Title:   Lowest Cash Levels Ever | Kevin Muir on Why It's Time to Buy Hedges
Show:    Excess Returns (host Matt Zeigler)
Guest:   Kevin Muir (The MacroTourist; co-host, The Market Huddle; ex-RBC institutional equity derivatives)
Date:    2026-FEB-05
URL:     https://youtu.be/TkrFfIdb6i0
Length:  ~1 h 10 min
Note:    Auto-transcript, timestamps mm:ss. Saved for personal study. Garbled names: "Kevin Weir"=Kevin Muir,
         "Bruce Cobner"=Bruce Kovner, "Leanne Saunders"=Liz Ann Sonders, "Dean Kernut"=Dean Curnutt,
         "Worsh"/"Borch"=Kevin Warsh, "Stanley Dreen Miller"/"Ducken Miller"=Stanley Druckenmiller,
         "Harold Ham"=Harold Hamm, "Warren Moser"=Warren Mosler, "remimi"=renminbi, "Cullen Ro"=Cullen Roche,
         "spoos"=S&P futures, "FXV"/"FX fall"=FX vol. Fillers (um/uh, tic-"you know", stutters) removed; wording otherwise verbatim.

================================================================

(00:00) And if you look at things like their cash level in terms of institutional investors, how much cash they're holding in their portfolios, it's the lowest level ever. When you look at these things in terms of sentiment, you realize that everyone is all in. I'm just looking at this setup and then you combine that with the fact that gold and silver are doing these crazy things.
(00:21) And to me, you put it all together and it's a time to buy your protection now. Doesn't mean I think that we're going to go straight down from here. It just means that this is an opportunity to buy some hedges. One of the things that I'm really struggling with here is this a healthy rotation into the rest of the market like a broadening of the market where we can see small caps, midcaps, value, equal weight do better.
(00:47) Can we see a nice rotation out of the Mag 7 into everything else? Like almost the immaculate rotation and or is this kind of just the final last grasp as people chase the last few stocks that are still cheap before we roll over? You're watching Excess Returns, the channel that makes complex investing ideas simple enough to actually use where better questions lead to better decisions.
(01:18) And now, co-host of the Market Huddle podcast, the macro tourist himself, old enough to be tragically hip and too young for a tragic hip replacement, Kevin Weir. Welcome to Accessor. >> Hey, Matt, I can always count on you coming up with something witty. And for those who don't know, actually I had this Christmas special and I forgot to give you credit because I went and credit for these things.
(01:39) >> I should have. Although maybe you didn't want credit after you saw it, but >> No, it was really good. Tell them what the Christmas episode was. >> You are one of the most kind of creative people in finance by far and away. >> I'll take it. My wife and my dog back there are smiling right now.
(01:57) So, I appreciate I'll appreciate that. We're going to talk about a bunch of different stuff today. You've been on fire with macro tourist posts, so this is a long time coming to get into this. We're starting with this piece. It just came out before we pressed record on this. >> It's winter. We're buying straw hats.
(02:13) I wouldn't Are you a straw hat guy? I can picture, >> so I need to wear a hat all the time. But no, I'm more of a baseball cap kind of guy. >> Yeah. >> And a toque. Here in Canada, we need to do toques. Do you know what a toque is? >> I think I know what a toque is. Explain you guys call them what do you guys beanies? >> Yeah, we call them beanies or Yeah.
(02:34) >> hats. >> Anyway, those types of hats, which is what I picture you in. >> Yeah. No, that is >> a pom guy. Do you like a pom? >> Nothing wrong with a pom. I'm secure enough in my masculinity that I'll wear a pom. >> Okay. And I figure on Halloween I could get you out there in like a fuzzy kangle or a bucket hat.
(02:51) That's a nice late '80s throwback. Okay. >> So, what the hell are these hats? Let's talk about serious. So, there's a saying on Wall Street. It's buy your straw hats in the winter. And basically, it means like hedge when you can, not when you have to, right? And one of the things that kind of just amazes me right now is that everyone is so bullish and they're just kind of falling all over themselves in terms of their enthusiasm for the stock market.
(03:19) And if I hear another person tell me that there's no way Trump's going to let the economy go this let the stock market go down and there's no way that he's going to run it hot and all these things and what I'm sitting around thinking about the risk in this environment and what I'm sensing is that there's all sorts of weird strange things happening under the surface.
(03:43) You're seeing some changes in like what stocks are leading. you're seeing things like gold and silver taking off. And lately I've been getting some of my, wise old friends, guys that are even older than me, like old as dirt, and they're sending me notes and they're saying things like, I can't put my finger on it, but something just feels not quite right.
(04:05) I'm getting nervous about the stock market. And these aren't the kind of like doom at 11 guys that are screaming, you got to get short. The world's going to end. These are just fellows that I respect that go long and sometimes short and I've been around for a long time and seen a lot of different cycles and I've just kind of been putting together a whole bunch of the different aspects of things that have been troubling me and I think to myself well you know what actually this is the time you know when everyone's enthusiastic
(04:37) when the sun's still shining and the flood hasn't hit the town this is when you should be buying insurance not later when everyone one sees the problems ahead of us and so let's just talk a little bit about what I see in terms of that so one of them is sentiment there's the bank of America has this great global fund manager survey that's kind of the gold standard of it and if you look at things like their cash level in terms of institutional investors how much cash they're holding in their portfolios it's the lowest
(05:07) level ever like ever not just like or sorry ever in the history of their survey Okay. when you look at their risk appetite, which is kind of a self-reported one, the only time it's been higher was in the midst of the 2022 frenzy. Otherwise, it's at the highest level of risk-taking that we've seen. other things like the AII in the American Association of Individual Investors survey which by the way you guys get Leanne Saunders on all the time and she is just got to be the most underrated awesome analyst
(05:45) there is out there and every time you have her on I'm like I got to watch the whole thing. I just I just love it. And she's the one that really opened my eyes to this. She said, you have to be careful with these surveys in terms of the soft versus the hard data. Some of them are just kind of self-reported.
(06:02) Are you bullish or bearish and with the kind of mood changes and the social media were getting flip-flopped from one side to the other? But the thing about the AI survey is there's another one that shows your actual stock market exposure and that one is actually at the highest that it's been ever as well. So when you look at these things in terms of sentiment, you realize that everyone is all in.
(06:31) It's very much a kind of enthusiastic exuberant world. A buddy was telling me that he was at a well I won't say the firm but was at a conference, one of these sellside firms, macro conferences and everyone was just talking about how bullish they were, how it was going to continue going up.
