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Why Has the Market Shrugged Off Escalation in the Iran-Israel Conflict? · Merryn Talks Money

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  Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News. Welcome to the Merrin
• 0:18
  Speaker 1: Talks Money Market Wrap, where we talk about the biggest
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  Speaker 1: moves in the markets this week and what is driving them.
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  Speaker 1: I'm Marin Sumset, web editor at Large for Bloomberg UK Wealth.
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  Speaker 2: Now joined Steavik, senior reporter for Bloomberg and Money Distilled newsletter.
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  Speaker 1: Orthor okay, now, John, We're recording our Markets round up
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  Speaker 1: a little bit early this week for two reasons. Well,
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  Speaker 1: I'd say first it is Monday, June the twenty third
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  Speaker 1: Brexit day, but that's not the reason for recording early.
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  Speaker 3: It could be, but it's not the first. The great
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  Speaker 3: John Authors is in London.
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  Speaker 1: John, of course, the senior editor for Market's in a
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  Speaker 1: Bloomberg opinion columnist is Bloomberg newsletter Points of Return is
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  Speaker 1: a must read. You must read it after you have
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  Speaker 1: read the Merrin Talks Money and the Money Distilled newsletter.
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  Speaker 1: But it's a great for the week and the past life.
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  Speaker 1: He's chief Market's commentator at the FT said we knew
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  Speaker 1: each other there too, of course, So first of all,
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  Speaker 1: welcome John.
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  Speaker 3: Good to have you with us.
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  Speaker 4: It's great to be great to be back in London.
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  Speaker 3: Also there's the second reason for this.
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  Speaker 1: We felt we needed to get some analysis on the
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  Speaker 1: markets out immediately, because of course global markets are reacting,
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  Speaker 1: or not actually reacting as much as you might think
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  Speaker 1: they would, to America's decision to get directly involved in
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  Speaker 1: the Israel Iran war. President Trump border strikes on nuclear
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  Speaker 1: facilities Iran over the weekend. So we are going to
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  Speaker 1: get into what that decision and the possibility of retaliation
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  Speaker 1: from Iran means for oil, for the dollar, and possibly
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  Speaker 1: for crypto, among other things. So here we go, John
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  Speaker 1: and John. This is going to be very trying as
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  Speaker 1: a conversation for me, isn't it?
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  Speaker 3: John and John?
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  Speaker 1: I just said we're going to be looking at the
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  Speaker 1: market reaction, but so far there isn't really that much.
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  Speaker 1: I mean, John number one, My John number one, John Seffeck,
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  Speaker 1: you published a piece this morning.
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  Speaker 3: Why is the market shrugged off? Escalator? What is the
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  Speaker 3: answer to that? This is scary stuff.
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  Speaker 2: So the US came in because they're the ones who've
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  Speaker 2: got the bombs that are big enough to kind of
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  Speaker 2: blow up the nuclear labs that Iran has got. But
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  Speaker 2: that is all they want to do. My best guess
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  Speaker 2: is basically the market doesn't actually see this as an escalation,
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  Speaker 2: and it's hoping that it won't go beyond this, because
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  Speaker 2: although everyone keeps saying that Iran could close the Strait
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  Speaker 2: of Horn Moves, if it does that, that really is
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  Speaker 2: a double edged sword because you know, a lot of
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  Speaker 2: the world's energy goes through there. But the problem is
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  Speaker 2: that actually that's also how Iran gets its oil into
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  Speaker 2: the world, and Iran needs the money. It's also how
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  Speaker 2: you know, China kind of relies on it to Kata
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  Speaker 2: relies on it, and they are both. I mean, Iran
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  Speaker 2: doesn't really have allies, but it does have people who
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  Speaker 2: it hasn't annoyed in China, and Kata are among those.
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  Speaker 2: So basically, if it shuts that off, risks alienating the
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  Speaker 2: few people who would still support it, and also the
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  Speaker 2: US would then it'll take action to actually do something
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  Speaker 2: about it as well. So you're dragging the US for
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  Speaker 2: the end of the war again. So I guess the
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  Speaker 2: thing is that that is as far as I can
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  Speaker 2: what could. That's why markets are basically shrugging this off
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  Speaker 2: because the either get it escalates from here what it doesn't,
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  Speaker 2: and the chances of it escalating, they will seem lower
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  Speaker 2: than the chances of it actually escalating.
