John Mousseau on Risk in the Fixed Income Market (Podcast)

I know Moose for a long time. He is David Kotok's right hand man, and I have been fishing with Moose up in Maine at the Shadow Federal Reserve event that takes place every summer for gee the better part of a decade. There aren't many people who understands, uh, the internal plumbing and the mechanicals of fixed income the way Moose does. He really is incredibly knowledgeable and insightful.

And I think if you are anything interested in fixed income bonds, munis and how they actually are are traded on Wall Street, you're going to find this to be a fascinating conversation. So, with no further ado, my Master's in Business interview with John Mussau. This is Masters in Business with Barry Ridholtz on Boomberg Radio. My special guest

this week is John Mussau. He is the CEO and Director of Fixed Income at Cumbling Advisors, a bond shop that manages over three point five billion dollars in assets. He is a chartered financial analyst and has his Masters in Economics from Brown John Mussou, Welcome to a shelter in place version of Masters in Business. I know John for a long time. We fish up in Maine every year in camp Co talk. We'll come back to that a little later. Let's talk a little bit about out

your career. Tell us about your first job on Wall Street. Hi, Arry, Thanks Uh. I walked in off the streets in New York in the followed nineteen eighty and answered an ad from the New York Times for the Value Line Investment Survey. They gave me a quiz and hired me as an assistant securities analyst. I remember getting the Value line um papers that you would put into a giant three ring binder on updates on different companies and different sectors. That

that was a couple of years ago. You know, it ran that way for a long time before they got to the Internet age. And what you did as a securities analyst there is you really wrote script to fit the model, uh for the stocks. They had a relative value model that ranks stocks. But like I said, it was a great place to learn. Still have a lot of friends from there. Met Jeff Finnick there who was my desk mate early on. And you know, the fact of the product still out there today, says a lot.

And and Vinnick ended up at a little shop call Fidelity of Memory. So yes, the little shop call Fidelity. And I can remember him saying to me we were there out over a couple of beers. He goes, moos, if I ever had it really big, I'm going to buy a hockey team. And sure enough you did, and for sure, so so what did you go from value on?

What was your next stop? From there? I spent the next twelve years at combined firms of E. F. Hutton and then Shearson after they took over Hutton, and did most of my work there in the beginning years for the government bond Department in the municipal d bond bond Department, and eventually ended up doing portfolio analysis at Hutton and ended up basically running a portfolio analysis group right to where we analyze municipal bond portfolios and suggested changes, and

in I went to Lord Abbott and became the director of Municipal bond Management. Was a great spot. Learned a lot from Bob Dow who ran the firm and ran the fixed income area there, and I was there until the year two thousand, and that's the year I joined Cumberland Advisors. So you end up at come when advisors in the year two thousand, why did you gravitate more

towards fixed income over equities? I really always enjoyed fixed income because of the way tied together UH math and the idea that all bond prices more or less moved in the same direction, but none of them moved in the same velocity UH and depending on maturities, etcetera. So

it always had a lot more appeal to me. And it's it's funny because when I started a value line and you're actually analyzing earnings of companies, UH, I was excellent at predicting earnings and still couldn't figure out why I stopped might hit the earnings, but go down or go up, and bonds always tied together much more rationally for me. So that leads to a question I've heard over the years bonds called the smart money. Why is

that is it? Is it that rationality that leads people to thinking bonds are are a little less uh random or emotional than stocks are. I think the idea is, particularly with innoscible bonds. You know, it's not my line, but I thought it was a great line. They don't make you rich, but they keep you rich. And the idea of bond investing over time and the compounding of interest, uh, it's it's terrific. And you know, you go back and look back to the early nineteen eighties when interest rates

are high. If you had bought something like zero coupon strips at four percent interests or thirty years, it would have been very hard to replicate that anywhere else. When I think of bonds, I think of three factors that go into the specific value of a bond. It's the credit quality, the coupon or yield, and the duration. Is it that simple or our bonds just a mathematical formula. No, There's a lot more that goes into it. It's not

