September 25, 2025 • 40 mins
There are two huge winning trades that people are looking at day after day. Gold keeps going up and US tech stocks keep going up. But what is driving this intense flow? How long can these consensus trades last? On this episode, we speak with Ozan Tarman, the Vice Chair of Global Macro at Deutsche Bank. As part of his role at the bank, Ozan talks non-stop with hedge funders, sovereign wealth fund managers, and, of course, the analysts at his own bank. This means he has an excellent perspective on why these trades are so popular now. He explains why there is a decline in confidence about the US sovereign (hence the rise in gold) around the world, but also an incredible fixation on the success of the big US tech companies (hence their constant bid). We also talk about other popular consensus trades, from steepeners to Chinese equities to Liz Truss moments all around the world.c
Read more:
China Courts Foreign Gold Reserves to Boost Global Clout
Nvidia’s OpenAI Deal Fuels ‘Circular’ Financing Concerns
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:18):
Hello and welcome to another episode of the Odd Lots podcast.
I'm Joe Wisenthal and.
Speaker 3 (00:23):
I'm Tracy Alloway.
Speaker 2 (00:24):
Tracy. Every day it feels like stocks and gold go
up every day, stocks and gold, and stocks and gold,
and it's just it's relentless.
Speaker 3 (00:32):
I'll tell you what it's good for. Anyone invested in
an index fund and a bunch of gold coins that
their dad gave them.
Speaker 2 (00:38):
Yeah, good for you.
Speaker 3 (00:39):
Yeah, thank you.
Speaker 2 (00:40):
The Tracy Alloway portfolio doing very well.
Speaker 3 (00:42):
Yes, No, you're absolutely right. And the big thing about
this is it's not really supposed to happen, right, Like
You're not supposed to see stocks shoot up because of
optimism about the future while gold simultaneously goes up because
gold traditionally is the sort of dour yellow rock as
you like to describe it, which usually signals something that
(01:03):
is about to happen.
Speaker 2 (01:04):
I'm going to relent. I'm going to relent to something.
Speaker 3 (01:06):
Are you a gold bug?
Speaker 4 (01:07):
Now?
Speaker 2 (01:08):
No, Well, I'm going to relent on something. Okay, Right,
I admit that gold is a medal. This is my
big cave. I always no longer a rock. Yeah, this
is my big cave. I used to say, there's yellow rocks.
You know what, I'll acknowledge it's a medal.
Speaker 3 (01:21):
If it's a medal, Now, will you admit that it
has industrial applications?
Speaker 2 (01:26):
Yeah, but they're very minor. And this is also I
will not acknowledge that there is a a. It is
mainly a store of value, or perceived to be. And
when people are fearful, when people are mistrustful, and people
don't TRUSTI had currencies or the governments, and there's all
kinds of reasons to be skeptical about the governments that
issue paper currencies. I understand why people want to hold
(01:47):
this metal that people have used as money for thousands
of years.
Speaker 3 (01:51):
I'm going to take you back to the jewelry district
in New York and get you more excited about gold again.
Speaker 2 (01:55):
No, and I'll just say on gold, I loved it.
And then I wore that big chain when to the
diamond district, and I wish I'd bought it, like now,
that's like my bigorite. It was like thirty five thousand
dollars gold necklace, and that today would probably be a
forty five or fifty thousand dollars gold.
Speaker 3 (02:10):
Neck Imagine how much that diamond encrusted furbie would be worth.
Speaker 2 (02:14):
This is the thing they don't tell you about gold.
By the way, if you spend ten thousand this is
my crank take on gold. That's not crank. If you
spend ten thousand dollars on a gold necklace, they give
you a ten thousand dollars gold necklace. Yes, it's free.
It's like you spend ten thousand dollars, they give you
something for ten thousand dollars back. In a sense, it's
a free transaction.
Speaker 3 (02:33):
No, you get two things. You got something to wear
and an investment.
Speaker 2 (02:36):
Yeah you actually, Yeah. I wish I had had this
realization when gold was like two hundred dollars an ounce.
But anyway, it took me a while, and it'll.
Speaker 3 (02:43):
Make a gold bug of you yet, I'm sure.
Speaker 2 (02:45):
So these are really exciting wild times in the market,
and the last time we talked to this guest was
another wild time and an exciting time in the market.
That was, of course April. We do, in fact have
the perfect guests to try to understand everything that's happening
all around the world in global macro. We're going to
be speaking with the vice Chair of Global Macro at
Deutsche Bank Ozon Tournament Ozon. Thank you so much for
(03:08):
coming back on odd lots. Last time we talked to you,
we were in London. This time you're in New York,
so thank you for coming to visit us.
Speaker 4 (03:13):
Very good to be in New York. I'd love to
be on this show, I mean, other to be invited again.
UNGA good inners. This is the highlights. And by the way,
I was going to bring my United Amamim Jersey Jurally
looks like him and some Backlaba for Tracy, but couldn't
find in the airport. Next time.
Speaker 2 (03:31):
That's a good reason to do another future episode. Actually,
we talked a lot about gold at the beginning, but
I don't want to first ask about gold is in
vidious swallowing the entire US or maybe even global economy.
Speaker 4 (03:44):
Almost hand in hand, right, these two questions, I mean,
they both continue to go higher and higher. Actually, let
me start with gold, because you did you did put
such an introy in it. One of the very famous
memes on the internet, Caricultures, done maybe two three years ago.
This gentleman or lady running a big macro h fund
looks around. I run very complicated products, but at the end,
(04:06):
I buy gold, and these days that resonates even more,
mentioned even more and more in these roundtables in TV
studios like this. Normally that jin thinks, but it doesn't
because at the moment it works in risk on and
risk of. Last time you were around again, you called
me at a very relevant time questioning US exceptionalism. I'm
(04:28):
sure we'll go into that. What's going on with US institutions,
those question marks, all those question marks against the dollars
help gold FX is about stories against the dollar. I'm
sure we'll go into this as well. Some of the
stories are now having a less easy time. Then people
like to go into gold and we maybe going into
(04:48):
a rate cut period cycle or not. Whether you're Miran
or Hammock, that differs, but gold works in that as well.
So for the moment, I always feel, you know, when
it's the top three on TVs on my round tables,
I put the orangsign on. But at the moment it
works for a reason. Now, Nimdia, yeah, I mean if
he had this show a year ago as well, you
(05:09):
could have said all done as of this morning. One
of my partners in success Sarrevelos. His piece is already viral.
He's claiming, tongue in cheek that Nimdia is almost keeping
us away from a recession. All that Chip story, all
that capex spending. If it wasn't for that, maybe we
could either question or be in a recession.
Speaker 3 (05:29):
I'm not sure he's saying it that tongue in cheek.
Speaker 4 (05:32):
There agreed, and also others are joining him again. I'm
hearing from my dear France clients this day morning Baine claims,
and Lake's revenues quickly catch up with all this aikpex spend,
we may be in big trouble. All of this bill
bursts by twenty thirty, and we'll go into recession before that.
Now we can say a lot can happen before twenty thirty,
(05:55):
but warning signs are there. Last night's the big headlines
the reason why again does that close on the ice
n media investing into open Ai. That also becomes almost circular.
I mean this is not to Oracle invest in open ai,
open a I invest in ni Media, Back and forth,
back and forth. Is this a closed circle? I hear
(06:16):
all the skepticism also mainly coming from those who haven't
caught this big rally.
Speaker 2 (06:21):
Since a bubble is a is a bull market that
I called golden bubble. Tracy calls it a boom because
of the difference. Exact inherited a bunch of exactly.
Speaker 3 (06:32):
I should just mention we're recording this on September twenty, I.
Speaker 4 (06:36):
Like that, right before, right before Power speech, right before
Trump speech.
Speaker 3 (06:39):
So just on AI and the sort of self dealing
circle is circuitous, incestuous relationships. Perhaps one of the reasons
we like talking to you is because you talk to
a lot of clients and so you hear a lot
of feedback from the byside as well, What are people
looking out for in terms of saying, okay, this is
a bubble, because it seems like, all right, people have
(07:01):
been talking about high valuations for a really long time.
The stock just goes up. Is there something else that
people are like watching for, in which case they might say, actually,
we're going to start cutting back positions.
Speaker 4 (07:11):
Excellent question. Almost like two months ago, I was hearing more.
I'm skeptical, but flat cuts are also coming. You can't
fight this now, especially from the pros who've been around
nineties and beyond. I do hear, Look, this does feel
a bit like end of nineties, beginning of two thousands.
By the way, the year your peak is very important there,
(07:33):
but we may still run. That's one thing that more
seasoned equity beyond macro pros are saying. I also it
was a bit the beginning of my career, but I
was around in late nineties, early two thousands. Then the
denominator almost didn't exist in this valuation discussion. There was
hardly any cash around. Everybody stuck Joe dot Com. It's
(07:53):
excellent in B two, be even better in B B
two C. And of course Hindsight is the world's top
page one, but you could feel it. Whereas this time
around you can question one hundred billions thrown around in
a circle, but you cannot question much the revenue the
cash Jensen Nividia open Ai is bringing to the table,
(08:15):
you cannot question much. Let's go beyond Nividia a bit
into Magnificent seven, Microsoft's Apple alphabet. They have customers. All
of us are are their customers. They make money. So
and in a way called talking about circle more posted
way of more glass, helpful way of looking at it.
