"When Markets Speak" – with Larry McDonald, CEO, Bear Traps Report

Summary

In the course of this in-depth conversation, Larry McDonald – author of How to Listen When Markets Speak and CEO of Bear Traps Report – delves deep into the financial insights acquired from his global network, discussing the major economic shifts and their impact on financial markets, as captured in his latest book. His intention is to democratize financial information, moving away from traditional, bank-dominated imprints on markets. This democratization is partly driven by technological advancements that increase access to critical financial data. Our conversation broadens into the implications of recent economic upheavals such as the COVID-19 pandemic, hinting at persistent inflation and the need for strategic financial planning, going forward.

We further explore passive investing's role in current market dynamics, highlighting how long-term disinflationary trends have buoyed such investments, which now face risks from potential normalization of inflation rates. Larry is rightly concerned about heavy investments in financial assets like growth stocks and bonds, favored from 2010 to 2020, that might not perform well under high inflation. Our conversation then transitions into a review of macroeconomic trends, government debt, and the implications of current fiscal and monetary policies. Each topic uncovers deeper concerns about the sustainability of current financial strategies and the potential need for drastic changes in the face of evolving global economic conditions, such as shifts towards multipolarity and its impact on commodity markets.

Finally, we dig into some of Larry's go-to websites and resources for information and news. Enjoy!

Larry's Bio

Larry McDonald, a New York Times bestselling author and a seasoned CNBC contributor, excels as a Political Risk Expert. He founded The Bear Traps Report, an independent weekly Macro Research Platform that delves into global political and systemic risks, providing subscribers with actionable trading insights. Larry is renowned for his ability to intertwine humor with critical analyses on topics such as the Trump Administration, the U.S. Financial Crisis, European Sovereign Debt issues, and the economic challenges facing China.

In 2016, Larry took on a partnership role at ACG Analytics in Washington D.C., leveraging his expertise as one of the foremost political policy risk consultants and strategists. His professional journey includes significant tenure as Managing Director and Head of U.S. Macro Strategy at Société Générale from 2011 to 2016. Furthermore, he founded an investment research firm in 2010 that publishes The Bear Traps Report, focusing on political and systemic risks, complemented by actionable trading strategies. Larry is also a frequent presence on CNBC, where he discusses political and economic risks and opportunities.

Before his current endeavors, Larry McDonald made notable contributions to the finance world as Vice President at Lehman Brothers. There, he successfully led his team in capitalizing on the subprime mortgage crisis, securing over $2 billion in profits for the firm prior to its collapse. This experience formed the basis for his international bestseller, A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers, which has been translated into 12 languages and sold over 400,000 copies. Earlier, Larry co-founded Convertbond.com, an innovative resource for convertible securities, which was later acquired by Morgan Stanley in 1999. His insights are not only sought after in financial circles but have also featured in documentaries such as the Academy Award-winning "Inside Job" and National Geographic’s "The 2000’s." Larry continues to contribute regularly to Bloomberg TV and Radio, Forbes, and Fox Business. His keynote speeches, which now exceed 125 worldwide.

Transcript

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Larry McDonald, it is such a pleasure to chat with you. Thanks for joining me on the podcast. I have your book right in front of me here and this arrived last Friday. We are recording on a Monday and I dug through the first two chapters on Saturday and Sunday and wanted to kind of just jump in and get your thoughts on like, why the book? Why now? Although I guess the, the question why now is on everybody's mind because we've had a wild past 36 to 48 months, but yeah, like, why the book and why now? Well, thank you, Bob, so much. And I really like this platform because we work with hedge funds, family offices, institutional investors in over 20 countries. And so what happened was in 2008, I was a Lehman Brothers, I was a trader and I put together a book that was about the failure of Lehman and it became a New York Times bestseller. We did 140 speeches in 16 countries over the last 15 years. And the most amazing thing is, you know, the lesson is you can get everything in life that you want if you just help enough other people get what they want. In other words, working with people around the world at a professional level, helping them making deposits, things, getting withdrawals and developing kind of like a circle of people that are in our, we run a live chat on Bloomberg with professional investors, right? So we made a lot of deposits over the years with some of the biggest hedge funds and the biggest families. And now we kind of host what we call a, I call it almost like a live ideas dinner in New York way back 20 years ago, we would host an event at the Palm in New York, we would have the back room and we'd get an equity portfolio manager, maybe versus a credit or a foreign exchange versus say someone in different parts of finance. And we would kind of work out ideas and have a debate. And my assistant would sit in the back of the room. What we've been doing over the last 10 years here, and this is the reason I came up with the book, is this book is really about democratizing information. So we're crowdsourcing intelligence real time with the institutions globally. So we're cutting out the sell side, the sell side is your banks, your Goldman's, your Morgan Stanley's, they have opinions which are often biased. And so what we're doing is we're kind of as markets move, as markets speak, we're hosting this conversation during the day. And we've kind of like taken the best intelligence over the last like three, four years and put it into this book and try to like, let's bring a book out to the market that helps people understand what the professionals are really looking at, looking out over the next 10 years. Yeah. Yeah. And the professionals, I mean, look, there has kind of been a democratization of finance, I think over the past, let's call it five to 10 years at most. And it's in part due to good technology platforms, books and resources like yours that are out there. And prior to that, there has been like a sort of a dark veil or sort of not a lot of opacity around the markets. And even if you're a savvy person, you may run a business, you may be senior executive, you may be in the venture world, it hasn't traditionally been easy to figure out where the best sources of information are. It's kind of been a secret. It's like, well, either you're an insider or you're not, you're either spent 20, 30, 40, 50 years in the game, like the mongers, the Buffets of the world, which most of us, we just don't have the bandwidth for over the time. So it's like, all right, what are the resources out there that are available to us? And further coming out of the pandemic, and this is really kind of the question that I'm building up to, coming out of the pandemic, my gut is that inflation is here to stay. And I think you would agree. And the question is coming out of the past 30 years, there's been a generation of us. It's just been up, up, up, 2009 onward, it's been a party, everything's up. And so the question is, how do we not only reset our portfolios tactically, but strategically think about where the world is headed, where our companies are headed, and then therefore as people and families, how do we kind of direct ourselves to make sure the next 20 to 30 years of our lives, our careers, we're able to make some money? Well, the thing about crowded trades and group think, passive investing is there's a chapter in our book, When Markets Speak, about the dark side of passive. And if you think of how much capital is tied to S&P 500 or NASDAQ index funds, it's over $35 trillion. And so passive, that's worked for a long time. And one of the