(06:49) AI was going to give us all these benefits. there was going to be all the stimulus from the one big beautiful bill just anyways from the this the sentiment perspective Matt it doesn't get any better than this then when we go and we look at the actual performance of the stocks it's not really reflecting what we what we're hearing right like if you go I went and looked at the charts I was surprised to see that the QQQ's the NASDAQ 100 hadn't hit a new high in like 3 months right it's been going sideways we haven't gone anywhere there. S&P is the same way. And
(07:23) so, one of the things that I love is this Bruce Cobner line. He says, "What I'm really looking for is a consensus that is not being confirmed by the market." And why he's looking for that is that in essence, he's looking for something where everyone believes one way and something else is happening in the market and then there's going to be a lot of people that are wrong.
(07:41) So, I'm just looking at this setup and then you combine that with the fact that gold and silver are doing these crazy things and to me you put it all together and it's a time to buy your protection now. Doesn't mean I think that we're going to go straight down from here. It just means that this is an opportunity to buy some hedges.
(08:00) So, I love the layers of nuance that you have in this especially with sentiment analysis because sentiment analysis is intended to be confirmed by something else. One of the classic examples I always go to in my mind is in that Bank of America fund manager survey where it's so A you're looking for complacency that everybody's on the side same side of the boat.
(08:17) B you have to always recommend everybody always throws up the tail risk part which I always think is the craziest part to reference to that entire report cuz it's like >> where was pandemic right before CO hit? It wasn't on the thing but it stayed there >> for a full like year. >> Yeah.
(08:35) Well, I always laugh and say whatever everyone's worried about, I always discount the first one. And the reason I priced out the first one Yeah. Exactly. >> Right. By and like a market crisis is by its very definition a surprise because if it wasn't a surprise, it wouldn't be a market price crisis because everyone would have priced it in already that the possibility of it occurring.
(08:57) So, I'm 100% with you. >> All right. So, let's talk about internal market movements since the turn of the year. So, I think December into January has been wild. And to your point, the Q's sideways, but like equal weight S&P up. You've got a bunch of these things, small caps, the Russell 2000, that doesn't just go down.
(09:14) Did? >> Yeah. >> and did you see the damage that was done to the quants in the first couple weeks of the year? >> Talk about that. We've I don't think any of the guests have talked about >> it was just huge. Guys were just get destroyed. They had all the wrong trades on.
(09:32) I think that we had, you referenced the small caps. I think that they went up the most they've ever gone up versus the NASDAQ 100 in terms of number of days by like they beat the old record by like six days or something like that. It was just every single day you pull up the chart, it just every day was just and it really felt to me like that there was somebody big that was offside or had come in or someone else had come in and said, "Okay, in the new year, we're going to rebalance our portfolio.
(10:01) We're going to go and we're going to do this." And I've seen that happen a lot. And I always kind of think it's funny when people start trying to make not excuses but reasons behind why it occurred and sometimes it's just the fact that someone big has changed their position. And I was on the sell side at RBC like in Canada.
(10:24) And I remember sitting around and like this one really sticks in my mind because I knew the index trader had told me, "Listen, we're going to go. We're upping our position in act equities. I need you here because we're going to do a lot of trade. We got a lot of stock to buy." And I kept waiting for it.
(10:42) And I would phone him up and go like, "Okay, so we're going to do it today." And he says, "Well, no." And it ended up being like someone's kid got sick, right? Like so one of the portfolio managers kids got sick. And so we have a situation where all of a sudden it gets finally the guy comes into work and we get the situation when the orders coming in and for a week we buy the stock market and we send it way up to the moon.
(11:09) like we're just buying it and buying it and buying it. And I'm sitting there and they're like I'm watching the news like at night and they're coming up with all these reasons why the Canadian stock market's rallying. Canadian stock market's rallying on good news because of this, this, and this. I go, "No, it's not.
(11:24) It's ringing, because I'm buying it because this client is allocating more money." And it could have just as easily been the week before and it just happened to be this week. And so when you're actually the one executing those orders, you realize that over the daytoday, it's much more random than anyone understands. Yes, there's like elements that aren't, but there's also big huge elements that are.
(11:49) And so when I thought about what happened at the beginning of the year, one of my worries was, was this just kind of some random change in a portfolio? and are we just seeing this rotation that is just someone rebalancing their portfolio, some big huge whale out there that needs to rebalance it.
(12:09) So, I reached out to one of my buddies who's kind of a whale himself, a kind of an allocator. And we were talking about this and one of the things that he brought to my attention that kind of worried me is that he reminded me sometimes towards the end of the move you get a move out into the cheap stocks right before everything rolls over.
(12:29) And so one of the things that I'm really struggling with here is this a healthy rotation into the rest of the market like a broadening of the market where we can see small caps, midcaps, value, equal weight do better. Can we see a nice rotation out of the Mag 7 into everything else? Like almost the immaculate rotation and or is this kind of just the final last grasp as people chase the last few stocks that are still cheap before we roll over.
(13:05) That's back to my, straw hats. one of the reasons why I think it's time at the very least on the possibility that is what's occurring here, why you should be looking at the, owning at least some protection out there. There's a wrinkle inside of this and this is from I used to do a lot of work, still do a decent amount of work with policy portfolios, pensions, stuff like that.
(13:29) >> Okay? >> And I've always noticed this just because so many conversations over the years, it just pushes my brain into It's like we're coming up on 1231 last year. All I can think of is all the people who need to rebalance because they just had another year above target for their portfolio performance, >> right? >> And like they felt it at the end of like Q3, but now coming into Q4, they're like, I might be sitting on the next two years worth of like distributions or like all these planning strategies that come into this.
(13:56) >> Yeah. That like I got to rebalance and lock this in. The weird part about that port policy portfolio rebalancing that I'm like, I know this is happening that first week of January is now because of that style rotation, a lot of the stuff they would have rebalanced into also just ran farther than it was supposed to coming into the end of January, right? And I'm like, the last basically six months of these policy portfolio rebalances, stuff is just happening too fast.
(14:26) And sooner or later, some of these kids gonna miss soccer practice or whatever the hell was going on. And that's where my brain goes, >> right? And to your point as well about the fact that one of the things is the mag seven and the concentration in those markets in terms of how big they are and then the versus the other parts of the market.
(14:46) I think we've kind of forgotten how small some of those other markets are. >> Say more about that. Give some examples. Yeah. Like so that's a great point. gold like gold stock like the gold miners it was only a year ago you couldn't give these things away that everyone hated them even as the gold stock even as gold was going up everyone said people gold central banks buy gold they don't buy gold miners right there was there was nothing and I wrote a piece saying okay eventually they're going to start making some money like they can
(15:16) only blow so the CEOs can only blow so much more money and eventually it's going to start going to the bottom line, then you're going to get the quant guys buying it because the EPS revisions are going to go higher. Then it's going to feed upon itself. there's only so many private jets they can buy.
