Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Bloomberg Quick Takes Tim Stanobek. We're here every day bringing
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Speaker 1: You can also listen to our radio show at two
Speaker 1: pm Eastern Time on Bloomberg Radio or watch us on
Speaker 1: YouTube and now also on Bloomberg Quick Take. We just
Speaker 1: talked about the big bank CEOs, Tim in a big way.
Speaker 1: We are getting a good feel of the outlook from
Speaker 1: them thanks to that Goldman sax conference. If there's a
Speaker 1: one sort of theme that drives them together, it's sort
Speaker 1: of a downbeat note about the economic outlook, Goldman sax
Speaker 1: Group CEO David Solomon saying that smaller bonuses and even
Speaker 1: potential job cuts could come as no surprise. He didn't
Speaker 1: make those comments Carol at the Goldman sax Us Financial
Speaker 1: Services Conference here in New York City, speaking exclusively to
Speaker 1: our Bloomberg Shanali bassk alright, so covering the event as well,
Speaker 1: bloom Big News finance reporter Shree not or John he
Speaker 1: is inter Bloomberg Interactive Broker Studio. Sure, so, first of all,
Speaker 1: we're all talking about it, and a good reason. These
Speaker 1: great exclusive interviews by Bloomberg Sinnelli bask It does feel
Speaker 1: like they're kind of Debbie downers most of these guys.
Speaker 1: There's certainly no ifs and buds out here. We've had
Speaker 1: a parade of CEOs with talking to Bloomberg today and
Speaker 1: it's clear from their tone and what their messaging has
Speaker 1: been that there are a lot more cautious. In fact,
Speaker 1: David Solomon, the CEO of Goldman Sex, made a point
Speaker 1: to say that while his firm Zone economists believe that
Speaker 1: we will be able to avoid a recession in the
Speaker 1: US narrowly next year, he says he himself is a
Speaker 1: little more pessimistic, and that was clear in the messaging
Speaker 1: he put out there, that the talk of possible additional
Speaker 1: job cuts, the need to pay people down, it's not
Speaker 1: what you were hoping to hear. And one and saying listen,
Speaker 1: guys were worried, we can't pay peop a lot this year,
Speaker 1: my first such a cynic that's a factor, right, because
Speaker 1: we do know that, especially bloombergree doesn't know that Goldman
Speaker 1: has begun compensation conversations, and it is clear that even
Speaker 1: those who performed really well this year will be paid
Speaker 1: down because the entire firm as a whole has not
Speaker 1: done as well as twenty one was an exceptional year.
Speaker 1: But I am going to run a little bit further
Speaker 1: away from the cynical lane only because what he said
Speaker 1: has been echoed by almost everyone else who spoken with
Speaker 1: Bloomberg today. And look at the reports out of Morgan Stanley.
Speaker 1: They're cutting about two thousand jobs to percent of their
Speaker 1: work force, not a whole lot, but again, job cuts
Speaker 1: in the news cannot be very fun to hear. Let's
Speaker 1: go to his words, because Goldman Sachs CEO David Solomon
Speaker 1: spoken speaking exclusively to Bloombergstionnelly Bastik on the sidelines of
Speaker 1: the Goldman sax Us Financial Services conference in the city
Speaker 1: earlier today. I'll check out what he told her. We're
Speaker 1: at a very uncertain time, and uncertain time given we're
Speaker 1: changing monetary and economic conditions, very very quickly, and that's
Speaker 1: certainly having an impact of slowing down economic activity. And
Speaker 1: so if you're running a big financial services firm, I
Speaker 1: think you have to assume that we have some bumpy
Speaker 1: times ahead. We could see her session in also, and
Speaker 1: so I think you've got to be cautious and prepare.
Speaker 1: That was Goldman sax CYO David Solomon from the firm's
Speaker 1: US Financial Services conference here in New York City. Check
Speaker 1: out more from that interview on the Bloomberg Terminal and
Speaker 1: at Bloomberg dot com. Carol, you're got a smile on
Speaker 1: your face, thinking of bet Davis, fasten your seatbelts, it's
Speaker 1: going to be a bumpy night or bumpy ride like
Speaker 1: that kind of ominous tone. But I do think about
Speaker 1: this is something we have said Tree. What these big
Speaker 1: banks CEOs have to say is we get ready for
Speaker 1: the next round of earnings, as we get ready for
Speaker 1: the next and last FED meeting of the year. I mean,
Speaker 1: you've been covering this sector when they are so negative.
