Episodes

Episode 139: What’s Different This Time When Saving For Retirement With Byron Boston

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Yes, markets do run in repeating cycles. However, the best traders ask themselves, “What’s different this time?” Byron Boston, CEO of Dynex Capital explains that this is the very first rule his firm uses when plotting how to navigate their portfolio through changing times. However, two large exogenous events – the pandemic & now a war – are creating some uncertainty for baby boomers hoping to turn assets into income.

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We hope you enjoy the show.

Links mentioned today:

https://www.dynexcapital.com/about-us/leadership-team/default.aspx

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Transcript

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[Paul Tyler]: hi this is paul tyler and welcome to another episode of that annuity show ramsey

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[Paul Tyler]: how are you

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[Ramsey Smith]: fantastic

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[Paul Tyler]: hey a good um we have a great guest in fact it was a really good show it was one i

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[Paul Tyler]: missed when i was on vacation now mark is out so we’re tag team in this show

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[Paul Tyler]: ramsey do you wanna do the intro

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[Ramsey Smith]: absolutely so we’re very lucky today to be rejoined by byron boston who is the ceo

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[Ramsey Smith]: of Dynex a mortgage real estate investment trust and the reason that we wanted to

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[Ramsey Smith]: have him back on the show and the reason it’s so timely is byron

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[Ramsey Smith]: is a student of economic history

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[Ramsey Smith]: and he has really an extraordinary view on sort of macroeconomics

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[Ramsey Smith]: and and geopolitical issues which of course we you know really at the center of

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[Ramsey Smith]: everything that we need to worry about

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[Ramsey Smith]: as an economy and it’s not just it’s not just big investors need to focus on it we

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[Ramsey Smith]: as individual americans financial advisors all need to have context and so we’re

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[Ramsey Smith]: we’re delighted to have delighted to have byron back and one of the things that i

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[Ramsey Smith]: always say about baring that i think is many things that are interesting is that

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[Ramsey Smith]: fundamentally when he when he talks about how he viewed the world he starts with

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[Ramsey Smith]: you know four four words i am a lender and i think that’s something that people

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[Ramsey Smith]: not necessarily understand about what it means to be a mortgage reit but he’s

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[Ramsey Smith]: fundamentally a lender and and that that lens i think brings a very interesting

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[Ramsey Smith]: perspective on the way it looks at the world so with that

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[Paul Tyler]: oh

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[Ramsey Smith]: welcome back byron we’re delighted to have you tell us a little bit about tell a

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[Ramsey Smith]: little bit about yourself and your journey and what brought you to

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[Ramsey Smith]: and what dyne does very quickly no

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[Byron Boston]: thank you sure sure ramsey paul thank you so much for having me and um that’s a

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[Byron Boston]: fantastic introduction

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[Byron Boston]: to i am very much so a student of history

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[Byron Boston]: i am a an economics ner a very student of economics and i found my way to that

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[Byron Boston]: topic in college and i’m very happy that i did i am an economics major from

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[Byron Boston]: dartmouth college

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[Byron Boston]: and i found my way there senior year it was not my original major i had to switch

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[Byron Boston]: my major my last year in school and the reason that’s important and so many

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[Byron Boston]: students are confused in terms of their majors i switched that major because

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[Byron Boston]: that’s what i was interested in i had taken a path down the the wrong direction

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[Byron Boston]: mainly because of influence of of others and and i’m so happy that at some point i

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[Byron Boston]: said you know what i love economics i want to switch my major the head of the

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[Byron Boston]: department helped me switch my major and here i am sixty three years old that had

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[Byron Boston]: to be and at this point it was forty two years ago and um forty yeah forty two

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[Byron Boston]: years ago when i made that decision and i am so happy i did because i i really am

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[Byron Boston]: an economics ner and so in this job at dynex capital

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[Byron Boston]: this is a core

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[Byron Boston]: knowledge skill set that i lean upon and how we make our decision so i am a lender

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[Byron Boston]: i came out of dartmouth college after studying economics i came right to the wall

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[Byron Boston]: street world and i was trained in one of the better corporate lending programs at

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[Byron Boston]: chemical bank spent three years as a lender i went back to business school and

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[Byron Boston]: studied finna county came back to wall street as a mortgage backed securities

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[Byron Boston]: trader i was fortunate it was before larry fing started black black rock that one

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[Byron Boston]: of the best he ran one of the best mortgage back securities trading desks on wall

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[Byron Boston]: street and i was allowed to join that group and so i believe i trained

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[Byron Boston]: in both both the chemical bank and at first boston by some of the best in lending

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[Byron Boston]: and in uh investing and in trading and the asset class and trading that i focused

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[Byron Boston]: on was mortgage backed securities

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[Byron Boston]: and so i started that journey as a trader in eighty six eleven years on the what i

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[Byron Boston]: would call the south side of wall street and i flipped over to the b side where i

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[Byron Boston]: was at freddie mac for seven years where i further hone my skill and knowledge of

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[Byron Boston]: lending money against real estate um and in two thousand four i started my first

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[Byron Boston]: company it was called sunset financial was a mortgage reit took it public i got a

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[Byron Boston]: takeover bid in two thousand six we sold the company happily sold the company the

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[Byron Boston]: company was successful and one of the the most important things i can tell you

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[Byron Boston]: about my career

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[Paul Tyler]: no

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[Byron Boston]: is that a chunk of the investors of my first company i started asked me to come to

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[Byron Boston]: dine capital and help them rebuild this

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[Ramsey Smith]: w

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[Byron Boston]: organization dye had hit some hard times and it was somewhat of a rebuilding mode

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[Byron Boston]: so this has been a turnaround i’m very proud that my i started a company sold it

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[Byron Boston]: and i had enough happy investors to ask me to come and do it again with her and so

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[Byron Boston]: i’m still here that was about fifteen years ago my fifteenth year at dint

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[Byron Boston]: investment trust a financial services company and we generate dividend income long

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[Byron Boston]: term total returns by financing real estate assets but most importantly our

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[Byron Boston]: purpose we’re here to make lives better and the way we make lives better is by

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[Byron Boston]: taking care of the individual savers who buy our stock or our preferred stock we

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[Byron Boston]: also make the lives better of our employees by creating a great working

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[Byron Boston]: environment and giving them also an opportunity to own dn capital stock and enjoy

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[Byron Boston]: the dividend and cash income that we throw off from that stock and then here’s

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[Byron Boston]: another category that most of won’t understand we use leverage or we borrow money

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[Byron Boston]: to to make money in other words we

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[Byron Boston]: we sell stock to our investors we then borrow additional money to then take and

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[Byron Boston]: lend that money to either directly to homeowners

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[Paul Tyler]: it’s

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[Byron Boston]: uh through securities or directly to homeowners and we also lend against other

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[Byron Boston]: asset classes such as apartment buildings malls

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[Byron Boston]: we’ve pretty much a l again in every asset class

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[Byron Boston]: in fin capital the last thirty years or so so our goal again make lives better

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[Byron Boston]: take care of the savers take care of our employees and the last category i forgot

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[Byron Boston]: to tell you was we take care of our creditors when we borrow money we don’t want

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[Byron Boston]: to be a problem to our creditors we want to be one of the best credits that they

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[Byron Boston]: have on their books

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[Ramsey Smith]: so i just want to jump in real quick there so you you’ve got a business that you

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[Ramsey Smith]: are a lender it’s you’re a leverage lender and so tell us a little bit about why

