YouSaid · the spoken record

Jonathan Treussard

lines on the record: 87
first: 2024-04-08
most recent: 2024-04-08
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Well, I think people, particularly people that have experience with it, you know, for them that resonates very directly, which is, look, ask yourself a couple things. Do you really feel like your investment strategy and your wealth manager and financial advisor are giving you truly personalized advice? Or are you fitting into a bigger machine where the degrees of freedom are, again, inherently dictated by scale and the ability to process people in the hundreds and thousands, if you will? And along the lines of what you and I discussed during this conversation, do you feel like you're being sold a bunch of products? Do you feel like sometimes you might even be the product yourself as opposed to the client? And that's what I mean.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“No question, no question. And that's exactly right, which is ultimately this is very personal. First of all, your money is personal, your relationship to your wealth is personal. But then what is comfortable for you and what is aligned with your goals and risk outlook and all of that is inherently very personal, which is why, again, you know, when I try to tell people what I do and I try to be cute, I say, look, I help people escape the wealth management industrial complex. And that's the whole point, which is you really deserve a very personal experience because there's so many factors at play.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Be a lifespan. And at the bottom of every page, you can just put your name in and your email address and you'll be added to the newsletter. So that's really where to learn more is trussard.com tru ssardasndavid.com.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Your wealth management experience should be aligned around someone paying attention to your stuff, someone asking you questions like, what is this money for? And importantly, what is this money about? Because in a lot of ways, if you start defining what the money is about, it helps you make sure that your wealth doesn't define you. Instead, you define it. On our website, if you're curious about working with me, please contact us. There is a big fat contact us button in the top right corner. And I would be delighted to have a conversation and explore. And if that's not where you are and you just want to kind of continue to receive my thoughts on markets and the world and the economy, I put out a newsletter once or twice a month. I try to.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Well, the easiest place to go to is my website trousard.com, which is the website for Trousard Capital Management. It's T as and Thomas R-E-U-S-A-R-D-Azandavid.com. And you'll find a lot of information there along two dimensions. One is learn more about our approach and how we work. And again, the baseline is it really is a boutique wealth management experience predicated on my experience and predicated on the concept that”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Kind of like close your eyes and envision it type of thing. And then step two is like if I'm okay without general distribution, are the current prices making that more or less attractive? And that's where you can look at things like the VIX, which is implied volatility in the S&P, and it'll quickly educate you that you're probably not getting As much kind of marginal income as you think you are or should be relative to like, you know, the full range of the world that we've lived in”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“No Their selling for cheap now on things like the SP, right? That's the only thing I can tell you. This isn't an unconditional statement about calls are always too cheap of something. Sometimes they're cheap, sometimes they're expensive. Right now they seem relatively inexpensive. That's what I mean. But this really is a two-track consideration that people have to kind of go through. Do I like the distribution of outcomes, number one, right? Am I okay capping my upside and retaining downside in exchange for a little bit more income today?”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Say for audience, put is the right but not the obligation to sell something in the future, call the right but not the obligation to buy an asset in the future. And they are price based on implied volatility if implied volatility is high. That's pricing in that the asset will move in a lot more. So the option is more valuable. The call covered call strategy of owning the asset than selling a call option against it. If you're saying that you're kind of not in love with that strategy, and I'm sure you've got the data to back you up, does that inherently mean that calls are somewhat overpriced, excuse me, underpriced and therefore selling them are a bad idea If selling them is a bad idea, does that mean that calls are kind of underpriced?”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Crisis, we've seen VIX go up to 80. So I'm just saying, sure, you can put big fat yields in front of people's faces now because honestly what's going on in treasury markets more so than anything else. But ask yourself Are these good prices? Don't just stop at the yield.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“AK lose money. And the 9% is a number I've seen. But if you think about the 9%, 9% is a 9%. 