🔴 Will Corporate Bonds Cause the Next Recession? (w/ Jeff Gundlach) | Real Vision Classics


Thanks very much great to see you again thanks for doing this I know you’ve not been well and neither was have been so The time of year is that time of year and I’m very cold Los Angeles so much I want to talk to you about but I want to start with the stock market and there’s something that has been on my mind And that is December Did something change in December or was it just a glitch as it’s been nailed? Well, I I think that the attitude about jpowel really changed a lot during December it can’t change twice first it changed in a way that Accelerated the stock market lower and I think that also has something to do with year-end I think there was some people adjust things at your end. There may be some selling and the like but Powell was thought to be Different than the other Fed chair I fell for it, too. Yeah, he was supposed to be Non-academic, he doesn’t have a PhD in economics. And I think the word was pragmatic. Yeah for jpowel and then he showed up at After the rate hike at the press conference and he sounded very different than being pragmatic. He’s basically said Were on autopilot with quantitative tightening which is the last thing that a falling stock market needs to hear because quantitative easing seems to be correlated with With higher prices so quiet of tightening. It is interesting the global stock market really accelerated to the downside in October Which is when QT was ramped up to a maximum of 50 billion per month So pollicis were on autopilot which the market was shocked to hear because he thought I was pragmatic and wouldn’t be rigid and his thinking and then he also Used the word models a lot. Yeah inputs to the models and All of a sudden he sounded as wonky as any Fed chair Ever gets and kind of detached from being pragmatic at the market didn’t like that at all so it went accelerating I think about dropped eight hundred points for money hoping his mouth to the end of the press conference and that Scared him and we had a complete 180 From the pragmatic Powell to the Powell put which wasn’t supposed to exist at all. No, and I don’t think I can remember rhetorical shift so rapid and so major From a Fed chair, but it’s just a few days later with the stock market and freefall It’s all about patience and I didn’t really ever say really that we were Closed-minded on quantitative tightening and we tried it out many Fed officials to go along with this. So then it was that fateful afternoon We was on stage with Bernanke and Jan Yellen And suddenly it was one big dove fest and a love fest probably ever since then It’s like Powell put and feds got your back and also year-end kicked in where I think there was a lot of rebalancing And I think it started maybe just before your end. So put in the low intraday on December 26 The low close was the 24 and I think the rebalancing was pretty major because stock market something was negative Some significance for the year and the bond market eked out a positive return that leads Rebalance errs to sell bonds buy stocks and that kind of started happening So I think that fundamentally I think we’re in a bear market global equities peaked way back on January 26th of 2018 right in the center of the coordinated global growth Narrative, which was pretty well supported by the data. It was it was true, but it’s all based upon Stimulus and the like and so you had a classic kind of rolling top formation bear markets usually start are preceded by something insane happening and the insane thing goes on far longer than people believe that it should or could So in the 1990s it was calms You know these IPOs were floated with no sales. Let alone. Yeah net revenue and Succeeded at IPO and I don’t know seven It was the insane lending standards and leverage and the structured finance market Which went on for about two years longer than seem like it should have or could have and this time it was cryptocurrency So in 2018 or 2017 rather you had this parabolic rise in Bitcoin whilst use as a placeholder Where suddenly it was a mania and that was observed because of Long Island iced tea changes names a Long Island blockchain Kodak which had 100 million dollar market caps probably nothing really there. They said they’re gonna do Kodak coin is if they could do that with a hundred dollar market cap and The stocks went up 400% on these announcements which was very reminiscent of the mentality of the dot-coms Then Bitcoin started crashing About a month before the global stock market went to its peak. So that was the front edge of the beginning of I think a risk bear market and then global stocks to generate 26 and then utilities and then Transports and then the Dow and then the S&P and finally the Nasdaq Went to new high into the early part of the fall and that was down to the fangs and then it was down to Amazon and Apple and then Amazon gave it up in an Abbe. Apple announced we don’t really want to tell you how many phones we