Are YOU Nestled Comfortably at 5%?

Greetings and welcome to Inside Baseball with Old Chestnut. I'm Liam Allen with my friend Morris Ax. How you doing, MB? I'm doing great, kid. How about yourself? Oh, I'm just fantastic. Another another week in the books. Here we go, chugging along. Unbelievable. What are we looking at? September, huh?

Uh it's it might as well be October. It's it it might as well be. I bought milk yesterday and the expec expiration date was November 14th. So that's my time horizon. That's what I work with off my milk cart. When you uh when you go buy the milk, do you check to make sure you get the freshest one? Yeah, I get the one the oldest one. I dig to the back. I get, you know, there's like a September twenty eighth that I'm leaving for for the other day. So I take November 14th.

Yeah, as part of my Wall Street training, um, I worked as a bag boy at Dominic's Finer Foods. And um one of the roles uh was to do we call blocking, you may recall. And uh yeah, you would move the older inventory to the front. Yep. Yep. Still a tried and true practice today.

Unbelievable. You know, if it ain't broke, don't fix it. Eight bucks. Eight bucks for a gallon of milk if I have to go to the corner store. Okay. If I have to go to the corner store and I want to get a half a gallon, not a full gallon, a half gallon. Of the good milk, quote unquote good milk, the organic whole milk. Okay. Right. 779. That's$14 a gallon.$14 a gallon. Forget about gas, folks. Forget about your gas. Okay. Let's talk about the milk at$7.79 a half gallon.

Okay. Y you know, I'm I'm even seeing inflation uh seep into my narrow world. Um is an example, um I invited several friends to join me to go to a a uh fish concert in Chicago where I was gonna get access to a luxury suite, provide private air transportation, and apparently That's not even enough to get people to respond with a fucking answer.

So yes, there must be inflation. No, I waited. I waited and waited and waited. And finally when there were some like, you know, serious answers, I I I chimed in. Okay. So what? It's gonna be you, me, and the kids. It's gonna be fun. You laugh. You mean Fiona. And let me tell you, there'll be complaints about the set list. Okay. I'm running it right down to the wire. By the way, set list. I was graciously invited to go see Bruce Springsteen last week at the Meadowlands. Oh fuck. And um

I I wasn't feeling well, so I had to excuse myself. And Yeah. And oh why why weren't you invited? Yeah. Well hello. Could you forward that email of all the shit you send me? You don't forward me. Well I at the bottom it's at at the bottom it said this invitation is non transferable. Come on, I'm but I'm not like you and me together. Like okay I I know, I know. What what might have been but Just to make matters worse, it was the finest set list I've seen in 20 years, and I fucking missed it.

So how about I guess I'll see Bruce when he's ninety. You know, he um he he had to um postpone the tour the tour because he Poor guy is a fucking ulcer. Yeah, dude, he's a million years old running around. Him and little skill that there yeah. Uh dude, why didn't you go? You had you would have gone to Met Life with with so and so and so and so and you said no. Yeah, it it's a long and complicated story. Sounds like a bunch of uh well, you know. Um Come on. I I haven't uh gotten

uh authorization from the government censorship office to uh announce why. But uh we proceed, as they say. Um You know, I I realized, uh or maybe you mentioned it, that um we spent so much time slamming DJ Saw last week, we didn't have time to talk about the market.

So with that in mind, I I think we should continue slamming DJ Sal. Um I I I just had a couple of quick things I thought might be of interest to people. Um You know, every once in a while I f feel like treating this thing cavalierly, meaning like I don't know what to talk about. Are people tired of hearing the same old shit, you know? And then we get Some fucking guy writes us a note about how great it is about the financial plumbing and how much they learn and how

Oh no now the pressure's on. It's like holy shit. You know, it used to be when it was you and me and two tin cans and Kevin Muir up in Canada it was like no pressure. Now it's like You know, they're waiting in line and I know. It's terrible. But um as we like to say, we proceed.

Um, let's start with just some general comments and we'll work our way backwards to the market. Yep. Make sure you allow enough time because I do tend to run on sometimes, but uh Y y you've seen in the popular press DJ Sall is um Surprised, disappointed, uh saddened by the caricature being painted of him. Doesn't recognize Right. So um Being a a wee bit old older than than most, I've had some time to learn a few more things. Uh I call it learning, some people call it wisdom.

So there was a book um I read several years ago and I looked it up and I checked with uh Centcom. Cause my thought was I could send this book to DJ Saul. Cause I believe his address is DJ Saul. care of Goldman Sachs 200 West Street. I don't know the zip code, but it's probably like one triple oh five or something. I don't know. Just I'm just spitballing here. But um anyway, if any of our fans think of doing this, Just be sure to mention on the the uh the gift card.

As suggested by his friends Liam and MB. But um anyway, the book, and I have read this, it's actually uh pretty good. It's called The Lies We Tell Ourselves. How to face the truth, accept yourself, and create a better life. Say that again. Say that again. Say that again. The li the lies we tell ourselves. How to face the truth, accept yourself, and create a better life. It's paperback. Um it's uh Kindle's only eight dollars and forty nine cents. Wow. Um so that is one area.

uh I think he might benefit from. The other, this is a little bit more sophisticated and I've mentioned it um before because it relates to that idiot Max we ride with on the gimbals. Um I've referred to it as the Dunning Kruger effect. And this applies to David Solomon too. I'm just going to skim the Wikipedia definition so we're all on the same page. The Dunning-Kruger effect.

