Still Nonsense After All These Years

0:00Ladies and gentlemen, it gives me great pleasure to introduce the Henry Hazlitt Memorial Lecture. Carolyn Baum is a columnist at Bloomberg News, where she has worked since 1998 after spending 11 years at Dow Jones. Her work has appeared in Barron's The National Review, Bloomberg Markets, Bloomberg Personal and The International Economy. In April 1996, Worth Magazine profiled Miss Baum as the Mary Mistress of Bonds. Miss Baum appears regularly on Bloomberg TV and radio. From March 2002 to August 2003, she hosted her own weekend radio talk show, No Nonsense. She makes guest appearances on NPR and local business and financial news radio across the country.

0:48Her book, Just What I Said, was published in August 2005 and we have copies downstairs. The National Headliners Club recognized Ms. Baum's work with consecutive first place awards in 2004 and 2005 for her wire service commentary. She won the News Woman's Club of New York first place award for wire service commentary in 2001 and then again in 2006. Ms. Baume holds a B.A. in Political Science from Tufts University and an M.A. in Cinema Studies from New York University. Her postgraduate education includes courses in nonfiction writing, economics and technical analysis. She will speak to us on Still Nonsense after all these years. Please help me welcome Carolyn Baume.

1:47Anyway, it's a pleasure, we're the women, I don't say, oh good, okay, it's really a pleasure and an honor to be here today. I have never given a named lecture before, you know, I've given lots of speeches and I've lectured at universities, I've been the keynote speaker and I've been a luncheon speaker, the only qualification for which seems to be to prevent the audience from going to sleep after the meal. But it's a special honor to be asked to give a named lecture when the name attached to it is someone as distinguished as Henry Haslett, economist, journalist, economic journalist.

2:33Now I first read economics in one lesson about 20 years ago when I was just starting my real economics education, you know, not the stuff they teach you in school. And in preparation for my talk, I decided I would go back and read it. Now imagine my surprise and my horror when I learn that some of my best ideas are derived from him. You know, and here I thought I was being original all these years. Anyway, for example, Hazlitt's pension for looking at a policy and carrying it through to its logical conclusion and seeing how all groups are affected. I remember back in 1992, right after Hurricane Andrew, it was a category five, very powerful hurricane swept the coast of Florida, left a lot of devastation and destruction in its wake, and I remember turning on CNBC and the anchor was going on and on about, you know, how, you know, this is great news for GDP, you know, and I guess in a very haslet attribution, not even knowing it at the time, I remember writing something like, well, you know, if natural disasters are so good for the economy, why sit around and wait

4:01for Acts of God to Occur, why not nuke our own cities and then we can rebuild them? I mean, I don't have to tell this audience that wealth destruction is not good. When you have a hurricane, you may get more housing starts, but you don't have any more net new homes. Industrial production goes up, doesn't add to the capital stock. Destruction of wealth is not good. Why it's good to use scarce resources to get back to square one is just anybody's guess. Anyway, bad ideas like this never die and bad economic ideas have a way of coming back in a little bit different form as if on cue at certain times in the business cycle or in response to certain events such as hurricanes.

4:56As a financial journalist, I've always had fun and trying to upend economic nonsense. I was leafing through my book, which Joe mentioned, it's a book of columns published in 2005 that Mises Institute was good enough to stock in their library, and I was leafing through the book and I noticed a headline that I wrote in the aftermath of Hurricane Floyd in 1999, And the headline for this column was, Hurricane Sweeps Coast, Nonsense Sure to Follow. And it did. You know, we had the whole thing again about how this was going to be good for GDP. Anyway, that column is in a chapter that I entitled, Still Nonsense After All These Years, and I thought that would be a good topic for today's talk.

