September 5, 2025 • 48 mins
This week, former US Treasury Secretary Lawrence H. Summers comments on why the markets have been slow to react to President Trump's efforts to fire Lisa Cook and further change the composition of the FOMC. And, concerns about BLS politicization are growing - what is the real problem behind the jobs numbers? Plus, gold prices near record highs are fueling a mining boom in Australia. Later, India is opening its markets to investors, but can regulators strike the right balance between risk and stability?
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Episode Transcript
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Speaker 1 (00:12):
This is Wall Street Week. I'm David Weston bringing you
stories of capitalism. The message in the jobs numbers last
month was disappointing and surprising, so President Trump fired the
messenger doesn't have a point and is his approach the
right one to make sure we can trust those jobs numbers. Plus,
we go to Australia to see the effects of soaring
(00:34):
goal prices on mining there and what miners are going
to do with all those profits. And we bring you
the story of the huge Indian retail derivatives market that
got Jane Street into trouble. What does it tell us
about the Indian capital markets overall, and what does India's
real economy need from those markets. But we start with
the continuing battle over the Federal Reserve, as President Trump
(00:58):
insists that Governor Lisa Cook must go and ms Cook
refuses to leave, even as the President's nomin need to
replace another governor heads towards Senate confirmation. Our special contributor
Larry Summers has consistently expressed his concerns about FED independence,
but so far the markets have been calm, so Larry
(01:19):
continued focus on the Federal Reserve as their proceedings of
respect to Governor Cook, Lisa Cook as president, trups tried
to fire even as they try to appoint Stephen Myron
to come in. What is the significance of what's going
on right now with the Federal Reserve.
Speaker 2 (01:35):
I think we're on the foothills of a credibility crisis.
We're not there yet because people believe that ultimately US
institutions endure and succeed. But between the President's demand the
interest rates be cut by three percentage points, which no
(01:57):
economist anywhere has endorsed any idea of that kind, between
the harshness of the President's rhetoric vis a vis Chairman Powell,
between the extraordinary efforts to fire a sitting FED governor
(02:18):
with no kind of due process surrounding the fore cause provision,
between the ominous rhetoric about hijacking the process for choosing
local presidents of the regional federal reserves, between rumors about
(02:39):
other members of the Fed Board. We are in completely
unprecedented territory. There hasn't yet been a dramatic market reaction.
There are some concerning things in markets, not just one
year ahead, but one year one year ahead. Inflation expectations
(03:04):
are trending up a bit. The spread between the thirty
year bond and the ten year bond is larger than
any time since COVID, but we haven't seen substantial reactions
in markets yet. But this could turn very quickly if
(03:26):
the psychology changes, and so frankly, I think we are
playing with fire in terms of inflation expectations, a situation
made much worse by the fact that the United States,
unless we get a big break in terms of artificial
(03:48):
intelligence or other technology, really has a very problematic fiscal picture.
Speaker 1 (03:56):
One of the questions some accounts is is does it
make that much of a difference have one person on
the FED or two people on the FED. Part of
the strength of the institution is the FMC is a
group of people, and so one or two people alone
cannot really change the direction.
Speaker 2 (04:12):
That may be right, But what the President is talking about,
what he's explicitly scheming about on his truth social account
and in some of his rhetoric, is getting a majority
of the Board of Governors and using that majority on
(04:33):
the Board of Governors to force a majority on the
Federal Open Market Committee by controlling the appointment of regional feds.
So this is not a one and done thing involving
just the chairman. This is an attack on the governance
(04:56):
of the institution. Part of what is really disturbing to me,
there have been a long tradition of distinguished Republican leaders
(05:19):
who have stood up for the importance of inflation credibility,
who have stood up for the independence of the FED.
I particularly admired Senator Pat Toomey when he was on
the Banking Committee for his efforts, but there were others.
(05:44):
There was an effort made to deny a nomination when
President Obama made it to Nobel Prize winner Peter Diamond
because he wasn't steeped enough in monetary policy and respect
for the independence of the Federal of the Federal Reserve.
(06:08):
And yet here when we're talking about the wholesale politicization
of the FED, there is no response from concerned Republicans.
And I have to say that I have been struck
(06:28):
that the prominent members of the financial community have had
more to say being critical of Zoron Randani's bad ideas
about grocery stores in New York than they have the
wholesale takeover of the FED, which is a major threat
(06:49):
to the financial system as we have it. So I
am very worried that highly irresponsible behavior are being normalized
by what the President is doing and by the failure
(07:11):
of the establishment and of the traditional voices to find
the courage to resist and call out what President Trump
is doing. If disagreements can't be stated openly or asked
(07:37):
on or acted on, that's really a very chilling thing.
Speaker 1 (07:42):
One of the major driving forces behind the Trump administration
and dealing with the Fed is trying to get rates
down too, you things like mortgage rates, rates on car loans.
Last time the Fed cut, actually the yield went up.
It's expected right now that the Fed is likely to
cut this month again. What is the administration's options if,
in fact, the Fed does cut this month of September
(08:03):
and actually yields go up.
Speaker 2 (08:06):
Well, first of all, David, I think you said the
important thing. Markets are already pricing in cuts in rates.
So if a rate cut is delivered as expected, I
would be surprised if that had a substantial impact on
long term rates. I think what markets will be watching
(08:27):
is less what happens in September than the signals that
are sent with regard to the future. And I think
there is a sense that if the Fed is moving
towards the President's line easy rates over everything else. I
think the likelihood is that in such an environment, long
(08:47):
term rates would rise and take more GOODE rates up
with them. That's the kind of pattern we saw with
the politicized nineteen seventies Federal Reserve. It's the kind of
pattern we avoided during the times of Chairman of Vulgar
(09:08):
and Chairman Greenspan. So I think that's something very much
to worry about, and it's why I'm not sure the
President is proceeding wisely, even in his own terms of
aspiring towards lower rates that people see. I suppose if
(09:31):
long term rates go up, there are, of course options
to bring back, in some form or other, the quantitative
easing that the President and his people have largely condemned,
where the Fed goes in and buys up or somebody
(09:52):
goes in and buys up large quantities of long term bonds,
or in which pressures are applied to banks and pension
funds that force them to buy long term bonds. But
if you start down that road, you are really, I think,
very severely compromising the integrity of our financial system in
(10:15):
ways that we'll have far reaching consequences.
Speaker 1 (10:22):
Coming up. President Trump claims that the Bureau of Labor
Statistics has been misleading the markets with its jobs numbers.
What will it take to make sure we have numbers
that we can trust? That's next on Wall Street Week.
(10:45):
This is a story about trust, maybe the most important
thing underlying the markets. Last December, we told you about
major problems facing the Bureau of Labor Statistics, the body
that publishes those all important jobs numbers each month. Problems
got much worse when Donald Trump fired the agency's head
last month. Our colleague Molly Smith reports on what it
(11:06):
could mean for the system and for private businesses looking
to get a foot in the door.
Speaker 3 (11:16):
In a shared office space in downtown Manhattan, a group
of economists see an opportunity.
Speaker 4 (11:21):
As you can see, the BLS revisions are quite large.
Speaker 3 (11:24):
You might not have heard of Vellio Labs, but they
know an awful lot about the US economy. Benz Wig
is the company's CEO.
Speaker 4 (11:31):
We're a workforce data company, so we collect data from
the public web, so anything that's online and that could
be public professional profiles, online job postings. We gathered that data.
We curate it, we standardize it, we enrich it. And
then we ultimately sell that data.
Speaker 3 (11:48):
Revellio's main audience is hedge funds and private firms looking
for another perspective on the economy beyond what's offered by
government agencies. But things changed after an ugly July.
Speaker 5 (11:59):
Jobs We got a very disappointing number here, and this
is going to get Wall Street's attention, seventy three thousand
jobs created.
Speaker 3 (12:06):
President Donald Trump claimed without evidence that the numbers were
biased and ousted the head of the Bureau of Labor Statistics.
Speaker 2 (12:13):
I believe the numbers were phony, just like there were
before the election, and there were other times.
Speaker 6 (12:18):
So you know what I did, I fired her, and
you know what, I did the right things.
Speaker 2 (12:22):
We need people that we could trust.
Speaker 4 (12:24):
We were really really shocked when this happened. This happened
on Jobs Friday, of course, and then over the weekend.
I remember making some calls. You know, I called our
chief economists and you know, a few other people on
the team, and we were all kind of thinking the
same thing. We were like, all right, we gotta publish
macro statistics. There's some concern that the BLS may become politicized,
(12:48):
either institutionally or just through the incentives they face. You know,
maybe there's some concern that whoever leads it gets the
message that, you know, if the numbers don't match a
certain narrative, they might be out of job. So there
are some distorted incentives, and you know, there's there's some
concern that this that this data might not be trusted
(13:08):
in the way that it has been, and it's time
for us to step up.
Speaker 5 (13:13):
There's nothing to report that says that there's been actual
political interference. Now I know there was a charge and
that was the reason for the firing, that the data
for the revisions were politically manipulated, and that is absolutely
one untrue.
Speaker 3 (13:30):
Mike Horrigan is president of the Upjohn Institute, a think
tank focused on labor markets. He also spent over thirty
years at the BLS, at one point leading the Employment
Statistics Division.
Speaker 5 (13:40):
I've served under many commissioners, whether they be nominated by
a Republican president or a Democratic president. I got to
say all of my experiences will as at the Bureau
was that of collaboration, collegiality, understanding. I personally think all
the business leaders I talk to still have trust in it.
