Citi Sizes Up the Markets

will do about it. We'll get into it with the head of investment strategy at the wealth management unit of a big bank. But first I have to say I've been worried about you. I'm gonna say I've been worried about it because I know you live in the seen of you. By the way, do you have air conditioning? I have? Yeah, I have air conditioners, like in my window. Okay, all right, are you asking because it's so hot? Because it's hot. Now, I'm not as as worried about you.

I feel like you city slickers don't have the all the appliances you need to live. Sometimes we don't, like everybody probably needs a blender or like a vacuum, you know, I'm thinking of the big ticket and whatever people hipster's is okay to call you a hipster city city slickers here that out the suburbs, I have central air, a

washer dry. Don't tell me about the wash dishwasher. You're like, what are you some kind of billionaire with Yeah, with a washer dry, like the air conditioning, yes, everybody needs it right now. At least you have an air conditioner, right the washer dryer? That killed that? I would I mean, I would like a billionaire out there in the suburbs. You're so rich. Oh my god, dishwasher as well? Yeah, I bet our guess has a dishwashing and a washer dry. But I do want to I want to introduce Sean Snyder,

head of investment strategy at City US Wealth Management. Thanks so much for joining, Sean, Thanks for having me. Sean, we're all having this debate about whether or not we're in a recession. I know you sent us a note over that said one side will be wrong, which is a very diplomatic way of putting it. So I'm wondering what side you're you're falling under. You know, It's it's really fascinating because you have the potential for two negative really real GDP prints in a row. We had a

negative print in the first quarter. Atlanta said is actually tracking at minus one and a half percent for the second quarter, and most people think that that fits the technical definition of a recession. But that's not necessarily true. Uh. And we also have the FED that's in their June f on MC meeting minutes that growth appears to be rebounding in the second quarter. So that's what I meant when I said one side will be wrong. It's interesting that if you look at two thousand one, we had

a recession. We never had two negative prints in a row, and yet we were it was still defined as a recession. Or if you look at the global financial crisis, you actually had the recession called in December for two thousand and seven, but it wasn't until the fourth quarter two thousand and eight that you actually had two consecutive quarters. So this notion that two consecutive quarders negative growth always

definition this isn't exactly right. Uh. It's actually kind of winds us better with payrolls, and we've actually seen payrolls coming in, you know, really strong through first half this year, average of four and fifty seven thousand jobs add in the first half, and that doesn't line up with this nourse number session right, And we've been hearing a lot about the technical definition of a recession. We've talked on the podcast recently about what might constitute a recession by

the nb ER and by their standards. But so do you think that we should be rethinking our definition of a recession? And if we do, what does it mean for how investors should be thinking about this? Well, I ultimately is at the end up to the n b R, right, you have I think belief eight economists you know associated with it that makes the call, and it often tends to the actual recession by about a year. So I'm not sure we can actually you know, change who the

arbitr of that is. What does it mean for investors? I think in general it means this notion that we're seeing capitulation already, you know, might be wrong. We have seen the market react very fast to the notion of recession simply because the FED is essentially telling us what it's going to do, right. It wants to destroy demands

so that it can bring down inflation. So markets have reacted extremely quickly to the potential for a recession um and now they're kind of just waiting to confirm whether or not we will have one or will not have one. Uh. Traditionally, if you don't have a recession, uh, you know, these bare markets tend to bottom out so on between, which is kind of where we are. And if we do have our session, there's usually another leg down and that's

maybe another five percent. Further defending, sure, I'm kind of more fascinated with this rebound we've seen off the low. You know, like I said in the intro, it's been I think five weeks now. The middle of June was the last low we're recording here. On Wednesday, July twenty, were something like eight percent above that low. Now, at what point, you know, do you go for saying, oh, this is just a dead cat bounce or a bear

market rallies actually being a believer. You know, you mentioned capitulation. Back of America's fund manager survey was out this week. They said, you know, they think that this is it. They've seen, uh, fund manager capitulation. How do you sort of try to suss out whether or not that bottom is the real deal or whether it's a sort of a false bottom and we'll be back there again, or

