Hedging an Epidemic

to play the market. Plus, there have been some major moves in the FX markets, particularly as dollary and breaks out of a multi year trend. And sorry, I've been meaning to ask you, do you think we should once again do the craziest thing I saw in markets At the end of the show, I do think we should do it. At the end of the show. Why why all of a sudden change I feel good about. I just want to make sure you're on board with it. You know, I scared you have kind of a losing

streek going. And okay, first of all, I don't have a losing street going. I would even say that I came prepared. We had a couple of listeners who really came out of the woods in this last week to really hit on Mike. For one, we had a comment from Corman one three four who said, like the Yankees, I'm always rooting against Mike. So Mike, not everyone's on your side, particularly not me and not Corman one three four, Corman one one three four, whoever you are. I am

like the Yankees of the craziest thing. But as you know, the crazy things in markets are one of my passions. And as you also know, another very big interest in mine is leveraged e t s. We've talked about this before. UM, I'm fascinated by them. So we have a great guest this week to discuss them with us. His name is Simeon Hyman. He's the head of investment strategy at pro Shares. Simeon, welcome to the show. Thanks for having me and also joining this uh this week first time on the show

is Bloomberg's own uh Rachel Evans. She's a managing editor covered ets for a long time now shifting focus a little bit to bonds and FX, but still one of our in house et F gurus who we're happy to have on the show. Good to be here, all right, uh Sammy, let's start with you. I do want to get into sort of what's going on in the leveraged et F space. But one of my favorite pro shares E t F s has got to be Pause P A w Z. And this is from the owner of

a Golden Doodle. You know, a neighbor of ours. Gotta go golden doodle in my touch and New Jersey. Then we got one and then next thing you know, they're all over, all over with touch and fifteen years ago he's well, he's fifteen years old. Now he's still hanging in there. We were before you wait wait ahead of me, of course, But Sammy, and talk to us about the pause ETF, just the rationale behind it. I know, uh, you know it buys pet store companies, pet medicine companies.

I'm fascinated by this ETF. Talk to us a little bit about how it came about and sort of what the reaction has been. Sure the tickers P A w Z. And yes, we do pride ourselves on clever, clever tickers, so this one counts as a clever ticker. But look, we we look at themes all the time, and I think the challenge when you look for themes is you got to find where money is really being made. Um,

So here there's real money being made. And anybody who has had to take care of their dog or even you know, God forbid, have to actually have serious health issues with their dogs, know how expensive it can be. And also the trends towards premiumization and humanization. I mean, right now, there are more households in the US with pets than there are uh than there are children. And the spending has been incredibly robust. And of course, as you it wouldn't surprise you to hear that the spending

actually increased during the Great Recession. But there's also money to be made. You know, around half the t F is animal healthcare. And one of the ways I sort of think about the spaces, uh, fresh off of the the debates and all the political stuff that's going on, I note the following there's no medicaid for dogs. You gotta pay for that. There's some emerging insurance companies. But it's a place where there there are margin, there's money

to be made. So, um, we thought the opportunity was there. Uh. We think this is you know, a long term you know opportunity. We think we did this right. In other words, we we appropriately I found companies that were, if you will, the pure plays, real pet care companies. You know, sometimes you see these themes, like you know, a blockchain idea and it ends up being a bunch of financial services company, or like do I really get blockchain and I get

something else. We think we really did it right. We think the the opportunities for the firms are there, the right companies are in the e t F. And you know what, it's conversational alpha. You know, if you're talking if you're a financial advisor and you're talking to your clients, it resonates because their pets are near and dear to their heart, and they're spending so much running out of them. Would be nice for them to make a little money. Well for the pet care industry as well. I love

this idea of conversational alpha. This is something that the Global X has talked about a little bit on the Trillions podcast that that covers a t F and it's this kind of idea that you've got something to go to your clients and talk about. It goes beyond the returns, so you're not just thinking about the return side of things.

