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Hello and welcome to What Goes Up, a weekly markets podcast. My name is Mike Regan, I'm a senior editor at Bloomberg.
And I'm Vildana Hireth, a cross-asset reporter with Bloomberg.
And this week on the show, well, the magic number is 1.1%.
That's how much the US economy grew in the first quarter, according to the government's first estimate.
That's down from growth of 2.6% at the end of last year, and quite a bit lower than the 1.9% that economists had estimated in a Bloomberg survey.
So, is this it? Is that looming recession we've been hearing about more or less since the last recession?
Is it finally upon us? And if so, how bad could it get?
We're going to pick the brain of a senior economist at a major US bank, but Vildana, first, I have a very important question for you.
You always have an important question for me.
This is a divisive question this time of year.
Okay.
It's playoff time, but the question is, hockey or basketball?
Hockey, obviously.
Hockey, really?
The sabers are out.
Yeah.
Right? They're out. I don't actually watch that much of it.
So what Ben Wagnerian?
What my husband tells me.
Okay, the...
Wait, wait, wait, wait. You just... Do what your husband tells you?
No, no, just when it comes...
Come on!
No, that's not what I said.
I mean, the only knowledge I have of the NHL is what he tells, what he relates back to me.
Okay.
You have me flustered now.
I know that the sabers are out, which is sad for our household, but the devils, are they still in the play?
Devils, indeed, are still alive.
Oh my gosh, then that's who I'm rooting for.
Just beat the ranges. The ranges.
But Florida beat...
Boss?
You're exhausting my hockey knowledge.
Oh my gosh, okay.
I was going to say I'm an NBA guy.
I...
This is like the best time of year for me.
I see, I see. Okay, okay.
But I wish the hockey would just end earlier.
Like, I could get into it if they weren't competing at the same time with the NBA.
Anyway, I don't know if there's a hockey team where our guest this week is based.
She's in Charlotte.
Is there a hockey team?
Oh yeah.
Oh, I believe so.
I don't know.
Well, let me bring her...
Let me...
Let me bring her in.
It's Sarah Howe, senior economist at Wells Fargo.
Welcome to the show.
Thank you.
So I'm joining you from Charlotte.
So our closest NHL team is in Raleigh and the Hurricanes, I am happy to say, are still
in the playoffs.
Oh my gosh, she knows more of the main you.
It's amazing that they play hockey in Carolina during basketball season at all.
It's amazing that they play hockey in Florida at all.
Yeah, true.
I'm always amazed by that.
Well, Sarah, hockey your basketball.
The important question first.
Hockey for sure.
Really?
There you go.
We beat you out.
Okay, but Sarah, maybe you can just start by telling us about your role at Wells Fargo.
Sure.
So I'm one of our team's senior economist.
So I focus on the US economy, specifically inflation and labor markets.
Look a lot at Fed policy, just given the importance of those two sectors there.
But really just that broader focus on the overall US outlook.
So Sarah, that print for the first quarter GDP surprising to you.
We're less way expected.
Walk us through how you're thinking about what we know about the economy after that report.
Yeah, so we're actually below consensus in part because you did get some pretty significant
revisions to consumer spending in the days before the release.
So we had taken down our consumer spending numbers.
But I think in some ways it was surprising just the degree of the slowdown, so sort of
bigger drag from inventories.
But overall, final demand from domestic purchasers was holding up.
And so that's really kind of the better bellwether for underlying pace of economic activity.
But we did see momentum slow over the quarter.
And so we're a little less optimistic that we can maintain the pace that we saw in Q1
as we look out further into the year.
Okay.
So let's look up further into the year because I believe you and your team are anticipating
a modest recession for later this year, starting later this year.
So can you tell us what's behind that?
Yeah, so we are in the recession camp.
We don't think it's going to be quite the doozy of the past few recessions.
But when we look at just the degree of tightening that we've seen coming from the Fed and really
just the severity of inflation, we think that if the Fed's going to be really set on getting
inflation, anywhere close back to its 2% target, it's likely that we're going to
see demand need to pull back.
And so we are expecting a contraction later this year in spending.
We're already starting to see some weakness coming out of the business investment side.
And this is really a Fed engineered recession aimed at curtailing demand to send that inflation
pressure.
So even before the mess of March, we already seen credit conditions tighten just as the
outlook was deteriorating.
So we think that's going to be an important part of this slowdown.
And not just the availability of credit, but just also the cost leading to businesses and
households just getting a little bit more conservative.
