YouSaid · the spoken record

Michael Drury

lines on the record: 121
first: 2024-08-26
most recent: 2024-08-26
sittings or episodes: 1
sources: podcast

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“It is, and unlike a lot of emerging markets or some emerging markets, historically China is not a large dollar creditor. A lot of the credit, it's not like Thailand in 1997 where huge amounts of dollars were flooded in and they couldn't print the currency that the debt was denominated in. There's a lot of debt in the private sector in China, but not a lot of it is in dollars. Have you looked into this whole Belgium thing”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“They have a trillion dollars in buying power, and they are allocating that around the world. Now some of it is being allocated by non-government players, right? It's people who have the money, GM has money in China, and they're laying off 15,000 people and they're going to be moving their facilities out. And so they're probably going to be taking their dollars and going to India or someplace else with them. But the majority of it is being allocated either by the government or with government influence. That's a lot of money to be invested. It is.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“But even that, so that's an important and export consumption of transportation services, hotel services, leisure and hospitality. Those are accounted for in the consumption accounts. So that's before the trade deficit. That's what I'm saying. After the trade deficit, after all the education in the United States, after all the travel to Disney world, after all the oil from Saudi Arabia, they still have a trillion dollars left, dollar, euros yen, whatever currencies they earned it in.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“When you buy something from Timu, you send a hundred dollars to Timu. Now, you know, and Timu is a bad example because they're based in Singapore now, but you know what I'm saying? So now somebody in China has got $100. They can't use $100 in China. They could convert it into one, but that just means that somebody else has $100 who has to do something with it. Ultimately, that $100 has to be used to either buy goods and services or They buy oil from the Saudis and they buy copper from the Chilean. Statistics. The trade surplus tells you how much they have left to essentially invest and to buy assets, to buy capital.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“I got a question for the accounts to balance do they have to invest in assets internationally? Because I know if you ask me, what is China investing in domestically, huge amounts of bank credit and debt being created and lent to formally infrastructure and real estate now new 5G”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“A lot of it is invested all around the world. They own the Port of Piraeus in Greece. They own the largest utility in Portugal. I mean, there's tons of money going into Africa. There's tons of money going to Latin America. That's where you can see it where they're vying something physical, the port in Sri Lanka, things like that. You can see that. What scares me is what I can't see. How much of Apple Stock is owned by Chinese funds? Do I even know how much is owned by Middle Eastern sovereign wealth funds? How much of Middle Eastern sovereign wealth funds are owned by Chinese sovereign wealth funds?”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“And that's what people are doing, right? We know what people are doing with their money. Why would I think the Chinese aren't doing the same thing? Why would I think that they don't shadow own significant parts of the global equity markets. You say, oh, we know. Would you? Panama Papers? I wouldn't know. Some people would know. Yeah, I mean, look, I mean, Swiss counts, Belgian accounts, I mean, it's not hard to hide ownership. And if they're not interested in control, if they're just interested in almost like a sovereign wealth-fine view, a Kuwaiti or a Norwegian view that, you know, as long as I'm participating in this stuff and I've got the money rolling back in and I can tweak around the edges for influence.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“It was the government investment was the dominant one now in the last year the Chinese private sector getting money out of China has become very big and the exit of like US or German or whoever other foreign companies from China has become very big and so that may be half of the trillion dollars is going back to the control of somebody else to invest but the size and the involvement of the first half trillion that just scares me to death is I tell people whenever I go to a conference say the thing that keeps me up at night is where are the Chinese spending a trillion dollars a year because I can't see it and that scares me because where would I be spending a trillion dollars? I'd be buying NVIDIA”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“Those three different channels, how does it break out? I know China invested via the Belt and Road Initiative in other countries, particularly Africa, where they buy stuff in dollars and then foreigners just taking dollars with them. Which are the three biggest channels”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“So the Federal Reserve may manufacture the dollars, the treasury may print the money, but China distributes it because all that money gets gathered up all around the world for dollars or euros and gets sent to China where it can't be used because they have won and they have their own printing press and so it gets reinvested around the rest of the world either by the Chinese government, by its sovereign wealth funds, or by Chinese exiting China with that capital to go someplace else.