July 25, 2020 • 50 mins
In this exclusive podcast, Colin talks first with Ron Insana, CNBC Commentator and Contributor about the stock market reacting to the Covid-19 pandemic. They talk about what could happen financially after the next election and he talks about growing up across the street from John Elway
Then, Colin talks with football Analyst Warren Sharp. Warren puts together an in depth season preview every year using advanced analytics that people in the NFL don't pay enough attention to. They talk about the Seahawks not having enough trust in Russell Wilson, the Packers use of Aaron Rodgers and which AFC team will be disappointing in 2020
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Episode Transcript
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Speaker 1 (00:02):
Hi everybody, and welcome to our Saturday podcast, where we
often take a exit off the interstate and talk about
stuff frankly I just like and stuff I'm interested in.
We've had chefs, movie producers, and we have two guests
this Saturday, and my first is run and Son him
and he's a senior analyst and commentator for CNBC, has
(00:24):
been for years. He's written four books on Wall Street
and always has a common sense approach to investing in
an unstable world. He is a stable, smart, common sense
voice and he is joining us on Saturday. So I
want to run. I want to start with this premise
(00:45):
is in my life, every five or six years we
would have a pullback economically, a recession. We had a
bullmarket post two thousand and eight for about double that
ended twelve years. So let's start wrong with this. Why
did we have an extension of a bull market for
(01:07):
so long? International money? Was it money being parted in
by the government. Were we less chaotic than the rest
of the world's markets. How do you explain a bull
market that lasted twice as long as the average bull
market probably since World War Two? Well, the answers yes
to everything that you put forward telling and thanks for
(01:28):
having me on the show. A long time fan, first
time caller. So listen, as we came out of the
Great Financial Crisis, you know a lot of things happened
from a policy perspective that never took place before. The
Federal Reserve took interest rates to zero, the Fed and
the federal government launched a wide variety of support programs
to prop up the economy, and we were thinking ourselves
(01:48):
out of a pretty big hole. So against that backdrop,
the economy never caught fire, never overhead it, and never
really forced the Federal Reserve to jack up interest rates
the way they have towards the end of other business
cycles to cool things down. So we had, you know,
kind of muddle through growth for a dozen almost a
dozen years at ten years, eleven years at around two percent,
(02:08):
and so inflation never picked up. The Fed in late
twenty sixteen started to raise interest rates a little bit,
they found they couldn't do much of that, and they
went back to keeping rates on an even keel, and
the economy just grew and expanded nicely, and they were
for us anyway. A very few bumps along the road. Overseas,
as you mentioned, you had the European sovereign debt crisis
(02:30):
in two eleven. You had other concerns along the way,
but they were not our concerns, and the US economy
just grew well, even relatively evenly, even though income inequality grew.
We did see record low unemployment at three and a
half percent or near record low unemployment, and we saw
decent growth, and there were a wide variety of policies
that helped us get there. And then we ran into
(02:52):
this brick wall at the beginning of this year. Had
we not run into COVID nineteen, you know, the market
wasn't I think twenty nine thousand? Yeah, I had. I
had for the previous eighteen months. I would call my broker,
who I've had since college at Morgan Stanley, and I
would say, should we, you know, cash out in a
lot of this stuff, and he'd be like, no, it's
(03:13):
it's it is. It looks good for the first seeable
future six to twelve months. Do you agree with that assessment?
If not for COVID, the economy was really humming with
no foreseeable gait or stoppage. Yeah, I think that's that's
pretty true. I mean, as I said, the fit tried
to raise interest rates, there wasn't much room for them
(03:34):
to maneuver. So we had a couple of corrections along
the way. In the stock market, the FIT found that
it was going to have to leave rates low for
an extended period of time, and then when COVID hit,
it had to lower him even further and then engage
in all this additional activity that we've seen in the
last three months, which has been historic. But the economy
was pretty I'm pretty even kill you know, we had
more job openings than we had workers available. Even with
(03:58):
the tax shut which I don't think a puplished what
many said it might, which would be to raise wages
or increase employment, or increased capital spending on new planted
equipment here in the United States. It still gave corporations
a huge profitability cushion, and so the stock market was
likely destined to continue going higher, you know, even if
a plateaued a little bit for a while. We were
(04:19):
in pretty good economic shape and then and then the
virus hit. Now, there were some signs that the economy
was beginning to slow prior to that, both domestically and globally,
but but nothing like what we've seen in the last
let's say, since March. I've never felt the stock market
is the economy. I don't believe that to be true.
(04:43):
But to what degree is it part of the economy
in your opinion? So there have been a lot of
ways that's been described. The barometer a thermometer. It's reflective
of the composition of the economy. Investors reward companies that
are growing and creating new industry, and never has that
been more true, I think than during this period that
(05:04):
of lockdown, where we've seen a radical shift in what
investors have been willing to buy. They've been buying the
stocks of those companies that have not only survived but
thrived during this work from home, shelter in place lockdown
periods of the Amazons of the world. Microsoft, which is
big in cloud computing and supports these activities, as does
Amazon's web services, You Zoom, Walmart, and Costco have done
(05:27):
a great job. Companies that have allowed us to continue
our lives in more of a virtual manner have done
extremely well. And those that are really high touch consumer
hospitality type companies restaurants have gotten crushed. Airlines, transportation, all
of that stuff's really gotten hammered. So the stock market
is a barometer of economic health, sometimes social and political health,
(05:49):
but only rarely. Most of the time, though, it's allocating
capital to companies and industry groups that are going to
win in the longer term. And that's what we've seen now.
Whether or not we've got ahead of ourselves here's another question,
but that's what's happened since the coronavirus hit. I do
feel like we're in a bubble. I'll get to that
in a second. But there is a level of anxiety
(06:14):
created when you see double digit unemployment currently, no vaccine
on the horizon, and yet the market. You know, obviously
there are exception days like a Thursday, but the market
is moving up. That to me, That to me for
the first time in a long time. Combined with the
government relief bill, you know, those are running out now,
(06:35):
those stimulus checks are ending. I do believe right now
we are looking at a major pullback. Your thoughts on
my current opinions, I don't I don't disagree with you.
I mean, and I think we'll have to define major.
I mean, I think it's maybe, you know, fifteen to
twenty percent as opposed to something more cataclysmic. And I
do think the market's out over its skis. We're already
(06:56):
getting indications that the economy is beginning to slow with
the state with states like California where you are, Arizona, Texas,
Florida and others beginning to end their reopening process and
actually go in reverse. Those are huge GDP states. And
so the job has claims number on Thursday, which was
(07:17):
higher than expected, was the first indication that the labor
markets started to cool. Maybe we get a negative jobs
number next month. We'll have to wait and see. Airlines
are saying that just as they were starting to open
up new flights, consumer demand has fallen off. So with
this reemergence, or let's say, with the extended first wave
of the virus, we're starting to see a slowdown in
(07:37):
the economy. So I do think the markets overestimated the
speed with which we will recover, and they may also
be overestimating the amount of stimulus we're going to get
from the federal government as they engage in these new conversations.
Republicans want to cut what was a six hundred dollar
a week enhanced unemployment benefit to individuals who are out
of work down to one hundred dollars a week now,
that would be a real blow to the consumer. And
(07:59):
given that we're not out of the woods, you know,
these are the things where I think the market's going
to have some trouble going forward. Plus, the market is
extremely rich by historic standards. Us as simply as you
can and perhaps this this is mostly a sports audience.
My entire life, we have had debt. It now grows
at a much faster rate. Explain to people I know
(08:23):
in my personal life, I don't carry a great deal
of debt. I'm very fortunate. I have an income which
allows me to buy most things cash, and I'm not
I don't consider myself. I've never had a second car.
I'm not a big consumer that way. But where where
would debt hurt the average person in Indianapolis. Wife's a
school teacher. He's got a solid job. They make ninety
(08:44):
two thousand combined. And he doesn't know what the debt
means for him. He knows what his personal debt means,
but what is the what is the the federal debt
mean going forward? Right now? We don't know. I mean,
at the moment, you have really whether you like or
just like this administration, this Congress, this government, whatever, however
you want to characterize it. They were between a rock
(09:06):
and a hard place. It Once we started locking down
the economy, the deficit was going to explode because businesses
were shutting down. Tax revenues were going to zero effectively,
you know, for individuals and corporations. So they had to
go out and spend money to support the economy and
keep people running in place. So that was a three
trillion dollar program. The national debt is now approaching twenty
seven trillion dollars. It was, you know, twenty one trillion,
(09:28):
just not too long ago. We've spent a lot of
money and have to spend more just to keep the
economy from falling off a cliff. Now we have the
luxury of borrowing in our own currency, which is a
good thing when you can borrow in your own currency.
If the currency goes down, it's actually the bondholders who
maybe overseas investors, who actually lose money, and it's actually
(09:50):
a benefit to our government. So for now, the world
seems to be able to absorb the amount of death
that's being issued by governments around the world. All of
governments are doing what we're doing. Corporations are borrowing because
interest rates are at zero. I mean, Apple is borrowing
at two percent, you know, and even companies that are
cash strapped and not great quality companies have been able
(10:11):
to tap the markets for debt as well. So at
the moment it doesn't mean much. It may mean something
down the road if we don't come out of this
in a way where we can grow fast enough to
start well, first of all, to stop growing the deficits
annually it's gonna be four trillion dollars this year alone,
and then start to work on getting the debt down
(10:32):
to a manageable level. We're not there yet, So at
the moment it doesn't mean much, but it may mean
something somewhere in the future. I'll simplify this. I don't
know the connection between president and economy. Jimmy Carter was
much of one. Not Yeah, Jimmy Carter wasn't great for it.
Reagan was better for it. But I don't think it's
(10:54):
Democrat or conservative both Obama Clinton, the market was fine.
It's fine with Trump, who I don't think the most
stable President's most stables, but the most instable White House
of my life. That said, um, there's always been a
sense among my business friends. Oh, these Democrats are bad
for the economy. It's regulations. But I watched Clinton for
(11:15):
eight years during dot com. I've watched Obama take we
were we were on, you know, the precipice of a depression,
and I saw eight years where the market went up.
Is there? When I look at Biden, what the market
doesn't like is unknown. So Trump may bee pro business,
but he is so chaotic. You know. The fear of
(11:38):
the unknown with Trump day to day is significant. I
think Biden disagree with you on that. So to me, Biden, Ron,
I think, oh, it'll be you know, very low energy.
It will it will not be chaotic. It will be
a very soothing presidency. That feels like if I was
an investor, I could really use. I could really use
(12:03):
waking up twice a week and not having a headline
scare the hell out of me. I look at I
look at Biden as good for the market. Yeah, it's
kind of like having you know, mister Rogers in the
White House to a certain extent of your granddad. You
know who's who's got some experience. He's he's got his
gray hair, he's calm, he's been he's been there, before
he's done it. And look what what the what Wall
(12:25):
Street more than I would say the economy or Main Street,
which fear is that corporate taxes, which went from thirty
five percent down to twenty one percent. Joe Biden says
he's going to raise him the twenty eight percent that
he's going to raise capital gains taxes, the taxes that
you pay on the gains that you make in stock market,
real estate or other investments up to ordinary income, which
(12:46):
would be thirty seven percent at the top rate. It's
currently twenty three percent. And so the market fears that.