5:50Now I know this audience, above all of others, will appreciate some of the economic nonsense that passes for commentary and analysis. Three years ago I had the misfortune to review a book by a well-known financial journalist on why bubbles were good for the economy. I kid you not, I mean the title was POP, Why Bubbles are Great for the Economy. And the author made an argument that investment bubbles leave behind a usable infrastructure, which are a net positive. For example, the tech bubble that burst in 2000. I remember reading we had enough unused fiber optic cable to go to the moon and back six times.

6:42Well, according to this author, when something like that happens, a whole new generation of Entrepreneurs can come in and they can pick up equipment, office space and talent on the cheap. In other words, out of the ashes of global crossing sprang Google. What about the cost? Haslett probably would have said that investors overpaid for resources that were underutilized, sometimes for years. Price signals were distorted just as they are with inflation and wealth destruction is Not Good. The author of the Bubbles are Good Doctrine book had a lot of trouble when it came to defending the housing bubble in 2007, it was already deflating then.

7:30And I pulled out this quote to read to you, this is what he says about the benefits of the housing bubble, quote, the bubble achieved a goal that billions of federal dollars and and Thirty Years of Good Intentions Could Not, Gentrification and Renewal in Formerly Some of the Most Wretched Spots of Cities, Ashes to Ashes, Dust to Dust, Wretched to Wretched. I wonder what he'd say now about the blocks of urban blight and foreclosure signs. Even when my review, even when I reviewed the book, I remember including at that time in 2007 some snarky comment to the effect that I hope his publicist didn't schedule too many book events in Phoenix, Las Vegas, or Fort Myers, Florida, which was ground zero for all that gentrification he talked about.

8:32Fast forward to Haiti's devastating earthquake earlier this year, and the Wall Street Journal dragged out, the bubbles are good, disasters are good argument, in a long weekend section essay. This time the author was a professor of American studies, and he actually invoked Schumpeter's Gale of Creative Destruction in support of his thesis. Now I'm no authority on Schumpeter, but I suspect his gale didn't include high force Rather, it was a process by which capitalist economies progress, with innovation leading to the creation of entire new industries and the demise of superfluous ones.

9:20Enough on the subject of destruction is good. Let's turn to another one of my favorite pieces of nonsense, something that I've labeled loop-de-loop economics. This school of thought seems to think that prices rise and fall on their own accord and that cause and effect are one and the same. Let me give you a couple of examples. Oil prices. This is the idea, and it's promulgated in every newspaper, every news wire, and a lot of economic research that higher oil prices slow the economy and lower oil prices stimulate it. Well, it makes you wonder why we spend so much time worrying about the Federal Reserve if OPEC can run monetary policy.

10:07You know, it's dangerous actually to sleep through Econ 101, especially the micro stuff. And I always like to tell people, if you mastered the law of supply and demand, you'll be far ahead of most of the PhDs on Wall Street, who don't seem to know the difference between a shift in the curve and a movement along the curve. Now look, if the price of oil rises because we all want to consume more oil at any given price than we did before, it's an outward shift in the demand curve. We get a higher price, a higher quantity demanded. So you can't argue in the same breath that the higher, you know, the increased demand that led to a higher price, the higher price is now going to lead to reduced demand.

10:53I mean, they aren't the same things, but economists do just that. They can't differentiate between a higher price when you shift the demand curve out to a higher price when you're moving inward along the demand curve, a supply shock. It may be the same price, but it's not the same outcome. Anyway, I always mean to ask some of these people how we ever get out of this closed loop with higher prices slowing demand and lower prices increasing demand. Oh, and then there's the question of they talk as if this revenue disappears from higher oil prices. I mean, it doesn't. It doesn't. You know, it goes somewhere.

11:38It may be a transfer from consumers to producers, you know, but producers, increased dividends, So shareholders, consumers benefit, or they invest in research and development, in which case they hire people and pay them a salary. Even if it goes overseas, the money still doesn't go into the ground, the profits don't go into the ground, comes back here in terms of securities purchase or foreign direct investment. So just to summarize loop-de-loop as it pertains to oil prices, higher oil prices, slow the economy, lower oil prices, stimulate it.

