Latest / Merryn Talks Money / Markets Wrap: SpaceX Returns to Earth, UK Sheds More Stocks

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Markets Wrap: SpaceX Returns to Earth, UK Sheds More Stocks · Merryn Talks Money

• 0:02
  Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
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  Speaker 2: Welcome to the Marin Trogs Money Market Wrap. But we
• 0:20
  Speaker 2: talk about the biggest news in the markets this weekend.
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  Speaker 2: What is driving them? I am Maren sum Zai, Web
• 0:25
  Speaker 2: UK Money Editor at Large.
• 0:27
  Speaker 3: No, I'm joint Staviic Senior Reportered at Bloomberg and author
• 0:29
  Speaker 3: of the Money Distilled newsletter.
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  Speaker 2: Right, John, there is a lot going on which is
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  Speaker 2: outrageous really, given that it's holiday time and both of
• 0:38
  Speaker 2: us are, you know, back and forth from glamorous destinations.
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  Speaker 2: You shouldn't shouldn't be having to talk about who's going
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  Speaker 2: to be the next chancellor of the UK.
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  Speaker 3: Again, this is nine I think in Sam in French
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  Speaker 3: we're seeing in something like ten years more.
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  Speaker 2: Chancellors than prime ministers.
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  Speaker 3: So do we care?
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  Speaker 2: Can you drag up any interest? Does it matter? Is
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  Speaker 2: it more of the same? I'll tell you the only
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  Speaker 2: thing that matters is it is not Ed Miliband.
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  Speaker 3: If that's the key.
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  Speaker 2: If it's not Ed Miliband, we just get more of
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  Speaker 2: the miserable same. It is Ed Miliband, we get a
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  Speaker 2: nasty shifter to the left and more net zero blah
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  Speaker 2: and yep one Michaels will be a little upset. The
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  Speaker 2: rest of the world would look at us with even
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  Speaker 2: more eye rolling than usual.
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  Speaker 3: Yeah, I think that's basically it were The only thing
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  Speaker 3: I would say is well, a couple one. It's interesting
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  Speaker 3: because I actually think part of this is because there
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  Speaker 3: was a Bloomberg survey read out and it came back
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  Speaker 3: and I think it was not yesterday, but the day
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  Speaker 3: before the results and Ed miller Band was deemed the
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  Speaker 3: least market friendly chancellor, and not until then he was
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  Speaker 3: the absolute top favorite, including among people who a chat
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  Speaker 3: to who know about this stuff. They would sort of
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  Speaker 3: tell me Ed miller Bands doing for chancellor, that's what I.
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  Speaker 2: Had too, absolutely nail down fixed in stone or fixed
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  Speaker 2: in Edstone.
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  Speaker 3: Yes, yes, And then suddenly this story comes out in
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  Speaker 3: Bloomberg and well they ought to suddenly shift dramatically and
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  Speaker 3: it looks as if we're going to get Chavana Mahmoud
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  Speaker 3: for chancellor instead. And again, as you say, the only
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  Speaker 3: thing we know is that she's not as left wing
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  Speaker 3: as Ed mellerbound. And that's been enough to actually it
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  Speaker 3: did give Gilts and the pound a little bit of
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  Speaker 3: a boost yesterday. I'm usually very very careful about attributing
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  Speaker 3: these things to politics, but everything else was down and
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  Speaker 3: gelts in the pound were up, and it looks as
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  Speaker 3: if it probably was something to do with a bit
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  Speaker 3: of relief on that front.
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  Speaker 2: Yeah, but you know what, John, Yes, I think that's
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  Speaker 2: absolutely terrifying. Shall I tell you why? Yeah, because that
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  Speaker 2: market pulled market pul survey from Bloomberg told us something
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  Speaker 2: so obvious that it is beyond the bounds of all
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  Speaker 2: reason that anyone in the government could possibly have not known.
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  Speaker 2: It could not have understood that Ed Miliband would be
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  Speaker 2: the least market friendly contender. Not new news, not something
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  Speaker 2: you'd have to look at any survey to know. So
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  Speaker 2: how can it possibly be that the results of a
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  Speaker 2: survey showing that Ed Miliband would be the considered the
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  Speaker 2: least market friendly chancellor for the UK could be new
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  Speaker 2: news too an incoming prime minister when it is not
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  Speaker 2: new news to anybody else. And that for me is
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  Speaker 2: quite scary and boats really badly for the next few years.
