The Breakdown - What a Professional Trader Thinks of the Fed, Robinhood and Real Estate, Feat. Tony Greer

Episode Date: August 1, 2020

Today on the Brief: The DXY hits a 52-week low Consumers seeking alternatives to cash  Bank of England rebuilds settlement system to work with CBDCs Our main conversation is with trader and analyst Tony Greer. In this conversation, he and NLW discuss: The Federal Reserve’s role in increasing inequality  How the Robinhood crowd differs from the 1999 bubble Why high-frequency traders might be the real villains when it comes to the retail bubble Why gold is surging even though the dollar remains fundamentally sound  How to navigate the disparity between markets and the real economy Why real estate is doing well even as the economy is floundering  Find our guest online: Website: tgmacro.com Twitter: @TgMacro

You expressed the frustration that's clearly coming out from a younger generation and needs to be heard is that, you know, they're feeling as Americans feeling totally disenfranchised. You know, they see the stock market like this disco ball that's just running away from them and it's like, wow, you know, how do you latch on to this? And that's why the attitude has manifested itself through barstool presidente of all places saying, I'll show you how you f***ch on it is. You get in there and you fucking buy stocks. They go up every day, right? And like, as that sounds to somebody that's been in the markets for 30 years, that sounds completely nihilistic. Like, what are you doing? You know, that's not how you do it, right? Like, the way we've done it is, you know, you pick the companies that you like and you have reasons for liking them and you stay patient and you wait for an opportunity till they dip, certainly, to buy them because markets go up and down and why just chase a market to the moon. You ask a day trader that today, the higher the price, the better, right? They want

things that are exploding, right? You can't talk to them about something that's sitting still, you know? And so that, that to me is translating, you know, it's that sort of disenfranchisement translating into the nihilistic attitude, set of emotions that I feel like I read from that generation. And I totally, I'm in touch with them. I'm not telling them that they're wrong. I'm saying that there's definitely something that needs to be addressed here. Welcome back to the breakdown, an everyday analysis breaking down the most important stories in Bitcoin, crypto, and beyond. This episode is sponsored by BitStamp and Crypto.com. The breakdown is produced and distributed by CoinDes.

And now, here's your host, NLW. What's going on, guys? It is Friday, July 31st, end of the week, end of the month, and today we have. have a very entertaining conversation with Tony Greer about how a professional trader looks at just about everything, from the Fed to MMT to Robin Hood and beyond, so don't miss that. First, however, let's do the brief. A little follow-up on the dollar. For anyone who listened to my assessment of the interpretations of Bitcoin's price rally

at the beginning of the week, you'll know that ultimately the interpretation I thought most compelling had to do with the fall of the dollar and the DXY and the comparative rise of gold and silver. Well, the DXY dollar index has fallen again to a 52-week low under 93, getting as low as 92.55. This is driving a continued narrative of weak U.S. outlook, and it's exacerbated by the fact that the U.S. national debt as a percentage of GDP has skyrocketed to 136. percent, the highest ever by a significant margin. So why does this matter? Well, on the one hand, there are good arguments why we shouldn't pay too much attention to the DXY. Jeff Snyder's latest article is a critique of the actual index itself, basically saying that it's much more about the euro than it is

about the dollar. On top of that, the dollar is still incredibly strong versus emerging market currencies, right? It's really a very specific set of currencies that the dollar has fallen against. But whether Jeff is right or wrong, the market pays attention to the narrative of the DXY, and it pays attention to this question of the U.S. national debt as a percentage of GDP. So to the extent that we think macro markets are narrative-driven, which I obviously do, this is something that we need to be paying attention to. It also brings us to our second topic on the brief. Bloomberg published an article today called People Fear they've got too much cash in their bank accounts. They wrote, falling interest rates are tempting some Americans to forego safety and pour their

savings into assets such as stocks and Bitcoin. This is one of those articles that's not really news, but it's an interpretation and analysis, and I think it has some interesting little nuggets. Here are a couple key lines. For a while, Brian Harrington 28 had been satisfied with a high-yield savings account at Ally Bank, earning a risk-free 2%. Now, the marketing consultant in Anaheim, California, is planning to convert his remaining 15,000 in savings into Bitcoin.

He thinks the future is one of long-term economic stagnation and low rates. Quote, I'm not rooting for doomsday, he said, but you have to keep searching for yields. Bitcoin is up about 55% in 2020, while gold has risen 29%, smashing the record price set in 2011, as investors flock to the precious metal as a hedge against inflation. Stocks, meanwhile, have surged since bottoming out at the start of the coronavirus outbreak in the U.S. From March 23rd to July 1st, the S&P 500 rallied 40%. Its best 100-day performance since 1933, according to bespoke investment group. Why is this interesting?

Well, there's a couple reasons. The first is that it's basically the most casual inclusion of Bitcoin I've ever seen. Really, I mean, when was the last time you saw a Bloomberg article that dumped Bitcoin just as another thing that people might be using to look to get out of cash because cash wasn't yielding enough and that was a concern? It very much breaks the template of the two types of Bitcoin article. that we've previously gotten, which is either Bitcoin is flying and it's a huge mania, or Bitcoin is crashing and it's dead again. Weirdly, the boringness of it is actually, I think, the most

interesting sign of maturity that I could imagine. The second thing that I think is interesting about it, however, is the idea of people being pushed farther and farther out on the risk curve, or at least feeling like they're being pushed farther out on the risk curve. This is a combination of just fundamentals, right, where you can't make the same sort of yield that you could on a savings account before. At the same time, there's the external pressure of seeing social media invaded by the sort of Robin Hood day trader types. The combination creates kind of a perfect stew for people to think about getting into different types of assets, whether that's right or wrong for the individual involved. Last up on the brief today, the latest in CBDC News

Out of England. The Bank of England is redesigning its real-time gross settlement service, RTGS to be forward compatible with central bank digital currencies. The RTGS currently settles more than $685 billion, i.e. 900 million dollars of value daily, but wants to be compatible for a future where not only a British pound or a British digital pound might be on the agenda, but other countries are bringing digital currencies to bear as well. This comes after the new Bank of England governor said earlier in June that they were seriously considering whether to launch as CBDC. And this goes back to my point that I've made numerous times around central bank digital currencies, which is this is going to be a trickle that turns into a flood. We're not

at the flood stage yet, but it's certainly brewing. And with that, let's turn to our main conversation with Tony Greer. Tony Greer is an independent macro analyst. He is the editor and author of the Morning Navigator newsletter. He's been both a host and a featured guest on Real Vision, and is someone who I find has a really good ability to move between the absolute precise mechanisms of a specific trade in a specific industry to the highest levels of kind of macro analysis. This is a really fun conversation about a lot of different topics and what Tony calls financial postmodernism. So I hope you enjoy it. All right. I am here with Tony Greer. Tony, what's going on? How are you doing? I'm doing great, man, trying to follow the global markets as best I can.