Is a cognitive bias. I'm not sure what that really means, but let's just read on. In which people with limited competence in a particular domain overstate their abilities. So I think um the way I like to think of it is they're not smart enough to know they're not smart. Yeah. Does that make sense, right? A hundred percent. And that's such a thing. That's such a thing. It's such a thing that it's got a Wikipedia page and a name.

Yeah. So between the Dunning Kruger effect and the book that I mentioned, I think not only David Solomon, but I think the board of directors of Goldman, again. You know, there's that phrase, it's always the children that get hurt. And the shareholders don't understand. Because they stare at the stock price. And that's the price today. Okay. That doesn't mean that's going to be the price in five years. And there's some, you know

uh hackneyed expression about credibility takes years to acquire and minutes to destroy. And you know, uh I don't understand how they can go to work, do their job, take their millions of dollars, and and watch this. It it it literally in my mind, and and I'll get off this subject in a minute. It literally in my mind is the emperor has no clothes. Like you're gonna wake up one day in some

You know, like that short seller, the guy who was always talking about bad companies and they go down. Uh Mark Cohortis. Mark Cohotes, yeah, or Heisenberg Research. Which one? Heisenberg Heisenberg, right? So I saw a picture of David Solomon. Um uh spinning and he's got his hands in the air and the smoke's billowing and he's got this shit eaten grin on his face. I'm sure he's got a boner, you know, the whole thing. Uh w one of the few times. But uh and I noticed

The fucking guy has a tattoo on the inside of his arm. Now, look, I get it. I uh you know everyone has a huge Difference of opinion about tattoos. A lot of its ethnicity, a lot of it's generational, okay. But under no circumstances. Does the head of a major investment bank get a tattoo on his forearm? I I I challenge our listeners. Send in the picture.

Or even maybe like 150 years ago. Maybe uh uh you know, yeah Marcus Marcus Goldman got it uh or perhaps Uh uh uh God forbid there was a uh concentration camp. survivor who went on to run an investment bank and would have had yep a number tattooed on them. Right. But absent that um Anyway, I I if I beat the horse dead, I mean I don't know. I just took it the post had nothing to serve up, but other than the layout.

Two weeks ago the post told you that Goldman had layoffs coming. What'd you get on Wednesday? Layoffs are here. Layoffs are here. Post told you. The post two weeks ago Post told you. I I know I know you make a point of us not blowing our own horn. But it was predicted here weeks and weeks ago about the Wall Street layoffs. And that strap in kids, because you're looking at two years of this.

I heard an interesting uh uh concept. Um I haven't had a chance to run it by you yet, but it's it's not off the reservation. So you have uh an age category and I'm not sure exactly what it is, but it's basically the younger generation that went through the analyst training program during COVID. Mm-hmm. So these young people were um Trained via Zoom or however. I have heard a conversation with the major player in the world of finance.

They will not look at a resume with a person born in the year that would indicate that they were um trained during COVID and it's not the training, it's they have observed a lack of ability to work create create create creatively with others. By the way, that was not a Joe Minutian freeze. That that was a I just got stung with McConnell Mitch McConnell. Sorry, yeah. Whatever. They're all What do you why what do you why are you paying attention to him? Joe Manchin. Joe Manchin.

Man and Steve Minution, you got a good you got you roll the you roll the good one. You roll the bunch of fucking clowns into one, Steve Minution and Joe Manchin. If those two would freeze, I'd give a fucking standing ovation. I was just delighted to see Nancy Pelosi announce that she's running. So this is my throwdown. Okay. Who's the guy that Mitch McConnell? He's the one that froze, right? Yeah, twice Okay. And so yeah, Nancy Pelosi. So this is what I propose. Okay.

If they want to run for office, they got to run a 50 yard dash in under three minutes. Dude. Dude. Please, please. Oh. They're they're 84. She's gonna she's gonna sign up for another four years. What kind of leadership is that? What is what does that tell the younger guy? Like with the younger women. What like how's that like stepping aside for the next Whoever, you know, I don't know their names. Mallory McMahon or whoever it is. Pick some young rising star, some female. I mean

Dude, it's it's gotten brutal. And we shined a light on that a long time ago. Uh and I don't want to get point pointed at I don't want to get labeled as age age. But I mean, it's come to the point. Are we gonna have Joe? I heard Joe embarrassed himself pronouncing the Saudi prince's name wrong.

Okay, you can't go to Saudi Arabia and mispronounce Muhammad Bill bin Salaam or whatever it is. I I don't need to get it because I'm not going to talk to him face to face. But our president, our leader, our the face of our nation can't go there and botch Right? Am I right? Yes, however.

You know, the Saudis aren't our friends. I mean, so just talking about one of the biggest investment disasters of my career, a number a number of years. I became acquainted with these things called master limited partnerships. And so, long story short, It's a vehicle that got set up, which basically is structured in in the area I focused on is transmission of energy, meaning pipe. And at the time, um the yield was really good, and that was mostly because I misunderstood the product.

The man who claims to know how to value. Okay. But what I liked about it was it was. Domestic secured energy. Which in my mind gave us geopolitical freedom, meaning we weren't hamstrung on the whims of a bunch of Uh oil cartel? OPEC, yeah. Oil cartel. So now we've wasted all these years. And I understand, in fact, even in the Sachs house. There's a huge discussion about, you know

getting oil out of Alaska and the environmental damage. Um to me, I try and walk a fine line between understanding we need the energy And uh we don't want to destroy the environment. I I mean, I I once went on a family vacation out west and we saw one of these tree farms.