Nidia is the big champ. Okay, but take ni Media aside.
(08:36):
All of a sudden, oracle became a story for reason.
From oracle, we go to alphabet because for this time
around Judge decided favorably on chrome. The story continues, move
from one I said to another. Also, yeah, Nividia is
doing great. We'll talk about how Nasdak the Heracules is
catching up with my blue head Mega. But it's a
(09:00):
leave spinning like NI Media is not the top stock
in SMP today, talking about waiting for Godo. Finally, small
caps rolls up since the famous now jacksonvill and another
famous jacksonall Dowis speech. So it's not just one one
one guy is very important November nineteen me media earnings
are very important, but it's not just one stock.
Speaker 2 (09:19):
By the way, Ozon was regaling us or showing off
his make Europe Great Again hat, it's signed by Mario Draghi.
If I own that, I'm very jealous. I would not
be carrying it around. I would be carrying it at
a glass case. I'm selling it maybe for eBay.
Speaker 3 (09:34):
You'd have it in the vault along with your gold coins.
Speaker 2 (09:36):
I would have it in the vault along with my goal.
Speaker 4 (09:38):
But I thatsk how much I did respect my clients.
I want to show.
Speaker 2 (09:41):
Off before we can go further. Actually, for listeners who
maybe didn't hear previous episode with you in April, can
you just give us a little back. You talk to everyone,
you have these dinners, you afford you an incredible perspective
on what a range of people on the street are
thinking about. Just so that people can understand your perspective
and where you're coming from. What do you do like
(10:03):
on a day to day basis, Who are the range
of people that you talk to and how do you
interact with them?
Speaker 4 (10:08):
My job is to talk to my bank's top institution clients.
He funds real money, but also because of experience, talented relationships,
going going deep. This also includes now sotore on wealth funds,
key private banking institutions, and I love as you know,
I'm a person who tries to bring things together. So
in these roundtables, small or bag, it's not just edge funds,
(10:30):
it's not just real money, it's not just sorro and
wealth funds. All of said classes, credit rates, efs, emerging
Marcus my proud Terro equity of course, so they learn
from each other as well. Because we talked about in
these shows and equity perspective can be very different to
a race perspective. Right as we speak again, we're in
one of these doll drums on if you define macro
(10:53):
just as rates and fcs, it's almost like a magnet.
Four to twelve. Okay, we try we on us tanyar.
We tried below for pard for twelve, four thirteen, four
to fourteen. As Stacy said, we are recording this on
September twenty three at nine am. In three hours, share
Power will speak. Let's see if he changes tone or
six to his so called Howkish presser. Some people hope
(11:14):
that may again ignite a little bit of the other
stronger rates, higher tone. Otherwise, volatility in effects and rates
are struggling. Meanwhile, equity is continue to do better and better.
And back to your question. Different sets of clients coming
to my roundtables, coming to my realm, learn from each
other on why differents classes act different.
Speaker 3 (11:49):
So you mentioned the dollar just then, and of course
you have a very international group of clients that you're
talking to. Can we talk about the dollar drop this year?
Because I think it's really important and even though it
gets some attention, it's nowhere near enough because we're talking
about stocks rallying, US stocks rallying. Things look a lot
different when you start to adjust for currencies. How are
(12:10):
people thinking about US assets in light of the dollar drum?
Speaker 4 (12:14):
Very fair, I'm tim Odlass. So I also remember last
time we met is April sixteen in London, so just
a week before the big fear You're dollar was right
around one eleven. We were beginning to sense that this
could be a historic here in terms of this dedorization.
He fund ratio is changing, but we swift the mood
beyond one fifteen as well. Now looking at the picture,
(12:37):
two things are very important. First of all, the flows
back to our friend Nividia, back to our friend magnificent seven.
Because one pushback from some of my especially fast money friends,
who all either smell, want, or wish a dollar squeeze
after such a soft dollar move is what will the
flows do? World continues to buy Nividia's and Microsoft's do
(12:58):
they buy it hashed? So I was a little bit
skeptic on that. By the way, flows are back, so
a big difference to Aple sixteen. I'll talk we can
talk about that as well. Retail led rally. Look where
we are all time high my research reports and claims
again George Servelos that in the last recent thirty forty
five days or so, those laws almost eighty percent of
(13:21):
them are heged, so people are buying their Nidia haged
so believe it or not, eighty percent is a big number,
say seventies eighty sixty. That definitely helps the soft dollar
side of things. What continues to help is, of course
institutionists decreasing their exposure to US. Like hindsight I said
(13:41):
rightly on that April sixteen, nothing to end the US
private site exceptionalism. Nidia's microsofts so far are fighting back
the tests of deep sick, even though champion of the
year is China Tech in terms of performance, but from
Asia so Nordics big funds are reducing their dollar exposure
(14:05):
a little bit seven to sixty five, sixty to fifty five.
That makes a difference. That made a difference.
Speaker 2 (14:11):
This is really important. I think we should just continue
on the specific line because what it sounds like is
all around the world you have to have dollars to
buy in video, and video is a stock that's sold
in dollars. It's profits are denominated in dollars. It's sales.
It sells things in dollars, and that's the same for
all of the mag seven include Microsoft and Apple, and
all of them are doing phenomenally well. They have real profits,
(14:34):
real earnings and so forth. They're very excellent businesses. And
it sounds like basically all around the world people want
exposure to a handful of extraordinary US companies. They just
don't want to take the risk that the denominator and
this time we're not talking about earning but that or
that the dollar that they trade in or selling, et cetera,
(14:57):
is going to go down further. So they want everything
about this. They just basically don't want the US sovereign
exposure that's connected to these American domicile companies.
Speaker 4 (15:06):
Completely correct, and honestly, I was a little bit skeptic.
I wasn't sure. If you told me Osan this year,
this big surgeon back in NI media Microsoft won't happen,
then I would feel even more comfortable with the short
dolar position. But Magnificent seven roads it may even pass
Mega despite that is also remaining sort so whether I
(15:27):
was skeptical or not, what you explained is happening. But
I think for the next legs are included. A lot
of biensy site are calling for one twenty one, twenty
two light levels. You need now the European side of
the story or whoever you want to talk about Japan, China,
the lagger side of the story FX is too legged.
We talked about why the dollar side of short dollar worked.
(15:51):
We need now a bit more help from our European
story Tersea.
Speaker 2 (15:55):
You know what strikes me is interesting about this, which
is that when we think about countries where there's political
risk and so forth, we don't often associate them with
the most impressive enterprises in the world, right, And it
strikes me that that's the tension we're talking about here,
is that there's all this anxiety about the US as
a sovereign for all kinds of reasons. That's not unusual.
(16:15):
Other countries have sovereign risk. They're just usually not home
to literally the most impressive companies in the world.
Speaker 3 (16:20):
No, and it is true that most of the investor
nervousness around the US has shown up on the sovereign.
Speaker 2 (16:25):
Yeah, not the corporate sete, rather than the corporate.
Speaker 3 (16:27):
Side, which we've been writing about in the auth Loots newsletter.
Speaker 2 (16:29):
Which everyone should subscribe.
Speaker 3 (16:31):
To it, Yes, seamless plug just then. Okay. One of
the other I guess big questions about the market right
now is there's clearly nervousness about fiscal dominance and Federal
Reserve independence, and that is playing into the drop in
the dollar too. And yet at the same time stocks
seem to be taking off and a lot of investors
(16:51):
don't seem to be that nervous, at least on the
equity side. What accounts for the discrepancy there the two.
Speaker 4 (16:58):
Different roles pluging about plugging. I also love the New
York Times piece. I think you guys deserve all the
trust me, all those trans clients, they listen, they are
very excited when I'm on now. Tracy definitely hit the
right point. Deed organization is one key big team going
into the end of the year. Fiscal dominance or not
(17:18):
and the famous fed independence. Those are my second and
third key topics. By the way, where where are tariffs?
All the way down to four? I forgot about dominance,
So we talk right. I love brainstorming with you guys.
Remember what I said in August as well summer everybody
was everybody like some key investors, especially fast money. We're
gunning for from my deer islands. Four key trust moments
(17:43):
in four countries at the same time. What does that mean?
I mean trust moments. We said, you know what I'm
talking about, long hands getting out of control for people's
For Marcus.
Speaker 2 (17:51):
Big fisical, US, UK, Japan was the four for the.
Speaker 4 (17:53):
Right Reasons Europe book for Right Reasons because ramp up
the German span will come at the end of the
at the end of the year, et cetera. Some key
investors were asking, well, one trust moment, we know how
we handled chance. Later down prime minister goes different sets
of policies. What happens if four goes at the same time.