Yeah, it's a strange task these days. Yeah, it is literally there is, like I've been saying, with some buddies of mine in the markets, there is almost too much going on to follow at once. And all of it is such heavily weighted content that it's really important to try to keep your head. You know, it's really difficult. And I don't mean to be vague. I'm talking about, you know, what's going on at the Federal Reserve, you know, what's going on with the heads of the tech companies in front of Congress and trying to decide what any of that means for the market. and yeah, man, it's head on a swivel time. Absolutely.

Well, and so I guess just by, you know, by way of background, because, you know, I have been following you on Twitter for some time. I loved your conversation with Dimitri and Hidden Forces earlier in the COVID crisis cycle. But for people who don't know you, give a little bit about your background and what you spend your time on day to day. Yeah. So I started my own independent market analysis company in 2016. And I have, I basically have two sides.

of my business, I publish a newsletter and a more advanced technical look at markets, a daily newsletter and a monthly technical look at markets. And I have a consulting business where I do various different things for various different people on the streets, on Wall Street. And I spend a lot of my time lately growing my publication business, which has been, you know, really where the heart and soul of what the business came from. I've been, you know, in the market since 1990. Yeah, late 1990, actually 1991, but I've been journaling them actively on my own since probably the late 90s. And I had a formalized note that went to my equity clients for about 10 years from 2004 or so through 2005 or 6.

And so that's really what I spend a lot of my time doing is analyzing markets and looking for the opportunities to make money that suit me selfishly. I mean, we were just talking about before the show. It's this weird paradigm right now of, for people who are conscientious and thoughtful and spent a lot of time looking at all these different dimensions, it can really force you to almost kind of live in two worlds at once, right? The world of where you want to see things go in the future on a kind of structural, economic and societal level, but then at the same time, just playing the hand that the markets are dealing. Yeah, exactly. figuring out the economy is a very slow-moving process, you know, as you can see by the data that's coming out and sending all kinds of mixed signals. But the market is very immediate right now, you know, with volatility up around 20, you know, the VIX around 25, 30, you know, the market is

firing off in all kinds of different directions and not being shy about the footprints that it's leaving, you know, so it's really, really intense time to follow the markets. You know, I've been calling at financial postmodernism where we've got, you know, this dichotomy between a U.S. economy that is likely coming apart at the seams for some period of time and, you know, the liquidity-driven markets, which seem to never back off the highs. So it's really, really, really wild twist on the psyche, right? Nathaniel. Yeah, I mean, so that's perfect segue, because I actually wanted to start off with this concept that you have of financial postmodernism. So, you know, in some ways, you kind of gave the TLDR, the psychic fracture between what's going on in the real economy

and what's happening in the markets. But maybe you could just explain this idea a little bit more and how it's come together for you. Yeah, you know, it's, I can keep it very simple. Obviously, the economy suffered some pretty severe damage due to the lockdown for the pandemic. And so as that data was coming out, you know, obviously markets are forward-looking, market is a forward-looking animal and the market sold off aggressively long before we knew what the impact of the COVID crisis would be economically. And I'd argue that we still don't really know exactly what the impact economically is going to be. But because we had this, I call it the Godzilla of all equity selloffs happen. And it was so enormous in size and in speed and in scope that it left a lot

of distortions behind because the market got crushed in unprecedented proportions first through the end of February and into March. And then we had economic data after that while the market was in retracement mode. So rallying now back toward the levels that it came from. And now we're starting to get this unbelievably bad economic data. So we had these periods several weeks ago. I guess they more occurred in the months of, you know, April, May, and June rather than just recently, but I'm talking about the days where the S&P would be up, you know, somewhere between like three and five percent or something like that on a day that we got, you know, 18 million unemployment claims or claims for unemployment insurance, right? So obviously we've got a growing unemployment line and an adastardly employment pictured here in the United States. And we've got equities just firing, you know, to the upper right hand corner of your screen for days at a time.

and the world can't come to grips with that. So I call, we labeled it financial postmodernism because you get these kind of days where, okay, we've got the worst economics, for example, we printed the worst GDP number that we printed in 10 years. And what did the stock market do? Up 5%. Right? And the up 5%, the public can't really deal with that because, you know, maybe there's not a full understanding of considering what the Federal Reserve is doing. And obviously their job is to prop this market back up and they're doing that by adding liquidity in historic proportions.

So it's created this, you know, crazy dynamic to observe and be a part of and try to trade through. And, you know, as usual, it's like something we've never seen before in the markets. So as a trader, we're constantly reinventing ourselves and trying to figure out what's going on. And I guess that was my attempt to do so, Nathaniel. So one of the things that makes this really extra interesting is that, you have this force in the markets going on simultaneously, which is the Robin Hood crowd, right? And so you almost have a pied piper of financial postmodernism in Dave Portnoy. And there's an interesting read, or one of the reads on this is there's perhaps one set of folks who are looking at the crazy economic dislocation on the one hand and just surging markets on the other and saying, that doesn't make any sense.

And then there's this other group that kind of the stoolies have become who are saying, sure, it's because the system is rigged and there's this external actor who's going to make sure this always goes up. So instead of fighting it, we're going to play it, right? How do you read the resurgence or the surge of retail? And I guess maybe put it in some context. You've lived through cycles before. Is this just 1999 all over? Is this something different about this particular set of retail investors? Well, I have to say that, you know, there are some stark differences, but there are some really, really clear similarities. And I feel like the differences is more how this information is getting around and being transmitted, right? In 99 or 2000, you know, not everything some people were saying about equity markets was being transmitted in a chat room, right? That was going on. But it was more like you would hear it in conversationally in bars and restaurants and everybody you met had, you know, their pet, tech stock that they made a fortune on. And so that was an interesting dynamic back then. Now, it's more that dynamic has shifted to examples like Robin Hood traders, you know, sending screenshots of their daily P&L to each other. You know, like, hey, look at this. I just made four grand. I just made six grand. I just made 10 grand. You know, so it's changed form, but it's very much the same of, you know, just market bravado and something that's natural and celebrating winning and making money. What I think is really wild about is obviously that we've got

the, you know, the editor of a new communications company in Barstool Sports with the character and the persona that he has. And we've got this unbelievable, unprecedented situation where, you know, sports betting and all of sports have been shut down. So we've got a whole entirely new legion of people in the stock market that have never been in it before. And I, I can tell you that I have firsthand evidence of this because as a newsletter author, I saw an obvious spike in sales when volatility picked up. And I've gotten to know a lot of the recent people that have joined on to read my note every day. I've gotten to know some of them very, very well. And they are from all over the world. They have money to play with in the markets.