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  Speaker 3: We thought that is Marrian, and I think you're really
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  Speaker 3: this boy was donning at the other big point about
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  Speaker 3: it is, how can this stuff he already not be
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  Speaker 3: kneeled down and be if he was going to go
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  Speaker 3: with them, then it should have been an anticipation of
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  Speaker 3: a negative reaction from the markets, and then have a
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  Speaker 3: think about how he was going to deal with that.
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  Speaker 3: It shouldn't, I mean, the only rational thing that you
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  Speaker 3: can say about it into once. I don't even believe this,
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  Speaker 3: because I think most of them are too narcissistic to
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  Speaker 3: not see these things until they're in their face. But
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  Speaker 3: one thing you could say is maybe Bundum needed an
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  Speaker 3: excuse not to appoint Mill the band, and then he
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  Speaker 3: gets the excuse in the form of something like this,
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  Speaker 3: Oh look, I was going to hire you, but now
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  Speaker 3: the headlines are all saying that you would be a
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  Speaker 3: terrible chancellor. And that's you know, it's not me, it's
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  Speaker 3: it's the you know, bond market or whatever.
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  Speaker 2: But that even wash that's even already got the it's
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  Speaker 2: no me, might be yea and it's not even prime
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  Speaker 2: minister yet.
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  Speaker 3: Yes, that just put you right back to where Kure
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  Speaker 3: Starmer was a year ago.
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  Speaker 2: It doesn't matter how you interpret this shift, assuming it
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  Speaker 2: is a shift. I mean they're not done yet, right
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  Speaker 2: a shift. There is no way whatsoever to interpret this
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  Speaker 2: positive beyond the fact that if he's not Chancellor, well,
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  Speaker 2: I mean that's a minor positive, but it doesn't you
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  Speaker 2: can't interpret it positively in terms of the way Burnham
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  Speaker 2: is thinking and the way he is likely to manage
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  Speaker 2: going further. And you know, prove me wrong the future please.
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  Speaker 3: Oh yeah, yeah, I'd love to be wrong. But there's
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  Speaker 3: the ultimate hedge, as if we're wrong, then things get better.
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  Speaker 3: And if we're right, then the only consolation that you
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  Speaker 3: get to see I told you so, along with the
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  Speaker 3: rest of the population.
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  Speaker 2: So all right, moving on, John, because my head's going
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  Speaker 2: to explode. Moving on. There are a couple of other
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  Speaker 2: things we wanted to talk about, right. We wanted to
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  Speaker 2: talk about SpaceX being back to its IPO price, which
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  Speaker 2: is really depressing for the entire team because regular listeners
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  Speaker 2: will know that my profits on my vast space position
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  Speaker 2: were to be used to buy the team summer drinks
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  Speaker 2: and now there are no profits, so no summer drinks.
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  Speaker 2: Sorry guys, sorry summers summer Moses.
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  Speaker 3: Sorry Moses, I mean we need to buy your drink
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  Speaker 3: is negative from here?
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  Speaker 2: Yes, yes, yes, it's on you and I'll have the Bollinger.
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  Speaker 2: Thanks very much.
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  Speaker 3: Well, hope it's been how file it falls that may
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  Speaker 3: even to that you never.
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  Speaker 2: Know, right even Okay, So back to my papers, and
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  Speaker 2: one of the things that you and I've worried about
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  Speaker 2: for a long time now is that these big i
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  Speaker 2: pos might be a negative marker for the market, might
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  Speaker 2: give us some kinds of top. There were a variety
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  Speaker 2: of studies, studies reports when the when the IPOs were
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  Speaker 2: first announced. But the giant sucking sounders and money goes
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  Speaker 2: out of other parts of the market to go into
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  Speaker 2: the IPOs and then of course maybe slides back out
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  Speaker 2: again to go into other things. So there's there's a
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  Speaker 2: lot going on in the market, and that this first
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  Speaker 2: i PO is not an immediate success is a worry. Yeah.
