Watch What They Do, Not What They Say

A month ago I learned just yesterday.

Greetings and welcome to Inside Baseball with Old Chester. I'm Liam Allen with my friend Morris. Remember how bad the music used to be, MB? Unbelievable. What a what an incredible return on our investment with the sound truck and the producers and the overdubbing and the whole thing. We nailed fucking nailed it. Just goes to show you with an unlimited budget what you can accomplish.

For anyone that's new to the show, welcome to the program where we uh we're we'll do accounting two oh one this week. Um but where this program used to open with a a really, really tough audio segment that that sometimes consisted of like an equalizer and and it was just a brutal introduction that people gave us a really hard time about, but we We persevered through that and uh we upgraded the audio. We got a um a super bowl

Producer on board, a 12-time Emmy Award. We got some advice from uh an entertainment business legend. Um, and he said, stick with it. It's good. It's it's it's on brand for you guys. You just need a little quality improvement. And here we are, season four, and we sound great. And the number one podcast in the world. Did you know that? I did. That's did you see we have an app now? Did you did you see Yeah, I'm I'm I'm a party to that, yes. Um

Yeah, well that was the webmistress run amuck. Um so uh yeah, we have an app. We'll talk about that later. Let's talk about the app. We'll talk about the app and the festival after we talk about how the Fed needs to hike rates.

Uh they need to hike rates. Yeah, we're not cutting rates. We're gonna hike we we need we're gonna have another we're gonna hold it until until June, July, and then we're gonna hike. Okay. I wouldn't rule it out. I'm not. I'm not lean in one way or another. In fact, I um wanted to tell you um I'm crying, Uncle. Like I have no uh I I usually give you the old You know, June and December or whatever fucking month you want, but

I'm Uncle. Well, good. That that's perfect for your prediction of choppy data and tough speed. So your overall umbrella, the overall umbrella has has protected us from this storm. So um to steal from Grant's interest rate observer. Um, uh I'll just go ahead and if Jim doesn't like the free publicity, he can sue me or us depending. Oh, no, no, no. We love we love Jim here. Like almost daily grants. Go ahead.

He uh goes into, and because of my failing eyesight and poor light, I won't be able to read this entirely, but he breaks down part of the CPI number that freaked everybody out. And apparently uh he he's looking at um there's a Uh exotic measure called the Cleveland Feds sixteen percent trim mean CPI. Which excludes items whose expenditure weights fall in the top eight percent and bottom eight percent of the price exchange distribution.

printed at a point five percent versus at a point four percent in December. Now yeah exactly. So it is I have said many times First and foremost, one number does not a trend make. Secondly, economic turning points. I will continue till they rip this mic from my, you know, dead hands that at inflection points, these numbers are worthless.

And so we continue to come back to the same thing over and over again. You need to base your decisions off of your own situation. And if you're in the business of being a professional money manager, which I am not anymore, uh, you know, first of all, do no harm. Right. Secondly, there was a really nice article in Bloomberg, I think, describing describing how the hedge funds are taking even more money.

from investors. Um again, uh a very minor but noteworthy victory for the little guy. Apparently And I don't have all the details. But word on the street is some court has decided that the real estate brokers have colluded to keep the uh commissions artificially high. Now You know, when I went to school, which was a long time ago, anti-monopolistic behavior uh yielded what was called treble damages. Trouble for those of you who aren't musician m musicians means three.

Now I I think they got hit with a pretty big fine. But i you know, as I've said many times, and I I do think it bears repeating, real estate brokers are like prostitutes without the integrity. And um now they're getting even less money. So for all those housewives with nothing to do, picking up two, three hundred grand a year, schlapping people around in the Mercedes that their depreciation. Yeah. I recommend Costco.

I and here's there's a couple reasons. So let's say you're in the military and you do your service and you get out of the military and you can't get a job. All you have to do is go to Costco and they will give you a job. Another way to get a job at Costco

is to go to Costco and you ask for a job and they'll give you a job. So the military seems a little bit overkill, but um I I think some of these Grenache moms um Yeah, I like to see them put their back into it a little bit because I remember uh many a night I might be at a bar uh or let me rephrase. At a restaurant. waiting to meet somebody for dinner. The the Greenwich Housewives with the die jobs will be drinking their Chardonnays, bitching about their husbands. And you know what?

I I don't blame you either. Most of the guys there are slobs, but you know it What can I tell ya? I you know, move on. I I think the world needs more Teachers. Go get it go get a teach learn how to teach middle school English. Do something. Both my parents were teachers, as you know. My father taught public school for thirty-eight years in New York. My mother taught in private school for forty years in New York.

