With the state of the market Eugene, I just figured, you know, last night I decided I'm going to turn to a life of crime. I think this is my future now.
always looks pretty dramatic in movies, you know, so I don't know. I just figured maybe that you want to join me?
Yeah, I'll have to do some consideration, but yeah, what's your take on how things are going right now? Pack West looks interesting. There's a lot of things that are happening. What's your take on the market?
I was just shocked to see him raise interest rates again. I couldn't believe it. I mean, I guess I kind of get it, but I was still a little surprised.
Yeah, I mean, the market expectation for what is going to happen is sort of in the next meeting is sort of an interesting thing to consider, right? And a lot of the movement actually happens after market closed, though that was an interesting thing to actually take a look at.
Yeah, yesterday's finance base was actually fascinating. We had some great guests. You know, we had Robert Wolff, the former head of UBS and some other folks, opining live on that Bumsey meeting. So it was really cool to have a conversation, but there were definitely disagreements about where things are going.
-Sulamon. -Sulamon. -Good morning. -We're going to be... -Hi, guys. -I'm doing... -You Jean and I have decided we're going to join the life of crime now after the market performance. -I never said...
I thought we were going on this together Eugene come on now. Yeah, yeah, everybody. Don't issue. Yeah. So while he's he all day Donnish. He's
Try and clarify for people and make it more simpler people so people understand but yeah, go ahead Danish tell us what the score is Hey guys, how's it going? I know I've been off for a couple of days. Thank you everybody. They reached out So I'm on Mario everybody that's
I had a personal thing, but really happy to be back, obviously in the middle of the world melting down. So lots of news to talk about. Sorry, I didn't hear the conversation beforehand. Thanks, Eugene.
So, we wanted to set the stage. We are having a confluence of issues right now. And I might repeat this multiple times today.
The this confluence of issues that's going on right now is so insane that it needs to be mentioned directly. Number one, the Fed
And we can talk about whether they made a mistake or not. We can talk about whether people are worried about stagflation or not. We can have this conversation. But the Fed made a mistake. They used lagging data again to make a decision. And we can talk about that. So they increase interest rates by 25 basis.
2) Real Estate is in Freefall in America. Real Estate, especially commercial real estate, is actually in a freefall currently. The contagion will spread from commercial to residential.
Mark my words. By the way, everybody that comes in here and it's not that at 8 a.m. Eastern we end up with or by 9 a.m. Eastern we end up with like 4 or 5,000 people every day. You all know that I've been complaining that what
But as happened, there have been people up here, including Robert Wolff, who is an incredible contributor, an amazing person who argued directly with me, and I'm just a fucking doctor. Like, I don't even know anything. And I was like, "Um, this banking contagion is going to continue."
I don't know if people agree with this but I've been saying this for a while and I was like the banking sector is gonna stop and everybody was like everything's fine, everything's fine. So commercial real estate trust me is in the free fall. I was on the phone like literally the reason why I was late was like I was on the phone with one of my good friends
friends who owns a PE farm. It's very well known. It's a different kind of PE model, but they do primarily commercial real estate. I can't out him, but he was saying that he has never seen what's about to happen.
70% of his properties will come up with new interest rates. Oh, there's Robert. Robert, I was just kind of painting the photo or painting the picture right now. So I need to hear from you about where I'm wrong in a little bit. And I'm sorry that I
been out for personal emergency last few days but happy to be back and happy to talk all about all of this. Thank you so much for joining us Robert. But I'm just going to accept the stage and I want to get your thoughts on whether my suppositions are correct. So number one
I don't want to say I told you so, but I did say that the banking condition was going to continue. And I think it is continuing. Obviously for shareholders right now, not for depositors, and I think that the Fed will need to step in. There's some talk about them potentially stepping in and showing up every deposit across every bank. We can talk about that. But number one, the banking sector
is obviously being affected right now. I think the Fed made a huge mistake by increasing interest rates again. And we're here one more time and we're probably going to keep coming back. It's going to be a slow moving banking crisis. We can talk through that. Number two, commercial real estate is in free fall.
mentioning one of my really good friends, very big at least in Missouri, in the middle of the country. And he was saying the commercial real estate is in significant decline more than expected. He is in this space and even he is surprised by how dangerous it's becoming. And I think that was one other big part. Number three,
this debt crisis and the debt ceiling, we are in a political nightmare. We have an incumbent president who is running for re-election again as he should. Again, for people that don't know this, I am actually a Democrat. And I think he should run again. He has a good thing to run.