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[Ramsey Smith]: that makes you so sort of hyper focused on what’s going on

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[Ramsey Smith]: in the macroeconomic environment

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[Byron Boston]: so first off

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[Byron Boston]: just trying to think every lender most people in this economy deal with deal with

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[Byron Boston]: they’re leveraged so banks are leveraged banks leverage themselves through demand

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[Byron Boston]: deposits right and so uh they could use other type of leverage but their core uh

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[Byron Boston]: uh liability happens to be demand deposits we

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[Byron Boston]: use shorter term borrowings which are not as um

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[Byron Boston]: what word simple word i can use not as easy as demand deposits it’s a little bit

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[Byron Boston]: tougher when you’re leveraging yourself through what we call the repurchase

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[Byron Boston]: agreement market or short term markets as such

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[Byron Boston]: risk management is essential for running a real estate investment trust such as Dynex

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[Byron Boston]: capital so if you ask me for just one line about dyne i’m going to say we bring to

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[Byron Boston]: the table expert risk management

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[Byron Boston]: discipline capital allocation and those are the two skill sets that we bring to

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[Byron Boston]: the table and we’ll present you with a very skilled and experienced management

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[Byron Boston]: team so we are leveraged we must think about the

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[Ramsey Smith]: thats

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[Byron Boston]: global environment we have a very disciplined approach start first with assessing

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[Byron Boston]: the global macro environment and then work your way down to ultimately the either

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[Byron Boston]: the bond or the loan that we put in our portfolio and let me just add this one

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[Byron Boston]: thing ramsay and paul i don’t want to confuse anyone if you lent money in nineteen

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[Byron Boston]: seventy five more than likely you’re making a direct loan to a borrower in twenty

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[Byron Boston]: twenty two i have more options i can either make a direct loan or i can buy a

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[Ramsey Smith]: b

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[Byron Boston]: security

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[Byron Boston]: that is backed

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[Ramsey Smith]: back

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[Byron Boston]: by a pool of loans and those are we call securit eyed assets so today dyne

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[Ramsey Smith]: like

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[Byron Boston]: balance sheet it is majority you know ninety nine percent securit eyed assets

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[Ramsey Smith]: so to talk about and we were paul and you and i were talking about this before the

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[Ramsey Smith]: before the call like there’s a lot going on in the world right now

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[Ramsey Smith]: so

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[Ramsey Smith]: you know tell us tell us about you know what what what’s on your mind and and

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[Ramsey Smith]: importantly like why things might be different this time around

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[Byron Boston]: that

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[Ramsey Smith]: in terms of market distress something that you have a great deal of patience for

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[Ramsey Smith]: because you expect it to happen every four five six seventy years but it might be

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[Ramsey Smith]: different this time tell us a little bit about that

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[Byron Boston]: what would you look at what

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[Byron Boston]: the main question we ask at din’s capital is what is different this time so there

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[Byron Boston]: was a book written called this time is different and you hear quoted on t v and

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[Byron Boston]: other shows and i think that book is misleading there is something different every

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[Byron Boston]: single time and the real question you ask is what is different this time but be a

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[Byron Boston]: avid student of history to understand global economic cycles global uh market

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[Byron Boston]: cycles and at

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[Byron Boston]: economic data social data political data

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[Byron Boston]: and to assess inform an opinion first and foremost on the macroeconomic

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[Byron Boston]: environment we don’t want to get so focused on that loan or that bond that we want

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[Byron Boston]: to make and ignore the global environment and we make a decision and then we get

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[Byron Boston]: completely annihilated because there’s a major macro change or such as

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[Byron Boston]: at this point we’ve experienced two exogenous shocks in the economy so in general

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[Byron Boston]: we believe a dy that the world changed as of january one twenty twenty that we

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[Byron Boston]: have entered into just a completely new environment what are the characteristics

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[Byron Boston]: of the environment first and foremost right off the back we were hit with an

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[Byron Boston]: exogenous shock as this decade started what happened next the global governments

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[Byron Boston]: both central banks and fiscal policymakers responded enormously like none of us in

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[Byron Boston]: our generation has ever seen um to try to

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[Byron Boston]: save the global economy

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[Byron Boston]: uh given this situation that they intentionally shut down the global economy none

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[Byron Boston]: of us could have ever imagined we shut down a global economy we were all sitting

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[Byron Boston]: at home two years ago not leaving our homes right so this enormous effort was made

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[Byron Boston]: um central banks took an unprecedented step except maybe during world war two of

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[Byron Boston]: stepping into the the global capital markets buying etfs bonds i don’t know it

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[Byron Boston]: seems if they bought a little bit of everything

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[Byron Boston]: and now two years into that we came into twenty twenty two

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[Byron Boston]: with the central banks intending to try to reverse that

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[Byron Boston]: and in addition

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[Byron Boston]: fiscal policy makers potentially trying to pull back on some of the fiscal policy

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[Byron Boston]: that have been added to the economy so when we started this year off at dns we

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[Byron Boston]: believe we were in a big moment in history we’ve never been through this where

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[Byron Boston]: central banks at first built up their balance sheets that large and now they’re

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[Byron Boston]: going to try to pull back the stimulus or the liquidity that have been pumped into

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[Byron Boston]: the global system and right in the middle at the beginning of this process we now

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[Byron Boston]: experience another major exogenous shock and what do we mean exogenous shock it’s

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[Byron Boston]: outside of the economic system something that happens on the outside now we have

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[Byron Boston]: to assess that and say through what mechanisms will this impact the economy and so

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[Byron Boston]: we first had this huge drop in demand from the the pandemic as we shut down the

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[Byron Boston]: economy this time we have another exogenous shock and now we’re coming through the

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[Byron Boston]: uh the mechanism uh o energy right we’re going to drive inflation

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[Byron Boston]: with that issue you could ultimately have a psychological impact because at some

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[Byron Boston]: point the war could bring very negative psychology

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[Byron Boston]: to the consumer

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[Byron Boston]: the consumer environment the largest one we’ll all talk about is inflation we had

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[Byron Boston]: an inflation issue before the exogenous shock now it’s been more exacerbated and

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[Byron Boston]: then when you think about it we’ve got the supply issue supply chains the if you

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[Byron Boston]: think about cutting off russian oil in effect we’re saying okay we’re going to cut

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[Byron Boston]: off certain supply of our energy but the demand is still there

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[Byron Boston]: so now we probably have a problem in terms of prices increasing as we try to

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[Byron Boston]: allocate

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[Byron Boston]: scarce resources so we’ve enjoyed for thirty forty years this wonderful world of

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[Byron Boston]: globalization

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[Paul Tyler]: so

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[Byron Boston]: it has helped keep inflation lower it took a long time for many of us to recognize

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[Byron Boston]: the

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[Ramsey Smith]: alright

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[Byron Boston]: full impact of moving production from

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[Byron Boston]: an employee asked that

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[Ramsey Smith]: yeah

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[Byron Boston]: asked for fifteen dollars an hour to an employee that ask for one dollar an hour

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[Byron Boston]: that that’s in effect what took place

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[Ramsey Smith]: i

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[Byron Boston]: right we moved to the low low cost producing areas of china mexico other places in

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[Byron Boston]: asia and now these supply chains are being ripped apart and we don’t know what the

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[Byron Boston]: impact will be we do know that one of the mechanisms that it will transfer into