reasons why it really worked, and one of the reasons why it accelerated was because of this disinflationary tendency over the last 15, 20 years. So we've had multiple failures of, say, inflation. In other words, inflation, whenever it's picked its head up, we've had a disinflationary move. And that pushed a lot of money into a kind of a, what I call it in the book, a 2010 to 2020 portfolio, which includes really paper certificates, really what we call financial assets. And financial assets are simply growth stocks, long duration equities and bonds. And what is happening is there's so many people, Bob, that are vested in the media, in the politics, with an election year. There's so many people that are really massively invested in a return to disinflation, a return to zero interest rate policy. And so if you're the Biden team, obviously, they want to get reelected. God bless them. They should. And any Republican or Democrat would do this. But they're going to sell, they're going to use every one of their relationships on the Hill and in New York, in the media sphere. They're going to try to sell people on a return to normal inflation, because that's what's going to help them get reelected. That's what any incumbent office would do. And so what we're seeing here is that there's been this really hardcore sales pitch on a return to normalization of inflation. And because of that, everybody's in that same 2010 to 2020 portfolio, which is mainly financial assets. And the point we make in the book is, we think that with a high probability, there's kind of a return to, or inflation is going to normalize, let's say, three to 4% instead of one, two. And that means there's potentially $5 to $7 trillion that's really in the wrong place. So that does, number one, it makes you sort of think about, if your portfolio was a classic 60-40, and we can chat about this a little bit later, because I want to stay reasonably high level here. But let's say you're in a 60-40 now, and you're looking at the macro trends, right? What are the macro trends that would either have an impact on a business looking to raise a little bit of debt or equity, or on an individual thinking about how to realign the portfolio from the macro trend level? Where are we? Do you think about fourth turnings, which, of course, you've mentioned in the book? And if so, are we in the crisis phase of a fourth turning? How long does that last? And I guess, yeah, how do you inform yourself mentally and tactically with your portfolio? Well, Sir Isaac Newton, in the late 1700s, he said, for every action, there's an equal and opposite reaction, right? It's a basic fundamental laws of the universe, right? And if you think of Lehman Brothers, the fiscal and monetary response that we talked about in our first book, The Colossal Failure of Common Sense, it's now been published in 12 languages. I'm really proud of that book. And the fiscal and monetary response to the Lehman crisis was about $4 trillion. And then right after that, we had a pretty nasty austerity regime in the United Kingdom, 2016 Brexit, and then also Greece, and then in the United States with the Tea Party. So not only was the fiscal and monetary response pretty small relative to today, which I'll get into, but within four years, we had a pretty profound austerity regime in the United States and in Europe. And so today, fast forward to COVID and then the banking crisis of 2023, the fiscal and monetary response to this period is about$16 trillion. So it's about four times greater. And there's been, you know, I did it with Mick Mulvaney, maybe a month or so ago, former head of the OMB. And I'm like, Mick, I don't understand, like, austerity in 2012, 2010, 11, 12 was a big thing in Washington. And the Republicans, you know, really wanted to try to knock the Obama team off their rails. You know, they tried hard with this austerity regime. And now there's just no motivation from either side on austerity. And if you talk to people on the Hill like Mick, it's Republicans, everybody's just bought in. At the end of the day, when central bankers suppress the cost of capital for longer and longer and longer and longer periods of time, they enable idiocy, they enable hubris. And so we're in a very dangerous point around interest rates, because they suppress rates for so long, everybody expects rates to go back to inflation, just to normalize and rates to go back to zero. And so all these politicians on the Hill, you know, there's a five-year auction this, I think this month, it's $70 billion, right? Five-year auctions within the last, you know, five years were $15, $20 billion, right? So there's just one auction. And so the amount of borrowing with a higher interest rate regime and a higher inflation regime, it's just a totally different cocktail. And that's part of what's creating this kind of new inflationary regime. So the borrowing, the government, the debt, the number that I've heard is that, what, we're somewhere around 33 trillion dollars of debt right now, right? It's now 34. So it's a trillion every hundred days. It's a trillion new every hundred days. Okay. Yeah, that's just unbelievable. So the question is, right, like, why do we care? And then how does it impact our pocketbooks? And of course, the reason I ask that is that over the decades, up until pretty recently, if you were left-leaning versus right-leaning, you wouldn't care whether there was a little bit of government debt. When Teddy Roosevelt, I forget the number, but from Roosevelt through Reagan, it wasn't a crazy leap. But from Reagan onward, or maybe it was Carter, yeah, I forget. But the point is that sort of the past kind of 30 years, the number has gone way up. And the question is, does it matter? Does it have an impact to businesses as well as to us as citizens? And what do we do about it? That's a bigger issue. You look at the candidates right now, just reading this morning on Twitter, or X, that Robert F. Kennedy Jr. is coming out pretty strong that, hey, we've got to do something about the debt. If this were a Democrat a decade ago, they wouldn't care. Nobody would have cared if you were left-leaning. You say, it doesn't have an impact on your average Joe. So what? There's government debt. It's okay. Well, so think of interest rates, when you suppress the cost of capital for over 10 years, then think of all the mortgage-backed securities that are out there on bank balance sheets, or in pension funds that are in the 2%, or think of all the commercial real estate loans that are in the 1%, 2% financing realm. Let me give you an example. Apple's CFO came to market with about, I think, $6 billion to $8 billion of the borrowing when rates were near zero. So he was borrowing at like 2% in 2020, 21. And those bonds, think about, this is backed by Apple. I want to give the listener, kind of a viewer, an example of the duration risk that's out there. So because they suppress rates for so long, and because trillions and trillions of dollars of mortgage-backed securities, commercial real estate loans, corporate loans, bonds, and also leveraged loans, all these securities were issued in that, say, 2017 to 2021 rent area. And so they're sitting out there. That Apple bond that they sold to the public at par, traded within the last four or five months at $0.56 on the dollar. So that's showing you how dangerous. So if that bond's backed by Apple, and it's trading at $0.56 on the dollar, that means that there's trillions of dollars of paper out there that's trading $0.20, $0.30 below par. And that's what caused the financial crisis in, just say, 2023. So if you go into a higher inflationary regime that keeps rates up, then there's just going to be a lot of refinancing risk in the coming, say, 12 to 18 months. And the refinancing risk is not only with the US government, but it's also with corporations, right? And you may feel it all the way down to midsize businesses and the SMB space as well. So I guess if you are... It's almost like the government, they're going to have to raise more debt to pay off the existing debt. And it's almost like having to get a second credit card to pay off your first card. It doesn't really make a ton of sense. So are we going to get into a cycle here where at some point the government will have so much debt that all of a sudden we're back to the question of, well, does it really matter or not? Because there's so much, we're never going to be even able to whittle away at that. And then if you're the average consumer or