YouSaid · the spoken record

George Robertson

lines on the record: 144
first: 2024-08-12
most recent: 2024-08-12
sittings or episodes: 1
sources: podcast

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“So, do we carry on reestablish it? Because the real money to be made is in the derivatives, the options, the dispersion books, and some of the other plays. There's other people which you've had on who would have a much better answer than I on that. I think the Russell 2000 will always be the Russell 2000. The SB 500 will always be the S&P 500. And what I noted about the S&P 500 valuation, probably even more so for the Russell 2000, but you have to respect that It's a small cap. It's a small index relative to the S&D, and there's some very big players that control it for, I don't know, six months a year. And I think they are.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“And then going out from that, controlling the option markets to do zero trade date to expiry and all sorts of games that have been going on for the last two years. Three years. And so I think the Russell 2000 to the S&P 500 does have an obvious relative value, which will be realized, but with this very large game going on, and now it seems like there's an effort to try to figure out, well, what do we do? Do we carry on? I think we took our short off on the Russell 2000. We got dumped our lungs and the large caps.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“That we would trade just like the SP 500 we'd be waiting. It's a very vibrant, very exciting. And I think the amount of dead issues in the Russell 2000 are always there. It's just the way the Russell 2000 is. So I think it's more of an issue of valuation. And I think there's wires. They're not nefarious, but there are some big players that I think have to establish a very large Paris trade, if you will, which the last one was Short Russell and all the various small caps and long S&P 500 and various large caps with the obvious players, the FAB 7, which is not really meant to make money, although it does. That's what they want to do. But it's the basis for the stock loan books.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“Well, first, the Russell 2000s market weighted just like the SP 500. The fact that it's like some liver, disease liver collecting bad toxins is wrong, especially, I don't do it anymore, but especially every annual re-weighting.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“It's a financial thriller. It's a fictional book, but it has a lot of the narratives of my thesis. It has a corrupt central bankers. It has a financial markets controlled by quantum AI supercomputer. It has an attempt to put in a global central bank digital currency, all while the world kind of sits on the precipice of a financial collapse. been really successful thanks to everybody who's bought it if you haven't check it out the audiobook is available now that just came out earlier this month and if you like any of these themes and you're also a thriller or a fiction reader a la tom clancy or something like that i think you would enjoy quaz”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“The monetary frontier was, I guess, I'm retired, although I'm loath to say it. And my risk manager, i.e. my partner in life, she was starting to really look askance all the time I was spending in digital media, i.e. that I'm nuts. So I had to come up with a good reason as to why I'm actually making some money. And this is actually a livelihood. It's not just some old character babbling away. So the monetary frontier was created. And I hope it does have value because it's the distillation of 30-odd years of knowledge, often hard won and learn the hard way, not by any sort of great intelligence. I hope that if you visit the monetary frontier, you find it valuable.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“Congress is going to be very slow to reclaim its mandatory indiscretionary rule base and setting its budget. It'll be very foggy in terms of what the budget is going to do for the next five years like it used to be. It's going to be pretty chaotic. And then at the same time, we got the situation with the Fed that I've gone on perhaps a nauseam in terms of how explosive the market can end up being, which I think Mill and I agree with in terms of what will happen, but for different reasons. So it's going to be a really, I guess, interesting time. It's going to be great stuff for you, Jack. You've got all sorts of shows to do next year. But that's my call.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“And not only that, kind of going to rack up like 500 billion really quick for hospital expenses and everything. And if you don't let New York go bankrupt, you got to give me all the money in about six, seven months. So the state and loco is still very powerful, if not the power for the Democratic Party. California, what's going on in San Francisco, so on. That being the case, if Harris gets in, it's going to get even crazier in terms of spend. It's going to be She's going to be very concerned about any inroads. She's going to try to negate the enthusiasm for the populism of Trump. Now Trump will be there for a bit. And even Vance, Trump is very much a populace. So he's going to spend. He's just going to try and divert it to Red States. So I think it's going to be chaotic. I see no reason why...”