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Hello and welcome to another episode of the Odd Lots podcast.
I'm Joe Wisenthal.
And I'm Tracy Alloway.
Tracy, we're recording this March twenty fifth, twenty twenty six.
That's nine ten am in there.
Are you going to do the seconds as well?
No, But the reason they do mention the time this cash trading in the stock market hasn't open. The reason I mentioned the time is not just because things are moving fast, but to establish we've had market moving headlines already this morning. Oh and so just in the last like fifteen to twenty minutes, we got some headlines attributed to the Forest News Agency out of Iran saying there is no interest in talks, there's no interest in ceasefire in the US position about pursuing a ceasefire is a
logical that mood futures down a little bit. We're you know, it's a cliche, you know, a headline driven market.
You hear that a lot.
The last several weeks have felt like the headline driven market to drive all headline driven market.
No, it really, I know it's a cliche, but it really is a headline driven market, and I think part of the issue here is because no one's entirely sure what the goals are when it comes to Iran, It's really hard to judge progress of the conflict on any sort of fundamental basis, right, so all you can look at is basically what Trump and the other two sides are saying, and so you get these big reactions every time they tweet something or post on truth social and
then tend to contradict each other absolutely.
And you know, I do think, Look, there is this extreme level of skepticism from almost any headline you get out of us White House. I think if you go back to the post Liberation day environment, particularly with these sort of modest approchement with China, you would get these headlines we're talking, and then the Chinese would put out a headline, we're not talking. But then it turns out that there was a little bit more talk than what
maybe the Chinese side had admitted to. So often, I think, as much as you is, many people are inclined to disbelieve headlines. I don't think people disbelieve them entirely. When Trump said yesterday that the Iranians had sent him a prize, that was extremely valuable, and it's like, who, I mean, that's tough to take seriously, but is there.
Some modest signal? I don't know. It's really tough.
It's really tough, but I you know, I just want to say two other things real quickly on this, which is that even with the headlines today about Iran rejecting ceasefire, futures are still up. So it's not like people have like completely, oh, nothing's happening and for all.
To talk about.
And we've had multiple guests and they're the smartest people in the world to talk about. Oil is going to surge the longer this goes on. As of the time we're talking about this, Brent crude is still right around or just under one hundred dollars. We haven't had the mega surge yet. So I like to take market seriously, even if sometimes I don't always understand what.
They're doing well.
The big question to me is whether or not markets are still in denial right and you see people talking about like, oh, people are being very optimistic about the future. I saw the Morgan Stanley report saying that corporate profits were going to go up later this year. The oil price again, we're talking about the closure of the strait of war moves, which is the sort of thought experiment that has been deviled oil analysts for decades, and yet you know, the reaction has been kind of muted.
Yeah.
Meanwhile, in the rates market, there's a lot going on there too, and you still have a lot of bond traders who are very reluctant to price out the possibility of a rate cut later this year completely.
And it feels like the idea of a rate cut, at least for now, does not seem anywhere near the quote table. But yeah, anyway, so how do traders even make sense of this headline? How do they know what headlines to believe? Why does there sometimes seem to be this gap between what a lot of people think the market should be and where it actually is very excited to say, we have one of the most plugged in people that we know as someone who is talking to
people who move serious money every single days. He goes around the world and he has dinners with them and he talks to them about their trades. Even brought us a nice gift which is a core t shirt. It is the cover the Macro Dinner's twenty twenty six tour with a nice Deutsche Bank logo.
You should read some of those cities just to get an ideas.
To the Macro Dinner Tour Jan fourth, London, Jan twenty one, Geneva, Jan twenty ninth, Milan, Miami, buddhap Has, London, New York City, Montreal, Copenhagen, Ria, Dooha, Dubai, etcetera.
You get the idea.
He's always talking to people and he has the one of the most plugged in people that we talked to. We are going to be speaking, of course, to the one and only Ozon Tarman, vice Chair of Global Macro at Deutsche Bank. So Ozon, thank you for coming back on out lots.
Joe and Tracy's an absolute pleasure, highlights off the week, very close to it. I used to live in New York City as well.
It's great have you here in the studio. It's a pretty wild market to trade, I assume.