But because he's running again and because there is a very divided Republican House, which means that they actually can't push their way through and do the right thing, we are coming to
a very big crisis and there was a tax issue that Janet Yellen spoke about that then means that actually the debt ceiling crisis is going to come earlier. And then for this issue in Russia that just happened actually will have big, ceramic, ramifications because now, again,
opinion, I'm not a political person, I know nothing about politics. I actually know nothing about anything which I think helps me a little bit because I'm just like your average Joe. But I was going to say that, you know, that actually makes it even harder to see a horizon where we see this war over, which means that supply side dynamics
going to be negative or going to be poor for a long time. We have this confluence of issues and I'm extremely worried about basic things like what is the dollar going to look like? Like what is the banking sector going to look like? And I don't I think the Fed is an incredibly hard position but I actually think the
Administration isn't a really hard position. So Robert, where am I wrong? I know you're a lot more optimistic than I am and I love that we can disagree on this but I would love to get you to weigh in on where is my narrative completely broken because I do want you to tell me that so I can sleep at night.
Okay, well a bit unwrap there. So one, I think
you and I are more aligned than meets the eye. So let's start, I mean, I, where I'm more optimistic than most is on a recession. I would say the four points you made and we can go through each quickly and I apologize. I have to leave in about 20 minutes.
And it's sorry, I want to make sure others and we can get a good debate in Q&A going. A few things. On the banking crisis, because we had a bit of a debate yesterday. And I think I was called a Monday morning quarterback, which is a complete dog shit, but that's for a different topic.
What I would say is I don't see the banking crisis the way you depicted it. Do I think regional banks have issues? Absolutely. Do I think every regional bank is the same? No. We have over 4,000 banks. There are not 4,000 banks in trouble.
Let's just talk a little about facts. One, the three banks that were in the most trouble also had the highest number of uninsured deposits for any banks. And I think just about the fastest balance sheet growth there was. The number one bank of
most uninsured deposits of a regional was SVB. The number two was signature. The number three was first for public. I'm not saying that everyone could have seen this coming. I have never said I could have seen it coming. Actually, I was just the opposite. I said that what happened between the social
media and digital finance on that 24 hour period of 40 billion deposits moving out with something that no one has ever seen. And it's a paradigm shift that's taken place with tools that we don't have in the banking system. So to say this is Monday morning
quarter backing is just the opposite. What happened is smart people look at the facts and then start looking at the new facts. So you look at those facts and then you start looking at okay what are the companies that had the biggest uninsured deposits that actually grew their balance sheet the most. Those are the ones that can be the most in trouble and actually
I was 100% right not wrong just to be clear that wasn't quarterbacking that was just looking at facts So yes, I think they're going to be continue regional banks that have some trouble I mean if you take PCW I think they announced that actually deposits have gone up so it's it's there is a
concerns with certain banks on stocks versus conservative ship versus receivership, but not each bank is built the same. One was driven, you know, Silicon Valley bank was really, you know, a bunch of different things that went on and you guys debated that.
signature was something different. First, the public was down for something different, but the things they all had was huge ballooning of balance sheet, huge mismatch of asset liability and huge. Let me finish the full. Let me go through the first one. The second thing you mentioned,
And so I would just say I think there is some issues with a bunch of banks. I don't think the systemically important banks are in any trouble at all. I actually think they're stronger than weaker. They have a lot of capital adequacy up against that. Number two.
you and I are aligned that we think that commercial real estate and office buildings are in trouble and that this is going to be the asset class over the next 24, 36 months that have incredible issues. That also
will force issues upon both some regional banks and the shadow banking system that has done more financing and commercial and residential and office than actually the large money center banks. I just want to go. Number three,
on the Fed, you and I are on the opposite side, I think the Fed did the right thing by raising rates. I think that inflation is the bigger concern I have than anything. Inflation hits 350 million people each and every day.