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, it gets interesting and advance is going to be shooting for another eight years because you don't want to be around until 2036. So he's talking about a regime and he will have an immediately an inordinate power as vice president versus previous administrations, certainly more than Camel Harris had. And now Camel Harris coming in, she will be laden with the constant, which has been the story for the Democratic Party for, you know, a century plus with the state and local guys. The idea of a federal power of the Democratic Party to make change, well, a good example was that what Kumo said is why you guys dither about what the hell to do with COVID, I am now putting New York on pause.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“Think it should be realized that as soon as Trump's elected, he's a lame duck. You know, he has got no legacy. He's got no real, he's not going to get re-elected. He's got no pull. He's got no power. He's gone out of his way to base himself or not to have his power sourced from his base, which is pretty fickle reason to be powered. Maybe he can threaten Congress that in the next election in two years like that, I'll have my guys rise up or not. But basically as far as power, he's like any president, but even more so as a lame duck. So a lot of Trump focus will very quickly dissipate. So I think it's fance, assuming that they get in. Advance is an interesting story. We're talking about Peter Thiel. We're talking about what's that guy's name, Arvin, whatever the monarchists and the Silicon Valley guys. Oh, that guy.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“Spending and less tax cuts with Harris with Trump. We get more tax cuts, but less spending. Harris gives us more spending, less tax cuts. So basically it's more or less 61 half a dozen of the other, in my opinion. And I think that the train continues until it hits that stopping point that we've I talked about earlier, which isn't a hard stopping point, but more a psychological shift around the entitlement.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“I think generally, I think no matter who it is, we might have a difference between who are the winners, who are the losers, if it's Harris, is that, you know, favor maybe certain green orientated companies relative to what happened under a Trump administration, I think some of the things that we've seen people talk about with JD Vance and some of his views, I think he's actually said he agrees with, say, Lena Khan in her antitrust actions. Maybe he's a little less favorable to something like an Amazon. But at the end of the day, Vance isn't running for president and Trump will make the decisions that Trump wants to make. So I think at the end of the day, you're going to see the lobbyists still have impacts and the gravy train continues, the fiscal spending continues. Maybe we get more.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“Earlier, George, you referenced senior age, which is the difference between how much government money is notionally and how much it costs to produce. So for like a gold coin, there's senior aid, but not that much because gold is expensive. But for fiat currency and printing paper money, it costs a lot less for the mint and the treasury and the Fed to create a hundred dollar bill than $100. And I think the real question is, does the rest of the world continue to own US treasury debt? I think for a very long time people talking about diversifying away from the dollar, whether into Chinese yuan or euros. And I think you've seen ever so slightly a move away from the dollar, but it's not even as if the euro has gone up. It's like the, you know, the Norwegian krona went from 0.1% to 0.3%. It's moving very slowly. That could change with Russia and the British.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“Think it's way overdone to be concerned about what's going on in Spain or Italy, but for a humanitarian interest that we don't want to. Add to or be the cause for suffering. As far as Finance, I think it's way overblown.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“It probably induces a boon as we back away from this global trade. Free market type of And we start to revert back to being self reliant. Higher level than we are now. Never be able to put the genie back in the bottle Always be in an international sphere”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“That's probably more true than not. Now, I'm not saying that we don't want to pay attention to what's going on in Japan or China, but I think that when the rubber hits the road, it's just a national security issue. It's not an issue of finance. It's a big issue for J.D. Morgan if they lose all their European earnings. It's a big issue for Morgan Stanley if all the real estate holdings that they still have goes tits up in China. It is not an issue for the... But for the guys who just worked for JP Morgan, it's not an issue for. The Americans, if anything.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“I think there'd be a big commotion to Amazon, there's a big commotion to Wall Street. There'd be 3% of the U.S. populace in terms of political power would have a big commotion in trouble. But I don't think 97% of the people give a damn. That's why Trump's America first type of thesis has resounds with a lot of people. Why do we care about Italy or Greece? Let them rot. Why do we put all this money into NATO? Let them rot. Now, I don't think that's a good idea. Because there's evil people out there. But as far as financial systems go,”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“To answer your question though, George, we're talking about financial markets, the financial market catastrophe. So you look at in 2011, why would Greece, the sovereign debt yields at Greece matter at all? Well, because who owns the Greek debt or whatever? So I think if you had, why would anything that happens in Europe matter doesn't matter to the Chicago Uber driver if the United States were a perfect island, a perfect autarky, if we weren't living in essentially a financialized society where there are connections between Deutsche Bank and JPMorgan and all, like if you started to have your example, let's say Germany really did fall off the face of the map. I mean, I think most people would say that wouldn't be good for the US financial markets. And so I think that you will have an impact from these financial repercussions.