And you see it starting later this year and then continuing on into the first half of
2024 or how long can we expect it to actually be playing out?
That's a good question.
Yeah.
So in our baseline forecast, so we have the economy tipping into recession around the third
quarter and really things getting worse around Q4.
So Q4 is kind of where we see the worst of it, but still spilling over a little bit into
Q1.
So we think it's likely to be kind of more of a slow drag in terms of economic activity.
Just given that we also don't think the Fed's going to be riding to the rescue as soon as
you do see that weakness.
So the nature of the inflation that we're seeing right now, we think that the Fed's actually
going to be pretty reluctant to ease policy even as the economy is entering a recession.
So we do think it's likely to last a few quarters.
You know, sir, there seems to be this sort of discrepancy right now between the manufacturing
side of the economy and the services side of the economy.
Manufacturing is very weak, according to most of the purchasing manager indexes.
They're all coming in below 50.
You know, that's sort of dividing line between growth and contraction for manufacturing.
It is, have been better, but they're still holding above that 50 signaling growth in
the service industries.
I mean, obviously the service side of the economy is way, way bigger than the manufacturing
side.
But I'm wondering how you think about that discrepancy.
Is there, you know, the possibility that that manufacturing side is sort of a canary
in the coal mine for the entire economy?
Or how do you think about it?
Sort of, you know, one's growing, one's shrinking, and what it means going forward?
Yeah, so I think one important aspect of that manufacturing services divide in this cycle
in particular is the nature of the crisis that we just came out of and really what
areas of the economy have done fairly well over the past few years and which ones have
struggled a little bit more to get back on their feet.
So, you know, what's so interesting about the COVID recession is that it was a boon for
manufacturing.
So typically we see a downturn that tends to be some of the more cyclical items, you
know, big ticket costs, and so consumers retrench more, but just given the nature of
the shock that we saw and the demand that resulted in physical things over experiences,
that was a huge benefit to the manufacturing sector.
So we think some of this pullback is cyclical, so it's in response to the higher rate environment
that we're seeing businesses cutting back on capital goods expenditures, but we also
think it's a little bit of payback from some of that demand being pulled forward and just
really unsustainable levels of activity and demand for goods that, again, just benefited
so much from the nature of the crisis.
So I think there's a little bit of both in there that I think the downturn that we've
seen and not just the ISN's, but some of the hard data on manufacturing from the industrial
production report is indicative of, you know, the conditions are getting harder.
It's harder for businesses to plan.
They're cutting back on spending, but we think some of this is also just payback from what
we saw in the pandemic years.
And you mentioned the turmoil that we saw in the banking sector, and obviously that
continues to play out, but I'm wondering how you're thinking about it, like, is the worst
behind us?
And then how can we start to see credit tightening or credit crunch, whichever way you refer to
it?
How can we see it starting to manifest in the economy?
Yeah, so our baseline assumption is the worst is over.
You know, we saw, obviously, the Treasury, the Fed, the FDIC come out pretty strongly
and swiftly to try and stem the issues surrounding the banking sector.
So, for example, we have a new facility aimed at helping banks with some of the securities
that have lost value.
And so our working assumption is that we're not in for, you know, an outright credit crisis,
but we do think that on net credit is going to be tighter ahead.
So we had already seen credit tighten pretty substantially leading into March.
So if you look at the senior loan officer survey, for example, they only went through
the fourth quarter.
We were seeing recessionary degrees of tightening across business loans, consumer loans, commercial
real estate already.
Now we don't have the next survey out quite yet, so we don't know exactly what the March
events did to that.
But you do have some data, for example, from the Dallas Fed that does a bi-quarterly version
of this, and it showed marginally more tightening.
And so we think that it's that additional restraint on credit flow.
So we think maybe there's not a significant degree of additional tightening.
I think that's consistent with what a number of financial conditions index, including the
Bloomberg one, is showing.
But I think overall we're looking at probably marginal, more tightening as banks are just
a little bit more conservative.
There's probably more angst around some of their funding costs and what's happening
with deposits.
And so we think that that's going to lead to just lower credit growth across the economy.
And that's going to weigh on activity.
It's going to weigh on business's ability to expand to hire.
And so we think it's going to be a slow kind of a slow burn as we move through the rest
of this year.
And you do point out in a recent note that credit spreads haven't exactly blown out.
They did widen quite a bit after the March bank turmoil.
They've closed up a little bit in freelisters who are unaware.