Um still got students that come back and thank them. They keep in touch with hundreds of students. My dad was a legend. Um Yeah, dude but like did teachers like teachers now, the public school system has become So frightening. I it's i I I don't wanna talk about I don't want to talk about the school system. Um I'm worried about where I'm gonna send my kid and all that. Um and college, am I gonna send my kids at college? College is like

spring break at a luxury hotel with a with a couple of classes. They're gonna come listen to you talk about accounting kids these days? It's it's difficult because I I think it's easy for guys like us and and and just to remind everyone, you and I are separated by a fair amount of years. It's not like we're two years apart, right? Yeah, we're j we're separate generations. Yeah. So I think it's easy for us to

Huss on the kids sitting at home playing Xbox. You know, we didn't grow up in that environment. We didn't have the helicopter parents. We didn't have the iPhones. Uh my sister was out here uh to visit and stop right there. Wait, wait, wait. Before you said the iPhones, I wanna thank thirteen D and I wanna thank the I wanna thank our uh

Who sent me? Well the the listener that sent us the the note that thirteen D put out about how iPhones wreck kids and how like I don't know how it got I don't know why 13D got on it.

But somebody sent it to me. Is it a uh what is his name? Ara or is it Ava? You should know this. I sent it to you. It's Ara, all right. Um he sent that about how Thirteen D used their platform and instead of gold and telling you to buy gold on Sunday night and sell it on Thursday, whatever they do it, they were doing They use that platform to to to broadcast that note and that whole study about how dreadful and damaging iPhones are. I'm delighted you brought that up.

As a former subscriber of 13D, okay, you know when they should have been talking about this? 2018, when Jared Lenure Lanier wrote a book. I put the book down. I didn't finish it. I put the book down. I walked into my study and I eliminated my Facebook. And um whatever fucking thing I have. Instagram. Yeah. Instagram or whatever it was. And I told you it's a fucking cancer. Yeah. So no, they get no kudos. Okay. All right. I'm throwing the fucking flag. Okay. Ten twenty grand a year.

You're it you you you've been bullish on gold forever and now and now you're gonna discover the internet. Is bad for children? No, no, I I'm crying bullshit on that one. Because we've we've talked a little bit. No, no, no. I I I you had your rant one day and I I'm I'm gonna get mine. Okay. So I'm particularly sensitive to this because I'm a father of three daughters. And I have a family with a history of some mental illness. And so

I did my homework. And as we have discussed, and this falls into the category of more debate than hard science. But there is general agreement that the teenage brain doesn't become mature until something into the very early to mid-20s. Which is why i if it hasn't happened already, you'll see this with your child children children. E.G. will do something completely stupid. And you'll be like, why did you do that? And he'll say, I don't know. And you know the truth is, he doesn't know.

He he just doesn't know. Yeah, it's like you hitting the kid with the plane. I know. I think about it every time this Exact. Thank you for remembering that. Or the 16-year-olds will all tell you they know if they smoke. it can give them cancer and kill them. But they don't have that logic circuit in place, right? That makes them think, well, then maybe I better not start now because quitting is hard, right? They don't have that.

So this situation took place at a time where you're in that age group of let's say Seventeen to twenty two. That is when Young adult mind is most susceptible to very, very serious mental illness. Schizophrenia, bipolar.

um e eating disorder, um what's that eating disorder? Anorexia. Anorexia, bulimia, yeah. All of that. All these things. Okay. And I remember during that period of time during my daughter's lives, just uh always being a little bit on the edge of my chair because I knew, you know, they're in a complicated world. uh who knows what you wanna do with your life. Do you do you wanna be a a business person? Do you wanna be a mother? Do you wanna be a teacher? Do you wanna be an artist?

uh you don't know. There's all sorts of changes with your body going on. And now we've introduced uh this concept that uh Jaron Linair had talked about, which is the bullying and the the group collection effect of these things. And so I think You know, I I don't give 13D kudos. for doing that. I I I just don't. I think they're late. have success at every turn. And I canceled my subscription to it. I I just I'm tired of hearing the self-congratulatory thing about how in nineteen seventy nine

he called the turn in interest rates. Ver very bright man, very amiable. I think he has overcome some incredible life challenges, his personal story. is worth reading. I think that's great. But you know, it's not show friends, it's show business. And they're in the business selling newsletters. And, you know, I I I just I just get a little tired of paying for stuff.

that I'm figuring out on my own, you know, the the I somebody forwarded me this thing. I think it might have been a GaveCal piece. What's their suggestion now? Yeah. Where are you supposed to put your money now? No, sad. No, no, they did not. They can't do that with a straight man. Silver. They have they must have said silver. Please tell me it's silver. I think well, I think it was more like

Gold but silver looks cheap. Oh. They're like matadors. They're like matadors. The the um The life coach Leslie Harris says something like, Go pick another wall to bang your head against. Not on my fucking nickel. It it it in for all of those claiming I'm an old man shouting at clouds guilty, yet, Your Honor, doesn't mean I'm wrong. Right. I agree. So I I'd like to now I've been a risk manager in some shape or form for uh maybe more years than you've been alive. Yeah. Yes.

