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Speaker 2: The Conversation of the Day, Amy with Silverman, joins us
Speaker 2: from the Royal Bank of Canada RBC Capital Markets. Amy,
Speaker 2: you take the four cross moments and you bringing it
Speaker 2: into the dispersion in the market, the huge variance of opinions.
Speaker 2: How does one navigate the markets with such wide dispersion?
Speaker 3: Hi, Tom, Yeah, it's a great question. It's one that
Speaker 3: folks have been noodling on because when you do have
Speaker 3: high dispersion in the market, so meaning some stocks are
Speaker 3: going one way, others are going the other way, you
Speaker 3: do have this effect of it kind of canceling out
Speaker 3: on the index level and making signals like the VIX
Speaker 3: look lower than I think we feel it ought to be. Right,
Speaker 3: you have closed the closed VIX hasn't even surpassed that twenty,
Speaker 3: but we all feel the whiplash of those headlines and
Speaker 3: part of the culprit for why it feels lower from
Speaker 3: a volatility perspective, is that dispersion is so high, we
Speaker 3: don't have this big correlated co move particularly during earning.
Speaker 2: And now as we go into February, we have our
Speaker 2: Hobbsey and double negative moment with Amy Woo Silverman. Amy,
Speaker 2: is it what I do do in the market or
Speaker 2: is what matter now? What I avoid, what I do
Speaker 2: not choose to do.
Speaker 3: You know, when you have these high dispersion environments, it
Speaker 3: really really matters what you what you do do. And
Speaker 3: you know, my favorite stat about this is you could
Speaker 3: have the same level of vix tom, you could have
Speaker 3: the same level s and P draw down, but in
Speaker 3: a high dispersion environment, if you made the right stock
Speaker 3: pick versus the wrong stock pick, you know, that outperformance
Speaker 3: differential could really be huge. It really matters if you're
Speaker 3: in the right sector. Is it really matters if you're
Speaker 3: in the right stocks versus a high correlation environment where
Speaker 3: it's all macro, we're all riding one wave.
Speaker 2: She's like the Queen of active management. I mean, that's
Speaker 2: what we're talking about here. Amy.
Speaker 4: There seems to be you know, now we have a
Speaker 4: President Trump back in office. Here, the the headline risk
Speaker 4: seems to be back into this market. How do you
Speaker 4: suggest that investors hedge that? Should they hedge that, should
Speaker 4: they not worry about it? Should they look through it?
Speaker 5: What do you say?
Speaker 3: You know, look, I, first of all, I don't drive,
Speaker 3: but for some reason, I really like driving analogies and
Speaker 3: my volatility outlook was called watch out for potholes. And
Speaker 3: that's exactly what we're going to get. You know, when
Speaker 3: you have someone like Trump in power, it's we're just talking.
Speaker 3: There are these potholes you're going to get. It could
Speaker 3: be like in August fifth, it could be like a
Speaker 3: February twenty eighteen. You know, we got our fingers and
Speaker 3: toes cross. But because of that, you know, I do
Speaker 3: think hedging makes sense, and simply because the positioning has
Speaker 3: gotten a lot more long after two consecutive twenty plus
Speaker 3: percent s a p years, right, there's just more to hedge.
Speaker 3: And we do see that starting to climb up in
Speaker 3: the skw in Tom's favorite word, the Kurtross, you are
Speaker 3: seeing that hedging demand rise much more than it has
Speaker 3: in the past two years.
Speaker 4: So I guess maybe one of the more recent headlines
Speaker 4: risk has just been terrorists. Do your clients care about that?
Speaker 4: Do they think it's a risk. Do they kind of
Speaker 4: look through that and say, hey, it's just a negotiating tool.
Speaker 4: We're not going to worry about the economic impacts.
Speaker 3: You know, it's so funny when we have these kind
Speaker 3: of macro client round tables. The most surprising kind of
Speaker 3: anecdote I can tell you is clients just say that
Speaker 3: they believe Trump will manage the stock market. And obviously
Speaker 3: there's no sort of fundamental analysis there. But I can't
Speaker 3: tell you how many times I've heard that that they
Speaker 3: just think the stock market will be okay, that this
Speaker 3: is all just part of a negotiation tactic. And that's
Speaker 3: another reason why I think you don't see these volatiley
Speaker 3: potholes kind of priced out to these fat or left
Speaker 3: tails that you feel like they ought to be given
Speaker 3: the headlines that you know, that is anecdotally what investors
Speaker 3: keep telling me.
Speaker 2: I'm reading Roger Altman as I try to get into
Speaker 2: the baseball season, one of his classic books from Here's Ago,
Speaker 2: It's a Tigers in nineteen sixty eight. Norm cash ol
Speaker 2: Kline amys Woo doesn't know what this is, but the
Speaker 2: answer is the baseball analogy, Amy Wood. It sort of
Speaker 2: like a batting average, thirty percent of the stocks go
Speaker 2: up in seventy percent don't really participate. Which way are
Speaker 2: we in that direction? Are we talking about fewer winners
Speaker 2: in more malaise or the other way around?
Speaker 3: You know, I really think investors hope it's the other
Speaker 3: way around. And we've seen fits and starts of that,
Speaker 3: right So, you particularly after the deep seek news, there
Speaker 3: was this question of if Megacaptec's going to keep holding
Speaker 3: us up? And when you saw that rotation, when that
Speaker 3: Monday that news came out, where did we go to?
