Welcome to Ask Fear and Greed, where we take your questions and do our best to answer them. I'm Michael Thompson, and good afternoon, Sean Aylmer.

Welcome to Ask Fear and Greed, where we take your questions and do our best to answer them. I'm Michael Thompson, and good afternoon, Sean Aylmer.

Hello Michael, Sean.

Hello Michael, Sean.

I love this show. I know it's only a bonus episode, but it is so interesting to see the questions that listeners have been asking, and today's is a great question that comes from Greg. He has sent it in via the website. He went to Fearangreed dot com dot are you and sent it in there. You can also do it via LinkedIn or Facebook or Instagram or any of the social media platforms. But Greg's gone to the website and he says a timely question for Ask Fear and Greed. He goes On Monday. Last week, the ASX tumbled, but there was a lot of talk about interest rate sensitive stocks falling disproportionately relative to the index. Given that interest rates have started to fall across the globe and that the RBA's launch on that rate cutting cycle appears somewhat imminent, the reaction of the market seems totally counter intuitive that stock's sensitive to rising interest rates would plummet when rates are next going to fall.

I love this show. I know it's only a bonus episode, but it is so interesting to see the questions that listeners have been asking, and today's is a great question that comes from Greg. He has sent it in via the website. He went to Fearangreed dot com dot are you and sent it in there. You can also do it via LinkedIn or Facebook or Instagram or any of the social media platforms. But Greg's gone to the website and he says a timely question for Ask Fear and Greed. He goes On Monday. Last week, the ASX tumbled, but there was a lot of talk about interest rate sensitive stocks falling disproportionately relative to the index. Given that interest rates have started to fall across the globe and that the RBA's launch on that rate cutting cycle appears somewhat imminent, the reaction of the market seems totally counter intuitive that stock's sensitive to rising interest rates would plummet when rates are next going to fall.

Why is it so, ah, Greg, Greg, you're assuming rational behavior, come on common, That's not how it works.

Why is it so, ah, Greg, Greg, you're assuming rational behavior, come on common, That's not how it works.

So basically, what you're saying, really is that markets are irrational? Is that what you're trying to tell?

So basically, what you're saying, really is that markets are irrational? Is that what you're trying to tell?

Well, they're probably rational. It is a cracking question because so many times you say, interstrate sensitive stocks fall because of bad news, which means interest rates might fall. But then the next thing you know, they're doing really well because interestrates are going to fall. So what's the different sort of thing? Why? Why is that the case? Economists and investment analysts are absolutely known for cherry picking the data. In fact, they take what they want to tell their stories story. This actually reminds me I'm going I'm digressing a little bit here. The Reserve Bank Deputy governor yesterday, Hauser, he was out and he had a real crack. He was speaking to a room full of economists and had a real crack at them. He said economic commentators had created a world of winners and losers, gurus and charlatans, geniuses and buffoons. Those seeing things differently are casticated as in competent, biast or on the make, and changes in views are presented as disastrous or humiliating.

Well, they're probably rational. It is a cracking question because so many times you say, interstrate sensitive stocks fall because of bad news, which means interest rates might fall. But then the next thing you know, they're doing really well because interestrates are going to fall. So what's the different sort of thing? Why? Why is that the case? Economists and investment analysts are absolutely known for cherry picking the data. In fact, they take what they want to tell their stories story. This actually reminds me I'm going I'm digressing a little bit here. The Reserve Bank Deputy governor yesterday, Hauser, he was out and he had a real crack. He was speaking to a room full of economists and had a real crack at them. He said economic commentators had created a world of winners and losers, gurus and charlatans, geniuses and buffoons. Those seeing things differently are casticated as in competent, biast or on the make, and changes in views are presented as disastrous or humiliating.

Failures.

Failures.

