YouSaid · the spoken record

Harris Kupperman

lines on the record: 74
first: 2022-10-18
most recent: 2022-10-18
sittings or episodes: 1
sources: podcast

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“Make the data better. I mean, we have some great things we really want to do with data. It seems like every couple of months we add a new screen. Analyst Day is something I've wanted to do forever. We just couldn't figure out how to do the data. And as time goes on, we find other ways to clean up the data, make the data better. We have this four people working there now full-time, producing this data. You can't do this at home. It's impossible. Trust me, I tried. But it's really data for hedge funds built by a hedge fund. And we've added a macro section in the first couple.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“I mean, we created Ketem at the time. I thought we were getting about 80% of this event-driven stuff, but we had no systematic way to do it. And I asked one of my analysts, can you build a spreadsheet to track all this stuff? I want to make sure we don't miss anything. And we really quickly realized we were getting about 10% of it. We're missing like 90. And I couldn't believe how much money I was leaving on the table because we looked at the spreadsheet, like, yeah, I totally would have played that. Yeah, I knew that was coming. That was last week, man. So we built it really internally for us. And then we gave some friends of ours who were having data integrity issues. And we were saying, look, you know these companies too. Find the bugs so we can make the data better. And people started reaching out that I'd never met before. And they're like, cuppy, I love this thing. Can you put me on the list? It was just an Excel spreadsheet. And pretty soon we had 200 people on the weekly list. And I said, there's probably a business here, you know. And, you know, if we get some revenue out of this, we can hire more.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“I find I have a podcast about macroeconomics, and so obviously I put a large focus on that, but I found that a lot of investment opportunities that I've sort of stumbled upon a lot through Event Drive Mod or Ketam are not macroeconomic. It is, oh, there's a lockup day and all of, there's this stock that's insanely overvalued and all of the insiders want to sell the stock, but they can't until December 12th. So on December 13th, it's not a good time to own the stock. And that's important information to know. Yeah, Cupy, can you speak to why did you create Ketem and how do you see the value in your own work or for other investors?”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so there's a lot of this stuff that's interesting that I don't have the brain with or the bandwidth to do. It's simple. It's cheap and it's great. And there's also the Cuffy's community, which a lot of noise, but a lot of good stuff too. I love it.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“Yeah. So there's a lot of screens like that. There's the insider, I'm a big fan of insider buys versus insider sells, right? Look at Eli. Sold stock at 400 bucks. He knew exactly what was going on, right? Insider buys insider sell the selling the selling teaches just as much as the buying as well so activism I always look at that thirteen D monitor Strategic alternatives. I don't give a shit about stock splits. And then the bedroom.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“The BTU, the big news, is hey, they finally cleared that debt stack. It took them two years. Now it's about shareholder returns. I think it's changing the whole narrative. Let's face it, coal stocks are always going to trade at one-time zero because I've accepted that. So it's all about the capital returns basically is where your returns coming from. And I think that's why they're having an investor day is to tell the world, hey, look, we've fixed the debt problem finally and look at all the cash we have and it's going back to you guys. And yeah, I think what you said on Investor Days is one of my favorite screens. A company that's been quiet for a long time, they suddenly, I mean, it's not just like, you have to have something good to say to say. And it's that it takes a lot of time to put together a 50-page deck and get all your junior VPs to all give their five-minute pitch on whatever the hell they want to pitch on and have your head of ESG come and talk about all the smiling kids they got that are near mind sites like this takes a lot of effort they're not going to waste all this time and”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“A crash also gives Powell cover to pause. I mean, they like to say that they're not political, but they're very, very political. And when people are complaining about the price of broccoli, Powell gets to keep pushing on the raids. When people start crying about their IRAs, they force Powell to do something about that. And so I think a big crash that makes it into the news that gets people like my mom to log into her retirement account and check what's going on. That's the sort of thing that I think leads to the pivot.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“I think at the bottom of the cycle, you'll see reasonable valuations throughout the market, right? There's not a lot of reasonable valuations out there. I mean, there are a couple, but especially in tech, there's no reasonable valuations. And numbers haven't been And I think you're going to be set up for the next big bull market or ability to buy stocks in two or three years. I think it's going to be a great opportunity. But I think until then, you just got to be patient. And I think it's going to be... You better hope for a crash because the slow, painful water torture is going to be bad because people are going to buy the dip all the way along and get killed.