Druckenmiller Interview 2009

hi everyone

uh thanks for being with us today

we um

it is a really unique privilege

to be hosting one of the world's

greatest investors

and having the opportunity to gain his

insights on risk and trading

our guest began his career in markets at

the pittsburgh national bank of all

places

uh and he began in equity research

in 1981 he left the bank and started

duquesne capital based in pittsburgh

and after a few years he left

and started his own firm called duquesne

capital

a few years into running duquesne he was

hired by dreyfuss and he only went there

on the condition he could continue to

run duquesne

and then in 1988 he went to george to

work for soros

working with george soros and running

his quantum macro fund

while stan was there the fund grew to 20

billion dollars in assets

and throughout his time both at

soros anna dreyfus he continued to run

duquesne management

here's some facts on duquesne

duquesne has never had

a losing year and it was founded in

1981.

his assets while not disclosed to

something greater than 10 billion

his annual returns

while not disclosed

exceeds

25 per annum which by the way in the

same period

makes him a more successful investor

than warren buffett

his total staff is less than 100 people

including the back office

and that's what he uses to generate

those returns

and

for us

he is probably the most professional and

valued client

we have because his firm

operates the way he does

always in the most professional manner

he's also an important member of the new

york community

he is a very active chair of the harlem

children's zone

he's on the boards of the environmental

defense fund

of memorial sloan kettering and of the

children's scholarship fund

for me

and i say this with complete sincerity

it has been an utter privilege

to have the ability to talk to him

um most weeks for the last few years and

i hope you will find

that's true today as well please join me

in welcoming stan druckenmiller

hmm

can i get a peek at the questions yeah

when uh when i asked dan if he would uh

if he would come do this

he said so wait let me understand this

all i have to do

is listen to your questions and be

honest with the answers

and i said that's all you have to do he

said fine i'll do it

so let's start with uh your director of

investments

at a bank of tender age of 28.

how did you learn to trade

at a bank as a head of research

well i started at

i get i give you a little background i

started at the bank at uh

23 i dropped out of

graduate school because i want to get a

phd in economics

it took me about a semester and a half

to figure that one going to work

and

i got a job in construction

and then the only job i could get was at

pittsburgh national and

i started in the training program

in a bank you're a teller you go through

the credit department and everybody

wants to go to the credit department

uh and i thought i was pretty smart

there were 12 of us had a pretty high

opinion of myself and i went in after we

went through the training program and

the guy in credit said

you couldn't sell snowmobiles in alaska

if there was uh

no other uh transportation vehicle there

so we have no use for you anywhere in

the bank

um

but but um

there's a guy up

on the 30th floor whose personality is

worse than yours

um

who once who runs the trust department

you know he's a great investors but

um you should call him up and uh see if

he'll hire you so i called the guy up

and

he said where'd you go to school and i

said i meant university of michigan and

before i got out he said if i went to

michigan you're hired

um

so i went up there and uh i started uh

as an analyst in the banking industry in

the chemical industry

and i'm doing that about a year and a

half i think i was

25.