business trying to think about debt ratio and mortgages or a loan for your business, you may be thinking twice. That can affect hiring. My feeling is, and by the way, just in the hiring piece, my feeling is that the reason why job growth feels to me to be pretty steady is that you may have the younger generation having more than one gig. So it just kind of looks... And then to your point about austerity, is it your base case that in the next year or so that we might see a little bit of QE? Well, yes. I mean, they're going to get forced into it by God. There's no way we get around that and that's coming. But the- What's it going to look like? Will it look like it look like a COVID or something different? Well, when they admit that... See, the one thing is the Fed has a lot of friends. They have a lot of pawns and they're good at messaging. And so what they won't do, and I know I've worked with CNBC and Fox and Bloomberg over the years, I've made a lot of appearances in the media. And I've been intimately involved with these people. And there's certain questions you're not allowed to ask at the Fed, what we call the Fed press conference. In other words, they're going to get forced into QE because at the end of the day, the only way out of this kind of $34 trillion debt hole is there's two ways. There's what we call a debt jubilee. And you can go back through the last 3,000 years of civilizations, there have been many debt jubilees. And that's just like a big reset. We actually see those in places like Argentina. There's been a number of kind of resets there. So you're either in a debt jubilee or you go into financial repression. And that's where you keep interest rates below the rate of inflation. And so they never will admit to us, and they're not allowed to admit to us in public. Steve Leisman from CNBC is not allowed to really ask questions about this because it's very controversial. And it makes the Fed, the Fed doesn't want to admit financial repression that they're going to get forced into it. But if you hold interest rates, if you do QE below the rate of inflation, that's one way to get out of that debt hole. And that's the only way right now without a debt jubilee. But in that world, if you're in that world of what we call financial repression, then your hard asset type companies or portfolios or your value stocks, there's a whole bunch of different investments that work in that world. And so because of the debt and the leverage and because of all the spending, what the Democrats want to do in the world, obviously they want to keep Trump out of office. They're maxing out, we're spending our annual deficit is close to 6%, 7% of GDP. That's something you would run in a real recession. So they're running it and actually near a full employment economy because they want to prevent like that financial crisis last year, we had four decent sized banks go down. The Fed expanded the balance sheet. They juiced the fiscal spending in Washington in a big way. And what they're doing is they don't want a financial crisis to impact the 2024 election the way it impacted, say, the 2008 election. And Obama was a great candidate and McCain was a weak, relatively weak candidate, but there's no question that the financial crisis helped Obama. And the Democrats going to the 2024 election, they're willing to do whatever they can to really juice liquidity, keep unemployment low and get us through the election. And they're willing to really experiment with what we almost call modern monetary theory or higher levels of inflation just to get us through. But then after the election, that's where there's going to be a price to pay. That's where my head was going to. It's like, okay, probably certain things will happen over the next six to eight months because we're in that cycle. And what comes after that? By the way, I mean, handicapping this election from the nonpartisan perspective, is there a candidate that jumps out to you that would be better or worse for the economy? Or is it really the people around them and it wouldn't matter? Well, we host client dinners in New York over the last month. And we sat down with different fund managers. And I would say if you poll 10 people in a room, two to three people, 23% think that Biden won't be on the ticket. And there's also another 5% or 10% think Trump won't be on the ticket. So there's different things that can knock these guys out. And we're eight months away, or let's say a little bit less than that. I mean, like the Democrats, do they really want to have a candidate that old on the ticket for another four years? They may do just whatever they can at the convention to convince Biden to be a team player. And there's a decent chance of that. The other thing is around what we talk about in the book is we've taken 5 million jobs out of the United States, and we've shotgunned them into Bangladesh and India and China. And so we've raised the standard of living globally, dramatically, but we're creating all these carbon consumers, right? All these new carbon consumers in India. I mean, in India, this is a billion people, Bob, a billion people that don't have air conditioning. But if you're working in a call center in India, you're making 10 to 100 times more than your great grandparents. And so what we've done is we've decimated the Rust Belt. And that's why both Biden and Trump, and Biden has wisely picked up on this from the 2016 election. Trump, you know, put forth this aggressive plan on like bringing those jobs back. Biden has picked up the torch and played it even more so with the CHIPS Act. And so both candidates want to reshore and create a new supply chain in this hemisphere. That's extremely inflationary, right? And so what we talk about in the book is there's a multipolar world, say from 1968 to 81, and that's where you didn't have the supply chain efficiency, you had more global conflicts. And that multipolar world is a lot more inflationary. Whereas a unipolar world, which is more pure globalism, where the supply chains are just as fast as lightning speed and very efficient, those allow for massive exporting of jobs around the world. And that's very disinflationary. And so it's very clear that if you listen to both candidates, for a whole bunch of political reasons, they want to bring jobs back. And then at the same time, we've raised the standard of living so much around the world that we're creating a whole new generation of aggressive carbon consumers. Both of those things are pretty inflationary. That's interesting. Yeah. And reading in your book, I think in the first chapter, you talked about your meeting with James Baker, who was former secretary of state, and he had told you that a multipolar world is generally a bad thing. And I guess it's because it probably contributes to the inflationary environment that you just mentioned. Well, so let's get it down to dollars and cents. So right now, materials, oil and gas, industrials, uranium, precious metals, those groups in, say, 1981, that was at the end of the last kind of multipolar world, those groups were 49% of the S&P 500's composition. 49, right? Industrials, metals, oil and gas, uranium, 49%. Within the last year, this number got down to 12%, 13% within the last year. And so think about it. We're not saying in the book we're going back to 49, but do we go back to, say, 30% of the S&P's composition in precious metals, in oil and gas, in all kinds of different copper metal? I mean, the power grid in the United States is 50 years old in some spots, 30 years old in others. And we're going to take all of this artificial intelligence, all of these electric vehicles, all of this Bitcoin mining, and we're going to keep hoisting it upon a power grid that's a $2 trillion rebuild. The amount of copper that's going to be needed for this rebuild isn't above ground on the planet, Bob. And you look at countries like, look at Panama. This first quantum mine, Bob, is a dream property, right? You can get the copper from the mine into the ocean in literally 20 minutes once it's mined. But meanwhile, political protests in Panama have shut down that mine, political protests in Peru and Chile. Think of 40% of the global copper supply is coming from Panama, Peru, and Chile. And Peru, yeah, yeah. And you're under a lot of political suppression there. So we have a big, what we call energy commodity crisis coming at us, let's say 2025, 26, 27. So even with the advent of AI, you're bullish on the commodity space simply because it's, in