Zero Rates = Beer Goggles.

as long as I can. Go now.

Greetings and welcome to Inside Baseball with old chestnut. I'm Liam Allen with my friend Morsex. How are you doing, MB? I'm doing great, pal. How about you? Well, the time has come. The time has come for For the central bank To cut its key policy rate. This is the moment this is the moment that we've all Talking about at nauseum, debating.

speculating and wasting fucking time talking about fucking rate cuts because here we are at Jackson Hole and you're gonna you're gonna get what a quarter inch cut and then we're gonna sit around for six months on our hands. We're gonna do this for another six months, right? Uh well, what you do with your own time is up to you. Thank you. You know, I I just uh First of all, I wanted to tell you, uh, it really dawned on me.

How much I look forward to doing this podcast with you. What a what a thrill it is to be able to. sit down with you once a week and chat about the markets. Um really very fulfilling uh experience. Um One of the things that I wanted to mention, uh, especially to our uh younger listeners, is

A lot of times when we see new products or new things in the markets, I tend to be, you know, kind of a a Debbie Downer about them. And I want to explain that. When you've been doing this as long as someone like myself has, you see a bunch of these things come and go, and very few of them pan out. And um so experience has taught me to look at these things with a jaundiced eye. It's just, you know. Time will tell. For instance, I think we were very early in the bandwagon of

uh speaking poorly about Bitcoin. Um I'm still waiting. someone to present me with a great case of what value added that has created. The artificial intelligence thing. Uh you know, I'm I'm waiting. I I I know there's lots of evidence. of kind of repetition and manual labor that it will be able to take care of. But just like Twenty years ago when somebody told me my job as a trader would disappear because computers would figure it out and be faster and better than me. Um

You know, there's plenty of computers on private jets, um, but they're working, they're not sitting in the back. Yeah, yeah.

Um so anyway, how was your week? Um It was good. It was I had a good week. It was it's been nice weather here. It's the dog days of summer on the east coast. Um but the the i i i we've just been swamped with Jackson Hall talk and Jackson Hall, so I w you know I waited all week for Jay to talk on Friday. And I swear, like, they complained about him speaking for nine minutes last time, but he he sat down and and spit out six paragraphs and it was over in ten minutes.

But he said the magic words and off to the races we went. So part of me was happy to put the the rate cut, how many priced in? Are we gonna get a h like how how long have we talked about it? So I'd like to there to be a new topic de jour for the markets. We've gone through AI, we've gone through the carry trade.

And now we've gone through the rate hike. So I'm not really sure. Oh, we're gonna have to do recession. Are we gonna be talking about recession for another month now? Probably. Probably. Uh that doesn't excite me either because as we know From the downward revisions from the Bureau the BLS number where, you know, they said, Oh, by the way, we by the way, we cooked those numbers by a million, okay?

I get I I get tired of these uh of these themes. I was somewhat interested, and other people were somewhat interested. On Friday, I heard that they're doing the carry trade in the US dollar now.

Um, that they're no longer using the yen, we're gonna use the US dollar. Could could you walk me through the the thoughts behind that? No, really not my area. Um you know, the idea with the carry trade. was you know, you are borrowing money in yen at zero rates, right? Zero rates make everything You know, like beer goggles. Yeah.

Yeah. So I'm not sure how that would play out. That's a good line, dude. Zero rates make everything look like beer goggles. I don't I can't believe you've been you've sat on that. since since Z I it just it just hit me. That's really good. Thank you. You can use it. Use it. Um so I when I saw

uh Jay Powell's speech. Um I was reminded, you had asked me the week earlier, um, when I had said I bought puts because the market didn't go up on good news. And the question was, what good news was MB talking about? And I said, Well, Hal spoke and said, you know, they were committed to good employment yet they were determined to maintain their whatever it is two percent inflation target and i thought that was that was very good news Market didn't go up, but puts our compute luckily um

But I think what you saw with the Jackson Holt thing is he he spelled it out more simply, which is you know, our plan of you know sticking to Uh anchoring inflation expectations, but the time has changed for a new rate regime. Oh Well that was kind of what had been my thinking. Um

Yeah, don't get me wrong. I mean, uh it's not like I've made a huge amount of money on that trade, but it it didn't come to me completely out of the the blue, right? I'm with you. I'm I'm Tired not so much of the talking about the rate structure and the cuts and how many cuts. I'm tired of hearing everyone shooting their mouth off about the Fed should be doing this, the Fed should be doing that. Yet I'm waiting for our good friend Dr. Zervo.

to come out and do a piece because I you know, frankly, I think Jerome Powell has done a very nice job. You know, he's kept his wits about him and uh Um he even had a quirky line about the the good ship transitory. Oh I did hear yeah yeah yeah yeah yeah. So uh You know, do I think we're gonna have a recession? You know, don't know, don't care, because For me it's all about setting up the structure of your portfolio.