So I thought I heard every excuse in the world. I l, you know, uh the the PL clerk was wrong, a trade got posted late. I think they marked it on the offered side, yep, yep, yep. This clown at Greenlight, David Einhorn. Okay, you ready for this? Are you sitting down? Oh, yeah, go ahead. The market is broken. I mean for fuck's sake. What is the sweetest music I could hear someone say to me is uh arbitrageur. The market is broken. Perfect. Fantastic. I'm in. Show me. Yeah. Yeah.

Cut the crap. Yeah. In in um this is what I invite people to do. They don't have to, but I took um two funds. One is Pershing Square, and you can get their net asset value on their website. And the other is A hedge fund that I uh signed up for Uh you know, I put in a redemption several years ago. I still don't have the money back. Um but what I did was this, and and I went through this, uh I won't say big ed uh audited my numbers, but he went through my philosophy, which was basically.

Okay, in year one you make ten percent, but the investor pays tax. Now I understand many investors are tax exempt, but uh this was, you know, if I'm gonna put money in one of these things, this is how I'm gonna do it. So year one, you pay tax. But they don't reduce the amount of your investment by the tax you pay. They just assume you have the same amount of money in. And then year three, they lose 30%.

Okay. Now you don't get to to to take the thirty percent loss. You're limited to three thousand dollars a year, right? Yeah, yeah, yeah. Okay, so we we we go back and forth. Meanwhile, the whole time They have what's called the high water mark on the trading, meaning they don't get a performance fee until they get you your money. But they always get the feed. And the one of the things the Bloomberg articles pointed out was they're throwing more fees into the

of things. So, you know, whether it's paying for thirteen D or paying for GaveCal or Dennis Garpin, if he's still alive. You know, the investors pay for that directly. The legal fees, the investors pay for that directly. That doesn't come out of the two percent that these guys are getting on top of the fact that nobody has a hurdle rate. And so the cash that's sitting there, let's just make the math easy. Let's say they're getting 5% on cash that's sitting there.

Um they get 20% performance fee on 5%. So what's up? A percent that they're getting for showing up for doing nothing. Yeah. I you know, you wanna keep doing this stuff. And again, I know a lot of hedge fund guys out there. You're good people. You you really are. Okay. It's not too late. Turn to the side of good and light. Say I You know, I'll get twenty percent after I beat the Fed funds rate. Okay. No way. Zero zero chance. Never go. Well, why would they? Why would they? Well probably.

So and that's why I chuckle at this David Ivar. I David, I I I know. I know. I know. Yeah, because he's a great, he's a great poker player, like he's a champion poker, you know, same thing with the clown uh Boaz Weinstein.

You know, nobody talks about him blowing up a Deutsche Bank. Yeah. Yeah, let's talk about that. You know, um a number of these guys, they They got blown out and they they started over. And I, you know, I guess that's okay. I it was never really my approach. And as I look back on this a little bit, I I'm first and foremost. I'm delighted with my how my life has worked out. You know, I I d I don't look back and say I wish I had worked more or I wish less. You know, it it occurred to me.

Not as soon as it should have. But this FOMO thing, you know, I I didn't call it FOMO at the time, that that phrase hadn't been coined, but I realized there was always gonna be somebody that was gonna have more money than me. Someone's going to have a prettier wife, someone was going to have smarter kids, belong to more country clubs. So I just better settle in and decide what do I want with my life and get comfortable with. And after forty years of therapy

Finally got that belt buckle. You finally got the belt buckle. I finally got that fucking belt buckle. That would have driven you nuts. You didn't get the buckle. You wouldn't, you would have sat here and been like, the one thing in life I regret is not doing Leadville again and getting my buckle. But you did it again. It that would have bothered you. That would have bothered you. Somebody.

Asked me about this. In fact, my climbing partner, the official guide service of inside baseball, though just not Marty Malatoras at Alpine Endeavors. We did some for a Jewish guy, we did some hard stuff. And and the question came up, you know, why did you why did you do it? And and it was a couple of reasons. One was the intense focus. gave me a chance to take everything that I was thinking about. that was on my mind. And for two hours once a week.

Just completely you just I I give you an example. I lost my focus one day. I slipped, I pendulumed. I broke a rib. And let me tell you, it wasn't it wasn't eloquent or elegant. It it was a fucking nightmare. Yeah. You ever break a rib? No. No, it's miserable though, right? Laughing hurts, breathing hurts. You can't everything. Every element. Now but but oddly enough. I'm a very good bike rider. I don't I didn't crash. So you're a little wobbly on the bike as is as a just to begin with.

So hot speeds and the wobbles, little frail Jewish guy, it's it's not a good recipe. You know that it does lead us to the trivia question. Morris Sachs has gotten stitches in his life twice. What person was the same person with them the same time? And the answer, of course, is Jason Tullis. Jason Tullis. Yeah, of course. No problem. Well, that's one of those things you see someone do something. It's like, oh fuck, that looks easy. I can do that.

