0:00

Every time I drink these mother highlives, I always think

0:02

of that scene in Anchorman where he's like, oh,

0:04

that escalated quickly. You know, that really escalated

0:07

quickly. I was gonna say, because I still,

0:09

I'm still laughing about every time I see

0:11

you with a highlife, I just think about

0:13

that, that guy who was trying to import

0:15

highlife into Europe, and the French were like,

0:18

not on my continent, you don't. And

0:20

they intercepted the shipment and destroyed it all. Because it

0:22

calls itself that you didn't hear about that. Champagne of

0:24

beers? Yeah, what? No. Because they call themselves the Champagne

0:26

of beers. The French are going, no, the

0:29

French said Champagne is a protected

0:31

legal designation of the wine made

0:33

in the Champagne region of France.

0:36

Unbelievable. So by calling itself the

0:38

Champagne of beers, it violated that

0:40

trade law. So they intercepted it.

0:44

Did you know that over $5 trillion

0:46

exchanges hands on a daily basis?

0:49

That's an average of over $220 billion an hour. Now, how does

0:52

this much

0:55

money move every single day? And why does

0:57

it move the way it does? Here

1:00

on Drunkenomics, two bartenders who also had to

1:02

be students at the University of Nebraska Graduate

1:04

School of Business are going to sit down

1:06

and drink to the global economy and

1:09

try and translate it into English. So

1:11

sit back, relax, burn yourself a stiff one

1:13

and have a drink with us to the

1:15

comedy that is the global economy. All right,

1:17

guys, welcome back to Drunkenomics, the drinking podcast

1:19

with an economics problem. For

1:21

wanting you this week, we're going to be keeping a little short. Ah,

1:24

you're less gracious host by power of the

1:26

VIX. I'm just getting over a slight

1:28

bout of the COVID. So we're not back

1:30

in full form, unfortunately. So everybody have a

1:32

drink for me because I can't do it

1:34

right now for myself. It's

1:37

a it's rough work, but but some of

1:39

you have to do it. I'm doing it for

1:41

you, man. This is my fourth. I know life

1:43

because I'm trying to drink for the both of

1:45

us to just before the mics is hot. So,

1:47

you know, I got to take four. We're accurate

1:50

now. I know. You know, I'm trying I'm trying

1:52

to keep spirits up, man. And I really appreciate

1:54

you being a trooper coming out here. Less gracious

1:56

form. It's okay, guys, to get a little

1:58

bit of the same. effect. I've taken

2:01

some NyQuil. I stopped

2:03

making sense. It's getting to that point in the

2:05

night and I know that NyQuil has a lag

2:07

on it. There we go. Yeah. But I took

2:09

some earlier because I was like, well, yeah. So

2:11

they say, yeah, I mean, don't they

2:14

say you got to take NyQuil like four hours

2:16

before you go to bed, three to

2:18

four hours because that's how long it takes to get that long.

2:20

But I know they say it's generally about two. Okay, two hours.

2:22

I was kind of looking at like an

2:25

hour or two before you expect it

2:27

to take a pic. If you're an

2:29

insomniac like me, maybe four hours is the number.

2:31

But anyways, I am your more gracious host. Vix

2:34

is at, what is that at? 12? 1204. Oh my gosh,

2:36

it's a 1204 right now. That's

2:40

just crazy. They can't see certain movies on a

2:42

10. Let's put it that way. It's not

2:44

going to be PG-13 yet. The Vix is

2:46

so low. That's unbelievable. It seems like the

2:48

markets are volatile, but that's the downside. So

2:50

I guess that's why the Vix is so

2:52

young. But anyways, I am your more gracious

2:54

host, Aaron Wong. So glad you

2:56

all can join us. Hopefully you have a nice

2:58

stiff one and you're drinking to James, unless of

3:00

course you're about to drive somewhere. In that case,

3:02

please wait till you get to where you're going.

3:04

Please drink responsibly. And then have that drink for

3:07

me. Absolutely. And furthermore, I

3:09

do also want to say nothing we

3:11

say here on this podcast should

3:14

be considered as financial advice. Nothing we say here

3:16

is financial advice, nor do they reflect

3:18

the thoughts and views of our employers. These are

3:20

just our opinions alone. These are just snippets

3:23

of what we see on

3:25

the news, on CNBC, on Fox Business,

3:27

on The Economist, on whatever it is. And

3:30

we decide that we want to have a

3:32

drink to that and react to that and

3:34

give our opinions. We could be wrong. We

3:36

could be right. But either

3:39

way, we're going to try to keep things junk

3:41

and amicable. Speaking of which, I like

3:43

that bad idea that you had and you're talking about

3:45

when I was doing my own four shots before the

3:47

mic was hot. So for those

3:50

of us that know, for those of

3:52

us that don't, before the next time

3:54

we record, Tesla's shareholders will have met

3:56

to vote on whether or not to

3:58

pay Elon Musk. $36 billion that

4:00

was disallowed by the Delaware Chance records. And so we're

4:03

going to, I guess between the two of us, take

4:05

a bet. I don't know. What are you thinking? What

4:07

do you think will happen? I don't think it's going

4:09

to happen. But I think you also don't think it's

4:11

going to happen because you brought it up. I want

4:13

to give you the opportunity to pick

4:15

which side of the coin you want first, you

4:17

know? I think they're going to pay him. Really?

