Barry Dyke: Corruption on Wall Street & Big Money

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welcome to

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fun with annuities with your host me

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stan

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the annuity man america's annuity agent

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absolutely they can

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start right now

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[Music]

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welcome everybody to fun with annuities

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my name is stan the annuity man

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america's annuity agent licensed in all

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50 states i'm so glad that you joined us

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today we have a very special guest

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i'm going to tell you a little bit about

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him then we're going to jump right into

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some of the

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some of the most interesting things that

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you don't know which is the reason he's

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here

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he's a good friend of mine his name is

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barry dyke um

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he's written he's written books he's

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been published by every major

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publication

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um you know he's a he's a financial

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planner

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and i'm reading kind of from his site so

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for the people on the fun with annuities

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youtube podcast recording i'm looking

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away from the camera for all of our

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friends on

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you know spotify and all those platforms

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uh it doesn't matter i'm looking away

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you can't see me anyway but um

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one of his books that really caught my

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attention a long time ago was called the

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pirates of manhattan

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and um it really kind of illuminates the

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the corruption that you know about but

1:34
didn't know the details

1:35
in the united states financial system um

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you know he calls himself the economic

1:40
warrior he also has a podcast called the

1:42
economic warrior that i

1:44
i would tell you to uh to check out um

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and he's

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like i said he wrote the pirates uh of

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manhattan

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um but he's also written a book called

1:53
guaranteed income which is fantastic

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um so i mean i'm really he he he does a

1:59
little bit of everything i called him i

2:01
called him a

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a a truthful factual brutally factual

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financial journalist but oh by the way

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he's one of the best

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um financial advisors in in america

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so he's been there done that he's

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forgotten more than most people will

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ever know

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and that's a fact um i'm just going to

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kind of let him tell

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you a little bit get his 30 000 foot

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elevator speech

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welcome to fun with annuities mr berry

2:28
dyke

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stan the man it's great to see you uh

2:32
always good to see you and uh and we're

2:35
going to keep pushing back to frontiers

2:36
of ignorance don't we

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every time i talk to barry it's just um

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he just tells me things that just kind

2:43
of blow my mind and i'm in the no

2:45
i feel like but he's really enough mary

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kind of tell tell people how you landed

2:49
here no one plans to be

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barry dyke the author of pirates of

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manhattan not pirates of the caribbean

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but pirates of manhattan how did this

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all start and tell us a little bit about

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what you do on a day-to-day basis with

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clients well essentially i you know i

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you know i'm a registered investment

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advisor i i do planning throughout the

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united states actually do

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planning outside the country as well um

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and um

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i'm doing uh financial planning and

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benefit consulting that type of thing

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she was for 38 years now something like

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that and

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um i've owned a pension consulting firm

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i sold an

3:23
insurance company in my in the 80s i

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owned a third party administration firm

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i set up my own riaa and in 2001

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i still have that uh roughly 20 years

3:34
later

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and um the reason why i uh um

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i i had been essentially

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you know been involved in all angles of

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the uh

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the finance service business primarily

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savings plans and

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and uh retirement plans that type of

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thing and i think right i i

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the reason why i wrote the first book as

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i had a

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i went through if people go to

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barryjamesdyke.com they can get the

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books by the way

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but people i had to reinvent myself and

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i explained i understood a lot of the

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financial products which are sold by

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wall street

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yeah do not work will never work but

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but but as you know all the

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misinformation marches on and becomes

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you know a daily part of our

4:16
our diet in in in wall street

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and and people's savings plans so any

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event so i wrote the first book uh the

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pirates manhattan um it took me

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roughly seven eight years to research um

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but i

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um i came to understand that one of the

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best things that really works for people

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is life insurance and annuities

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but no one was talking about it and i

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had been through

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a tough divorce and you know such a

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financial

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argument on my own and i had to reinvent

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myself so i figured out

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to help people some of the truth and um

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the thing is that uh but what stumbling

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i think it was a god shot is that uh i

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stumbled into uh the fact that all your

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major banks

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are the hugest purchases of life

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insurance and fixed annuities

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in the world and and i published the

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first book

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stand in 2007 so now we're like 14 years

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later now that's right

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and we're still this isn't the darkest

5:11
ever stand you know so

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no that's right barry and i have a

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competition of who's hated the most by

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the industry and we're running a really

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one

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of like a one-two combo here because

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we do peel back the onion on facts and

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he is brutally factual like myself and

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that's the reason that um you know that

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we get along so well and that's the

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reason i wanted my listeners to know who

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he

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is and i'll have all of his contact

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information on my site

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where you can access it and you know

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sign up for his stuff as well

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he is a fanta he's a he's just a

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fantastic guy but he's very very smart

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and he he just doesn't accept the

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answers that are out there

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or the explanations that are given which

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is why i

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love what he does now today what we're

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going to do and we're going to have

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barry on

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a lot okay so this we're not going to

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try to get it all in on one one show

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but um what we're going to talk about

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today

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are a couple things that are in the news

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recently um let's

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start barry with the one that i just

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read about that blew the top of my head

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off

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and you can pronounce it better than i

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can

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she goes arcagose

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yeah it's actually it's a uh arch arches

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archie egos it's uh it's actually a

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greek word believe it or not the god of

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the savior and it's kind of

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it's kind of weird of course your family

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office why wouldn't you name it

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god of the savior my goodness someone

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else doing god's work

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you know and um you know

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it's it's it's i essentially the losses

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uh stan

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um are incredible they say um

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the hole that is blown into credit

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suisse

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and to this guy uh bill hang wang

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whatever it is

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who has been barred from the securities

