The Compound and Friends - Venture Capital Babies

Episode Date: August 13, 2021

On this week's episode of The Compound & Friends, Michael Batnick, Sam Ro, Allison Schrager, and Downtown Josh Brown discuss: the stock market's PE ratio, the labor market, universal basic wealth, Chinese stocks, the social side of work, infrastructure, financial literacy, and more! This episode is brought to you by Polymarket. For a limited time, sign up with referral code “Compound” to get your first trade reimbursed up to $100. Visit https://polymarket.co/CompoundShow to learn more. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: https://ritholtzwealth.com/podcast-youtube-disclosures/ Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

Allison, I have a question for you. Before we start, are warranties a scam? Depends on the warranty. Can I tell you a story? Yeah. All right. We did start. I got a line on my TV.

I have a big TV. When did you buy it? I'll tell you. 80-inch TV. 80-something-inch TV. I bought it in March 2019. Okay. So pretty new.

Pretty new, right? There's a line on my TV. A big f***ing line. All the way across. So I went to Best Buy. They said, too late. Your two-year warranty is expired. I was like, yeah, I know, but

I just got this TV. It's not even two years old. And she goes to me, well, you could buy a new TV. And I was like, yeah, I know. I'm in Best Buy. I know I could buy a new TV. And I was like, yeah, I know. I'm in Best Buy. I know I could buy a new TV. I don't want to. What recourse do I have? She was like, unfortunately, nothing. You can call Samsung, but they're going to charge you $700 just to come to your house. The TV, we can give it to you for $1,900. So I was like, but I don't want it. So anyway, with that said, am I a sucker for not buying the warranty? I never buy the warranty.

I never buy the warranty on things like TVs. They shouldn't break it after two years. You have to think about it like just the odds. Like you buy 10 TVs and never buy the warranty. You end up saving money even if you have to replace one of those TVs. Right? Is that the way to think about it? Especially because TVs get so much cheaper.

Right. Like you're going to be paying. Yeah, cheaper and better. In my office, I have a 55-inch Sony that is at least 12 years old, and it still runs pretty well. Wait, what brand is broken? Samsung. I've had two Samsung TVs that have broken within that same amount of time.

I should have asked you before I bought the TV. Yeah, I don't know if you – you probably Google searched all this stuff, but there are entire message boards of the same thing breaks in like a certain design of tv so like i don't know what caused that line but there's probably like 2 000 people who are experiencing the exact same thing and they'll either tell you it's it's this easy to fix or you just have to throw it out i was talking to ben today about it because i was supposed to have best by coming to my house between 9 and 12. They just didn't come,

which was a whole other story. So he said, oh, you're getting a new TV? I said, no, no, no, no. It's for something else. I said, I'm not taking the loss on that TV. And Ben's like, dude, you already took the loss.

Your TV's broken. You're watching TV. Your TV's broken. Well, also, it's expensive. Is it even possible to fix TVs like that? Not this. I'm telling you, it's $700 just for them to come diagnose it.

And then at least that to fix it. The TV is $2,000. Okay. And $1,900. So I have a Samsung. The other day, it told me it's out of memory. I have to delete either Disney Plus or Netflix. Ooh, that's tough.

Like, that's the on-screen message. Like, you have too many apps. I have five apps. Spotify. I have Disney Plus. I have Netflix. HBO Max. And maybe one other thing that they force you to have that you can't delete. And they're like, you're out of space.

So I go through the whole menu, troubleshoot menu. There's no way to do this. So I start deleting apps, and it's still not enough memory. So finally, I just said, all right, I'm calling Samsung. This is the dumbest thing I've ever seen, right? Yeah. They're like, well, you I'm calling Samsung. This is the dumbest thing I've ever seen, right? Yeah. They're like, well, you need to update the operating system on the TV. I'm like, you need to.

They're like, no, we're not going to push out this upgrade for a little while. So if you actually want it to work, here's what you have to do. I had to download computer code to my computer, put a thumb drive in, pull the thumb drive out, put it into the TV. I couldn't reach the back of the TV because it's bracketed to the wall. This was like hours of time to get this thing to just do what it was doing fine

the day before. Did it work? It eventually worked. Very, very frustrating. It's annoying. It's annoying. I don't know. This is like, isn't this like...

Might be done with Samsung forever. Isn't this exactly what has old school car people like terrified of new cars? Because it's all a computer now. Yeah, it's like the mechanics versus the electronics or whatever you call it. It's all shifting. Yeah, there's chips in everything. There's chips in my refrigerator and my oven now. Soon there's going to be chips in your turkey sandwich.

And then sometimes you're just like- Or you get on the side of your turkey sandwich. How about it's not a computer? How about it's just a refrigerator and it's fine like that? I don't need the computer. I don't know what anyone needs the computer for. It's just another way for them to track you too. Yeah, they're tracking my fridge usage.

I knew it. I always knew they were deep down. How are you feeling? Are you nervous? You all right? I don't know. You're running this solo. Is my mic on? Can you guys hear me?

Yeah, we can hear you. Yeah. All right. Give me the click. The Compound and Friends, episode 11. Welcome to The Compound and Friends. All opinions expressed by me, Michael Batnick, and our castmates are solely our own opinions and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain positions

in the securities discussed in this podcast. Today's sponsor is PolyMarket, the world's leading information markets platform where you can trade on the most pressing global questions all on the blockchain. Choose from a variety of markets. Will the US have record high COVID cases before 2022? God, I hope not. Will August inflation be above 0.5%? Will Trump run for president? With over $100 million traded in its first year, PolyMarket is the go-to platform to settle the biggest debates of the day. I haven't placed a trade yet, but I'm definitely going to before next week's show. So I'll be back to you on that, what I end up doing.

So head over to polymarket.com. Today, I make an account. Sign up with the referral code COMPOUND to get your first trade reimbursed up to $100. Go to the description and click on the link for more. All right, we're back. Hey, I'm sorry to do that to you. All right. So first of all, thank you guys for coming today. We have a very, very special show. Secretly, I've been using this show as a way to reconnect with my old friends, and I couldn't be happier to see you, Allison. Sam, you're an old pro. You've been here on the show before. Let me just give people a very quick introduction.

Allison writes for Bloomberg Opinion Now. You have the Known Unknowns letter. I read it every week. Which we all read and share. We think the world of your writing. And you're a PhD? Yes. Okay, in television repair?

That would be so much more useful. Okay, economics, I assume? Economics, yeah. Okay, awesome. So we're so glad to have you back. And you've been on The Compound before. You've done all our videos, all our podcasts. So you're kind of an old pro too.

And Sam writes the Axios markets letter, which you took over what, a month ago, six weeks ago? Two months ago. Are you burnt out already? Yeah, I'm totally burnt out. It's crazy. Okay. And I read your thing every day. You're going five days a week? Five days a week. You're doing like five topics per letter.

Yeah, it's four topics per letter and a lot of collaboration with a lot of the other business reporters. How many people are covering business at Axios right now? You know, that's a great question. I think depending on how you define it. We'll count Felix as five people. Who else? So we also have Hope King writing. Oh, yeah.

One of the editors I work with, Kate Marino, writes a lot about debt and stuff. I also have a colleague, Courtney Brown. She writes the Closer. That's the after the close newsletter. And then there's, you know, they have a big tech team over there too with Ina Fried.

Do you feel like this group of writers, because you were at Business Insider, you were at Yahoo Finance, do you feel like this group is like a really good group? Oh, yeah. Yeah. Very, very strong. Like everyone is very deep into their subject matter. And I think everybody complements each other really well too.

You're not overlapping on stuff, but you're able to speak to each other's things that you write. Right. Yeah. Like, you know, if something happens with like like, market mechanics, you know, Felix raises his hand and starts talking and writes something, you know, right away. Anything involving, like, debt markets, credit, you know, I have two editors who, like, spent their entire careers covering this stuff, so. Okay.

Do you call it, like, when you're at Axios, do you guys call it a newsroom or it's a little bit more? It is? It's a newsroom. Yeah. I think everybody defines it differently, but it's just easier guys call it a newsroom or it's a little bit more? It is? It's a newsroom. Yeah. I think everybody defines it differently, but it's just easier to call a newsroom. All right. So we're going to start there because you did a thing about how the S&P 500 forward price earnings ratio actually has gone down.

I feel like the last few years, a lot of what the bears were saying about stocks is that it's multiple expansion and it's driven by easy money and et cetera, et cetera. And that's not actually the case this year. So let me, uh, there are, there are no dumb questions, right? We're in a safe space. Yeah. Why? What do you got? So I understand where the forward estimates come or the, for where the forward PE comes for single stocks. How do we get the forward PE for the S and P 500 as a whole? Is it just an aggregate of all the forward estimates for individual stocks? Yeah, it's an aggregate. I think the way... So this one's compiled by FactSet,

and I think the way the analyst does it over there is it's either a weighted average based off of all those ratings, or I can't do the exact math, but it reflects the proportions of the breakdown of the S&P 500. So tech stocks will have a higher weight than financials. All right, so allow me to quote Sam Rowe.

The S&P 500's forward PE touched a high of 23.6 on August 28th, 2020. According to FaxNet, that day closed at 3508. Since then, the forward PE has trended lower, 28th, 2020, according to FactSet, that day closed at 3508. Since then, the forward PE has trended lower, registering at 21.2 as of July 30. During that period, the S&P surged 25% to 4395. So basically, earnings are far outpacing stock gains, which is like actually kind of nice. But- First time, long time.