I think what they're looking for is whether or not
(14:01):
a new commissioner is going to come in and interfere
with that trust. I think that's the next big test.
Speaker 3 (14:10):
After ousting Rika mcintarford, President Trump tapped to EJ. Antoni
to head up the Bureau of Labor Statistics. Antoni is
the chief economist at the Heritage Foundation, a conservative think tank,
and was a contributor to the controversial Project twenty twenty
five plan. He faces Senate confirmation before he can step
into the new role at BLS. We spoke with former
(14:32):
Commissioner Bill Beach about the politics of the role. Beach
served under both President Trump and Biden.
Speaker 7 (14:37):
Whether the president's Republican or Democrat, They're going to find
someone who has maybe demonstrated or at least could demonstrate
that they support the general drift of the policy portfolio
of the president has laid out. So EJ definitely qualifies
on that.
Speaker 8 (14:54):
So EJ and Toni has been pretty vocal about his
critiques of BLS, including the.
Speaker 3 (15:00):
Job's data the revisions. He suggested before he was named
to the role that the BLS should suspend the monthly
jobs report until the data issues are quote corrected. Do
you think that that's a viable solution? For a problem
that BLS is facing.
Speaker 7 (15:18):
It's not viable at all. The monthly reports coming out
of BLS, particularly the Job's Report, are watched by financial
movers and shakers all over the world, by policy people
all over the world. Their biggest impact is here in
this country. And I can't imagine a situation more deleterious
(15:41):
to the economy that a statistical agency could do than
to suspend or stop or delay one of their reports.
I mean, it would cause a lot of problems. So no,
it's not viable, and I think EJ will quickly see
that if he's confirmed.
Speaker 3 (16:00):
The reports suggests Antoni has since backed off from the
idea of suspending the monthly jobs report. But regardless of
whether Trump's new BLS chief makes the agency better or worse,
the issue remains that there's room for improvement. The agency's
problems are twofold, the budget needed to get the numbers
right and the people to make sense of those numbers.
Its resources haven't kept up with the scope of the
(16:21):
challenge it faces. Adjusted for inflation, BLS funding has slumped
about twenty percent since twenty ten, and President Trump's fiscal
twenty twenty six budget proposal would shave off an additional
eight percent, but Horigan says that the BLS has already
been making the most of its tight budget.
Speaker 5 (16:39):
The Bureau gets about fifty eight percent of their reports
now from this thing called EDI. So for example, with Internet,
where it's more like a say a single firm or
smaller firm will go into the Internet or the Web
data collection facility and enter their answers into that format,
that's probably about twenty to twenty five percent of the sample.
(17:00):
There are other forms in which the data are collected.
So for example, CADDY is a computer assisted telephone interview.
So a lot of these innovations were introduced well before
I came on board, but over its history in those
different innovative data collection techniques have been increasing over time.
Speaker 3 (17:20):
Changes in the BLS's methods of collecting data wouldn't be
without precedent its statistical The Census Bureau is already working
with private partners to get creative in its data collection.
Speaker 5 (17:31):
In terms of that next step, I mean that's really
kind of a function of resources. Census Bureau, for example,
is doing some innovative research right now with Intel and
Amazon to take a look at how you could use
the firm's data in its own format and then use
a large language model to basically fill out a survey form.
(17:51):
That's the kind of innovative thinking that the Bureau and
cs have done for years, and with more resources, they
would be capable of doing that kind of innovation.
Speaker 3 (18:00):
Innovation at the agency can also come through changing processes
that no longer work as well as they once did.
Nancy Podok was the Chief Statistician of the US at
the Office of Management and Budget and is currently CEO
of Knapax Consulting.
Speaker 9 (18:13):
There's no question that we need improvement. We need investment,
we need more research, and we need to update methodologies.
The agencies have been starved of resources for a long time.
I think a healthy discussion within the administration is a
great thing. I'd love to see it, and I think
it should involve people outside the system as well. The users,
(18:37):
you know, people who are really relying on the numbers
to make decisions, need to provide input into that as
well as methodologists.
Speaker 5 (18:49):
I'm not telling the Bureau what to do, but they
collect the data through the Friday before the release of
the data on Employment Situation Day. So one option to
consider is if you want more reports coming in. Before
you introduce any additional innovation in terms of data collection techniques,
maybe consider extending the time period for that first closing.
Speaker 3 (19:12):
But processes and innovative partnerships need people to shepherd them.
People it's been losing. The agency has roughly two thousand employees,
and a third of its top positions are now vacant.
Speaker 5 (19:24):
One of the concerns I have is, even if you
throw more resources at a time when we've lost so
many talented members of the statistical community because of the
fork in the road, because of firing all the folks
that have less than two years of tenure, and all
the senior executives that have decided to retire, you've got
a people problem.
Speaker 8 (19:44):
It's just amazing looking at like the magnitude here, the
green ones again, thels and the blue ones are yours.
Speaker 4 (19:52):
Pretty much what you get the first time is going
to be very close to what you get a month
later and a month after that.
Speaker 3 (19:58):
The private sector thinks it can lend to HA and
to solve the government's data problem. An idea that's come
up in the context of improving federal statistics is this
idea of blended data, so incorporating private or alternative data
sources on top of what the government collects. Is that
something that you have explored with BLS or other statistical agencies,
(20:19):
or something.
Speaker 4 (20:19):
You want to do, Yeah, I mean we would love
to do that. It hasn't come up. You know, no
one has asked us if we'd like to.
Speaker 3 (20:29):
Would you ask them?
Speaker 6 (20:30):
Yeah?
Speaker 4 (20:31):
I think so. I mean, I think they know about us.
You know, we're very much in the same circles. You know,
it's the small world of laborconnuts and we all know
each other. And and I think you know, certainly within
financial markets, we're well known as the kind of go
to source for labor market information. So I think they
know that we're doing this. My sense, and granted I'm
(20:53):
not in the room when these discussions happen, is that
the BLS has not been able to just defy funding
for these new initiatives, and they've had their funding cut
again and again. And this is something like a wish
that has never really.
Speaker 10 (21:15):
Gotten traction.
Speaker 4 (21:16):
So not holding my breath for it, and I'd love
if it would happen. In the meantime, We're just going
to put it out there as a public service.
Speaker 3 (21:25):
The science of statistics is empirical, but under the hard
data lies the immeasurable but important quality of trust in
those numbers and in the entities responsible for collecting and
reporting them.
Speaker 7 (21:37):
This is not a trivial matter. The trust in BLS
is connected to trust in their product. The two are
the same. And if you don't trust the product, then,
for example, you're making a big merger with another company
and you use data from BLS, it has to be
pretty believable in order for your hurdle rates for the
(21:59):
investment to be believable. Well, now you don't quite believe it,
so you begin to hedge a little bit more uncertainty
around that hurdle rate than there was before, and uncertainty
produces higher costs than the acquisition process. I'm using a
very small slice, but that's repeated every day, thousands of times.
So I think losing trust in a bedrock institution is
(22:23):
highly consequential, highly difficult, and very expensive for an economy.
Does it reduce the growth rate? Yes? Over time it
could actually reduce the growth rate in economy. Not to
know the economy is operating at a certain level because
you distrust the data means you don't know how the
economy is operating, and how can you function efficiently and
(22:43):
use your resources at their highest and best use if
you really can't see the economy the way you think
you should.
Speaker 3 (22:49):
Nancy Podock says that today, as Trump's BLS pick prepares
for the Senate confirmation process, the country sits at acrossroads.
Will leadership continue to prioritize the best, most impartial data
or will it fall into a familiar trap that other
countries know too well, in which numbers aren't used to
learn about the economy, but to tell an approved story
(23:11):
about it.
Speaker 9 (23:11):
We really need people to get excited about the whole system,
not just the firing of the BLS commissioner, but knowing
that that's a keystone in a larger system that is
in peril. We're going to go one way or the
other at this point. I don't think there's a status
quo option. I think it's either going to get very
(23:34):
political or people are going to really strengthen the system.
We've got to choose as a nation which way we're
going to.
Speaker 1 (23:43):
Go up next. There's gold in them. They are Australian
outback minds and firms are reaping the benefits from higher
gold prices. But what are they going to do with
all that money? This is a story about money burning
(24:10):
a hole in your pocket. The price of gold has
been on our rocket right up. Our colleague Paul Allen
tells us about what this means for gold mining in
Australia and both the risks and the opportunities.
Speaker 11 (24:24):
In the Australian outback, scrub and red dust stretches as
far as the eye can see. It's desolate out here
and it's dry, but beneath the dust there's a bounty
that miners are willing to dig a long way for.
Speaker 12 (24:37):
How many ounces of gold would be in a typical truck,
So the beare and five hundred grams of gold and
the tripe. So we've got a line of trucks slowly
making their way out of the pit here. How long
does it take to get from the bottom to.
Speaker 10 (24:49):
The top, Yeah, it's well over an hour.
Speaker 11 (24:52):
The Kelgooli super Pit in Western Australia is a sight
to behold. More than six hundred meters deep would covery
in Manhattan's tallest skyscrapers. It's so vast it swallows Central Park.
Speaker 13 (25:05):
This project is going to be an important one for
our business. And our shareholders A Zabaham.
Speaker 11 (25:09):
Stuart Tonkin as CEO of Northern Star, Australia's the biggest gold.
Speaker 13 (25:13):
Miner, probably around three to f one a million dollars
per annum being spent moving material from the southern part
of this pit, gaining access to over six million ounces.
Speaker 10 (25:21):
Of gold in the bottom of the southern part of
this pit.