And they honestly don't know which direction to look every day when they wake up in the morning. You know, so this is something interesting where you've got guys that are comfortable going through the sports page and betting literally thousands and thousands of dollars on the Broncos Patriots or Steelers. And now they've literally opened up Robin Hood accounts with similar amounts of respectable amounts of money. You know, they're willing to trade in these markets because, you know, the word has gotten out, like you say, through the barstool presidente that stocks only go up, you know. So just to sort of wrap it all up, he is definitely having an effect on the psychology of the markets, right? But what he has picked up on is that he has picked up on this new dynamic in the markets that happens to be working at the current time, right? We've got the Federal Reserve adding liquidity to the markets, you know, via quantitative easing in unprecedented proportions. So there is plenty of liquidity to flow into the equity markets.

Dave Portnoy has picked up on the fact that when high frequency traders get a stock going in a certain direction, that it usually just keeps snowballing and snowballing in that direction. So they've picked up on the fact that starting from a flat point of zero every day, you can generally buy stocks and they will go up. And so the timing that he's picked to come into the markets, right, which is during this retrace. rally off of the lockdown lows, combined with what's going on at the Federal Reserve, combined with what's going on, you know, as globally in terms of liquidity being added to attack this, you know, economic scenario that we're dealing with. And, you know, the time is right for something like, you know, Davy, day, day, trade, or global to exist right now. And that's the best

way I can explain it. I think it's a really, really, you know, lightning in a bottle type of dynamic. I don't know when it's necessarily going to end, but I don't think that it's particularly sustainable, that type of thing. I honestly think that when sports comes back online and that we get well through this pandemic shutdown and things get much closer to normal looking, that all this money will leave the equity markets and go back to playing sports. So it's interesting. One of the things that I find so fascinating about this and why I like discussing it is that, you know, you've got on the one hand, of the traditional financial media's take on it, which is very dismissive. But I think that's in part

at least being threatened by Portnoy, right, because he's terrified. I mean, they should be terrified. He's massively more entertaining than any 10 mainstream financial commentators put together. You know, it's not even close. So you can kind of understand that side. But the funny thing is that there's a lot of pearl clutching, right, around this idea that, oh, these guys are going to get wiped out. And they're not saying it the same way that you are. You're just basically, reflected a kind of common sense, what goes up eventually comes down on some way, especially when there's mania, especially when it's some of the bets that like you're choosing are such, you know, how close to the edge of the cliff can you play chicken with, right?

It's bankruptcy bed and things like that. But the thing that's funny is that the kind of pearl-cratching assessment of this is like, oh, they're going to be disillusioned. And my feeling is kind of been like, I almost feel like disillusionment is like the table stakes to buy in. that it's coming from this sort of cynical place of, well, these markets, it wasn't trickling down to me anyway, so I'm going to make it work for me by brute force, right, with my team who's here. And the funny thing about it is that in some ways, although that is a sort of a cynical place to start,

the fact that you have this huge number of people who are trying to learn about markets, I mean, to the extent that they're actually interested in learning about markets rather than just kind of picking bets, you know, based on what Dave says, that's actually potentially a positive thing for diversifying and kind of, you know, bringing more people into a space that implicates or impacts everyone, even if you're not actively involved. Oh, yeah. I mean, you know, talk about bringing people into a space, man. I mean, you know, Robin Hood with their business model of zero commissions, right? Like, that is a shape-shifting idea, you know, like that took the equity markets by storm. And, you know, that idea on their end was, look, we're going to get the buy-in and we're going to get, you know,

we're going to get the people that are curious enough to figure out what's going on in the stock market. And we're going to offer them all zero commissions and they're all going to come running to us. And so luckily, they had a mechanism, you know, by which they could pay for that and offer execution and some services at the same time. And, you know, I don't try to fight trends like that. I kind of just try to observe them and decide what they mean because, you know, who's to say that, you know, that it isn't sustainable. Maybe these guys do make some money and they're successful and maybe they, you know, stay here instead of going back to sports games. gambling, you know, so it'll be interesting to see what the world will look like if that's the case. But I really believe that, you know, the real driver behind all of this is, let's be honest,

it's the Federal Reserve, right? Like, these guys are part and parcel of the scenery right now, you know, but as somebody that's been in the markets, you know, for 30 years now and has seen, you know, these types of things, you know, come and go. And it's the kind of thing where it's very believable while you're living through it, right? Like, look, the guy, you know, started a communications company, Barstool Sports, you know, now he gets, you know, stock tips in a chat room and he gives out ideas and these stocks go flying and, you know, he has a good time with it. You know, this kind of thing is new to the stock market. So obviously, you've got the old Wall Street guys all throwing rocks at him because he's, you know, taking up all the oxygen in the room right

now, like you said, and probably taking a lot of attention away from them. But, you know, my, my posture has been to just sort of always read the markets. Well, actually, my, my, I, I shouldn't say always. Since I learned how to trade and become profitable, it's been to learn, you know, what the markets in the world are telling you and to figure out how to bet on it and adapt, you know, rather than just take shots at the first thing that pops up and say, you know, this is going to be gone tomorrow. That's not my style. So there's this idea of, I think that you're right, that a key driver here is sort of the Fed or the perception of the Fed. And so I'm interested, you know, in your time, how have you seen the narrative of the Fed put evolve, right? Because it's not new, but it feels like it's hit a whole new level in this particular crisis. Yeah. You know, it's kind of like, you know, it's kind of like the life, you know, if you've seen those charts that show, you know, sentiment during the life of a bull market, you know, where in the beginning it's disbelief, right?