You're not just thinking about the strategy, but you're able to say, well, look, you know you own a dog, you own a labradoodle or retrieve and it's something that people can really identify with and they can think about that in terms of how it might boost their portfolio. For me, and you said, there's money to be me. This is a long term opportunity. But if I look at the market cap of the fund right now, it's roughly fifty six million dollars. I mean, how do you

get over this hurdle? What is the conversation with investors to actually get people to want to come and invest in a product of this sort rather than just going to a broad market fund um and have them zeroing in on one thematics but also thematics surrounding the pet care space. Yeah, a couple of thoughts on that. So, first, fifty six is uh A a nice viable size for any TF So you know, we launched this a little bit over a year ago, so it's going in the

right direction. But absolutely these are you know that satellites to a to a core UH to a core investment portfolio. So you know, if one were to have an appropriately structured long term investment portfolio. You would indeed have this as an addition to to a core holding. So nobody would be suggesting that you're you're the core of your

retirement from should be in a pet care ETF. But UH, it's going to It really has the opportunity to add alpha, to add diversification, UH and to add a little bit of extra juice to UH to a core portfolio. And those are the of the conversations that we're having, and we think they're going pretty well. We're certainly looking to grow it, but it's been moving in the right direction

since it's launched. You know, Simon Simeon as Uh Sarah will tell you if the way I think about it, if if I'm pulish on pets, I want to go triple levered Paul, triple triple ever, triple levered everything. But I do want to sort of segue into that discussion because I know there's been UH some backlash obviously two

leveraged e t F s UH. The f sec UM wants to sort of implement a system where brokerages have to sort of quiz clients on whether they're sophisticated enough to to understand what's going on in leveraged and and I suppose inverse ETFs as well. Could you sort of get us up to date on where that UM debate stands right now? I know the SEC is still accepting comments about this, Is that right? Yeah? I'm not actually not really the right person at the firm to to

talk about the current proposals. You know. What I can tell, of course, is that leverage and reverse ETFs have been around for quite a while and have been valuable tools for investors for UM both hedging positions in their portfolio looking for opportunities where they have particular points of views have been valuable tools. But unfortunately I'm not the right person at the firm to be talking about the updates on on what's going on with the proposal. I can

type it that. So this is something that we've been following quite closely for actually for a couple of years. This is kind of part of this long thought out derivatives proposal that the SEC has been mulling over for a while, and they finally came out towards the end of last year with some proposals and a sort of carve out provision from the Derivative's rule that would apply

to to leverage funds. And what they've kind of suggested is this kind of give with one hand, take with the other kind of approach in that they are proposing lifting what has essentially been a moratorium on new issuers of leverage products. So prohas, for example and its competitive direction, have been able to sell a leverage products, but we haven't seen any new issues being able to come into the space for since I think around. So they're proposing

lifting that moratorium. But the downside is that they do want these From an issue perspective, the downside is that they do want these greater controls at the point of sale. So for the brokerages that maybe selling these leverage products, they would have to ensure that they're the client has a certain degree of sophistication, that they have a certain number of assets that they have a certain level of understanding before they are able to it's green lighter a

sale of that of those products. So the SEC has been collecting comments on this process has been quite interesting in this space, and that they did come out and encourage their shareholders to actually respond to the SEC and to give their thoughts on this process. But it's still something that's kind of um your ongoing and the SEC

has yet come out with a final proposal. You know what I find interesting, Rachel's if I want to so the way I envisioned this is if I lag onto my E trade or my uh, you know, a marriage trade account, and I try to buy a levered e t F, I'll get some sort of pop up saying you have to answer these questions. I don't correct me if I'm wrong, but I don't think the same is true if say I want to open a margin account

or want to start short selling stocks over the same platform. Um, So I wonder if would that be a next step. Do you think that that they would sort of start cracking down on that as well. So there's an interesting thing we've kind of purchasing leverage products already and that you do times have a few boxes to go through already without having these extra kind of provisions that the SEC is contemplating in place. Um. You know, some people will have a box that you kind of have to tick,

but there isn't for an options based contract. You would have to actually get documents through the mail, sign them,

film all in, send them back. There's no kind of um level UM like that that applies for leverage products, and the argument goes that, you know, if you have products that have options embedded or other derivatives embedded, maybe there should be kind of a similar sort of process to ensure that you understand in the same way that there is for the more complex, um, you know, purchases