Um But the idea, the idea, at least with the climbing, was I wanted a chance to clear my mind, right? The mountain biking stuff started after we had met, and we had been doing these, as you know, really intense group rides. And I had gotten to where I felt like I had become competent. And and to me that that really means something. You know, I I didn't make it around in every ride, but I made it around most rides and and I felt like I was part of the group, which was an achievement for being

who I was and my background. Okay. Then the guy who uh was uh did a lot of my mechanics, world's best wrench mate. Just started talking about this lead hill. And uh, you know, I sponsored him a couple of times and he he got it and he was on me about you've got to do this, it's right up your alley, it's not technical. It first of all. I don't know how it's not technical when the guy in front of me by 10 seconds the last time I did it crashed, hit a tree and died.

Some may consider that a technical course. I don't know. But um uh anyway. Uh You know, there's this element, and it's not for everybody, okay, but there's always been an element in me where I just wanted to see how far I could go. And and and and just push it to just the edge. And and you know, you have these you have these moments in life where and and I've talked about this before.

Uh for those who don't know, the there's this mountain bike race that's fairly well known. And some argue it's the hardest mountain bike race. I I I'm sure it's not, but it was the first of its kind. And it's fucking hard. There's just the hardest I think it's the hardest bike race to to from the gun. Yeah, dude. You got a throws that that guy's gunning for Leadville. That's a tough big time race. So okay, I'll st I'll I'll just say it's a hard race. And at mile 80.

You've been on the bike, I don't know how many hours, ten hours, something, ten hours. You hit the base of this thing called power line, which is it's basically one mile. at I don't know three four five percent grade it gets steeper than that my mountain biking shoes actually have metal cleats in the toes. So when you walk, you can get some purchase, right? And as Liam had mentioned, I, you know, had done this a couple of times and didn't didn't get the buckle. And so

Jason, my coach and I decided we were gonna throw everything at it. Okay. And I spent two weeks beforehand in Telluride. I met him in Leadville. And we went out and we did this power line and Liam's done it and uh he he can attest to the fact that if there's hell in mountain biking land this is it it it's just it the heat of the day no shade you're walking straight uphill you can't

I mean the pros can ride it, the the A-riders can ride part of it, but the bulk of it is fucking walking. And and so Jason and I are practicing this thing because What are you supposed to do? Practice the stuff you're good at? No, you practice the stuff you suck at. And I'm pushing this bike up to hell. And I look at this guy and who I I hold in as high esteem as possible. And I look at'em and I'm like, I'm

30 I'm 49 years old. I'm successful guy. I've accomplished everything in my life I've ever set out to do. What the fuck am I doing? Pushing a bike uphill. And he looks at me and he's like, you don't have to, but but that's the event. And and I look at this man who I really I can't I couldn't let him down. I couldn't look him in the eye. Okay, with the commitment he has made, not just to cycling, but to me. You know, I mean obviously

He was my coach and I paid him. But, you know, these guys are not in the sport to get rich, right? They're doing it because they have a pay. You know, I couldn't look at that guy. and leave anything behind, you know, and consequently Uh you know, the following race, I got the buckle and now I can, you know, Kaiser Sose, I can just disappear, which I plan on doing. But, you know, I wonder if You know, for me never having been in the military, which I I think is was a shame.

But I I I really felt like this was one of the rare chances where I'm clearly not in my element. I mean, first of all, I wasn't a mountain biker. I was a road cyclist. And by the way, it's easy to go from mountain to road. People do that all the time. They don't go the other way, right? Never. Never. So and I did it. And what what's great about that is

wiggle room. There's no you can pay a little extra and get to the front of the queue. There there's nothing. It's it's just fucking you against this mountain. or mountains and there was something in there that just seemed uh Like I had to I had to really see if I had it in me. And then, you know, I I I'm did a disservice. I had my number one fan, my wife.

and then my kids and then many of my friends. And, you know, when you have all these people rooting for you, uh how do you how do you let'em down? I I I just I I just couldn't I I just couldn't do it. And and looking back on that, you know I I feel as proud of that as I I do about uh really anything we talk about on the show, you know, like this trade or that trade and

You know. That's part of it for me, dude. Like you could have you'll talk about the trades and you remember the big trades, but like dr but you can remember that bike race from from morning to night of that day. Well, you know, I I I think part of it is People and it's it's not an insult. I don't think people comprehend How much planning and work goes into being able to do that race in under twelve hours. Now

There's plenty of guys you and I ride with. They could go out there and they could bang it out in ten, eleven hours and it wouldn't be a big deal, right? I mean, that's just how it is. But, you know, it fifty something years of age, it's it's a horse of a different color, right? And and, you know, uh so putting the time in was was really uh really productive to me. So um

Anyway, we received some really nice notes from from some people. And one of the people that I used to work with, uh uh, my friend Henson, had listened to the show and and really liked. The notion about managing trades. And he came back with a question I thought would be worth discussing, which is, you know. Let's say you find a trade that you you love and and you know, you have certain risk elements, but even with all your risk analements, what if the thing goes completely side?

