Sacks

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.

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.

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.

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.

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.

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.

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 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

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.

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.

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.