Very very wild market trade. And on the T shirt, unfortunately, for example, the three odd cutary leg that I was looking forward to, we'll see what happens. So we'll see, we'll see, we'll see what happens with that. But unnecessarily untradable still traders always smell things, always have a sense of where the painting is, where the momentum is. Even walking in now I became a veteran of this wonderful show. I was thinking, this time around, we should really say Wednesday.
That's how I know that what I can say now one day later may look a little bit different exits, etcetera. But still walking now. Obviously it's a big cliche to say it takes two to tango or tackle three maybe, but that being said, at the moment of paint trade, the momentum trade is for this equity rally and oil fall to continue. There are many unfortunately, I have told all my clients friends since wounded hurt players out there, certainly in race markets, certainly on front end, so people
are reluctant to take fresh bets. But as I constantly hold these conversations round tables, I do get the sense that now getting to know the president well as well, people did expect this. We want the war, I want the war mission accomplished moment, which is trying to do in a few ways. Then the big debate is yes, and we do get these spikes of equity sire, oil lower. At the end as you're rightly said, even Brent is lower than under them, we should talk vi Vidia is
even lower. But do you fade it or not? That's what it boils down to. Another big true cliche is what does Iran do? What does Iran say? As we speak? Because of Fars? Like you said, Israel twelve said, these talks are happening fast. Iran said no, We're still waiting which one to fad. That's the big question. Mark my god. Feel from what I sense from the clients is there is room for a squeeze here in equity hire oil over, but the tail risk is very very fat.
Yeah.
Wait, so talk to us more about positioning. I mean, going into this war, I think everyone was pretty much expecting rate cuts later in the year, oil prices. Nothing dramatic there, certainly did Everyone just change very very quickly, And now we're left with positioning that can lead to a bigger squeeze higher.
Very elevant question. I want to take us back to February twenty seven, the night before the attack on Iran. Again, I was visiting Palm Beach and Miami, and the field couldn't be more different. The main obsession focus of the US client based the key players was AI extreiny research. Something big is going to happen. Schumer how fifty percent of white color jobs could be lost in twelve to eighteen months. So finally, not only rate cut expectations where
it can increasing, we were getting bull flatteners. So even long end was coming down. Thursday Friday, it was around four or five. And I do remember before Iran US ten year close top tick three point nine three and it cannot be named, but some one of those more legendary France clients of mine comes to me with an email, Osan, we nail this this that bond is the new gold. Oh we need to talk about our friend goals as well. Yeah, one more thing, another good friend. I did bring this
on paper because it's very very telling. This guy sends me a message I think the Tuesday or Wednesday before Iran, the multi tillium question is can the rest of the world isolate itself from this destruction? I'm not sure he was talking more about the AI fears. Another observation today reminds me of early February twenty twenty. While we also people falling over in China. It became clear by the day that we were about to see a pandemic. The SMP made new all time high. The same is today
with Iran. Nobody cares. I mean, yeah, rings sow true now right.
Actually, let's a about Golden Position for a second. The last time we had you on with September, and one of the themes of that was the relentless bid into gold, and whenever we frame a conversation, I'm like, oh my god, this is gonna be the top. It was not the top even closed. So that was gold was around thirty eight hundred ounced during that episode. It got over fifty five hundred dollars. And now it's in early February. As of yesterday we saw a ten day gold sell off.
How much is this just about all these different trades not working at once, the steepener trade not working at once, the oil trade not working at the same time, and essentially a lot of players being forced to liquidate the one big winning thing that they had in their portfolio.
Very much so, and look, I love you guys. But on the last show as well, when we all started with Golden Media, Golden Media, I was very you know, happily and politely answering, but in my mind, I was saying, this is annoting sign. I know it, of course, and then I listened to our show this so I'm like, risk on this works, risk of these works. I'm like Joe Sacy, like it has to be something that comes
from the left field that gets the whole thing. And even though the guy says here Iran, people look and nobody cares. The repercussions on the positions, just like you said, led people to get out of all winners, and gold was a big winner. Emerging markets were big winners. So that was the first trigger. And then another story. Now once you are in this position, once you realize it's not days, it's not weeks, this is going to continue on and on petro dollar countries, other people start selling
their winners to build defense mechanisms. I mean, it's almost like public reporting. In terms of China, my motherland, Turkey, India, they have these gold reserves for reasons. So that's another reason why first technicals you go after your winner, and then fundamentally some of these strong hands, for understandable reasons,
are selling them. Everything happened back to Tracy's question. So people were all into these bear flat steepeners first, then they believe in bull latinus because everything was all rys, We're coming down. Then you get into this world and thanks for jumping onto it Monday after Iran warflation. Warflation,
this is serious inflactation. Expectations will increase. It's not as simple as finding the next Venezuela Jersey and my God from like getting ready for cut discussion one, two or maybe three in FED at least hold ECB and certainly cut the Bank of England. Look where we are now. For a while we've priced in four hikes for Bank of England and ECB. We're right below three now for both. That's huge. That means seats are lost, pods are closed.
