Now, I don't know what they think private equity is investing in, but what's your thought, if any, on that? Or you can pass, as I said.

Yeah, so I was just in Hangzhou.

We hosted a conference with a lot of ex-Chinese allocators and then both tech firms and hedge funds onshore in China.

And I would say the general vibe from allocators is, I'm incredibly over levered the US and I'm incredibly, I'm incredibly over levered AI.

So if you just look at the ACWI, the broad world index, 65% of it's in the US.

The average allocator is like 75, 80% US.

And then you have to add in whatever you have in Korea and Taiwan and like ex-US AI investments.

What is your thought? Is this just a rationalization of the business and we should applaud it? Or do you think this is evidence of AI taking jobs?

What's happening in their market?

Yeah, so the BOJ hiked and then the yen sold off.

There were two dissents by the Takaishi, the prime minister of Japan, her picks for the board or the governing council.

7-2 and then Ueda, governor Ueda spoke and like was more dovish relative to expectations, which were exceedingly hawkish from my perspective.

Yen sold off and then the BOJ had to do a rate check and do a soft intervention to like save the end, so to speak.

It is a holiday week in Japan, so like less liquidity makes sense, but So I was like a yen bull earlier this year thinking the BOJ would hike or like would catch up.

Secretary Besant clearly got them to that place.

It's

What's happening in their market?

Yeah, so the BOJ hiked and then the yen sold off.

There were two dissents by the Takaishi, the prime minister of Japan, her picks for the board or the governing council.

7-2 and then Ueda, governor Ueda spoke and like was more dovish relative to expectations, which were exceedingly hawkish from my perspective.

Yen sold off and then the BOJ had to do a rate check and do a soft intervention to like save the end, so to speak.

It is a holiday week in Japan, so like less liquidity makes sense, but So I was like a yen bull earlier this year thinking the BOJ would hike or like would catch up.

Secretary Besant clearly got them to that place.

It's

So he has to do the opposite just to keep his reputation.

I think the credibility argument is a little misplaced and largely comes from the investor community, which will easily change their mind about a Fed chair in a few months.

You know what I mean? They're not looking at this from a more structural perspective.

Ultimately, the Fed's credibility comes from making the right policy choices.

And for instance, if the Fed hiked last meeting and hiked this meeting, Or let's say the Fed hiked in June and July, and then we got soft inflation prints.

We got those pretty bad labor market prints.

Would that have been a policy mistake? Maybe.

Eric, what's your read on the bond market right now with yields hitting multi-year highs, and especially with the Treasury supposedly stepping in with this raised buyback program?

So something like Spain, right? Is that a market you would try to short?

Yeah.

So I think countries that have, you know, shaky trajectories like France, Italy, Spain, France and Italy also have very troublesome fiscal outlooks.

Their debt to GDP is quite high.

Their deficits are not small enough.

So just functionally every year they go on, they're piling on more debt to GDP and greater interest expense.

So more and more of your tax revenues are just going to bondholders as opposed to productive endeavors.

One, how did you know that would be the case? And how did you make that call? And two, can you walk us through your thinking on how you arrived at that conclusion?

You've been writing some, some great research at Clocktower, digging into your geopolitical framework right now, and I just would love to hear you unpack how you're thinking about where we go from here, what's the context, and perhaps leaning on a little bit of what you understood from how those big players were playing within the Trump administration to how you think they're thinking about this current situation in Iran right now.

Yeah.

You know, I think the really interesting thing, um, about when Iran happened, it was kind of right on the back of the AI labor market fear story, and I mean, rates mar- like, even just the Friday before the strikes, like rates markets were pricing in more cuts across the world, um, private credit fear.

It was like private credit, AI.

Like, I honestly think Saturni wrote like the most influential piece of like macro research of the last few years, which is incredible 'cause it was like on Substack and like more of a narrative-driven story.

Um, but I think that all kind of combined, and we were, we were worried that AI was no longer this like tangible, physical, real world industrial build-out.

It was now a real, physical, tangible labor market shock, uh, that was gonna foster unemployment.

It does feel like all these pieces move towards this focus on China, and I'm just wondering how much credence do you give to that framework?

yeah

i mean i'm just my my view is out to 2027 2028 i'm just like i think there's enough visibility here that The economy is very strong right now.

And at least for the next two years, it's probably going to continue to be so.

And there's extra kickers that can come in on the banking sector.

So, and globally China's picking up.

I mean, I I'm actually more kind of more interested in the emerging markets right now than I am when the U S but I just don't think the U S is about to fall over.

I mean, cause a lot of people may be interested in the other markets as well, but.

What if we're going to 30 times earnings? And

And so why does your Denny not think that this will cause a slowdown this time?

Yeah, so like the biggest foreseen left tail risk is a global trade war, right? That absolutely crushes global trade.

Imports and exports fall, real growth falls.

it's bad for everyone.

I think the encouraging signs that that's not happening is the fact that, and President Trump has said it himself, right? Like tit for tat lowering trade barriers, you know, like you've seen, yes, we're going to raise tariffs, but also like, okay, if you keep your barriers to US exports lower, then we're going to, you know, have more favorable terms for you.

So it's, it's a little more art of the deal than just raise it to 25%.

across the board and raise revenue like that.

Not in order to achieve an end goal, as it means, but just as he likes tariffs as an end in and of itself.