But they feared that with President Obama. As you said,
So I was at a and because after I left
CNBC on a full time basis, if I wanted to
encounter any candidates, so it was really Rudy Giuliani in
two thousand and eight, or Barack Obama or Hillary Clinton.
I had to pay my way in to see these people.
(13:06):
So I went to fundraisers. So Obama walks into a
room full of hedge fund managers and lawyers and says,
I'm going to raise your taxes. You guys can afford it,
too bad. Wasn't the most grateful way to say it.
You didn't say, listen, we have some really exciting programs
we'd like to get off the ground and help people,
and we think you guys can help out. Not the
way he approached it. Everybody was freaking out that he
was going to raise taxes. Well, what happened, As you said,
(13:27):
he walks in during the middle of a great financial crisis,
a great recession, on the brink of depression, and he
extends the Bush tax cuts. So I think Wall Street
may be overestimating the risk that Joe Biden, with an
environment like this, is going to walk into the White
House if he wins raise taxes across the board and
crush the economy. We may not be able to have
(13:48):
that happen unless we are fully out of this thing.
There's a vaccine, we're back to normal, and we're growing
at rates that are faster than we've seen for the
last dozen years. So he may not have the flexibility
to do it, even if he wants to. And so
I think to that end, you know, Wall Street business
types and others maybe a little too fearful. And on
the regulatory side, I think he's probably going to restore
(14:10):
some common sense regulation again, as I'll be giving away
a slight political bias of my own. I think there
this president has rolled back far too many environmental regulations.
I'm not a tree hugger or anything, but you know,
letting stuff spill into the water and growing back these
regulations just for the sake of doing it is not
wise either in the short runner in the long term,
and I think President Biden, if he were to be elected,
(14:34):
would probably, I think, be more cognizant of the risks
that comes with that kind of deregulation. Yeah. I'm not
a tree hugger reader, but I agree on the regulations.
Ron asna is joining a senior analyst commentator for CNBC,
written four books on Wall Street, and I've always already
thought of him as a com sold four books on
Wall Street. Oh it was some total of all four? Yeah,
(14:54):
it was great. How about that. You know, I've always
thought of you as a common sense guys. So I'm
going to throw a theory out to you, and I
do this from time to time. In sports, there's something
called the pitchfork society when you have such a divide
between the halves and the have nots. And in most
of my lifetime, technology has eliminated time and space twenty
(15:19):
four seven. My money grows now. You know, it used
to be you could be in the sixties Warren Buffet,
but when when you got in your car, you couldn't
make deals. You're in your car that now it just
it's never ending. And here's what I worry about in
America that technology we have people making thirteen billion dollars
a day. The gap between not just the poor, the
(15:44):
gap between the middle class and the wealthy is now
creating almost a second gap. We always talked about rich
and poor. Now it's a gap between poor and middle class,
middle class and wealthy and then wealthy and thirteen billion
dollars a day. Jeff Bezos, what concerns me about this?
And my solution would be, you know, to have some
(16:07):
sort of alliance, a Silicon Valley alliance, where they do
start on certain big days for the market two to
three times a year, we set aside money that becomes
stipends for the poorest Americans. Now, again that makes me sound,
you know, very liberal, but I think we have a
problem that emerged probably ten years ago with the growth
(16:28):
of tech. And it is this fear mongering or is
it something that's discussed in your circles. Well, I mean,
I think if you look at Bill Gates and Warren
Buffett and others who have taken the pledge to give
anywhere from fifty percent to one hundred percent of their
wealth to the Gates Foundation or to other charitable causes,
some of that's already underway. And I think Bill Gates
(16:49):
has done a remarkable job, you know, And I know
Warren Buffett pretty well, and you know he's he hasn't
given everything all yet. He's, you know, pushing ninety years old,
and he's got seventy billion dollars to give away that's
going to go to the Gates Foundation, and those people
do a lot of good. Now I'm intrigued by your idea. Now,
there is a certain fickle nature to this. So yes,
(17:11):
Jeff bezos wealth grew by thirteen billion dollars in a
single day, but that's because the stock went up. It's
not his liquid network. So's he can't just sell thirteen
billion dollars one day and one not crush his own
stock and send the message to the markets that he
suddenly lots confidence in the company or something like that.
And so it takes rather extensive planning. But I do
agree that among the super rich, and remember, on an
(17:34):
inflation adjusted basis, there's still no one wealthier than mister Rockefeller.
So those folks are actually wealthier than than Bill Gates
or Jeff Bezos if you adjust for inflation. So yes,
they are super rich, and many have taken steps towards
helping either to ameliorate diseases, as Bill Gates has done
(17:55):
in Africa and other parts of the world, and as
the Robin Hood Foundation has done with respect to hunger
and education. Look, I think what we really need is
a domestic policy that focuses on equality of opportunity, that
makes sure that disadvantaged individuals, particularly kids who are coming up,
have adequate access to nutrition, healthcare, and education. And if
(18:17):
you can get those kids who are economically and in
some cases socially disadvantaged into programs where the equality of
opportunity is at least close to equal, we will ultimately
solve this problem. And we still haven't had a cogent,
coherent conversation about how we get there. And stock market
gains are what they are in a certain sense, and
(18:38):
I would my colleague and I Jim Cramer, may have
approached this differently, but he's right in the sense that
the stock market on its own is a moral It
doesn't view the price of a stock as good or bad.
It's what investors are really doing is paying x amount
of dollars for a future stream of earnings. So if
Amazon is going to win, if Microsoft's going to win,
as Apple's going to win, they pay a lot of
(19:00):
money for that, and that's how they get their returns.
And the founder of the company, like a Jeff Bezos
or Mark Zuckerberg or somebody like that, you know, reap
the benefits. And that's how capital capitalism has worked, I believe.
And Joe Biden has mentioned this. I think I wish
he would be more explicit about it. That we need
to focus on stakeholder capitalism, that the world, the capitalist world,
(19:22):
has to look at all the constituents of the industrial
society in which we live. That's not just shareholders, it's employees,
it's consumers. You know, Henry Ford and Milton Hershey were
very good at this decades ago. They wanted to make
sure that their workers were paid adequately so they could
buy the good since they were producing. And that's you know,
the type of enlightened, you know self interest that Adam
(19:44):
Smith talked about the early you know economists who focused
on capitalist systems, that you want people to make enough money,
if for no other reason than to be able to
buy your stuff, but you also want them to have
access to healthcare, and that there have been industrialists in
the past to focus on that, and there are something
today who do it. I would agree, though it needs
to be a much broader initiative, and I do think
(20:06):
the government has a role to play here as well.
I can my sense of a bubble. And again, as
a novice, I've been investing since nineteen eighty nine. My
dad was a hused to have a lot of Washington
Mutual I remember that that was his number one Yes, yeah,
he was a Northwest optometrist and didn't make a huge living,
but my dad invested, and so I started investing in
nineteen eighty nine and to this day dollar cost average,
(20:29):
do it every month, write a check and I would
never give a stock tip ever on the air. I
gave you two the other day that I've done well with,
but I think that those are understood kind of by
you know, Morgan Stanley gives me a tip. I go
in four years ago. But I would say, they give
you advice. Yeah, they give me advice. So but let
me ask you this. So I won't ask for a tip,
(20:52):
but I'll ask for a to analyze a sector. Is
there a sector that you really like, feel very confident
about economically and ethically. If I said to you, Ron,
Silicon Valley's not going anywhere, but in the next five years,
keep your eye on this sector, what would it be?
(21:12):
I would imagine health sciences and things that are focused
on longevity, cancer cures, and you know, biotechnology. I think
that's where a lot of growth is going to come.
You know, I am worried that that technology writ large
has gone way beyond its ability to grow in the
short run. I mean, for the first time really since
(21:33):
two thousand, the five biggest market cap companies comprise over
twenty two percent of the waiting in the S and
P five hundred. Now they have cash flow that's equal
to their waiting. So it's different than nineteen ninety nine
and two thousand because a lot of those companies didn't
necessarily have the same type of business operations that the
Apples and the Microsofts and the Amazons have today. But
(21:56):
I'm worried that they're toppy, and I'm worried that it
is a little bubble, like I would what I would
really warrant people against because there's been such a surge
in individuals who have no experience in the market day
trading on these various platforms, UM buying penny stocks and
listening to internet gurus talk about how you know stocks
only go up again, as you suggested, a disciplined approach. Um,
(22:20):
you know, buying a mix of indexes that are likely
to be higher five, ten, or fifteen years from now. Um,
is a smart thing to do. Picking stocks and day
trading them is you may as well be gambling, right,
You may as well just go bet on the Washington
football team, as I believe it's not ball, want to
(22:41):
get my mind. I mean, it's just so absurd. I mean,
it's just so transparent. Yeah, I think personally at this
point they should just leave it that way. You know,
what's the difference, right? I mean? But um, but no,
I think you know, discipline helps, dollar cost averaging helps,
not you know, not chasing ads obviously helps. But we
(23:01):
are seeing we're seeing a compositional shift in the economy
because I do think over the long run, all this
work from home stuff, And you know this as well
as anybody. It can be done now. And you know,
whether I'm affiliated with a financial firm on the one
side or CNBC on the other, everything I do now
is from home. Everything is virtual, and I don't mind it. Actually,
I've been home. I've been working from home for a
dozen years. But I don't have to get on a
(23:24):
plane again. So I mean, it's not like I go
out and buy airlines and you hope that they're going
to be back at fifty percent capacity in the next
six months and one hundred percent capacity in two or
three years. That that's a tough trade, but I would
you know, the cutting edge of technology has always done
people reasonably well. You do have to get some advice,
You do have to know what you're doing. You can
buy a technology or biotechnology index which is diversified, and
(23:47):
that's a way to go about it, but it should
also be part of a hub and spoke type investment
process where let's say you own an inexpensive SMP five
hundred index fund and then you can put technology and
biotech around it and create a portfolio that has exposure
to those areas, but doesn't leave you hanging on a
single stock. What a pleasure for me run inside and
(24:08):
for me absolutely well, I'm just a sports guy. I mean,
you're you're, You're in you're You're in an industry that
feeds America. I just have opinions on sports and Washington
football teams. Would you have to understand when when I
was eight seventeen years old, I was playing as a
backup quarterback at Shamanad College Prep in Canoga Park, California,
(24:30):
Number seven. Across across the street from my house was
another number seven playing for Ganadas Hills High School by
the name of John Elway. My age, my year, my court,
my position, and my number. He stole all of my
press and I have been bitter ever since nineteen seventy
eight and seventy What was he like in high school?