Where they harvest the lumber. And I'll tell you something. For uh an hour on the highway driving through this thing, it was a blight upon the land. And You know, I not that much later I was in an investment policy committee meeting, and it came up that the firm had an investment in these tree farms. And so I make the mistake of sticking my hand up and I'm like, you know, I I've seen these things and they're fucking nasty.

I got hooted out of that meeting. They ran me out of town on a rail. ESG meeting ESG Pioneer? You were finder. I'm always a little bit ahead of the cloud. Yeah, no kidding. But but the bottom line is. Uh we have people who are determined to fuck with us, and we've given them the flexibility to fuck with us. Now There's gotta be some way

Okay, and I'm not talking about solar and I'm not talking about wind, but there's gotta be a way that we can find a compromise. And um balance this because what people don't understand is you know We're s we send spend a lot of money on defense. And a lot of that money is to protect the Saudis, yet their willing to cut our nuts off if it suits them. They're already closing up to China and to Russia, right? I mean, you know.

What what what what more do you need? So I I I'm a little bit disappointed. Um not just that I lost a lot of money. That that clearly didn't cheer me up. But but i intellectually I feel a bit vindicated now. Um But uh, you know, when you got people like Nancy Pelosi running. So there's that phrase, watch what I do, not what I say. Look at San Francisco.

Would you let your son or daughter go for a walk around? Dude, not my friends. I I wouldn't you know I I would be hesitant to send my enemies to that war zone. I mean they took they run They wrecked what was the crown jewel of the West Coast, wasn't it? Like you c you you had to cough up six million bucks for a thousand square foot, you know, it was pretty cool. It was insane, you know, it was the j the

It was gorgeous. And then Oakland went and then San Fran San Frans on on the high heels behind it. So let's uh let's give somebody who's a total fuck up. And give'em more responsibility. That's how we roll. Yeah. That's how corporate America rolls, not yeah. Um Anyway, I don't wanna sound like I got the grumpy old man thing going, but it just you know, I I I saw recently uh and to be honest with you, I didn't watch the interview because it was too heartbreaking.

But I think we need to have some rules. Without them, we live with the animal. Uh so um last week I think we discussed

The sad clown Lee Cooperman. Come on, I wanna I'm here to defend Okay. I'm drafting the team. I'm taking Lee on my t Lee's on my team. Okay, good. Cause I think I can be of some assistance to you. Okay. Now Um, I didn't see this, but where on the street is he was on CNBC and he started crying again, right? Is that true? I can't confirm it, but that's the that's what I saw. I couldn't watch. I don't want I couldn't see it. But it tears. Right? Tears. Okay. Okay. So a couple things.

One is um he's an elderly man who's suffering from depression. Okay. And because a number of my friends' parents are that age. I I've come to understand there's several very effective techniques. for dealing with older people. Uh with Depression. I can understand it. I'm not his age, thankfully, but I am uh in in similar career art.

Where you've spent your life working on Wall Street and the goal on Wall Street is to make money. Okay. Then When you've been doing it long enough, even if you're mediocre, when you're there 30, 40 years, you acquire enough money that Unless you're into buying, you know, art boats. That's uh the other thing, boats, um, you're probably gonna come to realize that. You s your life's work has been to acquire a pile of money and now when you're

sixty, seventy, eighty, you realize that money's not gonna buy you time. Now, it might if you have health issues, this or that, but you know So y you've what have you achieved other than building a pile, which there's always gonna be someone with a bigger pile? And that that leads one to a um What I've come to to understand is called a um An inferiority complex what the inferiority complex? What you got some you have some funny name for it? The existential conflict.

Okay. Yeah. Like what what what what have I achieved what have I achieved in my life? So all he's ever done is trade the market and talk about the market. And so, you know, older people They look at their life and then they wonder what what have they accomplished and then a lot of times uh not a whole heck of a lot. And as they get older and the grim reapers coming, they start to question You know, and a lot of times it's not that great.

And as you're nearing the exit, it it can put you in a bad place. So this is not an uncommon phenomenon. Um, one which I've referred to as my friend Tom Cromey a couple years ago sent me this article about. Great mathematicians, great music musicians, what happens towards the end of their career? And the the ones that because most Mathematicians and musicians, I guess maybe scientists, I don't know. But they they have their breakthroughs a relatively young part of their life.

Certainly thirties, maybe forties, but that's pretty much And the ones that reinvent themselves. to become teachers and mentors live very full happy lives. And the ones that sit there constantly trying to bang out you know, the next great opera or next great it's it's miserable because that time in their life has passed. And I would I would say there's an element of that in trade. Okay. And so, you know. To see him a couple of times now fall apart on TV, I mean, you know.

Yeah. Someone some of us should be asking the question. Yeah. Um apparently um He hadn't been taking the uh uh stool softener long enough to make a difference. Well hopefully he read the journal. The the journal picked up on that. So the journal ran a nice a nice article on uh on Friday about the the national shortage. Okay. The national shortage of so M B

Chimes in last week. What are the chances, dude? You do 110 shows here. You dropped two words, stool softener last week, talking to poor Lee. Okay, what does the journal run an article about? Friday afternoon? The nationwide shortage of laxatives in America. And I'd like to remind everyone that collase is the official stool softener of inside baseball with all chestnuts. Yeah. Um I proposed a whole segment which got vetoed. Talking about the difference between laxatives and stole softeners.