(15:31) They couldn't even they couldn't lose money fast enough given how quickly gold was rising. And all of a sudden, out of nowhere, like the gold miners went just ballistic. And even though I was a bull, I never imagined they would be this violent. And I think if I was going to give people advice about one thing, it's that don't underestimate when we get these rotations how violent the moves can be.
(15:59) And I kind of coined this term way back when as like a series of mini rolling bubbles. And it was these things that I kind of noticed was that all of a sudden everyone would get excited about one thing. It would go up for a year. And I kind of always thought about it would be like the smart hedge fund would buy it. He'd tell his buddies.
(16:18) Then all of a sudden, the tech the techn the kind of guys that were the chart readers would buy it because it was doing better. Then they would go on TV and it would get some momentum and things like that. And then it would just kind of go and it'd be a year later and then it would roll over again and they go to the next one.
(16:35) And this kind of cycle went through and you'd see it occur., it'd be EVs one time and then it's like, right now it's gold miners, but it was also Bitcoin at one point. like these series of rolling bubbles, but the bubbles are getting just kind of more and more violent. And I think that's one of the things that I think people should be really aware of.
(16:56) If you hear yourself saying it's gone too far too fast, and that's fine if you want to sell your long, but if you got out a pink ticket trying to go short, and you say to yourself, it's gone too far too fast, put that pink ticket away and wait another couple weeks because it can always go farther than you can imagine. Like let's not forget Stanley Dreen Miller sold his Nvidia what like 100% ago like it double >> a double ago. Easily a double ago. Yeah.
(17:24) >> Right. >> Yeah. >> Like this is one of the smartest most shrewd investors in the world thought it had gone too far too fast and it gone even it went even crazier. I think inside of this and I want to take this to volatility next and cross asset volatility asset class volatility because the too far too fast doesn't bother me when it's a meme stock or it's like an idea that everybody's bowled up on.
(17:49) It doesn't bother me because I'm like I probably know or can guess who the players are pushing money this way. >> Yeah. What bothers me is when I start to go the people who are trying to do this responsibly are going to start tripping because this beginning of this year is the example they rebalance responsibly in 2024 the responsible rebalancing carried along nicely and it's all right no no big stress but in 2025 as the year progressed it's like well we rebalanced out of that and then the thing we rebalanced out of now requires another rebalance.
(18:18) >> Yeah. And it's kind of that whole like once you sold, how do you get back in? And then >> Oh yeah. Yeah. >> That's where cross asset crosset volatility starts to become a real problem to me because like those ripple effects make it >> Yeah. >> They really mess with you. You can trip >> for sure.
(18:36) And I think also the different assets are affecting like sorry the precious metals to me >> Yeah. talk Yeah. is like because >> that is >> that is a worrisome rise like at a certain point you start to worry about it and I always said that >> too precious. >> Yeah. and that the reality is that gold was going up for reasons that were actually because people were worried about the system and it's more complicated than that, but at the end of the day, that is why folks were buying gold. They were
(19:16) worried about the financial system. And when you have that sort of worry, eventually people start to look and say, "Hey, look, gold's going up at this rate, maybe something else is going on. It causes concern, right? And I really viewed the gold rally as unhealthy.
(19:38) " And it was part of the reason that I thought I think that a lot of my buddies were saying it's not they were worried about what they were seeing and all the different things. it like let's stop and think about other times gold rallied like this. They weren't good times, right? Like it's not like you go say gold rising is terrific.
(19:57) And I know it felt good for a lot of us because like I was a gold bug. I had my good share of gold. I obviously sold it too early like a chump like I always do. But the reality is that I was in I was enjoying it. I think a lot of people enjoyed it. I think there was a lot of investors who thought this was great in general.
(20:16) something going up is all terrific. but I think that when you stop and think about it from a kind of a system or point of view, when you start thinking about what this means for the global financial system, it was actually a terrible sign. It was showing that there was less confidence in our underlying fundamental money and that is the real problem and the signal it was sent that was sending and I think it's actually more complicated than that.
(20:42) I think there was another element of the gold rise that people probably overlooked and I and I first came upon this I think it was Dean Kernut with this alpha exchange. he would talk about this and he was talking about how gold was a great hedge asset to marry with your risk assets. And then like if we think back to the original risk parody and the fact that you would go and you would combine stocks with bonds and it was like just a beautiful portfolio construction tool because you had this asset which was bonds that
(21:16) was in the midst of this secular decline in interest rates rise in prices that was also negatively correlated to your risk asset. So you almost it was like almost like a hedge that made you money, right? Because when stuff got really ugly on in terms of the economy or the markets, your bonds would go bid and then your stocks would go down, but your bonds if you owned enough bonds, you'd be okay.
(21:43) And then meanwhile, on the whole, bonds would also just keep carrying positively and going, up and up. Liberation Day, that all changed. And for the first time in decades, we saw a situation where the US dollar, the US bond market, and the US stock market all went down together. And I think that was that's underappreciated in terms of how big a deal that was because if you think about let's just take a European pension fund.
(22:13) They sit there, they buy their mag seven because in the past the US has been the only place with growth and so they own these US dollar assets and then they can say to themselves, hey, you know what the other great part about this is that when stuff goes wrong, the US dollar goes bid.
(22:31) So we actually have a situation where when things are going down, when the when my MAG7 stock is going down, I'm actually picking up on the US dollar currency. So my overall volatility is lower. So well therefore I can buy more US stocks. Well, what happens when all of a sudden that correlation becomes positive and the US dollar goes down while the stocks are going down? Instead of them owning, being able to own more, they actually have to own less.
(23:01) And that's part of the reason that I actually I'm kind of negative on US stocks because I think that they're overowned and things like that. But back to gold, I think that the bonds were replaced with gold. That ended up being a new hedge asset that you could own alongside your risk assets that could go up on its own in the secular gold bull market yet also be a balance to your portfolio.
(23:28) I think this is a fascinating take because I think you can actually map that back to the 2022 for swift seizure of the Russian assets and I think that's where it's really interesting to talk to you to talk to like Rupert Mitchell about this stuff a non US perspective on how this goes into portfolio construction and I will even wrap it in to say that the great debatably non-financial movie Charlie in the Chocolate Factory or the book if you really want to go road doll where you buy the golden ticket and you realize
(23:56) it's a horror show on the other sides. You want to comment on that? I'm get myself in trouble. I won't be allowed into your country if I start saying this stuff like that. And let me just say, don't forget to burp when you're at the highs. All right, take me take me to this because that V pickup in bonds, in commodities, in currencies, >> I'm with you on this.