12:23You have to wonder why some bureaucrat hasn't decided to search for the perfect oil price that will keep the economy growing at its potential in perpetuity, if it's so easy. Now, this thinking doesn't just apply to oil prices, it's applied to housing prices about a year ago. Various analysts were quoted, sounding very authoritative, saying that home sales are not going to pick up until house prices stop falling. Okay, so why did prices start falling in the first place? You know, more sellers than buyers. Now, I understand that potential homeowners, like investors, may not be bottom pickers. They may be happier Buying a Trend, Buying a Trending Market.

13:14But with foreclosed homes being added to the already bloated inventory, home prices are not going to start rising until demand picks up. Now what really gets me is when you translate this thinking to long-term interest rates and then it's enough to make your mind spin. Higher long-term rates slow the economy, lower long-term rates give it a boost. Once again, why do we have a central bank? That's not a question for this audience. That's not appropriate. For most audiences, I could ask it. Why do we have a central bank that is constantly trying to find the appropriate short-term interest rate if long-term interest rates are what matter? Look, when you have a monopolist in the short end of the yield curve. The long rate serves as a kind of gauge on what the central bank is doing.

14:11Newt Wichsel, Austrian, socialist Austrian, but I mean an Austrian nevertheless. I mean Wichsel called it the natural rate and the bank rate or the money rate and he saw a value in that relationship which nowadays is known as the spread, the yield curve or in academic circles the term structure of of Interest Rates. The long-term interest rates can rise again because of increased demand or decreased supply for your people willing to lend to the U.S. government. How can you tell with something as vast as the credit market whether long-term rates rising, what the source of it is?

15:00If you don't need a treasury finance or a budget expert, the Fed will do that for you. I mean, if market interest rates are rising out the curve, if all rates are rising, and the short-term rate is the one controlled by the central bank is not rising, you can be pretty sure that a steeper yield curve is expansionary. Because what it means is the short rate would be rising if the Fed weren't pumping out sufficient reserves to keep it from doing so. So, you know, a steeper yield curve, the spread it reflects the stance of monetary policy. Now, the loop-de-loopers like to look at long-term rates in isolation, just like oil and house prices.

15:50And in every cycle when the yield curve inverts, as it ultimately does, the cries go out that This time is different, an inverted yield curve does not mean what it meant previously, and especially now if the economic statistics look good, and sure enough, as night follows day, the curve inverts, the expansion ends, recession begins. And it is interesting because the official date of the last recession, December 2007, the long-term treasury yield was yielding about 4 percent and I remember doing, I write about the yield curve frequently and I remember having a lot of arguments with people saying, I mean, the economy does not go in recession when long-term interest rates are at 4 percent, so be it.

16:42While we're on the subject of long-term interest rates, I want to talk about another subject near and dear to my heart, the bond vigilantes, another nonsensical concept. Presumably, these self-appointed gunslingers roam the globe in search of irresponsible governments and look to impose some discipline on them. And the idea was introduced by economist Ed Yardeni in 1983. And the idea was something that if the monetary or fiscal authorities weren't doing their job, the credit market vigilantes could do it for them and impose some discipline. Sorry Ed, a trader selling bonds and a central bank with a printing press are not fungible.

17:31In fact, if the central bank is inflating, the public will expect inflation to be higher, will spend more today, because it's going to cost more tomorrow, long-term interest rates notwithstanding, and a steeper yield curve, all things equal, will induce banks to create more credit, assuming that they are not balance sheet constrained, as they were coming out of the 1990 recession and the current one. Now the vigilantes may have gone underground during the Great Moderation, but they too did not die. Instead, they get holed out every time people are worried about easy money or fiscal spending. When they do, I'm always reminded of my late friend and economics teacher, Bob Laurent, who wrote under Milton Friedman, he was the best monetary economist I knew, taught me economics on the phone over the years.