It's basically the interest rate on corporate bonds, the spread above the interest rate
on treasuries is what we're talking about.
Should we expect some more widening if the economy is headed for a recession and how bad
would you expect that to get if so?
And really to complicate the question even further.
How do you explain why credit spreads have remained fairly tame in this environment?
Yeah, so I think it's possible that we'll see those credit spreads widen a little bit
as you do see market participants get a little bit more concerned about the path for the economy.
So we're a little bit more downbeat in our assessments of what we think is going to happen
to the US economy.
There still is this soft landing camp floating around.
So we think if we were to see that happen, I think you would see those credit spreads
widen.
But I think in some ways that the fact that they haven't widened already at space too,
this is a pretty uncertain environment.
So while we're in the recession camp, there's a lot of unique factors about this cycle,
which I think makes it very difficult to pin down the timing of when activity is likely
to just slow more meaningfully.
And when you actually might get some of that more pressure on corporations and their profits
and just pricing therefore being reflected in that worst need outlook for the business
sector.
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and find the right ETF for you.
Investing risk includes principal loss, past performance is no guarantee of future results.
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expenses and other information that you should read and consider carefully.
Van Eck ETFs are distributed by Van Eck Securities Corporation, a wholly owned subsidiary of
Van Eck Associates Corporation.
There's so much news happening around the world that we're somehow supposed to stay
on top of.
That's why we launched the Big Take.
It's a daily podcast from Bloomberg and iHeartRadio that turns down the volume a bit
to give you some space to think.
I'm Wes Casova.
Each weekday I dig into one important story and talk about why it matters.
Listen to the Big Take on the iHeartRadio app, Apple Podcasts or wherever you listen.
And then how are you thinking about what's going on with the jobs market?
Because we do have some more chatter of people saying the jobless claims have ticked up a
little bit in recent weeks.
The Jolt's number was a bit more surprising than people had thought.
So how are you starting to think about what's going on in the jobs market?
Yeah, so our view of the jobs market is that overall the market remains very strong.
But the direction here is very important.
So if you look across a whole host of labor market indicators, the direction is deteriorating.
So you can see that certainly from the demand side with those job openings down 20% from
their peak.
You can see it in terms of the jobless claims, so still at exceptionally low levels.
But we have seen them trend higher over the past few months after being more or less stable
through 2022.
And same thing with hiring plans.
So we've seen weakening across the PMIs, whether you're looking at the ISM versions
or some of the regional Fed employment components in their surveys, but also just the small business
hiring plans.
That's been an area where small businesses have been the ones that have had the hardest
time getting labor in this economy over the past few years.
But we're seeing those hiring plans dial back pretty markedly here.
And in fact, they're lower than at any point of barring just the throes of the pandemic
since about 2017.
So you're seeing the demand indicators come down.
Supplies coming back a little bit, and that's helping prop up the overall level of non-farm
employment and the pace of hiring.
But even then, we've seen it decelerate over the past year.
And we think we're going to see a further downturn here in the coming months.
So I think when we hear the word recession, you know, don't, don't, don't, people tend
to think of double digit unemployment, something really nasty.
I don't get the impression that's what you're bracing for though.
How bad do you think that unemployment rate could get from here?
We're not bracing for a huge spike in the unemployment rate.
And part of that has to do with the fact that we're not thinking this is going to be a downturn
like we saw in 2008, 2009, or the acute downturn that we saw in 2020.
So our GDP contraction, we're looking for basically a peak-to-traff decline of roughly
one percent.
But even when we look at the increase in the unemployment rate, so we're only expecting
that to go up to about 5.1%.
So if we realize that would actually be the smallest increase in the unemployment rate
over a recession.
And I think part of that reflects the fact that it's not a super severe downturn, but
also there are still industries like leisure and hospitality that are catching up on hiring.
And so that's going to have an impact in terms of perhaps the degree of output cuts, but
you know, those are less lower productivity jobs.
And so that's going to help there.
But then there's also a supply consideration here.
So just the fact that one, employers are already pretty desperate to hire.
They might be a little bit more conservative in terms of laying off workers just given
how hard it's been to get workers in the first place, not just over the past two years,
but in the years preceding the COVID recession.
And then also just the inflows into the labor force are much, much slower than what we've
had in prior decades, just given population trends.
So I think just the normal inflows that we'd be seen into the labor market in the coming
years, that's going to limit how high you see that unemployment rate rise.
So would that level of unemployment a little over 5% would that change the calculus for
the federal reserve?