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“I'm not sure about that because I think at the end of this cycle energy will be 25 to 30 percent of the S&P again just like in 1980. And so I think you're just going to see a massive rotation. And early on, obviously, the rotation is going to have negative impact because energy is so small. But over time, I think the S&P will find a bottom just because energy will become a bigger piece of the S&P and that's going higher. And so I just think you see a massive rotation. We saw the same thing. And in 2000 where tech was big, energy was small and by 2008 it kind of had gone the other direction. I just think you see a massive rotation as opposed to just the bottom falling out.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“All their customers went broke. I could see this happening cascading through the generals. Everyone keeps thinking the tech bubble is contained to San Francisco real estate or something. I think it is going to have much bigger implications”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“I think people don't remember the lesson of 2000. You know, everyone says, oh, look, the specs are all down from $10 to 70 cents. That's contained. I forget that a lot of these companies, these venture capital things that never even got the SPAC, Softbank was given the money and they were buying a dollar of revenue and spending $1.20 on it and hoping to make it up in volume. And as long as you're showing massive revenue growth, you got more funding. Well, the funding's cut off. So what do you do if you're an unprofitable business that's never hit scale? Well, you start firing people. What do you do? You try to basically shrink your way into profitability. And where do you shrink? Facebook or meta, whatever they call themselves today. You stop buying keywords, you know, Google, you stop buying keywords. Everyone thinks that these big stocks, you know how many people keep telling me how cheap Google is based on cash flow because it grows 20% every year and it's safe. There's a lot of cash flow. I mean, they forgot what happened to Cisco Systems where all of a sudden people stopped buying equipment because”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“I mean, I think that look what happened to Navidia, where they cut estimates three times in three weeks, right? I thought we were in a chip shortage. Chip shortage is supposed to be good. And it fell off the cliff that quickly. And so I think you'll see a lot of this stuff all over the place. The Apple shot across the bow. That wasn't the first shot across the bow. They're going to hack numbers. And when the generals start hacking numbers, I think you better watch out because there's a lot of stuff that's already down 70%. But Apple ain't down that much. And every single American owns it. Every single person in the world owns it.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“I just don't think this cycle's over. The cycle doesn't end with no bankruptcies. We are so early in the grand scheme of this cycle, we're in the first inning of corporate profits reduction, right? And the cutting of estimates, all this type of stuff, it's all coming. You know, the fact that the monetary policy acts with a lag. And there will be no housing activity for two, three years. None. The buyers can't buy because price hasn't fallen enough. And there's no inventory out there for people to buy. So they're sitting there going, well, I'm waiting for the price to go down. But my wife says I need to buy a house now. And so prices aren't falling. And I just think that housing inventory. As well as auto inventory, everything in America is bought on leverage, right? So there will be no activity going on. And so”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“I love the trade too. I'm just happy to just sit on it. I don't even look at it from a day-to-day basis. I mean, occasionally I'll pull it up. But it's so far below production costs and it's so clear to me that that's the only answer in town. And it's coming. And so I don't know if I don't know and I don't actually care whether I get paid this month, next month, or next year. I just know I'm going to make a lot of money. when this thing explodes. And so I'm with Capiato, I'm playing it there. You know, in terms of the rest of the markets, let's wait to see what the CPI brings. Again, I'm still short a lot of stocks. I'm long a lot of stock. So, you know, I had that trade on. And listen, if the CPI is a lot lower, I'll come back in a month and press the shit out of them all again.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“I want to be long a ton of uranium because there's already shortages of the stuff. And you can't consume 30 or 40 million pounds a year more than you produce. At some point, there's a deficit and the price screams out of control. And I love that trade too. That's where I'm pressing. The other stuff, I have no idea. I mean, if you tell me what JPAW is thinking, I can tell you what the trade is, but I don't know what the hell he's thinking right now.