we're lower in the near future. Well, let's say I think it's interesting because the NASACK is up, you know, about ten percent since mid June and leave June just about eight percent since mid June. It's kind of interesting that it really coincides with these five consecutive weeks of gasoline prices to clining. So you know, I think maybe they're kind of sniffing out that maybe inflation has finally peaked. And you know, I feel sometimes like I'm the boy

who cried Wolf, because I keep saying inflation peak. There's you know, we're near peak, and it just keeps going higher and higher. And you look at Europe um, you know, it's what's going on there with this heat wave, and then you have potentially even higher food prices and higher energy and more difficult times ahead for them in particular. But I do think there are some signs that maybe

inflation hats peeking, and I think there's expectations. Um. We saw the University of Michigan's consumer inflation expectations for five years four to calm down. Last month it was revised from three up to three point three, then back down to two point eight. Um. I was just in the midwestern Wisconsin and people they're constantly mentioned to me that gas has come back down, and it seems to be a little bit more happy about it. Um. So I

think maybe the markets, you know, sniffing that out. And then again, the earnings this season have been, you know, pretty good. I do you want to ask you more about earnings, but first I want to ask you how difficult it's been to make a call on anything right now, considering that the economic signals are a little bit all

over the place. So I'm just thinking about, you know, if we were to have a recession, We've never had one where the labor market has been tight, right, That's right, you know, so when it comes to making calls in this type of market, and you know, I think the first half of this year was extremely difficult for almost anyone because you know, bonds weren't performing in your portfolio, activities weren't performing in your portfolio, and there was a

pretty historic decline in both. Um. The potential upside of the environment now is that fixed income looks more attractive. Uh. You know, I think bonds will like the peak in two And I think if you were to see your recession, well, then the fixed income side of your portfolio at least provides you some sort of buffer. You also have higher yields now, so there are some you know, attractive opportunities their USB disciples, um, other areas like that. So I

think it's a little bit easier here. Um, it might get a little bit more difficult going forward though, And I think energy is a particularly interesting sector. Has been one of the you know, few sectors that has you know, worked uniformly throughout the majority of this But if you do see a recession, when you're gonna see energy prices come down. If you look at the past four recession, crude oil prices spelled by about uh and that's gonna

mean lower IPS estimates three. That means the energy sector may not work as well um as it has, so that there's gonna be some difficult things if we do have a recession. Yeah, let's talk about that earnings outlook, Sean, I know, you know, for this year, I think the estimates are still something like ten percent a little bit lower. Fore, everybody we talked to seems convinced that you can't believe

these estimates. They're gonna have to come down whether it be you know, to your point, the energy sector, uh, and that fabulous growth and earnings they're showing comes back to earth or recession knocks just pretty much, you know,

everything out of order. But I also can't help but think, you know, companies tend to beat these estimates, right, you know, so if we're looking at say eight nine percent growth for next year, even if they come down to I don't know five percent or less, sake call two percent, and that the market tends to beat those estimate it's by five How bad of a of a sort of rerating and earnings expectations are we talking about to justify what we've seen in this market? It just seems like

people have gotten a little carried away? To me, do you think do you think that's possible? I think what you're describing as a somewhat optimistic scenario, and it's not necessarily because I'm extremely negative, but I think if you did have an ever session in the back half, then that would bring down those estimates, and the current EPs

expectations of eight point three would calm down. And even now if you actually strip out the energy sector, which is doing phenomenal, we're not seeing tem percent EPs growth on on a broad swath, we're seeing that when you include the energy sector, you strip out the energy sector in the second quarter here you're actually see negative earnings

per share. But you know, companies thus far and a kind of maybe ten percent that have reported the speive hundred so far this earning season have actually shown they've been able to weather it fairly well. They've been able to kind of handle inflation. The profit margins are do okay. But again that that's not the most difficult scenario. That's not a scenario where unemployment is rising, which is what you would see in so you know, we're not there yet.