A core inflation is still running around 4.44 and a half percent higher than where their standards are. I think their standards are 2.2 and a half percent off. I think it should be close to the 3.3 and a half. But the Fed has been clear where they are going.
and I think when the Fed's clear, you should listen to them. And I have been very clear that I have not aligned with the Fed over the years on their quantitative easing and some of the other things that they have done. Number four, I'm going to agreement with you on geopolitical risk. I have been saying
for over I think two months now or a month, however long I've been on these, that my biggest concern is long tail inflation because of geopolitical risk. So I'm aligned with you that what has been going on in Ukraine and the nervousness, you know, whether
it's in the Middle East or wherever it may be in the South Asian seas, that geopolitical risk is always part of how we should look at economic risk and macroeconomics. So I'll pause there. I think I eat the four questions in a rapid way.
knowing I don't have that much time. So I'm going to open it up to other people. So if you have questions, raise your hands. But what I was going to say was, first of all, I will only disagree with this. There's always a narrative at the beginning of any sort of contagion. Again, unfortunately speaking as a doctor, but usually a
virus affects people that are most vulnerable first. That doesn't mean it's not a virus that can affect people that aren't vulnerable, but it is not surprising that this contagion began with the banks that were most vulnerable and then it takes over and you know gather steam
Sorry again, this is an analogy that my trigger folks given that we just came out of a pandemic, but I think it's also real about where we are and my concern is that it's going to continue to clip people that are highest at risk. Again, the commercial real estate sector does not work
in a vacuum. It works with the shadow banking sector, the PE hedge fund and pension funds and those sectors who also have exposure to the rest of the financial sector and often are leveraged by
local and regional banks. So, you know, my concern is around that. But I wanted to kind of pivot the conversation. And again, if anybody has questions, please raise your hands here so I can know. But I was going to say that you didn't touch on the debt ceiling.
And even Larry Summers who I respect tremendously I know people also say call him a Monday morning quarterback which I think is completely unreal. He's actually been calling foul on all of this for a long time but he said that the risk of default
In his mind is higher than it has been in a very long time because of the political situation domestically. Do you agree that even in your brain, in your mind, you're seeing the risk of defaulting given a divided house, especially
a divided Republican majority in the House and the fact that we have a president that's running for re-election and honestly we can't get anything done right now. Do you think that we are at more risk today than we have been that even two weeks ago or a month ago for the debt ceiling to be, to far as to go into default?
So I want to coach this that the phrase more risk.
is a very broad-based term. So let me, before I answer that, on the debt ceiling. The debt ceiling, I think, has been passed something like 78 times. I think 49 times with a Republican
president something like 29 times with a Democratic president and 18 times under Reagan, three times under Trump. And in my opinion, if you look back what Reagan said, whether you're a Republican
or Democrat or if you look back what happened during the Trump administration, you know, we should never put our full faith and credit of our nation at risk. I don't think we're going to have a debt default. This is not in my opinion like 2011-2012.
2012 when you had a majority in the House of 24 seats, you know, this is only four or five seats, I think there's going to be at least a number of Republican moderates that will
will come to the table and not allow the full faith and credit to default. I don't think we'll have a default, but yes, with 30 to 45 days left, we're certainly
And more risks than we have been in the last decade. That's just a fact, right? They haven't passed a clean debt ceiling. I think it will pass.
you know so let me just start with that yes there's more risk as the number of days left i'm not supportive of this prioritization plan that some republicans are for i don't think we should be picking and choosing you know who we pay and who we don't and and that type of impact i think there will be a clean debts
But I also think there'll be harsh negotiations starting on the budget and it should be so You know, but the idea is that more risk than we've seen the answers. Yes So Shikhar you have a question for Robert. I do Robert. This is a little bit different than the definition
But I know we've all been thinking a lot about how AI is going to impact the future of knowledge worker jobs. Of course, there have been several reports published on this. I think this week there was an article about IBM not planning on rehiring 7,500 people, but instead replacing them with AI.
question for you is what impact do you think will have on regional banks? I guess maybe the bigger picture here is like what percentage of their deposits or cash on hand are dependent on knowledge worker contributions and would we expect more people to be concerned about their own financial future?