Speaker 1: Does it usually pan out to some extent? Yes, because
Speaker 1: I do think that they use these occasions, these public
Speaker 1: appearances to try and signal and flag what is ahead.
Speaker 1: So they are preparing us for what's ahead. But I'll
Speaker 1: tell tell you, and you guys tell me whether this
Speaker 1: reader is right aroun we're actually to your readers. To me,
Speaker 1: the most fascinating thing in that interview was David Solomon
Speaker 1: talking about this idea that it should come as no
Speaker 1: surprise to anyone that they have to pay people down
Speaker 1: this year. That is going to happen definitively, while also
Speaker 1: repeatedly saying in that interpret in the remarks, not not
Speaker 1: necessarily record, but this idea that there is this massive
Speaker 1: competition for talent. What's the point of saying that. Is
Speaker 1: that him signaling that there is still room for tinkering
Speaker 1: and he could still potentially tweak the compensation pool to
Speaker 1: make it look better. Or is he telling people who
Speaker 1: are complaining and whining, if you really want to complain,
Speaker 1: I'm telling you the pay pool is going down. The
Speaker 1: market out there is great. You're free to go ahead
Speaker 1: and find a job out there. I don't know what
Speaker 1: do you guys make of it. That's why I like
Speaker 1: that sort of cynical view of it. But I do
Speaker 1: wonder how you explain the distance between what the firm's
Speaker 1: own economists say versus what the CEO says. That's it's
Speaker 1: interesting that now I'm the cynic in house. I thought
Speaker 1: that was Carol, so that's unfortunate. But I know, well,
Speaker 1: you know it's I will say this time, though, I
Speaker 1: think David Solomon's always had this posture of being more
Speaker 1: cautious even when things are going great through the run up.
Speaker 1: We've seen in the post pandemic times. Every quarter David
Speaker 1: Solomon would come out and say, it has been great.
Speaker 1: We're not certain that that pace can be maintained next quarter.
Speaker 1: And yet quarter of the quarter off the quarter these
Speaker 1: big banks performed really well, and Goldman Sax in particular.
Speaker 1: So I personally, having observed him closely for four years,
Speaker 1: and not that surprised that he would strike a more
Speaker 1: cautious note than his economists. A little surprised that he
Speaker 1: is going away from the script because he tends to
Speaker 1: stick to what the economists say and often says, I
Speaker 1: don't have a crystal ball. But the fact that he
Speaker 1: was willing to be a little more downbeat was easily
Speaker 1: explained and everything else he said in the interview. With
Speaker 1: the idea of the pressure on cost the cost cuts
Speaker 1: the commentary had on the paper. That kind of shows
Speaker 1: you why he would be more cautious. All right. Well,
Speaker 1: having said that and speaking of cautious tones, ar Sinali
Speaker 1: Bossak also caught up at the conference with the CEO
Speaker 1: Bank of America Brian Morninghan. Great clue in terms of
Speaker 1: how consumers are feeling as well. So here's what he
Speaker 1: had to say about inflation and higher rates. The evidence
Speaker 1: shows that, yes, the economy is being slowed by the
Speaker 1: higher interest rates, by the fact that the inflation is
Speaker 1: eating up more of a person savings. They need to
Speaker 1: get that under control. That means higher interest rates. But
Speaker 1: on the other hand, you've seen them slow down which
Speaker 1: I had to put less price pressure. That means they
Speaker 1: could slow down. So that's going to be the debate.