How many times have you heard the word liquidation or you know a pod shot blowing up in the past few weeks A lot?
Unfortunately, right, capitulation. And I teach all our young stars or mentors. So after all, the cliche is, oh, investment bank will do well, trading floor will do well because you know, bit off fear or not like that. After a while, there is really something called bad wall stilty, and this is bad wall stilty from these crazy headlines being that much slaves to what somebody says at Friday ten pm to Saturday eight eleven pm. Two. Also this
much of liquidation and capitation. After a while, people say the best thing is a blank piece of paper less trading, and let's watch. That's why you're opening question. Some people see this market as untradable, but unfortunately, in times like this, especially if you're not wounded, somehow flat is the new up. If you have survived, these are the moments to make the difference. Who knows, Joe, maybe this is right around
April night, twenty twenty five moments. This is when maybe this is right around the dip and we will remember it like the time we were able to look through it. I have my doubts. But maybe.
What is a pain trade?
And why is that.
A useful concept?
Very good questions. You know, you know what triggers me a paintred I mean it's not the ideal definition, maybe because you don't want your clients and friends to be in pain, but a lot of it. Even before the days of quant trading, crowding out positioning is so important for this market. After a while, it can become as important as a fundamental factor. After a while, you do
feel that in these echo chambers. Players almost want to believe because of the prising fundamentals and what they're talking about. So pain trade is when that hurd gets a belief in a trade so much and when it works just ether way around. I mean, what happens to gold is a big one because for a long time it was unshaken, but sometimes even smaller instances, for the past fifteen to eighteen months, we really believe that big dollar would trade salt.
What I mean by that is either because of hage ratio didalarization, dollar wouldn't be the safe haven that it used to be. It would make sense to sell dollars whenever one has a chance now all of a sudden because of Iran, because of people building up setting their winners to go to save havens. If we trade towards the one ten, one eleven before one twenty one, twenty one, that's a much less talked about pain trade. Why because it's gonna further shake places like rest of the world,
emerging markets, Korea, etcetera, et cetera. And of course it opens conversation right. Sometimes you say sometimes pain trade is to abvious. Sometimes we said, no, you know that trade is there for a reason. Conscience is going to continue to work. You develop a market, you trade on it on the.
Dollar, and this is related to gold as well. We do seem to be in this weird situation where like, okay, people are liquidating the successful trades to raise cash, go neutral, whatever. But at the same time, you still have plenty of people talking about diversification away from the US, and you could make a very strong argument that given what's happening in the oil market right now, maybe you don't want to only price that in dollars. Maybe you want to
start thinking about other currencies. How are people thinking about the I guess like US exceptionalism trade at the moment, because there's two cross currents.
For sure, it's moving from US exceptionalism setting your US assets to more hag ratios. It definitely moved, let's put it that way again. At the beginning of January February, all these events one after another, Venuezuela, Greenland, Mike got so much happened in three months?
Tell us about it?
Well, Powell's case again, not necessarily selling your US set, but buying more, buying less, increasing your heratios had become fashionable. But your very right races my partner and success one of them. George was head of our effects strategy. He has this, George, yeah, we all do. He has this rough formula euro dollars roughly two thirds oil price, one third gas price. It should have traded around one twelve fifty one thirteen as we speak, it doesn't. Part of
the reason is exactly this. Despite what oil is doing, despite what gas is doing, people do want to own a little bit less dollars. But unfortunately, as I sit here, as I come to my old lost every three months or so wide Shaedasche Bank proudly waving my blue make europreate again, hat it's in trouble of it. Whether this world, you know, takes another one week, two week, two months, the wounds will say, the wounds will especially stay in
oil and gas prices. We disrupt the supply enough and the big important with the ones we need those oil and gas price is lower is Europe. So in an understanding way, it's talking about when concent starts becoming more sense in these on tables and beyond, it's becoming a bit fashionable to start questioning the European equities, European credits. Funny enough, it doesn't show as much yet in the effects, but watch out for the equity and credit angle of the zurop date.
