← Excess Returns 
Loading summary
Transcript73 lines
- [00:01]
Blinds.com Announcer
Thirty years ago, blinds.com broke the mold and made custom window treatments easy for everyone. Over 25 million windows later, we're celebrating by giving our customers up to 50% off site wide during our anniversary sale. Whether you DIY it or want a pro to handle everything from measure to install, blinds.com has you covered. Shop online, access real design professionals and get free samples. Thank you for 30amazing years. Shop the anniversary sale now through March 11th and get up to 50% off site wide@blinds.com
- [00:33]
Jim Paulson
Are you a player in
- [00:34]
Troutman Pepper Lock Law Firm Host
the private equity industry? Troutman Pepper Lock is one of the leading national law firms focusing on middle market private equity. Our podcast, PE Pathways brings on dealmakers to share their thoughts on trends and developments. We do a deep dive into the M and A industry with topics around tax, employment issues, regulatory developments and much more. Check out PE Pathways wherever you get your podcast.
- [01:00]
Justin
The economic data has held up well recently, but the behind the scenes numbers tell a different story than the headline numbers. In our latest episode of our new podcast, the Jim Paulson show, we take a deep dive into what is going on. We have included this episode in the Excess Returns feed, but if you want to keep receiving new episodes, you can subscribe to the Jim Paulson show on all major podcast platforms using the links in this episode. Description thank you for listening. We hope you enjoy the show.
- [01:18]
Jim Paulson
Today we have 1% growth with zero job crash. Every other time that we had this situation, if you look at 1% growth, we were well into a recession either in one or headed to one. And yet today we seem okay with this. In the last year, real new era spending is up 14 times faster than the rest of the economy. There's 14% growth in real new era spending and there's 1% growth in the remaining 89% of real spending. The small 11% new era piece is now wagging the whole GDP dog. And more importantly than that, it's covering up the fact that the 89% of the older economy, most of our economy, is basically flatlined. Why are we worried about inflation when 90% of the economy is dying and the other 11% of the economy is a huge deflationary force?
- [02:15]
Justin
Jim, nice to see you again. Welcome back.
- [02:18]
Jim Paulson
Well, thanks for having me guys. Good to see you too.
- [02:21]
Justin
By the way, that was a great Barron's piece at the end of February. I was really happy and I was really happy for you to see that. That was really great.
- [02:29]
Jim Paulson
Yeah, it's always a great opportunity to be in that iconic publication, so I appreciate the opportunity myself too it's been a while since I've had one of those, so that's good. Yeah.
- [02:39]
Justin
Now, I did learn something new from reading that piece that I didn't know, which I should have picked up on the substack, which is. You call yourself the retired grandpa.
- [02:50]
Jim Paulson
I smell they got that in there. Yeah, that's how I feel. Anyway, so I'm just doing what I like to do now. And you know, I mentioned you guys before I came on. I got my house, I got, we got our youngest granddaughter and my daughter and my grandpuppy here today. So if we don't get interrupted, that's what I'm going to be doing after this. So.
- [03:09]
Jack
Yeah, that's great.
- [03:10]
Justin
And by the way, for those listening, you can follow along with Jim sort of in real time over on his substack, that's Paulson Perspectives, where he's writing a couple times a week. And a lot of times, you know, in these conversations, we try to highlight some of the material, some of the content that Jim is so kind to share with us in our audience. But there's a lot of great stuff over there, so definitely check that out if you, if you can. So, Jim, I think where we wanted to start, which, I mean, this is kind of everyone's talking about it because it is a big deal, but is, you know, what's going on over in Iran and the conflict, obviously the US Is heavily involved in this and we wanted to, I guess, just kind of start, you know, when you think of things like this conflict in Iran, you know, how do you go about thinking of it from like a market, market implication standpoint?
- [04:06]
Jim Paulson
Well, you know, one way to, just before we get into it in too much detail is just, you know, it's just part of Trump utility. It's just another, another part of Trump utility that we, we've had volatility ever since that whether he's dealing with trade negotiation, tariffs or immigration or tax policy or, or, or invading other countries. I guess it's been a constant sense of, of volatility in some sense. You know, the reaction to this might be less than it might otherwise be just because we've kind of been so used to having something that's always off the charts in terms of, you know, volatility under the, under this administration. And I think that, you know, the, the thing that's worse with, with the unexpected, so to speak, is, is it just comes out of left field and then it just, everyone has to adjust. And that's kind of what you see with great volatility at the front end. But once the markets have a chance to vet whatever the new situation is, then I think things do tend to calm down. I mean we've had a lot of vetting already done here. I mean if you look, look around and think about it, the VIX now has gone from, it's probably about 15, 16, couple few weeks back and now it's 26 and the move index is blown up somewhat similarly over, over that period period of time. You know you've got a lot of the investment sentiment measures that really come off. AAII four week moving average is now negative at minus two and a half. The CNN fear and greed index is, is at fear and just barely above extreme fear levels now. So you know there's been some adjustment attitudes and that's been going on. You certainly have Brent crude breaking above $90 barrel. You know, a pretty big move. You have bond yields so that backed up quite a bit. You know you kind of have an ongoing correction that's happening in the, in the stock market that was kind of happening before this invasion, you know. So there has been a lot of what I would call vetting going on here already. To me that makes me a lot more comfortable than, than you are at the start of this thing. It's not like other bad things can come out of left field yet. There certainly could be. I mean the two biggest that bother me probably are a terrorist attack tied to Iran or Iran back militia or whatever here in the United States that would create on a whole nother round of fear and additional vatic if you will. That's probably the worst thing right now for me. Secondly, boots on the ground is, is pretty, it's, it's out there. People are already vetting it a little bit. But I think the reality of that is, is kind of frightening as well because it introduces a whole lot of unknowns that come out of that as well. When you look at this now, I don't know. I know I'm certainly no military expert and I, I always, I always find it interesting us in the investment business when we get into these issues, whatever it is, you suddenly become an expert. You know I few years ago I was an expert in Covid. I mean you know, you just expert whatever pops out. Your reality is you're not, you know about all you can do is look at this in the sense of what this is, is an emotional reaction going on to new events. And you've seen that a lot in the investment business. If you've been in the business a While, and there are commonalities and things, you know, and you certainly kind of notice that today. But I guess what gives me a much better feel is this seems, I don't know, this seems a bit lopsided to me in the sense that it's not US versus China or Russia or somebody that's got equal military might. It's really Iran against not only the United States, but most of the Middle east and Western Europe and even, even what would have been considered friends earlier after they shot off missiles at a lot of their friends. So it seems a very lopsided battle. And, and I think that, that if you don't have to be a military expert to conclude