Speaker 11 (25:25):
The price of gold has been on a tear. It's
up nearly tenfold since two thousand and more than doubling
over the last five years. Tolkien's company and many others
around Carl Guli are cashing in. But the gold industry
has been here before.
Speaker 13 (25:40):
There's probably more failure stories than success stories where people
can point to in the gold sector, and so repairing
a lot of that trust with investors as we go
into another cycle has been really important for our company
and I think for many Australian companies to get that
investor trust.
Speaker 11 (25:59):
But before we get to that, let's set the scene.
There was eighteen ninety three when a group of prospectors
on horseback quite literally struck gold in Calgooley. Russian sued
and the precious metal has dominated the Western Australian town
of thirty thousands ever since. And the other Ashok Pereka
is the local accountant and chairman of mid tier gold
(26:22):
producer Horizon Minerals.
Speaker 14 (26:24):
I've been involved in the mining industry for over forty
years in Calgooley and I happened to in the pub
as well. When I came here, gold was probably one
hundred and fifty dollars an aunts. Today it's over five
thousand dollars in aunts. It has been great for everybody
in Australia and cayl Gooley win the biggest goal mining town.
Other is in Australia and Carl Gooley is different.
Speaker 15 (26:44):
You can come to Carl Gooley, you can walk into
a pub, you've got no job, nowhere to live and
no money, and by the time you walk out you've
had a meal, you've got a place to stay and
you've got a job.
Speaker 11 (26:59):
There's plenty more people finding jobs and places to mine.
With the price of gold booming.
Speaker 10 (27:05):
We're currently mining. It's all a great goal price environment.
Speaker 16 (27:08):
What those high goal prices do for is this, we
can actually produce gold now pay a little more through
processing through third party infrastructure, so use other people's infrastructure.
Speaker 10 (27:18):
What it does is as actually.
Speaker 16 (27:19):
Closed, as that funding gap will need to refurbish our
own plants.
Speaker 13 (27:22):
Now I call them pop up shops around the gold
fields here, just the amount of flurry and activity of
things that weren't economic six months ago that suddenly become economic.
Speaker 11 (27:32):
Australia produces about three hundred tons of gold each year,
that's about eight percent of global production. It's a costly exercise.
The process involves breaking down vast amounts of ore extracted
from the mind. Each truck can carry about two hundred
and fifty tons of material, which is typically five hundred
grams of that is gold. That materials then broken down
(27:56):
and processed by crushes before being melted.
Speaker 17 (27:59):
The melting point of gold is ony twenty four degrees,
so we then hate the furnace up to roughly twelve
hundred degrees as we go through the poor process. The
first material comes out is all of that slag off
the top of the in creacible. Then when the gold
comes out, the color chained actually goes from a yellow
almost or greeny color, and that's the gold coming out
(28:22):
of the process. Probably one of the good things about
this site is that we have a relatively nice or
body coming into it. We don't have a great deal
of impurities coming through. So these are some of the
nicest bars that I've seen in my time in industry,
and with.
Speaker 11 (28:38):
A surgeon prices, Australia's gold miners are cashing in and
setting themselves up for long term success. Lorie Conway is
CEO of Evolution Mining.
Speaker 18 (28:49):
So back in June twenty three, we made the decision
to invest two hundred and fifty million dollars building this
plant expansion and seventy five million dollars to open up
a new mining center into the North heat Feur the plant,
taking it from two million tons to four point two
million tons. And in twenty three it was pretty difficult.
The market was high, it was hard to get people,
(29:09):
hard to get equipment.
Speaker 10 (29:10):
I think we were very fortunate when we did that.
Speaker 16 (29:13):
But gold price was only two four hundred two five
hundred dollars an ounce when the board approved this, and
it had very good economics. I mean bringing it in
right now at two hundred dollars an ounce is a
perfect time.
Speaker 10 (29:26):
To be commissioning it.
Speaker 16 (29:27):
I think that the difference this time is what's going
on around Central Banks and that shift of we need
to have gold in our reserves a lot more, whereas
back in the last cycle it was it was really
around the whole mining boom and therefore what was going
on in low inflation, low interest rates that pushed the
price of gold up, and so that was will being
driven by an economic standpoint.
Speaker 12 (29:49):
This time it's.
Speaker 16 (29:49):
Really being driven by geopolitical tensions and the shift in
the way that governments are handling their reserves. And so
that's why you sort of see that structural shift that
that the governments are driving this price whereas the economy
was driving the other one. And that's why in the
long term, yes, the goal price will come down a bit,
but it structurally shifted higher because of what central banks
(30:11):
are doing.
Speaker 10 (30:12):
Versus the last last boom.
Speaker 11 (30:14):
In twenty nineteen, Evolution reported adjusted gross profit of about
two hundred and seventy million US dollars or about four
hundred and ten million Australian dollars. That's now jump to
about one billion. It's expected to grow even further to
almost two billion next year.
Speaker 10 (30:31):
And how harry about on the costs front, what's that like?
Speaker 16 (30:33):
At the moment, power will go up because we're obviously
doubling the processing and the processing uses power.
Speaker 10 (30:38):
Fifty percent of our costs are labor.
Speaker 11 (30:41):
And investors are keeping a keen eye on costs this
time around. When gold prices last jumped, Australia's gold miners underperformed,
falling sixteen percent of the three years from twenty ten,
while the price of the metal itself rose fifty two percent.
Kate McCutcheon covers Australia's gold miners for City.
Speaker 6 (31:02):
So last cycle, we definitely saw a lot of transformative
m and E which was very value destructive. So that
last cycle from two thousand to twenty twelve, the ten
biggest gold stocks in our coverage universe cumulatively burnt ten
billion dollars in free cash.
Speaker 16 (31:17):
As an industry, we made those missteps because when the
price did come off and that cycle changed, shareholders went, well,
where's the cash, And all the industry said is, well,
we reinvested it in the projects or we went in
board assets, and therefore we've reinvested that money for you.
And the shareholders were like, well, we would have liked
some of that, and we didn't see that. It hasn't
(31:37):
changed too much, I mean, other than that we're putting
more cash in the bank, which is why our shareholders
want to see it.
Speaker 12 (31:42):
So it's interesting you say you've got more cash in
the bank. Has this changed your approach to reserve management
and long term planning as well?
Speaker 16 (31:50):
You know, you've got to see it as a stained price
at these levels before, because you can't just change your
mind plans overnight. So what it does mean we look
at our reserve pricing, We look at what the costs
have changed, because you do see costs generally follow the
goal price. And then we look at all what projects
become more economic in a higher price environment, and then
(32:10):
we apply the normal discipline of when do you bring
those on.
Speaker 13 (32:14):
I think it's important that you look at a lot
of these things in hindsight, some things like hedging, you know,
hedge book legacy, at prices that people had never never
thought that they would see exposure to. You know, when
people had a high equity price, they probably tried to
use that currency by raising lots of money on the
back of an elevated equity price and then potentially dropping
(32:35):
money out of their balance sheet, return capital to shareholders
that then wasn't retained for its own sustainability inside the business.
So there are very many different disciplines of what people
do at different times.
Speaker 12 (32:46):
And do you feel lessons have been learned? Do you
feel like the approach is different this time.
Speaker 10 (32:50):
I feel that the.
Speaker 13 (32:51):
Heat has come out of some of that, but I've
found a foundation discipline of true capital management across a
variety of things. So, you know, dividend gold companies was
never really heard of. There's a lot of good track
record of gold companies paying dividends, doing share buybacks, compressing
registers that they had raised equity on the back of.
Speaker 10 (33:11):
Those are the type of capital.
Speaker 13 (33:12):
Management measures that aren't typical to a gold company are
this time.
Speaker 6 (33:16):
Investors want to see more tuck in acquisitions or bolt
on acquisitions close to infrastructure.
Speaker 10 (33:22):
It's very very.
Speaker 6 (33:23):
Hard in a bull gold market to do a deal
that's a creative and I think the gold companies are
realizing that. Secondly, what's not different this time is delivery
on operational guidance. So the three biggest stocks in our
coverage Universe, Evolution, Northern Star in Neumont actually up until
the SFY hadn't delivered on guidance for between four to
(33:46):
seven years. The third thing that's different this cycle is
also hedgebooks. So now we're seeing gold miners opt for
no hedging policy, so that exposure to spot prices and
putting in place and put options to protect the downside.
Speaker 10 (34:01):
And this cycle as well.
Speaker 6 (34:02):
Most of the gold miners in our coverage are in
a net cash position or running at peak net data
fifteen percent, so balance sheets are very different this time.
Speaker 11 (34:11):
And investors appear to be liking what they're seeing. Since
the start of twenty twenty two, the gold price is
up eighty five percent. Australia's gold miners are up ninety
eight percent, with both Northern Star and Evolution balancing share
buyback programs with new investments in recent months.
Speaker 12 (34:28):
Do you feel like investors now buy the idea that
the gold industry is more disciplined than it has been
in the past.
Speaker 1 (34:33):
Yeah.
Speaker 16 (34:34):
I think if we can continue that over the next
sort of twelve eighteen months through increasing dividends, making sure
that some companies do buybacks that they do see that,
as well as reinvesting in the business, because the shaholders
still want us to reinvest.
Speaker 10 (34:47):
In the business.
Speaker 16 (34:48):
They want us to make it sustainable over the long term,
but they do want to share in that.
Speaker 10 (34:52):
As we're going through this cycle.
Speaker 19 (34:54):
Just spent a couple of weeks in the US meeting
with investors because there's a lot more interest in the
US in Australian doll stops at the moment, and so
it was good to go and talk to them and
explain what we're doing here at Evolution, but also what
the gold industry in Australia is doing, and they're certainly
going to be more interest.