It was kind of that way when Ben Bernanke started in 2009 and started with Q. We won. I think David Tepper probably has become clear was like the first guy that the light bulb actually went off for and he was able to buy all the bank stocks off the lows because he knew that the first QE round actually meant that stocks were done going down. But everybody's psyche had still been so damaged by what just happened that nobody could believe it. So people, you know, I mean, the most educated of traders, it took them another round of course. quantitative easing before they realized that, you know, guys, the stock market is done going down, like stop looking for the retracement rally. This liquidity program actually works. You know,

and so you can argue about how it worked on the bond markets and worked on the equity markets. And, you know, sometimes how when they implemented programs, the opposite thing happened in, you know, both equity markets and bond markets where it was kind of a sell-the-fact event. But then as we progressed, you know, from Bernanke to Yellen, you know, Yellen just seemed to have a lot more of a, I guess she had an unapproachable approach to me. You know, Janet Yellen was just, you know, this academic that you almost couldn't question because she seemed to have her portion of the economic recovery combined with the quantitative easing going her way, right? So she was able to to really make her way through her tenure at the Federal Reserve because the whole thing was clicking

and working like a charm without, you know, any obstacles, really. You know, we had periods of cyclical moments in the economy and a few things to deal with here and there. But in general, Janet Yellen had a very smooth path. So, you know, with her as the head of the Fed, people started to realize that this is obviously, you know, a bullish dynamic for stocks and that we should all be involved. You know, and then we came to Jerome Powell and we had to live through that super brief period where Jerome Powell came in with his chin up saying, look, I feel like we need to raise rates in this country. The economy is not in as bad as shape as maybe is being portrayed. You know, we've got to get off the zero bound because it's not helping anybody in the middle

class with no savings rate. And then all of a sudden, the president climbed down his shirt, decided that, you know, he wasn't going to be the president that had the balance sheet normalized under his term and probably made some really strong points with the Federal Reserve there. And next thing you know, we go into that period in September of the fall of last year, where there are enormous amounts of money trading at the discount window every day. And people are trying to understand what's going on with that. You know, and we so now we've got this emergency fund, you know, at the borrowing window. And there's this much overnight liquidity as anybody possibly needs. So to me, you know, Jerome Powell did a Jekyll and Hyde thing and came in as a guy that I totally respected for trying to raise rates. Then he caved to the president, you know, and fast forward to yesterday when he can actually go on a press conference after the, after Congress has literally inflated, you know, given them the green light to inflate their balance sheet. They added another three trillion dollars to their balance sheet. And here is Jerome Powell of the Federal Reserve yesterday saying, well, you know, amazingly enough, after we created all these

emergency funds, the market started working again. And so we didn't really need them. But it's imperative that the funds are there just in case we have a problem in the future. Right. So to me, he is slowly handing over any credibility that he might had as he sort of pivots his way into, quietly trying to support the story that powerful, forceful and aggressive actions of the Federal Reserve to combat the lockdown damage. And here he is admitting that the markets were actually functioning okay even as these funds were created.

So now that the Federal Reserve is a huge holder of high yield bonds, investment-grade bond, ETFs, you know, everybody's looking at each other saying, well, what's going on? If the markets are functioning okay, then why is the Federal Reserve buying all this corporate credit? And so now we're heading toward that moral crevasse, and we don't know how that's going to go either. So the slippery slope arguments, you know, there's a logical fallacy with them, but that's not really what we're getting into. But I do think it's hard not to see what's happened as an exact manifestation of a slippery slope of kind of this question of whether once the Fed starts getting,

involved with one thing, whether they're just going to be involved in everything. And I think in a lot of ways you've seen that over the response to this crisis and just how fast, I mean, there was no one arguing, hey, maybe there shouldn't be that much intervention. It was just a matter of how much and how far and how quickly, right? But like, we went right to massive large-scale intervention right away, you know? And I think it shows the shift in attitude that's happened over time. And to your point, the question for me becomes how is it possible to even unwind this? And don't you just have an inevitable, you know, unassailable political pressure to go farther and farther and farther? Yeah. You know, the fact that, you know, there's no mistaking that the exit plan has not been

discussed, right? Like that's something that to me has been, you know, a fault of the media, a shortcoming of where, you know, the media's got an opportunity to ask the, you know, the Fed chairman of question about it and unwind and either, you know, doesn't ask it or ask a softball question that the Federal Reserve can skirt and say, well, we're not really in the process of discussing how we're going to unwind this yet. And so they continue to leave this gaping hole in the logic, you know, which actually just got kind of turned on its head with the pandemic because, you know, we were discussing, you know, at some point during Jerome Powell's early tenure, you know, that he was going to figure out how to normalize the balance sheet. And

Like I said, I think he just caved into President Trump. And now we've got the exact opposite taking effect and almost with, you know, a limited, limited evidence for it, you know, or limited explanation for it as to what the plan is going to be, like you say, right? So what's the next move? So, you know, now they're inhaling corporate credit. And so what happens if the market backs off 5% or 10%? Are they just going to buy the S&P?

Are they just going to sell volatility? Like, you know, it seems like there is just an endgame of they will not allow the trajectory of the market to fail. So that's the best read I can get on it. Yeah, I mean, and I think that's what other people are picking up on as well. I mean, so here's a rather, because we can we could sit here and speculate on this all day, but it's, you know, that plus, you know, two bucks or whatever is going to buy us a cup of coffee. But so there is a specific interesting dimension of this conversation, though, which has to do with

personality. So what do you make of the Judy Shelton appointment in the kind of context of what we're talking about? You know, I can't. Plead the fifth. No, yeah, no, like, I refuse to think that far in advance, Nathaniel. I'm like, you know, I'm a last sale guy. You know what I mean? Like, I'm like waking up in the morning looking to trade and make fresh donuts every day.

And I'd be honest with you, as a professional trader, I haven't even gotten to the Judy Shelton conversation yet. You know, it's just, it's not, I haven't gotten to the point of, you know, if it seems to me, this is what I think is happening. You know, she seems because she coincides with the modern monetary theory conversation, obviously. And it doesn't seem like we're discussing or experimenting with the idea of modern monetary theory anymore. It sounds like we're just doing it, right? It sounds like when the Federal Reserve adds another $3 trillion to their balance sheet and to make it $7 trillion and says that there is absolutely no instance that we plan on letting up on this. You know, that pretty much tells the story. Yeah.