Speaker 3: We went to all the breadth widening trades that have
Speaker 3: had fits and starts since last year. But I do
Speaker 3: you think that's what investors still believe is their keystone
Speaker 3: for this market being healthy. Of course, make a captech
Speaker 3: has to be, okay, Tom, it's just too much of
Speaker 3: a concentration not to be. But you know, small mid
Speaker 3: cap or what breadth widening traits that that's still what
Speaker 3: investors are really hoping for this market to be bowied
Speaker 3: up to this year.
Speaker 4: Amy, where do you see value in this market? I
Speaker 4: think some people, you know, they're trying to get away
Speaker 4: a little bit from maybe the mag seven kind of
Speaker 4: concentration risk into this market looking for maybe some value
Speaker 4: outside of that.
Speaker 5: Where do you guys see that?
Speaker 3: So one thing that we've talked about as one of
Speaker 3: our pillars for hedging is because you have this index suppression,
Speaker 3: you know SMP hedging may not necessarily be your best bet.
Speaker 3: We have a lot of thematic baskets where we think
Speaker 3: that hedging differential makes a lot of sense. So you know,
Speaker 3: if you believe in I versus you don't believe in
Speaker 3: an A actually using those thematic basket differentials and hedges
Speaker 3: versus using your traditional tools.
Speaker 2: Like we keep us out of suspense, I understand the
Speaker 2: New York Mets are the attic basket, particularly after bringing
Speaker 2: Alonzo on board. Give us an example, Amy with Silverman
Speaker 2: of a thematic basket.
Speaker 3: So we have a lot of them, and it's it's
Speaker 3: sort of you know, it's very driven by clients. But
Speaker 3: a good example is what stocks would benefit from AI continuing.
Speaker 3: They don't necessarily have to be AI specific names. They
Speaker 3: could be AI adjacent names like utilities. And then we
Speaker 3: have the opposite, right, we have your traditional cyclical baskets.
Speaker 3: When you look at that differential TOM in the weighted
Speaker 3: average applied volatilities. To me, that gives you a much
Speaker 3: better sense of where risk is right now than just
Speaker 3: purely using something like the SMP index. And we look
Speaker 3: at those differentials really closely because it gives us a
Speaker 3: sense much more of skew nowadays than just looking at
Speaker 3: the index level.
Speaker 2: Okay, well, where's the value trap right now? On a
Speaker 2: quantitative basis when you look at the harmful you got
Speaker 2: to hedge? And if you want to avoid a value trap,
Speaker 2: how do you study that? And what do you avoid?
Speaker 3: You know, I think what you avoid right now is
Speaker 3: getting trapped in the dispersion on that index level. So
Speaker 3: for instance, you know, if you are thinking about a
Speaker 3: hedge right now, you may actually be better off with
Speaker 3: idiosyncratic hedges because of where dispersion is than using something
Speaker 3: like S and P or something that is much more
Speaker 3: going to benefit if you get a pickup in correlation.
Speaker 3: To me, that's the difference right now in this market
Speaker 3: that wasn't true in a higher correlation environment. To me,
Speaker 3: that's the trick right now when you're thinking about hedging
Speaker 3: your reports.
Speaker 6: I mean, that's just what she just said there.
Speaker 2: Let me translated, folks, She said, use the Boston Red
Speaker 2: Sox as an age.
Speaker 6: That's what she said.
Speaker 4: Amy, You know what, the stock markets adder near all
Speaker 4: time highs. Here are you seeing downside protection? Are folks
Speaker 4: hedging some of their gains?
Speaker 6: Here?
Speaker 3: They are? They? And you know, to me, it's really interesting,
Speaker 3: right because if you look the past two years, we
Speaker 3: were in this fomo yolo market, one was buying call options.
Speaker 3: But you know, the one distinction I'll tell you is
Speaker 3: it's really a dichotomy between what institutional investors are doing
Speaker 3: and what retail is doing. We're actually still continuing to
Speaker 3: see that fits to the right tail on the retail side,
Speaker 3: it's mostly the institutional investors that are now thinking more
Speaker 3: about protecting their portfolio. And then that goes back to
Speaker 3: what I had said earlier about well, how do we
Speaker 3: protect our portfolios right now in a high dispersion environment.
Speaker 3: You know, do we use our traditional indices or do
Speaker 3: we think much more sector and stock specific, use those
Speaker 3: thematic baskets. I don't know baseball at all, but I
Speaker 3: guess they're like the Boston Red Sox, but you know,
Speaker 3: be much more specific about that in an environment where
Speaker 3: you know, some things are going one way and some
Speaker 3: things are going the other way.
Speaker 2: When you see the ten year yield come in, I
Speaker 2: mean it's more like a Francis Donald question. But when
Speaker 2: you see the yield space come in in the somewhat
Speaker 2: exuberance within the cacophony of political news, including in Canada
Speaker 2: any with Silverman, is this a bull market? And the
Speaker 2: answer is, I'm sorry, we're printing higher at seeames.
Speaker 3: We certainly are. And you know, to me, it's one
Speaker 3: of those like it's going to be great until you
Speaker 3: get that volatility potfule, right, it's going to be great
Speaker 3: till you get that August fifth or that February twenty eighteen.
Speaker 3: But you know, the one thing I'll say about what
Speaker 3: Besson said about targeting that yield versus marketing rates is
Speaker 3: we have to really be careful Tom about watching the
Speaker 3: rates versus equity wall correlations changing, because that's a relationship
Speaker 3: we've been counting on, just like bond equity correlations. But
Speaker 3: you know, when people start to kind of say we're
Speaker 3: thinking about this, then you have to watch that relationship
Speaker 3: because if that breaks, we see a lot of other
Speaker 3: things breaking to I.
