A Market Bounce…Then Look Out Below?? | Lance Roberts & Adam Taggart

Lance Roberts 0:00
You know, I think that we could very well bounced and October, November, December, we might wind up posting a lower high this year than where we were back in July. That would not be surprising. Maybe we get to 4500 by year end, that would probably be a logical place for kind of for markets to drive to. But, you know, again, if we post a lower high, then that’s certainly going to be a concern heading into next year.

Adam Taggart 0:27
Welcome to Wealthion. I’m Wealthion founder Adam Taggart, welcoming you here at the end of the week for another weekly market recap, featuring my extremely telegenic friend, Lance Roberts, Portfolio Manager from real investment advice, Lance, how you doing, buddy?

Lance Roberts 0:43
I’m doing good. You must be friendly with a small dinosaur, because every week it’s new terms.

Adam Taggart 0:50
Yeah, pet the source that you’re talking about. Exactly. Exactly. All right. Well, we got to keep everybody you know, looking forward to something new at the beginning of these this since we do these every single week. And we got a lot to talk about this week, a lot of data came out. You know, if you looked at the, this, the beginning of the weekend price for the market and the end of the weekend price, you would think not too much happened, but the market kind of took a big round trip this week. So tell us, you know, what are you seeing here? Is this is the market finally finding its footing after some weeks of weakness here? Or what do you think?

Lance Roberts 1:25
Well, there’s, there’s a lot of panic early in the week, you know, market was selling off and bond yields are ticking up and, you know, lots of, you know, headline driven narratives about you know, oh, my gosh, why is this happening or that happening. And what everybody forgot was, is that the last week of September is, you know, first of all, at the end of the quarter, so you have some, you know, activity that occurs around, you know, MAMP fund managers at the end of the quarter, but most importantly, there’s about 20% or so of hedge funds, mutual funds, you know, big big pension funds, etc, that is their fiscal year end. So they’re having to make their annual distributions and those type of things which, you know, can can can push the market in two directions, depending on what the market was doing previously, it can either push the market separate push markets now. And that was a lot of really what looked like was going on this week, we saw a lot of kind of, of what seemed to be more, you know, kind of this need to sell and I don’t wanna say capitulo Tori, because it really wasn’t that dramatic, we didn’t see a huge spike in volatility, it did pick up a little bit, but not dramatically so, but it certainly had there was really no news of any consequence to any really great degree this week to drive the moves like we saw. So it really had that flare of this was potentially just kind of more positioning for the end of the quarter. And this also is is a good is a great setup, you know, things are actually kind of working out you know, kind of as we hoped for you know, we’re getting the market to a very oversold condition cinnamon is getting very negative our technical indicators are getting very over oversold. So this is actually becoming a really really good setup for that kind of year in rally

Adam Taggart 3:06
we’ve been talking about okay, um, we’re obviously going to get to your trades later on in the discussion, your specific trades, but you know, I believe you’ve mentioned on past recent videos here that you guys we’re gonna be looking for entry points as the market started weakening here. Have you been nibbling in at this point in time?

Lance Roberts 3:25
We’ve been we have been over the last couple weeks. We haven’t done anything this week to any great degree other than you know, personally, I bought more bonds this week. But that’s just me personally. But in our client accounts, we haven’t done a whole lot this week, only because we’re just waiting for the quarter in to actually end which is was on Friday. So starting on Monday will be into the new quarter we’ll have of course not only with kind of the new quarter, we’ve got earnings season starting. After we get through October, we get stock buybacks starting back up. So on Monday or Tuesday, we’ll probably be doing we’re pretty much fully weighted. We’re currently near our target equity waiting anyway, after the last couple of weeks of buying. But kind of coming into next week. We were just having this conversation Friday morning. We’ve kind of got some some last trades kind of set up of companies that we’re going to be looking at that we already own, we’re just going to add to those positions.

Adam Taggart 4:21
Okay. All right. It’s interesting, you know, there was a lot of hand wringing earlier this week, people really started to begin to, I would say almost sort of panic about rising bond yields. And so, you know, I know there’s going to be a big chunk of viewers here that just can’t wrap their brains around how the markets might end up powering higher into the year. You and I’ve talked about that multiple times in past recent videos, so I’m not going to really hash it here except just to tell anybody whether you’re very bullish or you’re very bearish is your primary thesis, to always be open to your thesis not playing out, at least in the short term and hopefully We at least being positioned well enough that if your thesis goes against you, you’re not taking on too many unexpected losses in your portfolio, you’re sort of smiling and nodding as I’m saying this.

Lance Roberts 5:10
Yeah, and again, you’ll we’re talking about potentially a rally that last a month or two, maybe two and a half months, there’s gonna be some volatility on the way, come the first two weeks of December, you can expect another correction in the markets, that’s because we get about another 25% or so 25 30% of mutual funds, hedge funds, etc, doing their year end, and the first couple of weeks of December, so you get those annual distributions of capital gains and interest, income, etc, all occurring at that point, things picked some more volatility around those first two weeks of December, and then you kind of get that year and chase the proverbial kind of Santa Claus Rally into the end of the year, because they’re, they want to have all the positions on their books, when they report earnings at the end of the year report their their fun positions, they want to make sure that, you know, they own Nvidia and Apple and Google and Tesla, they may not have been good all year, but they’ll own it in the last lab report. And their their investors see the report, you know, they own all the right stocks, you know, on their portfolio. So, you know, that’s what’s gonna be driving the markets petitions going out. And now on your end, that lets we get to 2024. You know, all bets are off, I just, I’ve been writing a couple of articles over the last couple of weeks just have one out yesterday, as a matter of fact, talking about the yield curve. And in particular, you know, what has happened historically, and this kind of this idea of this soft landing narrative is really not likely. And you know, everybody points back to 1995, and says, Well, we had a soft landing in 1995. Well, we did, but we didn’t have the ingredients that predicted a recession,

Adam Taggart 6:49
right at the toxic soup that you and I talked about every week.

Lance Roberts 6:53
Yeah, and more importantly, the yield curves, never inverted in 1995, in 1998, yield curves inverted, and in 2000, you had the recession. So you know, there’s, there’s you, it’s hard to say that this time is going to be a soft landing, when that has never occurred when there’s been inverted yield curve, particularly when you have 90% of the 10 yield that we track 10 Different yield curves that affect the economy in both the short end and long in 90% of those are inverted, whenever you’ve had 50% or more, you’ve always had a recession, period, end of story is never not been a case. And so that, you know, we get 2024, and we get a year, and I’ve talked about this before, that, you know, everybody was expecting recession in 2022. Now that you didn’t have one, everybody’s like, Oh, great. It’s a soft landing. No, it’s just delayed because of all this monetary and fiscal stimulus, still working its way through the system. And we’ve been pretty vocal by saying, hey, you know, the recession is coming, it’s probably going to be in 20. latter half of 2024, though,

Adam Taggart 7:55
or you’re putting in the latter half now. Well, no, no,

Lance Roberts 7:58
I’ve always been, you know, second, third, fourth quarter of you know, it’s not going to happen in the first quarter. It’s too soon. You know, the the economic data still coming in is fairly strong. So we’ve got to kind of work that off here a little bit more. So we

Adam Taggart 8:13
just mentioned it, because we’ve had, you know, different people on the channel kind of placing their stake. So want to make sure we know where your stake is. Last week, we talked about our Darius Dale said his window has been between November and April, but he said, You know, it’s looking to me like it’s probably going to be more like April, you know, 2024 ready.

Lance Roberts 8:31
So you sort of will say, Yeah, my that’s more August, September next year.

Adam Taggart 8:36
Okay. All right. Well, look. So you talked about several things that I want to drill into. One in particular, is the bear steepening that’s going on right now in the yield curve, had a really interesting interview with bond analyst ALF Pekka tlo, that actually is premiering on Wealthion channel. As you and I are recording this Lance, I want to get some of your reactions to some of the observations that alphabet, but before if we can, I’m going to pull up some data in just a few minutes. But can you pull up that your standard chart of the s&p, and I just want to update folks, as we sort of agreed that we tried to bring that up, you know, most weeks when we talk to show folks where we are and in particular, if you can talk to how I’m doing this from memory, but it was no Monday or Tuesday this week, where we had a pretty big drop in the s&p, I want to say it was like, you know, percent and a half or something like that. And all of a sudden, there was this sense of like, oh, my gosh, is this it? Is this the breaking point? Right. And I want you to speak to the technicals here, because it seems that the technicals are still holding in quite well, that yeah, the market dropped within or bounced off support here.