of derivatives. UM. So I think it's going to be interesting to see, um, you know, kind of like how the SEC sort of goes from here, whether this is sort of the further edge of their kind of policy making. Because let's remember this is a proposal, this is not kind of written in stone and these things. Looking at what the different commissioners from the SEC have come out and said on this, there is clearly some division between the sort of republican and democratly and in commissioners, and

this is a bit of a dialogue. Here's a little bit of a given take here. So I think it's hard to say at this stage whether things veer towards the you know, increasing kind of client checks and that becoming more and more something we see expanded to other markets, whether actually it kind of reigns back and they find a middle ground where maybe we see it a little bit more required, but not quite what's being contemplated at the moment, so simeon regardless of what's going on in

the regulatory arena. Some of the leverage for leveraged funds that you guys are well known for our the pro shairs aultopro triple q c q q Q. Then there's the short version s q q Q. Can you walk us through maybe how you typically see investors actually utilizing your products? And then from your perspective as the head of investment strategy, how do you actually go about having conversations with investors as well about the right way to

actually put them to use. Yeah, I'll answer them in two parts, because one with regards to the lever gtfs and the leverage diniversity TFS. We have a ton of education on our website to help people think about how they can express different views and create portfolio constructions that make sense and use them in a way that will help them meet their objectives. UM but actually UM myself and my team we spend most of our time talking about um our our sort of for us traditional buying

whole strategies. In fact, our biggest et f UH today over seven billion dollars has took your n O b L which is the S and P five Dividend Aristocrats e t f UM. So we talk about our suite of a dividend growth ETFs UM more than just about anything else on the platform these days. And in fact it's very applicable to the current environment because companies that consistently grow their dividends have you know, been a really nice way to be able to UH participate reasonably well

when markets go up. But when you have a bad quarter like we had in twenty eighteen, the down capture the defensiveness has has worked very well as well. So that's been a really UH core part of our conversations with UH. With Financial Advisor is another clients for a little while. Now I love the name of that, the Aristocrats.

What is it you have to have UH grown your dividend for Is it twenty years going or something twenty five for the large cap And we think we also have ticker R e g L which is the SMP four Aristocrats and SMDV the small cap And there's almost a little bit of an interesting I don't want to say more per se, but certainly an interesting opportunity with mid and small caps because as we know, large caps have run this market for a while, but it's perhaps

even a bigger has been a bigger impacted people. Note over the last decade, on a price to book basis, mid and small cap stocks have gone from parity to the SMP five hundred to trading at a discount sixty cents on the dollar. Now, the problem is there's a lot of junk when you get down there, but you resolve the junk problem if you invest in the dividend growers.

The consistent dividend growers and been small So uh, you know, we've been talking not just about the flagship and O b L, but also R E, g L and mid cap and and SMGV and small, which resonates with folks. You know, you're looking at the tape and wondering, things keep going up, but I'm a little nervous night and a nice alternative for that, things keep going up, but

I'm a little nervous state of mind. But but at the same time, I want to ask because I feel like we've almost been in the state of mind for quite a while now, this idea that things keep going up, but I'm pretty nervous. And with that We've heard multiple strategists, portfolio managers, many people I've spoken to saying, all right, so that means look at small caps, look at emerging markets, look elsewhere, don't look at US large caps. But that's just continues to be what keeps going up, and you

would imagine maybe making people more nervous. I mean, is a solution really to keep going elsewhere even though it's been roughly I guess a year now over that since we had that correction in in which we did see this performance continue. Yeah, So first, I'm kind of a classic acid allocation. So yeah, somewhere between forty and of your portfolio probably should be. US large caps are for US investor, And if you love it, you have a little more. If you hate, if you had at less.

And to put that in perspective, if you think about the valuations of large caps, I don't get two worked up because and you've you've all heard this many times before, because how low interest rates are? You know, if you plot the p the SMP five D guess interest rates at a two percent ten yere you get a twenty multiple and we're now one and a half times and we're at somewhere around the twenty multiple. And by the way, we're starting to have a little bit of earnings growth.