Yes, of course, these people are getting paid to make a prediction, and so they need to make a prediction. And so that's kind of what happens. Back to Greg's question, when you get some piece of data like weak employment, for example, does that mean the labor market's slowing? Okay, so maybe the Reserve Bank will cut interest rates because they don't want the unemployment to go too high, and that's good for shares. Or does it mean, oh no, the economy is slowing, we could have a recession. Oh dear, that's bad for shares. And that's kind of the number of the answer of the question. If you get unequivocally good news or bad news, then you do get big shifts. And that's actually what happened last Monday, which is when Greek is referring to in the US, on the previous Friday or Thursday Friday night in the US previously, there was data on manufacturing, on the services, and on the labor market. All of it was bad news data saying things are slowing sharply. So people thought, oh no, the Fed needs to cut rates. But rather than thinking that's good for interest right sensitive stocks, it was all about they haven't done enough, therefore we're heading into recession. If we go into recession, the stocks get hit hardest often are those consumer discretionary stocks, the interest rate sensitive consumer discretionary stocks. So it's a fine line, and that's what the sell off last Monday was about. Unequivocal bad news all around. I suppose bottom line economists and investors are telling a story to fit their hypothesis. That's what they're paid to do. The best ones don't always get it right, but their analysis is good enough to pay for. So I don't think I can be too critical of anyone not getting it right or you know, getting it wrong too often, especially if their analysis is good. So I think I've answered.

Yes, of course, these people are getting paid to make a prediction, and so they need to make a prediction. And so that's kind of what happens. Back to Greg's question, when you get some piece of data like weak employment, for example, does that mean the labor market's slowing? Okay, so maybe the Reserve Bank will cut interest rates because they don't want the unemployment to go too high, and that's good for shares. Or does it mean, oh no, the economy is slowing, we could have a recession. Oh dear, that's bad for shares. And that's kind of the number of the answer of the question. If you get unequivocally good news or bad news, then you do get big shifts. And that's actually what happened last Monday, which is when Greek is referring to in the US, on the previous Friday or Thursday Friday night in the US previously, there was data on manufacturing, on the services, and on the labor market. All of it was bad news data saying things are slowing sharply. So people thought, oh no, the Fed needs to cut rates. But rather than thinking that's good for interest right sensitive stocks, it was all about they haven't done enough, therefore we're heading into recession. If we go into recession, the stocks get hit hardest often are those consumer discretionary stocks, the interest rate sensitive consumer discretionary stocks. So it's a fine line, and that's what the sell off last Monday was about. Unequivocal bad news all around. I suppose bottom line economists and investors are telling a story to fit their hypothesis. That's what they're paid to do. The best ones don't always get it right, but their analysis is good enough to pay for. So I don't think I can be too critical of anyone not getting it right or you know, getting it wrong too often, especially if their analysis is good. So I think I've answered.

The question, and purely sean from a media perspective, the last thing you want is someone who's going to sit on the fence on everything. Yeah, you want someone to kind of give their view and if they're able to back it up and provide the reasoning as to why they believe that it's going to happen one way or the other, at least it gives you something to work with. And if they show their working they're okay. All right, I understand where you're coming from. The last thing you want to hear if you're listening to the radio, or is just someone going, oh, it could go one way or the other, like no, no, no, just tell me one way the other.

The question, and purely sean from a media perspective, the last thing you want is someone who's going to sit on the fence on everything. Yeah, you want someone to kind of give their view and if they're able to back it up and provide the reasoning as to why they believe that it's going to happen one way or the other, at least it gives you something to work with. And if they show their working they're okay. All right, I understand where you're coming from. The last thing you want to hear if you're listening to the radio, or is just someone going, oh, it could go one way or the other, like no, no, no, just tell me one way the other.

Tell me why.

Tell me why.

I think it will all be happy.

I think it will all be happy.

It's a fair point because the media has a lot to blame for this because immediate just wants the headline.

It's a fair point because the media has a lot to blame for this because immediate just wants the headline.

I wasn't saying that. I'm not trying to take any responsibility here, Sean.

I wasn't saying that. I'm not trying to take any responsibility here, Sean.

I suppose what you want is to have that. I mean, it's okay to say this is bad news, but you want the media to give the other side, you know, however, because then you can make up your own decision. That's what i'd say. But certainly the meat is to blame too. Thanks for pointing out out, Michael, I had glossed over that bite.

I suppose what you want is to have that. I mean, it's okay to say this is bad news, but you want the media to give the other side, you know, however, because then you can make up your own decision. That's what i'd say. But certainly the meat is to blame too. Thanks for pointing out out, Michael, I had glossed over that bite.