I don't have the link and I won't be posting the link, but our good friend uh life coach Leslie Harris sent me a copy of Howard Mark's recent memo, which is freely available. And you know, th this Marks guy. He's got it figured out. And he talked about the uh iconic uh Benjamin Graham approach talking about Mr. Market. And you know, Mr. Market gets very emotional. And every day On his company.

And you can either buy or sell at his price all you want. Mr. Market's miscalculations provide profit opportunities to investors interested in taking advantage of that. mister Market's miscalculations provide profit opportunities to investors interested in taking advantage of The rapid market decline we saw in the first week of August. along with the rapid rebound compels me to pull together what I've said previously on the on the subject.

The replay of the mistakes I've witnessed for decades was so obvious that I can't resist cataloging before. You guys can go find it. And then he goes on 1949, Benjamin Graham, yada yada yada. Yeah, you got it nailed, but it's It's there. It's it's the perfect calm, measured, thoughtful Howard Marks, you know.

missive that is different than the talking heads we get on CNBC, you know? Which, you know, for me, I take a little bit of a I think we're entitled to a little bit of a victory lap because week after week we're talking about you know, caution, pick your spot. You know, I I really I'm very enamored with my um transitioning the uh battlefield strategy of the strategic reserve. Um I I think that's really, really accurate. And you know, so I've been doing this since

Since I was seventeen. That's a long time now, right? And Every couple of years, something comes around that's really attractive. And the only way you can take advantage of it is by being in cash. I I recall distinctly during the financial crisis when rates fell a great deal and uh me and my Muni guys were Ginormously long munis, which were backed by treasuries. Munis Back by treasures. Meaning

They went and they did this thing called defeased. So the the municipality went and they bought governments and they put them into trust to back up the creditworthiness. Okay, yeah, yeah. So you know here it is, rates are a hundred lower. I open up my account. kind of revel in my profits and I've got huge losses. Why? Because the market decided that Treasuries in a defeased trust weren't safe enough.

Now, let me tell you how they got there, which is not entirely inaccurate, but You know, so when they put investments in these defeased trusts, the trustee has the right to swap. equal value. And in a lot of these cases, they went and they swapped US Treasuries for bonds and Treasury agencies which were backed by the full faith and credit of the United States, but the language spooked people. And so They were just selling these things like crazy. And I remember thinking, holy shit.

This is free money. But I had all my money tied up in these munis. Yeah. Yeah. So yeah, I could have sold them. But all I would be doing is replacing stuff uh where I was selling it, which is so um you know, um

The anxiety people feel about missing something. You know, it it it comes down to that that saying about don't sign anything in the room, right? Get up and go for a walk. before you do anything. And you know, from time to time there will be opportunities. And you know, I give you an example. Um right now What's the most hated asset class in the world? Commercial real estate? Probably. Okay. Well, everything has a price. And if it's as bad as People say There's going to be forced liquidations and

you know, as a retail investor, it's going to be very hard to capitalize on those. But there are some publicly traded vehicles. Now I'm not recommending these, but I'm trying to use them as as an example. I think Fornado, PNO. Yeah, Real Trust. Yeah. Great. Um amount of commercial real estate and if if This shit hits the fan and people are selling that, you know, haphazardly.