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industry more than one i mean one time

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right

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yeah i paid 44 million dollar fine and

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uh wrote a check

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in 2012 a little just pocket change

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[Laughter]

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how do you want me to do that you want

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me to get you the 44 million in a check

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or you want a money order i mean that's

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these guys are liquid man i don't know

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if he's liquid now kind of explain in a

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in a very easy to understand way

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what happened and i'll give a little bit

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of a premise he ran what's called a

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family

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office and family offices and barry can

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help me a little bit with this

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um they kind of fly under the radar

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screen from a regulation standpoint

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somehow

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somehow and they don't have to report

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things that they own or positions that

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they have or the margin stuff that

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that's on the books

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i think that's part of the problem huh

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barry

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yeah it's it's it's it's always gets

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back to the dead stand you know it's

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always too much debt too much

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leverage the same old same old stuff

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prior to

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99 2008

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and all over again staying as you know

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it's worse now than it was in 2007

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and 2008 it's worse than it was 99 in

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2000.

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so excessive leverage okay but um you

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know the two big banks again at this

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arch egos

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thing which has just been bloated and i

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think credit suits gonna take three

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billion dollar hit

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that's what the b y'all with the three

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billion ahead

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yeah and no more the japanese bank

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uh investment bank they've taken two

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billion i'll hit i guess jp morgan

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estimated uh

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there's going to be 10 billion i'll hit

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overall but all the all the prime

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brokers the people who are

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supplying all this debt to our egos

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um they said they had to liquidate

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positions of 20 billion dollars like

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essentially overnight so but i guess the

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aggregate loss again

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but but about 10 billion now the whole

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thing is is that

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this is these are supposedly the the

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savvy which

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uh welcome to the universe that's that's

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the masters of the universe or

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who want to manage your money you know

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and um

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you know and so the irony of the whole

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thing is is that so you get

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you know the usual uh suspect usual

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banks involved in lending all the money

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to arch egos

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and it blew up and and the guy you know

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um

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as you know how regulated you and i are

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you know i'm an ria

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and insurance guy we're so we put us

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under the microscope i mean

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you know if his application's wrong yeah

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everything goes to compliance

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but this guy since you flew on the radar

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blew up a 20 billion dollar position

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and um same old same old well and here

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here's the interesting part about it is

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that

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if you're in the securities industry if

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you're if you're working for one of the

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big firms i mean

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the the compliance is suffocating the

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compliance is a little bit less when you

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go to the hedge funds even though that

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is ramping up but the compliance at the

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family office and family office was set

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up for

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very uh you know a few relationships

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with a couple of large

9:57
wealthy families that's what a family

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office was put on on the planet

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but what happened to the people that get

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in trouble and get dings on their record

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and can't

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work in the securities or hedge fund

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industry because of that now they're

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opening these family offices i read

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al article the other day barry that the

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a lot of the talent from the hedge funds

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are being recruited to the family

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offices for this specific reason which

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um it will be you know if me and you are

10:22
running things

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we're we're either shutting down family

10:25
offices right now just to see what's

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happening

10:27
or at least regulating the heck out of

10:29
them we'll see what happens but that's

10:31
kind of the new wild wild west or these

10:33
family offices because

10:35
and maybe you know the details on this a

10:36
little bit more than i do but what i

10:38
read about

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arch egos which which we can just use

10:41
the word for arch we could just use big

10:43
big egos egos um okay

10:46
uh they in the securities industry you

10:49
have to report i think on a quarterly

10:51
basis and

10:51
i might be wrong on this very you can

10:53
correct me you have to report your

10:55
holdings

10:56
yeah okay family offices

11:00
don't have to report their holdings to

11:01
my knowledge and that's what caused all

11:03
of this am i right about that

11:05
yeah and that would that does the family

11:07
office essentially got to pass

11:08
all regulation on the graham leach for a

11:11
second

11:12
what they gotta pass they get a pass was

11:16
it was it uh they were exempted when

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they remember when the uh dodd-frank

11:20
uh went in 2012 oh yes oh yeah they were

11:23
supposed to regulate hedge funds and

11:24
private equity

11:25
sure absolutely and they'll get a they

11:28
get a pass and

11:29
so that's like you know you know you

11:31
know uh

11:32
essay capital it was stevie cohen you

11:35
know what i mean yeah

11:36
shut down and he ends up doing a 12 13

11:38
billion dollar family offices and

11:40
ends up buying the yankees you know so

11:42
it isn't cohen's running a family office

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no nothing against him

11:45
we don't know him and i'm sure his wife

11:47
makes a really nice peach cobbler

11:49
but what we're commenting on is the fact

11:51
that people that

11:53
kind of got in a little bit of trouble

11:55
supposedly allegedly

11:56
you know innocent until proven guilty

11:58
but they're moving to the family offices

12:00
because there is the wild wild west is

12:02
that the true

12:02
family office is that the true wild wild

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west ferry

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yeah yeah but it's yeah but again it is

12:09
it's the rare fight here the one the top

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one percent

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one one tenth of one percent the people

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the billionaires okay

12:16
but there's been an amazing increase uh

12:19
i

12:19
and it was i think it was the journal or

12:21
financial times

12:22
final challenge probably has better

12:23
reporting but um

12:25
but i think the the amount of uh assets

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in family assets says sir

12:30
surpasses uh um hedge funds now so

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family offices have more money under

12:35
management than hedge funds

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i believe so i believe i i could i could

12:39
get back to you

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on that but that's it's it's up there

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it's so it's really up there so they're