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“I can just only tell you what I'm doing, and I put the pedal to metal and energy. As we discussed, there's a confluence of events that all happen in mid-November into December that are wildly bullish. We're basically a balanced market becomes a $5 million deficit. I think energy is going to scream out of control. And I'm just pressing there. And same with uranium. I think Greta Thornberg, whoever writes her speeches, must be prepping the Europeans for the return of nuclear because for 20 years they scared the Europeans shitless and a bunch of propaganda and they all shut down. I mean, they're still shutting down nuclear power plants into an energy crisis. I don't understand it. But the powers that be obviously got control of Greta and they're starting the pivot in terms of, hey, nuclear is the only option we got, so let's go with it. And so they're prepping the Europeans for this. I think you, well, I think we're going to have a nuclear renaissance.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“I'm amazed that private equity keeps selling their energy, but I guess they have a mandate from above get out of the energy, improve the ESG score of the fund so we can do fund vehicle 19 or whatever. It's just amazing. If you think of why energy prices couldn't recover from 2014 to 19, it was private equity just drilling wells like madmen. The public companies kind of pulled back with the privates. And now the privates are finally cut off from capital too, which is why you just haven't seen the response really in the shale side. I don't know what's going to change it, but normally guys make a ton of money and other people get greedy and they follow. And here you have a bunch of guys making a ton of money and energy and no one cares. It's just amazing to see.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so that's how we think about it. I think these energy companies, I was talking to this guy today, has this ESG orphans ETF. It's all energy stocks. And people hate this stuff. There's been outflows from energy and materials this year. And there's been called $30 billion of inflows to the market to tech. People are going to the old playbook, which is the wrong way to do it, right? In 2008, there was $50 billion of outflow from the market. This year, we've had $50 billion of inflow. So people are still buying the dip. And, you know, that's one of the things that scares me of when do people actually wave the white flag and give up, right? Whereas they've already given up in energy. There's not much to sell anymore.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“Like crazy, right? They're almost completely debt-free, right? So they have, they're not beholden to the capital markets. You think about the inverse of what's going on in tech, the cost of capital is going up for every single tech company, whereas the cost of capital for every single energy company is going down. BTU still has 10% yielding debt out there. It's going to zero, right? And so BTU.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“Maybe a little bit higher. But I think these are 20, 30 year assets. And they're going to be around for a long time. Maybe the price is not as high. But in an energy crisis, you want more energy. And I think that these coal stocks are going to be going to keep surprising everyone. They're just going to keep buying back the stock. Whitehaven in Australia has been a monster. I keep calling it white horses. This is a tavern in New York City. But White Haven's been a monster for us in Dangala, Peabody. I love all these stocks. The oil and gas stocks, I know Cuppy is in oil itself, but I own a lot of these upstream producers. And they're just cash flow machines at this point. And in my ideal environment, I would take a $70 to $90 oil price for five years because these things are going to catch.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“We've held on to a lot of them because our basis is so low. And then I think the best winner for us this year has been coal. And coal is basically we've deemed it the cheapest source of energy in the world and the most hated. And so if you're a contrarian investor, you love the most hated. In terms of demand, I didn't really predict the war, but the war happened. And then the Nord Stream 1 and 2, I didn't really predict that happening. But these are all optionality. And it goes back to what we said is war is inflationary, right? You blow up Ukrainian power plants and you blow up Nord Stream 1 and Nord Stream 2. You have problems. And so I think that coal, which still was valued at a basically one times cash flow all around the world.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“The only bankruptcies really were energy companies. And so we found Chesapeake at the bottom. We found California resources, Valeris. There's a lot of these things which were all in companies monitor. We were buying it almost every single bankruptcy we bought.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“Did that one of the ways I met Cuppy is through Ketam, we found a lot of stuff out of the, I think the original one was both spin-offs and bankruptcies. The spin-off are, I think, our still single biggest winners was Dongala, which was a spinoff of Anglo-American. Yeah, unbelievable. We bought it at 180p, I think it was, and it's now 2000 or something like that. And the dividends along the way. And then I think that every great investor, a lot of the great investors were distressed debt buyers. And if you think about the emergence from bankruptcy, it's the most elegant process in the world. You've taken away all the debt or most of the debt of these companies. And a lot of these banks.