Lance Roberts 9:50
Right. And again, you know, the the again, it was it was a rough, it was a rough Monday, Tuesday, Wednesday. I mean, you know, no doubt about that, you know, but Interestingly enough, you know, we have to go back more than 100 days to see a day where the market fell by one and a half percent, which happened earlier this week. And that was that big kind of moment where it was like, Oh, my gosh, you know, it’s been a while since we’ve seen one half percent decline. In other words, and that goes, that really speaks to that kind of low volatility environment we’ve been in volatility has been very low. And we’ve been talking about for a while that, you know, that very low volatility was going to reverse at some point. And, you know, this is, you know, part of that kind of summer correction that we’ve been discussing, really, ever since June. You know, back in June and July, both, we were writing articles saying, hey, you know, be sure and, you know, you should expect to have a three to a five to a 10% correction sometime in the summer, that’s completely normal, completely within the parameters of how markets function in any given year. And it shouldn’t be a surprise, and I even told you, I said, as soon as we get it, everybody’s going to be going, Oh, my gosh, the bear markets back right. And, and, you know, the bull trap is in and you know, all the stories and that’s exactly what we saw, this was, it’s still been a very orderly, normal summer correction. The markets have gotten very oversold here over the last week, RSI down at 30 get. And so you know, that kind of led to the bounce on Thursday and Friday, nice reversal, by the way, on Thursday, both stocks and bonds were down early in the morning, both of them rallied back into positive territory at the end of the day. And that’s exactly that kind of late day buying, that starts to show you that institutions are stepping in and starting to buy things. So you know, that kind of late day buying was very different than what we saw earlier in the week where we were seeing late day selling. And so that’s, that was kind of a key difference on Thursday, and Friday, as well. And again, I think that really speaks to that. It really kind of looked like Monday, Tuesday, Wednesday of this week, it was institutions just prepping for fiscal year end. And, you know, then on Thursday and Friday, they were starting to reposition, you know, for the next quarter. So, so again, you know, it’s just the markets playing out kind of exactly what to expect, and we’re down, about down about 7%. From the peak all together, that’s not dramatic, you know, people forget, we brought 15%, from February of this year, to the peak in July, we were up 15%, the s&p is still up 12% for the year. So having a 7% correction, when you’re up 15% shouldn’t be surprising, given that markets don’t return 30% On an annualized basis, every year, right? So, you know, it’s just, you know, keeping some things in perspective is important markets set right on the 150, day moving average turned up, that’s that blue line there on the chart. And again, we got some resistance here. 4400. So we might rally, you know, first couple of days in next week, run right out of resistance, don’t be surprised if we kind of bounce off of that we sell off a little bit. There’s a lot of people that got kind of caught in a sell off, there’s so they’re looking for a rally to sell into. So don’t think it’s just going to be, you know, October 1 straight off to New time, you know, new all time highs, that’s not going to be the case, you know, I think that we could very well bounced, and October, November, December, we might wind up posting a lower high this year than where we were back in July. That would not be surprising. Maybe we get to 4500 by year end, that would probably be a logical place for kind of for markets to drive to. But you know, again, if we post a lower high, then that’s certainly going to be a concern heading into next year.

Adam Taggart 13:31
Okay. All right. Well, you know, we’ll be tracking that. And if we do, we’ll we’ll talk about what that means if and when that’s what, where the year ends. Really quick here, if you could just remind folks that the moving average, that’s there in the blue line that the latest data sort of bounced off of this week, which moving averages that

Lance Roberts 13:50
that’s the 150. So here, let me I’ll put up a kind of a warm up. Let me just switch charts real quick. And, you know, this is kind of the more of a normal one that we look at. So this one is our MACD indicator at the top, that’s kind of our standard buy sell signal for the market still on a sell signal. That’s now starting to turn up. And this is exactly what you want to see, by the way, for the seasonally the start a seasonally strong period of the year. So when we when we actually trigger that MACD buy signal that should occur in the next, you know, week or so that will actually officially mark the beginning of a seasonally strong period for the markets. And again, that’s a fairly oversold condition for a MACD in a bullish trending market. So there’s a good bit of upside for that MACD to travel during the next rally. We broke through the red line on this chart is the 20 day moving average, the blue lines, the 50, the black lines, the 200. We haven’t gotten there yet, but we did break through the 20 and the 50 earlier this year, so earlier this summer, so that was certainly part of that corrective process that we’re in but again, you know, markets are oversold here on a short term basis. Got below three already on the RSI index, again, a bunch of technical mumbo jumbo. But what it says is, is that, you know, you corrected some of that exuberance. More importantly, in our newsletter this weekend at real investment vice.com, we’re actually going through this whole kind of technical setup for this rally. And importantly, in this context, investor sentiment got very negative technical positioning on a weekly basis got very negative. So again, you know, that’s the fuel sentiment and technical positioning is the fuel that potentially drives the rally. So once you start turning sentiment and turning those technicals, that’s gonna start dragging more and more people who are betting on the market to keep going down. Now they’ve got to cover their shorts, and they’ve got to start buying back into equities. And so that’s what will drive the market, then we get October, sorry, November, like I said, then you get 5 billion today in stock buybacks, which further kind of fuels the market higher.

Adam Taggart 15:55
Right. Okay. So, you know, you almost think of the market as sort of, you know, pendulums within a pendulum, right, you know, you get the big pendulum that is, you know, what the markets doing over the course of the year, but then you have these smaller pendulums that are just what it’s doing at any given time, right, where people on both sides of the pendulum they swing from basically fear, degreed or bearish to bullish, right. And the indicators that you’re looking at, at least in the near term, suggests that, okay, you know, the pendulum swung real far too bearish and oversold. And now we’re beginning to see that it is just potentially beginning to swing back, right. And once you get that buy signal, which you expect to get in the next week or so, that’ll give you confidence, right? That Okay, yep, pendulums now swinging but we’re still kind of in the early stage of it. So if we hop in now, we can get a really nice ride out of this thing.

Lance Roberts 16:50
And again, you know, it’s always interesting, if you take a look at the bottom indicator there, that’s the relative strength index. And you know, whenever that is above 70, that’s when everybody wants to buy stuff. So you know, and this is always goes to basic investor psychology. If you’re sitting at home right now watching this video, go, man, I don’t know anything to do with this market, it just keeps selling up. You need to you need to, you know, start figuring out how to buy stuff. When you’re wanting to buy stuff, that’s when you need to figure out how to start selling stuff. And this is because investors always do exactly the opposite of what they should be doing. They don’t want to buy stuff that’s beaten up and sold off and oversold, and nobody wants anymore. Now no, look, there’s certain things you don’t want to buy, that are beaten up. You don’t want to buy peloton, right? As a good example. There’s there’s companies that are fundamentally broken, you don’t want to own but there are certain asset classes that you want to buy when nobody else seems to want them. If you’re buying an ETF as an index, while you’re an s&p index buyer, you want to buy the index every time everybody gets bearish, because that’s always long term did a great entry opportunity. If you’re if you’re at home, go man, I can’t wait to buy in, you need to sec step back and second guess yourself about buying something because you’re probably buying into the hot hype. And you’re probably buying when something is grossly overbought, because everybody else has already bought it, the reason you want to buy it now is because the price has already gone up. Nobody wants to buy bonds right now, because, you know, they’ve been just getting, you know, beat over the head with a hammer. But this is why every time they get beat over the head with a hammer, I’m stepping into buying more, because the fundamental backdrop of bonds hasn’t changed, bonds don’t go to zero. So you know, there’s a real opportunity there to make a lot of money that that people that are involved in the price of it, and in the short term sentiment, are completely missing out because they’re letting emotion drive their investment parameters.

Adam Taggart 18:38
Okay, great. And by the way, we’re going to talk more about bonds in just a little bit. So, you know, technical analysis isn’t everything, right. But it’s a very useful tool. And it does give us a pretty good measure most of the time, where we are, in terms of, you know, market trajectories and things like that. And you know, what I just want to point out here is is if you and others were making the arguments, yeah, I think stocks are gonna power higher from here and at the end of the year, right, but instead of the RSI bouncing off at 30 here, it was above the red line above 70. Right, then we might say really? Because it seems pretty overbought, right? Similarly, if the same thing obviously on the MACD, if it weren’t, you know, down below that dotted blue line, but it was it was up near its apex we’d be similarly skeptical or if the main just you know, action of the s&p there was actually above its moving averages if it was above the 50 day, right. All those things would tell us, you know what the activity is actually I’m probably unsustainably exuberant right now, right. But we’re seeing exactly the conditions that you would expect to see that could proceed or run up from here.

Lance Roberts 19:50
Look, and this has been our this has been our jet our jib kind of a whole year this year so far. You know, when in June and July when the you and I We’re discussing recent Hey, we’re ready for you know, expect a five to three to five to 10% correction this summer. That was because everything was very, very overbought. Back in March when you know, we were having central bank failures, we were like, Hey, we’re starting to buy, we started buying some of those regional banks markets were very oversold markets and sold off nicely from from the kind of the previous run, great entry opportunity. Same thing back in December when we were talking about potential sell off, you know, in December mark is he gotten very overbought and said, Hey, take some risk off the table time to look for that opportunity. Back in October when we were talking about, you know, the markets are so bearish, it’s bullish was because markets had gotten deeply oversold. So these indicators are great short term indicators, they’re good for a month or two. That’s about it. That’s all technicals are good for. But they’ll but they do kind of give you guidance about the overall psychological sentiment of the market, which is this living, breathing organism of buyers and sellers fundamentals drive the long term return. So if you’re buying something that’s fundamentally strong, fundamentally based, you’re going to make money with that long term, you’re not going to make money month, money on it six months, you might not make money on it for two years. But a good fundamental investment will make money for you more so than not any other investment over the long term fundamentals drive long term returns technicals are only good for short term variability in portfolios and markets.

Adam Taggart 21:26
Okay, well, look, I know that one of your long term investments that you’re very excited about now is bonds. And so we’re gonna get to that again, and we’ve been talking about that every week. But we’ll do this week’s update in just a little bit. Let me just bring in some recent data here when that was driving markets on Friday. So markets got a little bit of a boost because the Feds preferred measurements of or one of its preferred measurements of inflation, PCE it fell on a year over year basis. And we’re sorry, it rose on a year over year basis. 3.9%. But that was a drop from previous month, which was 4.2%. So it’s been coming down. Now just drop a load of four handle. This is the lowest since September of 2021. So it’s the lowest reading in two years. So you know, some are saying, Okay, this is giving the Fed confidence that, you know, it’s finally beginning to get some control over inflation. Obviously, it’s not not coming down super fast here, but it’s showing, you know, progress in the right direction. Now, it’s hard not to roll your eyes a little bit when you talk about PCE because it’s x food and X energy, which are two critical things that consumers need need to buy. They’re much more volatile, which is why the Feds stripped it out of the measurement here. But you know, with high oil prices right now, and food prices, you know, in many cases still back on the rise. I think most consumers say, I don’t really care about this metric, because it doesn’t reflect my personal life. But anyways, Lance would just wanted to get a sense from you how material is the continued decline in PC here and your opinion?