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  Speaker 3: And it's interest because the most recent high for the
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  Speaker 3: US markets that both the S and P and that
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  Speaker 3: is like was the second to June and the space
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  Speaker 3: X I p O or was the eleventh of June.
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  Speaker 3: That doesn't mean they're not going to make new highs,
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  Speaker 3: but it is kind of interesting in that if this
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  Speaker 3: did prove to be the top, it wouldn't be an
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  Speaker 3: astonishing thing to happen. It's also I think it's just
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  Speaker 3: it's a useful reminder as much as anything else that
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  Speaker 3: you shouldn't outsource your investment thoughts or views to the
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  Speaker 3: market price itself, because you know, before SpaceX launched, slots
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  Speaker 3: of people thought, actually this, this looks kind of expensive,
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  Speaker 3: and it was kind of expensive, and then it shoots
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  Speaker 3: up on the day and everyone thinks, of God, maybe
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  Speaker 3: everyone else knows something I don't, and so the temptation
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  Speaker 3: is then to try and pile in or try and
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  Speaker 3: make a quick buck or whatever. But history shows that IPOs,
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  Speaker 3: even long term successful ones, do tend to drop below
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  Speaker 3: their IPO price at some point within the first year.
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  Speaker 2: Average down, average down eight percent.
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  Speaker 3: Right, and that's one of things like Facebook and Google.
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  Speaker 3: Here we're not talking things that you know, hit the dark.
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  Speaker 3: So this is perfectly normal ip behavior and all on
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  Speaker 3: this day. But also more importantly I think is that well, yeah,
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  Speaker 3: I mean SpaceX was overplaced to ploic stell is overplaced
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  Speaker 3: at this level, and you should didn't feel underppreciately buy
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  Speaker 3: something just because it's going up.
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  Speaker 2: I mean, I suppose it does make sense if you
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  Speaker 2: think about it, which we do try to do, don't
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  Speaker 2: We think about things good for an IPO to end
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  Speaker 2: its first year down, because when do you bring something
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  Speaker 2: to an IPO and you think you can get the
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  Speaker 2: absolute maximum top price for it. On the whole idea
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  Speaker 2: of the the olden days, there was an idea that
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  Speaker 2: you should leave something on the table. You shouldn't bring
• 8:37
  Speaker 2: it to market that its peak price. You to leave
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  Speaker 2: something on the table for the public market investors. But
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  Speaker 2: I think there's days are gone. So when you bring
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  Speaker 2: your company to market, you do it when you think
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  Speaker 2: you can get the maximum for it. So it makes
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  Speaker 2: complete sense that it would then end the year slightly
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  Speaker 2: off a percent makes sort of intuitive sense. Yeah, it's
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  Speaker 2: a sales market, it's a seller's market. Right. Just as
• 8:58
  Speaker 2: we look at this kind of thing, I think, oh, well,
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  Speaker 2: things very little topy and these giant hypos might change
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  Speaker 2: some things, et cetera. We then get a half yearly
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  Speaker 2: letter from Terry Smith, manager of the fund Smith Equity Fund,
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  Speaker 2: which is boys that had a nasty time recently. So
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  Speaker 2: I don't know. Wow, now well, look I'm just looking
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  Speaker 2: at the chart of the performance of this fund, Smith
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  Speaker 2: Equity Fund, which I know a lot of listeners in
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  Speaker 2: the UK will be in because Terry Smith, the very
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  Speaker 2: well known manager. Here now it is let me see
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  Speaker 2: here fun Smith Equity Fund from the first of January
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  Speaker 2: this year at the end of June this year down
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  Speaker 2: three percent, MSc Wild World Index up eleven percent, and
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  Speaker 2: of course other things up a lot more. That's inception. Okay,
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  Speaker 2: we have to say this because you know, lesbian and
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  Speaker 2: let's be nicer. Since since inception the fund is still
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  Speaker 2: up thirteen percent annualized and MSCI World up twelve and
• 9:53
  Speaker 2: a half percent annualized, so you know, okay, but probably
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  Speaker 2: not quite what people expected when they brought into the
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  Speaker 2: hype around this. Now here's interesting, well, I hope it's
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  Speaker 2: interesting to people. What Terry Smith always said that he
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  Speaker 2: would do is to buy good companies, don't overpay for
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  Speaker 2: those companies, and then do nothing to sit and wait.
