Today's number, $33,000. That's how much the average wedding cost in 2025. Ed, true story, on wedding night, my wife said to me — my ex-wife, I should add — said, 'I've got very good and very bad news. It's going to make you very happy and very angry.' And I said, 'Lay it on me.' And she said, 'Oh my god, your dick is so much bigger than your brother's.'
What happened to the PG jokes when all guests are on?
I could keep going. How are you, Ed?
I'm doing very well. It's freezing here in New York. It is unbelievable.
Yeah. Do you miss me? You haven't seen a lot of me in the last month.
I do miss you. Where are you?
That was very sincere. I'm in Jackson Hole. I've been in LA, New York, Davos, and now Jackson Hole, which by the way, those routes aren't easy. There's no airline that has direct routes to all those places.
There's surely some private air flights. Those are all the hot spots now.
Yes. And don't call me Shirley.
What are you doing in Jackson Hole?
I'm speaking. Am I allowed to say this? I'm at the annual meeting of...
You're not allowed to say it. Sorry.
He's at an Illuminati meeting is what he means to say.
I'm the keynote speaker at a — and notice how I said keynote, not just 'I'm a speaker.' Desperate for everyone's affirmation. I'm a speaker at a conference of an investment bank that is here in Jackson. That's all I'm allowed to say.
Not doing a good job defending against the Illuminati rumors. What's going to happen? Are we going to sacrifice babies and dance in a circle at Bohemian Grove? How does it work?
No, no, no. At 3:00 there's mountain biking and then at 4:00 we have redrawing the maps of the world in the lounge downstairs and income inequality — 'How to Make It Worse.' That's at 4:30.
Yes, that sounds like good fun.
And then I go back home on Friday and I'm spending a ton of time trying to organize and get some traction around this national economic strike. Everyone's calling my bluff and saying, 'Okay, get on with it. What do we do?'
Yeah, it was interesting that that got a lot of attention. Basically, Scott on the other show — as I always call it, the show that will not be named — Scott discussed the implications of what we should be doing about ICE and suggested that one way to fight back is to just go on a general economic strike, bring down the GDP of the nation, and that could create some incentive to change things. It got a ton of feedback. I know you're not on Twitter, but you were all over my Twitter feed. A lot of people were talking about it.
Did they have me in a bikini?
Not yet. Not yet. But I can speak to the people at X, make it happen. What did you make of the reaction from the world?
I was honestly — I wasn't expecting that people would have such a visceral reaction to that comment. I've heard from governors, actors, economic ministers saying, 'Yeah, it's a great idea. What are you going to do about it?' So literally people are saying, 'Okay, people are calling my bluff.' So this morning I was on the phone with Katherine Dylan putting together a website trying to figure out how I'm going to curtail my own spending. But the basic logic is I don't believe that — I think protests are powerful. Political parties don't start movements throughout history. It's people. And political protests are very cinematic. They make people feel good. But I would argue over the course of the last couple years, we've had some really dramatic protests, including one of the biggest for the No Kings movement. And then we feel good and then nothing happens. And I just think we need to be more strategic about this and say, what is the strongest weapon we have? And in America, consumers control 70% of the economy. And at every moment, we are hit with incredible offers to spend more money. And it's striking how little a slowdown in spending would dramatically roll the markets. I'm like, well, let's go for the soft tissue. Let's go to the epicenter. How do we start a chain reaction? What's the grid where we fire photon tubes into it and take down the entire Death Star? And what I've circled in on is AI. And specifically, if ChatGPT — just as an example — if we could convince a bunch of people to unsubscribe in the month of February, I'm calling this movement Unsubscribe February or Resist and Unsubscribe. If OpenAI were to see for the first time in its history a down month in subscriptions, they would have to report that to other investors. I think it would send a chill to Nvidia, Microsoft, Amazon. If people cancel their Amazon Prime, their Amazon TV, their Apple TV Plus, put off buying an iPhone for a month — I think that any significant move, anything, not even an insignificant move in the subscription rates and the revenues of these companies would have to be disclosed. And I think you would immediately see a reaction across these companies' valuations. And then given that 40% of the S&P is represented by these companies, you would see potentially just a dramatic echo effect, and that is a chain reaction. And if you look at Trump, he doesn't respond to citizenry, doesn't respond to shame, doesn't respond to the media. He responds to the markets. And that is the only time he ever backs away from this weird behavior is when the equity markets go down. He withdraws from these tariff threats or an invasion of Greenland. When the Japanese bond market got wobbly, he backed away from tariffs. And in recent history, the greatest political action in history in terms of action and speed was exactly six years ago. And that's when in Q1 of 2020, COVID hit. You saw literally the government move on a dime. Tons of stimulus, tons of mandates. Whether you agree with them or not, we've never seen that kind of political action globally in history at that speed. And it wasn't because people were dying. That's where they get it wrong. It's because GDP plunged 31%.