4:19

Like, here's the thing. The funny thing is, I

4:22

think they're going to pay him. And part of

4:24

me says they should pay him. But then all

4:26

the parts of me that say they absolutely shouldn't

4:28

pay him are the ones I like and

4:30

I want to listen to. The only reason I'd say they

4:32

should pay him is because they agreed to it. He

4:35

agreed to it. And then he did ostensibly

4:37

the work. Now, all the things that say they

4:39

shouldn't pay him, all those

4:41

parts of me are parts that say, well, the board

4:43

wasn't independent. So it was a really nice deal for

4:45

him. Now, it was a hard deal. But

4:48

then the rest of it's also like looking

4:50

at it now, I'd be like, well, he's

4:52

very clearly violated, in my opinion, his fiduciary

4:55

responsibility to Tesla on multiple occasions. What are

4:57

you talking about? Leveraging. He's distracted. What are

4:59

you talking about? First of all, the tweets in

5:01

2018, all those tweets? Oh,

5:03

no. I mean, well, yeah, those don't help.

5:05

But I do specifically mean, in terms

5:08

of violating his fiduciary responsibility, I mean, in

5:10

the last few months, Nvidia came out and

5:12

just recently, Nvidia came out and said they

5:14

had a $500 million

5:17

shipment of GPUs to Tesla that

5:19

he said, no, you can redirect

5:21

them to Twitter or XAI, one

5:23

of his other companies. And

5:26

so he, as the CEO

5:28

of publicly traded Tesla, redirected

5:30

product that Tesla paid for to

5:32

a privately held concern that he

5:35

also owned. And his response

5:37

is, oh, they would just

5:39

have sat in a warehouse because we weren't ready

5:41

to have them at Tesla yet. My response is,

5:43

doesn't matter. Tesla got in line first. Tesla paid

5:46

the money. It's your fault that Tesla wasn't ready

5:48

to receive those GPUs and that the other companies

5:50

were. That, for me, is where it's like you're

5:52

and that's a problem. At

5:54

some point, you can and I don't know. Like,

5:56

I don't know if there's some sort of commodities

5:59

exchange for those GPUs. I mean, this is

6:01

just an idea of spitballing, but like, and

6:03

maybe the CFO of Tesla could have been

6:05

like, okay, we can issue some warrants on

6:07

these GPUs while we store them and hopefully

6:09

then we'll get called away. Right?

6:12

I don't know. I'm spitballing ideas. I'm not

6:14

a good, I don't know anything about being

6:16

a CFO, but yeah, like the thing is,

6:18

you know, he's done stuff like that. He's

6:21

leveraged Tesla shares a bunch of

6:23

different times, such as

6:25

to buy Twitter, such as to

6:27

fund certain projects for SpaceX. So

6:31

yeah, okay, fine. Just

6:33

for the sake of the bet, because I don't want to be on

6:35

the same side as you, I'll say they don't pay him. And

6:38

next week, I don't know, we can wager a

6:40

12 pack of

6:42

beer and who gets to be more gracious next

6:44

week. Yeah, I'm in. Okay. Sounds

6:46

good. It doesn't hurt that Elon holds 20%

6:49

of the company, more than 20% personally. So

6:54

are those voting shares? They have to be obviously.

6:57

While I was holding them. So okay. I

6:59

didn't, I'd never ask that question. Please

7:01

pretend like I never asked. Yeah,

7:04

he owns, he owns 715 million shares, essentially.

7:09

So 20, 20.6% of the company. All

7:12

right. Well, he's getting the $50

7:14

billion bonus and that's pretty much. He's

7:17

got a much smaller road to climb. Now, having said

7:19

that, if the, I

7:21

don't know, maybe the big investment groups

7:23

will come out and say no, because remember

7:25

they've all written a 30% loss this year

7:27

and he started to make bad G and

7:30

he started to, like I said, he's redirecting

7:32

things to other companies that he owns that

7:34

only he profits from. So I

7:36

don't know, but that's a bet for Eric for next week. So we'll see. I

7:39

guess we'll go tomorrow. We'll all find out together in real time.

7:41

We'll find out tomorrow because I think the

7:43

big thing that we need to talk about is today's

7:46

fed day. We are currently recording

7:48

on May 12th, 2024. So

7:52

just to kind of brush us up on what's

7:54

happened in the last few weeks since we last

7:56

recorded, I know we talked a little bit about

7:59

bricks. Just a brief

8:01

overview on the whole BRICS agreement. And

8:03

I know it doesn't seem

8:05

like the BRICS agreement is actually gonna have,

8:07

I don't think they have that much merit

8:09

behind declaring any sort of war on

8:11

the US dollar. I know that the

8:13

Petro Yuan was something that was proposed

8:15

or Petro Gold. Yeah, no, I agree

8:18

with you. Like they couldn't mount a

8:20

war if they wanted to. I

8:22

actually looked at, I read a very

8:25

interesting op-ed piece and I can't remember where it was, but

8:27

if you wanna find it, guys, ask

8:29

us in the social medias, so

8:31

that's Facebook, Instagram, Reds, Twitter, to

8:33

speak of things that privately held,

8:35

right? And then finally went to

8:37

the Discord, we should have opened up on

8:39

all of those. Exactly. And Dr.

8:41

Uncle Diorian, K-E-N-O-M-I-C-A-L. Exactly, yeah.