fact, the parts, the bits and the pieces of the commodities that are going to make all the chips, right? And the fiber optic lines, et cetera. Exactly. Chips, the infrastructure. And so if you think of like- Yeah, it's a supply chain, really, for these chip makers. So I guess, will you see the larger chip makers and larger tech companies perhaps trying to own the entire supply chain from end to end? Will we be seeing Nvidia with all their cash purchasing a mine to get things moving a little faster? Yeah. Well, Amazon's already looking in the small modular. So your small nuclear facilities, small modular technology, this is going to be... Because it's so controversial, Bob, the terawatt hours that potentially are going to be... We're going to go from 450 terawatt hours in say 2022 to maybe 2000. And so these big companies right now, we're in a weird stage where if you talk to people on the hill and on the... I'm sorry, in the valley in California, Silicon Valley, we host a Bloomberg conversation with hedge funds and mutual funds and pension funds behind us. And we have these conversations all the time. And it's pretty clear that Zuckerberg and Amazon, they were trying to front run each other. So they bought all these chips from Nvidia, but those chips haven't been put to work, Bob. You know what I mean? Those chips are sitting, they will be put to work. But right now, we've got all these companies that are trying to front run or kind of disrupt competition through purchasing the key chips that are going to be needed over the next five years. Those chips are being housed somewhere. And the moat that Nvidia has is so big that it's actually safe to do that. And what's happened is it's got everybody... In the 90s, I was fortunate enough to create convertbond.com, and we sold it to Morgan Stanley. So I lived through this. And I could see everybody was focused on your Lucent, your JDS Uniphase, your Ciscos. And at the end of the day, those stocks, those investments were like this infrastructure play, but it was very well known. Meanwhile, if your match.coms, your Facebooks, you can go on and on and on. There were so many other companies that flourished, Google, flourished behind the scenes, and that harnessed that technology. So I look now at some of the natural gas companies. I look at some of the uranium companies. There are so many cheap plays that are kind of like the least... It's like the 90s again. It's like everybody's focused on one type of investment. Meanwhile, the spectacular upside of, say, natural gas or Generac, companies that are going to back up and support the power grid as we go. There's just so many trades like that that nobody has their eye on. And I suspect that's where you're going to get the 10, 20, 30 baggers. Very interesting. So as much as many people are long-term tech because of AI, you think that even the mid long-term, there may be more potential upside with the commodities out there. Well, Antero, for example, they're trading it like they give a free cash flow yield of like 11%. This is like just one natural gas play. The stock's so cheap, they've bought back like 10% of the public equity. And so you've got value stocks out there that nobody cares about because they're not... Remember, it's a passive universe. So the passive index is just the trillions of dollars has to own certain investments. So if NVIDIA goes from, say, $1 trillion to $2 trillion market cap, which it just did, then the passive indices have to own more and more and more. And there's a point where there's a really dark, dangerous side to passive because you're talking about a $2.3 trillion valuation in NVIDIA, where 5% of the S&P composition and the entire energy space, the entire energy space, Bob, it's like three, four percent or three, three and a half within the last six months, three and a half percent of the S&P composition. So meanwhile, all that infrastructure, all those copper companies that are going to support, if you believe NVIDIA's growth model, if you believe their management team, if you believe them, then these other trades are going to be offering a lot more upside because for NVIDIA to double from here, it has to become a $5 trillion market cap company. Yeah, which is big, biggest. Yeah. To be a trillion and a half bigger than anything else that exists today. So tech, commodities, you're bullish on them mid and long term. Well, I mean, technology to me is because of passives. It's just too, if you really look at it, the composition, the S&P, if you add it all up, because what they've done is like Facebook and Google are in the communications bucket, right? They're not really considered tech. And it's consumer discretionary, Tesla and Amazon. If you really add it up, the S&P composition is over 43 percent tech, which is just ludicrous. And that's always been a classic. We talk about this in the book, right? When the tech, when the financial sector in like 2007, financials got up to like it was almost 30 percent of the S&P. And so one of the classic warning signs is when there's that kind of like overdosing into one sector. But the passive thing, Bob, there's 2 trillion bucks more in passive today than there was, say, five or eight years ago. So there's so much more money in passive that the distortions are even much more profound than in previous decades. So that's why I think you want to be underweight tech. You want to be overweight. Some of these other sectors, sectors that are going to benefit from the technology inroads that have been created. How much of the passive will need to be reassigned or realigned to the commodity space or whatever else may not be as crowded or provide lesser returns? Well, right now, Bob, there's 21 trillion in the NASDAQ 100, 21 trillion. In 2000, say, 11 in that range, the energy space was the same size as the NASDAQ 100. And now the NASDAQ 100 is about 18 trillion larger. So you got from, so energy and the NASDAQ 100 were about the same size in 2011. And now the technology space through the NASDAQ 100 is about 18 trillion larger. And so, but since that period, say from 2000, say, just keep it simple from 2014 to 24, the global population is up, Bob, about a billion people, 950 million people. So the global population's a lot larger. We have a billion people in India that don't have air conditioning. Like I said, there's a billion people in China that really don't own an automobile. And so we have this situation where the global population has grown so much. But if you look at the investments, Bob, the investments that in terms of capital expenditures from your Chevrons, your BHPs, your Ballets, just look at all the investments from oil and gas and metals from 2014 to today. If you took the 2010 to 2014 trajectory of investments, you moved it forward until today, we're essentially $3 trillion in the hole. So in other words, because of ESG, and because of a lot of regulation, and a lot of hostility toward commodity producing companies and regulation, and a lot of hostility, remember, they were going to kill shale in 2020 election, right? So Democrats- Cracking, yeah. And Germany wanted to knock all the nuclear power plants out of Germany, right? So there's this tremendous hostility toward investments in the natural resources. So we're $3 trillion in the hole, but the global population is up almost a billion people. And so we're suppressing investment and we're juicing demand. And that's what sets up for- That's what sets up for the price, yeah. A whole new portfolio for the next decade. For the price spiking, yeah. How do you think about whether... So I guess when you listen to various others speak about the markets, they say, look, there's the market economy and then there's the real economy, let's call it. Most folks would say that the markets generally bake in recessions nine to 12 months out. So you can make the argument, hey, the markets had the tough times we're experiencing baked in maybe a year and a half ago or more. And so when you think about mitigating risk and talking to your clients about that, coming into the next, let's just call it near term, next 12 to 24 months, how do you think about risk mitigation for both the institutions you talk to as well as the high net worth individuals you talk to? Well, remember one thing. So the boomers, the oldest boomer now is 78. And here's a great little formula to remember. So the boomers control about 78 trillion of wealth and the oldest boomer is 78 years old. The millennials now are about 41, 42. They only