True Anon Truth Feed - Episode 57: Mr. Market Goes To Washington
Aired: 2020-04-01
Duration: 01:11:23


=== Ron Paul's Breath (02:47) ===

[00:00:03]  Hello, um, this is This is Ron Paul Love Elution Radio.
[00:00:13]  I am calling you from my fortified and pure compound deep in the heart of haha, you thought you'd get me, I won't tell you where, Texas.
[00:00:27]  I am joined here by one of my many mistresses.
[00:00:31]  This is, I believe, young Elizabeth, correct?
[00:00:39]  Hi.
[00:00:40]  Hello.
[00:00:41]  And of course, my footman and bodyguard, young Chomsky, who I believe is a Hebrew fellow.
[00:00:53]  Liz, Liz, I am so grateful to have you here.
[00:01:01]  Are you feeling okay?
[00:01:03]  Yeah, it's just a little something I picked up on the road.
[00:01:09]  What?
[00:01:10]  What are your symptoms?
[00:01:13]  You sound a little out of breath.
[00:01:15]  Well, it's made it very difficult for me to say the N-word.
[00:01:18]  I will say a lot.
[00:01:19]  It's made it very difficult.
[00:01:21]  You know, as you know, in my career as Ron Paul, I've done that quite a lot.
[00:01:26]  And it's hard for me to continue like this.
[00:01:29]  But yes, I'm out of breath.
[00:01:31]  That's mostly from I've been doing mutual masturbation over Zoom.
[00:01:36]  Okay, okay, alright.
[00:02:04]  And scene.
[00:02:06]  Scene.
[00:02:08]  That was very funny.
[00:02:11]  You thought I was Ron Paul.
[00:02:13]  I did.
[00:02:14]  And then you said, oops, just kidding, and revealed yourself to be Brace Belden.
[00:02:20]  That's correct.
[00:02:21]  The one and only.
[00:02:23]  Of course, I already introduced these two Jokers, so we don't need to go through that again.
[00:02:26]  Liz, let's quick check in.
[00:02:28]  We got a hell of an episode for you guys today.
[00:02:31]  Quick check in.
[00:02:32]  How are you doing, sweetheart?
[00:02:34]  I'm okay, I think.
[00:02:35]  I kind of a boring day.
[00:02:37]  The days are starting to blur.
[00:02:39]  Yep.
[00:02:39]  Yep.
[00:02:40]  Mine, mine, mine too.
[00:02:42]  Yeah, so I got to, like, I keep saying this, and then I don't do it, but I got to strategize some things.
[00:02:49]  What do you mean?

=== Good News, Potential Depression (02:42) ===

[00:02:50]  In terms of, like, doing more stuff, figuring out stuff to do.
[00:02:55]  Yeah, yeah.
[00:02:56]  Yeah, that's the thing.
[00:02:57]  Is like it's, one becomes rather limited.
[00:03:01]  Eventually you could get into.
[00:03:03]  Have you have?
[00:03:04]  Could you?
[00:03:05]  Uh, have you heard of World Of Warcraft?
[00:03:08]  No, i'm not gonna game, I don't want to game this.
[00:03:11]  See, this is week two.
[00:03:13]  Uh, we'll revisit this topic in week seven and we'll see.
[00:03:18]  Oh my god, week seven.
[00:03:20]  So yeah, for those of you who do not live near uh, San Francisco I, I guess actually this information is freely available on the internet.
[00:03:29]  Uh, SF has officially extended its lockdown order until may 1st.
[00:03:34]  Yeah, and I, I think probably that's like.
[00:03:37]  At least it says at least.
[00:03:39]  Well, that's so, that's been.
[00:03:40]  My thing is, I think they're just gonna keep doing like this, like little bit at a time thing, so that people don't go fully insane or bounce and there's like some crazy thing where like, people are getting out of the city or whatever.
[00:03:52]  Yeah yeah yeah I, I anticipate june, if we're lucky.
[00:03:59]  Um yeah probably, I would say I would say early june, but we could be looking at july.
[00:04:07]  Yeah well, I can't.
[00:04:10]  Personally, I cannot wait until it's beautiful summer nights here in San Francisco and I am once again at the roller rink, but I get to go on the inside track so I can stay six feet away from everybody.
[00:04:22]  Um yeah i've, i've.
[00:04:24]  Uh, what i'm trying to do is not think about it.
[00:04:27]  I know I spent too much time thinking about it this morning and it like put me in a really bad space.
[00:04:33]  Yes yeah it's, it's.
[00:04:36]  It's weird.
[00:04:37]  The days have been going by quickly for me, which is not a good sign.
[00:04:41]  I think I don't know why it's not a good sign, but it doesn't feel like a good sign, like it's astounding to me that it's evening time right now.
[00:04:48]  Yeah, it's kind of a bummer.
[00:04:50]  You look up and you're like what the fuck?
[00:04:51]  Where'd the day go?
[00:04:52]  Yeah, I did a lot of walking today, both inside my house in a pacing sort of pattern and then outside in a I call it an extended pace.
[00:05:02]  Um but yeah, it's we.
[00:05:05]  It's so weird.
[00:05:06]  I know well luckily.
[00:05:09]  Um, you know we might be going crazy as time goes by from being locked in our houses, but for good news, there's also going to be another depression.
[00:05:18]  Yeah, uh on.
[00:05:20]  Yeah, good news.
[00:05:21]  News of the week is that the federal government seems to be in tip-top shape.
[00:05:27]  Yeah, doing great.
[00:05:28]  The markets are up soaring, everything's fine.