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“You know, the Scottish widows and orphans in terms of representing the legacy British Empire. Same thing. The Dutch guys, Japan, they have no choice. They have to own U.S. debt. Otherwise, what Pettis was talking about, the balance of payments fall apart and they're screwed. We will survive. We'll just issue more debt. But they're screwed. So they have no choice. And that's what an identity is called. It has to be done So, the international system is The argument I would make is that instead of having three more aircraft carrier task force, I allow this holding of the U.S. debt offshore and I give concern to the international markets. Or if I'm Brainerd, I want to maintain my position of power at the Fed by talking about China instability. But as far as Americans, like...”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“Disagree with that. You were talking about balances, not financing. And China has no choice. They have to have those U.S. treasuries to maintain the six, seven yen. Not the yen, sorry, R&B So, in many ways, the holding of U.S. debt is actually a debt of the holders to the U.S. Like if they want to play in the US, they better pony up and buy that debt. It's a shakedown. Now, as long as there's enough people in the United States who have a vested interest to maintain that, they have no choice. China has no choice”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“I'll say this, George, is that a large part of U.S. treasuries are owned by U.S. banks, U.S. households, and the Federal Reserve, which are all obviously in the U.S., but a large, I don't have the exact number off the top of my head, China owns a lot of treasuries. Japan owns a lot of treasuries. So the rest of the world does finance the U.S. deficit, as Michael Pettis has talked about.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“Of 120%, or whatever it was, 35 maybe. And so I think the cracks will start to show up in certain ways that the international financial system is organized, that it's not really built to handle six and a half, seven and a half, eight and a half percent 10 years.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“We're at a trillion dollars in interest spends, and the government's revenues are like, I don't know, four or five, six trillion in tax revenues, whatever it is. So we're not near those things. But my point would be we don't need to turn into Venezuela or Argentina for there to be significant shockwaves in our financial markets. So people have observed that just when the 10-year was starting to creep above or hit 5%, we started having certain issues because of the banking system. And so I think when you look at the amount of outstanding debt we have and what we're doing, you have to roll it over all the time. And the fact that we're doing a lot of bills and different things, it's even going to be a quicker turnover in debt. So when you start having to refinance at these higher rates, that's when you start getting into problems that we didn't have in the 1980s when government debt-to-GDP was 30%.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“Mammoth debt will be a problem, you know. I mean, Charlie Munger, you'll rest in peace. The great mester said that, you know, you have to, if you believe that the huge US debt isn't going to be a problem eventually, you probably, if you believe that, you probably also believe in the tooth fairy. However, but it's impossible to know, you know, at 100% debt to GDP, people were concerned. At 70% debt GDP, people were concerned. When it was at 60% GDP, and then in the 1970s, people were being concerned about this so much debt to GDP now is 120% federal debt. Why not 134%? Why not 140%? Like, how do you know when it's going to be the ticking time bomb? Well, I mean, I think there's different ways you could look at it. You could look at it and you could say, okay, you know, some people have said, you know, countries start to get into issues when their interest expense is greater than their defense or then they might define hyperinflation when you're having to print money simply to cover interest expense, which we're not anywhere near.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“Right, it was only for a flash, but it did hit it. And if you see the inflation as a debasement of the currency, i.e. the value of the US, you're absolutely right. And then you are Argentina, Venezuela, Weimar Republic. You know, there's a whole list of examples. But I think it's a huge mistake to see any input or information from global or non-US countries. The US is on to itself. It's a phenomena that we've never seen. You have to go back a thousand years before 2,000 years before you even figure out what the hell's going on. It is remarkable so that we're alleviated from any of these concerns about, you know, now the one thing that the U.S. could get into, which it did, and I will use history, is You know, intense internal”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“The way to look at it, not to defend inflation or not, but the way to look at inflation is, well, what the hell is it? It's