You know, the price of Vernado go down and that might be an opportunity for you. I I myself, as you know, have got way too much uh real estate. Um, although Is Rernado New York centric? My guess is probably yes. Yeah, it's trading at thirty-five bucks. It was up two percent on Friday. Yeah, they got Penn Two. Yeah, it says their their Manhattan portfolio book, the new Penn District. Yeah, Vernado Real Realty Trust. I'm familiar with them. Um

Yeah, I wonder. My first experience, I may tell you, uh, and our friend of the show, Leslie Harris, can verify this. I had bought Part of an office building in New Orleans. With a bunch of my um Greenwich Capital colleagues. And of course, right away the thing went in the shitter, right? You know, the the air conditioning units which There, they don't call them air conditioning units, they call them chillers. Yep, yep, yep. Okay. So, um You know, anyway, we bought this office building and

There was initially some interest in other parties buying it. And so I talked myself into the fact that I wanted to hedge out the real estate risk. So uh at that point I was working in London, Leslie was visiting in London, and I had an account at the August firm of Goldman and Sachs. So I talked myself into shorting an equivalent amount of ornado to hedge my unrealized gain in this office building. And the associate at Goldman said to me,

I wouldn't be doing that. Like, why? Because I just flew over to London with the head of Ronado. And let me tell you, this guy's pretty fucking impressive. I'm like, okay, I know better. Right. And so I don't know whether it was a day or two later. But this bornado took off like a honeymoon hard-on and I was out like a hundred grand. In the blink of an eye. And you asked Leslie about that. He he saw the whole thing unfold. Yeah, yeah. Um

So I I don't know why I brought that up. Oh, so it it it didn't end in horror because you remember there was a big flood. In New Orleans. Yeah, Katrina. I'm looking at the Ronado chart here. It looks like around like oh three, oh four. It looks like the Matterhorn. Yeah. And then it kind of crashing down. Okay. Yeah. So in the end, like most of my stories, I survive. But Katrina hits New Orleans. The only building left standing is this building we own. Got it.

So FINRA comes in and just grabs the whole fucking not FINRA, FEMA. FEMA, FEMA, FEMA, yeah. And uh You know, I will not claim that I made a killing, but I got my money back. And uh Once again, you're profiting off of human disaster. Well, I remember telling that what I thought was a cute story. about you know Cheryl telling me about the wheat and then uh one of the listeners writing in you know

reprimanding me for, you know, chuckling at profiting at human suffering. Um you know, I can I tell you. The first rule of trading is make money. You know like fight club? You know what I'm talking about? Fight club? If you're not there to make money, you're in the wrong fucking business. Yeah. And you know, I look, I'm sorry it happened. Uh, but uh, you know, what's that?

Hate the game, don't hate the player. Yeah, yeah, exactly. Hate the player, don't hate the game. Yeah. The Bornado. If you look at the Bornado chart, it seems like the the C R E

has bottomed and their recovery has begun because they're up fifty seven percent past year. Okay. They were they got crushed obviously in in 2020. They got, you know, whatever. They got crushed in 2020 and it really bottomed. in twenty twenty three. It was down to twelve bucks and now but now it's climbed steadily escalator back up. Um

So like maybe the CRA thing, this too shall pass and it'll be pockets and pockets. I'm open. I got my fingers crossed. I'm what's that you guys do? You say Hail Marys? Yeah, Hail Mary. Yeah, you crank out a couple of Hail Mary's, yeah.

Well yeah, you're in the bucket. You're in you're in the bubble. You're you're not in Louisiana anymore. You're down in lower Manhattan and you're you're squared away as far as I know, right? Well we'll we'll see. I uh you know, I got a couple of hurdles to jump, but You know, Leslie had a great rate call and um you know, I leaned into it. I at one point bought a lot of long data paper. leaning on his recommendation. And um

Uh I sold it. You know, I sold it before uh this last little run up I did nicely but um you know my investor takes a great interest in how we do and um I mentioned we had sold a lot of the long data paper and she asked me why and I said well it's sort of a Texas hedge and and she said what Texas hedge Well let me explain. So, and I learned this at the University of Illinois circa 19 something.

The idea of a hedge is to take a contrary position to what you have to protect yourself against an adverse turn of events. So With all this real estate, I'm gonna benefit if rates go down. So having long data paper, which would do poorly if rates went up. was duplicating my risk. A la the Texas hedge. And um I guess they say Texas is cause everything in Texas is bigger. Yeah.