9% is 5% from a treasury and 4% from selling puts, right? And all of a sudden you're like, well, is selling puts for 4% and really providing kind of catastrophe insurance to the stock market a good deal? And again, it goes back to what I just mentioned, which is right now implied volatility on the US stock market is historically low relative to the full range of values. I mean, look, round figure VIX is probably around 12, 13, depending on the day. That's not high when you think that generally speaking, you know, volatility over whatever, just a forever horizon, it's probably closer to 16%. And in times of”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Investment type of thing, you know, it's not, it doesn't have a ticker. And you're going to make 9% unless, and this is the important part, unless the market is down a bunch, and if the market is down a bunch, congratulations. You get to participate in the downside, right?”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Upside to somebody else for a low price. And so you have to ask yourself, is that a thing? You know, that's again the way to think about it at a basic level. Yeah, you've got more yield today, but did you get a good deal in achieving that higher yield? And do you like the resulting kind of distribution outcomes type of thing? That's one version of it. The other version of it is, you know, lives more in the private wealth private banking type of world, though not exclusively, where it's not, you know, covered calls, it's more like, hey, we're going to write this note. It's a private.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Covered calls, you know, they might be a time for it and they might be a time when it's not such a great idea. And one of the issues we're having now, so why is it kind of in general something to tread carefully with? Where you start with stocks. And so the whole notion is stocks go up a bunch or they go down a bunch, right? And so you say, when you do covered calls, imagine the following conversation. Hey, you own this thing and it goes up a lot or it goes down a lot. How about you sell me the upside? You keep the downside? Start there. The first line of defense, maybe you say, nah, I'm good. But if you're a little more sophisticated, maybe in the way you're willing to engage in the conversation, you say at what price because you're giving up something really valuable, the upside of the thing that has two possibilities going up or down. And it happens to be that implied volatilities are low right now. And so what you're doing is you're selling off.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Right? Which is a way to engineer yield is, of course, not to buy options, but to sell options. We know that. When you sell options, you get income now in the form of option premium. So imagine now that you say, well, gee, what I could do is buy a bunch of stocks and then sell call options against these stocks. And of course, we know those are called buy right strategies or covered call strategies. And this is where, you know, that particular strategy has really grown massively recently and it's been kind of ported into ETF formats and it's found its moment in the sun. But if you think about what's going on,”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Imagine you start with 100 bucks today and you say, I want at least 100 bucks in a year's time. And you say, given where rates are, I can buy that 100 bucks in a year's time for 95 bucks today. And then that leaves me $5. And then if I want to get some upside going, then maybe I buy a call option on the S&P. Super straightforward. That's engineered, right? There was no yield in there, but that's my point about engineering, right? That's like you put structure in place and you're like, now I get it. Now there's a bond and there's a call option. That's engineering. And the world that we live in now allows for engineering in a way that the world two years ago didn't. Again, if you needed 100 bucks today to buy 100 bucks in a year's time, which was 2021, basically, then you had no money left over. So you couldn't buy the call and the whole thing just didn't work. Now, that's kind of the benevolent version of it. Now, let me tell you another story.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Had to put some thought and structure into juicing yield. And again, I'm being intentionally saying juicing and there is some negative connotation to it, but at the basic level, that's neither good nor bad, right? So I'll give you a couple of examples. And going back to what you and I just talked about a minute ago with interest rates being at 5%.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Right, the money is coming from the business. And that's kind of what the business is about. And it doesn't, the reason I said, I don't want to claim that it's good, bad, or sideways, is there are also certain things you're just not going to get out of that kind of a business. You're probably not going to get a lot of price appreciation. That's also not what they're naturally set up for. Engineered is the opposite of that, where this has nothing to do with kind of the natural course of things. It's just like someone probably someone who looks like me with, you know, a PhD in option theory.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“The difference between natural yield and engineered yield is pretty straightforward, which is the natural yield is just the thing that happens as a matter of course, right? So we were just talking about Europe a minute ago. And if you look at European dividend payers, they're kind of like natural yield. I'm not saying they're a good or a bad investment. That's not my point. My point is if you're a utilities company in Europe or, you know, a little less tasteful for some people, but if you're like a tobacco company in Europe, your thing is like you run the business, you make money, you distribute it to investors, right? That's kind of like there's no engineering going on. That's just like what the business is about, right? So that's, and you look at it and you say, do I like the dividend? Do I not like the dividend? But it's kind of sort of high. And for very kind of natural reasons, which is that's functionally what those businesses are about.