12:44
very

12:44
a significant uh uh

12:47
exposure in the marketplace and um you

12:50
know

12:51
so it's that's not being reported so

12:53
what you're telling me is the new hedge

12:55
funds are family offices

12:56
and all of their holdings aren't

12:58
reported

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essentially that's fantastic doesn't

13:03
that make you feel good

13:04
because barry what i want to do now is

13:06
okay we've laid that foundation of

13:08
the masters of the universe you know the

13:11
people that are just

13:11
leveraged to the hill and okay

13:15
how does that affect mom and pop and my

13:18
listeners and your listeners

13:20
how does that affect the investor

13:22
because they're getting blindsided it's

13:24
like

13:24
running down on a kickoff on a football

13:26
game and not seeing the guy just about

13:28
you know come from

13:29
the left side and hit you and almost

13:31
knock you out

13:33
tell me how this is going to play how

13:35
does this play out for the investor

13:38
for the typical mom and pop he's left

13:40
he's at the end

13:41
he's at the end of the line i mean and

13:43
you know the stand and i know this is

13:45
that

13:45
the typical person where you want to

13:47
like we talk about retirement plans

13:49
the purpose of retirement plan is to

13:51
generate retirement income

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end of story and what has happened is

13:55
that

13:56
because there's so much speculation it's

13:58
gone to overdrive

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that the average investor doesn't have a