So this is really important, which is that basically, okay, there's this long term pessimism about Europe, but there had been some optimism recently, and cheaper energy prices certainly help the relative competitiveness and profitability of the domestic industrial giants and so forth. But we're going to probably be regardless of the length of the war, in a period of structurally higher energy prices, and that continues to build to
the negative side of Europe. So let's talk a little bit more about oil, because if you just talk to the oil analysts who I love, like their hair is on fire right now and they probably you know, this is cataclysm. But Brent crude not only is it well off its highes from a week ago, it's not even anywhere close to it ties in twenty twenty two at the peak of the inflation. I mean, we got at one point in March twenty twenty two, Brent crude was
at one thirty nine. We're below ninety nine. Actually right now when I'm talking about this, the thing is like, oh, you close the straight of hormones oil just explodes, et cetera. We all know it, we all see it. There is nothing that any of us. You can be online all day and talk to all the energy experts. You are like, you do not know more information than the market does.
So talk to us like how you're thinking about oil and the fact that there does seem to be this gap between the hair on fire rhetoric of the oil and oers versus the prices which are high but even by the scille last five years not i'msand.
I was as the question was coming. I was preparing for my next but first of all, on the oil on fire. We all see and respect Jeff Curry what he said about molecules and interesting people are watching right. Did you see the tweet of head of Iran Parliament?
Oh yeah, you also he usually you can't print molecule exactly. This is another thing. He also referred to another thing as fake news. Everyone around the world is now talking the same. That actually reminds me of a friend who visited Afghanistan and he met some people working for the Taliban, and like they started what's happening him like Pepe the frog names and they called him a soy boy and stuff like that, like everyone talks the same way anyway, A bit of a divergence, but a little.
Bit depressing that this is the common liguage.
Now, this is the lingua frank of the internet.
We all everyone, but this physical versus paper, the papers trading. He's very very important. So this friend of mine, ex collegue, I worked with him for decades, big commoditistrators. Now a dear client and you know one of these guys he talks to meth t Russia's mit execuse. He sends me a message and we are now even one more weekly.
This is last week.
And he doesn't do on high all the times on High on if it's not starting to open in one month now three weeks, the world has a huge, huge, huge problem. And this is not all on this guy doesn't say, yeah, kutart ELNGI will need months to restart once rooms is clear. And in all we have ten millibytes of shuttings already, and Asian Refinance are very very start pipelines to date CEA would take years and also are not a panacea.
Et cetera.
That he talks about woties, so I get it brand versus what WTIWTI is trading even better, etcetera, etcetera. But especially if the like so far is correct, if we have a lot of talk. But one way another, this rumos is only two three tanks, you know, Yeah, one Indian tank, one China tank. I do fear that these guys warning us about physical deliberty maybe more right?
Yeah, And look, of course, and I get the largic But the people in the oil market who are trading, whether they're speculators or they're hedge funds, whether they're real oil companies who are having the hedge production, they have a lot of money at all, and they know all of this. There is nothing that can be said about the longer this goes on blah blah blah, the more they get shut in blah blah blah, running out of storage. It's going to take time to rebuild. There's nothing they
could be said. And yet here we are.
And I respect their approach as well.
This comes back to also why equities haven't sold off that much, why credit hasn't sold off that much. At the end of the day, Okay, it may not be venezuela, we didn't find the dirty but I think people do believe that this squeeze longer squeeze will come and it's not that easy to fade. So, whether it's is Lamabat, whether it's Evans meeting somebody in Islamabat, whether President I would be surprised in two days saying I need one
more week and you know, creating a delay. People do believe that in three months time, six months time, that's the forward all market as well, we will not be talking about this. We will be talking much more about AI or private credits. That's why the tale is big. That's why Okay, another I'm choosing my words carefully as well. All but marines are approaching. We're talking about car gu Islands, these trans clients talk to that ex general, this ex general.
Some claim that taking control of Foremost once marines are that are there may not be that difficult. Imagine that going wrong. Imagine you know, of course, lives being lost. But even Joe one or two ships getting kids, these are not These are not army professionals driving those ships. These are people on payroll. So even on one gas ship, one oil ship hit, things can get out of hands very very quickly. And that's why, by the way, let's think it back to markets. Okay, you have a point.