In Q four we had about one percent earnings growth for the SMP five hundred, but if you take out energy, you had actually over a four percent increase in earnings. That's the first time in four quarters, and I would argue it's it's a little bit of kind of this. You have to follow the bouncing ball, but it's an artifact of the corporate tax cut. The corporate tax cut temporarily boosted margins in AN eighteen, but then for the large part of twenty nineteen that started to be eroded

in price. Just like we learned in Freshman economics, the tax cut went through price for a lot of companies that are are price competitive where you don't have the anniversary it anymore, using old retail speak. And in Q four he started to see some earnings growth. So if you put that together, it's not a terribly bearish story for large caps, particularly when we're in this almost goldilocks

of two GDP growth. We have two percent GDP growth because we have a very strong consumer in a middling manufacturing sector, and that means the FED can't do anything but we're growing just enough, so I don't want to be I'm not I'm not a particular pessimist, such a pessimist on large cap that you should dump all your

large cap and going to mid small emerging markets. But it would absolutely agree with the notion that, as I mentioned, there's a relative valuation opportunity in mid and small And I'll pile onto the e M a little bit too. One of the things that people I think, uh don't are aren't as familiar with with regards to emerging markets box. And by the way, we have ticker e M d V, which is our dividend grower and e M as I do a ticker check because that's part of my job.

That's where I'm an e t F. I gotta I gotta put tickers out there. That's what we do. So in emerging markets the quality is actually higher than in developed markets. So in other words, margins and returns on assets and equities are actually higher in e M. We know that the virus isn't overhanging e M. We also suspect there's stimulus coming along the way, not just from China, but look, we even might get cut in the US

and that's always good for EM. And I think if we see some stability and commodity prices, I know that's a big if people looking at oil, copper and all that. Um, there's an opportunity there. So I am. I am on board with the notion that there's some relative value opportunities in things like mid small and EM. But I don't think valuations are that scary in in in core US large cap pequitis either. Now, Ray sure Simeon sounds fairly optimistic, um, but I know you were looking at some of the

flows into the pro shaares funds year to date. I'm got to say that the money coming into the pro shairs is does not look very optimistic. Tell us a little bit about what the flows look like to you, Yeah, I mean, it's all you always have to be a little bit careful when you look at leverage funds and flows because you do see a lot of people kind of using these very much as getting get out kind of trading vehicles. But there is a sign here. When

you see a flow, it means that people need more shares. Therefore, more shares have been created because people want to use that fund. And we've been seeing a lot of that in s q q Q and in s H which are two short funds, one against kind of the nasdack and one against um that the SMP five hundred, And that suggests to me that the people are hedging themselves or betting against the current highs that we're seeing in

the SMP five and the NAZAC. We are starting to see a little bit of signs that maybe we could see a slight pullback in stocks. Been a couple of wobbles this week, so I think it'll be kind of interesting to see sort of whether those flows continue, whether we see a little bit of reversal, if some of the kind of froth is taken out of the market. Look, I mean, people when the virus is creating volatility, and you know, people always look for hedges and times of volatility.

It's not it's quite well known that after just about every one of these UH pandemics epidemics viruses, you look six to twelve months out the markets up. But in the short run things can happen, uh you know, outside of the of the opportunities that you discussed with with our vehicles. I also point out a classic old school hedge, you know, zero coupon bonds are up thirteen percent year

to date. The problem is with duration. All we need is just to calm down and the ten year goes back to two percent and you lost twelve So um that but that's but that's something that that that's old school heage right there, because you have the if the virus um you know, really kicks in for all we know, you could see a further rally and treasuries from our perspective of we think in the medium term, you know, the the odds of anything or a little bit of uh you think of two percent on the tenure is

a normalization, but I guess it would be directionally normalization. At this point. We've actually got a couple of interest rate hedged um corporate bond e t f I G h G is the it's our investment grade flavor and h Y s G is high yield um and as we had a little bit of movement out and spreads if you want to take advantage of that, but hedge out the treasury rate risk and just have the corporate piece.

