Markets At Risk Of Serious Correction, Valuations ‘Out Of Whack’ | Moody’s Mark Zandi

and I generally don't comment on valuations and except at points in time where there's they seem so off-kilter out of whack that they could become a macroeconomic issue and that's that's this period in time Mark xandy returns to the show he is the chief Economist at Moody's we'll be talking about his outlook for economic growth markets equities and bonds and inflation welcome back to the show good to see you Mark David it's good to be with you thanks for the opportunity the S rule was triggered last time we spoke a couple months ago we'll talk

about your outlook on the economic growth landscape whether or not getting an infl an inflationary impulse in 2025 whether or not we're getting a recession in 2025 these answers uh hopefully uh we can discuss today take a look at some of my um or some news coming out of the financial times earlier today top Federal Reserve official warrants progress on taming US inflation may be stalling this is from uh Christopher Waller governor of the policy setting uh FMC he said that uh he still the still elevated borrowing costs were curbing demand across the world's biggest

economy the US he noted that in the data we received between today and the next meeting surprises in a way that suggests our forecast of a slowing inflation and a moderating but still solid economy are wrong then I will be supportive of holding the policy rate unchanged in December do you support that view that the FED should and possibly could keep rates unchanged at the next meeting I think it's a possibility I think it's a close call but I think at the end of the day inflation is very close to the Federal reserve's target and

all the trend lines here look good the only difference between current inflation and the fed's target is the growth in the cost of home ownership the owner's equivalent rent and I think that's a very lagged vexed uh measure and you exclude that we're there and that's that's where we're headed so I think ultimately they'll cut in December but I don't say that with strong confidence I think it will be a close call do you think that they're too early to cut where they have been too early to cut this year no I don't I mean

I think they've achieved their mandate which is full employment consistent with a 4% unemployment rate and as I said I think inflation is very consistent with their target and if not they're headed in that direction so if that's the case then uh they they should bring they should normalize the federal funds rate uh to be consistent with the so-called equilibrium rate that rate at which policy is neither supporting or restraining growth that's an that's tough to know what exact what that is exactly but I know it's not 4.75% certainly not 5 and a half% where

the funds rate peaked so I I think they should they should have cut rates and they should continue to cut rates until we're you know back down closer to 4% which is probably the highest estimate of the Full Employment unemployment rate at this point okay now Mark let's talk about your outlook overall for economic growth in 2025 as I as I alluded to earlier in the introduction when we spoke a couple of months ago the unemployment rate ticked that to such an extent that you could argue the recession already happened uh but obviously it wasn't

de clared officially are we still um on the on track to see some sort of economic slowdown is a recession basically in the cards for 2025 uh no uh I think the Som rule was not useful this go around in part because in significant part because the runup and unemployment was due to labor Supply not labor demand I mean historically it was Labor demand got hit you got layoffs and thus unemployment Rose and that was consistent with recession this go around it was mostly Surge and immigration added to labor force that caused unemployment to notch

a little bit higher uh and uh it wasn't had anything to do with demand and therefore the Som R didn't work and it's not working now and I think the economy is on Solid Ground we got a you know big policy changes dead ahead with the the new president and new Congress so I think that will pose some threats and challenges but uh it had to be a pretty gracious policy are at this point to undermine the economy I think the fundamentals are good what do you expect uh to happen for earnings next year uh

earnings should be fine uh you know if the economy performs as I expect um and even if margins stay where they are I don't expect margins to widen here because they're already very wide by historical standards and I'm and when I say that I'm thinking about economy-wide earnings economy-wide profit margins so that means earnings will grow at the rate of sales and if you told nominal sales so if you told me the economy is going to grow 2 3% real 2% inflation that says you know sales are going to grow four five 6% and that's

what that should be what earnings grow in in the coming year you mentioned to me Offline that things are looking froy on the valuations front are you referring to the equities markets in particular uh across the board uh feels like uh asset prices are getting uh ahead of themselves I mean as you can tell I'm pretty sanguin about the economy and you know corporate earnings but I think markets have gotten ahead of all of that and you know take a look at Equity prices and price earnings multiples look at uh corporate bond spreads they're paper

thin by any historical standard uh look at crypto prices look at gold prices look at the value of single family homes uh pretty much across the board I guess the only exception would be commercial real estate values you know they're down they've corrected uh but uh outside of that I think asset values are feeling on the high side and they continue to March higher uh and I think getting increasingly disconnected from the fundament even the good fundamentals and that does uh uh open up uh the asset markets financial markets to sell off a correction you

