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Her but now to the markets and more bad news for bonds but before you -- out.
Did you know a record eighty billion dollars has been pulled out of bonds in June.
That is more than twice the amount that ran for the exits in 2008 at the height of the financial crisis.
So does that mean you are about to lose big money Paetec.
With me now is money manager.
President of the Del -- -- after the show.
These must agree to be here eating has been into staying.
To say the least to watch everyone in the bond market run for the exit and it's had some.
-- had a lot of impact across the line in ETS a bond funds as we said we've seen eighty billion dollars run for the door and in some cases in the ETF funds.
Talking about Citibank in particular.
They have not let some redemptions go through -- other words they have stopped people from getting their money back because they've reached this threshold that looks like panic.
That's scary for investors do you see that getting works.
You know -- -- -- -- talk about yelling fire in a crowded theater boy this is with something yeah we don't you know this is like the worst kept investment secret that I've ever seen in my in my investment career.
Everybody seems to agree and and believe that rates have nowhere to go but up and whenever I see an investment theme like that.
That everybody is in universal agreement on I get worried disaster thinking boy you know I don't know if that's really gonna pan out you -- think about the dot com but.
And also we'll -- you don't think we're gonna go up is that we have -- We don't know lower rates are gonna do -- I mean that's that's that's the investment -- how do we know that our vision is not clouded by the past forty years him.
We're already seeing it I mean if you look at the tenure given the thirty year mortgage and -- -- seeing some big moves in your folks like JB data coming out and saying.
Yet this is gonna come to a violent end it -- to happen rates have to normalized.
But it's -- if you take the training wheels off its normal thing with the bikes gonna wobble a whole bunch before he can finally ride off into the.
-- -- I agree -- but I just wondering how much of our how much of our vision for the future is clouded by the past when I got to high school.
Interest rates were a money market accounts were 20%.
And we've -- really high above inflation yields for the whole time since I've been in the business and so how do we know our our view of the future's not clouded by that there's ample precedent.
For rates to be very low for a generation for example from 1933.
We had a period of a bus and a big boom for your world war two and thereafter rates were at 1% or below for the short term treasuries.
For sixteen years consecutively.
And for those years -- were at 0% OK -- we know we're not going to a situation like that.
So so those are all persuasive things to say but let's just say people are persuaded and they're still feelings -- -- panicky.
Out there okay.
When you see people run to exit from each yes -- -- -- ETS are relatively new phenomenon and there are a lot of people that are concerned by virtue of having so much money.
In these funds that all tree in the same direction because that's what they're for.
That it exacerbates.
The ups and downs and it makes the volatility even more so this is gonna worry all along with the ET apps as all the sudden rise to these moves get more -- and by virtue of the number of people who are all trading in the same direction which kind of just your point you know everybody panics at once whether or not it's justified they're still packing.
So could be plenty -- -- situation.
Make this even worse and is that some of what were seen with his eighty billion dollar pull out in the past -- It's possible it's possible I think everybody was rushing for the -- didn't want to be the last guy you know -- caught with you know holding and holding the bag.
But I think you know that the situation with the ETFs.
I mean they're not perfect obviously but they they provide.
Great access to entire asset classes with with with liquidity throughout the day.
That you can't get anywhere else mutual funds used to have -- and you mutual funds.
Before you can only get one time a day liquidity into the market day.
We've got extremely driven costs down -- -- on transaction costs and management fees.
Two all time lows they've got tax efficiency them that rivals iris practically if you bought it in the hole and held a diversified.
Thought I know -- you're -- and that all makes sense until Citigroup says you can't have your money back I mean talk about getting everybody thinks it's true they're good -- state there is group think right there interesting discussion we're out of time I appreciate your points thank you so much coming on.
Thank you Melissa.
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