8:43

And asked me there and I'll find it

8:46

again, but I found this really interesting op-ed

8:48

piece that was essentially stating that the reason

8:50

that the Chinese wanted to go to a

8:53

Petro Yuan or they want the Yuan to

8:55

be the global reserve currency has nothing to

8:57

do with conflict with the US. It's actually

8:59

to avoid sanctions. It's essentially saying we want

9:02

to avoid being sanctionable, so we'll

9:04

just make ourselves the reserve currency. I think

9:06

that's a lie, personally. Like President Xi met

9:08

with Saudi Arabia a hundred times in what,

9:10

2022, 23? Or

9:13

not even, but 2021, they met. They

9:16

met at 1000, it seemed like every other week he

9:18

was in Saudi Arabia, or vice versa, or the other

9:20

guy was in Beijing. And it

9:22

seemed like they met all the time and

9:24

I feel like he like explicitly wanted to

9:27

come up with a Petro Yuan agreement where

9:29

it's like, okay, well, screw the US dollar.

9:31

And then of course, the US dollar had

9:33

the massive strength that we saw in 2022.

9:36

It's still extremely strong relative

9:38

to other currencies. So

9:40

I don't know, I think it's pretty

9:42

funny. So the South African election, what

9:45

did you see? Oh yeah, so

9:47

yeah, so South Africa, so a

9:50

lot of the nations in BRICS are having

9:52

elections. Some we knew were gonna

9:54

have the outcomes they did, Russia. Some

9:57

don't have elections at all, China. And

10:01

then India and South Africa both had elections.

10:03

And the funny thing is, is it looks

10:05

like the same thing happened to both India

10:07

and South Africa. The difference is it's the

10:09

first time this has happened in South Africa.

10:11

So what has happened is the

10:13

current ruling party failed to receive

10:15

a flat out majority in both

10:18

India and South Africa.

10:20

So in South Africa, the

10:22

African National Congress, the ANC has been the

10:24

ruling party since the end of apartheid. And

10:26

since Mandela was elected in 90, I wanted

10:29

to say 94. Oh,

10:31

okay, whatever. But they've been

10:33

the ruling party. This is the

10:35

first time they failed to have a majority. So

10:38

now if the African National Congress, which did still

10:40

get 40 in the mid 40s, percent

10:43

of the vote, they're still the largest party, but they

10:45

have to find some votes somewhere else to bring together

10:47

a coalition government. And if they don't, it's

10:49

possible, very unlikely, but possible that

10:51

all the other parties can get together and create

10:54

a government instead. Oh, no, oh, wow, okay. So

10:56

it's kind of like, is

10:58

it kind of like what's going on in the UK? Like

11:00

there's like nine political parties and then they

11:02

can get together and then create another coalition

11:05

to weed out. A coalition government, yeah.

11:07

So that's what the Tories did years

11:09

ago with the Lib Dems. They

11:12

reached out to the Lib Dems first and

11:14

with a better option than Labour did. And

11:17

if Labour reached out to the Lib Dems, they would have

11:19

been in government. But good old Brown couldn't

11:22

do it. That's so annoying, but it's also

11:24

like, I don't know, okay, but

11:26

anyways, India, what's going on in India? Yeah,

11:28

in India, election as well. And Modi's party

11:30

was already in kind of a union and

11:32

a coalition union. So his

11:34

party, again, failed to receive the majority,

11:36

but it looks like his coalition is

11:39

already in place and his coalition will

11:41

remain in government. So it's interesting, I

11:43

mean, that we're seeing this kind of

11:46

political and economic upheaval in the countries

11:48

that are actually having elections in BRICS.

11:50

So are there, like, would you say

11:52

that these, I know Brazil has had

11:55

a ton of political turmoil in the last 16,

11:57

18 years. Yeah,

11:59

but they had. their election member a few years

12:01

ago. So we're okay. They're the excitement. Yeah, because

12:03

they're off kilter with the rest of them. Yeah,

12:05

with with God, I forget his name.

12:08

But yeah, but okay, but

12:10

it's not necessarily politically stable

12:12

country. It's stable. It's just

12:14

it's just it's polarized. I'm

12:17

not I'm not that sounds like a prerequisite

12:19

for instability, though. Like, despite

12:21

everything that the previous president,

12:23

Bolsonaro, Bolsonaro, there

12:25

was a peaceful transition of power. Sure.

12:28

You know, so the other guy in

12:30

power was in jail for like

12:32

seven years of his life or whatever. So I don't

12:34

know. South Africa made it work. Mandela

12:37

was in prison for 23 years. True.

12:39

True. Or more. At least at least

12:41

23. For different reasons. But that's okay.

12:43

I don't know. Political crimes.

12:46

Let's just put it that way. Yeah. Well, I

12:48

just think I think it's funny, because like

12:50

we talked about political instability all the time here

12:52

in the United States, which there's plenty of that

12:54

here. But it seems like you go around the

12:57

world, look at the UK. Now, I wouldn't

12:59

say the UK is politically stable. Look at France.

13:01

Did you see what happened in France? Not politically

13:03

stable. So and look at these different BRICS

13:05

countries. I don't know, man. Well, the difference is

13:07

so. So here's here's the issue economically that,

13:10

at least from my perspective, that when

13:12

you look at the difference between like

13:14

instability in France, the UK, the US

13:16

versus instability in Brazil, South Africa,

13:18

South Africa, the BRICS

13:20

countries is that to, for

13:22

the most part, those countries

13:24

are the first world

13:27

countries. So right, the US, France, France,

13:29

in the truest sense, the NATO countries,

13:31

the non-communist aligned nations are

13:33

developed. These are developed countries. Good infrastructure.