Speaker 1: I think we need a few more months to see
Speaker 1: whether it's just a trend or not. All right. Of
Speaker 1: course that's the Bank of America CEO Brian Mornahan, who
Speaker 1: also said that they had to slow down hiring with
Speaker 1: fewer workers leaving their managing headcount moving investment bankers. Uh,
Speaker 1: they're hiring in private banking. So yeah, like I know,
Speaker 1: I'm just wondering what this means. I don't know, you
Speaker 1: added up. You cover this space, we will get earnings
Speaker 1: come January. Um, how do we take this forward? This
Speaker 1: tells you all of these executives, all of these senior
Speaker 1: manages are deep in daily weekly meetings planning for the
Speaker 1: year ahead and what they're seeing. They're not quite thrilled
Speaker 1: with what's been put in front of them, and that
Speaker 1: is reflected in their messaging right now. I don't mean
Speaker 1: to ask you why the markets are moving, but I'll
Speaker 1: go the same question that I said to Jas. I mean,
Speaker 1: it seemed like these comments have a real effect on
Speaker 1: the way that traders are thinking about sentiment today. They
Speaker 1: should because look at where the comments are coming from.
Speaker 1: The CEO of Bank America, one of the largest consumer
Speaker 1: banking operations in the country. The CEO of Goldman Sachs,
Speaker 1: the most important Wall street firm out there. These people
Speaker 1: have a real pulse for what consumers are doing, what
Speaker 1: the average American out there is doing, and also what
Speaker 1: the big institutions and the big companies are doing. If
Speaker 1: they don't have a view into what the year ahead
Speaker 1: looks like, or at least the weeks and months ahead,
Speaker 1: that no one does, and the fact that they are
Speaker 1: willing to summarize all their conversations and rapid in this
Speaker 1: uh a ball of negativity. I have to assume that
Speaker 1: place some rule in the market price action. And then
Speaker 1: you do have morning and saying, you know, consumers still
Speaker 1: spending more than a year ago rate of growth and
Speaker 1: spending those starting too slow, and then you do wonder
Speaker 1: ultimately how they're paying for it, so whether they'll add
Speaker 1: up um Street. Thank you so much. I really appreciate it.
Speaker 1: We knew and this event was going on. We wanted
Speaker 1: to check in with you and see what David Solomon's
Speaker 1: comments and the others had to say and what it
Speaker 1: all meant. Tree not a rag and he's financial reporter
Speaker 1: at Bloomberg News. Here in our interactive broker studio KBW
Speaker 1: Bank Index. By the way, it is down for one, two,
Speaker 1: three or four days in a row, and it's down
Speaker 1: almost nine percent in that time. This is Bloomberg. This
Speaker 1: is Bloomberg Business Week with Carol Masser and Bloomberg Quick
Speaker 1: Takes Tim Stinovic on Bloomberg Radio. Most read story in
Speaker 1: the Bloomberg Today it is about the Yale professor who
Speaker 1: became an enemy of the Russian state over a list.
Speaker 1: He's a guest that we've had on this individual on
Speaker 1: our air in past, and the story is in the
Speaker 1: newest shoe of Bloomberg business Week with more. We're joined
Speaker 1: by Bloomberg Business Week contributor Rob Mandelbaum. He joins us
Speaker 1: on the phone from Brooklyn. Joining us along with him
Speaker 1: is Bloomberg Business Week Senior editor demetric Casseds. She joins
Speaker 1: his via zoom from New York City. This is incredible.
Speaker 1: I know we we've Caroline, I've spoken several times to
Speaker 1: Jeffrey Snenfeld. You know, anyone who listens to our program
Speaker 1: or watches Bloomberg Television certainly knows his face, knows his voice.
Speaker 1: How did he find himself, Demitra just a few months ago? Uh?
Speaker 1: The enemy, an enemy of the Russian state. Sure, um, well,
Speaker 1: you know he You know him and many people know him.
Speaker 1: Given so much work than he does with respective CEOs
Speaker 1: and leadership in the round tables, he has the ear
Speaker 1: of many CEOs around the world and have been contacted
Speaker 1: if I'm not mistaken by some folks saying, you know,
Speaker 1: this is something we need to look at, is which
Speaker 1: what what companies are pulling out of Russia and what
Speaker 1: companies are staying behind and how do we how will
Speaker 1: we make these distinctions? Right after Russia invaded Ukraine. UM
Speaker 1: So he got a little bit of play about this,
Speaker 1: But as as we expanded our look at business school stories,
Speaker 1: he became somebody that I was focused on, and I thought, well,
Speaker 1: I'm curious to know what what Jeff Sonnenfeld was up to.