Speaker 2: Mean, nobody cares. All they want to know is skylt
Speaker 2: Caruso over People Magazine has Jason confirming Taylor Swift will
Speaker 2: be at the Super Bowl to support Travis. Okay, great,
Speaker 2: we have to remind everyone, Amy Wu Silverman dragged I say,
Speaker 2: dragged her daughter to see Taylor. So they said they're
Speaker 2: looking and screaming like Row six or something. I mean, Taylor,
Speaker 2: Adam and all that. Give us a Taylor Swift update,
Speaker 2: Amy Wo Silverman, I mean, do you go with the
Speaker 2: Chiefs just because she's going to darken the door in
Speaker 2: New Orleans?
Speaker 7: I guess.
Speaker 3: Look, I know so little about football, like it's worse
Speaker 3: than what I know about baseball. But if that's where
Speaker 3: tem Taylor is, I guess that's where we are too,
Speaker 3: So go chief.
Speaker 2: Okay, Amy Wo Silverman, thank you so much, greatly appreciate it.
Speaker 6: RBC Capital Markets.
Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live
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Speaker 2: David Rosenberg leads his note this morning with comments on
Speaker 2: the Secretary of Treasury. David just to begin with, can
Speaker 2: the Secretary of Treasury single handedly lower the ten year yield.
Speaker 5: No US, there you go.
Speaker 4: So what do you expect to hear from our secretary
Speaker 4: of the treasure What would you like to hear from
Speaker 4: the secretary?
Speaker 8: Well, you know, I mean the assumption is that Besson
Speaker 8: has any real influence on the president. I think that
Speaker 8: we don't really know the answer to that. But we
Speaker 8: know that Donald Trump is going to do what he
Speaker 8: wants to do. So it really comes down to you know,
Speaker 8: what he says and ultimately what he does and what
Speaker 8: you think his objectives are. But to me, you know,
Speaker 8: the most important voice, by far is what the President
Speaker 8: has to say. I don't think Scott Besson has the
Speaker 8: same degree of influence on Trump say that Bob Rubin
Speaker 8: may have had on.
Speaker 5: Bill Clinton back in the day.
Speaker 8: So, you know, tremendous respect for the Treasury secretary, but
Speaker 8: I question just how much influence he really has.
Speaker 2: We're going to get to this with David Rosenberg. I
Speaker 2: did a panel with him up in Toronto. It was
Speaker 2: like riveting on the politics of Canada and the I've
Speaker 2: been reading the Globe and mail, David Shreeman and others
Speaker 2: up there.
Speaker 6: I want to get to that in a moment.
Speaker 2: You have a headline David Rosenberg's classic David, and it's
Speaker 2: the bond bullion barbell outpaces the equity market.
Speaker 6: To me, that's fascinating.
Speaker 2: Describe the bond bullion barbell.
Speaker 8: Well, it's the barbell or the blended return between the
Speaker 8: two save havens, which are treasuries and gold, which combined
Speaker 8: have generated a total return of around six percent so
Speaker 8: far this year, the SMB one hundred total returns four
Speaker 8: and a half percent. Just a reminder to people out
Speaker 8: there who have ice in their veins and the risk
Speaker 8: on momentum trade that's dominating the headlines that actually, when
Speaker 8: you look risk for reward, combined bonds and gold have
Speaker 8: actually been a better strategy year to date, still early on,
Speaker 8: than the equity market's been. So that was basically the
Speaker 8: message is that if you're looking for alternatives, that particular
Speaker 8: strategy is actually a great stabilizer, not just a stabilizer,
Speaker 8: but also is adding alpha to your total portfolio.
Speaker 4: David Tomorrow, here in the United States, we're going to
Speaker 4: get the non farm payrolls here.
Speaker 5: What are you looking for?
Speaker 6: Him?
Speaker 4: How do you think the Fed's gonna kind of look
Speaker 4: at this data?
Speaker 8: Well, it's a great question. I mean, the question is
Speaker 8: not just about non farm payrolls, but about just the
Speaker 8: data right now in general. How much influence are they
Speaker 8: going to have because the Fed is already lead down
Speaker 8: the gauntlet that nothing is happening in the first half
Speaker 8: of the year. And you remember, you go back a
Speaker 8: few months ago, we had a ton of rate cuts
Speaker 8: being priced in immediately, and that's not happening because of
Speaker 8: all the Trump uncertainty. So I'm not so sure that
Speaker 8: tomorrow's number is going to have a big influence on
Speaker 8: the Fed. Of course, you know, the markets trade around it.
Speaker 8: We just had back to back months. You know the
Speaker 8: new Powell inflation indicators no longer you know the super core,
Speaker 8: you know the CPI X energy X shelter. It's the
Speaker 8: market based core pc the flavor, which he's discussed several times,
Speaker 8: and that metric has come in at zero point one
Speaker 8: percent each of the past two months. And I think
Speaker 8: without all the Trump uncertainty, especially regarding tariffs, and you
Speaker 8: could argue also a fiscal policy, although right now fiscal
Speaker 8: policy is tightening on the spending side, so it's really
Speaker 8: mostly about tariffs. The FED would still be talking about
Speaker 8: cutting rates right now. When you're talking about what the
Speaker 8: trend in the market based core PC to flavor, you know,
Speaker 8: it's running now on a three and six month basis
Speaker 8: right of the two percent target. And this has become
Speaker 8: Powell's favorite indicator. But they're actually signaling that they're on
Speaker 8: hold in definitely, and that's because of all the policy
Speaker 8: uncertainty that we have in front of us, and we
Speaker 8: have to wait for that clarity to come to the
Speaker 8: fore whenever it does come to the fore. But the
Speaker 8: Fed right now is signaling nothing's going on rate wise
Speaker 8: until the summer. So tomorrow's number, I don't think is
Speaker 8: going to bear a lot unless you know, we're going
Speaker 8: to get revisions to the household survey and the payroll survey.
