Reading the Fed Tea Leaves

second consecutive quarter. We're not going to get into the big debate about whether this is or isn't technically a recession, or whether it's wise for the Fed to keep jacking up rates at a time like this, But what we do want to talk about is, well, what exactly should investors do in this strange environment we're in. Our guests are an investment advisor with a strong Wall Street pedigree, as well as one of our own reporters at Bloomberg who will help us get the temperature of the sentiment

among investors out there. But Phil dona Uh. First off, speaking of temperature, you know, I like to tease you city slickers who live in Manhattan for your lack of major appliances. You know, you have to do your own dishes. We have to wash our clothes in our bathtubs. Yeah, no washer dryer. That's what I do. You just like get in the shower fully dressed. Basically you've got like your your shampoo, your conditioner, and some tide in there and said, and then you hang it up outside so

you can dry, you know, outside your window. Fascinating. Fascinating. Although the other night it occurred to me that in the city you are missing out on one of the biggest, most annoying headaches of suburban life, especially this summer, is it's been so hot and dry. My lawn is just toast. It's just completely burnt out. And I'm not a big lawn guy. I don't have sprinklers like it used to me. I could just go out with the hose and you know, wet it down every couple of nights and be fine.

Most of my neighbors have sprinklers, and I think they programmed them to turn on as I'm walking the train. Yeah, and then they get get me on the zoom camera. I'm pretty sure sure that's what's going on. But it's like it's like the dust bowl out there. And I gotta say, if you're a suburban dad, this is a big deal. This is like, I'm worried the other dads are gonna have an intervention with me soon about my lawn. I'm it's it's getting traumatic, so looking ugly. In other words,

it is it is. It's so you you, Um, you've got one up on me with that. You can always if next time I teach you about um doing your laundry in the in the shower, you can get about the lawn. I will. But it also made me realize, I do think agriculture and this drought and this heat um is a big story. And I think we need to get a agg trader on the show. Um, maybe someone who trades. We were swayed beans lean hog lear Hoggs trader on because lean Hoggs are killing it this year.

They're they're up. Yeah. So if any listeners have ideas, uh for some good hog traders for us, by all means, tweeted us in the normal places and we'll try to get one on. Yes, all recommendations welcome. That's a great idea, Mike, all right, My first I think finally ever your first yes, finally, but I do want to introduce our guests for this week. We have Emily Grafo, she's a Cross Acid reporter with us joining us this week. And we also have Mimi Duff.

She's the managing director and Senior Client Advisor at gen Trust. So welcome to both of you. Thank you, thank you, And maybe I want to start with you. Maybe you can just tell us a little bit about you know, Mike mentioned your your Wall Street pedige, tell us a little bit about your background, and tell us a little bit about what gen Trust is. But but me me first,

most importantly, how's your law on doing right? Mike? I'm now going to be on the lookout for you because I don't know where your your property is, but I've seen some folks that are in in dire need. Um. I'm just glad that my lawn people left about ten minutes before this podcast. That's the truth, because it was a little loud no law intervention for you. I'm worried. I know all the dads in my town are gonna show up at my house one night, you know, in

crisis mode, like what are we going to do about this? Guys? But carry on lines point tell us about your background and about interruest. Yeah, so your listeners can't see me today, but I'm I look a lot younger than I am. I have my start on Wall Street in ninety three UM, after studying engineering. At that time, they were hiring a lot of math and quanti people to go to Wall Street.

So I was lucky enough to land at Goldman and I spent my first eleven years their, first in research and then in bond trading, where I traded most types of interest rate fixed income products. I spent four years in London there and then I joined Barclays to run their interest rate swap trading desk. I was there for for many years, and then I was at Tutor, which is a global macro shop. Then I did a bit of consulting and then rejoined some former colleagues at gen Trust.

So what is gen Trust. It was founded by my former colleague about ten years ago UM from Barclays and gen Trust is a multi family office r I A with the goal of providing sophisticated and importantly independent financial management for for wealthy families and small institutions. So the difference that we can provide our clients is that we bring an institutional approach. We have more than a hundred and fifty years of instant tutional trading experience at both

the major Wall Street firms and hedge funds. And we also are transparent and accountable. So that's kind of ore the key point. And we managed three billion under management right now. Okay, Mimi. Obviously the big news this week was the FED. I'm hoping you can just lay out for our listeners what exactly we saw from Powell and then what you are expecting we see going forward. Yeah, so the FED is on the most aggressive rate path

that we've seen in since easily. UM. Coming into the year, people were expecting three rate hikes or seventy five basis points for the whole year UM FED funds. We've already seen three significant rate heights, the last two seventy five clips. Those are that's three quarters of a percentage point each UM. And what we're dealing with is a very strong inflationary environment. I think most most listeners know that the groceries cost a lot more and the gas costs a lot more.