Speaker 1: And I saw little snippets about some of this work,
Speaker 1: but nothing really that dealt deeply into how this all
Speaker 1: became such a big list and became such a powerful list. Um.
Speaker 1: And that is how he got onto my radar with this.
Speaker 1: And then UM I contacted Rob, who has been a
Speaker 1: regular contributor to Business Week UM and asked him that
Speaker 1: he would be interested in taking a closer look. And
Speaker 1: I think that from the first minute, we'll let Rob
Speaker 1: answer this, but I think he was intrigued given that
Speaker 1: there were certain aspects of the story that had not
Speaker 1: been covered at all out there and that really were
Speaker 1: very meaningful to again, like what is it that this
Speaker 1: list do? Right? What kind of power does the whale?
Speaker 1: So I will let Rob talk about that, all right? Hi? Hi,
Speaker 1: Oh you would like me to talk about it? Yeah, Well,
Speaker 1: tell us about you get this assignment and you start
Speaker 1: looking into this story on Jeff Snenfeld, tell us what
Speaker 1: you found out. Well, I mean the first thing I
Speaker 1: found out was that, um, this was that that the
Speaker 1: list itself was this UM what was actually something that
Speaker 1: came from his sort of correspondence with other with c
Speaker 1: e O s. It wasn't something that he started to do.
Speaker 1: It was something that they asked him to do, because
Speaker 1: these were CEOs who had pulled out of Russia and
Speaker 1: they felt like, um, the business media, um, but not
Speaker 1: Bloomberg business Week were was conflating what they were doing
Speaker 1: actually pulling out with you know, other companies that were
Speaker 1: sort of, you know, sending thoughts and prayers to the
Speaker 1: Ukrainian people, but you know, counting the Russian roubles and
Speaker 1: that sort of thing. And and so that's where the
Speaker 1: list started for him, was just sort of trying to
Speaker 1: figure out who was actually leaving Russia and and who
Speaker 1: was sort of making noise like they were leading leaving
Speaker 1: Russia but but not really. It's pretty incredible because you know,
Speaker 1: sani Felt is certainly Professor son Felt was certainly associated
Speaker 1: with the list, as you right, But at the same
Speaker 1: time he's got a research assistant and then all of
Speaker 1: the volunteers who ended up helping with this list, so
Speaker 1: so who actually worked on it and work is working
Speaker 1: on it. Rob There were at one point up to
Speaker 1: forty two I think other people working on it, and
Speaker 1: many of them were undergrads at Yale and other schools.
Speaker 1: They were people like a guy I talked to named
Speaker 1: Frank Sokovowski, and he is a was a freshman at
Speaker 1: the time. He was studying economics. He had actually heard
Speaker 1: about some of Sonofeld's earlier work sort of organizing c
Speaker 1: e O s after election to sort of protest, you know,
Speaker 1: the overturning of the election, and he had heard about
Speaker 1: that even before he got to New Haven and resolved
Speaker 1: to work with Salenfeld and it find it happened that
Speaker 1: this was the project, and you know he's from Poland,
Speaker 1: uh and so very close to Ukraine. He ended up
Speaker 1: getting so involved with it that he reschedules his classes,
Speaker 1: you know, for the spring, some of them for the summer,
Speaker 1: so he could work on the list in the spring,
Speaker 1: and he recruited a bunch of other students at Yale
Speaker 1: and at other schools to work on the list for him,
Speaker 1: and a lot of those people were Poles who spoke
Speaker 1: not just Polish, but Russian. And you know that gave
Speaker 1: this team and you know, an inside edge, you know,
Speaker 1: able to analyze Russian material that doesn't normally get translated.
Speaker 1: I want to bring to meet her back in in
Speaker 1: a second, but before you do, Rob, So, how did
Speaker 1: he ultimately then become um an enemy of the Russian
Speaker 1: state as a result. It's just where they so ticked
Speaker 1: off that he was accumulating this list. Why he Well,
Speaker 1: he had started with the list and and and then
Speaker 1: it became yeah, it was mostly the list, but then
Speaker 1: he started doing some research and he had published research
Speaker 1: I think in late May, uh indicating you know that
Speaker 1: if you were a company pulling out of Russia, Uh,
Speaker 1: you saw a benefit to your stock price or you
Speaker 1: paid less for debt, Like there was a market reward
Speaker 1: for pulling out of Russia that you could sort of
Speaker 1: tie to the announcement that you were leaving Russia. And
Speaker 1: he ended up on a stop list. Uh. This was
Speaker 1: in June of people who weren't allowed to go to Russia.