this guy was really quirky okay and uh

he got in a fight with the top

management of the bank

and

no that was later i'm sorry so

there were about eight eight guys in

research

and

i've been there about a year and a half

and he promoted me to be director

research

which is a little crazy because

everybody else had an mba they had more

experience

and i'd like to say it was something to

do with me but i think it was just this

guy wanted to show them how powerful he

was that he could make the make them all

report this 25 year old

so

they all hated me and it was sort of

working out uh because this guy

protected me and then he got in a fight

with the guy up above him

so

he's gone to eastern airlines and i'm

there at

i guess 26 now

and there's the charitable guy there's

the pension guy and there's the

individual guy and then there's me

director research

all vying

for power

and um

this this guy that ran the thing was a

lawyer and he didn't understand anything

about investments but he'd sit on the

investment decisions they had made a

decision about who was going to be

director investments

so the

shaw of iran had just

been overthrown

i was 26

had more courage than brains

um didn't know about diversification i

said well

this is pretty easy let's put 70 of our

money in oil stocks and let's put 30 in

defense

um

these guys all said

well that's nuts you got to do

diversification blah blah blah

i said no that's what we should do and

you know

so um the lawyer's listening to this and

he doesn't know

anything and

so my stock selection list went up 300

percent in two years the s p was flat

bonds went down the tubes which i hated

now if you asked me that question

anytime in the next 10 years after i was

more experienced

i probably wouldn't have given that

answer but that's how i became director

research

and this guy

that mentored me even though he was

quirky he was an investment genius

and he was very trading oriented and

actually very chart oriented which was

good for me because when you get

promoted at the age of 26 you never

really learn fun and fundamental

analysis

and

charts are kind of quicker and easier if

you want to see what's going on so

actually

jeff i learned from this guy because uh

he knew about things like if

if all the news is great and the stock's

not acting well

get out which is

pretty simple thing that for some reason

most analysts don't know

he taught me

more what makes stocks go up and down

than analysis itself which is

it's it's 90 of the function but i'd say

about 10 of the people is what they

focus on

so if we were just to jump over to the

you know the technical versus

fundamentals

you're making an investment decision or

a trading decision

how do you how do you piece the two

together how much time do you spend

looking at charts today

okay so

every night

at about 4 30

i get 272 charts

they cover

um

just about every group in the stock

market

every commodity

every currency cross i'm interested in

every fixed income

market around the world

and

they're basically daily weekly

and monthly daily supposed to predict 8

to 20 days weekly 8 to 20 weeks

and monthly 8 to 20 months

when i make an investment decision it's

usually

sometimes believe it or not the idea

comes from the charts

but i will never invest just on a chart

but if i really like a fundamental

thesis and the chart stinks i won't do

it there's

you know my my old boss used to say in

terms of socks i apologize to women in

the audience there's 6 000 girls out

there

you know if 20 or 30 of them look great

i don't need to bother with the rest and

you can always find at least in terms of

equities 20 or 30

great fundamental stories that the chart

looks good but i always assume

that the market may know something

and i've always had a great deal of

respect for the market so

i'd say 75 to 80 of my ideas come from

fundamental and then they're verified by

the chart but

i've also found ideas

from the charts

and then

discovered the fundamentals

the the charts we use

because i took a shortcut to my career

as you can hear

charts were a great

tool for me early on because i didn't

learn a lot of the fundamentals in time

but i did i was introduced to all the

top chart systems

um throughout 20 years

and we ended up buying a system

and bring it internally and because it

used um second derivative rate of change

these things will often bottom a year to

a year and a half before the

fundamentals so they'll give you time

um

to study the thesis

so that's why sometimes the charts

actually

generate

the initial idea and then go and try and

find a story um before we get back to

your career i just want to on the

charting thing ask you about one trade

you know i had lunch in in march of last

year

must have been a week or two after bear

stearns failed

and uh talking oh wait oh wait

and yeah that's a bad week for me but go

ahead

no wonder you weren't eating much the uh

and we were talking about commodities

and you said

look i'm as bearish as can be on the

economy

i don't

get what's going on with commodities but

my charts are telling me they're going

up

so i'm long every chart i now all the

rest of us who were really bearish on

the economy were short commodities

how did you reconcile the fact that

you're really bearish on the economy

but you went long commodities because

the charts told you to do that

um

my recollection

uh

is i just saw so much liquidity that was

going to be provided um

worldwide that i was willing to go with

the charts

i do remember

the reason we did fine in 08 was around

may or june

those charts started to look

quite dodgy

and

we got out but i i believe at that time

it was pretty obvious to me that

bernanke and company eric were just

going to put petal the metal after bear

stern so i was willing to believe the

charts in terms of commodities

the um back to you so you at some point

you made a decision to leave

the bank and start your own fund yeah

what drove that

how about running six billion dollars

with the best record i knew and getting

paid 43 grand a year i mean these guys

you guys are complaining about what

they're doing to you okay so

most people reporting to me were making

more money which i thought was a little

weird

my mentor

had left

and what really happened is i came up to

new york to a dinner and uh

i gave this

presentation on uh

gold

and there was a guy at the dinner and uh

he came up to me after and he said

you don't sound like you're from a bank

i said well i guess that's a compliment

thank you

apology's exciting

and uh

he said uh

well why aren't you on your own i said

well

i'm 27 years old and

frankly i don't have any money um

and uh

he said well

how about if i pay you

ten thousand dollars a month to talk to

you you don't have to write any reports

nothing i'll just pay ten thousand a

month to talk to you

so i was

28 oh and i came up and i interviewed

with uh

jp morgan because i was frustrated and i

thought i was great in the interview and

i didn't get the job i must not be able

to sell um

so um he told me he paid me 10 000 a

month to talk to me a couple people that

knew me through the bank were giving me

900 thousand dollars to manage

times one percent with no performance

fee was 9 000.