Okay. Um so you w you're you're looking forward to rates coming down. Um that's gonna that's fortuitous for you. I would trade away All the upside for them to do. Just you know, just lie there, don't move. Yeah, yeah. That you would that would be that would be ideal for you. That would be acceptable. Yeah, it it it works because you know, we have the the buildings are built. They're mostly occupied. So now it just

comes down to the game of where you borrow the money versus what you spent to build a building. Yeah, interesting. Yeah. Yeah. And um the way you value a building is you get this thing called a cap rate. Okay. And uh let's see I I didn't write this down, so I might fuck it up, but You take a building and you get the rents, and then you subtract from it all of the operating expenses, and you get a number called NOI, net operating income. Yep.

you take that number and you look in the marketplace, what are investors willing to pay? for properties and that's based on a cap rate. Yep. So what you would do is you would take your net operating income and divide by your cap rate. So if you had a hundred million of net operating income and the cap rate is five percent. You take a hundred million, basically multiply multiply it by twenty.

One over five percent twenty ish. So now million times twenty is twenty million dollars. That's what your buildings were. Um cap rates tend to follow interest rates. So the double whammy is your cash flow, which is your net operating income less your cost of capital benefits, because the interest you're paying on your loan is is declining. Yep. Yep. But cap rates Follow rates. So not only is your cost of carry dropping, your cap rate is

going down, which means the value of building is going up. Yeah. So you're effectively double dipping. But based on my Bornado experience, I am not, I repeat, I am not selling long data treasuries.

Okay, understood. Understood. And by the way, it's not that I don't think it's the right thing. I'm like that black cat that once got on the hot stove. Now I won't get on a hot a cold stove either. Yeah, yeah, absolutely. Yeah. Wow. Yeah. So I've been uh very pleased to see that the rates have come down. Um You know, recession is a little bit of a mixed bag because the textbooks would tell you

Recession should result in lower rates. Recession is generally comes along with businesses doing poorly, which would decrease the demand for office space. uh which decreases what companies make so employees get paid less. They can't afford the same amount of rent, so rents have to drop to fill the vacancies. So it's quite a Complicated dynamic. I saw it. I saw a chart where somebody posted that the recession always comes after the first rate cut.

There was like whatever, three examples. It was I think it was like O one, O eight and then something else where They then they they decided somebody said do ninety five and it didn't happen in ninety five but whenever there were the the rate cuts the rate cut came and then then the recession came after the first cut. Yeah, it was an interesting chart. I don't know whether it was you or somebody else, but You know, for a long time here we've been saying how because of the COVID.

And because of the change in consumer behavior. It's really a fool's errand to try and predict which way things are gonna go. And that got posted in some sort of mainstream comment. Even Paul talked about, you know. behavior and you know, these were unusual times and unusual behavior. And so, you know, I I would argue again, um I'm not gonna try and figure out what you know, when the recession is gonna hit. I you know.

I I'm gonna focus on, you know, my assets. You know, and as we said last week, in a lot of ways it's a very easy time to invest because you can get uh I'll bring up the number um if i can find this without talking so but the the the two year note yields uh 391 now It's way less attractive than our five and a quarter two year level we loved. But if the inflation rate is three percent.

You're still beating inflation and you're not taking any real risk. I mean, I guess the price could drop, but it's the two year, it's not gonna move very far. Um Yeah, I'm happy to sit here and wait for something obvious to happen. Yeah. Um what gives me a great deal of confidence. In things being okay, is you had Powell tell you they're going to cut rates. And um the long end rallied. The long end is the

I thought it the phrase was the canary in the coal mine. Yes. Apparently, according to my wife, it's I have that quote wrong. Oh, you don't. I'll I'll I'll set her straight. Yeah. She's not let me know how that works out. Okay. It's definitely the canary in the coal mine. You will recall numerous times I have

Talk trash about Greenwich Hospital. And you've defended them because both of your lovely children were born at Greenwich Hospital. Fantastic experience. Top to bottom. So You know, it occurred to me. after doing an entire show regaling the accomplishments of Irish women to which we got no street cred by the way. Nothing. One of our listeners, a dear friend,

Irish guy, I assume his wife is Irish. His wife, they were living in Darian. His wife went in to labor at home and she said, you we gotta go to the hospital. I'm I'm going into labor. And he's so well effectively I'm telling the story now, right? Effectively he says, Well, let me grab a quick shower. And she's like, you know, I don't think we got enough time for that. Anyway, he's

Go wait in the car. Yeah. He takes a shower. Apparently She goes into labor in the car and he gives birth to his child. with his wife in the back of the car. Yeah. And um the Darian the Darien police guy shows up. And he's basically, what's going on here? And my appendix says, Well, my wife's going into labor. And um the cop says, Okay, that's fine, but maybe you want to turn the car off.