Speaker 11 (35:12):
The big question is where to next. Gold is plataued
in recent months, but in an increasingly uncertain macro environment,
is the room to go higher.
Speaker 13 (35:22):
It's a really exciting time for gold and it's been
elevated for some time, but there doesn't seem any signs
that this is going to fall back. We think it's
possibly the new norm and if anything, the start of
another continuing ball run for gold.
Speaker 10 (35:37):
Yeah certainly.
Speaker 16 (35:38):
I mean gold started back in the eighteen fifty so
it's been around and been a part of Australia for
a very long time, and I think as we go
through the boom and bust of economies, gold has had
a significant role to play. It now has a more
important role to play because we are a top ten producer,
we're low cost producer, We're a great jurisdiction in which
to operate and therefore makes it important to the Australian economy.
(36:01):
But it also means it makes it attractive for people to.
Speaker 10 (36:04):
Invest in the sector.
Speaker 11 (36:05):
Whether it does make it attractive for people to invest
in is going to depend on some big decisions being
made by companies like Evolution and Northern Star. Is a
time to double down on the gold mining bet or
is it time to take some money off the table
and give it back to investors?
Speaker 1 (36:26):
Coming up, millions of Indians put billions of dollars into
equity derivatives and lost most of it. We take a
look at Indian capital markets and their role in driving
growth and innovation. That's next on Wall Street Week. This
(36:50):
is a story about walking a tight rope. India Prime
Minister Modi is committed to making India and economic power
and capital markets are what provide businesses with the money
they need to start and to grow. But to do
that they need to encourage investors to take risks, enough
risk but not too much, a fine balance. We recently
saw lost in India's equity derivatives market. As a market
(37:15):
maker with a unique model, Jane Street's business makes bets
on inefficiencies in markets. Bloomberg reporter Catherine Doherty has been
reporting on its business in India.
Speaker 20 (37:27):
Jane Street has kept its trading secrets close to their chest,
but it was really the Millennium lawsuit.
Speaker 1 (37:34):
Jane Street saw an opportunity in India's equity markets, engaging
in a strategy called index arbitrage.
Speaker 20 (37:42):
So the firm was essentially placing these large bets that
were then impacting the other side, and they were profiting
from the way that these markets were moving. So the
regulators in India have identified this as a manipulative trade,
and the firm has said it was a arbitrage trade
and not market manipulation.
Speaker 1 (38:03):
India's market regulator, the Securities in Exchange Board of India
or SEB, banned Jane Street from the country's securities markets.
Jane Street has filed an appeal alleging that SEB denied
access to documents it needs to defend against market manipulation accusations. Ironically,
the problem with India's capital markets historically has not been
(38:24):
encouraging too much risk but too little. Nil As Shah
has watched the evolution of the country's capital markets as
the Managing Director of Kotak Mahindra Asset Management.
Speaker 21 (38:35):
The Indian savings location is more tilted to its physical
as sets. We are one of the largest buyers of
gold in the world, putting anywhere between fifty to seventy
billion dollars annually. We also have love for real estate.
Capital market or financial savings itself is taken off in
recent times, but thanks to mutual funds, insurance industry and
(38:59):
bens funds, slowly and steadily a location to capital markets
both debt and equity is increasing rapidly.
Speaker 1 (39:08):
India's transition to retail investing is still in its early stages,
but it is moving fast. One in five households today
whole shares are from one in fourteen. Just five years ago.
Speaker 21 (39:21):
We launched an investor awareness program called Mutual Funds Sahih
Mutual funds are right thing to do and that has
helped us in mobilizing more and more retail savings into
mutual fund Our industry is growing at a phenetic pace
and I believe the najis from the regulator. The work
(39:43):
done by the regulator is laying the foundation. Now it
is up to us as an industry to carry forward.
Speaker 1 (39:49):
The work. One measure of the expansion of Indian capital
markets is the success of its IPO market, which is
among the biggest in the world.
Speaker 22 (39:59):
Last year, IPOs in India accounted for about twenty more
than twenty billion dollars US dollars. It was the number
two IPO market in the entire world.
Speaker 1 (40:10):
Josh Felman is the principle at JH Consulting and advised
the Indian government on economic and financial matters during his
time as the Director of the IMF's India office. To date,
regulators have encouraged retail participation in IPOs, helping contribute to
overall retail participation in markets.
Speaker 22 (40:30):
One thing that they've been fantastically successful in as opposed
to say China, is they've managed to get household participation
in the capital markets.
Speaker 1 (40:43):
It's not all roses. Under the surface of India's blossoming
capital markets is a risk that threatens its stability derivatives.
Speaker 22 (40:51):
About forty percent of derivative transactions are conducted by households
in India, which is an incredibly large number. So if
you take the derivatives market in particular, the regulator SEBI
did a study They found that last year about ninety
percent of the participants in the market lost money, and
(41:14):
they found that again about forty percent of them were
under thirty. Three quarters of them earned less than six
thousand dollars per year.
Speaker 1 (41:25):
The growth in derivatives has caused a liquidity problem.
Speaker 22 (41:29):
It is a fact that there are a large number
of unsophisticated investors. It is a fact that they have
very poor cash buffers. But what to do about it.
You don't want to push these people completely out of
the market. On the same time, you don't want to
(41:49):
unduly restrict the professional participants in the market, because they're
the ones who iron out the market inefficienties. So far,
it has not had any adverse impact on the ability
to raise money through the equity market.
Speaker 1 (42:10):
Even if the ill liquidity in markets hasn't affected raising
capital to date, it has introduced a different kind of risk.
Speaker 20 (42:18):
So in India, the options market is quite liquid, the
most liquid active market really across the globe. In the
US you also have a very liquid options market, but
the cash market, the equity market is also liquid. It's
also trading at high volumes, and it's moving very efficiently,
and the regulators really have a sense of the big
(42:42):
players and if there's any manipulation or if there's any
large moves, they're able to identify it very quickly.
Speaker 1 (42:49):
India's financial regulator SEBBI has made an example out of
Jane Street and drawn a boundary in how far it's
willing to go to liberalize its markets, but keeping the
door open to foreign investors will be crucial for the country.
Speaker 21 (43:03):
India is one of the most open economy in terms
of foreign direct investment. India's largest fmciti company, automobile company,
telecom company, mutual fund, private sector bank, insurance company. All
our majority owned by foreigners. There is hardly any other
country in the world where foreigners will be allowed to
(43:24):
own such kind of industry. However, can we improve further
upon this? My favorite example on foreign direct investment is
Maruti Suzuki. In the eighties, Suzuki came to set up
an automobile company in India. They have gone through the
ups and downs of India. Today, Maruti Suzuki, a fifty
(43:47):
three percent owned subsidiary of Suzuki, sells more automobiles in
India than what Suzuki sells worldwide, and Marutiya's delivered better
return than Suzuki Honda Toyota combined in the equity market
since it's listing in two thousand and three.
Speaker 1 (44:06):
It isn't just equity markets that provide capital companies and
the debt side of the capital market. Equation may be
about to get a shot in the arm when Indian
government bonds are included in several foot Sea Russell bond
indexes this month.
Speaker 21 (44:21):
Essentially, we have seen that whenever a country becomes part
of benchmarkt dices, both passive as well as active flow
starts flowing in. So inclusion infoot Sea government bond and
dices will undoubtedly increase our location tibets India more importantly
when you get an alternate source of funding. For example,
(44:43):
all domestic investors are generally on one side of liquidity
either it's high or it is low, but global investors
can bring balancing park.
Speaker 1 (44:55):
Indian markets have come a long way in encouraging risk
taking among retail investors and offering channels of investment to
foreign investors, but Sha says that hasn't been enough to
support the risks inherent in generating the kind of innovation
that comes from the success and failures of startups.
Speaker 21 (45:12):
Unfortunately, here, Indian capital market has not done a good
job maturity of our startups, both innovation as well as
otherwise have been funded by global private equity and venture
capital funds. It has been to some extent funded by
family offices and high networth individuals. Like the public market,
(45:37):
private market has not received encouraging participation from Indian capital.
The second thing is related to instruments. The private equity
market unlisted market is not as much regulated as the
public market is, so the domestic flows, domestic retail flows
(45:57):
have not moved into unlisted segment as much as it
should have done. The third and probably which is changing
rapidly is creation of angel networks. The whole purpose of
Ventua capital industry is to some extent go from monkey
to King Kong scenario. You invest in lots of monkeys,
(46:22):
some of them will grow to become gorilla, and one
of them will eventually become King Kong.
Speaker 22 (46:27):
There was a lot of financing through venture capital through
private equity for Indian startups. People wanted to bring this
sort of it ecosystem that exists in the United States
into India. So, for example, food delivery firms, which has
proved to be an enormously big and very successful market
(46:49):
in India, ride hailing apps. All these things have been
started in India and have proved very successful. Full a
lot of them have. Firms have grown and exited through
the PE, firms have exited through IPOs. But of course,
(47:11):
more recently, as elsewhere, when interest rates moved off the
zero level, a lot of that financing has dried up.
Speaker 1 (47:22):
Whether it's reforming taxes on securities transactions, or limiting speculation
and cash equities and derivative markets, or making sure both
debt and equities are supporting innovative new companies. India is moving,
trying to walk that tight rope of risk and stability
to support its economic growth, and its very motion means
that it can't come to arrest. That does it for us.