129 000 that's more than i was making

i figured worst case i could i could

come to new york and work for a bank if

i fell on my face that's how it started

now after working on your own for a

while at some point

you switched strategy right you went

from being i guess a stock picking fund

the long-only fund to

what today we would recognize as a

macro fund actually no um

because my background was economics not

business

and it's true my first

venue into at pittsburgh national

analytically was stocks

because i was the banking analyst

and because of this guy i told you the

quirky guy that mentor he was a top-down

real good investor i learned about

liquidity and

i was very strong in bonds i didn't tell

you in the meeting of a lawyer i kept

telling anybody bonds weren't going to

go down the tubes which they did

but when i started duquesne

it was 81

and

i had a great first year or two

because i put 50 percent of the capital

in 30-year bonds

which quite radical at the time because

they were yielding 14 and henry kaufman

said they were going to 25 and

he was a guru and it was a little

terrifying

but

so you're right i'd say it was

more about when i started running money

for dreyfus i started to get

really more involved in currencies and

bonds by by the time i had gone to soros

he didn't know this he thought i was an

s p guy

trader but but

i thought i knew a lot about bonds and

currencies and it was actually bonds

that launched my

record at duquesne not not stocks

so you went to soros and obviously

there's a legendary trade happen there

that

it's basically your trade

when

uh you broke the bank of england or so

they say can you tell us a bit about

that

okay um

that was just one of these anomalies in

history

because britain and

and

germany

were

i'd say loosely economically linked

and the deutsche mark and the pound

were at a fixed rate i think it was 178

and the loose economic link was fine

until germany

decided to

reunite with east germany

and

this created

huge demand

and basically the strongest economy in

the world while while that was happening

at the same time

um

the u.s banking crisis savings and loan

thing was in full bloom

and

the uk

for whatever reason even though we're on

other sides of the ocean and so forth

they were more correlating with our

economy than with the european economy

and particularly at that time the german

economy so they were going into a

housing recession

while germany was first taking off

from the reunification

so

you had one economy tanking

the other economy going like this one

requiring lower rates the bundesbank was

going crazy threatening

politicians and everything just raising

rates

continually and they had a very strong

currency so the pound was getting

dragged up with it

so

i watched this for a while

and i was really screwed because i

didn't have a chart it was just a fixed

exchange rate so i couldn't cheat the

way i usually do is look at look at my

momentum curves

but in august of that year

um

i looked and the six-month forwards were

a half a percent

well

i figured it was a little bit of a long

shot that i would win but if i did win

it would be twenty percent it was a half

a percent

so we were managing 6 billion at the

time so i did a billion and a half and

just decided to sort of watch it

so then um

two weeks before the pound happened

i got a call from

a consultant

in washington

that the

the germans weren't pleased at all with

the italians

and uh we did some lyra

and

that worked out

um

and then you know i was just

going along and the forwards were

starting to move a little but it was it

was nothing dramatic at all

and

it was simple as i opened up the

newspaper

one morning and this guy schlesinger

who's head of the bundesbank at the time

has written an article

basically

announcing that it's just totally

inappropriate for the

for the pound if you read it you know

how one learns to read central bank it's

just totally inappropriate for these

bozos to be linked to the great deutsche

mark

so

i read it again because i couldn't

believe my own eyes it was in the

financial times

so i decided to do um

five billion dollars to basically with

the one and a half take the fund

fully invested short the pound

so

the arrangement i had with george which

was not the arrangement the first six

months i had there where there was no

declared

leader it was kind of a mess

but by that time i was running the fund

and

he had his personal account

which by the way was larger than most

funds at the time

um

so when i was doing something

significant i used to just make him

aware and a lot of times he he'd

piggyback in the f in his personal

account on what i was doing so i went

into him and i said

i said george i just want you to know

i'm going to do 5 billion dollars

worth of the pound i only think i had

told him about the billion and a half

i've been wandering this for a while i

went through the thesis

and uh you know the whole economic pitch

i gave you and he goes there

that's ridiculous

and uh

i said excuse me

uh

george this is this is like this is like

a layup he says

exactly the point why are you only doing

five billion dollars

so

he says this is a one-way this is a

one-way bet

that's not the way you know you manage

risk you should do 15 billion dollars

um because the forwards are still like

half to three quarter of a percent that

whole diversification lesson you learned

is out the window now

diversification is over very overweight

we can talk about it later

but anyway so

you know i decided uh

he was right and and that this was kind

of a once-in-a-lifetime thing and it was

the same day it was like

two or three in the afternoon

so i called city and a few other banks

and

we started

and like

went to bed had given those of you who

know my traitor then he's still my

traitor the infamous steve oaken

um we got a guy back there who uh does a

great imitation if you want to see it

later

i i'd love to see it and if you if you

call on them my condolences but anyway

um

i get a call about one in the morning

that uh

this thing is a mess

the forwards have completely blown out

you know we're not going to get where

you want to be

i said well how much have we done he

said like five or six billion

and i said uh

okay well where are the forwards

and i said uh all right i'm going back

to sleep oh you know i get up like 3 30

and i'll talk to you so

got up and uh

the british

had raised their rates i i can't

remember where they came from but they

had raised them hugely to like 12

so uh

at that point even though the forwards

were out i knew they were finished

because

um

their economy couldn't even handle

whatever it was at the time i think it

was eight or nine seven something like

that

but i said that you know if they're in a

recession at seven 12 is going to do

wonders for them

so

and and i knew they didn't have a

political will so even with the forwards

blown out we started to add even more

because the fords i think were

five or six or seven percent now and i

knew that evaluation had to be 15 or 20.