So these Irish women are tough. Yeah. Right. So you know, Amy was in no danger whatsoever at Grange Hospital. No, no, no, no. Need be, she could have got it done on her own. Yeah. Um it was a lovely experience over there, quite frankly. So all all the girls that work in the maternity ward and OBs over at Greenwich, I love you guys. Okay.

Well, you know, nurses are special people. They're warped people. You need to be a special, special. Okay, you have to have it takes a special woman and there's a lot of guys that do it. I know there's a lot of guys nowadays, but it takes a special woman. that can deal with an ER and be a nurse with nasty sick people? Why would and you wanna Sign up to help those people. It's it's they're a gift from God. Okay. So I I will have no nurse.

Slander. You just can't date them. You cannot date nurses. I've had if I have a friend that has a date with a nurse, I say you can go on one and that's it. You have to end that relationship. They are lunatics. Okay. Really? Oh, yeah, dude. In New York City they always do like the fire department gets like social gatherings with the nurses. Good lord, that combination has produced More bad results than than than anything. Thursers and firemen. It's a n it's a legendary combination um that is just

fraught with with problems, like from schedule to like high intense anxiety. Like they're special people. They're both they You know, they're just they're they're really high intensity people, um, and sometimes they clash. Like sometimes that's not a great combination. I can see that. Yeah. I can see that. You know, I I've taken to watching That show called uh the Bear. Okay, yeah, yeah, yeah. Mm-hmm. You know, I I did a tour of duty working in a restaurant.

And uh I remember a lot of the yelling and the screaming. Um But what struck me is this guy is obsessed. With being the best cook, right? And it really, it really struck a chord with me because I really wanted to do that.

You know, the best that's a tough question, right? But I really wanted to be as good as I could be. And I remember watching one of those shows and I was going to bed thinking about upcoming podcast and uh um thinking about going through every one of these trades that i fucked up and It was it was a long list, you know. And um why are you doing that to yourself? I I fuck, I don't know. Yeah. I I guess you know. I don't think you learn anything unless you break something.

Didn't Howard Mark say was it was it Stanley Druck and Miller that said that Stan Druck said that. They you know, we I bought all this tech shit. at the top of the bubble. He knew he was wrong. And he knew he was wrong. And then the guy says, What'd you learn? He goes, I didn't learn anything. He goes, I you know, he's like I I fucked up my system or whatever the answer was. He goes, I didn't learn anything, you know.

You know, there's there's times I've been through it where you're taking a trade-off and you know. You shouldn't be taking it off. It's like every fiber in your being tells you stop, just fucking stop. And I don't know what it is. You get in this hypnosis and it takes control. You know. Leslie and I will debate back and forth. He has this line about, you know, if if you don't.

feel good about just take a little bit off. Yeah, yeah, yeah. The financial equivalent of just a tip. Yeah, I'll tell you. Doesn't work. Not for me. I sell one share within 20 minutes, they're gone. Yeah. And yeah. You know, again, one of these. I had some ginormous amount of euro dollar calls and out of the blue the Fed eased. And you know, I was so drunk with the PL. Euphoria. I just looked over Again Irish woman. I said Meredith sell a thousand.

I had like 24,000 of these Eurodollar futures. Sell a thousand. And I kept just they were gone in the blink of an eye. And I I remember Leslie looking at me, just kind of shaking his head. I couldn't help but I was in the grip. Kind of like the time we we hit her with the the uh straight path. You know, one of the and and

You know, what have I learned? I I've learned one of the things that Howard Marks talks about. I've learned to understand. how my body feels when I've had something really good happen and how I should behave with it, which is why with the real estate stuff. I mean the obvious thing would be for me to short a bunch of that Vernado. And as God is my witness.

I w w uh forget it. It just it's just not happening. So um I actually uh made some notes for today's show. Oh good. You get a sponsor? You get a sponsor? Yeah, responded by Colace. Okay, still. Okay. Um, you know, I was I won't regale you with uh my family history, uh, but bits and pieces, you know, my brother. was in the industry and had a a nice, I think very successful career. I went a little different route, you know, raping and pillaging.