I'm not reality and maybe potentially trigger more bank cards. It's an interesting question. I don't think I have a quick answer on that type of correlation. I've been on not surprising the other side.
of the immediate impact on AI on the labor market. I've read a bunch of the stuff that you're referencing and my view is a little different. The technology sector.
is something like 10 million of labor and when we are reading the jobs that are being either let
go, terminations and/or halts. If you add up all of them, maybe it came up to like, you know, 500,000 to a million jobs and we've already, you know,
taken that up in the private sector just in the last three months with job gains. So one, I think we are ways away from seeing the impact of AI into the labor market. And so I don't see that core
and the near future, you know, to regional banks, you know, so once again, I'm probably the other side of the impact from a near term perspective. Can I ask a question, Robert? It's been bothering me again. If it's bothering you,
me that I'm assuming it's bothering a lot of regular people. As I've said many times, I'm a moron, so it makes it easier. But one of the questions that I got is on Twitter, you guys have called me worse the last 24 hours as well. I haven't. You know me, I would never. But this is why, you know, I, and again,
Thank you so much. By the way, I'm not sure if there's a glitch, but we have nearly 9,000 people listening right now at 8am Eastern, which is fascinating. But what I was going to say. I hope some people tweet some positive stuff so you have me keep coming on it. Well, if people want
to treat some positive stuff. Go in the comments on the bottom right. I always say this is what makes markets right having two sides of a exactly debate. Go ahead. So one of my questions is do you think that the jobless claims and the unemployment is a red
Because and again, this is not about the value, but about what the impact on the economy. If you have 100,000 people that make $500,000 a year get fired, the impact on the economy obviously is going to be higher, right?
Then you know the same number of people that make a tenth of that and and we're not capturing that in our in our unemployment data And I think that's what people are getting concerned about is that we have a lot of tech workers being laid off and they all made like three four five hundred thousand dollars a year and it's affecting again in
one part, one area, quite a lot, and in this current economy, like you said in the beginning, when the information spreads so quickly and things are happening at such a wild rate, and we don't have regulation to stop it from happening, you know, are you concerned that
we actually are using the wrong data set and nobody's actually capturing and the Fed is not taking into account the fact that the people that are being laid off, the people that are losing jobs are knowledge workers and those knowledge workers traditionally made way more money than the average American that's shown in the unemployment data.
And again, if it's already taken into account, please correct me. But my understanding is that none of this data takes into account actual salaries, actual income. So the answer is no, I'm not concerned because north of 70% of our GDP is consumer driven. And the percent you're talking about
that move is so small. Number two, wages have been going up. So if wages going up, you know, yes, not as fast as inflation, but most of the sectors that we hit the most over the last three years, such as, you know, construction, hospitality and leisure, if you kind of look at those type of sectors
and the service side, wages are going up much faster than the inflation. So the answer is no because wages are up 4 to 5% on the aggregate, which is much bigger than those individuals being hit. Number two, we're such a large consumer GDP in the consumer has stayed strong. So I just don't
see that impact the way you do. Oh, fascinating. It's so interesting because again, I think we're just looking from first principles and the economy doesn't work on first principles. And so it's fascinating. And thank you for that response. I know you have to leave Robert. Do we have time for one or two more
questions. Yep, I have about three minutes. Okay, so one of the other questions is what happens from here? What can be done? So obviously we've got to fix the debt ceiling issue. I know that you're feeling very comfortable about it, but you know, again, being a regular. No, I didn't, no, timeout. I don't think we
will default. Okay. Okay. So that's a very specific. Sorry. I don't mean to represent your point. Your point is that you don't think we're going to default that I actually don't think we're going to get a clean debt ceiling past. I think they are the Republicans will not be able to convince those fringe Republicans
And again, I'm using French in a not judgmental sense. Please don't DM me on the back end. Thank you. You're talking about the speaker deal. The speaker deal. And the speaker will not be able to get the MTGs and the Macs.
and all of these, you know, in the boberts and the freedom caucus to get across the finish line on, you know, just doing the same thing. They are dug in. They want, they want the press. They want to be, I mean, think about what they did to the speaker himself. You know, how are we going to get this across?