And at the end of the day, the Federal Reserve, the US Federal Reserve has a dual mandate of maintaining maximum employment but also maintaining price stability, and their inflation goal is two percent. So cp I all items is running at nine point one percent UM for PC which is another key metric that they watch. And we we have that data print tomorrow. That's way you know. I think it was four point seven percent last month, but

we'll we'll wait for tomorrow's data points. So inflation is is missing on the top side, so demonstrably that the FED is putting that front and foremost. And I would add also that it's not a US problem, right the Europeans are also dealing with very high inflation. European central Bank is a single mandate central bank inflation for instance. So, um, we're going through a lot out of supply constraints. Are

are contributing to the problem. I don't think it's the single contribution there, But the FET is really putting this for first and foremost, and um, they're putting it first rightly. So and I think, you know, somebody asked Powell a question yesterday basically do you think it started too late? And he said he probably would have done things differently knowing what he knows. Now, Um, the you know, at the start of the year, we weren't looking at the

Russia Ukraine situation. But he you know, he also added, would it have helped if he started three months earlier? Not clear. They're on the job right now. I think

that markets recognize that. Yeah, maybe I wanted to lean into your background in the fixed income markets a little bit, um, because one thing that's called my attention is these break even rates UM, which for you know, the unfamiliar basically the bond market's best guests out where inflation will be over the next five or ten or or however many years. And if looking at them at least looking at five years especially UM, they've come down quite a bit um.

And when you combine it with stuff like the University of Michigan uh sentiment and their question about inflation, and just you know, the price action we've seen in commodities in the last month or two UM, it does sort of all add up to the idea that maybe the fever has broken with inflation figures crossed, knock on wood,

you know, and everything else. How are you thinking about that, especially, you know, viewing it through the lens of of a sort of a bond market expert, yeah, So I think your point is a good one, that the market at least is perceiving that longer term inflation is more under control and UM, just to put it in perspective, we were long something called TIPS, which is, you know, an inflationary bond UM early last year, throughout most of last year,

ten year break evens got to three and we felt like, wow, that means the market is implying that the average inflation over the next ten years is going to be three percent, knowing that the Fed's mandate is two percent. So we felt like at that point the market had really woken

up to the inflationary pressures. Since then, we've come way down UM to you know, lower two handles really and to your point, even the one year inflation break events show market decreases in expectations at least for UH for overall inflation. Now, these break evens, they're based off of TIPS pricing, which is an all items cp I. It does include all the volatile components of of UM, food and energy. And to your point that we are off the boil on some of the energy sectors, but food

and inflation is still carrying on. So I guess on the margin, I would say that maybe even the market has almost too much confidence that everything's gonna come right back down into control in the next year. Having said that, we know that their recession risks are a little higher than any other day of the of your lifetime, let's say. And the truth is, tips don't trade so well in recessionary environments, so we don't have a strong opinion they're

out of our benchmark. We had them in the portfolios for a long time, and we took them off when those tenure break events got to three percent. We felt like okay. But on the margin, I would say maybe the market perception of the Fed's ability to control inflation over the very near term one or two years is could be a little over optimistic, but there is this risk of RECESSI then out there and Emily, I want

to bring you in. You and I obviously spent a lot of time talking to people like Mimi, talking to strategies and money managers, and I want to get a sense from you of the sense you're getting from them, of how how you know what they're seeing in in markets generally speaking, I mean certainly generally speaking, this has absolutely been a very tough year to navigate. But some of the portfolio managers that I speak with are now saying, you know, while we don't, we haven't hit a stock

bottom yet. This is maybe a good time for investors with a longer term time horizon to start adding to some positions in names that have been beaten down so much, particularly in mega cat tech. And there's some other strategists who say maybe fixed income, now that yields are rising, there warming up to that sector just a little bit. But by and large, there's still uncertainty regarding what in