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Jonathan, you published a note about engineered yield and the difference between natural yield and engineered yield and why it might be wise to be a little bit prudent and cautious with regards to some of these engineered yield products that Wall Street is turning out. So number one, what's the difference between a natural yield and an engineered yield in finance? And what engineered yield products have proliferated over the past few years? And why are you somewhat wary of them?”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Dark early in New York. And so by the time four o'clock rolled around, you could see in their offices like you could see in your own office. You know what I mean? And one day there's like tens of people and computers and desks and everybody's, you know, milling about. And literally the next day was all gone. It was gone. The people were gone. The computers were gone. Everything was gone because these guys had gone under clearly. And so that's, you know, those are times that remind you that the range of outcomes can get pretty wide pretty quickly.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“And then you, I mean, look, I remember the day I just told you, I remember Lehman Day like it was yesterday, but also remember the day TARP didn't pass the first time around. And you're like, I don't know what that means. Did we just give up on the whole thing? Like, are we, you know, I would walk home. I would live in New York at the time. I would walk home from Midtown, from Park in 51st to Chelsea. And every day you would see more store closures and you would see all these things happen. We were on the 14th floor of this tall building in Miktown. And I remember distinctly there was, you know, this is hedge fund land, right? And across the way, across the street, there was another building on the same floor, across the way. You could see all these people with computers and doing things. And it seemed pretty clear that they were, you know, a hedge fund type of outfit. I don't know who they were. And this is the fall and winter of 08. So, you know, it gets.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, one's Bear Stearns has gone under and this and that. Like everybody knows everything, right? Of course, it was not even close. And this is again where I hate to sound woo-woo about it, but in those scenarios, everything is connected to everything. And you just can't get around that fact, which is why we all know the quote-unquote research, which is people say things like, well, geopolitics really doesn't matter for investing. And I'm like, well, it doesn't until it does. You know, there are these kind of points in time where you can't run away from it. And so we knew there was trouble because of the mortgage situation. We knew there was trouble because, and by we, I don't mean any one person. I just mean, you know, the diffuse knowledge at the time. We knew there was trouble because the mortgages, we knew there was trouble because the global economy was slowing down and was really going to slow down. But there was a lot of confusion and we just didn't know.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Well, it was a suspended state, right? I mean, if you remember then, June, July, we knew the economy was slowing down hard, but June, July was still this weird world where that's when a crude hit. You know, 140 or something. So it was like things were going up and they weren't going up and they were certain things were going up, I guess is my point. And it was just like, what is this world that we're living in? So the real, obviously the real collapse happened, you know, into September and October. So the summer was just this very strange, suspended state where you're like, this can't. This isn't this isn't the end of it, is it? And, you know, some people were desperate to convince themselves that it was.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Where's our money? When are we going to get it back? No, no, no. I don't think you heard me. Where's our money? Where am I going to get it back? You know, so on and so forth. And so it teaches you that investing and being the whatever, the person entrusted with. Managing money at all levels is about markets. No question, but it's also about the plumbing. I don't care how smart you are. If your money gets tied up in Lehman bankruptcy, it's like, you know, whatever the expression is, no cigar.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, yeah, yeah. And it didn't last two weeks, it lasted some version of two hours because, you know, the world was moving fast and things were getting pretty scary pretty quickly. So I did risk management. I did investment strategy globally. This is across all asset classes, all jurisdictions, so to speak, through the financial crisis. And it was an incredible experience, one, to see all the things kind of move so fast. I will forever remember. And, you know, my boss's boss, so to speak, was a woman by the name of Katie O'Dwyer. And Katie was really in charge of the operations. And I remember seeing Katie glued to her cell phone on the day that, you know, Lehman collapsed, just like basically some version of like.