You know, orphans drunk. Stuff around while while he just sat and bought. Yeah. Like he said, most of his money he made sitting, uh which is great. Um but uh We have a sister who has devoted her life to the good and the righteous. And so she's has a specialty in social work. And coming out of school, she went into child protective services. You know, the really nasty shit, like going into the homes where the kids are being abused and

You know, like learning like to see if the kids are eating. Yep. Yep. So she would explain to me, you don't ask if you had breakfast. Because the kids kind of get divided. Yeah. What did you have for breakfast? Yep. Yep. And that is a little bit more instructive. Or taking kids to the hospital to get x-rayed to see if they've got broken limbs and stuff like this. just, you know, really God's God's work. And um she is involved and this is what I wanted to mention.

She's involved with this organization called Big Brothers, Big Sisters, and it's a mentoring uh organization. So I don't think you know these people, but on the Gimbals ride, one of the longtime riders. His name is Tom Coleman. And his his wife's name is Sue. Tom is a um economics professor at the University of Chicago. And um I got to know him a little bit on the Gimbals ride. And we used to meet

When I was kind of scrambling to figure out what to do with my life, you know, back in the dark time. And W we talked a lot about income inequality and the way you know, family organization affects outcome. Cause his father also known as Tom Coleman, was hired by, I think, like the Johnson administration to do a study on busing kids to different neighborhoods. You know, forgive me, I don't have this exactly right, but it's all on Wikipedia. So anyway, I would meet with Tom every couple weeks.

At the Pret au Manger on the bottom of Grand Avenue. And we would discuss these notions of income inequality. And he had incredible research. And I won't run into specifics, but if you just let your mind wander for a minute about you know if there's

than that. It's exactly like you would think. I'm not going to give any examples because I don't want to be accused of being racist. Yeah, yeah, yeah, of course. But you know, the the data is there and it all proves out. And one of the things is Why this big brothers, big sisters is such a good thing is because it takes kids who don't have uh an adult male figure in their life and they match them up with appropriate men. And they act like a little bit of a big brother. And um

Their success rate is insanely high. And I mention it because, you know, I think there are a lot of people who listen to this show that um I'm sure our listeners are very generous philanthropically. You know, one of my bugaboos is I don't want to ask people for money. That's not my thing. Big brothers, big sisters. They set the whole thing up for you. You just kind of contact them. You give them a little bio. I think I'm sure they do some form of background check.

And uh they do the whole thing. They'll give you ideas what to do with the person. And they might even, you know, paid it for you to take them to a movie. And what I can tell you in my own experience with limited amounts of mentoring. It's an incredibly uh fulfilling feeling. You know, most of the young men I've mentored. are you know young white men who've gone to university.

That's just who I run into. Yeah, of course. Yeah. You know, I mean. And um and then of course I think what you and I do every week. I believe, and you know, we won't bore the people now, but you've seen the notes we've gotten from people. Recently, one talked about not only has It saved him money, helped him money financially. It's made him a better father. I mean, what what what higher accolade can you receive? You know, so I mean there's a lot of competition in this space of the free.

uh financial podcasting. Exactly. So to get letters like that, uh you know it's it's very fulfilling. And when you get a thank you for doing something which is no more than spending your time. Um I would encourage, even to the point of asking, If this is something that you think you would like to do. Send us your name and email. And um to Liam at uh inside inside baseballcast at gmail.com. Inside baseballcast.

dot com. Big brothers, big sisters of Connecticut. I got it right here. Ctbiggs.org. Ctbiggs.org. I'm sure there's one from New York. Yeah. Well the one I am familiar with is in Michigan, but you know, yeah uh if you come through the Ibwak. um portal, you get the velvet road treatment. Yeah, absolutely. Right to the VIP.

Yeah. Yeah, dude. I always had older guys um Older guys like it when you're a little kid, you look up to the older guys in the neighborhood. So, like for me, I I'll admit it, there was like two older kids that had dirt bikes in the neighborhood that had like dirt bikes.

And my parents are like, Don't go on the dirt bike trails. It's dangerous. I don't want you I don't want you riding the dirt bike. You can ride your bicycle. But like you always looked up to the kids with the dirt bikes, and that's when you were like eight.

