1 00:00:05,120 --> 00:00:07,119 Speaker 1: This is the Bloomberg Surveillance Podcast. 2 00:00:07,160 --> 00:00:11,080 Speaker 2: I'm Tom Keene, along with Jonathan Farrell and Lisa Abramowitz. 3 00:00:11,280 --> 00:00:15,760 Speaker 2: Join us each day for insight from the best and economics, geopolitics, 4 00:00:15,760 --> 00:00:20,720 Speaker 2: finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, 5 00:00:20,960 --> 00:00:25,439 Speaker 2: Spotify and anywhere you get your podcasts, and always on 6 00:00:25,520 --> 00:00:29,720 Speaker 2: Bloomberg dot com, the Bloomberg Terminal, and the Bloomberg Business App. 7 00:00:29,840 --> 00:00:31,360 Speaker 3: Mike Wilson, Morgan Stanley. 8 00:00:31,560 --> 00:00:33,720 Speaker 4: He's been making a lot of warnings recently, the latest 9 00:00:33,920 --> 00:00:37,080 Speaker 4: saying that risks are building for US consumer stocks, writing quote, 10 00:00:37,080 --> 00:00:40,839 Speaker 4: this price action is picking up on slowing consumer spend, 11 00:00:41,000 --> 00:00:45,479 Speaker 4: student loan repayments resuming, rising delinquencies to certain household cohorts, 12 00:00:45,680 --> 00:00:49,240 Speaker 4: higher gas prices, and weakening data in the housing sector, 13 00:00:49,280 --> 00:00:52,400 Speaker 4: the quinfecta of threats or however money you want to 14 00:00:52,440 --> 00:00:55,560 Speaker 4: say that. Mike Wilson of Morgan Stanley joining us now, Mike, 15 00:00:55,880 --> 00:00:59,480 Speaker 4: how much pushback we talked about this before. Do you 16 00:00:59,520 --> 00:01:01,960 Speaker 4: still get the same degree of pushback that you did 17 00:01:02,200 --> 00:01:05,320 Speaker 4: a month ago? Or are more people listening and saying 18 00:01:05,319 --> 00:01:07,880 Speaker 4: wait a second. In the anecdotal data, this is starting 19 00:01:07,920 --> 00:01:08,520 Speaker 4: to make sense. 20 00:01:09,120 --> 00:01:11,800 Speaker 5: Yeah, look, I mean, I think the question for investors 21 00:01:11,880 --> 00:01:15,199 Speaker 5: is always price. I mean, we're in a late cycle environment. 22 00:01:15,280 --> 00:01:16,640 Speaker 5: Let me just set the table a little bit, right, 23 00:01:16,640 --> 00:01:18,920 Speaker 5: So we're in a late cycle environment for the last year, 24 00:01:19,280 --> 00:01:21,319 Speaker 5: and when you're in a late cycle environment, there's a 25 00:01:21,319 --> 00:01:24,319 Speaker 5: lot of uncertainty, right, I mean, people erroneously called for 26 00:01:24,400 --> 00:01:26,360 Speaker 5: recession in the first half of this year, it didn't happen, 27 00:01:26,640 --> 00:01:29,080 Speaker 5: and now they may be erroneously believing in like this 28 00:01:29,120 --> 00:01:32,000 Speaker 5: beautiful soft landing with some reacceleration next year. 29 00:01:32,120 --> 00:01:33,520 Speaker 6: They probably overpriced that. 30 00:01:33,480 --> 00:01:36,119 Speaker 5: In the summer. So what happens is investors get whipped 31 00:01:36,120 --> 00:01:38,360 Speaker 5: around by price action. And I would say what's happened 32 00:01:38,360 --> 00:01:40,800 Speaker 5: in the last two months is we are seeing a 33 00:01:40,840 --> 00:01:42,319 Speaker 5: breakdown again in a. 34 00:01:42,880 --> 00:01:43,759 Speaker 6: Lot of the stock market. 35 00:01:43,840 --> 00:01:45,960 Speaker 5: Okay, yeah, the overall averages are down four five percent, 36 00:01:46,080 --> 00:01:48,400 Speaker 5: not a big deal, but some of these consumer stocks 37 00:01:48,400 --> 00:01:51,120 Speaker 5: are really really struggling. And I think that reflects kind 38 00:01:51,120 --> 00:01:52,720 Speaker 5: of what we were talking about a minute ago before 39 00:01:52,720 --> 00:01:54,320 Speaker 5: we get on the air, which is that the middle 40 00:01:54,680 --> 00:01:57,800 Speaker 5: lower end consumer definitely is out of excess savings. That's 41 00:01:57,800 --> 00:01:59,520 Speaker 5: starting to bleed a little bit into the higher end 42 00:01:59,520 --> 00:02:02,240 Speaker 5: now as well. We have the student loan moratorium, and 43 00:02:02,320 --> 00:02:04,320 Speaker 5: I just think it's that's the wildcard, that is the 44 00:02:04,520 --> 00:02:06,960 Speaker 5: risk for the fourth quarter is can the consumer continue 45 00:02:06,960 --> 00:02:08,080 Speaker 5: to surprise on the upside? 46 00:02:08,120 --> 00:02:11,760 Speaker 4: Can you see some of these retail and consumer facing stocks, 47 00:02:11,760 --> 00:02:15,840 Speaker 4: these small cap stocks get blown out, have their valuations 48 00:02:15,919 --> 00:02:18,880 Speaker 4: completely decimated, and the rest of the markets hug along 49 00:02:19,040 --> 00:02:22,480 Speaker 4: and no one noticed because the Magnificent seven keep heralding 50 00:02:22,639 --> 00:02:25,720 Speaker 4: all of the cautious votes of confidence from a lot 51 00:02:25,720 --> 00:02:28,119 Speaker 4: of the consumers that see them as cash cows in perpetuity. 52 00:02:28,440 --> 00:02:31,160 Speaker 5: Well, it can continue if you don't have that heart landing. Okay, 53 00:02:31,200 --> 00:02:33,320 Speaker 5: if you have a heart landing, then even the big 54 00:02:33,360 --> 00:02:35,560 Speaker 5: winners will feel that, right, And I think that's what 55 00:02:35,760 --> 00:02:38,399 Speaker 5: the market's betting on. The market's betting there is no recession. 