I mean, I think that's a, you know, like I just leave it there. It's like so now it's like we went from considering how we were going to normalize the balance sheet to an absolutely outrageous doubling of the balance sheet. And if you had to ask me, I would imagine that it probably triples from here or quintuples from here before it becomes a conversation, you know, that anybody wants to have. I mean, you know, at this point, we are at a departure from, you know, normalcy, departure. from the reservation and now it's under, you know, under the control of a set of unelected officials that I like to call them and remind everybody. BitStamp is the original global cryptocurrency exchange. Since 2011, BitStamp has been the preferred exchange for serious traders and investors,

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crypto.com. Crypto.com offers one of the most cost-efficient ways to purchase crypto out there, as they've just waived the 3.5% credit card fee for all crypto purchases. What's more? With crypto.com's MCO Visa card, you can get up to 10% back on things. like food and grocery shopping. When you buy gift cards with the crypto.com app, you can get up to 20% back. Download the crypto.com app today and enjoy these offers until the end of September. So let's talk about something that's a little bit more contemporary that you have had, or potentially the potential to trade against, which is, you know, we've seen a huge rise in gold and silver over the last couple weeks, coinciding potentially with a drop in the DXY and the

dollar. There's a lot of narrative competition around explaining all this right now. What's your sense of what's going? Well, my take on it is that the sort of, you know, the biggest central bank on the block, the Federal Reserve, just took the most extreme measures and, you know, did an absolute number on, you know, their own, on our own deficits, on our own Fed balance sheet. And that should naturally on our own interest rate portfolio, and that should naturally trickle down to our currency, right? And I am not of the camp where I believe that the dollar is about to lose reserve status. I am a perma dollar bull. You know, I remember when Giselle Bunchen wanted to get paid in euro when it was 160 bid, you know, and the reality of it, in my opinion, is that the dot,

this move in the dollar, this is the move that is the adjustment. Like this move that you've just seen, I think that's the majority of the move that's taking place. I think it's the market saying, whoa, the big dog on the block just took some serious, serious moves to lower interest rates, expand their deficit, you know, their economy is on its back. This currency needs to be downgraded and it got downgraded, you know, six or seven or eight percent, whatever it was from, you know, wherever you want to measure, call it DXY going from 105 to 95 or 93. And in my opinion, when I take a step back from the screens, the dollar hasn't moved, right? That's not a significant enough move in the dollar for me to get excited or to trade off of.

I'm looking at the corollary moves and buying commodities off of that move and buying commodity correlated stocks and natural resources names. And so, you know, the gold move is going to happen partially because it's a play against the Federal Reserve's balance sheet and obviously a play against the weakening dollar. But I think as more and more people wake up to the mechanism that's propping up the equity markets, I think that that's what drives people and eventually real investors to buy more and more gold. I think we're in that phase now where the institutional investor has clearly caught on. They're clearly, you know, inhaling metals and mining stocks at a ferocious pace. You know, they were the biggest leaders in the first half of the year last year, outperforming technology. So you know that their PMs or portfolio managers are coming after gold stocks now and increasing their weightings in their portfolio.

And this is really all because, again, what's going on at the central banks. And it's a little bit of an awakening. To me, the next pivotal move is, you know, we're starting to see some portions of the media leak with, is the Federal Reserve really just propping up Wall Street and, you know, sending pennies to Main Street? And the reality of it is that's what the reality is, right? The reality is the Federal Reserve is saving your ass if you're a bondholder, but doesn't have really much to do if you're a part-time employee at a, you know, at a hair salon, right? So that that's become the clear dichotomy. And I think that this is something that eventually is going to get journalists to wake up from

their, you know, trumped arrangement slumber and maybe start focusing on some of the things going on in his administration that actually matter, right? Like that, that to me would be a tremendous awakening if, you know, journalists actually started asking difficult questions to the Federal Reserve heads and, you know, saying, what about, you know, tell us more about how this is affecting income inequality. And we just saw, you know, a very, very stark run from the conversation this week where the Federal Reserve put up a post on their New York Fed website that is essentially, you know,

blaming income inequality largely on decades and decades of systemic racism, right? The timing is perfect for the Federal Reserve to create another straw man to blame income inequality on because they certainly don't want to take any blame themselves for saving Jamie Diamond's bond portfolio, but, you know, letting the gig economy go to zero on lockdown. You know, so this, I think, is something that might eventually get picked up by the journalists of our time and discussed. And I think that'll be the next move of, you know, putting some kind of a pressure on the Fed and actually getting an answer to, okay, so what's the plan from here? You know, does the balance sheet go from $7 trillion to $70 trillion? Or do you guys have a plan from here to take it down? And I think that we'll find by question them soon enough that there's absolutely no plan and no mechanism and that the mechanism to solve any problem. is to print more money. It's sad as it is. You know, what's interesting about this conversation is, I think this is probably the one

where Bitcoiners, like, beat their heads against the wall most often. Because, you know, one of the, this sort of idea of cantalone effects and the role of kind of Fed policy and increasing income inequality is something that's really a fluent part of the conversation in that space. You know, there's other areas as well, but it's one of the things that you come to. And the fascinating thing is that once people start to dig into that, it doesn't fit comfortably into either left or right dominant political narratives, which is actually a really powerful thing in this moment where everything is so calcified because you start to have a conversation

with either side who wants to explain things, again, based on those dominant narratives, whatever they are at the moment. And all of a sudden, you have a conversation about something that is both, structural but specific and is a set of decisions that can be located and people really open up right whatever they're coming in whether they're coming in from the left or right you it's not hard to have a conversation where you say well look houses get more expensive because credit gets easier and so people can charge more because you can get the credit that you need same place process happens with education and so you're stuck in a rat race where you know your savings are worth less and

less and less it's harder and harder to buy into the stock market because it's more expensive in kind of nominal terms. And all the things that you need to have a good life are more expensive too. But that's not a big grand conspiracy. It's specific decisions that we could do something different about if we were having that conversation, but we're not. We're distracted. Yeah, exactly.

And we've become so nihilistic because of it. You know, and I think, you know, you expressed the frustration that's clearly coming out from a younger generation and needs to be heard is that, you know, these guys, they're feeling as Americans feeling totally disenfranchised, right? You know, they see the stock market like this disco ball that's just running away from them. And it's like, wow, you know, how do you latch on to this? And that's why the attitude has manifested itself through barstool presidente of all places saying, I'll show you how you latch on it is.

You get in there and you buy stocks. They go up every day. Right. And like as that sounds to somebody that's been in the markets for 30 years, that sounds completely nihilistic. Like, what are you doing? You know, that's not how you do it. Right? Like the way we've done it is, you know, you fill, you know, you pick the companies that you like and you have reasons for liking them and you stay patient and you wait for an opportunity till they dip certainly to buy them because markets go up and down and why just chase a market to the moon, right?

You ask a day trader that today, the higher the price, the better, right? They want things that are exploding, right? You can't talk to them about something that's sitting still, you know? And so that to me is translating, you know, it's that sort of disenfranchisement translating into the nihilistic attitude, set of emotions that I feel like I read from that generation. And I totally, I'm in touch with them. I'm not telling them that they're wrong. I'm saying that there's definitely something that needs to be addressed here. Totally.