Lance Roberts 23:13
Well, I’m first of all, considering the PC makes up, you know, 70% of GDP component, it’s pretty damn important. Also, in just the recent, we just had the five year revisions to GDP yesterday on Thursday, and base which basically wiped out PCE for the last quarter. So there’s a big drag and PCE that’s coming right now. And that’s still continuing to feed through. And again, it’s exactly what we expected to happen. What we’ve been talking about for a while is starting to actually show up, you know, high interest rates, high inflation, starting to finally weigh on the consumer. Now, as you kick off these student loan payments on, you know, beginning on Monday, that’s going to further to drag on this whole issue but you know, PCE at the core is is important and yes, you know PCE at the headline is is important as well. But no, there is no good measure of inflation. You know, Adam, you live in California, you pay stupid prices for real estate in California versus what I pay for it. Here in Houston, you pay stupid prices for gas, why you pay five $6 for a gallon of gas is beyond me when it’s 350 in Houston. So, you know, it’s, it’s, you know, there is no good measure of inflation because everybody, no matter where you live, it also depends on your income depends on what you buy, and how you live your life. Those measures of inflation are different for every single family. So this is just kind of a ballpark gauge of what inflation kinda looks like. And you know, we’re trying to drive monetary policy in the rearview mirror, which is why they’re always wrong. And it always winds up causing a crisis or a break in the economy. But you know, you gotta have something, you gotta you gotta have some measure, to you know, gotta kind of go play the game and so these are the best Some measures we have, but they’re deeply flawed.

Adam Taggart 25:03
They are in thank you for taking your normal opportunity to beat up on the difference between where you live and where I live.

Lance Roberts 25:12
Yeah, but you’ve got good temperatures, and I’m hotter than hell right now. So there you guys,

Adam Taggart 25:16
I know, I gotta hold on to what I can while I have it. So Gree with everything you said, I while you were talking, I was furiously looking for this chart that I’m going to put up, which shows the myths in personal consumption or the downward revision, right? And look at this, it’s a nine sigma MIS. Now, for folks that don’t know what sigma is, it’s basically a statistical concept in terms of a degree of error, right? Something might be, you know, one sigma, which means it’s in a higher error band than we normally would be expected. Well, this one is nine sigma. So

Lance Roberts 25:57
I can actually help you out here a little bit. Yeah. So So basically, if you think about one sigma, and these are rough, round numbers, and you can go look it up and get the exact percentages, but I’m just gonna give you some rough round numbers. If you if you assume that something happens 95% of the time, so 95% of the time, something is going to occur in this manner. That’s one sigma event, two sigma is you’re now pushing about 98%, three sigma is you’re at 99.6%. Four sigma is you’re at 99.99%. So in other words, at a nine sigma Miss, you are at 99.9999999, almost to infinity percent of that event occurring. So it’s such a rare event, it is so far outside the magnitude of normality, that it shouldn’t actually ever occur. But it did. And what’s important about this is this comes on the heels of the fact that the Federal Reserve just published their prediction on economic growth. And everybody’s like, Oh, they upgraded all their growth announcements, and it just all got downgraded in one day.

Adam Taggart 27:06
Yeah, and of course, the narrative is also the subject of my, my article on fries is okay, yeah, and also just the narrative that we’ve been hearing, you know, all year of, you know, hey, the consumer is super strong, right, like the super resilient consumers hanging in, right, and I’ve got some additional consumer data we’re gonna get to in just a second. But this really kind of puts a boat in that, right.

Lance Roberts 27:28
Absolutely, any. And that’s, that’s the whole gist of my article on Friday, which was talking about the Feds predictions are always wrong, they are the worst economic forecasters on the planet. And, you know, and literally in just one day, and unfortunately, I didn’t have this data at the time I was writing the article, but it just blew their entire analysis right out the window. So all their predictions are now gonna have to start to come down in their next projections coming out, because they’re gonna have to adjust for this lower PCE number. Because it’s such, again, it’s 70%, of the overall consumption process. But this is why. And again, you kind of go back in history, and particularly the articles talking about yield curves and these recession risks that are clearly out there. And, you know, when you start looking at these events, this is why the Feds always wrong. They’re looking at trailing data that is highly, highly subject to revisions on a lagged basis. And this is why the National Bureau of Economic Research, they when they date something they’re generally nine months after the fact that oh, yeah, the recession started nine months ago. Well, great. That was a lot of help now. But that’s because they’re having to wait for this data to be revised to pinpoint where the recession actually started.

Adam Taggart 28:42
So it kind of begs the question, and I know you’re gonna roll your eyes at this, but like, why does the world hang on every syllable of every fed? You know, press conference, when when Jerome Powell was out there, and all the q&a and everything where, no matter what the Fed says, It thinks it’s gonna happen. It’s got the world’s worst track record. Like I said, Well, the reason is, why do we continue listening?

Lance Roberts 29:08
Well, the only reason this is because this started back in 19. Really 998 ish when Alan Greenspan you don’t look back in the 70s. If you went down the street and asked all your neighbors who the Chairman of the Federal Reserve was, they got the federal what nobody knew. In really the early 80s. Nobody knew who the Federal Reserve was in the 90s. Nobody knew the Federal Reserve, what kind

Adam Taggart 29:31
of I’m sure they knew who Volcker was when inflation was 18%. Interest rates were 18%

Lance Roberts 29:37
No, not really, because we weren’t young remember back in the 70s 80s. When I was growing up. There was one guy on our street and he was down the street around the corner, and he got the Wall Street Journal. Everybody’s like, Woohoo, that guy’s got a stockbroker. Nobody was involved in the stock market back then. Except a very few people. And they were reading the Wall Street Journal. We weren’t glued to our televisions every A 24/7 We weren’t on our iPhones and our computers, looking at every tick of the stock market, right? We were living our lives back then people were working and raising families. And they basically they were happy. It’s so but you know, they were just most of their money was in a checking account in a savings account. That was that was their net worth, they didn’t have credit card debt. They didn’t have all this other stuff. They had a house and a car. And that was pretty much it. They raised their family. So nobody really knew that these people were and then in the late 90s, as CNBC came online, and we started to get an E trade and AOL and all of a sudden, we started getting glued to Alan Greenspan of what he was saying. And you know, he was the maestro of gobbly gook. I mean, the guy could speak for an hour and nobody understood what the hell he said. But, you know, he was becoming that face of the markets. And then that really once Bernanke took over, and we began all this stimulus, now we’re glued to the Fed, we don’t really care what the Fed says, All we want to know from the Fed is when the hell is going to cut rates and start giving me more money. That’s what the markets are wanting to know. And that’s why we’re glued to every single tick of inflation, employment, which are the worst indicators, but we’re glued to those things, because that’s going to drive the monetary policy of the Fed when you give me more easing, because if you give me more easing, stock prices go up, and I can make money, that’s so glued to it.

Adam Taggart 31:26
I don’t know, it’s just like, like the Feds just like, you know, Godzilla with a dunce cap on, right where it’s like, you don’t really necessarily feel like you can trust what it’s saying or hang your hat on what it’s saying. But just whatever direction it turns in, it just creates all sorts of wanton destruction, or at least you know, just moves everything out of it, right. So you just you have to pay attention to where it’s going, even if it doesn’t necessarily know where it’s going next.

Lance Roberts 31:51
It’s the worst thing that we could have done the markets. I mean, you know, we started these whole bailout things, you know, last Sunday was the 25th anniversary of long term capital management. But the bailout of long term capital management was the very beginning of too big to fail. So, you know, we started these bad policies back in 1998, we’ve carried him through to President we’ve turned the market into a casino, you know, back in the 70s, and 80s. You know, people held stocks for six to eight years when they bought stuff. Now it’s five to six months. So again, we don’t invest we gamble. And this is why when you manage your own portfolio, why technicals matter so much. If your time horizon is a week to five weeks to a month to five months to six months, all that matters is technicals, fundamentals don’t matter? And unfortunately, that’s where we are in the market today. The Are you buying video at 40 times price to sales? Why? Because it’s going up? That’s That’s why you buy it. You don’t buy it for the fundamentals. You buy it, because it’s going up in price.

Adam Taggart 32:49
Yeah. Funny, you mentioned Long Term Capital Management. I’ve actually been in discussion with one of the CO founding partners of long term capital management, to potentially bring them on and then have a discussion of basically what happened with all that. So I think that could be a really interesting discussion. Haven’t quite long to meet yet, folks. But it’s looking good.

Lance Roberts 33:13
It’ll be it’ll be honest with you. Yeah. It’d be very interesting.

Adam Taggart 33:17
Yeah. Well, I mean, that’s the point of the conversation is to just give an honest assessment of what went on there. All right. Hopefully, folks, you’re interested in that. If you are, let me know in the comment section below. Okay, a couple couple of charts just to dial through here real fast. Yeah,

Lance Roberts 33:34
by the way, before you have that interview, you’re gonna have to have a history lesson. Most people have no idea who long term capital management was because it was before their time.

