm seeing just
[23:42] by googling Honda Civic. Now, let's say
[23:45] that that's New York, right? And the
[23:48] surrounding areas. Okay. What does that
[23:50] mean? What what is it in, you know, the
[23:52] middle of Missouri or Iowa or, you know,
[23:54] in Arizona? Is you think it's that
[23:56] different? Probably not.
[23:57] >> Probably not.
[23:58] >> Right. And so you start to say to
[23:59] yourself, okay, hold on a second here.
[24:00] You know what's interesting? The poverty
[24:03] line in America is still officially
[24:04] $15,000 for a single person. 30 I think
[24:08] 30 or $32,000 for a family. Try to go to
[24:11] McDonald's and eat for 365 days a year
[24:14] with $15,000. You're going to run out of
[24:16] money by August.
[24:17] >> It's crazy, right? So then you say to
[24:18] yourself, okay, well, hold on a second.
[24:20] That that's a brand new Honda Civic,
[24:22] right? So some people may say, well, I
[24:24] don't necessarily want to do that. I
[24:26] again, I just Googled Honda Civic. The
[24:28] first used car that I see show up in the
[24:30] sponsored section is in Jackson Heights.
[24:33] A 2022 Honda Civic. $21,000. Are you
[24:36] kidding me? So, you start to look at
[24:39] this and again, people can play, you
[24:41] know, anecdote versus anecdote all day
[24:43] long, but we're talking about pretty
[24:46] simple things, a car, diapers, uh, gas,
[24:50] groceries, all this kind of stuff. So
[24:52] then the question becomes, okay, if that
[24:54] stuff is continuing to tick up, then I
[24:57] think a lot of people in the economy
[24:58] have basically convinced themselves the
[24:59] only way out of this thing is I got to
[25:00] invest. I actually agree with that.
[25:02] >> I agree with that.
[25:03] >> But then they're faced with, hold on a
[25:04] second, these AI stocks are flying, but
[25:06] every time I turn on the TV, all these
[25:08] people are telling me the end is near, a
[25:10] big crash is coming, the bubble,
[25:13] you know, like all this crazy stuff. And
[25:14] so I think a lot of people are saying to
[25:15] themselves, wait a second, I know what
[25:17] I'm running from, right? I know I got to
[25:19] get away from the affordability stuff.
[25:20] And hopefully they got enough common
[25:22] sense and their head screwed on right
[25:23] that they're not turning looking at the
[25:24] crazy extreme socialism nonsense and
[25:26] saying that's the solution. They're
[25:27] saying I I got agency. I'm going to go
[25:29] and fix this with my portfolio. How do
[25:31] you look at the equity market and AI is
[25:35] this amazing thing but also there's
[25:37] people who are really scared. They're
[25:39] like you know watch out below.
[25:41] >> Yeah. Look man uh I think you're asking
[25:44] the question which is you know you need
[25:46] to participate right everyone. You have
[25:48] to participate. If you're not trying to
[25:50] put yourself align your income and and
[25:53] wealth creation with the income and
[25:55] wealth creation activities of the folks
[25:56] on the top part of the K, then you're
[25:58] going to be left behind. Uh you're going
[26:00] to be suffering from a historic Cantalon
[26:02] effect. That's in my opinion, I think
[26:03] that's the number one cause of the uh
[26:05] the the political angst that we see in
[26:06] this country is there's a Cantalon
[26:08] effect, a mass.
[26:08] >> Oh, you mean the richest counties in
[26:10] America all around Washington DC?
[26:12] >> Yeah. Well, that's that's part that
[26:13] happened. That's part of it 100% by
[26:16] bipartisan sucking from the teeth of big
[26:18] government. You want to know another
[26:19] interesting stat I saw recently? This
[26:20] one blew my mind. 89% of seen of uh
[26:24] people over the age of 65, they are in
[26:26] support of raising taxes on young people
[26:29] so they can continue to get paid their
[26:31] benefits.
[26:32] >> That's wild.
[26:35] >> My question, how is it not 99%. Well,
[26:39] some people care about their grandkids.