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  Speaker 3: Okay, yeah, is that how you see? John?
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  Speaker 4: I didn't catch anything in there that I that I
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  Speaker 4: didn't agree with. I mean that the whole point of
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  Speaker 4: risk management is that sometimes what's likely to happen doesn't.
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  Speaker 4: But plainly, for the reasons John just set out, the
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  Speaker 4: odds are that we don't get a serious escalation from here.
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  Speaker 4: Iran has already been very badly weakened. As John said,
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  Speaker 4: if you close the streets of Hormos, you annoy China,
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  Speaker 4: which is basically by far, I mean more than half
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  Speaker 4: of their oil exports go to China. They really need
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  Speaker 4: to keep China being friendly. And it's also not so
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  Speaker 4: much of an all or nothing thing. Closing the streets
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  Speaker 4: of straight to four moods. There are two sections which
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  Speaker 4: are only two miles wide. But it would be an
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  Speaker 4: indicate invitation for the American fleet to come in and
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  Speaker 4: sink the Iranian navy, which they probably would do. That
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  Speaker 4: obviously would be an escalation. It would raise the risks
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  Speaker 4: that you actually saw some US combat deaths, which makes
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  Speaker 4: escalation bad. I'm not saying this is good, but it's
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  Speaker 4: just that Iran can see this coming and that in
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  Speaker 4: terms of the implications for the flow of oil and
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  Speaker 4: the price of oil, which is what really matters, the
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  Speaker 4: odds are high that oil is just not going to
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  Speaker 4: go anywhere that the market can't handle. Also, you have
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  Speaker 4: the underlying backdrop is that oil demand is on the
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  Speaker 4: low side and oil supply is on the high side
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  Speaker 4: or moves depending on whose estimates you believe. Has you know,
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  Speaker 4: twenty percent of oil experts go through that strait. So
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  Speaker 4: you can't shrug it off just like that. But if
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  Speaker 4: there was a time to have a big one off
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  Speaker 4: threat to oil supply, this is quite an easy one
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  Speaker 4: for the market to deal with. That's the exact opposite
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  Speaker 4: of three and a half years ago when Russia invaded
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  Speaker 4: Ukraine when supply was weak and demand was increasing quite
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  Speaker 4: rapidly in the wake of you know, the as the
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  Speaker 4: world woke up after the pandemic, and that helped create
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  Speaker 4: that spike then in the old price.
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  Speaker 1: The other thing you might add to that is when
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  Speaker 1: we use this twenty percent number and had verified twenty
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  Speaker 1: percent here or there, but as twenty percent of the
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  Speaker 1: world's oil flows, so the fact that the US, for example,
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  Speaker 1: is now energy independent thanks to share to the great
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  Speaker 1: game changer. The idea that oil should have a very
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  Speaker 1: big geopolitical risk premium attached to it might have changed
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  Speaker 1: over the last decade.
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  Speaker 4: Even it's certainly weakened. There's this concept of the oil burden.
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  Speaker 4: You take a look at the cost the total expenditure
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  Speaker 4: on oil as a proportion of GDP, and it's far
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  Speaker 4: lower than it was in the seventies. Because we're a
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  Speaker 4: less energy intense economy, there are far more services. The
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  Speaker 4: industries that do make things generally do so in a
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  Speaker 4: much more energy efficient manner. Doesn't mean that you can
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  Speaker 4: ignore it, but the kind of it's hard even to
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  Speaker 4: imagine anything that could create the same shock, same level
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  Speaker 4: of inconvenience to global industry that happened with the embargo
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  Speaker 4: of seventy three.
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  Speaker 3: Yeah.
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  Speaker 1: I do want to clarify there, because people tend to
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  Speaker 1: sometimes deliberately by sent to down this kind of thing.
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  Speaker 1: What you mean is that oil, the expense of oil
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  Speaker 1: is a lower percentage of GDP, not that the US
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  Speaker 1: or the UK and the country used less oil than
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  Speaker 1: they did previously. It's not an absolute it's precisely speaking
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  Speaker 1: about here.