(47:45):
Here at Wall Street Week, I'm David Weston. See you
next week for more stories of capitalism
This is Wall Street Week. I'm David Weston bringing you
stories of capitalism. The message in the jobs numbers last
month was disappointing and surprising, so President Trump fired the
messenger doesn't have a point and is his approach the
right one to make sure we can trust those jobs numbers. Plus,
we go to Australia to see the effects of soaring
(00:34):
goal prices on mining there and what miners are going
to do with all those profits. And we bring you
the story of the huge Indian retail derivatives market that
got Jane Street into trouble. What does it tell us
about the Indian capital markets overall, and what does India's
real economy need from those markets. But we start with
the continuing battle over the Federal Reserve, as President Trump
(00:58):
insists that Governor Lisa Cook must go and ms Cook
refuses to leave, even as the President's nomin need to
replace another governor heads towards Senate confirmation. Our special contributor
Larry Summers has consistently expressed his concerns about FED independence,
but so far the markets have been calm, so Larry
(01:19):
continued focus on the Federal Reserve as their proceedings of
respect to Governor Cook, Lisa Cook as president, trups tried
to fire even as they try to appoint Stephen Myron
to come in. What is the significance of what's going
on right now with the Federal Reserve.
Speaker 2 (01:35):
I think we're on the foothills of a credibility crisis.
We're not there yet because people believe that ultimately US
institutions endure and succeed. But between the President's demand the
interest rates be cut by three percentage points, which no
(01:57):
economist anywhere has endorsed any idea of that kind, between
the harshness of the President's rhetoric vis a vis Chairman Powell,
between the extraordinary efforts to fire a sitting FED governor
(02:18):
with no kind of due process surrounding the fore cause provision,
between the ominous rhetoric about hijacking the process for choosing
local presidents of the regional federal reserves, between rumors about
(02:39):
other members of the Fed Board. We are in completely
unprecedented territory. There hasn't yet been a dramatic market reaction.
There are some concerning things in markets, not just one
year ahead, but one year one year ahead. Inflation expectations
(03:04):
are trending up a bit. The spread between the thirty
year bond and the ten year bond is larger than
any time since COVID, but we haven't seen substantial reactions
in markets yet. But this could turn very quickly if
(03:26):
the psychology changes, and so frankly, I think we are
playing with fire in terms of inflation expectations, a situation
made much worse by the fact that the United States,
unless we get a big break in terms of artificial
(03:48):
intelligence or other technology, really has a very problematic fiscal picture.
Speaker 1 (03:56):
One of the questions some accounts is is does it
make that much of a difference have one person on
the FED or two people on the FED. Part of
the strength of the institution is the FMC is a
group of people, and so one or two people alone
cannot really change the direction.
Speaker 2 (04:12):
That may be right, But what the President is talking about,
what he's explicitly scheming about on his truth social account
and in some of his rhetoric, is getting a majority
of the Board of Governors and using that majority on
(04:33):
the Board of Governors to force a majority on the
Federal Open Market Committee by controlling the appointment of regional feds.
So this is not a one and done thing involving
just the chairman. This is an attack on the governance
(04:56):
of the institution. Part of what is really disturbing to me,
there have been a long tradition of distinguished Republican leaders
(05:19):
who have stood up for the importance of inflation credibility,
who have stood up for the independence of the FED.
I particularly admired Senator Pat Toomey when he was on
the Banking Committee for his efforts, but there were others.
(05:44):
There was an effort made to deny a nomination when
President Obama made it to Nobel Prize winner Peter Diamond
because he wasn't steeped enough in monetary policy and respect
for the independence of the Federal of the Federal Reserve.
(06:08):
And yet here when we're talking about the wholesale politicization
of the FED, there is no response from concerned Republicans.
And I have to say that I have been struck
(06:28):
that the prominent members of the financial community have had
more to say being critical of Zoron Randani's bad ideas
about grocery stores in New York than they have the
wholesale takeover of the FED, which is a major threat
(06:49):
to the financial system as we have it. So I
am very worried that highly irresponsible behavior are being normalized
by what the President is doing and by the failure
(07:11):
of the establishment and of the traditional voices to find
the courage to resist and call out what President Trump
is doing. If disagreements can't be stated openly or asked
(07:37):
on or acted on, that's really a very chilling thing.
Speaker 1 (07:42):
One of the major driving forces behind the Trump administration
and dealing with the Fed is trying to get rates
down too, you things like mortgage rates, rates on car loans.
Last time the Fed cut, actually the yield went up.
It's expected right now that the Fed is likely to
cut this month again. What is the administration's options if,
in fact, the Fed does cut this month of September
(08:03):
and actually yields go up.
Speaker 2 (08:06):
Well, first of all, David, I think you said the
important thing. Markets are already pricing in cuts in rates.
So if a rate cut is delivered as expected, I
would be surprised if that had a substantial impact on
long term rates. I think what markets will be watching
(08:27):
is less what happens in September than the signals that
are sent with regard to the future. And I think
there is a sense that if the Fed is moving
towards the President's line easy rates over everything else. I
think the likelihood is that in such an environment, long
(08:47):
term rates would rise and take more GOODE rates up
with them. That's the kind of pattern we saw with
the politicized nineteen seventies Federal Reserve. It's the kind of
pattern we avoided during the times of Chairman of Vulgar
(09:08):
and Chairman Greenspan. So I think that's something very much
to worry about, and it's why I'm not sure the
President is proceeding wisely, even in his own terms of
aspiring towards lower rates that people see. I suppose if
(09:31):
long term rates go up, there are, of course options
to bring back, in some form or other, the quantitative
easing that the President and his people have largely condemned,
where the Fed goes in and buys up or somebody
(09:52):
goes in and buys up large quantities of long term bonds,
or in which pressures are applied to banks and pension
funds that force them to buy long term bonds. But
if you start down that road, you are really, I think,
very severely compromising the integrity of our financial system in
(10:15):
ways that we'll have far reaching consequences.
Speaker 1 (10:22):
Coming up. President Trump claims that the Bureau of Labor
Statistics has been misleading the markets with its jobs numbers.
What will it take to make sure we have numbers
that we can trust? That's next on Wall Street Week.
(10:45):
This is a story about trust, maybe the most important
thing underlying the markets. Last December, we told you about
major problems facing the Bureau of Labor Statistics, the body
that publishes those all important jobs numbers each month. Problems
got much worse when Donald Trump fired the agency's head
last month. Our colleague Molly Smith reports on what it
(11:06):
could mean for the system and for private businesses looking
to get a foot in the door.
Speaker 3 (11:16):
In a shared office space in downtown Manhattan, a group
of economists see an opportunity.
Speaker 4 (11:21):
As you can see, the BLS revisions are quite large.
Speaker 3 (11:24):
You might not have heard of Vellio Labs, but they
know an awful lot about the US economy. Benz Wig
is the company's CEO.
Speaker 4 (11:31):
We're a workforce data company, so we collect data from
the public web, so anything that's online and that could
be public professional profiles, online job postings. We gathered that data.
We curate it, we standardize it, we enrich it. And
then we ultimately sell that data.
Speaker 3 (11:48):
Revellio's main audience is hedge funds and private firms looking
for another perspective on the economy beyond what's offered by
government agencies. But things changed after an ugly July.
Speaker 5 (11:59):
Jobs We got a very disappointing number here, and this
is going to get Wall Street's attention, seventy three thousand
jobs created.
Speaker 3 (12:06):
President Donald Trump claimed without evidence that the numbers were
biased and ousted the head of the Bureau of Labor Statistics.
Speaker 2 (12:13):
I believe the numbers were phony, just like there were
before the election, and there were other times.
Speaker 6 (12:18):
So you know what I did, I fired her, and
you know what, I did the right things.
Speaker 2 (12:22):
We need people that we could trust.
Speaker 4 (12:24):
We were really really shocked when this happened. This happened
on Jobs Friday, of course, and then over the weekend.
I remember making some calls. You know, I called our
chief economists and you know, a few other people on
the team, and we were all kind of thinking the
same thing. We were like, all right, we gotta publish
macro statistics. There's some concern that the BLS may become politicized,
(12:48):
either institutionally or just through the incentives they face. You know,
maybe there's some concern that whoever leads it gets the
message that, you know, if the numbers don't match a
certain narrative, they might be out of job. So there
are some distorted incentives, and you know, there's there's some
concern that this that this data might not be trusted
(13:08):
in the way that it has been, and it's time
for us to step up.
Speaker 5 (13:13):
There's nothing to report that says that there's been actual
political interference. Now I know there was a charge and
that was the reason for the firing, that the data
for the revisions were politically manipulated, and that is absolutely
one untrue.
Speaker 3 (13:30):
Mike Horrigan is president of the Upjohn Institute, a think
tank focused on labor markets. He also spent over thirty
years at the BLS, at one point leading the Employment
Statistics Division.
Speaker 5 (13:40):
I've served under many commissioners, whether they be nominated by
a Republican president or a Democratic president. I got to
say all of my experiences will as at the Bureau
was that of collaboration, collegiality, understanding. I personally think all
the business leaders I talk to still have trust in it.
I think what they're looking for is whether or not
(14:01):
a new commissioner is going to come in and interfere
with that trust. I think that's the next big test.
Speaker 3 (14:10):
After ousting Rika mcintarford, President Trump tapped to EJ. Antoni
to head up the Bureau of Labor Statistics. Antoni is
the chief economist at the Heritage Foundation, a conservative think tank,
and was a contributor to the controversial Project twenty twenty
five plan. He faces Senate confirmation before he can step
into the new role at BLS. We spoke with former
(14:32):
Commissioner Bill Beach about the politics of the role. Beach
served under both President Trump and Biden.