14:01
clue what's even going on

14:04
um uh someone actually assisted in my

14:08
office

14:08
uh sent me a tweet which um noam chomsky

14:12
put out this weekend and um he's uh let

14:15
me see if i can find this this is

14:16
because it's so good

14:18
i just want to say it and this is and i

14:20
bet by the way people go to

14:21
barryjamescyc.com

14:22
and you go to the economic warrior tab i

14:24
interviewed uh no he actually likes my

14:26
uh

14:26
by the way that's barry looks like

14:36
and i actually interviewed noam chomsky

14:38
but this would known

14:39
uh chomsky uh it was his perfect quote

14:42
for today

14:43
and and you know he's you know written

14:46
like 96 books

14:47
he said the general population does

14:49
doesn't know what's happening

14:51
and it doesn't even know that it that it

14:54
doesn't know so in other words

14:56
the general public has no idea what's

14:58
going on and they don't even know

15:00
that something's happening to them i

15:02
have an analogy beer that i always use

15:03
with people i'm like i don't put the

15:05
stock market down people need money that

15:06
need growth etc it just needs to be in

15:08
proportion allocated properly

15:10
but i tell people in today's markets

15:12
where over 85 percent of all trades are

15:14
non-human algorithmic black box

15:16
high velocity trades it's like surfing

15:18
beside a cruise ship you're going to

15:20
catch a wave

15:20
you know sometime but eventually you're

15:22
going to get sucked under the boat

15:24
and we're back to 2008 barry where

15:27
people have

15:28
have forgotten you know what happened

15:31
back in the day

15:32
remember all those people back then

15:33
because barry and i've been in the

15:34
business so long

15:37
we were there before computers i mean we

15:38
were we were we were putting in

15:40
rules yeah we were putting in stock

15:42
trades and then putting it through the

15:43
vacuum tubes to the person at the front

15:45
i'm not kidding that's where barry and i

15:47
come from that's how old we are

15:49
but but what's happening right now

15:52
i i think is the next downturn

15:56
barry and gr agree or disagree with me

15:58
on this one it'll be more violent

16:00
because it's going to be computers there

16:02
won't be emotions

16:03
there's not traitors it's not human it's

16:05
computers against computers it's

16:07
algorithms against algorithms

16:09
by the way you don't want to watch that

16:11
that's not pretty

16:12
tell me your thought and we're not being

16:14
gloom and doomers obviously but

16:16
tell me about the next hiccup that you

16:19
that you see on the horizon

16:21
well you know luckily stan i've talked

16:24
to a lot of people around the

16:24
country in some outside of the country

16:26
and some really

16:28
a lot smart people people a lot smarter

16:30
than me

16:31
and virtually 99.9 believe there's going

16:34
to be a correction

16:35
okay and it's going to be biblical

16:38
proportions

16:39
um we just don't know uh when it will be

16:43
um but if you look at the leverage and

16:45
um

16:46
uh and just the um

16:50
uh and but the unaccountability stand

16:53
is is is incredible too so um

16:56
so it's frightening so the whole thing

16:58
is if you're really too big to fail

17:00
you'll be protected but the retail

17:02
investor will not be

17:04
uh it'll be kind of like when if you're

17:05
in a you're in a uh

17:07
in a movie theater and then someone

17:09
yells fire and then

17:10
you know one of the exit doors closed

17:13
and that's what's going to happen that's

17:14
what

17:15
you and i i was around 87 i started

17:17
having you couldn't even get anyone on

17:18
the phone i was in the i was in

17:20
99 no no

17:23
and and 2007 2008 on there

17:27
you know and um and so now these

17:29
situations are much much worse um

17:33
and the leverage and the debt you know

17:34
it it's always but the debt and

17:36
um so the but the the problem is now

17:39
stan

17:39
um is that the retail investor who has

17:42
his families in ie and 401ks that type

17:44
of thing

17:45
has absolutely no control uh over 50

17:49
over 50 of the funds in our index fund

17:51
so it's actually they're all communist

17:53
funds so there's no

17:54
there's no stewardship if you will at

17:57
all right

17:58
and the whole thing is and if if it

18:00
collapses it collapses

18:02
and it's just um and i'm not

18:05
you see i'm i'm not against um we manage

18:07
money here but sure

18:09
but you're a risk manager you manage

18:11
risk you have seat belts around their

18:13
money and they need to have guard rails

18:14
run the money

18:15
and they need to protect their income

18:17
which is the purpose of retirement plan

18:18
but we're just gotten so far away from

18:20
it i know

18:20
how this is all about it's great and i

18:22
tell people all the time obviously

18:24
um you're you're i'm in one lane which

18:26
is you know fixed annuities and i tell

18:27
people you need your income floor

18:29
if you have your income floor in place

18:31
contractually then you'll be a better

18:32
investor

18:33
i think that's i think we both can agree

18:35
upon that but i think another thing

18:36
that's interesting about the current

18:37
times that we're in

18:39
and i always tell people this most

18:40
advisors that are

18:42
in in the game today aren't like very

18:44
nine old

18:45
okay i always tell people i have cowboy

18:48
boots

18:48
older than most advisors and most of

18:51
those guys have never really

18:52
seen a real down market um

18:56
back in the day when when i was first

18:58
you know with dean witter i mean tell me

18:59
how old i

19:00
am i mean moves that happened in a day

19:02
now happen uh

19:03
moves that happened in a year now happen

19:05
in a day

19:06
and people always say well but don't we

19:08
have you know i talk about you know when

19:10
when the next hiccup's going to be kind

19:12
of violent

19:13
don't we have these triggers to shut it

19:14
down yeah but when you shut it down

19:16
and pause it all it does is just

19:18
backload the orders that are coming in

19:20
right so i i don't

19:24
what's your advice overall and i know we

19:26
can't be real specific on here and if

19:27
you want to talk with with barry

19:29
you certainly can contact him what's

19:31
your overall thoughts on

19:33
on just markets and risk and what people

19:36
should be aware of and looking out

19:38
for when people who for particularly

19:41
approaching retirement should look at

19:43
the retirement plan as resource

19:44
retirement income first and foremost

19:47
if you get this all this grand

19:48
speculation the only one who makes money

19:50
on this stuff is the asset managers

19:51
the banks you know people can read i've

19:53
written three books about it i've sold

19:55
them in 23 countries so they can

19:57
read about that so but the whole thing

19:59
the most important thing is really to

20:00
consider having income streams for life

20:03
you know because

20:04
i have clients now stan who believe it

20:06
or not they're in their 30s 40s now

20:08
they're in their 80s okay

20:09
i've had them so long where they have

20:11
they would just call it

20:13
what's called cognitive dissonance sure

20:15
in other words some people are pretty

20:16
wealthy when they're very very sharp

20:18
they can pick stocks all that type of

20:20
thing but now they just like i can't do

20:22
this anymore

20:23
and so actually the department of labor

20:25
actions came out

20:27
a study about this i think was funded by

20:28
fidelity and i think

20:30
if anyone wants to know about i can pull

20:32
up but essentially so you

20:34
so what happens is people age they don't

20:36
want to they want to enjoy their money

20:38
they want to see their kids or their

20:39
grandkids

20:40
they want to travel they they don't want

20:42
to it's lifestyle

20:43
chapter 2 is lifestyle i tell people

20:45
that all the time and

20:46
i totally agree with you i think that um

20:50
you know we're back into a raging bull

20:51
market where everyone thinks it's going

20:53
to go straight up and then we have stuff

20:54
like gamestop happen and they read about

20:56
the guy

20:57
the ex-volleyball coach that made 20

20:59
million dollars they didn't read the

21:00
backstory to that

21:01
but it all sounds good and it all sounds

21:03
wonderful um and i always tell

21:06
i always tell people this barry that

21:08
when i'm

21:09
and this is no offense to anybody who's

21:11
who's been a waiter or waitress because

21:12
i certainly was

21:13
but when i hear them talking about

21:15
trading i know we're at the top

21:17
okay

21:20
that was who wasn't was it the uh

21:24
during the carnegie whatever when he was

21:26
getting advice from a shoeshine boy

21:28
whatever

21:31
so we're there again okay and and it's

21:34
and

21:34
it's funny there's the bunch but a bunch

21:37
of uh

21:38
well there's actually a bunch of movies

21:39
and books written other people's money

21:41
and this is the whole thing it's all

21:43
gambling with other people's money and

21:44
this is

21:45
as you know stan this is about uh

21:49
gambling with other people's money yep

21:51
you know it surely is

21:52
um i know a lot of people what we're

21:55
getting ready to go into next which a

21:57
lot of people just shake their heads

21:58
because

21:58
all they've seen are ads on tv or ads on

22:00
the internet or ads in the newspaper

22:02
that say i hate all annuities of which i

22:04
say

22:04
well if you hate all annuities you got

22:06
to hate social security and if you hate

22:07
all annuities and you got to hate cds

22:09
because there's a

22:10
there's an annuity product that's a cd

22:11
people say annuities they think it's

22:13
just one

22:14
product a new saying you hate all

22:16
annuities like saying you hate all

22:17
restaurants it's just stupid

22:19
i hate all shoes i mean it's just dumb

22:21
you're falling for it

22:22
but what i'm leading into and what barry

22:25
i want barry to talk about

22:27
are the billions of dollars

22:30
that that major corporations place

22:34
in life insurance and annuities can you

22:36
peel back that onion mr dyke

22:38
yes i'm happy to and actually i will be

22:40
redoing a um

22:42
uh an update on my book guaranteed

22:44
income then go to barryjames.com

22:46
buy it off my website it's they're

22:48
selling over 100 on the amazon but

22:51
so you better off go to the website if

22:52
you sign them it'll sell for 200.