56 00:02:38,639 --> 00:02:40,560 Speaker 5: And we taught you know, the bomb market. Is that signaling, 57 00:02:40,600 --> 00:02:42,520 Speaker 5: you know, greater strength or is that signaling that maybe 58 00:02:42,560 --> 00:02:44,680 Speaker 5: the bond market's pushing back on the fiscal you know, 59 00:02:44,760 --> 00:02:45,360 Speaker 5: kind of spending. 60 00:02:45,400 --> 00:02:46,400 Speaker 6: I think it's a little bit of both. 61 00:02:46,800 --> 00:02:48,680 Speaker 5: And if we don't have a hard landing, then the 62 00:02:48,720 --> 00:02:50,840 Speaker 5: big names are probably going to continue to lead because 63 00:02:50,840 --> 00:02:52,440 Speaker 5: they have scale and they have better bantle treets. 64 00:02:52,600 --> 00:02:54,880 Speaker 1: Let's go back to Graham dud cottle one oh one. 65 00:02:55,000 --> 00:02:57,880 Speaker 2: Mike Wilson, how can you be as cautious as you've 66 00:02:57,919 --> 00:03:01,840 Speaker 2: been and not have a massive cash position? What is 67 00:03:01,880 --> 00:03:05,280 Speaker 2: your cash position? How invested are you within your caution? 68 00:03:05,800 --> 00:03:09,200 Speaker 5: Yeah, I mean we're we're basically ninety five percent invested. 69 00:03:09,280 --> 00:03:11,960 Speaker 5: You know, we're like five percent underweight equities. And we've 70 00:03:11,960 --> 00:03:14,000 Speaker 5: talked about this before. We never go one hundred percent cab. 71 00:03:14,080 --> 00:03:16,560 Speaker 2: Yeah. What the financial media does, of course, great theater 72 00:03:16,760 --> 00:03:17,120 Speaker 2: of course. 73 00:03:17,160 --> 00:03:19,040 Speaker 5: Now what we can do, Tom is we can be 74 00:03:19,160 --> 00:03:22,239 Speaker 5: positioned more defensively within our equity exposure, which is what 75 00:03:22,280 --> 00:03:24,760 Speaker 5: we've done, right, So we're skewed more towards kind of 76 00:03:24,800 --> 00:03:27,680 Speaker 5: defensive growth. You know, late cycle cycle calls as the 77 00:03:27,760 --> 00:03:29,639 Speaker 5: post to that. We're not grabbing for beta, we're not 78 00:03:29,680 --> 00:03:31,800 Speaker 5: grabbed for small caps. We're not grabbing for the stuff 79 00:03:31,800 --> 00:03:34,200 Speaker 5: that's really kind of vulnerable if things go sideways. 80 00:03:34,240 --> 00:03:36,600 Speaker 2: Okay, you're with James Gorman. He's saying, Mike, I don't 81 00:03:36,600 --> 00:03:38,520 Speaker 2: care about it in this blather. Just tell me about 82 00:03:38,520 --> 00:03:42,520 Speaker 2: the damn banks. I've been remiss on this Keith Friett Index. 83 00:03:42,600 --> 00:03:44,600 Speaker 2: You and I know it, we love it, And the 84 00:03:44,680 --> 00:03:47,960 Speaker 2: answer is it's a grim chart. You go back to 85 00:03:48,040 --> 00:03:51,360 Speaker 2: pre California, pre idiocy out there with one. 86 00:03:51,440 --> 00:03:53,480 Speaker 1: You know, you know the game that they went through. 87 00:03:54,160 --> 00:03:57,200 Speaker 2: It's one of the barest charts I've seen in years. 88 00:03:57,480 --> 00:04:00,000 Speaker 2: When do you know to load the boat on banks? 89 00:04:00,240 --> 00:04:02,240 Speaker 5: Well, look, it's the same story as the broader market time, 90 00:04:02,320 --> 00:04:06,560 Speaker 5: the bigger getting bigger. There's concentration, you know, in the winners. Again, 91 00:04:06,640 --> 00:04:09,000 Speaker 5: it's it's like the higher quality banks are performing. So 92 00:04:09,160 --> 00:04:12,240 Speaker 5: you long Apple, Well, I mean we are in many 93 00:04:12,280 --> 00:04:14,560 Speaker 5: portfolio was obviously because it's such a big part of 94 00:04:14,600 --> 00:04:18,200 Speaker 5: the index. But Apple's another category of stock where people 95 00:04:18,200 --> 00:04:20,040 Speaker 5: are paying up for the quality of the barel sheet, 96 00:04:20,080 --> 00:04:21,440 Speaker 5: the lack of need for financing. 97 00:04:21,720 --> 00:04:23,760 Speaker 6: But the banks are representative of the broader market. 98 00:04:23,800 --> 00:04:26,720 Speaker 5: Okay, the higher quality banks are outperforming the lower quality banks. 99 00:04:26,760 --> 00:04:28,320 Speaker 6: That's just that's just where we are for everything. 100 00:04:28,520 --> 00:04:31,640 Speaker 2: Lisa Shallon emails in and she says, ask Mike Wilson 101 00:04:31,680 --> 00:04:34,000 Speaker 2: with his easy day job, she's got the real job 102 00:04:34,080 --> 00:04:37,120 Speaker 2: managing money. Do you buy an R squared tyke to 103 00:04:37,200 --> 00:04:39,640 Speaker 2: the S and P five hundred or if I'm active. 104 00:04:39,360 --> 00:04:41,960 Speaker 1: Managed, do I want to be idios? Who did we 105 00:04:42,040 --> 00:04:43,400 Speaker 1: talk to in London? Kathy? 106 00:04:44,200 --> 00:04:46,840 Speaker 2: Kathy said, who Kathy would arc? 107 00:04:47,080 --> 00:04:48,680 Speaker 4: Oh, Kathy would Kathy would arc? 108 00:04:48,680 --> 00:04:50,080 Speaker 2: I mean, do I want to buy an R squared 109 00:04:50,080 --> 00:04:52,000 Speaker 2: tyke to S and P five hundred or do I 110 00:04:52,040 --> 00:04:54,000 Speaker 2: want to get more idiosyncratic? 