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[Byron Boston]: the economy will be through inflation through energy prices because that’s one of

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[Byron Boston]: the major areas that we’re going to fill this supply chain disruption taking place

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[Byron Boston]: in the short medium and long term

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[Paul Tyler]: environment

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[Paul Tyler]: step back to something you said earlier what’s different this time well that

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[Paul Tyler]: implies we know the time that we’re comparing this against

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[Paul Tyler]: and you know i’m a history i was a history major in college and i think back you

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[Paul Tyler]: know they also i think when we could have a whole show on this is i know you spent

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[Paul Tyler]: a lot of time in psychology just the social change going on you know i could say

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[Paul Tyler]: well it what’s different now than what we went through in nineteen sixty eight i

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[Paul Tyler]: could say that here in the us in certain points

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[Paul Tyler]: looking at what’s taking place

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[Paul Tyler]: psychologically and politically i don’t know it’s just back to the vit know in

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[Paul Tyler]: germany you know post world war one you know you’ve got national psyches t

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[Paul Tyler]: people trying to create myths that didn’t ever you know recreate history that

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[Paul Tyler]: never existed before how do you factor the social change going

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[Paul Tyler]: taking place at the same time

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[Byron Boston]: boy the first point is you gotta acknowledge the social issues it’s it’s it’s

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[Byron Boston]: unbelievable how many economists i talk to and they don’t recognize the social

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[Byron Boston]: issues so let’s go back to the inflation of one thousand nine hundred seventy

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[Byron Boston]: seconds that everyone wants to talk about what took place in nineteen set by the

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[Byron Boston]: side issue if someone says that the inflation ninety seven was jimmy carter issue

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[Byron Boston]: just ignore them they don’t have a clue what they’re talking about the inflation

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[Byron Boston]: that developed ultimately in the one thousand nine hundred seventy was a result of

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[Byron Boston]: multiple factors i would say over the twenty years before nineteen eighty between

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[Byron Boston]: nineteen sixty and nineteen eighty think about everything that took place because

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[Byron Boston]: it ultimately came through social issues right so you have a president shot and

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[Byron Boston]: killed in our country you we have this view of our country in great history we had

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[Paul Tyler]: sh

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[Byron Boston]: a president killed then we had his brother killed we had martin luther king killed

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[Byron Boston]: we had enormous social issues that develop enormous programs that were put in

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[Byron Boston]: place to try to to deal with this this social unrest that was happening you had

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[Byron Boston]: generational tensions between the the young baby boom generation and the older gen

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[Byron Boston]: generation before them and so this led to public policy issues that that would

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[Byron Boston]: ultimately play a role it led to especially some of the programs were trying to

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[Byron Boston]: deal with poverty and other issues such as that so these are social factors

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[Byron Boston]: rippling

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[Ramsey Smith]: correct

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[Byron Boston]: through the economy in ways that you can’t always predict so let’s think about

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[Byron Boston]: today what was amazing about twenty twenty we have this pandemic and then what

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[Byron Boston]: happens someone had a phone with a camera on it and so they video tape the police

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[Byron Boston]: in minnesota with his with his knee on the neck of george floyd so now we have

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[Byron Boston]: this huge movement developed right in the middle of this unbelievable moment in

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[Byron Boston]: history where we shut down the global economy so when we think about what is

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[Byron Boston]: taking place at dyne when we think about risk we think definitively broader than

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[Byron Boston]: just c plus i plus g plus net exports equals gdp there are a lot of factors that

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[Byron Boston]: ultimately come into play let me just point out a couple of them human conflict is

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[Byron Boston]: at the top of our list at dyne capital we’re concerned about human conflict where

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[Byron Boston]: does it come from

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[Byron Boston]: it comes from history we’re seeing this now not only in the united states we’re

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[Byron Boston]: seen in other places right you go to turkey and and you know ewan doesn’t want to

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[Byron Boston]: admit that there was a armenian genocide that took place you come to the united

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[Byron Boston]: states and you got this debate over you know how are we going to look at our own

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[Byron Boston]: history here in the united states you’ll probably go to germany you’ll have find

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[Byron Boston]: some germans and want to deny that there was a holocaust so so right off the bat

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[Byron Boston]: the social issues around just what has happened in the past and how we’re going to

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[Byron Boston]: reconcile and deal with what has happened in the past um today

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[Byron Boston]: income and wealth inequality in my opinion is like high blood pressure in your

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[Byron Boston]: body they call it a silent killer and so it’s it’s or or is the the professor from

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[Byron Boston]: university of chicago wrote the book fault line it’s a crack beneath the surface

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[Byron Boston]: of a global economy and it will manifest itself in ways that of us can really

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[Byron Boston]: imagine that it’s happening whether it’s electing an extreme person into office

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[Byron Boston]: because a certain sector of the population feels less left behind

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[Byron Boston]: or whether it’s just an explosive situation that took place if you remember the

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[Byron Boston]: arab spring or how about the french revolution we could go on and on in terms of

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[Byron Boston]: how might wealth and income inequality manifests itself you layer on top of that

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[Byron Boston]: technology and so now back to the human beings right because that’s what sociology

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[Byron Boston]: and psychology happens to be technology has allowed us to really experience

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[Byron Boston]: everyone else more than when i was a child so i didn’t grow up on the the

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[Byron Boston]: wealthiest side of the railroad tracks but if you had to ask me if we were not

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[Byron Boston]: wealth i would have been not i don’t know what you’re talking about we’re fine but

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[Byron Boston]: when i went

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[Paul Tyler]: it

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[Byron Boston]: to dartmouth and all of a sudden i started to realize how other people lived then

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[Byron Boston]: it was like whoa man maybe you know maybe life is a little different for us right

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[Byron Boston]: but today technology take talk newspapers facebook they keep everyone

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[Byron Boston]: almost whatever

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[Byron Boston]: coveting everyone else and it’s that’s a psychological issue that comes into play

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[Byron Boston]: the wealthy don’t live a life that no one else sees the wealthy live a life where

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[Byron Boston]: all the poor people can see exactly how they live and they can see what they’re

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[Byron Boston]: missing so there are a lot of social factors that are coming into play the one

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[Byron Boston]: that concerns me the most is human conflict we’re seeing that in terms of the

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[Byron Boston]: russian situation today i had some more colorful language i’ve used in my office

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[Byron Boston]: on this i won’t use that that color uh language

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[Ramsey Smith]: no

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[Byron Boston]: here but

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[Ramsey Smith]: i don’t care

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[Byron Boston]: we have had a larger amount of authoritarian type leaders rise to the global stage

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[Byron Boston]: over the last call it ten to twenty years and it’s concerning to us at

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[Byron Boston]: i hope that wasn’t too long winded there’s a lot

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[Ramsey Smith]: no

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[Byron Boston]: of social

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[Paul Tyler]: no no

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[Byron Boston]: factors that are happening there’s a ton

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[Paul Tyler]: no well you know and i think it’s it’s interesting how how do all these pieces add

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[Paul Tyler]: up to something different right pandemic we’re stuck in we’re on zoom all of a

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[Paul Tyler]: sudden we realized oh the technologies has been sitting here for ten years

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[Paul Tyler]: actually is kind of useful connects all of us you know ukraine is interesting

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[Paul Tyler]: because

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[Paul Tyler]: y

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[Paul Tyler]: as i’ve started to kind of start talking to people i know somebody you know i know