Can you actually talk more about what you've noticed so far this earning season. I wanted to ask you if it's the case that maybe the worst case or most feared scenarios aren't actually playing out. And maybe the Netflix report is a good example of this. But you know, potentially there had been a lot of fear, but we were what we were going to be seeing from companies,

and so far it's not playing out. I think that's right, and I think what it's reflecting is the macro backdrop, and I think it's actually seeing this play out in real time of whether we're currently in a recession or we're not in a recession. And I think earnings are telling us that we're probably not in a recession yet. So I think that's why they're coming across is a bit more optimistic. But we kind of knew that we

may not be in a recession just yet. The consumer has, you know, really strong balance sheets, monetary policy operates with the lag you know, actually as much as a year or even longer. So I think this is telling us that, yes, they're holding up fine right now. But what happens is the SEC continues to tighten, tighten Titan, Well, then it's a different story in three. And to me, the Federal Reserve kind reminds the Esop's tail about the tortoise in

the hair. Right they're reacting like the hair right now, and they're trying to act very very quickly because they felt like they're behind the curve. But eventually they're gonna turn to me to turn into the tortoise and slow things down if they really want to avoid tripping and having it's hard landing. And so far they haven't shown any signs that's turning from a hair to a tortoise, but I think the market is hoping that that will happen.

It's inflation does in deep peak and comes down, you know, Sean, It's I tend to think of the say, the last decade in three parts. I'm sure everyone does. You know, we had the pre pandemic era, you know, the old normal where you had growth in tech was you know, outperforming pretty consistently. Then you had the pandemic where you know, certain segments of growth in tech just went went bananas,

went through the roof. Now we have this after well maybe the pandemics not over yet, but we have sort of the over the hump of it at least, you know, the trying to get back to normal phase of life. UM. And we have seen value more cyclical UH companies outperform UM. And I know you guys at the at the moment at City Global wealth investors are overweight UM, a very sort of defensive bucket of stocks, uh, you know, consumer staples, healthcare,

dividend growers, commodity hedges like natural resources. You did point out though that that NASDAC is outperforming since the low in June. Again, it's starting to look you know, maybe like that growth trade is going to come back. That to me seems very much a risk of a head fake, I guess in this environment. But I'm curious how you're

thinking about that, that resurgence in tech and NASDAC and growth. Um, you know, is the new normal gonna look like a lot like the old normal once were truly past this this pandemic phase of the economy, or is it look like something completely different? And how do you sort of suss out when to you know, go from one side of the boat in defensives or value back into into growth and tech. How are you sort of thinking about

that transition if you are at all? Right, it's difficult to call the exact moment where you should switch from one thing back into another thing. But you know, when I think of technology, and we've really seen a huge divergence between the technology companies that you and I use on a day to day basis, right. You know, there's a handful of names that we probably don't go a single day without using. And then there's also kind of what we call the nonprofitable tech that have really been

hit during this downturn. And I think that's that's a big difference, And I'm not sure that the nonprofitable tech is really going to see the rebound and come back to where it was in you know, maybe two thousand one or towards the end of two thousand one. I think that's going to take some time. And you know, there's simply certain things that we may not need as

much anymore. We may not need to fancy, um, you know, bicycle at home to exercise on, because now people are going back to the gym, they're going outside, they're going back to life. Um, you know, those types of things. I don't think you're going to see that same you know, surge again. But you know, at the end of the day, technology is where growth is. Over the long run, many

of them are much cheaper than they were before. And I think if you have a long enough time horizon, I think, you know, this is probably a good opportunity to add to those decisions. Um, you know, is it going to instantly rebound or you know, to the moon? Not necessarily, but if you're gonna hold it for ten years, I think you're gonna be rewarded. To the moon, filled out a Shawn spent on Reddit. I think we've been studying a lot of time on social media I remember

those meme stock very well. It does seem like a really long time ago. Though I still don't know what diamond hands means. You'll learn if you spend a lot of time on Reddit. Mike likes to say around here, the people tune in to this podcast so that they can learn about what smart people like you are actually favoring in this environment. So I do want to ask you to talk a little bit more about those defensive

equities that you do like. Right, So, we actually made a few changes recently at City School of Investment Committee, which I'm a voting member. Is one thing we did is we brought down are overweight in oil field services down to a neutral. Again, we think maybe there's some risk there um if we do indeed enter recession in three You know, I mentioned that oil prices tend to come down when the economy slows down. So we've we've

turned a little bit there. We still have an overweight and natural resources, agriculture, those types of commodities we actually think are probably going to continue to hold up for the most part. And then we like consumer staples healthcare. Those two sectors are sectors that tend to have positive earnings growth even if there is a downturn. So they're one of those sectors that kind of helps you, um, whether it's the storm and act like a bell weather.