22:56
so so this is the whole thing you know

22:59
kind of a uh

23:01
anyone knows my research knows i the

23:03
major banks buy

23:05
more life insurance and fixed annuities

23:07
in anybody you know america wells

23:09
fargo i don't think people know that

23:11
barry i really do not believe

23:13
people know that because you just called

23:15
me on one the other day where someone

23:16
put

23:17
what two billion with somebody uh yes it

23:20
was jc penney

23:21
jcpenney just bought a 2.6 billion

23:23
dollar annuity

23:24
for uh for uh retirement obligations of

23:28
uh

23:29
actually i can tell you how exactly

23:30
santa if you just beer

23:32
while he's looking that up here's the

23:34
thing people

23:35
we talk about when me and you talk about

23:37
one-on-one you know when you call you

23:39
successfully called me i always talk

23:40
about transferring risk

23:42
you're transferring the risk to the

23:43
annuity company

23:45
life insurance company life insurance

23:46
companies issue annuities to

23:48
guarantee either lifetime income or

23:50
principal protection in most cases

23:52
you're transferring the risk so what is

23:53
in this specific instance that barry's

23:55
talking about

23:56
jcpenney they're transferring the risk

23:59
which is what you need to do

24:00
or think about doing to the life

24:02
insurance and annuity company

24:04
to back up the the claims now go from

24:06
there barry okay so

24:08
so this is the whole thing you know i

24:09
would talk about this the other day but

24:10
so

24:11
i tracked this up uh pretty accurately

24:14
go through

24:14
the 10ks and stuff like that sure um and

24:17
i have a good friend of mine actually

24:18
who's

24:19
helped me but i've been tracking this

24:20
since i wrote last book but so this last

24:22
week

24:23
uh jc penny you know um

24:26
uh uh that made two enormous annuity

24:30
purchases

24:31
to ensure the pension benefits for 43

24:35
900 employees and their dependents

24:38
for a total aggregate value of 7.8

24:41
billion

24:42
okay now this is a fact and i testify in

24:45
court and anybody

24:46
okay but would you see this in new york

24:48
times or the journal

24:50
or even the financial times or uh fox

24:52
business cnbc

24:54
no no you're not

24:58
yeah you know and then we can go on you

25:00
know we can i can tell people how you

25:01
know

25:02
fedex uh fedex's let's see

25:05
um looking here fedex did a major one i

25:08
mean

25:08
everyone uses fedex is uh oh yeah

25:12
six billion for 41 000 employees or

25:16
rolls royce for 33 000. they're

25:18
transferring risk and

25:19
we're not very not aren't we're not

25:22
homer saying you're

25:23
going news annuity no we know for a fact

25:25
that

25:26
a lot of people don't need an annuity

25:27
but a lot of people do

25:29
and a lot of people need to transfer

25:30
risk and a lot of people in a

25:32
pensionless world

25:33
need to create their own pensions and

25:36
forget about return on investment

25:38
because

25:38
as i always say there's no roi until you

25:40
die up until that point's a true

25:42
transfer of risk nobody ever says you

25:45
know what i wonder what the roi is on

25:47
social security why

25:48
because it's a it's a lifetime income

25:50
stream that's all you care about

25:52
and that's the same thing with lifetime

25:55
income

25:56
annuities there's not just one so it

25:59
just depends on your

26:00
your specific situation and the

26:02
customization

26:03
of that so i what i want people to walk

26:06
away with is

26:08
the the people that are saying i hate

26:10
all annuities they probably have

26:12
you know big huge annuities for their

26:14
company so just

26:15
just be just filter in the information

26:18
one thing barry dyke is not is fake news

26:21
okay

26:22
that is not that's not barry i mean

26:25
barry's going to shoot it straight and

26:27
dig

26:27
into the numbers that are crazy and i

26:29
wanted to

26:31
also talk about current interest rates

26:33
now at the time of this taping

26:35
you know we're at perceived low interest

26:38
rates but if you look at the 10-year

26:40
treasury compared against all other

26:42
global 10-year treasury

26:43
equivalents we're still pretty high no

26:45
jimmy carter

26:46
we don't have those interest rates but

26:48
in my opinion barry i want you i want

26:49
you to comment on this

26:51
when you print all the money we have we

26:53
must have all kinds of toner up there to

26:55
print as much as we can print

26:56
when you print money like this there's

26:58
no incentive for the government to raise

27:00
interest rates on themselves it'd be

27:03
like me and you barry saying you know

27:05
what just because

27:06
i want to i'm going to raise my mortgage

27:08
interest rate

27:09
there's no incentive for us to do that

27:11
there's no incentive for the government

27:13
to raise

27:14
interest rates and i understand all the

27:17
macro and micro economics vary and i

27:18
took those courses and made a's okay

27:21
we get it but tell me in the blue water

27:23
we're in when i say blue water listeners

27:25
and viewers

27:27
we've not seen this before there is no

27:29
tick data looking back in the future

27:31
saying

27:31
well the last time we printed 7 trillion

27:33
this is what happened last time we had

27:35
63 trillion leverage this is what

27:37
happened barry

27:38
give me your interest rate thoughts even

27:41
though none of us know where interest

27:42
rates are going to go but boy i want to

27:44
hear what you've got to say

27:45
well the um the big thing is is that uh

27:49
uh luckily i have some good actuary

27:51
friends of mine

27:53
everyone thinks you get a lot of money

27:54
in the market and you understand you and

27:55
i know

27:56
that's as much of hot air okay so sure

28:00
because everything generally returns to

28:01
the mean and um

28:03
two actuarial firms one pascatica

28:05
research up out here

28:06