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[Paul Tyler]: a startup in ukraine i talked to her when she had her two two months ago she had

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[Paul Tyler]: her bag ca work on zoom she says oh yeah i have a bag of cash i have a gun my tank

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[Paul Tyler]: of is filled with gas

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[Paul Tyler]: wait a second i’m looking at you i feel like i know you and i see you here i think

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[Paul Tyler]: you know ukraine has such technology talent we’ve had so many you know especially

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[Paul Tyler]: in our business you know i have worked with so many different technology vendors

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[Paul Tyler]: now there these people just to screen away you feel like you know them you know i

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[Paul Tyler]: talked to somebody who was was on slack

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[Byron Boston]: yeah i do feel like you know

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[Paul Tyler]: slacking somebody and on video with a programmer in ukraine doing their day job in

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[Paul Tyler]: a bomb shelter with wi fi

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[Paul Tyler]: right now you know to buy your point if you didn’t have a camera and a screen in a

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[Paul Tyler]: on every

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[Paul Tyler]: camera i don’t know would ukraine just be kind of a strange thing off to the side

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[Paul Tyler]: and we don’t know how to spell it we barely you know now we know to say cave right

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[Paul Tyler]: a lot more than that a lot more

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[Byron Boston]: yeah yeah

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[Ramsey Smith]: hm

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[Byron Boston]: yeah it would be off to the side i i’ll tell you i have

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[Byron Boston]: a wonderful woman who reports to me

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[Byron Boston]: employee dix she is from the ukraine she came to the u s in the nineteen nineties

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[Byron Boston]: and she challenged me she said oh byron

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[Ramsey Smith]: she

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[Byron Boston]: what’s different between bosnia in the nineteen nineties her husband is from

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[Byron Boston]: bosnia so he

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[Paul Tyler]: wow

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[Byron Boston]: is he he unfortunately felt the brunt

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[Byron Boston]: uh um uh he’s a muslim descent from bosnia and uh she said what’s the difference

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[Byron Boston]: the world didn’t care about bosnia and the world didn’t care about syria why is

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[Byron Boston]: everyone responding to this so she’s from ukraine and i said you know that’s a

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[Byron Boston]: good question i thought about it pretty hard and i said the ukrainians are doing

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[Byron Boston]: something really really powerful they’re using the media and technology to make

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[Byron Boston]: sure that we all live this horrible journey with them

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[Byron Boston]: we’re living this journey i mean we’re seeing the president there he’s on the air

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[Byron Boston]: we can see it we can see the story we’re living this with them in the one thousand

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[Byron Boston]: nine hundred ninety seconds when they’s events were taking place in the balkans we

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[Byron Boston]: really didn’t know we didn’t have life to infect some of the worst genocide events

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[Byron Boston]: we’ve only been told about it because no one who was there is really trying to

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[Byron Boston]: admit if you talk to the serbian people today apparently my understanding is

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[Byron Boston]: they’ll deny that there was ever any type of genocide events that took place but

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[Byron Boston]: this is different what’s different this time right what’s different is that

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[Byron Boston]: they’re taking social media and they’re ensuring that byron paul and ramsey live

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[Byron Boston]: with them

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[Byron Boston]: the the or or get as close get close to it we can’t live with them because of

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[Byron Boston]: they’re feeling the pain of this what is taking place we’re seeing this president

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[Byron Boston]: speak on video we’re seeing other people

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[Byron Boston]: broadcasting up to the web we’re all living this experience day to day with them

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[Byron Boston]: very different than the balkan situation in the one thousand nine hundred ninety

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[Byron Boston]: seconds when we didn’t really have internet at that time didn’t have cell phones

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[Byron Boston]: didn’t have tick talk didn’t have facebook ett cetera et cetera so we’re living

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[Byron Boston]: this event together so it’s hard

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[Ramsey Smith]: mm

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[Byron Boston]: not to feel something

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[Ramsey Smith]: alright

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[Byron Boston]: with it i know there’s a lot of debate about you know why

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[Byron Boston]: is this getting a lot more attention than even some of the syrian it’s that point

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[Byron Boston]: the technology use here is to me seems very different and it’s allowing me to live

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[Byron Boston]: this

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[Byron Boston]: with the people of ukraine in some way

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[Ramsey Smith]: so do you have do you have any thoughts on how this might all play out i know

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[Ramsey Smith]: that’s a tough question none of us really know right

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[Byron Boston]: nine

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[Ramsey Smith]: but like do you

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[Ramsey Smith]: there’s so many directions it could go so

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[Ramsey Smith]: uh

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[Ramsey Smith]: putin could putin could

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[Ramsey Smith]: stop right he could keep going past ukraine even if he stops in ukraine like the

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[Ramsey Smith]: outcome can be a lot of different things like there could be some sort of some

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[Ramsey Smith]: sort of peace where he takes part of ukraine

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[Ramsey Smith]: he give some of the back to the existing government there’s all these various

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[Ramsey Smith]: outcomes like do you have a do you have any thoughts on what might be likely

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[Ramsey Smith]: outcomes or or even if not that like what maybe the implications are

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[Byron Boston]: right

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[Ramsey Smith]: for some of the various outcomes

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[Byron Boston]: yeah sorry so so so as ceo of dyne capital i am a coach right so the

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[Ramsey Smith]: yeah

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[Byron Boston]: way i tell smart papo who’s the president of our company companies and the chief

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[Byron Boston]: investment officer i tell her all the time i say you’re the quarter back on the

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[Byron Boston]: fuel i’m on the sidelines i’m the coach so i can’t come on the film through the

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[Byron Boston]: past so i’m coaching

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[Ramsey Smith]: yeah

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[Byron Boston]: my team through this

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[Byron Boston]: event so first and foremost this is evolving no one knows what’s going to happen

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[Byron Boston]: here no different than the summer july of nineteen fourteen no one really knew

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[Byron Boston]: what was ultimately going to take place but there are some things that i can

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[Ramsey Smith]: yeah

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[Byron Boston]: lean on and say okay this is what’s

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[Byron Boston]: the world is has changed period

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[Byron Boston]: get used to it what we knew ten years ago when the travel and the globalization

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[Byron Boston]: like it had gotten and it was and the great low prices we all enjoyed as the

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[Byron Boston]: iphones were made in china and brought back one piece made in mexico one in china

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[Byron Boston]: one and someplace else the world has changed we are going to go through a

392
00:25:55,600 –> 00:25:57,600
[Byron Boston]: decoupling process of some sort

393
00:25:58,800 –> 00:26:04,800
[Byron Boston]: what will it be how dramatic will it be how long would it last we’re not sure oil

394
00:26:05,440 –> 00:26:07,760
[Byron Boston]: clearly has been a political commodity

395
00:26:07,478 –> 00:26:08,478
[Paul Tyler]: yes

396
00:26:07,780 –> 00:26:08,780
[Byron Boston]: for

397
00:26:09,680 –> 00:26:16,640
[Byron Boston]: ages it continues to be a political commodity today so we’ve got to come to grips

398
00:26:16,720 –> 00:26:21,440
[Byron Boston]: with the fact at dye capital the world has changed we don’t need to sit around and

399
00:26:21,520 –> 00:26:27,600
[Byron Boston]: be and and cry over spilled milk the world has changed so things could escalate or

400
00:26:27,760 –> 00:26:32,000
[Byron Boston]: or they could could de escalate but we don’t know which way that will take place