=== Fed Intervenes in Money Market (15:49) ===

[00:05:33]  So, from what I understand, a bull market is that is the guy that comes in and has sex with your wife while you watches.
[00:05:40]  That's the bull market.
[00:05:42]  Okay, i'm not even okay, not gonna entertain that one.
[00:05:45]  All right, fair enough.
[00:05:46]  Uh yeah, the markets are.
[00:05:48]  Markets are climbing.
[00:05:49]  Baby right, you love markets.
[00:05:51]  No, they're just up a little bit, but uh yeah, they're definitely not.
[00:05:54]  They're not hemorrhaging like they were last week prior to the professor doctor and his infinite wisdom kind of trying to calm them down.
[00:06:04]  And then also the stimulus relief bill which uh, you know, seemed to calm some things.
[00:06:12]  Um, but there's, there's much more to this story.
[00:06:16]  And what's going on in the economy.
[00:06:17]  So I think it's great that today we have on Alexander Skaggs.
[00:06:24]  All right, who's our uh, what do you call her Fin?
[00:06:29]  What do you call her Finco?
[00:06:31]  She's our fin, financial correspondent Finco.
[00:06:34]  I like that, that's cool um, and she's uh, she's here.
[00:06:37]  We're gonna talk what's going on in the FED.
[00:06:41]  What is up with the, with Minunchin and his crazy.
[00:06:45]  Is he the most powerful Treasury secretary in all of history?
[00:06:49]  And you know just what this possible depression we're facing down looks like.
[00:06:55]  Because here's the thing baby, you might be depressed inside your house, but the economy is also depressed.
[00:07:01]  The economy needs to do some self-care.
[00:07:04]  I think the economy should stop masturbating as much and I think the economy should maybe go for a run, but not at peak hours when everyone else is doing.
[00:07:12]  Maybe the economy should stop gaming and maybe call up a nice girl on the phone.
[00:07:18]  Maybe the economy should stop bugging me and maybe i'm already on the.
[00:07:22]  Maybe the economy is already literally on the phone with the girl right now, which is how he's recording this episode.
[00:07:28]  Maybe the economy should remember what time they were supposed to call to say hello.
[00:07:33]  So they were, because they were good.
[00:07:34]  The economy was gonna video chat.
[00:07:37]  Maybe the economy, maybe the economy is holding up the economy's phone right now and is showing you uh, that the economy called someone who didn't pick up and then when, when he, when the economy texted like an hour later, it's like, hey, do you want to talk before we record uh, and then maybe the economy gets a text back being like, oh yeah, and then eventually a call back and maybe on that call, the economy is told, oh, I missed your call.
[00:08:00]  Even though I know how phones work, I know that you did.
[00:08:04]  You may have missed a call, but you saw the call.
[00:08:07]  Maybe that's what happened in the economy.
[00:08:08]  I didn't see the call.
[00:08:09]  My phone was in my coat pocket and it didn't show up on my computer.
[00:08:12]  Waiting out and about you were gonna face time, you said, do you want to face time?
[00:08:16]  You're out and about spending money in what?
[00:08:18]  The economy?
[00:08:20]  Who do you think was calling?
[00:08:21]  I'm just saying, yesterday you said you wanted to feast time.
[00:08:24]  You didn't do that today.
[00:08:25]  This isn't about me.
[00:08:26]  It makes it more embarrassing if I say it's about you.
[00:08:29]  Okay, let's get this on the road.
[00:08:56]  Welcome to another episode of End the Fed Radio.
[00:09:01]  My name here is Ronald Paul, No Relation.
[00:09:05]  I am joined here by Liz Franczak, and we have with us today our official true Anon, which is also the other name of this podcast, Finco, which stands for Financial Correspondent, Financial Reporter at Baron's, Alex Skaggs.
[00:09:19]  How you doing?
[00:09:20]  Alexandra.
[00:09:21]  Good.
[00:09:23]  You holding down safe?
[00:09:25]  Yep.
[00:09:25]  Yep.
[00:09:26]  I'm in Delaware, which is a state, believe it or not.
[00:09:30]  I thought it was one big credit card, actually.
[00:09:33]  One big bank.
[00:09:34]  It's also that.
[00:09:36]  I got to say, it's a little on the nose for you to have to be in Delaware.
[00:09:43]  You're going straight into the belly of the beast.
[00:09:45]  That's true Gonzo financial reporting.
[00:09:48]  On the ground reporting.
[00:09:51]  All the companies are here, maybe like 10 people, which means it's good for coronavirus.
[00:09:56]  Yeah, that is good.
[00:09:58]  Well, maybe a few less of those companies pretty soon, too.
[00:10:02]  Yeah, seriously.
[00:10:04]  So we are so excited to have you back on the show because, as many of our listeners, I'm sure, are aware, there have been some big moves at the Fed in a really short period of time.
[00:10:16]  I feel like the last time you were on, we kind of were talking about all this stuff in context of what was possibly going to happen with what we didn't even know was yet going to be a world historical pandemic.
[00:10:31]  But it turns out we were kind of spot on about some of our reads and what was going on in the global markets.
[00:10:39]  So we're so stoked to have you back on to kind of help us walk through our listeners and women's plane some of the unprecedented moves the Treasury and the Fed are taking in the wake of this crisis.
[00:10:57]  Yeah, it's been a lot.
[00:11:02]  I'm playing the role of dumb guy here, which is purely a role.
[00:11:05]  So listeners, I'm on your side with this.
[00:11:08]  But yeah, what's going on here?
[00:11:11]  Okay, so in the past three weeks, the Fed has intervened in the treasury market, in the mortgage-backed security market.
[00:11:21]  Remember those things?
[00:11:22]  They blew up the economy in 2008.
[00:11:25]  It's intervened in the corporate debt market, which is a totally new thing.
[00:11:30]  And it started backstopping money market funds.
[00:11:34]  And I think that it's done a few other things.
[00:11:37]  I think it's in the commercial paper market, too.
[00:11:40]  Oh, yeah.
[00:11:40]  Absolutely.
[00:11:41]  That's bad.
[00:11:42]  Wait, what is the, what is the corporate debt market is a new thing or it's a new thing for the Fed to intervene in?
[00:11:48]  Oh, it's a new thing for the Fed to intervene in.
[00:11:51]  Gotcha.
[00:11:52]  Well, that's good.
[00:11:54]  So when we say, just so we can totally explain, when we say they're intervening, what exactly is like, what are they doing?
[00:12:02]  Okay, so they're buying treasuries, they're buying mortgages, and they're just like keeping them on their balance sheet like indefinitely.
[00:12:12]  And they're buying an unlimited amount.
[00:12:13]  So basically, they're just saying like, we want interest rates to be low.
[00:12:18]  We want mortgage rates to be low.
[00:12:20]  So we're just going to buy everything that we can to keep rates low.
[00:12:24]  Yes.
[00:12:25]  Which is a generally good idea.
[00:12:28]  Right.
[00:12:29]  I guess my question is, you know, I think people's only real comparison or immediate, like you mentioned, the immediate comparison is 2008.
[00:12:39]  And just in terms of scale, what's happening, like that versus the intervention, you know, when the Fed basically took on, you know, AIG and, you know, again, buying up a bunch of the, what they called toxic, you know, who knows how they determined what was toxic and what wasn't, debt to get a bunch of stuff off of the bank's balance sheets.
[00:13:02]  Like how that compares to maybe what we're seeing now?
[00:13:06]  Okay, so that's a good, that's a good question.
[00:13:09]  So in 08, there was really like a bunch of like actually toxic mortgage-backed securities out there.
[00:13:15]  At this point, like markets themselves have been going down a lot, obviously, but they haven't been like completely blown up the way they were in 2008.