Like it's just a five standard deviation rule. you know, what what do you do? And and I I I think it's I think it's the question. I I don't know if I have any real answers. I I I had it happen to me a couple of times. Um one was uh I bought some mortgage-backed securities from the mortgage group, the guy who ran it, asked me to buy a block. Um And that was back when we were in the quasi-partnership mode. So I felt like I was taking one for the team. But I didn't understand the trade.

And so the the first thing to point out is I've learned the hard way. If you don't understand a trade, okay, don't do it. Don't trust me. somebody else. If you can't figure it out, I don't mean you have to discover it, but if somebody shows you a trade and you don't get it, leave it alone. There's it's like Men, women, and buses. There's always another one coming along, right? So that was a disaster.

Uh we lost a huge chunk of money on it, but in this case It it came during the middle of the year and so we had the internal capital. Meaning we were up and off money, we went from being up X to 0.7 X. So that and again, that's not a great answer. Um But it was my own situation. I think the more telling one was the sort of the JGB problem we had, where we had a very large trade.

And uh to repeat something we've probably talked about a while ago, in Japan, the banks get to set the closing prices because the bonds trade on the stock exchange. And they uh colluded without question to force the Americans out of the standard basis trade. And I I don't think I've ever posted it on the website, but I have a square quote sheet which shows, you know.

Ninety nine percent of the bonds were unchanged in the futures, which all the Gaijing, meaning the Americans owned, were were down like two points. You know, it was just total ass fuck. Mafia hit It was a yeah, it was like in front of sparks. Yep. You know, kind of thing. Paul Castellano. Yeah. So two things happened in that instance. It first of all, again, we were up some money, but it it wiped out.

my year. Okay. What I did, and this is unique to me in this time and place, but I got my partners together and I went in a room and I put the trade on the whiteboard. And I explained the trade to them and I told them I Believe that this is the way to go. I'd I'm not arguing we're supposed to add. But I'm willing to forego any compensation as long as y you let me see this thing through, which was not even in another ninety days. It was something much less.

And, you know, i in the end, through various stories I talked about how I got out of positions. It's not gonna claim I made any real money on it, but it, you know. Again, I knew my time and place. I I knew the type of trade. It was my specialty. It went way further against me than I had any anticipation it possibly could. But again, it was in the middle of the year and we were up some money. So I felt like I had a little bit more latitude. And I felt that I had

I had partners who had my back. Now having your back on Wall Street isn't the same as Butch and Sundance coming out shooting, right? I mean, uh they're they got your back as long as they think you're not gonna cost them any money, right? But um but that thing that thing came out okay.

You know, if you're a sole practitioner, I um I would answer the question about sizing. sort of like this. And again, it goes back to my friend Henson. We were uh and you like this, I think, we were snowboarding together at uh Park City. Because uh Deer Valley doesn't allow Jews. Oh, I mean I mean snowboarders, I'm sorry. Um, and we were riding up the channel. I know. I know. Dear Rally Rally. Dear Rally.

I heard another good there's we went to a hockey game tonight. He did. No, we did. We saw the uh we saw the Oilers play the whoever the Arizona hockey team. So coyotes. Coyotes. Coyotes. Yeah, yeah. But it's funny. There are more Jews that are the Messiah than are in the NHL. Uh Hall of Fame. That yeah, I could find I bet. Yeah, it's probably a small source is believed to be reliable. But um

When I was riding the chairlift with Henson, who is um probably a tiny bit older than you, but younger than me, uh, he was uh a very senior salesman at Greenwich Capital. And and To this day we keep in touch. I'm very fond, very bright man, uh Princeton grad, you know, the whole thing. Gets it. But we were having a a conversation and to the best of my recollection, I'm like, you know.

You know what we're getting paid is ridiculous, right? And he's like, Well, yeah. You know, somehow you have that ability to talk yourself into thinking that's the right number. But I I said, you know, the way I live my life and the way you live your life is you have to assume that it stops tomorrow. Like not another penny is coming in. So if you're building this huge lifestyle for yourself.

Just be aware that there may come a time where you can't sustain it. And um, you know, that was something that uh I know he remembered and and I've lived my life that way. What I find sort of interesting as uh there, by the way, one of the employees of Inside Baseball with Old Chestnut violated internal compliance rules. Went out and bought Nvidia. And it went up like sixty percent. And this death sentence. It's gone. I they Back when uh I worked for Bobo and company.