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“Even if it's Samsung or even if it's Apple or whatever, I mean, they manufacture in China because it's less expensive. The biggest risk from China, China's an $18 trillion economy scowing 4%. So that's like did the math that passed on the hip. It's like $80 billion in an annual impact. The US is a 28 trillion dollar economy. Make it 30 to make the math thing. It grows 2%. So it's 60 billion, right? So our $60 billion versus our $80 billion, who's influencing countries the most? Whose growth is? China runs a one trillion dollar trade surplus, half of it from the United States, half of it from Europe.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“I didn't know that about Chip. So America, the rest of the world has an advantage in the very, very high end NVIDIA chips, other types of chips. And those are made by TSMC Taiwan Semiconductor. But the low-end chips in terms of volume is in China. Didn't know that.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“Design and the now the very high end chips to manufacturers. But let's face it, it's cheaper to manufactur in China. I didn't know”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“Excellent. Really? Taiwan makes very high end chips and some low end chips, but a lot of the low end chips the Taiwanese companies make are manufactured in Shenzhen in China on the mainland.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“Some of the best in the world. I think the United States will do a good job of keeping China behind the curve on this most advanced technology. But China is doing just fine sending people to the moon and saying, I mean, you can say, oh, that's with stuff that they stole from the United States. We're very good at that. So, I mean, there's no indication that there's been a real limitation on the export of these chips to them. They're just making it more expensive, you're making it harder. In the meantime, they are dominating the low-end chips. 80% of the low-end chips in the world now are made by the Chinese. And that's what goes into a washing machine that goes to Malaysia.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“The future, because you know who I'm talking about David's name, but he probably wouldn't even care, but a camp Kotalk camper believes that Americat currently has a huge advantage in next level chips and that America must remain ahead. I don't know if that's true. I think it probably is, but you're saying in the future it won't because China is investing 20 years ago, 15 years ago, China was not a player in electric vehicles. Now they make the cheapest and some of the best in the world.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“And if you look at U.S. News& World Report and you look up the number one AI university in the world, it's Tsinghua, MIT's 11th. I mean, they are just the same. Massive investment in semiconductors that we see Xi Jinping doing, they've been doing this to education for 30, 40 years now. To the point that they now have people who came to the United States, got educated, returned home, and are now teaching in universities in China, teaching instead of having taken those jobs in the United States, let's say. They went back home. So they have a fully self-reinforcing, capable educational system. That means that they can compete with us on semiconductors. The Germans can. The French can, the UK can't.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“And the Chinese basically, from the reopening of their universities in 1979 to a 1989 till now, China graduates 8 million college students a year. You can argue about the quality of their education, but pick”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“And it's the thing that makes China most dangerous, or two things that make China incredibly dangerous from pro-American perspective. There are only two countries that have ever invested in education to the degree that the United States did from the 1950s through the 1980s, 1990s, somewhere in there. I don't mean they're not still investing, but I mean the growth curve.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“Building these pre buildings. It is a consumption. I mean, look, when you malinvest, it's consumption. There's no difference, right? The thing that people that most people don't want to admit.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“Investments in human capital, America has a huge consumption as a percentage of GDP, a smaller investment percent percent percentage as a GDP, and China has a huge investment percentage as a GDP. But is China really investing that much in all these buildings that no one's going to live in? Maybe that's a consumption.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“And so I was thinking about this the other day. So, all of those things, services that would mostly be basketed under consumption, but as you say, a lot of them are investing in healthcare, investing in insurance, investing in your education. Could you think of that as investments in the same way?”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“So it's because of the comparative advantage. Germany is still a manufacturing economy. The United States is finance, it's administration, it's education, it's all the things that you only spend money on if your income's over $6,000, $7,000, $80,000 a year, right? If you think about what you spend your money, when you first get income, the first thing you do is you have rent and food and necessities, and then you get into services and then ultimately you just get into savings. And most of what's spent in the United States now is preservation, health care to make sure that you can keep earning, education to make sure that you're at the leading edge of job security insurance of all kinds on everything, financial services, et cetera.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“You don't pay your rent, right? I mean, Is the American suburb of analogy is what makes America so comfortable and safe from the rest of the world? The fact that America is a rich country? Or is it that America is a consumer import driven country? Because Germany has the former. It is a rich country, but it does not have the latter. Like China is an export-driven country.