sell Because it sounds to me like it’s not good news Otherwise, they’d probably be fairly comfortable of reporting it so down We went and we had what people call a bear market 20% not on a close in the S&P but intraday and every other index to the 20% but that’s obviously an arbitrary number It’s more of a mentality. Yeah, it’s more of a Change in preferences and way people think about things so we’ve had this spectacular multi-week retracement but I Just don’t think things are fundamentally healthy Yeah that’s what it feels like because I Looking at those markets in in so October November and then into the depths of December The numbers were bad at the headline stage, but when she looked under there is the plumbing It looked really as though things got shaken quite severely and yet we’ve seen this V balance Yeah, and I’m interested because people who’ve been around for a long long time who were very worried in October November December Seem very sanguine again now Which I find Curious because it is that all because they suddenly believe that the Fed Has turned around and they are gonna slowly I think you’d have to point to the Fed because the economic data continues to deteriorate And we’re starting to see reversals and unemployment claims now rising on a four week moving average basis. We’re starting to see Earnings estimates collapsing. Yeah, margin estimates collapsing sales dropping You see housing is negative Surprises confidence d’etre, none of these things are at the alarm bell recession, but they’re getting fairly close I mean we were miles away from anything resembling a caution signal on the economy back in September but there’s been pretty much across the board deterioration and the economic surprise data and just data changes and the like High-yield spreads have come in a lot from their wives of December But there’s they still have a look that it’s not doesn’t really all that long term Sanguine, and I think what people will increasingly understand is just how out of kilter our debt Situation is at the federal level and forget about state and local which is another problem But just focusing on federal I mean in 2018 for the calendar year not the fiscal which done in September before the counter data was just announced recently the national debt increased by one point four eight trillion dollars now that’s about seven percent of GDP and This is when we’re supposedly in a good economy with three percent real GDP five point three nominal through September we don’t have the data through year end yet and You have to ask yourself Are we really growing at all in an organic way? because the most recent data point on GDP 5.3 is less than 7 percent of GDP right in less than the growth in the debt So if we hadn’t grown the debt by some percent of GDP, I guess we’d have a negative economy right now And so what happens one has to ask? During the next recession which maybe is coming again. No alarm bells Blaring right now when it comes just how big is the deficit going to be foreigners are not buying our debt anymore The Fed for now is not buying our debt and maybe change their mind again I mean again one of the most amazing reversals auto-pilot cutie to last week an admission They’re discussing using QE as a regular tool. Yeah, not just emergency even when you’re not zero interest rates You don’t just use it as part of your ordinary toolkit. So what happens when the next recession comes will the deficit be? Four trillion three trillion. I don’t know but Usually the debt-to-gdp ratio goes up by 4% the deficit. Sorry deficit GP ratio goes up by 4% from the good times to the recession Sent me we’re gonna go to 11% Maybe worse than that and people are starting to realize that The supply of bonds relative to the interest rate that we have right now Seems like it’s a mismatch that I just think if retail is supposed to be buying the bond market Maybe if you have if you’re floating trillions of dollars of bonds, maybe you need more than the yield on the 2-year Treasury To get the ten-year sold in the 30 years old. So we’ve had the Pavlovian reaction interestingly when the stock market dropped we got a nice bond rally and but yet it kind of held as Stock market has rebounded bonds have fully gone quiet. They haven’t gone back to 340 on the third year. We’re hovering at 3% Right, so it’s interesting that the bond market is so quiet When these debt issues seem very big. There’s also 700 billion dollars of corporate bonds maturing this year and more next year and If they continue Qt, we’ve got more on top of that. So it seems to me that the yield curve should be steepening and particularly if The Fed is really going to get easy again And it’s thinking about maybe doing q:e or needing to yes have suggests to me that maybe long rates need to rise Yeah this interest because you’ve you’ve been talking about this debt issue for a while recently. We’ve become more vociferous about it Yeah, I was I was Talking about it really for about 10 15 years, right? But I announced