(18:15):
And we tried this on talking about dates September two,
when you guys came back from wherever you came back
from on the long final fine and final, long location,
long weekend, UK Gild's big move, followed by France because
the Prime Minister was about to go in six days,
joined Tracy. How long did it last? Four hours? That
(18:37):
long hand sell off lasted four hours And I'm not
trying to be funny. Basically since then US thirty years, Europe,
even UK has been much more under control. Up until
the Hawkish presser almost threatening below four percent, even more
than short dollars Tracy over the summer and inter fal
what were the real money and dhe funds common fail
(19:00):
with trade steepeners, steepeners, steepeners Europe, US, everybody and their
brother had steepeners first for different reasons. On Us more
due to the short end that sooner or later will
come to the Fed independence, the Trump side of the
equation would win more. Finally, the powerwood caving cuts would
come in and on the European side even more popular
(19:23):
because of the long end German spending coming through in
October November, and people believed in their steepeners. First, US
got hurt to nfp's myths, long hand moved big flatteners,
hurt gold aside whenever you say, or Nividia side, whenever
you say, somebody says a trade is untouchable, watch out.
(19:43):
European steepeners were supposed to be untouchable. Two days after
that flattening washout in US, Europe also got reduced and
since Tropkish pressure, we're more balanced onto Fed independence again.
Justice Morning of the Press mattter raskin my head of
US race strategy previously from the FED. Very respectable analyst
(20:05):
wrote about this FED independence sphere not being in the price,
not in the break evens, not in the term premiere.
Why I think a little bit, because so far, let's
die right into it if you wish. I think this
cut is justified in my mind. Even if they cut
fifty a week ago, it could have been justified talking
about some deer clients friends public So I may say
(20:28):
Reek reader publicly on TV and on his writing set,
they may and they should cut fifty because I think
if they sold the revisions in June and July, they
probably would have cut in June and July and going forward. Okay,
they cut twenty five. Not only they cut twenty five.
Miran did this thing probably that's the dot. But Waller
(20:49):
Woman stuck to twenty five. Even some of the previous
FED governors racing for the job. Bullard says they should
have done twenty five. So people are thinking and hoping
that there's still some fading dependence. Powell, even though he's
the past man, has some control over the situation. That's
why you're not getting any fading dependence.
Speaker 3 (21:09):
Feed on the long ends, Joe, it is interesting and
I would not have expected this earlier in the year.
But if you look at the move index, so the
index of non market volatility, it's going down. It's gone
down quite a bit, which is not exactly what you
might expect to happen when we're talking about things like
physical dominance and federal reserve independence. But there you go.
Speaker 2 (21:30):
That is a good chart I haven't looked at in
a long time. I want to go back to the
gold conversation because we've kind of been dancing around to
We're like, oh, political volatility in the US and sovereign
risk in the US, et cetera. But like, let's talk
about like gold in the US or gold and the dollar.
Like when you talk to clients, setting aside that it's
(21:50):
a good trade, people want to ride a good trade,
et cetera, how much fear anxiety, et cetera is there
about US political constability? And what are the and I
mean a prominent political commentator got assassinated recently in the
United States. Sadly, what are people at your geners maybe
inside the US or outside dinners saying about the US
(22:14):
when they look at our country.
Speaker 4 (22:16):
That's why more and more countries are building up their
reserves in gold shying away from a dollar more. My
motherland Turkey is an example, again publicly known in terms
of reserves. Also, let's remember what is still going on
versus Ukraine and Russia, the sanctions that Russia faced or
may face, so different countries are also because of that
(22:37):
leaning more towards gold. So besides our macro discussions ups
and downs of rates, that's uncertainty, that question mark over
US policy, that question mark over geopolitics leads central banks
to accumulate more gold. Joe for gold to go down.
The game should change. Like this year, my plan is
(23:00):
going all right. Again, I was on air. I thought
these big sipner transformans long aans crushing everything wouldn't happen.
I didn't expect this much of a comeback. But again
I said there would be a comeback, especially retail, much
more than pros belied in this nimdia gold go hand
in hand together. There should be something off the left field,
for example, maybe on tariffs. All of a sudden, tariffs
(23:23):
tongue in cheek, Tracy are a bit too good boy revenues.
They raise a lot of revenues. Twitter talks about the
TV's talk about the Torton Stock talks about it if
Supreme Court at whatever time, and that's also very key
when they make the decision Walt's against. I'm sure they may.
I know, they may use S three oh one, et cetera,
but will be all of the big that's the question mark. Now,
(23:45):
what will the Trump administration do? What will best send
to long aance can get going again, And even though
it's got nothing to do with necessarily Nimidia and gold,
the year's path may change and things like that can
take us off the.
Speaker 2 (23:57):
What about a big handshake with Chision and a new
I mean, I don't know what it would be. And
you know, my dream obviously is for a by D
factory in Tennessee one day, show me factory, et cetera.
But could that be a oh, this charge is in
a new direction, something that is like a real let's
reset this relationship. I'm not optimistic, but would that be
(24:18):
the type of thing that could reset the trajectory of
certain markets?
Speaker 4 (24:21):
You talked like my Joe, like a globalist Tennessee factory
by D. I mean that's not the pulse at the moment,
but sure if that happens, my gut feels still says
a short lived correction. But yes, that's that's what did
I say. That's not too pulse, That's not the New
York pulse at the moment. It would be a positive spice,
a little bit less scared of things spies and yeah,
(24:44):
it could see that eating.
Speaker 3 (25:01):
So I know it's number four on your list now.
But we should talk about tariffs a little more. And
I take the point that it could be a revenue
generator for the US and maybe that provides some support
on the bond side of things. But on the other hand,
I think most people would argue that it would slow
economic growth, which should be a drag on the equity side.
But we haven't really seen that. How are people talking
(25:22):
about the actual impact of tariffs right now? And I
gotta say, Joe, I got my first customs bill over
the weekend. It wasn't too bad. I think it was
like sixteen dollars or something, But I feel them personally
very fair.
Speaker 4 (25:37):
Comeback. I yess, especially fast money crowds hasn't necessarily given
up on ceculation. My takes for part of the reason
why all these new media gold long end calls have
been correct. I like to fade the inflation hulks, and
I like to fait the big recession bears, who are
much more quite these days anyway. But yes, if continues
(26:00):
to stick to them, even though on one hand they
generate revenue and keep the long end under under control,
there may be a growth impact on the other side,
accompanied by splice side immigration effects. And the jury is
out there on dear mister Waller, whether led by him,
whether this is the famous world the words, whether this
is transitory or not. More and more some clients start
(26:25):
to say, my binkie, the famous chief global economists start
to saying, maybe this tariff effect wasn't as bad, both
on growth side and on inflation side. These people immediately
get a pushback early days, early days. Let's wait, so
will companies continue to eat them and not pass that
much to the traces of the world to the customer,
(26:47):
especially when we talk of beyond ten percent terrists which
most countries face next year. Your country faces are very
key midterm elections. So I think Trump and Bessent know
that they got elected because of inflation. So the moment
the tacflation camp starts to look like they are proving correct,
(27:08):
even look like a bit of a climb on inflation
more so down on growth. I think we may we
may get more and more taco because they want to
win those midterm elections, then they will take more and
more steps over on race. But if they prove correct,
if it's not reflected on the customer, if inflation continues
to remain Okay, I know it's not two percent, but
(27:28):
below three percent, maybe this statistical continues.
Speaker 3 (27:32):
Sorry, did you just call pinky Chata my pinky?
Speaker 1 (27:36):
You have?
Speaker 4 (27:37):
Even like when we there's a lot of preparation going
for these macrodners as well. Trust me, when he sends
his questions and his keybouet points, he tells me to
start with my binki.
Speaker 2 (27:47):
I don't think we've ever heard him on the party.
We Gotta Yeah. I talked to him a couple of
times on TV. A big fan of his. We Gotta
make that happen. When you think about the US economy
and maybe the European economy too, but I think it's
US and you think about growth prospects. This is something
I've been asking a lot of people about, like how
much do you think the US economy as a just
(28:09):
the forward momentum of the US economy, especially over the
course of your career, how much has it become dependent
on this perpetual rise in asset values And you think, like,
do we need a booming market year after year just
to keep that sort of like consumption demand engine, investment
engine going.
Speaker 4 (28:28):
Well, yes, it's the short answer. I think the details
are even more complicated a bit sad. I think you
need you we need in this game that's eating it.