Adam Taggart 33:43
I know you’re right. That is true. And for those who don’t know, basically, I mean, long term capital management was it was a fun that was sort of created by what

Lance Roberts 33:58
do you know, it was two Nobel laureates, economist,

Adam Taggart 34:01
right? The smartest guys in the room. That book was written about something else, but but they were the first smartest guys in the room.

Lance Roberts 34:08
Right? It was a it was a it was a well respected bond trader to Nobel economic laureates. And there was another guy in there as well, there was a fourth one, I believe he was just kind of a Wall Street Maven. But they they took on the bond market, they were leveraged, they were cranking out 30 40% returns every year for the first three years. And then the Fed hiked rates blew the whole thing up. And then you had your first financial crisis. And then of course, the Federal Reserve had to step in, organize a bailout between 14 banks for bailing out long term capital management, because they were afraid of the financial fallout of this fund, which was $100 million at the time. So you know, that was the first too big to fail was 100, which was huge back then. Right, then yeah, I just want to say is that now if you’re not in the trillions, it just don’t matter anymore. So

Adam Taggart 35:00
Yeah. And that really did sort of start the era that we’re in now that I think we all wish we could get out. Right, which was, you know, first just sort of hubris, right? Where it was this sense of, Oh, we got these highly degreed guys. Surely this is this is too smart to fail, right? This is too smart, not to wildly succeed, right? It was sort of this the sentiment of the time, a lot of money at the time, you know, went into this thing. And when it went belly up, way faster than anybody could have imagined that it would the central planners, the Fed decided, okay, we gotta bail these guys out, you know, to kind of protect the contagion effect that this could have on the market. And that really began the era of bailouts, I believe, actually, that Jim Rickards early in his career was sort of assigned to help with the the organized dismantling of long term capital management. So maybe we’ll have Jim come on at some point again, and respond to the interview with the guy hope to be able to do here. But But anyways, I mean, this was, if you’re, if you’re angry about this neverending cycle of tons of capital going into Chase, you know, humoristic pursuit in the markets, and then when it goes belly up, the authorities bailing out all the perpetrators, usually at the expense of taxpayers, and, you know, in some ways that purchasing power of everybody’s currency, this really was the thing that kicked it all off. Yeah, absolutely. All right. So dialing through data, we get back to this for a second, but I’m looking for a chart here. So real disposable income, is now down for the third month straight. And let me let me just find that here. And I’ll pull that chart up so we can see. So this kind of is going back to, you know, what we said earlier about this whole narrative of, you know, resilient economy, plucky consumer who’s just weathering the storm, we had the the personal consumption, nine sigma revision that you and I just talked about, real disposable personal income, as this this chart shows, is down for the third month straight. You combine that with a personal savings rate. Bear with me one second here, the personal savings rate is sinking again, it you know, this, air just kind of keeps coming out of this balloon, I’ve got a really interesting chart that I’m gonna put up in about five minutes around personal savings. So let me just keep that as a teaser. But also, if you look at consumer sentiment, it is now back on the decline, Lance, right. It’s sort of sort of picked up during the summer, as the, you know, we had those July highs in the markets, and all of a sudden everybody was talking about forget soft landing, it’s now going to be no landing. But all of a sudden, sentiments beginning to sink again. And so, you know, kind of where I’m going with all this is. Jamie Dimon actually came out with a statement this week, and he talked about some crazy predictions of where interest rates might go. And I’m gonna reserve that just for a second. But he basically said the sugar high is over. And I guess my question to you is, is is, you know, with the stealth liquidity that we saw this year that we’ve already talked about on this program, and, you know, the the party that we had in the markets during the summer, are we beginning to kind of see the end of all that here? Like, is the Sugar Rush really coming off? I think a lot of this personal consumer data that I just shared, certainly gives credence to that.

Lance Roberts 38:36
Yeah, well, you know, we wrote an article back in 2020. And then again, in 21, talking, we actually titled The Sugar Rush, right? Because at the time, everybody was like, oh, you know, the government’s gonna send everybody checks isn’t that great, modern monetary theory is here, and we’re like, the Sugar Rush is fine. And giving people money is like, you know, feeding full of sugar, they’re going to run out and spin it like crazy, you’re gonna have inflation. And there’s gonna be over. And, you know, we’ve been you and I’ve been talking about for weeks now that, you know, that monetary supply is slowly being drained out of the market. And too, as a percentage of GDP is, is declining. You’ve now got these the last vestiges of the supports now kind of rolling off, you know, child tax credits, extended unemployment benefits already did December. But we’ve had this ongoing moratorium on student loan payments, that’s now gone away. The only other and then, of course, you’ve always had this inflation Reduction Act, which put 1.7 trillion of liquidity in the economy that led to a lot of manufacturing spending, we saw a lot of CapEx pick up from that. So that’s helped give this economy is this kind of this continued dosage of sugar has continued to keep this economy kind of rolling along. But now, there’s kind of no more sugar on the rise. At this point. We’re about to have a government shutdown over spending. So there’s no spinning bill coming anytime soon. Student loan repayments restarting and then of course, just the fact that you’ve got high interest rates weighing on consumers is just a function of time here.

Adam Taggart 40:03
Yeah, high interest rates weighing consumers. I’m gonna pat myself on the back for being 45 minutes into the discussion and not having mentioned lag effect yet, since I generally mentioned it all the time in every video. So a couple of things to really reinforce you just mentioned there. One is the student loans. They went into repayment at the beginning of this month, at the beginning of September, the first repayment checks are due next week. Right. So money is now starting to is just about to start coming out of consumer wallets now. Right. It’s been all academic until next week, right, so we’re gonna see what happens there. Here’s the chart that I mentioned, I teased you with earlier. So Lance, you and I have talked about the pig in the Python many times on this channel, which is sort of, you know, all the combined stimulus from the pandemic era, as well as the stealth stimulus that’s been done this year. You know, how much of that is left in the economy is it’s notoriously difficult to measure in totality. But this chart seems to indicate that the stimulus pig has now exited the consumer Python. Right. So this is household excess savings. And as you can see here, from this chart from JP Morgan, it actually has now gone negative in the last reading here on this chart, so from from a pig for the Python standpoint, for the folks that have got real tired of us using that analogy, I think this was an important milestone to note here, which we can sort of, say household savings wise that that pig is now out.

Lance Roberts 41:39
Yeah, be a little, just one caveat, be a little careful with the data. Because again, you know, nobody really knows, again, this is all kind of estimates and estimates about who has what in savings from what we sent them. And, you know, those type of things. And again, these numbers are also heavily skewed by the top 10% of income earners. So they have a lot of savings. And so you know, during the 2020, shutdown, 2021, they couldn’t spend money on anything. So they just accumulated a lot of savings, because they have a lot of cash flow from, you know, rental income or business income, or wherever they have their income coming in as a high net worth, income earner, the lower 80 to 90%, only had their checks, they spent all those. So if you look at the bottom, 80 to 90%, they’ve been out of cash for a while. And they’ve been diving into credit. And that’s that’s continuing to get worse here. But now you’re starting to see that depletion of some of those savings even in the top 10%, which is now going to start working their way through the economy as well. So, you know, there to your point, there’s a bit of a lag effect here. But it’s also skewed by who owns what and again, the top 10% of income earners, they’re not being affected near as much in this economy as the lower 80%.

Adam Taggart 42:52
They’re not, but to the point you just made. This is why when you sort of slump into economic correction, you said a speed up as you go into the slump. Because as those bottom 50% Plus households are cutting back, their contribution to the consumer spending in a consumer economy is less than a per capita basis, right? So it’s only when it really starts creeping up into those those higher income households who drive much more of the consumer spending. That’s when you really start being able to notice, okay, well, things are really beginning to weaken here, because those heavy spenders are now starting to cut back.

Lance Roberts 43:31
And that’s when we pay attention to you know, like traffic flow on retail, you know, where, where’s the traffic flow going to? Are they shopping at Nordstrom and Macy’s? Are they at Walmart Dollar General? You know, because you see them start to step down, as the economy really begins to weaken. And we’re starting to see some of that now. Kind of very early stages of that, but we will eventually see more of that as we get into the holiday shopping season.

Adam Taggart 43:53
Yeah, okay. I’m going to start pulling in some of the discussions that I had with with alphatech tlo. And one comment he made that Forgive me, I’m kind of doing it from a fuzzy memory here. But he said that a lot of the approved spending that the administration has been doing all year, is basically coming up for renewal like it like it had an expiration on it, or it was approved for a certain period. And he basically said that approval period kind of ends now as we go into October, and then would need to be reapproved going forward. But you just mentioned, you know, we’re going into potential government shutdown right now. We also have a divided Congress, there’s an election year coming up seems pretty good odds that the Republicans would be doing whatever they can to thwart any future, you know, potential generous spending on behalf of the current administration because they don’t want the administration be able to claim you know, it’s still handing out sugar money going into the the main election. So how Oh, how likely do you think we’re actually going to have a government shutdown? I’m just asking you to guess because you’re not a political analyst. But if we do get one, how material have an impact you think it’s going to have?

