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if this is such a terrific thing why do markets think it's so terrible for the american economy maybe the market's just
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completely wrong but job of markets is to look forward it's to look past the immediate it's to see what the long run
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consequence are going to be and markets are making a pretty devastatingly negative judgment not true not true so
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let's just establish a couple facts about quote unquote the markets number one there are two markets and they
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behave totally differently and sometimes inversely to each other there's the stock market and there's the bond market
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with respect to the stock market what they are debating and you're right larry is what is the effective long-term rate
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of return a dollar needs to generate in order to pay me back that dollar that is
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what the fundamental stock market does and what we've seen for many years with train imbalances trade deficits and
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close to zero interest rates of which more of that happened under democrats and republicans we have allowed the
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stock market to inflate past historical averages what we've actually seen happen
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in the last week is what most people would call mean reversion the stock market is still way above where it was
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last year 2 years ago 3 years ago what has happened is that the forward multiples have compressed so that's
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number one that's a fact and then with respect to bonds what we are seeing now is there are two very complicated issues
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in the last 2 days we saw one part of the bond market totally get out of whack and what we know is that the yields
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changed materially in a very acute way which is atypical of how the bond market typically digests a philosophical change
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in approach to policy what we heard in the last 24 hours is a lot of this move may have been attributed to an enormous
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levered bet on us treasuries by a japanese hedge fund it will take three and four and five and 6 weeks for us to
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really know separately what we do know though where the structural complexity of the market and this is where larry i
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agree with you is acute and important to observe is in the credit markets for private companies and that is where you
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have to pay a lot of attention