for the US with Senor H, inflation is a tax. And it's like if the tax receivables for a reasonable point of time, like say five years, 10 years, doesn't look like it's going to square the repayment car. If I buy a five-year treasury and I'm a little queasy about whether I will get my car back in five years, then what I do is I have the implicit tax on inflation to make sure I do get car back. And so this whole idea of the US has some sort of reasons for concern in terms of its longevity, for its status, for anything that makes sense to the majority of Americans is. Val”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“It's happy days for entrepreneurs. It's happy days for the large tech company. It's happy day for the guy at Chick-fila who gets from 20 bucks an hour in California to 30 bucks an hour. It's happy days for, I don't know what percentage, but certainly majority of Americans. They're told, though, that they're going to suffer and suffer greatly. But that's because of the popular view that which I think comes from the rentier class, which Keynes, of course, a lot of people mention. It doesn't mean I'm a socialist, but it's from people who really depend on a fixed return for the next 10, 20, 30 years to maintain their position in the US. For politicians, Inflation's happy days to get to fight more, and there's more spoils to come about. So Google doesn't mind inflation. Nevita. Love inflation. So”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“Silly to even talk about it almost. We are not as we were into the Great Depression. We are not as we were even going into the GFC. We are the closest thing to come and even then they're sort of not as sophisticated as us is Rome. And then you get really hairy, you know, talking about like examples. There is no reason to have any concern about the US coming under stress in terms of credit or availability of funds or will or anything that could cause a problem in the financial markets. Part of this too is that I don't think many people realize that inflation is a tax. It's not a debasement of the currency. It's not like the US is going into some end game. Also, inflation, I don't know, 110% or so is happy days for everybody, except for maybe 10% of the rentiers. The people who really have a 30-year horizon of their vested.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“In other words, you'd be very bold to say that the US will have a problem, say, 10 years from now, 20 years from now, 100 years from now. I guess China couldn't know, but I can't come up with any reasonable discussion on how the duration of the United States won't solve all problems. And all our problems are basically right now my read is just a political ruckus in terms of who gets the spoils. Are the Republicans allowed to spend it or are the Democrats allowed to spend it? Who gets the lobbyist money, et cetera, et cetera? It has nothing to do with concerns with the US's liquidity or how long it's going to last or in other words, we're not going to have any pain to the US. We're never ever going to have a depression again unless we have an existentialist world war. You know, it just gets.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“Mill and I agree. It seems 100% how we got here, but I can't say we agree much after that. I think a big problem right now is a lack of imagination, a lack of appreciation on Senior H of the United States. MMT guys get this right away. They really understand it. Michael Pennis understands that when he starts talking about the identities. The US is going to be here. The question is like Social Security and various other costs, the US government are what? A three-month issue, duration of half a year at some point. Now, it's going to go on and on. But as far as like managing it, it's a money market type of problem. The duration of the United States is I would say infinity right now as far as math.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“Able to work our way through this just like we worked our way through other collapses, whether it's a panic of 1907 or the great financial crisis or even the depression, I think, yes, we will be able to get through it, but that's just saying there could be some serious pain along the way.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“Such a amount of debt issuance that you then start to ruffle, I think, the feathers in the treasury market, which we've talked about that being somewhat manipulated, but is there a limit to how much they can manipulate or control it? Because if the issuance, not only do we start running like basically two, three trillion dollar deficits as things are, but now we're going to start funding Social Security through debt issuance and all of this, like what really does start to happen to the bond and the treasury market and then you start to get into all those other things I've talked about where they're prepping ways to tuck treasuries away onto bank balance sheets and making changes to the capital ratios and stuff like that. So, I mean, I think these are the issues that are going to be floating around in the air at the same moment that we have a ridiculous”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“It lists out all the expenses by department, cabinet level department. The biggest expenses of all the departments are not Homeland Security. It's not the Department of Defense. It's not even the Department of the Treasury with the interest expense. The department is with the biggest expense is the Department of Health and Human Services. And so that's where you also have not only Medicare and Social Security, but you have Medicaid, you have all of these social safety net programs. And so I think what I'm seeing is the Social Security issue being like the spark that really is a larger problem that's not just Social Security. It's also Medicare. It's also these other social safety net programs. And if you just had Congress say, well, you know what? We're just going to print enough money for this to happen. You're going to get into.