enough market rallied like crazy, ended qe-1, went down, then they announced qe-2. market went up, when they announced qe-2 would end, a lot of news about government fights and got our debt downgraded, but if you look at the timing the market peaked out exactly when qe-2 did. so now that we have qe-3 forever, i don’t know when this thing ends. but is it for real? i don’t know what real means. what i do know is $85 billion a month being put into the markets, a lot of people took a lot of money out the last four years for a lot of reasons, tech selling in december, a lot of interesting buyouts in the last month or two. so you’ve got a great supply and demand situation for stocks right now. but, i’d analogize to the harpster on the wheel. it was easy to know qe-1 and qe-2 were going to end. this thing is probably going to end, even though i think qe is going to go on forever because all the lobsters are about to get into the pot. maybe we’re in the seventh or eighth inning but they’re going to get boiled at some point. but right now, supply/demand looks great. it’s been surprising that even with all this talk, with the knowledge that rates are going to change, the knowledge that bonds are not going to — i’ve been surprised that you haven’t seen more money truly move out of those bond funds. well, bonds are being subsidized by the same thing equities are. if you print enough money, everything’s subsidized. real estate, bonds, stocks, you know, we all think we’re clever, but there’s no reason bonds should go down if they’re printing — what is the government buying, 80% of the bonds? you look at the last three years or so and the fed’s purchases have been about 75% to 80% of all the new issuance coming out of trernry. we used to say the chinese were the largest buyers of treasury debt. now it’s ederal reserve. one of the frustratingngs we mention in our piece is those purchases are canceling market signals. the bond market has, and the stoeshl, have provided wonderful signals for many years as to potential problems out there, or potential signals. and when you cancel those signals, whether it be to congress or other people the markets themselves, you could run into a problem. i mean, i thought we were done with wage and price controls back in the ’70s, this is the biggest price control of my it’s one thing to control short-term interest rates. it’s another thing when you’re 75%, 80% of the bond supply and holding that price down. and we had a lot of, what i would call, malinvestment, dislocations back in the ’70s. i think at some point in time we’re going to find out, and it may be years, exactly where you had a misallocation of resources here. but this is a big, big gamble to be manipulating the most important price in all free markets. by the a question to you two, where does the fed get the money to pay the federal government to buy the bonds? so the american people, i don’t think, understand how simple this is. explain it. so the invention of the printing press has something to do with this. that’s it. i mean ultimately, there is one government. there is one integrated balance sheet. the country’s finances, responsibilities might be divides but the finances are really one, and i think becky to your question on the stock market, listen, the stock market might like this, a period of 1.5% or 2% growth, a period of negative real interest rates that go on for as long as the eye can see, that could be good for people that are interested in putting risk to the. but that’s not the right miss k. if the economy is growing below trend the economy is not bursting out to the upside of 3% or 3.5%, what we’re really staying is standards of living and opportunity for all the kids at harlem children’s zone are in a very different place than they otherwise would be and i think jeff’s kids need an economy growing faster than it is. you three, kevin, jeff, andstonly, you wrote an op-ed together, where independents, democrat and republican, came together to say you have serious questions about what’s happening right now. raise those questions and you brought up because you see the impact at the school and what you can and can’t do. these issues are often talked about as if they don’t have real impact on real people. and the thing that i think we represented, the american dream, the opportunity for people to do their hard work through their ingenuity, through their intellect to make it in this country on a level playing field where the deck is not stacked. now look, these guys are some of the best economists and business people in the world. that is not me. but i’ve learned one thing in 25 years of knowing stan druckenmiller, every now and then, something so profound is happening to this country. and even geoff canada gets it. i don’t get a lot of this stuff. when he talked to me about the tech bubble before it burst m than a year, i got that. i was like how come no one else sees this? mortgage? the mortgage crisis, stan told me about that mortgage crisis 14 months before the rest of america, and it was so clear, and i got it. here’s another issue that is so clear that i get this, and i think it’s time for the american people to wake up. my kids, these poor kids in harlem, they are being taken advantage of. people like ken langone is getting social security. who shouldn’t get it. i don’t know why he needs social security. and it’s going to rob it from mykids, who really are going to need this. i’ve been telling these kids, work hard, go to school, this is the american dream, this is the way you make it in america. a bunch of guys my age should not be taking from you — you’re over 65? way over. even the — even the ryan plan wanted to not touch people 55 and older. right. and a lot of people are out there saying let’s delay this for 10 or 15 years. let me tell you why you should not delay it for 10 or 15 years, and current seniors, we have to act on it now. mr. langone and his wife, what do you get a year? 48,000 a year. so any economist understands opportunity costs. 48,000 to ken and elaine, lovely people. my mentor, i love him, okay. is $48,000 in opportunity costs that could go to geoff’s kids, and other things. and let me just say one more thing about qe, because i think it pertains to this exact situation. i don’t understand why people don’t see qe as the biggest well transfer. we’re all worried about rich versus poor. this is trickle-down monetary policy. who gets rich from qe? people like me. people in the markets. it hurts our seniors — — in harlem? or seniors on fixed incomes, too. we’re going to take a break.
let’s continue our discussion — we’re on. we’re back! stan druckenmiller is — you — i haven’t got any. — nobody has hair. i need a hair cut. it’s starting to show on top. ken langone is over, geoff canada and kevin war be. off camera we talk about a lot of things. i think one of the things in the op-ed piece that we’re talking about is, we talk a lot about capitalism, and we have said capitalists don’t portray well. they portray well across dream prosperity. but viewing it the way you do, it’s a moral issue for generations to come in that they can’t be saddled — they won’t have the same opportunities that we have. and it’s clear what made this country great. it’s the ability of folk to believe in the american dream. to believe that the system is really fair, and it’s not stacked against them. you can’t get a bunch of old guys like me, robbing from the next generation when you’ve got real — you’ve got real issues in this country. we’ve got a college becoming less affordable. we’ve got a middle-class that’s disappearing. we’ve got people who have degrees from college who wonder if this whole thing is going, and then i’mling my young kids that this is the greatest country in the world, that if you play by the rules, that everybody has an equal opportunity. and it’s not true when part of the country is literally taking the resources from the rest