but we only got like two or three

hundred million more on and all hell

broke loose and then uh

lorma norman lamont came out and they

they went to 15

but

it was a joke and then uh

like four hours later as

it was uh history

now

you've got this big move

you know you bet on it

you broke

them did you take profit at that point

it's very interesting because we made

62 net that year

and we were only up

16 on september the 14th

but i think we only made

uh

about 20

in the pound the answer is no

um it didn't go to where it should and

we waited and waited and waited and then

when it got to where i thought it could

go like 16 or 20 we just started slowly

bleeding it out

but we actually made more money

on the concentric circles

than we made in the pound i don't know

whether i've ever disclosed this but um

the british guilts were down

two points that morning not two ticks

two points

because it's a well-known theory in

academia

that if your currencies go down your

bonds are going to go down

it's a great theory everyone believes

that the only problem is there's

absolutely no basis for it if you look

at history

in fact if you looked at history you'd

say the opposite except you'd be

incorrect because you'd be saying you

know eating ice cream causes hot weather

but but generally when

when a currency is very weak

your bond market will go with it because

it suggests the economy is weak so the

gilts were down

two points people are selling like crazy

and we loaded up on gilts

and they went up i think 33 points

not ticks

points in the next year

we bought french motif bonds we bought

british equities we bought all the

things

that i thought the blowing up of erm

would affect

and

so we took our profits on the pound i

think like six to eight weeks later

and

more importantly

the other stuff fed us for about a year

but you ask a great question because and

this is

this is not something i did

but this is a great trading lesson

i wasn't there

but oaken will tell you the story

because he was

and this is this is

this is a great investor's name is

george soros

and

when plaza happened in 85

he was loaded

to the brink with yen

like

already too big

and

all the little traders there we didn't

have this when i was running quantum but

they were they had their little 25 to 50

million capital pools

so they were

they were allowed to piggyback so they

were all long yen because frankly george

was long in

so the next morning

after plaza

the yen opened up 800 ticks

and

george soros is an interesting guy but i

worked for him for 12 years and i never

heard him swear

and i never saw much emotional change

takes that would last with me for about

four minutes if you're with me on a desk

but um

apparently

these all these other guys started

taking profits

and he had an absolute heart attack

stop it transfer all that stuff to me

you know they're idiots and the thing

you know thing went another 40 another 4

000 ticks

so

the easy thing emotionally

was to take a profit

and in fact

george was adding

and and taking that too because

you know you can't just make yourself

feel good

by taking a profit when something goes

your way you have to remember your

original game plan your original thesis

and why you thought it would go from if

it's a to b wherever b is

and you know

so you know

kind of on that theme

but going the other way so people

describe you as very disciplined

at the same time i've seen you

run positions that have gone

against you

in a long way i think about you know the

yen and the

2005 period

or the rio last year

or the indonesian rupiah

my worst memory of my life in 96 but

let's leave that one out because it

won't teach the lesson you're trying to

teach here

actually i think we'd like to hear about

it

about the rupiah sure

oh boy um

we had a

we had a bigger hit in the thai bot

than we had in uh in the british pound

but they lent by then certain entities

within our firm that were above me

had learned to stay quiet

um when we had a success

but um

unlike the british pound the thai bot

was not my idea there was a guy uh that

worked with us named rodney jones

and he he he had worked for the bank of

new zealand and he was out in asia

and

rodney had showed me this chart of

thailand and loans to gdp had gone from

some nominal amount to 150 percent he

thought the whole thing could blow up

put it on in february

big position no no forward cost of the

time

and it blew up in uh july

and

um

so we made a lot of money and we had a

little bit of well not a little but we

had a fair amount of malaysian ringgit

so we're taking profits on the thai bot

and the malaysian ringgit

and uh

i became

convinced

by someone at the firm i've conveniently

forgotten who

um

that

the washout was over now and that

indonesia was different they didn't have

the fundamental problems that thailand

and

and malaysia had turns out i had worse

but um

i don't quite know what was going on

because

i think suharto was funneling money out

because the the macro numbers were fine

but this thing was unbelievable i mean

it just kept going and going and going

and i couldn't get out

and to some extent i was so big

relative to the size of the market i

froze

but i lost well over a billion dollars

in it and

the worst year i ever had

basically flat on the year

so how do you size your trades you look

at how many positions do you carry at

once and how do you size

any one trade well i think

diversification is really overrated and

i'm

no i really do i i'm from the school of

uh if you've really got a great thesis

and you've and you've

analyzed the risk award

put all your eggs in a couple baskets or

in one basket and then watch the basket

very closely

um

but when i was when i was at soros

a lot of my positions by the time we got

over 10 billion particularly back then i

always sized them relative to the market

not to the capital of the fund

so

i would never

get bigger

i would never get so big in something

that i i thought i couldn't get out

where it would cost the fun

maybe one or two percent in execution

cost alone

to get out

so

that was always a rule no matter how

good

um

no matter how good the idea and and the

pound thing is easy because i could have

gotten out of i could have gotten out of

the fixed exchange rate so that governed

that

um

now

back when i was younger and not as

wealthy

and

probably had a lot more courage you know

it's a lethal triple

um

i used to take my fund i'd put 150 to

200 percent of it in a currency

i put 300 percent in

10-year bond equivalent

um

equities i really rarely would get more

than 100 percent net long or

rarely more than 50 net short

but our our gross leverage

very very rarely would run more than

four to one but if i really really

believed something

i'd have no problem

putting a hundred percent of the fund in

it

again with the liquidity strength i

meant constraint i mentioned earlier and

i i will say that unlike

my competitors and who knows have the

right model

i learned very very very very early on

because i think we were the biggest at

the time

at least for me

it's very difficult to run a hedge fund