economic recession would mean for risk assets. And if we get that recess shin, is it going to be a short lived one or is it going to be something more painful and longer. How about you, Mimi, what are what are you warming up to? I mean, it's been a year where everything's been down, stocks, bonds, credit, everything

but oil obviously. Uh, when everything's down, it seems to me a trick environment to pick a bottom and anything is Is there any asset class or any sectors that are standing out to you as as the place to overweight these days? Maybe maybe you and I need to rename the podcast Mike to What Goes Down? That will be too confusing. Well, when everything's down, we see opportunity because we really, at our heart a bunch of you know, risk takers from Wall Street, although we're managing long term,

long only money. So these entry points are so much better than less falls entry points for somebody with a tenure horizon, and um baskets of bonds can be bought for yields. You know, with the ten year yield just south of to seventy. Now, you know, you could probably buy a basket of diversified bonds closer to three seventy yield. That's a heck of a lot better than it was when spreads were so much tighter outright, Treasury base yields

were so much lower last summer. On the equity side, these draw downs that we've seen, like we saw earlier this year, they're fairly common every three or four years, right, The bigger draw downs in the zip code of thirty or more percent, those typically come with the recession or something a bit more existential. Right, So we've squared up. We came into the year very um convicted towards higher rates.

We didn't like equity valuations. We hated tech valuations because we felt like the higher both crowded positioning and higher rates really could a number on them. So uh, and long real assets overweight real assets, which we typically have some baseline percentage of real assets and everybody's portfolios, and we've really squared up to neutral across the board now. Um,

in terms of pockets of really interesting stuff. Biotech got so cheap that more than of the names in the index were training they had more cash on their balance sheets than their market cap. So in terms of like cheap sectors, we really think that the biotech definitely fulfilled that that UM goal. Um, we've you know, we like some other thematic trades over a longer term, uh, like

a clean energy theme. We really feel like, um, there was an energy transition going on, albeit slowly before the Russia Ukraine UM conflict, But of any thing, it's just accelerated the need for further clean energy and energy diversification. But overall, we love Entry now for putting money to work over a longer term horizon. Our job is so

much easier to navigate these longer term themes. And speaking to your question about recessionary fears, yes, risk of recession is absolutely higher given that the FED is going through one of the most aggressive rate hike campaigns that we've seen in our lifetime. Having said that, you know, the labor markets coming from a super strong place, the balance sheets from households and corporates are are really short up, and so we do feel like if we get a recession,

it doesn't have to necessarily be a deep one. Yeah. I'd love to unpack that idea about by O tech a little bit because it's kind of a fascinating sector, especially when you drill down to the smaller, sort of unproven experimental companies in this space. You know, I feel like you can wake up one day and and one of these random biotechs has a release out on on the phase whatever trial, and you know, the stock either

goes up. So how you know is it a matter of just sort of buying them all or buying a big basket of them or there are certain names, um they stick out. You do you stick with this sort of tried and true leaders of the industry or just kind of play the lottery and buy them all at once. Yeah, So I'm glad you asked that question because I want to clear something up that we're not stock pickers um

and most stock pickers don't outperform their indsease. So uh Steva has a great report on that if you want to see some interesting pie charts of like the narrow sliver of the folks that actually can outperform their in disease. So we really do believe in assets selection UM at a broad level, diversification UM, and and primarily we invest in e t s which for individual investors are so much more tax advantaged. So UM. Now I do want to add another feature to what's going on in the

overall technology sector. Rates are so far off their highs, right, So ten year rates were up a three fifty. Now we're south to seventy and that's really been a global phenomenon to I want to I want to make that point as well. But more stable rates can help these kind of higher growth names stabilize as well. Right, like some of the stuff that we saw earlier in the year with some of the single name tex stocks down you know, ten to really from their peaks accelerating to

the downside with the rate moves. I think that that chapter's kind of behind us right now, at least in the very near term. And then we me in the notes you had sent over before we started the podcast. I think you also said you like commodities, and I'm hoping you can tell us a little bit more about that. Yeah, so we like real assets and commodities in general and portfolios just because we think it provides a longer term inflation hedge. Again back to the thematic, were long term

long only investors. UM. We did take off. We had overweights on coming into the year because we think that in addition to this Russia Ukraine crisis and addition to the some of the supply constraints that are going on, there's some other factors under the surface, UM shifts in labor supply, UM, that sort of thing that really are driving kind of a more longer term inflationary backdrop. So we had those on. Prices got to pretty crazy levels.