That's it's almost like credit ARB light in uh IN or a credit AR strategy and an index form that's been something that put people have been talking about. So mean to get back to that idea of asset allocation. I think you said, what forty you'd be fort yous large caps. What does the rest of your portfolio look like? Yeah, so then you have your ear slug of midden small on the order of you know, another ten or fifteen and small. If I don't add up because I'm not

writing this down, don't hold it against me. Another ten per sentence in uh in, five or ten percent in small cap, and then something on the order of twenty odd percent in developed international and another five decent percent in emerging markets. From a baseline standpoint, So the way the logic works, about half the world's equities are outside

the US. But if you're a US liability person, then you should probably have about the US dollar liability person who's have about six US broken out pro rata by market cap, and then the international stuff about two thirds developed, one third, one third emerging. Hey, we're journalists. You don't have to worry about us doing math. We're not going to check your math. You could take Yeah, I want to.

There's one of their opportunity that we've seen is sort of a quasi sector opportunity that we've been talking a lot about that UH, and that's in the infrastructure space. I'll have to do another ticker because that's my job. But our ticker is t O l Z, another clever ticker because it's tolls like a toll taker. UM. The UH the the infrastructure sector, and we follow the Brookfield

Index of owners and operators of the infrastructure assets. So in other words, not the sort of construction company and the and the drillers. These are the people who own the assets, for example, cell phone towers and airports and

things like that. You're currently getting in that space two times the yield of the SMP five hundred at only two thirds the price to book, and you're actually getting a hundred basis points more yield than utilities, which you know, if if dawns go up at well, you really got a problem there. So we think this is a clever space because you own the assets, you're making money even if there isn't the the long awaited infrastructure bill, and if there was one, you have a little bit of

ticket to upside to UH. And a lot of people have been talking to us about that sort of quasi sector opportunity and infrastructure. UH is looking to get four yield in this environment. Is it's hard to do even in bonds right, A lot of politics talk, but it will be very interesting over the next couple of years if we do see both sides of the table to

come together for some type of infrastructure bill. But Mike, before we get to the craziest thing, Rachel, let's move into your new world of the currency space, because we have seen some crazy moves there. The dollar just continuing to outperform. It's pretty unbelievable. I'm pretty sure. In the latest Bank of America fund managers survey they said and at of those surveys said that the dollar is overvalued.

I think many people have said this for quite a while now, but that's the second highest level since two thousand and two, and at that we've also seen just a complete breakdown in the end against the US dollar, and this even as people are moving to safe havens the like of gold elsewhere too. What is it about this move and dollar yen that that's so different and

interesting right now? Yeah, this is huge irony is that we've put this massive of risk off sentiment and yet the end is not doing what we would expect the END to do it as kind of a traditional safe haven, and I think there's kind of like a number of different factors that are are really playing into to to the end's weakness there. You know, we've seen obviously, as you mentioned, kind of this big dollar strength, and that's kind of a move that's been fairly sort of broad based.

If you look at some of the dollar indexes, they're pushing up on kind of significant levels, and one of the dollar indexes is looking kind the hundred handle, which is kind of as seen as a sort of yeah, we love round numbers on the side of the table, but yeah, I think that that is kind of an interesting level that people are watching. So there is this

broad kind of strength. But I think when it comes to Japan, there is both fears that kind of some of the handling of the coronavirus, that the quarantining of that cruise ship there, and kind of whether there could be more of an outbreak um sort of within Japan proper, whether that could kind of start to sort of pop

up in the news over the next few days. There are signs of course there that the economy and growth is not going to be um, you know, sort of heading in the right direction, and that seems to be another kind of thing that that's weighing on Japan sentiment and UM. And then we are moving towards the end of the fiscal year over there as well, so there's a sense of reallocating sort of assets out out of the year and into other attic into other currencies like

the dollar for example. UM, you actually do see this crossing over into et F LAN just to bring to bring it full circle, because we have seen there's a JP Morgan fund. I'm out there b b JP, I can play tickets to UM that that kind of has been seeing big outfit somebody else's I'm sorry, I have to have a broaden out but no, but we've seen big, big outflows from there over the last um, you know,

a couple of days, a few weeks. Really that money seems to be potentially moving into a European focus ETF. When you look at kind of the holders of both of those products, and there's one big goliath in the room. JP Morgan itself is a very large holder of these and we do see kind of these sorts of products used by model portfolio it's and used to reallocate kind

of money at home. But I think it's interesting that that this is kind of a not just a sort of yen situation, but it's a kind of Japan situation of just community. To see how that kind of plays out over the next few days, particularly as we do see kind of, you know, this move into other types of havens. You know, we are seeing kind of the movement to the dollar that seems to be a favorite place gold, as you mentioned um and treasuries. You see that in the et F space to g l D