[00:13:25]  So this is all really like, it's preemptive measures from the Fed instead of like, it was really funny in 2008, I think they were, they were listening to Larry Summers and they were listening to Tim Geithner and they were.
[00:13:39]  Our favorite.
[00:13:40]  I know, right?
[00:13:41]  So they were doing as little as possible, basically.
[00:13:45]  So they like tiptoed into the market.
[00:13:47]  This time they just were like, fuck it.
[00:13:50]  We're going to do everything we can, just the entire range of intervention.
[00:13:55]  And I think that they're actually going to create something to buy municipal debt to.
[00:14:00]  Yes, they are going to get into muni bonds, I think.
[00:14:03]  What are for of unbonded people like myself.
[00:14:10]  What is a municipal bond?
[00:14:13]  So it's what like New York State issues to build a highway.
[00:14:19]  It's what New York City issues to pay for stuff New York City pays for.
[00:14:26]  And I'm trying to think about other kinds.
[00:14:29]  It's usually like state governments and local governments and like the MTA.
[00:14:35]  Okay.
[00:14:35]  And now they're buying those?
[00:14:38]  Yeah.
[00:14:39]  Yeah.
[00:14:40]  Which is kind of wild.
[00:14:41]  Yeah.
[00:14:43]  So traditionally the Fed does not try to go into these markets just because on the municipal side, they're like, okay, well, if the federal government wants to help, like Congress can do that, right?
[00:14:56]  Like the Treasury can do that directly.
[00:14:57]  So why would we help out?
[00:14:59]  But of course, the way that things have been working in Washington, it seems like actually the quickest way to do it is just to let the Fed go ahead and start buying them.
[00:15:08]  Huh.
[00:15:10]  So you actually just brought up a good point, which is that usually the Treasury does it and not the Fed.
[00:15:15]  But I have a question about, is there a difference between the two now?
[00:15:21]  I mean, there's less of one.
[00:15:23]  Yeah.
[00:15:24]  It seems like that line is really blurring.
[00:15:27]  Yeah.
[00:15:28]  I mean, it makes sense, right?
[00:15:30]  And it makes sense considering like what we're facing, which is a giant pandemic that left, what was the jobless claims number last week?
[00:15:38]  3 million, yeah.
[00:15:40]  Which is absolutely fucking nuts compared to we might see what, between 3 and 5 million this week?
[00:15:48]  Just just for, and there was also 282,000 the week before.
[00:15:53]  So, I mean, that's 3.5 million basically in two weeks.
[00:15:58]  But they expected it to be 1.7 million.
[00:16:01]  So it's basically double that.
[00:16:04]  And the highest previous one week thing was an 82 at $695,000.
[00:16:10]  Excuse me, 695,000 jobs in one week, which is insane.
[00:16:14]  Yeah.
[00:16:14]  So it would be, I mean, I'm just doing some, I'm doing this in my head, so no one fact check it, even though this is recording.
[00:16:21]  But if we're looking at upwards of like 8 million people unemployed within two weeks, I mean, that's getting close to like a 6% unemployment rate in two weeks, six, seven percent unemployment rate.
[00:16:37]  And that's, you know, I think something to think about with that is that, you know, those claims are going to be higher in California because the state shut down much quicker than any other state.
[00:16:49]  And there are still states that aren't shut down.
[00:16:51]  And that's going to kind of continue to, you know, kind of like dominoes as we move into, you know, Q2.
[00:17:01]  So it's really like a little scary, the unemployment prospects that we're looking at, which I want to get into, but I almost like don't want to get into that just yet.
[00:17:11]  Yeah, yeah.
[00:17:12]  Because maybe we can talk about that when we get into the bailout and the stimulus.
[00:17:16]  Right, right.
[00:17:17]  But just to really quickly like kind of circle back.
[00:17:21]  I hate that fucking term.
[00:17:23]  I'm sorry.
[00:17:25]  Just back to the just to the Fed intervention.
[00:17:28]  Like I do kind of, you know, I don't want to give people the impression that like what the Fed is doing is necessarily like bad or wrong.
[00:17:35]  This isn't like the bank bailout.
[00:17:37]  We can talk about Mnunchin and what they're doing with the corporate bailout.
[00:17:41]  But what the Fed is doing is, like you said, it's like a preemptive measure in order to stop what would have been a massive hemorrhage, it looks like.
[00:17:53]  Yeah.
[00:17:53]  Well, like what's really kind of going on is that every company in the country basically is saying like, okay, I need as much cash as I can get my hands on, but like all at once.
[00:18:05]  And it's not just the companies too.
[00:18:06]  It's like, you know, assholes in the Hamptons going out and trying to, you know, withdraw all their money and put it in their mattress.
[00:18:12]  It's like basically everyone, everyone wanted cash all at the same time.
[00:18:18]  And that like basically made markets go nuts.
[00:18:24]  And it's not supposed to be really expensive to borrow short term, but when everyone's pulling their money out from cash markets and like short term, let me think, like money market funds, basically, then like the rates on those things go up and all of a sudden it's like cascading.
[00:18:43]  Exactly.
[00:18:44]  And it costs like, you know, 5% to borrow overnight or for like a week.
[00:18:50]  Yeah.
[00:18:50]  And so, I mean, I think like, you know, not to like use a scary like ooga booga word, but like you would say that they were kind of trying to potentially save off a liquidity crisis.
[00:19:03]  Oh, yeah, like a full-blown run.
[00:19:06]  Yeah.
[00:19:06]  Wait.
[00:19:07]  It's a liquidity crisis.
[00:19:09]  That means money, like real money.
[00:19:12]  Yeah.
[00:19:14]  That means they didn't want a bank run, basically.
[00:19:17]  Like corporate and individual.
[00:19:19]  Yeah, yeah, yeah, yeah.
[00:19:21]  Wow.
[00:19:22]  That's, that sounds bad.
[00:19:25]  Yeah, that, well, that was the thing that scared me because like, you know, the stock market goes down 2% or 5% or whatever.
[00:19:32]  And I'm like, okay, you know, stock markets move a lot.
[00:19:34]  I've seen it, whatever.
[00:19:36]  But then I was looking at the numbers of like, because they actually track how much investors take out from like money market funds and stuff.
[00:19:44]  And those were the highest ever by like a lot.
[00:19:49]  And that's why ever, ever?
[00:19:53]  Okay, like since 92 ever.
[00:19:56]  I'm sure that there were worse bank runs in like the 30s or maybe the 80s.
[00:20:01]  I don't know.
[00:20:02]  Yeah, yeah, yeah.
[00:20:03]  Wow, though.
[00:20:04]  That is that is yeah, that feels like a little bit of an underreported angle, but also probably underreported because they don't want people to panic.
[00:20:12]  Yeah.
[00:20:13]  Yeah, it's really hard to write about that stuff because it's sort of like, oh, there's a run going on, but like you shouldn't take your money out.
[00:20:20]  But like everybody.
[00:20:22]  You know, something I've noticed while walking around the streets these days is that everybody is running.
[00:20:29]  It's good for your lung health.
[00:20:31]  Well, I do just to pinpoint something too that is frustrating is that you mentioned how all the corporations don't have any cash.
[00:20:39]  And so that is something that I think speaks to maybe a larger possible systemic problem.
[00:20:49]  I know they don't like to use that term because that's a loaded term, but on this on the street, as they say, or as like dorks like me say.
[00:20:59]  But the fact that these companies, they don't have cash because they've been using all their tax cuts in stock buybacks, right?
[00:21:10]  And they're kind of like trying to get more in order to, you know, so they're completely like lean because they've just been enriching their shareholders with all of the money they've been saving from the tax cuts.