who eventually would win this, I think it's more a matter how much damage can be done along the way. But what's happening every moment as we go by is we're constantly degrading Iranians of military capability. I think it's less now than when this begun. It'll be less tomorrow than it was today and next week. And I think that really, really matters here because less and less unexpected can happen. The more and more I think that decays a little bit. And on the other side of that good news can start to occur. There might be something that could happen positively with the straight at home ooze, maybe the United States or Western affiliates, you know, find a way to kind of take that over and open it back up again, if you will. So I do think that some good things could start, start to occur as well as just, you know, just bad news here. And I, but mainly at this point, I like the fact how much we've adjusted. I've also just done a couple other things. Morning consult, which is a daily sentiment read done every day in the market. That thing is back to levels of low levels now that it was in April for April 2025, low last year in the SPX in the stock market. Similarly, you look at the relative performance of S and P cyclical sectors to defensive sectors that's come down. We're defensive sectors beating cyclical now back to where it was at the lows of the SPX last April. So again, I, I do think there's quite a bit of adjustments that have been made and I don't know, I think we're further along in this that we know. I'm not saying the final resolution might not drag on, but at the same time I'm not sure the markets will continue to react to it in the same way that we have up till now. As far as the rise in oil crude or Brent at 92, even, wherever it's at right now, this thing, this thing was 80 twice last year. It was 80 in June, it was 80 in January. If you go back to 2024, 2023, it was regularly between roughly $70 to $95 all the time. So one point, I think it's important here, when you look at how much movement we've had in crude oil or in yields, part of that is because you got to remember those were both almost at the lowest levels that we've seen since the pandemic. Prior to this whole event occurring, we had a big drop in, in Brent, you know, down to the 60s, which we hadn't seen for years, and also bond yields below 4%. So part of that move is just kind of some, you know, redoing something we put in place just not that long ago. How much inflationary content it has in that regard, I don't know. What I do know though is it's a very contractionary force. Again, another tax hike on the global economy in an economy that we'll get to later, I don't think is necessarily all that strong. So I think, if anything, there is hesitancy now at the Fed about what they're going to do with this with inflation front. But I think, I think, you know, this morning's job numbers were pathetically bad. And I think if anything, it's going to bring the chance of more ease as we go through this year, more likely than not, which to me is ultimately a positive for stocks. So we could stay volatile for the next few weeks. I certainly don't know, but I'd be, I'd be looking to buy here, thinking about the rest of this year, given where we are in this crisis.
- [11:59]
Sponsor Announcer
Experience a membership that backs your business journey. With American Express business Platinum. Earn 5 times Membership Rewards points on flights and prepaid hotels booked on amextravel.com plus enjoy a welcome offer of 200,000 points after you spend $20,000 on purchases on the card within your first three months of membership. American Express Business Platinum. There's nothing like it. Terms apply. Learn more@american express.com Business Platinum
- [12:29]
Jim Paulson
it's not
- [12:30]
Timberland Announcer
just something you made. It's the privilege that you get to work with your hands. It's building something that serves a purpose, proof that you have the grit to keep going. At Timberland, we understand you take your craft seriously, and we do, too, which is why our products are built to the highest quality. We put in the work so you can perfect Yours with purpose, in every detail and crafted with intention. Timberland built on craft. Visit timberland.com to shop.
- [13:00]
Justin
Could you spend a minute explaining the relationship? Obviously, price of oil is up. The dollar is also strong here. Some of that's a flight to safety maybe, but some of it has to do with, you know, oil is priced in dollars. So could you just take a minute and explain sort of that interplay between the price of oil, the strong dollar and how that kind of sort of manifests itself out in the market. Is that something you could take a minute?
- [13:28]
Jim Paulson
I think that, I think that, you know, there is a direct tie with, you know, everywhere in the world is price in dollars. But I think more importantly than that, Justin, is that I think it's the safe haven play of the dollar that's still at work. You get into these situations, the dollar generally gets a bid whether it's oil or whether some other event that creates a geopolitical situation. Generally there's a, a bid to the dollar. But here again the dollar has risen, but it's still down a fair amount from its highs that we had in January last year. You know, you got to remember that we had almost record highs in the value of the dollar. January 2025, it's come off maybe 7 to 8, 9% now. It's come up a little again. But it's not like we're at brand new record highs in the dollar. It's actually kind of flattish, maybe over the last 12 months after going up quite a bit. But I think that's mainly safe haven. That'd be my guess, yeah.
- [14:29]
Justin
Does it, and what about international stocks? Does it change, does this at all change any of your views on, you know, non US Yeah, I like non
- [14:38]
Jim Paulson
U s and I like them going into this. So, you know, taking the head just with everybody else on that, the good news is there is those that have been in it for a little while here, they're, they were up a lot. Right. So they're kind of giving back some of those gains. I, I have, I have little confidence that I'm going to predict when the bottom of this crisis is and when it's over, it's, it's all clear. I think there've been some nice pullbacks probably in more than anything else in the international markets compared to the United States, you know, particularly the emerging markets have been hit very, very hard. I kind of like that. If you haven't had an opportunity to kind of get your international position up a little bit relative to your domestic, I Think I'd take advantage of this. I'd start now. I might not put it all in today, but I start get. I always like just doing a plan over the next 30 days or 60 days or whatever you want to take. Put a little bit at once a week and, and see where you are when this thing gets. But I would rather be a net buyer of that weakness right now because I think a lot of the other things that were at play causing international to better, to do better are still going to be there when this thing winds down, you know. And again, you know, Trump has said that, yeah, you could see this lasting month or longer and now there's, you know, he's not ruling out boots on the ground and he's, you know, he always changes his story. But you know, the reality is a lot of things that he's done, they're still kind of out there. But the reality is we sort of quit, quit reacting to them in a big way after a while. I mean, we still got tariffs. We don't really. They're not a big thing anymore that's going on. There's. And so I think that's probably what happens here. If it drags on more likely it may drag on, but I'm not sure the markets, the markets might move on and there'll be other things that become more important along the way. So I kind of look at it that way. If we have a few more weeks of, of really big sell offs, I'd be looking to add, you haven't been
- [16:40]
Jack
too concerned about inflation for a long time now. Does, does this change that at all? Like if, if we have one case where this gets resolved and oil comes back down, but if oil stays up or if it spikes more, I mean, are you more worried about inflation now or are you not still not worried about it?