111 00:04:54,120 --> 00:04:56,520 Speaker 6: You want to be more idiosyncratic? For sure? This whole year, right, 112 00:04:56,520 --> 00:04:57,360 Speaker 6: I mean, even though the. 113 00:04:57,360 --> 00:04:59,880 Speaker 5: SMP is outperformed, it's been ten stocks that's idios And 114 00:05:00,320 --> 00:05:01,840 Speaker 5: I mean, if you pick those ten stocks, you did 115 00:05:01,839 --> 00:05:03,720 Speaker 5: really really well. If you pick the you know, if 116 00:05:03,720 --> 00:05:05,400 Speaker 5: you pick the other four hundred and ninety three, you 117 00:05:05,480 --> 00:05:08,359 Speaker 5: didn't do very well. So it's been the dispersion is 118 00:05:08,360 --> 00:05:10,599 Speaker 5: really really high. And it makes sense right now. The 119 00:05:10,600 --> 00:05:13,039 Speaker 5: market's paying up for what I would call operational efficiency 120 00:05:13,080 --> 00:05:15,520 Speaker 5: cost leaders. It's paying up for good balance sheets, paying 121 00:05:15,560 --> 00:05:18,640 Speaker 5: up for scale. Okay, will that change? Can we broaden 122 00:05:18,680 --> 00:05:21,160 Speaker 5: out to the lower end of the market. If the 123 00:05:21,160 --> 00:05:23,559 Speaker 5: market starts to believe that not only do we avoid 124 00:05:23,600 --> 00:05:26,000 Speaker 5: a recession, but there's a reacceleration, that's what we need 125 00:05:26,040 --> 00:05:27,760 Speaker 5: to see. That's what the market's trying to figure out. 126 00:05:28,040 --> 00:05:31,919 Speaker 5: Hard landing reacceleration. This purgatory land is we're just going 127 00:05:31,960 --> 00:05:33,880 Speaker 5: to kind of slot back and forth and the markets 128 00:05:34,040 --> 00:05:35,680 Speaker 5: to continue to gravitate to the lifeboats. 129 00:05:35,960 --> 00:05:37,800 Speaker 4: What does it mean to be defensive? And I keep 130 00:05:37,839 --> 00:05:40,960 Speaker 4: asking this because some people say it's tech stocks, some 131 00:05:41,000 --> 00:05:43,520 Speaker 4: people say it's consumer staples. 132 00:05:43,680 --> 00:05:45,200 Speaker 6: What do you say, Well, I think it's both. 133 00:05:45,240 --> 00:05:47,800 Speaker 5: I think I mean obviously, the market this year has 134 00:05:47,880 --> 00:05:50,760 Speaker 5: voted with its feet saying they want to buy large 135 00:05:50,760 --> 00:05:53,440 Speaker 5: cap growth stocks, not just tech, but growth stocks with 136 00:05:53,520 --> 00:05:54,960 Speaker 5: good balance sheets that have scale. 137 00:05:55,120 --> 00:05:56,719 Speaker 6: And I will just want to I want to point. 138 00:05:56,520 --> 00:05:59,000 Speaker 5: Something out that's really important for these seven or eight 139 00:05:59,040 --> 00:06:03,039 Speaker 5: stocks this year now X one or two. Most of 140 00:06:03,080 --> 00:06:06,080 Speaker 5: the earnings recovery for these stocks has been a result 141 00:06:06,120 --> 00:06:06,960 Speaker 5: of cost cutting. 142 00:06:07,200 --> 00:06:07,320 Speaker 6: Right. 143 00:06:07,360 --> 00:06:09,800 Speaker 5: They all got over their skis on too much spending 144 00:06:09,880 --> 00:06:12,080 Speaker 5: last year. They rained that in and so they've kind 145 00:06:12,120 --> 00:06:15,520 Speaker 5: of manufactured and earnings recovery if they don't see top 146 00:06:15,560 --> 00:06:17,520 Speaker 5: line reacceleration. This is where we're starting to see a 147 00:06:17,520 --> 00:06:20,680 Speaker 5: separation now, even in those seven and I think that's 148 00:06:20,720 --> 00:06:23,040 Speaker 5: going to be another story for the fourth quarter and 149 00:06:23,440 --> 00:06:27,039 Speaker 5: next year's. The market wants revenue growth, not just cost 150 00:06:27,040 --> 00:06:27,640 Speaker 5: cutting stories. 151 00:06:27,680 --> 00:06:29,839 Speaker 4: What we're talking about right now is the bottom line. 152 00:06:29,880 --> 00:06:32,040 Speaker 4: We're not talking about the rates picture and what that 153 00:06:32,080 --> 00:06:35,120 Speaker 4: does overall to some sort of macro call on equities. 154 00:06:35,320 --> 00:06:37,400 Speaker 4: Bank of America Strategies came out today and said, do 155 00:06:37,520 --> 00:06:40,239 Speaker 4: rates matter for stocks? And if so, it's not priced. 156 00:06:40,600 --> 00:06:41,359 Speaker 3: Do you agree? 157 00:06:41,560 --> 00:06:44,760 Speaker 5: Well, for once again, for some stocks it's mattered a ton, right. 158 00:06:44,760 --> 00:06:46,760 Speaker 5: I mean, I just think, look, we said this at 159 00:06:46,760 --> 00:06:48,640 Speaker 5: the end of the year. This is the most difficult 160 00:06:48,640 --> 00:06:51,960 Speaker 5: part of the economic cycle when you are late We 161 00:06:52,000 --> 00:06:53,880 Speaker 5: know we're late cycle for one reason, because we got 162 00:06:53,920 --> 00:06:56,560 Speaker 5: full employment. So you can't argue we're mid cycle or 163 00:06:56,600 --> 00:06:57,200 Speaker 5: early cycle. 164 00:06:57,240 --> 00:06:57,719 Speaker 6: That's silly. 165 00:06:57,880 --> 00:07:00,000 Speaker 5: What you can argue is that the late cycle period 166 00:07:00,160 --> 00:07:03,320 Speaker 5: can persist for a lot longer than people expected. And 167 00:07:03,320 --> 00:07:06,240 Speaker 5: that's what's going on. Rates are the one while because 168 00:07:06,279 --> 00:07:10,080 Speaker 5: the rates have really surprised everybody, vond investors and stock investors. Normally, 169 00:07:10,080 --> 00:07:12,960 Speaker 5: in the late cycle environment, rates come down. Why because 170 00:07:12,960 --> 00:07:15,680 Speaker 5: the Fed's done As you not well know, this cycle 171 00:07:15,760 --> 00:07:17,920 Speaker 5: is unique. That's the tricky part of the cycle because 172 00:07:17,960 --> 00:07:20,360 Speaker 5: the FED can't be proactive in. 173 00:07:20,320 --> 00:07:22,160 Speaker 6: Cutting rates ahead of the recession. 