Speaker 5: They'll probably show some convergence.
Speaker 8: We're going to get, you know, the numbers coming off
Speaker 8: that new population count based on the immigration file or
Speaker 8: the previous boom and immigration. So the question for me
Speaker 8: is going to be the big number tomorrow Actually after
Speaker 8: we all look at the non farm payroll headline and
Speaker 8: the visions is what how did this affect the unemployment rate?
Speaker 8: And so so far as that nudge is the unemployment
Speaker 8: rate up tells the fad, there's more slack than they thought,
Speaker 8: and that could you know, maybe bring marginally the date
Speaker 8: forward for when they might start cutting interest rates again.
Speaker 5: But to me, nothing much beyond that.
Speaker 4: David, I know in your note this morning, you talk
Speaker 4: about the US trade deficit and the big dent to
Speaker 4: US growth coming from the widening trade deficit. You're focused
Speaker 4: on the trade deficit, but I don't think the folks
Speaker 4: in Congress are How do you think about the US
Speaker 4: trade deficit?
Speaker 8: Well, I'm looking more at at the components, Like we've
Speaker 8: had a big decline in exports in December and they're
Speaker 8: down precipitously through the past four months. And what that's
Speaker 8: telling me is one thing is about the impact of
Speaker 8: the super strong US dollar. People, I don't think you're
Speaker 8: recognizing just how much financial conditions in the US of
Speaker 8: titan over the course of the past few months. And
Speaker 8: on top of that, it's also telling me that this
Speaker 8: how weak the global economy is right now that we're
Speaker 8: seeing the exports side really starting to not just accelerate
Speaker 8: but now contract, So of course it's going to lead
Speaker 8: to fourth quarter GDP downward revisions to what we already
Speaker 8: saw from the commerce Department. But it's telling us something
Speaker 8: about the state of the global economy, both in Asia
Speaker 8: and Europe, that it's coming back to hit home in
Speaker 8: terms of the reduction and exports, and exports have a
Speaker 8: very powerful multiplier impact on the rest of the industrial sector.
Speaker 8: And you're right, nobody else is talking about it. So
Speaker 8: I thought, Okay, I guess I'll order that.
Speaker 2: Mart David Rosenberg wh this week continue with Rosenberg Research, Toronto.
Speaker 2: Thrilled he's with us this morning. Futures up sixteen. They
Speaker 2: advance across the arc of the morning here nineteen minutes
Speaker 2: away from a market open. We welcome all of you
Speaker 2: on a commute across the nation, across Canada as well,
Speaker 2: and of course on YouTube subscribe to Bloomberg Podcast. Paul
Speaker 2: and I really humbled by the statistics for January. They
Speaker 2: let us into the statistics. I have to buy lunch,
Speaker 2: you know, yep, they forced me to buy lunch.
Speaker 6: But you know that's fine, thods just fine.
Speaker 2: There we were, David Rosenberg, you and I did this
Speaker 2: panel up in Toronto. I was shocked at what I
Speaker 2: perceived is the struggle of the Canadian spirit in Toronto.
Speaker 2: And I want you to explain the power right now,
Speaker 2: I've got CBC here with the Conservatives with forty three
Speaker 2: percent of the vote, the Liberals, whoever's going to replace
Speaker 2: Trudeau with twenty three percent of the vote. Is it
Speaker 2: like France where they get together in a coalition or
Speaker 2: is it just in our translation Republicans versus Democrats.
Speaker 5: Well, another great question.
Speaker 8: You know, it's a parliamentary system here, but it's not
Speaker 8: as it's not as fragmented as it.
Speaker 5: Is over in Europe.
Speaker 8: There's really three main parties and actually, for the past
Speaker 8: several years, because the Liberals didn't have a majority, the
Speaker 8: justin Trudeau Liberals had to team up with the Socialist
Speaker 8: and DP party to be able to well not have
Speaker 8: a majority, but have a coalition so that they wouldn't.
Speaker 5: Be a non confidence vote.
Speaker 8: A few months ago that coalition broke and now of
Speaker 8: course we're in a leadership race and Parliament is closed
Speaker 8: right now, and then we'll have it probably to life
Speaker 8: sometime I would expect during the spring.
Speaker 5: So it's not as fragmented.
Speaker 8: I don't think that unless we have a minority government,
Speaker 8: we're not going to have a coalition. If the polls
Speaker 8: are accurate right now, I'm not so sure that they are,
Speaker 8: because we don't know who's going to be leading a
Speaker 8: Liberal party. Mark Carney, being an outsider and being hailed
Speaker 8: of course, is having all these tremendous global economic and
Speaker 8: financial credentials, and he's not going to be tainted by
Speaker 8: the past number of years of failed Liberal policies. He'll
Speaker 8: be a fresh face. I would expect that if we
Speaker 8: have this conversation a couple of months from now, Tom,
Speaker 8: that those polls are going to narrow win. If Carney
Speaker 8: wins the Liberal leadership race, which I think he probably
Speaker 8: will at this point. But if the election was held
Speaker 8: today based on those polls, it would be it would
Speaker 8: be a Brian mulroney like landslide majority of the Conservatives.