Lance Roberts 45:11
Well, the material, so the odds of the government shutdown and probably like 90%, right now, in the next couple of weeks, so because they’re not going to get things done before them, again, it’s just the way it kind of Congress about now works. What this will lead to, of course, is a lot of debate, you know, finger pointing back and forth between both parties saying, Well, you know, they want to cut spending to these critical functions. And, and now, so security recipients aren’t gonna get their payments complete. Why we talked about this previously, during the debt ceiling debate, everybody was coming out saying, Well, you know, if we don’t, you know, if we don’t lift the debt ceiling, we’re going to default on our debt. No, we’re not going to default on our debt, no, Social Security, and Medicare gets paid, all that stuff gets done, we’re going to print money, and that’s gonna get paid. There’s gonna be other stuff we can’t find because of whatever it is, but those things will get paid. So we’re gonna pay Social Security with government shutdown, Social Security gets paid Medicare gets paid prescription drug benefits campaign, military gets paid, interest on the debt gets paid. Now, we may have to this is why, you know, during the Obama administration, remember, we had our government shutdown back then everybody was all up in arms, because we shut down the National Park. That’s what gets shut down, right, non essential spending gets shut down. So you lay off 900,000 workers and their home for a couple of weeks on furlough, they come back to get all of their back pay. So they’re not out any money whatsoever. But this is going to be the theater that we go through. And then at the end of the day, what will happen is that both sides will cave will sign a continuing resolution that funds the government for the next year. But importantly, what you don’t know is that that continuing resolution increases spending by 8%, every single year. So every time they do these continuing resolutions, that does the spending for the next year plus 8%. So everybody gets 8% More money. And this is why the debt keeps accelerating. You know, we just wrote an article on Tuesday talking about compound market returns. It’s a myth. markets don’t compound 8% annual increases in payments compound. And this is why if you’re if you’re spending 8%, more every year, every nine years, you’re doubling how much money you’re spending to the government, which is why we went from 9 trillion to $33 trillion since 2008.

Adam Taggart 47:31
Right, right. I do want to ask you about your markets don’t count pound article. So that that was really interesting. But so kind of just getting back to sort of a spirit of my question here. As we go forward from this point on, government wise, like I said, we’ve had a lot of sort of stealth liquidity that’s been pumped into the system this year that that pushed the recession back in time, we think, right, and gave some juice to the markets, right, in addition to the whole AI craze, and there was just more money sloshing around than than folks thought at the end of 2023 Going into this year. Do you think that that we’re less likely to see that type of stimulus sloshing around going forward from here, but my point is sort of like, Should we be considering this was one of the many issues we’ve talked about that could drop here, which is like there’s just going to be less juice, you know, goosing the system going forward?

Lance Roberts 48:27
Temporarily. Look, I did political commentary and political talk for over a decade. And, you know, did political and analysis work for almost a decade as well. And I’ll tell you this, I’ve interviewed probably every Republican Democrat person out there at one time or the other. And they always tell you the same thing, oh, we’re going to do this, and we’re going to do this. And it all sounds great on the surface, you know, the Republicans will always say, Oh, we’re gonna, you know, we’re going to cut spending, and we’re going to do these things. At the end of the day, they never do anything. They just kind of cave in and throw in the towel and go along with whatever spending is being done because they want to get reelected. And if you’re cutting spending, and this is why we never cut spending. If I cut spending to some social service, or some social program that hits my constituents, I don’t get reelected, and I want to be reelected. I like the perks of being in Washington. You know, it’s interesting, you know, we’re supposed, according to the Constitution, we’re supposed to elect people to represent the citizenry, in government, they are the servant of the citizen. And they don’t act that way. Right. They had, like, you know, they’re, they’re the king of the power and, you know, it’s all about being there and making the decisions that best affect their financial futures. And this is why we don’t make any progress towards fixing problems and we keep just kind of papering over either by bailing stuff out or just, you know, continuing spending, etc. So you can bet that when we get into a recession, you’re gonna have more spending being done. Now that we went through the 2020 situation where we were sending checks to household, you can almost bet that the next solution to the next crisis will be treks directly to the household. Why? Because it worked. It gave people money, everybody got happy, because everybody’s getting checks, damned it, that you’re gonna get inflation from it. But that’s going to be the go to going forward is every time we hit a problem, we’re gonna bail out banks or bailout companies, we’re gonna send checks to households, because that’s now the new formula for bailing out the economy. And until the point that you can’t do it anymore,

Adam Taggart 50:38
right. In there’s, there’s been a lot of talk, and I’m forgetting the name of the program. But, you know, that’s been put out there that, you know, we may just sort of bypass Congress, sending checks to people, and it might just be citizens have an account directly at the Fed, and the Fed just plops money in there for them.

Lance Roberts 51:00
Yeah. Same, same same outcome, though. You know, there’s

Adam Taggart 51:05
just curious, how, what sort of timeline would you put on that with guesstimating? That, is that the next crisis, or

Lance Roberts 51:12
I don’t know what the next remedy is going to be? Is it going to count for everybody’s gonna be just everybody gets a Social Security check all of a sudden, is that going to be the new thing? How do they remedy this? I don’t know. But the bottom line is, when you get to the next recession, the go to solution is more money to households. And the reason and this is, you know, we go back to 2008. You know, this is the big mistake that a lot of investors make about the Federal Reserve. They go, Oh, the Feds printing money that’s going to cause inflation, we didn’t have inflation, for 10 years, from 2011 years from 2009 to 2020. We didn’t have inflation, even though it was increasing their balance sheet by a large degree. Yeah.

Adam Taggart 51:57
I know, you’re saying I just want to parse it real quick. We didn’t see that money, we didn’t see a ton of that money necessarily escape into the economy to push up consumer prices. We did have asset price inflation that that

Lance Roberts 52:09
talked about, I’m talking about asset price, I’m talking about inflation, inflation, CPI, you didn’t have inflation, because it was an asset swap, you were swapping fed credits, basically the reserve balances of these banks for the bonds, and so the economy. So that’s why that’s why that was that whole kind of thesis was wrong for 12 years, because you had no inflation in the economy, even though that you were increasing the monetary monetary supply. And you were doing this, you know, the Fed was printing this quote unquote, printing this money, but they weren’t, they were doing an asset swap. When you sent checks to households, that was a totally different game, because now you gave demand to want to this to the demand side of the equation, and cut off the supply side by shutting down the economy. That was the perfect, perfect brew, for inflation, one to one. And that’s why you got such a massive surge in inflation. That was a very different structure than doing an asset swap by sending checks to households. And they’ll do it again, because it’ll get them elected. But it’s going to create inflation next time. You do it again, too.

Adam Taggart 53:14
Right. Right. And yeah, I mean, the everything you said is right, that, you know, checks straight to households is directly injecting that fresh new money straight in the economy, and it does goose the economy, right, which is what they’re trying to do. The cost of it is the inflation. Right.

Lance Roberts 53:34
To your point, to your point, you are right, right. We created asset inflation with QE. But that’s exactly what was intended. Back in 2010. Ben Bernanke said in his statement, and the reason that we’ve done QE one, it rolled off in June, the market declined by about 20%, going into September of 2010. And we and Ben Bernanke announces in September, the second round of quantitative easing, and he said in his statement, he says the reason we’re doing QE is to boost asset prices, in order to boost consumer confidence, which will boost the economy, which is your points. Exactly. Right. So the what the Fed knew was is by swapping the assets with the banks, it gave the bank’s money that they would go do proprietary trading with, they would run up asset prices, everybody would feel better financially because their 401 K’s up now. And their consumer confidence would improve and they go spend money exactly what you just saw happen earlier this year, market ran up 15% Consumer Confidence improved economic growth picked up. Right what you would expect to happen. So again, it’s a very different game that the Fed plays with QE versus what the government did sending checks to households.

Adam Taggart 54:46
So it is they’re different playbook reasons. The reason why I really want to underscore this is sometimes people say the, hey, no harm, no foul, it’s just an asset swap. Right. And, you know, we’re not we’re not causing prices to raise in That’s all fine. nobody even notices. Right? And of course, what happens is, is the people who own the assets benefit from, from QE, right. And as we talked about the top 10% of households, or 90%, of the financial assets, so the there is a great fail, there is a great harm, which is the acceleration of the wealth gap in this country. Right. And so it’s kind of interesting is like, both of those solutions, you know, they get to a point where this the cure is more painful than the disease. Right? In both cases, right. And at one point, you just, you raised the wealth disparity so much that you’re you have a revolution, right. And the inflation part that going directly households, well, there was there is that you basically kill the currency, and that, you know, everybody can afford anything because you basically destroy the currency if you’re if you’re on a long enough. So, you know, they’re talked about as strategies towards, you know, creating a solution, but neither of them really is helpful in the long run. And both have very high social costs. Right. But right now, it’s still looked at as a good that they’re trying to engineer.

Lance Roberts 56:09
Right, well, of course, and, you know, I find it interesting, you know, because you’re absolutely right, we’ve written articles about the wealth gap in America, and, you know, the disparity between the top 10%, the bottom 50%, who basically own nothing, and, you know, you kind of hit the nail on the head, you know, this is the prelude to economic historically, all throughout history. This is, you know, when the rich get rich, and they began to exert control and power over the economy, that’s when you have revolutions. And you kind of think it’s kind of a repeat of history, you know, we’ve got governments now trying to censor speech, and it removed the Second Amendment, and you know, all these types of things, you know, you know, and this is all kind of that Prelude that we’ve seen, historically, time after time, after time, when you have this big wealth gap, and you begin this kind of social repression, that’s what ultimately leads to economic revolutions. I’m not talking about pitchforks and torches, and those types of things. I’m just saying, at some point, you get the masses to stand up and they vote differently. Or maybe they do go pitchforks and pitchforks and torches, but, you know, there’s eventually an end game to that suppression when it occurs, and not just the suppression of rights, but the suppression of wealth.