We've taken overweights off. We're not prepared to go underweight here because some of these structural factors, like is the workforce going all the folks that left the workforce, are they coming back? I don't know. Like the market, the labor market is super super tight right now, and you'd think with payrolls with with UM employment cost index also has been continuing to rise. We'll see that data point tomorrow.

But are these folks coming back? We have we need time defend needs time to I'll add right like the chair, Powell made it really clear that he's got eight weeks of data in between this meeting and the next meeting and he doesn't want to commit to anything. So that's on back to your actual question that you asked. We do think that real assets are an important part of long term portfolios. Having said that, we don't UM. We don't go and buy a bunch of front month oil

for our clients. It's just not the business that in We're choosing some investments in agrabusiness, in precious metals, in UM, in the producers of energy. Uh, just a broader set of um of assets that frankly don't exhibit the volatility of say the G s c I, which is the primary index in the commodities, but is heavily driven to front month oil contracts and massive swings. So it's more of an appropriateness to hedge against longer term inflation MENI.

On the commodities front, I know one of the commodities you like is uranium, and I'd love for you to talk a little bit more about why you like uranium and then how you're allocating to it. Is it through uranium linked equities or some of these vehicles out there that are a little bit more directly tied to the price of the commodity itself. Yea. So we're in a uranium E TA and UM and the idea behind that is it goes along the lines of the energy independence theme.

Uranium is UM is an important in uh instrument in nuclear energy and UM. We also we sort of picked it up on the cheap, I'll tell you that, Like we've it's been in our portfolios for some time. But we like the clean energy and energy independence themes and that really ties in there. And in terms of how we're allocating, like we're just again going back to the idea of diversification. We don't really bet the farm on any one thing. It's just not the business we're in.

So what we will try to do is express a theme through several different ways. And like for instance, in the higher rates theme, we were long regional banks as one of the as one of the ways to express that theme. And while if you look at a chart of reasonal banks doesn't look also grand, it actually has been outperforming some of the broader in disease. So it's done less poorly, if you will. So what we try to try to pick up a theme in several ways.

Yeah wait, So so you're telling me you're not willing to take except physical delivery of uranium, that that would really be bad for your law And I think I was going to suggest we dropped some off for you, Mike, Well, thank you, a little thank you. Note. Well, I, you know,

energy is such an important theme this year, and energy independence. Um, I guess part of the thesis there's that maybe countries like Germany will will restart those those power plants that they shut down years ago, and maybe other countries as will too. But I can't help thinking there's sort of this race against the clock right now in Europe. Um as far as uh you know, winner is approaching, uh, you know, very quickly. Vladimir Putin basically can turn the

spec ITTs on and off with the natural gas. How big of a risk, um is an intensifying energy crunch in Europe? Do you think to to not just Europe, to our own economy, in the US and really the entire world. It's a big risk. It's a big risk. I mean, we've just seen what a hot summer looks like. What if we see what a really cold winter looks like? Um?

And uh, the Europeans reliance on natural gas is massive and putin is unpredictable, so UM, I know, I think that's a it is a bit of a race against time. But there's the short term, near term pressures, and then I think that there's the longer term um thesis as well, with summers continuing to get hotter and natural disasters, you know,

popping up more and more often forest fires. So I think I think we have both a short term and a longer term dynamic at play here, and I think the risk is real that we're not So that's what I'm saying, We're not ready to call call it done. On the inflation theme, I do think that at some point we're gonna look, I mean, at some point we're going to come off these peak levels because base effects

come in. Right. If we're just holding these very high prices or just going up a little bit and not nine percent a year, it's gonna look like we're coming down. But under the surface, I think that we've had a lot of inflationary pressures uncovered here, both on the energy side the labor side. Um oh, kind of aggrab business. I mean, the food prices is really hitting everybody in the wallet. I mean, we just to take us back

to what we heard from Powell this week. One of the big things was that he reiterated that they were going to be data depends endant. And I want to ask you if data dependence means that they back away once the data actually starts to get ugly, and how much weakness in the economy you think that the FED is willing to tolerate. Yeah, those are great questions. I mean, uh,