- [16:53]
Jim Paulson
I'm not. Maybe I should be. I'm not saying we won't get little out of this. You're going to get some prints, you know, if it holds for a few months, you're going to get some prints that show up that. But I don't know if it bleeds a lot into other parts so much. You know, energy and food combined. Right now, Jack, the percent weighting of, of overall income is, is down to just about 10% of the budget for Americans. It wasn't that long ago, maybe a decade or two decades ago that that amount was in the 20 percentile, 20, 25 percentile range. So it's come down a lot. If you just, if you take food out of there, it's even less. And then we're also, as a country now we're a net exporter of oil rather than an importer. So I think, I think it's, it's a lot less meaningful than it used to be. Particularly, you know, we are. Our vision goes back to the 1970s a lot of times, you know, in the runaway inflation, the other thing. And I'll get to that probably a little later here, I think the underlying economy is pretty weak, as kind of suggested by this morning's payroll numbers. But I'll get into that a little deeper attention to it. And to me, if you've got a weak economy, what this is in reality is it's not only inflationary, it's a. It's another tax on the real economic activity. Higher inflation. To the extent that it's going to be real big. I think there's a lot of disinflationary force out there. For all the talk about AI and the like, you know, that's a major disinflationary and, and to the extent it's being very successful and doing very well and nothing else really is, that's, to me, is a pretty disinflationary force. And the rest of it that's not doing well is also disinflationary because it's not very, very strong. So it's not like there aren't things you can point to. You know, the, just to. This month we had the ism, service sector and manufacturer sector price components go up a little bit. And we certainly have oil prices. We've had a little pickup in industrial metals leading up to this situation. So there's evidence of, you know, some of that picking up, but I think that's more EB and flow. I think the underlying, the underlying trend here is a fairly weak economy. And the part that isn't weak is highly disinflationary.
- [19:14]
Jack
So to sum up, this isn't really, this isn't really changing much about what you're thinking about the markets or about the economy. Like, you know, I'm an investment adviser during the day, you, you get calls during stuff like this to say, like, what should we do? How should we react? But it sounds like you don't think, you know, the opinions you had going in haven't changed much because of this.
- [19:31]
Jim Paulson
No, I mean, I, I didn't really mention. I wrote two pieces this week and neither one of them was really about this. Right. I just, I, I think, I think, I think largely it's, it's another Trump utility and it's short term volatility. And you know, at the end of the day it might not be all bad. I mean, we're gut checking sentiment, taking a pause. We've kind of paused this all year now. We've got some pretty good corrections in some parts of the market, particularly in tech and new era parts. I don't know if that's all bad for the sustainability of the bull as opposed to just blowing the rate of ascent from April 2025 through October of last year. Had that continued onward. You know, this, this could look different today than it looks right now. And I think, I think there's far too much fear right now, understandably about what this means with Iraq. I get that. I can convince myself about it too at various times, but I think there's far too much fear about AI. I think, you know, to me, those are the continued wall worry that's made this stock market click throughout its entire bull market. And we got, we continue to do that.
- [20:44]
Jack
So just to go from one area of fear to the other, we won't spend a ton of time on this. But I did want to get your reaction to it. Did you read the Citrini AI piece?
- [20:53]
Jim Paulson
Like, I gave it a perusal. I had not read that until you guys turn it over, but I gave it.
- [20:57]
Jack
Oh, you hadn't? Okay. No, yeah, like in our, in our world of social media and stuff, it kind of went insane in terms of everybody reading it. And you know, people overreacted, obviously and panicked, but. So we don't want to get into that part of it. But I am wondering, like, you're great, you take a great, balanced look at these things and I'm wondering about how you think about AI, because I was thinking about it like, if AI is a more transformative technology than what we've seen in the past. You could argue we're going to get way more benefits from it maybe than we've gotten from other technologies. But you could also argue maybe the short term disruption would be worse because it is some, to some degree human intelligence. So it may replace some more jobs in the short term before we're finding those new jobs that always come. Like, do you think that's a fair way to look at it?
- [21:37]
Jim Paulson
Well, let me take off my, my military hat a moment and put on my high tech hat.
- [21:42]
Jack
We should have gotten some different hats.
- [21:46]
Jim Paulson
Moving hat. I will see. I'm also not an AI expert by any means, but again, if I look at how that's come out, we've certainly in my career, but I've been through a number of innovative periods. You know, maybe you could argue that a lot of my career since the start of the 80s has been one big innovative cycle, you know, continuing and seeing how those reacting and you know, the things that stick out to me with AI, I can get myself just as scared as like that article, you know, when I think about. I'm reading one of my dive store novels that I'm currently reading at night called the Tin man and it's all about AI Robots being created for and military is testing them to see how they fight in orbs. And he's got live military going against these robots, AI generated robots and they, they lose every time they, they go up against the robots and, and it kind of plays well into today's fear that there's just no way, you know, we can, we can compete with these, with these things. They're unemotional, but they're better at everything than we could ever hope to be. Better and quicker. That's kind of been the story. I just feel like it's pretty much overdone and very, it's really become horrific scenario very quickly. And anything that's bad in the economy is now tied to AI. The fact that know I don't buy that the job market is as weak as it is because AI is suddenly here. I think that the unemployment rate in this country bottomed out at 3.4% in April of 2023 and rose about a full percentage point. Probably most of that occurred long before AI was really out there in a, in a big, big way. Centrus. And I could be wrong in this, but I, I think the other side of the story with AI that doesn't get near enough attention is the other side of story of all innovations. And that is just take an example. Like I don't know what, but just take, take. Let's say I'm going to do a will, new will and. Or maybe I'm buying a house, you know, and I need a lawyer or whatever. And I might pay, you know, whatever $5,000 for will or whatever. Now I can dial up an AI and do it for 100 bucks, same thing. I don't, you know, I want to sell my house, but I don't need anybody. I just dial up AI what I need to do and I save, you know, 2 or 3% the value of my house. Well, that might be bad for lawyers. They have, they're going to lose out on parts of business, there's no doubt about that. But everyone that buys that service. I now just save thousands and thousands of dollars. And guess what? I'm going to go spend that stuff. I'm going to go spend it elsewhere, whether, you know, a new boat, new trip or a new car, housing renovation, whatever, which is going to create a whole lot more of new opportunities for other people. Growing business elsewhere. You can talk about the, the contraction or loss of things we used to do that are no longer going to be done. But what it also does is it frees up a lot of new wealth to be spent elsewhere with a multiplier effect that will, I think, no doubt create a whole lot more opportunities for everybody. And I don't know if these are so disconnected. I mean, if I, if I gain three or four thousand dollars out of that deal, which I wouldn't have a year earlier, I'm not going to spend that just about as quick as it's going to hit that law firm overall. So I do think, I do think that part of the story doesn't get enough. Now. Could there be a, a mis, you know, connection, like you say, where job loss is faster than new opportunities? There could be, there could be some of that that's, you know, very disinflationary itself. And I, again, would come back when I look at AI, what I would suggest is I would be easing policy here rather than tightening, which is what we're doing. Because I, I think if there is a problem with it, it would be in that direction, probably at least in the interim time, you know, all innovations, a disinflationary sort of force. But I do think there's a real positive side of AI here, just in the sense of the, of the free wealth that it generates that could be spent and applied elsewhere to create a whole lot more activities for other, other jobs and other businesses and other. To other people.