I took a lot longer than people were expecting. They're looking to make a statement because they're looking for likes, they're looking and this is again, I believe this in my core, that they don't give a crap. This is more about getting in front of people and so I don't need you to say all the political stuff.
it so I can get the heat. But, you know, I'm worried about those four or five Republicans breaking the bank because they think that there's an ideological war going on and they want Biden to look bad. I think, you know, what can the administration do
to deal with that because the House will be the hard part Senate will not be an issue. I don't think the House will be the hard part. What can the administration do? I know you've advised the Obama administration
And I don't know if you're advising the Biden administration if you are you should disclose that. So I don't think you are. So, you know, if you were advising, what would you tell them the right thing to do? And the fact that we have less than a month left would be.
Yeah, this will be my last comments just because I have to hop. Yes. I don't think you negotiate on the debt ceiling. I think you absolutely negotiate on the budget. I don't think we'll default. I actually think that the debt ceiling will pass. And then there'll be things that, you know, should we, you know, like the COVID payments
or other things, there will be debates. There are actually some tools you can look at. There is the discharge tool where if they can get a few Republicans to bring it to the floor, then there is a possibility of 218 votes. The far right conservatives can still vote now.
I think there are other tools that we could bring up. I just don't have time to go through it. But this is a congressional thing. I think the meeting will be where, you know, with the White House and the four larger, the four leaders, I think they'll talk about, you know, how can we come to some sort of a win-win where
Carthy gets to say he's negotiating hard on the budget and the White House says that you know they're passing the debt ceiling I mean they'll figure it out and there will be trepidation over the next 30 days but we will not default I Have to offer the voice of reason later. Thank you guys. Thank you so much. Appreciate you coming on
Robert. Thanks again. So, Robert's point is super helpful because I painted a very doom and gloom picture probably because it's something that keeps me up at night. Why don't you hear from the other speakers on stage? Before we do, if you think
that Robert is correct, please go in the bottom right corner, there's the commenting section, tell me whether you agree with Robert or are you concerned like I am that the government won't be able to get its shit together. And you know also if I'm
Missing one part of the narrative. Please, you know, I know the dollars people are talking about that. I'm not worried about it. I know people are worried about China, Taiwan. I'm actually not worried about it like right now, but that's also because I'm not looking at it. So if people think there are other things that we should be talking about outside of the debt ceiling, outside of the banking crisis, outside of commercial real estate,
and outside of the geopolitics, please tell us in the comments in the bottom right. And usually what we do is that during the show, we have people on the back that are reviewing those comments and sending them to me. If we like your comment, we'll bring you up and we want to hear from you. So thank you so much everybody for sharing.
This is, I don't know if it's a glitch, I have to say that the fact that there might be 13,000 people listening to us is crazy. I have a feeling it's a glitch, but we'll find out. It might just be my impostor syndrome. So, thank you everybody for joining us. We have a bunch of new listeners obviously.
Eugene wanted to get your thoughts one on his, I want to start with his commentary on the fact that he's, he like kind of brushed off my commentary that certain, like when you compare one to one, people that make more income versus less income, the unemployment data is sort of irrelevant.
It's like, oh, it counts for that. It's not a big problem. And wages are rising in the aggregate. And it's like, yeah, but if there's a small group of people in a very concentrated area where they're losing a ton of jobs, that's got to affect the economy somehow. Am I completely off Eugene? Is this like a coast price?
bias because we're like in the tech sector. Right, recency bias or things like that, right? I think it's a great question, Donish. And so I want to address the two things. One is the debt ceiling and the second is actually that question. I think they're related in some way. But you know, on the on the debt side, I you know, I tend to be a little less
I would say optimistic, then Robert Wolff. In general, we've been on a few discussions. It's really great to hear its perspective, though, and I agree with actually a lot of what he says. But the one thing I think I do agree, at least at this moment, is the fact that I just don't see where the US gets in a position where it's defaults on
debt given that we do operate the reserve currency. And specifically, mechanistically, the way we default on our debt is if the US Treasury Department can't make principle or interest payments on treasuries, right? Treasury bills, bonds. I would love for somebody to walk me through how that happens. Now, technically,
of course, if we don't increase the debt ceiling, things can happen, but at the same time, do we, like, I would love for somebody to pay me a realistic picture of how that leads to Treasury decides not to pay, you know, principal or interest. Now, I will say it is supported by the fact that USDDS has gone up.