Uh we had this lovely lady who worked in compliance and I wasn't keen on asking permission for stuff. Yeah, forgiveness before better than permission. Yeah. So, you know, yeah. Um, and so I wasn't just accustomed to uh yeah, so Barbie would call me up with some bonds and

I say, yeah, yeah, sure. So I I buy these bonds and then the confirm would come through and this little nice young lady would call me up and she says, Did you buy these bonds? And I said, Oh, yeah, yeah, yeah. I'm really sorry about that. And uh and I explained it to her. She says, Yeah, okay. But next time You need to call, and I don't know. Needless to say, I just d I just was not very good at following orders and I I tortured this poor woman needlessly, uh hopefully.

She's since forgiven me or forgotten about me. The other thing I remember about that place. I don't like to talk about it much just because it wasn't uh a real special time in my life. They had a risk manager there, and his name was Rupert. And I remember because Rupert is an unusual name. This guy was as stupid as the day is long. And what was he good at? Why was he there?

I tick in a box. I don't I don't know. I Okay. You know, it's just just one of those things. I hope he's still there. It's not a big shop. Well nobody lasts there. Oh even the wives. Even Bobo can't keep a wife. Let's see how long this one lasts. Okay, all right. I thought this one already came off the rail.

To me about you, well tell me about speaking of uh you talked about your uh your municipal uh crony down there. Um Have you you talked about getting uh you said you're what'd you say about um you're perplexed, you're confused, you give up oh you throw in the towel, you cried uncle. So if I may uh move to the audiovisual portion of our broadcast, which is only audiovisual for me. I I see the two you note, is it a four sixty-five?

And the 30 years at a 4.467. So we're back to the inverted yield curve. And I've said over and over again. that's not normal and I'm tired of trying to scratch my head and figure out which way the economy's going. When Jim Grant tells you, you know, the year over year thing on the, you know, the 16% this and eight percent that they can't figure out. So I'm just I'm just taking a timeout and earn my what I did do was the bulk of the cash.

And um I'm not making any investment advice. I'm just telling you what I did. But I bought the uh the three month Treasury bill that's got a bond equivalent yield of like a three eighty eight. Excuse me, a five point three eight eight. Okay, okay, thank you. Okay. Now you pay State and la uh you pay federal taxes on that. Okay. I don't think you pay state and local. So I mean that knocks the yield quite a bit, but it's as liquid as it gets. And I I I do think um

I d I do think we're nearing some inflection point, whether it's the Russia situation, whether it's the election, uh you know, I I I don't know. Um I I I do feel like we're overdue for some turmoil. Um the fact that everybody seems to think we're in a recession. yet the curve can't go positive. Credit spreads are very tight. Uh

You know, um, I'm not sure what's going on in the middle of America, but rents in New York are again going through the roof. There's not enough housing. Uh food prices don't sound to me like They're coming down. In fact, in fact, uh Anthony Peters has mentioned what he had to pri pay for a price of uh head of uh cauliflower and it sounded like an awful lot of money. Well, talk with your commercial real estate. You know, I'm kind of...

No, no, I don't I don't know. I don't know. You tell me. I want I want I need people want to know what is going on. I mean, when is the commercial real estate thing gonna when is that gonna come home to roost? How is there buildings that are overdue on loans? I What's going on with that? It's it's not that complicated. It goes like this. If you can make your loan. The you're making your loan and the lender's keeping his fingers crossed. And if you can't.

make the loan payment, you have a sit down with your lender. And depending on, you know, the d the the loan to value and this and that, there's a lot of deals getting cut. You know, there's that famous saying extend and pretend. Um you know, I and it's I hate to use this word, but it's accurate. It's it's very idiosyncratic, you know. So if you have a class A office building in a good part of town. uh you're getting a very nice rental return. In fact, you've seen some of these um

uh funds buying commercial real estate, right? Because if you got, you know, uh tushes in the seats and they're paying the rent. It's like any other real estate investment. You know, it's a good deal. if you got a class B or a class C building You know, you got a problem on your hand. Maybe you can reconfigure it into housing, maybe you can't. Maybe the lender remembers the last time there was trouble and you were a prick.

you know, then that ain't gonna go so well for ya. Um so, you know, the the notion of idiosyncratic meaning each ca is a case by case basis, I think really rings rings true here. Where's that gonna go? I it sounds to me as far as Manhattan goes, There is a bit of traction, meaning there are people looking for office space. Again, I you know I'm just not that tied into it. You know, we have a new building going up.

And uh, you know, we had a deal to take the top floor and uh you know the guy walked away. Um it was a hedge fund guy. And I I had heard of'em and I had mentioned to my partners I would not lean on this thing. And, you know, they were disappointed when he pulled. And I'm like, it's a blessing. And they're like, why? And I'm like, because he was just going to be a over the term of the lease, right? So better better okay.

But my understanding is we're getting some real traction on sort of the the middle level stuff. I I don't think we've we've signed any leases yet, but the building's not finished. It's far from finished. What's the date on completion? I would guess it's another nine months. Oh, you're getting close. Yeah, and and this is when people start signing leases for new space, right? They they like new space.