I mean, it just takes me back. He played literally
across the street from my house and I never met
(24:51):
him and I played. You know, in those days, Shamanad,
which is actually now a southern California powerhouse in sports,
was a one acif school Catholic Interschool Federation, So we
were a step above eight man. They were a step
below pro so we never really crossed paths, and had
we had, we um I would have just had cleat
marks all over me, so wildly different experience. Then, well,
(25:12):
it's great. It's great to finally talk though we've we've
texted here before, and I would love to use your regularly.
I think you have a real common sense approach. I
always trust what comes out of your mouth. I think
we're kind of politically aligned as well, which doesn't know
us matter. I Bill Maher's more liberal than me. I
absolutely love Bill Maher, and I've actually listened to Ben
Shapiro a few times and agreed with her. So yeah, yeah,
(25:35):
that's funny. I used to see Bill Mark the improv
in the late eighties in La and my favorite joke
of his was, you know, in the year one, did
everybody keep signing their checks zero? That's that's the one
that stuck with me the longest. Fun Roman Sonna, what
a pleasure. And by the way, I'll give you mine,
I'll give you what's the My favorite joke. My favorite
(25:56):
joke is one that sounds like it's going to be off.
It was by Jeff Stilson, a Seattle comic, and this
joke sounds like I'm going to say something inappropriate, and
it lands, and it's one of my favorite jokes that
I really remember. He says, you know, I like my
women like I like my coffee bitter, and I've always looked.
(26:18):
I've always loved that joke by Jeff Stilson. I love them.
If you're a Stephen Wrights fan. My personal favorite. I
know I'm probably taking you overtime, but my favorite was
I bought some batteries but they weren't included. That is great,
my friend. Thank you so much. Ron. We will talk again.
Thank you. Thanks. Look forward to it. Our second guest
(26:41):
on the Saturday podcast. I believe this is Warren Sharpe's
second visit. He's just released his three hundred fifty page
twenty twenty preview book. He is, in my opinion, kind
of the leader in football analytics and analysis right now
in his space. And Warren is joining us again. Last
(27:04):
time we had Jan we got huge feedback on this,
so I'll start with this. I'm going to start with
something close to my heart, Russell Wilson. I watched the
offense and it feels outdated. It feels like they rely
in a running game behind a below average oe line
and then need Russell to save them on third down.
What does your analysis, what do the numbers, what do
(27:25):
the tendencies say about that Seahawk offense. They say that
you're absolutely correct in that presumption in terms of what
they're relying upon. This is a team that has arguably
one of the best quarterbacks that we've seen over the
last five years in terms of what Russell Wilson has
been able to do. And yet in early downs in
(27:46):
the first half in twenty eighteen, they had a sixty
percent run rate, the most run heavy offense in the NFL.
Last season, that improved a little bit, but they were
still running the ball three percent more than average. They
were the tenth most run heavy offense on early downs
in the first half of games. And we know what
happened to their running back corps. They got completely blown up,
(28:08):
injuries all over the place, and as a result of
their reliance upon these running backs that aren't being productive enough.
They trailed in ten of their first twelve games. They
needed Russell Wilson to come back. Somehow. They won ten
of those twelve games. They were trailing at various different
points in those games, Russell Wilson had to wills them back.
(28:30):
He constantly bringing this team back from first half deficits
where they're leading entering the locker room. They led in
the locker room entering only six of their games last season,
and he had to bring them back and win a
lot of these games in the second half. Number one,
very difficult for a quarterback to do that. It's not
typical that a quarterback is going to be able to
(28:51):
post double digit win seasons when they're only winning at
halftime in so few games. They absolutely must get more
aggressive early running games and become more pass heavy. Russell
Wilson was the number two most efficient pass or whether
you're looking at EPA, which is expected points added success
rate yards per attempt. He was number two across the
(29:12):
board on early downs in the first half. Yet they're
one of the most run heavy teams in the NFL
on these downs to keep falling behind on the scoreboard.
I believe as they put more on his shoulders, let
him have more influence over the team in the first
half of games, they will be leading a lot more
at halftime. And this is so important because teams that
are up at halftime win eighty percent of the games
(29:34):
number one and number two. This is not the same
type of defense they had in twenty fourteen. They're much
much worse. They've gone out and paid Russell Wilson, so
they don't have as much money to go around. They
don't have as much talent. They had ridiculous draft classes
on the defensive side of the football. They haven't had
such draft luck lately. They don't have a talented defense.
(29:55):
They cannot rely on that defense to be able to
get the ball back for the Office in the second
half and let Russ work is magic. They need to
have leads so that life is easier on that defense,
so that the opposing offense pass to throw the ball.
That makes things more predictable. When that opposing offense is
down at halftime, the defense for Seattle knows they're going
(30:16):
to come out past the football. Seas are on the
pass rush. It's easier on the secondary because things are
more predictable, and then they can get the ball back
and let Russell Wilson continue to grow. The leads I
want to segue because Russell Wilson now gets compared often
to Aaron Rodgers, so that the feeling has been Russell's
had great support through the years, and Aaron they've got
no owner, free agents don't like green Bay. He doesn't
(30:39):
have any support. But if I look at the offensive
and defensive lines of green Bay entering this year, they
feel significantly more trustable than Russell Wilson's O and D lines.
Then I watch Matt Lafleur in the front office of
green Bay go with a blocking tight end or running
back in three interior offensive lineman and a backup quarterback
telling me they're going to change the offense in green Bay.
(31:02):
My question to you, how good is Aaron Rodgers support?
How good was it last year? Because Russell has had
the tag, He's got a surplus of credits, and Aaron's
dealing with debts. Here when you look at green Bay's
overall talent, should they become more run centric? Has Aaron
Rodgers eroded? What's your take on what the numbers say?
(31:26):
I don't believe any team in the NFL should become
more run centric, though, just right off the board, I
can tell you that no team should become more run centric. Now,
should you be more diverse when you choose to run
the ball and have less predictability when you run the football?
And so you can use a little bit more heavier
groupings and make it look like run and then throw
the ball out of that and occasionally run out of
(31:47):
those heavier groupings. Yes, you can do all of those things,
but you absolutely shouldn't become more run centric with the
rules construct that you have in the NFL right now.
But the fact that they didn't go out and improve
the sieving core of the green Bay Packers is problematic
to me. That being said, I do think top to
bottom the green Bay Packers do have more talent on
(32:10):
their roster. But the one thing that I think a
lot of people when they're looking at Green Bay and
they're forecasting them for this year and they're seeing what
Aaron Rodgers surrounded with. People see this team that improved
from six and ten to three to thirteen and three
last year, and they think, wow, Matt Laflour made the
team significantly better. This is a great football team. But
the reality is, if you look at this offense, an
(32:31):
offense that Scott Mike McCarthy fired in twenty eighteen but
obviously made things look really good for Matt Laflour last season,
this team played in the same number of games in
twenty nineteen as they did in twenty eighteen that were
decided by one score, But the twenty nineteen Packers won
nine of those ten games. The twenty eighteen Packers only
won three of those ten games. The real difference was
(32:54):
not offensively. The offense in twenty nineteen was actually worse
in terms of their production on early downs, their ability
to skip third downs, and their distance to go when
they were forced into third downs. They had fewer less
distance to go in twenty eighteen than they had in
twenty nineteen when faced was third downs. This was a
better club in twenty eighteen offensively than what they did
(33:17):
in twenty nineteen. But the real difference was the luck
in terms of their schedules. This defense faced a ridiculous
schedule of opposing quarterbacks. They played Mitchell Trubisky through the
ball fifth sorry ninety four times against these guys. The
next closest quarterback was down at fifty nine, So they're
getting a ton of attempts against Mitchell Trubisky. They're playing
(33:38):
guys like Kyle Allen and Daniel Jones and Matt Moore
and David Blow and Dwayne Haskins, all these backups and
Joe Flacco, guys who aren't starting this upcoming season, They're
going to be challenged a lot more on the defensive
side of the ball. I think that overall is going
to make their team look worse because the defense isn't
going to post these top fifteen, top ten metrics across
(34:01):
the board like they did last year. That's going to
put more pressure on Aaron Rodgers and this Green Bay
Packers offense to throw the ball more to stay in
these games. And I think that's where we're going to
start to see more problems because you're not going to
have as many leads against better offense. Warren Sharpe is
joining us. We talk both the Seahawks and the Packers,
and there's little some revelations in there. If you're a
(34:23):
sports better, perhaps maybe we're a little high on Green Bay.
He just released his three hundred and fifty page twenty
twenty preview book. Now I'm going to go to a
couple of teams. One I think is going to be
significantly better. Now their record won't be I think Denver
is going to win two to three more games I
watched at the end of last year with Drew Locke.
(34:45):
They added in the draft of the wide receiving corps.
I think no offense has a chance to be really good.
They bring in Melvin Gordon, and we know they have
two good rushands and Vic Fangio's an excellent defensive mind.
I think Drew Locke's gonna work. I think Den is
underrated going into the season. You tell me you're the
expert on this, am, I nuts, What do you like?
(35:07):
What are you What concerns you about the Broncos going forward? Well,
my concerns with the Broncos number one, if we look
at what their schedule ends up looking like. I mean,
I agree with you. When I looked at this team
on the surface heading down the stretch, and I thought,
when I was sitting down to start writing their chapter
in this book, that I was going to write a
lot of positive things about Drew Locke because they had
(35:28):
a good record down the stretch. He looked pretty good,
I thought, you know, And they ended up producing pretty
well in those games down the stretch. Was he was
taking control four and one in their last five games.
But then I went back and I looked at the
teams they played, the past defenses that they faced, and
then actually how he performed in these games, and in
the book we showcase a completion percentage over expectation by
(35:50):
depth of targets, and you could see in a couple
of those graphics, like Drew Locke was really good within
ten yards of the line of scrimmage, but beyond that
he struggled tremendously, And the sh becomes will these new
receiving weapons help assist him in completing some of those
balls down the field? Or you can look at it
from the contrasting perspective of they face a much difficult,
(36:11):
much more difficult schedule this upcoming season. I've got them
playing the eleventh toughest schedule of defenses against the past
this upcoming year, a big jump from what Drew Locke
was facing at the end of last season. Number one
and number two. This is an off season of change
of question marks. We haven't had the ability for him
to start working with a new offensive coordinator in Pat Shermer,
(36:32):
so they don't have that experience going He's working in
new weapons, so we may not see those guys flourish,
especially early on in terms of these younger guys trying
to fit in and do things with this offense. So
while I was expecting to be a little bit higher
on Drew Locke. I actually found myself a little bit
lower on Drew Locke. And this is a difficult division
that they're in first and foremost, and their schedule isn't
(36:53):
going to be very easy. So I'm not saying that
he can't be a long term solution, but I'm not
as eager to jump on the twenty twenty bandwagons of
Drew Lock because there's a lot of question marks and
I saw enough things that concerned me out of his
game when I dug into it last year to be
a little bit more. So I'm sitting this one out.
(37:14):
I'm not going to judge Drewlock. I'm not going to
get on his bandwagon just yet. I think we need
to see more out of him before I'm going to
make an educated decision on whether or not I think
this guy could be the future long term franchise quarterback
of the Broncos. Quick break back with a team and
a quarterback that totally confuses me, the New York Giants.