with more than 10 billion dollars

effectively

and

being from the equity school

and having learned

currencies and bonds

i felt i had a lot of weapons

so

the funds that

to me over 15 or 20 billion and still

raising money

i don't understand that

and

we have tried religiously

to keep our assets

around the 10 billion dollar level

because

my belief is

if we let our assets blow up to 40 or 50

billion

and a modestly we certainly could have

any time in the last three or four years

based on the record i would just have

horrible performance and the assets

would leave anyway

so

our philosophy has been to grow it

organically and then when you get to 10

billion start squeezing clients out and

manage your own money to try and

keep it there because in the long run

a i've got an ego problem so i like

i like performing

after a while it's not about the money

you make it's about it's how you feel

about yourself

so that i guess i've given a very long

answer to your question so let's get

back to you so with indonesia it just

kept going against you and you couldn't

explain why and

lost enough money that you were like i'm

done with this

what about something like brazil and la

where

you saw it go from 180 to 240.

okay so brazilian 08

i think somebody gave you the wrong

information because i had a problem with

brazilian but

it's instructive

um

i brought i brought bought brazil

i think above 250

you know for and had held it for quite a

while and as those of you know brazil i

had quite a carry and uh

armenia fraga had been a partner of mine

for

six or seven years

uh at soros so i felt i knew brazil

probably knew just enough to you know be

dangerous but i thought i knew brazil

pretty well and i'd owned it for a few

years

and frankly um

at the low which was just through 160

and it was the first time the japanese

started buying it by the way the whole

way they had no interest from 310 to 160

but at 160 they discovered the real

um

i

i did take a bunch off

because i just thought

this is going to be very tough for

brazil to exist with this exchange rate

and then at

170 180

the chart turned dramatically

so i think i had been 3 billion which

was really really stretching the limits

of what i would call liquidity but i

liked it so much and it kind of grown

there organically so i already violated

the discipline rule i told you about but

um

i guess i had about a billion left

when it went through 180

and but since i had had three billion i

convinced myself it was okay because it

was only go to like 205.

and uh

so it's at 2 40

you know it took a couple weeks

and uh i thought this this is uh

this is tough

and uh

so i barfed

at least two or three hundred million

right at the low the good news is

some of you must know a nudge mahatra he

bought it from me internally i have my

own guy

buy the low from me

inside the

duquesne

but it stayed there for a while

and i still liked brazil

and

i ended up

adding between 240 and 220 and

basically

held a lot of it through about

180 or 190 and still have quite a bit

i

i think what you may be thinking of at

the time is

i i started buying brazilian rates

at 13 or 14.

and they've they violated every chart

limit

you could possibly think of they went to

19.

and

this is really really rare for me i

don't know

when i've ever done it in the past and i

just kept adding because this is the

stupidest thing i've ever seen it

it's trading with risk but i think u.s

two years were 40 basis points you know

we kept lowering our rates

and

that was one of those rare cases where

i ignored the charts i told you that i

never ignored

because i just thought it was just so

fundamentally ridiculous

and we held them all the way from 18 or

19 these were the

january of o2s down to

you know uh down to 10.

we held that trade for years

so is it really you know when you've got

something that's like a 1 in 100 for me

to

violate

to that extent

when you're violating you're violating

the charts it's the charts that'll

signal to you to get out

yeah we have no i have never used a stop

loss in my career i don't use a

like a number i know i know that's a

discipline system and i know it works

but i have like conditions if it starts

not acting well relative to news or

other things i'm watching

you know i'll get out so i probably do

have a stop loss in my head

but it's like

um

another golden rule i has is is

january 1 has always been a great

resetting of risk

for myself

and

for those of you who gamble you probably

know that 95 of the people that go to

vegas lose money

but the odds are 33 to 32.

so 95 percent of the people shouldn't

lose money it's because people who get

down

want to go home and tell their spouse

that they made money so they start

betting big when they're on losing

streaks

um and then when they get out go get up

they want to tell their spouse they made

money so they like they're playing very

small when they're doing well and

they're playing bigger and bigger when

they're doing poorly

so we have always believed

january 1 is sort of when the house

starts

and

if i'm up

i think this is the reason so far we

haven't had a down year i'm sure we will

have one at some point but when i'm up

i'll play much more aggressively i i see

a lot of managers to get up 20 oh i want

to book my year i made my high water

mark let's go to the beach

i'm the opposite and frankly i learned

that i learned a lot of that from george

um

if you're up 20 or 30 percent you're

playing the house money

that's when you try and get up 60 or 70

percent

and you're usually hot at the time any

of you who have managed money the most

important thing is to manage to monitor

yourself

i don't know why streaks happen but they

happen to happen in baseball they happen

in putting they happen in money

management and one of my jobs is to know

whether i'm hot or cold

but i will say just like the brazil

thing

if i'm down eight or nine percent on the

year

i'm playing very differently that i'm up

15 or 20 but if there's a great

opportunity

i'm not going to go

oh i'm down on the year i'm going to put

my head in the sand i'll play it it's

just more of a

it's an intuitive general

feel the um

another time you turned it around was

98 where you looked like you were going

to miss the tech bubble

and you were short going into the fall

right

i think you're thinking in 99 but um

what

this is a horrible period i i try to

black this one you bring back all these

nightmares

but uh

99

was was the first time in my career and

i started in 81

that i i felt

my fund was really in trouble and i was

in trouble psychologically and it really

started in

march of 99

i had

i had shorted 200 million dollars worth

of

what i would call low quality internet

stocks

now

mind you this was not early on aol was

up eightfold

yahoo was up these things had already

gone way to the sky

so i shorted 200 million dollars worth

of internet stocks i would have done

more but i have my liquidity rule and i

lost about 800 million dollars in 13

days they gapped open

like 100 stock would open 130 you try

and buy a little would be 170.