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  Speaker 2: And theoretically that should really work. Going We're both down
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  Speaker 2: with that, arn't we, John By great companies, don't overpay
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  Speaker 2: for them and then sit around and wait, because investing
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  Speaker 2: is our long term game, but it has not been
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  Speaker 2: working in this environment of the shift to passive because
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  Speaker 2: what really works in this environment is momentum investing, not
• 10:34
  Speaker 2: long term quality slash value investing. Right, So he is
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  Speaker 2: now beginning to backtrack in this letter, is it's worth reading.
• 10:41
  Speaker 2: By the way, I'm going to put the link into
• 10:43
  Speaker 2: the show notes so you.
• 10:45
  Speaker 3: Can read it.
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  Speaker 2: It's a public letter, and he talks about the way
• 10:50
  Speaker 2: that Pascifists conquered the world and that possibly one needs
• 10:55
  Speaker 2: to adjust one's investing process as a result. And what
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  Speaker 2: Terry is going to do is to change his holding
• 11:02
  Speaker 2: periods as opposed to or anything else. So still buy
• 11:04
  Speaker 2: good companies, still don't overpay, but the third leg needs
• 11:08
  Speaker 2: to change. So if you look at their portfolio turnover,
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  Speaker 2: it's gone up a lot, and I think quite rightly
• 11:12
  Speaker 2: points out in a world where share prices sometimes may
• 11:15
  Speaker 2: have twenty thirty percent a day, even in very big stocks,
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  Speaker 2: buy and hold kind of doesn't work anymore.
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  Speaker 3: It's a shricky one, isn't it? Because I actually sympathize
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  Speaker 3: overall his view and the passive highs tounned markets spent
• 11:31
  Speaker 3: a momentum market, and this has been the case for
• 11:35
  Speaker 3: a long time now, certainly longer than reversion of the
• 11:40
  Speaker 3: mean with investors can handle. I think it's also interesting though.
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  Speaker 3: The one thing I would say, and I can see
• 11:48
  Speaker 3: why obviously he doesn't want to go there, but he
• 11:51
  Speaker 3: and neck Train, another big retail face and fund manager
• 11:55
  Speaker 3: that have a sort of similar style, which is this
• 11:58
  Speaker 3: focus on quality thing. And you know, from the investment
• 12:02
  Speaker 3: point of view that respect them both. They both explained
• 12:05
  Speaker 3: their ideas very well, They're very good at communicating with investors,
• 12:09
  Speaker 3: and obviously they both have excellent long term track records.
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  Speaker 3: I think it is also fair to say that their
• 12:14
  Speaker 3: style kind of went out of fashion, and partly that
• 12:18
  Speaker 3: was for I would argue reasonably predictable reasons, because a
• 12:24
  Speaker 3: lot of this stopped in twenty twenty one after the
• 12:29
  Speaker 3: the kind of basically the kind of COVID ultra zero
• 12:34
  Speaker 3: interest rates backdrop ended interest rates went up, and most
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  Speaker 3: of those stocks then got demolished, and a lot of
• 12:45
  Speaker 3: them are also the kinds of stocks that then got
• 12:47
  Speaker 3: further hit in the software as a service apocalypse as
• 12:52
  Speaker 3: they called it, as an AI is going to take
• 12:55
  Speaker 3: all that business. So I feel that there is there's
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  Speaker 3: a lot of sense and sticking to one strategy it
• 13:04
  Speaker 3: makes a lot of sense. But I do think that
• 13:06
  Speaker 3: that was perhaps a tourning point at which an act
• 13:09
  Speaker 3: of manager, even when we are long term ultra long
• 13:14
  Speaker 3: term take on things. Might have wanted to look at
• 13:16
  Speaker 3: what was changing about the backdrop and then reconsider the
• 13:20
  Speaker 3: portfolio within those parameters. But maybe that's unfair.
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  Speaker 2: Maybe that's unfair. But it's interesting, isn't it. I Mean,
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  Speaker 2: when we were talking about what we were going to
• 13:34
  Speaker 2: talk about today, you said, well, there's a lot of
• 13:35
  Speaker 2: turning points out there, and seeing someone like Terry Smith,
• 13:40
  Speaker 2: who's been so clear and so firm in his view
• 13:44
  Speaker 2: and his investing style for so long, to start to
• 13:48
  Speaker 2: make changes in it makes me feel a little contrarian.