First time in a long time. And I think it's kind of like under, under recognized. Is that a word? Maybe, but I have a question for the two of you. Do you know how accurate these forward estimates are? Alison, have you done any work on this? I haven't, but I'm assuming these are projected earnings. Projected earnings. Yeah. So forward 12 month earnings. So, I mean, I don't know. It depends on the sector probably. But I'd obviously be curious if we could take this out another couple years.

Because I reckon in fall 2020, prices were high. Remember, stock was going up. But, like, firms weren't making any money. And now they're making money. And prices have continued to go up. So the idea this has gone down since the pandemic doesn't shock me. But I'd be curious if we could take it out two more years. Yeah.

So take it, take it backwards. Yeah. Yeah. I mean, one of the things that you about this chart is like, okay, you know, two multiples down is not mind blowing stuff, but it's the fact that direction directionally, it's interesting, but you're right. The magnitude is not great. The magnitude is not spectacular, but it's also this reminder that just because there's a high valuation in the market

doesn't mean prices have to come down. Prices were going up this entire time. If that denominator is catching up with you, then stocks can get cheaper while prices are going up. So, Allison, to answer your question, Ben Carlson did a piece back in 19 showing that forward earnings numbers always start out too high.

And then they come down as the year progresses. And obviously, by year end, they get pretty close to reality. But I asked Michael and Ben if there were times where earnings growth was outpacing stock performance. So I thought this was really interesting. In the 2010s, it lined up pretty closely. So you had 156% earnings growth and 214% S&P 500 performance. So for people to say, oh, it's a bubble, it's a bubble. Well, actually, the earnings growth lines up like okay with what ended up happening.

But then you've got these periods of time where earnings growth is better than stocks. And it's this year so far. We're seven months into the year. but then you've got these periods of time where earnings growth is better than stocks. It's this year so far. We're seven months into the year, but I just thought it was interesting that you really could have all different versions of that. The most pronounced version up here to me of earnings being better than stocks is the 70s, which did you know that offhand? Yeah. You knew that that was the case? Not to brag, but I did. Not to brag, but you definitely did know that.

Yeah. You knew that that was the case? Not to brag, but I did. Not to brag, but you definitely did know that. But look, so I'm curious what you guys think. Does this trend persist into year end? Because consensus earnings estimates are still high going into the end of the year. This past quarter, earnings growth was incredible.

But can we reasonably expect stocks to keep up? Probably not. So we could actually see that get even more pronounced. You could have 50% earnings growth this year and 20% stock growth. We had 83% of S&P 500 stocks beaded expectations, the highest like ever. So it's pretty wild. I don't even, it's not that the analysts were so behind in this. Like I don't think anybody, I certainly didn't expect earnings to be this strong. So for this particular piece, I had actually a pretty long conversation with Lisette Saunders and Charles Schwab about this. And one of the things she pointed out was a lot of this in terms of the accuracy of analyst earnings forecasts and why there's so many revisions happening is because all these companies had cut guidance last year. Not cut, but suspended guidance.

And they're still in the process of, of returning to this. And as a result of the lack of guidance, there seems to be a bias for analysts to, to be more conservative than what actually happens. Right. So is that a recent bias? I don't think that's actually a recent bias because, um, there's a, so I'm glad you asked because I actually looked into this. There's an accounting professor at NYU. His name is Baruch Lev who has actually done a lot of work on this kind of thing. Jewish, we think. Most likely.

Go on. But it's pretty intuitive, but like the history tells you that whenever a company pulls guidance or suspends guidance, it tends to precede a lengthy period of bad news or disappointment. In so many ways this year and last year with the anomaly. Right. Yeah, this is the opposite. And I think one of the challenges with getting the earnings growth number right this year is we had no buybacks last year. They suspended them in March and they didn't come back. This year, obviously, they have more cash than ever. We have to assume there'll be huge buybacks into year end, which then shrinks the float and EPS increases.

Also, how many people had operating margins at an all-time high on their calendar, on their forecast last year? Nobody. Oh, I would have guessed the exact opposite. If you're telling me labor is expensive, if you're telling me raw materials are expensive. And didn't Chipotle, even after their wage increases, have pretty decent margins?

Yeah. I don't think it cut into that very much at all. Yeah, no, I remember we were talking about Chipotle the last time we were here, and I remember following up on that. Yeah, their profit margins are expanding. Did you write something about, uh, did you write something about profit margins as a percent of revenue also hitting a record high? So, so yeah, net margins,

net margins, um, uh, hitting a record high and, uh, inconceivable, at least for me, I never would have, I never would have thought we would be seeing that. Yeah, but it's so the feedback that I've gotten is it's a combination of companies spending all of last year figuring out how to, you know, cut costs like closing offices, replacing people with machines and stuff. And let's not forget that, you know, there's 10 million job openings out there and we're still like five million. Is that all the money is being saved? They have one person doing the job of two people? Exactly. They're not paying any people. So it's like, yeah, sure, you're raising wages for individuals, but you have fewer people on the payroll.

So have you seen anything about productivity? You'd expect it to be way high. Yeah. Admittedly, I don't follow the aggregate productivity numbers that closely because at least from like the stock market perspective, because that's the other thing too. Like this is a very, this is very specific to like S&P 500 gigantic companies. Well, this is a great question for Allison.

How is productivity measured? Well, not well. Generally. It's a big controversy now, right? It's the net profit margin. It is. You look at growth and you net out capital and labor and whatever's left over is productivity, but it's notoriously terrible. So it's like a catch-all for whatever's left net profit margin. It is. You look at growth and you net out capital and labor and whatever's left over is productivity.

But it's notoriously terrible. So it's like a catch-all for whatever's left over? Yeah. Why is it notoriously terrible? Is it missing things? It misses things. Things change. You know, prices of goods change.

It's not necessarily that accurate, but it's the best we've got. Okay. So I know there's a big controversy. Like the West Coast, they don't think productivity measurements mean anything. The tech people, they're like, what are you talking about? How could you not see how much productivity we're gaining? I reckon that might be true. Or, you know, they often, you know, what makes an economy more productive takes a couple, like the steam engine apparently took to a hundred years to show up in productivity estimates. But when it did.

So I'm sympathetic to the argument. But also you think as the economy changes, perhaps the measurements we had before are no longer valid. I think they have a case. How many things did you have to mentally throw away over the last 18 months because of how strange everything is right now or not really? Wow. A lot. A lot, right?

But, you know, that's what's good about being an economist. You always find out you're wrong. Are you delighted when something happens that completely forces you to change the way you thought about how the machine works? Well, the two times that's happened was the financial crisis and the pandemic. So not happy things and bad for people, but good in terms of economic growth that shakes, that shakes you out of your, uh, your beliefs. Well, because good things happen very slowly. You know, you're like, you look back on data for the last 10 years, you're like, well, inflation was low and so was unemployment. That's nice. But you'd only notice that 10 years later,

as opposed to like a crisis. It's like people weren't very excited about that in real time. No, I, I agree with you. What, what was the biggest surprise for you about the way 2021 has shaped up so far economically versus like what you would have been expecting at the end of last year? I think how strong it's coming back. Okay. You know, that there was less damage than I would have thought. You thought there was damage that maybe would have taken years or decades to repair to like the labor force or – Into small businesses. Yeah.

I didn't think that you could put the economy on ice and have it reopen the way that we have. And obviously there are problems in a lot of the manufacturing and there's bottlenecks and all those sort of things. But of course there was going to be problems. But to what we were just talking about with earnings at all-time highs, I mean I could not have predicted this. I'm shocked that we're not looking at, like, a barren wasteland right now. Like, all the stuff that you talked – that everyone was talking about during the financial crisis, for instance, with, like, money seizing up and access to credit and all this stuff, like, becoming a big problem. But, you know, last year activity actually just stopped. Like, this is something that you're seeing in front of you.

And so, like, what happens when, you know, money stops moving in that sort of intuitive way? Well, we threw a lot of money at the problem. That's true. Like, I'm not sure how I feel about current policy, but I think we did a good job last year. Well, last year was whatever it takes. And this year, whatever it takes is probably inappropriate. But then there's also a huge disagreement

about what does it take. And then there are different constituents that want different things out of the new rounds. But last year it was like, just give everything to everyone, no bankruptcies, no foreclosures, can't throw anybody out of anything. It almost felt like more of a team effort. But then, of course, obviously that couldn't last.

A few trillion dollars later, it's like, okay, game on. So one of the unforeseeable things that came out of this was 18 months later, however far removed we are from the beginning of it is wages or, or I'm sorry, labor having the upper hand. And so one of the charts that we're looking at is low skilled jobs. Their, their wage growth outpaces overall pay in June. This is a rarity. So, Allison, what do we make of this? What is this chart?

Wait, Mike, what is this chart showing us? This is showing the wage gain for low-skilled employees versus overall growth. And you could see that low-skilled jobs are actually outpacing overall, which is incredibly rare. I don't think it's ever – it happened once in 2009. Well, I don't know if you saw the New York Fed just had this survey about people's reservation wage, like how much they would have to get paid to go back to work. And for people with a high school degree or less, that reservation wage has gone up 20 percent in the last year. Like the highest it's ever gone up. Is this construction jobs? Is that why? No, just maybe or even honestly even to go back to being a hotel.

So leisure and hospitality is an example. Annualized 6.6% over the past year. People are saying, no, if you're going to get me back in that shit job, I want more money or I'm not coming back. Also, if you're getting the enhanced unemployment benefits, if you're in a low-pay job, like $300 a week, it's huge. Like you're going to lose money by going back to work. So they better really give you a lot to go back as opposed to if you're making 120,000 a year, it's less compelling. And Sam, you write a lot about jolts. Like there are, I don't know how rare this is, but there are more job openings than there are job seekers.

