RUSH TRANSCRIPT Charles so ░░░░░░░░ power to move or ░░░░░░░░ can come from powers ░░░░░░░░ be from communicating think ░░░░░░░░ the action White House ░░░░░░░░ the bully pulpit The ░░░░░░░░ Reserve as we know ░░░░░░░░ really jawbone markets almost ░░░░░░░░ they want but the ░░░░░░░░ have a weapon as ░░░░░░░░ It is called the ░░░░░░░░ tantrum Believe me last ░░░░░░░░ s selloff the corresponding ░░░░░░░░ in the vix one ░░░░░░░░ the best temper tantrums ░░░░░░░░ ve seen since the ░░░░░░░░ tapeter tantrum in 2013 ░░░░░░░░ very next day the ░░░░░░░░ changed their mind The ░░░░░░░░ outlook data for the ░░░░░░░░ part is a calming ░░░░░░░░ for the markets The ░░░░░░░░ what s next What ░░░░░░░░ the clues we should ░░░░░░░░ looking for What should ░░░░░░░░ be paying attention to ░░░░░░░░ etf portfolio manager Nancy ░░░░░░░░ Nancy come in here ░░░░░░░░ a second Talk about ░░░░░░░░ the inflation data Wall ░░░░░░░░ talks about inflation than ░░░░░░░░ Street Wall Street says ░░░░░░░░ is down Main street ░░░░░░░░ no prices are up ░░░░░░░░ re up about 20 ░░░░░░░░ keep hurting us Whenever ░░░░░░░░ hear both the corresponding ░░░░░░░░ you say how does ░░░░░░░░ apply to markets and ░░░░░░░░ economy overall Well prices ░░░░░░░░ up The change which ░░░░░░░░ what Wall Street s ░░░░░░░░ on is going down ░░░░░░░░ they re still higher ░░░░░░░░ people are still feeling ░░░░░░░░ in their daily portfolio ░░░░░░░░ in their daily lives ░░░░░░░░ In their daily lives ░░░░░░░░ that brings me to ░░░░░░░░ cuts The drum roll ░░░░░░░░ Blancato on Only guy ░░░░░░░░ zero cuts in September ░░░░░░░░ next few months Wall ░░░░░░░░ building 200 basis points ░░░░░░░░ rate cuts What do ░░░░░░░░ see If we look ░░░░░░░░ we started 24 we ░░░░░░░░ six Kate ruts prices ░░░░░░░░ Expectations fallen a lot ░░░░░░░░ six zero back to ░░░░░░░░ follow the bouncing ball ░░░░░░░░ can t run their ░░░░░░░░ off of this To ░░░░░░░░ inflation is something everybody ░░░░░░░░ have as part of ░░░░░░░░ balanced portfolio This is ░░░░░░░░ real world right Charles ░░░░░░░░ is not bar by ░░░░░░░░ We have real cost ░░░░░░░░ living especially getting close ░░░░░░░░ retirement you will not ░░░░░░░░ the wage inflation from ░░░░░░░░ job Charles you wrote ░░░░░░░░ great note and one ░░░░░░░░ you talked about is ░░░░░░░░ volatility and I want ░░░░░░░░ to explain this for ░░░░░░░░ audience also known known ░░░░░░░░ skew it is a ░░░░░░░░ tool People don t ░░░░░░░░ what it means Anytime ░░░░░░░░ hear volatility there is ░░░░░░░░ volatility Anytime we talk ░░░░░░░░ implied volume at this ░░░░░░░░ we re talking about ░░░░░░░░ options market For instance ░░░░░░░░ strategy trades interest rate ░░░░░░░░ A lot of people ░░░░░░░░ on equity volatility Implied ░░░░░░░░ is what the market ░░░░░░░░ pricing in in the ░░░░░░░░ So it is a ░░░░░░░░ to volatility You have ░░░░░░░░ tenors This is the ░░░░░░░░ month volatility of the ░░░░░░░░ 7 Also referenced with ░░░░░░░░ three month vol of ░░░░░░░░ S P Charles look ░░░░░░░░ this for a moment ░░░░░░░░ every one is talking ░░░░░░░░ the mag 7 I ░░░░░░░░ your note You re ░░░░░░░░ this is actually suggesting ░░░░░░░░ markets investors are more ░░░░░░░░ about the S P ░░░░░░░░ or 493 more so ░░░░░░░░ the mag 7 It ░░░░░░░░ very much like 2000 ░░░░░░░░ you remember in 2000 ░░░░░░░░ lot of people were ░░░░░░░░ into everything that was ░░░░░░░░ right Pet as com ░░░░░░░░ dot com they were ░░░░░░░░ call options speculating that ░░░░░░░░ market was going higher ░░░░░░░░ that skew In the ░░░░░░░░ seven stocks the put ░░░░░░░░ is not as more ░░░░░░░░ than the cost skew ░░░░░░░░ S P the put ░░░░░░░░ is cost of volatility ░░░░░░░░ own downside protection is ░░░░░░░░ than these names because ░░░░░░░░ are speculating buying call ░░░░░░░░ instead of actually buying ░░░░░░░░ share price of these ░░░░░░░░ Is this sort of ░░░░░░░░ has been a big ░░░░░░░░ just the use of ░░░░░░░░ in general like zero ░░░░░░░░ expiration those kind of ░░░░░░░░ Yeah Charles is it ░░░░░░░░ reliable now that so ░░░░░░░░ people are using it ░░░░░░░░ a tool too invest ░░░░░░░░ one gets in buy ░░░░░░░░ bunch of options because ░░░░░░░░ can get rich Options ░░░░░░░░ a tool I think ░░░░░░░░ is always people who ░░░░░░░░ hedging people who are ░░░░░░░░ but my point of ░░░░░░░░ at quadratic we love ░░░░░░░░ options because everybody is ░░░░░░░░ to lose money on ░░░░░░░░ right Think about it ░░░░░░░░ you re buying it ░░░░░░░░ a hedge you don ░░░░░░░░ want the hedge to ░░░░░░░░ If you re selling ░░░░░░░░ for income you just ░░░░░░░░ insurance policy you Want ░░░░░░░░ to expire I feel ░░░░░░░░ it is actually good ░░░░░░░░ if you can construct ░░░░░░░░ portfolio using options because ░░░░░░░░ else seems like these ░░░░░░░░ is trying to make ░░░░░░░░ from options Right They ░░░░░░░░ using it as periphery ░░░░░░░░ the portfolio Charles before ░░░░░░░░ go I got 30 ░░░░░░░░ You were on last ░░░░░░░░ about the difference agg ░░░░░░░░ has been a beautiful ░░░░░░░░ here Is that still ░░░░░░░░ if you re in ░░░░░░░░ is that still maybe ░░░░░░░░ place to be Agg ░░░░░░░░ core fixed income The ░░░░░░░░ short falls in agg ░░░░░░░░ no inflation protected bonds ░░░░░░░░ it It is old ░░░░░░░░ Used to be the ░░░░░░░░ ag Now the bloomberg ░░░░░░░░ 25 of it is ░░░░░░░░ the Fed said they ░░░░░░░░ not own mortgages long ░░░░░░░░ in the balance sheet ░░░░░░░░ have to be careful ░░░░░░░░ 25 of this is ░░░░░░░░ which are by the ░░░░░░░░ short options because homeowners ░░░░░░░░ long the option to ░░░░░░░░ Charles great stuff I ░░░░░░░░ always learning Next time ░░░░░░░░ m bringing a pad ░░░░░░░░ Thanks a lot Appreciate ░░░░░░░░ Markets right now cheering ░░░░░░░░ inflation data but could ░░░░░░░░ be cheering too soon ░░░░░░░░ also the initial jobless ░░░░░░░░ is now the most ░░░░░░░░ economic data point out ░░░░░░░░ Yikes Larry mcdonald just ░░░░░░░░ a brand new book ░░░░░░░░ until you heart the ░░░░░░░░ and what it tells ░░░░░░░░ about where this country ░░░░░░░░ going. He’s next.