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“Everything went wrong for the Germans at the same time. The only good news is the Germans are rich. And so they can take it. It's easier to absorb pain if you've got savings, right? I mean, again, this is a suburbs issue, right? I mean, this is why you can take a shock in the suburbs where if you live hand to mouth and are not so nice place,”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“No, I mean, it was undervalued, but it was an undervalued artificially the way the euro was into the Deutschmark was into the euro. Germany's advantage dissipated over time, and in order to stay at the leading edge, they made a second bet, which was that they would turn to the east and that they would court Eastern Europe and they would buy Russian oil and Russian energy cheaper. And that meant they didn't have to rely on French nuclear, and that hurt France and it benefited Germany and Germany stayed in the lead and that gave them the ability to compete with the French for control of the Eurozone until it didn't. And the day it didn't, they found themselves in a terrible place where they were dependent on their enemy for energy. And Eastern Europe was under more pressure from its exposure to Russia than anywhere else. And then at the same time, the Russians were allies with the Chinese and the Chinese were now exporting cars.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“Made a great deal and then terrible. So when the Germans wanted to unify, they knew there'd be a price. So they went to the French and the French basically said, we've wanted a unified Europe for a long time. So if you want a unified Germany, that's fine, but you got to unify Europe under French control. And the Germans said, okay, but the caveat to that was that they brought in all of East Germany at parry to the Deutschmark. and the Deutschmark crater because all of a sudden you had this massive new money supply, right? So the Deutsche Mark crater and that was right when you set the prices for entrance into the euro. And so the Deutschmark was undervalued when it went into the euro and it gave Germany a tremendous advantage for growth once the European Union started.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“No, legally, they still are, it's not oil anymore, it's gas, but this is gas that comes across the Ukraine, so you're helping the Ukraine by buying it. But I mean, it's a very bizarre kind of war where you're buying your energy from the guy that you're fighting with that energy. But that's the kind of we've got a new world where these kind of bizarre situations develop and segment your behavior. But Germany...”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“Detroit did for a very long time. Some places, Morg, some places don't morph. The UK has been through a pretty brutal process with Brexit, etc, but the flexibility of having their own currency, the flexibility of having to work out these trade deals has put them in a better position now that there's a rebound to take advantage of it. The Germans, they're still buying energy from the Russians. It's not a good place to be.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I mean. I don't hear that. I just don't hear that from any sector of the US economy. I hear that from China. I hear that from other places. What other places? Germany in particular is in a very bad place. France is not much better. Italy, Spain, they seem to be okay. The UK seems to be rebound. And what's the difference there? The UK doesn't make cars anymore. Germany does, right? I mean, the French export high value goods to China and the Chinese aren't buying. So the economy of France and the economy of Germany are hit hard by China. And the UK kind of oblivious to it. It's not really, they don't really make things that get exported to China and they don't buy things from China in the same measure as the rest of Europe does. There's a mixed bag in Europe. Again, I go back to my analogy to Rust Belt. I mean, Pittsburgh figured out a way to rebuild.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“So the bond market told them in late 07 the bond market was screaming that rates were too high. And so that's typically what happens, right? I mean, typically, the bond market tells the Fed that it's time to lower rates.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, it is. At lunch, you connected the fact that Wall Street is his focus on the stock market and profits and the Fed is focused on inflation and employment, which actually in some cases all things being equal, which they never are, is good for corporate profits, as that is being a reason why Wall Street always says the Fed is too late. I hear this all the time and I understand why this Federal Reserve, they started cutting interest rates in I think the end of 2000 in September 2006, I think. And it was 2007. December 2007, they started off with a 50 basis point”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“Thing, but they are good now. I know, but I mean, the market's always, somebody in the market's always going to think that they did the wrong thing because there's somebody on the other side of most trades in the market. Because most of the market these days isn't the stock market anymore. It's the options on the stock market, right? And options trading is a zero-sum game. Somebody wins, somebody loses. That's why it's so much fun.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“And the Pentiton just before, that was Greenspan's purse tightening, Paolo did the same thing. He tightened in 18, then he had to pull it back. So, I mean, these guys get burned. They don't want to be the leader. The market wants them to be the leader. But if they were the leader and did what the market said, then the market would argue that they did not.