Speaker 8: But I wouldn't extrapolate that because Carney. If Carney emerges victorious,
Speaker 8: he's going to pack a very powerful punch.
Speaker 2: Do you or anyone have any idea what happens? What
Speaker 2: is it twenty seven days? Like David, do you have
Speaker 2: any idea what happens in twenty seven days?
Speaker 8: Well, I don't think the tariffs are going to be coming.
Speaker 8: I'm notwithstanding the quotes thirty day reprieve because we have
Speaker 8: to look at the facts that are presented in front
Speaker 8: of us, you know, Friday, last Friday at the White House,
Speaker 8: when asked if there was any chance that the tariffs
Speaker 8: on Canada and Mexico would be averted, he said, no,
Speaker 8: not a chance. They're a done deal. And then one
Speaker 8: phone call on Monday with Mexico and two in Canada.
Speaker 8: Next thing, you know, well, no, we've got a thirty
Speaker 8: day reprieve. Remember he changed his mind as to when
Speaker 8: he was going to level the tariffs. He still has
Speaker 8: the power to do that. And so the question comes why,
Speaker 8: because what Mexico. Let's talk about Canada. What did Canada
Speaker 8: really do? Like, what did we do?
Speaker 6: What?
Speaker 8: Like fentadelts are like, what is that We'll have a
Speaker 8: few helicopters and drones looking over the border. The one
Speaker 8: point three billion dollars of more border security and enforcement
Speaker 8: justin Trude already pledged that quite a while ago. So
Speaker 8: you know what really changed, What really changed is that
Speaker 8: Canada Mexico moved a little bit. And now Donald Trump
Speaker 8: can once again claim a win to the US general public.
Speaker 8: He got a win from Canada. It went from Mexico
Speaker 8: got you know, got a win from Colombia got a
Speaker 8: win from Panama, So he's just collecting all these wins.
Speaker 8: Of course, I think that they're inflated. But I think
Speaker 8: that the bottom light here is that it comes back
Speaker 8: to the initial question about about Scott Besson about you know,
Speaker 8: they want to get inflation down, they want to get
Speaker 8: the So answer the question, can he directly get the
Speaker 8: ten year note yield down? Well, not directly, win directly,
Speaker 8: you know, forego all the tax stimulus and keep your
Speaker 8: focus on on the spending restraint right now, Well that's
Speaker 8: the help and anything you can.
Speaker 5: Do to reduce inflation.
Speaker 8: Inflation expectations will tell me that's not going to bring
Speaker 8: down to ten year treasury no yields. So certainly, you
Speaker 8: know he can have an influence from a fiscal policy standpoint.
Speaker 8: But yeah, ask you of the question why did Trump
Speaker 8: change his mind? And why do I think he was
Speaker 8: never going to take him seriously or literally? He campaigned
Speaker 8: on a lot of things, but the biggest campaign message
Speaker 8: was he was going to unwind the rest of all
Speaker 8: the Biden inflation. He was going to bring ghastly and
Speaker 8: the grocery prices down. Didn't you know, well, how are
Speaker 8: you going to do that and then put a tariff
Speaker 8: on Mexico, which applies sixty percent of US food imports
Speaker 8: or thirty percent. Canada supply sixty percent of oil imports.
Speaker 8: There would be a massive inflation shock, even temporarily, and
Speaker 8: that would work against his objectives. So as I think
Speaker 8: about it, and I wasted too much time on the
Speaker 8: weekend worrying and writing about it that it was never going.
Speaker 5: To happen, it didn't happen.
Speaker 8: And I still have Canadians here are still on tenor
Speaker 8: hooks about what's going to happen on March first.
Speaker 5: I'm telling them, I mean, he's not gonna do it,
Speaker 5: I guess.
Speaker 8: So maybe he'll get more concessions and show that I
Speaker 8: got more wins.
Speaker 5: But it's a to me basically.
Speaker 8: You know, Justin Trudeau had a chance to actually call
Speaker 8: Trump's bluff, but he didn't. But no, I don't think
Speaker 8: I think that if they didn't as close to zero
Speaker 8: percent probability, I do not think the tariffs are coming
Speaker 8: into your country because it's.
Speaker 5: Going to work against it. Right, It's going to work
Speaker 5: against Trump's legacy.
Speaker 6: I gotta squeeze this in a one minute.
Speaker 2: David, one of the reasons. I'm a Montreal Canadians fan.
Speaker 2: Is a gunpoint I was for We had a family
Speaker 2: family that we knew called the Great Britains, and we
Speaker 2: would go up to the Thousand Islands of two lifetimes
Speaker 2: ago David Rosenberg, and there was this relationship between America
Speaker 2: and Canada wrapped around the Saint Lawrence Seenway and Gananaqua
Speaker 2: up to Montreal.
Speaker 8: Is that gone, Well, it's it's I wouldn't say it's gone,
Speaker 8: but you know, it's it's been impaired, at least for now.
Speaker 8: I really I don't like the fact that you know,
Speaker 8: we're booing you know, national anthems. I mean, this is
Speaker 8: more about you know, half the US population voted against Trump, Like,
Speaker 8: what are you booing against? It's really h It's really
Speaker 8: about the president. So be the president. But the reality
Speaker 8: is that you know, politics will compulx will go.
Speaker 5: I wouldn't, you know.