Do you think make them actually throw in the towel and start cutting rates or no?
So we do think probably once the unemployment rate rises a percentage pointer or so, we
think at that point when it's very clear that the economy is in a recession, we do think
that the Fed will start cutting.
So this would still be a market departure from the reaction function of prior cycles.
So for example, if you go look at the 2007 cutting cycle, so they began to cut rates
when the unemployment rate had only ticked up about a tenth or two.
So the fact that the Fed is likely to wait until unemployment has risen a full percentage
point, which is pretty well known that it usually only takes about half a percentage
point and you're definitely in a recession.
I think that's a big change in the Fed's reaction.
So we don't think that they'll completely look through the rise in unemployment, but
we think that they will drag their feet because they want to make sure that you are seeing
slack in the labor market come back, but also weakening demand, that's going to be enough
to put enough downward pressure on inflation where you're going to get back somewhere at
least close to 2%.
What about before we see any potential cuts?
What are you expecting from the Fed for the remainder of the year?
Because I was speaking with a bunch of money managers earlier this week and a bunch of
them are expecting the Fed to also raise rates at their June meeting, even though it's not
something that the market is exactly pricing in right now.
What is your team projecting in terms of what we're getting from the Fed before any potential
cuts?
So our baseline expectation is that they hold during June and they remain on hold for the
following few meetings and that May is likely the end of the hiking cycle.
And with that, I think that comes from the fact that you do see a number of Fed officials
I think getting increasingly nervous about how much they've done, lack of certainty over
what the impact of the increases are on the banking sector, what it means for credit
growth and therefore the economy ahead.
So I think just given the rapid degree of tightening that we've seen and the fact that
Fed officials they know that policy acts with the lag, they want to see how that affects.
So I think it's likely that we'll see the Fed on hold for an extended period.
And then our baseline assumption is that then they cut, but I think if we continue to see
the spending continue to grow, if we see the jobs market remain very strong, resilient,
we don't really see that meaningful increase in unemployment and inflation remains sticky,
you might hear a lot more conversations about, well, maybe the next move is actually another
hike rather than the next move being a cut.
So the one thing that we really haven't touched on so far is your outlook on inflation.
I think the one thing everybody can agree on is it's just not coming down fast enough.
So what are you expecting in terms of the inflation rate coming down and to what level?
Yeah, so our expectations are that we are going to see some meaningful improvement here
over the coming month.
So I think some of the increases we saw in the first quarter might have to do with a
little bit of a residual seasonality.
So you tend to see more price increases at the start of the year and maybe just the seasonals
not quite catching up with that.
And I think also some of the momentum we've seen in inflation, you have to remember a
lot of that came through revisions to those seasonal factors.
So showing that Q4 was actually a lot stronger than it was.
As we think ahead, I think there's some technical reasons why we might get a little bit more
of a clear improvement on the inflation side over the next few months as those seasonals
will actually lend a little bit more of a depressing effect to some of the readings coming up.
But then I think also just where we are in the economy and the growth cycle.
So our expectations are that you're starting to see the impact of the weaker housing market
start to show up in these official inflation measures.
I think we got a little bit of a taste of that in March.
Maybe it overstated the pace of decline, but I think that's set to gather momentum.
Thus far, the improvement in inflation has been pretty narrow.
It's been largely energy and vehicles, but I think that there's certainly more room for
that vehicle, this inflation to pick up, but also broader goods as we have seen supply
chains correct.
And also just consumers are getting more choosy and their finances are squeezed.
And so they just don't have that same degree of purchasing power.
Just they're not able to just accept the same degree of higher prices that we've seen.
So we think that that's going to be an important part in other goods, but also even some services,
including some of the more discretionary services, light travel that can also reprice pretty
quickly as compared to other parts of the service sector like medical care, for example.
So we have core inflation coming down, but still looking pretty high when we get to the
end of the year.
So core PC, probably somewhere close to three, three and a half percent on a year over your
basis.
So it's not a progress, but still unacceptably high.
And I think what will put the Fed in a pretty tough spot is they're seeing that labor market
deteriorate, but inflation's still running uncomfortably high.
So what does the Fed do?
So you guys are projecting cuts obviously towards the end of the year, but if inflation
is still at three and a half, it does put them in a bind, as you say.
So what do they do in that instance?
Maybe you can put yourself in their mindset and think about how they might be thinking
about it.