Oil brand is still below one hundred. But look what ECB and Bank of England pricing did and they're not backing away. They're saying Madame Lagart today of course, like she sounded calm, she didn't say I embraced the three high pricing, I will hike, but she did say we will be were watching this. So back to twenty twenty analogies. People don't want to be seen laid m hm. Things can move very, very fest I do.
Want to talk about private credit because I think it's important and it's kind of gotten overshadowed by the Iran situation for obvious reasons. But just going back to the Taliban and soy boys, which is a sentence I never thought I would say on this podcast. I mean, this is the first like major conflict related market event where we have both sides to some extent, using AI generated memes and content to for you know, propaganda purposes to express their point of view on how the conflict is
going and what they're trying to achieve. I am very curious on a trading floor if you're a big investor, when Iran tweets like a lego video showing Trump doing something or showing their reaction to Trump doing something. Are traders watching those and thinking seriously about them.
Thinking seriously about them. I don't know about them, and they're watching thereforelding each other the things. But more key thing is, yeah, people do start to read out the more credible sources or the more credible reverse signs. In this day and age, we all translate from Arabic very very quickly. We do compare what a US source says on a potential exam about meeting versus what an Iranian source says. After a while, you do get a sense that which Iranian source seems to be more connected than
the other. All of these things are I'm not going to say it makes our job easier, but it makes our job even more spicy complicated in a way we do have. Yeah, I completicate your lego and memes is one extreme, not very useful. But on the useful side, yeah, there's the Iranian credible journalist is right there on the table tweeting and telling you look at that, look at this.
That helps you know I'm thinking about your shirt again.
And the dinners that are scheduled in the golfer that may or may not happen, which brings me. You know, you're someone who is extremely plugged into money in that area, and there's this question of like, does something change in the trajectory about the business of Dubai. There was a hamlet about millennium. Did you see that they may move some traders to Jersey? Which, okay, cards on the table like Dubai probably I've never been. I doubt it's my cup of tea.
I feel I can say with some certainty that Dubai is more fun than well, this.
Is what I'm saying.
It looks nicer them what I imagine the island of Jersey is, which I just imagine it's very gray and bleak all the time. I don't know, but I assume, like you know, do you think there's any of the talk about is there going to be a real trajectory and the amount of money flowing into the golf?
Is that really? Yeah?
Short term and medium to a medium to a manser, of course, I do. I have some dear friends that be on this industry, the other industries, like I react anology when I come to New York. Obviously you see your clients, but you see your friends in Dubai. You have to give even more time because there has been such a move for different funds, taxes, you know the deal. People do have short term memory, do remember COVID. But at the same time, of course it would have an effect.
Other areas may try to get some of that influence. Maybe some of those people go back to London, maybe places like Milan, other areas of Asia gets more interesting. Absolutely heart goes out to them, but at the same time it affects the sentiments as well. By the way, part of the reason why many people got the whole Iranian thing wrong, warflation and all that, it was that too.
So not only from that Friday night, Saturday morning of attack to Monday, we didn't get a dirty you know the way I put it, you know, up to a lot to face with e C. There was no regime change, but Iran immediately began hitting GCC. Lifestyles got affected. That affects sentiments. So way before the worries about inflation and war, inflation and supply change sly change is sentiment got affected right there. So my hope and thinking a year from now when we do the show again, the effect and
power of Dubai and Katar will still be there. But yes, in the short term, it's not going away. It's it's an important market moving factor.
By the way, did you see that Delcia Rodriguez is just going to be speaking in Miami at a investment conference back by Saudi Arabia. I'm just saying, they don't make communists like they used to.
Let's talk private credit, because we have all these headlines coming out about redemption requests and a bunch of funds
limiting those as is there right in the fun documentation. However, I am starting to get frustrated with this knee jerk response, which is you see all these headlines, you know, ares Apollo curbing withdrawals, and then everyone in private credit is like, well, this is fine, this is a feature of the system, it's not a bug, and obviously investors should have read the docs and this is exactly what's supposed to happen.