Adam Taggart 57:22
Okay, well, I gotta, I gotta manage my blood pressure here, because we could, we could really get a good rant going on this. But we got too much more to talk about here. Real quick, just an ending this topic of the Fed. I gotta find the chart I just had here. Let’s see, here it is. Nope, that’s not it. But basically, I just wanted to put up another milestone here, which is the Fed balance sheet. If I can find it here. We should celebrate this, I suppose. So cutie, has been continuing on in the background. And Hurray, we’re now down to just $8 trillion. Right? So trillion bucks? Yeah, we almost almost reduced the Fed balance sheet by a trillion dollars. And we should crack below the 8 trillion mark pretty soon. So you know, that’s, that’s not nothing. Right. It’s still double what the Fed balance sheet was prior to COVID. Right. I’m not mistaken. Right. I think we’re around 44 trillion or so then. Right, of course. 800 billion going into the right before the great financial crisis. Right. So we’re still 10 times where we were back in 2008. But I guess it is notable to show that Qt does continue in the background. So with the feds, you know, continued well, you think they’re done rising, raising rates, but but with the high rates that we have right now that that look like those stay high for longer? We still have Qt happening in the background. And that ultimately, you know, is is continuing to pull, you know, increase that gravitational force that’s pulling the economy but but also to a certain extent financial asset prices down to right. That’s correct.

Lance Roberts 59:07
Yeah. Okay, yeah. This is why looking at going into next year, I think there’s real risk to stocks, you know, I’m right now I’m bullish in the short term, because markets are oversold sentiments negative, I think we get a good rally here. Once that rally is over, then you know, it’ll be over and then we’ll have to deal with what happens next. And that’s why I’m saying next year, all bets are off. I have no idea what next year is gonna look like but I think next year is the year where you’re not going to want to probably be in equities that much.

Adam Taggart 59:36
Okay. It’s a great transition to the next set of topics. So I want to want to get your opinion on some of the things that affect TLO mentioned, as I mentioned, big thing he and I talked about was the bear steepening that’s going on in the yield curves, right? So yield curves get inverted, right? Where the short end of the curve is higher than the long end of the curve. Right and Um, the curve can correct basically by either short term rates coming down, right. And that’s what everybody has been hoping for forever with the Fed pivoting, right. And we still don’t think it’s going to happen anytime extremely soon, short of a massive crisis, it can also correct with the longer end of the curve, those yields beginning rising to get closer to the shorter end. And that’s what’s sort of beginning to happen right now. And one of the things that offsets sort of two things, he said that the, when the short end of the curve rises, you know, that has some impact on the economy, it increases the cost of debt to a certain extent. But the long end of the curve, when that starts rising, that increases the cost of debt. But because it’s its debt for a much longer duration, he said, a generally has about 10 times the impact on the economy then rises in the short end of the curve. So when the bearish steepening starts happening, it’s like, that is really rough for the economy, because that’s really pulling, it’s really increasing with the gravitational force of the cost of debt. Right. So that was one thing he just wanted to make sure he’s like, like, these things are not even right, they’re not equal, a rising of the long end of the curve is much worse for the economy than arise on the short end of the curve. Secondly, he said markets in his mind, he said, they’re, they’re, they’re testing. They’re basically testing the prices right now, where they’re just like, hey, you know, like, like straws on the camel’s back, if you will, like, hey, you know, like, it seems like, you know, with these additional rate hikes, like, like, things are gonna hang in there. So you know, how much higher can rates go? Can we can we just keep on going as rates inch up here and show up here? And so far, nothing’s broken. Right? So the markets are like, Okay, well, maybe maybe we can get away with a little bit more, right. So it’s kind of like straws on the camel’s back, where they’re just trying to see how much they can get away with, but but highly likely, at some point, you’re going to put on one strike too many, the whole thing’s gonna break. And that’s where the real risk is in stock. So basically, he’s just saying like, like, you know, earnings estimates haven’t come down yet. You know, they’re just seeing how much they can get away with at these higher rates. They’re not, they’re not willing to basically, you know, adjust their forward projections and begin to actually, you know, do the work that maybe we should do today, given what’s going on, to start bringing asset prices down. They’re like, I don’t know, no one’s really causing much of a fuss yet. Let’s keep on doing this. So anyways, I’m curious to get your reaction to both of those.

Lance Roberts 1:02:43
Well, first of all, bears evenings are great for bond buyers, because, generally, Bear steepings are the beginning of your best rates of return for owning bonds, looming long duration assets, primarily for the reasons that he’s that he’s right about, which is that, you know, is an impact on the economy. And look, you know, right now, everybody is short term bullish on this is why they’re increasing estimates. And this is why they’re increasing outlooks. And they’re all thinking that it’s a no recession scenario. We’re back in 1995, despite inverted yield curves and everything else, which again, is the subject of the article that I’ve just published on Friday at the website, saying, you know, that’s not the case, this is not 1995. But because nothing happened last year, when everybody was expecting a recession. Now, we’re assuming a no recession scenario, there’ll be wrong, but it’s gonna, you know, nobody’s willing to do that. Because again, being bearish does not make money. And as Wall Street goes, I want to make money. I can’t sell an IPO. If I’m bearish on the markets. why would why would you buy my IPO? If I’m telling you, the markets are about to go down? Right? How would I get arm to go public? If I’m telling you the market is going to go down? Right? So how would Instacart go public? If I’m telling you the market is gonna go down? Instacart is probably a crappy company. You don’t I don’t know. But I’m just saying, you know, you know, their valuation was cut by two thirds before they went public. Why would you want to own it? Right? You know, so it’s just, you know, these are the things that you need to think about what Wall Street’s telling you short term, is them trying to sell you a product, you’ve got to be thinking ahead. I just had a conversation with a guy. He’s one of your your viewers, he email me. And he’s telling me about, you know, he owns a lot of stuff. And, you know, in one to two year treasuries, he’s kind of laddered out over 18 months, and he’s very happy. He’s got nice yields on his money for 18 months. And my question back to him is great, that’s awesome. Nothing wrong with it. What are you going to do in 18 months, right? He’ll probably be zero in 18 months on those same instruments. So where are you going to go to then? And so this is why you’ve always got to be thinking about your investments as kind of like 3d Chess, this is where I am today. This is where I’m going to be in six months, eight months of where am I going to be in year, two years to five years to 10 years and you got to start thinking out ahead of where the cycles go to. And again, this is why you know with with buying bonds, So you know, every time I get an opportunity, I keep buying more bonds because my window is 18 to 36 months, but the the the revenue potential or the income potential from that, from capital gains is phenomenal because of where yields are going to be, because of all these very things that we’re talking about, where yields are going to be as a function of that, and it’s a function of math, it’s not really a function of guessing the only thing that could derail that trade was for some reason, we are able to go back into the 1970s and slip our economy from 80% services to 80% manufacturing, and wipe out all the debt and get rid of the deficit and have no inverted yield curve. That’s the only way that you’re going to derail that bond trade going forward over the next few years. And I just can’t find the math to make that work out.

Adam Taggart 1:05:50
Okay. So so your your thesis for investing big and bonds right now is the the situation that’s going to prove you wrong is magic happens? And you don’t believe that’s going to be the case?

Lance Roberts 1:06:03
Oh, look, no thanks. I’m just telling you things can happen. Could I be wrong in that trade? Absolutely. But there’s very few trades where you get a setup for something to where the outlook is as clear as it is, again, 2008 was a great example of that, at the bottom of the market in 2008, after Lehman blew up, bonds on all kinds of companies that were just deemed to go bankrupt. And there was no way these companies were going bankrupt, they had too much cash on their books. So but everybody was just throwing bonds out, you know, baby with the bathwater at that point, because everybody was going bankrupt because of the financial crisis. And there’s, that was one of those opportunities to where you could buy stuff, you could buy depressed stock prices as well. Because valuations were cheap, everybody assumed that the market was going to zero, and that just simply wasn’t going to be the case. So again, you know, there’s these opportunities, you get where the outlook is, is pretty, pretty clear. You just got to give it time to get there, it’s not going to happen in three months, it’s not going to happen in four months, or six months, or maybe even a year, but you give it time, the math is simply going to work in your favor.

Adam Taggart 1:07:10
Okay. So I don’t think elf view differs too much of you in that, which is, look, you know, one of two things is highly likely to happen. Right, which is the wheels come off, right, something breaks, right, and that at today’s interest rates are higher for long enough. We think the odds of that are pretty good for many reasons we we’ve discussed, or the Fed gets inflation down under 2%. Right? I don’t think that’s necessarily the more likely scenario in the next 2012 months or so. But who knows what could happen? Right,

Lance Roberts 1:07:44
the Fed will get inflation under 2%. No doubt about that.

Adam Taggart 1:07:47
Right, and eventually, eventually, eventually get there. Right.

Lance Roberts 1:07:52
So it’s gonna get there, and they’re gonna break something along the way doing it, but it’s, you know,

Adam Taggart 1:07:58
and that’s my point, which is it’s from our, you know, count seed quarterbacking, you know, we think it’s more likely that probably something breaks before the Fed gets gets into there. But But either way,

Lance Roberts 1:08:11
think about this way real quick, Adam, right. So in March, we had regional banks about to go bankrupt because of the depress collateral, right? These weren’t bad banks, right? These these banks own top quality collateral for their banks for their fractional share banking. Because rates were at 4%, on the 10 year Treasury that the values of that collateral had dropped so much that we had to basically close banks, right, what things happening to those banks right now at four and a half percent. Right. Well, that collateral didn’t improve magically, overnight.

Adam Taggart 1:08:43
No, it didn’t. And stuff. I’m not gonna get a chance to really delve into you with you. But But like Jamie Dimon came out this week, and basically said that, you know, folks should start preparing for the potential he’s not saying it’s gonna happen, but for the potential that rates could go to 7%. Right.