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“The stock market because Higher inflation is generally good for business and a higher unemployment rate if it's because businesses are shedding labor costs can be good for business too. So this is part of the Fed's role is to balance the distribution from the business sector, which may or may not be doing it better, to the private sector. And only when the whole thing tips over does the Fed get very active or has to get involved, but they don't have a mandate to keep the stock market from having a 5% correction or the NASDAQ a 15% correction. I mean, it's not in their mandate. And when they have done that, like 1987, Stock market started in 1987 and 1800 and ended 1987 at 1800. It was volatile in between.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“Supposed to maintain inflation at a low level because high inflation makes voters very unhappy. On the other hand, they're supposed to keep the unemployment rate low because a high unemployment rate makes voters very unhappy. You'll notice that there is nothing in there about GEP or growth or profits or business.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“And it's a problem, but they tend to be lower income because they're younger because they're renters. So even though they're one third of the population, like fifteen percent of the economy, fifteen percent of the economy has a problem, then the question is what is the other eighty-five percent doing and does it offset? And we were growing much faster second half of last year. We were going north of 3%. Now we've slowed down to maybe two. We grew one four, then two eights averaged to two GDP now is at 2% now. So we've definitely slowed down to two percent. That's still above potential. That's still a decent environment. Businesses can make money at 2% with 2% inflation. A significant problem here. We talked about this at lunch is the Fed has two mandates and their mandates that were given to it by government officials who want to be re-elected. And so on the one hand, there's...”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“15%. I'm not saying everyone is doing well in the US economy. I mean, clearly, if you're younger, Gen Z, renter, things are much harder for you than they are for somebody who's got an asset, it's got a house or money in the stock market, two-thirds of Americans own a home. Doesn't matter whether it's leverage or not. It's going up faster than the interest payments, especially for your interest payments are locked at 3%. Yes. So there's a huge chunk of America, two thirds that is, they're doing great, and there's no amount of interest payments that can hurt them because their biggest asset, which is three times their income, is going up in value of those high interest rates, because it's kept supply off the market. It's bizarre, but that's what's going on. So now you want to cause a problem. You're looking at that one-third that's renting.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“9.3. Crushed So I don't want to have my economic theory and be my ivy tower and ignore the facts, but I have just a hard time wrapping my head around that the US private sector businesses are paying less in net interest income, that is, how much they pay in interest income, which is obviously higher when high interest rates are higher, minus how much they're getting. And that is also higher. Because yes, Apple, yes, Google, yes, Microsoft have hundreds of billions of dollars in the bank and US treasuries that are now earning 5.3% instead of close to 0%. What about all of the companies that are very levered, that are borrowing, that are you turn on Bloomberg? And you see people talking about private credit, we get sofer, so 5.3 plus 10%. Someone's paying 15% for their bank credit. And that's high. And the economy is good, but is it good enough where all these companies are paying 15%?”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“So high that the economy crushed? No, not so high that they would be crushed. There'll be some people unhappy. Obviously, the housing sector is unhappy. Autos aren't as happy as they should be. But the flip side of all of this interest being paid by the federal government is that someone's receiving it. And if you look at business net interest payments, they're collapsing because for the first time in a generation, the deposits that these guys have at banks are earning. They're earning five percent now, and that's a big deal.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“Demand for workers, which means income still going up. The same rule at everybody's fixation with that, the sum rule works because every other time that the sum rule worked at the unemployment rate went up for half of a percent from the low, it was because workers were being laid off. Income was disappearing. And when income disappears,”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“Yes, 100,000. There'd be warn notices. There would be more than just, oh, claims is a little bit higher than I expected it to be. There would be 100,000 people who are losing their jobs somewhere in the economy. It would show up. So my guess is the payroll numbers are closer to them. I'm not saying they're right, but they're closer to you. You only need 90,000 jobs to cover normal population growth. So what is going on? We know that a lot of immigrants were allowed in under the Biden rules, and we know that most of them are going to find jobs because they will work at whatever wage. That's why they came here. They came here to work to get money to send back home. They can't get on benefits. They can't, not in the beginning anyway. So the question is, who are they unemployed by seeking employment? And so what we've had is unemployment rising more because the supply of workers has increased faster than the”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“And so, this is my issue with how good is the economy. You can either believe payroll, which says there's 200,000 hires a month, or you can believe household says there's zero hires a month. I know that there's like 100,000 between healthcare and government because I can see it. I can see the job listings. I can see the people being hired. I can see the hospitals being built. I know the teachers and the size of the union and etc. You can see it. So, if the household number is right, then someone's going to be laying off 100,000 people. If they were, Challenge Grand Christmas would be seeing it. There'd be articles in the front page of the paper.