And then dividend growers, Uh, those are you know, what I would describe as quality companies, really strong balance sheets, consistent dividend growth. Uh. And what they do is they tend to outperform the more risky segments of the market. Right so, Uh, they're probably down maybe a third of what the Nasdaq is down this year, or perhaps even a half. I'm not exactly sure. I haven't checked it recently, but they tend to perform better in these times of

kind of difficult backdrop. We do like Chinese equities. We actually added a little bit further there. We think their economy is in a different position than ours is. We think that their economic activity may have bottomed in May and actually is potentially start to rebound. So we're just looking for pockets of opportunities. You know, it's very desynchronized kind of uh paths of the global economy right now. China seems to be coming out of a slowdown, we

may be entering further injury slowdown. Uh. And then Europe is you know, anyone's guests. But it doesn't seem great right right, especially heading into the fall and winner, I guess with you know, so many questions about the guests supply us. I wanted to unpack you're thinking on China a little bit, Sean, because I do feel like that's a bit of a contrarian call right now to be uh, you know, sort of bullish on China. How are you

thinking about um, sort of the regulatory risks um. It almost seems like possibly that the pendulum has has swung in China where you know, last year they were cracking down on tech companies and education stocks and it really spooked a lot of money out of the market. Does it seem like, you know, uh Jimping has learned his lesson and and is not gonna keep that heavy handed approach for regulation going. And is that it all part of your your thinking on on way to be bullish China?

You know, I'll be honest, I don't have particularly great insights into the politics there, and I think that is probably the risk you take when you do invest in

in those equities. But our call is more simply based on the macro backdrop, and that we think that their economy is kind of turning the corner, and that we've seen extremely cheap valuations there, and it's really you know, if you talk to clients and that reason, it really feels like that moment of capitulation where uh, you know, you feel that frustration and no one wants to come anywhere near it. So I think that kind of sets

up for the contrarian call. Is there that idiosyncratic risk of you know, political issues or maybe things that are kind of opaque to outside investors. Yes, but I think for the right person still makes sense. What's behind your call that their economy is potentially making a turn for the better. Is it the COVID zero potentially going away or abating or lessening, or however you want to describe it,

or is there something more fundamental at play? I think it's at the expectations that the credit impulse and the reason will pick up. So when you see the credit impulse pick up and stimulus kind of take cold and generally economy response to that. So, you know, we think that their economy is going to continue to pick up steam here. Maybe they don't hit the five and a half percent growth targets that they want, but we think that uh, economic you know activity, particularly GDP is on

the uptrend there, So that's that's really it. Yeah, Sean, So much of the story this year has been the treasury market. Um this really eye popping surge in yields earlier in the year. Uh, it seems like knock on wood up. I'm probably gonna jinx it, but it it seems like that volatility in in treasuries is you know, fingers crossed, Calm down a little bit, got the ten years settling in right around three um our bonds attractive at this level, even though we haven't quite seen that

inflation come back to earth. Yet, Is it Is it worth sort of making the gamble that these will be positive yields if you buy further out on the curve right now. I think that's the case. We We've done actually a few kind of experiments or look at historical examples, per se uh, and when you saw both stocks and bonds sell off by over four and a half percent and during the same period, it's tends to set up

for a rebound in fixed income. And we've only found five other examples in the past where we had, uh, this first half of the period of six months, we're both sold off uniformly end together. And what happened in the following six months is that fixed income returns work significantly better, and they were positive in all the cases, whereas UH stocks with three out of five cases or less. So so our conviction is stronger on the fixed income side.