13:35

Yeah. Like good trade partnerships, all that

13:37

kind of stuff. Yeah. Strong service

13:40

based economies. Yeah. BRICS

13:43

is a weird combination now of the

13:45

second and third world, right? Because the

13:47

second world countries were the communist aligned,

13:49

Soviet aligned nations. Well, that's Russia and China,

13:51

where for the lack of better terms,

13:53

the second world. And in the third

13:55

world where the people were the political

13:57

standpoint, now it's used to be undeveloped.

13:59

And don't want that to be what people

14:01

think we're saying. What I'm saying is there are the

14:03

countries that said, we are not aligned with either one

14:05

or two, we are our own thing. We'll

14:08

take money from both, but we're not gonna

14:10

play your game. Yeah. Exactly. Yeah. And so

14:12

that's India, South Africa, well,

14:14

less South Africa, but India, South Africa,

14:16

and then Brazil. But those are developing

14:18

countries. I mean, if you look at

14:20

India, it's India, South

14:22

Africa, and Brazil all have the same issue, which

14:24

is, they all have the same

14:26

demographic issue, which is they have large populations

14:28

of people who

14:31

are impoverished, who require education, who require

14:33

a better, who have a very low

14:35

standard of living. Yeah. And they have

14:37

to find ways to go out and

14:40

improve their quality of life. And that's

14:42

very different than what Russia and China

14:44

have, which is they have very large

14:46

populations of people who have a

14:48

very poor quality of life, but that's because their

14:51

systems have already done what they're gonna do and

14:53

they're broken. Yeah. And

14:55

either the Russian or the Chinese model is going

14:57

to work for the other three countries because

15:00

it didn't work for Russia or China really either.

15:02

Yeah. I don't know if it worked for anybody,

15:04

but yeah, I

15:06

don't know. It's interesting. It's something we gotta keep an eye on

15:09

for sure. And I hate to jump

15:11

ship on this topic because I also want to

15:13

talk about OPEC. No, it's fair. They announced

15:15

that they're gonna boost output. Did you see what the number was?

15:17

300,000 barrels per day for next year. Okay.

15:21

Yeah, that's right. I remember seeing that last week when

15:23

I was at a conference and I didn't remember what

15:25

the number was, but yeah,

15:27

so I don't know. That sounds a little

15:29

bit more promising. That sounds like the Fed,

15:32

ah, see the transition there. I like it. Has a

15:34

lot more work to do. Thank you. Because

15:37

we all know what increase

15:39

in supply does when it comes

15:41

to- The cure for high prices is high

15:43

prices. Yeah, exactly. Yeah. So what we're seeing

15:46

here is some law of supply. They're happy with

15:48

the price. They're willing to produce more. Maybe go

15:50

that, maybe drive that price down a little bit.

15:52

Well, maybe they made back a lot of the

15:54

losses that they incurred in 2020 to 2021. I

15:58

don't know. I think we're seeing that. So

16:00

I think we're also kind of seeing the

16:03

OPEC nations looking at how Russia, I

16:05

think they're looking at what's happening between

16:07

Russia and China. And if I was

16:09

Saudi Arabia, I'd be very leery of

16:11

the Chinese. They very clearly...

16:13

Just because? Well, they've took Russia, they

16:15

took strong advantage of Russia. They're

16:18

getting oil and natural gas from the Russians at

16:20

a very low price. Oh, yeah. I

16:22

mean, they're very much every man for themselves. Yeah, for

16:25

sure. Yeah. But it's still one of

16:27

those things where I'd be sitting here going, I'm, as a nation state,

16:29

I'm trying to divest myself of being totally dependent on

16:31

oil, which is why they

16:33

went public with Saudi Aramco and

16:35

why they've been essentially divesting themselves

16:38

out of, or rather trying to

16:40

diversify their economy. The

16:43

nice thing about what OPEC is doing is I

16:45

think they're really... I

16:47

don't think they're doing this because of the Federal Reserve. Don't get

16:49

me wrong, that's not what I'm trying to imply at all.

16:55

This move certainly placated to what the

16:57

Federal Reserve is trying to accomplish in

16:59

terms of hitting their inflation targets because

17:01

energy is still a pretty big part

17:03

of CPI. It's been sticky. And it's

17:06

very sticky. And I think energy also

17:08

plays a big role. If you look

17:10

at the PCE basket of goods, which

17:12

is really what the Federal Reserve looks

17:14

at, energy prices being high doesn't

17:17

bode well for it. Anything.

17:19

Yeah. Well, especially in

17:21

the PCE basket of goods. Yeah. Absolutely.

17:24

That high energy prices, especially high gasoline costs,

17:26

high diesel costs in the US lead to

17:28

more expensive goods. Just, I have to ship

17:30

it, it's not more expensive. So food becomes

17:32

more expensive because I have to move it.