What the hell is going on with this economy? 10.1 million open jobs, which is the highest on record. It's like 8.6 million people are filing for jobless claims. Right. Yeah. I mean, you know, jobless claims is kind of a weird number. But yeah, however you measure it, there's more job openings than people. Than ever. Yeah.

10 million. What is wrong with this country? Like, is it they don't live in the right place? Or is it skills mismatch? How many of these people that quit are trying to do their own thing, like start a business? I mean, new business formation is exploding, right? Yeah. If you look at new business applications, like they've in a recession, they've never

gone up this much. They're up a lot. And not only that, they're up a lot for single proprietor businesses, like people who aren't going to hire other people. So it seems like people are sort of going out. They're shooting their shot. Yeah. And I thought last year that made sense.

Like, oh, people are stuck at home. Maybe they'll do some gig work on the side. But this is going up still all spring when we're seeing this big mismatch when they could get a job. I think people are still underestimating the impact of working from home and people like taking their lives into their own hands. Like, I don't. It's the cloud.

The cloud is what the cloud in the cell phone did not exist in the last recession. Like, I mean, we had phones, but come on. The iPhone was one year old in 08, and there was no cloud computing to speak of that anybody knew about. The cloud and the cell phone are what enables somebody to wake up one day and say, f**k that supermarket. I'm going to start a bike repair company and take care of all the kids' bikes in the neighborhood.

And I have a website in 15 minutes. I have a phone number. I could process credit card transactions with my phone. I'm never answering to somebody again. We are underestimating those two pieces of technology working in concert, like are having a big impact on whether or not people will ever take these jobs.

Like we used to be afraid of robots. We might need robots for anything to get done. So super bullish for stocks, right? Talk about their margins, like- Super bullish for robotics stocks. It's like I was saying about how it took a hundred years for the steam engine to show up in productivity. I think we just had a shock that just sped up a transformation that normally would have taken 20 years.

We did it in one. It's really an unbelievable thing to have lived through. I also don't think anybody has the answers for how this plays out, what this looks like in the future. Like how could anybody possibly know what happens 24 months from now? I don't even know what's going to happen in November. Here's Peter Bukvar. We love Peter. It's going to happen in November.

Here's Peter. Here's Peter Bukvar. We love Peter. While somewhat dated, at least in June, the U.S. economy had a record number of job openings, 10.07 million. That was 800,000 more than expected. Great job with the expectations, guys. And up from a revised 9.5 million in May, positively, too, the number of hirings rose by 697,000 after a little change in the prior two months. The number of quitters rose. Quit rate 2.7%, second highest since the survey started in December 2000.

So that's the thing. It's like people are quitting. We have this chart, John. Like they've never done before. Look at this. Look at that. Look at that. Yeah, beautiful.

Unbelievable. Speaking of cloud. All right. What is basically, yeah, I mean, this is like not what you would expect to see a year after a recession, a quit rate with that level of confidence, like people just being like, I'm out. I don't need this anymore. But but also we were talking about the extended unemployment benefits, but even states that suspended that are not seeing like people flooding back to work. Yeah.

Go ahead. Oh, sorry. No, you go. No, you go. It's a podcast. Both of you go. So, you know, another thing that, you know, I think we're not talking about yet is this whole matter of excess savings, right?

Like this whole, like the additional, like the rate at which people were saving their income over like whatever the pre-pandemic level was and then you start that from March and go into now and there's like $2 trillion in excess savings that consumers have accumulated. That's got to be helping fuel the quit rate because you're not quitting your job if you don't feel confident that you can live for six months without income while you figure out what you want to do next. So Nick Bunker at Indeed does a survey that revealed something like this. And one of the big reasons why people aren't urgently seeking a job is because they all have these financial cushions, whether it's, I don't know, stimulus checks or whatever, or not having spent anything while they were working from home. You know what bullshit server we don't hear about anymore?

40% of Americans don't have $400 in emergency savings. Can we fix that? Everybody has that right now. We fix that. Did, okay, let me put it to you this way. Was the second round of unemployment benefits from the federal government bad policy? Was that a mistake? Was it poorly targeted? Was it poorly targeted?

Was it poorly thought out? What do you think? Well, I mean, I wouldn't say it was. I mean, if I'm a- Did it stop people who would otherwise have gone out and filled some of these 10 million jobs from doing so? Probably on the, I think these things work on the margin. Sort of like your home, you don't have good childcare,

and someone's paying you more to be at home. I think that's the tipping point. I don't think any one thing does it. I think it's this confluence of thing. And like probably, honestly, a lot of these people who are home are like, I would love to go back to get a job again. I'd like to get out of the house and stop looking after like four, three-year-olds. But it's like you layer in that they're going to be losing money to do that,

then they don't. Taking care of three-year-olds is like the hardest job in the country and there's no compensation for it. We don't pay moms to be at home or dads to be at home with children. It's, it's kind of a weird thing because it's the, I wouldn't like, I wouldn't do that job if I, if I were given that choice. Yeah. And everyone who has small children really had a hard time this last year, that stuff. Right. All right. But like if we could do it all over again, do you think we would have less open jobs? Or is that too small of an answer?

So you mean extending the unemployment – enhanced unemployment benefit or the big checks we gave out? Well, the big checks were just based on your income. So, I mean, I am more pessimistic on them because I just feel like they were expensive and unnecessary. Assuming interest rates stay low forever, maybe it won't be a problem, but it's just sort of added more to the debt load. Allison, I want to ask you about this.

What do you think this does to forward policy? Like the way that, so I've been, I think what I think is that this exogenous shock was so obvious that we needed to battle it and nobody was going to say, no, we can't do that. So like Ben is saying that in the next recession, politicians are going to act quickly because their base is going to pressure them. Why not? It worked last time. But I think that unless like one party really has control of both sides, that there's not going to be the political like wherewithal to come together. Because I think that unless there's another one of these, God forbid, we can't even agree when

we're in the middle of a recession if we're actually in a recession and the policy response that's appropriate. So how do you think this is going to affect future decisions? I think it'll depend on the nature of the next shock. You know, who's at blame? What's the nature? I mean, one of the reasons I think the money worked so well last year is this is a supply shock. So it wasn't that, you know, people just didn't want to spend as if they couldn't. So I think the prescription is a little bit clearer. When you're in a demand shock, like from a financial crisis, I think the right policies are less clear. So there's more scope for debate. I mean, we probably won't be that thoughtful and nuanced next time. We'll probably, we'll be like, let's just, I think everyone's going to want to be like, let's throw

money at everything. Because it worked last time. And people, we'll be like, let's just, I think everyone's going to want to be like, let's throw money at everything. Because it worked last time. And people like it. Politically, it's always a winner. We had this also once in a lifetime situation where the president is a guy that like, doesn't care about debt and loves the idea of throwing money at problems. Like that's his entire life.

And so when Democrats in the Senate and the House urgently wanted to do something that involved blasting money out, he looked at the president at the time in a different party, looked at it like, hey, you know what? I actually like this idea too

and mobilized treasury and like treasury, the Fed and Congress all working together with the same goal, get checks out now. We'll figure out how to pay for it later. You may never see that again, even if people want it. And it was at every level, like corporations, government debt,

like it was just everywhere. And I think that also, I mean, it'll be very different if suppose the next four or five years we have sustained inflation that really cuts into real wages. So I wanted to ask you about this. In terms of what you learned getting your PhD and monetary supply expanding, and yes, we are seeing inflation in areas that have been impacted. Obviously, used cars is a big one, used cars and trucks. But what do you think the inflation

ramifications are going to be six months from now? I guess like that's up for debate, but what's your opinion? You know, I think I don't think we're going to have like hyperinflation. I don't think inflation is going to be like 10 percent, but I think it's going to be higher than what we're used to. And I think real wages could fall in a slightly. That would be problematic. Yeah. So people are going to feel hurt. But it's not going to be as obvious as, oh, my God, I don't know what things are going to cost the grocery store tomorrow. And as I said, that could weigh on things.

That also could increase interest rates, which might mean we can't afford to do these sorts of things in the future. Nick Colas took the July CPI, which came out yesterday. We're taping on Thursday night. Took July CPI, pulled out used cars and energy. 2.3% headline, 2.5% core. It's not inflation. Yeah. I mean, that's not like...

So arguably, it's transitory already. And then a lot of what could dictate the future path of that probably is shelter costs. Like our rent's going to keep going up, our home price is going to keep going up. Yeah, but we also see wages going up. So wages don't go back down. But let me ask you this.

But they don't expand at that same rate forever either. If we're seeing a lot of the wage gain at the lower end, and those are people that are pumping money into the economy, right? They're spending their money. Isn't that a good thing? Like, shouldn't we want that? Obviously, nobody wants the potential inflation associated with that. But couldn't that be very good for the economy?

Could be. You know, especially, as I said, if they have more security, if, as I said, they're more financially secure, that's really good. But as I said, we just don't know. I mean, it could just sort of feed up the whole wage cycle. And we could, if people, if everyone's getting paid more than you do have inflation, I think what makes inflation is expected changes in expectations. So if people become convinced the idea that inflation is higher, it becomes self-fulfilling. Okay. What have you guys been doing on inflation lately? Exactly that.

It's used car prices. I mean that's like such a huge component of it. Why does anyone think that condition is going to persist past the summer? Well, used cars, it already stopped. Well, it stopped at least temporarily. They were up like 0.2% after being up 10.5% a month prior. Right, right. So this also relates to, so University of Michigan does that big gigantic sentiment survey.