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  Speaker 3: I mean, yeah, I mean there is an element of
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  Speaker 3: capitulation here as well. Yeah, and obviously, well that goes
• 14:02
  Speaker 3: to all the other signs that we are very toppy
• 14:05
  Speaker 3: at the moment. I think the problemly all of the
• 14:08
  Speaker 3: top signs is that well it is working out when
• 14:14
  Speaker 3: the dominoes finally going to fall over, Like what is
• 14:16
  Speaker 3: the straw that breaks the camel's back, because there's been
• 14:19
  Speaker 3: a lot of them and a lot of them going
• 14:21
  Speaker 3: back years now, you know, no, just minds.
• 14:25
  Speaker 2: Yeah, but we do really need there's a turning point
• 14:27
  Speaker 2: in the UK stock market because the other thing is
• 14:30
  Speaker 2: that we got to talk about is the ongoing demise
• 14:32
  Speaker 2: of the UK stock market closing down sale continues. I'm
• 14:36
  Speaker 2: afraid I'm not sure who it was. You wrote closing
• 14:38
  Speaker 2: down sales continuous on Twitter and somebody wrote underneath it,
• 14:43
  Speaker 2: at least this time we won't have to turn the
• 14:45
  Speaker 2: lights out, which, of course there's a reference to our
• 14:50
  Speaker 2: rather rickety electricity grid and the fact that the lights
• 14:53
  Speaker 2: might just turn themselves out. I thought it was quite funny. Well, George, George, excellent. Anyway, John,
• 15:12
  Speaker 2: I'm going demise of the UK don't market We've lost
• 15:14
  Speaker 2: another company, haven't we?
• 15:16
  Speaker 3: Yeah, I mean, so there was a bid for road Talk,
• 15:18
  Speaker 3: which is an engineer and all means. I don't know
• 15:22
  Speaker 3: very much about road Talk. It's a bit familiar name
• 15:25
  Speaker 3: to me. Low I believe it was set up in Bath.
• 15:28
  Speaker 3: As soon as we know part of that tweet. I
• 15:30
  Speaker 3: got an awful lot of older city heads kind of
• 15:34
  Speaker 3: reply and say, no, I remember that that was one
• 15:36
  Speaker 3: of the first stalks I ever covered kind of thing.
• 15:39
  Speaker 3: She's got a long history of being here and but yeah,
• 15:42
  Speaker 3: it is just the latest one to get kind of
• 15:45
  Speaker 3: spiped up. And I think the other interesting thing is
• 15:47
  Speaker 3: that this week I was writing about this and money distilled. Hey,
• 15:52
  Speaker 3: Barrett red Row, the house builder. I know that you're
• 15:54
  Speaker 3: not your favorite sector for very acceptable reasons, but just.
• 15:58
  Speaker 2: Go to look at the hard sand house builders. I
• 16:04
  Speaker 2: hate them for the hideous houses that they build, and
• 16:06
  Speaker 2: I hate them for not trying. But I do understand
• 16:09
  Speaker 2: that the right number. I'm just difficult, but I still
• 16:11
  Speaker 2: don't think that these houses have to be quite this hideous.
• 16:15
  Speaker 3: I think this is fair. But the reason they bring
• 16:17
  Speaker 3: it up is because basically one of their big shareholders
• 16:20
  Speaker 3: said to them, look, you need to buy back your
• 16:22
  Speaker 3: own shares because no one else is going to, you know,
• 16:25
  Speaker 3: appreciate what a you know, good good quality in terms
• 16:29
  Speaker 3: of profitability, long term business you've got. And so they've
• 16:32
  Speaker 3: started doing that, and it's just adding to the whole
• 16:37
  Speaker 3: sense that nobody these things are just lying around unappreciated
• 16:43
  Speaker 3: on the supermarket shelf until someone where an eye for
• 16:46
  Speaker 3: a bargain comes along and takes them, or the management themselves.
• 16:52
  Speaker 2: Compass.