know things don't stick exactly to script and again we got a lot of policy changes coming our way and not sticking the script would probably be an app description of what's coming what what what is coming either a correction or uh just more FRA the evaluations I I you know it's as my Baseline forecast down the middle of the distribution would say you know markets kind of go sideways here and let fundamentals catch up to Value to prices and valuations normalize or at least don't uh don't become even more uh lofty but I think that

there is a growing risk uh threat that you know the these lofty valuations and prices are uh will unravel in a correction and a sustained decline in price and I do worry about that as a kind of a risk scenario I I it's it's not my the most likely Baseline scenario but it's a reasonable scenario to entertain and with each passing day that stock prices continue to rise strongly or credit spreads in the Bond Market corporate credit spreads in the bond market narrow the more worried I I get about that possibility the greater the risk

that you know that the that we suffer a correction that will have you know significant macroeconomic implications let's take a look at uh Trump's policies uh especially regarding fiscal policies and then we can examined some of his trade policies and how they may impact the economy on the fiscal side tax cuts will that boost margins going forward yeah that's one reason why stock prices are up uh I think investors are discounting uh a tax cut a corporate tax cut president Trump on the campaign Trail talked about going from 21% which is where the current uh

tax rate is to something closer to 15 he talked about 20 so and you know hard to know exactly where he's going to land there's other corporate tax cuts that will also be on the table and make it through the legislative process around R&D accelerated depreciation bonus depreciation so yeah I think businesses will get some form of tax break and that's one reason why stock prices are up um why we've seen Equity prices rally here in the wake of of uh when it became inre increasingly clear that Trump was going to win the election and

actually did win the election what about his the criticism that a lot of his tax cuts aren't going to be implemented right away it'll still take some time uh for these to be realized and so um companies still face the immediate threat of tariffs which may be profit margin reducing not expanding yeah I think the tax you're right the tax cuts probably don't get implemented until the start of 2026 I mean there is a legislative process uh tax cuts have to be passed into law and tax cutting legislation is always complic ated a lot of

moving Parts a lot of stakeholders and so it's going to take a bit of time and then I I don't think they'll want to cut taxes you know for logistical reasons until the F the start of 2026 but I think investors obviously are looking forward and they're discounting that I do think the tariffs are a potential problem for the economy and earnings but it depends on exactly what those tariffs will be I mean president Trump on the campaign Trail talked about a 10% across the board tariff 20% % at one point in time 100% on

certain products and countries higher than that for you know certain companies you know if that were the case then that's the prescription for a recession we would see a major correction decline in equity prices and asset values more broadly that would be a real problem I just don't think that's going to happen I don't think the markets think that's going to happen they think it's going to be something much more benign uh uh and thus uh thus the rallying stock prices that's a fair point this we're speaking today on Monday the 2nd of December the

S&P is above 6,000 points again and just over the weekend Donald Trump posted on his social media Network truth social that uh if the brics countries were to abandon the dollar and work on developing their own joint brics currency Trump would look into implementing a 100% tariff across the board on those brics Nations I don't think the markets are discounting that at all today but what are your thoughts on that is that likely to happen no I I I don't think so I mean that would be very disruptive and again the fod for a major

correction in stock prices and asset values broadly and an economic recession I think that's more performance policy you know performative policy he's trying to make a point create a little bit of drama you know not not something that's unusual you know based on his first term so I I don't view it as something he will actually do because if he did it would be highly disruptive and I don't think he wants to do that you mentioned also that uh on on the um on another channel that you think that there is some room or some

place for broad-based tariffs across the board what what do you mean by that no I don't I I I think there is room for strategically placed tariffs so you don't think there is yeah my my my apologies yeah you don't think there is a role for broad-based terrorists but on particular sectors yes well yeah I mean like Biden imposed tariffs on 8 billion dollar worth of imports from China EVS batteries you know those kinds of things uh in in an effort to make a point and make clear that China's not playing fair and in the

current context where there's no other way to adjudicate differences around tariffs or any other kind of trade or Economic Policy that's the only tool you have okay fair enough but that's 18 billion you know that's not 3.4 trillion that would be across the board teror so that's a a whole different as they say Kettle fish when Trump announced higher tariffs on Canada and Mexico last week the Canadian dollar fell bit the Mexican PES fell a bit how do you anticipate the US dollar to react to potentially retaliatory tariffs from some of the American trading partners