in 12 or 13 that there’s good news people as a Debt worrier we are actually in a stable place Where we’re not going to worry about it for the next few years because debt to GDP will actually stabilize deficit doesn’t have the Entitlement compounding problems for the next few years. I said would probably have to start worrying about it in 18 or 19, right? And so here we are but but it’s it’s one of those things that the law of large numbers has applied It’s been such a big number. We haven’t talked about the 123 23 trillion. Yeah 6 times GDP if we wanted to fund our liabilities the 123 trillion Over the next 60 years we’d have to put 10% of our GDP aside right from negative 7 today to +10, right? Which of course is? Impossible with today’s currency, but everybody says that they say, you know what, so let’s not even talk about that. Sure But it but it is a real problem These are real promises that after remember the guy that ate a Big Mac everyday for a month. Yeah Doing great. Yeah. Yeah. Yeah Maybe this is the healthiest diet ever and then all of a sudden the kidneys start shutting down, right, you know It’s the same thing. I mean I heard president Trump last week was asked Are you a little concerned about the 1.48 trillion dollars of growth the national debt? And he just said growth will take care of it, right? Wait, mr. President. I thought you said this is the greatest economy ever if growth is taking care of it Why isn’t it taking care of it? Yeah, so plus the the deficit was announced at well 800 billion Well, they like right they don’t count what are considered to be? temporary military exercises just even though we’ve been at it for almost two decades and they don’t count a natural disaster relief and They’d say that they’re getting loans from Social Security, which is that say me loaning, you know myself money So it’s not really gonna work. Yeah, so it’s really just a question of when the issue really does devolve into a crisis and we are we any closer because it’s it’s been put off and put off and put off but Somewhere there’s a line I think the the date is no further into the future than 2025 if I use the CBO projections This is now on interest expense for the federal government It’s been stable at about one point two five percent in spite of the tremendous growth in debt. We’ve had interest rates Declining of course that works its way through with a lag. So the more recent interest rate rises haven’t really factored into that much Yeah Because not much debt has rolled over but the CBO says that around 2025 or so Without a recession which is a long time without a recession and assuming some basic assumptions Which need to be challenged that we would have 3% of GDP and interest expense That’s one in three quarter percent of GDP that just disappeared. Yeah, and so you start to wonder can you have economic growth? That point with that interest expense eating into the economic potential and if you used a Recession Scenario it would blow up very quickly. So It’s I think that we’re getting to the point where the compounding curve is Very close to the point where point of no return Well, I mean the other thing that’s obviously gonna exacerbate this on the political side of things. Obviously the real auditory everything Yeah, and that’s gaining some serious traction and whether or not you believe in the politicians putting this stuff forward a lot of people Don’t think I OC is a genuine threat because she’s so young inexperienced, but her policies are gaining some serious traction It’s astonishing that the bartender. Mrs. Bush’s what I call Castillo Cortez because that was her profession, I think she basically With 15,000 plus votes not even 16,000 votes has somehow been Informally elected as the leader of the Democratic Party, right and she’s got fifteen thousand seven hundred votes. I think it was that’s it But it shows that how out of sync Things have started to become I’ve been saying for well since 2015 Frankly I said if you think this elections weird the one coming up in 2016 with job Trump is gonna win You ain’t seen nothing yet. I said I think in 2020 you’re going to see fracturing So you might have more than two parties that really have funding and today Tom Friedman. I think his name is wrote a piece Suggesting exactly that so my lunatic idea has now made it into at least part of the mainstream That you have a fracturing of the Democratic Party into the old-line try to build the pie until you redistribute the pie and then you’ve got the diamonds which were shattered in 2016 and will you have Trump running depends if there’s a recession or not. He won’t run if there’s a recession Yeah, you can’t brag about the economy if we’re in a recession No, if nobody gets reelected in a recession you know it but if he runs will admit Romney type try to be the adult in the room as they call themselves and fracture that To parties and I know we’re gonna get a socialist running That’s for sure whether whether they are have the mantle of the