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Well about I think about fifty to sixty percent of CI debt is held by the CNBS market, So that's an investor problem. That's not my problem, that's somebody else's problem. And then maybe forty percent is held by banks. Very little of that is held by large banks as a percentage of their of their assets. You know, some regional banks have significant risk, and it's a problem, but you know they're able to pull shtick, you know, as we always like to say, maybe there's a rolling loan catches
no loss. I mean, they just roll it until they can't roll it anymore. So, you know, commercial real estate is a problem that's sort of glacial in that way. You know, they'll be restructurings. Banks will have issues, some regional banks, I mean, and I don't know if any regional banks will go under or not. But it's not a systemic It's not just not a systemic issue.
If I think about the biggest problems facing us. Unfortunately, I know that you don't care that much about the federal deficit and debt. But how calm, like if we're billion dollars a month in servicing costs.
I'm gonna take on my violin.
Okay, but more than the military, okay, sometimes so can I can.
I like to take a couple of Number one, I'm gonna I'm gonna put you in the camp of what I like to call the OI, the deficit crowd.
Yes, I'm there, I'm ready, You're there, Me and Lisa.
I'm not an economist, but I understand arguments, and literally every single word that people are uttering about the deficit today has been uttered by somebody for forty years now. In my business, being too early is being the equivalent of being wrong. But I've been he too early. I've been two years to early. I've been forty years too early. So clearly that it's more complicated than the deficit people like to say, you know, is there a point where
it becomes an issue? Sure, but you know how you'll know instead of on a day like today where the ten year is down, how many basis points is it? Do just eleven? You'll walk in and it'll be up fifty and you'll say, oh, you're the deficit, and then it'll be relevant exactly.
This is exactly the same as housing, right.
You know, forty years forty years long time. It's really just a very, very long and the argument as to why I think it's just not that relevant. Excuse me my ear piece, you don't need you, is that it has to be that the fear about the deficit causes people to start to walk away from the dollar. That's the feedback loop. So let's think about that for a second. Why is the dollar the reserve currency of the world.
It's actually very simple. Big money has to park its money somewhere, and they're only going to park it in the most liquid, safest bond market in the world, and that's the US government bond market. Until there's actual replacement, the US dollar will be the reserve currency of the world. And what you're talking about is just going to be academic. It's not China, it's not Europe. You know, no offense to all your crypto people, it's not going to be crypto.
So until somebody can show up and show me some replacement for the US government bond market, I'm just not concerned.
And it remains to be seen if that will happen in the next forty years. But before we get there, I do want to talk about the state of shorting. Of course, you were in the Big Short Steve Carell played you great movie, But it feels like this on.
My tombstone already, by the way it's carved in.
But in any case, it feels like the state of shorting in this market. This just feels like an environment where companies won't die. And you see these high valuation, high flying stocks, and it just feels like there's a lot of temptation out there to short. But how are you thinking about short selling?
I don't shure it for clients at all. I short any bitty little bit for myself once in a while. I mean, what I would say to people is number one, a couple of rules about shorting. Shortening of stock purely because you think it's expensive is a death wish. You have to have a fundamental reason to be short of stock. You know, isn't vity expensive? I mean, yeah, it's expensive, but earnings have tripled, so you know, you could have made that argument a year or so ago and then
earnings doubled or triple whatever they did. So look, I think the economy is fine. Is it slowing to a little bit? It sure, our delinquencies up a little bit in consumers, Okay, but there's no fundamental case to be massively short things. I mean, are other individual stories. Maybe you could short here and there. Sure, but but to go after you know, the market, I think it's insanity.
But you know we have the DOJ going after short sellers. I mean, don't they serve an important person.
To serve an important purpose. I don't understand whether the do goes after short sellers.
The other thing to it, I believe you were one short Tesla for a certain amount of time too.
What would the lessons learned there?
Because you've seen so many people get squeezed on trying to short that stock in this market.
I've been shortened, I haven't been shorted. It's a look you can. I think you get at times short tesla when the fundamentals are deteriorating, and then then people stop focusing on the fundamentals and they start talking about, you know, the dream of auto taxis or AI or whatever, and then then it becomes impossible. So Test is not a stock to be short long term at all.