in portsmouth new hampshire another one

28:08
out uh cliff water associates out in

28:10
marina del rey

28:11
they actually looked at like you know

28:13
126 of the large

28:14
major pension plans okay and what they

28:17
found this is really

28:18
really frightening is almost they and

28:20
there were separate uh 70s but what they

28:22
found is that

28:23
the the 30-year returns uh return

28:26
20-year returns on investments within

28:28
pension plans was roughly

28:30
uh roughly mirrored 30-year treasury

28:33
bills

28:34
so in other words um you know all this

28:38
all this fancy shenanigans and trading

28:40
and

28:41
private agreeing hedge funds and

28:43
distressed debt and all this stuff

28:45
essentially people the major pension

28:47
plans could have got the same return

28:48
just by throwing their money into

28:49
10-year tr the 38 treasuries which is

28:52
historically in that

28:53
in the lat and since we've been around

28:55
kind of that three to five percent range

28:56
obviously

28:57
in the recent memory right yeah um or

29:00
lower

29:00
but but i think that's an interesting

29:02
point because

29:04
i have people call me and i'm sure you

29:05
do too and they'll say something to the

29:07
following

29:08
i just want a reasonable rate of return

29:10
stand the annuity man of america's

29:11
annuity agent something like seven to

29:13
nine percent annually

29:16
and i go you know what you find me the

29:19
person that gets you seven to nine

29:20
percent annually year after year after

29:22
year

29:23
and i will show you a statue of

29:25
themselves right beside the bull on wall

29:27
street

29:28
i mean but don't you run into that the

29:31
level of expectations of return and

29:34
especially in a bull market like this

29:36
they're out of whack don't you think oh

29:38
yeah it's it's total misinformation but

29:40
anyhow these two actuarial firms came up

29:42
essentially

29:43
the pension plans projected roughly

29:45
seven to seven and a half percent

29:47
to remain buoyant okay but what they

29:49
really got was essentially about

29:51
5.6 which was like the 38 treasury rates

29:54
so

29:54
right so my point is is that no one

29:58
and and now so when you see with 38

30:00
treasuries are now what are they

30:02
i don't know i think two two point three

30:04
right yeah at the time with this typing

30:06
yeah they're

30:06
so i hate to say that

30:09
if you know and these guys have we got

30:12
large numbers behind it we're talking

30:13
about four

30:14
trillion in assets we're not talking

30:15
about teen little pools we're talking

30:17
about

30:17
huge pools and this is what the the gut

30:19
may return so my point is

30:21
if a massive you're in the state of

30:23
florida so if a massive pension plan

30:25
like florida which is one of the biggest

30:27
or calpers

30:28
which is in california or new york or

30:31
whatever

30:31
if they can't get these rates returns

30:33
okay with all their assets and all their

30:35
all their their uh masters of the

30:38
universe

30:39
how's the little retail investor gotta

30:41
get it you just thought you're throwing

30:43
darts and you're hoping

30:44
and as as i tell people time if you can

30:46
go ahead and throw darts and hope all

30:47
you want

30:48
just have the income guarantee in place

30:50
okay

30:52
tell me your your thoughts about the

30:55
archaic four percent rule and and for

30:59
the listeners and viewers out there

31:01
what the four percent rule is is you

31:03
have your investments right

31:05
you have your investments all in stocks

31:07
and mr jones and mrs jones

31:09
we're gonna just peel off the gains four

31:11
percent of the gains

31:12
every year and then we can just keep

31:14
investing

31:16
that dog will not hunt as they say in

31:18
the south anymore

31:20
but that dog is being taken for the walk

31:23
with clients every single day

31:25
um what's your opinion on the 4 rule

31:28
mr dyke it's awful you know

31:33
it's awful because if you really want to

31:35
look at the four percent rule the

31:36
actually the dutch uh uh they've run the

31:39
best pensions

31:40
in the world stand and they run at uh

31:42
their assumed rate of returns three and

31:44
a half percent so

31:45
this whole four percent rational that's

31:47
rational right so

31:49
yeah it's there's so much misinformation

31:52
i guess

31:54
there's other shorter words i could say

31:55
but i really think about it but

31:57
it's it we just don't know i mean

32:00
and so um there's four percent i don't

32:03
know how that come about it's been

32:04
around for like decades

32:05
it's been around so long it's been

32:07
around as long as i've been in the

32:08
business i've been in the business

32:09
you know a long time decades multiple

32:12
decades though

32:14
it's crazy yeah so there's so much

32:16
misinformation about

32:17
in in the financial world uh things like

32:19
four percent withdrawal rate

32:21
like who came up with that or who you

32:23
know things like dollar cost averaging

32:26
which is which is just you know mental

32:29
i don't know it's just how about the

32:30
money the harlow system how about the

32:32
money

32:32
harlow that's been around and people if

32:35
people know what that is that's not

32:36
let's go down to monte carlo

32:38
and and play the slots or whatever but

32:40
we hang out with the rich people

32:42
monte carlo is a system that's used in

32:44
the retirement planning world for it's

32:46
been

32:46
decades to kind of project where things

32:49
are going to go

32:50
that's been around a long time barry i

32:53
mean a long time

32:54
yeah and it's really misinformation i

32:56
would

32:57
i know there's something if you hear

32:59
something long enough over and over

33:00
again

33:01
alive turns to the truth there's some

33:04
something in psychology or whatever

33:06
george costanza from seinfeld says

33:08
if you believe it's the truth then it's

33:10
not a lie

33:11
[Laughter]