174 00:07:22,360 --> 00:07:25,040 Speaker 5: So we're just gonna ride this until basically you run 175 00:07:25,080 --> 00:07:26,680 Speaker 5: out of gas, and that could be another year. 176 00:07:27,400 --> 00:07:28,559 Speaker 6: You don't know the answer to that yet. 177 00:07:28,760 --> 00:07:31,680 Speaker 2: I mean, I find it absolutely fascinating here. Let me, 178 00:07:31,720 --> 00:07:33,840 Speaker 2: I want to touch on this through the next number 179 00:07:33,880 --> 00:07:36,160 Speaker 2: of minutes, Mike Wills, So, Mike Wilson and Morgan Stanley 180 00:07:36,200 --> 00:07:42,240 Speaker 2: with US folks, dovetail your revenue line, your animal spirit 181 00:07:42,320 --> 00:07:46,640 Speaker 2: in the equity market with Zetner's Ellen Zenner's nominal GDP 182 00:07:47,200 --> 00:07:50,040 Speaker 2: bringing in a real GDP. Who knows what disinflation is 183 00:07:50,160 --> 00:07:52,960 Speaker 2: even Jim Karen doesn't. He Karen doesn't have a clue. 184 00:07:53,160 --> 00:07:56,040 Speaker 2: But the answer is model out nominal GDP and how 185 00:07:56,040 --> 00:07:57,400 Speaker 2: it affects your revenue line. 186 00:07:57,440 --> 00:07:59,120 Speaker 5: So this is really interesting. This is where Ellen and 187 00:07:59,200 --> 00:08:01,120 Speaker 5: I are kind of aligned. I mean, I think we're 188 00:08:01,160 --> 00:08:03,920 Speaker 5: the only bank industry where we called for soft landing 189 00:08:04,400 --> 00:08:07,000 Speaker 5: and an earnings recession both turned out to be true. 190 00:08:07,240 --> 00:08:10,320 Speaker 5: So why is that, Well, because revenue growth and pricing 191 00:08:10,360 --> 00:08:13,760 Speaker 5: has been actually not as good as the the sort 192 00:08:13,800 --> 00:08:17,520 Speaker 5: of pricing and the inflation numbers in the government statistics. Now, 193 00:08:17,560 --> 00:08:21,640 Speaker 5: Ellen is, I would say, far from excited about economic growth. 194 00:08:21,640 --> 00:08:23,640 Speaker 5: I mean, she's not calling for recession, right, but she's 195 00:08:23,640 --> 00:08:26,640 Speaker 5: looking for basically one percent GDP growth, real GDP. 196 00:08:26,520 --> 00:08:28,080 Speaker 1: Growth three point eighty four percent. 197 00:08:27,840 --> 00:08:30,840 Speaker 5: Nominal exactly, And so you know, three to four percent 198 00:08:30,880 --> 00:08:33,600 Speaker 5: nominal GDP growth. I mean, could that lead to three 199 00:08:33,679 --> 00:08:37,400 Speaker 5: to five percent revenue growth. Maybe here's the risk the 200 00:08:37,480 --> 00:08:39,720 Speaker 5: economy is not the is not company with companies. See 201 00:08:39,720 --> 00:08:42,120 Speaker 5: what companies are seeing in pricing is very very different 202 00:08:42,120 --> 00:08:45,360 Speaker 5: than what the economic statistics will tell you. Very similar 203 00:08:45,360 --> 00:08:48,240 Speaker 5: in twenty twenty one when companies were getting twenty percent 204 00:08:48,280 --> 00:08:51,679 Speaker 5: price when CPI and Core CPI were saying six seven eight. 205 00:08:52,040 --> 00:08:54,800 Speaker 5: So now if you have CPI three four, you actually 206 00:08:54,840 --> 00:08:56,080 Speaker 5: have companies seeing deflation. 207 00:08:56,679 --> 00:08:58,360 Speaker 1: Mike Wilson with this. Here at. 208 00:09:02,360 --> 00:09:06,560 Speaker 2: Jonathan Faraoh staying in London in conversation with the former 209 00:09:06,600 --> 00:09:10,439 Speaker 2: Prime Minister of the United Kingdom, Gordon Brown, Mohammed Alarian 210 00:09:10,559 --> 00:09:13,559 Speaker 2: of the University of Cambridge, and the Nobel Prize winning 211 00:09:13,640 --> 00:09:16,880 Speaker 2: economist Michael Spence of New York University. 212 00:09:17,240 --> 00:09:18,000 Speaker 1: The book is. 213 00:09:18,080 --> 00:09:21,920 Speaker 2: Perma Crisis, A Plan to Fix a fractured World, Brown, 214 00:09:22,000 --> 00:09:26,720 Speaker 2: Alarian and Spence an AI and crisis to manage in 215 00:09:26,760 --> 00:09:29,480 Speaker 2: the future. Here is Professor Spence. 216 00:09:30,760 --> 00:09:33,800 Speaker 7: When jen AI came along, then I saw it sort 217 00:09:33,840 --> 00:09:37,040 Speaker 7: of multi domain capability, the fact that you can use 218 00:09:37,080 --> 00:09:39,280 Speaker 7: it with no technical training, just a little bit of 219 00:09:39,320 --> 00:09:43,240 Speaker 7: a you know practice, you know, creating prompts, and its 220 00:09:43,280 --> 00:09:46,360 Speaker 7: applicability pretty much everywhere. I thought. You know, even though 221 00:09:46,400 --> 00:09:49,599 Speaker 7: it's early days and we're in a period of exploration 222 00:09:49,679 --> 00:09:54,480 Speaker 7: and experimentation, I think it's a reasonable forecast that this 223 00:09:55,559 --> 00:09:59,440 Speaker 7: tool is an important part of a future productivity surge, 224 00:09:59,440 --> 00:10:03,240 Speaker 7: and if it comes, it'll make it a lot easier 225 00:10:03,280 --> 00:10:07,360 Speaker 7: to do inclusive growth patterns because it won't be a 226 00:10:07,440 --> 00:10:11,280 Speaker 7: zero sum game. It'll be easier to invest multi trillions 227 00:10:11,320 --> 00:10:14,200 Speaker 7: of dollars in the energy transition. It's going to be 228 00:10:14,320 --> 00:10:18,720 Speaker 7: terribly difficult to get that done with fiscal's space declining, 229 00:10:18,760 --> 00:10:22,200 Speaker 7: the rising debt levels and rising interest rates. So that's 230 00:10:22,280 --> 00:10:24,719 Speaker 7: why we spend a fair amount of time. It's not 231 00:10:24,760 --> 00:10:28,960 Speaker 7: that the growth by itself is the only thing, it's 232 00:10:29,040 --> 00:10:31,600 Speaker 7: that it enables an awful lot of what we want 233 00:10:31,640 --> 00:10:32,160 Speaker 7: to accomplish. 