=== Lender of Last Resort Concerns (14:43) ===

[00:21:23]  So wait, these guys don't have any money because they've just been paying themselves?
[00:21:28]  Yeah, it's funny how that works, right?
[00:21:30]  I'll be honest with you guys, I would probably do that too.
[00:21:35]  It's almost like this system is the problem.
[00:21:39]  Let me be clear.
[00:21:40]  These individuals should be in prison as well.
[00:21:43]  But yes, yeah.
[00:21:46]  Wow.
[00:21:47]  So this is, this is crazy.
[00:21:49]  I thought these guys were supposed to be good with money.
[00:21:52]  Yeah, right.
[00:21:53]  Well, I feel like because they wanted so much to like get every single penny of profit out of every, you know, every penny they spend, they basically got to the point where they were basically borrowing against like supplies that hadn't come in yet, more or less.
[00:22:15]  Like they, like all, you guys know about like the just-in-time delivery stuff.
[00:22:19]  Like basically they were trying to make sure that like there is no fat whatsoever.
[00:22:24]  This is the like drop shipment model, but for like profit Walmart.
[00:22:30]  Yeah, yeah.
[00:22:31]  But like it's like if Walmart had like maybe 75% of what it needed in its warehouse, right?
[00:22:39]  And then it was like, okay, well, we'll just like ship the other one straight from our supplier to the customer.
[00:22:45]  The.
[00:22:45]  The amount that the companies were leveraged like operationally was and it sounds terrible, it's stupid words to use, but like i'm trying to think of other ways to describe it it just was really stretched.
[00:23:00]  I mean, why is that, do you think?
[00:23:02]  I mean?
[00:23:03]  So okay, what I think the fundamental problem is is that markets, especially the stock market, has been operating on the assumption that corporate earnings grow every year right, no matter what.
[00:23:16]  And that strikes me as like kind of problematic, because corporate earnings don't always grow every year and so the shareholders expect that.
[00:23:26]  And when the shareholders don't get it, they're like okay well, how are we gonna grow earnings?
[00:23:29]  And one way you can do that is by buying other companies, by buying back shares, by doing all of this stuff.
[00:23:38]  But like the question is how much of it is financial engineering and how much of it is real.
[00:23:44]  That's like that was a big thing with Apple, because Apple would report these you know year-over-year earnings that were insane and you'd be like wow, Apple's doing great.
[00:23:54]  And then you dig into it and you see it's absolutely just.
[00:23:58]  You know, either it's like totally inflating stock prices through whatever buyback strategy they have, or other kinds of you know financial maneuvering, like you say.
[00:24:09]  So, there's these, like you know I, I mean it's again there were.
[00:24:15]  There's the underlying, like systemic issues here that are kind of just all like being brought to the fore.
[00:24:22]  It seems like well yeah, and you know, you talk about how there are supply shortages of everything.
[00:24:29]  I mean, I think part of that is that these companies just had no room for anything to go wrong.
[00:24:35]  Well, that was again.
[00:24:36]  You know, as you rightly point out, that's by design.
[00:24:38]  I mean, there was like fucking Larry, Larry Summers is like out there.
[00:24:45]  He's like, oh my gosh, he's like up there on the list man oh, absolutely my god.
[00:24:52]  But um he uh, he came out and he was like how come we don't have masks?
[00:24:59]  Where are all these ventilators?
[00:25:00]  Why are these supply chains in China?
[00:25:03]  And i'm like Larry, my dude, you literally wrote this policy under Obama.
[00:25:08]  Like what are you talking about?
[00:25:12]  Classic move.
[00:25:15]  Yeah, the stock buyback thing has been really interesting.
[00:25:18]  This is that's like I, I it's.
[00:25:20]  I guess it is a good way to show up profit when it doesn't look, or to show up like appearances when it doesn't look like it's going to be like a good year or something.
[00:25:28]  Well yeah, I mean a lot of the way that a lot of the ways that people look at this is earnings per share.
[00:25:33]  So yeah yeah exactly, shrink the shares and the earnings per share goes up, just like math.
[00:25:38]  And less shares, more earnings makes sense.
[00:25:40]  Yeah yeah again, this is the way I would and it's just to float.
[00:25:43]  It's just to float the stock market, because everything is fictitious now it's not actually, and that's like, I guess, what's so frightening about what we're facing.
[00:25:53]  Like I I think we were talking, or I was talking to someone else.
[00:25:55]  It's like I can't even get my mind around the scope of what we're dealing with.
[00:26:01]  Like I can't, like, physically in my mind, understand the like contagion, not to use a you know, whatever a little bit, that's a little on the nose but um, because it's because of all of these things it touches, I mean like, and like real things.
[00:26:16]  It's like okay, stock market fine, like 2008 prime was, you know, even though it had real world ramification, or like kind of like what you would call like main street ramifications.
[00:26:26]  Right, like I don't want to, you know, i'm not downplaying that, believe me.
[00:26:30]  That's like not my brand to downplay that at all, but like it primarily originated on Wall Street and so it could kind of be dealt with there in a lot of ways, even though, of course, people losing their houses, that couldn't.
[00:26:44]  You know, that's not on Wall Street, but it went from Wall Street to the rest of America and this is like not a Wall Street problem.
[00:26:53]  This is like an actual American, like financial and economic, like real economic, like supply chain fucking disaster.
[00:27:04]  And one of the funny things is that like, going into this, like companies are super indebted, they have like a ton of operational leverage, they're basically again like borrowing against their supply chain, and people are talking about this stuff like, oh well, you know it's not in the banks, so it can't be systemic.
[00:27:24]  So like you know what's the worst that can happen.
[00:27:27]  I love the system we've created, I know, but like the the pandemic is, like it seems, almost perfectly created to just like blow that entire system up, because everything changed all at once only in the real world and the banks are like oh, we're fine, but like who cares?
[00:27:47]  The stock market has been doing rather like okay, the past few days right, have you heard it's in a bull market again, And because, you know, Liz has been harping on this as, you know, actually, you know what.
[00:28:00]  That's gendered language I'm using.
[00:28:02]  Liz has been a harpy about this.
[00:28:03]  No.
[00:28:06]  Liz has been harping about how Trump's whole, like, she thinks Trump's whole, you know, talk of getting back to work by Easter and stuff was just a way to, I really enjoy saying this, to juice the market a little bit.
[00:28:18]  I don't know which, I don't know which one of Donald Trump's disgusting slob sons, who one of whom, by the way, is married to Mayor New, excuse me, Governor Newsom's ex-wife, which I think is very funny and baller.
[00:28:33]  One of them said right before this, like everything crashed, basically, was saying, now is a great time to invest.
[00:28:39]  If you're looking at stocks, here's a time to get involved.