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Well, again, I had just completed my PhD in late 07, early 2008, and I had the great fortune of meeting with someone who's become a friend and a mentor, Allie Crawford, who was building out a much bigger and kind of fully staffed risk management function for the ZIF brothers, the ZIF brothers investments being the family office. And so I was one of a handful of people that joined in the summer of 08. And I remember Alec being the kind manager that he is. And you know, I'm a kid at the time. And he says, well, you know, the first couple weeks, we're not going to, you know, this is going to be pretty chill. You get to learn how to use the phone and the computers and where the kitchen is, whatever.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Net present value. But option theory says way, way, way, way, wait. Before you make that decision, because right this minute, project A is worth a penny more than project B, like think long and hard about the long-term risk attributes of A versus B, it might be that even though you're currently in the thing that seems like suboptimal, it's worth holding on to because who knows what's going to happen in a year, right? That's the way to think about that.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Correct. And that's exactly, and that's the point, right? And this is the thing that's really the one thing that is sophisticated about option theory relative to kind of the basic thing, which is like basic NPV analysis, right? NPV analysis is like, I do it right now. And if project A is a penny worth more than project B, then I'm going with project A, right?”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Just basically you're always comparing cash flow A against B or against C like, oh, I could walk my dog, but that's time that I'm not spending time with my family or I could go surfing and that's great, but that's time I'm not working, basically constantly comparing things”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“It when you say when you say option theory are you your R or not talking about stock options or options in finance where it has a delta and a gamma and it's basically the right to buy or sell something in the future You were not talking about that or you're talking about”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“About a person trying to manage their career. But the same is applicable in a wide range of circumstances. I mentioned to you I worked for the Ziff family in New York. The Zif family, and we're talking, you know, these are gigantic businesses, right? The Zif family was in the publishing business and the publishing business through the 60s and 70s and 80s had a certain set of attributes when it came to earnings generation and so on and so forth. And the internet came along and I think through great wisdom, someone realized that that dividend stream, its attributes were going to change in a post-internet world. And the family basically decided to sell the publishing business, Ziff Davis. And swap out one set of dividends in the future for another. So that's the way to think about that.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Obvious examples that I did work on, which is career switching at an individual level. Well, if you think about your career, if you think about your income, it's an asset, right? It's a dividend paying asset where you do this thing and whether you're doing it on your own and it's got a weird kind of upside type of format to it or you work for somebody and then you get this coupon every two weeks, you know, the point of the point is a career is a string of dividends. And imagine that you have the kind of human capital that allows you to go from career A to career B and career A and B have different attributes. Maybe one is riskier. Maybe one is as more or less correlation with the economy or the stock market. Then you can actually kind of apply option theory to that setup. And again, I gave you the description where we're talking.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“That you know, all that type of deal, and then, of course, life cycle finance is about how do we move resources over the course of decades, often associated with, but not exclusively related to things like retirement planning and just like, hey, I have money now and I want money in 40 years type of deal. But when you align the two, you realize that moving money through things, you know, through decades like the retirement planning issue or just the wealth management issue, generally speaking, which is literally about like, particularly by the way, for very wealthy people, where it's not about moving money from today to retirement date, it's like moving money through generations. It is about risk management. It is about thinking about different scenarios. It is about pricing out all those things. So, I mean, I'll give you some very painful.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“I really was basically the intersection of option theory and life cycle planning. And really the life cycle planning part of it being kind of the application of option theory. You know, I was a student of Bob Merton's in Boston. And I really learned option theory from what are some of the people I would consider the greats and some people that are also very sophisticated on the more kind of modern side of things, people like Jerome de Temple at BU. And so I learned a lot about option theory. And I think it just aligned with the way I inherently think about the world, which is think of the future as a whole different states of the world. You don't know which one's going to happen. In option theory allows you to kind of price different scenarios, right? So it's like the upside is going to cost you this much. The downside is going to cost you.