- [26:29]
Jack
And I wasn't thinking. It's just not, it's not elsewhere, it's in addition to elsewhere. Because I was thinking about, like, if law firms are able to use AI and their cost goes way down, then you could argue the price of legal services to go down. And people like me who are like, I'm never paying $600 an hour for a lawyer, like we're suddenly going to use lawyers more. And so there is a demand that's probably driven by that price.
- [26:49]
Jim Paulson
You're exactly right. You're exactly right. It was probably expand net legal services overall because of a generalized decline in the relative price. And I do think, I do think that that's sort of the essence of all innovations. You know, I also would say that there's a lot of innovations that happen that if you think about it, you know, a lot of it's used by us, but do we pay for it or do we really, I mean, does it really, you know, create any major change? I, I use my phone a lot of ways for entertainment, you know, look, perusing stuff and whatever, but I don't necessarily pay anybody for that privilege. I think a lot of AI is going to get lost that same way. In a way not necessarily replacing things per se, but just easing uses of entertainment and things like that. Net benefit doesn't necessarily cause initial job loss, but used in ways by people to increase their own enjoyment on certain things. And I, in some ways that's very similar to a lot of the innovations we've had in recent decades.
- [27:56]
Jack
Is there anything you would look at like as AI, as the years go by, as AI, you know, advances, is there anything you'd look at like in the economic data to say here's the impact, like you, you mentioned to us in previous podcasts, like productivity is not that useful. And I was actually pulling the chart from Fred for like another podcast. And it's, it's basically just like a squiggly line that ends up in the same place that it started. Like if you look at productivity long term, so that that may be mismeasuring in a technology area like era. What's going on? Like, is there anything you would be looking at over time to see what the impact of this is?
- [28:24]
Jim Paulson
Close your eyes, exhale. Feel your body relax and let go of whatever you're carrying today.
- [28:32]
Sponsor Announcer
Well, I'm letting go of the worry that I wouldn't get my new contacts in time for this class. I got them delivered free from 1-800-contacts. Oh my gosh, they're so fast.
- [28:40]
Jim Paulson
And breathe.
- [28:41]
Sponsor Announcer
Oh, sorry. I almost couldn't breathe when I saw the discount they gave me on my first order. Oh, sorry. Namaste.
- [28:48]
Experian Announcer
Visit 1-800-contacts.com today to save on your first order.
- [28:52]
Justin
1-800-contacts.
- [28:54]
Experian Announcer
My dad taught me a lot, including how easy it is to forget to cancel things. So I downloaded Experian, my bff. Big Financial friend Experian could help me cancel my unused subscriptions and lower my bills, saving me hundreds a year. Get started with the Experian app today. Your big financial friend friends here to help you save smarter. Results will vary. Not all bills or subscriptions eligible. Savings not guaranteed. $631 a year average savings with one plus negotiations and OnePlus cancellations paid. Membership with connected payment account required. See experian.com for details.
- [29:22]
Jim Paulson
Experian. Well, I think we need a, I think we need a new productivity measure in this country because we've got so much now that's tied to technology. And I don't think we measure, we really don't measure productivity the right way to capture a lot of what's going on. And I don't think we've got a better measure right now. So it is, it is difficult to separate that or to know, you know, some of our, you know, even the concept of gdp, it gets kind of hard to, even if that's the right patient. But if what we're a lot of this, of what we're doing, I don't think we have a good replacement. Major JACK I, I do think that we, we need more work in that area. And you know, the problem with when there's a vacuum of something to measure something, people go to what they want to go to to prove it. I mean, I do it myself. Everyone does it, right? And right now what people are doing is if there's any weakness in the job market, it's all AI, you know, now people have gone and tried to say, well, when I look at the job numbers, you know, a lot of it's old, sort of old style that don't really aren't AI related that much, where the job losses are the worst or, you know, so it's hard to, hard to tell where the truth lies in this. And part of it is because of our measurement is not real good. I don't know what to tell you on that.
- [30:46]
Jack
Yeah, it's challenging because so many people start with their opinion and then go find the data that supports the opinion. And you know, often you can get people on totally opposite sides of an issue who both have data they're pulling to say, oh, here's why I'm right.
- [30:57]
Jim Paulson
And the data itself is, you know, limited and, you know, fraught with errors. It always has been when you, but when you have rapidly changing innovations, it's probably even gets worse. And there's a lot of things you'd, I know myself that I'd like to investigate sometimes and I don't how know how I could get the data to look at it. It just isn't available, so to speak. And that kind of comes about with rapid and red. You know, the innovation is disruption, man. That's what it is. And it's very uncomfortable. But it also has been hugely profitable, not only just for Real corporate profits, but profitable for the human race in general. And I, I just think world history is a strong recommendation that this one's probably going to work out okay. I too. I mean, more or less. I think it'll have. Be disruptive, it'll be worrisome. There'll be things you can point to that aren't great with it, you know, but I don't know if that's that much different than what we're doing with a lot of the technology innovations that came about in the 80s and the 90s and 2000s. Today, we're, we're arguing about our loss of freedom, personal information, freedom of, you know, because technology can capture so much on us and it could be misused and it can affect our kids, and those are all really big issues. But it's also been a huge advancement in how we do things, and everyone's pretty much benefited from that. I think AI is probably going to turn out to be kind of the same thing. And I also think it's probably not going to unfold nearly as fast as people are saying, we'll see.