Whereas to me, it seems very clear there is stress in private credit regardless of what's actually happening with withdrawals. And if you think about private credit as this huge asset class that was growing enormously in recent years and was a major source of credit and financing for companies in America. Then it seems very clear to me that what we should be talking about right now is a potential tightening of financial conditions as some of that demand
starts to EBB away. How are you thinking about the private credit space and when you're doing your meetings with investors, I'm very curious how much time is spent on private credit versus Iran right now.
Right before you're on a private credit and ais of the world now as immediate headline to you. Last night when I did a small round table, of course it all started of Iran, but I did make sure that we went to private credit. And I'm with fut Tracy the immediate reaction there from directly involved people to more macro tourists. It's not systemic. It's not systemic. It's not two thousand and eight, maybe two thousand and one that with smaller teacher. That that to me immediately a bit of
an orange sign. Okay, I understand. So it all seems orderly with troubles are orderly, etcetera, et cetera. But headlines are not going away. If anything, they are definitely hiding behind the Iran at the moment. It would be almost all what we would be talking about, especially in US, if it wasn't for Iran. And by the way, because of that, my blue hat would have done much better than us. So that's another sad thing, right, It's like quote unquote US and Israel's war, but Europe and UK
and rest of the world gets hurt more. But anyway, these are the new cars we're dealt with. The key thing to watch is at the moment they claim it's orderly, you get your money. If it feels more and more like this ABC, if you see the headlines, you're not going to be able to get your money for a while. Then, first time you mentioned my binkie, I'm very curious to see what he says to night on my macro dinner.
It's a Wednesday macrod big macro Dinner's right, he's still sticking to its eight thousand y If people cannot take their money away from private credit and have to sell something liquid, then watch out for public credits that has been seeing very resilient, and of course watch out public equities. So I'm watching that space very carefully. I do understand why they immediately say it's not systemic. I get it.
But you know, okay, maybe it's not two thousand and eight, but it's maybe something between this two thousand and one to two thousand and eight. Also, it's very in to say, yeah, it's not leverage is not there. Thank god, we may not see the Northern Rock BBC scenes of two thousand and seven, two thousand and eight, all these q's and stuff. It's a more quote unquote one person problem. But what if it's spreads and spreads and some of the big
US banks start lending less to these friends? What if insurance companies get hit more and more watch this space. I think it's a bit too superficial to say it's not systemic, it's going to be Okay, it's almost like the bank crisis of two years ago in this place. I'm more worried on that.
You know, one of the things we're talking about is there's very violent rate to move and war inflation and so forth. But one of the things that's emerged in the last few weeks is there's growing evidence that actually inflation was reaccelerating even prior to the start of the war.
And so when we look at these moves, we might attribute some of them to the war itself, and the pastor of oil prices and the military spending, and that of course Trump gets another two hundred billion dollars for defense. That's more spending that's inflationary. But maybe, like, could it
be that that is actually not the story. That the bigger story in raids is simply that the data is showing that through the end of February there is more evidence that inflation was not heading down to two percent as many people have maybe wishcasters.
And that's really blow to my heart in terms of expectations and stuff, right because quote unquote we almost had them on twenty seven close.
We're a good thing. It was a hurricane.
It was a hurricane. Obviously much more important than market. It's a tragedy for humanity, war, et cetera. But for the market as well. It was a hurricane. Ty was a three ninety three. If that NFP printed like that, maybe we would be talking, yes than your three seventies, et cetera. Now, Genie is completely out of the bottle for very understandable reasons. Another reason another world I want
to relate to relate to inflation. And before we wrap up this whole rationing, that's a big watch out for Europe in Asia. If this continues like this, if my Russia and my t friend is right about Humus and the problems, after a while people are already talking about
look at Philippines headlines today for their airlines. We may soon be at a point when some of these Asian countries can say, look, I need to give energy and fuel to my very important, famous company, But much more important than that, I need to give fuel and energy and electricty to my households. Sorry, I have to choose. In Europe, we may be told maybe, you know, don't use that air conditioning too much, work from home, more travel less, back to my T shirt. Sadly, Dubai cut
on maybe postponed for understandable reasons. But what about Asia? All these airline prices will shoot up. Maybe for work I will go, but for leisure maybe there will be one less trouble. All of this stuff will hurt growth at the same time, it will need interrational means more physical mesages means more inflation expectations. So you know, I'm not in love with the word taclation. But also I'm a rational guy. My job is to smell the market. Yeah, we woke up that taclation.