just credit quality. It's relative credit quality. It's not just duration as a relative duration to the market, And it's the structure of bonds to call protection or lack of call protection, a convexity comes in. I mean, that's that's really a lot of those judgments are what you would call total return bond management. And that's where David Kotok is still the chairman of Cumberland and I agreed early on it was you know, we we we saw the world the same in the world of bonds. Explain convexity

of bonds positions. To me, sure convexity is is really the They call it the second derivative. So if you look at a bond and you can judge it's duration or basically how much the price changes for a given change in yield, the convexity will tell you how fast that duration is changing. It's like the it's like the equivalent of acceleration to speed. Quite interesting and and for most of my career I've heard bonds describe as the

adult supervision in the room. Um, the bond vigilantes. We're gonna keep the Congress in check and make sure they didn't deficit spend too much. They were going to keep their eyes on inflation and fight that. Whatever happened to the so called bond vigilantes. Boy, that was a while ago, and and you know, if you go back, one of Bill Clinton's favorite lines was, and I'm taking out the swear words, but you know, do you mean I I really have to bow down to all the bond traders.

And the answer back then from Alan Greenspan is yes, you do. And they figured out a way back then to actually lower the government deficit and actually get it to a surplus. And along the way, interest rates came down, which was really not a surprise. Now you've gone the other way and the deferences really haven't mattered, and you're

at all time losing yields. So to answer your question, a lot of that has been thrown at the door his his political advisor, James Carville, I believe, is the one who said when he comes back, he wants to be reincarnated as the bond market because everybody is terrified of it. Right, maybe not this bond market, but yes, so Moose, let's talk a little bit about how the bond market has changed over the past thirty years. What are some of the big differences between and I think

there's some differences and there's some similarities. Barry. I think the biggest difference, of course, is electronic trading much more prevalent on the taxable side. On the municipal side, you actually still need to talk to dealers and underwriters, and that's because of the diffuse nature of the municipal bond market. The municipal bond market is still much more of a people business. You have to kind of know where the bonds are, where the levels are, who's offering what bonds.

On the corporate side, it is much more electronic oriented, block trading oriented, uh and and that's been that's been the biggest change. So a lot less people, clearly, a lot less firms, and bigger volume electronically. So so let's talk about what I think is the most fascinating difference between stocks and bonds. You know the Wilshire five thousand. The joke is it's now about three thousand stocks, and in some of the over the counter and really small

caps maybe have four thousand stocks. When we look at the worlds of bonds, there's hundreds of thousands of individual bonds. It's almost as if putting together a bond portfolio is bespoke. How infrequently do these bonds trade and how unique are each of these issues that are out there? Again, it differs when you're in the world of corporates and mortgages

and treasuries. It's it's a fairly defined universe of bonds, and putting portfolios together is probably a little easier than on the tax free side, where you have probably have a million different QUE SIPs out there. And that's because of the nature of many bond issues that come to market, where they have serial bonds and term bonds, and so

that just the amount of issues is almost overwhelming. So in the tax free side, only a fraction of the available bonds that are out there actually trade every day. And explain what Q SIPs are for the audience who may not be on a bond desk. It's it's a uniform identification system. So each bond has its own unique identifier, which is crucial to identifying the bond itself as well as processing the trade later on. And and let's talk

a little bit about processing those trades. You know, early in my career and certainly early in your career, every brokerage firm had its own bond trading desk, every bank, every insured trading was done constantly all over the place. Today, it seems, uh and and I rely on my friend David Nadig, who's been pushing this argument for a long time. Not it says all that has been replaced with black Rock and Vanguard as as the new street bond desks. Is he exaggerating or how true is that? They're They

are certainly behemous out there. But look, you know you can you can look at that and say does that with your advantage or not? As as a smaller investment advisor relative to those those guys, Uh, black Rock's not going to care about a twenty five million dollar water bond from Eastern Ohio some school district. We care about million dollar water bond from eastern Ohio because it's meaningful to us. So to the extent that they've gotten too big and a lot of issues aren't relevant to them,