So I think given what we've seen in terms of the discussions and how frequently you're
seeing officials, including Chair Powell, harkenback to the 1970s, I think that they're going
to lean towards giving inflation a little bit more weight in this environment, that they're
going to accept somewhat weaker labor market conditions and a higher unemployment rate,
in part because the labor market is contributing to this inflation environment.
It is just not all the supply chains for physical goods, the lack of chips for autos production,
but it comes down in large part to the fact that you're still seeing exceptionally strong
labor costs growth.
So we had a very strong Q1 employment cost index showing labor costs still running at
close to 5% annualized.
And that has the Fed pretty nervous about what's happening to some of the services components
of the core.
And so I think that given that the labor market is contributing to these inflationary pressures
in a significant way, I think that the Fed looks through some of that labor market weakness
if it means getting inflation at least back on track towards 2%.
They don't need to hit 2% on the nose, but I think they want to see that conditions are
in place for it to slow further.
The next question is about the market.
Income is back and Van Eck has you covered with VETFs to bring income to your portfolio.
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of income focused ETFs, which includes municipal bonds, corporate bonds, international bonds,
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Eck's ETF yields as well as the monthly flows and performance of each income ETF category.
Take advantage of the back to income play, explore Van Eck's income ETFs at ThinkYield.com
and find the right ETF for you.
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expenses and other information that you should read and consider carefully.
Van Eck ETFs are distributed by Van Eck Securities Corporation, a wholly owned subsidiary of
Van Eck Associates Corporation.
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You know, Sarah, one of the biggest headlines that we saw this week that I think caught a
lot of people off guard was Treasury Secretary Janet Yellen came out and said, the quote unquote,
x-state for the debt ceiling is in her estimation now June 1.
In other words, the US government, if the debt ceiling is not raised by then, basically
has the potential to run out of money in early June, then the Congressional Budget Office
came out and kind of confirmed the timing more or less.
I don't think to the day, but said early June was kind of the target.
So many people that we've talked to have kind of, I think, ignored this issue and hope
it goes away to some degree, which makes sense given how many times issues come up and the
brinkmanship goes down to the 11th hour and then there's a deal struck to avert the worst
case scenario.
I do wonder though, if this time is different, politics are so toxic and so combative in
the US right now.
I'm assuming, you know, if you're forecasting a shallow recession that your base case is
that this won't be an issue that this will get resolved before disaster strikes.
But I'm wondering how you're thinking about it.
How big of a risk is this the US doesn't get to a deal to increase the debt ceiling before
that date?
How big of a threat to the economy is that?
I mean, my guess is it's a massive threat to the economy, but I'm just curious how you're
thinking about it all.
Yeah.
So I think this is a significant threat and we think despite, you know, it seems we go
through this exercise, you know, at least every couple of years and it eventually gets
worked out and we've all become a bit numb to the debate.
We think that this particular instance has the potential to be quite contentious and
it's reaching that x-state and surpassing it would, it's a tail risk in our view, but
it's a significant one just given the catastrophic implications that it would likely have.
So we think about just the split in Congress and even just the some of the divisions within
the GOP and how thin their margins are.
You know, this could very likely come down to the wire.
And I'd also point out that it doesn't even, we don't even have to actually reach that
x-state without a deal, but if it looks like it's coming down very close to the end of
that period, you could still see a lot of collateral damage in the economy, I think,
particularly given the toxic political environment and perhaps, you know, some, you know, not
a lot of optimism that it might actually get done.
So if you go back to 2011, for example, consumer confidence over the summer when we were having
a very similar split in terms of Congress and the White House, you saw confidence plunge
that summer, you saw the stock market decline essentially 17% in just a matter of weeks.
So you don't even need to actually default on the debt for, I think, there to be real
damage in the economy.
And particularly given that the overall picture is already getting increasingly fragile.
So it wouldn't take a lot to kind of accelerate that downward momentum if you did see another
contentious debt ceiling debate.
But then even an actual default and it just seems like, well, the wheels really come off
the bus at that point.
Game over.
Yeah.
It's not funny.
That's not.
I laugh because a nervous laughter.
Of course, yeah.
At the apocalypse.
Yeah.
The apocalypse.
We can cry after the podcast is over.
Well, Sarah House, senior economist at Wells Fargo, really great to be able to pick your
brain on all things about the economy this week.
Can't let you go just yet.
We have to talk about the craziest things we saw in markets this week, which is our
tradition.
I have a lame one and a good one.
I guess do the lame one.
Should I go with the lame one?
Okay.
It's actually from my sister who's our new craziest things.
Oh my gosh.