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“Very insensitive to interest rates, it's very insensitive to changes in demand. You don't wake up in the morning and say, I'm going to defer that surgery or something. Maybe elective surgeries, but I mean, the other surgeries, do you have insurance or not? If you have insurance, you're going to go get it done. You just don't think about those kind of things. And those are the biggest growth industries in the United States today. Healthcare. And that's.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“We make about 15 million cars and we take 15 million cars off the road. So if your car breaks down, you're pretty much going to get another one. Where years ago it was like the baby boom, if you're the whole bunch of new kids who don't have a car and we're going to get a car, the question is when. And you could change that timing by a year two years depending on how things were going. But if your car breaks down, you got to get a new car. Maybe you'll get a cheaper car. Maybe you'll get a smaller car. But that impact is much smaller on an economy than, no, dear, you're not getting a car this year. We'll wait till next year. I mean, that kind of thing. We just don't have that in the US anymore. So even the auto industry is basically become a service. It's like leasing auto services monthly and you buy the same amount every month. Medical care is a huge industry in the United States and it's essentially service, essentially paid for by the government.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“It's larger. And so in the suburbs, if times get bad, money comes in because you rust to safety, right? You rush to the US Treasury. You rush to, you do the same kind of thing where, I mean, if you're in this volatile market, you want to take your money out of those risky places, factory areas that are doing business, you're going to bring it back to where, you know, it's going to be safe, where you know that the loans are going to be paid, where you know that delinquency rates are going to be lower. And so that's the role that the United States has been playing here for this really started with Reagan when he opened up the global economy and American companies went out, but it's gotten bigger and bigger. And now the U.S. economy is 70% services. There's almost no volatility in that. The manufacturing sectors, the housing sector is basically a replacement business. The auto industry is basically a replacement business. What do you buy?”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“even faster than they interest and pay them back. So the most indebted people are the wealthiest people. I mean, people always think, oh, it's poor people borrowing money. No, it's not. It's mostly rich people borrowing money to leverage even more and increase economic activity.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“And there was a kind of growth recession, and that recession was much deeper in China where they actually had a recession in China because the slowdown in the US caused us to stop buying imports and backed up to the manufacturing floor where then it spread out in their economy where it wasn't spreading out in ours. And this is why I talk about the United States as a suburbs. If you observe how an economy works in the suburbs in the United States, that's how the United States operates in the world today. You don't have high unemployment rates in the suburbs. They're like 1%, 2%, right? Because those people never lose their job. They tend to be in debt. Why? Because they're rich and they can borrow a lot of money to leverage their activity because they're borrowing money from people who aren't smart enough to use it, let's say. So that's why they're not in the suburbs. They didn't figure out how to do this. And the guy in the suburbs will borrow the money and then use it for something that will grow.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“I'm troubled as to who's supposed to go into recession. I have what I call eponymously the drury rule, which is if you're going to tell me that you're going into recession or if you're going to tell me you're going into a boom, then don't just tell me that economy is going to boom. You have to tell me the outlier. You have to tell me autos are going to grow 10% or housing's going to shrink 15% because that average of a recession, negative one, is made up of a bunch of negative six, seven, eight, nines, right? And some growth areas because some areas are always going to grow. So how do we get there? Who's the big loser? And in the United States today, it's hard to identify that big loser. People say, manufacturing. Manufacturing's been shrinking in the United States for decades, and it's just not big enough that unless it's shrinking at something like 10% for it to go down. And I'm just not aware of firms that are in that much trouble.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT
“So, the U.S. economy exported its volatile manufacturing sector decades ago. Housing, which is a domestic volatile sector because of very interest rate sensitive, has shrunk significantly in the United States because interest rates are so high that the activity is just down.”
2024-08-26 · Forward Guidance · Michael Drury on China's Trillion Dollar Secret and Why The U.S. Is Not Headed Imminently Into A Recession · IDENTIFIED FROM THE TRANSCRIPT