Speaker 1: I don't think that bothered him too much, you know,
Speaker 1: I don't think he was planning to go to Russia
Speaker 1: any type of suit. They're about a thousand people on
Speaker 1: that list. Now at the time there were far fewer.
Speaker 1: Hey he I mean he wears it as a badge
Speaker 1: of honor, rob Oh, he does. But at the same time,
Speaker 1: there's a little bit of nuance to it because he
Speaker 1: won't be the first lady above Mitch McConnell exactly, And
Speaker 1: he won't. But he won't come out and say that.
Speaker 1: He thinks it's a necessarily a good thing. Like he's
Speaker 1: not gonna come on say that companies should leave, right
Speaker 1: he kind of he stops almost at almost almost saying
Speaker 1: that it's a very semantic Yes, it's it's a very
Speaker 1: semantic distinction. But he, uh, he won't. You know, you
Speaker 1: can you can press him and press him, and he
Speaker 1: won't say, you know, uh, companies should leave Russia. Uh,
Speaker 1: at least not officially, you know. But he'll call, you know,
Speaker 1: as you talked to him about it, he'll call those
Speaker 1: companies that did courageous, you know. And I mean the
Speaker 1: whole idea that that um, you know, companies that leave
Speaker 1: Russia get an A grade and companies that stay get
Speaker 1: an F grade have implications. It seems to me right, Hey,
Speaker 1: Dmitra really quick, just got about twenty seconds left here.
Speaker 1: What I love is I feel like there's going to
Speaker 1: be a second story for you guys in the Business
Speaker 1: Week team, and Rob, because he's got Sanenfeld has another target,
Speaker 1: Saudi Arabia. Just quickly twenty seconds you guys thinking about this.
Speaker 1: Perhaps we are thinking about it. We're looking at it.
Speaker 1: I mean, as I said, you know, with um this
Speaker 1: is interesting because it started as a remit to kind
Speaker 1: of expand how we're covering the school and its perfectly highlights,
Speaker 1: just like the very interesting work that happens at many
Speaker 1: of these institutions. So we're thinking about it. I'm not
Speaker 1: quite sure what it's gonna lead to you, but what
Speaker 1: you know, stay tuned. Well it's gonna lead to I
Speaker 1: think us to reach out to Jeffson and Feld again
Speaker 1: and getting him back on. Guys, thank you so much
Speaker 1: to meet yours. And She is senior editor at Bloomberg News,
Speaker 1: joining us from New York City. Rob Mandelbaum, he's freelance
Speaker 1: contributor to Bloomberg Business Week on the phone from Brooklyn.
Speaker 1: This is among our most read stories, and it's in
Speaker 1: the upcoming new issue of Bloomberg Business Week. This is
Speaker 1: Bloomberg Radio. I'm bro journal now, but you let me drive? No, no, please,
Speaker 1: I'll do. I want to drive. It's a good question.
Speaker 1: Good drive. This is the Drive to the close on
Speaker 1: Bluebird Radio. All right, just under eight minutes left in
Speaker 1: today's trading session. Shortly we'll check in with our TV
Speaker 1: colleagues talk about pict trade. Oh, I'm we got like
Speaker 1: eighteen minutes. Yeah, we got like eighteen minutes left, Carol. Yeah, sorry,
Speaker 1: it's been that kind of day. It feels like it's
Speaker 1: moving fast and furious. Having said that, as Charlie mentioned,
Speaker 1: we're just surrounding around the worst levels of our session
Speaker 1: when it comes to the equity chair. But pretty broad
Speaker 1: based only utilities. When you look at the major industry
Speaker 1: groups in the spire, actually showing some green today, and
Speaker 1: it's not much. It's broad based selling. A real risk
Speaker 1: off day today, it's time for drive to the clothes.