And one of their sub, like they have a subcomponent thing where they compile sentiment towards, consumer sentiment towards buying houses, durable goods. And I think cars are the third part of it. And basically there's this outrage over how expensive everything has gotten. But these are all things that – I'm sure people – there are some people who are urgently trying to buy this stuff because they need it for work or whatever. But these are all things that can be delayed. It's not like –

Unless your lease comes up like Josh's did. But also you buy it once. If you buy a used car in 2021, you might rage at a survey how much you had to pay for it. You're not buying one the next month. Right. So it's hard to say that that one high price of a car that you bought affects your expectations about everything going forward. Maybe it does, but I think for most people it probably doesn't. So I'm in camp transitory.

I've been, I've been for, for a while. Where are you? Do you have like a strong opinion or not really? I think it's going to be higher than it was before. I don't think it's going to be, as I said, I don't think it's going to be more than 5%. It could get up to three or four though. Isn't that what the Fed has been trying to do though? Yeah.

Well, no. I think they don't mind it being like 2.5%. They're like, our target is two, and 2.5% is good. I just watched them spend 10 years promising inflation. Here it is. Oh, we have an economist in the house. You, Allison. Uh-huh.

Could you just school us on the real impact of buying all the mortgage-backed securities, how that impacts the housing market, if at all? Well, definitely like it makes mortgages cheaper, right? Because, you know, it's less risky to lend. So that's long and short of it? Yeah. I mean, it also probably makes lenders less sensitive to risk. So it's undeniable then that all of that activity that the Fed is – was it $40 billion a month buying mortgage-backed securities?

I think they're still doing it too. Yeah, still doing it. It's undeniable that that's having an impact on prices. Yeah, because I mean what's the mortgage rate right now? Like 2.9%? Still very low. Still so low. Right.

It's crazy that like our parents paid like 9% of mortgage rate. Can you imagine? Or higher. I know. All right. So do you view that as like a settled argument? Like, yes, there is home price inflation and it is being driven by the Fed. And why are we making it more complicated than it has to be? Well, there could be other factors.

Well, demographics. I think it's as much demographics as anything. Yeah. I think low mortgage rates are a huge part of it, but there's other aspects to it like demographics demand. There are what, 70 million people my age looking for houses for the first time, so that'll have an impact. How old are you? 36. There are 70 million of you around that age. Yeah, I think that's right.

I think the most common age in America is like 30 or 35. Okay. You wrote something, Allison, about universal basic wealth versus universal basic wealth versus universal basic income. And, uh, I feel like you put yourself at great Twitter risk with a, with an opinion like this. So I want you to defend it.

And, uh, no, I'm just kidding. Uh, this is you. The strange new policy idea coming from Silicon Valley is universal basic wealth. It's like universal basic income, except you get a pile of money once, twice, or several times to build your bank balance. And then you're talking about how it's being proposed by like Eric Schmidt from Google and Evan Spiegel from Snap.

And they want the state of California to basically give people money, which automatically gets put into startups, which I thought was funny. I didn't read what they had to say. But I don't hate the idea as much as you do. I do like the idea of if we want a level playing field, not level, all right,

we can't give everybody the same outcome. But if we could give people, get people closer in terms of like where they're starting, isn't that a more fair world than what we have now where people born into wealth almost can never fall behind and people not born into wealth have a very difficult time catching up and most of them can't ever just because of compounding and other advantages. So why are you against this? Well, I'm not – I also would like – Why are you such a horrible person?

That's what I really want to know. I also would like to level the playing field. I just wonder if this is the best way to do it. Because, I mean, just the details are so vague to me. It's like you're giving people a pile of— What's so hard? Here, you own a startup. Every baby should be an angel investor.

Every baby is an angel investor now. And we pick the investments for them. And Eric Schmidt sits on the committee. No, they go on AngelList. And the representatives select the most attractive investments. investor now and we pick the investments for them and eric schmidt sits on the committee no they get they go on angel list and uh the representative select the most attractive it was very clear it goes through uh vc professional well investors of course it does yes how could it not these people who never lose money for anyone um and get the babies be playing to paying two and twenty is the important thing i I'm sure.

So it's almost like the plot of a movie. It's obviously ludicrous. But the general idea of baby bonds. Exactly. Let me quote you. You said, that seems suboptimal to me. So many models of life cycle savings and public finance are exploding in my head. Because you're really putting a constraint on people. You're going to give people money.

You have to put terms in on when they can spend it. Otherwise, you're just giving them like a transfer like we did last year. What if there was like a credit card use it or lose it type thing? Like to your point. What do you mean use it or lose it? Like you spend this money in 90 days or it vanishes. Well, what are you trying to achieve? Just get people to buy more stuff?

Yeah. Consume. That's what we do. Okay. But where does that money come from? Our kids.ume. That's what we do. Okay. But where does that money come from? Our kids. Yeah. What's the problem? Grandkids. They're angel investors. They'll be fine. Wait. So, all right. So you're saying that the idea is okay, but this doesn't, this doesn't sound like it's actually going to work because there's a mismatch in timing.

Well, I'd prefer to have policies that are more targeted, right? So there's no doubt about it. You have an advantage if you have parents who can pay for your education and can help you buy your first house, right? So why don't we just have policies that target those things for low-income people rather than giving people this pile of money and put all these strange restrictions on how and when they can spend it? Wouldn't the counter to that be, we've tried that, making everybody a homeowner and that blew up? Like wouldn't the counter be like almost like we have to just give people this wealth and then lock it up. Isn't that when they're old enough,

they can use it. But isn't that worse politically? Like it's just more handouts for people that whatever. Well, they're all handouts. Well, so maybe this is a good point to click on because when you said, where does the money come from?

I think that we've learned that we have much more capacity to spend money than we thought until we don't. So, but I guess that's, that's we have much more capacity to spend money than we thought. Until we don't. So, but I guess that's like the $10 trillion question. Where is that line? Yeah. No one knows. And I mean, a lot of it depends on the global economy.

I'm a little nervous that, you know, we kind of had that savings all those years where interest rates just trended down, down, down, no matter how much we spent. But that was because we had a lot of foreign buyers of our debt. We don't so much anymore. Now we have the Fed buying our debt. That's the only thing keeping the wheels on the bus, though. So you've seen this chart of China and their foreign purchases of our bonds, and that's going down a lot. And it has not impacted interest rates in any way, shape, or form.

Because the Fed is buying all the debt. Right. What if inflation becomes an issue and they have to start selling bonds instead of buying them? Can we have inflation without interest rates rising? Like, is that, like, you're a model person. Would that break your brain? Well, so an interest rate, a long-term interest rate is composed of, you know, people's, whatever, time preference of money, like how much they want to save in the future, their expectations of future rates, and a term premium, right, which is current, their inflation expectations and the risk around inflation. So if inflation goes up or people are worried inflation is going to become

more risky, in theory, bond prices could go up, but those other components could go down. So it could moderate it. You never know. And the other thing that you talk about in terms of where interest rates are is there's so many price insensitive buyers. So maybe that just breaks some of the models that we all learned about. Like banks who are required to hold it. Yeah. I mean, effectively, I mean, this is what they call financial repressions. Like we're forcing banks to hold a lot of bonds and then we're – the Fed is buying a lot of bonds and that keeps rates low.

I think you were saying, was it you? You were saying like 60% of the people involved in the treasury market are not, they're not traders or expressing a view on where they think rates are going. They're like pensions and they have no choice. They have to take a certain amount of risk and that's the only way to do it. Yeah. I mean, I guess more in the UK where they're actually required to hold a lot of gilts. Right. Less so here, though.

I mean, there are probably a lot of pension funds aren't de-risking as much as they used to just because it's so expensive to do so. Well, like, so you have these big pools of capital like a pension, for example, where they hit their target already. The stock market has gone – the stock market, like, just doubled off the low. So, of course, they would go back to treasuries. Yeah. This may be a non sequitur, but people talk about, like, forces people out into the risk spectrum, which is like pretty much undeniable. But what's interesting is that the demand for fixed income is still massive. So bond ETFs added $17 billion in July, which was their 32nd month out of the last 33 with inflows.

So no matter how low rates go, there is still demand for bonds. Well, also, I mean, we all do retirement target date funds. I mean, all these people are automatically going to bonds. They're huge buyers. There's like trillions of dollars in there. Yeah, and it automatically puts people into bonds no matter what the prices are. So trailing 12-month flows into fixed income, $210 billion.

That's a lot of money. Yeah, so effectively- Target date is like 529 plans, 401k plans, all types of insurance products. They're not like, ooh, this rate looks juicy to me. It's just automatic buying into that pool of assets regardless of the rate. But it all makes me uncomfortable because it's all like something's like Argentinian about this, right? Like we're counting on rates staying low because of policy.

Either the Fed – I mean because even if you look at it – Wait, wait. That's provocative. Tell us why it's Argentinian. I mean, because even if you look at it, that's provocative. Tell us why it's Argentinian. Well, I mean, keep in mind, other than Sam, the rest of us in this room, John, me, Michael. I'm literally like quitting this. We don't know anything.

John, John's family's from Portugal. And Mike and Michael and I haven't studied this stuff. So we don't know from Argentine stuff. It's not that bad. But I mean, roughly like you run up a lot of debt. Look, you know, you don't know shit about this, right? Allison, tell us. You run up a lot of debt and then you require people to buy it, which is even with target date funds kind of the case because they're QDIA. If you want to have, if you run a 401k and you want to have a default investment, which you're required to have,

it has to have all these qualities and target date fund fits those qualities. So it's effectively, it's policy forcing us to buy more bonds. Okay. So is this, is this, is this something that we could grow our way out of? I always hear people say grow our way out of it. We did.

We did. And after the world war two, yeah, it's possible. We inflated the debt away. We grew out of it. So because GDP is, you never have to pay it back.