so

i took my i took my 800 million dollar

loss i just said get me out

you know discipline thing you're talking

about indonesia taught me something

so

i had some currency trade not working

and in may

we were down 18

and

i'd never had a down year and i'd had

big drawdowns but always from like up 40

to up 20 or something

so

the summer wore on and you know i was

watching this thing and

my charts on the technology stocks

looked incredible

and

it finally dawned on me

that greenspan

was responding the asian crisis

but it wasn't appropriate for the united

states

so we were running a world monetary

policy

but rates were required much higher for

here and the charts were just screaming

at me

to buy tech

i think someone said the

quote you said at the time was the fed

was throwing a party and i was missing

it

well that's what i said that's what i

said it sounds familiar

so

so i loaded up on

tech stocks

and uh

i think we ended up 42 net on the year

and we are still down eight

in early november

so we made about five billion dollars

in november and december all in tech

stocks

i might as well keep going because the

next part's a real nightmare

and this is a this is a lesson in money

management

so in january we still own these tech

stocks

and

we're now up 13

but a lot of my technical indicators

were horrendous

i mean i think there were 13 new highs

and 242 new lows

on a uh year-over-year basis but the

market was going up it was all like 10

or 15 tech stocks

so

i sold everything

and was flat

and up 13

i went into george and told him why i

did it he said that's great you know

well i had these two

internal managers that i had hired

um

to buy the go-go tech stocks the ones i

didn't know how to pronounce verisign

veritas i only knew old stuff like ibm

and hewlett-packard who would help me

gun the fund in

in 99

my god they were making six or seven

percent a day while i was sitting out

and i just couldn't stand it

and uh completely lost my cool and my

discipline

and after being out for a few weeks and

they'd made another 30 or something i

jumped back into

the tech market and to be fair my

momentum charts were bullish

but they were bullish

they were bullish for an equity chart

but i had seen commodity charts do this

and just fall out of the sky because

again my stuff is rated change and

second derivative

anyway i i bought these tech stocks all

back

and uh

about a month and a half later i was

down 18 again it was like

the nightmare of uh

the year before and the worst thing is i

knew when they were down

when i was down one percent i knew i was

toast

and uh i just started liquidating

told george that i couldn't take it

anymore i was leaving

and uh

told him i was gonna sell everything and

we could have a press conference about

three weeks but i want to get out of my

stuff first

and uh

went on uh

went on sabbatical

sent a letter out to my duquesne

investors and said

my head's all screwed up

um

i'm gonna uh

i'm gonna take a break

um

you can leave the fund

and that's fine um by the way if you

leave it i you won't necessarily get

back in if you want to come back in but

uh no charge if you stay in

we lost

one account

and uh

by labor day that was made by labor day

because i had nothing else to do because

my kids were going back to school i came

back

and uh

i've had a lot of luck in my life but

this was maybe one of the luckiest

things ever because i came back in

late august right around labor day

and oil was screaming upward

interest rates were screaming upward

it had this huge rally back

in the s p and the tech stocks that i

had sold

and uh

everything i had ever looked at told me

we're gonna we're gonna go in a

recession

and

plus the nasdaq had been down

30 or 35 percent

and uh

i had the analysts that i rehired called

some companies they all said business

stunk and everybody on wall street was

you know 18 earnings and

um

ed hyman had this simple little model uh

50 dollar 50 g7 rates and i can't

remember what the other 25 percent g so

i can't remember that anyway it spit out

earnings are going to be down 36 percent

in the next 12 months

and wall street strategists had them up

18

okay

so i'm not a rocket scientist but up 18

down 36 and this thing had fit like a

glove for one and it fit with everything

i believe

so

fed funds were six and a half

two years for

604. we were down at new cane we weren't

down 18 we were down nine but i i thrown

i finally have a down year that's it

it's over

man this looked like

red meat in front anybody who hadn't had

a steak in about 10 years

and uh i was fresh the four months off

it really helped

so i literally put

300

10-year equivalent of the fund

in two-year notes

and we made like

we made a lot of money

um

in in the next few months and then ended

up i don't know around 15 or 20 nets

something like that but that was that

was like a miracle

so what is it you think that makes a

good trader i mean i know you got a lot

of friends who are

pretty legendary traders all the

different styles you've had a lot of

people work

for you people that you've worked for

what is the the common denominator

well i i'd say first of all they're

extremely competitive

you know

they want they have an unbelievable will

to win

and

that just

if you look at any

anybody with a great investment record

for whatever reason

the people without passion can't compete

with them because they have passion and

they're willing to just work

work harder

and and you're in the wrong arena if you

think you can compete with those maniacs

if you don't have that passion number

two

um

they may have very very different styles

but they're all disciplined

and i just told you about four times i

wasn't disciplined

but um

that's over about 30 years

it doesn't even matter what your system

is

but as long as you follow it there are a

lot of ways to make money and and

with regards to that

you really really have to fight your

emotions

because i have wanted to sell every

bottom so bad and a lot of times i'm

buying there i'm always doing it never

feels great

when you're out of turn

the other thing i have found is that

contrarian investing is is way overrated

people tend to um

they tend it's intellectually cool

to not be with the crowd

but the crowd makes 80 money 80 of the

time and and

they kill themselves at the turns and

end up losing as much as it turns as

they make during the 80 percent of the

time

but

i have found contrarian thinking just to

be contrarian

can be a death trap particularly

particularly in uh bonds and currencies

because

economic fundamentals are what they are

it can be a rough ride if it's very

crowded

but i i think the main thing jeff is

you have to be disciplined you have to

be unemotional

and to me the really great ones you have

to really be able to play

you have to have courage you have to

play big when

when the opportunity's there make hay

while the sun shines whatever the term

is

one more question before we take some q

a

you know we're we've brought all our

foreign exchange and local market

traders from the americas and a few from

asia

and europe here today

to talk about

over the next two days how to grow your

risk

how to grow how to grow your risk how to

take more how to get bigger

um

you seem to have no problem

driving it although you had the help

from a mentor

to push yourself to get bigger

to take more risk are there any other

besides having someone push you what

helps you

be confident enough to step it up to the

level

i think you just have to follow

you know whatever your whatever your

style or whatever your system is you

just have to follow a disciplined

pattern

and you have to teach yourself

that you're good

i mean i can remember in 87 and 88

in 80 in 87 i caught the crash and i was

on a couple magazine covers so i was

really smart okay but i was convinced we

were going into a depression

and 88 the stock market kept going i can

remember getting up

two nights a week throwing up and

thinking

oh my god i went to boden i never got a

degree i can't be a plumber what i'm

going to do this this might be random

what what you know i might have just

gotten lucky for six years because

you're a bull market playing a trend

and you know i had made 42 a year

compounded and i was thinking that way

so it's not easy but i think

if you follow a disciplined system

you just have to watch your own results

and you have to believe in yourself

and success breeds success and again

one of the things with me is

i know when i'm hot and i know when i'm

cold and you have to learn to play big

when you're on a streak

a lot of times when i'm cold i'll just

start trading really small

and the whole purpose of the trading

is to find out when i've got it again

and every once in a while you'll think

you'll got it and you hit eight in a row

and then you bet big and ooh i missed

and

that's tough that's probably the

toughest thing you could ever do that's

the old whip saw term

but you know you just have to dust

yourself off but i would say the way to

get big is follow discipline watch

yourself and then just

grow organically what i would never do

ever

is if you swing and you miss

is put on a big trade just to get even i

got to get out of the trap

that is a death

that's a death sentence

don't bet big and unless a you love your

thesis

and b you're hot now if you really

really love your thesis and you've had a

lot of successes in the past

that's what i'm talking about for

example when i put that treasury bet on

when i came back in 2000 that's fine

but

don't ever bet big just because you

think this is the you know the way to

get out of a mistake you've made so when

you're losing i think this is key

get small keep trading

was 2000 the only time where you said

that's it i really gotta

get my head out of this i'm gonna square

everything up and go away

yeah jeff i was exhausted i'm

it had more to do with all sorts of

psychological factors which you have to

know when you're a trader but i had been

running the most public hedge fund

for 12 years

with a guy

who had a need

for publicity because his his

philanthropy and his status were

enhanced

i don't think he was doing it at the

time because of his ego it enhanced his

position in philanthropy

well i'm a private person as you know if

you try and find anything out on

duquesne

and

i was just tired and exhausted

and in 99

i think money managed a little bit like

a boxer and body blows you get these

body blows

and 99 took a lot out of me and do it 2

000 and my kids were 9 or 10

i just

so yeah that's the only time

i did it but let me tell you there have

been 10 times when i wanted to do it

and at those times i i just trade small

suck it up and try and remember

all the successes i've had in the past

and this will end at some point i'm

really not that stupid which at the time

you feel like you are

all right uh why don't we take a few

questions

anyone want to kick off

peter

of success not not early but after a

mature string of success

is when they're at their worst they get

sloppy they get overconfident

um

so

i would kind of disagree and i i just

want to ask you specifically why do you

think

that when someone's doing well

that it's a time to take more risks

well

i i believe in streaks and i don't know

whether you do disagree because what

you're talking about

is someone who loses their discipline

um

and

you cannot allow you make a good point

you cannot allow yourself when you're

doing well

to start thinking your god

and lose your discipline but i i do

believe

that

life and trading runs in streaks

and if you're still disciplined without

with what you're doing

when you're up 20

with clients money you have the right

if you really like an idea to bet more

than when you're down 10 percent and i'm

not saying oh i'm up 20 let's go shoot

for the moon

what i am saying everything else equal

if you're playing with house money and

if you're doing well and you're trading

well you should definitely take bigger

positions otherwise but no i'm not

saying

i'm up 20 let's just get and i've hit

eight in a row let's get reckless so i'm

not sure we do disagree i may not have

articulated my position well

but

if if you look at the best part of my

record at soros i literally didn't make

a mistake for five years

literally not one

and then

for two years i stunk

okay

and

if i had gone

in any of those five years from

basically 89 to 95

well i've done too well i need to take a

break

you know i probably would have lost half

my net worth that i have now

so

different strokes for different folks

tom

yeah when we

of had a uh that the risk management

system was you

um and i think it might be interesting

yeah

if you talk a little bit about

how you thought

of the money

i don't remember when you walked in but

this is a terrific question um

because

i have never had a

well i did but i am paying attention to

it and it's what tom's alluding to

i have never had a fancy

quantitative

risk management control system

overseeing me

and by the way

either did george soros

in the

25 years he ran the fun

before i did and between us

there's one down years since 1969.

there's no var at duquesne

well there was because the banks came in

and made us

put it in

uh

after 98.