Nice sole contribution to today's ask Fear and Greed. I reckon Greg would be satisfied with that answer. I don't want to speak for him, and maybe Greg, if you are satisfied, let us know. We've actually had a couple of people come back to us after you've answered their questions and confirmed that yes, that's exactly what they were looking for. I've never actually told you that, Sean, So I've never never delivered that.

Nice sole contribution to today's ask Fear and Greed. I reckon Greg would be satisfied with that answer. I don't want to speak for him, and maybe Greg, if you are satisfied, let us know. We've actually had a couple of people come back to us after you've answered their questions and confirmed that yes, that's exactly what they were looking for. I've never actually told you that, Sean, So I've never never delivered that.

I didn't know that now affirmation. Now we only even use people's first name. But I know this Greek because I'm well, I don't know, but I suspect it's a Greg that I used to work with many years ago, and he is a great fan of the show and has been listening for years and years.

I didn't know that now affirmation. Now we only even use people's first name. But I know this Greek because I'm well, I don't know, but I suspect it's a Greg that I used to work with many years ago, and he is a great fan of the show and has been listening for years and years.

Do you know what he deserves? Michael, Oh, you're going to do it again.

Do you know what he deserves? Michael, Oh, you're going to do it again.

We only got the MEA mugs, the fear and greed most enthusiastic advocate MEA mugs, the rare collectible items. We've got them yesterday, and you've already given out five.

We only got the MEA mugs, the fear and greed most enthusiastic advocate MEA mugs, the rare collectible items. We've got them yesterday, and you've already given out five.

Yeah, well, I mean two to my mother woner me. So let's face it, I'm not going to give those out take those back? No, but Greg, and I'm going to call him what ow if that is the right Greg that I'm talking about and effected. If it is you, Greg, make sure you're get in touch.

Yeah, well, I mean two to my mother woner me. So let's face it, I'm not going to give those out take those back? No, but Greg, and I'm going to call him what ow if that is the right Greg that I'm talking about and effected. If it is you, Greg, make sure you're get in touch.

We will send you our new merch.

We will send you our new merch.

I only received it yesterday. We've been promising it for four years. So you know, it's kind of a bit like economists, isn't it really promising one thing giving another.

I only received it yesterday. We've been promising it for four years. So you know, it's kind of a bit like economists, isn't it really promising one thing giving another.

And finally finally delivering it a lot to deliver at some point in the future. Then at least you can say, yeah, see I got it right, just wrong on the timeline.

And finally finally delivering it a lot to deliver at some point in the future. Then at least you can say, yeah, see I got it right, just wrong on the timeline.

Yeah, that's right. But if that is you, Greg, please get in touch and you will be one of the first recipients of the most enthusiastic advocate a dreadful acronym.

Yeah, that's right. But if that is you, Greg, please get in touch and you will be one of the first recipients of the most enthusiastic advocate a dreadful acronym.

But the spirit of it that was fantastic. So it's all about kind of the Then Greg will go and take that into the office and you'll drink out of the Fear and greet me a mug in front of other people and they'll all see it and they'll ask him what Fear and Greed is and then he'll explain and lo and behold, We've got an extra four listeners out of it.

But the spirit of it that was fantastic. So it's all about kind of the Then Greg will go and take that into the office and you'll drink out of the Fear and greet me a mug in front of other people and they'll all see it and they'll ask him what Fear and Greed is and then he'll explain and lo and behold, We've got an extra four listeners out of it.

That's what it's about.

That's what it's about.

That's all right, Gregory went five, not four far. I'm high.

That's all right, Gregory went five, not four far. I'm high.

All right, Greg, thank you very much for the question for sending that in via Fear and Greed, and thank you Sean.

All right, Greg, thank you very much for the question for sending that in via Fear and Greed, and thank you Sean.

Thank you. Michael.

Thank you. Michael.

Remember, if you've got something you'd like to know, then send it through LinkedIn, Instagram, Facebook, Fearangreed dot com dot au. I'm Michael Thompson. And this is ask fear and greed,

Remember, if you've got something you'd like to know, then send it through LinkedIn, Instagram, Facebook, Fearangreed dot com dot au. I'm Michael Thompson. And this is ask fear and greed,