[00:28:42]  And I think obviously that was just like, you know, they were trying to like bump it a little more.
[00:28:51]  And I'm not so sure that like, it's just crazy to me that it's going up while things, everything else is getting worse, but it's bullshit, right?
[00:28:59]  Yeah.
[00:29:00]  So I actually like got in, I got in a little argument with people on the internet about this.
[00:29:05]  So I actually think that, and like this is really grim, right?
[00:29:09]  But I think that part of the reason stocks are doing better is because jobless claims were so high, which like, because, you know, what, what are they, right?
[00:29:18]  They're minimizing costs.
[00:29:20]  Like, this is the sort of like ruthless logic that the market actually imposes on the world.
[00:29:25]  You know, if you, if everyone thinks everything's getting a lot worse and like stocks sell off a ton and they're down whatever, 20%, you know, that's like a worst case scenario type thing.
[00:29:35]  And then that's all priced in.
[00:29:37]  And then all of a sudden it looks like companies are like cutting costs, you know, laying people off quicker than people thought and not getting in trouble for it.
[00:29:48]  You know, maybe that makes them a better investment.
[00:29:50]  Oh, I see what you're saying.
[00:29:51]  So like whatever sports, sports warehouse or whatever is basically preemptively lays off all of its badminton clerks, et cetera.
[00:29:59]  I'm not really sure.
[00:30:00]  You know, I'm a sports guy, but it's mostly body sports.
[00:30:06]  But it's so they lay off body sports, you know, sports, you wouldn't understand.
[00:30:12]  All right.
[00:30:14]  But so they lay off everyone off, but like, you know, whatever, they're still shipping stuff.
[00:30:20]  And so all of a sudden, it looks like they're actually saving a lot of money because not only did they not get in trouble for laying everyone off, they didn't have to do the thing like they do in Europe where they actually have to pay the salary to some people.
[00:30:34]  Yep.
[00:30:34]  And the quicker they do it, the more they're like, okay, well, we're going to survive at least.
[00:30:39]  But then like, you know, what happens to the people who were working there?
[00:30:43]  But it's got to be a short-term run.
[00:30:46]  Yeah.
[00:30:47]  Like real short.
[00:30:48]  Because, I mean, I don't know, you know, you can lean out your company as much as you want, but, and, you know, again, pretty much, and we'll get to this in a little bit, but pretty much everyone is getting some sweet, sweet dollars from Secretary Menunche personally delivered.
[00:31:05]  I hope it's in a novelty check, like a fucking clearinghouse.
[00:31:09]  I would use it to take his beautiful wife on a date.
[00:31:13]  But at the same time, it's like, you know, this is the really scary part is that you're facing, if you're talking about 30% unemployment, which Frace, you said today the Fed said 32% unemployment.
[00:31:26]  They're estimating 32% unemployment, which would be, I believe, I think 10% more than the Great Depression somewhere around there or the height of the Great Depression.
[00:31:37]  Yeah, we didn't have, you know, we obviously have more, you know, labor markets a little different, but like, I'm going to go ahead and take the over on that because it is a bull market.
[00:31:47]  So I'm going to take the over on that and say that, you know, you're, if you've got 30 to 40% unemployment, that's a demand collapse that you've like never seen before.
[00:31:59]  Yeah.
[00:32:00]  And I don't know where people think, like, it's not just like, it's not after 9-11 where we can just all go out and buy TVs again or whatever Bush told us to do.
[00:32:09]  Like, so you, and this is what I kind of keep saying is that the nature of this beast is you've got, and globally, you've got a twin supply and demand shock that like won't resolve itself until maybe the summer, if that.
[00:32:31]  Oh, yeah.
[00:32:31]  I mean, I think that, you know, people at the banks even are getting ready for like, okay, everything's going to be shut down until June.
[00:32:39]  And like, what do you do?
[00:32:40]  Yeah.
[00:32:40]  But like, what does that mean for GDP?
[00:32:42]  I mean, that's like, and I don't, you know, I don't mean to be one of those people that's like, my best friend GDP, as if that like means something.
[00:32:48]  I don't work for Vox Media, but a barstool podcast.
[00:32:55]  But, you know, you know, I think I said this before.
[00:32:59]  Yeah.
[00:32:59]  It's like, you know, 40% unemployment and 30% drop in GDP.
[00:33:05]  I don't think anyone knows what that means.
[00:33:08]  Yeah.
[00:33:08]  And that's a big part of it, too.
[00:33:10]  I do think that no one really knows what to expect.
[00:33:14]  And I mean, that's why markets are going insane.
[00:33:17]  That's why the Fed is throwing everything they have at it.
[00:33:21]  And I think the Fed kind of knows also that companies are, they have too much debt.
[00:33:28]  They've cut things too far in terms of like supply chain management.
[00:33:32]  And so I think that because they've noticed it, they're like, well, shit, we have to do something to sort of like stop, you know, backstop this whole thing.
[00:33:41]  And to do that, they're basically telling companies, like, okay, we're going to buy, we're going to buy your bonds.
[00:33:47]  Like, we're just going to lend to you for five years, up to five years, basically for free.
[00:33:53]  Like, what, you know, okay, it's not actually for free, but I mean, it basically is.
[00:33:57]  Yeah.
[00:33:59]  And, and so that's basically, you know, they're, they're going to lend to companies that like no one else is going to lend to.
[00:34:08]  So it's a lender of first resort, basically.
[00:34:11]  Instead of lender of last resort.
[00:34:13]  I feel like someone, I think I was listening to Joe Wiesenthal's podcast with Zoltan, and Zoltan said that, I think.
[00:34:22]  Maybe he said that.
[00:34:23]  I can't remember which person said that.
[00:34:25]  But I thought that was a cute way to, or not cute, but like, that's a new way to think of the central bank as the lender of first resort is like definitely a new way as we enter this phase two reality.
[00:34:55]  okay so we've teased it for a while but we really do need to get into then the other half of the coin which is the trump relief bill which um you know I think a lot of our listeners are probably familiar.
[00:35:11]  You know, that passed on Friday, I believe it was signed into law on Friday.
[00:35:16]  There was some pretty like sketchy, weird stuff in how it was passed.
[00:35:20]  The House had a voice vote, which is very weird.
[00:35:25]  They got to blame it on the pandemic, which is, in my mind, bullshit.
[00:35:30]  So we don't have a record of who actually opposed it.
[00:35:35]  There was no written vote.
[00:35:36]  It was literally a voice vote.
[00:35:37]  So anyone can claim they were against it.
[00:35:40]  Massey.
[00:35:42]  Yeah, the Republican tried to, he tried to get a vote.
[00:35:49]  Yeah.
[00:35:50]  And they shut it down, which, you know, is total bullshit.
[00:35:54]  I mean, I think, you know, there's like, I mean, just as a side note, I think the reason why, because they were saying, oh, you have to call a quorum.
[00:35:59]  And in order to call a quorum, you have to be in person.
[00:36:01]  But it's like, who's going to sue you?
[00:36:05]  And to win, oh, you're going to go to the Supreme Court?

