Sacks
speaker
82 appearances
1 recordings
1 series
first heard Aug 2024
last heard Aug 2024
Sacks’s voice in public audio — every appearance, attributed to the second.
Trend
recordings per month · last 12 monthsNo recordings in the last 12 months.Older appearances are listed below; set an alert to hear about the next one.
Appearances
So when you add it all up, you're probably talking about a few hundred billion dollars of notional capital. That's enormously levered. That's what causes that sensation, as Zach said, that things are ricking.
We have a lot of regulation on banks. Essentially what happened is after all of the chaos of the great financial crisis, the thing that we don't talk about is what we really did was keep running the same, if not more risk. We just took it off balance sheet. So the banks were able to structure business lines to work with these hedge funds.
And these hedge funds in turn were able to show over time that they're so tightly managed that there are no black swan events that could happen. that they can run highly levered. So I think we are in this moment where there'll be these fissures from time to time. So here's this Bill Hwang, that's an example. The Cary trade is another example.
There've been examples a couple of times a year, but at some point, these folks will have taken too much risk. And we'll look back on it and we'll think that hedge funds should probably have been more regulated than they are with respect to their leverage ratios, not with respect to their strategies.
I think we're in a low-key recession. So I think that we're going to probably go through a couple of very difficult revisions of old data. The thing to remember about non-farm payrolls isn't as much what the number is, but if you actually look to the number of times it then gets revised, the reality is that these things get revised constantly.
And right now we're in this trend where we are overestimating and revising down. Sachs mentioned this, that that was the same with GDP. So we are, I think, in a tough situation. And then what you're seeing is folks that run very cyclical businesses are telling us in very plain spoken English that demand isn't there.
So the one that was interesting this past week, Jason, you mentioned millennials, but like Airbnb, where you think all these young people are running around, YOLOing whatever cash they have. Airbnb had a massive warning on demand.
So when I think the excess capital, whether it's the steamy check or what have you, has been exhausted, you're now starting to see it bear out in these cyclical businesses. I don't think the demand is there. I think we're in a recession. It probably becomes more obvious in Q3 and Q4. And so Powell's going to have to cut. The question is, will he overreact to the pressure
and cut 75 to 100 versus 25 and take it slow.
Well, those are not... Those are not opposing things. So you're saying a year from now? I don't honestly know. Okay. But I do think that we'll probably be in a technical recession.
But I also think that there's a pretty decent chance the market will be up.
Nat and I, when we're here in Portofino, we go in the morning to the fishmonger and we'll buy, you know, fish for the family. It is unbelievably expensive. And we always think to ourselves, how is it possible that folks can actually choose to eat healthy and local if they want to? It's next to impossible. What was a Branzino?
You know, if you want to have locally caught sole, it's like 48 euros a kilogram. Wow. And it's expensive. Wow. It feels like more than a restaurant. Yeah. To feed a family of seven, which is what we are, you'll have to spend $150, $200. It's not sustainable. It's not something that makes sense for enough people anymore because that probably used to be $40 or $30. But Freeburg is right.
We're in a real serious problem because it's like these systems have remained the way that they have been for a very long time. And while other industries like the tech industry have captured all these incredible efficiencies, but the problem is that then these other industries are what supports everyday people's everyday lives.
And in the absence of a way to actually reduce cost and improve quality, you end up where we are today. And I don't think that that's sustainable.
I don't have much to say. I mean, I think it's been a trend in their letters when he stops mentioning a company in his letter, it's because he's selling.
Yeah. And that's what happened here. Okay.
I think that David is right that Freeberg is right that China thing could have impacted it, because he also sold a lot of BYD, which they've owned since 2008, I think. So that's a Chinese EV company. And so it could be just that that could have played a part. To be honest, I don't know.
Maybe, yeah. I could buy that. That seems like reasonably logical. I think the thing to remember, though, is that these decisions, I think, have been stewing for at least a couple quarters. Remember, that letter that he writes was not written yesterday, right? That was being drafted months and months ago. So these decisions were made even longer. So I think these decisions were made a while back.
Another reason, if we're going to play kind of conspiracy theorists is like, you know, after the death of Charlie Munger, maybe what he's starting to do is consolidate the book so that it can transition elegantly to Greg Abel when Buffett passes away. Let me unpack that for a second.
Showing 21–40 of 82 · page 2 of 5
← Previous
Next →