And if you don't follow if you don't look up to the right kid, you get in trouble quick. Like the dirt bike kids turned into like delinquents by the time they were sixteen and you fall in with the wrong leaders. So the idea of having a big brother, even like when I went to to boarding school. They always matched you like the like an incoming freshman with a with an outgoing senior or something. So they matched you with somebody that g that gave you guidance. Um

And it was always a bizarre match. Like my I I had a kid from Brooklyn, like a basketball player from Brooklyn, um, was my was my my not in the mentor, but um but that kind of stuff makes a difference, especially for guys and guys nowadays and kids nowadays.

with all the distractions, like the kids got choices between like the phone, video games, go out and play, get in trouble. Um so to have an older successful guy that can be some sort of beacon is And anyone will tell you in business, guys will tell you in business

What was the biggest thing that helped you? And it was like, Oh, I learned from from so and so or Morris took me under his wing or or Liam helped me in the beginning. And dude, it's the same thing like in the bike rides when you get there in the beginning, no nobody's gonna talk to you. You know, you're gonna you know, but when somebody finally Someone's confidence, it makes them feel comfortable. And it's it's not an understatement to say, it's like a life-changing event.

So I I've heard there's there's been this has been a thing in New York for the longest time. I've I remember the radio, um the radio ads on eight eighty C B S A M was like big brothers, big sisters donate some time, like two hours a week or whatever, like And you can make a difference in a kid's life. It's not hard, you know. So you know, I

I've said to you, you know, my father died when I was young. And, you know, our family was pretty estranged, so I didn't have an uncle. But there were a couple of, you know, men in their 40s. that had been friends of my father. And uh, you know, I would interact with them from time to time. And I I think it I think it made a difference. You know, your your bicycle story resonates a great deal with me because You know, we you and I met on the world's famous Gimbals ride, right? And

It's not a nice ride and it's not easy, right? And you go there and nobody knows you. So nobody wants to ride next to you because they don't know. Um Damn. They don't know if you're safe to ride next to, right? Yeah, yeah, yeah. I remember just flailing and there was a fellow Two people. One was Chris Lambiazzi, who uh was the uh publisher of Bicycling Magazine at the time. just a hard ass screaming at everybody, you know, step out of line, you were gonna get an earful. And I remember

In one of the rides, as I was starting to make it a little further, he rode up next to me and put his hand on my back. And he said, just relax. Don't look around. Just look at the wheel in front of you, but relax. You're good. And uh it it was uh obviously uh you know, thirty years later I remember it and yeah. How do that that embrace was Uh the other was my friend uh Zhuao uh Correa, who um was riding a Pinnarello. And I was riding a pillaretto pinnarello at that time. Um

And we kind of looked at each other and it was a kindred spirit. And I always felt now's younger than me. But he was professional cyclist. And you know, just having someone out there who I felt was Yeah, a little bit on my team. Yeah. So That was a great thing. So anyway, uh You know, the big brothers, big sisters thing, this is not a call to write checks. It's just, you know, if this is something you could see, you know, 20 minutes a week, 30 minutes a week.

You know, instead of hanging out at uh snatch, you know, with the models and the bottles. Catch you're lucky. Called catch, not snatch. I'm sorry. I guess that was Freudian, huh? Ha ha. Oh well have you ever been there? Yeah, I've been there per year. But I went back in the day before it was before it turned into what it is now. When it w when it was

Well it was borderline serious seafood restaurant. But yeah, the you went there for the visuals. You didn't go there for the it wasn't you weren't there for the catch of the day, okay? You were going there to see like, let's be honest, the stunningly gorgeous staff and the stunningly gorgeous like clientele that arrived at that place because it was the hot, trendy, you know, I don't even want to call it a seafood. One of uh one of my business colleagues who lived in the meatpacking district.

was a regular there. So we would go. And you know the food was mediocre. But I I'll never forget apparently someone in New York decided For every client that walks into a high-end restaurant, they're supposed to be greeted by three models with stern frowns on their face. And when you tell them their name, they they direct you to the bar, like you're being dismissed to Siberia. And um I remember a couple of times having a few unsavory words to say to them with the attitude because uh one of my um

One of my real estate partners owns part of that. You know, just as uh inside baseball, the fact that My kids listen to the show is the only thing that keeps me from going off the rails. That was pretty funny about having the wrong name for the restaurant. I mean the food, yeah, it's not Nishkit. Yeah, yeah, yeah. No, you're not going.

Um all right, pal. Well, we've done it once again. We've gotten through another episode here. Uh we've gotten to the rate cut and uh it's been it's been a long road. It's it's been a long way to get here. I I've had to listen to Muhammad uh Dr. El Arian talk about pals making a mistake and they should have caught like all that is just hot air coming out of the balloon that doesn't matter now. That's like

We wasted so much time about how many are priced in. But you know what? The market did have it wrong. Didn't we have six cuts for the year priced in? And now reality knows they've had it wrong all year. Which which is why I never worry about what's my next trade.