Democratic Party or not there I mean it will definitely be no Democratic Socialist. Don’t forget its display put Democratic in front Yeah, because it makes it sound like it’s better than its forced upon you because you voted for Yeah, I guess but yeah Democratic Socialist Bernie Just announced that he’s in the Democratic race, but his rhetoric has changed remarkably. He’s been transformed from the socialist wing leader with basically an anti Wall Street greed message back when he announced in 2015 and now he’s basically Borrowed all of the identity politics rhetoric in his announcement on a video yesterday that he was throwing his hat in the ring He talked about we have to combat racism sexism bigotry, etc And that was nowhere to be found in Bernie’s. Yeah rhetoric in 2015 So people have taken his ideas and run with them and they’re warmly embraced the 2015 ideas But he doesn’t really quite seem relevant anymore Because the way that you can get his ideas with a fresh young editor that I chase on it well, we’ll come back to politics, but I want to talk about the phone line taking a corporate bond market because Exactly to me that looks like ground zero well The the problem with bonds it were they go wrong is when people think they’re in something safe Because they’re safe people. They’re oriented towards non risk-taking so they buy floating rate triple A’s subprime bonds in 2005 and they’re not getting a huge return there any like LIBOR plus 50 or something, but hey, you know It’s more than LIBOR and its triple-a and it floats. So risk can’t be found well Then they woke up one day and they were bid at seventy Not at 100 anymore and suddenly there now or disabused of the notion these are safe and you can’t really blame them for selling Because they didn’t sign up for this show Well, we have a similar maybe not as egregious But it’s an echo of a rating problem in the bond market right now in the corporate bond market Where the but the court by market has exploded in size. It’s like more than double where it was ten or twelve years ago And a lot of it is I think over rated there was a report by Morgan Stanley research that suggested that fully fully 45% of Parts of the corporate bond market would be rated junk right now if you use leverage ratios alone now They use more than leverage ratios. There’s other variables that go into rating but the leverage ratio seems to be a really important Yeah, you see. What do you think? Yeah, and the the corporate debt is percent of GDP said of record high and if you really had a recession I have a feeling that the rating agencies have which have been reassured they listen with sympathetic ears to reassuring statements made by highly leveraged corporations as long as they Indicate that they’re aware of the problem and have some eye some desire to work towards a better place over the next few years Well, if there’s a recession there’s not convenient working towards a better place. And so all of those bonds potentially could be downgraded into a junk status and as we all know when a triple B rate of corporate bond Crosses the line in the junk status the price goes down. It doesn’t go up so you could find people that have poured into corporate bonds that includes corporate pension plans Which thought that they had a clever idea of matching up their liabilities which are discounted by the single a long Corporate rate and so let’s match them with assets that are corporate bonds. So they move together That sounds good until the recession comes Because the single area corporate bond Index will forever be rated single a it may be populated with different names But it will always be single a whereas the portfolio’s that are invested in single a and trip will be corporate bonds They will get downgraded and so suddenly these corporations could realize well my safe solution Turned out to be unsafe because it let’s say they just widen by and these are 20-year duration bonds Yeah, so there’s a lot a lot of spread duration so you could say okay Maybe they widened by let’s just pick a not terribly. Scary number 200 basis points could be much worse than that You just lost 35% Yeah Well, you should underperformed your solution by 35% So will they sell I think the answer is yes And so if you have a miss rated market and it goes into a downgrade problem You get tremendous force selling and that’s what happened in. Oh say, oh no eight with a securitized market and this time I think it’s the corporate bond market Stern. Well, we didn’t have ETF spec You know, I hate them and that’s just gonna exacerbate the problem. Absolutely I think ETFs and passive investing broadly is the definition of momentum it’s pure momentum investment you own more and more and more of the stuff that’s gone up the most and you know in less and Less and less of the stuff that’s now cheap And so it’s classic momentum investing so it helped momentum on the way up and it will exacerbate momentum on the way down I think that’s part of what we saw in If you want to call