(24:26) This is where it feels disorienting like why hasn't this crept into stocks if all of a sudden gold is a safe haven asset in all these portfolios and are we just waiting for that? That's my question. So that's a that's a great question. personally I think one of the issues that is that has kept the US stock market bid more than it should has been the Asian retails love affair with AI.
(24:52) Right. And you've seen the Koreans, Japanese just continuing to plow money into that. And so much so that it recently you saw the Korean government on Christmas Eve sneak a rule change in and I can't believe it wasn't on purpose cuz you put something through on Christmas Eve that's like the Friday night dirty or whatever they say in terms of like releasing bad earnings like at Friday at six o'clock.
(25:24) Friday night at six o'clock. Like you're releasing a change in tax law on Christmas Eve. You're doing it on purpose, right? so they made this change in tax law that basically tried to encourage investors, Korean investors to sell their foreign assets and to bring them back home. like they encourage them >> repatriation incentive >> and I think that we're getting to the point where this will happen because the reality is that it almost has to because a lot of these countries are spending more money. They're going to need the
(25:59) money at home. I think that we're going to see more of that re money coming back home and whether this was a tax incentive but it might as well have just been a tax penalty. It's the same thing, right? And so what really worries me is that although there's been this kind of one last gasp into the US stock market by these, foreign things that foreign investors, and by the way, I have this great chart that shows the actual amount of foreign buying of equities.
(26:31) And it's like through the roof in terms of like numbers that we've never seen over the last 12 months. And to me, that's just the chasing of the final gasps of a of an AI bubble. but as that money needs to come back home, I think you're going to see it being sold in the US and it's going to create a lot of volatility, a lot of tension.
(26:54) There's going to be foreign currency wars. I think that'll be one of the next steps. and in ter back to your question about when we finally roll over, one of the things that I think a lot of folks miss is that, you'll see guys on TV saying, "Oh, all you people that said sell America, you don't understand.
(27:18) look at how much we're rallying. You guys are just a bunch of idiots." Like there's a famous ETF specialist on Bloomberg that just loves going on about all the panickins that were saying sell America and he'll go look the Canadian pension plan owns US stocks and look how great they've done.
(27:35) They're up 17% or whatever it is on their S&P 500. But what he doesn't ever stop to think about is the fact that the Canadian stock market's up 35% in terms of compared to that. >> You look underperforming. >> Yeah. You look at 25 like go pull up world stock markets for 2025 and then look at them on a nominal basis and the US is still is at the bottom but then look at them on a US dollar basis like put all the currencies the same and it's even shockingly more then go and risk adjust them like figure out the sharp and it's like unbelievable I think
(28:14) that the MCI world XUS index so basically Every other stock in the world except the US one had three times the sharp as the S&P 500 in 2025. Now I'm going to get in all sorts of trouble because all I'm going to get all these things about sharp doesn't count. You should be using Sertino and I like whatever. Okay, whatever.
(28:38) It doesn't matter. The reality is a risk adjusted. The rest of the world's doing better. >> We're going to invent an AI friend named Sortino. We're gonna have them just like magically appear in these conversations. >> There's always the quan guy that has to be like, "Oh, you shouldn't use sharp, right?" Like, "You gotta use the Ortino.
(28:56) " >> Like, "Yeah, okay. I get it." >> It's certainly the right thing to say and your disclaimer is approved with excess returns stamps. Talk about in the US if not big cap tech, if not AI, you've been writing a lot about energy and you've been actually saying like not yet, not yet, not yet for a long time.
(29:17) that's been changing recently. >> Talk to me about energy. >> So, I you're right. I was kind of on the fence about energy. I was trying to just not touch it. I all my friends, were feeling the pain from it because they were all long., it was the butt of all sorts of jokes, like why is oil down? Because it's a day ending in the letter Y.
(29:42) it was just it felt very much the same sort of behavior that the gold miners felt like the previous year. Like I my buddy Paulo Macro has this thing. You know that guy on the on the desk that says and he's got a sign in front and like convince me of this. He goes and it says something like convince me that stocks gold stocks or sorry energy stocks aren't what gold stocks were in 2025 like whatever meaning that the energy is the new gold stocks.
(30:12) so yeah I kind of changed recently. I went and said this is it. This is time and it happened when Trump went and invaded or sorry not invaded. I should I'm going to get in trouble. Definitely not going to be definitely not going to be allowed into your country now. >> Kicked out of our shot. >> this will get censored.
(30:29) when he liberated Venezuelan from the terrible dictator and what we got was this kind of just huge bearish rush in terms of you remember everyone started selling oil. all these, Trumponians telling us how he was playing 4D chess and there was going to be this rush of oil to the market because we've now opened up all this locked in crude.
(31:01) Wouldn't surprise me at all of that Bloomberg ETF analyst was talking about how you know that he's just Canada's no longer needed. And I stopped and thought about this. I'm like okay I get it. They're going there and I'm like I started digging around looking at how difficult it was to get this oil out of Venezuela and I'm like this is nobody's going to invest in this. This is ridiculous.
(31:25) This is going to need so much money, right? Like this is going to need just tons and tons of capital. Not only that, we're already at a price where existing oil wells are no longer new exploration isn't being funded. I think Harold Ham said for the first time, did he shut down wells in the Balkan or at the very least he's not he's not he's not exploring for any new ones, right? Like so we're at the point where oil is no longer profitable.
(31:59) And so everyone always tells me that Trump's going to, put oil price down. And I always already say like he already has. We're at the stage where it really can't go much lower unless you just want to kill the entire US energy industry. So I stopped and I thought about into that and I said you know what this is it.
(32:25) This is kind of like the sell the rumor by buy the news and kind of in reverse and I said this is the time to buy it. So I just stood in there and within a week people kind of had figured out that Venezuela was no longer what we thought it was. And then I got lucky in terms of there was a wholesale, rush into assets.
(32:45) combine that with some problems, worries about Iran and we've run a while now. But kind of bigger picture, one of the things I just want to talk about in terms of commodities, and I think you can take this story and apply it to a variety of different commodities. And earlier in the year, I applied it to aluminum.
(33:06) Aluminum was a perfect example. And let me just walk you through why I got bullish on aluminum was we had this situation where, aluminum's used in a lot of electrical things. there's a growing demand for it and stuff like that. It there's a good buy there's a good story on the demand side.
(33:25) The trouble was always on the supply side in that we had this situation was where whenever the demand picked up and the price picked up, we saw that there was Chinese ready to make another aluminum plant and just kind of supply it. So, you're sitting there and you're like I can't remember the number like US used to have I don't know 20 25 aluminum smelters. They're down to like four.