You know credit default swaps and you're like five years CDS has gone up really interesting to see and it's actually kind of you know those numbers have gone up and they now compare favorably or unfavorably I should say to even CDS is for large you know large corporate in America like JPMorgan or Apple or things like that I was talking with Jay and some others about
this on a different space. I find that confusing, right? Like, is there a world? And then what's the world in which, you know, JPMorgan and, you know, Apple have better credit than the US government? I'm sure it can happen. Lots of crazy things have happened. But I like Donish. Don't know a whole lot. So I'd love for somebody to walk me through that
But on the side of what you talked about with tech workers making a whole lot more, I think that's true. I think tech still is big tech, etc., has become a larger percentage of GDP for sure, but certainly isn't the whole country's economy.
I'll say having worked in big tech, not working in tech, but having worked in big tech and among the fang group of stocks, so to speak, there's a theory going around that actually makes playing this. So the question is, what contributions do these large companies make to GDP, right? The alphabet
that goes that these are actually monopolies and order to not be regulated as monopolies, they, for example, hire people with lots of money to decrease their profits. That's things that actually even the tech pickers talk about, what will be the eventual impact? What I worry about and what I
I'm concerned about when it comes to US GDP as productivity and productivity gains because to me that's the way in which the US views long-term stable growth. Does it concern me that people making a whole lot of money that maybe they should have been making which we can debate and of course whether that's true or not aren't getting
paid the same they were. Sure, there's some issues, maybe it'll affect real estate, commercial real estate, and some other risk assets. But the real question is, what's the underlying productivity and productivity gains that are being driven by these companies and these people? So yeah, I mean, there are people like my old colleague, John Carmack, who is the founder of Doom, whatever people didn't just call
a 10X engineer, he was considered a 100X engineer inside Meta. So people like that are the people I think driving, you know, gains and growth. But you know, random director at Meta, you know, doing some random thing. Nobody knows who knows how much productivity gains is that person adding. So. >> Trying to be a little personal, I'm not going to lie. But yes.
I used to be one of those folks and maybe I'm throwing shade at myself, but yeah. Yeah. Justin wanted to give you a chance to respond to Eugene and get your thoughts. Yeah, just in general, if this is a, I don't know if I agreed, Dr. Damish, but if this is a like lights and camera and
wanting to seek the spotlight kind of an issue. If that's true, I think honestly that this Republican holdouts that held up the vote, that made national news, of course, for, I don't know what that was, weeks. If that's true though, it's a pretty easy solution. The White House tones down the rhetoric and says, hey,
We talked to we talked they had some great ideas. It's as reasonable we understand they care about the country I you know They throw their names around and I think all is good But if they're principled in their in their original pushback, right if they're principled in this then we actually might be looking at a deep
And that's where I'm like Eugene I have no idea what that realistically looks like. I don't know if that's ever happened. So yeah, by the way, I'm trying something new today everybody and I think this is going to work out. So people went into the comments on the bottom right and they put something
I'm actually going to read the question on stage. By the way, there's 17,000 people here. There's no way that there are 17,000 people here. But assuming that this is not like some some bot craze, we just went from our usual daily 4 to 5,000 to 17,000.
So I'm doing something very different. Let's see if this plays well. The easiest way to find out is if the numbers go down suddenly. But Matt asked the question around the violent downturn and oil prices over the last 10 days. What a great question. So I said, you know what? I'm going to let people
I can give my thoughts on why oil is going down. I think it's largely being driven by the fact that we are worried about a global recession. And when you have global recession, you have a global recessionary environment, you see oil go down at rapid rates. I think people are really worried about
about the remember that as America slows down, it takes everyone else with them. And there's a big concern around oil and this is a good example of how everybody wants and the next question actually was on by the way if anybody wants to give a different David I know
you trade quite heavily. I don't know if you are an oil trader at all but would love to get you way in if you have, or math if you guys have any thoughts on why oil is slowing down so violently. It is true the numbers have never been lower math or David did you guys have anything to add there? Are you guys still with us?