we can take advantage of that. So I would disagree with Dave a little bit and combling, are you guys putting together bespoke bond portfolios? Are you buying bond mutual funds or bondingtfs? How do you deliver a fixed income

mixed to clients? Um? Now, we we will use individual bonds as we put portfolios together, and our own our thoughts have always been that the final product looks much better when you have individual bond ones as opposed to owning mutual funds, and part of that reason is the ability to input certain yield levels and duration levels into portfolios. You know. The other part two is just talking about

mutual funds in general. The difference between owning a portfolio of individual bonds and owning a mutual fund of bonds is the fact that if you want a mutual funding, your subservient to one price and one price only, and that's the price of that fund at the end of the day, or if it's an et F, the price of that et F at the end of the day. If you own individual bonds, they can be spread out. You can have some longer term bonds and some shorter

term bonds. So if there's a need for cash, uh, and maybe it's not a particularly good bond market, you can find assets in the portfolio that have not been hurt price wise and use them to your advantage. So I think individual bonds offers a much greater degree of flexibility.

We've had some clients say to us, I don't want to own a bond mutual funds because I'm concerned if during a bond sell off, I'm subject to the whims of what my fellow mutual fund investors are doing, and that could drive the price below either fair value or net asset value. How realistic of a threat is that to people who are bond mutual fund investors as opposed to buying individual bonds themselves. I think it's a very

good point because you don't have control over that. And the route we just went through is a perfect example of that. You walked in the dor March ninth, and treasury prices were skyrocketing because of the Saudis selling of oil. Uh. That meant that a lot of the corporate and municipal bond dealers couldn't hedge anything anymore with the prices and treasures doing what they are doing. So what do they do?

They backed off their prices. So then the evaluation services don't have many prices to put on that night, so they take prices down. So the poor guy who's only holdings is x y Z bond fund looks at his NAV the next day is in that ascid value and it's gone down. He says, maybe I should sell some, so he sells something. The next day, the mutual funds have to meet these redemptions by selling bonds into a market that's already of routing. So prices get on further.

The next day, the same investor looks at my NAV went down further. I bet ourselves some more. So now you've gotten yourself into a negative feedback loop of selling of mutual funds. And we saw that on an absolutely gargantuant level in the middle of March and HAWD they just wrote it out for a couple of weeks. The worst of it would have passed and we would have seen some sort of recovery in the in the mutual fund and fund market. Is that a fair statement? That

is a more than fair statement. And it was not only a rebound, it was a rebound of historic proportions, so the back off was also historic. He went essentially from two percent at to four percent and about seven business days six business days, and then you rebounded three quarters of that in about three business days. I've been managing money for thirty six years. I've never seen anything

like it. So we have a mutual friend from Fidelity, Eric Golden, who runs a quantitatively driven fixed income portfolio. He said he saw prices do things that the models say just can't happen. Your your experience sounds like it was very similar, very similar. And and I can tell you just from I mean, having put trades on. We saw bond prices down over twenty points and certainly some

discounted bonds from lower coupons. So think about a bond that came in December at a hundred cents on the dollar, that was trading at seventy five cents on the dollar in mid March, and less than a week later was being priced at par. So if you were nimble, there was that capital, there was upside to be had. Oh sure, absolutely, you know. And a total return manager is going to use that type of a distress in the market to

go and change the mix of his portfolios. And in our view, that sell off that you saw in March was not credit related. It was all liquidity related. Because of what was going on in the stock market. People wanted cash. It didn't matter whether it was in a bond, mutual fund, or a a reat or or anything else, I mean, or selling gold, and by the end of that week they were also selling treasury bonds. So anything to get cash. The old line is in an emergency.