17:34

Goods become more expensive, I have to move

17:36

them. Homes become more expensive because I have

17:38

to heat or cool them. Lumber, I don't

17:40

know what lumber, shipping lumber to build homes,

17:42

whatever it is, copper to put it into

17:44

your... Oh, I need to... Invidiot

17:46

ships or whatever. I need to smelt or

17:48

manufacture anything while the energy costs to keep

17:51

my factory functioning are higher. So

17:53

hopefully 300,000 barrels a day

17:55

can reduce to an extent, alleviate

17:58

some of those concerns non-stick the

18:00

stickiness of energy and in doing so,

18:03

maybe actually do something that

18:05

the Fed clearly can't, which is bring that

18:07

inflation down just that little, that next little

18:09

bit. Well, I mean, so

18:11

I guess we can start with the CPI

18:13

report because CPI came in what yesterday at

18:15

3.3%. So

18:19

inflation, the CPI metric of inflation,

18:21

not the PCE metric came in

18:23

at 3.3%, which is closer. I

18:27

don't know if revisions later are gonna kind of reverse

18:30

any sort of positive optimism coming from

18:32

this thing. But for now it is

18:34

what it is. I

18:36

just realized I said positive optimism, but

18:39

yeah, for now it is what it is. The

18:42

number itself suggests that the Fed, what they're doing

18:44

is working. But if you look at the labor

18:47

market on the other side, I mean, we saw

18:49

the weekly jobs report. Was it the weekly or

18:51

was it the monthly jobs report last week? Last

18:53

week was monthly. The monthly jobs report last week

18:55

was a- Oh my gosh. That was a monthly

18:58

report? Yeah, that was like

19:00

what the Dodgers did to the, I

19:02

forget who the Dodgers played today or yesterday, but

19:04

boy, that was- Oh nice. It was not nice.

19:06

I was at the Diamondbacks game yesterday, so I

19:08

didn't see it. But that

19:11

was not, if you're rooting for a strong

19:13

economy, this is not necessarily something that you

19:15

wanna see in terms of how job

19:17

growth and labor expansion is

19:19

trending. But in

19:22

terms of what the Fed is trying to do, if

19:24

you're rooting for the Fed to cut

19:26

rates, this was a good jobs report. This

19:29

was a good CPI report. It's

19:31

definitely a lot of signs that the

19:33

economy is slowing. I don't necessarily think

19:35

that it's not strong. You

19:38

said- The job report was a

19:40

real grand slam. So the Dodgers beat the

19:42

Rangers. I had to look at who it

19:44

was, 15 to two yesterday. Oh my God. And

19:46

that basically was the jobs report I saw

19:48

last week. So you

19:50

thought it was a good jobs report? Yeah. I'm

19:53

not gonna lie. I don't really see this. I think that the economy is strong.

19:55

Well, one, that it came in at 270,000 jobs versus

19:58

180,000 expected. Okay, no,

20:00

that's not I think I think

20:02

the expectation was really low. Okay, then

20:05

if we're gonna say that the expectation was

20:07

wrong Then absolutely. Yeah, I think the expectation

20:09

was incredibly low and I think that like

20:11

the expectations were not revised I'll

20:14

give you that I'll give you that that see when I saw that

20:16

the expectation was like a hundred and eighty thousand They came in it

20:18

like to sin it came in to 70 or 272. I was like

20:20

180 seemed low well,

20:23

but to me like what bothers

20:25

me is that the unemployment number is

20:27

now 4%

20:29

like the fact that it cross over that threshold. It's kind of like with

20:32

a Cross month over month. Yeah, like

20:34

I took with an SP cross over 5,000 like this. There's

20:36

a milestone, you know So this is this to me is

20:38

a milestone, but I'm not a good way I know we

20:40

looked at it. I know you and I had looked at

20:42

the Labor force participation and

20:44

we found that it really hasn't moved. It's

20:47

down a little bit, but it hasn't But

20:50

it's plateaued. Yeah to me I don't

20:52

look at I don't look at unemployment ticking

20:55

up as I see big jobs report

20:57

numbers as a bad thing It can be

20:59

but to me I look at it I

21:01

go Wow and so now up to

21:03

see if there's another month and what happens But it's

21:06

it says two things to me and it says one lot

21:09

of new jobs not a new hires for May to

21:11

the The unemployment

21:13

number says well unemployment people trying to find

21:15

work. So yeah, it tells me more people

21:18

are trying to Okay, so there's people

21:20

coming back coming back in me. There's people trying

21:22

to find more work now It's also no no

21:24

it's people trying to find more work So

21:26

to me that's that's a good sign that

21:29

we have more people enter or trying

21:31

to enter the workforce or trying to get

21:33

back Into the workforce. So that's good.

21:35

Yeah, probably And

21:37

then if I was an investor Holistically looking

21:40

at the markets I go. Okay, I'm

21:42

not seeing that Despite all the jobs

21:44

and all these jobs being created I'm

21:46

not seeing a point where we're running

21:48

out of bodies to fill like there's

21:50

still like if I were to see

21:53

like unemployment really start to shrink at

21:55

workforce either freeze or I'm

21:59

sorry later force or participation, right, workforce

22:01

participation, freeze or kind of start to

22:03

encroach into a point where I'm like,

22:05

there's really not a whole lot more,

22:08

there aren't more people out there to plug

22:10

in, I would look at it and

22:12

that's what we may be very nervous.

22:14

But seeing that the workforce has kind

22:17

of stayed in a spot and

22:19

we're seeing more input means that people are trickling that

22:22

essentially we're not running out of potential

22:24

employees. Yeah, well, so this is the

22:26

thing is I'm looking at jobs added

22:29

in the various months throughout the year.

22:31

So in, sure. And it's,

22:34

I know it's very cyclical, right? So you

22:36

look at jobs added in January, 353,000

22:39

jobs, jobs added in February, 275,000 jobs, jobs

22:44

added in March, we have 303,000 jobs.

22:49

And it went 165,000 in April. Exactly,

22:51

yeah, and if you go to April, why

22:53

was it, I think it was 175,000 jobs added in April. So

22:57

I don't know if there's a single cloud even to

22:59

spring, but like April

23:02

was not a good month and we

23:04

had a very good start to the

23:06

year in terms of jobs added alone.