Guys there's like 18,000 people in the room. Come on. All right David. Yes, I was gonna say it's gonna be a bit sad. Okay, like the oil's been dropping over the last little bit, but that's not it hasn't been unique to the last little you know little bit like it's been down. I mean it peaked last June when inflation peaked. Um
And this has been coming down ever since and it's been dropping. In fact, it's actually flirting with its 200 week moving average, which now is like fair market territory for that particular asset class. So that is definitely a reflection of economic growth expectations.
It is going to be reflected in commodities, correcting, and then ultimately then going into their own bear market as well. And so, thank you for that question. Sorry, David. You're having a lot of background noise, at least for me. I'm going to mute you for a second. Yeah, same here. Yeah. So thank you. Oh.
Matt is that you yeah, I would yeah, I'm actually I agree with that you know All right, I'm gonna meet you my friend yeah, Matt do not talk anymore fix your mic first. Thank you. So I was gonna say that you know
So with, I think I heard his initial point, which is I think he agrees that this is just a reflection of what's happening. And so for people that are not aware, again, I learned the most on these spaces with everybody else.
The thing that has been very obvious is inflation has peaked. We have to be able to say this. I know some people believe in stagflation. I am telling you a recession is coming. Inflation has peaked. Oil is dropping at the most ridiculous rate. It has had a violent change. Oh, there's nearly our
the econ expert and you know we are actually seeing the situation worse than faster and faster and I think that people are seeing what we're seeing which is a global turn down but nearly did you have anything else to add to that
in terms of why we're answering, we're doing something different today, nearly. People write so many good comments every single day and we often don't talk about them. So by the way, if you want us to answer any questions that you have, please go into the comments in the bottom right, put them in, we're going to get back to our regular
schedule programming, but we're going to start actually answering these questions as they come along and we have a team of people that are reviewing your messages on the back end and we're actually going to address them. But, Neely, I don't know if you had an answer to Matt's question up there. Can you touch on the violin downturn and oil prices over the last 10 days? If not, we can move on.
I just have to nothing specifically on oil, but I will say it, you know, are continued postures that were seen a pretty decent slowdown, a consumption just broadly in demand. So, you know, we're watching that closely across all areas of consumption, gasoline,
transportation etc included. And that again that's an early sign of impending recession or a deeper recession. I think that's so Melissa also asked a question Melissa we're gonna touch your question really quickly one of the topics that we didn't talk about was the dollar at being at risk for losing its its
Reserve currency. I know it's a question that actually comes up quite a lot. And so I wanted to address it. I am not worried about that at all. If there is a global slowdown, people are going to chase and go, a flight to quality will occur. Nobody's putting their money in Russia and China.
when the world is slowing down, people are going to come back to the US. In fact, that will actually be very positive for the US. That is my opinion. Businesses in the US will actually, and forget about business in the US, the currency is actually going to be much more involved. The only risk to that
is the risk of default. If we cannot get our shit together, that is the only major risk. And I am telling you, my risk meter is going up, not because I've been watching too much news or because we are talking too much about this every day and there's some level of recency of
I'm very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very, very,#
people may forget, I know the last 10 years have been a lot, but I'm telling you these are the situations that put us at risk and I am just like I said, and again, this is like I hate being right by the way, I hate being right about certain things, I was right about the bank contagion, we had people
up here that we're like, this is a one time problem, this problem only, and actually some of my friends are listening right now, Dakota, I'm telling you, I was right, which is great, but you know, amongst our friends on the stage with people like Mark Cuban and others, I was like, this is not an individual
issue. Whenever there's a new sort of contagion, it affects the weakest first. That's how it happens. And then it spreads, it gets stronger and stronger and becomes more and more God, I'm sorry, I'm a doctor, transmissible, and it becomes easier and easier for it to affect
other people. And by the way, the dominoes start to draw a fall, you know, the infrastructure starts to crumble. We've seen the story before we just went through a pandemic. This is what happens. And right now we have seen that it affected the ones that had concentration of deposits first SVB signature and others. Now it's affected
making local and regional banks more at risk. But David, I know that you had your hand up. I wanted to give you a chance to weigh in on the question that Melissa had. Melissa, thank you for your question. Yeah. So the dollar actually right now is relatively like very strong. Like I know it's down from the October
over from his October peak, but his October peak was actually below pay for the against the euro. So like it right now at $1.10, you know, offer that low point against the euro, the dollar still, I mean the last time we had a credit crisis that you're talking about in 2011, which was almost the exact same
political environment was a tea party then as the freedom caucus now, right? But it's the exact same thing and incumbent president and a different party that came through the midterms and grabbed majority and and their split. The dollar at that point or the euro that point was at a dollar 40 was above a dollar
40 and right now like I said, it's at $1.10. So there's no threat. The dollar is actually still very strong. Well, in a long term set perspective, there's no, I wouldn't say there's definitely no imminent risk of the dollar losing reserve status at all, not at these levels.