control, that's the oldest one right now. So I'm just saying, keep it simple. The oldest boomer is 78, 79 and the oldest millennial is 41, 42. The boomers have 78 trillion of wealth and the millennials have about eight or nine trillion. And so we talk about risk mitigation. One thing is pretty certain as interest rates have come up because of the age, I mean, the general rule of thumb is for financial planning. I mean, this is like the hallmark is you take your age and that's the percentage of your assets that should be in bonds. And so if that's the case, then you're going to see a lot more people now that bond yields have really moved up sharply. You're going to see a lot of people reallocating portfolios to a higher bond contribution. So that's one. Number two, like emerging markets and say what we call global value stocks, they are dramatically under-owned. The amount of capital of pension plans in the world that are in emerging market or just global value. Think of, like I said, the BHPs, the Rio Tintos. Rio Tintos, to keep it simple, there's EWUETF, which is like a global value. It's basically long, a lot of these big conglomerates that are in the value space, UK type companies. And so if you think about risk mitigation, we're probably coming into a period of say from 2000 to 2005. When I was at Lehman, when you went around the trading floor in 2003, 2004, everybody had a much higher percentage of their wealth in global value stocks. And now global value is a joke. If you look at any one of the ratios, there's tremendous under-ownership of commodities and there's tremendous under-ownership of say global value. So risk mitigation just means, first of all, you have a more significant cash component right now, makes a lot of sense. But also you want to take down that S&P component, which is a crowded trade. It's passive. It's pretty dangerous. And you want to be diversifying into the road less traveled. Yeah. And then if you think about cash, there's sort of one camp that would say, if you're just sitting on cash at the start of every year, you're starting at negative 5% or 7% or whatever. So just to make money, you're already down a couple of points. And then there's of course the other school of thought that says, hey, you're holding cash. That's the denomination of every debt of every country in the world. That's how most people are transacting and buying things and goods. So the debasement of the US dollar may not really matter. How do you think about the debasement of the dollar and are you a fan of cash, particularly in this moment in time and even just moving forward on a general basis? Are you a fan of just holding the cash? Well, if you think about 1980, once again, at one point, 22% of wealth was in some type of metals. Today, that's about 1%. And so think of precious metals. The gold-silver ratio today is about 84. In a normal commodity bull market that is threatened with inflation and currency debasement, you could see that gold-silver ratio down at 18, best case, but at least 35. And so your silver miners, your copper miners, or your silver miners, your platinum, there's a number of platinum ETFs. If you think of all the gold ever mined, we've all heard this, you can fit into an Olympic-sized swimming pool. Everybody's heard that. What many people don't know is all the platinum ever mined in the history of humanity would only go up to your ankles in that same pool. And so when you think of hard assets, you think of, I mean, that's why Bitcoin was invented, right? Because they wanted to create scarcity. And so you want to own, whenever there's currency debasement, the safest bet is to own cash against some type of combination of silver, gold, platinum, Bitcoin. And you've got to trade the ratios and be careful and work with a good financial advisor on that gold versus Bitcoin ratio too. That gold-Bitcoin ratio has offered investors tremendous buying opportunities and selling opportunities. You need to watch that. But yeah, just have a much higher component against your cash of say precious metals right now that makes a ton of sense. Yeah. And certainly gold has been on a run in recent, the past kind of 90 days or so. It looked maybe this morning when I checked a few hours ago, it looked like it was down a couple points, but it has still been on a pretty wild run. And Bitcoin, of course, as well with the halving happening, I guess, last weekend as well. How do you advise folks on the crypto space? There's so much noise and hype around it. It seems like if you're investing in crypto, your time horizon is short. It's just, you expect to have a big win now or in the next couple of years. Whereas I think traditionally with any asset, if you're going to play the game of the markets, you're going to be sitting in your asset for a while. But the crypto space certainly has a lot of folks who are just thinking they're going to be able to get in and out fast, which is a little bit risky. Yeah. It's a market, it's a currency, or it's a store of value that's in infancy. And store of values cannot drop 50 to 80% four times in say six years. And so if you had a million bucks in crypto in the last five, six years, that million went down to like 300,000 a couple of times. And so depending on if you had in 2017, by 2019, you were down again, you're down almost 80%. And so it's just a classic investment, an emerging asset class that offers tremendous volatility. Let me give you an example. Whenever the VIX, you look back the last say five, six, seven years, over 90% of the time when the VIX has gone above say 18, Bitcoin has been in a very large drawdown. And so we had some tensions in the flare up in the Middle East in recent weeks. And at the end of the day, Bitcoin is a beneficiary from global liquidity and Fed accommodation. And so at any point in time, if liquidity pulls back, or if the VIX, which is the equity volatility, I say this, people don't understand when you're long Bitcoin, you're actually short the VIX. People don't get that. It's interesting when you look at it, yeah. I can show you the data through every major volatility spike since 2017, especially with the VIX above 30, you are in large drawdowns. And I'm going to tell you that we make the point in the book that will change over time. When the asset class matures and offers more stability, it's going to be a much better spot. And you made the point earlier around like, now that the institutions and the infrastructure is more supportive, all that's going to be, it's going to basically help prevent the volatility of the drawdowns. Yeah. Yeah. Well, certainly Larry Fink is in the game now. So there are certainly folks that would say, well, look, if Larry's in, other institutions will follow. Don't bet against Larry Fink. He even has the ability to not only move markets, but maybe move the SEC to create some ETFs and some wrappers for the crypto industry. So yeah, maybe the drawdowns will be less extreme and you can convince folks like my father, who is 80, hey, look, take one to 2% of your assets and throw it into crypto. And that's sort of the hope and the dream as well. If there is one or 2%, that lots and lots of the boomers are going to move it just a little bit into crypto, then that's where the market goes from whatever's now at a couple trillion to 10 trillion and eventually to whatever trillion, 50 plus, like over the next decade. It's a very interesting space to follow. I don't pretend to be an expert. I've had some luck and a little bit of fun with the space over the years, but I primarily have looked at it as a trade more than anything else. And I'm truly not much of a trader, but like I say, I've had a little bit of luck anyway in the space. Yeah. Watch that Bitcoin gold ratio. When it gets down near 13 to 15, 13 to 17, then you want to be much more long Bitcoin than gold. When it gets near 27 to 32, then you want to be taking down your Bitcoin and getting long with gold and silver. And it's the same thing with gold and silver. Gold is, what happens, Bob, the beginning of every commodity bull run, people, we saw this with oil in 2020, people will hide out at first in the commodity. And then as the bull market matures, then they'll start moving into the exons and the chevrons. And then they'll go into the marathons. And then next thing you know, they're going into the Chesapeake. And so it's the same thing with, say, gold or silver. The first stage you go into gold, then some money goes into the miners. Then when the cycle really