[26:42] >> Only 11% do 89% of people over the age
[26:46] of 65.
[26:46] >> Well, they're probably suffering from
[26:48] the same dynamic in terms of everything
[26:49] we're talking about from a cantalonic
[26:51] spec perspective. The the the rapid
[26:53] increase in everyday items that you
[26:55] actually need to survive. They're
[26:57] suffering too there. A lot of these
[26:58] folks are on fixed or limited income
[27:00] certainly relative to where they were
[27:01] midlife. And so I understand their angst
[27:03] and and and I I empathize with them and
[27:05] and I and I I support, you know, their
[27:07] desire to improve their own situation,
[27:09] but the problem is isn't raising taxes
[27:11] on people who barely make any money and
[27:13] have no savings. Um you know, I don't
[27:15] want to get political here, but the
[27:16] reality is we know that we have a wealth
[27:17] pump on. Peter Turin talks about this in
[27:19] his work. Uh Ray Ali alludes to this in
[27:21] his work. Um my former colleague and
[27:23] mentor know how alludes to this in his
[27:25] work. you know, we have a, you know,
[27:26] just we for a variety of reasons, mostly
[27:29] because of campaign finance, we've
[27:31] allowed, you know, the elites, I guess
[27:32] technically speaking, we're part of that
[27:34] class. We've allowed our class of people
[27:36] to change regulation in ways that is
[27:38] very harmful for the the common man.
[27:40] We've allowed the folks in our class to
[27:42] change uh fiscal policy uh in ways,
[27:45] particularly tax policy in ways that are
[27:47] very harmful for the common man. And
[27:49] then we ultimately allowed them to
[27:50] change monetary policy in ways that are
[27:52] very harmful uh for the common man. you
[27:54] know, the Federal Reserve's, you know,
[27:55] balance sheet and interest rate policy.
[27:57] I mean, you know, if you look at, you go
[27:58] back to 2021, just using this as an
[28:00] example, you know, the Federal Reserve
[28:02] kept the policy rate in 2021 prior to
[28:03] the big upsurge in inflation that we're
[28:05] still talking about today, uh, they left
[28:07] their interest rate, uh, at a level that
[28:09] was about a,000 basis points below what
[28:11] the Taylor rule would have said at the
[28:12] time, which is the most common kind of
[28:15] u, you know, you know, uh, model based
[28:17] uh, estimate of the policy rate. So
[28:20] thousand basis points compares to 700
[28:22] basis points for author Burns in the 70s
[28:24] at at the height of his malfence. You
[28:26] think about the balance sheet took up to
[28:27] 90 36% of nominal GDP. We're at 21% of
[28:30] nominal GDP now. Why is it at zero? Why
[28:33] does the Fed need to constantly be
[28:34] expanding its balance sheet and
[28:35] devaluing creating more supply of money
[28:38] in a way that devalues the purchasing
[28:40] power of money uh that is obviously very
[28:42] clearly being under reportported. Um,
[28:44] you know, if you look at measures of,
[28:45] you know, e economic angst, you know,
[28:47] financial hardship, all those types of
[28:49] measures, they're going one way while at
[28:50] the same time, the equity market and
[28:52] wealth of the folks like us is going
[28:53] another way. You know, the only way out
[28:55] of this mess is to turn off the wealth
[28:56] pump. We're going to have to eat some
[28:58] some some some eat our vegetables for
[29:00] once in the last 30 years at least. Um,
[29:02] we're going to have to eat our
[29:03] vegetables in order to save our country.
[29:05] And I'm not sure that everyone in the
[29:07] baby boomer generation agrees with that
[29:08] or will we'll go, you know, along with
[29:10] that. I think there's a lot of people
[29:12] who say, "Uh, what can I get, right?
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[31:35] the other thing that I think is really
[31:36] interesting is when you look at the
[31:37] equity market is uh the Mag Seven. Yep.
[31:41] >> They were killing it. Yeah.
[31:42] >> They they were they the the pretty girl
[31:44] at the bar.
[31:45] >> Emphasis on were.
[31:46] >> Huh.