they will be data dependent. I think the mistake of the seventies is that the FED kept backing off two aggressively backing off, and then had to restart the hike cycle, back off, restart the hike cycle, and then finally they hiked and really through the economy into a recession. I don't think that's going to happen this time. I think

that they've learned from that cycle. I think they're happy to do more earlier and then wait, Uh, FED policy takes about six months to filter through, so they think at least and I think too, I'll share that opinion that they've got three tools at their disposal. They've got communications, which they were heavy communicators very early on in the year. They've got the interest rate, the front end interest rate tool,

which they've been using handily. And they've got the balance sheet which is now you know, north of eight trillion dollars and they're starting to roll that balance sheet off and that pace will go up to a pretty significant pace of ninety billion securities a month starting in September. So those are their three tools, and we have to just if you just believe in the thesis that it takes about six months to filter through, some of these

things can go through straight away. If you raise rates immediately there go to mortgage rates up, they go um. But I do think that coming from such a tight labor market, they're gonna they're gonna be willing to tolerate some pain on the recessionary type, you know, slower growth. Another point that I want to add for those listeners that aren't looking at GDP every day of their life.

Howell made the point it's very very heavily revised. It's really heavily revised, and so by the time you get a clear picture on what the economy was six months ago. It's backward looking, so you know, he wants to take that with a grain of salt. I would take it with a grain of salt as well. And in the past when we've had some serious revisions, UM, the FED has acted because they realized, oh wait a second, the economy actually wasn't coming from that level, it was coming

from this other level. Um. So there's there's that too, But I think they're going to be willing to tolerate some pain on the on the low growth side. Another thing, sorry, just to keep adding, but GDP is reported in real terms net of inflation, so not that many economic data points are expressed in real terms, like when you go to work and you get a raise because he did a great job nobody sent you. But in real terms you're actually down. But GDP is in fact, uh measured

and reported after inflation. So keep in mind minus one UM GDP uh print is you know, pretty steamy in nominal terms right now with inflation where it's at. Mimi, I wanted to ask you about how you've been managing just the change in FED the FEDS tightening cycle. You had mentioned it a little bit earlier, Um, in the podcast that when we started the year, we were looking at maybe three rate hikes of twenty five basis points and now we're well north of that. So what has

it been like? Um at jan Trust just managing how quickly everything has changed. Yeah, So we were, uh, we were in the camp that this market has it all wrong back in December. And I was actually on Bloomberg News being interviewed by your colleagues in December and they're like, how many rate hikes do you think? And I thought to myself, you know, I kind of think seven, but I don't know if I should say that. So I was like five, I don't know five, and they're like

five and I was like, well not three. My colleagues afterwards like, well, okay. Now this was before all the Russia um Ukraine crisis had come out, So I mean the way that the economy has evolved and the inflationary pressures have like basically Russia Ukraine just pushed back. It made worse anything that was going to get back to normal on on its own. So um And at the at the time also I was thinking that, and then

I was staying at too. But the podcast to stop easing first Remember they were buying a lot of securities every month fall, and I'm like, why are they still easing. That's their view of easing the same way that their view of letting these securities roll off, the portfolio will be tightening. So they've started that in baby steps this summer, this fall, starting in September, it's going to be a

more forceful letting those securities roll off. The actual impact is then natural buyers like you and me, or economic buyers will say, oh do I think that's a decent yield to buy a new tenure? Because before the fet was like oh it's it's eleven am, time to buy another five billion. There was no economic thought behind it. So how we were navigating it. We came into the year underweight fixed income, underweight equities, no tech long rates, uh sorry, long real assets. We saw the big rate

backup at two and a half percent ten years. We thought, you know, um, at this point we can start buying some some more fixed income and the front end of the curve really repriced very heavily, two year notes and around there. I mean, at one point the peak Fed funds rate was closer to four percent. We're not there now, but there was quite a lot christ in so we sort of took some baby steps and covered the underweight and bought very front end securities around the one year

and two year parts of the curve. And since then we've actually closed out the underweight, and so we were both short duration, meaning we were owning less risky or or less yield sensitive bonds, but also had cash on the books. So we've closed all that out. And you know, it's hard to say that there's so much value at

these yield levels, especially in ten years. I think it's uh it becomes a real conundrum for people don't know what to do with ten years at to seventy when the Fed's supposed to hike so much higher than that.