- [32:36]
Jack
Well, I hope, I just hope you'll keep talking to us on the podcast and you won't send AI Jim in the future to talk to. Yeah, I hope you might say, like, I'd resonate with the grandkids. Like, I'll just send AI Jim to talk to these guys.
- [32:47]
Jim Paulson
AI Jim. Yeah, it's probably, It'll be a much, much better version, Jack, if that happened. Much better version I've got. It'll be younger too. I'm sure of that.
- [32:55]
Jack
So going to the point you talked about earlier, you wrote a great piece recently called Technology Is the Tail Wagging the Dog and the Rest is Recession by any other name. And you had some really interesting data in here. And this is something I've been thinking about a lot because this new era investment has become such a huge part of our economy and part of what we do. And I think what you were getting at here is if you take that out, the larger economy is not looking too great right now. So as we move into chart one here, like, what are you. What were you getting across with this chart?
- [33:22]
Jim Paulson
Well, one thing about it, I don't know of any measurement that's available where you can just say, I'm sure we all have this question, you know, how much does new era activities make up of the Aron? I don't think everybody has the answer. If you go through the GDP data or the PC, you know, there's different line items in there. But there's no like overall new era line item that kind of tells you in one area, you know, how much a new era is sort of comprising of our economy. Now what I did do was I, I looked at the, what I think is the biggest component of new era spin and that is investment. You know, certainly you and I buy computers and other things and we're adding to this overall. The government does too and adding to it overall. But I think that it's, I think the, these are two things that are well captured or I mean a thing that's well captured is investment spending for new era sort of investments and they're sort of at the epicenter impotence of the whole new era movement is where that begins is how much business spends there and then it goes out from there. So what I'm going to get at is I'm going to look at a component of new year investment spending. Is new era part of the economy. But it's probably smaller than what it really is in some regard. So it's not totally accurate but it's a good representation here of what we're looking at. And this chart just shows the percent of new year investment spending. And that is comprised by two components right out of the GDP accounts. It's comprised by spending on new equip equipment processing, information processing equipment and on intellectual property products. Those two components. What I want to point out is just it's been growing throughout the post war era but really from infinitesimal small levels. I mean you go back to 1970, it was barely over 1% of, of in this case real private GDP. If I take consumption plus investment real private GDP. And the reason I'm using real private GDP is there's fewer distortion to the, you know, if you get into the broader GDP you have distortions with trade, you have distortions with the government taxation and tariffs and all the things that happen. But if, but C plus I just looking at real private part of the GDP economy and I look at the percent of new era spending as a percent of that. It's basically non existent really until you get to about 2000. You know the decade of the 90s would happen there at least grew it. It's been doubling over the, over that period of time. You know, it's out in 2004.8 it has risen up to 11% of GDP. Right. Okay. By this measure 11% is kind of a private GDP in real terms comprised by new year spending. But that means 89% of the economy is New Era. Okay, so let's look at how they're doing. And if you go. And one thing I like to say, look how fast this thing's gotten big. As I mentioned, you know, start of 1990s, you know, it was whatever it was 2, 2.8% or something, and now it's 11. So it's, it's finally gotten big enough that it can really start to impact the overall economy, even though it's still only 11% of the economy. And this just looks at breaking down private sector real GDP into New Era and the rest. New era is the blue, and the rest is in the red. The new era comprises currently 11% of, of of private GDP and the red comprises 89% of it. Now this just looks at the annual growth rates. You can see that New era growth has always been pretty much stronger than the rest of the growth in real spending in the economy. Most of the time it's, it's quite a bit bigger. But there's never been anything like we witnessed just this last year. In the last year, real New Era era spending is up 14 times faster than the rest of the economy. There's 14% growth in real new era spending, and there's 1% growth in the remaining 89% of real spending. Now there are some pretty big ones you can see there. In the 1990s, we had a 16% growth rate in New Era back here at a time when the rest of the economy was growing about. I guess that number's about 6%. And so you could see it at that point. You know, it's, it's a little over two times. But this is 16 times the differential in growth just in the last 12 months as a whole. And two things have occurred. One is the growth differential is dramatic. We got one small part of the economy just exploding in growth, and then the great bigger part of the economy, which is flatlined almost. Okay, that's sort of the state of what we're dealing with here. And if you go on to the next chart and just look how this has crashed out into the open here just this last year. The blue line here is just private sector real gdp. The annual growth in blue is the annual growth in real spending by consumers and investment. And you go back historically, the red line is the 89% of the economy. Currently that's not New Era, the old era part, and its growth rate now until really just the last and probably until 2010 and beyond, you barely see red. The reason you don't see any red is because it's so infinitesimally small, it just hardly makes any difference. It, it comprises, you know, 1% of the economy or 2%. And its growth rate differential isn't, isn't enough with that small of an amount of the economy to show up. But you know, it started to show up at the, during the dot com part here in the late 1990s a little bit. Not much, but a little bit a differential in growth between new era and old. And it certainly started to show up a little bit more in the 2010 to up to the pandemic. But look at what's happened here in the last year. In the last year. Now year for 2025, overall real private sector GDP is reportedly growing at 2.3%, but the old era part is only growing at 1% in the last 12 months. So I think what's happened here is the new era part has finally gotten big enough, even though it's still only 11% of the total. Given how much it grows, how much faster you take a big enough with a rapid growth rate, it's now having meaningful influence on the overall economy as a whole. That is the tail, the small 11% new era piece is now wagging the whole GDP dog. And more importantly than that, it's covering up the fact that the 89% of the older economy, most of our economy, is basically flatlined. It's down to 1% growth. If you go back historically and look, and I'll show that in a minute, you're generally in recession down here. Okay, back here, I'll come back to a minute. We had this 1% growth back here, but we had a lot higher employment in these two periods than we do today. I'll show you in a second. We not only have 1% growth in 89% of our economy, but we have no job creation in the last year and no profitability really going on. And that's, that's, that's how the tail has overwhelmed and really hidden what's going on with the dog.
- [41:04]
Jack
You'll, you'll hear on CNBC a lot like people saying that this AI Capex spend is like the only thing holding up the economy. And without this AI cap expand, the economy would be in trouble. Like, does this to some degree illustrate that idea?