Um apparently there's been so much interest that might be a separate show. Dude, how about you and Lee t maybe instead of just, you know, bashing them on your radio show, pal, maybe you should take Lee. uh out to dinner again, you know? And you could you could have this conversation with them. You clearly have a connection. And I want to defend Lee talking to the plumber at dinner with you. Who are who are you?

back then, okay,'cause he was him and you were you at the time. So like, you know, this is Lee and you asked him out. Okay. So if he's not talking to the plumber Kind of you know, the sump pump, that's got he doesn't wanna have water in the basement. He's gotta take the call. He's gotta take the call. Okay? So you can't bash Lee at the time, you know, like

I mean this is Lee Cool talk about this isn't this isn't you know, this isn't Pip uh what's the the Wally Pip here? This is you know, this is Luke. Now first of all I we're you and I have big gone to war together. Okay. And many dinners, yes. So and bike rides. So I'll let the water roll off the duck's back. But far from bashing it. I'm pointing out it's a cry for help. I dude, I totally agree. I do. I I I agree. And dude, he's not, he's old. He's an old timer.

Go like stop working. Stop talking to C N B C. Uh next time I see you on C N B C I want you to be in West Palm sitting on your deck smiling, you know. With like your dog by your side or something. I don't think I don't think he can smile. I I don't think it's possible. Going back to the crying, I just wanted to circle back. Um When you have a billion dollars Okay. Or in DJ Sowell's case, a hundred million, a hundred and fifty million. Um, and you go on uh media.

There's no crying. Okay. You've you've signed away your right to cry in public. And that that goes to, I'm sure, I don't know, but I'm sure a big fan of the show Bill Axel. Right. I mean, I can see how you can talk about the markets and after a while you're you you start to feel for those poor little people that you've been taking m money from for all those years and I don't know. I just I I Just give me a second to compose myself. I'm so upset.

By the way, you know, you still have the Golden Mike Award from the Swiss Podcasters Association of Switzerland to to pick up. I know. I know. But dude, Bill talks more than me. I have a I have a weekly radio show and Bill talks more than me, dude. He cannot stay away from the microphone. I I do not care. No, he he he won he he he's uh Bruce Springsteen used the term. Bru one of Bruce's kids once said to him, he said, Dad, you're an attention whore.

Bill needs the tension. He needs the adulation. Yeah. And we're where better to get it than on the cesspool of Twitter. Yep. Um I I actually We haven't had a chance to bring this up at the weekly meeting, but I I know that you run a Twitter feed uh in conjunction with the show, and I I don't yeah, I I'm starting to think I'm not that comfortable with that. I I mean there's no

There's no gun to the head, but I I do think we need to bring that up a little bit. I I I just you know, if it wasn't run by a man who, by his own admission, had a diagnosable mental illness. Okay. I think we produced too high quality of a product here. to run the risk of being commingled with that. Uh I just throw it out there. Um I I don't uh I don't go on uh Twitter myself

Uh I was a Facebook user up until a number of years ago and I downloaded the pictures that I had. There was some nice pictures, although I haven't figured out if I can actually retrieve them. I think they're sitting on a file somewhere on my computer. Uh anyway, I you know, if you look at what's going on with depression and suicide. It's like high fructose corn syrup and obesity. Just map those two things on top of one another and the correlation is uh is one.

Um speaking of correlation of one, not. My favorite thing is nearly a day goes by without an article talking about massive central bank buying of gold. The fucking thing doesn't go up. That's like it's a thing. It's like h it's like model trains, dude. That's like a hobby for some people. That's what gold is. Gold is model trains, okay? I love model trains. Uh you know, I'll go watch them.

But I'm not gonna buy it, I'm not gonna spend money on it and put it in my basement. I'm gonna go look at it. That's a whole you know, that's like a whole thing, model trains. I'm not kidding, dude. I'm a model train fanatic. So then you know about this, like adult men. build like whole networks and they sleep in the room as ch taking yeah change turns as the as the engineer. Yeah, yeah Rod Stewart's a big malachrain game.

He's got his whole basement done. That's gay. Sorry. Stop it. Rod Stewart's a legend. Leave him alone. It's weird. It's a little weird. Don't get me wrong. Right. Going back to the going back to the gold thing, one of our listeners, and I apologize for not remembering who When I commented about Russia was selling gold, he wrote a very long explanation on the comment section. Clearly knows way more about Russian finance than I do, and explained to me why I believe Russia was a net.

you know, importer money because of the oil and this and that. You know, I gotta tell you something. Um maybe if you pick a point a year ago or two years ago. Gold's a little higher since then. And maybe if you pick it in yen or some other currency, it might be a little bit higher. But right now, Putin is shooting missiles off every day. And last I checked, he's digging

out of his own cupboard. He's not getting them delivered by Biden and company. That money's coming from somewhere. And you um as seeing as you're married and you've already done the engagement. You may not have noticed, but me being a student of the market and liking to watch a broad swath of indices, apparently the price of diamonds has collapsed. Thank you. I have a feeling uh Russia exports diamonds.