The next thing it was B to B B two
C three decades ago, three D. Now of course AI
AI AI the past three years. And also US, I
mean again as the country that gain my education right
(28:50):
in more open times, for that relies on growth, relies
on animal spirits, relies on those classes to go higher
and higher. And that's why the Tacy question from like
ten minutes ago. It's very key whether we're at you know,
we're getting their stage of the bubble or we're at
the bubble, because if that bursts, economy can get effected
as well. Also, Joe, I'm a big believer in the
k economy, the whole terminology of that. So I said
(29:14):
this again before on your shows. World may be more
okay for whatever we define ourselves as one percent, five
percent point one percent. There's a much bigger part who
are struggling, definitely on us, but globally as well. Some
again it's a statistics thrown out there. These days, ten
percent of the US consumers accumulate almost fifty percent of
the consumption and the rest much less. Valve effect is
(29:37):
getting bigger and bigger. When I was in college running
around in this country, again, we were talking about the
valve gap. But now this becomes relevant, even macrorelevant. That's
why people like me are okay with the Rade cuts,
risk management or not.
Speaker 2 (29:51):
When you encounter Americans in London, or Americans in Europe
or anywhere outside the English many in Europe, do they
bad mouth US policy? Do they like talk about how
terrible and like how much our institutions are deteriorating, and
how we need to get back to that sort of
like good old fashioned IMF orthodox economics of the good
old days.
Speaker 4 (30:11):
Okay, let me get the past from Kobe and do
a bit of a shack look they do, especially if
they have liked me born and read emerging markets, but
now trading the whole wide world, and if they are
Americans during my beautiful, beautiful world, they are affected like
when they hear conversations like this, they understand when they
(30:33):
traded Turkey are hungry Argentina and say, okay, because of
this politics financial repression, I don't believe it. That's why
I'm selling the currency. It was easier to do for
somebody else's land and currency. Now both it's hurt them
a bit. And also it becomes a bit of a dilemma. Right.
They may continue to criticize some of the things that
(30:54):
are going on, but for the arguments that I laid out,
risk parity at least depart continues to do okay, and
US ten years still is not going to six percent.
It frustrates them. This brings me to not in the
mine are big, big ones, but big thematics A key
point going forward, much beyond the fourth quarter. What's going
(31:14):
to win the trust moments my symbolic way of saying,
fiscal dominance or financial repression. Again, somebody who's experienced in
these Turkeys, hungry Argentina's of the world, what does their
mister bestan say? As a former client friend tell a
friend banding the curve, he literally said, I'll bend the turf.
(31:34):
We will take care of the curve. You know yet
banned even not take care of maybe true like they do,
being very watchful over the auctions, making sure auctions go
very well, which they have been. One tips auction a side,
maybe through buying much more on the short end vice
versa buying more on the on the long end, to
make sure that those rates stay under control. Operation twists
(31:56):
are eleven twelve. They may win over majority. Is taught
that fiscal dominance women, my god feel continued to say,
don't necessarily bet against whether you like it or not.
FED and Treasury working more closely together on this ala
us financial repression. Going back to your questions, some clients
(32:18):
that Americans I meet in New York, London or Saint
Paulo are a bit taken aback by saying, AREIC becoming
a bit emergent marketized? What do you mean by Treasury
and FED working even closely together? This is not two
thousand and eight two thousand and nine, But so far
those to bet towards that tols to bet with, mister
bethsand did better on their longan US views.
Speaker 3 (32:42):
Speaking of the wide world, what are your clients saying
about China in particular? Because you know I'm looking at
a very good Bloomberg story on my screen right now.
China floods the world with cheap exports after Trump's tariffs,
and I think they just posted a record trades surplus.
Speaker 2 (32:58):
And there was another good article is from More Worrying
China wanting to be a gold storage hub was really straight.
Speaker 4 (33:04):
He did become a gold goldic.
Speaker 3 (33:06):
Doing a Switzerland.
Speaker 4 (33:07):
Yeah.
Speaker 2 (33:07):
Yeah, and the free point.
Speaker 3 (33:09):
But on the other hand, you know, growth has been
slowing in China and there is deflation, but if you
look at something like the Shanghai composite, it feels like
people are starting to get a little bit more optimistic.
What are you hearing?
Speaker 4 (33:21):
Three parts of that. First of all, China as an
asset class, we have it here as alongside Golden emerging
Marcus Champion of the Year in December, November, January earlier.
Everybody and their brother a bit like this, not a
bit like the steepener trade of this August early September,
it was the top trade going long dollar CNH. These
(33:42):
tariffs lightisers, they will be the toughest on China. There
is no way. All the dollar CNCH calls were both
starting with seven and a half flights at eight all
of that didn't materialize. Okay, we didn't go to six
ninety six eighty, but the NH is appreciating talking about
the day we made April sixteen. On April nine, the
big fear was on that morning when we questioned the
(34:05):
system April nine morning, China would devalue big time, big bank.
They didn't do any of that. And currently my head
of Greater China Trading ten who named drop nice to
call this China Take and nah Rally thinks that and
with his research, RMB strength has more legs to go
because whenever they go around the world, Peru ports Brazil
(34:27):
amazon forests following the China corpus. Back to our discussion,
these guys are full of dollars out of their ears
and now for discussions for the points that you mentioned,
they want to hage a little bit, so they want
to sell their dollars a little bit and that's a
big factor. So that's I think China Take will continue
to be the champion asset class. Gone to my head,
(34:48):
maybe not going to six ninety six eighty, but I
am still betting with CNH and R and B strength
over the dollar strength. One of these leggers of the
year will do better to the world effect. You guys
actually bloomberg at a great piece this very morning, like
Tracy said, on exporting this inflation. So two big countries
in this world are American are China. Mister Trump is
doing what he's doing on the tariff side. These other
(35:11):
big countries of the world don't necessarily fight with the
other big giant in the world stage. So those cheap
cars are coming into Europe than beyond and that is
a macro factor. Why because ECB back to blue hat.
Now they're done. Madame la Guarde very definedly says they're
done for now. Madame Schnabel for now is winning the discussion.
(35:34):
Even Lane is sounding a bit more like her, more hawkish.
Let's see they don't we maybe we don't have an
inflation problem painting below two percent if anything, my Mark
World Chief European Economist thinks it may go lower to
one point six to one point five. If that happens,
Let's see what their twenty is come December, come January.
If this China contries to export to this inflation, maybe,
(35:56):
even though they don't say it now, they may have
to end up cutting. So that's that's a big factor
for the European story.
Speaker 3 (36:04):
Joe, we should have asked Ozon to wear his europe
hat for this entire interview.
Speaker 2 (36:09):
I know it's a cool hat. It was a time
advice y of Global Macro at Deutsche Bank. Always a
pleasure meeting up with you. Always seems to be an
exciting times in the market. Also, if we like talking
to you because it's just a list of deutsch Bank analysts,
is like, oh yeah, we need to talk to that guy.
We need to talk to that guy. Yeah right, good
(36:29):
sales anyway, Thank you so much.
Speaker 4 (36:31):
This was great. Thank you so much.
Speaker 2 (36:45):
I love catching upon for all kinds. Always really fun.
He's a great read on one of the popular trades
for right now.
Speaker 3 (36:53):
It's just the talking points, right, and the talking points
this idea that you know, we we don't talk.
Speaker 2 (36:57):
About the Chinese market that much in terms of the
stock market. We do a little bit. But the idea
that from his perspective, long China is up there right
now with all the big ones in Nvidia and Gold
and up until recently the steepener, maybe that's fallen off
a little bit because it hasn't worked as well. That
this is one of the sort of top tier consensus
(37:19):
trades right now, something that we should probably talk about further.
Speaker 3 (37:22):
I also find it interesting that tariffs have fallen from
like number one on the list of concerns to like
number four.
Speaker 2 (37:28):
If that no, that's totally right. I mean when we
talked to him, that was middle of April in London
or early April, I think, and so it was all
about tariffs. And yet despite the fact that tariffs are
not top of mind for a lot of traders apparently
right now, it is interesting that still this idea too,
we don't really want to have exposure to the US
(37:51):
per se. We want to have exposure to US companies,
but not the US per se. That's all part of
the story.
Speaker 3 (37:57):
Speaking of which, another really good chart to look at
right now is gold versus real rates. So you can
bring up like tip yields or something like that, and
you can see there used to be a really strong,
almost one for one correlation and that's broken now.
Speaker 2 (38:11):
It's very interesting, right because it suggests that there's something
else going right right, because it's very easy to say, okay,
real raids, et cetera, they're going down. You want to like,
I think it's that sovereign's sovereign concern. It's like something deeper,
and it may be deeper to a lot of different
sort of you know, Western governments and Fiat currencies and
so forth. A lack of trust. Maybe something that doesn't
(38:34):
show up in a traditional market showing up in gold.
I do think that's really important.
Speaker 3 (38:38):
Yeah, all right, shall we leave it there.
Speaker 2 (38:40):
Let's leave it there.
Speaker 3 (38:41):
This has been another episode of the Odd Lots podcast.
I'm Tracy Alloway. You can follow me at Tracy Alloway and.
Speaker 2 (38:46):
I'm Joe Wisenthal. You can follow me at the Stalwart.
Follow our producers Kerman Rodriguez at Kerman armand desh O
Bennett at Dashbot and Cal Brooks at Keil Brooks. For
more Odd Lots content, go to Bloomberg dot com flash
odd Lots, where the daily news and all of our episodes.