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Look at, hey, this is happening. What are we going to do about it? Hey, this is happening. What are we going to do about it? And so again, in a weird way, conflict arises, period. That's just the nature of things. Trade-offs arise. We either do this or we do that. And, you know, that sort of thing. When you're forced to deal with it in real time, like the EU is forced to deal with it in real time, you kind of sort it out. And then in a weird way, you've learned something, you've moved on, you know, you've gotten to some form of either consensus or compromise in real time, as opposed to the more organic thing where like kind of sort of someone's in charge, but then you wake up 20 years later and you're like, did I sign up for this thing? You know, look, I guess my point, and I'm not trying to be pro-EU just because I'm from Europe.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Like every 12 seconds, you're not like, breathe, right? You just breathe. You're not like make sure the heart's beating. And so, yeah, there's when you have that integration, some of the functions just happen more organically. But, and again, this is where we underestimate the importance of culture. And part of culture, and I mean that in like a corporate finance kind of standpoint, right? Part of having a healthy culture is having a culture of conflict and conflict resolution because of the lack of fiscal integration. I think the EU has a benefit of being forced to kind of contend with these things in a more immediate way as opposed to just kind of kind of sort of making it happen. And so it's a much more intentional.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“The short answer is yes. And, you know, of course, there's a slightly more subtle answer, which is there's no question, right, that fiscal unity is valuable. I mean, by the way, it is, again, it goes back to the founding of our nation, the US. And we don't think twice about the fact that on any given year, we need to quote unquote underwrite Michigan or something. And the good people of the state of New York aren't, you know, kind of whether it's pitchfork saying, you know, why are we sending money to whatever, some state that's struggling, right? That has the advantage of just kind of short circuiting some of these internal conversations, but they're not, I mean, again, they're not happening. They're just happening in a much more streamlined kind of way. And it's almost like the human body, some of the functions just happen. You're not.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“You know, issues municipal bonds, but its citizens also benefit from the immensely large and powerful fiscal government in DC, whereas Europe does not. It's only France. And they have a currency that they don't control. It's the European Central Bank. And there are, I think, one or one or two or three years ago, a European bond issuance for all of the Eurozone, but I don't think that's a major factor now. And it does have this issue of if Greece has issues, it can't print the drachma to stimulate its economy. It has to do some accord with Germany and everyone else. And do you think that's a structural weakness of the European economy that necessitates lower price earnings ratios?”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Right, from a geopolitical point of view, and I mean, again, I hope that global conflict does not rise to be very clear, but if it does, that tends to be inflationary and good for producers and manufacturers of industrial tools. And Germany is definitely one of those countries. But tell me about, as someone who was born in Europe, the structural issue of, okay, Europe is like the US and France is the New York, let's just say, for example, but New York.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“It's scary and you don't know what's going to happen and it's getting reflected in prices, but really is Germany at risk, I just don't see it.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Because I think Europeans want to be European, they see the value of it, both economically and fiscally, I'm sorry, from a monetary standpoint, not fiscally. That's one of the things they're going to have to sort out. And from a defense standpoint. And so, yeah, Germany has gotten its face ripped off from a stock market standpoint because it's closer to the conflict. I think this is true. I think Finland is looking pretty rough from a stock market standpoint. You know, some of these countries that are really close, definitely Austria. But ultimately, it's one European, I think it's one Western European bloc. And it doesn't hurt that within that Western European bloc, both France and the UK, which is elected to not be part of the EU, our nuclear powers. So, yeah.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I think it's really tricky. I mean, look, I'm French. I was born They want the EU. They want this thing. It's actually interesting when you think about the US today versus Europe today, they're not that different. We're just like a bunch of different places clumped together. I mean, look, we're fundamentally different in other ways. Like the US is a country and everybody agrees that, you know, we're Americans first and, you know, all of that type of deal. No one's walking around being like, I'm whatever, Californian first. You know what I mean, type of things as opposed to the French and the Germans and all of that. But I think there is, I would not worry right now that you see a disintegration of the EU.