The most radical act of protest in a capitalist society is nonparticipation. So it's less about ideology and cinema and just more about mechanics. So I'm trying to figure out a way to start a movement. And I believe so many people have moved from the indignance part of the program to, 'Okay, what the fuck do we do now?' And my thesis is that the easiest way to create a dramatic reaction that the administration has to listen to is a very targeted, surgical national economic strike. And that's what I'm thinking about and trying to organize.
Yeah, I like the emphasis on targeted and surgical because I think one of the criticisms — which I think is a fair criticism — is that you don't want to try to hurt the Trump administration by hurting the real economy, by hurting regular American businesses. You don't want to just, 'Okay, I'm going to stop going to my local grocery store because I want to stick it to Trump,' which would end up backfiring on your neighbors and your local grocer. But I do like the idea of a targeted surgical strike towards a handful of companies that were okay with being very upset, i.e. the big tech companies, i.e. the AI companies. But these are really hard things to organize. And I think one question will be, you know, I wonder how many times you get to play this card. How possible is it to get people en masse to strike in this way? Because we have become pretty dependent on a lot of these products and services. But I do think it's a really good point and I think if it can be pulled off, and it can be targeted also in its messaging on what the demands actually are, I agree. I think it could be very powerful.
Well, you said a lot there, but one — I agree with you. I don't think it's fair for, you know, someone with some money sitting in Jackson Hole to tell people to stop buying groceries.
Yeah. And I think that this also — the onus has to be on some of the most fortunate among us who have benefited from the incredible system of rule and law, which is why I like...
And who make up half the spending. I would also just...
Yeah, exactly. And the reality is I could take my consumer spending down 30%. The average household can't do that. They just can't do that. And in terms of a target list, my target list is very strategic. All those sycophants and people who think if they wake up with the president's jizz on their face that he'll take their stock up. And that's the individuals who went to that ridiculous meeting and Tim Cook presenting the president with an inscribed hard drive. And I think you'd be shocked at how — I don't want to say easy it is — but I subscribe to three LLMs. I'm going to go down to one. I am thinking about withdrawing my funds and my stocks from US banks and transferring them to a Canadian bank in the short term. I have seven streaming media platforms. I'm going to go down to one. I'm not suggesting that people just sit at home. But these companies are so fragile in the sense that if anything looks like their growth, their subscriber growth is coming down, they're going to put off buying an iPhone for two months. I was about to go buy an iPhone, a new one. I'm going to wait a couple months.
It has to be surgical. It has to be around the most overvalued and quite frankly it has to go after the people that he listens to. And if OpenAI all of a sudden had its first negative subscription month, it would leak into all AI companies, 40% of the S&P, and you can bet the administration would respond. So as I've constantly said on this show, one of my many faults as a professional has been the difference between being right and being effective. I get indignant. I know I'm right. It's like, okay, great. Now what? If you want to be effective, a national economic strike that puts a dent in the growth of AI-centered companies that could start a chain reaction that would absolutely freak out the people who the president listens to and the president himself. Enough indignance, enough outrage. Let's move to action.
All right, let's get into our conversation with Katie Martin, markets columnist and editorial board member at the Financial Times. Katie, thank you for joining us.
So a lot we want to get into here. I thought we would probably start with what happened last week at Davos, where we saw a lot of controversy and drama over Greenland, which eventually led to another TACO, which your colleague Robert Armstrong has talked about a lot on our podcast as well. He of course invented the term TACO. We saw another one. I guess I just start with, what were your takeaways from yet another TACO that seemed to move markets again? What did we learn?