234 00:10:32,200 --> 00:10:32,240 Speaker 2: It. 235 00:10:32,280 --> 00:10:34,600 Speaker 8: Yeah, I think we're heading for a low growth decade 236 00:10:34,679 --> 00:10:37,440 Speaker 8: if we don't have the productivity surge that AI can 237 00:10:37,480 --> 00:10:39,959 Speaker 8: give us. And I think what Mike is pointing out 238 00:10:40,160 --> 00:10:43,360 Speaker 8: is it can transform a whole range of industries. You'll 239 00:10:43,400 --> 00:10:47,160 Speaker 8: never see the accountancy or legal or even medical professions 240 00:10:47,240 --> 00:10:50,800 Speaker 8: or teaching profession be the same. Again, if EI has 241 00:10:50,840 --> 00:10:53,520 Speaker 8: the impact that I think and Mike thinks it will have, 242 00:10:54,120 --> 00:10:57,120 Speaker 8: but equally We've got to have that productivity search because 243 00:10:57,120 --> 00:11:01,040 Speaker 8: without that, the inflation, the fiscal space being narrow, the 244 00:11:01,080 --> 00:11:04,920 Speaker 8: debt that we're running, and of course the supply side 245 00:11:04,960 --> 00:11:08,520 Speaker 8: shocks and constraints that are in existence mean that as 246 00:11:08,520 --> 00:11:10,800 Speaker 8: things stand, we're heading for a low growth decayed AI 247 00:11:11,040 --> 00:11:13,360 Speaker 8: is the way forward to take us out of growth, 248 00:11:13,360 --> 00:11:15,439 Speaker 8: and I think Muhammad agrees with that totally. 249 00:11:15,480 --> 00:11:19,080 Speaker 9: And it's critical because we have a debt issue that 250 00:11:19,160 --> 00:11:21,680 Speaker 9: has to be resolved with an inequality issue. We need 251 00:11:21,720 --> 00:11:27,000 Speaker 9: resources for critical transitions. So you know the notion, as 252 00:11:27,080 --> 00:11:30,920 Speaker 9: Mike and Gordon correctly said, that higher, more inclusive growth 253 00:11:31,080 --> 00:11:33,800 Speaker 9: and most sustainable growth is a massive enabler to deal 254 00:11:33,840 --> 00:11:34,840 Speaker 9: with all these other problems. 255 00:11:34,880 --> 00:11:36,520 Speaker 10: All three of you understand the risks involved. 256 00:11:36,520 --> 00:11:36,720 Speaker 1: Though. 257 00:11:37,360 --> 00:11:41,920 Speaker 10: If globalization hollowed down manufacturing bases domestically in places like America, 258 00:11:42,080 --> 00:11:44,240 Speaker 10: in the United Kingdom to some extent as well, and 259 00:11:44,280 --> 00:11:46,440 Speaker 10: I'm asking the question, why wouldn't AI do the same 260 00:11:46,480 --> 00:11:50,880 Speaker 10: thing to services? My question, if I'm a member, a citizen, 261 00:11:51,200 --> 00:11:53,160 Speaker 10: someone who's got to vote, is why would I trust 262 00:11:53,160 --> 00:11:56,640 Speaker 10: the same people? Loll over again, who should I trust 263 00:11:56,840 --> 00:12:00,280 Speaker 10: to manage that transition, that integration of those technologies. 264 00:12:00,000 --> 00:12:04,480 Speaker 8: That's what my children say, My young teenagers say, you 265 00:12:04,559 --> 00:12:07,760 Speaker 8: guys have messed it up. And it is true that 266 00:12:07,800 --> 00:12:12,439 Speaker 8: we tried to create a more inclusive system. We tried 267 00:12:12,480 --> 00:12:14,600 Speaker 8: to deal with the problems of environment, but we couldn't 268 00:12:14,600 --> 00:12:16,960 Speaker 8: get the agreement that we needed, and we tried to 269 00:12:17,000 --> 00:12:20,520 Speaker 8: have more equity and better jobs. But I do think 270 00:12:20,679 --> 00:12:23,200 Speaker 8: when I talk to young people, they want to see 271 00:12:23,200 --> 00:12:25,880 Speaker 8: this change. You know, the issue is not whether you 272 00:12:25,960 --> 00:12:29,080 Speaker 8: have change or not now the issue the issue, the 273 00:12:29,160 --> 00:12:31,360 Speaker 8: issue is what kind of change, And we've got to 274 00:12:31,360 --> 00:12:32,440 Speaker 8: make that change inclusive. 275 00:12:32,880 --> 00:12:38,000 Speaker 7: Mike agree. I mean, you know, Eric Brynolfsen talked about 276 00:12:38,040 --> 00:12:41,320 Speaker 7: the touring crap. You know, the touring test basically pushes 277 00:12:41,360 --> 00:12:44,000 Speaker 7: you in the direction of automation. We want to push 278 00:12:44,640 --> 00:12:47,559 Speaker 7: in policy should be pushing in the direction of augmentation, 279 00:12:47,720 --> 00:12:51,160 Speaker 7: of giving people powerful tools that make them more productive. 280 00:12:51,640 --> 00:12:53,960 Speaker 7: So this is the journey we're setting on. But it's 281 00:12:54,000 --> 00:12:58,439 Speaker 7: not it's not I don't think right to just capitulate 282 00:12:58,480 --> 00:13:02,920 Speaker 7: and say productivity produces employment problems. It's at least more 283 00:13:02,920 --> 00:13:04,040 Speaker 7: complicate than that, Jonathan. 284 00:13:04,160 --> 00:13:06,680 Speaker 8: But our global institutions have got a reform to be 285 00:13:06,720 --> 00:13:09,000 Speaker 8: capable of dealing with this. They're not for purpose at 286 00:13:09,000 --> 00:13:10,880 Speaker 8: the moment, and the IMF has got to be a 287 00:13:10,920 --> 00:13:14,880 Speaker 8: crisis prevention mechanism to proper surveillance of the world economy. 