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“And the end of the crypto bubble and the slowdown in gaming or the Kathy Wood arc and all these unprofitable things, or it's Tesla or it's Apple here at 27 times earnings. So we're short a lot of this stuff. Carvana was a massive short for us at the top. We're still there. I haven't covered a share, but it's actually gotten a lot smaller. So I'm not pressing the stock here, you know, Coinbase Beyond Meat. All of this stuff. And so it's been fun. And it's also kept this in the energy trade, right? And there is a bull market, you know, somewhere and our exposure has been an energy. And we founded a bunch of different ways. One of the things we...”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“You know, I think it's, I think you have to learn throughout your career just of what you're good at, right? And you take lots of wins and lots of losses and hopefully you keep the what I kind of did right structurally and what you did wrong and you don't do that anymore, right?”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“I have some other idiosyncratic things in the book that I'm really bullish about. But look, if you think that uranium is going to be the logical solution for green energy, it's the only solution. And you think that the price of oil is about to scream out of control, why would you focus on shorting a tech stock, especially because the day they turn the QE machine back on, these things are all going to explode out of control because every crisis needs more stimulus to fix the mess from the last crisis. And if hepow really takes rates up into the fours, they're going to need a whole lot of QE to fix it. And so I don't want to be on the other side of that. I want to be just letting it happen. I don't know. How do you feel border?”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“So, I don't really short much, so I deferred to Porter on shorting. I do think that there's an abyss just beneath the market, and if they press it a little harder, all the margin calls start rippling through and everyone liquidates stuff. I think you can see a washout in tech and fang. It's amazing to think that a lot of these SaaS stocks illustrate at like 20 times revenues down from like 50 times. At the bottom of the cycle, it'd be like one times. And a lot of them aren't profitable. And they say, oh, it's because we're investing in growth. I'd have to think a lot of their customers probably go bankrupt. And a lot of that growth investment was wasteful too. I think there's a lot of excess that still needs to be taken out. I just focus on bull markets. And despite the fact that tech is breaking, I don't have any exposure there. I'm in the bull markets. I mean, the bull markets right now are uranium and energy. That's where I have the bulk of my experience.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“Do you see the SNB had a $100 billion loss? Like, think how big that is. Everyone's worried about credit suis. I mean, the Swiss National Bank is the Death Star. They just don't have a mark-to-market function, so no one cares until someone actually needs their collateral back, and then the whole thing blows. It's massive, these things. And I think that's what takes the dollar down.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“But think of the magnitude of what LTCM was and the fact that it had to get bailed out because it was too big to fail. And now it's just like a rounding error. No, no, Greenspan should have let a lot of these things fail. He should have, whatever. I just think it's funny that they gave Bernanke a noble right as the House of Cards he really built up with QE is about to crumble. It's like at the precipice of the collapse and they gave it to him. I would say on the dollar too, I think what precipitates the fall. So right now we're in the, everyone's scrumbling for dollar liquidity and everyone needs dollars to functionally short. Dollar milkshake. The next step is the central banks and the pension funds that get their margin call. And then what have they been doing for the last 20 years? They've been buying treasuries and they've been buying Fang. And so what they're going to do, they're going to unwind treasuries and fang because they're getting a margin call, but the margin call isn't in dollars. It's in British pounds or it's in Swiss francs.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“Agreed. I agree with that completely. I mean, he should have let LTCM blow up the galaxy. I mean, think LTCM was like, what was it, like a $2 billion loss amongst a bunch of different banks? Just think how small that is compared to today's dollars of the magnitude of losses that happen. I mean, if you don't get your SPAC off and get at least $2 billion last year, you kind of failed, you know? Like if you're dog walking app didn't do their C funding at a $2 billion valuation, it meant you failed at life. You'd be too embarrassed to go.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, but if you're in a currency crisis like the UK, right, it doesn't matter, yields go up because you're in a currency crisis, not because it's a rate differential. And so I think if you get to the point where people start worrying about the either not creditworthiness, but just the Federal Reserve printing and taking your purchasing power away, I think you're in trouble because eventually the Fed's going to have to print because there's no one's going to step up and buy all these paper. We have a glut, a glut of paper. That's what this is. They can do swap lines. They can do all this type of stuff. We're just, there's just too much paper, too much debt. And that's the problem. And I just don't know how you get out of this, right? It's like quicksand.