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  Speaker 3: I just want to be clear on.
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  Speaker 4: That, but in percentages it's much less, much less significant
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  Speaker 4: than it was.
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  Speaker 1: Okay, so oil seems relatively relatively stable. Ish cure markets
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  Speaker 1: have barely reacted Iver John.
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  Speaker 2: Again number one. Sorry, I guess that's just that's downstreamly oil. Really,
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  Speaker 2: I mean, that's what I mean. I suppose breaking it down,
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  Speaker 2: this has happened because the world or you know, the
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  Speaker 2: US and the bits of the world of we around
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  Speaker 2: certainly don't want a nuclear armed Iran. And that's why
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  Speaker 2: the US went in and did this one off thing.
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  Speaker 2: It's not like I know a lot of people, I
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  Speaker 2: think sometimes with malintentions, have tried to draw a parallel
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  Speaker 2: between this and Iraq. There's nothing like it. The you know,
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  Speaker 2: the US is not looking to occupy Iran or even
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  Speaker 2: regime change. And see why Israel would want regime change.
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  Speaker 2: But that's a different issue. So it's as far as
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  Speaker 2: the US is in is in this they want to
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  Speaker 2: make sure that Iran can't get a nuclear weapon, and
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  Speaker 2: so if and also I think the other thing I
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  Speaker 2: have to remember is that Donald Trump's you know, base,
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  Speaker 2: one of the reasons Donald Trump was popular with his base.
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  Speaker 2: And also, you know, between twenty sixteen twenty twenty he
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  Speaker 2: must avoid geting the US involved in any significant wars,
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  Speaker 2: which was an unusual feat for a president, and he
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  Speaker 2: kind of wants to maintain that streak. So the chances,
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  Speaker 2: you know, that leans heavily against the US getting any
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  Speaker 2: more involved in this war, which is another reason why
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  Speaker 2: Iran will probably unless the regime is completely desperate, will
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  Speaker 2: be thinking it would be better if we don't close
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  Speaker 2: the streets of hor moves, because we don't want to
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  Speaker 2: escalate to the point where we drag the US in.
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  Speaker 2: So again, it's just sort of buzzed down to this
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  Speaker 2: thing where there is from from an equity market, in
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  Speaker 2: Visu's point of view, there is not really any point
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  Speaker 2: on worrying about this until it does get worse. So
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  Speaker 2: like why doing your portfolio today, which kind of me explained,
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  Speaker 2: I'll give you.
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  Speaker 1: I'll give you that, But I would have still thought
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  Speaker 1: that as geopolitical tension around the world rams up and
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  Speaker 1: up and up and up, there would come a point
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  Speaker 1: when whether you whether the oil price is rising or not,
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  Speaker 1: whether there's an obvious feed through to inflation or not,
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  Speaker 1: whether there's an obvious feed through into corporate earnings or not,
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  Speaker 1: you might get to a point where ever, we're just
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  Speaker 1: not to feel nervous and think to themselves, you know what.
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  Speaker 1: I can't really pin down where it's making me feel
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  Speaker 1: scared here, but I think I might hold fewer expensive equities,
• 9:32
  Speaker 1: and I might hold a little bit more gold, and
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  Speaker 1: I might just you know, maybe a little cash for
• 9:36
  Speaker 1: now because it looks a little scary out that. And
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  Speaker 1: that's the thing that surprises me. I would have expected
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  Speaker 1: by now the market to stop shrugging off absolutely everything.
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  Speaker 1: And you make a great case, but this doesn't really matter.
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  Speaker 1: Maybe it's fine, who knows, let's get hysterical.
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  Speaker 3: But you know, over the last.
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  Speaker 1: Six months have been thing after thing after thing after
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  Speaker 1: thing after thing, and everyone's thought, oh, well, you know,
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  Speaker 1: maybe it's fine. I would have thought by now have
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  Speaker 1: moved into you know, maybe it is fine territory.
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  Speaker 3: But call me a bersamuster. I don't know.
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  Speaker 4: Okay, if I could invoke, continuing the the coterie of
• 10:10
  Speaker 4: people connected to the Financial Times, our our old colleague
• 10:14
  Speaker 4: Rob Armstrong, who has suddenly become much more famous after
• 10:19
  Speaker 4: he came up with this acron taco always chickens out.