18:27And he's certainly the last person to advocate the idea that bond traders can do the central bank's job. And I remember I used to call him up when the nonsense would start, you know, and he would always chuckle and he'd say, you know, I have to wonder why like some of these markets like Brazil or these hyper-inflating Latin American economies, why the vigilantes can't work their wonders there. Now, the good news is, I do hear the vigilantes have been sighted in Greece, and I imagine that there's enough work in Zimbabwe to keep them busy for a long time. While we're on the subject of inflation, another one of my favorites, and we have to deal with this several times in each expansion, is that beast known as wage inflation.

19:17Of course, there is no wage inflation, it doesn't exist. Businesses are a price, they're the price of labor, they happen to be a big input price, especially in services, in the services industry, but they don't cause anything. In order to believe that wages push up prices, that thing called cost push inflation, you'd have to think that businesses are dumb enough to pay someone more than their marginal revenue product. It would be one thing if we lived in a world where the unions had great sway, but in a globalized economy and union membership down, this idea of wage inflation still persists, and it shows up of all places in the Federal Reserve minutes, with the Fed wondering about Another one of my favorite pieces of nonsense is the idea that there is a fixed amount of work, that if we could just curtail immigration or restrict trade, there would be more jobs for More Americans.

20:46Now this one actually has a name, I had to make up loop-de-loop, but this one is called the Lump of Labor Fallacy. And France fell victim to the Lump of Labor Fallacy about a little over a decade ago when the socialist government decided to reduce the work week from 40 hours to 35 hours. The logic went like this, if it takes one man 40 hours to do a job, and one man is limited to 35 hours, it will take 1.14 men to do the equivalent of 40 hours of work. Of course the flaw in the logic is that 1.14 men need two benefit packages. So the 35 hour work week has been effectively repealed, but not before the French took to to the streets to protest the forced erosion in their quality of life.

21:44The lump of labor fallacy was revived in 2001, the jobless recovery, except this time it was productivity growth that was the enemy of hiring. Of course, expansions with the strongest rebounds in productivity seem to also have the strongest and don't let the facts get in the way of a good story. Even if immigrants displace American workers, they increase the size of the economy, which adds new jobs. I think it was Milton Friedman who said, you know, it's really not tough if you want to create work. Get rid of earth-moving machines and go back to shovels and forget the shovels and use spoons.

22:30People who think the quantity of labor is fixed probably buy into the idea that the demand for goods and services is finite as well. This piece of nonsense makes an appearance usually when the economy is struggling to rebound from recession and things aren't quite going according to plan and usually some This idea reached its apotheosis in 2004, with the publication of a book called The

23:24This book landed on my desk courtesy of some publisher or publicist and the reason it piqued my interest is that the field of gloom is usually populated by Malthusians who worry about the inability to produce enough food to take care of a growing population. I mean, here was someone who actually said demand was satiated. This author argued that we had reached something called an innovation saturation, that there was nothing capable of reinvigorating the economy. Well, who knew we needed an iPod before Apple came up with an idea, successfully produced and marketed it?

24:09And even if there's nothing new, we want more of the old stuff, we want bigger houses, fancier appliances, more cars. In the 50s, it was a car in every driveway. That gave way to the two-car garage, now the three- and the four-car garage. I always like to tell people that if I'm going to worry about something, it will be the sun going dark in five billion years and not the death of demand. Of course, the list of bad ideas that never die would not be complete without not mention of Keynesian economics which unlike its founder is never dead in the long run.

25:00Instead it comes back to haunt us regularly. Now the neo-Keynesians may debate whether the spending multiplier is 1 or 1.3 or 1.5 or whether you get a bigger spending gives a bigger spending on infrastructure gives is a bigger boost than transfer payments or entitlement spending, but the one thing they never ever question is how it is that transferring money via taxation, inflation or government borrowing can be a net positive for the economy. Bastiat laid it out 160 years ago and broken windows are still the rage today.