Um My own take is one treasuries are owned by overseas buyers and they're looking at what's on the menu, and on the menu on their menu is German buns and Japanese tenures and uh so in that regard, there's this a big international component too, and if you look at German yields for instance, they've rallied a whole lot

off the highs as well. Um So that's how we've navigated that, and we're like I said, neutral, if we were to um, if we were to back up, if the FED has a more persistent campaign, because right now, I think people perceive that the FED will slow their hiking and then you know, stop their hiking by say

early next year. But if they have a more persistent campaign and we think that over the longer term they will be more successful in controlling inflation, then I think bonds will be a great buye UM back in I'm

aging myself a little, but not too much. But back in two thousand and six, I think there was a point, there was a day in the markets where the entire curve was flat as a pancake, and I think that all the yields were at five seventeen five point one in two spives, tens and bonds, and I think, you know, if we were to see I don't think we'll see those type yields again because there are so many buyers, pension funds and long dated UH liability type companies like

insurers and the like that would have so much interest way below those levels right now, And those actors were just getting started in terms of UM, in terms of immunizing some of their risks at that time, and the cats out of the bag right now. So I don't think we'll get that high. But as as rates back up, I think it presents an opportunity for longer term UM buyers to to really have I don't know better feelings about buying bonds, because nobody had good feelings about buying tenure.

Not it's at that one percent or anything near that, it sounds like a bad idea, maybe. I that was an excellent point you made about how GDP is reported in real terms rather than nominal terms. I think a lot of people don't realize that it doesn't get as much focus as it should. If I was Joe Biden, I think I'd be tweeting out GDP and in purely nominal terms, and and you know, get a lot of

the heat off of his fact. But one thing we talked about incessantly here almost every day is the earnings growth of companies in the SMP five, which obviously is reported in nominal terms. And you know, say we get eight nine earnings growth this year, well that's almost nothing and maybe negative depending on whatever the latest inflation figure

is when you look at it in real terms. Do you think that explains the valuation compression that we've seen this year, and does it set us up for sort of if we do get a sort of reversion back to normal inflation levels? Um, does it set us up to go right back to those valuations we saw before everything went haywire? Or do you think that is? Those days are gone? Those days of you know and the

SMP are are are for the history books. I never want to say never, but I do think that after these things happen, people learn and they behave differently over some period of time. And if we were, for instance, to uh, if we had the FED in a situation where inflation is controlled, where's the base rate? Right? Like Powell yesterday said, he thinks now the base rates at normal or sorry neutral? To you know that that's neutral?

People think for the most part that's between two and two and a half percent, although I heard one fair Fed person say it was closer to three I think last week or the week before, and I thought, oh, geez, are they're going to redefine neutral? Okay? Um? So taking to your point though, like okay, FED hikes a bunch they get the inflation under control, it's still not going to give the boost to those um, those kind of crazy tech companies that they had when rates were so low,

So the valuations were really benefiting from that. Um. So, I don't know. I'm not in the camp that we're going to go straight right back to those valuations. I don't think so. I think the cats out of the bag. Speaking of cats out of the bag, did you keep your cat in the bag? Never? Oh my gosh, wouldn't up torture? I don't know you. No, my cat can. She can roam around anywhere. She treat her like a princess. So you constantly let the cat out of the bag

all the time. Yes, Yeah, Well I'm gonna let some crazy things out of the bag. I think it's that time to let the crazy things out of the bag. I hope our guests came prepared with some crazy things. Uh, but we do. You go first, what's your crazy thing of the week. I initially was going to go with some story about how mushroom leather is supposed to upend the leather industry, which apparently is a seventy eight billion dollars I thought you might like that story. So us

mushroom leather. Yes, yes, it's made out of mushrooms. Mushrooms. Yeah, apparently it's it's a pretty good fake, but I'm going with something else instead. There's a skeleton of a Gorgasaurus. I hope I'm saying that right. It's a relative of the t X, and it's going up for auction. It's smaller than a t REX would be, but it's much faster, and this skeleton is ten ft tall and twenty two ft long. So maybe it's perfect for your dry yard. I'm not sure, but I'm wondering how much you think