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  Speaker 1: Damn it, John, Why didn't one of us come up
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  Speaker 1: with that and we'd be more famous.
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  Speaker 4: That did bother me has crossed my mind. That being said,
• 10:35
  Speaker 4: I'm quite happy not to have Rob's inbox at the moment,
• 10:38
  Speaker 4: which might not might be even more of a frenetic
• 10:41
  Speaker 4: read than mine.
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  Speaker 3: Do you know we can fix that for you. We
• 10:45
  Speaker 3: can talk about crypto.
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  Speaker 4: Anyway. Carry on the point is that the taco trade
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  Speaker 4: had some considerable validity to it. That's how it went
• 10:57
  Speaker 4: viral because on the tariff's liberation Day tariffs with China,
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  Speaker 4: his threatened to fire j. Powell from the FED. You know,
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  Speaker 4: he made a number of threats, and if you look
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  Speaker 4: back pre Liberation Day, the really extreme tariffs, he says
• 11:14
  Speaker 4: he's going to put tariffs on Columbia, and then he doesn't.
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  Speaker 4: He basically says he's going to put tariffs on Mexico
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  Speaker 4: and Canada because of fentanyl, which was ludicrous in the
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  Speaker 4: first place. And then they basically announced these are the
• 11:28
  Speaker 4: people we're going to have on the border, and Trump says, okay,
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  Speaker 4: no more tariffs, and then you read the small print
• 11:35
  Speaker 4: and discover these are exactly the same number of people
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  Speaker 4: they had on the border before. So you know, there
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  Speaker 4: is this sense that Trump does always checking out that
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  Speaker 4: you can safely ignore him, and that the one time
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  Speaker 4: people really did react negatively reacted to a geopolitical shock
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  Speaker 4: the way you would expect, which is the Liberation Day tariffs,
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  Speaker 4: which were pound for pound, possibly the single biggest policy
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  Speaker 4: era of my career and just unbelievable, stupid, terrible thing
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  Speaker 4: to have done. The lesson from that is, you might
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  Speaker 4: be right in this is a terrible idea, but you
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  Speaker 4: should also have realized this is such a terrible idea
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  Speaker 4: that it's not going to happen. I'm not selling and
• 12:20
  Speaker 4: the people who and plenty of people made a lot
• 12:22
  Speaker 4: of money out of second guessing that one, and they
• 12:26
  Speaker 4: don't want to make the same mistake again. I'm nervous
• 12:29
  Speaker 4: about making such a reaction. It leads to over confidence.
• 12:34
  Speaker 4: Most Middle East conflagrations end up fine as far as
• 12:40
  Speaker 4: the supply of oil and the market is concerned. Every
• 12:43
  Speaker 4: so often there's a yong Kapoor war. We do know that,
• 12:46
  Speaker 4: as we were saying earlier, the risks of something really
• 12:49
  Speaker 4: terrible on the scale of the yon Kapoor War are
• 12:52
  Speaker 4: definitely lower. But there is this ability to forget that
• 12:57
  Speaker 4: every so often something might go wrong.
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  Speaker 3: Then something bad really does happen.
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  Speaker 2: There's also just the BTFD because people who have not
• 13:05
  Speaker 2: bought the dep have been keckt in the face really
• 13:08
  Speaker 2: hard for the last fifteen years, and that just you
• 13:11
  Speaker 2: know that psychology day is hard. So I think any
• 13:13
  Speaker 2: bias towards an excuse to buy or not to sale
• 13:19
  Speaker 2: is kind of embroduced.
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  Speaker 4: By the market BTFD and FOMO.
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  Speaker 1: Yeah, and John authors, What do you think might bring
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  Speaker 1: that to an end? How long can it really go
• 13:30
  Speaker 1: on that every dip is bored? When you know, we've
• 13:33
  Speaker 1: looked over We've looked at the direction of flows from
• 13:37
  Speaker 1: the baby boomers, we've looked at the direction of flows
• 13:39
  Speaker 1: from foreign investors, et cetera. And they're all going the
• 13:43
  Speaker 1: other way. Yet you have this huge surge of retail
• 13:47
  Speaker 1: investors will come in and.