• 16:53
  Speaker 3: Yeah, thats exactly stick to ekes track. They kind of
• 16:57
  Speaker 3: the value themselves if you like. So I don't know
• 17:03
  Speaker 3: if there is a turning point, because regardless of how
• 17:09
  Speaker 3: much to be buying this drum nobody seems to be paying.
• 17:11
  Speaker 2: The time interested.
• 17:13
  Speaker 3: Yeah, I know, which is fine from a short term
• 17:17
  Speaker 3: point of view. At the end of the day, if
• 17:18
  Speaker 3: you can invest in these stocks, then you'll get the
• 17:21
  Speaker 3: takeover premium or you'll get to be the last person
• 17:25
  Speaker 3: owning the last share outstanding, so you make money that way.
• 17:28
  Speaker 3: It's just not great for the long term healthy the economy,
• 17:32
  Speaker 3: if our equity market specifically, because London's cattle markets as
• 17:36
  Speaker 3: a whole are fine, there's nothing wrong with them, but
• 17:39
  Speaker 3: this bit is just dying on his backside, and I
• 17:45
  Speaker 3: think we should try to stop that from happening.
• 17:50
  Speaker 2: Okay, well, we should try and to be feder ritual raves.
• 17:53
  Speaker 2: This is one thing she did slightly get and she
• 17:56
  Speaker 2: was trying at least in a regular environment. Let's see
• 18:00
  Speaker 2: it is focused on comes up with on a similar subject.
• 18:05
  Speaker 2: We have for years, John, our favorite favorite markets. You
• 18:08
  Speaker 2: and I've been Japan and the UK, and you know,
• 18:11
  Speaker 2: Japan has kind of come good. The UK has come
• 18:13
  Speaker 2: a little good, but not that good. Has just discussed.
• 18:15
  Speaker 2: But Japan is really interesting because the only thing we've
• 18:19
  Speaker 2: talked about a lot on this podcast is financial repression
• 18:22
  Speaker 2: and return of the extent to which governments might, in
• 18:26
  Speaker 2: our great age of debt, demand that domestic investors bring
• 18:31
  Speaker 2: their capital home to help out with either national infrastructure
• 18:35
  Speaker 2: or investing in the domestic bond market to make it
• 18:38
  Speaker 2: look less rubbish, et cetera. And we're now seeing something
• 18:41
  Speaker 2: happening in Japan. Nothing set yet, but the Finance Minister
• 18:48
  Speaker 2: Kata Yamastan, we're speaking earlier this week about how one
• 18:51
  Speaker 2: might encourage local investors, including Japan's whooping great government pension fund,
• 18:56
  Speaker 2: to consider bringing money home and investing in themes stick assets.
• 19:01
  Speaker 2: And it's interesting that this has shifted since twenty fourteen
• 19:04
  Speaker 2: or so, when there was a much higher level of
• 19:07
  Speaker 2: Japanese assets held inside Japan than under Abasan. There was
• 19:11
  Speaker 2: a shift in as it started to flow abroad. And
• 19:14
  Speaker 2: in one way that's been great. Very cheap yen has
• 19:16
  Speaker 2: been brilliant for the Japanese exporters in the manufacturing sector
• 19:20
  Speaker 2: dat in an age when you know physical AI, robotics, etc.
• 19:23
  Speaker 2: It's all been marvelous. But now there is talk about
• 19:26
  Speaker 2: trying to bring some of that money home, which would
• 19:30
  Speaker 2: be kind of interesting. And Deutsche Bank have done a
• 19:32
  Speaker 2: little blog on this looking at what might happen, and
• 19:35
  Speaker 2: suggesting that at the maximum the amount of money that
• 19:37
  Speaker 2: might be brought back would amount of about ten percent
• 19:39
  Speaker 2: of GDP. It should be something of a game changer
• 19:41
  Speaker 2: for the end.
• 19:42
  Speaker 3: Yeah, and I think this really has both paying attention
• 19:44
  Speaker 3: to because I mean, obviously the semmetery as the in
• 19:49
  Speaker 3: twenty tweyelve, as you say, that's where then playmnster sins
• 19:54
  Speaker 3: or RB can they say it will basically we need
• 19:56
  Speaker 3: to do something about this and started a policy. It's
• 19:58
  Speaker 3: a little bit deliberately being the end amongst other things.