could we see Capital outflows out of the US could we see bond yields uh fall could we see the dollar fall in response well no I think uh you know if the president Trump does go down the Tariff path in a meaningful way that's that will lead to a stronger dollar that will you know put a lot of pressure on the countries that are facing those higher tariffs Mexico and Canada I think memory serves 15 15 to 20% of their GDP is tied up in exports to the US so if you're imposing you know significant

tariffs on that that's going to push those economies under the under the uh underwater and that would put that puts down more pressure on their currencies and get Capital flight into into the us so I expect you know a stronger dollar those tariffs will result in more inflation uh and uh that means higher bond yields so I think in general you'll get higher uh bond yields uh you know higher interest rates and a higher value of higher inflation higher value of the dollar okay uh turning back to financial markets you have this interesting tweet that

I like to show people financial markets are increasingly off-kilter in the blue line you have the High Yield Corporate spread and the green line you have the fixed mortgage rate spread uh currently below the um high yield spread what is this chart showing Mark yeah pretty cool huh that's pretty that's Ian and it's now converging well it's actually last I looked when I when I did this a week ago or so mortgage spreads were above corporate be High Yield Corporate spreads for the first time ever I mean I've got data back into the 90s not

even close and just to my point about markets in asset markets in general they're they're they're overvalued bordering on froy speculative a lot of weird things going on in these markets this is just another example you know where things the time uh space continuum has gotten bent in a pretty significant way you know I don't want I don't mean to overstate the case here lots of things going on both in terms of highi corporate spreads and mortgage spreads but but nonetheless it does highlight you know that things are off kilter and generally when things are

off kilter in the financial markets things correct you know there's so-called mean reversion and you know that this would be good case in point we get we're going to get some mean reversion at some point here in not too distant future mean reversion to the downside or the upside if if some certain assets have not caught up yet well I think it's generally lower lower asset prices so that means higher the corporate bond yield will rise case of the mortgage rate um that's that's pretty elevated I don't know if that's going to change much here

given the prepayment risk and the mortgage Securities given prospects given the inverted yeld curve the thing that's going on is I think uh investors are beginning to Discount the possibility of so-called gsse reform this is getting Fanny May and Freddy Mack the big mortgage Giant out of conservatorship and if they do that that means that uh that there's going to be more credit risk there and so investors are starting to Discount that and pricing that in and that's why mortgage rates are high relative to treasure one reason why mortgage rates are high relative to treasury

yields so there's a lot of lot of different things going on here but I think in general mean reversion to me in a highly valued froy Market means lower prices a correction sustained decline in prices okay uh on that note do you think that um the bond markets right now have um are a little bit froy as well take a look at the 10year yield I have here a chart showing the US Equity uh index the S&P 500 Index versus the uh 10e yield um now obviously no no direct correlation over the last year or

so although we are starting to see this um this trend of higher equities prices with lower yields which you may expect um is kind of strange you the move in the same direction but I'll let you comment on that well that that's my point you know you know this has happened all in the last couple of months this kind of Divergence long-term yields have risen I think significant Park as investors are anticipating inflation uh and um inflation uncertainty and larger budget deficits that's all getting embedded in the higher 10year yield and stock prices have continue

to Rocket higher because of lower corporate tax rates maybe some deregulation you know in financial services utilities and and Technology uh and less antitrust so these things are diverging but those that can't continue I mean that that makes no sense when long-term yields are rising and asset prices are rising at the same time so that's again goes to my point things are I'm using the word off-kilter off base doesn't feel right and thus my growing angst about uh potential for a market correction an asset Market asset price correction you know RIT large here in the

not do distant future do you think that the bond market is pricing in perhaps lower inflation no because if you go try to if you go decompose the 10e treasury yield you can see that inflation expectations like for example go look at fiveyear break evens yeah they're all you know 4050 last I looked I haven't looked in the last you know few days right but they're up 4050 basis points so about half the increase in 10year yields is related to higher inflation expectations if you decompose it yeah so what are these fry valuations me for

a longer term investor heard the argument that uh if you were to hold a five or even 10 year holding time period you make consider alternatives to equities because uh with higher valuations mean inevitably lower returns over the longer term Horizon does that make a lot of sense to you yeah I mean I I think uh as an investor you the most obvious thing is you shouldn't count on getting the returns going forward that you've gotten in the recent past I mean stock prices are up what on the S&P 50 60% since just before the