Speaker 7 (14:37):
Whether the president's Republican or Democrat, They're going to find
someone who has maybe demonstrated or at least could demonstrate
that they support the general drift of the policy portfolio
of the president has laid out. So EJ definitely qualifies
on that.
Speaker 8 (14:54):
So EJ and Toni has been pretty vocal about his
critiques of BLS, including the.
Speaker 3 (15:00):
Job's data the revisions. He suggested before he was named
to the role that the BLS should suspend the monthly
jobs report until the data issues are quote corrected. Do
you think that that's a viable solution? For a problem
that BLS is facing.
Speaker 7 (15:18):
It's not viable at all. The monthly reports coming out
of BLS, particularly the Job's Report, are watched by financial
movers and shakers all over the world, by policy people
all over the world. Their biggest impact is here in
this country. And I can't imagine a situation more deleterious
(15:41):
to the economy that a statistical agency could do than
to suspend or stop or delay one of their reports.
I mean, it would cause a lot of problems. So no,
it's not viable, and I think EJ will quickly see
that if he's confirmed.
Speaker 3 (16:00):
The reports suggests Antoni has since backed off from the
idea of suspending the monthly jobs report. But regardless of
whether Trump's new BLS chief makes the agency better or worse,
the issue remains that there's room for improvement. The agency's
problems are twofold, the budget needed to get the numbers
right and the people to make sense of those numbers.
Its resources haven't kept up with the scope of the
(16:21):
challenge it faces. Adjusted for inflation, BLS funding has slumped
about twenty percent since twenty ten, and President Trump's fiscal
twenty twenty six budget proposal would shave off an additional
eight percent, but Horigan says that the BLS has already
been making the most of its tight budget.
Speaker 5 (16:39):
The Bureau gets about fifty eight percent of their reports
now from this thing called EDI. So for example, with Internet,
where it's more like a say a single firm or
smaller firm will go into the Internet or the Web
data collection facility and enter their answers into that format,
that's probably about twenty to twenty five percent of the sample.
(17:00):
There are other forms in which the data are collected.
So for example, CADDY is a computer assisted telephone interview.
So a lot of these innovations were introduced well before
I came on board, but over its history in those
different innovative data collection techniques have been increasing over time.
Speaker 3 (17:20):
Changes in the BLS's methods of collecting data wouldn't be
without precedent its statistical The Census Bureau is already working
with private partners to get creative in its data collection.
Speaker 5 (17:31):
In terms of that next step, I mean that's really
kind of a function of resources. Census Bureau, for example,
is doing some innovative research right now with Intel and
Amazon to take a look at how you could use
the firm's data in its own format and then use
a large language model to basically fill out a survey form.
(17:51):
That's the kind of innovative thinking that the Bureau and
cs have done for years, and with more resources, they
would be capable of doing that kind of innovation.
Speaker 3 (18:00):
Innovation at the agency can also come through changing processes
that no longer work as well as they once did.
Nancy Podok was the Chief Statistician of the US at
the Office of Management and Budget and is currently CEO
of Knapax Consulting.
Speaker 9 (18:13):
There's no question that we need improvement. We need investment,
we need more research, and we need to update methodologies.
The agencies have been starved of resources for a long time.
I think a healthy discussion within the administration is a
great thing. I'd love to see it, and I think
it should involve people outside the system as well. The users,
(18:37):
you know, people who are really relying on the numbers
to make decisions, need to provide input into that as
well as methodologists.
Speaker 5 (18:49):
I'm not telling the Bureau what to do, but they
collect the data through the Friday before the release of
the data on Employment Situation Day. So one option to
consider is if you want more reports coming in. Before
you introduce any additional innovation in terms of data collection techniques,
maybe consider extending the time period for that first closing.
Speaker 3 (19:12):
But processes and innovative partnerships need people to shepherd them.
People it's been losing. The agency has roughly two thousand employees,
and a third of its top positions are now vacant.
Speaker 5 (19:24):
One of the concerns I have is, even if you
throw more resources at a time when we've lost so
many talented members of the statistical community because of the
fork in the road, because of firing all the folks
that have less than two years of tenure, and all
the senior executives that have decided to retire, you've got
a people problem.
Speaker 8 (19:44):
It's just amazing looking at like the magnitude here, the
green ones again, thels and the blue ones are yours.
Speaker 4 (19:52):
Pretty much what you get the first time is going
to be very close to what you get a month
later and a month after that.
Speaker 3 (19:58):
The private sector thinks it can lend to HA and
to solve the government's data problem. An idea that's come
up in the context of improving federal statistics is this
idea of blended data, so incorporating private or alternative data
sources on top of what the government collects. Is that
something that you have explored with BLS or other statistical agencies,
(20:19):
or something.
Speaker 4 (20:19):
You want to do, Yeah, I mean we would love
to do that. It hasn't come up. You know, no
one has asked us if we'd like to.
Speaker 3 (20:29):
Would you ask them?
Speaker 6 (20:30):
Yeah?
Speaker 4 (20:31):
I think so. I mean, I think they know about us.
You know, we're very much in the same circles. You know,
it's the small world of laborconnuts and we all know
each other. And and I think you know, certainly within
financial markets, we're well known as the kind of go
to source for labor market information. So I think they
know that we're doing this. My sense, and granted I'm
(20:53):
not in the room when these discussions happen, is that
the BLS has not been able to just defy funding
for these new initiatives, and they've had their funding cut
again and again. And this is something like a wish
that has never really.
Speaker 10 (21:15):
Gotten traction.
Speaker 4 (21:16):
So not holding my breath for it, and I'd love
if it would happen. In the meantime, We're just going
to put it out there as a public service.
Speaker 3 (21:25):
The science of statistics is empirical, but under the hard
data lies the immeasurable but important quality of trust in
those numbers and in the entities responsible for collecting and
reporting them.
Speaker 7 (21:37):
This is not a trivial matter. The trust in BLS
is connected to trust in their product. The two are
the same. And if you don't trust the product, then,
for example, you're making a big merger with another company
and you use data from BLS, it has to be
pretty believable in order for your hurdle rates for the
(21:59):
investment to be believable. Well, now you don't quite believe it,
so you begin to hedge a little bit more uncertainty
around that hurdle rate than there was before, and uncertainty
produces higher costs than the acquisition process. I'm using a
very small slice, but that's repeated every day, thousands of times.
So I think losing trust in a bedrock institution is
(22:23):
highly consequential, highly difficult, and very expensive for an economy.
Does it reduce the growth rate? Yes? Over time it
could actually reduce the growth rate in economy. Not to
know the economy is operating at a certain level because
you distrust the data means you don't know how the
economy is operating, and how can you function efficiently and
(22:43):
use your resources at their highest and best use if
you really can't see the economy the way you think
you should.
Speaker 3 (22:49):
Nancy Podock says that today, as Trump's BLS pick prepares
for the Senate confirmation process, the country sits at acrossroads.
Will leadership continue to prioritize the best, most impartial data
or will it fall into a familiar trap that other
countries know too well, in which numbers aren't used to
learn about the economy, but to tell an approved story
(23:11):
about it.
Speaker 9 (23:11):
We really need people to get excited about the whole system,
not just the firing of the BLS commissioner, but knowing
that that's a keystone in a larger system that is
in peril. We're going to go one way or the
other at this point. I don't think there's a status
quo option. I think it's either going to get very
(23:34):
political or people are going to really strengthen the system.
We've got to choose as a nation which way we're
going to.
Speaker 1 (23:43):
Go up next. There's gold in them. They are Australian
outback minds and firms are reaping the benefits from higher
gold prices. But what are they going to do with
all that money? This is a story about money burning
(24:10):
a hole in your pocket. The price of gold has
been on our rocket right up. Our colleague Paul Allen
tells us about what this means for gold mining in
Australia and both the risks and the opportunities.
Speaker 11 (24:24):
In the Australian outback, scrub and red dust stretches as
far as the eye can see. It's desolate out here
and it's dry, but beneath the dust there's a bounty
that miners are willing to dig a long way for.
Speaker 12 (24:37):
How many ounces of gold would be in a typical truck,
So the beare and five hundred grams of gold and
the tripe. So we've got a line of trucks slowly
making their way out of the pit here. How long
does it take to get from the bottom to.
Speaker 10 (24:49):
The top, Yeah, it's well over an hour.
Speaker 11 (24:52):
The Kelgooli super Pit in Western Australia is a sight
to behold. More than six hundred meters deep would covery
in Manhattan's tallest skyscrapers. It's so vast it swallows Central Park.
Speaker 13 (25:05):
This project is going to be an important one for
our business. And our shareholders A Zabaham.
Speaker 11 (25:09):
Stuart Tonkin as CEO of Northern Star, Australia's the biggest gold.
Speaker 13 (25:13):
Miner, probably around three to f one a million dollars
per annum being spent moving material from the southern part
of this pit, gaining access to over six million ounces.
Speaker 10 (25:21):
Of gold in the bottom of the southern part of
this pit.
Speaker 11 (25:25):
The price of gold has been on a tear. It's
up nearly tenfold since two thousand and more than doubling
over the last five years. Tolkien's company and many others
around Carl Guli are cashing in. But the gold industry
has been here before.
Speaker 13 (25:40):
There's probably more failure stories than success stories where people
can point to in the gold sector, and so repairing
a lot of that trust with investors as we go
into another cycle has been really important for our company
and I think for many Australian companies to get that
investor trust.
Speaker 11 (25:59):
But before we get to that, let's set the scene.