it's supposed to fetch at auction. Eighteen million US dollars. Maybe Emily can correct you a little bit, three million US dollars, Mimi, Oh, I think eight million or something five to eight million. I'm gonna I'm going to acknowledge that I was cheating. No, no, I heard it. I'm eating about that at five in the morning, So I earned that's not cheating. That's preparation. Then, yeah, luck favors

the prepared. Okay, that's not what Matt David says. But I couldn't believe that that thing was found at a private person's home in Montana in two thousand eight. It was excavated in two in there, Okay, in there, I thought you met in their home. Like talking about a skeleton in the ground. I did a little bit more research because I thought I had no idea you could buy a dinosaur skeleton. There's a lot of that stuff actually that they're going to be auctioning off. I think

it's Southby's auction house. But um, it's wild and a lot of it has been excavated in Montana, Wyoming and um, Colorado. So if you have a spare five to eight mil, there's a lot to look at in a nice dry yard to display it. Maybe it's not kidding when she talks about real assets, she's really uh on the curve there on that I'm putting my money, but we can't recommend that and actual portfolios. But I did find it fascinating and and and that is crazy, all right. I'd

still like the mushroom leather. That's a good one, but maybe tough tough competition this week, What's what's your craziest thing that is like so crazy? I'm now at a loss for words. Um did come a little prepared, but I thought it was a longer term horizon at the crazy things that were And I came up with like twenty and so easily. All right, we'll have to bring you back then maybe we'll do it all special crazy things.

I mean, they were all finance features because I feel like the timeline for crazy is like accelerated massively over over the past year. Yeah, so I'll just I'll be quick because I want to hear your crazies. But um one, I think it's a little crazy that the current FED path is like a hurry up and hike and then hurry up and ease, Like I just don't think that's not consistent with what I've seen out of these guys for my lifetime. Uh, nor do I think it would

be the right thing to do. The crypto landscape, I think is crazy, just like the fact that everybody came in with this long held narrative that this stuff was going to be inflation protection and it's gone the opposite way. And I think that, um, the you know, so many bankruptcies and how quickly things could go to zero definitely has highlighted the need for regulation in the space. And the mother of all crazy for me was when the Nickel was going haywire that the Elmy actually broke those trades.

I was like floored as a as a vond trader at heart, and I've seen other crazy situations where the trades were held, so that was crazy for me. But I can't beat the dinosaur. I'm happy to the billion dollar lottery. That's pretty that's pretty crazy, meem it's good at this. We'll have to she's gotta we gotta bring her back for more crazy things. But now, Emily, the pressure is on you to top any of this. Okay, well, I have so you guys like sitting pool side of course,

right of course. So I still an article in the Wall Street Journal that at the Bellaggio Resort in Las Vegas, if you want to sit in a pool side lounge chair, you now have to pay for it. So I'm wondering, Bill Donna, how much do you think you have to pay as a hotel guest to sit in a chair and it includes a side table and umbrella and towels in this fee fifty dollars a day? Okay, Mike, I'll go on a day. Mami, what do you think? I don't know, because I think like nine inflation, I'm going

higher because it's the Bellagio. I'll say one a day. You guys were all too low. It's two hundred dollars, so MENI was closest. But and this is on This is for the Friday of Labor Day weekend, so I'm not sure if it's every single day, but definitely do not go to that pool on the Friday of Labor Day weekend. All right, maybe you're you're two for two on the price is right here. I gotta say you, guys,

I'm the game show host here. Okay. I don't know why everyone thinks they get to be the prices right game show host? That's my role, but I'll allow it. And I got a good one for you, uh vill Donna as a proud native of New Jersey. When I say the boss, who who do you think I'm talking about? Bruce? Okay, good good. I thought you were gonna say, like and crown and your boss or something setting you up to fail there. But to me, it's crazy and I'm a

I'm a Bruce fan. Back from MENI I think you and I did you cred Way College and ninety three? Is that the class ninety three? What's up? Me too? Just just not not too long ago. We're recent grads, so I go back to Bruce yesterday. I go back Bruce. Bruce stantson in the dark days. My my first Bruce show was in like eight seven, and I remember people back then talking about, Oh, it's so hard to get

a ticket, how outrageous the ticket costs are. But it's really gone off the rails this year with ticket masters dynamic pricing UH strategy. It's basically ticket Master has turned. It's kind of like the stock market, you know. There there they are upping the face value of the tickets depending on demand for the tickets, and the Bruce fans are outraged. I've never seen such loyal, die hard, passionate fans turn on Bruce like this. It's it's really it's