You mean it just shrinks as a percentage of the size of the economy. Yeah. Cause you, as long as your growth rate has to be – you're OK if your growth of the economy is bigger than the interest rate. Right. So – I get the fears over inflation because once you have it and once you've experienced it, you never forget it. And then once you have it, it's like obviously too late at that point to really fight it. So I get why people are so paranoid. But it just seems to me like we're going to be okay.

Well, Argentina required, Argentina was on the hook and they required the kindness of strangers. They needed other countries and the banks in other countries to buy their shit. We don't seem to need that. So Mike's earlier point about like China not being a big buyer of treasuries anymore.

You know, a lot of people like politically would say, oh, we owe China all this. They don't even want the debt anymore. They were using that for their FX. Well, they were also monetizing their debt. They also I mean, they were more dependent on foreign countries than we were, but they were also said effectively requiring people to buy their own debt, too. So so the so the Fed is monetizing the debt. Nobody seems to mind. Both parties are benefiting because they don't have to make any hard choices. Both parties seem to be behind. They just say yes to everything. Both parties seem to be behind MMT.

Like, is that? They just won't say it. Well, the Republicans definitely won't say it. But that's how they're behaving. Yeah, well, I mean, these things go on until they stop, though. I mean, that's the thing. It doesn't mean it's going to end in tears, but it's certainly a risk. Stephanie Kelton was advising, like like the Biden campaign, I think.

Really? I think maybe I might have that wrong. No, probably. But it's like it's the easiest answer on earth. You never have to make any tough choices or piss anybody off. But the thing is, it's like, I don't know. It's never made sense to me because like the Fed doesn't control the entire yield curve. They control the short end of the curve. There's the whole long end of the curve. And she seems to talk as if bonds are like just – there's just one yield curve.

Well, she would not – that theory would not have the popularity that it has now if it were being proposed 25 years ago. But I think what I find attractive about this idea is that we could spend more than we think, but we don't just spend to spend. We could say, if we're doing a giant infrastructure project, you go to the steel mills and whoever, whatever it is, and say, we're going to spend this amount of money. Is there capacity? Is spending this much money going to cause inflation? And I just think it's a better way to frame the argument of how much money we could actually spend versus one side saying yes and the other side saying no. You an MMT guy?

No, but I've listened to a couple of podcasts. But yeah, that seems to be the argument, right? But how do you measure that? How do you know what the capacity is? That's the thing. Like inflation and interest rates, I mean, they're market variables. Like they're unpredictable. But at least you could talk to the producers and say, like, we want to do X.

Can you accommodate that? Yeah, but, like, that assumes that we do policy based on economic reasoning and not political ones. Well, yeah. I mean, that's it. Once we go into that world, everything's better. Yeah. That's mic drop, Allison. You're right.

So you don't have to believe in MMT because the people making decisions do, even if they won't call it by its name. And I don't want to say that word five times because it's like the Candyman. Like it will appear. Like Colin Roche will appear behind me and strangle me. Are you seeing the Candyman? Are you going to see the Candyman? No.

Too scary? I don't like scary videos. But the problem is that this is, I mean, I don't really fully understand MMT, but from what I understand, if you do have this, so right now interest rates are low largely because the Fed is buying a lot of bonds, right? What if we have inflation and they have to stop buying a lot of bonds? That's scary.

So MMT assumes we're just going to raise taxes in response to this high inflation environment. I mean, that's not really going to happen. Historically, that has not been a good answer to inflation. But what if interest rates are low because economies are maturing and they're low around the globe and they have been for much of the last 10 years before this? But not before that. I mean the economy was pretty mature in the 70s. That's what I wanted to ask you. What if it wasn't?

Like what if it really wasn't? What if corporate America was dominated by companies with 5% profit margins? They were like smelting copper. Like these are the biggest companies in America. The economy now is structured very differently. It's all about intellectual property, networking effects, businesses that are born scaled effectively. Like this is a very different economy. And maybe one of the reasons why interest rates are high throughout history is a lack of trust that you're going to get your money back as a lender.

And that gets eliminated by better technology. Look at all these fintech companies. People are giving Microsoft money for 2%. Yeah. So what if we're in a situation where you can lend at a lower interest rate with more confidence because you've got better data on where you're really taking risks and who's not going to pay you back. Isn't that like, isn't it reasonable to think that technology is also driving a willingness on the part of creditors to lend at lower rates and therefore the natural interest rate

would be lower anyway, regardless of what the Fed is doing or whatever. That could be true. But I feel like every time we tell a story like that, historically, then like something horrible happens. When you read the S1, though, of these new lenders coming along, like whether they call themselves neobanks or whatever, fintech, like that is the premise of why their insurance products will be better, why their lending product will be better, because we're just smarter now. We have better technology. We know who's got a better chance of defaulting versus what we would have known 10 years ago. Yeah, but didn't even 10 years ago we said that about the 10 years before and then the financial crisis?

Well, I hope you're wrong because that's the premise of about a trillion dollars in market cap right now. Because you can never be 100% sure about anything. And that was like why bar models and all that stuff broke down and the seat in Tullibs. I don't think it's lemonade. There's another one of these fintech insurance startups that came public. They're basically saying we're hooked into somebody's phone. We're watching them drive around.

We know what the speed limit is on the streets. The phone is telling us how close they are to the speed limit via GPS. You can't fucking tell us that we're not smarter at pricing insurance for a motorist than we would have been 10 years ago. They don't know a Mack truck's not going to drive out into that car. I mean, that's fine, but neither does the traditional insurance company. What they do know is who rolls through stop signs. They even know who's looking at their phone because they're in your phone.

They even know if you're smoking like brisket in your backyard now, right? That was another one of these S1s for one of these grill companies. There were these three or four grill companies that filed paperwork to go public. Smart grills? Yeah, smart grills. Don't track my grill, bro. I don't want a smart grill either. That's the thing now.

Some of these grills have chips in them so that they know exactly what kind of kind of wood chip you're using to smoke you know and then what do they do with that sell you sell you bags of that wood chip i think i'm maybe that's what they're doing they ought to deliver it uh i just i i feel like it could be partially true but i agree with you if we all get too confident that data is the answer to low prices, low rates forever, probably we'll end up taking more risk than we otherwise would. Because data is always inherently from the past used to predict the future. So it's always flawed. I only use future data. Can we pivot to China?

What do we do? What do we do with this mess? This is not going to get that. Let's start with this. What do we do with this mess? This is not going to get better. Let's start with this. The relationship between China and the Western world, purely from a capitalism perspective, it's not going to get better, right?

No, and I haven't surprised anyone surprised. about this. The stock market is not panicked about what seems to be a new iron curtain coming down, almost mutually agreed upon, where we don't want their companies listed here anymore, and they don't want their companies listing here anymore, or complying with our listing. And now pretty much every deal is canceled. You're not going to see any new ones. But there's, what was the market cap amount in chinese stocks do we get that information carry on i'll get a few in a sec okay so let me just read you this from uh i guess this is wall street journal uh some market participants believe china is trying to direct capital and human resources away from internet companies into sectors that will help the country

become more self-reliant they They are trying to reach a new equilibrium because it seems capital flows were not in line with long-term top-down priorities. So basically that's Beijing telling the stock market, I guess, don't invest in these companies anymore. We don't view them as being helpful to society. Invest in these companies. Is that unprecedented or do we see that around the world?

And we do it here too. Not to the same extent. I mean, East Asian countries have always, you know, engaged in a lot more industrial policy than we have. But in some ways, I feel like this is, you know, I don't think there's going to be a new Cold War. We're still going to trade with China. We have too much, our economies are way too integrated to just completely decouple. On the other hand, you know, this actually, I think, is just bad for Chinese innovation. On the other hand, you know, this actually I think is just bad for Chinese innovation. Innovation doesn't happen where you expect it does. Like there could be some video game technology that someone creates in China that ends up

having this profound impact on all our lives. They don't want it. Like Ant is an offshoot of the online marketplaces business. They needed a way to pay for goods that was seamless. And then you end up with the biggest fintech company in the world. And Beijing basically says, no IPO. We don't want foreign money invested in this thing. We don't want the data being shared, whatever.

They don't seem to want innovation. They seem to want to grasp back. So they're never going to be like a serious, like economic leader. Okay. If you're not, if you're not innovating, you're not a major, like you can grow based on the size of, you know, your population and how much capital you throw at people, but you're never going to, it said you're never coming up with that intangible capital. This is worse for them than for us. Yeah. I think like, I think this for me really, not that this was keeping me up nights, cause it doesn't really bother me if that were true

either way, but like in terms of worrying that China was going to overtake us, at least in terms of per capita terms, I think we can worry a lot less about that. All right, here we go. Check this out. So this chart is showing the green line is the MSCI China index. Obviously, you know, it's getting the shit kicked out of it. The pink line are US domicile, China specific ETPs year to date. These are the flows. ETPs are exchange-traded funds. Right, so people are going, investors are going nuts. They're not relenting. They're buying.

They're buying. John, we have a few other charts here. Those cumulative flows to China? Yep, China-specific. So this next one, this is as of the end of July. And these things were crashing then. So look at KWeb.

The flows into this, Chinese technology stocks are going gangbusters. This is as prices are crashing. What if this is just automated rebalancing trades? That's not on. Look at that, dude. That's vertical. The purple line is K-Web.

That's vertical. That's our friend Brendan's China internet ETF. Let's put that one aside. Look at FXI, too. That's nothing. That could be rebalancing. That's Chinese companies trading on the London exchange, like Chinese blue chips, Hong Kong.