(37:34):
Warren Sharp back Sharp Football Analysis, just released his three
hundred and fifty page two twenty preview book. All right,
let's get to the New York Giants. I did not.
I watched Daniel Jones enough of him in college. I
didn't see the arm strength. And that was with David Cutcliffe,
who's a very smart offensive mind, and I thought he's erratic.
I don't see the arm. The accs a watered down
(37:56):
perhaps the weakest outside of Clemson College Football Conference. Then
he walks into the New York Giants and I watched
him last year and there were three or four games
where I thought Warren I whiffed. He is way better
than I thought. There's an Alex Smith quality, athletically, good
straight line speed, He made good enough throws, and I
do think Dave Getleman had a pretty darn good draft
(38:17):
this year by any standard. Daniel Jones, what is the
truth serum on this? Did I completely miss or again,
is it fooling me because he was good against bad
teams and struggled against good defenses. Well, yeah, he does
move from a below average schedule of opposing pass defenses
to a top ten schedule this season, so he's going
(38:39):
to be going up in general against more difficult pass defenses.
But the one thing that I think that we may
see here is a little bit more intelligence from a
play calling perspective as to how they're utilizing Daniel Jones.
I could see looking at this from the outside that
the New York Giants and Dave Gentleman made no secret
about this, is he didn't really have these quote unquote
(38:59):
analytics folk in the building. But I could tell that
they were not utilizing analytics when they were figuring out
how they're going to utilize Daniel Jones. And that's why
I think maybe if they start incorporating that a little
bit more, Daniel Jones would look even better. One key example,
he was much better with play action than without a
lot of quarterback star but this was just the night
and day difference. They were moving from like six yards
(39:20):
per attempts up to nine a forty three percent success
up to fifty nine percent. But the big difference for
them is it wasn't just any play action. It was
play action from shotgun because when Daniel Jones was under center,
and think about it, you're taking a staff from under center,
you're turning your back on the defense to stick the
ball in the belly of Saquon Barkley or another running back.
Then you're facing back up to the offensive line. The
(39:42):
pass rush and where your receivers are down the field.
He was very poor when he had to turn his
back on the defense to do play action from under center,
But he was much better average nearly eleven yards per
attempt and a sixty seven percent success rate when he
was using play action out of shotgun. But they used
about equivalent amounts of play action from under center as
(40:03):
they did from play action in shotguns. So there's just
one example of I think you can make Daniel Jones
look even better when you're giving him better play calls
and you're analyzing this data in better context, and so
I think that you can improve upon his production. Two
areas that I'm still kind of shocked so they didn't
get higher production out of number one. Evan Ingram. Evan
(40:26):
Ingram is a matchup nightmare. He had a great season
in twenty eighteen. In twenty nineteen, he was terrible if
you look at his counting stats, like his total yards,
his total catches, because that are looked okay, But if
you're looking at his efficiency metrics, terrible last season, and
so they need to improve that. He's a matchup nightmare.
Skill sets much better than any defender would be against him.
(40:46):
And then number two is this better incorporation of Saclon Barkley.
You've got it. I know that Jason Garrett's there, so
they may start to run the football even more so
on early downs, which is going to be bad for
the New York Giants. They got to figure out how
to utilize him even more offly, and I detail that
how they can do so in the book. But they
need to get a better census to passing to Barkley
(41:06):
when and where they're actually passing him the ball out
of the backfield to increase the efficiency of those targets.
But in general, I think there's a lot that you
can work with Daniel Jones here, and I agree, I
think maybe his feelings higher than we thought entering last
season if he gets the proper coaching and play calling
and system. There another team that I find intriguing. I
(41:27):
don't have them winning a ton of games is the
Las Vegas Raiders, but Mayock has shown an ability to
deliver in the draft. I do think Gruden has always
been pretty good running the football, and they've got a
nice set of running backs I like, and their old
line to me feels like at times a very effective
o line. I like Derek Carr more than John Gruden,
(41:51):
but I do feel like sometimes he just won't let
it rip. He tends to be a little Kirk Cousins
to me, a little safe. But the d and Narrators
are in a tough division. I start to watch him
last year and they were very hot and cold. You know,
they go to London and they're great against the Bears.
They come home and they can get doused. Where do
you fall on the Raiders going forward? What do you like?
What do you not like? Because I just think between
(42:13):
Gruden's personality, the kind of a unique rub with he
and Derek Carr, I think they're offensive pieces. Hunter Renfroll
has been a wonderful find. Where do you Where do
you go with the Raiders going forward? Well, I think
jig sorry, I think John Gruden is a very good
in game coach and he did a lot of things
(42:35):
that were that enabled this Raiders team to get leadd
at halftime. They led at nine games at halftime, which
is very high. They ended up only winning seven of those.
But my issues really start with Derek Carr and then
you to talk about the defense, which was very bad
last season. I am not very high on Derek Carr.
Like you mentioned in one of your talking points there,
(42:55):
he tends to bail too often. I mean, there's a
famous play where it's fourth and goal and he throws
the ball out of bounce like he just throws it away.
These there are situations where under pressure he does not
do very well. I know they got new pieces this season,
but I like Gruden more as an in game coach
than I do is influencing the general manager. But I
(43:16):
just think that this is a team that has too
much variance for me to be confident in that. I
really do not like though, just how they are up
and down far too often. And I think that they
do a lot of things from a coaching perspective to
make life easier on Derek Carr, but then he makes
things more difficult and unravels at the same time. And
(43:37):
we also have to consider the fact that this season
I'm currently projecting them to play the number two most
difficult schedule of opposing past defenses. They played an average
schedule last year, so an increased difficulty and schedule, a
tendency not to be able to hold on to lead
Layton games, and then just the overall fact that I
don't love Derek Carr in a division that has some
(43:58):
other good quarterbacks. I think that I'm not jumping on
board with the LA Raiders anytime soon. Yeah. No, I
think you're right. Warren Sharp is joining us, and I
hope you're enjoying this as much as I am. Starting
with the Seahawks into the Packers, the Broncos, the Giants,
the Raiders. Now Baker Mayfield. I did not think he
(44:18):
was a number one pick. I look pretty smart today,
But I could also say Freddie Kitchens was completely over
his skis. He'd never been interviewed for a coordinator job
and was handed kind of a chaotic situation with Baker Mayfield.
I do think Baker has talent. I've always said he
reminds me of Case Keenam with a big time arm,
that size, athleticism very average, but I think he can
(44:42):
sling it. I think he plays aggressively and with confidence.
And I'm going to say that Freddie Kitchens was a
majority of the problems last year. Is that fair? It
is fair? But I will say that there's a public
narrative out there that, oh, if only we used more
of to Monkin last year, who was the offensive coordinator
(45:02):
who came out after the season and said this was
a disaster and I didn't get along well with Freddy Kitchen. However,
there's a narrative that if we used more Todd Monkin
everything would have been fine. But the reality is this
team used a lot of Todd Monkin's ideas early on
in the season. Todd Monkin is an air raid coordinator.
He likes to spread the field with wide receivers and
(45:23):
attack the defense. They used a ton of eleven personnel
weeks one to nine. The eighty four percent of their
passes came from eleven personnel, so they were at one
of the highest rates in the NFL in terms of
using eleven personnel. But what's the problem. The problem is
they aren't looking at analytics because they would have seen
that in twenty eighteen and then into twenty nineteen. Baker
(45:44):
Mayfield's terrible with eleven personnel with only having five guys
typically protecting him in front of him. He was much
better when they utilize heavier sets twelve personnel which is
two tight ends or twenty one personnel, where they're having
a couple of backs out on the field and giving
the defense and first of all the idea that Okay,
this really could be a run play. And number two,
(46:05):
when he drops back, he's terrible with pressure. So we
need to keep Baker clean and give him this confidence
before the snap that we're going to have things bolted
down and when pressure is not going to leak to you.
When he got those situations, he was actually very good,
well above average when he was tasking ball. Incomes Kevin Stefanski.
Kevin Stefanski is a guy who used a ton of
(46:26):
twelve and twenty one and even thirteen. Yeah, exactly the
least amount of eleven personnel of any team in the
NFL last season. So he comes in the door, and
what do they do. Well, you need personnel to be
able to operate the stoppic you can just say I'm
going to start using this. So what do they do?
They get very aggressive. They go out and trade with
(46:47):
the Broncos to bring in Andy Janovich, a fullback. They
go out in free agency and acquire Austin Hooper, another
tight end. They go out and draft a tight end
in Harrison Bryant. So now we're getting the pieces we
can use more twelve, twenty one, thirteen, even. Now we
go out and we acquire tackles. We've got to protect Baker,
get the edges square down. We go out and we
(47:08):
get Jack Coughlin at right tackle. We draft Jed of
Wills from Alabama number ten overall. Now we're getting our
tackles to help ensure that our offensive line can help
support Baker Mayfield. This team in the off season, in
my opinion, did more to help their quarterback than any
team in the NFL did, And their scheme is going
to be more set up with the coaching staff to
(47:31):
help Baker Mayfield than I think any scheme change in
the NFL is going to help that particular quarterback. So
I think we've got massive upside from a scheme perspective
that's new, from a roster perspective that's improved, and they're
going to be able to use a lot more twelve
and twenty one more Baker shines. And then the last
piece of the puzzle callings is the defensive schedule. Baker
(47:52):
Mayfield and the Cleveland Browns last season played the number
one overall most difficult schedule buy my Metrics of opposing defenses,
the numbers three most difficult schedule of opposing past defenses.
I have them forecast to face the number one easiest
schedule of opposing past defenses in twenty twenty, moving from
number three hardest to number one easiest. Obviously, that's the
(48:13):
biggest jump in the NFL. I think we're going to
have a Baker Mayfield who everybody expects a jump in
quarterbacks from year one production to year two. That's when
they tend to make their big jump. We didn't see
that from Baker last year. We got down on Baker.
The narrative shifted to the other quarterbacks because Patrick Mahomes
is ridiculous, Lamar Jackson had such a great season. Baker
(48:35):
Mayfield is lost in the distance. I think this season,
if Baker Mayfield doesn't perform in this situation, that's you
got real big problems that can shine the spotlight directly
on Baker. But I think last season's problems. He obviously
plays a role, but there were a lot of other
things going on that were problematic around him. In addition
to the team not utilizing analytics and not surrounding him
(48:56):
with the right players, and the roster and the coaching stuff.
All those other things have been squared away. I think
you're three of the guy nobody's talking about is Baker.
Their forecast to win only what eight and a half games,
third in the AFC North. I think Baker makes a
tremendous jump this upcoming season. What a pleasure for the audience.
(49:17):
I am not done bringing you on. I would love
to bring you on regularly at some point during the
NFL season. I think you add such value. It's called
sharp football analysis. He just released a three hundred and
fifty page twenty twenty preview book. He texted me the
other night, are you reading it? And I said, yeah, Warren,
(49:38):
give me a couple of weeks here. I just love
bringing you on, respect you so much, and and my
audience just gobbles up your stuff. So I'm not gonna
ask anymore because I want to save some stuff before
the season starts. I'm gonna bring you back on in
another month if you have time, but just you just
wet our appetite here on a Saturday morning podcast. Warren,
thank you so much. Hey, I'll be happy to join
(50:00):
your getting call. And thanks for having me on. Love
talking with you.