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  Speaker 3: Buy any old ap How what makes that end?
• 13:51
  Speaker 4: I actually flipped through Malcolm Gladwell's The Tipping Point recently,
• 13:57
  Speaker 4: and basically it's quite a frustrating book if you're actually
• 14:00
  Speaker 4: carefully says that every so often you come to a
• 14:02
  Speaker 4: tipping point and look at these historical examples of tipping points.
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  Speaker 4: He doesn't tell you how you can see them coming
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  Speaker 4: in advance. Or quite why that was the particular tipping point.
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  Speaker 2: Glad, will you see.
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  Speaker 4: Like so, sort of if you look at the great
• 14:19
  Speaker 4: market bottom of nineteen eighty two, you can sort of
• 14:21
  Speaker 4: talk in general terms about why it happened. Paul Volka
• 14:24
  Speaker 4: was winning the winning the battle on inflation, Ronald Reagan
• 14:28
  Speaker 4: was doing what he was doing. The market was really
• 14:32
  Speaker 4: absurdly cheap by that point, seven times earnings or whatever
• 14:35
  Speaker 4: it was. There was no one moment that triggered anything.
• 14:40
  Speaker 4: It was just after about six or nine months you
• 14:43
  Speaker 4: notice that the market really was trending back upwards again. Similarly,
• 14:47
  Speaker 4: with the dot com bubble, there is no It's not
• 14:49
  Speaker 4: like the Lehman Brothers, where people knew there was a
• 14:51
  Speaker 4: troublem and then there was one clear catalyst to catapult
• 14:55
  Speaker 4: into serious crisis. There is no clear reason why the
• 15:00
  Speaker 4: dot com bubble burst when it did. It just did,
• 15:04
  Speaker 4: and you could tell it would burst at some point
• 15:06
  Speaker 4: because it was so absurdly overpriced. So you know, to
• 15:12
  Speaker 4: that extent, you know, valuation doesn't help you. It tells
• 15:15
  Speaker 4: you that there is a risk that something is going
• 15:17
  Speaker 4: to blow. It doesn't tell you anything at all about
• 15:20
  Speaker 4: the timing in terms of what might change things here.
• 15:25
  Speaker 4: If the small tail risk in Iran comes true, that
• 15:31
  Speaker 4: would be serious. That would be very serious. So meaning
• 15:37
  Speaker 4: if we actually do find that there is a conflict
• 15:42
  Speaker 4: involving American soldiers and sailors and Americans getting killed in
• 15:48
  Speaker 4: the straits of hor Moos, if we have more bombs
• 15:51
  Speaker 4: because it turns out they didn't actually take out what
• 15:53
  Speaker 4: they needed to take out in Foordo, and this time
• 15:56
  Speaker 4: some radiation leaks. I mean, these are things I don't
• 15:59
  Speaker 4: think will happen, but are more conceivable than they were
• 16:02
  Speaker 4: a few days ago. And some of these really alarming
• 16:04
  Speaker 4: things might make a difference if there is a tail
• 16:08
  Speaker 4: risk we can see coming, which I would take more seriously.
• 16:12
  Speaker 4: It's it's just possible. We only have two more weeks
• 16:15
  Speaker 4: left before the Liberation Day tariffs are due to come
• 16:18
  Speaker 4: back into effect. Allegedly everybody assumes, I think correctly that
• 16:25
  Speaker 4: that's not going to happen. But Donald Trump does need
• 16:29
  Speaker 4: an off ramp. He doesn't like what Rob Armstrong said
• 16:33
  Speaker 4: about him and what everybody else has been repeating. There
• 16:37
  Speaker 4: are risks there that are probably I did a chart
• 16:43
  Speaker 4: if any any listeners who have who have access to
• 16:46
  Speaker 4: the terminal if you go ant news trends, you can
• 16:49
  Speaker 4: go anty tariffs and then anti Iran, and tariffs were
• 16:56
  Speaker 4: already sliding down into irrelevance before before Iran took off.
• 17:01
  Speaker 4: And Iran is now gobbling up attention in a way,
• 17:03
  Speaker 4: in a greater way than Tariff's ever did three months ago.