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“I think a lot of that, though, is rate differentials, right? If Japanese 10 years at zero and the US 10 years at 3.9, your money's going to go to the dollar and the dollar's going to strong strengthen.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“Just the deficit gets larger every day, like that's just by definition. And we are eventually going to have to bring the budget deficit in balance because that's just the simple laws of economics. And I think that our pension system, which was woefully underfunded, now it's an absolute calamity. It's not going to be able to withstand all this stuff. And so I think at the end of the day, the dollar will not be as strong as every algo which owns it right now thinks it is.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“We're an emerging That's why I think the dollar strength will eventually be proven wrong. In the fact that I know it is the reserve currency, but we're doing everything wrong to make the dollar strength. We're just the tallest midget right now. But I think that eventually you will not see the same dollar strength.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“And the Argentines haven't made their lives any better, obviously. Like Kirschner and their friends. But when debt of GDP is too high and your funding cost is too high, you just can't get yourself out of trouble. And that's the emerging markets trap, effectively. I mean, that's why Turkey can't fix its problem.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, but I'm sure if they did that in the UK, everyone, the pension advisors in the UK told everyone all throughout Europe to do that. I'm sure, you know, Calperus has the same trade on. Any way to lose money, Calpras will find a way to, you know, get squeeze in on it. No, I think if they stop now, they lose the bond market forever. The funding cost for the US explodes. And it's basically what the UK just saw. And they're going to blow up the entire pension system, which is going to force them to print a ton of money and bail it all out. I mean, it's very circular. Once you go above about 100% of debt-to-GDP, every decision you make sucks. There's no good decisions. The only good decision is to grow your economy faster. And the guys running the country right now hate economic growth. So, you know, the only good solution is take GDP growth up to 10%. That's the only way we solve this thing. Otherwise, you're just on this hamster wheel, which is why countries like Argentina can never get their act in order. Because everything they do is screwed in some way.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“I think they just keep going for it. I think that they've decided that they're going to take Fed funds above CPI and the two will cross somehow and blow up the rest of the world. Like that's not our fault. I don't really know. I don't understand. If you'd asked me a couple months ago, I thought they were just teasing about this stuff and maybe they're actually serious. I don't really have a strong read on what the Fed's thinking and doing. I just know that if they stop right here and CPI is eight and nine and they stop at three or three and a half, I think the 30 year just detonates. I mean, you can't go out there and say we're 600 BIPs behind inflation, take it for 30 years. And that's even a worse problem. That's basically what happened to the UK, where they detonated the bond market, which then blew up all the pension funds that, I mean, I always thought pension funds just bought IBM and, you know, some two-year note.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“So, the current terminal fed funds rate is about, I think, 4.6% in the spring of 2023, how far the market thinks the Fed can go, like the maximum rate. Do you think they get there? Do you think they go higher? They go lower, what's sort of the Porter Collins terminal rate for the Fed funds, and then what's the Harris-Kupperman terminal rate?”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“I think everyone's praying that this CPI number on Thursday is going to be like, I think that's the only possible way out for them, right? To say, oh, look, it's lower CPI. Everyone brings down. Dollar gets smashed. Commodities rip. And party goes on for a little while. People don't worry about it for at least for the next two weeks. If it's a much higher number, the stock market's lock limit lower.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“Down 60%, maybe more. British UK guilds, like the 30 year guilt, it's down something like 40% in pound terms and dollar terms is down 60%. And you saw the Bank of England had to intervene. So my question is, what's going to happen in between the Fed pivot? Does something have to happen first in another country? Because the Fed is sort of at the apex of the pyramid and the US will experience the consequences of easy money policy, or rather tight money policy, the last. So, you know, do you think that there's going to be blowups and markets breaking like we saw in the UK elsewhere in the world before there's a Fed pivot? Porter, how have we start with you?”