Lance Roberts 1:09:01
First of all, I’ve written so many articles about Jamie Dimon over the years, he’d see just used up out of his mouth. Just to make headlines, I think, look, the guy is a member of the Federal Reserve. And behind the whole scenes, there’s There’s Jerome Powell. And over here is Jamie Dimon pulling Jerome Powell strings. Okay. You know, when and if you notice lately, JP Morgan has been outperforming other banks, because everybody’s now assuming that other banks are about to fail, and JP Morgan is gonna buy him. So we’re eventually going to wind up this is like, this is like the series the Highlander right there can be only Right, right last. Yeah, it’ll be JP Morgan. But don’t buy it. Look, he says so much stupid stuff over the top. I’ve written so many articles about stupid stuff that he says that makes no sense whatsoever. And why he says it. I don’t know if it’s just to get headlines or whatever it is. But he says stuff is just complete nonsense. It’s 7% on Fed funds rate. You’re going to be in the Depression my friend,

Adam Taggart 1:09:58
right? Okay. So that’s what we were going To target but if we had more time, which is let’s just go through the mental exercise of what a 7% world would look like, but you already gave the punchline right? Well,

Lance Roberts 1:10:06
by the way, you still want to separate that boundary.

Adam Taggart 1:10:09
Yeah, no, I know. So, you know, everything else gets gets nailed, bolted on top of that. Right. So I mean, it is almost inconceivable in this highly indebted economy, that anything would work in that scenario. But what’s, what’s meaningful of it is we have the CEO of the largest bank, right, most influential bank, just saying, Hey, you should start thinking that rates could go even higher than where they are right now. Right, contrary to your defense done thesis, right. So I’m just saying just to open that mental space, right, for a minute.

Lance Roberts 1:10:42
I did, and about blew my brain. Yeah.

Adam Taggart 1:10:47
Well, so. So anyways, it said, but all of this is sort of why, you know, we’re so concerned that a breakage is the probability of a breakage is scarily high. Right. So where I’m going with this is, so ALF says, look, the Fed is playing for its credibility here, right. And so it’s not going to pivot until it gets below its 2% inflation target, which is probably it’s probably not going to get to before something breaks. So because it’s trying to retain its credibility. It’s it’s going to allow the markets to take a fair amount of pain until the world comes to it on bended knee and says, Jerome Powell, Powell, please, please, a pivot now, right. We know you’re trying to get inflation or 2%. We don’t care. Just play. You know, Hank Paulson, you know, on his knees in front of Nancy Pelosi just pretty pleased where you pivot. And that’s when the Fed will pivot. So with basically office saying is, is like, we should expect a fair amount of pain to happen before we get that that turning point, right. And so right now, he says, I mean, it’s kind of hard to be long anything right now, because he expects during that pain period that stocks will suffer, but bonds will suffer too. He says, once the Fed announces the pivot, he expects bonds treasuries to rally super hard. So he is right there with you that there is like a massive opportunity coming. He’s just saying, you know, if you’re buying in now, which may well be the right thing to do, right, just know that you might be buying into a downward trajectory, until such time as the Fed is finally forced to get on the horse to rescue.

Lance Roberts 1:12:28
That’s, and that’s a fair statement. And the problem with when and you could probably wait, the problem with waiting is, is that to his point, as soon as the pivot occurs, and this is an article that I’m writing for next week, you have the largest short position on bonds right now that you’ve had since 2018. And if you don’t remember what happened in 2018, that was when we had the Fed taper tantrum, and then the Fed was bailing out hedge funds in 2019, cutting rates to zero yields moves so quickly, at that point, you never have the opportunity to buy them, because what will happen is yields are going to jump immediately when that occurs, you okay, well, as soon as they come back down a bit, I’ll buy them right there just moves so much so fast, and they’re just going to keep going down. And you know, your bond trade will be over before you know it, the whole bond trade from where we are now back to where we’re gonna eventually bottom will be something that occurs in a month, maybe two.

Adam Taggart 1:13:26
Okay, yeah, and we have talked about that in the past. And so there, there are several different types of investment opportunities. A lot of it’s sort of been said the same thing about a lot of like the precious metals, mining space, which is like when it catches fire, you gotta be in it beforehand, because it moves so fast, you’ll you’ll miss the vast majority of the move. If you don’t already have an initial position, you’re saying the same thing on bonds? And I think more than your words, Lance, you know, you are, as you’ve shared on this channel, you know, you are measurably preparing your client portfolios for this, but it sounds like in your personal portfolio, you know, you are saying hey, I’m happy to take that risk now, because I think the upside is so big.

Lance Roberts 1:14:07
Do you think you think I’m bullish on bonds? Michael, wave Woods is buying long dated Treasury calls? So I mean, he’s, he’s taking he’s taking my position and putting on steroids and he’s buying leather and call options on bonds. So

Adam Taggart 1:14:20
I heard he’s selling blood plasma, you know, to

Lance Roberts 1:14:23
come up with Yeah. You think? You think I’m taking a bet he’s, he’s swinging for the fences. And hey, he’s he looked, this guy knows more about bonds than than anybody I know. And way more than I do. So I’m just telling you what he’s doing. So great. And

Adam Taggart 1:14:39
just a reminder for folks, Michael will be presenting his latest thoughts and outlook on the bond market at Wealthion. upcoming conference in three weeks. So I’ll talk more about that at the very end here. All right, so we’ll start to wrap up here, Lance. You mentioned the pain that the banking system went through with lower yields that we have right now. Right. So higher yields just put more and more squeezed on the banking system. And I just want to share this chart real quickly to show that the squeeze continues. Right. So the blue line here is capital flowing into money market assets. The red line here is basically deposits on banks. And you’re seeing this, like just they used to, you know, go in lockstep right up until the banking crisis. And then basically, more and more consumers just got the memo of like, hey, I can get a better return, actually, without the banking system risk by just being in a money market fund or being in T bills directly. So, you know, the pain continues. And obviously, if yields start to go from here, the banks just begin to suffer even further.

Lance Roberts 1:15:45
Yeah. You know, in talking about Jamie Dimon, he’s so disconnected from the average American, this is kind of to my point. And you know, he’s so many statements that he makes he’s so disconnected from, you know, how the average American works and what happens in the economy for the average American. You know, JP Morgan pays zero interest to their deposit holders, but they will give you a 6% CD, as long as you have $5 million. Okay, yeah. So as long as you’re one of the wealthy few, he’s happy to pay you some interest on your CD deposit. But if you’re one of the smug people with, you know, just the average balance, yeah, you get nothing, my

Adam Taggart 1:16:23
friend, you’re making my whole point for me. Yeah. So if you’re one of the people that we decided should benefit from QE, we’ll come over here. We’re going to take great care you, you know, if you’re, if you’re one of the great unwashed, sorry, but all right. So, housing just real quick, another milestone 30 year mortgages are now at a 23, year high. Somewhere in the mid sevens, the article that I looked at said, 7.31% mortgage, I’ve seen some that are quoting higher, if you actually go online, and look at that 30 year average rate in the state of California, which is where I live. That’s 8.46% right now, I mean, these these are numbers that would have caused certainly, homebuyers buyers, but just realtors in general, I mean, it would have caused their heads to explode. If we had told people in 2021, that this is where mortgage rates were going to be in two years, they just honestly wouldn’t have believed that. And yet, you know, the housing market hasn’t triggered yet from a pricing standpoint, from a transaction standpoint, pending home sales are the lowest on record right now. So I mean, the market is in deep, deep sub Arctic freeze. Right now. And I guess just the question is, is, you know, what happens next? There’s still people holding on to that that narrative of like, well, just everyone’s just not going to sell. And so prices aren’t going to come down. As you and I have talked about, you know, I don’t think that’s like the case for a whole bunch of reasons. But But I guess, the higher these mortgage rates go, the more likely at some point this market is going to break. Do you agree?

Lance Roberts 1:17:59
Yeah. Well, you know, two things are going on right now, first of all, you got you got new home builders, right, that are financing loans at four and a half or 4.4%, right now for two years. So I can go get a loan from a home builder for a brand new home. And for four and a half percent for two years. And I’m just hoping that rates are going to be at the end of that two year period rates are gonna be lower when I have to refinance. So, you know, that’s helping buyers get into homes right now and existing home homeowners. They’re just not selling? Why would I sell my house with a 3% mortgage or a 4% mortgage? Should we get a mortgage, a seven and a half percent, that makes no sense. I’m just gonna stay where I am. So you’ve kind of got this real, you know, dichotomy of things that are going on that’s keeping, you know, the housing market, but keeping the prices elevated, right, because new home, new home, builders are able to charge a high price for their home because they’re the only supply. So they’re providing supply, they’re providing the financing, they can charge the price and people are willing to pay it. So that’s keeping prices elevated, and then nobody’s selling the existing home. So that’s keeping the previous price where it was because what drives the price lower is transactions, if there’s no transactions prices are gonna stay elevated. So it’s a confluence of events. That’s, that’s interesting. I don’t know how long it lasts. But at some point, I think you’re gonna see people come to market in force, and maybe that’s when rates come back down again, all of a sudden, we see just a massive deluge of inventory hit the market that you know, it kind of acts like a backward crisis, almost. I don’t know what I don’t know how this is going to end up. But it’s a very interesting situation we’re in.

Adam Taggart 1:19:35
Yeah, and you know, so. So, housing prices, housing price corrections tend to happen on a much lower trajectory than financial asset price corrections. I wonder if if we do get a housing market correction, material housing market correction. I wonder if this one might be sharper and more violent than previous ones because we’ve kind of kept everything pent up And stasis here. And you know, if when the dam cracks, you know, the transaction volume might be so vast given that there’s been so few that prices could really fall far fast.