25:46I could go on, but as I said in the beginning, bad economic ideas never die. I've made a career of upending economic nonsense, so I, for one, would be very sorry to see it go. And with that, I'll be happy to take your questions. gentlemen there yes I do you know and and and readers write to me sometime you know we're actually at Bloomberg not allowed to criticize the media so sometimes I I'm not going to get away with it by saying Princeton Economics professor, you know, but the editors are asleep at the wheel, but you know, readers are just outraged and they write, so where's your PhD that you can criticize a Nobel winner, so, yeah, gentleman back there?

26:56Why do they never die? Because on some level, if you don't think about them, I guess it makes sense, you know, because we have to find something. Government has to do something to make it better. No one wants to undergo short-term pain, so we end up with long-term pain. I don't know why they don't die. You would think the people that promulgate them should know better. Back there? Yeah, I do sometimes.

27:45This has been a period when there's been a lot going on. I had never written about health care until last year just because I can't understand in my own and I figured, you know, how could I write about this, but I got so angry last summer when I heard Obama wanted a bill on his desk by August 15th that I had to dive in. I don't know, you know, it's not easy cranking out, I crank out two columns a week. I used to write a lot more, but it was a little more market driven and stuff, so I don't know I don't know if you'd call it writer's block, but finding an idea that is new, fresh, that you can bring a new way, some value added to it is not easy.

28:34When I did my book, my book is a collection of columns, but it's organized by theme, not by topic. And I remember when I put it together, I remember I came home one day and I said, you know, here I thought I wrote the same column, six columns over and over. They're actually 18, you know, so. So, thank you. Gentleman here. In your estimation, who benefits from or whose interests are served by the propagation of these bad economic activities?

29:28So, they benefit from bigger government and more one-sided, you know, distribution. But it's not, they're not just propagated, it's not government propaganda. The government takes the actions, but, you know, there's a lot of Keynesians on Wall Street, you know, so I don't, I don't know why, it's just, it must be a very tempting I'm sure there's some of it, but this is what's taught in the schools, I mean, right?

30:24I was listening in the last month, I was listening to a Rothbard lecture that Max, a young intern at Bloomberg who's a good Austrian, god I must be 19 or something like that, learned a lot from him and he had sent me some links and said you have to listen to this and Rothbard was talking about Mises and Hayek not being able to get hired and salaries being paid by Businesses, and yet every Marxist could get a cushy seat at an Ivy League University.

31:52Well, I think there is a trade, you know, you get access on the other side of the quid pro quo is information and, you know, I'd like to think that, I mean, I don't, I'm not a reporter in the sense, but I'm trying to think at times in in my life that I've slanted something in order to get a story. I mean, I'd like to think not. And I work with some people who are adamant on background. No, why aren't you putting your name on it?

32:38But it's more prevalent in Washington. I don't understand why if various administrations, when classified information isn't leaked to by a member of the staff and then out through the newspaper they don't do something about it, but they don't. Well, you know, the taxes come first and the additional, you know, you know, you know, The additional health care benefits aren't fully implemented, I think, until 2014.

33:25So as a friend of mine likes to say, the way to eternal life is as a federal government program. I suppose once it passes, it will be hard to get rid of it, even if they clean house in the next election. I'm not an equity person in terms of how it's going to affect stock prices and what's already built into that. But again, from what I've learned and read, there's a lot of good ideas about how to fix health care out there. I mean, why do these microcosms like the Cleveland Clinic and even some Mayo and even some county health associations deliver quality care at at Lower Costs.