23:08

But I don't

23:11

know if jobs added and like, it's nice to see

23:13

that a lot of the jobs added is not in

23:15

the public sector. That doesn't make

23:17

me feel a lot better, but

23:19

at the same time, the government

23:21

spends money if they hire a

23:24

construction company, that's not jobs added

23:26

necessarily in the public sector, because

23:28

construction company, cars workers, contract workers,

23:30

albeit, but that's jobs added in

23:32

the private sector. But nonetheless,

23:34

it's still nice to see jobs

23:36

not added in the public sector.

23:38

Yeah, the public sector was number

23:40

two, wasn't it? Yeah, yeah, yeah,

23:43

but it's number two at

23:45

43,000 jobs added, but like the healthcare,

23:48

like it's nice to see healthcare and social assistance,

23:50

the jobs added there is almost 84,000. So

23:54

that is nice, but I just don't know. Like

23:57

when I see unemployment at 44,000,

24:00

and I see that labor versus participation apply

24:02

toe, to me, I feel like

24:04

that's more people out of jobs, like the more

24:07

number of people out of jobs. Yeah, we have

24:09

to look at it from the fact that, I

24:11

mean, yeah, where I work, I

24:13

mean, I can flat out say, I know

24:15

that in Nebraska, and it's specifically Nebraska, I

24:18

know that there are, in Lancaster County, Nebraska,

24:20

there's like, I

24:22

want to say it's like 90 people who specifically

24:24

they lost their jobs, literally on

24:26

Arbor Day. Oh geez. Their

24:29

jobs are probably gone. If

24:31

they get them back, it won't be for years. Yeah. And

24:34

it's because their place of employment was shwacked

24:36

by a tornado. Like it's building is barely

24:38

there anymore. So it's like. Yeah, that's an

24:40

extreme circumstance though. But that's, but it's like,

24:43

you know, and disasters like that have been

24:45

hitting intermittently through the Midwest. So like that's

24:47

certainly leading to unemployment. But those people are.

24:49

It's like a hurricane in Texas too. Yeah,

24:52

but people, I mean, hurricanes a little more,

24:54

a little, do a little more damage. It

24:58

wasn't really a hurricane. It was just like

25:00

a really, like a long drawn out rain

25:02

storm in the DFW in Houston area that

25:04

kind of flooded the city. Well, Houston's had

25:06

what a once in a century flood

25:08

every year for the last 10 years or something because

25:11

they paved over all their water absorption spots. Brilliant

25:13

civil planning, right guys? Some

25:15

of those government employees, I'm like, you shouldn't

25:18

have to have boys. Yeah. So

25:21

it's like, that's not like disaster stuff. That's

25:23

not, Fed policy is not going to affect

25:25

that. It can't. Yeah, of course. If

25:28

we cut government out, we see healthcare

25:30

as a close, it's just far and

25:32

away number one. Hospitality and leisure just

25:34

behind government, 40 selling

25:36

thousand and then business and

25:38

professional services, right? So it's a,

25:41

and then construction. Hey, construction is

25:43

great. That's cap X capital expenditure.

25:45

Yeah, but it could become a cap X too. Transportation,

25:48

financial activities, manufacturing. This

25:51

is, it seems like things are about to be

25:53

normalized. We're seeing, especially when we see like that,

25:55

for me, the hospitality, we see that. That is

25:57

a good thing. I think a lot of that

25:59

is smart. small business, but I mean,

26:02

the reason why I keep stressing the unemployment number

26:04

is because that's what the Fed likes to look

26:06

at. Like to look at inflation, unemployment, and I

26:09

think seeing unemployment tick up was kind of room

26:11

for the Fed to be like, whoa, guys, I

26:13

think this is an opportunity for us to be

26:15

like, well, we need to go in there and

26:18

fix the economy, which I don't like that we

26:20

leave it to them to fix the economy, but

26:22

you know, they can see that. I'm

26:25

with you, man. I agree. But

26:27

they can look at that and go, wow, unemployment

26:30

is ticking up at a pretty rapid pace,

26:32

inflation is cooling, that's with CPI 3.3%, is

26:34

the window open to cut rates? If you

26:36

ask the Federal Reserve, I mean, we had

26:38

the Fed meeting earlier today, like I mentioned,

26:41

nothing happened, right? Like no rate cuts, no

26:44

decisions. The dot pot shifted a little bit,

26:46

right? It went from three rate cuts this

26:48

year to one, but that kind of, that

26:50

was bad. Yeah, maybe one. Yeah, that was

26:52

bound to happen. Yeah. The dot

26:54

pot was going to shift. Federal

26:57

Reserve, just admit you're listening to Drunkenomics, call

26:59

us into the meetings. I'll sit

27:01

in there, dude. Like, we'll walk you through it.

27:04

It's not hard. No, like, well,

27:07

I thought, like, if they felt pressure to take

27:09

care of the debt maturity wall, which they shouldn't,

27:11

but if they felt the pressure to do that,

27:14

then they would have cut rates. And they would

27:16

have done it a long time ago, they would

27:18

have done it in March, but they didn't. Yeah.