288 00:13:15,160 --> 00:13:17,800 Speaker 8: It can't just be there for a crisis resolution. The 289 00:13:17,840 --> 00:13:20,079 Speaker 8: World Bank has got to become a global public goods 290 00:13:20,080 --> 00:13:23,040 Speaker 8: bank and deal with the energy transition as well as 291 00:13:23,720 --> 00:13:26,720 Speaker 8: human capital. The World Trade Organization's got to find a 292 00:13:26,720 --> 00:13:31,559 Speaker 8: way of diplomacy and negotiation and arbitration working better than 293 00:13:31,600 --> 00:13:33,760 Speaker 8: it has in the past. And we need a better 294 00:13:33,800 --> 00:13:36,839 Speaker 8: concept of burden sharing. I mean, I cannot understand why 295 00:13:37,080 --> 00:13:39,400 Speaker 8: when you have a humanitarian crisis, and we have many 296 00:13:39,400 --> 00:13:41,559 Speaker 8: around the world at the moment, all we seem to 297 00:13:41,600 --> 00:13:43,520 Speaker 8: be able to do is pass the begging ball around 298 00:13:43,559 --> 00:13:46,040 Speaker 8: and hope that someone's going to produce some money. We've 299 00:13:46,040 --> 00:13:48,680 Speaker 8: got a system of burden sharing, whether it's for the environment, 300 00:13:48,960 --> 00:13:51,160 Speaker 8: or whether it's for public health, or whether it's for 301 00:13:51,320 --> 00:13:53,640 Speaker 8: some of the other global public goods we want to do. Now, 302 00:13:53,960 --> 00:13:55,599 Speaker 8: if you talk to people around the world. I've just 303 00:13:55,640 --> 00:13:57,440 Speaker 8: come back from the United Nations, they all want this 304 00:13:57,520 --> 00:13:59,800 Speaker 8: to happen. So what we need to do is show 305 00:14:00,240 --> 00:14:02,640 Speaker 8: that this can yield the best results and then create 306 00:14:02,679 --> 00:14:04,120 Speaker 8: the political will for this to happen. 307 00:14:04,200 --> 00:14:06,440 Speaker 10: As I'm listening to I'm getting the same feeling that 308 00:14:06,440 --> 00:14:08,160 Speaker 10: I got when I read the book. This makes a 309 00:14:08,160 --> 00:14:10,079 Speaker 10: lot of sense, and then I end up in the 310 00:14:10,120 --> 00:14:12,520 Speaker 10: same place. Is there any evidence that people are willing 311 00:14:12,559 --> 00:14:13,120 Speaker 10: to vote for it? 312 00:14:13,320 --> 00:14:13,480 Speaker 6: Now? 313 00:14:13,520 --> 00:14:15,760 Speaker 10: You say it's incredibly popular, you go around, you speak 314 00:14:15,800 --> 00:14:18,679 Speaker 10: to people, and they're convinced by it. I don't see 315 00:14:18,679 --> 00:14:21,840 Speaker 10: any evidence from recent general elections that anyone wants this 316 00:14:21,960 --> 00:14:23,240 Speaker 10: vision that the three of you have. 317 00:14:23,560 --> 00:14:26,520 Speaker 8: I think people want hope. I think the lesson of 318 00:14:26,680 --> 00:14:30,720 Speaker 8: COVID and of the energy and food crisis and people's 319 00:14:30,760 --> 00:14:33,120 Speaker 8: reaction to the war in Ukraine is that things have 320 00:14:33,160 --> 00:14:35,680 Speaker 8: got to be better than this, and I think those 321 00:14:35,800 --> 00:14:39,640 Speaker 8: leaders that can show that there's a hopeful future. Now 322 00:14:39,680 --> 00:14:43,640 Speaker 8: you see me and Motley in the Caribbean producing her 323 00:14:43,920 --> 00:14:47,320 Speaker 8: plan for global growth. You see now politicians in Africa 324 00:14:47,560 --> 00:14:51,200 Speaker 8: talking about green growth. I do think that there's a 325 00:14:51,320 --> 00:14:55,720 Speaker 8: movement now that says, look, we cannot have politics just 326 00:14:55,760 --> 00:14:58,360 Speaker 8: as a negative sport where people are just attacking each 327 00:14:58,360 --> 00:15:01,720 Speaker 8: other and it's all so of about sound bites. I 328 00:15:01,760 --> 00:15:04,480 Speaker 8: think people want politicians that can give them hope, and 329 00:15:04,520 --> 00:15:06,120 Speaker 8: that's the next generation Mahmot. 330 00:15:06,960 --> 00:15:09,440 Speaker 9: I think he's absolutely right. I mean, there's a people 331 00:15:09,480 --> 00:15:13,240 Speaker 9: want hope. I think there's a world recognition that the 332 00:15:13,280 --> 00:15:17,120 Speaker 9: world we're on is unsustainable and it's getting more and 333 00:15:17,240 --> 00:15:21,400 Speaker 9: more bumpy. And third, we're dealing with a loss of trust, 334 00:15:21,640 --> 00:15:25,640 Speaker 9: and if we don't directly re establish trust in our 335 00:15:25,640 --> 00:15:29,280 Speaker 9: institutions and our policy making in global cooperation, things. 336 00:15:29,040 --> 00:15:30,000 Speaker 1: Are going to go and get worse. 