We have to put her on the payroll here.
Yeah, we will because she keeps texting me all the time like crazy stuff she saw.
Yeah.
But it's a little bit lame.
Anyway, she said this was the craziest thing she saw.
Wendy's is putting their chili with beans into grocery stores at 499.
A can.
499 for a can of chili.
From Wendy's.
With beans.
With beans and beef.
And apparently they started making the chili because they had a lot of leftover hamburger
meat and they didn't want to waste it.
Really?
Yeah.
Anyway, it's a little lame.
I'll admit.
I like it.
I like it.
Yeah.
Okay.
Come on, your sister for me.
Yes.
She's doing good work.
I like some really good ones.
5 bucks for a can of chili.
I don't know.
I know.
Maybe it's a super large can.
I feel like it's probably cheaper than that at Wendy's.
We'll have to do some research on that.
We can go to Wendy's.
Oh my gosh.
Yeah.
Get frosty's.
All right.
Sorry.
How about you?
You see anything crazy this week?
Well, one thing that stuck out to me was a comment from the ISM Manufacturing Index we
got earlier this week.
And I think it just did a really good job summing up just how much uncertainty that
we are seeing in this economy and how in some ways we're seeing things weaken, but in
other ways hold up better and it just speaks to I think the degree of uncertainty about
where exactly the economy even is right now, let alone where it's going.
So the comment was we seem to be in a season of contradictions.
Business is slowing, but in some ways it isn't.
Prices for some commodities are stabilizing, but not for others.
Some product shortages are over.
Others aren't.
Tracking is more plentiful except when it is in.
There's uncertainty one day, but not the next.
The next couple of months should provide answers or not.
It's hard to make projections at the moment.
That's almost like a poem.
It's like the shruggy man emoji at the end of the day.
Yes.
The one, they should have incident the little shruggy emoji.
The pandemic I feel like broke everything.
It broke every chart.
It really just created this environment where no one can predict anything.
Is that your vibe these days, Sarah, that it's just forecasting is infinitely harder
than it used to be before the pandemic?
It's certainly gotten a lot harder and I think there's tremendous more uncertainty.
I think you see that even in our own forecast discussions, but amongst other economists,
if you look at just the dispersion of estimates, if you look at the Fed and how they rank certainty
around their own forecast, it's at record highs.
I thought that summed up.
I think we're the overall state of the economy and economists are right now.
My crazy thing is back in the crypto markets.
I'm just going to read the lead of the Bloomberg story because it sums it up so well.
This is an Ohio man photographed lounging in a bathtub full of dollar bills must serve
four years in prison for stealing 713 Bitcoin from a computer device seized by the government
in a case against his brother.
The brother got arrested for laundering money in the dark net in various crypto transactions.
The IRS actually seized the brother's hard drive, which had what he thought were his
Bitcoin wallet, but I guess the way this works is you really just store your private keys
on the wallet.
The brother was able to using the actual private keys basically replicate the wallet
on the hard drive and steal 713 Bitcoins right off of a hard drive.
When was it?
Possession by the IRS 2020.
April 2020.
He was in that low.
Because we were coming out of March 2020 when it hit up.
713 Bitcoin valued then at about 4.9 million.
So I'll let you do the math there.
But there were a bunch of other 487.
Okay.
What is it again?
4877 digital tokens.
Valued it.
What?
4.9 million.
Divided by 713.
How do I put that into a calculate?
We're doing math live on the podcast here.
Divided by 713.
13.
What was the price of Bitcoin?
6800.
Really?
It got that low in 2020.
Yes, it was March 2020.
She's why didn't I buy?
The best part is they seized the guy's phone and they find this picture of him lounging in
a bathtub full of dollar bills.
I thought that was pretty good.
One of the things they said he did, he used 68 Bitcoin as collateral for a $1.2 million
loan and spent that loan to buy a luxury condo in?
Miami.
Cleveland.
Wow.
Yeah.
A luxury condo in Cleveland.
Which I didn't even know they had luxury condos in Cleveland.
I mean, LeBron had to live somewhere.
So I guess maybe it's that building.
But they released the picture of the guy in the bathtub full of dollar bills.
He looks very happy.
I would be too.
But you know, if you're a real player, dollar, like at least tens or 20s and filled that
up up.
What did he do?
He did just $1 bills.
That's good.
So anyway.
That's a good story.
Sarah House, so great to hear your perspective on everything.
We really appreciate your time.
Thank you.
Thank you, Sarah.
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