starts to mature, that's why in 2011, that gold silver ratio, I think, got down under 30. Because that was like when the 2011 was the peak. And as the cycle lasted from three years, it was like 2008 to 2011. And so I think this is with a high probability that you want to be moving out of gold here, which is like the mothership. And as the Fed is starting to offer up a more accommodative path, that's where you want to be along the SIL, which is the silver miners or the SILJ or the SLV relative to your gold, which is the GLD or the GDX. That's interesting. So then sort of right now is when you're thinking that's a good time to make that shift? You look back 30, 40 years, whenever the central bank is starting to offer a little bit more accommodation, that's where you get these big shifts. Now, to your point from earlier around, because the interest on the debt is $1.4 trillion. The Fed really goes higher for longer, which is complete baloney, right? Higher for longer. They project this stuff like they can do it. If you go higher for longer, your interest on the debt is going to be 1.4 trillion over the next 12 months. And so what most likely happens- That's a big number. Yeah, 1.4 trillion. That's bigger than Medicare. How do you get out of that? Yeah, it's just- Then you get forced into QE or supporting the market because we have a multipolar world with much, just look at China's appetite for treasuries, Japan's appetite for treasuries. The rest of the world is issuing more paper. The Europeans are selling more paper than ever. So everybody, China. So there's just less buyers of paper because there's more people selling paper bonds. And so the Fed gets forced into some type of QE that kicks off a real weakening of the dollar. Now, we don't think the dollar is going to lose its reserve currency status in my lifetime, but it's definitely like your percentage of assets that are in dollars is going to shift or your percentage of trade from, say, the mid-60s because of the hubris. One of the things we talk about in the book, Bob, is like with sanctions and confiscation of capital, these are weapons that should be used once every 10 or 20 years aggressively. But instead, the hubris in Washington, we've used sanctions against a whole bunch of different bad actors over the last, both Democrats and Republicans. And so it's classic hubris. This is classic, really dangerous cocktail because you're incentivizing all these governments in the world to go into things like Bitcoin, to go into things like silver and gold or platinum and hard assets, and you're disincentivizing them to own treasuries. And so that's, you know, because you've used the sanction as a weapon like so many times over the last 15 years, you're creating that environment that's going to support a weaker dollar. Yeah. I hadn't thought about it that way, but that is true if you're creating incentives that just, they tend to compel folks to not look at treasuries as much, then yeah, that's going to move them in another direction. That's quite interesting. That can have a negative impact too. Yeah. The US, like if you look at Japan, Japan always ran that 200% debt to GDP and everybody's like, well, Japan did it, Japan. I mean, it doesn't work that way. Japan's pension system and Japan's, the wealth of that upper middle class as well, that entire system is supporting the Japanese bond market in a very significant way. The US, although we have an incredible amount of wealth in the United States, we just don't have, we don't have that ability to fund our deficit the way they do. And so one part of financial repression will be, you know, the Fed hold down rates. The next thing is they'll probably force the US pension system to own more bonds, right? And they'll force all different types of investors in the United States to own more bonds at some point. These are the types of weapons that they'll use. But right now, those weapons are not really being used except that they are being used in Japan and they are being used to some extent in the United Kingdom. But that's what's part of financial repression is when you force large group of investors to own your government bonds. Yeah, yeah. That's a really good way to look at this. And if the interest rates, you know, are high enough, you know, then maybe it's worth it. Let's do a couple of predictions. Let's have a little fun here because I think about, you know, we are probably in that crisis stage of a fourth turning. And if that is the case, you know, how long do you think this phase of a fourth turning lasts? And then prediction-wise, like how does one set themselves up for success with your portfolio tactically? Strategically too, I guess, right? So one of the things we talk about in the book, When Markets Speak, is around the cycles of democracy. And if you study, you know, Toteville and Teitler, these very wise kind of philosophers, economic philosophers, flourished in the 1700s and 1800s. And their prediction was that, listen, democracies don't last because more than 250 years, because once the electorate realizes they can raid the public treasury with their votes, it creates a sustainability problem with democracies. And if you look, you know, look at Argentina, look at Venezuela, you look around and we have had some tragedies in some democracies. You look at the UK, we've had some more sustainability there. But you know, the cycle of what Toteville and Teitler both talked about in the book is you have a cycle where you start off with what we call bondage. So think of like 1773, the US was kind of under the thumb of the UK, right? And that's not bondage, that's not slavery, but you're really, it's not exactly like an economic freedom moment. And so you're in that kind of bondage, you know, with the history of democracy life cycles. All democracies start off in bondage, then you go into spiritual faith, great courage, entrepreneurship, abundance, let's say 1950 to 1980, you're in that abundance phase. And then you kind of go into this apathy, dependence, back to bondage. And this, I mean, this cycle keeps repeating itself. And it's typically over 230 to 275 years. It's a long cycle. Yeah. Yeah. And like, so that's my best prediction. Like, we're probably in that, if you look at the percentage of Americans, like, right, think about the 90s, right? So one of the stats from the book, in the 90s, the amount of people that were on food stamps or SNAP, the SNAP program was around 3% of the population, three, four, depending on the year. And now we're upwards of, you know, 13, 14, 15. And now they've expanded the plan. But you just go on and on and on, Medicare, Medicaid, we're in a far more dependence regime in the United States. And politicians want it that way. They want to control the electorate. They want the control of the electorate to be dependent on them. And so you think of like the amount of S&P, think of not just the amount of companies, not the S&P, but the largest, the percentage of profits that were controlled by the top 100 companies. Right now, it's about the, so the percentage of profits that are controlled by the largest 100 companies in America, it's upwards of 90% now, 90% of the profits are controlled by the top 100. And maybe 20 years ago, that was, that number was in the 60s. And 30 years, you know, 30, 40 years ago was in the 50s. And so there's no question that we're, we've got greater, most incredible, like acceleration inequality, a more dependent voter base. And so, yeah, that's, that is the recipe for a fourth turning right there. That's, that's a tough one too. And when you truly do have the rich getting richer, and if, you know, 13 to 15% of folks, you know, are getting food stamp program, you know, that's a recipe for revolution, you could argue. And so I guess maybe that's why we're seeing, you know, the political strife we're seeing and the deep polarization we're seeing, you know, in the political environment. I mean, it's, I mean, it really is something. So, so, so before there was inflation, right? The New York Fed, Bob lectured us for like four or five years. We were lectured and lectured and lectured again. When we had this kind of zero interest rate policy, the bottom 40% of Americans have less than $400 in their check account. How many times have you heard that? There was literally New York Fed survey after survey after survey. So this is the hubris, like they didn't think we would ever have an inflation regime. They never would have said that, right? They said it