okay

but

i believe

that every once in a while

usually about every 10 years you have a

financial crisis

and all these systems

that

are based on historic trends and what

happens when a does this and b does this

spit out a formula

and they work 90 95 of the time

but when

when you really really need risk

management they break down because by

definition of a financial crisis which

i'm sure everybody here knows because we

had a recent one

correlations just go wacko

um the stuff that has correlated

for years breaks down and you start

seeing

changes

that

make no sense whatsoever

and

my risk management system

is and i i believe this is true with

george although we never talked about it

you know if i own

let's say in today's world uh

the last 10 years at least if if you own

stocks

and your short bonds

that most of those 10 years has been the

same bet

and

if you're long the euro

that's probably a long risk bet

and you just kind of get a feel in your

head

of where your matrix is

and i can go in the gym and watch cnbc

um at 11 o'clock

and i have probably

if you include the whole firm hundreds

of positions on and all i see on that

stupid little ticker is what the s p is

doing

and i can probably tell you our p l

within two million dollars

just because my head

knows

what my pound or my euro position will

be doing and my goal position

based on that

and

so i sort of have this internal

thing where i'm watching everything

but

the reason i love the human side as

opposed to the quantitative side is

there's nothing like my p l

and you will pick up

oh

c is not acting the way it was with a

the last eight years and there's

something funny and then you'll start

seeing more funniness going on

and i have always thought

that if my p l extra

if things went well that day and i'm

losing money

and i examine what went on and if that

continues

something is really starting to go

haywire in the system so my risk

management system has always been

what i've described that knowledge and

then my gut and watching my daily p l

and if the daily p l

starts acting in a way it shouldn't

instead of going to some quantitative

var or beta model oh i'm okay

the model says i'm okay

to me these models are not only okay

they can get you in huge trouble by

causing you a false sense of security

um

when

when things start going awry because the

model will tell you you're okay and and

you will see things happen you've never

seen before whereas if

if you are a

intuitive human traitor

you should be able to use your instinct

to just start cutting when things aren't

acting right you ever if you're thinking

about the correlations if you're along a

lot of smps we say well

i'm bullish the euro bearish the dollar

but i'm not going to take that big

position in that because they're

correlated

yeah and and that gets back to this

question if

if i've got a strong opinion and i'm

doing well and we're up 20 percent

and this is what happened in the early

90s

and i've got eight positions and they're

all in the sec same direction it's an

eight times texas hedge

i have no issue with it

but if i'm down six or seven percent

i might just take my favorite

of those positions and press that alone

but but yeah i am constantly

um

weighing

that and

and you know one of the one of the

one of the reasons i plowed into those

brazilian bonds

is

they had traded with risk

since i'd owned them it was crazy a

couple times they moved 200 basis points

because you had something going on here

and it had nothing to do with the

brazilian economy and about a month

before they turn

before big signal they turned was the s

p kept crashing into the financial

crisis

and they stopped correlating

and that they were 18 or 19 and that's

when i knew they were golden because

i had watched some trade with risk for

two years

and my antenna the intuitive part i'm

talking about i said

oh they're not trading with risk and

this is a really cool thing because i'm

long them

and

i actually that's when i bought more of

them

all right one more

scott

uh

i am the worst hirer in the world

um

and

you know my mother-in-law says i'm an

idiot savant

she's probably right

i you know

so far i've been able to compound money

above a random level

but um

i just i just took that to someone else

in my firm

so um

if i was hiring a money manager

the first thing i'd look for

is

if all i heard was they never made a

mistake and they're telling me about all

their wins

that's a big red flag um

the great money managers i've met

they generally don't tell you about a

lot of their wins they tell you about a

lot of the losses

um

and there's a there's an immodesty about

them

but yeah i would definitely look for

discipline

um the first thing i do when i look at

the records i go right to the bear

market periods

and see how they did in those

uh

and look at the quality of the record

because i

hiring money managers i'm okay actually

it's analysts that i have a problem with

but um

yeah i would i would look at all the

things i'm talking about but i think you

can learn a ton from the record just by

looking how they did in certain years

and when you see an outlier

you ask them

because there'll be there'll always be

one or two inconsistencies in there like

i was flat in 96

pretty easy year why

turns out it was the indonesian rupiah

but um

you know and i think you need to delve

in what the reasons were in those

unusual unusual period or are they just

a bull market creature where they wrote

a trend

what are your thoughts on the markets

today going forward any big views

how are we going to make money next year

well

i i've had i i believe maybe the worst

year i've had relative the opportunity

we're up about 10 percent somewhere in

that area

and

i think the opportunities have been

tremendous this year

by hindsight of course

i i made the decision we had a very good

07 and a good 08. when that when the

government got involved

to the extent that they did

and look at all the factors

that

my skill set

was was not as valuable as it had been

in the past because i was dealing with a

set of variables

that i just

i didn't want to bet big

and jeff i still think

this is one of the most

unanalyzable periods

i've ever dealt with because i tend to

look at history and historical

i try to find similar instances

and i was on a roll until september of

08 because it looked like the 30s but

worse to me because we came in with more

leverage and then

we started running a monetary in a

fiscal policy exact opposite of what we

did in the 30s as well

now

so that's my big qualifier or hedge

since i run a hedge fund

um

and

i'll start out by saying

this is this is more uncertainty that i

would usually have and no one knows and

if you meet anybody who really thinks

they know what's happened next year stay

away from because they're an idiot okay

um

but

having said that here's how i here's how

i see

where we are

um

first of all usually in a in a

big time financial crisis and we've seen

this in a lot of emerging markets

usually something really productive

comes out of it and you usually get very

positive structural reform

now

i am no fan

of george bush for those of 43 for those

of you who have known me for quite a

while

but i do think it was kind of bad luck

at least

for for structural reform that this

thing blew up

um

on on the smaller government side of the

equation's watch

um

and i blame that guy for a lot of things

but i don't blame him for the financial

crisis to me the the seeds of this

started 20 years ago when greenspan took

over for volcker and then he decided he

won a recession

so we've just been you know we've gone

from 140 percent of gdp to 380 on debt

and you know it went parabolic and he

ignored it

so

the the problem i see is

we had this big mess

and

instead of getting healthy

response to it which would be demanded

in an em country and an em country would

come out of it usually

much better and a lot of times rise from

the ashes which is why i think

if you look probably

the countries that weathered the this

the best were obviously latin american

asia asia went through the asian

financial crisis and the latin american

countries

were on their deathbed in the early 80s

and

they were they they they made the right

response to it eventually

and the seeds of that and the benefits

of that went for a long time and i i

think

the last

really horrendous thing i saw in my

career was

was this whole 70s thing in the end of

it and carter was sort of the epitome of

it and out of carter

we got volcker

and we got reagan

and we basically got a 20-year bull

market out of some guys that were really

to take some serious

serious pain

for two or three years

so

my problem with with where we are today

is

we went into this thing

we have this thing and not only have we

not gotten structural reform we've done

everything wrong

and it's all kicked the can down the

road and we got into this thing

through a to me a reckless monetary

policy

and not willing to take the pain and not

willing to take a recession

and ironically i call it the curse of

the reserve currency

which is

you know this thing the curse of oil

that the country is well under the

ground

can yeah

the problem with being a reserve

currency is we're allowed to get away

with non-reform

and and behavior

and you keep doing it and doing it and

doing it and normally the markets would

give you a signal

and

they would

save you from yourself

before it was too late

i am deeply afraid

that

all this stuff we're doing

it's the wrong answer i mean capping

capping bankers pay this is this our