And Russia exports gold and Russia exports oil. And I was shocked. Liter no bullshit. I was shocked. Apparently. And if I'm wrong, guys are gonna jump on me. There's an oversupply of copper. And the production of copper in the next couple of years is way gonna outstrip the demand. Now if I'm wrong, I'm sorry, I apologize. But if I'm right.

that throws into question a whole shit ton of like economic growth and electric vehicles and and and so um Like I said, we didn't talk about the market much last week, and I don't know that we need to talk about it much this week, but um seeing as I was sort of starved. for um uh a way to cohesively uh expand on my feelings of where we are. I stole, cause genius is steal, um, and I'll pronounce his name wrong, sorry, but Torsten Slock. Got it. Who works at uh Black

Apollo. Apollo. Apollo. Yeah. By the way, Big Ed and I, along with you, we were trying to estimate how Leon Black paid. Let's go with

Let's go to tourists. Let me just finish this. All right, tourist and slack. No, no, no, no. What are you gonna what are you gonna finish? Finish it. Well well, just we were trying to come up with How invoice Leon Epst Leon Epstein paid excuse Leon Black Black paid Jeffrey Epstein a hundred and fifty million dollars and I replied uh what is it three grats in a living trust yeah yeah exactly and then add added eight hundred grand for photocopy expenses yeah exactly done um so uh

Given attribution, which I think prevents me from being sued, and by the way, Being sued is part of my marketing strategy. So anyone that wants to sue us, don't bother with Liam. Sue me. Come for me. Okay? Anyway, Torson. Independently, I have thought about these things, but he did a great job. And when we talk about this, let's roll into what you talked about, about man on the street. Okay. So Apparently the economy must be booming because interest rates are going up, right? Obviously.

So this is the ten downside risks to the US economic outlook. Number one, households running out of excess savings. You can't open up a chart package and see we're through that, right? Secondly, student loan payments are restarting. I don't know if that matters because I don't know that they pay anyway, but Um delinquency rates are rising for credit cards and auto loans. And there's this new thing, uh they've come up with a new gimmick. It's like

Purchase today, pay tomorrow. Oh yeah. Something buy buy now, pay later. Like yeah, like the old fashioned But it wasn't even like layaway. I think in layaway you didn't get your your goods you didn't yeah, you didn't get it till you pay. Yeah, no. Yeah. Nowadays you go on your phone and you can pay a hundred bucks a month for your twelve hundred dollar e-bike and get it tomorrow.

Yeah. In the old days they would say, I'll gladly pay you tomorrow for a cheeseburger today. And to which point you would say, Okay, I'm gonna put it up here on layaway for you. And when you pay me you can have'em. Yeah. Um so uh delinquency rates are no good. Default rates are rising for high yield and loans. This is a bigger one, but it's subtle. Interest coverage ratio is falling for investment grade and high yield.

That's subtle because it doesn't matter till it matters. What do I mean by that? It doesn't matter until you got a refile. And these are not thirty year loans. These are, you know, commercial loans like seven years, five to seven years. So at some point they're gonna have to refi Um the banking sector loan growth is slowing rapidly. That's a big deal. Like banks aren't making loans, businesses aren't growing. Can I can I just do one thing on that? Can I do one thing on the loan growth? Please.

I saw I saw half of the country, fifty percent of the country would get turned down for a car loan. So fifty percent of the country cannot buy a new car because of high o high prices and interest rates. Half of the country Yeah. And you know the back up to that is I believe The drop in used car prices has uh abated. Meaning people are moving from new cars back to you cars. Yeah. So

Um anyway, these other things don't really matter. Oil prices, who cares? The economy in China, Japan, and Europe's slowing, who cares? long term interest rates rising for non economic reasons. Who cares? None of those things matter, right? High interest payment. Of course they Yeah. So now um Pray. Uh my young friend, where are the headwinds? Uh these are the headwinds. Where are the tailwinds coming from? I I don't know, maybe Nancy Pelosi's gonna give them each five million dollars.

Dude, it's the unhinged American spending. I mean there's just a new dude, the old s the old saying, a sucker born every minute. There's a new twenty year old kid coming out tomorrow that's gonna buy uh you know, a hundred and twenty thousand dollar Dodge Hellcat with a fourteen hundred dollar payment that's not going to college. Um and he's gonna live in his parents' house and spend whatever money he has. Like, dude, the money money is just

the w the way Americans spend is wild. Wild. I mean I got a sixty nine Chevy with a three ninety six Heeley heads on a hearst on the floor. Sorry. Um now I lost my train. Okay, here we are. What are the tailwinds? What are your tailwinds? There are there are none. Yeah. Yeah. Liquidate assets. Pay down your debt. That's the tail one. So what I was uh true story. I was really disappointed. We hadn't been off the air 60 seconds last week.

And I really wanted to talk about the shape of the Yo curve. Yeah. Okay. Um, I call it twos tens. I was gonna ask if you were gonna do the two ten or if you're gonna do like the something else, because there's another curve. I saw somebody in writing put uh tens ones. Um Good do they expose themselves on that? Well, all I know is if one of my children said tens ones or tens twos, I would slap them. I'm I'm just I'm just I'm just kidding. I I just cut their I cut their their um allowance.

They got it right. Um any anyway, um so looking at the closes from Friday. My favorite, the two year note, comfortably nestled at five percent. Now you go out the curve and the third year is a a four and three-eighths. So we're severely inverted here. And um You know, it's a little bit like physics when you get to absolute zero, sort of weird things happen. And so for me. The two year note feels like it's a freebie at 5%. Okay. The third year at four and three A's.