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“Well, I think it's a larger issue in the sense that, look, people could come on here and say, Mel, none of this really matters. Social Security isn't that big of an issue. We can raise the retirement age. We can increase the employer and employee deductions by a percent or a percent and a half. We can maybe means test and take away some of the large. I think the top Social Security payout is actually close to $5,000 a month. And if you think about who's getting that $5,000 a month, a lot of the people who earned enough during their lifetime to get the $5,000 a month social security check are very wealthy. And so I think there are ways to dabble around the edges and kind of fix this in a certain sense. But then, you know, you have to look at it in the context of also look at Medicare, which is set up slightly different. And a lot of the Medicare expenses are being paid for by the Treasury. And if you look at that monthly treasury statement I mentioned,”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“Being passed because I have to say, you know, when I was a lot younger, I remember the Republicans beating on about this drum of we have to do entitlement reform and cut Social Security basically to make sure seniors get paid less as a percentage of GP. But now I think the Republicans have realized they've looked at who's voting for them. And a lot of those people get Social Security checks. And I think, I mean, just looking at Trump's platform and most Republicans, that's not talked about at all. So would you see there being a bipartisan? And I can see the Democrats definitely doing it. Could you see a bipartisan them just fixing this issue? Or is the loss of confidence the fact that they have to Congress has to pass this act? Or is the loss of confidence that there really is a bankruptcy of the Social Security Trust Fund?”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“We talked about okay, so there were some massive changes that happened around 2020 with, say, Social Security trust funds. So we have had a large amount of workers relative to those on the Social Security payrolls. And that all”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“You're right. The Russell as an index is at a disadvantage to the SP 500. The SP basically is a slowly actively managed index, right? If a company's not doing well, it gets yanked from the S&P. The opposite happens with the Russell, where you're constantly pulling the good companies out. With the S&P, you're constantly picking the bad companies out. And so just from a structural point of view of the nature of the index, the Russell, in a sense, is disadvantaged vis- ⁇-vis the S&P 500. And so one would expect to see, you know, the S&P do better over time. Obviously, if you took the 500 stocks that were in the S&P 500, say 30 years ago, the return on those 500 stocks is probably poor, very poor. Who knows how many of them aren't even around? And so, you know, the S&P in a sense, it is an actively managed index. It's just not.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, definitely. And I'd agree with George that he was going to wave away SP 500 earnings in a sense I could wave away the Russell 2000 earnings as well because I think it's more about the flows of where the capital wants to go. And you've got this small bucket of Russell 2000 and you don't need to have huge amounts of money go into it to make the PE multiple expand even further than that already high multiple you mentioned and that kind of you know this they can come up with the story after the fact to match it so they can say, oh well the rate cuts are going to be good. We've got whoever gets elected it's going to be a more onshoring US centric focus and that that's going to be powering some of these companies going forward. And then the last thing I would say at the Russell, so I do think that piling in is what's going to drive those returns.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“More floating rates loans, they do have to refinance, as well as a structural factor that if a company is great, it's probably going to get the S&P 500 because the stock price is going to go up so far. But all of those structural weaknesses so far, you still are bullish on small caps.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“Russell 2000, I'm looking at the valuation and it says it's a price to earnings ratio of 28.75, so actually slightly above the S&P 500. I know that a lot of Russell 2000 companies are not profitable. And I attribute that as to two main factors, I would guess. One is the inordinate number of companies that went public in 2020 and 2021 that were low quality companies and where else do they go? The Russell 2000 index. And also the narrative about higher interest rates are going to hurt large cap tech stocks because of the equity cost of capital, that theoretically makes sense. But these companies have so much cash. Their actual financial position is not harmed at all. I saw Google reported they earned a billion dollars in net interest income or interesting income, I should say, in per quarter. But the Russell 2000 companies are actually indebted, in some cases heavily indebted, and they do have the shorter.