There was eighteen ninety three when a group of prospectors
on horseback quite literally struck gold in Calgooley. Russian sued
and the precious metal has dominated the Western Australian town
of thirty thousands ever since. And the other Ashok Pereka
is the local accountant and chairman of mid tier gold
(26:22):
producer Horizon Minerals.
Speaker 14 (26:24):
I've been involved in the mining industry for over forty
years in Calgooley and I happened to in the pub
as well. When I came here, gold was probably one
hundred and fifty dollars an aunts. Today it's over five
thousand dollars in aunts. It has been great for everybody
in Australia and cayl Gooley win the biggest goal mining town.
Other is in Australia and Carl Gooley is different.
Speaker 15 (26:44):
You can come to Carl Gooley, you can walk into
a pub, you've got no job, nowhere to live and
no money, and by the time you walk out you've
had a meal, you've got a place to stay and
you've got a job.
Speaker 11 (26:59):
There's plenty more people finding jobs and places to mine.
With the price of gold booming.
Speaker 10 (27:05):
We're currently mining. It's all a great goal price environment.
Speaker 16 (27:08):
What those high goal prices do for is this, we
can actually produce gold now pay a little more through
processing through third party infrastructure, so use other people's infrastructure.
Speaker 10 (27:18):
What it does is as actually.
Speaker 16 (27:19):
Closed, as that funding gap will need to refurbish our
own plants.
Speaker 13 (27:22):
Now I call them pop up shops around the gold
fields here, just the amount of flurry and activity of
things that weren't economic six months ago that suddenly become economic.
Speaker 11 (27:32):
Australia produces about three hundred tons of gold each year,
that's about eight percent of global production. It's a costly exercise.
The process involves breaking down vast amounts of ore extracted
from the mind. Each truck can carry about two hundred
and fifty tons of material, which is typically five hundred
grams of that is gold. That materials then broken down
(27:56):
and processed by crushes before being melted.
Speaker 17 (27:59):
The melting point of gold is ony twenty four degrees,
so we then hate the furnace up to roughly twelve
hundred degrees as we go through the poor process. The
first material comes out is all of that slag off
the top of the in creacible. Then when the gold
comes out, the color chained actually goes from a yellow
almost or greeny color, and that's the gold coming out
(28:22):
of the process. Probably one of the good things about
this site is that we have a relatively nice or
body coming into it. We don't have a great deal
of impurities coming through. So these are some of the
nicest bars that I've seen in my time in industry,
and with.
Speaker 11 (28:38):
A surgeon prices, Australia's gold miners are cashing in and
setting themselves up for long term success. Lorie Conway is
CEO of Evolution Mining.
Speaker 18 (28:49):
So back in June twenty three, we made the decision
to invest two hundred and fifty million dollars building this
plant expansion and seventy five million dollars to open up
a new mining center into the North heat Feur the plant,
taking it from two million tons to four point two
million tons. And in twenty three it was pretty difficult.
The market was high, it was hard to get people,
(29:09):
hard to get equipment.
Speaker 10 (29:10):
I think we were very fortunate when we did that.
Speaker 16 (29:13):
But gold price was only two four hundred two five
hundred dollars an ounce when the board approved this, and
it had very good economics. I mean bringing it in
right now at two hundred dollars an ounce is a
perfect time.
Speaker 10 (29:26):
To be commissioning it.
Speaker 16 (29:27):
I think that the difference this time is what's going
on around Central Banks and that shift of we need
to have gold in our reserves a lot more, whereas
back in the last cycle it was it was really
around the whole mining boom and therefore what was going
on in low inflation, low interest rates that pushed the
price of gold up, and so that was will being
driven by an economic standpoint.
Speaker 12 (29:49):
This time it's.
Speaker 16 (29:49):
Really being driven by geopolitical tensions and the shift in
the way that governments are handling their reserves. And so
that's why you sort of see that structural shift that
that the governments are driving this price whereas the economy
was driving the other one. And that's why in the
long term, yes, the goal price will come down a bit,
but it structurally shifted higher because of what central banks
(30:11):
are doing.
Speaker 10 (30:12):
Versus the last last boom.
Speaker 11 (30:14):
In twenty nineteen, Evolution reported adjusted gross profit of about
two hundred and seventy million US dollars or about four
hundred and ten million Australian dollars. That's now jump to
about one billion. It's expected to grow even further to
almost two billion next year.
Speaker 10 (30:31):
And how harry about on the costs front, what's that like?
Speaker 16 (30:33):
At the moment, power will go up because we're obviously
doubling the processing and the processing uses power.
Speaker 10 (30:38):
Fifty percent of our costs are labor.
Speaker 11 (30:41):
And investors are keeping a keen eye on costs this
time around. When gold prices last jumped, Australia's gold miners underperformed,
falling sixteen percent of the three years from twenty ten,
while the price of the metal itself rose fifty two percent.
Kate McCutcheon covers Australia's gold miners for City.
Speaker 6 (31:02):
So last cycle, we definitely saw a lot of transformative
m and E which was very value destructive. So that
last cycle from two thousand to twenty twelve, the ten
biggest gold stocks in our coverage universe cumulatively burnt ten
billion dollars in free cash.
Speaker 16 (31:17):
As an industry, we made those missteps because when the
price did come off and that cycle changed, shareholders went, well,
where's the cash, And all the industry said is, well,
we reinvested it in the projects or we went in
board assets, and therefore we've reinvested that money for you.
And the shareholders were like, well, we would have liked
some of that, and we didn't see that. It hasn't
(31:37):
changed too much, I mean, other than that we're putting
more cash in the bank, which is why our shareholders
want to see it.
Speaker 12 (31:42):
So it's interesting you say you've got more cash in
the bank. Has this changed your approach to reserve management
and long term planning as well?
Speaker 16 (31:50):
You know, you've got to see it as a stained price
at these levels before, because you can't just change your
mind plans overnight. So what it does mean we look
at our reserve pricing, We look at what the costs
have changed, because you do see costs generally follow the
goal price. And then we look at all what projects
become more economic in a higher price environment, and then
(32:10):
we apply the normal discipline of when do you bring
those on.
Speaker 13 (32:14):
I think it's important that you look at a lot
of these things in hindsight, some things like hedging, you know,
hedge book legacy, at prices that people had never never
thought that they would see exposure to. You know, when
people had a high equity price, they probably tried to
use that currency by raising lots of money on the
back of an elevated equity price and then potentially dropping
(32:35):
money out of their balance sheet, return capital to shareholders
that then wasn't retained for its own sustainability inside the business.
So there are very many different disciplines of what people
do at different times.
Speaker 12 (32:46):
And do you feel lessons have been learned? Do you
feel like the approach is different this time.
Speaker 10 (32:50):
I feel that the.
Speaker 13 (32:51):
Heat has come out of some of that, but I've
found a foundation discipline of true capital management across a
variety of things. So, you know, dividend gold companies was
never really heard of. There's a lot of good track
record of gold companies paying dividends, doing share buybacks, compressing
registers that they had raised equity on the back of.
Speaker 10 (33:11):
Those are the type of capital.
Speaker 13 (33:12):
Management measures that aren't typical to a gold company are
this time.
Speaker 6 (33:16):
Investors want to see more tuck in acquisitions or bolt
on acquisitions close to infrastructure.
Speaker 10 (33:22):
It's very very.
Speaker 6 (33:23):
Hard in a bull gold market to do a deal
that's a creative and I think the gold companies are
realizing that. Secondly, what's not different this time is delivery
on operational guidance. So the three biggest stocks in our
coverage Universe, Evolution, Northern Star in Neumont actually up until
the SFY hadn't delivered on guidance for between four to
(33:46):
seven years. The third thing that's different this cycle is
also hedgebooks. So now we're seeing gold miners opt for
no hedging policy, so that exposure to spot prices and
putting in place and put options to protect the downside.
Speaker 10 (34:01):
And this cycle as well.
Speaker 6 (34:02):
Most of the gold miners in our coverage are in
a net cash position or running at peak net data
fifteen percent, so balance sheets are very different this time.
Speaker 11 (34:11):
And investors appear to be liking what they're seeing. Since
the start of twenty twenty two, the gold price is
up eighty five percent. Australia's gold miners are up ninety
eight percent, with both Northern Star and Evolution balancing share
buyback programs with new investments in recent months.
Speaker 12 (34:28):
Do you feel like investors now buy the idea that
the gold industry is more disciplined than it has been
in the past.
Speaker 1 (34:33):
Yeah.
Speaker 16 (34:34):
I think if we can continue that over the next
sort of twelve eighteen months through increasing dividends, making sure
that some companies do buybacks that they do see that,
as well as reinvesting in the business, because the shaholders
still want us to reinvest.
Speaker 10 (34:47):
In the business.
Speaker 16 (34:48):
They want us to make it sustainable over the long term,
but they do want to share in that.
Speaker 10 (34:52):
As we're going through this cycle.
Speaker 19 (34:54):
Just spent a couple of weeks in the US meeting
with investors because there's a lot more interest in the
US in Australian doll stops at the moment, and so
it was good to go and talk to them and
explain what we're doing here at Evolution, but also what
the gold industry in Australia is doing, and they're certainly
going to be more interest.
Speaker 11 (35:12):
The big question is where to next. Gold is plataued
in recent months, but in an increasingly uncertain macro environment,
is the room to go higher.
Speaker 13 (35:22):
It's a really exciting time for gold and it's been
elevated for some time, but there doesn't seem any signs
that this is going to fall back. We think it's
possibly the new norm and if anything, the start of
another continuing ball run for gold.