Speaker 8: Extrapolate this into the future, but right now, right right now,
Speaker 8: I got to say Canadians generally speaking, and of course
Speaker 8: I live in Toronto, they're feeling really hurt by what's happened.
Speaker 5: And the thing is that.
Speaker 8: I don't think the tariffs are going through. But the
Speaker 8: die has been cast and the damage is done by
Speaker 8: the way Tom not just here but in the US
Speaker 8: too because of the uncertainty that's being implemented into not
Speaker 8: just the financial markets, but in the economy. I think
Speaker 8: you're going to find the one thing that's going to
Speaker 8: be shelved in bulcan United States because just because of
Speaker 8: the specter and the threat with the tariff, it's going
Speaker 8: to be shelving capital spending.
Speaker 2: Clients say, I'm out of time, Michael Barsa's get out
Speaker 2: the hook. David Rosenberg. That was wonderful. Thank you so much,
Speaker 2: Thank you, Thank you. David Rosenberg of Rosenberg Research on
Speaker 2: his Canada.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Apple Corplay and Android
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Speaker 1: Just say Alexa play Bloomberg eleven thirty.
Speaker 6: This in the Washington Post.
Speaker 2: This time the anti Trump resistance is in the courts,
Speaker 2: not in the streets. For both of you supporting the
Speaker 2: president and those upset at the president. Wendy Schiller with
Speaker 2: his now professor at Brown University. The subtitle Professor Schiller
Speaker 2: is a president issues orders that some say disregard the law.
Speaker 2: A hap hazard group of opponents is filing lawsuits. Where
Speaker 2: is the judiciary professor Schiller?
Speaker 7: Well, good morning, Tom, Good morning, Paul and Lisa. You know,
Speaker 7: did you shary?
Speaker 9: We have to wait and see which judiciary is We
Speaker 9: know venue shopping, which is the term that describes people
Speaker 9: who are interested in getting a particular ruling from the
Speaker 9: federal courts, find a plaintiff in particular jurisdictions to match
Speaker 9: what the ruling is that they want. So the ninth
Speaker 9: certain California, is thought to be somewhat liberal.
Speaker 7: The fifth Circuit that deals.
Speaker 9: With Texas, mostly in Oklahoma and Louisiana, is thought to
Speaker 9: be quite conservative.
Speaker 7: So those are appeals court circuits.
Speaker 9: You start in the district courts and you really venue
Speaker 9: shop to see can you get a judge.
Speaker 7: We had a ruling from a Rhode Island judge that will.
Speaker 9: Issue a ruling that at least will give an injunction
Speaker 9: or some time for you to mobilize other forces in
Speaker 9: the American political system.
Speaker 2: So I got somebody in Bethesda listening to ninety ninety
Speaker 2: one FM. Good morning, Nathan Hager his food courts better
Speaker 2: than our Yeah, I don't know how that sounds.
Speaker 6: Very good, Wendy.
Speaker 2: That person in Bethesda now looking at Doze or you know,
Speaker 2: name the crisis. I guess they're going after the FAA
Speaker 2: tomorrow whatever, whatever the crisis is. How long do they
Speaker 2: wait for the judiciary, whether Texas or California to show up.
Speaker 9: Well, they've already showed up, right, I mean, they've already
Speaker 9: been in junctions against the Birthright Executive Order for example,
Speaker 9: most recently the spending the freeze on the money that
Speaker 9: was spent. There already are temporary injunctions, but they're temporary.
Speaker 9: They have to really go to court and get them
Speaker 9: more firm if they want to do any stalling or blocking.
Speaker 7: And so it's going to crawl through the courts.
Speaker 9: And the question is does the trumpministration pay attention to
Speaker 9: the federal courts?
Speaker 7: Will they actually abide by federal rulings?
Speaker 9: You know, in the past, we've had state governors that
Speaker 9: said no to federal government. It's unusual to have the
Speaker 9: federal government, the executi branch say no to the federal courts.
Speaker 9: That's coming and I think that's something we haven't seen before,
Speaker 9: and the impact of all these or Tom, we just
Speaker 9: simply don't know. I mean, first of all the issues orders,
Speaker 9: then he takes it back or issues orders, and then
Speaker 9: he qualifies. So in terms of the Trump administration, how
Speaker 9: much is real firing federal employees seems to be quite real.
Speaker 9: The impact that the average American will feel, that's gonna
Speaker 9: take a while.
Speaker 4: So, Wendy the news flow. Not surprisingly, he continues to
Speaker 4: be pretty darn steady coming out of Washington, DC. What's
Speaker 4: the feeling about this Gaza news over the past a
Speaker 4: couple of days. Was it an off the cuff the remark?
Speaker 4: Was it a serious policy initiative? What are you hearing
Speaker 4: from your sources?
Speaker 9: I can only, as I always do, speculate, But it
Speaker 9: is so in keeping with Donald Trump.
Speaker 7: He sees a beautiful property. I mean, it's on the water,
Speaker 7: it's beautiful, the weather's great.
Speaker 9: He literally, i think, perceives this as a good deal,
Speaker 9: A good deal for Palestinians, A good deal unless they
Speaker 9: are forcibly removed, obviously.
Speaker 7: Which would not be a good deal.
Speaker 9: But he's saying, nothing's ever stuck, and if you do,
Speaker 9: you don't have economic livelihood.
Speaker 7: You can't survive, and that is true. So you know,
Speaker 7: not every single thing Donald Trump says is untrue.
Speaker 9: We don't have any right to take it over at all, buyers, sell,
Speaker 9: or displace anybody. But when you think about his mindset,
Speaker 9: it's totally in keeping with Donald Trump's mindset to solve
Speaker 9: the problem through a business deal.