I mean, it's very weird to put it like this. But you have the guillotine, the billionaire's kind of socialism is looking good to me redistribute it all on one far. side and the screw it we're going to play chicken with hurts because the system's stacked against us. So why not try to bulldoze our way? Why not try to make the narrative trade so powerful that the media can't ignore it? It creates fomo among the other ones. All it takes for Robin Hood to actually move markets is for the financial media to repeat incessantly their stupid trades such that somebody's like, well, what if that did work? You know what I mean? It's like it's a game of self-fulfilling profits. That's right. And so, you know, I place a lot of blame, and this is a little bit of segue, but look, the high frequency traders that have come into this market are like largely responsible for setting the reset button at zero every day.

Right. It's like they don't care that the stock market went up 5% three days in a row. They set the market at zero, right? They go home flat every day. So what do they wake up looking for? Orders to front run. So if the orders, if there's one order to buy Apple that day, high-frequency traders can just run Apple to the sky.

And if there's one order to buy Amazon that day, high-frequency traders can just run Amazon to the sky. Right. And now clearly I'm exaggerating and there's several other factors involved. But, you know, that's the kind of thing that has been an overlay in this market that has helped David Portnoy succeed, you know, with his stocks only go up. You know, he creates this positive feedback and he creates 40,000 Robin Hooders bidding for the stocks that he's looking.

looking to buy, and then the high frequency traders are bidding ahead of them for the stocks that they're bidding for. You know what I mean? So you're literally creating quite a visible feedback loop, and you can watch it translate into the daily closes a lot of days. And then that's just the part of the dynamic. It's a separate part of that dynamic, but I think it's a strong one. It was so fascinating too because, you know, we have, I think, sometimes this debate about like our markets driven or how much are markets driven by narratives versus fundamentals. But I think what you're articulating that's so important is that there's this third factor underneath, which is the structural way in which narratives get translated,

right, into action. And it's actually kind of, it's too limiting to just view it as a narratives versus fundamental. Yeah, it is because we don't know, you know, we don't know what type of counterbalance the Federal Reserve is providing. Like, I think that what's going on is that we had this economic Adam bomb hit where we don't know how deep the crater is. And the Federal Reserve came in and just said, okay, well, we're going to give you enough liquidity to fill 10 craters. And so now we've got distortions going on where I don't even think the Federal Reserve was necessarily expecting, you know, Amazon and Facebook and Apple to take off for 40 percent gains in the first half of the year, you know, like astronomical stuff. I don't even think they were expecting that. I think it's

just a sort of unforeseen offshoot of, again, this unprecedented situation of them, you know, saying, okay, we don't know how big a Band-Aid we need for this thing. So we're going to make the world's biggest Band-Aid and we're going to fire it at the markets. And, you know, to me, that just seems like a little bit, you know, again, a repeat of that sort of nihilistic, you know, crazy attitude that seems to be taken place everywhere. But it certainly doesn't seem like a measured response by the Federal Reserve. So this is actually super interesting. It's a another good segue, you know, part of the, so I spent a lot of time kind of looking at how market narratives are playing out. I'm always fascinated by it by the psychology and by what we can learn

underneath it. And so on the one hand, you have this narrative of stocks always go up, right? But really, when you break into it, there's a tale of two markets, right? It's like the S&P5, plus the, plus basically the vaccine rumor trade. Like, that's really, that's what you got going on right now. You have like these random pop-ups are like the bankruptcy bet. You have the vaccine, you know, narrative trade or rumor trade, rather. And you have the tech stock. So I guess the question is, you know, at risk of you saying, you know, for that information, subscribe to my newsletter, how the hell do you trade in this type of environment?

What do you actually, how do you even navigate this? How do you begin to navigate? I figured out a method that I've sort of turned myself into a navigator, right? My morning note is called the morning navigator for a reason. And, you know, I guess I've developed my own science of following the markets that very much has to do with measuring performance, right? I sit down at the end of every week and I look at the, you know, who the winners in the race were that week. And I look how that week fits into every month. And I look at the winners of who that race was every month.

And I look at, you know, who's performing. And I try to put some money into that. And I look at who's not performing. and I try to take any money that I have out of those names. And then, you know, you learn after time that, you know, stocks that trend usually continue to trend. And next thing you know, when you've jumped on to the sectors that have showed you mathematically that they are trending and some time goes by and they continue trending and you've managed to get out of the, you know, the bad performers, you know, you manage to tell a pretty good story about the markets. Like I was just talking about, you know, we're just talking about income inequality in America. And I was just talking with one of my clients about how that has blatantly manifested itself in the stock market in the first half of the year.

So take a look at the first half of the year, Nathaniel, and how the indices performed, right? You've got the NASDAQ that was all technology, right? Up 16% in the first half of the year right through the pandemic lockdown, right? S&P, down 4% on the half. Dow Jones down 10% and the Russell 2000, all the little stocks, the small cap stocks, down 14% on the half. Right. So you can clearly see now technology just took off the small cap stocks that are going to have a hard time, you know, combating the virus lockdown because of their sheer scale being smaller than these huge behemoth big cap stocks. Those are all suffering.

You know, and we saw the bifurcation in the sectors even where all the tech sectors and gold. sectors took off and rallied. You know, anything having to do with oil, airlines, and industrials got slaughtered. Right. So right now this year, we're seeing the stock market absolutely break apart in directions that it has never broken apart in before. So, you know, as you follow the daily, the weekly, the monthly performance and start to put the pictures of the puzzle together, it starts to tell a story. And if you're able to sort of quantify that and narrate that for your office,

audience, you can help people understand what's going on. And it doesn't always make sense all the time. But if you're trying to make money and trade markets, it does. Yeah, I mean, this gets back to where we started a little bit. But, you know, do you find yourself having to really kind of keep separate exactly that process that you were just mentioning and what the markets are telling you from a larger kind of macro analysis about where the world is headed and whether you do or don't agree with that? Yes, but I broke, I do, and I will definitely say more so now than ever, but I will also say that I broke those two apart 20 years ago when I realized, you know, five and 10 years into my life as a trader that markets weren't going to conform to your view, right? Markets were never going to do what you thought they were going to do. Markets do what they are going to do and then you can decide if you want to participate. So it's the kind of thing where once I realize that markets are in security, trade in a separate direction, but maybe, you know, based on the narrative of one economic world, you know, once you've, you know, once you broke that separation apart, you realize that when

you sit down at the turret every day, you know, getting ready for the 930 bell, that it's about the game being played of making money. And it's not about, you know, the number of people on the unemployment line and the weakness in the manufacturing indices, et cetera. It's about how stocks are going to behave. And that's a science of its own. It really is a science of its own. Yeah, no, I mean, I think it makes sense. So another kind of thing, at the risk of kind of over and analogizing, you know, one of the things that people look to constantly is, you know, is this another 2008? How does it compare? Is this another 1999? You know, what moments in your career, maybe not like our direct comparisons, but you, like, can you extract lessons from into the markets as they are right now? Yeah, you know, those, I have to say that those were more valuable on the extremes. I have to say that I was, and my clients will vouch for me, that I was able to get a pretty good read on the market bottom. And it was from really gathering up all the extreme negativity around me.