You know. But um you know, we um we've uh we've had our friend Rochelle, the webmistress, come visit and um We took a chance and went out for Indian food the other night, which reminded me, you know, of You know, in your mind's eye when you see the British

You think of them as great. No. Uh no. Uh what's the word I'm looking for? Imperial conquerors? Yeah, I guess that's where we end up, but more like you know kind of like trying to not appeasers but but great you know But they're they're supposed to be very calm. and be able to, you know, negotiate and and and and take things down. And um I was reminded about this book I read several years ago. called the Great Partition, which is where under the British rule

They separated India from Pakistan and talk about fucking something up. I mean, you know, Bob Cobb can verify this, but I think They m murdered millions of people. Sounds about right. It was some kind of attempted ethnic genocide. That was under the British watch. Um So how'd that come up at dinner? How did that come up at the Indian dinner at the Indian restaurant for dinner? Well it it didn't. I was on the way back, hoping we got back.

to our room before before we had the collision yeah yeah the chicken tikka masala intersect. But what should The food tastes great. Yeah. Absolutely. Yeah, you gotta find the right one. You gotta find the right thing that you like. Um, yeah, I got a place, uh I got a nice Indian place there down in Yonkers to go to. Um All right, pal. Um what else you got? You got anything else on your n on your list of notes? I see you skimming your notes there. What else you got?

Well, um, you know, we talked about Howard Marks, we talked about big brothers, big sisters. Yeah.

We talked about the Great Partition. Um Doc Slock mailed it in on the email today. Um but I got a kick out of it because he brought up a a story that I I noticed this week. So Doc Slock for he sent a good one yesterday. He sent like the uh the monthly book. So thank you, Doctor Slock, for the uh for the chart book, our latest chart book with the daily and weekly indicators and and Doc Slock says the economy is strong. So but today's today's Dr Slock email from Apollo

was the average lottery spending by state. Okay. And I was kind of surprised by this. The average Highest average annual lottery spending per person, Rhode Island. Okay. Massachusetts. Okay. Maryland, West Virginia, and Delaware. All right. On hate lotteries. On Nantucket. There's a there's a little bodega or a deli or whatever they're gonna call it on Nantucket that has sold five million dollar winning tickets like in the last year, okay? On Nantucket. Okay.

It just yeah Like if you told me Queens or Brooklyn or Coney Island or you know, they're like okay, all right, they're gonna put some winners down there. To the lottery people, you don't need to put the winners on there and tuck it, okay? Please.

But yeah, I thought that was interesting. I don't know what Doc Slock, I don't know if he was out late drinking all night or something. He just fired that off this morning. But uh yeah, according to him, the the jolts data, blah blah blah, all the data is In fact, cutting interest rates too aggressively runs the risk of triggering another run up in inflation.

So I don't know. Doc Slock does a great job. Thank you for the emails. The Bloomberg emails are great. Um, Tom Keane, I love listening to Tom Keen surveillance every single morning. Um And we've lost another a great AM radio station. As you and I are are radio guys, it's it's a sad day in New York City because New York City is has lost eight eighty. AM radio. Yeah, there's no more eight eighty. So you're stuck with ten ten winds if you want to listen to the traffic and weather. Um

But that just leaves ri that really leaves the only frequency to listen to is Bloomberg. Um yeah, Bloomberg has a really good signal, eleven thirty. So if you're in the car or on the train in New York City, you should be listening to to Bloomberg on eleven thirty. Um but I was sad to see eight eighty grow. I uh uh eight eighty go. I I grew up with traffic and weather on the eights. Um

But yeah, satellite and dude, the news flow is the radio can't keep up and there's I guess there's not an audience for that. But uh No, in my car I can't even get AM radio. I'm serious. I believe you. There's a way. I'm sure there's an AM radio. Of course there's a way. Before we before we go. I just wanna mention today's Ibwak was filmed before a live studio audience. Oh, was it really? You did well. Okay.

Yeah, but they've they've they've performed nicely. Yeah, yeah. And I I was just kidding. I was just kidding about straightening her out. So I don't know. Goodbye. Take care, kid. All right, buddy. I'll talk to you next week.