Speaker 1: We're doing doing that today with Tony Roth What Wilmington's
Speaker 1: Trust and Investment Advisors, the investment advisory arm of Wilmington's
Speaker 1: Trust and M and T Bank joining us via zoom
Speaker 1: in Philadelphia. Good to have you with us, Tony how
Speaker 1: are you. I'm good, Jim, and Carol, thanks for having
Speaker 1: me well, thanks so much for joining us. I'm thinking
Speaker 1: about the program that Carol and I did last Wednesday
Speaker 1: after we heard from FED Chair J Powell, and the
Speaker 1: mood that we saw inequities after investors pretty much solidified
Speaker 1: the idea that December, you know, that rate heck that's
Speaker 1: coming next week is going to be fifty basis points
Speaker 1: instead of se uh. Look at the shift in tone
Speaker 1: since last Friday and the way that we've seen the
Speaker 1: sp down now for four days in a row. How
Speaker 1: do you explain it, Tony? I think it's actually surprising
Speaker 1: that it's taken so long to get to these levels
Speaker 1: of draw downs in the market when you can when
Speaker 1: you consider the labor market report that we had on Friday,
Speaker 1: so we did. We were down on Friday, but not
Speaker 1: by a lot, right, And when you consider how bad
Speaker 1: the labor report was, and then we had the I
Speaker 1: s M Services Report, which is really a very loser
Speaker 1: bad in meaning it was a strong report and wage
Speaker 1: and wage pressure, wage pressure, significantly lower participation, right. And
Speaker 1: then on the I s M Services Report, which is
Speaker 1: basically another view into wages, we saw a very strong
Speaker 1: services report, and the market is dealing with the reality
Speaker 1: that we are going to have a persistent inflation problems,
Speaker 1: specifically within the wage arena, and that is going to
Speaker 1: have an impact on where equities trade over the next
Speaker 1: probably two to four months. And equities are probably priced
Speaker 1: too high right now. Um, we need to move not
Speaker 1: just a little bit lower, but probably a lot lower.
Speaker 1: And and is that how you feel about across all
Speaker 1: of the equity landscape or there's certain names in particular
Speaker 1: that you think maybe provide some opportunity in this environment.
Speaker 1: Well on relative basis, there are things that we like.
Speaker 1: We like some healthcare areas, we actually like some some financials.
Speaker 1: Um we could tee to like energy in this environment,
Speaker 1: we like materials. But in an environment where we have
Speaker 1: higher rates and where profitability UH and price and power
Speaker 1: are going to matter, selectivity is much more important than
Speaker 1: what we've seen in many, many years. To take healthcare
Speaker 1: for example, healthcare is a very variegated space. So you
Speaker 1: have pharmaceutical companies which are almost like staples, but there's
Speaker 1: staples that are growing at a nice pace. And then
Speaker 1: you have medical device companies which are like big growth
Speaker 1: technology names which are not going to do well in
Speaker 1: this environment, and so it really requires very careful selection
Speaker 1: as you go through the this environment. But that's not
Speaker 1: to say that anything in the equity space is going
Speaker 1: to hold up particularly well over the next two months
Speaker 1: or so as we deal with the reality of a
Speaker 1: likely recession. And that also doesn't mean that we like
Speaker 1: bonds either, because we don't think bonds are particularly well
Speaker 1: positioned at the moment. And I could get into that
Speaker 1: if you like, talk a little bit about that. Well,
Speaker 1: when you look at the bond market right now, we're
Speaker 1: relatively three fifty on the tenure, and you think about
Speaker 1: where inflation is and have persistent inflation is going to be,
Speaker 1: which we think it's gonna come down, but it's gonna
Speaker 1: get stuck probably around three and a half percent or
Speaker 1: so due to wage pressures and a few other factors.
Speaker 1: That means that the ten year is still is low
Speaker 1: relative to where it needs to be in this part
Speaker 1: of the cycle. So we're probably going to get back
Speaker 1: up to the four range or selling the tenure. We're
Speaker 1: going to see credit spreads expand um and we have
Speaker 1: quantitative tightening, which is throwing more supply into the marketplace.