Speaker 10 (35:37):
Yeah certainly.
Speaker 16 (35:38):
I mean gold started back in the eighteen fifty so
it's been around and been a part of Australia for
a very long time, and I think as we go
through the boom and bust of economies, gold has had
a significant role to play. It now has a more
important role to play because we are a top ten producer,
we're low cost producer, We're a great jurisdiction in which
to operate and therefore makes it important to the Australian economy.
(36:01):
But it also means it makes it attractive for people to.
Speaker 10 (36:04):
Invest in the sector.
Speaker 11 (36:05):
Whether it does make it attractive for people to invest
in is going to depend on some big decisions being
made by companies like Evolution and Northern Star. Is a
time to double down on the gold mining bet or
is it time to take some money off the table
and give it back to investors?
Speaker 1 (36:26):
Coming up, millions of Indians put billions of dollars into
equity derivatives and lost most of it. We take a
look at Indian capital markets and their role in driving
growth and innovation. That's next on Wall Street Week. This
(36:50):
is a story about walking a tight rope. India Prime
Minister Modi is committed to making India and economic power
and capital markets are what provide businesses with the money
they need to start and to grow. But to do
that they need to encourage investors to take risks, enough
risk but not too much, a fine balance. We recently
saw lost in India's equity derivatives market. As a market
(37:15):
maker with a unique model, Jane Street's business makes bets
on inefficiencies in markets. Bloomberg reporter Catherine Doherty has been
reporting on its business in India.
Speaker 20 (37:27):
Jane Street has kept its trading secrets close to their chest,
but it was really the Millennium lawsuit.
Speaker 1 (37:34):
Jane Street saw an opportunity in India's equity markets, engaging
in a strategy called index arbitrage.
Speaker 20 (37:42):
So the firm was essentially placing these large bets that
were then impacting the other side, and they were profiting
from the way that these markets were moving. So the
regulators in India have identified this as a manipulative trade,
and the firm has said it was a arbitrage trade
and not market manipulation.
Speaker 1 (38:03):
India's market regulator, the Securities in Exchange Board of India
or SEB, banned Jane Street from the country's securities markets.
Jane Street has filed an appeal alleging that SEB denied
access to documents it needs to defend against market manipulation accusations. Ironically,
the problem with India's capital markets historically has not been
(38:24):
encouraging too much risk but too little. Nil As Shah
has watched the evolution of the country's capital markets as
the Managing Director of Kotak Mahindra Asset Management.
Speaker 21 (38:35):
The Indian savings location is more tilted to its physical
as sets. We are one of the largest buyers of
gold in the world, putting anywhere between fifty to seventy
billion dollars annually. We also have love for real estate.
Capital market or financial savings itself is taken off in
recent times, but thanks to mutual funds, insurance industry and
(38:59):
bens funds, slowly and steadily a location to capital markets
both debt and equity is increasing rapidly.
Speaker 1 (39:08):
India's transition to retail investing is still in its early stages,
but it is moving fast. One in five households today
whole shares are from one in fourteen. Just five years ago.
Speaker 21 (39:21):
We launched an investor awareness program called Mutual Funds Sahih
Mutual funds are right thing to do and that has
helped us in mobilizing more and more retail savings into
mutual fund Our industry is growing at a phenetic pace
and I believe the najis from the regulator. The work
(39:43):
done by the regulator is laying the foundation. Now it
is up to us as an industry to carry forward.
Speaker 1 (39:49):
The work. One measure of the expansion of Indian capital
markets is the success of its IPO market, which is
among the biggest in the world.
Speaker 22 (39:59):
Last year, IPOs in India accounted for about twenty more
than twenty billion dollars US dollars. It was the number
two IPO market in the entire world.
Speaker 1 (40:10):
Josh Felman is the principle at JH Consulting and advised
the Indian government on economic and financial matters during his
time as the Director of the IMF's India office. To date,
regulators have encouraged retail participation in IPOs, helping contribute to
overall retail participation in markets.
Speaker 22 (40:30):
One thing that they've been fantastically successful in as opposed
to say China, is they've managed to get household participation
in the capital markets.
Speaker 1 (40:43):
It's not all roses. Under the surface of India's blossoming
capital markets is a risk that threatens its stability derivatives.
Speaker 22 (40:51):
About forty percent of derivative transactions are conducted by households
in India, which is an incredibly large number. So if
you take the derivatives market in particular, the regulator SEBI
did a study They found that last year about ninety
percent of the participants in the market lost money, and
(41:14):
they found that again about forty percent of them were
under thirty. Three quarters of them earned less than six
thousand dollars per year.
Speaker 1 (41:25):
The growth in derivatives has caused a liquidity problem.
Speaker 22 (41:29):
It is a fact that there are a large number
of unsophisticated investors. It is a fact that they have
very poor cash buffers. But what to do about it.
You don't want to push these people completely out of
the market. On the same time, you don't want to
(41:49):
unduly restrict the professional participants in the market, because they're
the ones who iron out the market inefficienties. So far,
it has not had any adverse impact on the ability
to raise money through the equity market.
Speaker 1 (42:10):
Even if the ill liquidity in markets hasn't affected raising
capital to date, it has introduced a different kind of risk.
Speaker 20 (42:18):
So in India, the options market is quite liquid, the
most liquid active market really across the globe. In the
US you also have a very liquid options market, but
the cash market, the equity market is also liquid. It's
also trading at high volumes, and it's moving very efficiently,
and the regulators really have a sense of the big
(42:42):
players and if there's any manipulation or if there's any
large moves, they're able to identify it very quickly.
Speaker 1 (42:49):
India's financial regulator SEBBI has made an example out of
Jane Street and drawn a boundary in how far it's
willing to go to liberalize its markets, but keeping the
door open to foreign investors will be crucial for the country.
Speaker 21 (43:03):
India is one of the most open economy in terms
of foreign direct investment. India's largest fmciti company, automobile company,
telecom company, mutual fund, private sector bank, insurance company. All
our majority owned by foreigners. There is hardly any other
country in the world where foreigners will be allowed to
(43:24):
own such kind of industry. However, can we improve further
upon this? My favorite example on foreign direct investment is
Maruti Suzuki. In the eighties, Suzuki came to set up
an automobile company in India. They have gone through the
ups and downs of India. Today, Maruti Suzuki, a fifty
(43:47):
three percent owned subsidiary of Suzuki, sells more automobiles in
India than what Suzuki sells worldwide, and Marutiya's delivered better
return than Suzuki Honda Toyota combined in the equity market
since it's listing in two thousand and three.
Speaker 1 (44:06):
It isn't just equity markets that provide capital companies and
the debt side of the capital market. Equation may be
about to get a shot in the arm when Indian
government bonds are included in several foot Sea Russell bond
indexes this month.
Speaker 21 (44:21):
Essentially, we have seen that whenever a country becomes part
of benchmarkt dices, both passive as well as active flow
starts flowing in. So inclusion infoot Sea government bond and
dices will undoubtedly increase our location tibets India more importantly
when you get an alternate source of funding. For example,
(44:43):
all domestic investors are generally on one side of liquidity
either it's high or it is low, but global investors
can bring balancing park.
Speaker 1 (44:55):
Indian markets have come a long way in encouraging risk
taking among retail investors and offering channels of investment to
foreign investors, but Sha says that hasn't been enough to
support the risks inherent in generating the kind of innovation
that comes from the success and failures of startups.
Speaker 21 (45:12):
Unfortunately, here, Indian capital market has not done a good
job maturity of our startups, both innovation as well as
otherwise have been funded by global private equity and venture
capital funds. It has been to some extent funded by
family offices and high networth individuals. Like the public market,
(45:37):
private market has not received encouraging participation from Indian capital.
The second thing is related to instruments. The private equity
market unlisted market is not as much regulated as the
public market is, so the domestic flows, domestic retail flows
(45:57):
have not moved into unlisted segment as much as it
should have done. The third and probably which is changing
rapidly is creation of angel networks. The whole purpose of
Ventua capital industry is to some extent go from monkey
to King Kong scenario. You invest in lots of monkeys,
(46:22):
some of them will grow to become gorilla, and one
of them will eventually become King Kong.
Speaker 22 (46:27):
There was a lot of financing through venture capital through
private equity for Indian startups. People wanted to bring this
sort of it ecosystem that exists in the United States
into India. So, for example, food delivery firms, which has
proved to be an enormously big and very successful market
(46:49):
in India, ride hailing apps. All these things have been
started in India and have proved very successful. Full a
lot of them have. Firms have grown and exited through
the PE, firms have exited through IPOs. But of course,
(47:11):
more recently, as elsewhere, when interest rates moved off the
zero level, a lot of that financing has dried up.
Speaker 1 (47:22):
Whether it's reforming taxes on securities transactions, or limiting speculation
and cash equities and derivative markets, or making sure both
debt and equities are supporting innovative new companies. India is moving,
trying to walk that tight rope of risk and stability
to support its economic growth, and its very motion means
that it can't come to arrest. That does it for us.
(47:45):
Here at Wall Street Week, I'm David Weston. See you
next week for more stories of capitalism
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It’s 1996 in rural North Carolina, and an oddball crew makes history when they pull off America’s third largest cash heist. But it’s all downhill from there. Join host Johnny Knoxville as he unspools a wild and woolly tale about a group of regular ‘ol folks who risked it all for a chance at a better life. CrimeLess: Hillbilly Heist answers the question: what would you do with 17.3 million dollars? The answer includes diamond rings, mansions, velvet Elvis paintings, plus a run for the border, murder-for-hire-plots, and FBI busts.
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