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  Speaker 4: So that is quite a big sign that if there
• 17:10
  Speaker 4: is something that's you know, like a cartoon character treading
• 17:13
  Speaker 4: on a treading on a rake and getting smashed in
• 17:15
  Speaker 4: the face, that's going to be the thing you're not
• 17:17
  Speaker 4: worried about that will hit you. Tariff's not the thing
• 17:20
  Speaker 4: you are desperately thinking about Iran.
• 17:23
  Speaker 3: Yeah, that makes sense. What do you think it might be?
• 17:25
  Speaker 2: John, I think, I mean the rotation they're still happening.
• 17:29
  Speaker 2: The things the US has kind of already peaked, and
• 17:31
  Speaker 2: I'm going to keep kind of slipping down that slot.
• 17:34
  Speaker 2: I mean, I think people will keep buying the debt.
• 17:35
  Speaker 2: But I mean, I can't remember if I mentioned this
• 17:38
  Speaker 2: and I did deploy mention it in the last podcast then,
• 17:40
  Speaker 2: but if you'd bought the British stocks or in the deer,
• 17:44
  Speaker 2: the Kasi quar teng bijit, and you bought US stocks,
• 17:47
  Speaker 2: at the same time as in the S and P
• 17:49
  Speaker 2: five hundred, you would know you have made exactly the
• 17:51
  Speaker 2: same amount of money and British pone totaled it on
• 17:54
  Speaker 2: terms and other ones, but Devidentry invested and that's because
• 17:58
  Speaker 2: the dollars got a lot weaker. Since then, the has
• 18:00
  Speaker 2: got a lot stronger, and I think that sort of
• 18:02
  Speaker 2: relative rotation is continuing and probably well continue. I do
• 18:07
  Speaker 2: also take the point about, you know, the sort of
• 18:09
  Speaker 2: feels as if there should be scope for some sort
• 18:13
  Speaker 2: of crash at some point, but yeah, I mean I
• 18:18
  Speaker 2: don't know if that will happen. Yeah, well no, I
• 18:20
  Speaker 2: don't even Yeah, in real terms, there's a sort of
• 18:23
  Speaker 2: real terms thing, you know, where like you know, inflation's
• 18:26
  Speaker 2: high and it's eating away of your returns. You're not
• 18:28
  Speaker 2: really noticing it because if you're measuring local currency, and
• 18:31
  Speaker 2: then maybe it's not feeling it's bad.
• 18:33
  Speaker 4: I mean, it's it's interesting that you were just saying
• 18:35
  Speaker 4: that that the S and P hasn't got back.
• 18:38
  Speaker 2: To its February That hasn't quite hasn't y, which.
• 18:40
  Speaker 4: Gloriously happened on the day the White House tweeted a
• 18:47
  Speaker 4: mock up Time magazine cover of Donald Trump with the
• 18:50
  Speaker 4: crown on his head saying he was the King of
• 18:52
  Speaker 4: New York. So, if you wanted the curse of the
• 18:55
  Speaker 4: magazine cover, this is the case of somebody executing the
• 19:00
  Speaker 4: so the magazine cover on themselves. Other than that magazine cover,
• 19:04
  Speaker 4: which I really don't think was the recent people sold
• 19:06
  Speaker 4: stocks the next day. There wasn't any particular reason why
• 19:09
  Speaker 4: that day was the top. But so far it still
• 19:12
  Speaker 4: is the top. And that's whatever it is more than
• 19:15
  Speaker 4: four months ago now, So it's who knows okay?
• 19:18
  Speaker 1: And what do we buy, either of you to hedge
• 19:22
  Speaker 1: ourselves from the.
• 19:23
  Speaker 3: Difficulties around us.
• 19:25
  Speaker 1: If we're worried about this going further, we're worried about
• 19:27
  Speaker 1: the chance of escalation, we're worried about all prices rising
• 19:30
  Speaker 1: apart from oial, what do we buy gold?
• 19:34
  Speaker 4: Of course, well, you know nobody got fired for hedging
• 19:39
  Speaker 4: a risk by buying some gold, Notorrill. Well, Gordon Brown
• 19:48
  Speaker 4: still went on to be Prime Minister after a rather
• 19:52
  Speaker 4: badly timed gold sale a sale.