27:22

And I don't think they're going to. I think, you know, I think

27:24

one, you were the hawkish guy. I'll

27:26

be honest with you. Like, I'll level with everybody

27:28

and say, you were the hawkish guy. I was

27:30

the dovish guy. Oh, yeah. I

27:32

thought they were going to cut a little bit earlier this year,

27:34

but with the election, I think that makes it tough. But

27:37

I think we're now starting to see signs. Also with the

27:39

data, that makes it tough. I know, but

27:41

like every single thing that Jerome Powell said, like

27:43

all the questions that he took, he hedged every

27:45

single, I didn't listen to the press conference every

27:47

word, but like I watched bits and pieces of

27:49

it. He hedged everything. You know, I forget some

27:51

reporters like, is there more than one rate cut

27:53

this year? And it was like, you know, we're

27:56

going to continue to be data dependent. Maybe we

27:58

will, maybe we won't, but we're going to. continue

28:00

to look at the data. And it's like how

28:03

dependent on the data can you be and

28:06

how reactionary is the Fed going to be

28:08

now? Like is this something that we can

28:10

expect moving forward where the Fed just looks

28:12

at the economy, looks at the data, the

28:14

monthly data and just goes, okay, we're going

28:17

to pick and choose what we need to react

28:19

to and let the markets decide what that pattern

28:21

is? And

28:23

to be fair, that might be where we

28:25

end up. It's a... Oh God. So for

28:28

me, it seems like the

28:30

markets don't want the medicine. They

28:32

do, but they don't. They recognize that this

28:34

is necessary,

28:37

but they're like, this is really

28:39

hard. Personally, and I don't

28:43

know if this would make any sense

28:45

given in the environment that

28:47

we're in, we didn't have the

28:49

Federal Reserve for the longest time.

28:51

And I want to ask a genuine question.

28:54

Are we that much better off with the

28:56

central bank? With the central banking

28:58

system across the entire world, every single country

29:00

has a central banking system now. And there's

29:02

also like the European Union central

29:05

bank. Yeah, the ECB. And they cut rates.

29:07

And they did. They did. The Bank of

29:09

England cut rates too. So we're starting to

29:11

see rate cuts around the world. We're still

29:14

higher for longer. We're still very much in

29:16

that camp. But my genuine question

29:18

is like, how much better off are we with the

29:20

central bank? Maybe we are better off, maybe we're not.

29:23

But I think we are. For the

29:25

most part, I would say we are. But this

29:27

is just a crazy idea. And I'm

29:30

not... This is what happens when

29:32

I drink too much. I decide to try and

29:34

solve the world's problems. But what if we

29:36

just had the Federal Reserve have

29:38

rates at 4% or I don't know

29:40

what would make everybody happy, but let's

29:43

just say rates were permanently at 3.5%.

29:45

And in really hot economic cycles, they

29:47

can go up to 375. And in really slow economic

29:53

cycles, they can go down to 325. That

29:55

way you don't play with fixed income.

30:00

like the way you do like that we don't have years like

30:02

2022 I don't know if that's

30:05

the best idea but it's not you know the

30:08

only thing I would say is the second I know if I know

30:11

the speed trap is only on this one street

30:13

I just won't speed there like a the second

30:15

I know the most they'll do to me in

30:17

a cycle the most either way I can price

30:20

that activity in and then you I know the

30:22

problem is what happens when that's the point like

30:24

that's what I'm trying that's what I'm trying to

30:26

get at like you like like I

30:29

want you to price activity in if

30:31

you trade mortgages like you know you

30:33

know that the highest fed

30:35

funds rate you'll get if you're trying to you know

30:37

build a spread off of a mortgage is 375

30:41

that's a made-up number right I don't know what

30:43

the number should shouldn't be right but if

30:45

you know like you the spread that you want from

30:47

a mortgage rate with

30:49

the household of this kind of

30:51

credit history like the highest base

30:54

percentage is gonna be 375 like I'm trying to like think

30:56

of a way to provide stability

30:58

to the fixed income markets but then again

31:00

nobody wants ability right like you know I'm

31:02

making people are making way too much money

31:05

off of instability make your money in the

31:07

instability I know but like I okay

31:09

fair and like I get it like nobody wants that

31:12

but I'm just saying like I I

31:14

might be the only person in the entire world

31:16

that's tired of volatility yeah it's been

31:19

a fun four years all I can think

31:21

of is that scene in margin call where Paul Betney

31:24

is just going you know people people don't we have

31:26

our fingers on the scales in their favor they don't

31:28

he's like it's like we take our finger off and

31:30

it gets real unfair real quick people don't want that

31:32

they say they do but they don't and that's that's

31:35

the thing everyone is like oh I don't like the

31:37

vault we don't want volatility in these markets I was

31:39

like yeah you do it's where you make your money

31:41

well I know a market that only goes a market

31:43

that only goes up is is

31:46

is a Ponzi scheme so

31:48

right now a market that

31:50

only goes down fails it's

31:52

just yeah I'm

31:55

just spitballing here you know and

31:57

I know like I'm probably gonna

31:59

listen to to what I just said later and

32:01

be like, wow, that guy is such an idiot for thinking

32:03

that. But you know, like- But you did the heavy lifting

32:05

this week. You had all the drinks. Well,

32:07

okay, fine, fair enough. I appreciate you

32:10

acknowledging that, but you also had plenty

32:12

heavy lifting with dealing with

32:14

COVID and taking the NyQuil. So

32:16

I gotta send the recognition- All 30 milliliters.

32:19

Yeah, dude, that's what I'm saying. That's heavy

32:21

lifting, man. But I'm also trying to think,

32:23

like, we went so

32:25

long, pretty much, I would say, up

32:27

until 2008, where we didn't

32:29

depend on the Fed to solve our

32:32

problems. So that's why I just, I'm

32:34

trying to remove that's ability from the

32:36

Fed. And I think if you did

32:38

that, like if you did three and a half, high scene

32:41

go 375, low scene goes 325, that

32:44

takes away the Federal Reserve. And let's kind of

32:46

the free market do what it wants to do.