These are foreign investors? These are, this is US. These are US products that US dollars are going into. And we've got one more cool chart. This is all from iShares, by the way. I'll throw this up on the blog. All right. So what you're showing here is,

let's look at the left-hand side. So emerging market mutual funds are $800 billion. The China specific ones are tiny, which is super interesting because China is like a third. So I guess people are getting all their exposure to China through the indexes and they're not allocating specifically to China in a big, big, big way. People are, all right, US investors are buying the asset class emerging markets. They're not bulled up specifically on China to begin with. Right.

Okay. So they're getting a lot of what, South Korea? Like what are they getting in these products if it's not China specific? No, no, no, no. What China specific is, you see the red and yellow on the bottom? Yeah. That's people that are allocating

specifically to Chinese ETFs. So K-Web is in that column. So the purple line shows overall, it's 4% of AUM of emerging market assets. 4% is in China specifically. Here's the problem with your US investor then. You have this diversified portfolio, you own ETFs, you have foreign stock exposure. A lot of it is China. China's 10% of the all-country world index, XUS, right? Yep. It's like a lot. It's big. Is it bigger than every country in Europe individually? Oh, yeah. The only one that's

bigger is Japan. Maybe I should be rebalancing. Yeah, maybe rebalance. I have a lot of emerging markets. I mean, we're all speaking here like, this is over. I think it's just starting. I'm not Ian Bremer. Over in that like it's time to get out of China. Like it's not like some kind of faint where –

This would be a great buying opportunity. No, it's risky. I think it's super risky. Like it doesn't mean it's going to go badly, but like there's more risk around it. There's like a trillion dollars in the US, not just individual investors, but like every major asset management firm has money in u.s not just individual investors but like every major asset management firm has money in china and they are like saying publicly they don't like the uh structure of these things going public as shell companies in the caymans and enlisting a ticker and saying it's representative of alibaba or all the other you know there's 50 other so 10 So Tencent went from 100 to 55.

Baidu went from, let's see, 355 to 160. So these things are all cut in half and worse, or a lot of them. So how is this, like, I'm trying to understand, like, what the difference is between this versus what they teach you in emerging markets investing 101. Like the first day, the first- Geopolitics. Yeah, geopolitics and regulatory risk.

Yeah. So- So here it is. Well, so if we believe that risk and reward are tied, like this is what it is to invest in emerging markets. Right. It's part of it. The problem is though, you've had no reward.

That's true. In the last 15 years, emerging markets have sucked. It's been a minute. As an asset class. So it looks like if you're just looking at trailing performance, you're taking all the risk with no premium return for it. Tough. Why would you, you know, it's so maybe that's the opportunity and maybe that's why all that

money is flooding into the products. So I don't know. And I think also China in terms of geopolitical risk is larger because like if you're a smaller country, there's only so many crazy things you can do. And there's not enough stocks for people to buy a lot of. Yeah. So this is different. Yeah, because it's the sheer size of it.

Like, this is massive. So I'm surprised that it hasn't been, like, a shock systemically to just investors generally who are watching this go on and they don't know what's going to come next. It's amazing. Especially the way people have been talking about China over the last 10 years. Remember when people used to always say

their currency could become the global reserve currency? I was just saying- This sets that back, right? I don't know why anyone ever believed it to begin with. It's always going to be manipulated. You can't have a global currency. I mean, I guess you could- Not like what we do here, though.

No, because it's pure price. It's pure market price. It's all manipulated. It's how out loud are you manipulating, right? Yeah, we're a little bit less obvious. All right, so your conclusion is strong buy Chinese equities. Allison, just to be clear. Hey, Sam, are you getting a Dow 36,000 hat, by the way?

I've already got one stitched in. It's sitting somewhere. How far away? Atta boy. 35.5. We should get those. All-time highs. We should get those on the show. Next week.

We don't have much time. We do not have much time. All right, let's pivot. Let's get into this social aspect of physically going to work. Sam, this is you. Yeah, I toss that in kind of last minute. I mean, it seems... I agree with it.

Yeah, I mean, you know, so this is a new survey from ADP came out. And, you know, it basically reveals a lot of, you know, I think what people have already suspected, that there are certain components of being in an office that people find advantageous, like whether it's, you know, talking to the boss or, you know, those sort of, you know, random moments where you're brainstorming with someone and someone comes up with a great idea.

But I think something that isn't getting talked about enough is actually just that social component of like, maybe we're not talking about work, but we're going to talk about movies. And it turns out that we like the same movies. We're going to go see a movie. It's team building. Yeah.

You like the people that you work with. Right. And like, you know. Hey, on the plus side, sexual harassment, way down. Yeah, I mean. It's really hard to do that on Slack, it turns out. Right, yeah. I mean, you know, and just to sort of spin that a little bit, too.

But think about how many people met their spouses through work. My parents. You know I shouldn't even be alive? My parents met in the 1970s at Burlington. Not the coat factory, but it was like a garment center company. They made fabric. It was very high tech. So like my mom was my dad's secretary.

Like my parents would be arrested now, right? If they like tried to get married that way. So I don't know where I'm going with that. I think the message is – you feel me on that though? Yeah. Not, not everyone is sexually harassing each other. Like some people are just most people. Yeah.

I'm on Twitter. So not, not, not, not to sort of, you know, downplay that, but I'm trying to play up like, you know, these actual normal relationships that, that, that people form in work. And, you know. For people under 30, I think it's very difficult to climb the ladder without being in the office. I don't even know how you accomplish that. Yeah, because you need some senior person to really invest in you. Recognize, like, your work.

And, like, I know I got ahead various points in my career where some senior person, like, took a bet on me that I didn't deserve. Right. And that person is Gene Fama, Nobel laureate, right? Am I lying? No, no, no, no. It was more Merton, but, uh. Merton?

Yeah. Did he win a Nobel? Yeah. Okay. So good enough. Good enough. But, um, but yeah, I mean, how are you going to get that senior person to invest in you if they've never met you?

Right. Cause that, that all involves trust too, right? And beers. And beers. That's the only way that you build that trust. Right. Exactly. Like, you know, that's, you way that you build that trust. Right, exactly. Like, you know, this is what you get when you interview people for jobs, right?

It's like someone could be amazing on paper and have a 4.0 and like, you know, understands everything about your subject area. And then you meet them, they're a close talker. Right, and yeah, they become a close talker, in which case, you know, working from home is actually a great situation. You know why this is so true?

Every business book you read about like CEOs who built great companies, like their superhero origin story is always the fucking mailroom. And they were sweeping up late one night and somebody said, hey, come have a drink with me. Or they were bringing somebody coffee. Like that's everybody's story of how they gained a first rung of the ladder. How does that take place? If 75% of office workers are not showing up for prolonged periods of time, think about how many missed opportunities for careers that we're not even thinking about the impact of that. But so what if it's not one, one extreme versus the other? Like I'm in one day a week and I'm sure there's gonna be a lot of companies that are in three

days a week. Like, I don't think it's going to be necessarily all or nothing because you need that face to face activity. Yeah. But so refute that a little bit. Like I come in the same day as you, Alex is here, Cameron's here, Dylan's here. I'm like, you know, high five from across the room. We're not like really working together.

And it kind of sucks. I wish it were otherwise. But I mean, it's definitely sort of, you know, on a scale. It's on a spectrum, right? Because there's people who, you know, aren't going to go back to the office for months because they can work from home. I mean, that's very different.

You see Google's employees agreed to a pay cut if they could stay home? Oh my God, yeah. Would other companies offer that choice? and what would the results be? Probably the same, which is maybe not great. Maybe – I don't know. It's too hard to have a good culture. I mean Google's culture is –

I don't know what my employees would say, but most of them are remote anyway, so it's a little bit different. Are they still going to give you such good food and games if everyone's working from home? That's a good question. I mean, what's Bloomberg's snack cabinet like these days? Well, that's, isn't that, that's hilarious, right? It's like, not only are they

paying their employees less, but now they don't have to pay for that commercial office space. They don't have to pay for food. And that's where productivity comes from. There you go. And then net profit margins explode. All right, I threw this in

at the last minute. And then we'll move on to soapbox. Ben and Jen are going to buy an $85 million house in Beverly Hills. I was just blown away by the pictures of this house. John, what do we have on this? Already they're committing to a house together. They started dating two weeks ago, so it makes perfect sense. I don't know if they're really going to do it, but this is the house they're looking

at. Yeah. What is title insurance on that thing? What do you do with an $85 million house? They're not like young if they're really going to do it, but this is the house they're looking at. Yo, what is title insurance on that thing? What do you do with an $85 million house? They don't have young kids they're raising. Man, that's sick. Is this the sickest thing you've ever seen? Good grief.

Wait, slow down. That looks like a motel. Those are all guest rooms. I like how their relationship habits are the same as they were 20 years ago. Like, yeah, very subtle now. They learned a lot same as they were 20 years ago. Like, yeah, very subtle now. They learned a lot from that first round 20 years ago. I could relate to that, yeah. Dude, that is like one of the most beautiful houses I've ever seen.

I mean, you know, when you have that much property, you get privacy. Oh, my God. Look at this. That's the foyer when you first walk in. Oh, my God. And Affleck's just passed out on that couch. He's playing poker until 4 in the morning. Look at that bar.

Jen's doing his laundry. That's the bar. God, there's cocaine on the coffee table. This is where J-Lo just likes to kick back and answer fan mail. All right. I guess what do you think it costs to run a house that's $85 million? And that's the scale of what we just looked at. What do you think it costs to run a house that's $85 million?

And that's the scale of what we just looked at. If you had to like think about taxes, insurance, security, maintenance. At least a million, right? Way more. A year? Way more. Yeah. Staffing alone, way more.