I think the main thing that we learned was that this TACO was much smaller than the last one, right? So if you look back to April last year, we had the announcement of the big Liberation Day tariffs and very quickly markets just got it in the neck and started falling incredibly quickly. This time around, we saw a much more modest reaction in markets. You know, stocks, okay, they fell about 2% in the States. It's not nothing, but it's nothing like on the same scale as we saw last year. And I think that's because investors have become so accustomed to this idea that Trump always chickens out, right? He's chickened out on various things before. He's chickened out on the scale of the tariffs before, therefore he will chicken out on Greenland. And so I think there's a lot of people in markets who never took it that seriously to begin with. So I guess the dangerous thing there is that it just means that without that sort of stabilizing force of markets, without that pressure that comes from stock markets really taking a serious hit, we get ever closer to the day where you're closer to disaster. You're closer to some sort of accident. But I think there's still a lot of people who think that markets' primary function is there to be as some sort of check and balance on the president, and that's just not how it works.
Something you wrote recently about the TACO trade. You said, quote, 'One of the reasons this moment in history is such a head fake for investors is that it demands they do opposite things at the same time. They need to shut out the noise, but also listen to it carefully, ignore it, but also take some pretty radical action.' I feel like that pretty much sums it up. And something that we've been thinking about, you know, something Tom Lee has said, which I think on the one hand is true, is that if you want to outperform as an investor, you kind of need to pay a lot of attention to what's happening in the White House because the White House is moving markets. You need to see what are Trump's priorities. Which companies is he trying to award? Which businesses is he going to award? That's something you need to keep in mind. But at the same time, if you just follow that, he also TACOs half the time, which means you're going to be whipsawed in multiple different directions and probably lose money in the process. So it's hard to know what rubric to follow. Either you go with what the president is telling us and assume that it's real and follow it, or you kind of completely tune it out. But if you go with either of those strategies, it doesn't really work. So I guess my question is, what is the strategy? How are you supposed to tell what's real and what isn't?
God, I wish I knew. But when I speak to asset managers, hedge fund managers, you know, people who run large pots of quite conservative pension money, for example, around the world, they split into two camps, right? There's asset managers who are in the States who are US dollar-based. They don't really care if the dollar goes up or down. It's not that material to their bottom line and to how their portfolio performs. They see in front of them a US market that performs beautifully and a lot of them really don't see that much of a problem here. Now when I speak to asset managers who are in Europe, who are in the UK, who are in Asia, they all say a very similar thing to me, which is, no, something here has broken. First of all, the dollar has broken. The dollar is a lot weaker, and if you didn't manage to hedge out that dollar risk last year in 2025, then you had an absolute stinker in US markets if you're euro-based or sterling-based, for example. So the dollar has broken down, but more fundamentally than that, trust has broken down. And so now, particularly actually since the heat really increased on Greenland, what investors are saying to me is that, look, we have to accept that we live in a world where a president who is willing to demolish the East Wing of the White House and make threats against the Federal Reserve and literally in real life threaten to invade a NATO member is willing to do all sorts of things with your investment portfolio. Maybe, you know, when people are wargaming very extreme scenarios, that goes right up to including, is he going to pay me back on my treasuries, or is he going to get into some sort of argument with me or with my government that means that maybe he won't do that one day? What's the risk premium that I need to embed in my US assets to compensate me for these sorts of risks that didn't exist before? Also, as you mentioned, there are companies that he favors and companies that he doesn't favor. It makes it a very difficult decision for an investor to think, well, do I get involved in those companies? Do I avoid them? What are the ramifications of me selling down a holding, for example, in a company that is on Trump's good list, if you like? So there's a whole bunch of reasons why investors outside of the United States are saying we need to hedge our dollar exposure and we need to diversify. There's a lot of investors who have just mechanically churned 60, 70% of their equity exposure into the US just because that's how big it is in the global indices. And maybe that number is too high. So maybe they need to put more money to work in Asia, in Europe. And by the way, those markets had an absolutely fantastic run in 2025. So people are thinking very, very differently about what it means to invest in the US and how risky that is and what they want to be compensated for it.
Do you think that is the reason why all these global foreign markets outperformed the US by such a huge margin last year? Is this basically — I mean, there was talk of the sell America trade last year, which was getting a lot of momentum and heat early on after Liberation Day. Then it kind of dissipated, but quietly at the same time, maybe people weren't putting a lot of selling pressure on US stocks because the S&P rose pretty significantly, around 17%. But as you say, all of these other markets way outperformed the US. Is that a result, as you point out there, of these European pension fund managers deciding, okay, maybe I'm not going to sell my US stocks, but I'm certainly going to increase my international exposure?