401
00:26:32,160 –> 00:26:37,760
[Byron Boston]: and what we do at dns think through these scenarios what will we do in this a

402
00:26:37,760 –> 00:26:41,040
[Byron Boston]: generic situation what would we do in this situation what we do in this situation

403
00:26:41,600 –> 00:26:47,440
[Byron Boston]: one of the complications here is that before russia invaded ukraine at dns we

404
00:26:47,520 –> 00:26:53,200
[Byron Boston]: believe this was a big moment in history just based off of but governments trying

405
00:26:53,360 –> 00:26:57,840
[Byron Boston]: to pull back the liquidity that they had pumped to all the liquidity pumped into

406
00:26:57,740 –> 00:26:58,740
[Byron Boston]: the global system

407
00:26:59,680 –> 00:27:05,120
[Byron Boston]: to spare the world the pain of the pandemic so that was huge in itself so now you

408
00:27:05,280 –> 00:27:10,480
[Byron Boston]: layer this exogenous shock on top of it it really complicates the picture things

409
00:27:10,640 –> 00:27:15,760
[Byron Boston]: have changed supply chains are going to to change um if you recall in the one

410
00:27:15,760 –> 00:27:19,680
[Byron Boston]: thousand nine hundred seventy seconds you may not have been born yet ramsey but we

411
00:27:19,840 –> 00:27:25,360
[Byron Boston]: all had to to start we the speed limit on the highways were dropped from seventy

412
00:27:25,440 –> 00:27:29,600
[Byron Boston]: seventy five miles an hour to fifty five it was a federal law the speed could

413
00:27:29,760 –> 00:27:34,080
[Byron Boston]: drive over fifty five miles an hour on an interstate highway and so that was just

414
00:27:33,980 –> 00:27:34,980
[Byron Boston]: a big deal everyone

415
00:27:34,507 –> 00:27:35,507
[Ramsey Smith]: thank you

416
00:27:35,040 –> 00:27:39,520
[Byron Boston]: was like oh my gosh the speed limit is fifty five and then i think gas stations

417
00:27:39,600 –> 00:27:43,520
[Byron Boston]: were closing at night and there was a lot of adjustments that had to be made

418
00:27:43,920 –> 00:27:47,680
[Byron Boston]: during those oil embargoes so it’s been wonderful we’ve had a great life you know

419
00:27:47,760 –> 00:27:51,200
[Byron Boston]: everybody’s been traveling visiting other countries and everything’s been great

420
00:27:51,600 –> 00:27:56,400
[Byron Boston]: but things changed at this point likewise we all got used to this wonderful low

421
00:27:56,640 –> 00:28:01,760
[Byron Boston]: inflationary world and prices continuing to come down and if you look at history

422
00:28:02,160 –> 00:28:06,960
[Byron Boston]: in reality inflation has always been tended to be higher than what we’ve

423
00:28:07,040 –> 00:28:10,880
[Byron Boston]: experienced maybe over the last decade or so so we’re probably going to have to

424
00:28:10,960 –> 00:28:15,360
[Byron Boston]: get used to because if nothing else these supply chains changing and breaking down

425
00:28:15,840 –> 00:28:20,560
[Byron Boston]: and volving to something new we’ll probably end up with more inflation than we had

426
00:28:20,800 –> 00:28:25,520
[Byron Boston]: before one concern again i have i have a concern on the human conflict because i’m

427
00:28:25,600 –> 00:28:29,920
[Byron Boston]: concerned that this wealth and income inequality is being exacerbated by all of

428
00:28:30,000 –> 00:28:34,560
[Byron Boston]: these developments from the pandemic to this current development clearly the

429
00:28:34,640 –> 00:28:39,120
[Byron Boston]: higher oil and gas prices are hammering the lower income parts of the world more

430
00:28:39,520 –> 00:28:42,480
[Byron Boston]: than the higher income participants so the

431
00:28:43,520 –> 00:28:47,520
[Byron Boston]: the future is very very uncertain it’s not a new

432
00:28:47,158 –> 00:28:48,158
[Paul Tyler]: w

433
00:28:47,680 –> 00:28:51,920
[Byron Boston]: place for the world the world has been again study nineteen fourteen to nineteen

434
00:28:52,160 –> 00:28:53,760
[Byron Boston]: forty five but you could also study other

435
00:28:53,478 –> 00:28:54,478
[Paul Tyler]: see

436
00:28:54,080 –> 00:28:56,960
[Byron Boston]: other periods you could study the one thousand nine hundred sixty seconds

437
00:28:58,240 –> 00:29:02,000
[Byron Boston]: the world has i i know you want it to say it’s all nice and peaceful everybody’s

438
00:29:02,080 –> 00:29:07,200
[Byron Boston]: happy but that hasn’t been the case throughout history so things have changed we

439
00:29:07,440 –> 00:29:10,480
[Byron Boston]: are acting at dynamics if things have changed we’re trying to draw up scenarios

440
00:29:10,560 –> 00:29:11,760
[Byron Boston]: that include

441
00:29:12,940 –> 00:29:13,940
[Byron Boston]: some very

442
00:29:14,800 –> 00:29:15,920
[Byron Boston]: extreme scenarios

443
00:29:16,247 –> 00:29:21,207
[Ramsey Smith]: so then how do you how do you manage money differently so you have the old regime

444
00:29:21,367 –> 00:29:26,487
[Ramsey Smith]: right and you approach risk management one way and now this is new regime it’s

445
00:29:26,487 –> 00:29:31,127
[Ramsey Smith]: hyper inflation and but not hyper it it is inflationary it is inflationary there’s

446
00:29:30,740 –> 00:29:31,740
[Byron Boston]: yeah

447
00:29:31,207 –> 00:29:35,927
[Ramsey Smith]: there’s a lot of new risks um you know do you do you invest in different

448
00:29:36,087 –> 00:29:38,807
[Ramsey Smith]: instruments do you like how do you think about

449
00:29:40,167 –> 00:29:44,087
[Ramsey Smith]: you know managing your interest rate exposure just just big picture like what are

450
00:29:44,247 –> 00:29:47,767
[Ramsey Smith]: some what are some meaningful changes you think you’ll make in the way you run

451
00:29:47,467 –> 00:29:48,467
[Ramsey Smith]: your business

452
00:29:48,720 –> 00:29:53,280
[Byron Boston]: okay so i’m glad you asked this question i did bring this quote with me today so

453
00:29:53,067 –> 00:29:54,067
[Ramsey Smith]: okay

454
00:29:53,600 –> 00:29:58,400
[Byron Boston]: eight years ago in twenty fourteen here’s a quote from my

455
00:29:59,860 –> 00:30:00,860
[Byron Boston]: my fourth quarter

456
00:30:02,320 –> 00:30:06,960
[Byron Boston]: earnings call at the beginning of twenty fourteen i said we believe that economic

457
00:30:07,360 –> 00:30:11,360
[Byron Boston]: uncertainty regulatory uncertainty global market uncertainty have created a very

458
00:30:11,760 –> 00:30:17,360
[Byron Boston]: complex environment for global growth to be able to accelerate the levels seen in

459
00:30:17,440 –> 00:30:19,440
[Byron Boston]: prior post war uh

460
00:30:19,147 –> 00:30:20,147
[Ramsey Smith]: yeah

461
00:30:19,840 –> 00:30:24,320
[Byron Boston]: post war periods the recoveries so we use the word complex