I do very well. T LT, which is a longer term treasury, is also getting influence. Yeah, I thought it was. It was surprised me when the coronavirus started breaking out in the end was rallying on this haven deband when the main risk is right in Asia, you know, that's the time when the end stops working. And you look at the chart and the Asian financial crisis and it wasn't very strong than either. So in Japan has already been dealing with some of its own issues too at

that and then you introduced the coronavirus. So I think this is just I'm amazed that people look to currencies to headge equity market exposure because it's there's so many moving parts, you know, the better answer is either an explicit explicit hedge or the zero coupon bonds. At least you know if that virus gets a heck of a lot worse, that there's going to be a treasury rail.

The odds of that, I shouldn't say with certainty, but the odds of that are much much higher than trying to figure out if the end is gonna be too safe haven. But the virus is on its shore, and that to me, there's just too many moving parts there to use that as a as a as a hedge for other forms of risk in your portfolio. Okay, well, Simeon, there is no haven from the craziest thing we saw

in markets. I don't know see what. I don't know if they warned you about this gimmick of ours, but uh, every week we we discussed the craziest things we've seen in markets. This week, oddly enough, I tend to see the craziest things. I'm just gonna go out and say that, Sarah. I know that upset you. Mike thinks he wins every week, sime In, but there are a very I would say large group of people who would very much disagree. Some haters coming out. But first I will say we we

did have someone waiting on Twitter. Before we get to that, remember you can also give us a call at our very own Bloomberg Podcast hotline, leave us a message, ask us quite suestions, let us know about the craziest things that you guys have seen in markets, and we might even play your message on the show. So for that, the number is six four six three to four three four nine zero. But we did get a good way in on Twitter. This one came from at j y Squall.

He said, when decentralized finance privacies defy discovers what flash loans are used for? Yeah, Sarah, I'm gonna try to explain this one, all right. This is this is kind of like when dad makes dinner, though, so I might I might burn this and you know, call the hotline

if I got this wrong. But basically he's talking about this outfit b z X, which is sort of like a peer to peer type of lender, but with crypto and um what does all happens to pretty much every crypto exchange eventually they get hacked, and this one got hacked to the tune of six forty five thousand dollars, which I think, as far as crypto hacks go is is pretty much small potatoes, but still very interesting story. And we thank j Y Squal if that indeed is

your real name, we thank you for the contribution. Have a feeling maybe it's not Rachel. Do you have any crazy observations? Well, my crazy observation is one that you could probably have done last week as well. But I mean watching Tesla, like because we saw that enormous, crazy, crazy, crazy spike, um, and then it kind of rained back in. Everyone was like, see told you it was a bubble,

and it's just been creeping higher and higher. And yesterday kind of a week we went to a new kind of I don't think it was quite the high, but we were back around that kind of nine fifty level. So that to me is really fascinating. Um. I know, there was a lot of talk we initially saw that spike about whether you could overlay that the Tesla stock price with bitcoin, and there was a lot of like, no, no, these are very very different in this, but seriously, try

it a little bit. Scary is a perennial favorite of the last couple of weeks price target this week of a share within minutes, essentially tesliterating above nine dollars a share. I'll share my crazy thing because it's very much a compliment to Tesla. I've been living in this space lately. I've actually been working Asia hours to help out throughout the coronavirus, so my US daylight hours to search for

crazy things have been somewhat limited. But one that's been a clear favorite over the past week has been Virgin Galactic. Unbelievable similar space as Tesla the tickers SPC, but similar space when it comes to movements. I mean, this is a stock that's now up two your date up one in February alone. Uh So we're just seeing these odd, eccentric, crazy steep moves across the stock market in very weird and I'm not weird, but favorites that stocks going to