[31:47] >> Emphasis on were
[31:48] >> were Yeah. Now I saw someone say it's
[31:49] not the mag seven. Now it's the lag
[31:51] seven.
[31:53] >> 493 other stocks are they're flying.
[31:55] Yeah. And so on one hand that's how
[31:57] indexes work and you know thank god this
[31:59] is a team sport and so you know some
[32:01] carry some at other times. Uh but on the
[32:03] other hand
[32:05] maybe people should be concerned maybe
[32:07] there's cracks in the armor. Maybe the
[32:09] you know the valuations aren't what
[32:11] people thought they were. What's your
[32:12] take?
[32:12] >> Uh on the Mac 7 specifically uh there's
[32:15] two things I would say. Uh one we've all
[32:17] we've been of the view since last fall
[32:18] that the investors will use the Mac 7 as
[32:21] a source of funds to capitalize AI
[32:24] adopters. Uh and there's two primary
[32:26] drivers of that. Uh uh one, you know,
[32:28] this is where the car positioning was.
[32:30] And so to the extent that investors get
[32:32] uh more excited about uh the economy and
[32:34] the diffusion of AI throughout the the
[32:36] economy, they're going to start to look
[32:37] at the other 493 or the other, you know,
[32:40] 3,000 stocks uh and and start to
[32:44] capitalize, use their profits and their
[32:46] proceeds from the MAX 7 to start to
[32:48] capitalize other businesses which were
[32:49] uh very cheap on a relative basis. And
[32:51] then uh the number two point is on the
[32:53] Mac 7 specifically on the on their on
[32:54] their you know own operating dynamics
[32:57] and I'm not an analyst you know this is
[32:58] my not my own um you know analysis but
[33:01] you know there's some real questions
[33:02] about the decline in their free cash
[33:04] flow right you know historically
[33:06] speaking when you have big capex cycles
[33:09] two things tends to happen one you
[33:11] always overbuild uh we've seen this with
[33:13] the railroad the canals the consumer
[33:15] durable goods uh internet technology
[33:18] every time you have a capex bubble
[33:19] there's always some element of
[33:20] overbuilding. And two, uh, whenever you,
[33:23] you know, when you go from an asset
[33:24] light business to an asset heavy
[33:25] business, your maintenance capex starts
[33:28] to get much, um, goes much, it sends to
[33:30] a much higher height, uh, and stays at
[33:32] an elevated level. And so there's a real
[33:34] question about the massive expected
[33:36] recovery and free cash flow for these,
[33:38] uh, companies and and the ultimate these
[33:40] stocks uh, uh, in in the coming out
[33:42] years. I think, you know, if you look at
[33:43] sellside estimates, you know, they
[33:44] basically have a hockey stick recovery
[33:46] and and free cash flow for these
[33:47] companies starting in like 2029 or 2030.
[33:50] And I'm like that seems very unlikely in
[33:52] the context of history, those capex
[33:54] bubbles. And two, the fact that you're
[33:56] going to have to constantly be, you
[33:58] know, ma maintaining these data centers.
[33:59] It's not like you can build a data
[34:00] center and leave it alone for 10 years.
[34:02] You're going to have to continue to
[34:04] reinvest. You're going to put them in
[34:05] space. Yeah.
[34:05] >> And then we can't get them down.
[34:08] >> Well, I think that's another thing. I
[34:09] think Elon's uh pitching this data
[34:11] center in space thing to get away from
[34:13] the pitchforks
[34:14] >> because if we don't turn off the
[34:16] K-shaped regul regulatory policy, you
[34:18] know, the you know, without, you know,
[34:19] the the lack of trust busting we've
[34:21] seen, the the the Supreme Court's um you
[34:24] know, coddling of big business in in
[34:25] recent decades. Um you know, we don't
[34:28] turn off the the K-shaped fiscal policy
[34:30] in terms of the convoluted tax code,
[34:32] 10,000 pages, 10 million words of ways
[34:34] for people like us to get more income
[34:36] and siphon wealth from the bottom part
[34:38] of the K. we don't turn off the K-shaped
[34:40] monetary policy, then the pitchforks
[34:41] will come out. They're going to come
[34:43] out. They may already be out.