(33:54) Like it's just it's been absolutely crushed. So, nobody's invested in aluminum for just like couple of decades now because China's just been eating their lunch. So, China comes out and they say, we're going to do this anti-involution thing where we're no longer going to put prices of everything down to like the absolute money point where nobody makes any money. And nobody believes them.
(34:16) Like, nobody believes that this is going to be the case. They're all like, "Oh, no, Xi's going to keep doing this." And I'm like, I'm like, you actually look at this guy when he says he's going to do something, he does it, right? Like it's kind of like the opposite of our friend Trump, says he's going to do a lot of things and then doesn't do anything and like people the market's too quick to believe him and then Trump, Xi doesn't, do a lot of fanfare. He just kind of says it and
(34:41) then quietly goes about doing it. Anyways going back to aluminum we had this situation where for the first time we were rushing up against point where demand was pumping up against where the previously China would have supplied it and all of a sudden they said we're not going to supply it but not only that we have this situation where nobody has invested in aluminum for like a decade or two.
(35:08) So getting more supply getting it online is going to be really difficult. This is the exact same story that we've seen in copper, right? Like copper, we went and we had this huge bricks buildout in the 2000s, right? It was that whole Jim O'Neal bricks, China growing and stuff like that. And they threw money at it and they made so much excess supply that the reality was that nobody could make any money.
(35:38) And so what's happened now is that we finally kind of chug through all this excess supply and the reality is that any new supply is going to be really difficult to bring online and it's and I and the market is underappreciating how much we've underinvested in commodity supply expansion along with the fact that we've just gone from a world where we in essence had global, free trade, so nobody needed to stockpile anything to a world where all of a sudden you're worried about your neighbors selling you stuff, so everyone needs to own more of it. So
(36:20) we have this just huge massive resource bid that's occurring in terms of all these, resources being underinvested in terms of supply with rising demand. Also, the fact is everyone else is now all a sudden spending on a fiscal basis doing deficit spending. So, we have all this deficit spending happening and there's not enough supply.
(36:47) And going back to energy, just bringing it back. It's the same story there. And yes, I understand the world's going more electric and there's all sorts of different things of that. But at the end of the day, there's still a lot of oil that's been used. It's still it's still going up. Even China, even though the fact that their percentage of electric, it keeps going up, but the reality is that their absolute usage of oil continues to go up.
(37:15) And so I just look at energy as being one of the few places that you can hide in because no one owns it. Everyone's so bearish on it. And so if we do get a rotation, if we did get a situation where the economy rolled over and everyone would say in an economy rolling over, you should sell oil. I think the economy rolled over, you would find oil stocks actually outperform.
(37:37) And I know that seems ridiculous, but the reason they would outperform is because nobody owns them. So, they would just be like, "Let's get back to bench." It's kind of funny in that scenario, too, because I flash back to I flash back to 2008. I flash back to you have a giant economic contraction on your hands, but nobody owns these things, and there's a need for this supply.
(37:59) And that was the peak oil run. >> Yeah. It's not like we haven't seen a version of this before. >> And if you look, it wasn't just 2008. 2000 there was a oil run into the end. It's often the last sector that actually sends the economy over the cliff. Right. So if we are going to assume it's going to be a traditional cycle, this would be what you'd expect to rally at the end.
(38:23) talk a little bit about and this is one of the things I love seeing in the macro tourist stuff is you'll look at not just how the equities are valued how the equities are priced how the equities are trading but also the spot curve like you'll look at the oil curve you'll observe when something does or doesn't move sometimes a few years out yeah it's not something that most people are going to look at why do you do that how's that useful to you well sometimes it's for trade construction I'll go and I'll be
(38:48) like oh I can go and buy something a year or to out that's cheaper that'll be a better riskreward. one of the things that I remember specifically is that last time, not when oil went negative, but the previous time oil had the kind of the shale and then we had the Saudis deciding they were going to send prices way back down.
(39:13) We had this really bad I think it was 17 I can't remember the exact point but there was a there was a point where I got bullish oil like it had gone down and we had gotten to this point I'm like oh I'm going to go buy some oil and I looked at the curve and I was like oh man the curve is just like I'm going to have to pay up for forward oil and like there's a lot that's going to be difficult like I'm going to have trouble making money there like that's already discounting and then I said I went and
(39:42) looked at the equities and the trouble was that the this the price of these companies have gone down below the bond price. So the equities were trading like call options, right? And so I was like, h gez, like the equities are trading like call options. I don't want to buy that.
(39:59) Then I looked at it, it's like, oh, these bonds like these corporate bonds are trading like death. Nobody wants to own them. Nobody wants to own a 60cent bond, right? Like there's very few guys. I'm like, I could buy this and if I'm wrong, I'll own the next round of equity.
(40:17) Like, like that's what I thought to myself. I'm like, okay, so I'll be the next equity holder if I'm wrong on this. And if I'm right, these things will, yield me 20% or whatever. And so, for one year, I just sat there and I traded, corporate energy bonds and like and so that's one, when I when I named myself the macro tour, people used to say to me, it's like a derogatory term, right?, that's insulting, right? You got it right.
(40:40) >> Got to lean into it though. >> Yeah. But at the same time, one of the reasons that I left the bank was I was sitting there just being forced to trade one little thing and I was I just love markets. I love finding different niches. I love finding different opportunities and I went and I went on my own so that I could go and find the things that were the best riskreward.
(41:06) So, for that point, I thought that the bonds were the best riskreward. So, I ended up being a corporate bond trader. And Matt, you'll love this. I had the other day I was I was in one of my stir groups. And for those who don't know what a stir is, it's short-term interest rate. and these traders, they're the weirdest bunch of them all.
(41:24) Like, like there's no doubt about it. And they won't even be upset I say that. They'll just be like, "Yeah, of course we are." So, we're stirring badge of honor. and they and they were sharing some article about this just weird trade where someone had figured out tips when the government doesn't produce a an inflation forecast like you know how they missed the inflation for that one month.
(41:52) There was some strange trade where tips approximated or you still earned it in the tips but you didn't earn it in the in the inflation swap or I've got it backwards one or the other. No, >> but the reality was that there was a bunch of traders that had like figured this out, like real shrewd guys or folks and they had gone and done the ARB.
(42:12) And like to me, I'm like, "Yeah, man. That's just awesome." And like there like I love figuring stuff out like that the market misses and that you go and you're the person that figures that out and you're like, I'm going to nail this trade and it's like a terrific trade. There's no better feeling in the world.
(42:33) And in fact, if there's anything that like I would say was one of my weaknesses, it's the desire to find those trades instead of just the easy traits. Like sometimes I'm so busy trying to be. I'm like, why are you making your life so hard? Like, why don't you just go buy spoos? They're like, >> "Listen, kids.