Yeah, and kind of jumping into that. I say this is one of the most interesting discussions, the question about the dollar illusions with our currency status. I find a lot of people get very emotional about this question, but I think it's important to look at it with a very dispassionate eye. And I agree actually with
you know, the last figure and Donnisha about where we are in, you know, the near term or the medium term even. But I mean, we have to, we have to admit, and I was lucky I actually talked to Larry Summers about this because he was brought up earlier and he had, yeah, at some of the greatest answers, a great quip, wish him happy to share at some point after this. But, um,
You know the question I'd ask is do we we surely would all agree that at some point the dollar will resure will lose its reserves data right Donna Shrothers like in a long enough time horizon that's got to be factually true right so I see a hundred yeah, so I mean I do unless unless we do things differently
sure. I think that the US will evolve to maintain its dominance as a reserve currency, but I'm just not convinced that we're going to see the de-dollarization unless the US continues its current
I just want to be very clear there is a world in which the US can maintain its reserve currency status. You mean like indefinitely like under the years thousand you think indefinitely yes, if we do the right thing I think for example if we do a CBDC, you know, if we're
to evolve as needed to do it. I'm very convinced that we can do it. But again, I just think that there is a higher likelihood that it will lose its reserve currency status. But I actually think there are paths for the
us to maintain it indefinitely. Okay, go on that. Well, that's an interesting why I love for you to kind of lay that out because that's fascinating. I mean, we're talking about like some kind of Star Trek. I don't mean this in an ironic way. Like some kind of Star Trek where it's where live in a post-Scarcity society that I guess the question. But I mean, I would even say even in
multi-thousand year horizon. At some point, I still think that you would agree at some point that there's something like a loss of reserve currency status, right? So I would argue that's probably sooner or a lot sooner than that. But to, I think your point, if we look at, I know, I know, Ray Dahlia has done these studies right over
history with the Dutch guilder and the Great British pound, there are other great actual economists who've done these studies over long periods of time. And I think about reserve currency status, generally, is that it tends to be like the last dominant of fall. So you have an innovation technology center as a country, you're the military
toast, you're the major military power, you're the major economic power. And of those, if you look at the dominoes, again, reserve currency, whether it's a British pound or the Dutch Guilter, they tend to be the last one of the dominoes. So the question is, what of the dominoes of the US would fall before that? I don't
I don't think it's going to be thousands of years. I think it's going to be much sooner thing, but I would say that it could be between very short term to, you know, maybe max within 100 years. That would be my time bound, which I know is very, very large time bound. But I've never actually heard the 1000 year comment on that. That's actually really interesting.
Yeah, no absolutely so wanted to get back to the regular schedule for a moment today. Thank you so much for having questions everybody and please go into the bottom right and ask more questions as we continue to proceed we will bring your questions up and you know thanks again so
You know, one of the big things that Robert Wolff, who was up on the stage earlier, was mentioning was that the geopolitical risk is a big risk. But he agreed on that. But the other thing we agreed on, and Amy, thank you for joining us this morning.
Amy's becoming our on stage real estate expert and she and I share in our anti boomer sentiments often and so what I was gonna say was that you know Amy You know this morning and I can't name but very large
The CEO and I had a conversation right before our spaces because I was trying to understand is this just narrative or is the commercial real estate sector really as much risk as it is and he said that they are scrambling. By the way, if you
You know, PE folks, they never use those words. And the words were, we are scrambling, floating point rates are causing challenges. Occupancy is dropping. Not, and I asked him, I was like, tell me the truth, is that only affecting office, the office
building sector and he's like, "No, not at all." And he said that it's affecting even things that you would never envision, like storage. It's affecting strip malls. It's affecting every other part of the real estate sector more than people think it is.