You sell what you can, not what you want. And that's true about the meltdown and mutual funds. You know, a mutual fund manager won't sell what he liked us all, which might be a I'm making it up a hospital bond that he leaned the wrong way on and buying and doesn't have the greatest credit in the world. It's exactly what you said, Barry. You tell what you ken saw, which is usually a high grade bond. So earlier we were discussing the dislocation and corporates and treasuries, let's talk

a little bit about the muni market. From everything I heard and saw during the beginning volatility early in March, it looked like the muni bond market had just gone berserk, maybe maybe even the most severe dislocation of any of the fixed income trading we've seen. Tell us what happened? And so far have the markets uh recovered yet? Sure? Berry, I mean, it was certainly a March was certainly historic

volatility and historic loss and almost historic rebounding. You know, I still I hearkened back to March nine, when treasury prices were spiking upward and yields were dropping, and that rendered most firms out there on Wall Street impotent to actually give you a bit on bonds because they couldn't

hedge anything. So prices were backed off, and that combined with the stock market that it started to roll over, partly because the price of whale was dropping and there was concerned on the economy and the coronavirus picking up, and you suddenly had a perfect storm of dropping equity prices, people looking for cash wherever it could be, and that involved the selling of bond funds and bond ETFs into

a market that was overwhelmed. So when you think about bond yields moving up from two percent to four that is a historic rise in a very short period of time two basis points and essentially a doubling of yields. Uh. And like I said, most of that was almost all liquidity related and not credit related. And and and yet there are concerns out there, but of course about municipalities and how they're going to fare through this. Our viewpoint on that is that most really kind of high quality

general obligation and essential service bonds are going to be fine. Uh. You know what you end up doing is you're looking at the essentiality of a service through the prism of the virus, and things look a little different if you're talking about something like a rapid transit bond or an airport bond, etcetera. But that that was not the cause of the sell off in the mutual funds. So so

this wasn't a systemic issue. This was just a massive amount of volume that overwhelmed the normal liquidity that exists in the bond market. That's exactly right, And you hadn't seen that before, where the meltdown in the bond market was occurring alongside a meltdown in the stock market. The last time you really saw that was in two thousand and eight, and that was after Lehman failed, And that sell off in municipal bond funds was credit related because

nobody knew whether anything was gonna pay. In other words, when when Lehman went under, it was like the thirteen strike of a clock, and people wondered, oh, does that mean my school district is not going to pay off responds or that the water authority won't pay off respons It was really overdone, But but that was the nature of that sell off. So let's look at the current circumstances, which seemed to be not comparable to anything else that's

come before, including O eight oh nine. Uncle Sam has shown an ability to keep running deficits for as long and as deeply as needs. But states and cities don't have that luxury. And we know that these states, and we know that these cities, especially areas like New York, New Jersey, Washington State, wherever the virus has has hit pretty hard. We're starting to see signs that's happening in Florida.

How are these states going to operate if they can't run a deficit and have hundreds of millions or billions in shortfalls? Are these states potentially at risk for defaulting on whatever general obligation bonds they've issued. It's a good question, Barry, And what you look at is really twofold one. Almost all bond issuers have debt service reserve funds. Sometimes that can be a half year, sometimes a year. It depends on the depends on the issue. Will we see credit downgrades, absolutely,

you're seeing it now. Will you see invasion of that service reserves? Sure? And you're gonna see thinner debt service coverage across the board. That's a given. We don't think you're gonna see massive defaults, especially if you come out of this within the next month or two. So what it what it is is, it's just a it's a torpedo out of the side of the ship, but the ship is going to continue to sail and then you

start restoring debt service. Um. We think that there is a lot of federal support for certainly some of the bigger agencies out there. Let's take a very high profile one. Uh, look at the MTA in New York City with the subways. You can certainly think of you know, m t A as as a poster child for transportation, and transportation is certainly a poster child for infrastructure, and I think that's one thing that the administration is really keen on. So I I see certainly a lot of support for that.