Hi everybody, and welcome to our Saturday podcast, where we
often take a exit off the interstate and talk about
stuff frankly I just like and stuff I'm interested in.
We've had chefs, movie producers, and we have two guests
this Saturday, and my first is run and Son him
and he's a senior analyst and commentator for CNBC, has
(00:24):
been for years. He's written four books on Wall Street
and always has a common sense approach to investing in
an unstable world. He is a stable, smart, common sense
voice and he is joining us on Saturday. So I
want to run. I want to start with this premise
(00:45):
is in my life, every five or six years we
would have a pullback economically, a recession. We had a
bullmarket post two thousand and eight for about double that
ended twelve years. So let's start wrong with this. Why
did we have an extension of a bull market for
(01:07):
so long? International money? Was it money being parted in
by the government. Were we less chaotic than the rest
of the world's markets. How do you explain a bull
market that lasted twice as long as the average bull
market probably since World War Two? Well, the answers yes
to everything that you put forward telling and thanks for
(01:28):
having me on the show. A long time fan, first
time caller. So listen, as we came out of the
Great Financial Crisis, you know a lot of things happened
from a policy perspective that never took place before. The
Federal Reserve took interest rates to zero, the Fed and
the federal government launched a wide variety of support programs
to prop up the economy, and we were thinking ourselves
(01:48):
out of a pretty big hole. So against that backdrop,
the economy never caught fire, never overhead it, and never
really forced the Federal Reserve to jack up interest rates
the way they have towards the end of other business
cycles to cool things down. So we had, you know,
kind of muddle through growth for a dozen almost a
dozen years at ten years, eleven years at around two percent,
(02:08):
and so inflation never picked up. The Fed in late
twenty sixteen started to raise interest rates a little bit,
they found they couldn't do much of that, and they
went back to keeping rates on an even keel, and
the economy just grew and expanded nicely, and they were
for us anyway. A very few bumps along the road. Overseas,
as you mentioned, you had the European sovereign debt crisis
(02:30):
in two eleven. You had other concerns along the way,
but they were not our concerns, and the US economy
just grew well, even relatively evenly, even though income inequality grew.
We did see record low unemployment at three and a
half percent or near record low unemployment, and we saw
decent growth, and there were a wide variety of policies
that helped us get there. And then we ran into
(02:52):
this brick wall at the beginning of this year. Had
we not run into COVID nineteen, you know, the market
wasn't I think twenty nine thousand? Yeah, I had. I
had for the previous eighteen months. I would call my broker,
who I've had since college at Morgan Stanley, and I
would say, should we, you know, cash out in a
lot of this stuff, and he'd be like, no, it's
(03:13):
it's it is. It looks good for the first seeable
future six to twelve months. Do you agree with that assessment?
If not for COVID, the economy was really humming with
no foreseeable gait or stoppage. Yeah, I think that's that's
pretty true. I mean, as I said, the fit tried
to raise interest rates, there wasn't much room for them
(03:34):
to maneuver. So we had a couple of corrections along
the way. In the stock market, the FIT found that
it was going to have to leave rates low for
an extended period of time, and then when COVID hit,
it had to lower him even further and then engage
in all this additional activity that we've seen in the
last three months, which has been historic. But the economy
was pretty I'm pretty even kill you know, we had
more job openings than we had workers available. Even with
(03:58):
the tax shut which I don't think a puplished what
many said it might, which would be to raise wages
or increase employment, or increased capital spending on new planted
equipment here in the United States. It still gave corporations
a huge profitability cushion, and so the stock market was
likely destined to continue going higher, you know, even if
a plateaued a little bit for a while. We were
(04:19):
in pretty good economic shape and then and then the
virus hit. Now, there were some signs that the economy
was beginning to slow prior to that, both domestically and globally,
but but nothing like what we've seen in the last
let's say, since March. I've never felt the stock market
is the economy. I don't believe that to be true.
(04:43):
But to what degree is it part of the economy
in your opinion? So there have been a lot of
ways that's been described. The barometer a thermometer. It's reflective
of the composition of the economy. Investors reward companies that
are growing and creating new industry, and never has that
been more true, I think than during this period that
(05:04):
of lockdown, where we've seen a radical shift in what
investors have been willing to buy. They've been buying the
stocks of those companies that have not only survived but
thrived during this work from home, shelter in place lockdown
periods of the Amazons of the world. Microsoft, which is
big in cloud computing and supports these activities, as does
Amazon's web services, You Zoom, Walmart, and Costco have done
(05:27):
a great job. Companies that have allowed us to continue
our lives in more of a virtual manner have done
extremely well. And those that are really high touch consumer
hospitality type companies restaurants have gotten crushed. Airlines, transportation, all
of that stuff's really gotten hammered. So the stock market
is a barometer of economic health, sometimes social and political health,
(05:49):
but only rarely. Most of the time, though, it's allocating
capital to companies and industry groups that are going to
win in the longer term. And that's what we've seen now.
Whether or not we've got ahead of ourselves here's another question,
but that's what's happened since the coronavirus hit. I do
feel like we're in a bubble. I'll get to that
in a second. But there is a level of anxiety
(06:14):
created when you see double digit unemployment currently, no vaccine
on the horizon, and yet the market. You know, obviously
there are exception days like a Thursday, but the market
is moving up. That to me, That to me for
the first time in a long time. Combined with the
government relief bill, you know, those are running out now,
(06:35):
those stimulus checks are ending. I do believe right now
we are looking at a major pullback. Your thoughts on
my current opinions, I don't I don't disagree with you.
I mean, and I think we'll have to define major.
I mean, I think it's maybe, you know, fifteen to
twenty percent as opposed to something more cataclysmic. And I
do think the market's out over its skis. We're already
(06:56):
getting indications that the economy is beginning to slow with
the state with states like California where you are, Arizona, Texas,
Florida and others beginning to end their reopening process and
actually go in reverse. Those are huge GDP states. And
so the job has claims number on Thursday, which was
(07:17):
higher than expected, was the first indication that the labor
markets started to cool. Maybe we get a negative jobs
number next month. We'll have to wait and see. Airlines
are saying that just as they were starting to open
up new flights, consumer demand has fallen off. So with
this reemergence, or let's say, with the extended first wave
of the virus, we're starting to see a slowdown in
(07:37):
the economy. So I do think the markets overestimated the
speed with which we will recover, and they may also
be overestimating the amount of stimulus we're going to get
from the federal government as they engage in these new conversations.
Republicans want to cut what was a six hundred dollar
a week enhanced unemployment benefit to individuals who are out
of work down to one hundred dollars a week now,
that would be a real blow to the consumer. And
(07:59):
given that we're not out of the woods, you know,
these are the things where I think the market's going
to have some trouble going forward. Plus, the market is
extremely rich by historic standards. Us as simply as you
can and perhaps this this is mostly a sports audience.
My entire life, we have had debt. It now grows
at a much faster rate. Explain to people I know
(08:23):
in my personal life, I don't carry a great deal
of debt. I'm very fortunate. I have an income which
allows me to buy most things cash, and I'm not
I don't consider myself. I've never had a second car.
I'm not a big consumer that way. But where where
would debt hurt the average person in Indianapolis. Wife's a
school teacher. He's got a solid job. They make ninety
(08:44):
two thousand combined. And he doesn't know what the debt
means for him. He knows what his personal debt means,
but what is the what is the the federal debt
mean going forward? Right now? We don't know. I mean,
at the moment, you have really whether you like or
just like this administration, this Congress, this government, whatever, however
you want to characterize it. They were between a rock
(09:06):
and a hard place. It Once we started locking down
the economy, the deficit was going to explode because businesses
were shutting down. Tax revenues were going to zero effectively,
you know, for individuals and corporations. So they had to
go out and spend money to support the economy and
keep people running in place. So that was a three
trillion dollar program. The national debt is now approaching twenty
seven trillion dollars. It was, you know, twenty one trillion,
(09:28):
just not too long ago. We've spent a lot of
money and have to spend more just to keep the
economy from falling off a cliff. Now we have the
luxury of borrowing in our own currency, which is a
good thing when you can borrow in your own currency.
If the currency goes down, it's actually the bondholders who
maybe overseas investors, who actually lose money, and it's actually
(09:50):
a benefit to our government. So for now, the world
seems to be able to absorb the amount of death
that's being issued by governments around the world. All of
governments are doing what we're doing. Corporations are borrowing because
interest rates are at zero. I mean, Apple is borrowing
at two percent, you know, and even companies that are
cash strapped and not great quality companies have been able
(10:11):
to tap the markets for debt as well. So at
the moment it doesn't mean much. It may mean something
down the road if we don't come out of this
in a way where we can grow fast enough to
start well, first of all, to stop growing the deficits
annually it's gonna be four trillion dollars this year alone,
and then start to work on getting the debt down
(10:32):
to a manageable level. We're not there yet, So at
the moment it doesn't mean much, but it may mean
something somewhere in the future. I'll simplify this. I don't
know the connection between president and economy. Jimmy Carter was
much of one. Not Yeah, Jimmy Carter wasn't great for it.
Reagan was better for it. But I don't think it's
(10:54):
Democrat or conservative both Obama Clinton, the market was fine.
It's fine with Trump, who I don't think the most
stable President's most stables, but the most instable White House
of my life. That said, um, there's always been a
sense among my business friends. Oh, these Democrats are bad
for the economy. It's regulations. But I watched Clinton for
(11:15):
eight years during dot com. I've watched Obama take we
were we were on, you know, the precipice of a depression,
and I saw eight years where the market went up.
Is there? When I look at Biden, what the market
doesn't like is unknown. So Trump may bee pro business,
but he is so chaotic. You know. The fear of
(11:38):
the unknown with Trump day to day is significant. I
think Biden disagree with you on that. So to me, Biden, Ron,
I think, oh, it'll be you know, very low energy.
It will it will not be chaotic. It will be
a very soothing presidency. That feels like if I was
an investor, I could really use. I could really use
(12:03):
waking up twice a week and not having a headline
scare the hell out of me. I look at I
look at Biden as good for the market. Yeah, it's
kind of like having you know, mister Rogers in the
White House to a certain extent of your granddad. You
know who's who's got some experience. He's he's got his
gray hair, he's calm, he's been he's been there, before
he's done it. And look what what the what Wall
(12:25):
Street more than I would say the economy or Main Street,
which fear is that corporate taxes, which went from thirty
five percent down to twenty one percent. Joe Biden says
he's going to raise him the twenty eight percent that
he's going to raise capital gains taxes, the taxes that
you pay on the gains that you make in stock market,
real estate or other investments up to ordinary income, which
(12:46):
would be thirty seven percent at the top rate. It's
currently twenty three percent. And so the market fears that.
