Recorded: April 15, 2020 Mark Yusko is the founder, CEO and CIO of Morgan Creek Capital Management. Contact: http://morgancreekcap.com Twitter @MarkYusko INTERVIEW TRANSCRIPT (EDITED) Albert Lu: Welcome to The Power & Market Report. I'm Albert Lu. My guest this morning is Mark Yusko, the founder, CEO and chief investment officer of Morgan Creek Capital Management, which manages close to $2 billion in assets. Mark, thank you very much for joining The Power & Market Report. It's nice to meet you. Welcome. How are you?   Mark Yusko: Thanks, Albert. It’s great to be with you this morning. Everybody's doing well here in North Carolina. I hope you guys are doing well in California as well.   AL: We are, considering all. We're very lucky here. Lots to cover, not a lot of time, so let's get into it. [The] Dow rebounded nicely this morning; it's up 600 points. We're getting some good news on the health front — meaning that this thing is reaching peak. Are you willing to say that we put in the bottom and, if so, do you expect a retest of those levels any time? MY: You know, I'm actually not. I'm one of the few that's still in the camp that the worst is yet to come. You know Bob Farrell, the famous Maryland strategist, talked about bear markets. And his rule number 8 of his 10 investing rules was: Every bear market has a sharp down, a reflexive rebound, and then the fundamental downturn. And I think we're in the middle of this reflexive rebound and people are focused on kind of what's happening with every little piece of headline. And they're not really focusing on the big picture, which is, you know, we're going to have a pretty sharp downdraft in economic activity, already seeing that global trade is collapsing, profits are going to fall dramatically. And I just don't think you can increase P/E multiples in a world where interest rates are zero and global economic trade and growth are falling. But you know everyone else is doing that right now.   AL: Mark, is it a mistake to focus too much on the exogenous shock that caused this, rather than the fact that we're in this now and we have to deal with maybe some excesses that built up over the years? MY: Yeah, look, I think that's the great insight of all insights, right? Which is, everyone is focused on this shock and they're saying, oh, it's going to be temporal and it's going to go away. And look, I believe it. I believe the virus is a novel coronavirus. I don't think it's a bio-weapon. I think it will fade. I think it will disappear over one flu cycle the same way that, you know, other novel coronaviruses, like SARS or MERS, have faded away. So, I do think it will be a short-term shock. But to your point, which is again the great insight, it's not about the shock. It's about these epic bubbles that were created by a decade of abusive monetary and fiscal policy globally. And now, the day of reckoning is coming and you can't displace the entire global economic system. You can't lock everybody down for months and then expect it to just magically restart perfectly and go back to where you were. And, look, we've been conditioned over the past 10 years to buy every dip. And if you did, that worked out, because the Fed had your back. I think this time what we're going to find is the economic calamity on the other side overwhelms the opportunity for the Fed — through monetary policy or even a little bit of fiscal policy from the governments — to stimulate demand, because you can't fix a solvency problem with liquidity.   AL: Right. You know, I like the use of the word temporal. So this sort of is a temporal problem, in the sense that there's going to be a duration to it. And we're going to have to work our way through it. But to borrow a little bit from the “Star Trek” vernacular, Mark, they want a wormhole to, sort of, bypass this problem that we have. They did it in ’08. They did it, in my opinion, a few times since then, bypassing [it], sidestepping it, cheating in a way. T