You could chout about all of these topics twenty four
to seven in our discord Discord dot gg slash out Lots.
Speaker 3 (39:07):
And if you enjoy Odd Lots, if you like it
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on your favorite podcast platform. And remember, if you are
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Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:18):
Hello and welcome to another episode of the Odd Lots podcast.
I'm Joe Wisenthal and.
Speaker 3 (00:23):
I'm Tracy Alloway.
Speaker 2 (00:24):
Tracy. Every day it feels like stocks and gold go
up every day, stocks and gold, and stocks and gold,
and it's just it's relentless.
Speaker 3 (00:32):
I'll tell you what it's good for. Anyone invested in
an index fund and a bunch of gold coins that
their dad gave them.
Speaker 2 (00:38):
Yeah, good for you.
Speaker 3 (00:39):
Yeah, thank you.
Speaker 2 (00:40):
The Tracy Alloway portfolio doing very well.
Speaker 3 (00:42):
Yes, No, you're absolutely right. And the big thing about
this is it's not really supposed to happen, right, Like
You're not supposed to see stocks shoot up because of
optimism about the future while gold simultaneously goes up because
gold traditionally is the sort of dour yellow rock as
you like to describe it, which usually signals something that
(01:03):
is about to happen.
Speaker 2 (01:04):
I'm going to relent. I'm going to relent to something.
Speaker 3 (01:06):
Are you a gold bug?
Speaker 4 (01:07):
Now?
Speaker 2 (01:08):
No, Well, I'm going to relent on something. Okay, Right,
I admit that gold is a medal. This is my
big cave. I always no longer a rock. Yeah, this
is my big cave. I used to say, there's yellow rocks.
You know what, I'll acknowledge it's a medal.
Speaker 3 (01:21):
If it's a medal, Now, will you admit that it
has industrial applications?
Speaker 2 (01:26):
Yeah, but they're very minor. And this is also I
will not acknowledge that there is a a. It is
mainly a store of value, or perceived to be. And
when people are fearful, when people are mistrustful, and people
don't TRUSTI had currencies or the governments, and there's all
kinds of reasons to be skeptical about the governments that
issue paper currencies. I understand why people want to hold
(01:47):
this metal that people have used as money for thousands
of years.
Speaker 3 (01:51):
I'm going to take you back to the jewelry district
in New York and get you more excited about gold again.
Speaker 2 (01:55):
No, and I'll just say on gold, I loved it.
And then I wore that big chain when to the
diamond district, and I wish I'd bought it, like now,
that's like my bigorite. It was like thirty five thousand
dollars gold necklace, and that today would probably be a
forty five or fifty thousand dollars gold.
Speaker 3 (02:10):
Neck Imagine how much that diamond encrusted furbie would be worth.
Speaker 2 (02:14):
This is the thing they don't tell you about gold.
By the way, if you spend ten thousand this is
my crank take on gold. That's not crank. If you
spend ten thousand dollars on a gold necklace, they give
you a ten thousand dollars gold necklace. Yes, it's free.
It's like you spend ten thousand dollars, they give you
something for ten thousand dollars back. In a sense, it's
a free transaction.
Speaker 3 (02:33):
No, you get two things. You got something to wear
and an investment.
Speaker 2 (02:36):
Yeah you actually, Yeah. I wish I had had this
realization when gold was like two hundred dollars an ounce.
But anyway, it took me a while, and it'll.
Speaker 3 (02:43):
Make a gold bug of you yet, I'm sure.
Speaker 2 (02:45):
So these are really exciting wild times in the market,
and the last time we talked to this guest was
another wild time and an exciting time in the market.
That was, of course April. We do, in fact have
the perfect guests to try to understand everything that's happening
all around the world in global macro. We're going to
be speaking with the vice Chair of Global Macro at
Deutsche Bank Ozon Tournament Ozon. Thank you so much for
(03:08):
coming back on odd lots. Last time we talked to you,
we were in London. This time you're in New York,
so thank you for coming to visit us.
Speaker 4 (03:13):
Very good to be in New York. I'd love to
be on this show, I mean, other to be invited again.
UNGA good inners. This is the highlights. And by the way,
I was going to bring my United Amamim Jersey Jurally
looks like him and some Backlaba for Tracy, but couldn't
find in the airport. Next time.
Speaker 2 (03:31):
That's a good reason to do another future episode. Actually,
we talked a lot about gold at the beginning, but
I don't want to first ask about gold is in
vidious swallowing the entire US or maybe even global economy.
Speaker 4 (03:44):
Almost hand in hand, right, these two questions, I mean,
they both continue to go higher and higher. Actually, let
me start with gold, because you did you did put
such an introy in it. One of the very famous
memes on the internet, Caricultures, done maybe two three years ago.
This gentleman or lady running a big macro h fund
looks around. I run very complicated products, but at the end,
(04:06):
I buy gold, and these days that resonates even more,
mentioned even more and more in these roundtables in TV
studios like this. Normally that jin thinks, but it doesn't
because at the moment it works in risk on and
risk of. Last time you were around again, you called
me at a very relevant time questioning US exceptionalism. I'm
(04:28):
sure we'll go into that. What's going on with US institutions,
those question marks, all those question marks against the dollars
help gold FX is about stories against the dollar. I'm
sure we'll go into this as well. Some of the
stories are now having a less easy time. Then people
like to go into gold and we maybe going into
(04:48):
a rate cut period cycle or not. Whether you're Miran
or Hammock, that differs, but gold works in that as well.
So for the moment, I always feel, you know, when
it's the top three on TVs on my round tables,
I put the orangsign on. But at the moment it
works for a reason. Now, Nimdia, yeah, I mean if
he had this show a year ago as well, you
(05:09):
could have said all done as of this morning. One
of my partners in success Sarrevelos. His piece is already viral.
He's claiming, tongue in cheek that Nimdia is almost keeping
us away from a recession. All that Chip story, all
that capex spending. If it wasn't for that, maybe we
could either question or be in a recession.
Speaker 3 (05:29):
I'm not sure he's saying it that tongue in cheek.
Speaker 4 (05:32):
There agreed, and also others are joining him again. I'm
hearing from my dear France clients this day morning Baine claims,
and Lake's revenues quickly catch up with all this aikpex spend,
we may be in big trouble. All of this bill
bursts by twenty thirty, and we'll go into recession before that.
Now we can say a lot can happen before twenty thirty,
(05:55):
but warning signs are there. Last night's the big headlines
the reason why again does that close on the ice
n media investing into open Ai. That also becomes almost circular.
I mean this is not to Oracle invest in open ai,
open a I invest in ni Media, Back and forth,
back and forth. Is this a closed circle? I hear
(06:16):
all the skepticism also mainly coming from those who haven't
caught this big rally.
Speaker 2 (06:21):
Since a bubble is a is a bull market that
I called golden bubble. Tracy calls it a boom because
of the difference. Exact inherited a bunch of exactly.
Speaker 3 (06:32):
I should just mention we're recording this on September twenty, I.
Speaker 4 (06:36):
Like that, right before, right before Power speech, right before
Trump speech.
Speaker 3 (06:39):
So just on AI and the sort of self dealing
circle is circuitous, incestuous relationships. Perhaps one of the reasons
we like talking to you is because you talk to
a lot of clients and so you hear a lot
of feedback from the byside as well, What are people
looking out for in terms of saying, okay, this is
a bubble, because it seems like, all right, people have
(07:01):
been talking about high valuations for a really long time.
The stock just goes up. Is there something else that
people are like watching for, in which case they might say, actually,
we're going to start cutting back positions.
Speaker 4 (07:11):
Excellent question. Almost like two months ago, I was hearing more.
I'm skeptical, but flat cuts are also coming. You can't
fight this now, especially from the pros who've been around
nineties and beyond. I do hear, Look, this does feel
a bit like end of nineties, beginning of two thousands.
By the way, the year your peak is very important there,
(07:33):
but we may still run. That's one thing that more
seasoned equity beyond macro pros are saying. I also it
was a bit the beginning of my career, but I
was around in late nineties, early two thousands. Then the
denominator almost didn't exist in this valuation discussion. There was
hardly any cash around. Everybody stuck Joe dot Com. It's
(07:53):
excellent in B two, be even better in B B
two C. And of course Hindsight is the world's top
page one, but you could feel it. Whereas this time
around you can question one hundred billions thrown around in
a circle, but you cannot question much the revenue the
cash Jensen Nividia open Ai is bringing to the table,
(08:15):
you cannot question much. Let's go beyond Nividia a bit
into Magnificent seven, Microsoft's Apple alphabet. They have customers. All
of us are are their customers. They make money. So
and in a way called talking about circle more posted
way of more glass, helpful way of looking at it.
Nidia is the big champ. Okay, but take ni Media aside.
(08:36):
All of a sudden, oracle became a story for reason.