462
00:30:25,600 –> 00:30:29,200
[Byron Boston]: i got a ton of people who like really challenged me for saying that the global

463
00:30:29,840 –> 00:30:32,000
[Byron Boston]: risk environment was complex that was twenty

464
00:30:32,187 –> 00:30:33,187
[Ramsey Smith]: i’m

465
00:30:32,400 –> 00:30:34,160
[Byron Boston]: fourteen so why is that relevant

466
00:30:35,220 –> 00:30:36,220
[Byron Boston]: look at i

467
00:30:35,907 –> 00:30:36,907
[Ramsey Smith]: oh i live there

468
00:30:36,000 –> 00:30:38,640
[Byron Boston]: joined Dynex in two thousand and eight when

469
00:30:38,800 –> 00:30:43,600
[Byron Boston]: we first started to invest we invested safely then we took on more risk starting

470
00:30:38,807 –> 00:30:40,647
[Ramsey Smith]: is more so creating to remember

471
00:30:43,380 –> 00:30:44,380
[Byron Boston]: about two

472
00:30:43,667 –> 00:30:44,667
[Ramsey Smith]: all those

473
00:30:44,080 –> 00:30:48,080
[Byron Boston]: thousand nine we went what we call down in credit we bought triple b assets single

474
00:30:48,160 –> 00:30:52,560
[Byron Boston]: a rated assets some non rated assets we took a ton of risk in terms of credit

475
00:30:53,280 –> 00:30:57,760
[Byron Boston]: about this period in twenty fourteen because we were concerned about the uh uh the

476
00:30:57,920 –> 00:31:00,880
[Byron Boston]: rising level of global risk complexity

477
00:31:00,507 –> 00:31:01,507
[Ramsey Smith]: movie

478
00:31:01,220 –> 00:31:02,220
[Byron Boston]: we started to

479
00:31:01,707 –> 00:31:02,707
[Ramsey Smith]: c

480
00:31:02,640 –> 00:31:07,200
[Byron Boston]: go what we call up and credit and up in liquidity we sold our lower credit rated

481
00:31:07,100 –> 00:31:08,100
[Byron Boston]: assets

482
00:31:08,880 –> 00:31:12,480
[Byron Boston]: we then started to sell our less liquid assets

483
00:31:12,107 –> 00:31:13,107
[Ramsey Smith]: yeah

484
00:31:13,040 –> 00:31:17,360
[Byron Boston]: and we moved what we call up and credit and up in liquidity by twenty eight

485
00:31:17,840 –> 00:31:18,880
[Byron Boston]: eighteen we were

486
00:31:18,667 –> 00:31:19,667
[Ramsey Smith]: education

487
00:31:19,120 –> 00:31:20,960
[Byron Boston]: pretty much so ninety five per cent

488
00:31:21,127 –> 00:31:23,847
[Ramsey Smith]: oh if you’re gonna go down there’s in the face

489
00:31:21,600 –> 00:31:24,880
[Byron Boston]: uh ownership the assets on our balance sheet that we

490
00:31:24,587 –> 00:31:25,587
[Ramsey Smith]: and

491
00:31:24,960 –> 00:31:27,280
[Byron Boston]: owned were all all the most liquid

492
00:31:28,480 –> 00:31:32,560
[Byron Boston]: real estate bonds that we could find which are thirty year residential

493
00:31:32,880 –> 00:31:39,040
[Byron Boston]: freddie mac fanny may securities furthermore we increase the amount of cash in

494
00:31:33,127 –> 00:31:35,767
[Ramsey Smith]: for in e as in rush text

495
00:31:38,780 –> 00:31:39,780
[Byron Boston]: what we call

496
00:31:39,547 –> 00:31:40,547
[Ramsey Smith]: yeah

497
00:31:39,600 –> 00:31:43,680
[Byron Boston]: unencumbered securities on our balance sheet that we call out liquidity versus

498
00:31:44,000 –> 00:31:49,920
[Byron Boston]: twenty thirteen when bernanke said taper we’re probably carrying you know six

499
00:31:49,700 –> 00:31:50,700
[Byron Boston]: seven

500
00:31:51,280 –> 00:31:56,080
[Byron Boston]: eight times as much cash and unencumbered assets on our balance sheet so we’re

501
00:31:56,240 –> 00:32:02,640
[Byron Boston]: very very liquid and we have a very very flexible mindset because we believe the

502
00:32:02,620 –> 00:32:03,620
[Byron Boston]: world is complex

503
00:32:04,880 –> 00:32:05,920
[Byron Boston]: and we believe we’re

504
00:32:05,867 –> 00:32:06,867
[Ramsey Smith]: just kind printing

505
00:32:06,000 –> 00:32:10,400
[Byron Boston]: going to be surprised the phrase we use is surprises are highly probable clearly

506
00:32:10,480 –> 00:32:14,960
[Byron Boston]: over the last eight years the surprises have continued to come and we’ve stuck

507
00:32:15,120 –> 00:32:19,680
[Byron Boston]: with our posture of being up in credit and up in liquidity this give us the

508
00:32:19,840 –> 00:32:24,160
[Byron Boston]: ability in my opinion we make the right decisions we have the ability to make

509
00:32:24,320 –> 00:32:28,640
[Byron Boston]: money in any environment um now you got to be able to assess the environment right

510
00:32:28,460 –> 00:32:29,460
[Byron Boston]: now you can’t

511
00:32:28,827 –> 00:32:29,827
[Ramsey Smith]: sh

512
00:32:29,200 –> 00:32:31,600
[Byron Boston]: assess the environment it’s uncertain what’s not gonna happen

513
00:32:30,887 –> 00:32:35,687
[Ramsey Smith]: so so so higher quality higher quality credits higher liquidity and

514
00:32:36,727 –> 00:32:38,567
[Ramsey Smith]: that served you well through the pandemic

515
00:32:38,880 –> 00:32:42,000
[Byron Boston]: yes very well through the pandemic we were ready for that we look very well

516
00:32:38,967 –> 00:32:44,727
[Ramsey Smith]: right at right not right like if you look at like some some mortgage rates did

517
00:32:44,707 –> 00:32:45,707
[Ramsey Smith]: better than others

518
00:32:45,927 –> 00:32:51,127
[Ramsey Smith]: in through the pandemic put that put it that way and then and then here you are in

519
00:32:46,000 –> 00:32:47,760
[Byron Boston]: yes substantially better

520
00:32:51,207 –> 00:32:56,087
[Ramsey Smith]: this next crisis and it sounds like a strategy it works it’s continue to work well

521
00:32:57,367 –> 00:33:02,487
[Ramsey Smith]: you know the takeaway for this audience you know is is just sort of think about

522
00:33:02,567 –> 00:33:04,647
[Ramsey Smith]: things is like all right well how how do i think about

523
00:33:05,767 –> 00:33:11,047
[Ramsey Smith]: my own portfolio or my client’s portfolios if one is to sort of follow your lead

524
00:33:12,087 –> 00:33:15,607
[Ramsey Smith]: it is it is you know a flight to flight to higher quality

525
00:33:16,647 –> 00:33:21,047
[Ramsey Smith]: a flight to higher quality and having more liquidity as opposed to sort of dialing

526
00:33:21,127 –> 00:33:23,127
[Ramsey Smith]: up on risk but the interesting thing is everybody

527
00:33:24,167 –> 00:33:26,087
[Ramsey Smith]: everybody’s dialing up on risk these days