So, and I'm not going to, I don't really want to necessarily pat myself on the back for that. I really just want to relate it to this question and say, things felt at the bottom in February, March, this year exactly what they felt like with the S&P at 666 in October of 2008. Like to exactly if I tell you that it felt, I felt the same chills down my spine. You know, back then, back then at the bottom of 2008, I had a friend of mine that's a portfolio manager say to me, you know, it's going to get to the point where if you admit that you own stocks at a cocktail party in New York City, it's going to be like admitting that you have syphilis or something.

Right. And that was, when I heard. that, I was like, oh my God, like, that's the most, that's the scariest hyperbole that I ever heard. We have to be at a bottom now. And sure enough, while I didn't act on it back then, I realized that those were the types of sentimental comments that you hear at market bottoms. And so I was able to do a lot of analysis, you know, in that super short period around the turn, you know, but I sent out a note called turning point on March 23rd, I think it was or 24th. And I was like, guys, I've just heard about the most negative stuff that I've ever heard. You know, I've got people calling me up and

asking me to price up 1,500 prices. Excuse me, S&P puts on a 1,500 handle. And I'm like, you know, things like this, this is where everybody's looking in the wrong direction. And I'm expecting some kind of response from the Federal Reserve. And so then, you know, you have the Federal Reserve come in and you know that that was the thing that flipped the switch and, you know, allows you to buy for days and days and knowing that we're not even anywhere near where the market. market's going to stop yet. So yeah, there were some really, really direct applications. And now, you know, sentiment wise, everything's back upside down. You know, we whipped right back into the fastest speculative phase in the markets than I've ever seen. And it's clearly got to do with

the enormous liquidity being supplied by central banks all over the world. You know, so we're going to continue to see these distortions like Hertz trading up a thousand percent and Tesla going through the stratosphere and, you know, the banana duct tape to the wall trading for 100 grand at Miami-Arpazil. Like, none of that is done yet, that's for sure. So in that light, is there anything that's, like, particularly worrying? I know part of what makes crises so challenging is that they often come out of nowhere, but are any things you're looking at that are kind of more nerve-wracking than others for

you, trends in the market that you're seeing? Yeah, this Federal Reserve thing is bothering me, Nathaniel. you know, this has to do with our children's future, right? This has to do with, you know, at some point somebody's going to call in our debt and, you know, we face a currency devaluation. Now, I'm being an alarmist. I'm clearly being an alarmist and getting us to the end game. But when I hear the Federal Reserve shirk responsibility for income inequality, I can't even take it seriously, right? First, they tried the Federal Reserve before COVID. They were trying to build global warming into the reason that interest rates had to stay low

and that they were going to continue to print money. Then the pandemic rolled around and they had this massive excuse to continue to print money at an absurd pace and they add $3 trillion to their balance sheet. Now they're turning around when being asked about income inequality and they're blaming it on years of racial tension, right? And it is the most obvious thing in the world that when you're buying Wall Street's corporate bonds and sending out a check for 1,200 bucks to Joe public, who you're taking care of, right? It's quite obvious who you're taking care of.

And so to me, that's the most, like, that bothers me every day. So that that's the sort of scariest thing. And then, you know, there are all kinds of other things that we can talk about, you know, going into the election and politics and protests and all that. But, you know, I would say honestly that this thing going on at the Federal Resortals, You can go to New York Fed.org or whatever the head of the New York face is right now, and you can read how they are telling you that income inequality is due to racial injustice. And that's the kind of thing that's really, really frightening to me. That's blatant propaganda on the New York Fed website. I mean, does it just amount to? I mean, so here's the counterfactual is them being like, yeah, we've got ourselves in a bind where we do this to keep the economy functioning, but it has this negative impact. of radically exacerbating, you know, inequality by increasing asset prices. I mean, you know,

what is it like a situation where, by the way, I don't disagree, it's more just trying to play out how it could be any different in the environment we live in, you know? Yeah, you know, no, that's true. And it's because once we flip the switch to, you know, having the Federal Reserve liquidity being the hammer to any nail that presents a problem, you know, we've gotten ourselves into this situation. You know, the Federal Reserve started, you know, with the QE program to get us out of the great financial crisis. And that crisis was really a crisis of lending liquidity, right? Like that's when, you know, players in the market wouldn't take Lehman Brothers or Bear Stearn's

name. So that was a real crisis of liquidity. So they went and threw QE at it. Now we've got an actual blatant economic situation that really has nothing to do with banks taking each other's credit lines. It has to do with people in unemployment lines. And they're using the same response. So two very different crises, same response, massive scale.

And it looks like that's just going to be the road that they take. You know, and you can see exactly what it's doing to, you know, in the bifurcation of society, in the markets, you know, all over the place. We're having really, really crazy shit play out this year. And I think a lot of it, you know, can probably be directed, you know, a little bit more directly at the Federal Reserve and other central banks. Do you think it gets wilder over the next few months before the election? Oh, man.

I've got the popcorn out, you know? Like, I'm, you know, I don't like seeing, you know, all the destruction going on in the Democratic cities. And, you know, I don't think President Trump has necessarily done anything to help the situation. And, you know, I'm kind of just sitting here trying to figure out the markets most importantly. But, yeah, you know, we are in a, we are in a predicament where people need to hunker down and figure out what matters to them. Well, then there's this other dimension. You know, we're talking entirely domestically. But meanwhile, last week we have China and the U.S.

with dueling consulate closures, you know. So there's this whole global dimension that has obviously pretty significant impacts as well. Yep. Yep. I mean, looking around the world, to me, it looks, you know, I don't want to go into it because I don't want to go into political. I don't want to go political. Sure, yeah, yeah.