But they feared that with President Obama. As you said,
So I was at a and because after I left
CNBC on a full time basis, if I wanted to
encounter any candidates, so it was really Rudy Giuliani in
two thousand and eight, or Barack Obama or Hillary Clinton.
I had to pay my way in to see these people.
(13:06):
So I went to fundraisers. So Obama walks into a
room full of hedge fund managers and lawyers and says,
I'm going to raise your taxes. You guys can afford it,
too bad. Wasn't the most grateful way to say it.
You didn't say, listen, we have some really exciting programs
we'd like to get off the ground and help people,
and we think you guys can help out. Not the
way he approached it. Everybody was freaking out that he
was going to raise taxes. Well, what happened, As you said,
(13:27):
he walks in during the middle of a great financial crisis,
a great recession, on the brink of depression, and he
extends the Bush tax cuts. So I think Wall Street
may be overestimating the risk that Joe Biden, with an
environment like this, is going to walk into the White
House if he wins raise taxes across the board and
crush the economy. We may not be able to have
(13:48):
that happen unless we are fully out of this thing.
There's a vaccine, we're back to normal, and we're growing
at rates that are faster than we've seen for the
last dozen years. So he may not have the flexibility
to do it, even if he wants to. And so
I think to that end, you know, Wall Street business
types and others maybe a little too fearful. And on
the regulatory side, I think he's probably going to restore
(14:10):
some common sense regulation again, as I'll be giving away
a slight political bias of my own. I think there
this president has rolled back far too many environmental regulations.
I'm not a tree hugger or anything, but you know,
letting stuff spill into the water and growing back these
regulations just for the sake of doing it is not
wise either in the short runner in the long term,
and I think President Biden, if he were to be elected,
(14:34):
would probably, I think, be more cognizant of the risks
that comes with that kind of deregulation. Yeah. I'm not
a tree hugger reader, but I agree on the regulations.
Ron asna is joining a senior analyst commentator for CNBC,
written four books on Wall Street, and I've always already
thought of him as a com sold four books on
Wall Street. Oh it was some total of all four? Yeah,
(14:54):
it was great. How about that. You know, I've always
thought of you as a common sense guys. So I'm
going to throw a theory out to you, and I
do this from time to time. In sports, there's something
called the pitchfork society when you have such a divide
between the halves and the have nots. And in most
of my lifetime, technology has eliminated time and space twenty
(15:19):
four seven. My money grows now. You know, it used
to be you could be in the sixties Warren Buffet,
but when when you got in your car, you couldn't
make deals. You're in your car that now it just
it's never ending. And here's what I worry about in
America that technology we have people making thirteen billion dollars
a day. The gap between not just the poor, the
(15:44):
gap between the middle class and the wealthy is now
creating almost a second gap. We always talked about rich
and poor. Now it's a gap between poor and middle class,
middle class and wealthy and then wealthy and thirteen billion
dollars a day. Jeff Bezos, what concerns me about this?
And my solution would be, you know, to have some
(16:07):
sort of alliance, a Silicon Valley alliance, where they do
start on certain big days for the market two to
three times a year, we set aside money that becomes
stipends for the poorest Americans. Now, again that makes me sound,
you know, very liberal, but I think we have a
problem that emerged probably ten years ago with the growth
(16:28):
of tech. And it is this fear mongering or is
it something that's discussed in your circles. Well, I mean,
I think if you look at Bill Gates and Warren
Buffett and others who have taken the pledge to give
anywhere from fifty percent to one hundred percent of their
wealth to the Gates Foundation or to other charitable causes,
some of that's already underway. And I think Bill Gates
(16:49):
has done a remarkable job, you know, And I know
Warren Buffett pretty well, and you know he's he hasn't
given everything all yet. He's, you know, pushing ninety years old,
and he's got seventy billion dollars to give away that's
going to go to the Gates Foundation, and those people
do a lot of good. Now I'm intrigued by your idea. Now,
there is a certain fickle nature to this. So yes,
(17:11):
Jeff bezos wealth grew by thirteen billion dollars in a
single day, but that's because the stock went up. It's
not his liquid network. So's he can't just sell thirteen
billion dollars one day and one not crush his own
stock and send the message to the markets that he
suddenly lots confidence in the company or something like that.
And so it takes rather extensive planning. But I do
agree that among the super rich, and remember, on an
(17:34):
inflation adjusted basis, there's still no one wealthier than mister Rockefeller.
So those folks are actually wealthier than than Bill Gates
or Jeff Bezos if you adjust for inflation. So yes,
they are super rich, and many have taken steps towards
helping either to ameliorate diseases, as Bill Gates has done
(17:55):
in Africa and other parts of the world, and as
the Robin Hood Foundation has done with respect to hunger
and education. Look, I think what we really need is
a domestic policy that focuses on equality of opportunity, that
makes sure that disadvantaged individuals, particularly kids who are coming up,
have adequate access to nutrition, healthcare, and education. And if
(18:17):
you can get those kids who are economically and in
some cases socially disadvantaged into programs where the equality of
opportunity is at least close to equal, we will ultimately
solve this problem. And we still haven't had a cogent,
coherent conversation about how we get there. And stock market
gains are what they are in a certain sense, and
(18:38):
I would my colleague and I Jim Cramer, may have
approached this differently, but he's right in the sense that
the stock market on its own is a moral It
doesn't view the price of a stock as good or bad.
It's what investors are really doing is paying x amount
of dollars for a future stream of earnings. So if
Amazon is going to win, if Microsoft's going to win,
as Apple's going to win, they pay a lot of
(19:00):
money for that, and that's how they get their returns.
And the founder of the company, like a Jeff Bezos
or Mark Zuckerberg or somebody like that, you know, reap
the benefits. And that's how capital capitalism has worked, I believe.
And Joe Biden has mentioned this. I think I wish
he would be more explicit about it. That we need
to focus on stakeholder capitalism, that the world, the capitalist world,
(19:22):
has to look at all the constituents of the industrial
society in which we live. That's not just shareholders, it's employees,
it's consumers. You know, Henry Ford and Milton Hershey were
very good at this decades ago. They wanted to make
sure that their workers were paid adequately so they could
buy the good since they were producing. And that's you know,
the type of enlightened, you know self interest that Adam
(19:44):
Smith talked about the early you know economists who focused
on capitalist systems, that you want people to make enough money,
if for no other reason than to be able to
buy your stuff, but you also want them to have
access to healthcare, and that there have been industrialists in
the past to focus on that, and there are something
today who do it. I would agree, though it needs
to be a much broader initiative, and I do think
(20:06):
the government has a role to play here as well.
I can my sense of a bubble. And again, as
a novice, I've been investing since nineteen eighty nine. My
dad was a hused to have a lot of Washington
Mutual I remember that that was his number one Yes, yeah,
he was a Northwest optometrist and didn't make a huge living,
but my dad invested, and so I started investing in
nineteen eighty nine and to this day dollar cost average,
(20:29):
do it every month, write a check and I would
never give a stock tip ever on the air. I
gave you two the other day that I've done well with,
but I think that those are understood kind of by
you know, Morgan Stanley gives me a tip. I go
in four years ago. But I would say, they give
you advice. Yeah, they give me advice. So but let
me ask you this. So I won't ask for a tip,
(20:52):
but I'll ask for a to analyze a sector. Is
there a sector that you really like, feel very confident
about economically and ethically. If I said to you, Ron,
Silicon Valley's not going anywhere, but in the next five years,
keep your eye on this sector, what would it be?
(21:12):
I would imagine health sciences and things that are focused
on longevity, cancer cures, and you know, biotechnology. I think
that's where a lot of growth is going to come.
You know, I am worried that that technology writ large
has gone way beyond its ability to grow in the
short run. I mean, for the first time really since
(21:33):
two thousand, the five biggest market cap companies comprise over
twenty two percent of the waiting in the S and
P five hundred. Now they have cash flow that's equal
to their waiting. So it's different than nineteen ninety nine
and two thousand because a lot of those companies didn't
necessarily have the same type of business operations that the
Apples and the Microsofts and the Amazons have today. But
(21:56):
I'm worried that they're toppy, and I'm worried that it
is a little bubble, like I would what I would
really warrant people against because there's been such a surge
in individuals who have no experience in the market day
trading on these various platforms, UM buying penny stocks and
listening to internet gurus talk about how you know stocks
only go up again, as you suggested, a disciplined approach. Um,
(22:20):
you know, buying a mix of indexes that are likely
to be higher five, ten, or fifteen years from now. Um,
is a smart thing to do. Picking stocks and day
trading them is you may as well be gambling, right,
You may as well just go bet on the Washington
football team, as I believe it's not ball, want to
(22:41):
get my mind. I mean, it's just so absurd. I mean,
it's just so transparent. Yeah, I think personally at this
point they should just leave it that way. You know,
what's the difference, right? I mean? But um, but no,
I think you know, discipline helps, dollar cost averaging helps,
not you know, not chasing ads obviously helps. But we
(23:01):
are seeing we're seeing a compositional shift in the economy
because I do think over the long run, all this
work from home stuff, And you know this as well
as anybody. It can be done now. And you know,
whether I'm affiliated with a financial firm on the one
side or CNBC on the other, everything I do now
is from home. Everything is virtual, and I don't mind it. Actually,
I've been home. I've been working from home for a
dozen years. But I don't have to get on a
(23:24):
plane again. So I mean, it's not like I go
out and buy airlines and you hope that they're going
to be back at fifty percent capacity in the next
six months and one hundred percent capacity in two or
three years. That that's a tough trade, but I would
you know, the cutting edge of technology has always done
people reasonably well. You do have to get some advice,
You do have to know what you're doing. You can
buy a technology or biotechnology index which is diversified, and
(23:47):
that's a way to go about it, but it should
also be part of a hub and spoke type investment
process where let's say you own an inexpensive SMP five
hundred index fund and then you can put technology and
biotech around it and create a portfolio that has exposure
to those areas, but doesn't leave you hanging on a
single stock. What a pleasure for me run inside and
(24:08):
for me absolutely well, I'm just a sports guy. I mean,
you're you're, You're in you're You're in an industry that
feeds America. I just have opinions on sports and Washington
football teams. Would you have to understand when when I
was eight seventeen years old, I was playing as a
backup quarterback at Shamanad College Prep in Canoga Park, California,
(24:30):
Number seven. Across across the street from my house was
another number seven playing for Ganadas Hills High School by
the name of John Elway. My age, my year, my court,
my position, and my number. He stole all of my
press and I have been bitter ever since nineteen seventy
eight and seventy What was he like in high school?
I mean, it just takes me back. He played literally
across the street from my house and I never met
(24:51):
him and I played. You know, in those days, Shamanad,
which is actually now a southern California powerhouse in sports,
was a one acif school Catholic Interschool Federation, So we
were a step above eight man. They were a step
below pro so we never really crossed paths, and had
we had, we um I would have just had cleat
marks all over me, so wildly different experience. Then, well,
(25:12):
it's great. It's great to finally talk though we've we've
texted here before, and I would love to use your regularly.