It's certainly part of it. And look, you can't avoid the US and you can't avoid US markets. They are just so much bigger than European markets. You can fit like the whole of the FTSE 100 index just inside Apple multiple times in terms of the market cap. You know, it's important to bear in mind just the sheer size of this thing. The entrances into European markets, for example, are much, much narrower, and that's why when you have not even a huge crowd moving into European markets, but just more people than usual moving into European markets, you get gigantic moves. So you look at the performance of Spain last year, for example. I think it added 50% in euros or 70% in dollars. You know, some of the moves here are incredibly substantial. But it's exactly as you say. I think it's very tempting to paint this whole phenomenon as sell America. It's not quite sell America. What it means is that over time you take that allocation down. And I know that's less dramatic and it might be somewhat less satisfying to some people, but that is the reality of it. And it takes ages. And I was just today speaking to a very large pension manager who was saying, we're very conscious that we don't want to over-rotate. We don't want to move too far out of the US. We don't want to sacrifice the performance or find ourselves overly exposed to other small markets. So, you know, it's easy to forget, especially with some really, you know, large conservative investors, just how many investment committee meetings you have to go through to get to the point where you take a conscious decision to peel away from a big global benchmark. It's really not straightforward. It can take a really long time. But I do feel like this is a durable shift in how global asset allocation works and that we will be looking back on this moment in 10 years' time and thinking that was it. That was the point at which the US started to lose its global centrality.
You brought up a key point that I think a lot of market analysts miss or the media misses, and that is while the headline number, the S&P is up 17%, if you're a foreign investor and you're one of the many markets where the dollar declined by 10%, basically all your returns are wiped out. I mean, the US has not been a great performing market for a lot of foreign investors over the last year if you take in the currency devaluation. Leading into my question, a lot of activity and tumult in the Japanese bond market. Why should we care? The Japanese bond market has, as I'm sure you know, for the longest time, been aggressively boring.
Aggressively boring. I love that. That describes me at a bar in the 80s. Welcome to Prof G Markets, Katie. I'm sorry, Katie. The Japanese bond market.
Sufficiently boring that genuinely some Japanese government bond trading floors have like mini golf set up on them, right? It's just that nothing happens. If you get a few slivers of a percentage point move in one direction or another, it's a huge drama. Okay, so that era is over. What we're seeing now is actually quite lasting inflation in Japan, which they've had the opposite problem for the past few decades. They finally got inflation that sticks. This is a difficult adjustment for the Japanese economy, for the Japanese population and Japanese financial markets to get used to. And there is a suspicion that the central bank is slower than it might have been in raising interest rates to tackle that. And of course, if you get inflation, that means that it's bad for bonds and that pulls up the bond yields. It pulls up borrowing costs. Now, where this goes next is that's the sort of pertinent question, I guess. And there have always been people who've been looking for a crisis in the Japanese bond market because it's so big. You know, Japanese debt's GDP is what, 200%, something like that. It's always been enormous. So there have been people who've been calling for some sort of reckoning in that market for a really long time and it simply hasn't happened. It is plausible that we get a serious problem now. And what that serious problem would look like is potentially that yields blast higher, right? We get a really meaningful drop in Japanese government bond prices. Yields blast higher. We get something that looks like the Liz Truss moment in the UK government bond market in 2022. And that first of all leaves a lot of important Japanese investors with big losses, but also means that all of a sudden yields in Japan are so high that why would you, as a Japanese life insurance company, bother investing in the US with all the problems that you can see in the treasuries market? Why would you bother with the French government bond market or German or UK or whatever?
And that's referred to as the carry trade. Is that right?
Currently, exactly that. They go overseas because they want to get those higher yields. Why would they bother if you can get the higher yields at home? There is potential for that to be disruptive, but I think it's sort of slightly kind of, you know, disaster hunting to think that that is necessarily what is around the corner. Most likely, you know, Japan is blessed with very smart policymakers. They know what they're doing. They know what's at stake. The most likely path from here is that you actually end up with a government bond market that offers decent compensation to domestic investors, maybe even to overseas investors. That's a healthy adjustment, but it does mean that along the way you get some moves that do feel a little bit uncomfortable for people who are used to the Japanese government bond market being a place where fun goes to die.