Respected, respected. Yeah. Yeah. So that's a whole different podcast that we do when we're not recording and it's over drinks. Yes. In the meantime, though, I guess for people who are trying to kind of make sense of this all, what are you trying to pay most attention to? Who are you listening to? What do you think? What markets are actually interesting? Like where are the, I don't know, silver linings might not be the right way to think about it. But if you're trying to navigate this, you know, again, it's the kind of the name of your newsletter. On a kind of more fundamental level, what do you suggest people do? Yeah, well, put it this way, you know, there's a lot to watch. There are a lot of things that are driving markets right now, right? I think it's important. The most important factor, I think, is to watch the bond market, right? And I'm not going to give any bit. I'm not going to say a claim that I have a recipe, but it's important to watch the bond market because the bond market is telling us a clear story at the moment, right? We've just had a stretch where economic has been crushing expectations. Literally, every economic number was better than the last one. It was better than what BLS expected on the employment side. But the point is, the bond market has not backed off at all. Right. So that's one thing that's got, you know, has to stay in people's

minds that if the bond markets are going to continue to rally, it's because they're seeing, you know, what the, what kind of damage is really underlying in the economy. And I think that will eventually shake the equity markets. So that is one big picture, you know, sort of macro thing that I'm looking at. But I'm also trying to, you know, I'm also trying to be conscious, Nathaniel, of some of these sectors that have been, you know, well, beaten down and then come back and have had all kinds of different types of recoveries. But like I'm looking at sectors like the housing market. And I play the housing market from the long side for several years, you know, leading up into this. And I've been flat recently, especially through the pandemic. But what's interesting is that the

housing market has been on fire through, you know, even through this crisis. And before the crisis, it was totally on fire. We had a record number of new homes being built. We had a low number of homes in inventory. We had low rates. And we had an amazing scenario for the new home buyer. So, you know, home builder stats were fine. Home builder stocks were rallying. And now we've got a situation where we've got nothing has really changed except rates are even lower and we've got people that are dying to move out of cities into the suburbs. So I'm looking at a couple of sectors like that that are pretty blue collar bread and butter sectors to trade, but really might have some really strong tailwinds coming out of this pandemic. You know, there's between that factor of low rates and more

people wanted to move out of the big cities. I feel like home builders could be a really, really interesting gold mine to be trading over the next couple of years. So I don't know if I, exactly addressed your question, but I kind of gave you one of the things that I'm looking at in the macro markets to guide me in the big picture in the bond market. And then one of the underlying sectors that I've been studying a little bit more intently as it makes a sort of huge recovery after the pandemic. And I'm looking for real places to put my money coming out of the pandemic, if that helps. Yeah, no, I mean, I think it's super helpful. It's a different way to kind of frame what you said. I'm going off script a little bit here, but is, yeah, on the one hand, you're

looking at the, like, what is the big picture? What is the best place to go for that big picture macro story about the overall health? While at the same time being able to have a nuanced perspective that can break the, the quote unquote, larger economy into constituent parts and see where there's opportunities because you're never going to have everything. There's nothing that this that has this kind of big shift in dramatic impact isn't going to benefit something somewhere somehow. You know, there's always winners and losers. And I think in some ways it's about figuring out where, where, one, there are actual potential gains, or even in some ways, where are things being kind of overindex pessimistic that are likely to have some other kind of countervailing

forces. Yeah, exactly. I tell you, when I drill down into these sectors and it's like, you know, look at the energy sector, which I consider myself a semi-exper. in having trade commodities my whole life essentially and mostly energy. So, you know, if you wanted to raise money for an energy fund today, you wouldn't have, nobody would pick up the phone, right? At the same time, like, if you, when I look out my window, there are home builders building homes and house and trucks driving up and down the road. Like this sector, there's not enough people working in this sector.

Like if you wanted to start a business today, you know, around me, I feel like I could start a construction business and be busy for days. So it's just those kind of trades that you're trying to look for that are, you know, look maybe in places where the whole world isn't looking. You know, I'm not, I believe technology could continue to go up, but it's just not my type of trade from here. You know, I may own some and some of my retirement accounts, but I honestly don't go punting around Apple or Facebook much.

So it's the kind of thing where I'm just trying to find a sector that I can find tailwinds that I can both, you know, witness, quantify, believe in, and then sort of have the stocks translate into some positive reactions. And so through my methods of following the markets, you know, the home builders have been sticking out as one of the good performers off the bottom outside of technology. So that's kind of how I'm looking at the world right now. As someone who was planning on potentially buying a house this year in the Hudson Valley

outside of New York and is watching prices right now, I can painfully validate that as an interesting area for you, if not so much for us right now. Yeah, no, I know what you mean, but it is, it's part, you know, it's part of the economy that's booming. You know, everybody wants to talk about how much unemployment there is and how much deflation there is. And it's like, well, you know, there are some sectors that are still booming. So. Well, listen, Tony, it's super fun to chat. I could ask you about a million more things, but I've kept you here for an hour.

So let's wrap for now. But where can people find you if they want to, want to hear more of your ideas? Yeah, you can subscribe to my newsletter, The Morning Navigator at TGMacro.com. There is some background in there about a longer story about my bio. If you want to hear about my history and where my process came from, and that's it. I've been, my clients have been happy. We've been making money and following the markets pretty closely and subscriber base is growing. So I'm really confident heading into the second half of this year.

Awesome. All right, Tony. Well, thanks so much for hanging out today. And we'll definitely have you back to talk more of craziness as it transpires. Oh, I'd love to. That was a great conversation. I really liked your angle on it, Nathaniel. Thank you very much.

Reflecting on that conversation, one of the things that I find so interesting is the need for anyone who works in finance right now to be able to separate in some ways and compartmentalize the part of their brain that is looking at the wider world and the way they'd like to see policy change and the fundamentals of the economy that they think need to be improved on the one hand and on the other what the story the market is telling them and the story the market is giving them to react to. In many ways, this is the financial postmodernism that Tony is talking about. It's the disconnect and the dislocation between what people experience on any given day and what the markets are saying about the state of the world. Being able to move in between those two things

is, I think, a prerequisite of being a trader, being an investor of any type in these markets. But I also think it's a prerequisite of trying to change the system in any way. For traders, there is an obvious financial imperative to be able to shelve your priors, basically, to just react to what the market is saying. But in the inverse way, I think that for someone who is focused on changing the macro environment, getting policy shifts enacted, you have to be able to understand the incentives and actions of people who are actually participating in markets right now as they are. If you approach things with a completely ideological point of view, it's going to be very hard to find the levers of power to actually shift and change things.

And it should be clear from our conversation with Tony that even the folks who are highly committed to making money for themselves and for their clients, they have some of the same concerns that people who aren't in markets at all do about the state of the world. Being able to separate what the markets are telling us from what the real economy is telling us is important for both sides to be able to reconnect in the middle and maybe change something. Anyways, guys, that's it for me today. I appreciate you listening. If you like the breakdown, please go rate and review the show. It makes a huge difference. We've had a bunch of new reviews come in and they're helping new people discover it. And I really, really appreciate everyone

that does that. Until tomorrow, guys, be safe and take care of each other. Peace.