You know, I I I don't feel great about that. I I don't I I you know I'm not sure how this is going to play out, but one thing I've seen, and I don't really have an explanation as to why this happens. I I I will try and come up with a couple, but if the U curve normalizes in the way I expect it to, which is short rates declining and long rates increasing. You're going to get rising rates in the long end with falling prices. So a bear market. Okay. Bear markets and fixed income in the long end.

Excuse my language. They fuck up all sorts of shit. And The first example is in futures contracts because you have a window of delivery. uh in terms of date and securities. And so for the young kids who haven't seen rising rates, They don't necessarily understand the dynamic that changes as the longer duration asset. go down and all of a sudden become into what we call uh the cheapest to deliver. Or is the French Put it so succinctly, le cheapest of the level.

So that can cause all sorts of chaos. I think another part of the problem, and this would be um where one of our competitors Although we have no competitors, Harley Bassman might chime in. Part of the problem is as the bond prices go down, uh the duration changes. Mm-hmm. Uh and I I may not have that right, but that's a potential area. Certainly

uh the forward pricing of the yield curve changes, which messes up option pricing. And then any guy who's building a building His rates tie closer to the ten year note than the two year note, so it makes construction and all those sorts of industries slow. Um and I as I said, I I think the most likely scenario instead of this curve moving dramatically, in a parallel fashion, I I do think it's gonna be, you know, the niggling of the front end is gonna drop a bit.

with a Fed with some Fed easing and then the back end of the curve going higher in yield with um uh you know, loan demand picking up, something like that, uh unwinding of positions, uh a whole a whole host of reasons. So I mean I I've been pretty blunt about

how I've approached these things. So, you know, I've had floating rate notes that uh do better as rates go higher. Uh I've had some long dated paper. I've I've gotten out of a great deal of a long dated paper. Um I've gotten out of a lot of stuff, even the floating rate notes, because It seems like the one thing people can agree upon. is that the equity market is expensive.

And I'm not saying that it has to go down, like I I've given up on that, but at some point If the dividend yields don't increase, equities aren't going to look as attractive. And if that snowball gains momentum. Anything is gonna get the shit kicked out. It's just that uh all correlations go to one type thing. And the only thing that matters is cash. And and I don't mean like the reserve fund. I don't mean like

Tax exempt floating rate munis. I'm talking about cash and the ever popular uh two year note. Yep. Um So I I I'm kinda I'm kinda sticking with that thing. Um I guess I'm surprised the employment statistics are holding in as well as they are, but if you heard me say it once, you've heard me say a thousand times. You know, these models that forecast are slow to turn. And I I have to believe. I I won't hear otherwise that The COVID thing has changed the supply demand pattern.

Almost in a laughable way, right? Well, I've said this before. So initially everyone's trapped at home. They can't go anywhere. They're getting all this money, they're buying shit left and right. So what happens is the store shelves at Amazon, they're empty. Okay. Now they can go out and Get some fresh air. So what's going on? Everybody's going to Europe. The restaurants I think are packed, right? Anything to do with outdoor. My friend um Marty at Alpine Endeavor. She's like not had a day off.

three or four months because everyone's like, I want to get out, I want to do things, I don't care what it costs. The revenge experience. The revenge experience. Yeah. Yeah. Yeah. Like I don't know. Uh but dentists, doctors, all those guys that offices were vacant. So you see what's happened, right? You you had this exogenous shock. And then human behavior has behaved pretty much as you would expect it to, right? Because I've been trapped.

I'm sick of looking at the computer. I wanna get out and I wanna do things. And um So just a lot of people lost a lot. A lot of people lost a lot with kids. If you had kids in like developmental like years, if your kids were between like six and eight or eleven and fourteen or whatever, those kids got robbed of a whole chunk of their life.

And those people are gonna get it back, dude. Like the eastern seaboard, anywhere I went for vacations and even looking forward to the winter, I mean, plane tickets. Crazy. I mean there has just been no respite. Hotels, planes, travel is still Slammed. You go to the airport at four o'clock in the morning.

I mean not you obviously but like some people have to go some some of us go to the airport at four o'clock for that seven a.m. jet flu, okay, out of LaGuardia. Okay. So LaGuardia at four a.m. is like it's just Okay. So that's I I told you we're negate we're renegotiating your contract in October. Okay. Okay. No, but so you and I are like mind, right? So to see these surveys, all the service sectors picking up and and uh so I don't I don't I don't know. I I I just I got a plan.

I'm unlevered. I'm sticking to it. And I I think that uh when the money runs out. Unless you're a certain kind of ethnic cohort living in San Francisco waiting for your five million dollars.

You know, you you something something's gonna happen. Um I I I I I this doesn't have really much to do with anything, but uh I just wanted to to bring it up because Is you know and we've mentioned I subscribe to a lot of uh uh a broad range of uh investment advisors, research, research market. I read a piece and I won't embarrass them. What's the point? Okay. But it was the most absurd piece of shit. I don't know how they let this thing go. And so basically I'm canceling all of my subscriptions.