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Get specific. So, this new Cold War, I think it is between US and China. And are you saying, and I'm not saying that you're saying this. I'm just proposing it to you to tell you, do you agree or disagree? Or actually, I mean, I mean this, but that, you know, Apple won't be manufacturing as many iPhones in China. Tesla won't be able to sell as many cars in China that there will sort of be a minor economic blockade between the two nations and maybe between the Chinese bloc without a K for our audience and the Western bloc. And that in that world, maybe because there's French shoring and domestic production in more expensive places like America or Mexico, which is a lot cheaper than other places, that there's higher inflation rates and therefore you said higher interest rates. Is that kind of the world you envision? And might that world necessitate perhaps a slightly lower price to earnings ratio, i.e. lower stock market relative to earnings?”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“To that post-Cold War world. And part of that is it might very well be Higher interest rates and things of the sort. And so it's just going to be a different environment. And as long as our leaders here and around the globe have the wisdom to, you know, not take it too far, then Just the nature of how we operate on a global scale.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“Now if you put 95 bucks on the table, you've got yourself your hundred bucks in a year, round figures, and then you say, oh, gee, but I did start with 100, so now I can do other things with the remaining five. And that's how you get to, you know, kind of more structured ways of investing where you say, well, I've kind of sorted out, you know, the floor. I've sorted out the downside. And I can take upside with, you know, risk capital is a good example. Forget five percent treasuries, tips, you know, treasury inflation protected securities, which compensate holders for inflation, which is a real scary thing, particularly when you open the aperture. Forget the last three years, like look at 40 years. Tips are currently yielding 2% and change. That's pretty healthy compensation on top of inflation. So we're definitely, I think we've said goodbye.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“It's not the worst possible outcome. I mean, again, I go back to the silly point that I made earlier, which is, hey, treasury is at 5%. Like that's kind of good as an example. So if people are like, oh my God, we've never seen, we haven't seen this in a generation. And what does it mean and all of that? Well, I mean, it means bad things for some people, you know, borrowers. But if it's nice, I think it's good for cash to be rewarded. I think it's good to be able to say, and this is where, you know, again, I'm an option theorist at heart and I think about kind of financial engineering. If you need 100 bucks in a year's time, A couple years ago you had to put $100 on the table today.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“I think it's okay to accept that, to pretend that international competition isn't a thing at the nation state level, that's not always the best, right? Like we should compete and we should compete in aggressive ways that are peaceful. But maybe this is a helpful way for us to snap out of this la land that, hey, we're all friends and it's one big happy global family. Look, the history of mankind doesn't line up with that story very well. If this means that our national compact is a little stronger as a result, and I don't mean like rallying around the flag, you know, jingoism stuff. I just mean actually caring about your fellow citizen in a real and empathetic way. I think that's good. So this is a scary time in a lot of ways, but also.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“It's actually riskier to be a US equity shareholder. But as I noted, if you give the efficient markets people just a minute, they'll say to you, risk is good because every day that the big, bad thing doesn't happen, you have to be compensated for it. So that's great. But I think it's okay. I think it's.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“To acknowledge, we failed to accept that it wasn't just growing the pie, that some people kind of fell off of the edge of the pie. And so, yeah, it's been a great time to be a U.S. equity investor because profits have grown relative to the share of wealth accruing to labor in the US. You know, stuff like that. But it's created tensions that I think all of us can look at. And if we're honest with ourselves, say, yeah, I get it. Some people are had a rougher deal out of this than, you know, kind of the naive economists would say, well, we're all going to get wealthier and, you know, the rising tide and all of that. So, yeah, it might be that in this new world, the Cold War II world.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT
“And it's funny because obviously the peace dividend was real, but it was really more of a US hegemony dividend, where, you know, kind of the way we wanted to run the globe went and a big part of that was things like globalization. And I think this is where some of the economists are a little naive. It's funny because we were just talking about at the beginning about this concept that really ultimately it's all about growing the pie. And then once you've grown the pie, you can have an honest conversation about how to divide it. That's how it quote unquote should work. And so the argument, of course, post-Cold War was let's grow the pie by making this thing the world one thing and do all the things that economists like to talk about, you know, specialize and you'll do the manufacturing and we'll do the other thing and it's going to be great. And along the way, we fail.”
2024-04-08 · Forward Guidance · The Anatomy Of Bubbles | Jonathan Treussard on Private Credit, Nvidia, and Dangers of “Engineered Yield” · IDENTIFIED FROM THE TRANSCRIPT