in a period of certain, certain disinflation. And now if you have 30 to 40% of Americans that really do have, if you believe the New York Fed, that really do have $400 in a checking account. I mean, think of what those, what that body of human beings is going through. I mean, $400 in a checking account, eaten alive by higher interest rates and inflation. That is the recipe for, but that's the thing. If you spend a lot of time on the Hill and you spend a lot of time in New York as part of the media infrastructure, the last thing they want is the pitchforks, right? So they will message this thing a different way now, but every minute that inflation stays higher, they'll come up with true inflation. They'll come up with some way of telling you that inflation isn't a problem. But the average person that just spending money at the grocery store, $100, let's say 2018 is now like 160 bucks to buy the same amount of goods. And so it's just, it's one of these things where they're suppressing the kind of the message of inflation, the best they could, the best they can. And you can see why they would do that. They don't want the pitchforks heading to the New York Fed, right? Right. They don't. They don't. Yeah. And if you're living paycheck to paycheck right now, you are in a struggle because the cost of your food and of the gas for your car is easily up 30 to 50% from 2019. And sure, the salaries are higher, but if your minimum wage or you're slightly above that, I just don't know how you're able to create any kind of solid base for yourself, even if you're young, if you're pacing at that level and you're continuing that pace through your 20s, you're not going to be able to save much, if anything. And that's where we get to the American dream. And the American dream, if 90% of the profits of all of the top 100 companies are in, I'm sorry, in the possession of the top 100 companies, it just becomes a much more difficult playing field for the American dream. And so hopefully that's what fourth turnings really do. There's different types of fourth turnings. We don't really have to have a horrendous one, but anything that kind of like potentially levels that playing field a little bit more back to more normal American dream scenario. Right. And you'd like to think that this is a meritocracy and whether you have a college degree or not, there's some path where based on your merit and your skills and your work ethic, you're able to get ahead. And so it feels like if you're in your 20s right now, that that path feels like a big climb uphill. And maybe it doesn't, maybe it changes course a bit. And what we're experiencing now has a little bit of leveling off effect, but man, I would not want to be 25 with a college degree and lots of loans right now. I think the entry-level jobs, what are you going to get at an entry-level job, even at a tech company right now? Maybe 40 to 50K, that's going to go fast. That's going to go really fast. Yeah. Then you have artificial intelligence that's going to wipe out the jobs of a lot of lawyers, graphic designers. And there's no like, what's the plan for these people? And so that's where you could have even more dependence because of technology. And so that will create even more government spending, whether or not that's deflation or inflationary is up for debate. But if there's so much government spending and the Fed has to suppress interest rates to support that through some type of QE, then you get into a much more weaker dollar regime. And you saw Trump, there's a lot of chat in our Bloomberg conversation behind me. So if you look at the difference between CNH and CNY, which is the onshore, offshore, the Chinese currency, the yuan, because the yen has been so weak, violently weak, it's making China less competitive. So as the yen weakens violently, there's a point where China, there is a point where China might get forced to devalue. And so Trump has been looking at all this kind of currency problem with the United States, and Trump and Lighthizer, I don't know if they've supported a white paper, but they're actually walking down the discovery around how they could devalue the dollar. Because they feel like around the world, the dollar strength is allowing all these kind of distortions. Dollar strength, weaker yen, if the yen weakens too violently against the yuan, remember the Chinese yuan is pegged to the dollar. And so that creates a trade advantage for Japan. So if Trump were to go down, and if we were to get down to this Plaza type accord, and you think of what we talked about in the book around reshoring and Biden and Trump, and so all of this, the decimation of the Rust Belt, I mean, there are fathers that go home to the Rust Belt that used to have, their father and grandfather used to work in really amazing jobs in the manufacturing space. And now they're working in hospitality or very, very menial labor jobs. And so there's a lot of opioid deaths, right? Like the life expectancy in the Rust Belt is crashing. And so if you have this situation where politically, there's more pressure to reshore jobs, which is inflationary, and then there's more pressure to potentially devalue the U.S. currency against the rest of the world, that gets you into another wave of sustained inflation. And once again, that gets you into entirely, like your portfolio from 2020 to 2030 should look a whole lot different than, say, from say 2008 to 2020 or 2010 to 2020. Yeah. Yeah. Back on the China thing, you mentioned in the book how the Chinese pegged the yuan to the dollar, and it's a fascinating read. And as soon as I heard that, because I purchased your book on Audible as well, and of course I have the hard copy, but as soon as I heard your explanation of that, it made perfect sense to me. And so I guess I wondered, we can wrap up here, but I'd love to hear your quick quick story as to how the yuan is pegged to the dollar, because I think it's very, very interesting. And then I'd love to get from you, what's on your browser? Like, what are your go-to sources of information? Clearly the bear trap report, right? But like, what else are you, what else are you looking at? You know, do you go to X as your platform of choice? Yeah, et cetera. Well, so what we've done is, like I said, when the first book came out, we did 140 speeches in 16 countries. And so we did meet a lot of people that are on X and Twitter that we've known over the years, we can trust them. And so we filtered a group of people that are across different asset classes, different parts of government or different parts of the technology. And so we have this list and whenever they tweet, we get a special, you know, it's a special feed of the ones that we've selected since 2009. So that's really helpful. And then what we'll do is we'll put things behind me in the Bloomberg chat. And so if you take a piece of information, right, you put it into your hand and then you surround it with a number of other pieces, you can make that piece of information stronger or weaker than others. You can figure out whether it has more truth or less truth. In other words, is it more valid or less valid? And so that can help you really develop an investment thesis. So we will go through the news cycle every day. We'll then in real time kind of look at the reactions in the charts, like instantaneously, like where's, you know, dollar moves, currency moves. And then we'll kind of like discuss that big, those big shifts during the day or the week of the month in the chat with the institutions. So we'll kind of use Twitter to kind of, okay, say, okay, what's, you know, what are the most topical things that are happening? And then we'll digest it with a group of, you know, crowdsourcing intelligence real time. And then we recap this conversation for our family offices. So if you're a family office in Texas, you don't want to have Bloomberg terminal, you know, we'll send you that conversation the next day. And so you can, you're able to get kind of a download on that. That's great. And that's also in real time, I presume, right? Yeah. More or less. I mean, it's a daily use. Yeah. Yeah. So in other words, they'll get it by five in the morning and they're able to, but in terms of the Chinese currency, James Robinson, our first book, you know, our ghostwriter did a wonderful job, our partner in kind of like what made Colossal Failure Common Sense so great was that my ghostwriter team, they learned about finance as you went through the book. And so that book was written