You can't have no staff there. So to your point, it's nice that they're taking things down a notch. They've never been a low-key couple. No. That's going to go well, by the way. All right. That's what I wanted to do there. All right. We're going to go to Soapbox.

I want Michael to go first because he's going to talk about infrastructure. I think I agree with you. I'm an idiot. I put this article in the doc and I forgot to read it. But I think people – I don't think people pay enough attention to infrastructure. Yourself included. Yeah, exactly. It's ironic.

But what – I mean how much money are we spending now? We don't know yet. A trillion, maybe 3.5 trillion more. But we're going to actually get something for this? No way. Maybe pave roads and like good – This is not getting out of the house. The way it's currently drafted, right?

The 1 trillion or the 3.5 trillion? Pelosi is going to want to add another 2 trillion on and then add all these tax tax hikes to, quote unquote, pay for it. It's not ever going to happen. Right. I don't know. You look exhausted just thinking about it. I mean, I get it wasn't like as well as like I don't quite understand all this political stuff, but it's like the one trillion might pass. But then the Democrats are going to do the three point five through reconciliation. The Republicans don't need to participate.

So now it's like they're not acting in good faith. I don't know. Yeah. Why do you think we need to pay more attention to it? Because of how much money or because of what its impact could be on the market? Or do we need more roads? No, I'm just talking about like fixing our shit. It's been a long, long, long time that we've been having this conversation.

Why aren't we investing in our country? Bridges, tunnels, roads, whatever, like high-speed rail, all that sort of stuff. Like, let's go. Why not now? Well, if you could borrow money at these rates, which they are, what would be a better use for it? And Allison has already promised us that rates aren't going up. So like, why not now? I guess it depends on how well we spend it. You know, are we going to build bridges? Let's assume we waste half of it. Isn't the other half money well spent? I guess the plan for the rails isn't to give us high-speed rail. I think it's just to make Amtrak nicer.

So I'm down for that. I'll take it. And also, I don't know if you read, it's circling around Twitter, so we know it's credible, that if you want to build a good rail, you need to bring in foreigners because they know how to build rail better than we do. That's a deal breaker for half the country. Well, it's also a deal breaker with the bill. So that doesn't sound like it's stimulating the American worker to me. Well, yeah, the bill has all the Buy America provisions in it, so you can't do it anyway.

Do you see a lot of research that infrastructure is priced into stocks yet or it's not priced in? What's the consensus say? structure is priced into stocks yet or it's not priced in um i saw consensus i you know every i don't know maybe michael you can talk about this too but every time something makes progress you see industrials and materials like tick higher a little bit they made all the time today right so good although i did see one strategist say that it is not priced into stock so well there you go oh he's the maverick the xli the industrial sector spider, new all-time high today. Yeah, I mean, you know, I guess, you know, every time you hear about stuff like this. Oh, look at Alcala.

You wonder, like. Guys, I mean. Alcala looks. Does this tell you that we're going to start to build? We're going to build. They need to put Alcala back into the Dow. Great call. Somebody once joked.

This might do it. Somebody once joked that Alca was the Iowa caucus of earnings. Remember they used to go first? Yeah. Yeah. They were the first cause they were double a and they missed every time. Worst business on earth. That stock is on fire.

Um, all right. Uh, soapbox, let me go. I've been to many outdoor parties this summer because of how popular I am. And people seem to repeatedly make the same mistake. They're putting out cheese plates in August.

It's a hundred degrees. They go to like Whole Foods. They buy nine types of cheeses. They probably spend like a lot of money. No one's touching it because within five minutes, it's all sweating. That's such a great observation. Cheese sweats. Cheese sweats.

Cheese sweats. It's disgusting outside in the sun. You wouldn't put oysters in the sun and let them sit there for four hours and wonder why no one's eating them. So what would you do instead of – Sam, you're probably the best person to answer this because you know, like me, you have good taste in food. What should people be doing with these plates if they're not putting cheese on it? What could sit in the sun that would be a good substitution? I mean, I'm guessing soft cheeses probably don't sweat as much as hard cheeses. Yeah, cheddar looks like Patrick Ewing. And the foul line.

And the foul line. Cheddar is a bad choice. All right, so it's less noticeable if you do camembert brie. Yeah. Yeah. Okay. Yeah. Something like that.

Because they're born sweating. Yeah. Yeah. The consistency is already mush. If no one's eating the cheese, then yeah. No, but no, I'm already solving this for you. Nobody is. Yeah.

Within five minutes. What about a giant bowl of ramen? I mean, well, I guess that's what it really comes down to. Like, you know, what do the people want? You know, did this Chris Venn did this? I knew where you were going with that. No, I didn't mean to like just blow him up because I've seen this all summer. They're just throwing out pounds of cheese.

Don't put it outside. Yeah. Right? So I really wanted to get that off my chest. It's been bothering me. I feel like how little common sense do people have? Sorry, Chris. Allison, what's on your mind?

I guess I haven't been here. Is it cheese related? No, it's not that good. All right. Not nearly as important. I guess I haven't been here in a while. I guess it's what I've learned this year is my new cause is that we need more both financial and risk literacy. Okay.

Who do you want to deliver that? Elementary school teachers? Every level of education, it should be in there. Okay. We have to start with the educators then. Yeah. Because I don't think they're particularly financially literate from what I've seen in my career. It's also shocking how poorly people understand probabilities. What should we be teaching people? Not stocks. What should we really be teaching them? Like basic saving or personal finance or how to write a check?

Compounding, things like that. Yeah, also credit. How come we learn how to like sew a stuffed bear, but we don't learn like basic financial literacy? I don't know. You know, in financial literacy – It's easier to teach the bear. Has gotten a bad rap, partially because bad financial literacy is ineffective. So people look at those studies and say it doesn't work.

Also, just like a general culture, people are sort of skeptical of personal responsibility. What if I told you there's an explosion in financial literacy being taught, but it's on TikTok? And as stupid as that sounds, it's not that terrible. Like when you get into one of these,

and you're on TikTok a lot like I am. Yeah, some of it's good. Some of it's horrific, but some of it's really good. Yeah. Like, like it's well-meaning people like really explaining, but I think we need it before people are 21 years old. Yeah.

Well, I mean, when they're 10 and they talk is like, I think that the challenge, the challenge with getting, you know, kids into this is like getting them to understand what's at stake. Cause I remember learning about

financial literacy in seventh grade and some guy from the bank came in and told told us the bank yeah it was literally a guy from the bank it was like i forgot it was like pnc somebody's dad yeah it was someone's dad and like they had a book it was like coloring book and all this stuff but like this was the introduction to wait they brought you a coloring book in seventh grade? I forget. There were pictures on it. I remember very clearly. But he was in here explaining to us compound interest. And he was telling us if you put a dollar in the bank, at the end of the year, you're going to get $1.05 back. And that doesn't mean shit to a seventh grader.

It's like you're going to lose five cents on your way to the bus stop. I think these kids are learning more than we think. My kids are learning financial literacy, but via V-Bucks, which is the currency on Fortnite. My kid knows what to do with his money and how to expand it in the game. He's doing trades. He's learning financial literacy in a way that he would never listen to me if I tried to teach him. So when he asked me for money for V-Bucksbucks i actually mined it less than i thought i would because i know that he's like being smart with his virtual i mean i mean if anything you know growing up you know something that you did learn a lot from was trading baseball cards yes and then

you get the beckett they're doing that too now yeah they're doing that yeah it's crazy right now but uh but yeah you would trade baseball cards. You'd think you'd get value. And then two months later, you'd get the new Beckett. And then you realize if you're up or down in value. Well, they better get really smart because their younger siblings are all going to be f***ing venture capitalists from the moment they're born. So they better catch up now.

So what about all these people who've opened up Robinhood accounts and are learning with actual money? They're learning all the wrong things. They'll learn the right things eventually. But they're learning options trading. Yeah, that's true. Like I just read about somebody who lost a million dollars options trading. Like I mean I think it's fine if people are doing this with a small amount of money, getting more engaged with investing. Most of them are.

That's why it's not a catastrophe. Yeah, like if you're learning – if you're becoming more engaged with stock investing in general and it's a little bit of money on the line, like I think that could be good. It's just, I'm talking to a lot of people who've never invested before who are doing it and I'm like, it's great, but just have most of your money in index funds. Right. And then they like earn 80% in an options trade and they're like, what is that crazy lady telling me?

Yeah. What is she talking about? That'll change. All right. Did we do it? Did we do it? We got through them all? Sam, she talking about? That'll change. All right. Did we do it? Did we do it? We got through them all?

Sam, you have anything? Sam, what do you got? Yeah. So this is a continuation of what I talked about last time, but cyber risk and cybersecurity. And I think this is a hilarious story. I forgot. It was this DeFi platform where hackers stole like $600 million worth of – The numbers don't even seem real anymore. It doesn't...

That's like more money than anyone will ever see in their life. But I think... So that kind of speaks to the magnitude of why cyber risk is so scary, right? Like robbing a bank, you can't run out with 600... Like a couple of guys can't leave a bank with $600 million. Right. You're lucky if there's $6 million in a bank.

Right. And so you apply this to anything, You can't leave a bank with $600 million. Right. You're lucky if there's $6 million in a bank. Right. And so you apply this to anything, whether it's infrastructure or logistics, oil, energy, all this stuff. It's like this is still incredibly scary. And it's like this stuff happens so frequently that we're not even paying attention to this anymore. I didn't even hear about this story. I think you're right. I still don't necessarily care. Whatever.