pandemic over the last 5 years that's pretty significant increase in in stock prices I mean kind of out of bounds increase so first you know most obvious thing is don't count on that that's not happening it's going to be at best kind of flattish up a little bit you know over the next three five years second thing is you know you might want to be I mean if you're an active investor and most people shouldn't be but if if you are an active investor you might want to start thinking about you know valuation very carefully

in the context of your portfolio uh and here I'm a little out of my remit I am an economist I I I play you know Market strategist on podcast so I don't want the people to take you know uh to to take this completely a face value and I generally don't comment on valuations and except that points in time where there's they seem so off-kilter out of whack that they could become a macroeconomic issue and that's that's this period in time I I think this is uh this chart summarizes what you just said corporate bond

investors are overly optimistic youve tweeted about this as well recently now you know when we talk about valuations things could go up in value for for a host of different reasons are they at all disconnected these valuations disconnected with fundamental economic growth currently no I wouldn't say they're disconnected because the fundamentals are good right remember what I said in the beginning I business are making a lot of money they got a lot of cash I mean there's good credit risk is is low so I would expect the spreads here to be thin it's just that

they are paper thin meaning I think uh if you go back the only other point in time where spreads were thinner was right before the financial crisis in 2007 so the fundamentals are good it's just that the markets are taking them well beyond the fundamentals you know they're discounting you know that nothing is going to go wrong here at all and again I just that that just is very unlikely and uh particularly in the context of the policy changes that are coming under President Trump and the Republican Congress and there big policy changes coming which

policy changes could trigger a reversal or mean reversion well I'm no fan of broad-based tariffs that's a good example they're if it's on the margin no big deal you know but if it's any if it's truly broad-based that's a big deal you know I worry about Mass deportation if it you know if it's 50,000 immigrants undocumented immigrants that are deported maybe that's not great but it's not a big deal if it's 500,000 that's a deal that's a big deal and that's gonna that create all kinds of dislocation how would that how would that impact the

economy two two key ways one is labor Supply I mean we the US relies like Canada very heavily on immigrant Labor uh and if you're asking people to leave the country and and others are self Deport deporting because of the pressures they're under and employers are under that just EXA and we're at a full employ we're at full employment a 4% unemployment rate that means labor markets are going to get red hot again wage growth is going to accelerate inflationary pressure are going to develop and fed can't cut interest rates so it's it's labor Supply

and it's really in some key Industries where you know immigrant labor is critical like in the construction trades uh almost a third of the workers are immigrant workers not all are undocumented but many many are and if you if you ask those folks to leave homes are not going to get built it's going to exacerbate the affordable housing shortage it goes right back to inflation because as I said earlier the key reason why inflation today is different than the fed's target is the cost of home ownership that goes to the ability to if you can't

build the cost of ownership is going to go up not down and that just makes it even more difficult for the FED to execute on rate Cuts let's talk about wages for justment in the job market so I'm seeing different metrics of how you measure the standard of living one metric is real wages so infl adjusted Wages that's been trending up recently if you take a look at data from the St Louis fed for example uh wages Contin to outpace inflation is that a trend that uh you're confident in seeing continuing into 2025 beyond that

goes back to my kind of sanguin perspective in the economy is in a pretty good spot I mean people's wages are rising faster than the rate of inflation and that's been the case now for almost two years across the wage distribution and you know as long as that continues hard to imagine you know consumers pulling back and consumers continue do their thing and spend you know it's hard to imagine the economy going into recession so that's that's a good fundamental reason to be optimistic you know about the economy and that why is that's why the

Baseline most likely scenario is we kind of navigate through this you know reasonably well markets don't correct they just kind of go sideways here for a while and let the fundamentals catch up to the valuations I see this chart being brought up several times as a counter argument to Consumer strength this is a credit card uh debt in nominal terms reaching new alltime high he the argument here that I've heard from um other people and comments on the Internet is that you don't need to use your credit card if you have the ability and the

propensity to actually spend right so this they're boring out of necessity not because they have money I don't know how you this that's wrong this includes both people who borrow and people who revolve so like me I you know I run up my credit card because I'm not using cash I pay it off every month but that balance goes into this data so this reflect both debt using cars as a debt vehicle and a transaction vehicle a lot of this is just transactions and especially in a world of high inflation you know the value of

what you're buying and using your card for it will rise and that's reflected in here if you take a look at this relative to income disposable income after tax income you get a much more benign picture uh and go look at it relative to Debt Service you know the percent of income that's going to servicing debt that's right it's very low and Rock Solid low household did a great job of locking in the previous low rights now you know this does highlight a stress point in the economy but it's on the margin and that's lower