Lance Roberts 1:20:11
Yeah, they could get again there. I think if you start seeing homes hit the market, and prices start coming down, then people panic, because they want to lock in that high or they were already going to sell anyway, there was waiting for rates to come back down. And if prices are coming down, even though rates are lower, which is backwards from where it should be, but then you start getting this kind of this rush to sell everybody trying to capture the latest highest price, which is declining. And again, it’s just a thesis, I don’t know. Because normally lower rates would suggest higher prices, but to your point price have never corrected. So what could cause that is going to be interesting to see how this this ultimately ends up. I don’t I don’t know how it ends up. It’s just like, I know, in my area, prices are stuck. They’re not moving anywhere. And home sales are fine house comes on the market, it sells pretty quick. So that’s just my area that

Adam Taggart 1:21:01
yeah, I just had an interview, I was interviewed by Michael Oh, gosh, Bolsonaro Gosh, I’m murdering his last name, I’ll look it up while we’re talking and let folks know the correct pronunciation. But he’s sort of like an Gerli, where he’s got a very popular real estate YouTube channel. And he was out here visiting the Bay Area, kind of to look at the housing market out here. And very kindly invited me to go into channels. So we talked macro, but you know, another guy who’s been involved in real estate for a long time, and he wants, you know, just just so you know, you know, veteran like him, thanks. Okay, you know, this, this is gonna break in, it’s gonna break that when it does. He’s,

Lance Roberts 1:21:47
yeah, I don’t disagree breaks. I just don’t know how it breaks. And I think it’s gonna be very different than what you would think because we’ve had so many artificial influences that causes problems. So I’ve been part of it now, too. We talked about for 3% downpayment mortgages that that boosted prices, you know, we’ve done all these interventions that have created this, this big price anomaly, and we price people out of your home loan affordability is completely through the floor right now. So you know, it just at some point, you know, it breaks, I just don’t know how it breaks. And, you know, the you can fix this problem very quickly by making everybody pay a 20% down payment, getting rid of all the nonsense, and that would bring prices down and the price home prices would track inflation over time. But, you know, considering we’re never gonna go back to that type of game plan. This is going to end badly at some point, we’ll have to bail out. I just don’t know how it does that.

Adam Taggart 1:22:41
Yeah. Well, whatever happens, folks, we’ll be tracking you here. I will be honest and admitting, I’m, I’m shocked. And at this point, I’m just kind of fascinated. Yeah, how long the stock markets, the housing markets been able to kind of hover near record highs, without adjustment. Given all the factors that Lance just mentioned out there, everything from the, you know, seven plus percent mortgage rates to the record on affordability levels to the fact that the Fed is not buying, what was it buying, like 60 billion of mortgage backed securities a month when it was doing QE. So that supports long been withdrawn. I mean, it is kind of amazing. But anyways, we’ll track it. And we’ll report on how things go here on a week by week basis going forward, folks, are you gonna start wrapping up, we’re gonna get your trades in one sec, Lance, I just want to put this chart up really quickly. And I found it interesting. So initial jobless claims, jobless claims numbers came out this week, they continue to go down, which is a positive thing, right shows signs of strength in the the jobs market course this is put out by the US government. If you look at the Conference Board’s job data, which are the red lines here, they’re very, very contradictory to the jobless claims numbers. So you know, there’s still a lot of smoke and uncertainty in the jobs market in terms of what’s really going on. But I think it’s increasingly becoming a story of whose data you’re looking at, to tell you really what what reality is on the ground here. We don’t have a lot of time to go into this, but I just want to give you a chance to comment on that. And anyway.

Lance Roberts 1:24:17
Yeah, no, no jobless claims are always low this time of year, just from the way they’re collected. Because, again, you just had a bunch of seasonal hires for back to school, and teachers are going back to work and those type of things. So you always have very low jobless claims this time of year, and then they rise into year end. So again, the recent readings, not surprising, you know, keep a watch on the four week moving average of claims, what we call continuing claims those have actually risen a bit here. So in other words, people are having a tougher time quitting a job and getting a new job. So, you know, that’s kind of the early kind of warning sign. But again, you know, it’s just, you know, this is data. It’s a it’s a survey sample, there’s lots of mistakes with it. Mathematical adjustments and again, And it’s kind of like the employment number, you just kind of kind of take it with a grain of salt and just, you know, kind of put other indicators with it to kind of figure out what’s really going on.

Adam Taggart 1:25:08
Okay. I’m just gonna mention this real quick, just so we can talk about it later on if it continues to sort of metastasize. But so China, we’ve talked about the troubles that their real estate market has been having it as the world’s largest asset, as measured by Goldman Sachs. Latest news on that breaking, today’s we’re recording is that ever grands chairman, has just been arrested for quote, unquote, crimes. I don’t know what kind of crimes. But, you know, are we witnessing kind of the implosion of the world’s largest asset here, right, and this is straight from the Chinese playbook. You know, heads up, gotta roll looks like they decided the chairman of Evergrande. Now, he’s got to do some, some hard prison time as the scapegoat for this, but I mean, when you just look at their, their, their mortgage lenders, their property developers, their bank lenders, it’s just, it’s looking pretty grim at this point.

Lance Roberts 1:26:03
I mean, this is the this is the country that was building entire cities that nobody lived in, right. I mean, they were building these these, you know, train stations, these massive train stations with no trains, you know, they were just spending all this money developing this real estate that had nobody to live there. And the whole thesis back in 2008 910 11 was is that all the people from the rice paddies, were going to come move into the cities and become city workers and that just never, that never, that was never going to happen, and it didn’t happen and so now you’re paying for it was an inevitable consequence of what would happen and why people think it would wouldn’t have happened is beyond me, but you know, here we are.

Adam Taggart 1:26:41
Yeah, I don’t know enough about the the ghost cities themselves, but I gotta imagine they’re challenged once that’s been built to find the capital to maintain the buildings in these go settings when cities when nobody’s living there, right. So you just have these structures that are just depreciating. Right? So anyways, it maybe this is just logic and karma, you know, catching up to this whole Miss allocation method misadventure of malinvestment. But we’ll see but I want to flag it because the contagion risk from this could potentially be be large. I don’t know time to go into it this week. But I want to flag it in case it continues to build steam from here. All right, trades, Lance, I think you said you didn’t do too much over the past week. But But what did you guys done? We didn’t

Lance Roberts 1:27:27
do any trades this week. The speak of and again, we’ll probably our trades will happen next week. As we kind of start positioning for kind of a year in over the last several weeks, we’ve been increasing our equity exposure, we’re pretty much fully exposed to equities and fixed income right now in our portfolios. So we’re kind of where we want to be heading into year end. So now we just need to let the markets kind of do the workforce.

Adam Taggart 1:27:49
Okay, great. All right, folks. Well, as we wrap up here, I want to remind folks that tickets are still on sale for the Wealthion fall online conference, which is coming up fast. Now. It’s on Saturday, October 21. If you can’t watch live, don’t worry, everyone who registers is going to get replay videos of the entire event, all the presentations, all the live q&a interactions, to go sign up for that conference, just go to wealthion.com/conference. And you can still, if you do it this weekend, you can still lock in the early bird discount price. That’s our lowest discount of I think 29%. And if you’re an alumnus of previous conferences, check your emails, you should have one for me with a discount code that’ll give you an additional 15% discount off of that, as we remind people every week, I mean, first off, folks, the conference is gonna be a great conference in general, it’s the best faculty we’ve ever recruited. But there’s so much going on right now that it’s an incredibly timely event for really helping you understand, you know, how to play your positioning going into 2024. Similarly, whether you’re good at a conference or not, you know, we all as investors have to make decisions, how are we going to start, you know, either protecting ourselves or positioning ourselves to profit, from all the things that Lance and I just talked about going into next year. If you’ve got a good advisor, who is advising you on that taking into account all the things that Lance and I talked about here, great, stick with them. But if you don’t have one you’d like a second opinion from wonder does, maybe even Lance himself and his team, they’re at Ria, then consider scheduling a free consultation with one of our endorsed financial advisors by Wealthion. To do that, just go to wealthion.com Fill out the short form there only takes you a couple of seconds. These consultations are totally free. There’s no commitment to work with these guys. It’s just a public service that Lance and our other great financial advisors offer to help as many people as possible figure out how to position as prudently as possible in advance of what might be coming down the road you know, a lot of the issues that Lance and I just talked about, if you if you basically get your reason for living by watching these weekly market recaps with Lance and I week after week after week, please let us know by hitting the like button and then clicking on the red subscribe button Hello, well, there’s that little bell icon right next to it. And as long as you guys keep wanting us to do this, Lance and I will do this week after week after week. See, Lance, it’s not just the intro. I gotta get creative on the outros as well.

Lance Roberts 1:30:11
Yeah. Oh, I get it if your sole reason for living is this weekly update? We got some other issues to talk about.

Adam Taggart 1:30:19
Well, that’s Look, I’ll let you have the last word as usual.

Lance Roberts 1:30:21
Oh, that’s it. You know, look, I think we’ve just got to wait to see how October starts. We’ll kind of evaluate it from there. You know, are we gonna get the seasonal rally we’ll see. And then, you know, we’re positioning for it now. But you know, that could change. So we’ll talk about it next week.

Adam Taggart 1:30:36
All right. Sounds great, Lance. Thanks so much, buddy. Everybody else. Thanks so much for watching.