34:14But I know that with the federal government running, it's certainly not, we're not going to find the ways to create incentives. And I even read something which I couldn't believe that the penalty, and when Obama came out with his 12-page plan that he wants to incorporate into the healthcare bill or that the CBO is now scoring. I mean it doesn't have anything to score but I think it's it's being developed that you know everyone every American must buy health care and the penalty for not buying it is so low I can't see why a young healthy person would not wait till the ambulance on the way to the hospital. So there's some really bad ideas on there. You know you read someone like the the The Dean of the Harvard Medical School on an editorial page has done a couple pieces with very thoughtful ideas.

35:15I mean, I don't think the Republicans would have done anything about health care, so I don't think that's the answer either. But it seems to me that we're rushing something that's very complicated, and my personal view is that we do have a moral obligation, not a right, but a moral obligation to try and help people get access to health care, whatever that is, whether it's by a subsidy or something like that, but I think some of the things they're doing is stupid and I don't think it'll be a net positive for the economy. Yes? not at Bloomberg News so well you know I reviewed the two biographies of Ayn Rand that came out last year, and you know, sales have zoomed, I mean, some of the stuff that you read about the Tea Party movement, you know, with grandmas walking around with the, you know, Federalist papers, you know, waving the Federalist papers, no, I mean, I think that's a great story.

36:36I think there is renewed interest, but certainly not in the news media where I work, and in the nation's academic institutions. Well, I happen to like Bernanke. I think he's a man of integrity that wants to do the right thing. I also know that the Fed usually doesn't get things right and this idea, I don't know how technically you want me to get that, you know, they're going to use the interest rate on excess reserves to prevent the banks from lending them out. Well, what's the risk-free rate you have to pay these banks to when the economy is expanding and banks are lending What rate are you going to have to pay to prevent this bank, or that bank, from lending in?

37:53I think, unfortunately, we will end up with more inflation, but I don't think Ben Bernanke is Arthur Berns to Richard Nixon, which is, we're going to expand the money supply for of the 72 Election. Technically, do they have the tools? Yes, but the fact is, it still seems to me that they have to sell assets. How can you lock up a trillion dollars and keep repo-ing it out? I mean, you can do that, but I just don't think that that is the solution. So, we live in interesting times. Back there? Yes, you in the black? Black turn on. Well, I mean newspapers are closing, cutting staffs, revenue is down, I have to say the revenue is down. Yes, it's changing a lot. The risk is you get some of these situations where something starts on a blog and becomes fact. The story about the New York Times having a scandalous story on David Patterson, governor of New York, and his sexual exploits started

39:35on some blog. It turned out they were working a story on his top aide and what he did to try and interfere with that. Information is good, but I think a lot of people see anything they read on a blog or a website as fact. But it's good to have sources of information. I think, unfortunately, the newspaper industry is continuing to die. Bloomberg bought Business Week, I don't even, and we also have a monthly magazine, I can't imagine how you can do a monthly magazine in this day and age, how can you plan something with a lead time of their working three months before, either someone's done the story, it's reversed, or something like that, it's very hard, I don't think we're going backwards though, although I still read physical newspapers, I like them on the train in the morning on the way to work, Luddite in that sense.

41:04Well, since I'm not trained as an economist and I couldn't do the math anyway, I always had to rely on the intuition. But I don't know if you'd say in the journalistic profession. I mean, it seems to me risk management, which is, you know, we'll get better risk management and we'll have a financial stability regulator that's going to look out and find out where this is before it, you know, upends the system again. I don't think that's a particularly a journalistic question. I mean the big econometric models, I don't see anything happening to, you know, for firms to move away from that sort of forecasting. I don't really, I'm trying to think, I don't really talk to use model-driven stuff. I mean sometimes I like to know what a Consensus Forecast is, and I'll use a survey or something like that. I don't know that the journalistic profession is that tuned into models.

42:13______________ But this wasn't a journalist. This was someone in the economics profession. You know I think, sorry? Yeah, I remember reading that. You know, I think it's one of those preaching to the converted. I think that the people believe in them, just believe there was something about the input to the model that was wrong, and those that don't still think there's no good. So, back there.