income households who did borrow against their credit cards when inflation was was raging back a couple three years ago and they're struggling you can see that in delinquency rates but even there that's starting to write itself credit card receivables are no longer Rising very quickly and it looks like credit card delinquency rates have peaked and there going to start to come in here relatively soon how are you interpreting this chart quits rate total non Farm it's gone down it peaked around the pandemic um and then started coming down after 2022 one way to interpret this

is that people are not confident in finding a better job and so therefore they're putting in fewer or less frequency I don't know how you would interpret that yeah I'm not exercised about it I mean it's down in part because people aren't hiring you know businesses people aren't quitting they aren't hiring it's kind of the flip of what was going on several years ago when everyone was quitting their job and hiring rates were very high sure the bottom line is if you look at the last data point it's pretty consistent with this long run average

which consist which is the economy and full employment and I think that's kind of this just another signal but that decline if it were to continue uh would be a worrisome sign and one re worry worrisome in the sense that the economy labor market is starting to weaken is demand is becoming a problem and you know the FED there the FED would have more impetus to cut interest rates so I I think it's an important indicator but right now to me it's signaling that things are roughly where they should okay uh Scott pent was uh

appointed treasury secretary how do you feel about his 333 policy 3% of debt or deficit uh to GDP rather 3% GDP growth three million barrels of oil produced today yeah well let me preface it by saying I think he's a very reasonable person well qualified competent you know he's a markets person so I think that'll be quite important if we do get that correction I've been talking about uh you know the 333 policy 3% growth yeah bring it on and we've been getting it right I mean but that requires strong labor force growth does it's

not consistent with immigrant deportation just the opposite and strong productivity growth and that's not consistent with higher long-term interest rates so I you know we're getting 3% now uh I don't I I worry that it's going to be more difficult under the econom policies that being espoused under under by President Trump to get there three 3% uh de debt uh deficit of GDP yeah bring it on I'm all for it I don't think you can get there with deficit Finance tax cuts is that contradictory to point number two 3% GDP growth uh it makes it

more difficult right because that means you've got to either raise taxes or cut spending and those two things make it much more difficult you know right now fiscal policy is neutral with respect to the economy we're getting 3% growth with stable deficits uh right now they're high they're wide they're not good but they're stable if you know if you bring those in at least initially that going to be problematic it's going to be tough for the economy to overcome that so that's that's an issue three million barrels I don't understand that at all the US

is producing 13 and half million barrels a day it's a record high it's oil prices are low you know I I think if the the us some and I don't know how they would do that I mean what do they get what policy would actually get uh o oil companies frackers to you know put more rigs into the ground when they know oil prices are going to remain as low as they are it's just not happening so that one I just think is I don't understand why that's a goal other than president Trump talked about

that on the campaign Trail yeah just to clarify what I said additional 3 million barrels a day from what it currently is yeah um so 16 and a half million that's like there's no way you know the oil industry is going to do that it makes no sense when oil is already sitting at $70 a barrel well okay so let's just focus on the two first main points 3% additional growth or 3% real GDP growth rather does that come from tax cuts alone is the Assumption here that tax cuts will stimulate the economy thus reducing

the need for government spending to stimulate growth and that's where the deficit redu well I think I think his the logic that's being put forward is yeah defic the deficit Finance tax cuts will stimulate economic growth and ultimately pay for themselves this is the old supply side saw of course that never happens we've been down this path many times so that's not going to work so if that's the and I'm putting words in in people's mouths and maybe they have a different logic but that's kind of my take on it so I just don't see

it I don't understand it can we assume that some of the tax reductions can be offset by tariffs meaning tariffs can provide the revenues lost or not gain not earned through income taxes would that work yeah I mean it would help but it's not going to be it's not going to solve the the deficit problem because if you tax something people buy less of it so you're going to generate less revenue and if you impose very high tariffs you will push the economy in recession you will call cause the stock market decline and the damage