- [41:16]
Jim Paulson
It's not just A.I. i mean, you go back up to the first chart we showed Jack, you know, right there. I mean, this has been going on for a long time. AI might be this last part in here, just this last leg, right? But, but you know, this wasn't this wasn't AI Most of this was, was different type innovations. This, this is just a ongoing sort of new era high tech economy that's been going on for a while. The only difference is it's is it finally has gotten big enough that it's overwhelming our traditional metrics of measuring how the economy is doing. It's, it's covering up how the biggest chunk of this economy is doing horribly. And no one's noticing because the overall GDP number looks okay. You know, and I think that's the, that's the difference. In the past if you got back here in the last year, as I said, new era spending's up 16% or 14% I should say there's been years back here where it was growing 16, 15 regularly a big spread, but now that spreads become even wider and, and it's just that much bigger today if you just do the math. If you take a 16 growth rate on, on, on you know, 11% of the economy and compare it to 89% on one, it suddenly sort of stands out. This just, this just chart just shows overlays the old era 89% of the economy. Its real growth rate in the last year's 1%. And on top of that the red line is our growth rate in employment which today is effectively zero. It's not only effectively, it is zero with with this morning's bad jobs numbers. But you know, if you look at this, we have never had anything like this 1% real growth in the economy, 89% of it at least with no job creation, without being in a recession. Now we go back to here, we had 1% growth in the economy but we had a lot higher job creation going on. That's the only other time that we really had that situation. You can see though we had it, I guess we had it back here once too with, with about 2% job creation. Today we have 1% growth with zero job creation. Every other time that we had this situation you look at 1% growth, we were well into a recession either in one or headed to one. And yet today we seem okay with this. And it's just, it's interesting when you look at this chart and think about this for a minute that we have. Well let's just go to what profits to just real quick on profits on the next chart. I just looked at this. You know, just during this bull market from the third quarter of 2020 to, to third quarter of 2025, we haven't had fourth quarter GDP profits reported yet, but real profits from the information sector growing 14.5% per annum. Real profits from the other 89% of the economy are growing at 1.8% per annum during this bull. That's a dramatic think about that difference in fortune. But the fact that we look at S and P earnings and they look okay today, but they're really lopsided, leaving a lot. That's not okay over here in terms of the broader economy. If you go back up to the other chart,
- [44:53]
Troutman Pepper Lock Law Firm Host
As a chef, I know flavor doesn't begin in the kitchen, it begins on the land. And West Home's Nature led Australian Wagyu is a story written in the landscape of Northern Australia. Cooking is storytelling and West Home Wagyu carries a story of Northern Australia itself. Raw, powerful and deeply authentic. It's a testament to the passion and care raised in the rhythm of Northern Australia. I'm chef Meilin from from 88 Club in Los Angeles and I invite you to visit westhome.commaitland to learn more and taste a story only Westholm Nature led Australian Wagyu can tell. That's W-E-S-T-H-O-L-M-E.comm e I L I N
- [45:37]
Sponsor Announcer
this episode is brought to you by indeed. Stop waiting around for the perfect candidate. Instead, use Indeed sponsored jobs to find the right people with the right skills fast. It's a simple way to make sure your listing is the first candidate. C According to Indeed data, sponsored jobs have four times more applicants than non sponsored jobs. So go build your dream team today with Indeed. Get a $75 sponsored job credit@ Indeed.com podcast. Terms and conditions apply.
- [46:06]
Jim Paulson
I'm just amazed when you think about 89% of the economy is real, spending is growing, has fallen slowed to 1%. There's no jobs being created. The average duration of unemployment per morning is 26 weeks. You not only can't find a job, but if you lose your job you're out for a half year minimum which is double the average used to be in post war period. And profitability is barely growing in real terms. And yet despite that, what do we have? We have a president that just enacted a big energy price hike on the world economy after enacting big tariff hike on the world economy prior to that. He's restricting immigration which we could use to promote growth. He's not the only person at fault. You got the Federal Reserve that refuses to ease because they say that 0% job creation seems stable I guess. But to me any other world in the past if we had 90% of the economy performing like it is today. We would be easing dramatically to try to help the situation out. And if our concern is inflation, why are we worried about inflation when 90% of the economy is dying and the other 11% of the economy is a huge deflationary force? That the only part that's doing well. I, I just. I think we, we really. When you look at this dichotomy that's occurred, we need to support a broader part of this economy. We can't just base our decision making on the tail of this dog, basically.
- [47:46]
Justin
You know, and I think one of the things it's like, interesting because. Because like something like the S&P 500, which is a market cap weighted index, is so heavy in these large cap tech companies, these new era companies. It's sort of like has masked sort of some of this, maybe not pain, but weakness under the surface and that. And investors kind of haven't felt it, you know, unless you were in small caps or something. But what. You know, so that is an interesting thing. It's like the market overall, when you think about the market like the S&P 500, it's actually done quite well over the past few years. But. But yet you've had this kind of pattern emerging, right?
- [48:29]
Jim Paulson
I. It is interesting though, John. I. You're exactly right. I mean the. The common speech about everything today is, is that we talk about the Mag 7 and the SP 483, you know, th. Those two dichotomies, if you will. And there's dramatic dichotomy in that, you know, you have the new era part doing really well and a lot of the rest not doing that well. I mean it's up, but it's not doing near as well until just recently. And it's interesting that's gained such traction. A lot of people know the Mag 7, you know, the SP 493. They know how lopsided the stock market has been. But you know, the stock market often reflects what's going on in the world. And I would say that that Mag 7 SP493 is just like the new era, 11% and the old era 89% within the US economy. It's got the same lopsided performance happening in the. On Main street that people have noticed for quite a while on Wall Street. And I think that we. It. Although it gives a very different. Like you said, it looks like the stock market's okay by the broad metrics. Well, it looks like real GDP at 2.3% is okay until you look under the hood and there's, there's so many, they're suffering and it explains why. You know, every Main street survey we have is pretty darn pessimistic. Has been throughout this bull market. Ask them how they're doing, they're saying not good. And I think it's because 90, you know, 90% of the economy is not doing well but it's being covered up with our aggregate numbers and it's kind of true. The stock market as well, same kind of phenomena.