=== Ford Sells Commercial Paper to Fed (13:49) ===

[00:36:07]  It's a pandemic.
[00:36:08]  Like, just fucking record the vote.
[00:36:10]  It's what these people are just, anyway, they're, you know, anyway, don't get me started on the clowns in Congress.
[00:36:18]  But, okay, so they passed the stimulus bill, package bill.
[00:36:23]  It's a, you know, kind of a double whammy.
[00:36:25]  You've got basically a massive, what they're calling stimulus, but it's really just a corporate bailout.
[00:36:31]  And then also an expanded benefits program in the wake of the pandemic.
[00:36:39]  So we'll talk about, let's talk about the slush fund first as it's being referred to.
[00:36:45]  Hold on.
[00:36:46]  Ladies, could you clarify to me, is this pork?
[00:36:51]  No, this is, well, this isn't what you would typically call pork, but I guess it could be.
[00:36:57]  It's halal pork.
[00:36:59]  Or kosher.
[00:37:01]  Pork is usually what like, like a senator, or usually it's like just a dirty little House representative is like, you know, one of his constituents is like mobbed up and is like, man, you got to get me, you know, this new base in my state or whatever.
[00:37:16]  Yeah.
[00:37:16]  And he goes and he gets it like shoveled into some big bill and that's kind of called pork or whatever.
[00:37:22]  Gotcha.
[00:37:22]  And it's a way for him to get votes back in his district.
[00:37:25]  Yeah, yeah, yeah.
[00:37:26]  But this is, so it's so funny because the news, the fake news, lion news media keeps calling this a $2 trillion relief bill.
[00:37:36]  But it's not really, is it?
[00:37:39]  No.
[00:37:40]  Well, the Fed itself is going to have, what, $4.5 trillion to lend out?
[00:37:48]  Which it might leverage out even further.
[00:37:50]  Wait, if this is a $2 trillion relief bill, how come this, wait.
[00:37:54]  All right.
[00:37:55]  No, I'll let you finish, but this is already confusing me.
[00:37:57]  You know, I'm not a numbers guy.
[00:38:00]  I mean, somehow they're going to take that number and make it into $4 trillion.
[00:38:04]  No, so what they're doing is they are, they set aside $450 billion for the Fed.
[00:38:14]  And the Fed's going to take that and put it in a bunch of little companies or whatever vehicles, really.
[00:38:19]  It's called a special purpose vehicle.
[00:38:22]  It's not that exciting.
[00:38:24]  That's what they're going to do.
[00:38:25]  But fun fact is what Enron used.
[00:38:27]  They used that for Enron.
[00:38:28]  That's where they came up with it.
[00:38:31]  They did.
[00:38:32]  And they're going to basically lever these vehicles up 10 to 1 and lend out 10 times the amount of money that they're getting from the treasury in these vehicles.
[00:38:45]  So, I mean, on one hand, like the Fed can do it.
[00:38:48]  Basically, this is a really elaborate way to disguise the fact that the Fed is just giving loans and basically printing money to give loans to companies.
[00:39:00]  Money printer go burr.
[00:39:01]  Oh, this is, oh, this is the printer.
[00:39:04]  This is the printer.
[00:39:05]  So, like, the thing is, they create all these weird fucking, like, all of these strange rules and all of these weird names, but like, it's all just disguising the printer.
[00:39:15]  Yeah.
[00:39:15]  It's that one guy.
[00:39:16]  It's the one Wojack.
[00:39:19]  It is.
[00:39:19]  Oh, God.
[00:39:20]  So, wait, they.
[00:39:21]  It's because they're so afraid of the appearance of looking like the Bank of Japan.
[00:39:25]  That's my, like, personal theory.
[00:39:27]  It's all just like a house, you know, smoke and mirrors so that they don't, they can kind of like plausibly deny that they're actually doing any direct intervention because that would make them independent.
[00:39:39]  Exactly.
[00:39:40]  People would try to hold them accountable.
[00:39:42]  Oh, no.
[00:39:43]  Yeah, we'll get to how that's not going to happen.
[00:39:47]  But so, yeah, so there's a lot of people.
[00:39:48]  That's why they believe Rand coronavirus, by the way.
[00:39:51]  Oh, that's a good theory, right?
[00:39:54]  That is a really good theory.
[00:39:56]  I'm going to workshop that one after we record.
[00:39:57]  And I'll have it ready to tweet by tonight.
[00:40:00]  It's perfect.
[00:40:02]  So, okay, so they're using these bullshit special purpose vehicles to leverage out 10 to 1 what they've been apportioned.
[00:40:10]  So $450 million turns into $4.5 trillion.
[00:40:14]  And that's what's on the books, right?
[00:40:16]  So, I mean, theoretically on the books.
[00:40:19]  But then basically, the treasury gets ultimately to decide where all of this money is going.
[00:40:29]  Yeah, for specifically for the like corporate, you know, bailout is a weird word to you.
[00:40:35]  Like, it's really loaded, whatever.
[00:40:38]  The corporate, the corporate funds, the treasury can basically say yes or no and like decide who gets loans.
[00:40:49]  So there is like an interesting thing about that because these are all like direct loans that they're talking about, but large companies can sell bonds to the Fed.
[00:41:01]  And I think that they, and this is like just a theory, but I think that they might be using the distinction between bonds and loans to not make big companies accountable at all to any sort of requirements.
[00:41:14]  Interesting.
[00:41:16]  Yes.
[00:41:16]  So that's actually, that's, it's funny you bring that up because I had a question about Ford.
[00:41:22]  I saw that a bunch of Ford's, I don't know, I guess debt have been written down.
[00:41:30]  Oh, yeah.
[00:41:31]  So like, or like their credit ratings have been slashed.
[00:41:33]  They're slashing ratings all over the place.
[00:41:36]  And by that, I mean like, you know, if people aren't familiar, there's credit, there's rating agencies, Moody's and SP.
[00:41:46]  And they, that's right, right, yeah.
[00:41:48]  Moody's is the ones for ladies.
[00:41:52]  And they, you know, they rate, you know, all different securities based on, you know, theoretically knowing what's in them, even though they don't.
[00:42:03]  But AAA, A, A, A, B, B, you know, et cetera, et cetera, it goes down.
[00:42:09]  And there's been over the past couple weeks, like a massive, what they, I don't know, slashing of ratings like across the board.
[00:42:19]  $90 billion, I think?
[00:42:20]  Like $90 billion of bonds.
[00:42:23]  $50 billion.
[00:42:24]  Really?
[00:42:25]  Oh, my gosh.
[00:42:26]  Wow.
[00:42:26]  So I saw that Ford was one of the companies that had a bunch of that slashed.
[00:42:31]  And there's a funny requirement, or there used to be a requirement for the Fed buying back bonds that they had to be of a certain rating.
[00:42:41]  And so I was curious to see if Ford wasn't going to meet that threshold.
[00:42:46]  That's an interesting question because I think that what Ford can do is Ford can sell commercial paper to the Fed.
[00:42:54]  So like for their, yeah.
[00:42:57]  What do you mean by what's commercial paper?
[00:42:59]  Commercial paper is, it's like how companies borrow for like overnight, a week, a month.
[00:43:06]  Like if it's just really short-term loans, it's supposed to be really safe.
[00:43:10]  It's supposed to be really cheap, but a lot of the rates on these securities have gone up to like 4%.
[00:43:18]  Oh, wait, is this what we were talking about a couple episodes ago?
[00:43:22]  Oh.
[00:43:24]  What's that?
[00:43:25]  Christ, I might be, I'm just stupid.
[00:43:28]  Go keep going.
[00:43:29]  No, not.
[00:43:30]  I mean, it's weird because I'm trying to like, I'm not sure I fully understand corporate paper markets, but I do know that rates are up really high.
[00:43:39]  Is there another name for this?
[00:43:42]  Repo.
[00:43:43]  This is different than repo.
[00:43:44]  Oh, yeah.
[00:43:45]  God.
[00:43:45]  Repo is it's not dissimilar to repo.
[00:43:50]  Okay.
[00:43:50]  But when it's repo, it's like usually just banks and investment funds.
[00:43:55]  Oh, but this is to companies.
[00:43:57]  And this is to me, yeah.
[00:43:58]  Gotcha.
[00:43:58]  So like, it would be like if overnight you needed to borrow, you needed a bunch of quick cash to get driver, like truck drivers going across the country or something.
[00:44:10]  Gotcha, gotcha, gotcha.
[00:44:11]  And one of the big things in 08 was that the commercial paper market started seizing up first.
[00:44:19]  And that's what really brought up a bunch of those cascading effects of people not being able to borrow.
[00:44:27]  Because then it was literally overnight, just no company could do business, which was really crazy.
[00:44:33]  So the Fed, so the Fed intervening or like preemptively getting involved in commercial paper shows that they're taking this very seriously.
[00:44:42]  It seems like.
[00:44:43]  And the funny thing is that they made this weird rule that if you were rated investment grade on the day that they like announced that they're going to do this, then you can sell them commercial paper, basically.
[00:45:00]  Okay.
[00:45:02]  And that's, again, there are like multiple steps they have to go through and it's really complicated.
[00:45:06]  But in effect, it's just them buying commercial paper.
[00:45:10]  Oh, well, maybe they'll get around it that way.
[00:45:12]  I also think they could just be like, oh, who cares about the regular?
[00:45:15]  We'll take it anyway.
[00:45:17]  They're not going to not buy, I mean, they're not letting Ford go down.
[00:45:21]  See, I'm not sure, because Ford has been high yield before.
[00:45:25]  And so, and it's funny because they actually like said that on a call a couple years ago.
[00:45:30]  And of course, everyone freaked out.
[00:45:32]  They were like, oh, shit, you're just saying you're going to be downgraded.
[00:45:37]  And so it's going to be like higher rates for a little while.
[00:45:41]  I actually think it probably won't like fail or anything like that.
[00:45:46]  And even if they don't have the Fed necessarily.
[00:45:50]  Yeah.
[00:45:51]  So do you so on that note, do you think that we're going to see a bunch of industries or companies fail?
[00:45:58]  Like even though the treasury has this unprecedented amount of money.
[00:46:03]  And also we should mention like I mean, this makes like Mnuchin like maybe the most powerful Treasury Secretary of all in his in American history.
[00:46:14]  Like this really is like an unprecedented corporate cash grab.
[00:46:20]  Yeah, and it's really funny because again, like the Fed is obsessed with being separate from the Treasury and they talk about their independence all the time and how important it is.
[00:46:30]  And then they're saying basically that like Mnuchin can say, okay, well, we don't want that company to get this money and that one's okay, which is really weird.
[00:46:40]  Yeah.
[00:46:41]  Yeah, and this is the same guy who, by the way, like foreclosed old ladies' homes who were like two days like past paying.
[00:46:52]  Like this guy is a bad dude.
[00:46:55]  Even like everything else aside, like he's a really bad person and was like a real key actor in the in the mortgage crisis.
[00:47:04]  Yeah, for sure.
[00:47:06]  So like, yeah.
[00:47:08]  Like with the industries and stuff, I mean, I feel like cruises are just dead.
[00:47:12]  Like forever.
[00:47:13]  Like those are, those are gone.
[00:47:16]  Airlines.
[00:47:17]  Yeah.
[00:47:18]  Well, Boeing, they were going to have to bail out before the pandemic hit because they were going through some rough mechanical...
[00:47:26]  Ch-ch-ch-ch-changes!
[00:47:33]  It's funny.
[00:47:33]  I did read that a lot of the cruise industry too might get screwed because this is such a delicious, I don't know what you call it, like turn, but a lot of the cruises are incorporated through shell companies in the Bahamas.
[00:47:52]  And I think some of the vessels are foreign flagged too.
[00:47:56]  Oh, really?
[00:47:57]  Yeah.
[00:47:58]  So the way like the shipping or the way that basically any maritime industry works is that you can get, there's many advantages to business owners to flag their vessels to basically say your vessel is from like Panama or like Panama is actually a country where they do this a lot or like anywhere, you know, Liberia, any of these countries.
[00:48:20]  And so you'll see like Maersk vessels or whatever.
[00:48:24]  I don't know necessarily Maersk, but like, big, big vessels that will like, have their technical, like country of origin or whatever be, you know, some some poor like nation with a big coastline or a small coastline uh America, you can't.
[00:48:39]  You can, but you can't really do that because we have the Jones Act, which means that any vessels that go between two American ports at like basically, it's more complicated than that they have to be crewed by American sailors, but it's, I mean, a lot of these companies.
[00:48:53]  You see, they're basically like floating sweatshops, ones that are anywhere else.
[00:48:57]  Yeah, it's grim and it's not.
[00:49:00]  Yeah the, the cruise.
[00:49:01]  Uh, the fact the cruise companies have the shell companies in the Bahamas is really funny, because it's like, why not Delaware?
[00:49:09]  Well, and if it had been in the United States then they probably would have been able to get bailed out.
[00:49:13]  Well hey, because they might actually not actually be American companies at this point.
[00:49:19]  Um so who, who else?
[00:49:21]  Give me some more, give me some more names here.
[00:49:23]  That's good, let me think uh, I mean I okay, so Ford's definitely going to be downgraded.
[00:49:30]  Um oh, insurers are a little weird right now.
[00:49:33]  Um, you're talking about like literal, like health insurers, life insurers.
[00:49:38]  Life insurers specifically, are the ones that have been buying a lot of low quality bonds um, and there are a couple of like small, corporate focused, like they insure companies and like they seem pretty fucked right.