Dage that will do will will cause revenue and cause spending to rise and do cause deficits to rise not fall so you know I don't think tariffs is the is the way to address the long the nation's long-term budget situation okay so finally let's close off on uh your Market Outlook any particular asset classes that you're most bullish on yeah as you can tell I'm cautious about everything yeah Everything feels a little overdone to me you know at this point so I think caution is the word I mean there's some asset classes I'm more nervous

about than others I mean I just don't understand crypto Bitcoin at you know 100,000 I just I just don't think that's going to work out in the long run uh you know Equity prices do seem stretched to me the corporate bond spreads as well so yeah Everything feels lofty so it's hard for me to identify other than cash where you can get I guess four or five% on a money market account or four four and a quarter 4.3% on a 10year treasury yield which is not bad you know I think that it's pretty tough to

identify an asset class where I'd be enthusiastic at this point in time what about the housing market a lot of analysts have spoken to have predicted that mortgage rates could come down a little bit from current levels if you continue this downward Trend do you expect transaction volume to pick up I do uh you know that's a tough one right when R decline that obviously will lift demand which would lift prices but it my sense is it will actually unlock Supply because you've got a lot of folks that are locked in from the low rates

that were prevailed back when they uh before during the pandemic when they refi into those lower rates so if you get lower rates and also you got a lot of homeowners out there that have been in their homes for a long time and those homes no longer are suited to their demographic need so this I would call it pent up life you know they they they have kids now they had a job change they had death or divorce the home is not the home they're in now is not suited so you combination of lower rates

and Pen up life think I think you get more Supply than demand and then that will put downward pressure on prices but that's one of those things again where I say I I say that with less confidence because that there's a lot of moving Parts there well you've you've studied the sub crime housing crisis um quite clearly you've written books about this topic I think one of them is called Financial shock a 360 degree look at the subprime mortgage implosion um Frist in the housing market anything that looks similar now to let's say 2007 if

you'd overlay the current um K Schiller housing price index for example it looks awfully like the period leading up to 2007 no I'm not worried I mean uh bunch of reasons I mean uh here you've got a very severe shortage of homes physical shortage back then you had a massive oversupply of homes vacancy the home ownership vacancy rate was at a record high now it's at a record low and also the mortgage Market's very different today right because of the reforms made after the financial crisis so that you know the mortgages uh are 30-year plain

vanilla mortgages uh C with various uh restrictions on who can get those loans so I'm you know it's just a whole different ball game you know it's not not comparable okay I'm gonna end on uh the title of your book how to avoid a financial crisis uh or the next financial crisis so that is a good question in itself what could the next financial crisis look like and what could we do to avoid to avoid this crisis this is the subject of your book called How yeah well that's a pretty deep question I mean I

mean I do uh worry about these valuations in markets uh and particularly you know what's going on in the the bond market uh the treasury bond market it feels very fragile to me in that uh you know the market is dominated by broker dealers who have not expanded their balance sheets consistent with the amount of debt outstanding which has been quite considerable for lots of different reasons so the trading is getting very choppy lot of volatility and yields again going back to those mortgage rates uh and um you know I do worry at some point

the market will get dislocated then you also have the FED exiting out of that market you've got central banks like the Chinese exiting out for other reasons Japanese investors are becoming more cautious because they can get a yield on their their their bonds the jgbs yes and so hedge funds are coming into the void and you know obviously they're very price sensitive so I I can keep on going but the point is I wouldn't be surprised if we had some major significant dislocation in financial markets and more specifically in the bond market here you know

over the next six 12 18 months again it's not a baseline because it's hard to put that into a baseline but it's something I certainly worry about and you know watching very carefully would the FED respond to such a dislocation or are they only concerned about the unemployment rate and uh inflation no they would they would respond uh just it's a question of can they respond quickly enough and and patch things up like they did with the banking crisis back over a year ago as that's the Silicon Valley bank failure they stepped in set up

a credit facility and FDIC guaranteed uh the deposits of all those that were insured below above the deposit limit so they they could step in uh but uh you know if it it gets into the corporate Market if it starts causing stock prices to decline if crypto is falling you know if you get this widespread selloff in asset markets that might be that might overwhelm their ability to respond and th and thus a crisis but that's not your base case no I you know that I can't I just worry we're going down that path given

where valuations are and where and where they seem to be headed okay well you're still sanguin like you said uh a little more cautiously optimistic I would say since the last time I spoke with you in the summer but good update nonetheless where can we study uh your work learn more from you yeah uh you can see it on economic view uh that's a a website that we have where I put up all my content and you can there's a lot of stuff other stuff going on on that website that you might find the value

folks that are listening in here might find a value okay fantastic thank you very much Mark speak next anytime David it was a great pleasure to chat with you and uh look forward to the next conversation absolutely and uh follow Mark in the links down below and uh thank you for watching don't forget to like And subscribe