Except for the daily shot. And the daily shot, I I guess I gotta keep paying Kevin Mirror. It's'cause it's in Canadian dollars and that would be I and I I think Kevin has good stuff. I he I think he has too much. I'd like to see him settle down, focus. You know. you know you don't get paid on volume you get paid on quality

I had one of these guys write an article about how he went back and looked at the last hundred years and how gold and the dividend of the SP and it's an anti-fragile asset. And I'm thinking, you know. How are you gonna move? And and and it as you know is my want, I like to think of things as to how do you move.

a legitimate position. I'm not talking about and I know this will upset you, but I'm going to say it anyway. I'm not talking about your Lynn Alden moving buying five shares of this or eight shares of that. Okay. Great economist. I d I don't care. Like that one's been gone for a long time. But you know, how do you move? You got to move a billion dollars, you got to move five billion dollars. How how are you gonna do it? And those things.

simply fascinate me, but but secondly, they show you the limitations of what institutional investors can do. So these clowns are making up how you're supposed to have some huge chunk of your money in gold. And by the way, Two odd years ago, I was one of those guys, right? I mean, I think I made a pretty good case. Didn't work. Move on. But you know How do you move ten billion dollars of gold from New York to London?

How do you you know, it's like I I I don't know, that's a lot of gold. And and I'm reminded, and I'm gonna take some latitude here, but uh my friend Robbie. Who who uh was a former colleague. He was around at the time and may be able to later on refresh my memory. But we trafficked in Italian government bonds. at at one point. Uh and I would claim arguably

We were top five in the world for people who owned um Gre uh Italian bonds. Okay. I I would also argue at one point we were the largest holder of Greek treasury bills in the world. Mm hmm. I don't know how the fuck that happened. Imagine that sentence. More sex, Greek treasury maven. But before my time not a lot before my time, but before my time, I think

somebody, I'll just say Robbie, because it's not bad. But Robbie bought a bunch of bonds that were bear bonds, meaning there was no name on them. Like you showed up at the bank, they're cash, right? And We had or they had to move them from Milan to Rome. Okay. Fair bonds. And I think ultimately they were able to register them. But they were trying to cobble together these Brinks trucks to drive. across Italy. Now, you've seen the Godfather. I mean, you don't think

Somebody or how about like in Goodfellows? They knew there was a chunk of cash coming and they just Oh yeah yeah ro robbed uh a JFK? Los Tanzia Yeah, yeah. So Mr Schmo with his anti fragile goal decides, you know I got I need to spend a little time in my orca with my hookers and my drugs. You know, break me off half half a yard, send it over. Oh, and by the way, by the way. Did you send this? No, I think Big Ed sent this to me. A doctor in Nantucket.

Just got caught. He's from Florida. From Florida. The guy's from Florida. Florida man. Florida man. On a yacht. With hookers and cocaine. Where where was this? Nantucket. Nantucket. Yeah. Hookers, cocaine, and handguns. Sleepiest island on the east coast. If you go to Nantucket. Hey, hide and play in sight. Uh yeah. Yeah, yeah, yeah, yeah, yeah, yeah, yeah. Yeah, no, I saw a big boat too, big ninety-six footer, yeah, yeah, yeah. Whole gang of hookers and

And drugs and ketamine and pistols. Everything was fine, but his license was expired. That's what they oh that's what they think. Yeah, you might the drugs and guns were fine, but your your medical license No, his pistol license. They were like, Oh yeah, the guns would have been fine, but your your license expired, sir. So like, you know, you would have had like a ticket, like you would have had a narcotics ticket.

You know, like a a desk appearance ticket. They would have sent him back on his boat, but he his Florida crystal lightning fucking clown, you know? You clown. Yeah. Yeah. You know what? Crime is everywhere, Morris. Okay. Nowhere is nowhere is safe. Next thing you know, it'll be Greenwich, okay? God knows.

Well um Apparently, I I stopped going to the store mostly because just Which by the way reminds me of the Next Saturday, meet Liam and I at the Whole Foods in Porchester. We're gonna have a stand. We're gonna have balloons for the kids. If you're a fish fan though, bring your own balloon. Yeah. Okay. I don't know. Um you were talking about the um

What's the debate in the Saks household regarding the uh drilling in Alaska? I would really like to sit down for a a round table discussion regarding that. 'Cause I would like to get the opinion on nuclear'cause I believe a nuclear uh what's can we get a an uh a read on the unanimity of opinion on nuclear. To them, they're scratching their heads why that's not all we're using. Thank you. Dude, I grew up in the shadow. Okay. I grew up in the shadow of Indian Point.

Okay. Okay. You know what Indian do you even know what you know Indian Point? Yeah. Okay, fine. I drive I drive by it on the way to the gunks. Big exactly. Yeah, exactly. I drive I drive by it every single day of my life for the last 40 years. Indian Point, okay? I sa I fish in the Hudson, I swim in the Hudson, I grew up here. You know what the the the motto for Indian Point was before these lunatics got it shut down? Safe, secure and vital. Safe, secure and vital. Okay.

You would never know Indian Point was there, dude. I don't have three ears. Okay, I'm fine. So like this big thing about oh nuclear isn't safe, you could put that fucking reactor in my backyard. To to augment what you said, I've been to the Gung. Two hundred times. Okay. I couldn't even tell ya where it is. All other than I know Exactly. I drive right by it before you get that rocky ledge up in the hill near where John Ford piano tuners is, right?