And they're not gonna sign a lease for something twenty four months out, right? Um what is it? Mixed use? What's the what what is the um I think C D M D or something? The um The street level is gonna be commercial. I think whether it's um office type food preparation. You know, like and then the rest of the stuff is probably gonna be

more financial oriented family offices. Yeah. Maybe some small investment banks. I I you know, I don't know, but it it's it was one of these buildings constructed during the COVID. So Not only does it have the, you know, the newest and the security features, it's got all of the uh Uh smart education. It's actually now that COVID's over and done with, it's a waste of money. But it it's actually quite impressive what people have come with versus, you know.

uh so you would have the old school HEPA filter. Mm-hmm. It's a standard kind of thing. But now even the there's light bulbs you can use in bathrooms. There's finishes you can put on counters. You know, that sort of thing. But it is important to note that one of the greatest accomplishments in medical science was a doctor discovered that if he washed his hands between visits. going from room to room in the hospital the patient.

A huge percentage of the patients live longer. Okay. And here, in such respect, For this achievement, he was pronounced crazy, thrown in a mental institution, and beaten to death. This is a true story. Okay. So

You know, um, everyone thinks it's so fucking smart. And here we are. So um All right, so commercial real estate doesn't bother you? You're y Manhattan is still the place. I don't wanna say it doesn't bother me. I don't have any loans out the commercial real estate guy. Yeah, yeah. No, I know. I'm just saying the state of the situation in general for our audience that that hears because the fear mongering about commercial real estate and empty office buildings and

And Manhattan and crime and cities and and all it's gonna the banks are gonna have to take huge losses and they're hiding it and you just it's gonna happen. Like is it I'm like, eh, is it? Is it, you know? Well, y you well let's be pragmatic about Okay. If really, if people really believe that, would the stock market be at all time highs?

I I you know, I'm not a stock guy. We've all come to realize that that's true. It's a paradoxical situation. The stock market's separate from the crime in Manhattan, okay? Manhattan real estate. The stock market doesn't reflect Manhattan real estate. Right? I don't look, all I know is this. Maybe David Einhorn's right. Maybe the market's broken. Maybe his schmuck investors believe him. They meant to talk about the other David, okay? They backed up the money truck for Solomon. Oh, David Solomon.

Talk about the uh somebody came up with a better lie than blowjobs aren't sex. And it's this guy. I'll tell you what, he earned every penny of it. He convinced Dead gang of fools. Known as the board of directors of Goldman Sachs. He's got dirt. How fucking stupid are you people? I don't know how there isn't a class action suit suing and you know why? It's because they all have insurance. They don't give a fuck. They're getting their 20 million bucks.

They're getting their reservations at the famous restaurants through the golden. They're flying on the company Joe. Why are they gonna tell me why are they gonna rock the boat? They're gonna duck those headlines from the post. They don't care about inside baseball talking shit. They really don't. No.

Keep David at the helm. I take offense to talking shit. I is a member of the what are we, the fourth or the fifth estate? The fourth estate. We have an obligation to to bring these things to our listeners. I know. True. I do want to make one little comment about private equity. Um if I may, I I know it's a bugaboo with our good friend Anthony Peters, but years ago, back when I was at Greenwich Capitol, a number of these guys

got involved with a private equity firm. And I I will be polite and not use their name because they suck dick in terms of the job they did. And I knew something wasn't going to be right when I'm in Fund number two. And they send out a memo how they're about to buy one hundred percent of the Greek yellow paper. Now, for those of you too young to know, when Liam and I were young,

before the internet, if you wanted like let's say there was a cute girl you met in class and you wanted to ask her on a date, you would go home and you would get the phone book. It was a book and it was thick. And it had everyone's name from alphabetical order and you would you would look it up. And then somebody got an idea. Maybe businesses might put ads in and Triple A carding, triple A concrete. Those guys figured it out quick. Exactly.

So they developed the yellow pages. Okay. So along comes this island of Greece. Uh you know, I've been there, M Mikanos and I it's beautiful and Zervos owns a place there, he's always there. And it's really uh but they have the internet there. Yeah. And I remember talking to IG about this going. Geez man, I I'm a little I this one I don't get. Right. Why are we buying Something. Uh that's going the wrong way. And he's like, look, Doc, I you know, I don't know. I I think they just

you know, hit a lot of putts, some of them go in. And when they go in, they pay off big. So my life to date return gross, gross, is eight per n is six point three percent. Gross. So I I'm guessing neg it's negative net. Right. What's this what's the S P up? Fifty times? Good lord. So yeah, please, everyone who listens, that's what you should do.

Take your money, give it to hedge funds, give it to private equity. You know, you're better off playing the lottery at this point. I mean, it's just crazy.