33:13
which explains a lot of the annuity

33:14
indexed annuity sales people out there

33:16
they believe it there's a market upside

33:18
with no downside margaret participation

33:20
and i just tell people listen if there

33:22
was such a product the fed would just

33:23
buy

33:24
that let's let's put on our thinking

33:25
caps go ahead i'm sorry

33:27
i had to speaking of which but you know

33:29
but the only thing that

33:30
i stumbled into is that the federal

33:31
reserve itself had

33:33
uh 75 of its own 401k or

33:37
4.5 billion in fixed annuities

33:41
[Laughter]

33:44
okay oh my gosh hello

33:48
so this is the whole thing is is is that

33:51
you know and it's like um

33:53
i'm doing a uh some executives right

33:56
they're retiring right now and people um

33:59
and

33:59
um it's a very large company i can't

34:01
remember i can't

34:02
i can't disclose obviously but but but i

34:05
know the hr

34:06
guys had the retirement plan very very

34:07
bright guy

34:09
a very smart guy and i said you know

34:13
i said i'll just say his name is uh

34:15
cliff we'll say i said cliff you know

34:17
why don't you guys because we have these

34:19
executive uh

34:21
retirement plans i said i said cliff why

34:23
don't you just make your life

34:24
easier by 10 years spea

34:28
oh can't do that nah we don't want to

34:30
lock our money up

34:32
holy crap oh yeah i don't know what the

34:33
liability would you believe in a million

34:35
dollars

34:36
in the market you know it's it's so

34:39
goofy

34:40
it is it is and people always ask me all

34:42
the time what if

34:43
this is my this is my client i have a

34:46
mythical

34:47
client called chester and chester always

34:49
goes what happens is new york life goes

34:51
out of business

34:52
and my q my answer to him is this hey

34:55
chester

34:56
it'll be me and you in the grocery store

34:58
fighting for the white bread the cheap

35:00
white loaf bread because at that point

35:02
in time if new york life goes out of

35:03
business

35:04
it's game over it's anarchy i mean

35:08
it's mad max time it's mad max and so

35:10
you're when we talk about transferring

35:13
risk you're transferring risk to

35:14
companies to back up a guarantee

35:16
in the lifetime income world obviously

35:18
you have to choose carriers

35:20
that you know are strong solvent you

35:23
know you you need to look at

35:24
at all of that but i think it's ironic

35:27
that the

35:28
behind the scenes with noah knowing the

35:30
large corporations

35:31
are transferring risk whereas

35:35
then the the machine is telling the

35:36
public don't transfer risk

35:38
take risk shoulder i don't care if

35:40
you're 70. put it all in the market it's

35:42
a

35:42
markets are going to go up forever right

35:44
barry

35:46
that's that's what they say but this

35:47
again there's no better example though

35:50
than

35:50
than the new york times the old gray

35:52
lady you know and this is

35:54
the 10k yeah i've never heard him say

35:57
anything nice about life insurance

35:58
anyway

35:58
okay or annuities in any way do they

36:01
blow up was it 460

36:03
460 million in uh group annuities did

36:06
there you guys

36:06
were the pension risk the bbc offloaded

36:09
their risk

36:11
cbs you know 800 million for the pension

36:14
risk so these are major

36:16
media institutions and they're actually

36:18
doing this but they're not saying

36:19
anything about this

36:20
because of their advertisers yeah it's

36:22
um

36:24
from the interest rate standpoint and we

36:26
got to circle back because we digress a

36:27
little bit

36:28
and i don't want you to predict interest

36:30
rate movements whatever but

36:31
comment on the fact of the of the corner

36:34
that

36:35
the the government has painted

36:37
themselves into

36:38
give some give some brutal facts about

36:41
that

36:42
because no one knows where interest

36:43
rates are going but

36:45
where are they at right now what pickle

36:47
are they in

36:48
well they're not we're not europe yet

36:51
um that's a good t-shirt i'm gonna have

36:53
a t-shirt we're not europe

36:55
dot dot yet um we have

36:58
negative interest rate was actually

36:59
charging uh uh money to hold on to your

37:02
money

37:02
yeah um as you know stan is that um

37:06
you know uh anytime they raise interest

37:08
rates on cost of servings

37:10
the debt goes way up so it's it is kind

37:13
of paying a um

37:15
you know that's why i that's why i read

37:17
the bible every morning because i don't

37:18
know what's gonna happen

37:19
you know because this is something on

37:22
the book of revelations

37:23
you know but you just started there you

37:25
start right there

37:26
i have to because you when you when you

37:28
look at it it doesn't make sense

37:30
oh man that's awesome no that's it's

37:32
true

37:33
it's true none of this makes sense and i

37:36
think

37:36
you know one of the things that i love

37:38
about what barry does is he he gives us

37:40
all this information

37:41
that people aren't aware of and he's dug

37:44
into he just told you that

37:45
to write the pirates of manhattan no

37:48
it's not pirates of the

37:49
it's pirates of manhattan it took him

37:51
eight years

37:53
to research and oh by the way they're

37:55
not just giving that information away

37:56
he's got to dig

37:57
in i mean he's got to go to work to get

38:00
that i

38:00
i mean all of his books are great but

38:02
that one there is the most

38:04
unique financial book i've ever read

38:07
and i recommend it to people just

38:09
because it'll be one of those that you

38:11
read and go

38:12
what the heck what and it's all

38:16
documented and it's i mean it's not

38:18
very just written it's very digging in

38:20
with facts so

38:22
i mean if he i encourage you to put him

38:24
on like your list of

38:26
okay i need to check i need to get on

38:28
his list i need to check him out long

38:29
term

38:30
you know he's he's that guy because i

38:32
have no clue in fact

38:34
what what are you working on now what's

38:36
what's the b in your bonnet at this

38:37
point in time

38:39
well you know i've been working on the

38:40
book on private equity but i have to i'm

38:42
kind of be releasing guaranteed income

38:44
uh

38:46
doing like a 2.0 because uh because what

38:48
the insanity was is going on

38:50
absolutely unequivocal insanity

38:55
rapacious regret if you will in the

38:57
retirement market

38:59
space because of most of the people are

39:01
in target date funds now

39:02