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“I'm going to wave them away just the way I wave away U.S. Treasury tenure. SP earnings are clearly not reflective of how much money S&P 500 companies are making. It is impossible to have the corporate profits as reported by the BEA, which does a pretty good job in terms of its corporate profit. It's table six and the NIPA tables number six. It's very clear that it's been on a roar that there's as far as profits go, there's every bit of just a normal valuation increase just to catch up with where the profits have already gone. What I'm saying is the S&P assumes that those profits will drop because they've still got this myth of the Federal Reserve is when they say they're going to tighten they tighten and they meet it and inflation and so on. Discounting that's from the Fed is going to come off the market.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“Then, for it has in 2020 and 2021. In 2022, large costs went up a lot. So a lot of the mega cap tech stocks, Facebook, Meta, for example, revenues went up, but costs went up a lot more. 2023 was the year of efficiency. So corporate profits have, so you're right, but the stock market has gone up more than corporate profits. I mean, the valuations have gone up as well.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“It's definitely all voices 5000 by definition, but it's definitely whatever the ratio of S&P 500 to Vocher 500, it's a big chunk of the S&P 500 and it's not reflected in S&P earnings. So S&P earnings are not really all that useful to come up with a valuation of S&P. What I'm saying is that this boom has already occurred.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“Jack, let me correct it. SP profits have already boomed. They're tracking. I mean, something's making up these BEA corporate profits that the report every, you know, it's lagged a quarter, but it's coming up every quarter.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“Well, first of all, SP earnings have not boomed. They're doing okay. They haven't boomed. Now, corporate profits is measured by the BEA have boomed. So if we get rid of the idea of the S&P earnings have anything to do with anything for various other reasons.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“That will appear to most people as a mania or start of a bubble. And people like, as you said in Japan, everyone's dancing and the stupid people are watching the people dance, you know, to explain why you should get into the Nikai when it was only halfway up or two-thirds the way up.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“No, no, I'm saying if I understood you right, I'm seeing something else. I'm saying the economy has already boomed. And the economy likely will continue to boom. And that's not causing the stock market to go up higher. It is the discount between reality and where the stock market is now, which is still, although it's less so now than, say, two years ago, which is still pricing that there's a very effective bearish impact from the Federal Reserve. Now, as soon as people as everyone agrees with me, and they realize that holy cow, there is no Fed. And the only offset to inflation is equity and risky assets that aren't going to fall apart on you, then that discounting between the reality of the economy as set by the fiscal stage will close to current equity valuations. So I think it's about 20, 25%. But then the real show starts where”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“Stage, which will be just as clear as anything. It would just be as clear as how much fiscal spend has been. But Everl be into it because, gosh, if you don't talk about it and get into it, then no one's going to talk to you. And therefore, the crash is going to just make Congress live it. Plus it'll be a new Congress because all the Congress guys will be fired and they will readdress the situation of a no-fed world and we will get a Fed probably more powerful and more effective in monetary policy than we had like 10 years ago, 15 years ago. So that's my call.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“The mass Elon Musk with a bunch of guys doing hamburger flipping at McDonald's. That difference is getting bigger and bigger. It's a replica of why the Fed was created in the first place, which is to tone down that boom bust, that Minskian phases of liquidity availability that's too flush and then suddenly there's no liquidity. And I mean liquidity in the shorthand cash. That ends with the Fed governance in terms of like toning things down and trying to redress inequality. Now, the COVID remedy did a lot to give a start to that, but we must have a Fed. And I think where we're going to get the Fed again is when we do get into this, and this I do agree with Mel, if we do get into this.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT
“Life will carry on, and the US will be more powerful, more influenced, there'll be less of a global. There's already, I don't see any global effect on the US. I see there's a hell of a lot of U.S. effect on France, but I don't see any effect of France on the US. I don't think Basil matters at all. It's just trying to, the Fed's trying to organize itself to something or other to stay relevant. The last thing I'd point out is that I am a huge fan of the Federal Reserve System. I think it's the greatest creation that democracy has come up with in the last 200 years. And it is so required to, in difference to Mel, it's so required to.”
2024-08-12 · Forward Guidance · Deficit Spending Will Send S&P 500 To 6,000 And Beyond | George Robertson & Mel Mattison on the True Risk-Free Rate and The Fed's Control of The Treasury Market · IDENTIFIED FROM THE TRANSCRIPT