• 19:54
  Speaker 3: But you know, in general, there is no camera out there,
• 19:57
  Speaker 3: is that? What about what about crypto? Would you buy
• 20:00
  Speaker 3: crypto a hedge against this bit?
• 20:02
  Speaker 4: Joins this I certainly would.
• 20:06
  Speaker 3: Yeah, prified.
• 20:11
  Speaker 2: Oh, I'm going to say something, really, I think bitcoin
• 20:16
  Speaker 2: is fine as a small, sort of small allocation of
• 20:18
  Speaker 2: your gold allocation. I like Charlie's Charlie Morrissey's approach to
• 20:22
  Speaker 2: the whole bold thing. A lot of gold makes me
• 20:25
  Speaker 2: a little Dasha beckcoin. But that's mostly for avoiding the
• 20:29
  Speaker 2: fear of missing out element.
• 20:31
  Speaker 1: Just for the record, Just for the record, John number
• 20:33
  Speaker 1: one does not hold any bitcoin.
• 20:35
  Speaker 3: Number two, have you got any bitcoin?
• 20:37
  Speaker 4: No?
• 20:39
  Speaker 3: Well, there you go.
• 20:39
  Speaker 1: I am the only one of us with any bitcoin,
• 20:42
  Speaker 1: and I'm the one that gets all the flag.
• 20:44
  Speaker 4: I mean, it's it's it's a question of opportunity cost.
• 20:47
  Speaker 4: I'm also a big fan of Charlie morris that, you know,
• 20:50
  Speaker 4: who actually really tries much harder to put some kind
• 20:55
  Speaker 4: of a sensible fundamental fair value on both bitcoin and
• 20:58
  Speaker 4: golden Whether or not he's I thoroughly respect the fact
• 21:02
  Speaker 4: that he's trying to do it. What is interesting about
• 21:07
  Speaker 4: bitcoin in the last few days is that it has
• 21:10
  Speaker 4: behaved exactly the opposite of how it's supposed to or
• 21:15
  Speaker 4: how if you go back to the founding the white paper,
• 21:20
  Speaker 4: how it's supposed to in that it's behaved like an
• 21:22
  Speaker 4: extreme speculative risk asset. It dips really sharply when we
• 21:27
  Speaker 4: find out that Israel has attacked Iran, and it dips
• 21:30
  Speaker 4: again very sharply, going back below one hundred thousand after
• 21:33
  Speaker 4: the Americans drop the bomb on Iran. I haven't checked
• 21:36
  Speaker 4: it this morning so far, but it's.
• 21:43
  Speaker 1: That tells you that it is an extreme speculative asset.
• 21:47
  Speaker 3: I mean, could that be the answer? That's question.
• 21:49
  Speaker 4: That's part of it. The other slightly conspiratorial explanation I've
• 21:53
  Speaker 4: seen is that because people the kind of people who
• 22:00
  Speaker 4: the US bitcoin a lot of the kind of people
• 22:02
  Speaker 4: who are trying to avoid sanctions, when something like this happens,
• 22:06
  Speaker 4: they might well feel the need to take some profits
• 22:09
  Speaker 4: from their bitcoin because they're in because.
• 22:13
  Speaker 3: Well, I hope they're going to pay their capital gains taxes.
• 22:17
  Speaker 4: I mean, that's I have no names in everything that
• 22:19
  Speaker 4: that's actually plausible to me, that that that that that
• 22:22
  Speaker 4: that explanation, but it's it's worked terribly as a hedge
• 22:27
  Speaker 4: against the two really bad news headlines of the last
• 22:30
  Speaker 4: couple of weeks. Oh, very surprisingly badly.
• 22:33
  Speaker 1: Okay, perfect, John number one, John number two, thank you
• 22:37
  Speaker 1: so much for that that was really interesting and now
• 22:38
  Speaker 1: everyone knows, of course, exactly what to do.
• 22:41
  Speaker 3: Super helpful.
• 22:44
  Speaker 1: Thanks for listening to this week's Marin Drogs Money Debrief.
• 22:46
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• 23:01
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• 23:09
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