337 00:15:30,080 --> 00:15:32,400 Speaker 9: I think the reason why we wanted to put this 338 00:15:32,520 --> 00:15:36,800 Speaker 9: down is hoping to start a conversation on a set 339 00:15:36,840 --> 00:15:38,880 Speaker 9: of steps, and we keep on saying there is no 340 00:15:38,920 --> 00:15:41,280 Speaker 9: silver bullet. This is not a big bang, you do 341 00:15:41,360 --> 00:15:43,640 Speaker 9: something tomorrow and then everything's fine. This is building a 342 00:15:43,680 --> 00:15:46,840 Speaker 9: foundation that turns vicious cycles into virtuous ones. 343 00:15:47,440 --> 00:15:50,760 Speaker 10: Well, let's take the Feederal Reserve as one example. You've 344 00:15:50,760 --> 00:15:53,960 Speaker 10: written about this extensively over the last eighteen months. I 345 00:15:54,000 --> 00:15:56,080 Speaker 10: still remember a conference we did together in the summer 346 00:15:56,120 --> 00:15:58,680 Speaker 10: of twenty twenty one when you warned about what could 347 00:15:58,680 --> 00:16:02,360 Speaker 10: possibly becoming. How ill prepared the institution that is the 348 00:16:02,360 --> 00:16:05,960 Speaker 10: Federal Reserve was for this moment. How do they recover 349 00:16:06,440 --> 00:16:08,880 Speaker 10: from the mistakes they've made in the last eighteen months 350 00:16:09,080 --> 00:16:11,400 Speaker 10: to help contributes the vision the three of you have. 351 00:16:11,880 --> 00:16:14,080 Speaker 9: So the recovery is starting. I think there's much broader 352 00:16:14,120 --> 00:16:18,400 Speaker 9: recognition now that has been five failures, analysis, transit or 353 00:16:18,480 --> 00:16:26,960 Speaker 9: inflation forecasts consistently too optimistic, action too late, communication modeled, 354 00:16:27,240 --> 00:16:30,400 Speaker 9: and regulation had We almost had a big banking crisis 355 00:16:31,040 --> 00:16:33,600 Speaker 9: just six months ago. So I think that's now there's 356 00:16:33,680 --> 00:16:37,520 Speaker 9: more understanding, and what we propose is a few steps 357 00:16:37,600 --> 00:16:42,560 Speaker 9: that reduce the chances of that happening, things that minimize groupthink, 358 00:16:42,800 --> 00:16:47,600 Speaker 9: things that increase accountability. And without accountability, the independence of 359 00:16:47,640 --> 00:16:50,040 Speaker 9: the FED is going to be challenged going forward. So 360 00:16:50,400 --> 00:16:54,320 Speaker 9: the FED has huge interest in embracing the few things 361 00:16:54,320 --> 00:16:58,280 Speaker 9: we propose in order to restore trust in an institution 362 00:16:58,400 --> 00:17:01,040 Speaker 9: that's absolutely critical and that must have political autonomy. 363 00:17:01,920 --> 00:17:06,160 Speaker 2: Elarian, Elaron Brown, and Spence Prima Crisis is the book, 364 00:17:06,200 --> 00:17:19,600 Speaker 2: John Farewell, just a wonderful effort there joining us now 365 00:17:19,720 --> 00:17:22,760 Speaker 2: Kathy Jones, chief fixed income strategists. 366 00:17:22,000 --> 00:17:24,399 Speaker 1: Here on a higher yields, on the real yield. 367 00:17:24,400 --> 00:17:27,800 Speaker 2: I'm sorry even to schwab Lisa, it's been an adjustment. 368 00:17:28,280 --> 00:17:30,560 Speaker 4: Yeah, I mean, honestly, right now people are looking at 369 00:17:30,560 --> 00:17:32,479 Speaker 4: these yields and saying can they last? And you are 370 00:17:32,520 --> 00:17:36,440 Speaker 4: even saying yesterday, as you looked at them, why so why. 371 00:17:37,160 --> 00:17:39,560 Speaker 3: Yeah, you know, I do think that we are adjusting 372 00:17:39,600 --> 00:17:41,880 Speaker 3: to this new world where we have a positive term 373 00:17:41,920 --> 00:17:45,480 Speaker 3: premium and we have a stronger growth outlook and certainly 374 00:17:46,000 --> 00:17:49,199 Speaker 3: you know, higher for longer yields. The question is, you know, 375 00:17:49,320 --> 00:17:52,200 Speaker 3: what is the endpoint of all that, and so when 376 00:17:52,200 --> 00:17:54,320 Speaker 3: we look at it, what we say as well, the 377 00:17:54,400 --> 00:17:56,640 Speaker 3: FED might hold here for a while, but it's very 378 00:17:56,640 --> 00:17:58,880 Speaker 3: difficult to see why they want to go a lot 379 00:17:58,960 --> 00:18:03,119 Speaker 3: higher from here. So inflation is falling. Get a couple 380 00:18:03,200 --> 00:18:07,000 Speaker 3: more zero point two percent month over month prints in 381 00:18:07,080 --> 00:18:09,639 Speaker 3: PCE and will be at two to and a quarter 382 00:18:09,800 --> 00:18:13,399 Speaker 3: on core PCE, so we're almost there on inflation. The 383 00:18:13,440 --> 00:18:17,480 Speaker 3: economy is slowing down, the housing market is basically frozen. 384 00:18:17,640 --> 00:18:20,959 Speaker 3: You've got risks in the commercial real estate market that 385 00:18:21,000 --> 00:18:23,760 Speaker 3: could spread back into banking. I mean, there's a lot 386 00:18:23,800 --> 00:18:27,960 Speaker 3: of indicators here to suggest that they've done enough. So 387 00:18:28,119 --> 00:18:32,760 Speaker 3: I'm curious to understand why some of the FED members 388 00:18:32,800 --> 00:18:35,240 Speaker 3: are still talking about raising rates even further. 389 00:18:35,320 --> 00:18:38,720 Speaker 4: Partly because the economic data keeps surprising to the upside. 390 00:18:38,880 --> 00:18:40,760 Speaker 4: It's part of the reason why we keep hearing from 391 00:18:41,040 --> 00:18:45,679 Speaker 4: different CEOs Jamie Diamond, David Solomon talking about resilience, and 392 00:18:45,720 --> 00:18:47,639 Speaker 4: they're seeing it. They would see it first if they 393 00:18:47,640 --> 00:18:49,840 Speaker 4: were seeing it really start to crack. Consumers are still 394 00:18:49,880 --> 00:18:52,440 Speaker 4: able to spend, albeit not at the levels they previously were. 395 00:18:52,760 --> 00:18:56,120 Speaker 4: So what point do you lean into that and say, no, Actually, 396 00:18:56,600 --> 00:18:58,359 Speaker 4: maybe it's a screaming buy if you take a ten 397 00:18:58,400 --> 00:18:59,760 Speaker 4: year yield at four and a half percent and you 398 00:18:59,800 --> 00:19:01,959 Speaker 4: will to clip the coupon for the next ten years. 