the moon. So Penny Simeon, I know we we booked you last minute, but did you have a chance to I came up with one. So this is a little old school and you have to say yeah, you have to say it in measured tones because strategists always refer to this in measured tones. I've been watching the Baltic Dry in that you have to explain it in that voice the whole time. Yes, yes, yes, the Baltic Dry Index. That's the dry container shipping index. It's down eighty percent,

eighty percent from hundred to five hundred. The the sort of what fived means, don't worry about it. But it's down eighty percent, and by the way, that is now the depths of the crisis level. So that's kind of nutty. Uh. Some people think it's a recession signal. It's obviously much more about the coronavirus and the immediate impact to uh some of the commodities markets. But that that's huge, a big, big move. So I don't know if that would win me any prize, but it caught my eyes. I'll tell

you what I mean. I like the Baltic Dry a lot. The only reason I will not award you apprize to that is that I I that was one of my crazy things last week. I listened to a couple of them. Quick believe that I didn't catch that one. So it's okay. Alright, Well, Mike set him up pretty strong, and I want to say before you get started, because Andrea on LinkedIn reached out and he said, Sarah, please make sure Mike sticks to finance related topics when debating the craziest thing in markets.

No more vintage bikes or like occurrences. So Mike, you better stay honest. Alright, alright, that's fair, that's a fair LinkedIn. All of a sudden, we're getting trolled on linked over. What is going on? Man? That that'll teach me to post on LinkedIn? I gotta say, But now I can reveal the winner of the craziest thing we saw markets this week, And sir, with all honestly, Rachel, if you disagree that this is not the craziest thing, please speak up.

It's like handing Rachel attend bill. However, we've all heard of this company Facebook, right, uh sillion market cap and one of the most important companies out there. So there's a new book out called Facebook The Inside Story, written by a long time technology journalist named Stephen Leavy. There was a good review in it this week in Business Week,

sie book on the history of Facebook. There's one line in this review, buried deep inside the review that has caught fire on social media in the press, even the New York post. You know, if it shows up in the New York Post, it's a crazy thing. And it is this. Apparently, Mark Zuckerberg suffers from severe perspiration when

he speaks at public events. So to eliminate the I guess, to eliminate the threat of armpit stains, he has an executive, they say, an executive, not just some intern, an executive in the communications department at Facebook comes and blow dries his armpits before public speeches. Blow drives with heat. Wouldn't that make it worse? That's why. That's what I was wondering, because I sorry, I kind of live in a glass

house when it comes to having perspiration, you know. I think this is why our producer toof are always seats the guests on the opposite side of the table. For me, I would assume that blow drying your pits would make it worse. Yeah, but I can maybe they put it on the cool settings. But I'm thinking I don't know how to be on the cool setting right, Um, But I just I guess I'll have to try it. I don't know. I might start blow drying my pits, but I don't think I can get an executive in the

company to do it for me? I think Mark, come on, man, you gotta blow dry your own pits. I think that's illegal these days, right, right, exactly? I mean, how much do you have to get paid to blow dry another guy's arm pits if they're an executive? It's an important job, very important job, all right, the chief officer in charge of dry armpits? All right, Rachel does Mike win? I don't know, would we say that's markets? Facebook is one

of the most important stars. But did anything happen with Facebook? Keep it on that that share price? All right? We will, and we'll blame We'll blame Spotty Pitts. Alright with that, Simeon, thank you so much for joining us, and Rachel thinks so much for coming on the show. Thank you. What goes up? We'll be back next week. Until then, you can find us on the Bloomberg Terminal website and app or wherever you get your podcasts. We'd love it if you took the time to rate and review the show

on Apple podcast so more listeners can find us. And you can find us on Twitter, follow me at Sarah pon Seck. Mike is a reaganymous and Rachel Evans is at Rachel Evans Underscore and Why. You can also follow Bloomberg Podcasts at podcasts. What Goes Up is produced by Topur foreheads ahead of Bloomberg podcast is Francesco Levie. Thanks for listening, See you next time.