528
00:33:26,240 –> 00:33:28,480
[Byron Boston]: they are everyone wants to buy the dip

529
00:33:26,727 –> 00:33:29,847
[Ramsey Smith]: right we are in a low interest rate environment so a lot of people are going the

530
00:33:29,847 –> 00:33:33,127
[Ramsey Smith]: other way right so that’s kind of an interesting dichotomy there yeah

531
00:33:30,480 –> 00:33:34,560
[Byron Boston]: yeah they are they are can i give your thought on that um

532
00:33:34,187 –> 00:33:35,187
[Ramsey Smith]: sure

533
00:33:34,960 –> 00:33:39,200
[Byron Boston]: because i’m always thinking about the the individual investor i’d say fifty

534
00:33:39,440 –> 00:33:45,280
[Byron Boston]: percent of our investors are what we call retail investors and i have a great

535
00:33:45,520 –> 00:33:48,320
[Byron Boston]: concern for my generation the baby boom generation

536
00:33:49,360 –> 00:33:54,160
[Byron Boston]: they have just talked to too many friends who all believe in buying the dip they

537
00:33:54,320 –> 00:33:58,320
[Byron Boston]: all use phrases like well it always comes back don’t sell buy into it it always

538
00:33:58,260 –> 00:33:59,260
[Byron Boston]: comes back

539
00:34:00,560 –> 00:34:02,240
[Byron Boston]: you know by the dip mentality

540
00:34:03,280 –> 00:34:07,360
[Byron Boston]: i would urge whether it’s a if you’re an investment advisor listening to this or

541
00:34:07,440 –> 00:34:13,200
[Byron Boston]: if you an individual listening to this i would not simply fall back on the by the

542
00:34:13,280 –> 00:34:18,480
[Byron Boston]: dip mentality i would really do some analysis and understand why you are

543
00:34:18,800 –> 00:34:23,040
[Byron Boston]: continuing to if you’ve got your your your you just fully invested

544
00:34:24,560 –> 00:34:29,440
[Byron Boston]: you know for example all your risk is in stocks i would try to diversify in some

545
00:34:29,520 –> 00:34:31,840
[Byron Boston]: way shape form a fashion your holdings

546
00:34:33,600 –> 00:34:40,240
[Byron Boston]: i would ask myself what would happen if the stock market corrected and it didn’t

547
00:34:40,320 –> 00:34:44,880
[Byron Boston]: come back for seven years so i’m using the seven year benchmark because i think if

548
00:34:44,880 –> 00:34:49,680
[Byron Boston]: you bought the s and p five hundred in two thousand jan two thousand i don’t think

549
00:34:49,760 –> 00:34:55,280
[Byron Boston]: you got back to even t two thousand seven and then you got cober again with the

550
00:34:55,440 –> 00:34:59,920
[Byron Boston]: with the great uh financial crash and then you had to wait another probably seven

551
00:35:00,160 –> 00:35:04,560
[Byron Boston]: or eight years after that to get back to that level if you would have bought the s

552
00:35:04,720 –> 00:35:09,120
[Byron Boston]: and p five hundred i think in nineteen twenty nine you didn’t get back even until

553
00:35:09,300 –> 00:35:10,300
[Byron Boston]: nineteen fifty five

554
00:35:10,358 –> 00:35:11,358
[Paul Tyler]: yeah

555
00:35:11,280 –> 00:35:15,600
[Byron Boston]: and so finally we ran a chart at Dynex that

556
00:35:16,800 –> 00:35:21,120
[Byron Boston]: that layered on the growth of the fed’s balance sheet and the s and

557
00:35:20,747 –> 00:35:21,747
[Ramsey Smith]: where

558
00:35:21,200 –> 00:35:25,040
[Byron Boston]: p five hundred and and if you just a visual looks like a one to one relationship

559
00:35:25,680 –> 00:35:28,800
[Byron Boston]: right so there’s been a ton of liquidity pumped into the global system

560
00:35:28,427 –> 00:35:29,427
[Ramsey Smith]: oh

561
00:35:29,040 –> 00:35:30,160
[Byron Boston]: by the central banks

562
00:35:30,027 –> 00:35:31,027
[Ramsey Smith]: oh

563
00:35:30,640 –> 00:35:32,320
[Byron Boston]: that has inflated all

564
00:35:32,187 –> 00:35:33,187
[Ramsey Smith]: okay

565
00:35:34,080 –> 00:35:35,360
[Byron Boston]: all like let be two

566
00:35:36,460 –> 00:35:37,460
[Byron Boston]: an enormous

567
00:35:36,947 –> 00:35:37,947
[Ramsey Smith]: you cannot

568
00:35:37,440 –> 00:35:41,600
[Byron Boston]: amount of elevation in global asset prices stocks um

569
00:35:43,040 –> 00:35:44,480
[Byron Boston]: anti cars art

570
00:35:45,520 –> 00:35:49,120
[Byron Boston]: houses at least in the housing i think it’s a little bit unique i have an opinion

571
00:35:49,120 –> 00:35:54,000
[Byron Boston]: on that i’ll give you but they’re crypto there’s an enormous amount of liquidity

572
00:35:54,320 –> 00:35:59,600
[Byron Boston]: that has supported global asset prices i personally this is a byron opinion i am

573
00:35:59,840 –> 00:36:04,640
[Byron Boston]: concerned about a global asset price correction i don’t believe if let’s say you

574
00:36:04,640 –> 00:36:07,760
[Byron Boston]: didn’t have the russia situation if the central banks would have tried to reduce

575
00:36:08,000 –> 00:36:12,400
[Byron Boston]: their balance sheets and they try to do it now i eventually i do not believe they

576
00:36:12,480 –> 00:36:16,000
[Byron Boston]: can do it without with a soft landing i i don’t believe that they can do it with a

577
00:36:16,000 –> 00:36:20,560
[Byron Boston]: soft landing that i i just don’t believe they can do it so i am concerned about

578
00:36:20,640 –> 00:36:25,440
[Byron Boston]: the baby boom generation why because i’m sixty three so let’s say i take a hit in

579
00:36:25,520 –> 00:36:28,960
[Byron Boston]: two thousand it doesn’t come back to seven years okay i’m seventy now and then

580
00:36:29,040 –> 00:36:32,080
[Byron Boston]: let’s say i take another hit like the great financial crash when i’m seventy and i

581
00:36:32,320 –> 00:36:35,840
[Byron Boston]: maybe i’m dead by the time or before it comes back you see what i’m saying i mean

582
00:36:35,920 –> 00:36:39,360
[Byron Boston]: i’m just being real here about it if you’re if you you’ve got to think if you

583
00:36:39,440 –> 00:36:43,920
[Byron Boston]: don’t earn money anymore you’ve retired a lot of baby boomers have retired early

584
00:36:44,240 –> 00:36:48,960
[Byron Boston]: right the great resignation you must make sure you think about do you have enough

585
00:36:49,280 –> 00:36:53,280
[Byron Boston]: assets to go as long as you want to live everyone says i want to let them ninety

586
00:36:53,360 –> 00:36:57,040
[Byron Boston]: ninety five really well then maybe you should should work to seventy you know so

587
00:36:56,678 –> 00:36:57,678
[Paul Tyler]: yeah

588
00:36:57,200 –> 00:37:01,680
[Byron Boston]: check your income make sure you’ve got enough coming in and understand that this