Yeah, because if you think about the big heists throughout history, like the Lufthansa heist was I think $13 million. It was like global news for a decade. This is like $600 million and everyone's like, oh yeah. They made movies out of it. They made movies out of it.

You're exactly right. I don't know if you remember, but there was some congressional hearing a couple of months ago and they had all the bank CEOs. And I forgot what they were talking about. I don't know what they were talking about. But at one point, one of the congressmen or whatever asked each of them, what's the risk that keeps you up at night?

And every single one of them except for Jamie Dimon said cyber risk, cybersecurity. What did Dimon say? Elizabeth Warren? Yeah, he said politics. said u.s policy okay um but you just wonder what these people are exposed to in terms of like their risk meetings that you know in the middle of the pandemic the things that scares them the most is cyber risk there's a great rom-com where like jamie diamond and elizabeth warren are like en route to like something in Washington, DC and like the plane goes down and they end up on an Island for the next 10 years.

And like they become friends. I feel like that's probably not going to ever happen. They find out that they've been arguing the same thing the entire time. Yeah. That was like the plot of the movie with Harrison Ford and N Hish. She takes, she takes off the glasses and he's like, Oh,

you're like a different person now. All right. Let's go to favorites and then we'll get out of here. You guys had a lot of fun today so far? Yeah. All right. So I threw mine in, Suicide Squad on HBO Max, which, Allison, I know is your new favorite movie. I thought that was so much fun.

Did you watch it? No. Did you watch Marvel movies? No. So you're not going to like it then. But this is not Marvel. This was violent. It's the guy that makes the Guardians of the Galaxy movies.

I've heard it's great. It's actually, I was hearing a review of it that made me want to watch it. It was pure fun, right? I loved it. Fast-paced, violent, funny. It was so different than what I expected because all the DC comics movies were just garbagey. Sam, you would like this. I love Guardians of the Galaxy.

So James Gunn is who I guess Time Warner pulled over to work on this movie in particular. He got 100% creative control. He said, I need an R rating. I need to be able to kill as many characters as I want. I need to pick all

the music. And they just gave him the keys because those Guardians movies are billion dollar movies yeah and like he crushed it he crushed it and he had a great cast he had Idris Elba and he had uh what's the blonde girl's name that's really good Margot Robbie John Cena was funny John Cena he had like I don't I just I if you don't like comic book movies this shouldn't stop you from watching the Suicide Squad on HBO Max. I'll tell you something really personal. The last time I cried at a movie, and this was probably the first time I cried. Suicide Squad 1?

No, the end of the first Guardians of the Galaxy. You cried? Yeah. Wait, how did it end? You don't remember? With higher interest rates? What was the... 12% They the dot plot moved up. Oh, I remember how it ended. What was the... It's like 12%... They raised...

They hiked... The dot plot moved up. Oh, I remember how the tree made himself into a ball and saved him, but he died. No, no, no, no. The one where he opens that gift from his mother. Yeah, that's sad. And then it turns out it was another tape. Oh, shit.

Now I'm crying. I thought those were the best two of all the Marvel movies. Yeah. Like, easily. The two of all the Marvel movies. Yeah. Like easily, the two Guardians of the Galaxy movies. And I wasn't expecting anything of it because I never really paid attention to those comic books. I don't even know what the Suicide Squad thing was until they made the first one, but it was the worst movie I've ever seen. Yeah. So they basically gave this guy a ton of money and leeway.

They said fix this. He saved it. Yeah, it was great. All right, Mike, what do you got? There's a new documentary series on Netflix called Untold. It's about the malice at the palace when Ron Artest and Steven Jackson went into the stands. And I remember watching that live on TNT in college. What is it called?

It's called Untold. It's called Untold. So Jermaine O'Neal produced it. And there is a lot of footage that was not released that is now going to be made public. And I'm halfway through the first episode. I can't wait to finish it. It's great. I mean, they were like throwing punches.

Yeah. So there was one punch that Jermaine O'Neal, thank God, he slipped on liquid on the floor. Otherwise, he would have killed the person. Yeah, that Pistons guy came onto the court. Yeah, and went like this to Jermaine O'Neal. And Jermaine O'Neal just Jermaine just came flying and he slipped. Ron Artest had to change his name shortly after that. Cause his name,

his name was basically as toxic as an athlete's name. But that was a huge deal for the NBA. Like that was a very, very big deal at the time. Where is that? Where do you watch that? Netflix. Netflix.

Oh, we'll check that out. Allison, what do you got? So this is gonna be a little different and I'm not even sure it's good, but it's been bothering me a lot is, uh, the TV equivalent. Um, so it's the bold type. It's a show on free forum about young women working at a magazine and I'm

obsessed with the show. I just watched the final season. Um, because I can't tell what I'm watching. I can't tell if it's earnest or I can't tell if it's a cautionary tale of how socially conscious millennials hasten the demise of print journalism told from the point of view of an unreliable narrator. Wait, is it reality or it's- No, it's a-

It's a series. It's a series. So it's written. It's written. And you can't tell if these girls really mean this or if we're supposed to be watching, as I said, from an unreliable narrator, how sort of young people who are very socially conscious have

hastened the demise of print media. It's not clear. They can't even put a pretty woman on the cover anymore without being in a fight over what is beauty. Yeah. And the girls are like, anyway, they're at a fashion magazine and system writing about politics because this is what readers need to hear. Although like during the Trump years, what Teen Vogue was like, it was like Che Guevara

writing that magazine. I think it's sort of like based on Teen Vogue, but it's earnest. It's like they were doing the right thing, but you can't tell if you're supposed to as a watcher feel that way or supposed to be like, these girls are crazy. Nothing says you're doing the right thing like the audience completely disappearing. Yeah. Like the readers of the magazine just completely going away. Then know you're doing the right thing yeah right well they complain i'm sort of mentally writing fan fiction as i watch it about the meetings that happen when the

girls are in the room because they kind of hint at things like well the readership is down yeah no shit it is maybe maybe because we're doing tax debates uh in in in in the fashion magazine uh all right we'll check that out. Sam, what do you got? I wasn't really prepared for this, but off the top of my head, I'm watching White Lotus like everybody else. That's great. So good.

I could do an hour with you on this. Yeah. Oh my God. I think it's like the best show of the summer. It's incredible. Did you pick up on Uncle Rico? I did pick up. Yeah, really early.

I had no idea who it was. Yeah. I've missed this. The guy with Stifler's mom is Uncle Rico from Napoleon Dynamite. With the football uncle. Oh, you're right. Oh, this show gets better and better.

It's so great. And I'm dying to know how it ends. And maybe if you listen to this podcast, you already know. But it's this Sunday. So you got a prediction? No, I have. No spoilers. I'm completely lost.

Like who's dead? Steve Hassan. Because we've been foreshadowing it the whole time. Sorry. Oh, I think the manager. Oh, no. But why would his body be flown to California or back to America? Exactly.

No. I don't know. That's actually a very good point. I think the – But wait. Because – what's the douchebag with the Cornell hat? He's so good. What's his name?

I can't remember. He looks – Shane? They show him like forlorn watching this body be taken off the plane in the first episode. So I feel like it has to be related to him and we're all supposed to assume it's the fiancé or it's the wife. Or maybe the mom. Yeah. See how smart you are?'re a phd and i'm not who do you think it is you gotta i've no clues no views okay hopefully it's not yeah hopefully it's not one of the kids i was thinking that it could be the the you know the hotel manager but it almost feels like that would be too like generous

to him like He's probably – He doesn't deserve a quick death. I feel like he's maybe the most tortured of all of them. I hope they don't kill one of the kids. That always turns me off. And on that note – See? Hey, John, you did a great job.

How do you feel? I'm feeling great. We don't need Duncan anymore, right? Get rid of that guy. It's me and you from now on, my friend. Productivity. Productivity. Bang.

Bang. All right. And Duncan's in North Carolina planning his forthcoming nuptials, his wedding in English. So we'll see Duncan again next week. John, you crushed it. Good job this week. I want to thank Allison. Allison, where do we want people to follow you?

The known unknowns is probably where everything is linked to that you do, right? Yeah. Okay. So they can, what's the, what's the URL on that? I think it's a sub stack known unknowns. Known unknowns dot sub stack. All right. People will be able to find it. And Sam, you're the Axios markets letter. You're the middle of the whole thing. Yep. Yeah. Just go to Axios.com and you'll find me on one of the drop-down menus.

Axios.com slash markets, I think. Axios.com slash markets. I should know that. You should be able to tell people where they can subscribe to you. It's all linked on my Twitter page. But also, I was going to say, people should follow you on Instagram and on Twitter because you're funny,

you're smart, You have awesome stuff. You put up a TikTok that I said to my friend this morning that killed me. The guy who thinks he's going into his door, but he goes down the stairs. You put that on TikTok or that was someone's TikTok? It was someone's TikTok. Oh, my God. And then you put it on Instagram. Yeah.

You've been smuggling TikToks into Instagram for a while. Yes. Yeah. Yeah, that's my thing. He's my only window. I do it for the people. He's my only window. I do it for the people. He's my only window into TikTok. All right.

So we're all going to check out Sam Rowe on Insta and on Twitter. And we're going to check out Allison on Substack. And you guys will come back sometime? Absolutely. Anytime. How's tomorrow? Are you busy? I'll come every day.

All right. Hey, we love you guys. So great to see you. So great to see everybody. For those of you listening, if you like podcasts, don't miss Animal Spirits every Monday and Wednesday. Make sure to watch clips from this show with Allison and Sam on YouTube.com slash The Compound RWM. Thanks to Sam.

Thanks to Allison. We will see you guys soon. Guys, watch this. Let me see.