And we actually think that you're getting to this point now where if you do enter recession again, maybe not quite the base case, but it looks like increasingly likely in three Lenn bonds will add, you know, some diverstication your portfolio, and tarsuy yields probably will come down. I'm wondering, Sean, if you think there does come a point where bonds might be more attractive than stocks even listen for a

long term investor, I don't think that's the case. You know, that may be the case where the next year or so, but I mean, ultimately, you know, long run stock market returns are improving right now. So and I think we have to remember that even during these really tough periods, that bear markets are almost always followed by really lengthy

and substantial bowl markets. So after a typical bear market, what you tend to see is that the stock market posts about a hundred and six return um over the next period after that bear market, and it sends to last about six hundred or so trading days. So when you think of launch from investing, you really have to keep that in focus and realize that these bear markets are part of investing and that they're followed off and

followed by bowl markets. So to say that stocks are not going to be as a tractive fixed income and I think it is probably wrong. Maybe they might not be the place you want to, like, you know, sink everything into right now. Maybe there's another leg down, but I think over the long run, stocks are still a better investments and fix income. Yeah, Sean, we're going to get the uh, the next Federal Reserve decision next week, Um, what is the What do your your sort of expectations

for that? I mean, I think everyone's kind of, you know, expecting a seventy five basis point, like, uh, you know, it doesn't seem like a hundred is necessarily on the table as much as it was maybe a few weeks ago,

when commodities and everything we're still hide. Do you think they'll be able to react to this sort of correction in commodities to the downside and and get a little more dubbish for they just going to be peddled with the metal still, at least in their guidance and in their you know what pal has to say in the press conference, I think they've they mentioned the fact that

energy prices have come off a this. You know, if gasoline prices stay where they are currently UH holds through the end of July, then maybe you can shave off the air point three percentage points off of the CPI UH in July. But again, we do have prices firming on the services side, Shelter prices continued to rise. UH. Those are things that operate with the lag. So the way the CPI where the shelter component tends to lag the national case Shiller housing indext by about a year.

So that means you're going to continue to see that firming and shelter prices. So I don't think they're gonna feel confident enough to back off. I personally would like to see them react less to these individual data points. I think that creates kind of unnecessary market volatility. You know, anytime a CPI inflation print comes out, it's like, okay, now it's a jumble rate hike or no it's not. Or you could look at the University of Michigan Consumer

Inflation Expectation Index. It jumped up, that reacted to it raised their basis point rate from seventy five. Then it got revised down to a lower print. So you know, I would I'd like to see them kind of be sort of stable here. Hopefully that's what they do. Mike, do you want to know a fun fact of Yes, I like fun facts. My birthday is next Wednesday day. It's going to be awful. That's a good day to take off a right that should have taken off. Um. But Sean, can you also talk about what a FED

induced recession might mean for unemployment? I know in the notes you had sent over you said it could mean employment, right, unemployment rising to around six point five percent, and that could mean that stocks could fall another ten percent or so. Can you talk more about that. Sure, that's not an

official forecast. But what I did is I looked at past recessions, and what you see is that the unemployment rate doesn't tend to just pick up by a few ticks, right, So we saw or heard fetch your Powell in the past mentioned that they may need to continue tightening until they see the unemployment and it rise by a few ticks, but that doesn't tend to happen. So on average, the unemployment rate when you have a recession tends to rise by about three So, you know, right now we're at

three point six percent. You know, I think there is some rim between that and what that considers full employment. You know, I think that they're comfortable with the unemployment rate rising. Typically, you know, the natural rate of unemployment is considered to be somewhere around five five and a half percent. That's considered to be full employment. So I think they can accept the unemployment rate rising to some extent.

But you know, you're kind of treading into dangerous territory thinking that you can swerve just at the right moment, so you don't, you know, as to avoid unnecessarily job loss, and at some point it's does do that, then they have to focus on their other mandate. Right So, right now they can ignore the mandate a full employment because there's such a tight neighbor market and they can focus on price stability. But what happens when unemployment starts to ride?

Then what do they do? Which mandate becomes the most important, and I think eventually it will become, uh, the employment mandate and they may have to just accept the higher rate of inflation. Yeah. Try and your notes, you mentioned the PSALM recession roll or Sam? Is it? Say? H M, I'm not sure how you pronounced it, but I believe it's some some we'll go with some. It's it's interesting.