Do I have that right? Yeah, a hundred percent. Yeah. Yeah. You would never you would never know. You can't you can only see it from the river. It's safe dude, it was it's clean. Okay, so what? They used wastewater, but like Dude, New York City, that thing powered New York City, okay? And they got it shut down. Ri River Keeper got it shut down. All right. Whereas it was clean and they would have run it for another 20 years. Um, yeah, the the clear answer.

and that it's been shut down by the the you know the environmentalist lunatic They have they've really What's the word of they've they've they've mischaracterized they've portrayed nuclear in a light as if it's dangerous and three mile island and all that bullshit. When the fact of the matter is, dude, that thing's humming along, not bothering anybody, clean and cranking out free electricity, you know?

Yeah. Although although although I will tell you I have a complete uh kit of iodine pills in case there's a nuclear leakage. This no, this will be the best part. I bought them like 10 years ago, right? So something happens. We're gonna need them. And the first thing is gonna happen is I'm gonna be like, We're good. I got these things. And then I'm gonna hand one to Cheryl and she's gonna look and like they expired ten years ago. Totally, 100%. No doubt. I'm like, you're fucking faking.

I don't know

Are we run out of time? No, I got time. No, no, no. What else you got? You got a you what are you looking for? What are you paying attention to? Are you looking for any numbers? Do you care about numbers? You care about rate hike or hold? Do we have to have that exhausting conversation? Hike or hold? Higher for longer. They're not cutting rates anymore. I I I've got everything exactly where I want it. I've got my floating rate notes.

I've got some long paper, not as much as I did. Okay. And uh I'm I'm pretty liquid. It it it's one of these things, if you wanna talk about risk. And for me, that's you know what this is supposed to all be about at some level. Okay. I know it's it's stealing From Warren Buffett. But there's a lot of logic there. And one of his things is, I don't know whether it's 10 or 20, but he said, you're given a ticket.

And in your life you can make ten investments. And each time you take make an investment you you click off one of your things, right? And I'll tell ya Just like When Ed and I figured out the COVID was gonna be a problem and I'm like, I can't believe I'm getting out of this stuff at these incre incredibly good prices, is the world's coming to an end. I can't believe I can buy And I'm not gonna debate this definition, but I can't believe you can buy a riskless asset in five percent.

and sit on your hands and wait for your Minsky moment or whatever you want to call it. And and by the way, y you don't have to have a Minsky moment. You know I traffic in these munis, right? These markets trade. Some guy comes in on a slow Thursday and he needs to sell a chunk of some bond. It doesn't have to be a catastrophe, yet if it's slow and he's got a sell.

Boom, you're you're in. This concept of uh you know having to constantly be involved and stuff. We we had a um One of your epic uh show titles was Lie Back and Enjoy the Carrie. I think this is this is like going to school on scholarship here. Just take the money, you know. I mean. Wait and wait. And there's gonna be this I've been doing this a zillion years, okay. I mean maybe four months I had to wait before some stupid good opportunity came by.

I I I I just don't feel the angst to have to do anything other than kinda get my ducks lined up. while everyone's running around spinning about Bitcoin and AI and you know I mean like AI AI I I talked to a guy who's like an AI guy. He's like, yeah, it's fantastic. And yeah, it's gonna take five to ten years to implement. Right? Uh I mean people and and just a little side note. Um You know, I've beaten myself up about my trading of Apple. Rightfully so and for for my birthday, um

the kids got me the Apple headphones, which you can see I am wearing now. I think I they look very nice on me, I might add. But um There's a point here. Um so during the last fish concert, don't hang up. I bought the the season pass. What I I didn't read the fine print. It only plays on the 4K, which I paid up for, only plays on 4K devices. So I get in the bed.

I put on my headphones and I flip on the fish and I can't it doesn't play and I'm you know now I'm all pissed off and uh I finally figure out what's going on so I'm lying in bed And I realized the iPhone. is four K. So This is where it got particularly interesting. These headphones have some sort of spatial awareness. So imagine. Being on the floor at the garden. Okay. You and I are standing next to each other.

And you're looking at Trey and I'm looking at Mike and I go from looking at Mike to Trey and I turn my head as I'm watching it on my phone. the sound changes. It makes it feel like you're in the room. And the two points I want to make is one is that is now the end of humanity, because there's not a teenage boy that's going to leave his parents' basement. That's number one. Number two, I went back and looked at where I sold Apple. The la the final shares, okay. It has only doubled.

Now I know that's a lot. I know, I know, I get it. But it's it's I thought it was up like 10 times. So I you know interesting. Interesting. I I mentioned that to Leslie. I said, Don't ask'cause you know I'm not gonna buy it and he again said, you know, yeah. No, let me make you feel better about the uh the four K H D thing. So

Unlike you, I d I didn't buy the season. So I pick and choose my nights. So I want to watch the Sunday night. I get the cho choice. Do I want to buy the HD or the four K? And and the H D's twenty-nine, the four K is thirty nine nine.

So I buy the the 4K obviously all right and I watch it and I and I'm like doesn't look doesn't look great. I'm like I thought it would be a lot clearer, you know. I thought it'd be like when I walk into Costco and I have that TV that looks like like it's real life. So I go, well, let me think about this. Of course not. My dumbass, I don't have a 4K TV. I have a regular uh an HD TV. So the next week I said, let me buy the HD version. Beautiful, dude. So I paid 10 extra bucks.

the last the last 50 shows I bought buying the 4K version and watching it on my HD TV like a fucking moron. Well, just before you uh throw in the town by a four K T V. I got like six of I got six of them here that are sitting getting dusty. So just swing just swing on by, pick up your fucking award, take a TV and go. All right, I'll see you in an hour. You have a good one, pal. All right, buddy. I'll see you soon.