Speaker 2: Was this the way Andrew Jackson was.
Speaker 9: Andrew Jackson didn't have nearly as many layers of government
Speaker 9: despite Jefferson's effort to build a bureaucracy.
Speaker 7: And he was a general. I mean, you know this story.
Speaker 9: You know very well about Eisenhower, how frustrated he was
Speaker 9: as president of the United States because he had been,
Speaker 9: you know, the leader of the European theater in World
Speaker 9: War Two. He was a general and he would say
Speaker 9: things and they wouldn't get done. Trump has a general's
Speaker 9: mentality in that sense, and he wants things done. That's
Speaker 9: why he's letting us run the way he is. But
Speaker 9: when you can't fly because that's not working, when your
Speaker 9: water is no longer clean because that's not working, then
Speaker 9: we have to see whether there's any public reaction.
Speaker 4: So, Wendy, I guess one of the more nuts and
Speaker 4: bolts things coming out of Washington is they need to
Speaker 4: get a budget strategy going here. There's a lot of
Speaker 4: legislation that's kind of cueued up over the next several months.
Speaker 4: Do we have any idea how this will play out?
Speaker 4: Is a Trump administration, do they have a game plan
Speaker 4: for some of this legislation and some of this budgetary issues.
Speaker 7: This is a jogging between the House and the Senate
Speaker 7: Visa v.
Speaker 6: Trump.
Speaker 9: The Senate promises reconciliation, which means that you don't get filibustered.
Speaker 9: That means you can guarantee that you will get a
Speaker 9: budget through and the tax cut bill through, just as
Speaker 9: Obama used it for the Affordable Care Act.
Speaker 7: You can promise that to Trump.
Speaker 9: So in the game of delivering, John Thune, the Senate
Speaker 9: majority leader Republican, can deliver, whereas Mike Johnson does not
Speaker 9: have the votes to deliver the same budget because the
Speaker 9: very far right fiscal hawks want deeper cuts that the.
Speaker 7: Senate won't take. So Fune is saying, listen, side with.
Speaker 9: Us, put pressure on the House because our people won't
Speaker 9: take those cuts, and then you've got a government that
Speaker 9: will shut down. Here's the thing to watch for. Democrat
Speaker 9: strategy maybe to shut down the government. We're just throwing
Speaker 9: it out there, but I'm just saying, if you're going
Speaker 9: to stop this juggernaut of firing people and shutting things down,
Speaker 9: shut the government down.
Speaker 2: So under your quaffin launch at Tammany Hall Pub and
Speaker 2: Parlor in Providence, there's like four Republicans brown that's where
Speaker 2: they go to lunch. So, Professor Schiller, you're the Republicans
Speaker 2: the conservatives at Tammany Hall Pub and Parlor, and they
Speaker 2: ask you, when has mister Musk shown the door? How
Speaker 2: do you frame that discussion, that dialogue right now about
Speaker 2: this absolutely original thing that is doge.
Speaker 7: Again, the same mantra over and over again.
Speaker 9: When people who live in red leaning states feel the
Speaker 9: impact severely from some of the lack of government.
Speaker 7: Oversight, the lack of government inspection.
Speaker 9: We've got a bird flu that seems to be persistent,
Speaker 9: that's affecting now Nevada. You know, you need the federal
Speaker 9: to come in and have USDA, you need CDC, you
Speaker 9: need these entities.
Speaker 7: And when they aren't there and nobody is picking up
Speaker 7: the phone and you can't get help, sooner or later
Speaker 7: you will turn on the federal government. In turn on
Speaker 7: Donald Trump.
Speaker 9: And if that happens and his ratings go down, his
Speaker 9: full numbers have already gone down a little bit since
Speaker 9: he was elected, then he'll look to Musk and he'll
Speaker 9: conveniently probably blame Elon Musk and show them the door.
Speaker 7: But for a lot of people, that may take too
Speaker 7: long for them.
Speaker 9: To sort of escape any kind of injury or harm.
Speaker 9: So we'll have to see you can make the federal
Speaker 9: brok more efficient. I think there's a reasonable argument to make,
Speaker 9: but the way that they're doing it maybe too abrupt.
Speaker 7: And what you say, and there are more than four
Speaker 7: Republicans at Brown, I will.
Speaker 2: Just tell you, thank you, we'll go We'll go wild
Speaker 2: today ten Wendy just on doge In, mister Musk, we
Speaker 2: get forty thousand people. I guess they's show on the
Speaker 2: door in September. I don't know what's your timeline on
Speaker 2: Elon Musk. Do you haven't your head like this guy's
Speaker 2: got through the weekend? Does this guy got through March?
Speaker 2: Does this guy got to the next test earnings? What's
Speaker 2: the shiller timeline on mister Musk?
Speaker 7: Well, just one simple thing.
Speaker 9: A lot of federal grants run on a January schedule
Speaker 9: and a July schedule, So now you're dealing with the
Speaker 9: people who did apply in January or we're going to
Speaker 9: and now you're thinking about July. And as that money
Speaker 9: freezes up, it's hundreds and hundreds of millions of dollars.
Speaker 9: People are going to feel it all over the country
Speaker 9: in their hospital systems in particular.
Speaker 7: So I think that's I'm looking at JUNI or July in.
Speaker 9: Terms of impact. You know, all these changes, what are
Speaker 9: the impact? And now you're gonna have Robert F. Kennedy
Speaker 9: most likely getting through at HHS. That's another huge feeder
Speaker 9: of money from the federal government to individuals and institutions.