it a glitch It’s a systemic glitch, right because those ETFs haven’t gone away So yeah, I think that Passive investing is the flavor du jour it continues to amaze me how the idea of passive is through is the Path to success in equities yet anti passive Aggressive active management is successful in bonds amok again and that this ideas live side by side together Simultaneously, in fact in the 90s. It was exactly the opposite people thought active equity was a place to go Yeah And bonds had gone through a bad experience in 1994 and people said I don’t want to do any of this weird stuff anymore I want just fright down the center of the fairway index for ya. We never stopped making the same mistakes Yes, it’s so fast thing about it. It keeps going back and forth I read I don’t read a lot of books, but on Martin Luther King Day. I read John Kenneth Galbraith the rate crashed in 1929 Highly recommended very easy read it’s he’s got an incredible vocabulary. I need a dictionary next to it So yeah reading Jim grant for the first time is done it’s fascinating because a lot of the things that were happening there was ridiculous amounts of leverage then some some crazy stuff that was going on with margin rates and the like but the desire of the authorities to combat the decline Seemed very familiar to December Yeah So it’s really interesting to read so so what does listening to DOMA because there’s an awful noticing my highest conviction ideas The dollar is going down for a longer term longer term I’ve I turn negative on the dollar above a hundred on the Dixie index and You’ll remember that when the Fed first raise interest rates way back in December of 2015 the consensus viewpoint was the dollar has to be screaming-hot to the upside because the feds gonna raise rates and nobody else will and I pointed out in many presentations that that’s not historically true In fact when the feds raising rates very common for the dollar to initially decline buy the rumor sell the news the dollar went up into the Fed rate hike and Basically, it stayed at that elevated level and went up to 103 by January 2017 But dollar trends are very long-term, you know and there’s really not much in terms of counter trend along the way they’re persistent and sustained and they usually go on for about six to eight years So if the top was 2015 to 2017 we’re looking at 2021 to 2025 as the dollar bear case Which is very interesting along with my 2025 deficit problem Yeah, there was two ways to get out of the out of the liability problem. You can devalue or you can default and Devaluing probably is at least part of the solution. And so I think the dollars going down I am positive on emerging markets versus the u.s. Doc market I’ve been that way very significantly since basically last September that was one of my recommendations. It’s a Barron’s roundtable Whereas if you’re bullish just by e/m P.m P.m. And if you’re bearish parrot with a short on the S&P 500 And that is interesting because the emerging markets outperform during the decline of The fourth quarter, which is very unusual. Yeah, and it suggests significant underlying relative strength because with the dollar going up an emerging markets not underperforming in the downtrend it suggests that the cheapness which is evident to all on things like the killer the Shiller Cape ratio and all kinds of other metrics It looks like it’s starting to win out. And if you get if you get a dollar decline, well then obviously emerging markets have retrorockets unrelated performance and it’s interesting that with the dollar stable e/m has started to Outperform and gold is rising again Which is interesting and so I think one of the things that might really start to fuel Changes in relative value might be if the wealth tax Concept actually starts to go Truly mainstream and I Got News for you. It’s sort of already is in the polls. Yeah I read today a shocking eighty-seven percent of Democrats are in favor of the wealth tax proposal by Elizabeth Warren Eighty-seven percent you don’t get readings above eighty seven percent except for dislike of Congress, right? That’s about it And so even more than fifty percent of Republicans are in favor of it So with that kind of polling It’s pretty hard to see that that won’t be part of some platform of success in 2020 and one would think is people would be getting out of all forms of easily identifiable wealth like computer blips and bank accounts and Yeah other things and trying something I maybe that maybe it’ll bury gold in their backyard. Yeah, right. Maybe they’ll buy you know mohawk Pigeon blood red rubies, you know where you can put one in your shoe. It’s worth ten million dollars and you can walk comfortably, right? Because there’s the the wealth Concentration is just so high So it would seem to me that those things would be early warning signs of the potential for this wealth tech sort of thing, you know, it’s very fascinating because the reason that there’s a estate tax in America is because they They got around