(42:57) Dad's got to go read the fine print on exactly how this >> monthly tips >> is going to be calculated. >> I'm going to need three days." >> But I can see you appreciate that. You appreciate that trade. >> Well, because I appreciate the Hardy Boys and Nancy Drew and stuff like that, too. >> I like a good amount of torture. Yeah. >> In a in a All right.
(43:20) So big deep markets, a place where and I extra appreciate the tourism on this because I feel like it's supposed to be sleepy, boring, liquid, deep, and that's FX. What the hell is going on in FX? Because I also feel like this is much like nobody used to talk about gold and now everybody's talking about gold. Nobody talks about FX.
(43:41) My fall out of the seat moment was getting ready for some year-end stuff and looking at just how much equity markets around the world like XUS moved. Yeah. >> Because of changes in the dollar. >> Oh yeah. >> I went this is an earnings growth. This is multiple expansion in FX explaining all these country returns >> and just this can't be good.
(44:01) This can't be good. So, I've been a huge US dollar bear and I think it's just starting. And I one of the things I also believe is that FXV is just a is a is a screaming by and I've been saying this for 6 months and I've been just wrong. Like there's no doubt that I've been wrong. Like there's just there's no couching this.
(44:26) It's been boring. but I'm not giving up. And one of the things that I think is that don't own FX fall over the short run, buy longerdated FX fall. And ultimately, why do I feel this way? It's back to this thing about like the US capital account deficit is just so monstrous. And then ultimately if we think about the imbalances in the world like we think about what everyone's upset about Americans losing jobs about the K-shaped economy a lot of it is based upon that imbalance. It's based upon
(45:11) this huge financialization. It's made it difficult for America to compete on a manufacturing basis because everyone's coming in and buying your stocks, sending your currency higher. So, it makes those with assets richer, but it does it makes it difficult for you to compete on the world stage.
(45:34) And when you think about how to fix this, like how to, zero those imbalances or at least improve them, I don't see how you can do it without fixing the value of the dollar and it has to be lower. Like I have a lot of good American friends and they go they travel around the world and they're like one guy is like email because he travels a lot.
(46:00) He goes, "Oh man, I'm in Japan. You should see how cheap it is here." And he goes, "I'm in Brazil. You should see how cheap it is here. I'm in like Bordeaux. I can't believe Bordeaux is this cheap." And I'm like, "Dude, like do you not see the common, thread to this? It's not that everywhere else is so cheap.
(46:16) It's that your currency is so expensive." And like if you go and you're want to know like in terms of travelers like think about going to Miami versus going to Costa del Soul in Spain like go and just dial those two vacations right like it's not even close like in terms of like I bet you Miami would be at least twice as much for me when I go look at it.
(46:46) And so back to the currency, I think it needs to be fixed and when I see a situation that is that big of an imbalance and I see all the pain that it's causing and then I've seen how ultimately that fixing it would help a lot of things. I think we're eventually going to get there. And the trouble is we're going to get there in a way that's difficult.
(47:07) And part of the reason that I that folks have been hesitant to get there is because on the other side of a lower US dollar is less money going into the US to fund these deficits and also to go invest in their financial assets and it means a lower stock market. And so when I originally, came up with this piece in early 2025 where I was talking about the tariffs and I was and I was saying how Trump's goal is to get the trade deficit down like zero. Like he believes in zero.
(47:51) And let's just put aside, whether it's right or wrong. Let's just say we get to zero. If we get there, that means that there's going to be less money getting recycled into the US and that and like if you just think about what happens now you guys you buy iPhone from China you pay US dollars but someone has to buy the Chinese iPhone.
(48:15) So when you they some company somewhere Apple I guess buys it in remimi and the reality is that they get the Chinese company that's building it gets US dollars instead of converting that into remimi they say oh wait you know what the bank of people's bank of China doesn't want this to go up so people's bank of China will sell me the remimi we'll take the US dollars and we'll just leave the US dollars in there and recycle them into the us so that we can have a situation where the remimi doesn't go up in price, right?
(48:50) Like that is in essence what's caused this huge imbalance is the fact that the these currencies have not been allowed to rise. And so if we think about if that gets reversed and changes, it means that money that was getting recycled in the US that was buying bonds and then someone else was buying stocks or whatever and was buying all those things, it comes out of the US.
(49:15) So it means that the stock market goes down. So back to the trade deficit one point I someone has sent me this chart that was the change in the trade deficit versus the change in the NASDAQ. And it was a one-year change in the trade deficit versus the one-year change in the NASDAQ.
(49:32) And they sent me this thing and it was like on like the they had made it. And I thought to myself, there's no way that's right because it was like almost it was too right. So I did the old Reagan like trust but verify. So, I recreated it myself. I recreated it and yeah, it's like shockingly accurate like that the change in the trade deficit affects the change in the in the NASDAQ.
(49:57) So, when I wrote this piece about the tariffs in early 2025 before the tariffs came because I kept saying he's going to do them. He's going to do them and you guys because remember there's lots of folks thought he wasn't going to do them. It's all just part of the art of the deal and stuff like no he's going to do them. He loves them.
(50:10) Now, he ended up taco goinging way faster than I ever imagined, but I got the call right about him doing them. But I had this really smart pod, pod shop macro buddy that told me, he goes, "You know what? Even if he does them, once he realizes the cost of reducing the trade deficit, he's going to give up on reducing the trade deficit.
(50:33) " And sure enough, that was the correct call. that guy was wiser than me because he understood that Trump was going to taco. So back to this thing about the US dollar ultimately the US dollar needs to go lower and the trade deficit needs to be reduced for the a lot of the imbalances in the economy and for the rebalancing of towards US workers to occur.
(51:00) The trouble is that rebalancing towards US workers will come at the cost of a lower stock market and that is the dilemma that everyone is trying to stick handle right they want the US worker to have a job they want all these things but they don't want a US stock market to be lower and I think it's gonna like the market's going to dictate it eventually and not only that you go around threatening, the people who are buying your bonds.
(51:37) Generally, that's not the greatest way to encourage people to buy more bonds, right? Like that's the real problem, right? like that you're running this huge capital deficit and then you're going and it's like yelling at your customers and he doesn't think that they're customers and they aren't in terms of you guys are the customers for the goods but the other countries are the customers for your financialization and I think that's the part that a lot of folks are missing inside of this is this idea that
(52:12) you encourage you strongarm you do whatever to say you need to spend more money. And we're seeing it in Europe. We're seeing it in China. We're seeing in other corners of the world where governments are spending money. They're doing their version of stimulus to basically get spending up. But for the first time, there's not stimulus like through trade where the US is the beneficiary of that external spending.