• 20:03
  Speaker 3: And that was Bien was at the strongest end. And
• 20:06
  Speaker 3: as you say, twenty fourteen, the GPF, the big pension
• 20:08
  Speaker 3: fund started the increased the amount of foreign assets that
• 20:11
  Speaker 3: they could own. And so yeah, if they flip that around,
• 20:15
  Speaker 3: because it did have a big effect, they'll have a
• 20:17
  Speaker 3: big effect in the opposite direction. There's obviously the concerns
• 20:23
  Speaker 3: that the yen carry trade, which is basically borrowing money
• 20:26
  Speaker 3: and yen and investing in elsewhere, if that suddenly reverses
• 20:30
  Speaker 3: and a whole load of money could come out of
• 20:31
  Speaker 3: various assets, including you know, hot tech stocks. But I
• 20:35
  Speaker 3: think the other thing, and I don't know if this
• 20:37
  Speaker 3: was in the Deutsche study or not, but they said
• 20:40
  Speaker 3: that the most vulnerable asset was probably French sovereign bonds
• 20:46
  Speaker 3: and that would be interesting to watch given that vulnerable. Yeah,
• 20:51
  Speaker 3: I mean frances is the only reason that France is
• 20:55
  Speaker 3: not on the front pages all the time in the
• 20:57
  Speaker 3: way that Britain has been is because inflation is slightly
• 21:01
  Speaker 3: lower in the Eurozone as a whole. But also France
• 21:03
  Speaker 3: is effectively underwritten by you know, the European Central Bank,
• 21:07
  Speaker 3: which is Germany basically, and so that's you know, it's
• 21:11
  Speaker 3: it's kind of debt isn't isn't being subject to quite
• 21:13
  Speaker 3: the same pressures. But if if this happens and you've
• 21:17
  Speaker 3: also then got you know, again a very panicky looking
• 21:23
  Speaker 3: French political situation next year, I don't think it'd be
• 21:26
  Speaker 3: going too far to say that you start getting worries
• 21:28
  Speaker 3: about the kind of Eurozone again kind of erupting in
• 21:32
  Speaker 3: the you know, headlines and all the rest of it.
• 21:35
  Speaker 3: So yeah, I think this, this this suggestion is actually
• 21:40
  Speaker 3: quite consequential, and I'd imagine they will follow up on it.
• 21:45
  Speaker 2: I don't think it's worth saying that, as I think
• 21:49
  Speaker 2: a lot of people have pointed out that the the
• 21:52
  Speaker 2: government pigeon Fund does not fall under the Ministry of
• 21:55
  Speaker 2: Finance technically nothing to do with the Finance minister Cutma
• 22:00
  Speaker 2: but but but, but it all falls onder the same
• 22:03
  Speaker 2: thing in the end, and the pension Fund falls under
• 22:05
  Speaker 2: the Ministry of Health, Labor and Welfare. But it's all
• 22:08
  Speaker 2: part of the same government, all part of the same system.
• 22:10
  Speaker 2: And we know that the government has influence over pretty
• 22:13
  Speaker 2: much everything. I mean, the Bank of Japan is famously
• 22:15
  Speaker 2: not quite independent, et cetera. So I don't think the
• 22:17
  Speaker 2: fact that it's not directly cut Umiston's responsibility would make
• 22:21
  Speaker 2: a difference to this, nor but the fact that the
• 22:23
  Speaker 2: pension fund again has like all punch of funds in
• 22:26
  Speaker 2: the main so far for dishary duty to seek the
• 22:29
  Speaker 2: best returns, that doesn't necessarily make a long term difference
• 22:34
  Speaker 2: to how it's invested in Japan.
• 22:36
  Speaker 3: No, And that also they're able to They aren't at
• 22:39
  Speaker 3: the limit of that allocation either. They can that official allocation,
• 22:44
  Speaker 3: they can they can go higher even without changing anything overtly.
• 22:49
  Speaker 3: So yeah, no, I'd be surprised if this doesn't end
• 22:52
  Speaker 3: up being a turning.