the Constitution because it’s it’s a direct tax yet I call an indirect tax So they don’t have to apportion it and the way they got away with it is they said we are not taxing your estate We’re taxing your right To give money to your ears. Well, let’s suppose Warren’s wealth tax is Excellent. You’re you’re privileged to not give money. Alright, right Don’t give away is being text So you’ll be taxed on privileged of giving your money away and privilege of not giving it away Which kind of means to just being taxed directly? So be interesting to see how they try to kind of square that logic what you touched on gold air nation I know it’s something you’ve gone backwards and forwards over the attention which I’m sold at eleven eleven. Ninety six. Yeah Last summer and it was pretty close to the low I was discouraged when it broke down From the high 1200 s but when it got down there I became positive on it And I thought the dollar was going down and I think I recommend in Barron’s GDX Yeah also which got off to a slow start, but it’s catching up quickly. I think it’s up 10% now your due date or since January 7th when it did that Barron’s roundtable So I’m very bullish on that and it’s also interesting to see silver performing Well, palladium all time high. So yeah, I think that I’ve been Really recommending that if you want ever to own gold The time to do it was basically last summer. Yeah, and I it’s it’s a Fair amount from there, but not enough to worry about because if it really gonna work as part of your portfolio You know 1400 is just not of a huge price relative to not sure the range over the past 15 years What do you look across all this and we’ve touched on a lot of stuff here politics and the dollar and bonds and negatives Is there any one thing that keeps you up at night apart from apart from this cold? And the nurse dog flu? Yeah, I get asked that question a lot. It’s kind of those Standard questions to ask nothing really keeps me up at night. I don’t really worry about stuff anymore. I accept things the way they are and I think that the reason people worry, I think is that They are not acknowledging some certain dangers and they feel it subconsciously I know that there’s dangers, but I’m aware of them and I look right at them and I think that’s why I’m Pretty good at managing money I think it’s about looking for risks finding them and accepting that they’re there and trying to make them non-fatal I’m really most worried about The but just the basic divide everywhere in the you know, just the whole have have-nots thing which is ushering in fractured politics everywhere and It’s not gonna end until it fully ends. We’re not going to get the genie back in the bottle We’re not going back to Bush versus Clinton. No, right? It’s going to end up with awareness of the non sustainability of debt particularly now in the United States particularly if our dollar drops particularly if the challenge of the dollars reserve currency becomes increasingly real Because our interest rates would be a lot higher if we were not world’s global reserve currency well But that’s that’s something that is definitely a topic that is moving closer to front of us and it’s definitely moving that direction Yeah, people kind of just dismiss it still they say it’s no challenge. It’s just like the deficit its money sinks where It’s just a given if you if you say the dollar is Not well not forever be the global reserve currency people don’t are safe because it’s been their entire life Yeah, I remember in eight before Lehman went bankrupt. I wrote a white paper Begging people to get out of commercial paper money market funds and I gave a speech Saying whatever you do don’t own a commercial paper money market fund because it’s got all kinds of financial debt It might be 30 days, but it doesn’t matter it could all default and people couldn’t hear me They would come up to me after speech and say did I hear you, right? You said money market funds can be risky. And I said which one of those words did you not understand? This is not complicated. Right? Yeah, I was absolutely crystal clear in my statement It wasn’t oblique and yet it’s so foreign that they can’t quite accept it. And so people need to listen with Their mind as well as their ears and not just repeat what they’re told Which I’ve said this several times publicly my biggest revelation in life. Was that people want to be told what to think? Yeah, because I don’t and I do the same thing every human being does you assume everybody’s like you when you’re young You know You just know your own little world and you don’t know that there’s many different ways of operating and then you start to realize Gee by assuming that everybody wants to figure things out for themselves. I’m not getting anywhere, right? It might not explain it, right I’ll try harder and a few more years go by I’m still not getting anywhere then I’ve light bulb goes on No, they want to be told what to think. Yeah, so It’s very convenient to be told that deficits