=== Social Unrest and Economic Precarity (13:38) ===

[00:49:56]  Well, any of these things, when there's about to be a bunch of big payoffs all at the same time, generally not great.
[00:50:02]  Yeah yeah, bad news.
[00:50:04]  Well, that's not going to help the underlying possible liquidity crisis.
[00:50:08]  I know that's the thing it's like.
[00:50:11]  This is like literally okay, not literally.
[00:50:14]  It seems really really um, like perfectly designed to just destroy the way that markets are set up right now.
[00:50:24]  Yeah, it's like all of these.
[00:50:26]  It's like all of these.
[00:50:28]  It's not just like bad practices that have been like, you know, kind of the the key, like you know, structures of our economy, or the underlying structure of our economy for the past, you know 25, 35 years, 40 years whatever, but it's also like all of the these other things, just like hitting at once yeah, and so it's just like it's just exacerbating the whole system yeah,
[00:50:55]  and the supply Chain stuff is like a little niche.
[00:51:00]  It's less important than like obviously massive unemployment numbers.
[00:51:04]  But I do think it's so weird that like all of a sudden like companies can't buy, they can't pay their suppliers.
[00:51:12]  And they've been waiting to pay their suppliers.
[00:51:14]  So they've been telling suppliers, like, okay, we'll pay you in 90 days instead of like tomorrow, like we were supposed to.
[00:51:22]  But now they don't know if they'll be able to in 90 days.
[00:51:27]  So they like need to run for cash and borrow as much money as they can.
[00:51:31]  And you're seeing that in like so many different industries.
[00:51:35]  I mean, you know, I think you're, yeah, you're seeing it everywhere.
[00:51:38]  And in like real, real people industries, you know?
[00:51:41]  Oh, yeah.
[00:51:42]  Well, it's funny too, because like mall operators and other like commercial real estate people are also completely losing their minds.
[00:51:51]  Yeah.
[00:51:52]  That's the scary thing.
[00:51:54]  We were joking.
[00:51:54]  You and I were joking that like that the Fed can't get involved in commercial real estate.
[00:51:58]  And it's almost like, but maybe they can.
[00:52:04]  Commercial real estate definitely wants the Fed to get involved.
[00:52:07]  Yeah.
[00:52:08]  I mean, because it was already crashing.
[00:52:11]  I mean, it was like simmering.
[00:52:13]  A crash was simmering for a long time before this hit.
[00:52:16]  And now, you know, it's like, it's, it's, again, it's all these real world things.
[00:52:21]  It's people losing their jobs and the supply chain shocks and the fact that, you know, no one's working.
[00:52:27]  So there's a collapse in demand.
[00:52:28]  So no one's buying.
[00:52:29]  So, you know, consumption is down and all of that hit.
[00:52:32]  And there was already, you know, what people were calling the like mall apocalypse or whatever of all of these stores shutting down or restructuring, et cetera, which is the same thing basically.
[00:52:44]  That's just like a slow death.
[00:52:47]  So it's like, you know, yeah, I mean, I think, you know, the big question then looking forward, and this is something Brace and I have talked about, is like, can Jeff Bezos step in and absorb all of this slack?
[00:53:06]  Which is a horrifying, it's a horrifying thought, but you know, it's true.
[00:53:11]  Well, that's the thing too.
[00:53:13]  Like, it's funny you mentioned Apple before because Apple has so much cash.
[00:53:19]  Like, the amount of cash that it has access to is like completely obscene.
[00:53:24]  It's like $250 billion or something, or it was.
[00:53:28]  And they had so much that they used to like issue debt and say, okay, well, we want to keep this cash offshore.
[00:53:36]  So they like kept it offshore in like Ireland or wherever.
[00:53:40]  And then they would just be like, okay, well, we're just going to like borrow here.
[00:53:44]  And it's like we're, you know, it's like we're spending this cash, but we're just spending borrowed cash.
[00:53:51]  It was really funny.
[00:53:52]  They're insane also.
[00:53:54]  But it's super.
[00:53:55]  Go ahead, sorry.
[00:53:56]  What is this going to start like looking like in the because I'm just cognizant of time and I want to get to this?
[00:54:02]  What is this going to start looking like in like the real world, I guess, like in the day-to-day life?
[00:54:09]  Yeah, I mean, more abandoned malls.
[00:54:11]  That's been grim.
[00:54:15]  More unemployment.
[00:54:16]  Like the unemployment stuff, I think can't be emphasized too much.
[00:54:21]  Like that 3.3 million unemployment claims or jobless claims was seriously the biggest.
[00:54:28]  It just was insane, like completely unprecedented.
[00:54:31]  Yeah.
[00:54:32]  Way bigger than people thought.
[00:54:34]  And, you know, I hope this stimulus package ends up being enough.
[00:54:38]  But then like people have rent.
[00:54:40]  I mean, there are some you can't, I guess they said that people who live or people who have mortgages from like Fanny or Freddie can't get foreclosed on or evicted for the next few months.
[00:54:54]  Well, I know Newsome Newsome like asked asked banks to not foreclose on houses or to like to stop mortgage payments or charging mortgage to people, homeowners in California.
[00:55:10]  And then Bank of America said no.
[00:55:13]  I heard about that.
[00:55:14]  That's insane.
[00:55:15]  I know, which is, I think there's a few reasons for that probably.
[00:55:20]  But I mean, there's also like, okay, maybe for some people with mortgages, but like rent, you know, if it's going to be, I mean, they're going to have to obviously give people more money as time goes on too, because this is definitely already in San Francisco, they announced there's going to be at least until April or excuse me, May 1st, the lockdown will continue.
[00:55:42]  And it's like, I feel like the effects of this will worsen as time goes on.
[00:55:46]  Oh, yeah, for sure.
[00:55:47]  I mean, the longer, yeah, it's funny because like, you know, obviously things should be shut down for as long as they need to be shut down, right?
[00:55:56]  But like the reason that they've all been talking about like, oh, let's not make the cure worse than disease is because the longer things are shut down, the worse markets are going to get.
[00:56:06]  Yeah.
[00:56:07]  So like, but the thing is, again, if you open everything up and you've got huge numbers of people getting sick, then you're overwhelming the health system.
[00:56:15]  And like, that's just the same problem, but like through a different channel.
[00:56:20]  Yeah, yeah, yeah.
[00:56:21]  And it's probably also going to cause an equal amount of unrest or maybe even more.
[00:56:25]  Yeah, absolutely.
[00:56:27]  I mean, at least people would be able to, you know, go to Urban Outfitters or whatever by Arctic Monkeys LPs.
[00:56:33]  But it's, yeah, it's, it's, it's crazy because like you can't, it's the weird thing about this crisis is like we're stuck inside our houses.
[00:56:41]  And so it's like hard to see things as like see the effects of things sort of on the day-to-day level on the street because you sort of can only read about them.
[00:56:51]  But it's, it's like astounding.
[00:56:52]  I mean, 32% unemployment.
[00:56:54]  I mean, that would be, even if that is, even if that is actually accurate or whatever, instead of what, I think it's being too conservative, that will be, I mean, I don't even know what that could look like.
[00:57:06]  That'd be worse than the Great Depression by a lot.
[00:57:09]  Yeah, for sure.
[00:57:10]  I mean, I don't, I don't either.
[00:57:12]  The funny thing is that like all of the smart people don't.
[00:57:15]  And so like, you know, I'm trying to figure out like, okay, well, what does, you know, this guy or that guy think?
[00:57:20]  And no one has any idea.
[00:57:23]  Because it's just so big.
[00:57:24]  I think too, it's like, you know, when we think about unemployment, I mean, I think I mentioned this last time we talked, but it's like the rent, the, you know, large-scale unemployment has like direct and very real like social and political like ramifications that really don't get, I mean, I don't want to say priced into, but like as a way to kind of think about it economically, like don't get thought of in the same way.
[00:57:52]  Like you do not want like prime age people just like unemployed for like months and months of time.
[00:58:04]  Do you know what I'm saying?
[00:58:05]  There's a lot of reports of social unrest coming out of Italy too.
[00:58:08]  It's like no, it's like these are very serious.
[00:58:12]  And you, you know, you pair that again with, you know, there's no consumption.
[00:58:17]  You've got political unrest.
[00:58:19]  There's, you know, no local businesses except for quote unquote essential.
[00:58:24]  And those are then stressed.
[00:58:25]  I mean, it's very easy to see.
[00:58:27]  I mean, I don't want to get too like doomer, although I do like to get a little doomer.
[00:58:34]  But it's very easy to see like how quickly I always say that word cascading, but it's because it has these like furthering effects that aren't initially accounted for, but end up kind of ramping up as you keep like falling down the hill or whatever.
[00:58:51]  I'm mixing a bunch of metaphors, but you know.
[00:58:53]  It works.
[00:58:54]  Well, in the way that markets are set up, like they make that worse, right?
[00:58:59]  Exactly.
[00:59:00]  And that's one of the things that's been freaking me out because, you know, if everyone is like looking for cash at the same time, which is interesting because we talk about social unrest.
[00:59:09]  And I don't think it's, I don't think it's a coincidence that a lot of wealthy people are taking all their cash out and putting it in lockboxes because they must know.
[00:59:19]  Right.
[00:59:20]  Like I think that pretty much everyone knows that this is going nowhere good.
[00:59:26]  And, you know, a lot of a lot of what's causing the problem that's leading to the layoffs is people, you know, thinking, oh, this is going to be awful and pulling their money out and putting it under their mattress.
[00:59:38]  Right.
[00:59:39]  Which like, it's insane and really depressing.
[00:59:43]  I know.
[00:59:44]  I mean, I've, yeah, I heard about a bank that actually is doing really good business renting out lockboxes.
[00:59:51]  Like that's their new thing.
[00:59:53]  They're like, hey, we'll give you an extra strong lock on your lockbox.
[00:59:57]  And it's pretty.
[00:59:59]  It's funny.
[01:00:00]  Also, you know, gun sales have obviously been through the roof.
[01:00:04]  I'm sure.
[01:00:06]  But it's just crazy because we're going to see all these people basically forced out of their regular jobs and like in some cases, good jobs in order to become Instacart shoppers and, you know, whatever warehouse workers.
[01:00:19]  We were saying this before.
[01:00:20]  We were talking about this before we started recording, but Lyft is now telling its drivers to start working at Amazon warehouses.
[01:00:29]  And it's like, we're just going to see, I mean, the precariatization to make up another word from another not so, I think, dictionary-friendly word of the economy is, I mean, this is like an accelerant for it.
[01:00:43]  Yeah, and things were already precarious enough, right?
[01:00:46]  Like, you know, it's funny the way that people talk about these things, they're like, oh, it was like a jobless economic recovery back in 2004.
[01:00:56]  Like, what that means is basically that everyone's jobs got a lot more precarious and it's continued to get that way.
[01:01:03]  And now it's just like, full on.
[01:01:05]  Yeah.
[01:01:06]  Yeah.
[01:01:06]  One of my favorite statistics is that 80% of all new jobs created after the financial crisis were gig jobs.
[01:01:17]  Which is just like astounding.
[01:01:18]  Yeah.
[01:01:19]  So that's like, yeah, I get to say my favorite thing right now.
[01:01:22]  Thanks, Obama.
[01:01:24]  Well, it's funny too, because like, I mean, especially in the context, because I think we got to talk about this.
[01:01:29]  And then I think just because of time, we got to wrap it up kind of soon.
[01:01:33]  It's, you know, we're talking about unemployment insurance and, you know, people getting this $1,200.
[01:01:40]  And then on top of that, up to $600 a week in unemployment benefits.
[01:01:45]  As far as I'm aware, it's a little difficult for some of these precarious workers to apply for unemployment insurance.
[01:01:54]  Typically, but they expanded it to include gig and contract workers.
[01:02:00]  Oh, did they?
[01:02:01]  They did, which was like, that was a big fight over that.
[01:02:04]  But they, and, and to include free, like people that categorize as freelance, contract, gig, like whatever you would call it.
[01:02:12]  So those people can apply.
[01:02:15]  The question is, like, how much they're going to get and also the turnaround on that.
[01:02:20]  EDD is usually like pretty quick, but the backlog is just, I mean, like, who knows, like, if they have the capacity right now to deal with the claims.
[01:02:30]  Which is funny because it's almost like, you know, they could use a lot of people to do that.
[01:02:37]  Right.
[01:02:37]  Well, that's funny about all of this.
[01:02:40]  Well, I think it's also like, oh, man, it sucks.
[01:02:44]  Maybe you guys might have to raise wages to compete with unemployment benefits.
[01:02:49]  God forbid.
[01:02:50]  I know.
[01:02:51]  God forbid.
[01:02:53]  It's just funny because like, I mean, here in San Francisco, there's like, I mean, there's going to be like a massive need for basically city workers and other places.
[01:03:01]  Dude, San Francisco has a massive budget, $11 billion a year.
[01:03:05]  But like there should just be, I mean, if I was the government, which due to where I was born, I cannot be, I would, I would, like, do a massive make work jobs program in order to like help ease the effects of this crisis, but like, that's just clearly not going to happen.
[01:03:26]  Yeah, that's, well, that's what sucks about it.
[01:03:27]  And the funny thing is, like, the muni buying thing is probably the closest we'll ever get.
[01:03:33]  And that's kind of really grim, honestly.