i think 80 cents in every dollar is

39:04
going to a target date fund which

39:06
makes no sense at all none you know it's

39:09
all fictitious you know um but now

39:12
they've thrown uh the department of

39:14
labor let in private equity into the uh

39:17
uh into the uh into the target date

39:20
funds so

39:20
so essentially it's it's it's it's

39:23
gotten worse instead of better and

39:25
so but i'm so essentially gonna be

39:28
doing the guaranteed income two because

39:30
it's needed even more

39:32
now than ever uh essentially for people

39:34
to de-risk this stuff

39:36
tell us about the hedge fund book i

39:37
didn't know about that one tell me about

39:39
that one that's the one i want to

39:40
i want to read it i've been working on

39:42
that one for about eight nine years yeah

39:44
and that's

39:45
um and you know so that that's uh you

39:48
know

39:49
uh i've been working a lot and i've i've

39:51
gotten a lot of good support on it

39:53
it's it's it's a it's more of a love of

39:55
the truth and uh

39:57
i don't know however make any money on

39:58
it but uh it essentially the

40:00
the the pride the alternative managers

40:03
uh

40:04
stan and the alts or they call them alts

40:06
okay sure they're taking over this stuff

40:08
and

40:08
you know and you look at the crap that's

40:10
happened even with some of these banks

40:12
in the past uh

40:13
you know a couple months whatever um

40:15
it's and they're all 25 to 30 years old

40:18
i mean they're all

40:18
young whippersnappers that that just

40:21
know that just know a bull market

40:23
one thing barry needs he doesn't he

40:25
probably already has it he needs

40:26
full-time bodyguards

40:27
[Laughter]

40:29
he's a he's peeling back onions on on

40:33
big time big time things

40:36
we're talking about hedge funds and you

40:38
know the pirates of manhattan

40:39
peel back onions and i just you know i

40:42
think it's refreshing and i'm going to

40:43
tell you this

40:44
i don't know anyone else who does this

40:48
yeah i think i think you are the lone

40:49
wolf as they say in the in the

40:51
in the in the west the pioneers take all

40:53
the arrows right i mean

40:54
yeah but i'm glad you're out there doing

40:57
that and

40:58
this time has flown i mean and we didn't

41:00
even get to half the list that i had i'm

41:02
just telling you

41:02
i mean we could go forever um but i

41:06
really appreciate you being there now

41:08
again barryjamesdyke.com

41:11
go go sign up on his on his site he's

41:14
fantastic he this isn't his last time

41:16
here

41:17
obviously when he comes out with

41:18
guaranteed income 2.0 and the hedge fund

41:20
book we we definitely have and i will

41:22
have one before then if

41:23
something pops or if it gets weird and

41:25
definitely

41:26
if we have a hiccup in the market

41:28
because there's no one else that i would

41:29
uh want to explain it

41:31
to me than him but um i really

41:34
appreciate you being here

41:36
any closing thoughts and words of wisdom

41:38
barry

41:40
yeah um do your own research okay and uh

41:44
you know it's just uh you know and uh

41:46
keep passing it

41:48
keep passing back the frontiers of

41:49
ignorance because if your parents ever

41:52
told you something something if

41:53
something

41:54
sounds too good to be true generally it

41:56
is the case

41:58
and with annuities it's the case every

41:59
single time yeah

42:01
it really is but you know and the thing

42:03
is is the uh

42:04
but the uh so you know if people are

42:07
approaching retirement

42:08
really think about what what the purpose

42:11
of a retirement plan is to reduce

42:12
retirement income it's not to

42:13
pass gen well done the next generation

42:15
it's not to gamble with

42:17
but that's what you know and also um you

42:20
know look outside the country

42:22
the germans are like the exact opposite

42:24
of us you know

42:26
and the germans think all these stocks

42:27
and bonds everything they think it's all

42:29
gambling speculation which it is but

42:31
um you know and then did you give people

42:33
just to look at things like

42:34
going on which is things like spax now

42:37
you've seen this

42:38
it's it's that's another new bubble so

42:40
it's so

42:41
it's it's happening again and um be

42:43
careful out there people

42:45
be careful out there well listen barry

42:47
thanks so much you know as people know

42:49
the fun with annuities

42:52
youtube and podcast uh you can you can

42:54
watch the video of barry and i on my fun

42:56
with annuities

42:57
youtube channel and obviously you can

42:59
for all you podcast listeners drivers

43:00
and

43:01
and uh people running on treadmills

43:03
making me look bad i really appreciate

43:04
you

43:05
as you know you know our saying here is

43:07
living the reality

43:08
not the dream that's the fun with

43:10
annuities uh

43:11
saying is living the reality and reality

43:13
is contractual guarantees

43:15
contraction in my world i mean it is

43:17
what it is but with that being said

43:19
i really really appreciate you being

43:22
here and i'll see

43:22
everyone on the next fun with annuities

43:26
podcast

43:31
thanks for listening to fun with

43:33
annuities please hit the subscribe

43:35
button and make sure to go to my site

43:37
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43:40
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43:40
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43:44
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43:48
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43:50
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43:51
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43:54
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43:56
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43:56
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43:59
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44:02
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44:04
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44:05
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44:07
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44:08
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44:11
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44:13
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44:15
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44:17
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44:19
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44:36
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