I feel like that's being talked a lot about these days, especially because of this debate about well, what if we do get two quarters of negative GDP growth? Is that really a recession? People are sort of looking for that

an alternative uh indicator of it. And my understanding it's basically, if you take what the moving average of the past three months of the unemployment rate, UM, as long as it's hasn't risen half a percentage point from the low, the recent low in the past year, then uh, no recession. Is that something you think the FED keeps a nigh on. Well, it was actually created by Claudia Sam who worked at the FED, so I would imagine they'd at least be

aware of it. Yeah, you know, and if based on their tone and the things they seem to be saying, they don't seem to think that the U. S. Economy is in a recession, so it's possible. Um. You know what's interesting about some rules is it actually kind of lines up with beating economic indicators, so leading I can indicated. The other thing. I constantly look at the kind of judge whether intercession or not. Typically on a year on your basis falls below zero percent before you enter a recession.

It's been really quite accurate. The yield curve is part of that, uh, and right now it's a positives three percent, so I think the really it's will be released again, I think later this week, and I'm sure it'll come down further than you know, cooling rapidly, but it isn't signaling a recession, and it tends to lead the samburu

li about nine months. So if you kind of line them up together on a chart, it shows that maybe heading into three you'll start to see the unemployment rate rise and this constant uh, you know, persistence of job gains will potentially turn into job losses, and I think that will be a moment where the market kind of has to get its head around and the sight as well. And I think that's maybe when you see this turning point where from the Fed and then maybe even more

so the markets and Sean. Just to wrap things up here, and you sort of alluded to this, but I want to ask you about your long term thinking. What you're thinking about about this around the stock market for the next decade, because I know we had Katie Kotch on the podcast a couple of weeks ago from She's from Goldman, and she said, the next decade is actually going to be really, really tough for for equities. So how are you guys thinking about what the next ten years are

going to look like? Well, I think when you have a bear market like this, I think returns and the strategic returns over the next ten year period certainly improve. UM. You know, I think for long term investor, I don't think this matters that much. I think that you will see a relatively strong bull market coming out of this UH. And you know, I think timing the market doesn't tend

to work very well. I think when you do that, since you simply missed UH, you know the best twenty days your average return and you're turning from ten percent down a six point three, And you know eight of those ten worst days are right next to the ten best days, so it's really difficult to market time. So I really think it's important to stay focused on long term. And you know, if you simply looked at hypothetical performance to say a ten thous dollar investment, since it's been

quite impressive. You know, we've made it through bregit, We've made it through the global financial crisis, We've made it through the annexation of Premia. In the past, We've made it through a lot of difficult times, and I think that will absolutely be the case this time around as well. So I would be you know, I started at City Group during the Global financial crisis. I remember March nine when nobody wanted to touch anything, and that was an

extremely attractive entry point. So I think this will likely prove to be that again. Are we at that point just yet? Maybe not, but we will get there, all right, Well, you know what point we're at. I think it. The craziest thing there is Sean's bed on this show before he knows the rules. I've got a good one. I think I do too, but mine is kind of gross. Alright, I like it already. I like it already. Let's hear it. Okay, this is about a family dollar in Arkansas a few

months ago. Oh, I know where you're going. They had to fumigate the entire place because there was a huge rodent problem. And when they came back, guess how many dead rodent carcasses they found? Oh, this is at one store or is that a warehouse? It was a warehouse? Alright? How many? Boy? Um? Oh? I think I think it was a warehouse? Yeah? How many dead rodents in one? Dollar club? Warehouse? Family? Dollar family? Dollar? Sorry? Dollar club? What is where do you live? I'm thinking of the

dollar shave club. What's your guests on how many dead rodents were found? Oh? Man, that's tough. I'm going to go over. I've gotten they come in both there. That's good. It's not a costco. If his costco, I'm gonna go. I'm gonna take the under. I'm gonna go to fifty. Well, I obviously don't have a good poker face because I just did a really shocked face at you. But no, one thousand dead rodent carcasses. That's dud to inflation, I think. And now the rats, the rats are actually back, so

all these workers are finding them. I guess the story that I had said they found them enrolled up rogs and in different items, and the warehouses closed one thousand dead rodents. I think I think I saw them play at CBGB's in the nineties. I'm not I'm not sure. Yeah, I think she wins. That's pretty good. That's that's pretty good. All right, Sean. How about you see anything crazy this week? Yeah?