[34:45] >> Well, there Well, no. We would hear it
[34:47] because America has 400 million guns and
[34:49] 300 million legal owners. So,
[34:53] we would you're not you will hear the
[34:55] pitchforks in this country. Um and so,
[34:58] uh you know, I have the great privilege
[34:59] of living somewhere. I used to live in
[35:00] the city obviously for a long time. And,
[35:02] uh I have the great privilege of living
[35:03] somewhere that's, you know, it's not
[35:05] rural. You know, it's definitely nice.
[35:06] um you know, in terms of the the the
[35:08] income stratification, but the
[35:09] surrounding areas are, you know, what
[35:11] you would consider to be what what
[35:12] elites like us would consider to be
[35:14] Trump country. And so I go to church
[35:16] with a lot of folks like that. And I'll
[35:17] tell you one thing, uh I'll tell you a
[35:18] few things uh from this experience
[35:20] because the first time I've
[35:21] >> the first time in my life I've ever been
[35:23] around poor white people, if you don't
[35:25] mind me saying that.
[35:26] >> Like I grew up around very poor black
[35:28] people, very poor Hispanic people, very
[35:29] poor uh Samoan people, Tongan people,
[35:31] very poor African people, immigrants. Um
[35:34] I never seen poor white people. Then I
[35:36] went to Yale.
[35:36] >> Mhm.
[35:37] >> Just a bunch of rich white people. Then
[35:38] I moved to New York. Even richer white
[35:40] people, you know. Then I dabbled in
[35:42] Miami. Rich white people, rich Latin
[35:44] people. Now I live somewhere where
[35:45] there's, you know, still rich white
[35:46] people, but you know, the surrounding
[35:47] areas and surrounding towns are are not
[35:49] affluent at all. In fact, you would
[35:51] consider most you would say these folks
[35:52] folks folks folks folks to be on the
[35:52] bottom of the K. And uh, you know, I'll
[35:54] say a couple things. One, these are some
[35:57] of the sweetest, nicest, kindest people
[36:00] you're ever going to meet. Um the media
[36:02] does them a terrible injustice in terms
[36:04] of how they characterize them as you
[36:06] know racist and and and and you know
[36:09] sexist and and and just you know
[36:11] deplorables if you will to borrow a
[36:14] horribly used phrase. Um so that that
[36:16] deplorables moniker is not true. Uh what
[36:19] everybody wants is the same thing to be
[36:20] able to take care of their family
[36:21] >> 100%.
[36:22] >> That's all anybody wants. Now that I've
[36:24] seen poor black people, poor Hispanic
[36:25] people, poor Samoan people, poor African
[36:28] people, and now poor white people. I
[36:29] tell you right now, everybody wants the
[36:31] same thing, which is to be able to take
[36:33] care of their family. Period. I tweeted
[36:36] this recently. I said, "Politics has
[36:38] become a competition between two extreme
[36:40] groups that are competing to capture
[36:42] votes by promising unsustainable
[36:44] policies to unhappy citizens."
[36:46] >> Yep.
[36:46] >> And so, in a weird way, both political
[36:49] parties are offering a different form of
[36:51] socialism.
[36:52] >> Yeah.
[36:52] >> One is saying, "We're going to give it
[36:54] to the top and it's going to trickle
[36:55] down." The other side is saying we're
[36:56] going to take from the top and we're
[36:57] going to give it to the bottom. 100%.
[36:59] You nailed it.
[37:00] >> I don't know if either one of those are
[37:01] going to work.
[37:01] >> No, it will Well, unfortunately, they're
[37:02] not going to work. And here's why. Uh
[37:04] Peter Turchin, um the the the cleonamic
[37:08] specialist, complexity theorist, um
[37:09] whose work I tremendously admire and is
[37:11] featured in in in our own research.