(52:35) At least not directly. Maybe in a weird dense fabricated way they are. It feels like this is another artifact of what you're just describing like Yeah. So, listen, the system as it was needed adjusting. I will be the first to say that and it's not like everything Trump does is bad because he's going to rightfully point out that, the rest of the world wasn't doing their share in NATO. He's 100% correct.
(53:07) I'm embarrassed as a Canadian that we promised that we would do X percent of GDP. Can't remember what the number was, but we were doing half. He's right. He's right. It's embarrassing that we did not, spend our promised agreed to amount of money on NATO. Now, he's probably gone a little far and the rest of the world is kind of now waking up to the fact that he's not just forcing people to do their share.
(53:39) They're also realizing that the system as they know it has just been upended. And I would argue that I look at the last 20 years and I look at the wealth that was created in the US and the fact that you guys have x% of the world's wealth, whatever it is, 70%, I don't know what it is. It's big. >> It's a big number, right? >> Big number >> that you guys have been the biggest beneficiaries of globalization.
(54:11) You guys have figured it out. You have, understood how to do it. And when I hear him say that the world's ripping the US off, I'm like, "Okay, so you guys have 70% of the world's wealth." What? You're supposed to have 80. Like, is it 90? >> And I introducing to Boomer Logic. >> I'm like, maybe you don't have a problem with the like the system has worked great for you guys.
(54:40) What you've had is a redistribution problem, right? The reality is that the fellow that in, Arkansas that was making a John Deere tractor is now without a job and can't figure it out. And Elon Musk has, or, let's use Ken Griffin. Ken Griffin has more dinosaur bones. He's wealthier from that point.
(55:00) Like, it's just becoming more and more concentrated. But back to your point about the fiscal stimulus. So the whole world has woken up to this fact that the US has changed and we need to change. Now I'm going to talk about Canada because Canada's easy for me cuz I'm here and I see it happening here.
(55:19) So we, had 10 years, a decade plus of not doing very good things with our economy. Stupid stuff., no sense trying to overspill milk. It was dumb. It was it we weren't we weren't focusing on the economy. We weren't building pipelines. We were focusing, we were stopping LG terminals. Like I think at one point someone told me the German government came to us and said, "Listen, we'll build and pay for the terminal.
(55:48) You just let us put it there, because we need, we don't want to rely on Russian." And we and this the guy said no. Like just absolutely just brain dead things. Okay. But now all of a sudden we wake up and we have Trump, threatening our sovereignty and we're like, "Holy smokes, this isn't just a little bit of we need to change.
(56:07) " This is an existential crisis. And so now going back to pre Trump or pre- liberation day or pre-2025 you looked at the world's deficits to GDP and if I told the average person that the American deficit to GDP was 7%. And then asked them what's Canada they'd say well if the US is seven those guys are socialists must be 10.
(56:40) What about Japan? Well, Japan, I hear there's all sorts of debt and there's all sorts of problems. They spend like bridges to nowhere. That must be like 11. What about Europe? Oh, those guys are full-on socialists. They must be 12 or whatever. But the reality was that when you looked at the deficits of the spending of other governments, the US was running a 7% deficit to GDP.
(56:58) Canada was two, two and a half. Europe was two. Japan was two and a half. They were low numbers. >> Austerity effectively. >> Yeah. And in and in fact I have been long arguing for a long time that we weren't spending enough and that this was actually all the problem was that America was the only one willing to spend and therefore all they had all the growth money was attracted to there it made us so there was kind of a vicious circle right like if you're sitting there you're a smart Italian young person and you're sitting there going my
(57:29) economy stinks there's nothing going on like the econ like I have negative interest rates like and stop and think about negative interest rates. How stupid that is. You're sitting there, you're like an old Italian grandma and you're trying to save and some extra money to send your >> You' be nice to not with this metaphor.
(57:47) >> I love I love the old Italian grandmas. And so she's trying to save some money to send her, grandson to university and the government instead of giving her more as she saves is actually taking it away from her. So what does that make her do? That makes her, have to save even more.
(58:04) It's ridiculous. They got it all backwards. It was like completely just brain deadad policies. anyway, so going back to this, we had this situation where the rest of the world wasn't spending enough. Okay. And then Trump comes along and all of a sudden you have the Germans even going, "Oh gez, you know what? We used to have this.35% debt break.
(58:25) We got to spend some more." Right? Because like this is like even the it's serious when the Germans are talking about spending. And so Canada, we're going to go from two to five or four or whatever it is. Europe's going to go from two to four. And so the rest of the world is spending more money.
(58:41) And here's part of the reason I think the currencies are going to end up being a bigger deal is that we're going to see a situation where in the past there was excess capital because there wasn't enough people spending. So everyone there was money floating around, stuff like that. Now all of a sudden there's lots of people wanting to spend lots of different governments and it's part of the reason that I think that we're going to see some pain as the world starts competing for that capital and you're going to see a lot of folks being having
(59:15) to bring it back home back to the Koreans like they wanted to bring home the money and change the tax law because their currency was weaking too much. But what about Japan? They have a new woman in there. She's going to re be reelected as prime minister, but she is very much a Japan a MAGA like Japanese policy.
(59:35) So what if she starts spending some money? So where is that money going to come from? Well, the easiest thing to do would to be that 50% of the of the GPIF, which is the world's largest pension fund in the world, just is in foreign assets. Just bring it home. >> Repatriate. >> Yeah. >> Yeah. Like a lot of money.
(59:53) you're a big Russell Napier fan. It's going to happen. And people think financial repression, but the first, step of financial repression is for the money that's all out in this new globalized system that has been going around freely gets forced to come back home. >> All right.
(1:00:14) I have one more area that we definitely have to cover before I let you go. Okay. >> That's the new Fed chair. That's Worsh. You have been saying that basically is more of a trader than a traditional banker. Yeah, I'm really intrigued by this framing and I'm also just I'm fascinated by what it means to have the switch in the Fed chair because I don't know if the market knows what to think of this yet.
(1:00:34) I think a lot of stuff's going to get pinned on this donkey. That's a good lie. okay. Yeah. So, some people blamed the gold selloff on Thursday and Friday to Borch, in fact, because they said he's more hawkish and he's going to shrink the balance sheet. I'm going to take a little bit of a different tact and a lot of people are trying to read in what he said over the last six months as he's been auditioning for this job, saying this is where he's going to take the Fed.
(1:01:10) I have no idea what he's gonna actually do. I don't I don't think he even does knows what he's going to do. But I do have confidence in one thing. He is more of a trader than a central banker, right? And by the way, shout out to my buddy Harry Perkins who just like called it out and said that the greatest signal of all time has just been assigned to the be head of the Federal Reserve because this guy gets everything wrong.