I was actually going to go with the heat wave, and then I actually do think there's maybe some financial market implications. So it is beating about the heatwave, particularly in Europe. You know, only five percent of European household tap air conditioning. Just sounds absolutely miserable. But so they ended up having there's something called Durham wheat, which is a component used for pasta, and they had to harvest it two weeks early and they yielded less than normal.

So as a result, we might see postive prices go up. Oh no, it's a very big down five uh and yeah, that's really tough. And another interest thinking I think is actually air conditioning stocks are up about ten percent in the last five bags. I was kind of saying, there there's always there is always a bullmarket somewhere. It would be good to be a traveling air conditioner salesman in uh London, in London these days, for sure. But I've read that story about the wheat too, and I gotta say,

it's this whole food crisis thing. I feel like it's going to just become a bigger and bigger issue going for it. I'm kind of worried about that. But we'll have to keep an eye on that. All right, both are very good. I might give you your first win Bildana, really my first one ever, that's your first one. I don't know, is it's not embarrassing? Yeah, it is for you. It's very much for you for um, not so much for me. Not for you, ob all right? Have you

ever purchased a big ticket item without telling your husband? No, you can confess on the show. I don't think any big purchase, diamonds, a car, nothing, nothing. She was sean you ever ever buy a big I don't even know if you're in a relationship, so I don't know. But if I am indeed marriage, have I ever just went out and bought something on my own extremely expensive? I'm I'm gonna go with uh. I probably know, like like

a fang stock perhaps? Um? All right? What if I were to tell you there's a woman in Scotland who bought a castle without telling her husband, an actual seventeen century castle she impulse purchased it. Um not a very nice castle, but it is on a lot of land about four and a half acres outside of Glasgow. Uh, it's from the seventeenth century, was the Bishop of Glasgow's

residents at one point. And it's a mess. It's very very much derelict, as the Daily Mail describes it in their story, because you think of a Scottish castle as being all stone and just wood floors, but this had either drywall or plaster walls at some point that everything's fallen apart. It's it's a total mess. Several million pounds to to renovate it. But what do you think the selling price was for this derelict quote unquote Scottish castle? I think these are these things are cheaper than you

would think. You think castle, you think like princes and princesses, etcetera. I'm going to go with like four hundred and fifty thousand pounds fifty pounds show what do you want the over or under on that? Wow, that's a good I'm gonna go in there. We're gonna go in there. Yeah, the under is right, two hundred fifty pounds Derrick Castle, it's pretty amazing. It is a dump though, it really needs a lot of work. But she's one of these women who's like buys old houses and fixes them up

in turns about telling her husband airbnbs. I think the rest of them she told her husband about. Is she American? Is she benefiting from the euro dollar parity? She's not. But her her investment thesis is that Americans love castles, and I think she's right about that. I went to Scotland one time and we saw a lot of castles. We saw the money Python, Holy Grail Castle. That was pretty good. So her she wants to turn it into a wedding hall and uh and Lura Americans over to

gets European travels sheep right now yeah American. Yeah, I can't believe I almost went with two fifty. Yeah you were. You were in the ballpark though, don't beat yourself up about you still want Yeah, that's true, thank you. Yeah, and I lost on the one dead Rodents. Yeah, yeah, that was pretty embarrassing. I need to read a more on that. I really got you on how many dead Rodents. Can you dollar story? I think we've grossed out all

the listeners enough for one week about John. Always a pleasure to hear your thoughts, what's going on at City US Wealth Management? And I'm sure we'll have you back on again. Thank you, appreciate it, Thank you, Sean. What Goes Up We'll be back next week. And so then you can find us on the Bloomberg Terminal website and app or wherever you get your podcasts. We love it if you took the time to rate and review the show on Apple Podcasts, so more listeners can find us.

And you can find us on Twitter, follow me at Rea Anonymous, Bill Donna hirach Is at Bildonna Hirich. You can also follow Bloomberg Podcasts at Podcasts. What Goes Up is produced by Stacy Want. Thanks for listening, See you next time.