[37:13] Peter, he's the author of the ages of
[37:14] discord in times. Um you know, probably
[37:16] the the best mathematician, the person
[37:19] who's applied math to this problem, the
[37:21] most uh the best in the world. He would
[37:23] say what you just this dynamic that you
[37:25] just described is is what he call intra
[37:26] elite competition. Whenever you have
[37:28] what he calls elite overp production
[37:30] which is the concept of having too many
[37:32] elite aspirants and not enough elite
[37:34] positions for those elite aspirants.
[37:36] whenever you have a lead over production
[37:38] and popular emiseration, which is, you
[37:41] know, folks not being able to get ahead
[37:42] and, you know, falling behind from a
[37:44] real income perspective, which is what
[37:46] we've been doing for 50 years, ever
[37:47] since Nixon took us off the the gold
[37:49] standard. And we we we put our foot on
[37:51] the accelerator with the the
[37:53] neocclassical era of the Reagan
[37:54] administration. And obviously,
[37:56] neocclassics plus, you know, devalu fiat
[37:58] money equals, you know, 50 years later,
[38:01] you have a country full of very peuh
[38:03] angry people who can't get ahead. And so
[38:04] you have popular miseration plus elite
[38:06] overp production equals unstable
[38:08] society.
[38:10] >> And so unstable societies whenever you
[38:11] have these types of dynamics, they
[38:13] they've studied I want to say I think
[38:14] their database has studied 168
[38:16] civilizations dating back 5,000 years.
[38:19] They've collected data over the course
[38:21] of 10 years to arrive at this
[38:22] conclusion. 75%
[38:25] of those 168 civilizations end in
[38:29] violent collapse. Not collapse, violent
[38:32] collapse. and we are certainly tracking
[38:35] uh at one of the most extremes of the of
[38:37] that of that combination of of of
[38:38] dynamics.
[38:39] >> It's crazy to see just how much we're
[38:41] following the historical trend.
[38:42] >> It's crazy. It's it's actually kind of
[38:43] scary. I'm as a father of a 2-year-old
[38:46] son, I'm hopeful, very hopeful that
[38:50] whatever reckoning that we're heading
[38:52] for, we're vast I think we're fast
[38:54] heading for uh happens, you know, be
[38:57] before, you know, my my son is of
[38:59] military age.
[39:01] >> 100%. I uh I agree. All right. Uh anyone
[39:04] who has not yet checked out 42 macro,
[39:06] Darius is one of my uh not only smartest
[39:09] friends, but uh I think that they do an
[39:10] incredible job in terms of putting
[39:12] together very very um kind of uh uh uh
[39:16] intelligent but thorough. And I think
[39:18] thorough is probably the most important
[39:19] word. Uh research to help investors, a
[39:21] lot of institutional investors, but
[39:22] increasingly a lot of independent,
[39:24] sophisticated investors who manage their
[39:26] own portfolios, help them figure out
[39:27] what's going on in the market, what's
[39:28] going on in the economy, what's going on
[39:29] with monetary and fiscal policy. and
[39:31] then how do you invest your capital,
[39:32] understand different regimes that uh
[39:34] markets are going through or the
[39:36] economyy's going through. So, go check
[39:37] them out at 42mmro.com.
[39:39] I appreciate you coming in, my friend.
[39:40] >> Oh, it's a real pleasure, man. Thank you
[39:42] for allowing me to speak my voice. You
[39:43] know, I think we have a you know, I
[39:45] obviously I'm an investor and that
[39:47] that's what pays the bills. But, you
[39:48] know, as someone who's ascended from the
[39:50] very bottom of of of the the K um to
[39:53] somewhere in the you know, I would say
[39:55] certainly above the middle of the top
[39:56] part of the K um
[39:58] >> you know, I feel like I have a duty. I
[40:00] have a duty to to to heal our broken
[40:02] society. I may die trying uh but I you
[40:05] know it's very important for me. So
[40:06] thank you for allowing me to uh be part
[40:07] of your platform and and and spread this
[40:09] message and hopefully more people uh uh
[40:11] u take it to heart. I think you're doing
[40:13] a great job. Do it again soon. Thanks
[40:14] brother. Appreciate.