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“Do you remember the great bubble in the Austrian 100s? Were those things just screamed out of control and everyone was day trading Austria in 100s? Have you looked at a chart of that lately? It's just collapsed.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“But they, yeah. They were buying them all. I said, I don't understand how you're going to make, how do you understand to make meta? You've got to find another idiot to buy the bond at an even lower yield. That's the only way you're going to make money. And they said, well, that's what we do.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“I promise Vinny I would tell this story when we were in 2015 or something like that, our largest investor was a big Swedish pension program and we went to go see him. And I was young cocky kid and I was like, you know, this European sovereign bubble is just nuts. I mean, who the heck's going to buy negative yielding debt? And the entire room raised their hands. And I was like, oh, fuck. And sure enough, they redeemed from our fun about six months later. But those guys are all dead. Imagine buying a zero coupon bond and in 2000. Oh, they raised their...”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“Not to mention we've destroyed every pension fund in the United States at this point. The losses of this cycle have already been greater than 2008 because of the bond market loss has been so massive. And they were all buying up these 0% bonds forever.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, yeah, all these things. I mean, they were able to skate on by because people trusted them and believed them. And it's one of these things where if nothing bad happens, you just keep doing it. And then eventually the bad thing happens. I mean, the Japanese can't raise rates even though their currency is in free fall and inflation starting to pick up. Because if they raise rates, the Treasury goes bankrupt. They have the same problem we have here in the US. If Powell actually takes rates to 4.6, which is what he's targeting in theory, you add about $800 billion a year to the interest expense. Because despite having multiple treasury secretaries from both parties, they never turn the thing out. Most of it's in two years. And so if you add $800 billion, that's our military. That's like adding an extra military. That ends up being almost four and a half percent of U.S. GDP. Like at some point, you just squeeze the whole economy. You can't run an economy with this lead weight around your weight, around your neck.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“Of like the laws of economics of Europe, UK, and Japan running their central bank deficits for years. They thought they were better than everyone else. They could secretly do this run deficits forever. Well, the laws of economics are catching up to them. And it's the same thing.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“Maybe even go up. And I just think you basically have taken the laws of economics, which have existed for thousands of years. On the supply side, you've totally screwed it up. On the demand side, you've given it octane fuel and said, hey, consumers, go consume. And I think it's just going to go supernova.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“Out, you know, it's socialism for everyone. So, like the UK, don't worry about your heating bill. We got it. Don't worry about it. Now no one has any incentive to turn down the thermostat a few degrees or close a light bulb when they're not in the room. Why would you bother? The UK has already stopped you out on any loss. As countries go around doing that, and I'm sure we're all going to get stimmy gas cards here in the States, hey, Cuppy, here's 50 gallons. Go use it. You can't finish it all. I don't know. Give it 20 of your friends. Let them use it.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“Right, and what I was going to add to what Porter said on one side you have no supply. I mean, I've heard it called fat shaming, which I think is pretty apt, you know? If you go fat shaming the energy companies, they all go hide. Excess profits taxes, expropriation. Imagine being told you can't export or there's a price cap, you know. Let's be realistic. Oil is at 90 right now. This isn't a high number historically. In 2012 to 2014 until Thanksgiving or 2014, it was almost 100. And with all the inflation since then, to say it's at 90 now, it's not particularly expensive. I mean, it's like $4 a gallon. It doesn't cost very much, really. Let's be realistic. And so if the administration is freaking out now, like imagine how they're going to freak out later. But if you basically don't let producers produce, and then at the same time, you go there and you give everyone a stemmy because no one could do without.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT
“I don't know. And so I don't know. And so I think we're sort of peak oil production and demand seemingly grows every year. Right now, you know, there is no investment, right? We're doing all the wrong things. We're not incentivizing investment in oil and gas, right? We're not incentivizing we're doing windfall taxes in Europe. That doesn't help anything. And so you just don't have this we need energy supplies and we're doing wind and solar, but that's not doing anyone any good at this point.”
2022-10-18 · Forward Guidance · Oil Will Dethrone The Fed (Here’s Why) | Harris Kupperman & Porter Collins · IDENTIFIED FROM THE TRANSCRIPT