That it we run out of time? Oh, I got another 10 minutes. I want to hear about um t you said you're gonna wait until three months. Why the three months and not six months? You just wanna get the higher rate? Yeah, I I think the higher rate, but I I I I I think that once again The economic statistics, I I just don't have. I'm it I'm admitting my inability

To kind of get a visualization. And you know, over the three years we've been doing this, we've not been right about everything. I mean, tether, F. We we missed I mean, maybe it's a fraud, but they got away with it. Okay. And and I'll say the royal we. But me mostly. I was to this to my day I die, I'm convinced that thing Okay. Bitcoin, again, I I I still think it's a fucking joke, but hey, it didn't work. I was wrong. Okay.

I'm okay with being wrong. I was just gonna say, but I'd rather be happy and wrong about it than then go on, go on, go on. But the but so we're in a situation now Where I I don't see anything jumping at me. And every week we get up here and I spew the venom about this and that. But if I'm gonna tell people you know, uh David Einhorn's an idiot for saying the market's wrong. And I tell people if you're unsure, get the flat and I don't get the flat, I'm no better than him.

Right. So I've taken a lot of risk out and the three month bill is the easiest thing. And there's still a lot of Fed easing. And I don't know whether you were serious or not, and don't take this as an insult. But you were wondering if the next move was a tightening. Larry Summers said it. Larry Summers said it with a straight face. If Larry Summers is gonna say it, why You know?

You said there's a chance though, but you said I don't I don't Is there a chance? There is absolutely a chance. If you get three or four hot pay hot inflation numbers and you get three or four hot Payroll numbers. uh the that talk will begin. Yeah Hundred percent. Maybe they whack they whack you right before summer or maybe on summer vacation, you know, like maybe the end of the summer if th things aren't, you know.

I mean, we're in February, right? Yeah. Yeah. I mean, you know, February to June is what, four months? Yeah. You know, like that movie Fargo. A lot can happen in the middle of nowhere. They're not gonna cut Rafa the the the verbiage, the tone, there's been no hint, no none of not even any none of those big mouths, Raphael Bostick. mess all I haven't heard a single sound bite that they've all seemed pretty much on the same page about wait and see, wait and see, we're gonna wait and see.

You know? Okay. So I've just heard everything you said and I know you scrutinized the papers. And I respect that. Okay. And and so Watch what they do, not not what they say. We, you and I are not highly levered speculative traders. We are investors. Okay. Let's wait till we can read the tea leaves. And figure out what's an asymmetrical bet. And I don't think right now, so so right now what's going on is. the the Zervos meme is running through the market thought where and by the way

Guy's killed it. I mean, I've known a long time. Very bright guy. All that. And I'm not making fun of him, but his current philosophy is if something bad happens. the Fed is gonna come in and it's gonna make nice. Tough to argue. It's tough to argue, but I I'm not leaning on that. You know, what happens if all of a sudden the Fed decides they don't want to look political?

And they don't want to be easing because I'm right. Yeah, or something, um uh what's the word that I like to use, which is awful big sounding, but you have a a uh a jump in the market, like a disc discontinuous market, right? By the time the Fed gets around to doing something, you're out. Yeah, yeah. So, you know. It's okay to panic as long as you're first. And the chance of being the first guy to panic is very low. So I would rather, especially, again, I've said this too many times.

I don't ever remember being able to get the highest rate with the least amount. And uh you know, maybe I'm gonna miss out on something, but I can't be mad if I miss out on something when I don't see it. So anyway, I'm getting hungry. How about you? Thank you. Very good. I I kind of agree with Zervas. Okay. I don't know why. I mean like It's the I don't know why. I don't know why. Like it it's just it

I don't want to get into it now, but yeah, I I can see why you agree with him because he's said that for years and he's been right. I I mean I'm not saying he's been wrong, I'm just saying if I'm running a large position, I'm not leaning on keeping my fingers closed. Because remember the last couple of times they came to the market's rescue, there was a lot of jawbowling.

I you know, what if he decides to take an extra three weeks or four weeks or six weeks? Yeah, six weeks, yeah. People don't have that staying power. All right, buddy. Good to see ya. What's wrong? What's what's the you're not happy with that? No, I I I I I feel like I did a bad job communicating the the confusion, but No, well what the fuck? There's nothing to Y how would you communicate the confusion? Think about that sentence. It you know, I understand what you're saying.

Yeah. Dude, it falls under the umbrella dude, you said it before because you said it's gonna be choppy. Data. It's going to be tough to read. You're going to get good reads, bad reads. The data, this, that, and then bang, here we are. So it's been absolutely On script. Did I say that? Yeah, fuck yeah, you said that. You were like, yeah, dude, it's I don't know. That sounds smart.

Maybe it wasn't you. I can do things. Go eat, you're hungry, okay? I've been hungry since you were talking about Leadville. Goodbye. Take care. Have a good night.