response and all this other stuff why

don't we just get you know knock down

you know instead of dealing with the

real issue which is leverage to lose a

monetary policy you know it's all this

populist nonsense

out there so

i am convinced

that

this crisis

we've just had

is going to be followed by a bigger

crisis

because we didn't do what we needed to

do in response to this crisis

and now is where it gets

unanswerable and unanalyzable which is

our response to it which is how we got

into it which is more liquidity you know

let's not have any pain 10 percent

unemployment

buying 20 to 25 billion in

either treasuries or mortgages a week

makes everybody feel good causes another

asset bubble

but

it's going to cause hell down the road

and and in this one i think

the fed

and the treasury were big enough to

arrest it at the next one i think

there's a good chance that they'll be

the problem i think we're going to have

a sovereign crisis

due to everything we're doing now

and

normally

it would be arrested because the bond

market would give you a signal

but

with china trying to hold their own

currency down so they're buying

treasuries korea everybody knows who's

intervening every night brazil will be

intervening and we're intervening i mean

we're buying 20 to 25 billion isn't it

nice that that we don't want to

we don't want to target asset prices at

the fed on the way up but for some

reason we're buying them isn't that

targeting but anyway um

so

that

this liquidity that they're putting in

there

you can't go oh the economy stinks so i

hate the stock market

it doesn't work um

this thing

if you have the money supply growing a

lot faster

than industrial production the stock

market is generally going to go up

that's just the way it works that's

that's where the money goes

but at some point

we're going to get a signal

when that signal is i don't know it

could be

in three months or it could be in three

years so basically i'm pretty useless

other than telling you

i would not be shocked at all if we take

out the 680 and the s p again on the

downside but that could be in three or

four years

if you put a gun to my head

i'd say

given where liquidity is now

if january earnings are strong and i i

suspect they will be and the markets are

hot enough these guys will end qe

at the end of march is what they're

saying

uh if we get weak again i'm not sure i

believe them but if they end qe

i would be willing to entertain the fact

since

all my long-term thesis tend to happen

before i think they're going to happen

that it'd be very unlikely that risk

would be up

year to year in 2010 that sometime in

the first quarter before the end of

march

we'll start backtracking when the big

crisis comes

i don't know

i

personally we're playing a low gross

because i can't figure it out

uh we are

tilted toward long risk we're we're in

the liquidity thing

um

my favorite currency is gold

again

very popular not a contrarian vet

but my thesis there is quite simple

that

just like we had an anomaly in 92

with germany and britain we have an

anomaly now and the anomaly is

if you look at the world balance sheet

it's it's okay in total but it's

obviously ridiculously imbalanced so our

structurally impaired balance sheet

is somebody else's decent balance sheet

so debt to gdp in china is 120 130 here

it's 370 and you know you could go on

but that's

so basically because we're we're the

reserve currency and because no one else

wants their currency to go up

we are running moral monetary policy and

since we are have a structurally

impaired balance sheet

for the world as a whole that monetary

policy is way too loose

it's appropriate for us possibly i don't

think it is but you could certainly

argue it is it's definitely not

appropriate for the world

and

everybody hates their own currency and

that's why i like gold

and then

we're all so long a bunch of commodity

currencies

basically for the same reason but i

would put

gold at the bottom of gold at the top

if i was from mars of my currency regime

followed by selective commodity

currencies and i would put the pound and

the dollar

at the bottom of us because they have

structural problems bonds are incredibly

interesting

because they are the stupidest price

they are ridiculous

but

again

my discipline requires

um

i'm not just a value guy i need charts i

need catalyst

and

i think they're a one-way bet except

kerry but the carry's big

um

but i am salivating

um

to

short the bond market

in major size

um

that could happen

tomorrow morning it could happen in four

months it could happen a year i don't

quite know but

you know do i have a second yeah okay so

so in 81

what launched my career

was we had

18

short-term rates

we had about 14 or 15 inflation and the

long bomb was yielding 14.

and we had a crazy guy running the fed

named paul volcker who was going to do

anything to smash inflation

and all the bond guys were bearish

and it cost 400 they got 400 basis

points of carry by being short bonds

okay

and

interestingly the only bond bulls were

equity guys

michael steinhardt roy neuberger george

soros

myself although nobody ever heard of me

um

and we could see that this guy volcker

was going to win

okay

now it's a very interesting situation

it costs you 400 basis points

not to own the bonds but to be short the

bonds

we got in my opinion a crazy guy running

the fed okay he's hell-bent on

inflating

the bond guys are all bullish because

they're getting 400 carry they they

can't believe how what a party they're

having

the equity guys are all going this is a

disaster when i go and i meet ceos every

one of them thinks we're gonna have

inflation i don't know whether right or

not but you know

so to me it's almost the mirror

of

30 years ago when was george soros's one

down year

1981 he lost 22 percent why he was long

bonds he was just six months early i

don't want to be six months early

and trash myself

but i'm salivating but it's

you know i don't know the timing of it

and last question your uh

personal life one thing that is well

known is your big steelers fan

you're on the boards of a bunch of uh

of charities

but i know that your real focus is with

the harlem children's zone

why did you pick that one

well i i hit the lottery um

with this guy canada but but basically

it's a pretty simple story

um

when i went to work for for george

he had just retired

from money management

and

he he he wanted to give away 500 million

a year

i had no money so i never thought about

philanthropy but when i started making

money

i had a i had a personal

mentor and it was just it seemed like

the right thing to do

but living in new york

um

first of all i'm kind of parochial

because i came from pittsburgh

so

i wasn't really into the arts and i

thought giving to the philharmonic and

the moma was

i don't know they seem to have plenty of

money and plenty of supporters

and

i had a good friend i just met named

paul jones

and

you know we were we had a lot of

discussions about poverty in the area so

i joined the robin hood board

and

we had a board meeting up with the site

at this place called reedlin center for

for children and families

and i went up this sort of like

dilapidated stairs up into this little

room and uh

i meet this guy jeff canada and within

like an hour and a half the hair was

standing back on the back of my i said

this is like

one of the greatest

most dynamic leaders i've ever met

what's he doing in this little room

and then uh

five or six years later i was on the

real board it was jeff not me that

thought up

the concept of harlem children's zone

presented to a board i mean this is like

discovering

you know bill gates in a garage

uh as far as i'm concerned and and uh

so

you know he's he's he's had a massive

impact with a hundred square blocks up

there and now as you guys probably know

obama's trying to

use our model to do it in 20 cities and

uh

it's it's outside of my family it's been

the joy of my life but i just got lucky

and uh

i don't know why i was destined to meet

this guy but i did

i just want to take one minute and i

want to introduce arnold prasad

my boss he runs fxlm uh

you guys should know me by now at least

this time of the year

no we are a top bank guys

thank you very much thank you comments

thank you for coming and jeff thank you

for posting it

uh we have a surprise for you stan

oh god so

since you're a man that uh likes to

follow these markets and likes to melt

for his times

is jeff canada somewhere here

oh there he is

i didn't mean any of that stuff i said

about him

hey how are you

so um so stan we thought we'd want to do

something for you coming here and

spending the time with us

and then we realized that we are

government-owned bank with limited

screwed with limited resources and no

one wants to pay us

but anyway we asked the senior managers

of the bank to put some uh put to put a

donation together for the harlem

children's zone and they did and we've

raised a hundred and forty thousand

dollars well thank you

thank you very much

very proud to present you

so that is from most most of senior

managers in the in the markets area well

i know what the government's doing to

you so i know 140 000 is not what it

used to be it's a lot more so thank you

very much thanks a lot deeply

appreciated and um i would just ask just

so we can talk about what happens next

anyone who's in the fx element part of

our meeting if you could stay for a

couple minutes and we'll just tell you

where we're going everyone else thanks

for taking the time to come thank you

thanks jeff

foreign