Speaker 9: When that money gets blocked, you know, services may not
Speaker 9: be able to be provided, and then people are going
Speaker 9: to feel It's the same scenario as Nu Gingrid in
Speaker 9: nineteen ninety five. He was really run high January to
Speaker 9: July and then things fell off the.
Speaker 6: Right huge insight.
Speaker 2: That's what we love having Professor Schiller on.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Apple, Corplay and Android
Speaker 1: Auto with the Bloomberg Business app. You can also watch
Speaker 1: us live every weekday on YouTube and always on the
Speaker 1: Bloomberg terminal.
Speaker 2: So daily look at the front pages that Lisa Matteo report.
Speaker 2: She's far beyond driven.
Speaker 6: Lisa, what do you have?
Speaker 10: Okay? Count down to the super Bowl? Right, So the
Speaker 10: Wall Street Journal has this look into the new trends
Speaker 10: that you're going to see during the commercials because of
Speaker 10: commercials a big draw for the Super Bowl. Right, So,
Speaker 10: one burger chain is bringing back an old marketing strategy.
Speaker 10: Listen to this, and I've got.
Speaker 3: Just what you need to cure that post party bub.
Speaker 7: The Carls Junior hangover Burger.
Speaker 10: Carl's Junior bringing the sexy advertising back bikinis and burgers.
Speaker 10: You remember Paris Hilton, right, Kim Kardashian, they started this
Speaker 10: whole commercial trend. Now it's influencer alex Earl. Okay, for
Speaker 10: those of you who are watching YouTube, you can see
Speaker 10: the commercial right now.
Speaker 2: There you go.
Speaker 10: But the experts are saying that it shows the shift. Yes,
Speaker 10: there it is. Remember remember Paris Hilt. Oh my, see,
Speaker 10: no one's paying attention to.
Speaker 2: Lisa by the only planet that doesn't know is the
Speaker 2: rock and a commercial.
Speaker 6: That's all I want, No, no.
Speaker 10: But what they're saying is that they're showing. They're saying
Speaker 10: that it's kind of the country feeling the new feeling
Speaker 10: under the new administration. That's what they're saying. So the
Speaker 10: new administration is saying going back to old ways, and
Speaker 10: this carls Junior going back to old ways.
Speaker 4: That you to commercial.
Speaker 2: Can I just suggest maybe it will be a pleasant
Speaker 2: relief for all from what everybody's going through on a
Speaker 2: day to day basis. Okay, get the Sunday and it's
Speaker 2: actually like football.
Speaker 5: A good football game.
Speaker 10: You know who else is doing Open AI is actually
Speaker 10: debuting a commercial at the Super Bowl that's going to
Speaker 10: the Wall Street journals.
Speaker 5: So stay tuned for that.
Speaker 2: Sports books.
Speaker 10: Okay, So they want to cash in on the Taylor
Speaker 10: Swift fever at the Super Bowl, but it's not that easy.
Speaker 10: So novelty prop bets you know what I'm talking about, right,
Speaker 10: super Bowl centering on Taylor Swift, like Will Travis Kelsey
Speaker 10: proposed to Taylor Swift on the field, like those kind
Speaker 10: of bets. Okay, but they're on unregulated sites so the
Speaker 10: real guys can't get to it. But they're doing something different.
Speaker 10: So Draft Kings is coming up, with a quick way.
Speaker 10: They're called Swifty specials. So these kind of bets so
Speaker 10: prop bets that are named after Swift songs. So for example,
Speaker 10: you have the shake it Off bet right, okay, which
Speaker 10: has the Philadelphia Eagles scoring first and Chiefs to win.
Speaker 10: And then you have the Mine Bets, which is Swift's
Speaker 10: boyfriend Kelsey getting eighty seven or more receiving yards and
Speaker 10: scoring more one and more touchdowns.
Speaker 3: You see.
Speaker 10: So they're kind of using it that way in order
Speaker 10: to get it to be allowed either set.
Speaker 2: So the answer is that the Eagles win. It's a
Speaker 2: Champagne problems betright.
Speaker 6: That's one of her sons, exactly. Think I knew that.
Speaker 10: Next, okay, Moms and dads, I know I'm having trouble
Speaker 10: keeping up with the lingo that the kids are coming
Speaker 10: up with. It's fast and furious. The journal saying it's
Speaker 10: because of social media. So for example, remember Riz that
Speaker 10: was like the hot word. It's old, it's old read yes, okay,
Speaker 10: So you have to get to the new words like betamaxing, giat, gigachad, battie.
Speaker 10: Have you heard any of these? Sigma?
Speaker 2: Okay?
Speaker 10: So Tom, if your daughter calls you omega like you're
Speaker 10: so Omega, that's a bad thing. That's just just letting
Speaker 10: you know.
Speaker 7: So if it comes up at the dinner table, no.
Speaker 2: Go try dell, don't look I co try deal and
Speaker 2: it didn't work.
Speaker 4: Omega is like the lowest rate the.
Speaker 6: Today.
Speaker 2: Yes, yes, get squeeze one.
Speaker 10: And that's also AM radio could get a second wind.
Speaker 7: We're very excited about this.
Speaker 10: Okay, objections from EV manufacturers, you remember that, right, but
Speaker 10: biparts in legislation, advancing again in the Senate, so it
Speaker 10: could come back and get a second wind again.
Speaker 6: The newspaper is Lisa Matteo. Thank you so much.
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apples, Spotify,
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