From oracle, we go to alphabet because for this time
around Judge decided favorably on chrome. The story continues, move
from one I said to another. Also, yeah, Nividia is
doing great. We'll talk about how Nasdak the Heracules is
catching up with my blue head Mega. But it's a
(09:00):
leave spinning like NI Media is not the top stock
in SMP today, talking about waiting for Godo. Finally, small
caps rolls up since the famous now jacksonvill and another
famous jacksonall Dowis speech. So it's not just one one
one guy is very important November nineteen me media earnings
are very important, but it's not just one stock.
Speaker 2 (09:19):
By the way, Ozon was regaling us or showing off
his make Europe Great Again hat, it's signed by Mario Draghi.
If I own that, I'm very jealous. I would not
be carrying it around. I would be carrying it at
a glass case. I'm selling it maybe for eBay.
Speaker 3 (09:34):
You'd have it in the vault along with your gold coins.
Speaker 2 (09:36):
I would have it in the vault along with my goal.
Speaker 4 (09:38):
But I thatsk how much I did respect my clients.
I want to show.
Speaker 2 (09:41):
Off before we can go further. Actually, for listeners who
maybe didn't hear previous episode with you in April, can
you just give us a little back. You talk to everyone,
you have these dinners, you afford you an incredible perspective
on what a range of people on the street are
thinking about. Just so that people can understand your perspective
and where you're coming from. What do you do like
(10:03):
on a day to day basis, Who are the range
of people that you talk to and how do you
interact with them?
Speaker 4 (10:08):
My job is to talk to my bank's top institution clients.
He funds real money, but also because of experience, talented relationships,
going going deep. This also includes now sotore on wealth funds,
key private banking institutions, and I love as you know,
I'm a person who tries to bring things together. So
in these roundtables, small or bag, it's not just edge funds,
(10:30):
it's not just real money, it's not just sorro and
wealth funds. All of said classes, credit rates, efs, emerging
Marcus my proud Terro equity of course, so they learn
from each other as well. Because we talked about in
these shows and equity perspective can be very different to
a race perspective. Right as we speak again, we're in
one of these doll drums on if you define macro
(10:53):
just as rates and fcs, it's almost like a magnet.
Four to twelve. Okay, we try we on us tanyar.
We tried below for pard for twelve, four thirteen, four
to fourteen. As Stacy said, we are recording this on
September twenty three at nine am. In three hours, share
Power will speak. Let's see if he changes tone or
six to his so called Howkish presser. Some people hope
(11:14):
that may again ignite a little bit of the other
stronger rates, higher tone. Otherwise, volatility in effects and rates
are struggling. Meanwhile, equity is continue to do better and better.
And back to your question. Different sets of clients coming
to my roundtables, coming to my realm, learn from each
other on why differents classes act different.
Speaker 3 (11:49):
So you mentioned the dollar just then, and of course
you have a very international group of clients that you're
talking to. Can we talk about the dollar drop this year?
Because I think it's really important and even though it
gets some attention, it's nowhere near enough because we're talking
about stocks rallying, US stocks rallying. Things look a lot
different when you start to adjust for currencies. How are
(12:10):
people thinking about US assets in light of the dollar drum?
Speaker 4 (12:14):
Very fair, I'm tim Odlass. So I also remember last
time we met is April sixteen in London, so just
a week before the big fear You're dollar was right
around one eleven. We were beginning to sense that this
could be a historic here in terms of this dedorization.
He fund ratio is changing, but we swift the mood
beyond one fifteen as well. Now looking at the picture,
(12:37):
two things are very important. First of all, the flows
back to our friend Nividia, back to our friend magnificent seven.
Because one pushback from some of my especially fast money friends,
who all either smell, want, or wish a dollar squeeze
after such a soft dollar move is what will the
flows do? World continues to buy Nividia's and Microsoft's do
(12:58):
they buy it hashed? So I was a little bit
skeptic on that. By the way, flows are back, so
a big difference to Aple sixteen. I'll talk we can
talk about that as well. Retail led rally. Look where
we are all time high my research reports and claims
again George Servelos that in the last recent thirty forty
five days or so, those laws almost eighty percent of
(13:21):
them are heged, so people are buying their Nidia haged
so believe it or not, eighty percent is a big number,
say seventies eighty sixty. That definitely helps the soft dollar
side of things. What continues to help is, of course
institutionists decreasing their exposure to US. Like hindsight I said
(13:41):
rightly on that April sixteen, nothing to end the US
private site exceptionalism. Nidia's microsofts so far are fighting back
the tests of deep sick, even though champion of the
year is China Tech in terms of performance, but from
Asia so Nordics big funds are reducing their dollar exposure
(14:05):
a little bit seven to sixty five, sixty to fifty five.
That makes a difference. That made a difference.
Speaker 2 (14:11):
This is really important. I think we should just continue
on the specific line because what it sounds like is
all around the world you have to have dollars to
buy in video, and video is a stock that's sold
in dollars. It's profits are denominated in dollars. It's sales.
It sells things in dollars, and that's the same for
all of the mag seven include Microsoft and Apple, and
all of them are doing phenomenally well. They have real profits,
(14:34):
real earnings and so forth. They're very excellent businesses. And
it sounds like basically all around the world people want
exposure to a handful of extraordinary US companies. They just
don't want to take the risk that the denominator and
this time we're not talking about earning but that or
that the dollar that they trade in or selling, et cetera,
(14:57):
is going to go down further. So they want everything
about this. They just basically don't want the US sovereign
exposure that's connected to these American domicile companies.
Speaker 4 (15:06):
Completely correct, and honestly, I was a little bit skeptic.
I wasn't sure. If you told me Osan this year,
this big surgeon back in NI media Microsoft won't happen,
then I would feel even more comfortable with the short
dolar position. But Magnificent seven roads it may even pass
Mega despite that is also remaining sort so whether I
(15:27):
was skeptical or not, what you explained is happening. But
I think for the next legs are included. A lot
of biensy site are calling for one twenty one, twenty
two light levels. You need now the European side of
the story or whoever you want to talk about Japan, China,
the lagger side of the story FX is too legged.
We talked about why the dollar side of short dollar worked.
(15:51):
We need now a bit more help from our European
story Tersea.
Speaker 2 (15:55):
You know what strikes me is interesting about this, which
is that when we think about countries where there's political
risk and so forth, we don't often associate them with
the most impressive enterprises in the world, right, And it
strikes me that that's the tension we're talking about here,
is that there's all this anxiety about the US as
a sovereign for all kinds of reasons. That's not unusual.
(16:15):
Other countries have sovereign risk. They're just usually not home
to literally the most impressive companies in the world.
Speaker 3 (16:20):
No, and it is true that most of the investor
nervousness around the US has shown up on the sovereign.
Speaker 2 (16:25):
Yeah, not the corporate sete, rather than the corporate.
Speaker 3 (16:27):
Side, which we've been writing about in the auth Loots newsletter.
Speaker 2 (16:29):
Which everyone should subscribe.
Speaker 3 (16:31):
To it, Yes, seamless plug just then. Okay. One of
the other I guess big questions about the market right
now is there's clearly nervousness about fiscal dominance and Federal
Reserve independence, and that is playing into the drop in
the dollar too. And yet at the same time stocks
seem to be taking off and a lot of investors
(16:51):
don't seem to be that nervous, at least on the
equity side. What accounts for the discrepancy there the two.
Speaker 4 (16:58):
Different roles pluging about plugging. I also love the New
York Times piece. I think you guys deserve all the
trust me, all those trans clients, they listen, they are
very excited when I'm on now. Tracy definitely hit the
right point. Deed organization is one key big team going
into the end of the year. Fiscal dominance or not
(17:18):
and the famous fed independence. Those are my second and
third key topics. By the way, where where are tariffs?
All the way down to four? I forgot about dominance,
So we talk right. I love brainstorming with you guys.
Remember what I said in August as well summer everybody
was everybody like some key investors, especially fast money. We're
gunning for from my deer islands. Four key trust moments
(17:43):
in four countries at the same time. What does that mean?
I mean trust moments. We said, you know what I'm
talking about, long hands getting out of control for people's
For Marcus.
Speaker 2 (17:51):
Big fisical, US, UK, Japan was the four for the.
Speaker 4 (17:53):
Right Reasons Europe book for Right Reasons because ramp up
the German span will come at the end of the
at the end of the year, et cetera. Some key
investors were asking, well, one trust moment, we know how
we handled chance. Later down prime minister goes different sets
of policies. What happens if four goes at the same time.