• 22:53
  Speaker 2: Point, turning point, And you know, maybe a tanning point
• 22:56
  Speaker 2: for global finance for oppression, because it's not exactly the
• 22:58
  Speaker 2: only place that is talking about patriating capitals. It's been
• 23:01
  Speaker 2: an ongoing conversation here trying to get punch and films
• 23:03
  Speaker 2: to repatriate capital and invested in things of national interest
• 23:07
  Speaker 2: in the UK, and we hear of it in other
• 23:10
  Speaker 2: countries as well, and it may just be that in
• 23:12
  Speaker 2: an age of great public debt, capital can no longer
• 23:15
  Speaker 2: be free.
• 23:16
  Speaker 3: Yeah, we'll be interested because I've sort of de slaved
• 23:19
  Speaker 3: this as a capital nudge and I'll be interested and
• 23:21
  Speaker 3: to see, well when's it go from being a capital
• 23:23
  Speaker 3: nudge their capital capital control?
• 23:25
  Speaker 2: Yeah? Okay, well this has been positive, Yes, as usual
• 23:29
  Speaker 2: as usual?
• 23:30
  Speaker 3: You're ree of sunshine for the week?
• 23:33
  Speaker 1: Yep.
• 23:33
  Speaker 2: Absolutely, Look there is a red sunshine here and I'm
• 23:37
  Speaker 2: going to tell you about it, which is that nearly August,
• 23:39
  Speaker 2: which means that it is nearly time for our fringe
• 23:42
  Speaker 2: show all about Adam Smith and how moldless he was
• 23:44
  Speaker 2: at Pama House. We will put the link to how
• 23:47
  Speaker 2: to book tickets for that in the show notes as well.
• 23:49
  Speaker 2: I will say they do sell out very very quickly,
• 23:52
  Speaker 2: so you will want to book your tickets now so
• 23:55
  Speaker 2: that you are not the person calling me on the
• 23:57
  Speaker 2: day begging for a ticket from my personal family allocation
• 24:02
  Speaker 2: that right.
• 24:02
  Speaker 3: John, absolutely, absolutely, rather than the last bitcoin.
• 24:09
  Speaker 2: Not rare at all, bitcoinds onwards onwards.
• 24:13
  Speaker 1: Oh.
• 24:14
  Speaker 2: I will also say, by the way, that we have
• 24:15
  Speaker 2: asked a lot of people on the podcast over the
• 24:17
  Speaker 2: last few months about what they're reading, and not just
• 24:21
  Speaker 2: authors but non author guess what books they're reading. And
• 24:24
  Speaker 2: I've made a list of those for those of you
• 24:26
  Speaker 2: who don't quite listen to the end of every podcast,
• 24:29
  Speaker 2: and they'll be in my newsletter this week. So if
• 24:31
  Speaker 2: you want a roundup of the things that you should
• 24:33
  Speaker 2: definitely be reading on the beach, do read my newsletter
• 24:36
  Speaker 2: on Saturday. And of course you always read John's newsletter
• 24:39
  Speaker 2: every day. Anything to add to that.
• 24:42
  Speaker 3: John, No, I'll look forward to that one. I like
• 24:45
  Speaker 3: seeing what other people have reading.
• 24:47
  Speaker 2: Yeah, well, I tell you what. The one I really
• 24:49
  Speaker 2: want to read is the one that Ed Cole from
• 24:54
  Speaker 2: Margaret recommended, the final fatal adventure of Captain James Cook,
• 24:58
  Speaker 2: The Wide Wide Seiand that's absolutely brilliant. Jam. Now I've
• 25:02
  Speaker 2: given I've given away the ending.
• 25:06
  Speaker 3: Spoiler A Lot spoiler alert.
• 25:17
  Speaker 2: Thanks for listening to this week's Marren Talks Money Markets RAP.
• 25:20
  Speaker 2: If you like us show, rate, review, and subscribe wherever
• 25:22
  Speaker 2: you listen to podcasts. Also, be sure to follow me
• 25:24
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• 25:27
  Speaker 2: John Underscore Stepic. This episode was produced by Samasadi and
• 25:30
  Speaker 2: Moses and questions and comments on this show and all
• 25:33
  Speaker 2: our shows are always welcome. Our show email is Marror
• 25:35
  Speaker 2: Money at Bloomberg dot