43:00I just I don't know any more that's been in the press so I really I don't I can't I don't shed any light on that. I read the journal's editorial page regularly.

43:45I read the Times, too, because as I said, sometimes I get my best ideas from bad stuff. I try to think who I read. I mean, I look at a lot of the blogs. I look at Mises. I look at econlibrary.com. I don't know what the name is. I'm just drawing a blank. I'm not Sarah Palin. I really do read. but I read so much in the course of the day and it's all a little bit different. I have columnists I like, you know, I have economists that I do like, research that I read. So there's an Austrian, you know, Mies Shedlock, I don't know if you know him, Mises Global Economic.

44:31I think he's pretty popular among the Austrians. So, if I think of anything, I'll let you know. Yes, back there? Just a comment on the fact that the banks are more reserved. If I understand it, you know, the whole way the banks are outlining the country... Correct, exactly. The banks that are more reserved... Exactly, exactly. Like, what's the difference between paying banks to hold excess reserves and increasing the money supply? I did a piece earlier this year, and it's really far out, but for the first time ever, the Fed has low-yielding fixed-rate assets. It has all these mortgage-backed securities, 4 percent, something like that.

45:20It doesn't own a lot of T-bills. In the old days, in a rising-rate environment, it used to benefit from reinvesting at higher rates. On the other hand, it's going to have floating rate liabilities. You could get a point where, if the funds rate goes by rough calculation to something like seven percent, that the Fed is no longer self-financing. And I think if the Fed had to go to Congress, you know, for an appropriation, that would even be worse than what we have now. Well, you know, I think in the last 20 years, you know, when the Bank of New Zealand went to an inflation target, and I think actually the central bank governor could lose his job I think inflation targeting helped a lot of countries that hadn't been able to solve it.

46:32I know the Austrians think an increase in the money supply isn't inflation, but I'm talking about inflation as most economists define it as an increase in the price level. The problem as I see it is that the Fed, for example, does not tolerate deflation. So while you can say, you know, they define price stability as 2% inflation a year, well, at 2, 2.5%, I think the dollar loses purchasing power in 35 years. So what it may be price stability today, which, you know, Mr. Greenspan used to define as inflation so low that it's not a factor in business or consumer decision making. So what they call price stability in a one-year time frame is certainly not price stability over the long run.

47:20And by definition, they never tolerate a CPI of negative 1%. There's not much difference between 1% and negative 1%. Tell me what your question again was. I went off on a tangent. What's going on in monetary policy? Well, certainly the Europeans now are having to struggle with the issue of having one central bank and 16 sovereign states. So I think that's an interesting something to watch about how that works out. I don't know, I notice when you go to a lot of the central bank, the inflation targeting websites, they are a lot more transparent than the Fed's website.

48:12And the Fed has a good website, lots of research, statistics, but, you know, the ECB is very specific about, you know, their monetary stuff and other stuff, and it just, I think it makes a difference. Isn't there a big difference? I think that the transparency that some of these countries and central banks never had is a big plus. You know, I have a favorite saying, during these times when interest rates are going up, the Treasury would always send out someone from domestic finance to say, You know, the Treasury will have no trouble selling its debt.

49:10I like to say the only question is at what price, you know, and I still think that's the answer. I mean, would we have a failed auction? Can you imagine that in this country? I mean, demand for Treasury still seems to be quite strong, so back there.

49:36Well, I think Margaret Thatcher gave the euro like a couple years, you know, and in her time she said, you know, the currency, the common currency wouldn't last. You know, I think these countries appreciate the advantage of being in the union and, you know, not having looked at Greece's books. You know, I don't know what will happen, but I really don't have a view on whether they would choose to leave so they could inflate, or it looks to me like they're trying. I mean, they lied to get into the Union, so why wouldn't they try and stay in there?

50:22Anyone else? All right. Well, thank you.