(18:15):
And we tried this on talking about dates September two,
when you guys came back from wherever you came back
from on the long final fine and final, long location,
long weekend, UK Gild's big move, followed by France because
the Prime Minister was about to go in six days,
joined Tracy. How long did it last? Four hours? That
(18:37):
long hand sell off lasted four hours And I'm not
trying to be funny. Basically since then US thirty years, Europe,
even UK has been much more under control. Up until
the Hawkish presser almost threatening below four percent, even more
than short dollars Tracy over the summer and inter fal
what were the real money and dhe funds common fail
(19:00):
with trade steepeners, steepeners, steepeners Europe, US, everybody and their
brother had steepeners first for different reasons. On Us more
due to the short end that sooner or later will
come to the Fed independence, the Trump side of the
equation would win more. Finally, the powerwood caving cuts would
come in and on the European side even more popular
(19:23):
because of the long end German spending coming through in
October November, and people believed in their steepeners. First, US
got hurt to nfp's myths, long hand moved big flatteners,
hurt gold aside whenever you say, or Nividia side, whenever
you say, somebody says a trade is untouchable, watch out.
(19:43):
European steepeners were supposed to be untouchable. Two days after
that flattening washout in US, Europe also got reduced and
since Tropkish pressure, we're more balanced onto Fed independence again.
Justice Morning of the Press mattter raskin my head of
US race strategy previously from the FED. Very respectable analyst
(20:05):
wrote about this FED independence sphere not being in the price,
not in the break evens, not in the term premiere.
Why I think a little bit, because so far, let's
die right into it if you wish. I think this
cut is justified in my mind. Even if they cut
fifty a week ago, it could have been justified talking
about some deer clients friends public So I may say
(20:28):
Reek reader publicly on TV and on his writing set,
they may and they should cut fifty because I think
if they sold the revisions in June and July, they
probably would have cut in June and July and going forward. Okay,
they cut twenty five. Not only they cut twenty five.
Miran did this thing probably that's the dot. But Waller
(20:49):
Woman stuck to twenty five. Even some of the previous
FED governors racing for the job. Bullard says they should
have done twenty five. So people are thinking and hoping
that there's still some fading dependence. Powell, even though he's
the past man, has some control over the situation. That's
why you're not getting any fading dependence.
Speaker 3 (21:09):
Feed on the long ends, Joe, it is interesting and
I would not have expected this earlier in the year.
But if you look at the move index, so the
index of non market volatility, it's going down. It's gone
down quite a bit, which is not exactly what you
might expect to happen when we're talking about things like
physical dominance and federal reserve independence. But there you go.
Speaker 2 (21:30):
That is a good chart I haven't looked at in
a long time. I want to go back to the
gold conversation because we've kind of been dancing around to
We're like, oh, political volatility in the US and sovereign
risk in the US, et cetera. But like, let's talk
about like gold in the US or gold and the dollar.
Like when you talk to clients, setting aside that it's
(21:50):
a good trade, people want to ride a good trade,
et cetera, how much fear anxiety, et cetera is there
about US political constability? And what are the and I
mean a prominent political commentator got assassinated recently in the
United States. Sadly, what are people at your geners maybe
inside the US or outside dinners saying about the US
(22:14):
when they look at our country.
Speaker 4 (22:16):
That's why more and more countries are building up their
reserves in gold shying away from a dollar more. My
motherland Turkey is an example, again publicly known in terms
of reserves. Also, let's remember what is still going on
versus Ukraine and Russia, the sanctions that Russia faced or
may face, so different countries are also because of that
(22:37):
leaning more towards gold. So besides our macro discussions ups
and downs of rates, that's uncertainty, that question mark over
US policy, that question mark over geopolitics leads central banks
to accumulate more gold. Joe for gold to go down.
The game should change. Like this year, my plan is
(23:00):
going all right. Again, I was on air. I thought
these big sipner transformans long aans crushing everything wouldn't happen.
I didn't expect this much of a comeback. But again
I said there would be a comeback, especially retail, much
more than pros belied in this nimdia gold go hand
in hand together. There should be something off the left field,
for example, maybe on tariffs. All of a sudden, tariffs
(23:23):
tongue in cheek, Tracy are a bit too good boy revenues.
They raise a lot of revenues. Twitter talks about the
TV's talk about the Torton Stock talks about it if
Supreme Court at whatever time, and that's also very key
when they make the decision Walt's against. I'm sure they may.
I know, they may use S three oh one, et cetera,
but will be all of the big that's the question mark. Now,
(23:45):
what will the Trump administration do? What will best send
to long aance can get going again, And even though
it's got nothing to do with necessarily Nimidia and gold,
the year's path may change and things like that can
take us off the.
Speaker 2 (23:57):
What about a big handshake with Chision and a new
I mean, I don't know what it would be. And
you know, my dream obviously is for a by D
factory in Tennessee one day, show me factory, et cetera.
But could that be a oh, this charge is in
a new direction, something that is like a real let's
reset this relationship. I'm not optimistic, but would that be
(24:18):
the type of thing that could reset the trajectory of
certain markets?
Speaker 4 (24:21):
You talked like my Joe, like a globalist Tennessee factory
by D. I mean that's not the pulse at the moment,
but sure if that happens, my gut feels still says
a short lived correction. But yes, that's that's what did
I say. That's not too pulse, That's not the New
York pulse at the moment. It would be a positive spice,
a little bit less scared of things spies and yeah,
(24:44):
it could see that eating.
Speaker 3 (25:01):
So I know it's number four on your list now.
But we should talk about tariffs a little more. And
I take the point that it could be a revenue
generator for the US and maybe that provides some support
on the bond side of things. But on the other hand,
I think most people would argue that it would slow
economic growth, which should be a drag on the equity side.
But we haven't really seen that. How are people talking
(25:22):
about the actual impact of tariffs right now? And I
gotta say, Joe, I got my first customs bill over
the weekend. It wasn't too bad. I think it was
like sixteen dollars or something, But I feel them personally
very fair.
Speaker 4 (25:37):
Comeback. I yess, especially fast money crowds hasn't necessarily given
up on ceculation. My takes for part of the reason
why all these new media gold long end calls have
been correct. I like to fade the inflation hulks, and
I like to fait the big recession bears, who are
much more quite these days anyway. But yes, if continues
(26:00):
to stick to them, even though on one hand they
generate revenue and keep the long end under under control,
there may be a growth impact on the other side,
accompanied by splice side immigration effects. And the jury is
out there on dear mister Waller, whether led by him,
whether this is the famous world the words, whether this
is transitory or not. More and more some clients start
(26:25):
to say, my binkie, the famous chief global economists start
to saying, maybe this tariff effect wasn't as bad, both
on growth side and on inflation side. These people immediately
get a pushback early days, early days. Let's wait, so
will companies continue to eat them and not pass that
much to the traces of the world to the customer,
(26:47):
especially when we talk of beyond ten percent terrists which
most countries face next year. Your country faces are very
key midterm elections. So I think Trump and Bessent know
that they got elected because of inflation. So the moment
the tacflation camp starts to look like they are proving correct,
(27:08):
even look like a bit of a climb on inflation
more so down on growth. I think we may we
may get more and more taco because they want to
win those midterm elections, then they will take more and
more steps over on race. But if they prove correct,
if it's not reflected on the customer, if inflation continues
to remain Okay, I know it's not two percent, but
(27:28):
below three percent, maybe this statistical continues.
Speaker 3 (27:32):
Sorry, did you just call pinky Chata my pinky?
Speaker 1 (27:36):
You have?
Speaker 4 (27:37):
Even like when we there's a lot of preparation going
for these macrodners as well. Trust me, when he sends
his questions and his keybouet points, he tells me to
start with my binki.
Speaker 2 (27:47):
I don't think we've ever heard him on the party.
We Gotta Yeah. I talked to him a couple of
times on TV. A big fan of his. We Gotta
make that happen. When you think about the US economy
and maybe the European economy too, but I think it's
US and you think about growth prospects. This is something
I've been asking a lot of people about, like how
much do you think the US economy as a just
(28:09):
the forward momentum of the US economy, especially over the
course of your career, how much has it become dependent
on this perpetual rise in asset values And you think, like,
do we need a booming market year after year just
to keep that sort of like consumption demand engine, investment
engine going.
Speaker 4 (28:28):
Well, yes, it's the short answer. I think the details
are even more complicated a bit sad. I think you
need you we need in this game that's eating it.
The next thing it was B to B B two
C three decades ago, three D. Now of course AI
AI AI the past three years. And also US, I
mean again as the country that gain my education right
(28:50):
in more open times, for that relies on growth, relies
on animal spirits, relies on those classes to go higher
and higher. And that's why the Tacy question from like
ten minutes ago. It's very key whether we're at you know,
we're getting their stage of the bubble or we're at
the bubble, because if that bursts, economy can get effected
as well. Also, Joe, I'm a big believer in the
k economy, the whole terminology of that. So I said
(29:14):
this again before on your shows. World may be more
okay for whatever we define ourselves as one percent, five
percent point one percent. There's a much bigger part who
are struggling, definitely on us, but globally as well. Some
again it's a statistics thrown out there. These days, ten
percent of the US consumers accumulate almost fifty percent of
the consumption and the rest much less. Valve effect is
(29:37):
getting bigger and bigger. When I was in college running
around in this country, again, we were talking about the
valve gap. But now this becomes relevant, even macrorelevant. That's
why people like me are okay with the Rade cuts,
risk management or not.