=== People Decisions and Accountability (02:12) ===

[01:03:35]  Well, that's what I'm wondering.
[01:03:36]  I'm like, can the cities use that as an opportunity to basically enact these programs that they wouldn't have had the financial capacity to prior to that?
[01:03:47]  I'm really hoping.
[01:03:48]  It's not entirely clear yet because we don't know what the terms are going to be.
[01:03:53]  We don't know how big it's going to be.
[01:03:55]  But like, say that they take like another 300 billion and just like lever that up and then decide like, okay, well, we're going to lend $3 trillion to municipalities.
[01:04:06]  I mean, that's awesome, right?
[01:04:07]  Like you can actually employ people with that.
[01:04:11]  But, you know, they say that they're like, okay, we'll give $10 billion to this facility.
[01:04:16]  Like, that's, that's nothing.
[01:04:18]  And the thing is that like the people who are making these decisions are not accountable to anyone other than the president.
[01:04:25]  Right.
[01:04:26]  Right.
[01:04:27]  So it's, and, you know, there are a lot of weird democratic implications for like the Federal Reserve making all of these decisions.
[01:04:36]  Yeah, it's like, yeah, Federal Reserve, I mean, it's basically a policy that it's, that it's enacting.
[01:04:43]  Yeah.
[01:04:43]  And like, you know, on one hand, it's good to sort of lift the veil between the Treasury and the Fed because it was kind of, you know, it was bullshit in the first place.
[01:04:52]  But once it's up, you have to be like, okay, well, let's actually get, you know, some accountability in there.
[01:04:59]  Right.
[01:04:59]  Which there's not.
[01:05:01]  No.
[01:05:02]  And probably not for some time.
[01:05:03]  Yeah.
[01:05:04]  And we're certainly not going to know anything about where Menunchin's little fund goes for like till like next year.
[01:05:14]  I've heard that he's just using it to subscribe to people on Patreon.
[01:05:19]  Which is, I think.
[01:05:22]  That's when we'll know.
[01:05:23]  That's when we'll know when the crisis is bad.
[01:05:25]  The podcast economy.
[01:05:27]  When a podcast market collapses.
[01:05:29]  Well, I was thinking, I was talking to some other people about this.
[01:05:31]  I was thinking of just purchasing other podcasts, doing some hostile takeovers.
[01:05:37]  Because, you know, we all have boards and stuff like that.
[01:05:39]  So I can wear my way in there.
[01:05:44]  Well, I don't know.
[01:05:45]  You guys, Liz, do you have any final questions?

=== Why Celebrities Clench Up (02:47) ===

[01:05:48]  We're at the end of our hour here.
[01:05:50]  I don't.
[01:05:51]  I mean, I can go on forever about this, but.
[01:05:53]  Oh, I know.
[01:05:56]  But no, I just think like, yeah, it'll be interesting to see how far the Fed goes.
[01:06:05]  And like you said, like now that this veil is up, if Congress cares about, you know, maybe asking some questions to start, maybe trying to pass some laws to start.
[01:06:18]  I don't know.
[01:06:19]  Yeah.
[01:06:20]  And maybe even like elect local Federal Reserve Board governors.
[01:06:25]  Oh my gosh.
[01:06:26]  Now you're talking crazy.
[01:06:27]  I know it's insane.
[01:06:30]  You know, you got a dream.
[01:06:31]  Anyway.
[01:06:33]  But thank you for having me.
[01:06:34]  And I don't want to keep you guys too long.
[01:06:36]  No.
[01:06:37]  Thank you for.
[01:06:38]  Yeah.
[01:06:38]  Always, always a pleasure.
[01:06:41]  Well, cool.
[01:06:42]  Well, Alexandra, I hope you have a smashing night there in Delaware.
[01:06:48]  If you see Joe Biden, by the way, confuse him because he seems to have a hard time with that.
[01:06:56]  Or give him a hug.
[01:06:58]  But yeah, it's always a pleasure to talk to you.
[01:07:03]  Well, thanks for having me, for real.
[01:07:05]  Always fun.
[01:07:06]  Yeah.
[01:07:07]  See you next time.
[01:07:28]  So, well, first of all, that was fascinating.
[01:07:31]  It was.
[01:07:32]  You know, I can talk all day about this and many other things that no one really cares about.
[01:07:38]  Yeah, yeah, it's funny because I'm actually the one who's obsessed with celebrities, although technically all the celebrities I'm obsessed with are part of an international child trafficking sex ring.
[01:07:47]  But you're the person who's like the big, you know, you wear the money pants in the family.
[01:07:52]  Yeah, you're obsessed with fame and I'm obsessed with fortune.
[01:07:55]  Well, hold on here, baby.
[01:07:57]  My genetic heritage definitely makes me obsessed with fortune.
[01:08:03]  I just thought it was a cute way to put it.
[01:08:04]  Yeah, that is quite adorable.
[01:08:06]  So a lot of you guys know that I have a certain sound here, which, Young Chomsky, can you hit me with the...
[01:08:14]  Yeah.
[01:08:15]  But due to changes in my lifestyle, basically, you can't see this listeners, but I'm holding this up for my co-workers here.
[01:08:27]  I have a money clip now.
[01:08:28]  You guys see this?
[01:08:29]  It's an ILW money clip, which I think is very cool.
[01:08:34]  Now I'm a money guy.

=== Cha-Ching Clench-Up (02:47) ===

[01:08:35]  So my new sound is doing that.
[01:08:44]  Why do you do it?
[01:08:45]  Why does it sound like a bunch of people?
[01:08:46]  It's a higher pitched register.
[01:08:48]  Cha-ching!
[01:08:51]  Hold on.
[01:08:51]  I hate it so much.
[01:08:52]  I hate it.
[01:08:53]  Cha-cha.
[01:08:54]  Cha-ching!
[01:08:55]  How do you do it?
[01:08:56]  Can you guys do it?
[01:08:57]  Cha-ching!
[01:09:00]  Cha-ching!
[01:09:01]  No!
[01:09:03]  Cha-ching!
[01:09:06]  I can't even tell what I'm doing wrong.
[01:09:07]  I know it's not.
[01:09:08]  Listen, I know.
[01:09:09]  It's like you're like, you clench up when you do it.
[01:09:13]  Yeah, I get excited.
[01:09:14]  You sound really, you gotta relax and do it.
[01:09:17]  I cannot do that.
[01:09:19]  I am.
[01:09:20]  I throb when I do it.
[01:09:22]  Well, anyways, that's, that's, that's, uh, that's, I'm, I might, I'm thinking of switching sounds.
[01:09:27]  Whoa, sounds like.
[01:09:29]  I'm gonna have to check.
[01:09:31]  I'm gonna look into the technical feasibility aspects of that.
[01:09:35]  Well, we can always, yeah, yeah, yeah, yeah.
[01:09:38]  But it's obviously, you know, I have a bandolier filled with various sounds that I make with flawless accuracy, able to be drawn at any point and loaded.
[01:09:55]  Yeah.
[01:09:55]  Yeah, it's like your keytar.
[01:09:57]  Yeah, yeah, exactly.
[01:09:58]  It's like a key tool.
[01:09:59]  What did you call me?
[01:10:01]  It's kind of like that.
[01:10:03]  It's not.
[01:10:05]  Don't ever call me a key again.
[01:10:07]  What?
[01:10:08]  You said a keytar.
[01:10:10]  I was so good.
[01:10:13]  I'm sorry.
[01:10:14]  I didn't hate interrupting you, but I was doing it as a bit, and then I saw your face, and now I feel sad.
[01:10:19]  Why?
[01:10:21]  Oh, well, just, I don't know.
[01:10:23]  What if you die?
[01:10:25]  Brace?
[01:10:27]  Well, no, from like a, from just like the things that like a.
[01:10:30]  Don't say that.
[01:10:30]  That's bad.
[01:10:31]  I don't like that.
[01:10:32]  Don't put that out in the world.
[01:10:34]  By me doing that.
[01:10:35]  Okay, fine.
[01:10:35]  What if I don't?
[01:10:37]  No, stop it.
[01:10:38]  Fine.
[01:10:38]  What if you start wearing a mask for some reason to scare me?
[01:10:43]  I don't think I have any.
[01:10:44]  Oh, so that's okay to put out in the world.
[01:10:46]  Scaring Brace.
[01:10:48]  Well, thank you so much.
[01:10:50]  You got any last words, baby?
[01:10:52]  No, let's shut it down.
[01:10:55]  Okay.
[01:10:56]  My name is Randy Paul.
[01:11:01]  Why do you keep saying Randy?
[01:11:02]  Randy.
[01:11:03]  Randy.
[01:11:03]  Randy Paul.
[01:11:04]  Randy Paul.
[01:11:06]  Yeah, baby.
[01:11:07]  Randy Paul, baby.
[01:11:08]  You make me, you make me Randy Paul.
[01:11:13]  All right, I'm Liz.
[01:11:14]  We are joined, as always, by producer Young Chomsky.
[01:11:17]  He does the music as well.
[01:11:18]  And baby, why don't you sing us out?
[01:11:22]  We'll see you next time.