589
00:37:01,760 –> 00:37:08,880
[Byron Boston]: is a unique moment in history don’t just buy the dip because you bought the dip in

590
00:37:08,960 –> 00:37:10,960
[Byron Boston]: nineteen nineties and everything worked out okay

591
00:37:12,478 –> 00:37:13,478
[Paul Tyler]: wow

592
00:37:14,098 –> 00:37:15,138
[Paul Tyler]: ramsey this was

593
00:37:14,827 –> 00:37:15,827
[Ramsey Smith]: but

594
00:37:15,298 –> 00:37:16,658
[Paul Tyler]: great where the end of the hour

595
00:37:17,598 –> 00:37:18,598
[Paul Tyler]: it went fast

596
00:37:19,067 –> 00:37:20,067
[Ramsey Smith]: sure did

597
00:37:19,620 –> 00:37:20,620
[Byron Boston]: yeah

598
00:37:21,207 –> 00:37:28,247
[Ramsey Smith]: so at byron thanks thanks for thanks for coming back a lot of takeaways from that

599
00:37:28,407 –> 00:37:33,447
[Ramsey Smith]: but perhaps the biggest one for me this time around was you know that there’s not

600
00:37:33,767 –> 00:37:37,847
[Ramsey Smith]: probably a scope for soft landing and right and most importantly you didn’t see a

601
00:37:37,927 –> 00:37:38,967
[Ramsey Smith]: soft landing before

602
00:37:39,220 –> 00:37:40,220
[Byron Boston]: no

603
00:37:39,447 –> 00:37:40,887
[Ramsey Smith]: russia invaded ukraine

604
00:37:41,020 –> 00:37:42,020
[Byron Boston]: no i really don’t know

605
00:37:41,847 –> 00:37:46,567
[Ramsey Smith]: so whatever the delta was on you know they’re not being a soft landing it’s even

606
00:37:46,427 –> 00:37:47,427
[Ramsey Smith]: higher so

607
00:37:46,820 –> 00:37:47,820
[Byron Boston]: yeah

608
00:37:47,207 –> 00:37:50,007
[Ramsey Smith]: i yeah hard landing the delta hard landing is even higher

609
00:37:49,700 –> 00:37:50,700
[Byron Boston]: yeah

610
00:37:50,407 –> 00:37:55,687
[Ramsey Smith]: so a that’s a very very sort of interesting view and it’s consistent with your

611
00:37:55,767 –> 00:37:59,367
[Ramsey Smith]: focus on liquidity and higher quality so thank think of shame

612
00:37:57,840 –> 00:38:01,200
[Byron Boston]: and we’re still able to generate a solid above average dividend yield it’s not

613
00:38:00,747 –> 00:38:01,747
[Ramsey Smith]: yeah

614
00:38:01,200 –> 00:38:04,080
[Byron Boston]: like we’ve said shareholders are well at a great above average

615
00:38:03,787 –> 00:38:04,787
[Ramsey Smith]: yeah

616
00:38:03,980 –> 00:38:04,980
[Byron Boston]: dividend yield

617
00:38:06,320 –> 00:38:09,840
[Byron Boston]: guys are still making solid cash income from both our preferred stock

618
00:38:09,387 –> 00:38:10,387
[Ramsey Smith]: yeah

619
00:38:09,860 –> 00:38:10,860
[Byron Boston]: and our common stock

620
00:38:11,378 –> 00:38:17,138
[Paul Tyler]: yeah well byron thank you again this was i got a lot of more questions we’ll save

621
00:38:17,078 –> 00:38:18,078
[Paul Tyler]: it for that for next step

622
00:38:18,507 –> 00:38:19,507
[Ramsey Smith]: hi

623
00:38:20,258 –> 00:38:22,578
[Paul Tyler]: if people want to get more of what you’re

624
00:38:23,598 –> 00:38:24,598
[Paul Tyler]: telling us

625
00:38:25,378 –> 00:38:28,898
[Paul Tyler]: how do they do this what is the best way to follow you know what you’re writing

626
00:38:28,798 –> 00:38:29,798
[Paul Tyler]: saying doing

627
00:38:31,300 –> 00:38:32,300
[Byron Boston]: you know we we do have

628
00:38:31,947 –> 00:38:32,947
[Ramsey Smith]: let’s see

629
00:38:32,480 –> 00:38:38,880
[Byron Boston]: our quarterly uh calls are very detailed and we do have a macro view we start with

630
00:38:38,960 –> 00:38:45,200
[Byron Boston]: the macro view to ultimately get to the investments so every quarter we do have a

631
00:38:45,360 –> 00:38:50,800
[Byron Boston]: call sometimes i post on a linkedin but i try try to be very careful

632
00:38:51,920 –> 00:38:58,240
[Byron Boston]: about some of the social media we do at Dynex we do post we do post certain points we

633
00:38:58,480 –> 00:39:00,160
[Byron Boston]: thought about you know some of the economic

634
00:39:01,140 –> 00:39:02,140
[Byron Boston]: thoughts that we have

635
00:39:03,200 –> 00:39:07,280
[Byron Boston]: but you know it’s like when i said complex in two thousand fourteen i had so many

636
00:39:07,360 –> 00:39:10,720
[Byron Boston]: people who didn’t understand what i was really saying why were we going up in

637
00:39:10,720 –> 00:39:15,520
[Byron Boston]: credit or up in liquidity and so sometimes i like yeah you know fine i’ve got

638
00:39:15,540 –> 00:39:16,540
[Byron Boston]: shareholders who

639
00:39:16,358 –> 00:39:17,358
[Paul Tyler]: excuse me

640
00:39:16,560 –> 00:39:20,480
[Byron Boston]: listen to us and we’re all in the same boat together and we’re happy and i want to

641
00:39:20,480 –> 00:39:24,560
[Byron Boston]: take care of my shareholders it’s very very important so please you know there is

642
00:39:24,640 –> 00:39:30,640
[Byron Boston]: a quarterly call that’s there i i urge people with annuities to look to diversify

643
00:39:30,880 –> 00:39:36,400
[Byron Boston]: with something like a nine x capital stock or a preferred stock and and we’re in

644
00:39:36,480 –> 00:39:38,480
[Byron Boston]: the same boat as all of our shareholders were

645
00:39:38,358 –> 00:39:39,358
[Paul Tyler]: so

646
00:39:38,560 –> 00:39:40,240
[Byron Boston]: dedicated to making their lives better

647
00:39:40,818 –> 00:39:44,098
[Paul Tyler]: okay hey listen great ramsey thanks byron thank you and

648
00:39:43,947 –> 00:39:44,947
[Ramsey Smith]: pleasure

649
00:39:44,258 –> 00:39:49,138
[Paul Tyler]: thanks to thanks all our listeners join us again next week for another episode of

650
00:39:49,198 –> 00:39:50,198
[Paul Tyler]: that annuity show

651
00:39:51,360 –> 00:39:52,480
[Byron Boston]: thank you for having me

652
00:39:52,487 –> 00:39:54,247
[Ramsey Smith]: alright appreciate it byron

The discussion is not meant to provide any legal, tax, or investment advice with respect to the purchase of an insurance product. A comprehensive evaluation of a consumer’s needs and financial situation should always occur in order to help determine if an insurance product may be appropriate for each unique situation.

Ashley SaundersEpisode 139: What’s Different This Time When Saving For Retirement With Byron Boston

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