- [50:09]
Justin
So, so you wrote a piece in early March called the Leadership Toggle and some of these next charts we're going to pull from that. But walk us through because everything you just kind of were, you know, sharing with us, it would almost make it so maybe some of the changes in leadership you, it would have been hard to kind of see it coming. But yet you've been, you know, pretty consistent about sort of a leadership change happening. Better performance at a small caps value, kind of picking up the pace a little bit. And actually so far this year, you know, that sort of has been happening. So sort of walk us through and try to make the connection to you know, this transition. What would be, what is the catalyst? What is the market sniffing out here in some of these better performing areas of the market that really hadn't been good performers?
- [51:01]
Jim Paulson
Right. Well one thing I noticed this chart just goes back to 1990. The blue line is the relative total return of the S&P 500 technology sector and the red line is the relative total return, what I call broad marketplace. And I just created this index. It's just a GEO weighted index of the Russell 2000 small cap, the Russell 1000 value index, the equal weighted S and P and the S&P 500 cyclical sectors which basically are industrials, materials, consumer discretionary and financials at. I have other versions of this I could put in the international markets. As you know they'd also be part of this. It has a similar looking chart in the red. And what, what, what I wasn't as aware of until I did this was how much there's truly been a toggle switch between new and new era and broad market plays really for several decades. I mean as you in the early 90s, you know, broad broad won and tech lost and then tech won big from the middle 90s, you know, through and, and the rest of the market lost and, and then they went the opposite direction again. There was only a brief period of time really in the after 2008 or even 2010 or 12 where they kind of both were market performers every time, every other time one was either doing great and the other was doing terrible. There's like a toggle between the two. Hasn't been a bad approach to toggle one toggle off the other and then toggle that other one on and toggle off and kind of been. I've kind of surprised me. They're kind of contra opposites in terms of their relative performance. And as you mentioned, Justin, you're seeing, you know, a fairly decent sell off going on now in the relative performance of technology. It's, it's, it's. If I update this, it's a little longer now than this one was in 2004. That's the only one we've had since the bull started here in 2022. It's one of the few that we've had for more than a decade really of any significance. And you can see that broad market plays are starting to pick up overall. If you go to the next chart, I just, just want to point out just it's like just a value valuation basis here. Just looking at the relative performance of information technology sector to the relative performance of broad market plays, just their price indexes. You could see, you know, how cheap technology was back here in the early 90s and how cheap it got after the crash and of.com crash in 2000, mid 2000s and how expensive it is today relative to broader marketplace, even more expensive than it was at the dot com, just as a way to look at that. So there's certainly an emphasis which everyone knows that broad market has been, you know, dead in the water for so long in the, in recent years that it's become quite cheap relative to new era just on an overall basis. Okay, but the catalyst I think if we go to the next chart I've always felt is just policy support. And I looked at this in different ways historically but you know, we, one of the unique aspects of this bull market has been until recently the bull market lived under basically total policy contractionary force the entire time. This bull market started under an inverted yield curve that stayed inverted for the longest period of time ever. It started with negative year on year money growth for 16 consecutive months after never being negative ever since 1960 when it came out. It started and lived under its entire existence under real pessimistic attitudinal confidence on Main Street. It's had, it's lived most of its existence till early last year with a very strong dollar which is a contractionary force overall. It, it has had high short term and long term interest rates that have been refused to come down. I mean we've had a non policy supported bull up until just recently. And the reason that's so important is kind of this chart, the blue line here is the relative performance of broad marketplace that I just brought out in the previous chart. And what I've laid on top of that is the yield curve. Only it's pushed forward a leading by 12 months. And you can see it's not a perfect relationship. But what the yield curve does over the last year, about a year later it helps pick up the yield curve steepens. A year later it helps cause broad market plays do better. If the yield curve's been flattening or going to inversion, then a year later it tends to bring down the performance of broad marketplace pretty good. And certainly in this bull market, the big inversion in the shield curve has just chronically hurt broad marketplace. The last time they outperformed was in the pandemic when we eased everything. Money grow, everything we eased and, and broad marketplace outperform. But since, since then we've been tightening. Now the reason this is important at the moment is 12 months almost to the day later the yield curve has started to steep. And guess what's happened? Broad market plays are starting to pick up. Now this is just one policy verb, but you can relate this to what's going on with money growth, the dollar to, to yields as a whole. Whether it's long yields or just short yield movements. I mean it's also picked up because the Fed has just lowered short term rates. Long rates have come down a little bit from five to four. That is to say total policy stimulus is starting to improve. And I think with that we're going to see an improvement in that part of the market that needs policy juice to perform. It's historically done well with policy juice, not done well when it had policy tightening. Now if I look at the technology sector, they're like the opposite. This is the same yield curve in red leg by 12 months again, only it's in, it's inverted against the relative performance of technology. So the easing of this yield curve, the steepening is showing it going down in here. Now this is less close than the one I just showed you, this relationship, but it's still there. General periods of easing have hurt tech. General periods of tightening his health tech over the, over the pole. I would say that technology is just more invariant to policy. It doesn't need as much policy juice because it is driven by its own cycle of innovation. And when you have innovative products, you can grow whether policy is tight or whether it's ease. But the old traditional parts of the economy need policy easing and they just have not got that. I don't think we ever would have had a bull like this had it not been for the fact that technology is so invariant to tight policy. Because we've allowed a lot of this bull to rise mainly due to tech stocks, whereas everything else hasn't done much. I mean you talk to small cap managers, health care manager, value manager, international manager, it's dunk out there for this bull market. They just. Yeah. Have they gone up low? Yeah, but no, they've done horribly. And I think it's because we've practiced this bull market where we've had chronic policy, economic policy tightening throughout. That's a rare if not unique situation for bull markets generally. Bulls are born with, with stimulus, not never have any. And I think that we kept at it because to Justin's point earlier, you know, we looked at the stock market every day and accurately the big SP was doing fine and that star stocks within the S P were doing fine. So we could keep tightening. And I think it, it, it again the tail is wagging the dog the stock market and let it led to a very lopsided and narrow bull market. If we're now bringing the policy juice, I think we're going to see different leadership and we're seeing early signs of that. If I look at a chart of S&P 500 and compare it to the relative performance of technology just in the last five years, they are very closely correlated. Makes sense. When tech stocks outperform, market's going up. When tech stocks don't outperform, market just can't hold it. And they come down since October, late October. Tech stocks on a relative basis peaked out last October and they have come straight down on a relative basis since The S&P 500 has maintained itself, it's actually gone up over that same time period slightly. That is the biggest gap between having technology come underperform and still let the S&P 500 hang in there that we've had. That didn't happen in the dot com collapse. During the dot com collapse. Once tech rolled over, so did the whole market. So far in this one, tech is correcting and the whole market's sort of holding itself together. That's because broader market plays are doing much better of late. Now maybe that'll be aborted for a while during this Iraq, Iran situation, I don't know. But so far I think things are kind of holding wall police.