I see a lot of State of New York support for that. So I don't expect to see a default on that. It doesn't stop bonds from trading cheaper. We've seen that for sure, and that's that includes airport bonds as well. You look at the hub airports out there. The federal government is not going to have those airports go into default because they are necessary for the restoration of the economy when we're back working hopefully a month.

We normally think of equity investors as the risk takers who were more greatly compensated for assuming that risk than the traditional bond investor. But I have to ask, given what you just said, what sort of compensation are risk takers receiving in the fixed income market these days? Well, you can you can argue that um look at a lot of deals that have come in the last week or so. The long end of the tax rebond market, the high grade end is restored itself to roughly about

a three percent yield. That doesn't sound particularly high and like it doesn't sound like a particularly rewarding yield if you think about the potential for downgrades down the road or a thinning of debt service coverage, etcetera. It does look relatively cheap when you compare it to a long treasury bond of one thirty five. But I would contend the treasure are probably a little overbought in here, and municipal was maybe a little cheap, and they're gonna eventually

meet in the middle. I think the important part is to keep the long term really economics of municipalities in the forefront when you're investing. If you went back to the worst period in our history, which is the Great Depression, and we don't think we're going back to that. You had about municipal entities in this country stopped paying their debt. Didn't mean they went bankrupt in a legal sense, but

they just stopped paying. And in the end, as the economy turned around, they all, except for a few dust bowl towns in Oklahoma, almost all paid off their debt inter ears and got current on their debt and continue to pay. And that's because of the monopolistic powers that municipalities have. If a meteor came tomorrow and hit the St. Louis Water Authority, would they stop paying their debt? Yeah, most likely when they rebuilt things and started to get

debt service again, where they repay it. Absolutely So, John, and all of this, we haven't talked about the mac daddy in the room, the Federal Reserve. What is the role today of the FED in the fixed income market? Barry role is probably more important than ever and you only have to look back at the last few weeks to figure it out. Uh, you look at the FED and how did they step in on this crisis. Well, the first thing is that they fixed the short term

bond market. You think about things like revenue anticipation notes, bond anticipation notes. These are the things that money market funds invest in. Some of them are non rated, their their promises to pay. The bid dropped out of the market in the middle of this crisis in mid March. What the FED did is they established credit facilities that would buy these bonds from the money market funds, these rands and tans at their cost basis, not at the market,

and give them cash. So that up the money market funds in business. And you can't really get uh an improvement in equities until you improve the bond market. So their first stop was to fix the short term bond market. Then you saw the legislation come in where the Treasury, through the FED as their agent, was going to start to buy municipal bonds one out of five years that have to be investment, greater, better, not how yield. They haven't done it yet, just the fact that they established

it was enough to really improve the bond market. A couple of weeks ago. Is that package is putting together. So the Fed, through either their ability to do credit facilities or their special ability to buy bonds out through six months, which they have and have not exercised, and now the ability of the Treasury to go through the FED and try to buy bonds out through five years. All of that has helped shore up the market, and

it's been very important. So the mirror announcement that hey, we have the ability to buy munis if you want to, is sufficient to stabilize the bond market absolutely, and and not only is stabilized the short term market, which is also in this array, but it helped to stabilize a long term market because within that confined there is the ability to take that beyond five years. I mean, Steve Manuchan can call up J. Powe and say we want this extended to fifteen or twenty or thirty years, and

they could do that. Huh. I recalled during the eight o nine crisis, the big complaint I heard from the FED haters and the people wringing their hands over the various rescue packages was that the FED is adding three trillion dollars to their balance sheet. This is going to cause all sorts of trouble. Well, here we are a decade later, what is there five trillion on the way

to six trillion. What does that mean for fill in the blank, the economy, fixed income inflation, For the FED to potentially have trillions and trillions on their balance sheet, Well, what did we learn from the oh eight o nine area, and actually was essentially three rounds of quantitative easy? It never created inflation. Even though you saw the FED take their balance sheet up to what was then record levels