(1:01:44) He's gotten every call wrong. And I'm like, that's what happens when you work for a British bank and not a US bank. You're allowed to say stuff like that. He was just and I'm actually kind of shocked that I at first I was like I thought I was the only one who was pushing back on how great he was and then I've been reading listening to a lot of guys like Warren Pies was kind of saying negative things about him and all I'm just going to say I'm not sure what their reasons are for it but I will just tell you my experience and when I
(1:02:12) think about him and I think about what he's like I think he's a trader and I and I and one thing that people need to understand about traders is that they always think the central bank is slow. Like they're always running ahead and going, "Oh my god, this unemployment number so bad. We got to get out ahead of this.
(1:02:32) We need to cut. We need to cut right away." And then the thing is 3 months later they're like gets revised the other way and the traders are like, "Oh my god, look at the economy. It's way stronger than we think. We're going to have to raise rates." And stuff like that. and this tendency for traders to be like this and I've seen this numerous times where we've had a cycle and within the cycle you've seen them go up and down over the path of the fed of the of the central bank numerous ways. I've seen that happen time and
(1:03:03) time again and that's fine. That's how markets are. But the trouble is we've just put a guy that is was a cheerleader for those traders in charge of the Fed. And I'll just I remember very distinctly in 2018 when him and Stanley Ducken Miller were going around just pounding on the table talking about how Powell was way too slow raising rates.
(1:03:31) They were talking about raising rates at like 50 basis points and it was they were they were just brutal to them. Just brutal. And I'm thinking, "Oh god, these guys are real hawks." I thought to myself and I was like and they were just miserable. And then we had the situation where Powell actually started raising rates and then we had that were a long way from neutral error and combined with some problems in the funding market and all of a sudden the f the stock market went no bid. You couldn't finance
(1:04:01) a corporate bond there and we had that little mini Christmas swoon that was actually quite dangerous at one point. And literally just like that, he's changed his tune and he's talking about how Powell's an idiot for not cutting rates so fast. And I was just like, "Oh my god, bud. You were just like, it wasn't that long ago you were bitching about not going, up fast enough and now it's not going down fast enough.
(1:04:30) " And so my suspicion is if he's allowed and I don't know how much he's going to be like he's actually going to influence policy, but if it was just Kevin Worsh setting policy, I can assure you it would be way more volatile than it's ever been. The other thing I think is that he's going to go and I actually happen to agree with this.
(1:04:53) He's a big believer that they should cut down on the number of the amount of communication. I don't think that helps. I also think that you should introduce some uncertainty into the into the decision. Like they always go and do exactly what's priced into the market. I think you're better off actually having some uncertainty.
(1:05:11) In my day, I remember funding at the front end of the curve and the curve was always upward sloping and I think it may it helped a lot for it to be an upward sloping curve and there was always a worry that they would just out of the blue raise rates on you and that's why it was an upward sloping curve.
(1:05:28) Now, nobody's worried about that and it's and it's very much the opposite. And I think that you might see Worsh affect that. So, if I had to make a guess, I would guess he's going to try to be aggressive on cutting rates over the short run. He's going to commu reduce the communication. He's going to try to get it up where it's sloping.
(1:05:46) I don't think it really means that much, but I do think that over the longer run, one of the things that you can take home is that if he's influential at all, it's going to be a more volatile Fed than we've ever seen. >> All right, I have one of our favorite closing questions for you. >> Okay. >> What's something that you think the majority of your peers would disagree with you on? >> Oh, that's an easy one.
(1:06:13) They all hate MMT. like they're like that Paul Simon song that like they spit on the ground every time it gets mentioned. and I think I understand why they hate it because they're focused on the parts that MMT that people take the policies and then say okay given these policies this is what I want to do with it.
(1:06:35) And a lot of times it's mixed with green and all that stuff like that. But if you actually look at the way the economy works, like if you go like study what Warren Mosler and those types of folks that have, spent their lives devoted to MMT have figured out, you'll realize that in terms of understanding the economy, it's the one of the absolute best tools out there.
(1:07:03) And it's just like I it's underrated all the time. And not only that, I always say this, Trump is the most MMT president there's ever been. He really is. And even miles by miles, >> even now they're doing it. They're like saying, well, interest rates actually don't affect the economy as much as everyone thinks.
(1:07:21) Therefore, we should lower them. I'm like, >> you know what? I actually don't disagree with them. I like I have I my only problem with him is the hypocrisy of like saying, when my guy's in power, we got to crank rates because otherwise we're going to lose credibility with the Fed and when my when or so when the other guy's in power, that's what I got to do.
(1:07:41) And then when my guys in power, I'm going to just lower rates. But I am in War Moser's camp that I don't think interest rates affect the economy as much as people think and that there's all sorts of different things. So, one of the easy ones for me to say is, MMT in terms of understanding how the actual economy works, just be careful because people are going to go, "Oh, Kev, I read that and now all a sudden, like this the biggest bunch of BS.
(1:08:03) " I'm like, "Put aside what they think you should do. Focus on how the economy works. Focus on the plumbing side of it. Go listen to Warren Mosler and listen to all the different things he said. He's a hedge fund manager for, heck sake. like he and he is the father of MMT. This is it is one of the most valuable economic frameworks to understand.
(1:08:27) >> Kevin Wear Cullen Ro and the other people have gotten this in my head. >> Couldn't give you full credit for protecting Mosler's name. Kevin, if people want to follow you online, they want to bug you on the internet, they want to check out the macro tourist, where should we send them? so it is the macroouour.
(1:08:45) com and if you want to get a few of my old or my new pieces, feel free to send me an email kevin Kevinourist.com and I'll hook you up. >> you want to get some of those free pieces. Make sure you send Kevin a message. Let him know excess return sent you. And trust me, you want them because you want the recaps.
(1:09:03) What do you call the recap emails? >> My private feed recap. You like those? >> I love the private feed recaps. Trust me, if you're watching this, if you're still with us, you want the private feed because you want to see all the little chatter and back and forth and other ideas that come in. Guaranteed to have 15 things that weren't on your radar in your eyeballs.
(1:09:21) And then on top of that, there's always some like goofy other story. Well, I'm glad you enjoy it, Matt. I had a terrific time and thank you very much for having me on. >> Thanks, Kevin. like, comment, subscribe, all the things below. We are out. >> Thank you for tuning in to this episode. If you found this discussion interesting and valuable, please subscribe on your favorite audio platform or on YouTube.
(1:09:41) You can also follow all the podcasts in the Excturns network at excess returnspod.com. If you have any feedback or questions, you can contact us at excess returnspod@gmail.com. No information on this podcast should be construed as investment advice. Securities discussed in the podcast may be holdings of the firms of the hosts or their clients.