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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

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[Byron Boston]: decoupling process of some sort

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[Byron Boston]: what will it be how dramatic will it be how long would it last we’re not sure oil

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[Byron Boston]: clearly has been a political commodity

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[Paul Tyler]: yes

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[Byron Boston]: for

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[Byron Boston]: ages it continues to be a political commodity today so we’ve got to come to grips

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[Byron Boston]: with the fact at dye capital the world has changed we don’t need to sit around and

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[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.