Fear an urmm. Thank you so much for coming back on Atlas. Thank you for the T shirt. Always appreciate checking in with you, and we'll talk to you again soon next quarter.
What do our quarterly?
Wait?
Will you put us on the T shirt? Just one of your stocks.
You guys, the highlights.
Thanks, thank you so much.
I always love catching up with Ozon. I just find it, you know, it's just incredibly useful to talk to someone who's always talking to people, for sure, right, like that is a valuable thing in its own right. Ozon his very interesting perspectives. But to be able to just like channel his like his brilliantt friend what the people said at the Macro dinner last night, always very useful, you know.
Also to Ozone's point about actual capacity cuts in Asia and Europe. So, you know, because I travel a lot, and I've lived in different places, I'm on all these different random emailing lists for like services and flights and airlines and transportation and things like that, and I am starting to get the fuel surcharge emails. I got one from an Australian car service that I used once ages ago.
A lot of Indian airlines are starting to add fuel surcharges, like you can see it coming, and it's happening actually, like pretty quickly.
I just don't want to travel right now, especially with all the lines you see in the US.
Serious.
Well, that's a separate issue.
It's a separate issue. But I just want to cancel as much as I can.
I'll remind you of that the next time we're debating whether or not to go to an external event and you're like, yeah, I want to go.
I don't want to go right now. I don't want to go to anything.
But anyway, seriously, you know, I do think like this is the thing that I think about a lot, which is that I've always been a take market seriously and sometimes take them literally guy.
And I actually really don't.
Like, I know, you're a secret emh bro.
Yeah, not even so secret, and I really don't like, you know, there will be a headline from the White House and oil will go down, and everyone will say, oh, the people are so stupid, they're being you know, the investors are so stupid, traders are so stupid, there's a lie whatever, And I don't know about that. But my point is there's a lot of money on the line for people who are paid to take this very seriously. And if oil is trading below one hundred, I take
that seriously. And I want to understand why there's the get because there's nothing that all of us online and in the media know that the people with a lot of money on the line don't know. Right, this is a fact, and I do think that's a very interesting point that the people with a lot at stake. Yeah, oil's high, but it's certainly not at the hair on fire levels that either we even saw in twenty twenty two.
Well, my guess is that what we're seeing also is a divorce between the financial and the physical. That's true, right, So you can you can trade oil futures and assume that you're not going to have to take delivery at some point. But at the same time, if you're after the physical barrels, like, you can't get those at the moment. So I don't need know how that like actually relates to price.
There's apparently some price that we see. Rory Johnston is always quoted about the actual physical price in Oman.
Yeah, significantly.
But the two eventually have to merge, right, Like, they cannot remain disconnected.
Yeah, but not for a while. So I think that disconnect is kind of like what's in focus at the moment.
Well, if you're trading front month, oile, you have about a month, right.
Yeah, okay, fine, But like I think people are betting on like, no, I don't have to worry about it for a month. That's what I'm saying.
Very plausible. It's it's certainly a very very difficult, unusual time.
I mean, oh totally.
And this is the other thing to your point, Like it is very true that the outcome of all of this basically hinges on three players and one player in particular, and at any moment in time, you could have someone come out and announce the ceasefire. Yeah, at which point, to Ozan's comments earlier, like you could see an almighty rally just because of positioning going into this, you could
see a squeeze, like without the agreement. And so I think like that's also where a lot of the nervousness is coming from, Like no one wants to be caught completely offside if the conflict suddenly ends.
You know, Ozon used the term badvall, and I think that makes sense, which is okay. On one hand, the trading desks. Sure, there's a lot of activity in some sense, and so that is a source of profit. On the other hand, this is the type of environment where it's like maybe you just want to stay away, you want to keep positions light. If you have a position, you don't want to like go all in or anything.
That I'm imagining a trader like staring at the Vick's curve and going bad. All right, shall we leave it there, Let's live it there. This has been another episode of the Odd Thoughts podcast. I'm Tracy Alloway. You can follow me at Tracy Alloway.
And I'm Joe Wisenthal. You can follow me at the Stalwart. Follow our guest Ozon Tarman. He's at Ozon k Tarman. Follow our producers Kermen, Rodriguez at Krman, Arman, dash Oll, Bennett at Dashbot, and kel Brooks at Kelbrooks. And for more Odd Laws content, go to bloomberg dot com slash odd Laws.
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