Citi's Dirk Willer on How You Know When the Bubble Is Over

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Odd Lots 41 min 6 speakers 3 chapters transcribed 1 month ago
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Unknown 0:32
Bloomberg Audio Studios
Jennifer Zabasaja 0:34
Podcasts, radio, news.
Joe Weisenthal 0:48
Hello and welcome to another episode of the Oddlots Podcast. I'm Joe Weisenthal.
Tracy Alloway 0:53
And I'm Tracy Alloway.
Joe Weisenthal 0:54
Tracy, uh markets getting interesting again.
Tracy Alloway 0:57
I love interesting markets.
Joe Weisenthal 0:58
We do. We always say we're long volatility.
Tracy Alloway 1:01
That's right.
Joe Weisenthal 1:01
Here at the Oddlots Podcast. All financial journalists are uh long volatility, I guess.
Tracy Alloway 1:06
Yes. I mean you can actually see it in the listener and readership numbers. Um our traffic follows the VIX.
Joe Weisenthal 1:12
Some bad incentives for if it bleeds, it leads. I mean they've been saying this about the news forever.
Tracy Alloway 1:19
Yeah. So at the moment we are recording this on Friday, November fourteenth. At ten
Joe Weisenthal 1:24
oh seven AM.
Tracy Alloway 1:25
Yeah, we have to say that. We have to be very specific because things are changing so fast. At the moment, the S P five hundred is down like point seven percent, but it was down more than one percent earlier. And then yesterday it fell, you know, one point eight percent. So this is a pretty substantial slide. And of course it comes at a time when people were already worried about things like tech valuations and the possibility of an AI. Bubble.
Joe Weisenthal 1:50
Totally. The US stock markets had a phenomenal year. And this is all kind of minor in the grand scheme of things. But some of the moves haven't been that minor for some big things. It is some of the most volatile period since April, really. I mean, it's kind of been a smooth ride up since the end of April or the middle of April, whenever that bottomed. There's just a lot going on. Questions about the Fed. Gold, interestingly, had a massive year. And it also is selling off. So that sort of raises the question about what's been driving gold. Bitcoin getting absolutely clobbered, of course. You know, it's sort of a glorified tech stock and the way it trades. So many interesting things, so many market winners fading a little bit.
Tracy Alloway 2:31
You know what was really interesting this morning? For a second, bonds weren't really doing anything.

What is the current market outlook and why do the hosts think we are in a bubble?

Tracy Alloway 2:36
They weren't rallying. And so if if you can't go into gold, if you can't go into bonds, if everything's selling off at the same time, that seems kinda worrying. Well this is Well, this
Joe Weisenthal 2:43
is really interesting and probably needs to be discussed more, but you're absolutely right. I think yields on the tenure were actually up yesterday, November thirteenth. In the last week, I was looking at the Wort function on the Bloomberg terminal. Odds of a December rate cut have come in quite a bit. It's closer to a coin flip. A week ago, it was 66%. There have been some speeches from some of the FOMC members talking about, you know, they're an uncertain. Certain and part of the reason we're uncertain because we've had so little data. I guess we're gonna start getting data again now that the uh government's still Although it's still
Tracy Alloway 3:14
gonna be messy.
Joe Weisenthal 3:14
It's still gonna be super messy. You know, understanding the economy in real time is hard in the best of times. It's really hard when there's no data. And then it's really hard when the data that does come out is going to be driven by the lack of government employment, which then make the data even more ambiguous. So a million questions, very interesting moment and a very interesting year for markets. We sort of gotta get a better understanding of what's going on.
Tracy Alloway 3:36
Can I say one more thing before we get to our guest, which is I think part of the discussion at the Fed, we're kind of getting very circular here because I suspect what's happening is yes, the Fed is worried about inflation. So some FOMC members are getting a little bit more hawkish in their speech.

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