and they were buying treasuries, agencies, and mortgages. The key to that was the fact a they were trying to keep rates lower, but it didn't create inflation. Because if they bought a hundred million dollars worth the treasuries, and they bought it from the Bank of Barry Rithholtz and deposited a hundred million dollars at two o'clock in the afternoon, the Bank of Barry Ridholts put that money back on

deposit at the FED learning a quarter of percent. What it was not doing was lending the money out, So the velocity of money and the expansion of money that way was not happening. The quantitative easy was effectively keeping rates in a certain range. What could cause inflation is the two trillion plus early more money coming on the government spending side, and that's what you didn't have. I mean, you had eight hundred billion in programs back in the O eight o nine crisis that is going to be

tripled or quadrupled. Here, I would remember that, remember that eight hundred billion was three billion was a temporary tax cut, three hundred billion was a temporary extension of unemployment benefits. The pure stimulative fiscal part of it was barely two hundred billion dollars, right, And you saw some other things

like the BABS programs, et cetera. You might see a resurrection or something like that that's being built American Build America bonds, Build America bonds, which was really to try to get municipalities to borrow in the taxable market because the at that point treasuries were at three and long tax remonds were at six, so that it was really ineffective borrowing. So this allowed them to get a thirty five percent subsidy from the federal government, really lowered their

borrowing costs to something under four percent. And they were essentially building new things. So I think about an airport building a new runway, or a state university building a new dorm where they're pointing concrete, hiring people building stuff. That was the stimulative nature of it. Whether we see something like that here. We don't know that the administration has announced a two trillion dollar infrastructure policy, but we

haven't seen any particulars on it yet. I would I would think though, that if you don't get inflation down the road from this amount of government spending, then we might never see inflation. Huh. That's that's quite that's quite fascinating. So let's let's talk about the opposite of inflation. Let's talk about deflation and negative rates. When when you started your career, did you ever imagine a set of circumstances

where rates could go negative? Uh? Oh, And I guess one of the nice things of having a long career is I've seen the peak and interest rates, and I've seen the loan interest rates. Uh like forever you know, you you don't think about negative interest rates when you think about textbooks back in the nineteen eighties or seventies or even even nineties. But you saw negative interest rates, and you saw them in Europe over the last year. So you get back from this particular crisis and go

through last year, you saw negative rates not here. And our interest rates dropped in the US last summer, really not because the economy here is foundering, but because our rates are too high relative to what was going on around the world. UH. And all negative rate means is that you're expecting rates to go more negative, so you want to lock in something. Losing half a percent is better than losing one percent, so you want to lock that in. I think Europe was coming to the agreement

that this was not good for banks. UH. And you saw a lot of noise and some movement, and before all this you would start to see rates rise. So Germany had gone from negative tenure bond rates to actually positive rates UH. In the last in the last few weeks they have gone from negative like minus point nine to up to minus point three. So I think we're gonna move out of the negative interest rate range over time.

And I think the idea is if you can get back to a world where you have a steeper yield curve than the banks are in the shape to make money, and you need a decent banking system and a banking system that's in financial health and can make money to get the economy movement they used to call it the zero bound for a reason. I guess we can't use that phrase anymore. Um So, so it sounds like you're not looking at rates going negative from here, even if

we have a pretty substantial rescue package. No. I think what you'll see is you will actually see rates turn positive. I think you'll see a more positive looking yield curve. And I think if all the kind of government stimulus that you see, that should produce a positive yield curve because you think you would start to build out inflation are expectations as you go further out, and that's reflected in the shape of the yield curve as well. So that leads to the obvious question, are we ever going

to see inflation in our lifetime? I think so. And you know, if you look, if you look last year at the kind of the middle part of the year, you had a cover of Business Week and it had a picture of some kind of animal and it said says the death of inflation. That was good enough for

me to realize that inflation is probably coming back. It takes a while, and it will take a while to build up, and I think you wonder about where where will it end up, what asset class will it end up and we've seen some of the FEDS actions in the past. It ends up and maybe small cat stocks, or it ends up in the housing market. Does this time does it end up in commodities which are are

you know, it's been severely depressed. You would think that if you come out of this mess, those kind of traditional things like copper and timber and things of that nature would start to do well, and so I would start to think you'd see some inflation. And yet throughout this whole post credit crisis recovery period, we've seen a huge uptick in multi family housing construction. We've seen a lot of sectors of the economy over the past twelve

years slowly come back online, and still no inflation. So what's gonna be the the spark that lights that fire?