32:48

Not that I want that to go run rampant

32:50

either, but you know. I'll say this, if you

32:53

don't want, I see

32:55

what you're saying now. What I'll say is this, I'll come

32:57

the other way at this. If you don't want to need

32:59

the Fed, there

33:01

we go. You either have to break

33:03

up any company where moral hazard might exist.

33:06

Okay, let's start breaking them up, dude. Let's go. I'm

33:08

with you, man. Because the second you break

33:10

them all up, well now, one

33:13

bank fails who gives a shit. FDIC will cover

33:15

it, it's fine. There's not so

33:17

much systemic risk in these eight firms that

33:20

the Fed has to do something and the Treasury

33:22

has to backstop it. So okay, you guys all

33:24

made bad decisions. Fuck you, you're done. No, I'm

33:27

with you on that. Like, you know. Your shareholders

33:29

are washed, all your employees who had their bonuses

33:32

and everything else in the equity. You're the

33:34

CEO, I'm wondering about your traders are coming

33:36

for your flesh. Yeah, so there you go.

33:38

That's another question, right? So like, all these

33:40

banks are so incestual. Were we better

33:42

off before all this incest

33:46

existed? So absolutely. You know, I

33:48

think there's a lot of benefit to be had from

33:50

all this, but there's also a danger,

33:52

right? Yeah, because- Yeah,

33:55

like Lehman Brothers, they took the heat and

33:57

then everybody else was unscathed. Yeah, but then

33:59

the problem- The problem with what really went wrong

34:01

in 08 was that Lehman was doing

34:03

trades overnight and stuff, was working with the other

34:06

banks, and so seriously, like they do, and the

34:08

other banks were calling them everyday, just going, hey,

34:10

we don't think you're gonna be able to pay

34:12

us, so you need to post collateral. And every

34:14

time that Lehman would post collateral, it was just

34:17

they were getting sucked dry by the other banks

34:19

they were doing business with. And it's just, it's

34:21

just. That's what I'm saying. I don't know. You

34:23

know, I don't wanna go back to grassroots, but

34:25

I don't know how well the system is working

34:28

out. It's, you know, I just get,

34:30

I get, It's working out for a few people. It

34:32

is, it is. I get really curious, I think

34:34

about the stuff. You know, I think I'm an

34:36

anarchist by heart. I'm very punk rock in that

34:38

sense, but I don't, I'm

34:40

not like a true anarchist. I gotta be honest with

34:42

you. Like, I mean, you know me, like I, there's

34:45

gotta be some sort of oversight. I do believe

34:47

that there is a rule at the Federal Reserve

34:49

Place that is important. Absolutely, yeah.

34:51

But yeah, with that, I'm

34:54

all out of drinks. I really appreciate you

34:56

bearing with us and being patient. Absolutely.

34:58

But yeah, guys. But if you want

35:01

to look good, if

35:03

you wanna find a tank top now that we're in

35:05

the Southern ones that you can go to the lake

35:07

to, please check out shop.myspreadshop.com slash

35:11

Drunkenomics. Do you know my

35:13

CS? Drunkenomics.myspreadshop.com. Oh,

35:15

did I mess that up? Drunkenomics.myspreadshop.com? Okay.

35:17

Well, thanks for correcting me. Absolutely. And

35:20

the best part is, if you're in the Southern

35:22

Hemisphere and it's cold, you need that hoodie. You

35:24

need that hoodie. You need that hoodie. You need

35:26

that hoodie. You need that beanie for the head.

35:29

Absolutely grab those there as well. Yeah,

35:31

anything there is greatly appreciated from there.

35:34

If you want to leave

35:36

a tip with a tip jar, we're our bartenders by trade.

35:38

Anything there would be greatly appreciated.

35:41

That's Patreon, P-A-T-R-A-O and that's C-LIMP

35:43

slash Drunkenomics, D-O-U-N-K-O-M-I-C-S. You know,

35:45

that'll help us keep the beer cold, the

35:48

fridge on, that keeps the beer cold, the

35:50

ice cubes cold. If we do decide to

35:52

switch over to like the

35:54

gin and tonic or what's

35:56

a good summer cocktail that you like to do,

35:58

the Voucouret, I'll love it. I love the Vucoure. Vucoure

36:01

is fun. I don't know if, but I don't know

36:03

if Summer drink, the Saint Benedictine, the Vucoure, it

36:06

kills me a lot in Summer, but. Anyway,

36:08

my Summer drink right here, Pina

36:11

Colada. That's,

36:14

that's, recipe shouldn't be left out of

36:17

the way, but that's Margarita. And

36:19

Bill Paxton from the immortal movie Club

36:21

Dread, where he plays Coconut Peep from

36:23

Pina Colada Burg. Yeah, dude, Pina Colada.

36:25

Oh my gosh, dude, what a shout

36:27

out. Both of them, it's a

36:29

damn shame. But with that, thank you

36:31

so much to you all for drinking along with us.

36:33

I'll be back in drinking form next time we meet.

36:35

Yeah. No promises. No promises,

36:37

but praying for you, James. And, I

36:40

appreciate it. Yeah. With that,

36:42

my encouragement to you all is to continue

36:45

to fill and kill. Don't brag

36:47

to say, play chestnut checkers, but most importantly

36:49

do, what's that one thing again? Stay

36:52

drunk-edomical, guys. Yeah, that's what it is.

36:54

Cheers, my friend. Cheers.