at a very readable pace, right? And so they have a gift for describing, you know, very complex things in a much more readable fashion. So if you think of what China's done over the last, you know, 30, 40, 50 years is, you know, the WTO and the whole, you know, the Clinton administration and that China, you know, that move of bringing them into WTO and then paying that currency, the dollar. And then as the dollar strengthens, they're constantly like playing this kind of game around the band. And there are times like in 2015, whereas the dollar, because the Fed was threatening all kinds of rate hikes, the dollar violently moved so much that China was forced to basically widen that band and actually devalue more. And so the way they do that is it's very much a rigged system against the US manufacturing base. And, you know, nobody cared for a long time, because we're getting very cheap underwear, right? We were getting very, you know, the balanced trade, in other words, in terms of bringing disinflationary export, you know, I guess, imports into the United States. And, you know, there was a kind of a balance where even though we were decimating the Rust Belt and that manufacturing base, we had the offset of kind of really cheap goods. And eventually that broke in 2016. And Trump, you can say whatever you want to say, but we're very confident that that kind of stress from that manufacturing base, that's why he won Michigan, Wisconsin, Pennsylvania, by not by much, like by 140,000 votes, but he won over those people. Now, granted, he promised them some things he delivered on some didn't deliver on others. You can say whatever you want to say about the delivery, but the message was, we're getting screwed by China. And, and so yeah, that's, and that's only going to pick up under Biden or Trump. And so now we have this like, further conflict with China around, around devaluations, and around that band. And so that's going to create definitely more incentive on the US to devalue too. Certainly, you know, in China is they float so, so much of our debt that, you know, they be, you know, economic relationships, probably not going to slide one way or the other to the extreme. You figure it's going to stay within a band, regardless, you know, of the political rhetoric, you know, and frankly, just as we were chatting, I mean, I'm thinking about this in our conversation, it's, this might be one of the presidential cycles where the left and the right on certain economic trends don't have, they don't fight on as much as they have in the past. I think there are some big macro trends that, you know, agree on need to happen. Polarizing issues are not as much the economy, let's say, than it used to be. Well, there's a famous town hall where Obama, you know, this was both Republicans and Democrats had taken free trade and embraced it. And Obama had that famous line, you know, those jobs are not coming back, right? And remember that famous line, he's like, listen, he was saying it like emphatically, those jobs are not coming back. And if you, if you look at the CHIPS Act, if you listen to the Biden team, they're telling you now those jobs are going to come back, they're going to come back, we're going to reshore, they're going to come closer to shore. One of the things that we talked about in the book is I met with Andres Estevez. So in the book, I sat down with David Einhorn, billionaire, David Tepper, and then Andres Estevez, Charlie Munger. So we sat down with, you know, three or four billionaires in the book. And one of the things Andres Estevez told me was that he's the CEO of BTG Pactual, a brilliant global banker down in Brazil. He's like, listen, we're going to have a North-South supply chain, Larry, that backs up. So the addiction to the East-West supply chain, that addiction to the East-West supply chain is what got the US in so much trouble during COVID. North-South makes sense. I like that. Yeah, that North-South is going to, and that's why Mexico has had such a big run with their currency, with the equities. They've had a great run. They really have. I'm looking forward to reading the rest of the book too. And Munger, boy, he just passed, of course, but what an amazing life and career. Well, I'll tell you a quick story to finish up. So he invited me to Omaha. I went to the Berkshire Annual meeting, and then I had a private meeting with Munger. And I walked in through what they call the Marriott Hotel. And my wife and I went into this private room. And as we're walking through the hall, I looked in one room, looked at this room over there, and there's Buffett with the sovereign wealth funds. Then as we went around the corner, we saw another room. There was Bill Gates with the pension funds. And so these guys were doing their weekend entertainment. It's always the first weekend in May, first Saturday in May. And so we got into this room and Munger came in. And he's like, Larry, I just want you to know, and he shook my wife's hand. And I wanted my wife, I wanted Annabella to kind of leave the room because I only have 40 minutes with Charlie Munger. And I said, honey, when he comes in, just say hi and bye. And she was saying hi, about to leave. And he said, young lady, hardship is good for you. Mr. Munger, you're one of the richest men on the planet. What do you know about hardship? And he was like, Larry, I know you went through a hard time with Lehman and you had all that stock. And he said, hardship is good for you. I said, Mr. Munger, you're one of the richest men on the planet. What do you know about hardship? He said, oh, Larry, 1954, I had 18 lawyers in my law firm in Los Angeles. I woke up in the middle of the night in a cold sweat. That week, eight lawyers had quit. And my firm was in big trouble. And I woke up in the middle of the night and I leaned over to my wife and I said, honey, if I lost everything, would you still love me? And she said, I'd love you, but I sure would miss you. That's a great, that's a great line. That was my Munger moment. And he and I had a laugh and he was wonderful. That's a great line. Well, he's been a wonderful mentor of mine. I'm really grateful to him. Yeah, yeah, that is, well, you know, he's, he really has, you know, had a reputation out here, you know, in Los Angeles and his family as well. Half of the buildings at my kid's school, you know, are Munger Hall and Munger this and Munger that, you know, he was on the board of that school for many years. And, uh, you know, you talk about like, how to listen when markets speak, the title of your book, like there's a guy that was such, he used such plain speak and used stories and analogies to get across what was going on. And that was half the fun in learning and listening, you know, to him. He didn't make things complex or convoluted or try to sound smarter than the rest of us, which of course he probably was, but just trying to bring it, you know, bring it into story, right. You know, here's, here's what's happening. And here's a story to explain that. And I think there's a lot of magic in that. And that's look, and I've only made it through your book, uh, through the first two chapters, but that's what I like about this book. Number one is plain speak, transparent. You have to look no further than the praise, you know, the people on the back of your cover, you know, testimonials, Mark Cuban, Ian Remmer, Greg Zuckerman, Julian, yep. You got Zuckerman, you got, yeah, you got Julian Tetz, Niall Ferguson, brother, pal. I mean, you've got just a great group of folks. And I think as a testament to the fact that you, you are sharing what's going on in the markets in a very transparent, easy speak way, you know, and, and there, there's a lot of magic in that. So, yeah. So thank you again. And I realize we ran a little bit over time and I'd love to have you on again and maybe six months, you know, and, and we'll, we'll do a debrief on just where the heck we are, because that'll be probably just as we're getting into the political, like the heat of, you know, the political season. Right. Would be really interesting to chat again in the fall. Yeah. We're getting a lot of speaking engagements and, um, there's a couple of things coming in from the West coast. So I'll let you know that we should be able to get up there too and see you guys. Yeah. It's well, the next time you're in Los Angeles, let's see if we can get a group of folks together. I think, I think that'd be a lot of fun. So yeah. Great. Thanks. Thanks again, Larry. Thanks Bob.