it's quite something. Everyone's outraged about how high these ticket prices are because of this new ticket Master's system. So I looked up the ticket prices for the Tampa show. That's the first show of the tour in the US at least February one. And I know Valdonna has read every news story published in the last week. So I'm not gonna ask you what the highest price ticket is, but what do you think the lowest price ticket is

for Bruce and Tampa, February one, first tour stop. Lowest price ticket for fifty for fifty Mimi wow, um three three family, how about you? I'm gonna go higher seven hundred. I if I hadn't looked, I would have gone on the high end to I do. The lowest price ticket in an arena like this is like you get a good you know, I view a Bruce's back of Bruce's head, and you know probably probably don't even get to see the drums or anything. To one in fourteen bucks for

the lowest price Tampa ticket. So I'm like, what are you all these complaining about Bucks? Is not bad to see the Boss. I'm sorry, but guess who's three for three? We got to get you. We got to get you on prices right. Sometimes me stump the chump. I think that three D bucks. I'd rather just like sit in my house and listen to the Come on, have you ever been to Have you ever seen the Boss? Yeah? I like, I like, but I don't want to like sit. You know where those tickets are there behind the state

They are terrible. Behind the stage. You can't see the Boss. They're pretty bad. Back of a screen. That's true, you with all your peeps. There you go, Mike, you're with your peeks for that, you get the tailgate and everything. I would pay two hundred bucks to look at the back of Bruce's head for sure. I'm up paying that. Did you look at how much like the highest ones were or the median? Because this was news to me.

I didn't read that five am that ticket Master is doing all that jazz, and I'm kind of with the Bruce fans, I'm kind of saddened by it. It's it's yeah, dynamic pricing they call it, where you know, they have some algorithm and the algorithms rule our our life now apparently even when it comes to trying to see the boss. But depending on how many people are logging in and signed up for the pre sale, and yeah, all their data employees inputs, they they jack up the prices or

lower than to try to sell it out. And uh yeah, the goal is that the artist and ticketmaster makes the money rather than a bunch of scalpers um because the guy hasn't towards in like seven six seven years, so of course the tickets are gonna be hard to get. They're gonna be you know, you're gonna have to pay through the nose them the highest ones. I think they're like five six thousand for for floor seats right in front of the of the stage. So I would not be I would not be paying that, uh, but to

tight to go see the pot. See that makes the two high? Do? It looks so cheap? That's right, right, exactly exactly. But the other thing is, you know he's gonna add like ten twenty dates in the summer at stadiums, big hundred thousand seeds stadiums. So there, you know, I don't know. I think it's a much to do about nothing. Everyone should get off. The Boss is back, That's what I'm saying right now, you mami, I think Memi's outraged though True Value Investors is not going to pay two

to see the Boss. But with that said, good stuff. I think maybe it's time for you to uh take a sabbatical from work and go on the prices right uh and win a new car that was really good. Well, I'm running down to get some lottery tickets. Yeah, that's so. I know you don't like one billion uh for the pay out of it? What is it the mega millions? One? That's that high. We thought me, someone should start a mutual fund that just buys lottery tickets, like in every state,

every everyone. What do you think do you think we could get that off the ground. Yeah, maybe like an e t F to make it a bit more tax efficient. I'm gonna work on that, like like only it should be only the big ones right where you actually have an increased odd Yeah. I like this idea, you know. Or you can tell a micro cap scratch off strategy too. You can have a few of them, you know, work on that. That's a free idea. Yeah, free idea for you there, new business line, free idea with that, said

me me, very impressive. I don't think I've ever seen prices, right, contestant on the show do this well? Uh, you know, we'll try to stop calling it prices writer, we'll get sued, but we'll take to something else. But very impressive. Your clients are gonna be very rest I think you went three for three on the Crazy Things this week. We can call it prices correct prices, Yes, totally different, totally different. The lawsuit there, good, all right, but I think that

is all our time. Maybe great stuff. Really appreciate your insights Emily. Great to catch up with you as well, and I hope we can have you guys back sometime. Thank you so much, Thank you both. 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. Well, Donna Hirich is at bil Donna Hirach. You can also follow Bloomberg Podcasts at podcasts. What Goes Up is produced by Stacy Wang. Thanks for listening, See you next time.