- [60:30]
Justin
So so, so, so, so I guess sort of comment question here. I want to get your perspective Paul and perspectives. That's why that's the name of the, that's the name of the newsletter. But, but in the our investing career for Jack and I we've basically seen and you guys can correct me if I'm wrong. I think like Fed easing cycle early 2000s great financial crisis and then I think pretty much like during COVID and you know, all of those sort of easing cycles mostly coincided with you know, different types of economic contractions or recessions. Covid was short lived but the other two, you know, were pretty major recessions. But like one of the things I think is interesting here is that if the Fed starts to ease it's not necessarily. Well it doesn't. We don't know for sure but it might not be like coincided with like a official like recession let's say because part of the reason that they they would be easing was because they raised rates so much due to inflation. So I'm wondering like I'm just interested in your thoughts on I mean if there is weakness in the underlying economy, if the Fed does start to ease here, I mean could we see a situation which I guess it would be maybe the first time in my investing career where the Fed actually starts an easing cycle and it's not necessarily coincided with a result of a recession.
- [62:03]
Sponsor Announcer
Starting a business can seem like a daunting task unless you have a partner like Shopify. They have the tools you need to start and grow your business. From designing a website to marketing to selling and beyond. Shopify can help with everything you need. There's a reason millions of companies like Mattel, Heinz and Allbirds continue to trust and use them. With Shopify on your side, turn your big business idea into sign up for your $1 per month trial at shopify.com
- [62:29]
Jim Paulson
specialoffer Zootopia 2 is coming home to Disney. Let's go get ready for a new case.
- [62:36]
Sponsor Announcer
We're the greatest partners of all time.
- [62:37]
Jim Paulson
New friends. Give it the snake and your last name. The snake Dream team and new habitat.
- [62:42]
Sponsor Announcer
Zootopia has a secret reptile population.
- [62:45]
Jim Paulson
You can watch the record breaking phenomenon at home. Disney Zootopia 2 streaming March 11th on Disney Plus. Rated PG. And right now you can get Disney plus and Hulu for just $4.99 a month for three months with a special limited time offer ends March 24th. After three months, Plan Auto renews at $12.99 a month. Term supply. Well, I mean there, there have been times in the past when the Fed has been easing without recession.
- [63:08]
Justin
Okay, yeah, that starts.
- [63:12]
Jim Paulson
Okay, yeah, that's certainly going on the it does though. You're right, Justin. The major reasoning cycles typically occur when you're either already in recession or you're heading into one. And that's what typically happens. And I, you know I could argue though Justin that as I showed that in reality I would suggest 90% of the economy is already in recession.
- [63:38]
Justin
No, I agree. That's kind of what you're any other name.
- [63:41]
Jim Paulson
So if, if we bring the policy juice finally it probably won't be that out of character from other times. What makes this interesting is that's generally the description of a brand new bull market. Bulls begin usually because we're the policy officials are trying to get out of a recession or avoid one and, and they're easing aggressively for to try to do that. And that juice runs through the stock market and through the economy and picks up the economy but it runs through the stocks first. That's how bulls begin usually. And we never got that in the, in the October 22nd forward bull really ever Full on policy support. Maybe we do get that and fortunately maybe it's going to take a full on recession panic to get that. Or maybe we, maybe we just maybe text holds us out of the water just enough that we get a, a easing light version this time. I don't know but we're already getting an easing light version a little bit. The question is whether that becomes more broad based and intentional. I guess I kind of think it's gonna, I just think the lagged impact. The other thing is it's not just the Fed. I mean the you know, the fiscal juice is 2%. Fiscal deficit spending to GDP now is 2% less than it was 12 months ago. It's gone from 7.2 to about 5.2. And so I think fiscal policy probably also needs to get in the game if you will. Probably. And a lot of people I know are just from other comments. Oh heck, we can't be, you know, blown in the deficit up again or all this. But I think if the economy's bad enough, we're not going to worry about that. It'll be like with COVID or any other crisis that brings easing. We're going to extinguish the fire right in front of us first and then worry about the rest later. I think we'll probably do that again now. Maybe to your point we won't get a full blown recession. I kind of think we won't by the numbers. But I do think that there's many parts of this economy that need help policy wise. And it, it could feel a little like the start of a new bull, where all these new parts of the market that haven't done much are suddenly leading the market higher, at least for a period. The question's going to be if tech collapses enough, then it could take down the whole thing, you know, and that's going to be the problem. I I think if we talked about in the past if we can pass the baton successfully to these new leaders that aren't up as much in price, that got better back, or that got earnings that haven't been stimulated yet but maybe are just starting to, then they could, they could handle some pullback in technology without a complete collapse and continue this bull market on all right, Jim,
- [66:37]
Justin
thank you very much. We will let you go spend time with your granddaughter and your grandpuppy. So we appreciate it. Thank you for tuning in to this episode. If you found this discussion interesting and valuable, please subscribe on your favorite audio platform or on YouTube. You can also follow all the podcasts in the Excess returns network@excess returnspod.com. if you have any feedback or questions, you can contact us@xsreturnspodmail.com no information on
- [67:03]
Sponsor Announcer
this podcast should be construed as investment advice. Securities discussed in the podcast may be
- [67:08]
Jim Paulson
holdings of the firms of the hosts Tires matter.
- [67:11]
Blinds.com Announcer
They're the only part of your vehicle that touches the road. Tread confidently with new tires from Tire Rack. Whether you're looking for expert recommendations or know exactly what you want, Tire Rack makes it easy, fast, free shipping, free road hazard protection, and convenient installation options. Go to tirerack.com to see Tire test results, tire ratings and consumer reviews, and be sure to check out all the special offers TireRack.com, the way Tire Body
- [67:39]
Jim Paulson
should be hi, I'm Jane Wakefield and I host the Human in the Loop in partnership with Gravity. That's Gravity with two E's Helping organizations innovate with AI securely, we explore the rise of AI agents, their history, their potential, and the risks organizations must navigate as they scale search for Human in the Loop Wherever you get your podcasts for their clients.