Speaker 1: So for all those reasons. Even though a lot of
Speaker 1: people like to think that bonds are now very attractive
Speaker 1: because of the increased kerry, they're not attractive in the
Speaker 1: short term. Um so are they better evil versus equities
Speaker 1: right now? I think I'd probably actually rather put my
Speaker 1: money into equities than bonds right now given those factors. Yeah,
Speaker 1: it's an interesting predicament. And I do feel like at
Speaker 1: this point, despite the risk off trade that we've seen
Speaker 1: certainly so far this week, Um, we did see a rally.
Speaker 1: Just a couple of weeks ago, we saw FED rally
Speaker 1: thanks to j Powell. I do feel like we're in
Speaker 1: a universe where Tony, you know, volative volatility, you know,
Speaker 1: an uncertainty is one thing that we can kind of
Speaker 1: count on. Right we just don't quite know if we're
Speaker 1: going to be in a recession in the US, what
Speaker 1: kind of recession it might be. What's the FED ultimately
Speaker 1: going to do because the now data continues to be mixed.
Speaker 1: We just heard from big banks CEOs are exclusive interviews
Speaker 1: thanks to r Shonali Bossik, you know, with the likes
Speaker 1: of Goldman Sack CEO and others, where the tone does
Speaker 1: feel kind of negative in terms of the outlook. But
Speaker 1: you know, you talk to another CEO and we've had
Speaker 1: a lot in our air, Tim and myself, and they
Speaker 1: seem to still be upbeat despite some of the undercurrents
Speaker 1: and the narrative that's out there. So is it safe
Speaker 1: to say that we could kind of go either in
Speaker 1: a better direction or worst direction at this point? Is
Speaker 1: it kind of like a bet here? Well? I think
Speaker 1: that it's the question question is will we have a
Speaker 1: recession or not? But we are going to have weakening regardless.
Speaker 1: I think that everybody pretty much there's a consensus out
Speaker 1: there that we're going to experience economic weakening. We're seeing
Speaker 1: core goods rollover. We're seeing significant weakness and shelter housing
Speaker 1: which is going to find us way into the CPI data,
Speaker 1: which is a good thing. We are seeing um some
Speaker 1: capitulation in certain areas of the service sector. Um notwithstanding
Speaker 1: ten dollars tailor slip tickets, which maybe you can reset
Speaker 1: on for twenty that's right. We can all agree that
Speaker 1: that's a unique case. But you know, across services you
Speaker 1: are starting to see um some breakdown and if you
Speaker 1: look at the consumer, the consumer is now at a
Speaker 1: point where they are approaching exhaustion, so the consumer is
Speaker 1: blowing through their savings, they're getting deeper into consumer credit. Um,
Speaker 1: they're getting deeper into consumer credit in an environment where
Speaker 1: rates are higher than they've seen in a long time,
Speaker 1: and that means that the consumer is gonna have to
Speaker 1: slow down on the service to side as well. So
Speaker 1: all of that is happening, All of that is going
Speaker 1: to lead to economic weakening. The only question is how
Speaker 1: bad will it get and will it actually be a
Speaker 1: real recession? Will go ahead? Please thirty seconds, it's gonna say,
Speaker 1: we do think we'll have a recession, but we don't
Speaker 1: think it's going to be one accompanied by millions of
Speaker 1: job losses, probably maybe up to a million job losses
Speaker 1: scattered across the economy. Uh. And then at the end
Speaker 1: of the day, we think this FED is very concerned
Speaker 1: around the third rail GDP. So as long as the
Speaker 1: inflation rate comes down to, you know, call somewhere around
Speaker 1: three and a half or below by the middle of
Speaker 1: last year, that's going to be very active to back
Speaker 1: down rates in order to not cause to deeper recession.
Speaker 1: I thought it was interesting what you said about how
Speaker 1: many job losses, especially when we've had conversations where people say, yeah,
Speaker 1: we can have a recession, but the labor market can
Speaker 1: still be kind of taken along here. Tony Roth, thank you,
Speaker 1: Chief Investment Officer at Wilmington's Trust, Investment Advisors, the investment
Speaker 1: advisory arm of Wilmington's Trust, and M ANDT Bank. Thanks
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