I think you have a real common sense approach. I
always trust what comes out of your mouth. I think
we're kind of politically aligned as well, which doesn't know
us matter. I Bill Maher's more liberal than me. I
absolutely love Bill Maher, and I've actually listened to Ben
Shapiro a few times and agreed with her. So yeah, yeah,
(25:35):
that's funny. I used to see Bill Mark the improv
in the late eighties in La and my favorite joke
of his was, you know, in the year one, did
everybody keep signing their checks zero? That's that's the one
that stuck with me the longest. Fun Roman Sonna, what
a pleasure. And by the way, I'll give you mine,
I'll give you what's the My favorite joke. My favorite
(25:56):
joke is one that sounds like it's going to be off.
It was by Jeff Stilson, a Seattle comic, and this
joke sounds like I'm going to say something inappropriate, and
it lands, and it's one of my favorite jokes that
I really remember. He says, you know, I like my
women like I like my coffee bitter, and I've always looked.
(26:18):
I've always loved that joke by Jeff Stilson. I love them.
If you're a Stephen Wrights fan. My personal favorite. I
know I'm probably taking you overtime, but my favorite was
I bought some batteries but they weren't included. That is great,
my friend. Thank you so much. Ron. We will talk again.
Thank you. Thanks. Look forward to it. Our second guest
(26:41):
on the Saturday podcast. I believe this is Warren Sharpe's
second visit. He's just released his three hundred fifty page
twenty twenty preview book. He is, in my opinion, kind
of the leader in football analytics and analysis right now
in his space. And Warren is joining us again. Last
(27:04):
time we had Jan we got huge feedback on this,
so I'll start with this. I'm going to start with
something close to my heart, Russell Wilson. I watched the
offense and it feels outdated. It feels like they rely
in a running game behind a below average oe line
and then need Russell to save them on third down.
What does your analysis, what do the numbers, what do
(27:25):
the tendencies say about that Seahawk offense. They say that
you're absolutely correct in that presumption in terms of what
they're relying upon. This is a team that has arguably
one of the best quarterbacks that we've seen over the
last five years in terms of what Russell Wilson has
been able to do. And yet in early downs in
(27:46):
the first half in twenty eighteen, they had a sixty
percent run rate, the most run heavy offense in the NFL.
Last season, that improved a little bit, but they were
still running the ball three percent more than average. They
were the tenth most run heavy offense on early downs
in the first half of games. And we know what
happened to their running back corps. They got completely blown up,
(28:08):
injuries all over the place, and as a result of
their reliance upon these running backs that aren't being productive enough.
They trailed in ten of their first twelve games. They
needed Russell Wilson to come back. Somehow. They won ten
of those twelve games. They were trailing at various different
points in those games, Russell Wilson had to wills them back.
(28:30):
He constantly bringing this team back from first half deficits
where they're leading entering the locker room. They led in
the locker room entering only six of their games last season,
and he had to bring them back and win a
lot of these games in the second half. Number one,
very difficult for a quarterback to do that. It's not
typical that a quarterback is going to be able to
(28:51):
post double digit win seasons when they're only winning at
halftime in so few games. They absolutely must get more
aggressive early running games and become more pass heavy. Russell
Wilson was the number two most efficient pass or whether
you're looking at EPA, which is expected points added success
rate yards per attempt. He was number two across the
(29:12):
board on early downs in the first half. Yet they're
one of the most run heavy teams in the NFL
on these downs to keep falling behind on the scoreboard.
I believe as they put more on his shoulders, let
him have more influence over the team in the first
half of games, they will be leading a lot more
at halftime. And this is so important because teams that
are up at halftime win eighty percent of the games
(29:34):
number one and number two. This is not the same
type of defense they had in twenty fourteen. They're much
much worse. They've gone out and paid Russell Wilson, so
they don't have as much money to go around. They
don't have as much talent. They had ridiculous draft classes
on the defensive side of the football. They haven't had
such draft luck lately. They don't have a talented defense.
(29:55):
They cannot rely on that defense to be able to
get the ball back for the Office in the second
half and let Russ work is magic. They need to
have leads so that life is easier on that defense,
so that the opposing offense pass to throw the ball.
That makes things more predictable. When that opposing offense is
down at halftime, the defense for Seattle knows they're going
(30:16):
to come out past the football. Seas are on the
pass rush. It's easier on the secondary because things are
more predictable, and then they can get the ball back
and let Russell Wilson continue to grow. The leads I
want to segue because Russell Wilson now gets compared often
to Aaron Rodgers, so that the feeling has been Russell's
had great support through the years, and Aaron they've got
no owner, free agents don't like green Bay. He doesn't
(30:39):
have any support. But if I look at the offensive
and defensive lines of green Bay entering this year, they
feel significantly more trustable than Russell Wilson's O and D lines.
Then I watch Matt Lafleur in the front office of
green Bay go with a blocking tight end or running
back in three interior offensive lineman and a backup quarterback
telling me they're going to change the offense in green Bay.
(31:02):
My question to you, how good is Aaron Rodgers support?
How good was it last year? Because Russell has had
the tag, He's got a surplus of credits, and Aaron's
dealing with debts. Here when you look at green Bay's
overall talent, should they become more run centric? Has Aaron
Rodgers eroded? What's your take on what the numbers say?
(31:26):
I don't believe any team in the NFL should become
more run centric, though, just right off the board, I
can tell you that no team should become more run centric. Now,
should you be more diverse when you choose to run
the ball and have less predictability when you run the football?
And so you can use a little bit more heavier
groupings and make it look like run and then throw
the ball out of that and occasionally run out of
(31:47):
those heavier groupings. Yes, you can do all of those things,
but you absolutely shouldn't become more run centric with the
rules construct that you have in the NFL right now.
But the fact that they didn't go out and improve
the sieving core of the green Bay Packers is problematic
to me. That being said, I do think top to
bottom the green Bay Packers do have more talent on
(32:10):
their roster. But the one thing that I think a
lot of people when they're looking at Green Bay and
they're forecasting them for this year and they're seeing what
Aaron Rodgers surrounded with. People see this team that improved
from six and ten to three to thirteen and three
last year, and they think, wow, Matt Laflour made the
team significantly better. This is a great football team. But
the reality is, if you look at this offense, an
(32:31):
offense that Scott Mike McCarthy fired in twenty eighteen but
obviously made things look really good for Matt Laflour last season,
this team played in the same number of games in
twenty nineteen as they did in twenty eighteen that were
decided by one score, But the twenty nineteen Packers won
nine of those ten games. The twenty eighteen Packers only
won three of those ten games. The real difference was
(32:54):
not offensively. The offense in twenty nineteen was actually worse
in terms of their production on early downs, their ability
to skip third downs, and their distance to go when
they were forced into third downs. They had fewer less
distance to go in twenty eighteen than they had in
twenty nineteen when faced was third downs. This was a
better club in twenty eighteen offensively than what they did
(33:17):
in twenty nineteen. But the real difference was the luck
in terms of their schedules. This defense faced a ridiculous
schedule of opposing quarterbacks. They played Mitchell Trubisky through the
ball fifth sorry ninety four times against these guys. The
next closest quarterback was down at fifty nine, So they're
getting a ton of attempts against Mitchell Trubisky. They're playing
(33:38):
guys like Kyle Allen and Daniel Jones and Matt Moore
and David Blow and Dwayne Haskins, all these backups and
Joe Flacco, guys who aren't starting this upcoming season, They're
going to be challenged a lot more on the defensive
side of the ball. I think that overall is going
to make their team look worse because the defense isn't
going to post these top fifteen, top ten metrics across
(34:01):
the board like they did last year. That's going to
put more pressure on Aaron Rodgers and this Green Bay
Packers offense to throw the ball more to stay in
these games. And I think that's where we're going to
start to see more problems because you're not going to
have as many leads against better offense. Warren Sharpe is
joining us. We talk both the Seahawks and the Packers,
and there's little some revelations in there. If you're a
(34:23):
sports better, perhaps maybe we're a little high on Green Bay.
He just released his three hundred and fifty page twenty
twenty preview book. Now I'm going to go to a
couple of teams. One I think is going to be
significantly better. Now their record won't be I think Denver
is going to win two to three more games I
watched at the end of last year with Drew Locke.
(34:45):
They added in the draft of the wide receiving corps.
I think no offense has a chance to be really good.
They bring in Melvin Gordon, and we know they have
two good rushands and Vic Fangio's an excellent defensive mind.
I think Drew Locke's gonna work. I think Den is
underrated going into the season. You tell me you're the
expert on this, am, I nuts, What do you like?
(35:07):
What are you What concerns you about the Broncos going forward? Well,
my concerns with the Broncos number one, if we look
at what their schedule ends up looking like. I mean,
I agree with you. When I looked at this team
on the surface heading down the stretch, and I thought,
when I was sitting down to start writing their chapter
in this book, that I was going to write a
lot of positive things about Drew Locke because they had
(35:28):
a good record down the stretch. He looked pretty good,
I thought, you know, And they ended up producing pretty
well in those games down the stretch. Was he was
taking control four and one in their last five games.
But then I went back and I looked at the
teams they played, the past defenses that they faced, and
then actually how he performed in these games, and in
the book we showcase a completion percentage over expectation by
(35:50):
depth of targets, and you could see in a couple
of those graphics, like Drew Locke was really good within
ten yards of the line of scrimmage, but beyond that
he struggled tremendously, And the sh becomes will these new
receiving weapons help assist him in completing some of those
balls down the field? Or you can look at it
from the contrasting perspective of they face a much difficult,
(36:11):
much more difficult schedule this upcoming season. I've got them
playing the eleventh toughest schedule of defenses against the past
this upcoming year, a big jump from what Drew Locke
was facing at the end of last season. Number one
and number two. This is an off season of change
of question marks. We haven't had the ability for him
to start working with a new offensive coordinator in Pat Shermer,
(36:32):
so they don't have that experience going He's working in
new weapons, so we may not see those guys flourish,
especially early on in terms of these younger guys trying
to fit in and do things with this offense. So
while I was expecting to be a little bit higher
on Drew Locke. I actually found myself a little bit
lower on Drew Locke. And this is a difficult division
that they're in first and foremost, and their schedule isn't
(36:53):
going to be very easy. So I'm not saying that
he can't be a long term solution, but I'm not
as eager to jump on the twenty twenty bandwagons of
Drew Lock because there's a lot of question marks and
I saw enough things that concerned me out of his
game when I dug into it last year to be
a little bit more. So I'm sitting this one out.
(37:14):
I'm not going to judge Drewlock. I'm not going to
get on his bandwagon just yet. I think we need
to see more out of him before I'm going to
make an educated decision on whether or not I think
this guy could be the future long term franchise quarterback
of the Broncos. Quick break back with a team and
a quarterback that totally confuses me, the New York Giants.
(37:34):
Warren Sharp back Sharp Football Analysis, just released his three
hundred and fifty page two twenty preview book. All right,
let's get to the New York Giants. I did not.
I watched Daniel Jones enough of him in college. I
didn't see the arm strength. And that was with David Cutcliffe,
who's a very smart offensive mind, and I thought he's erratic.