don’t matter and you’ve been pretty much pounded into submission on that idea But the math is the math And it’s not complicated It’s just arithmetic and you get to the compounding curve where I mean if we pass legislation like next year Maybe we could somehow Reverse course, but we’re not going to we’re gonna buy that kind of legislation is is not gonna get you any votes Let’s face it all it gets you votes when? the Problem is out in plain sight and is hurting people right now Yeah And we’re still in mega denial mode because we actually think that we can get richer by borrowing more That’s the message from the Democratic Socialist. Don’t ask me how I’m gonna pay for it. That’s not even important You’re missing the real question. How are we going to divvy up the massive prosperity? Right? We’re gonna borrow our way to prosperity Which of course is? Nonsensical just think about that in your personal life but but not just from the more credit cards you get the more wealthy you are sure but MMT modern monetary theory is Gaining all kinds of traction wherever you look it’s suddenly become an incredibly hot topic which we know it doesn’t work It can’t work. You can’t just spend your way into prosperity. Sure You can’t drink yourself sober, right? but at a certain time in the cycle Which we seem to be at it it sounds great to a lot of people right and they want to be told what to think Extraordinary popular delusions and the madness of crimes exactly right and it’s amazing how it happens and bitcoin was an example of that. I think now maybe we’ll Go all digital and all this down the line something like this will work but bitcoin was not going to a million you know, it was just ridiculous mania and I think Spending your way to prosperity is so blatantly idiotic yet when you get groupthink going and everybody starts to repeat what they’re told Yeah, this is what happens but it’s a perfect example of what you’re just talking about people want to be told what to think and if The people on the TV tell them this is a great idea and it might just work they’re all going to get behind it because it sounds fantastic particularly if they hear it enough times for enough people and People nod their head in the north-south direction. When yes when you say yeah. Yeah So just one more thing before we finish cuz I like it A lot of your time but you you you called the Trump election Perfectly you talked recently about the next election. Perhaps being decided by Congress it could be because if you get four funded parties or even three it’s possible that nobody gets the majority of the electorate and What a show that would be can you because against this? Background of divisive miss you would have one house choosing the president and the other chamber Choosing the vice president and one is controlled by the Democrats and the others can fold roll by Republicans. So you could get this incredible situation where you’ve diametrically opposed in views that are number one and number two and you wonder if there wouldn’t be god forbid somebody that wants number two to turn into number one right through some diabolical means but even that’s not your base case scenario, I mean when you look forward I mean I know we’re a way out but when you look forward to 2020 as it stands now How do you gain that when you when you try to think through what it’s too early? It’s I think think it’s really early frankly. I mean this video record. I’ve been so good at these things I think it’s two words. So it’s amazing. It feels like this campaigns been going on for a while. It doesn’t right. It’s February of 2019 right. So we’re a year and a half plus away So a lot of things are gonna change the economy is going to change that’s gonna matter I think we’ll be able to get real clarity about a year from now maybe a little less what’s gonna happen? But I’m virtually positive you’re gonna get a socialist running the socialist ideas poll very well and Bernie Sanders Raised six million dollars in twenty four hours and he’s not even that strong anymore So there’s a there’s a lot of force there. I think Bloomberg could well run if you get a socialist, I think you could have This Howard Schultz character run. I’d I I don’t think so. He seemed to not really understand what he signed up for I think he lasted about 23 seconds before the heckler came in right and I don’t haven’t really heard from him since he’s gone Very so I I don’t know about that one, but you’ll get one of these people and maybe you know Maybe Joe Biden. I’m in which would shock me that he would think he would have a chance Because nobody who’s old-school is gonna win. No. No. Oh all I know is it’s going to be Trump again or some Socialist or we’re in a recession and I guess we’re all socialists then yeah You know, it’s a great way to finish Yeah, thank you so much for the time and forgetting that you’re sickbed to come and do this. I really appreciate it. Thanks Grant good to see you again

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