Speaker 2 (29:51):
When you encounter Americans in London, or Americans in Europe
or anywhere outside the English many in Europe, do they
bad mouth US policy? Do they like talk about how
terrible and like how much our institutions are deteriorating, and
how we need to get back to that sort of
like good old fashioned IMF orthodox economics of the good
old days.
Speaker 4 (30:11):
Okay, let me get the past from Kobe and do
a bit of a shack look they do, especially if
they have liked me born and read emerging markets, but
now trading the whole wide world, and if they are
Americans during my beautiful, beautiful world, they are affected like
when they hear conversations like this, they understand when they
(30:33):
traded Turkey are hungry Argentina and say, okay, because of
this politics financial repression, I don't believe it. That's why
I'm selling the currency. It was easier to do for
somebody else's land and currency. Now both it's hurt them
a bit. And also it becomes a bit of a dilemma. Right.
They may continue to criticize some of the things that
(30:54):
are going on, but for the arguments that I laid out,
risk parity at least depart continues to do okay, and
US ten years still is not going to six percent.
It frustrates them. This brings me to not in the
mine are big, big ones, but big thematics A key
point going forward, much beyond the fourth quarter. What's going
(31:14):
to win the trust moments my symbolic way of saying,
fiscal dominance or financial repression. Again, somebody who's experienced in
these Turkeys, hungry Argentina's of the world, what does their
mister bestan say? As a former client friend tell a
friend banding the curve, he literally said, I'll bend the turf.
(31:34):
We will take care of the curve. You know yet
banned even not take care of maybe true like they do,
being very watchful over the auctions, making sure auctions go
very well, which they have been. One tips auction a side,
maybe through buying much more on the short end vice
versa buying more on the on the long end, to
make sure that those rates stay under control. Operation twists
(31:56):
are eleven twelve. They may win over majority. Is taught
that fiscal dominance women, my god feel continued to say,
don't necessarily bet against whether you like it or not.
FED and Treasury working more closely together on this ala
us financial repression. Going back to your questions, some clients
(32:18):
that Americans I meet in New York, London or Saint
Paulo are a bit taken aback by saying, AREIC becoming
a bit emergent marketized? What do you mean by Treasury
and FED working even closely together? This is not two
thousand and eight two thousand and nine, But so far
those to bet towards that tols to bet with, mister
bethsand did better on their longan US views.
Speaker 3 (32:42):
Speaking of the wide world, what are your clients saying
about China in particular? Because you know I'm looking at
a very good Bloomberg story on my screen right now.
China floods the world with cheap exports after Trump's tariffs,
and I think they just posted a record trades surplus.
Speaker 2 (32:58):
And there was another good article is from More Worrying
China wanting to be a gold storage hub was really straight.
Speaker 4 (33:04):
He did become a gold goldic.
Speaker 3 (33:06):
Doing a Switzerland.
Speaker 4 (33:07):
Yeah.
Speaker 2 (33:07):
Yeah, and the free point.
Speaker 3 (33:09):
But on the other hand, you know, growth has been
slowing in China and there is deflation, but if you
look at something like the Shanghai composite, it feels like
people are starting to get a little bit more optimistic.
What are you hearing?
Speaker 4 (33:21):
Three parts of that. First of all, China as an
asset class, we have it here as alongside Golden emerging
Marcus Champion of the Year in December, November, January earlier.
Everybody and their brother a bit like this, not a
bit like the steepener trade of this August early September,
it was the top trade going long dollar CNH. These
(33:42):
tariffs lightisers, they will be the toughest on China. There
is no way. All the dollar CNCH calls were both
starting with seven and a half flights at eight all
of that didn't materialize. Okay, we didn't go to six
ninety six eighty, but the NH is appreciating talking about
the day we made April sixteen. On April nine, the
big fear was on that morning when we questioned the
(34:05):
system April nine morning, China would devalue big time, big bank.
They didn't do any of that. And currently my head
of Greater China Trading ten who named drop nice to
call this China Take and nah Rally thinks that and
with his research, RMB strength has more legs to go
because whenever they go around the world, Peru ports Brazil
(34:27):
amazon forests following the China corpus. Back to our discussion,
these guys are full of dollars out of their ears
and now for discussions for the points that you mentioned,
they want to hage a little bit, so they want
to sell their dollars a little bit and that's a
big factor. So that's I think China Take will continue
to be the champion asset class. Gone to my head,
(34:48):
maybe not going to six ninety six eighty, but I
am still betting with CNH and R and B strength
over the dollar strength. One of these leggers of the
year will do better to the world effect. You guys
actually bloomberg at a great piece this very morning, like
Tracy said, on exporting this inflation. So two big countries
in this world are American are China. Mister Trump is
doing what he's doing on the tariff side. These other
(35:11):
big countries of the world don't necessarily fight with the
other big giant in the world stage. So those cheap
cars are coming into Europe than beyond and that is
a macro factor. Why because ECB back to blue hat.
Now they're done. Madame la Guarde very definedly says they're
done for now. Madame Schnabel for now is winning the discussion.
(35:34):
Even Lane is sounding a bit more like her, more hawkish.
Let's see they don't we maybe we don't have an
inflation problem painting below two percent if anything, my Mark
World Chief European Economist thinks it may go lower to
one point six to one point five. If that happens,
Let's see what their twenty is come December, come January.
If this China contries to export to this inflation, maybe,
(35:56):
even though they don't say it now, they may have
to end up cutting. So that's that's a big factor
for the European story.
Speaker 3 (36:04):
Joe, we should have asked Ozon to wear his europe
hat for this entire interview.
Speaker 2 (36:09):
I know it's a cool hat. It was a time
advice y of Global Macro at Deutsche Bank. Always a
pleasure meeting up with you. Always seems to be an
exciting times in the market. Also, if we like talking
to you because it's just a list of deutsch Bank analysts,
is like, oh yeah, we need to talk to that guy.
We need to talk to that guy. Yeah right, good
(36:29):
sales anyway, Thank you so much.
Speaker 4 (36:31):
This was great. Thank you so much.
Speaker 2 (36:45):
I love catching upon for all kinds. Always really fun.
He's a great read on one of the popular trades
for right now.
Speaker 3 (36:53):
It's just the talking points, right, and the talking points
this idea that you know, we we don't talk.
Speaker 2 (36:57):
About the Chinese market that much in terms of the
stock market. We do a little bit. But the idea
that from his perspective, long China is up there right
now with all the big ones in Nvidia and Gold
and up until recently the steepener, maybe that's fallen off
a little bit because it hasn't worked as well. That
this is one of the sort of top tier consensus
(37:19):
trades right now, something that we should probably talk about further.
Speaker 3 (37:22):
I also find it interesting that tariffs have fallen from
like number one on the list of concerns to like
number four.
Speaker 2 (37:28):
If that no, that's totally right. I mean when we
talked to him, that was middle of April in London
or early April, I think, and so it was all
about tariffs. And yet despite the fact that tariffs are
not top of mind for a lot of traders apparently
right now, it is interesting that still this idea too,
we don't really want to have exposure to the US
(37:51):
per se. We want to have exposure to US companies,
but not the US per se. That's all part of
the story.
Speaker 3 (37:57):
Speaking of which, another really good chart to look at
right now is gold versus real rates. So you can
bring up like tip yields or something like that, and
you can see there used to be a really strong,
almost one for one correlation and that's broken now.
Speaker 2 (38:11):
It's very interesting, right because it suggests that there's something
else going right right, because it's very easy to say, okay,
real raids, et cetera, they're going down. You want to like,
I think it's that sovereign's sovereign concern. It's like something deeper,
and it may be deeper to a lot of different
sort of you know, Western governments and Fiat currencies and
so forth. A lack of trust. Maybe something that doesn't
(38:34):
show up in a traditional market showing up in gold.
I do think that's really important.
Speaker 3 (38:38):
Yeah, all right, shall we leave it there.
Speaker 2 (38:40):
Let's leave it there.
Speaker 3 (38:41):
This has been another episode of the Odd Lots podcast.
I'm Tracy Alloway. You can follow me at Tracy Alloway and.
Speaker 2 (38:46):
I'm Joe Wisenthal. You can follow me at the Stalwart.
Follow our producers Kerman Rodriguez at Kerman armand desh O
Bennett at Dashbot and Cal Brooks at Keil Brooks. For
more Odd Lots content, go to Bloomberg dot com flash
odd Lots, where the daily news and all of our episodes.
You could chout about all of these topics twenty four
to seven in our discord Discord dot gg slash out Lots.
Speaker 3 (39:07):
And if you enjoy Odd Lots, if you like it
when we get a read on what people are talking
about in markets, then please give us a positive review
on your favorite podcast platform. And remember, if you are
a Bloomberg subscriber, you can listen to all of our
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instructions there. Thanks for listening.
Hosts And Creators
Joe Weisenthal
Tracy Alloway
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