I don't see the arm. The accs a watered down
(37:56):
perhaps the weakest outside of Clemson College Football Conference. Then
he walks into the New York Giants and I watched
him last year and there were three or four games
where I thought Warren I whiffed. He is way better
than I thought. There's an Alex Smith quality, athletically, good
straight line speed, He made good enough throws, and I
do think Dave Getleman had a pretty darn good draft
(38:17):
this year by any standard. Daniel Jones, what is the
truth serum on this? Did I completely miss or again,
is it fooling me because he was good against bad
teams and struggled against good defenses. Well, yeah, he does
move from a below average schedule of opposing pass defenses
to a top ten schedule this season, so he's going
(38:39):
to be going up in general against more difficult pass defenses.
But the one thing that I think that we may
see here is a little bit more intelligence from a
play calling perspective as to how they're utilizing Daniel Jones.
I could see looking at this from the outside that
the New York Giants and Dave Gentleman made no secret
about this, is he didn't really have these quote unquote
(38:59):
analytics folk in the building. But I could tell that
they were not utilizing analytics when they were figuring out
how they're going to utilize Daniel Jones. And that's why
I think maybe if they start incorporating that a little
bit more, Daniel Jones would look even better. One key example,
he was much better with play action than without a
lot of quarterback star but this was just the night
and day difference. They were moving from like six yards
(39:20):
per attempts up to nine a forty three percent success
up to fifty nine percent. But the big difference for
them is it wasn't just any play action. It was
play action from shotgun because when Daniel Jones was under center,
and think about it, you're taking a staff from under center,
you're turning your back on the defense to stick the
ball in the belly of Saquon Barkley or another running back.
Then you're facing back up to the offensive line. The
(39:42):
pass rush and where your receivers are down the field.
He was very poor when he had to turn his
back on the defense to do play action from under center,
But he was much better average nearly eleven yards per
attempt and a sixty seven percent success rate when he
was using play action out of shotgun. But they used
about equivalent amounts of play action from under center as
(40:03):
they did from play action in shotguns. So there's just
one example of I think you can make Daniel Jones
look even better when you're giving him better play calls
and you're analyzing this data in better context, and so
I think that you can improve upon his production. Two
areas that I'm still kind of shocked so they didn't
get higher production out of number one. Evan Ingram. Evan
(40:26):
Ingram is a matchup nightmare. He had a great season
in twenty eighteen. In twenty nineteen, he was terrible if
you look at his counting stats, like his total yards,
his total catches, because that are looked okay, But if
you're looking at his efficiency metrics, terrible last season, and
so they need to improve that. He's a matchup nightmare.
Skill sets much better than any defender would be against him.
(40:46):
And then number two is this better incorporation of Saclon Barkley.
You've got it. I know that Jason Garrett's there, so
they may start to run the football even more so
on early downs, which is going to be bad for
the New York Giants. They got to figure out how
to utilize him even more offly, and I detail that
how they can do so in the book. But they
need to get a better census to passing to Barkley
(41:06):
when and where they're actually passing him the ball out
of the backfield to increase the efficiency of those targets.
But in general, I think there's a lot that you
can work with Daniel Jones here, and I agree, I
think maybe his feelings higher than we thought entering last
season if he gets the proper coaching and play calling
and system. There another team that I find intriguing. I
(41:27):
don't have them winning a ton of games is the
Las Vegas Raiders, but Mayock has shown an ability to
deliver in the draft. I do think Gruden has always
been pretty good running the football, and they've got a
nice set of running backs I like, and their old
line to me feels like at times a very effective
o line. I like Derek Carr more than John Gruden,
(41:51):
but I do feel like sometimes he just won't let
it rip. He tends to be a little Kirk Cousins
to me, a little safe. But the d and Narrators
are in a tough division. I start to watch him
last year and they were very hot and cold. You know,
they go to London and they're great against the Bears.
They come home and they can get doused. Where do
you fall on the Raiders going forward? What do you like?
What do you not like? Because I just think between
(42:13):
Gruden's personality, the kind of a unique rub with he
and Derek Carr, I think they're offensive pieces. Hunter Renfroll
has been a wonderful find. Where do you Where do
you go with the Raiders going forward? Well, I think
jig sorry, I think John Gruden is a very good
in game coach and he did a lot of things
(42:35):
that were that enabled this Raiders team to get leadd
at halftime. They led at nine games at halftime, which
is very high. They ended up only winning seven of those.
But my issues really start with Derek Carr and then
you to talk about the defense, which was very bad
last season. I am not very high on Derek Carr.
Like you mentioned in one of your talking points there,
(42:55):
he tends to bail too often. I mean, there's a
famous play where it's fourth and goal and he throws
the ball out of bounce like he just throws it away.
These there are situations where under pressure he does not
do very well. I know they got new pieces this season,
but I like Gruden more as an in game coach
than I do is influencing the general manager. But I
(43:16):
just think that this is a team that has too
much variance for me to be confident in that. I
really do not like though, just how they are up
and down far too often. And I think that they
do a lot of things from a coaching perspective to
make life easier on Derek Carr, but then he makes
things more difficult and unravels at the same time. And
(43:37):
we also have to consider the fact that this season
I'm currently projecting them to play the number two most
difficult schedule of opposing past defenses. They played an average
schedule last year, so an increased difficulty and schedule, a
tendency not to be able to hold on to lead
Layton games, and then just the overall fact that I
don't love Derek Carr in a division that has some
(43:58):
other good quarterbacks. I think that I'm not jumping on
board with the LA Raiders anytime soon. Yeah. No, I
think you're right. Warren Sharp is joining us, and I
hope you're enjoying this as much as I am. Starting
with the Seahawks into the Packers, the Broncos, the Giants,
the Raiders. Now Baker Mayfield. I did not think he
(44:18):
was a number one pick. I look pretty smart today,
But I could also say Freddie Kitchens was completely over
his skis. He'd never been interviewed for a coordinator job
and was handed kind of a chaotic situation with Baker Mayfield.
I do think Baker has talent. I've always said he
reminds me of Case Keenam with a big time arm,
that size, athleticism very average, but I think he can
(44:42):
sling it. I think he plays aggressively and with confidence.
And I'm going to say that Freddie Kitchens was a
majority of the problems last year. Is that fair? It
is fair? But I will say that there's a public
narrative out there that, oh, if only we used more
of to Monkin last year, who was the offensive coordinator
(45:02):
who came out after the season and said this was
a disaster and I didn't get along well with Freddy Kitchen. However,
there's a narrative that if we used more Todd Monkin
everything would have been fine. But the reality is this
team used a lot of Todd Monkin's ideas early on
in the season. Todd Monkin is an air raid coordinator.
He likes to spread the field with wide receivers and
(45:23):
attack the defense. They used a ton of eleven personnel
weeks one to nine. The eighty four percent of their
passes came from eleven personnel, so they were at one
of the highest rates in the NFL in terms of
using eleven personnel. But what's the problem. The problem is
they aren't looking at analytics because they would have seen
that in twenty eighteen and then into twenty nineteen. Baker
(45:44):
Mayfield's terrible with eleven personnel with only having five guys
typically protecting him in front of him. He was much
better when they utilize heavier sets twelve personnel which is
two tight ends or twenty one personnel, where they're having
a couple of backs out on the field and giving
the defense and first of all the idea that Okay,
this really could be a run play. And number two,
(46:05):
when he drops back, he's terrible with pressure. So we
need to keep Baker clean and give him this confidence
before the snap that we're going to have things bolted
down and when pressure is not going to leak to you.
When he got those situations, he was actually very good,
well above average when he was tasking ball. Incomes Kevin Stefanski.
Kevin Stefanski is a guy who used a ton of
(46:26):
twelve and twenty one and even thirteen. Yeah, exactly the
least amount of eleven personnel of any team in the
NFL last season. So he comes in the door, and
what do they do. Well, you need personnel to be
able to operate the stoppic you can just say I'm
going to start using this. So what do they do?
They get very aggressive. They go out and trade with
(46:47):
the Broncos to bring in Andy Janovich, a fullback. They
go out in free agency and acquire Austin Hooper, another
tight end. They go out and draft a tight end
in Harrison Bryant. So now we're getting the pieces we
can use more twelve, twenty one, thirteen, even. Now we
go out and we acquire tackles. We've got to protect Baker,
get the edges square down. We go out and we
(47:08):
get Jack Coughlin at right tackle. We draft Jed of
Wills from Alabama number ten overall. Now we're getting our
tackles to help ensure that our offensive line can help
support Baker Mayfield. This team in the off season, in
my opinion, did more to help their quarterback than any
team in the NFL did, And their scheme is going
to be more set up with the coaching staff to
(47:31):
help Baker Mayfield than I think any scheme change in
the NFL is going to help that particular quarterback. So
I think we've got massive upside from a scheme perspective
that's new, from a roster perspective that's improved, and they're
going to be able to use a lot more twelve
and twenty one more Baker shines. And then the last
piece of the puzzle callings is the defensive schedule. Baker
(47:52):
Mayfield and the Cleveland Browns last season played the number
one overall most difficult schedule buy my Metrics of opposing defenses,
the numbers three most difficult schedule of opposing past defenses.
I have them forecast to face the number one easiest
schedule of opposing past defenses in twenty twenty, moving from
number three hardest to number one easiest. Obviously, that's the
(48:13):
biggest jump in the NFL. I think we're going to
have a Baker Mayfield who everybody expects a jump in
quarterbacks from year one production to year two. That's when
they tend to make their big jump. We didn't see
that from Baker last year. We got down on Baker.
The narrative shifted to the other quarterbacks because Patrick Mahomes
is ridiculous, Lamar Jackson had such a great season. Baker
(48:35):
Mayfield is lost in the distance. I think this season,
if Baker Mayfield doesn't perform in this situation, that's you
got real big problems that can shine the spotlight directly
on Baker. But I think last season's problems. He obviously
plays a role, but there were a lot of other
things going on that were problematic around him. In addition
to the team not utilizing analytics and not surrounding him
(48:56):
with the right players, and the roster and the coaching stuff.
All those other things have been squared away. I think
you're three of the guy nobody's talking about is Baker.
Their forecast to win only what eight and a half games,
third in the AFC North. I think Baker makes a
tremendous jump this upcoming season. What a pleasure for the audience.
(49:17):
I am not done bringing you on. I would love
to bring you on regularly at some point during the
NFL season. I think you add such value. It's called
sharp football analysis. He just released a three hundred and
fifty page twenty twenty preview book. He texted me the
other night, are you reading it? And I said, yeah, Warren,
(49:38):
give me a couple of weeks here. I just love
bringing you on, respect you so much, and and my
audience just gobbles up your stuff. So I'm not gonna
ask anymore because I want to save some stuff before
the season starts. I'm gonna bring you back on in
another month if you have time, but just you just
wet our appetite here on a Saturday morning podcast. Warren,
thank you so much. Hey, I'll be happy to join
(50:00):
your getting call. And thanks for having me on. Love
talking with you.
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Colin Cowherd
Jason McIntyre
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