You know, it's hard to say very because I think what's gonna be going on here is a lot of it based on demographic and what you're gonna see is the millennials, who if you draw a bell cover the millennials, the biggest part of that curve is just starting to turn thirty and they're just starting to get into the years where uh they will start to spend money on family formation and all the things the baby Boomers did, except maybe a little more delayed and and a little

more delayed, partly because of the financial crisis of two thousand eight oh nine. So kids will got out of college between say two thousand and eight and two thousand eleven. We're really behind the eight ball a little bit in terms of getting jobs, are getting the quality of jobs that people just a couple of years younger gut later on. So even they are now approaching that point of liftoff

from a spending standpoint. And if you look at the millennials as a group, they are bigger than the Baby boomers. So I think that's where it's going to come from. Quite interesting. So normally, if we were in the Bloomberg office, I would be asking my ten favorite questions, but we don't have the full ninety minutes to do that. So I'm just gonna give you a speed rounds. Five questions, quick answers. Let's plow right through this. What are you

streaming these days? Give us your favorite Netflix, Amazon Prime, Uh, Disney Plus shows. I am back watching all the Ken Burns specials on baseball, World War, Prohibition, etcetera. So you know, you're never too old to learn, and you're never too old to relearn. Huh. Quite interesting. Who were your early

mentors who influenced your career? Um? Really, when I look back at a man named Billy gow At E. F. Hutton who was a public finance banker, and he really kind of took a liking to me and got me into the municipal bond area, and then later on Bob gao at Lord Abbott. Tell us about your favorite books? What are you reading? What do you like to give his gifts? I'm big into history. Um, you know, one of my favorite books was Rise and Fall of the

Third Reich, which was a tumb by William Shier. I go back and read for You to Choose by Milton Freedman every once in a while to make sure I'm or he handed the right way, and I'm I'm trying to read the Ulysses Grant biography right now by Ron Turner. Quite quite interesting. A recent college graduate considering a career and fixed income comes to you and ask for some advice.

What would you tell them? I would say, find a spot on any firm and do everything they asked, from sweeping the floors to uh, you know, make sure you show up the first one there every day and find a mentor. But I would give that advice to anybody that's starting out, if you can find a mentor. Uh and and even if it takes you a few years, it is well worth it because you have somebody to bounce ideas off of. And our final question, what do

you know about the world of fixed income today? You wish you knew forty years ago when you were first starting out. I wish I had known the importance of international flows and currencies. Um. You know, as a as a municipal bond expert. Back forty years ago, you didn't realize the importance of international flows and how they would affect me. So the fact is that the change in the Chinese currency would affect municipal bond invest he would

never occur to you. It definitely affects it today. So I think that's the one thing that I've learned quite quite interesting. We have been speaking with John Mussau. He is president, CEO and director of fixed income Trading at Cumberland Advisers. If you enjoy this conversation, well be sure and come back for the podcast extras when we keep the tape rolling and continue discussing all things fixed income. We love your comments, feedback and suggestions right to us

at m IB podcast at Bloomberg dot net. Give us a review on Masters and Business at Apple iTunes. I would be remiss if I did not thank our crack staff that helps put these conversations together each week under trying conditions from various remote locations. Michael Boyle is my producer. Jolie Volmer is my audio engineer. Michael Batnick is my head of research. I'm Barry Hults. You've been listening to Masters in Business on Bloomberg Radio