399 00:19:02,440 --> 00:19:04,879 Speaker 4: But are you really going to see that appreciation with 400 00:19:05,000 --> 00:19:08,399 Speaker 4: some sort of massive decline in yield increase in price 401 00:19:08,520 --> 00:19:10,000 Speaker 4: that people were previously expecting. 402 00:19:10,440 --> 00:19:13,040 Speaker 3: Yeah, I think that we will see a decline in yield. 403 00:19:13,240 --> 00:19:15,760 Speaker 3: Obviously we're not going back to zero or one percent 404 00:19:15,840 --> 00:19:18,080 Speaker 3: or two percent or whatever. But I do think we'll 405 00:19:18,080 --> 00:19:20,879 Speaker 3: see a decline in yield. So consumers are spending, but 406 00:19:20,920 --> 00:19:24,240 Speaker 3: they're filing for bankruptcy, you know. That's that's kind of 407 00:19:24,280 --> 00:19:28,480 Speaker 3: the two sided issue here. We're seeing a lot of 408 00:19:28,520 --> 00:19:32,600 Speaker 3: delinquencies on credit cards, on auto loans, We're seeing defaults 409 00:19:32,640 --> 00:19:35,280 Speaker 3: in the corporate sector. The speculative default rate is starting 410 00:19:35,280 --> 00:19:37,440 Speaker 3: to pick up. I mean, there's a lot of evidence 411 00:19:37,520 --> 00:19:42,160 Speaker 3: that higher rates are biting. It takes time to work 412 00:19:42,200 --> 00:19:45,199 Speaker 3: its way through. The question is, you know, does the 413 00:19:45,200 --> 00:19:48,280 Speaker 3: fad really want to send it over the edge or 414 00:19:48,320 --> 00:19:50,679 Speaker 3: do they want to try for this soft landing. But 415 00:19:51,000 --> 00:19:53,399 Speaker 3: you know, we think there's value in fixed income. You 416 00:19:53,440 --> 00:19:55,080 Speaker 3: don't have to go all the way to tens. But 417 00:19:55,119 --> 00:19:57,159 Speaker 3: we think there's plenty of value in just clipping the 418 00:19:57,160 --> 00:19:59,280 Speaker 3: coupon here. I mean, you look at the egg. You 419 00:19:59,320 --> 00:20:02,639 Speaker 3: can look at positive returns going forward because you've got 420 00:20:02,680 --> 00:20:05,439 Speaker 3: a higher coupon and you don't have that much duration. 421 00:20:05,560 --> 00:20:07,480 Speaker 2: Ren Okay, bring up the chart you just put up there, 422 00:20:07,560 --> 00:20:10,240 Speaker 2: Amy and nailed it with that ten year chart on radio, folks. 423 00:20:10,240 --> 00:20:12,880 Speaker 1: It's just the ten year chart in the yield here. 424 00:20:12,880 --> 00:20:15,440 Speaker 2: I'm gonna get a little fancy here with Kathy Jones 425 00:20:15,480 --> 00:20:17,320 Speaker 2: because she's a fancy at person. 426 00:20:17,520 --> 00:20:21,040 Speaker 1: I have nice log convexity, I have. 427 00:20:21,040 --> 00:20:25,640 Speaker 2: A beautiful two standard deviation trend in a higher yield. 428 00:20:25,880 --> 00:20:29,560 Speaker 2: I've got elegancy on my climb in moving averages, I 429 00:20:29,760 --> 00:20:31,800 Speaker 2: have a trend in place. 430 00:20:32,440 --> 00:20:36,240 Speaker 1: How do you know when the yield turns and goes lower. 431 00:20:36,400 --> 00:20:39,679 Speaker 1: I don't see that here. I see higher ten year yield. 432 00:20:39,960 --> 00:20:42,320 Speaker 3: Oh, you're right, I mean I pick trying to pick 433 00:20:42,480 --> 00:20:46,119 Speaker 3: the peak is really really hard. It is in every cycle, 434 00:20:46,160 --> 00:20:49,960 Speaker 3: and this cycle has been you know, particularly unusual dynamics 435 00:20:50,000 --> 00:20:53,879 Speaker 3: because of the pandemic and the fiscal stimulus and you know, 436 00:20:53,960 --> 00:20:55,680 Speaker 3: all the special things that have happened. 437 00:20:55,840 --> 00:20:58,879 Speaker 2: I have an inertial force in the yield space to 438 00:20:59,240 --> 00:21:00,240 Speaker 2: higher e ELD. 439 00:21:01,119 --> 00:21:02,560 Speaker 1: How do I respond to that? 440 00:21:02,600 --> 00:21:05,840 Speaker 2: Do I stay wicked short term money market fund cash 441 00:21:05,880 --> 00:21:08,320 Speaker 2: and that or am I a brave fall on a knife 442 00:21:08,359 --> 00:21:11,880 Speaker 2: and dive in here? Dollar costs to average into it? 443 00:21:12,280 --> 00:21:14,959 Speaker 3: Yeah, we don't fall on knives typically, that's usually not 444 00:21:15,000 --> 00:21:19,399 Speaker 3: our yeah exactly, but yeah, we leave that for the 445 00:21:19,440 --> 00:21:22,200 Speaker 3: equity folks. They can try that. But you know, we're 446 00:21:22,280 --> 00:21:25,040 Speaker 3: dollar cost averaging in. So you know, we're looking at 447 00:21:25,040 --> 00:21:28,080 Speaker 3: the agg with a duration of six and a yield 448 00:21:28,119 --> 00:21:31,240 Speaker 3: of five and a quarter, and so mimicking something in 449 00:21:31,320 --> 00:21:34,920 Speaker 3: that space, having a barbell perhaps to do that. Because 450 00:21:34,920 --> 00:21:36,679 Speaker 3: you do get a lot in cash, You do get 451 00:21:36,720 --> 00:21:38,560 Speaker 3: a lot in the short end, but you don't want 452 00:21:38,560 --> 00:21:40,440 Speaker 3: to ride the cycle up and down because you're not 453 00:21:40,480 --> 00:21:42,560 Speaker 3: getting any of the benefits and you want to lock 454 00:21:42,600 --> 00:21:44,840 Speaker 3: in some of the income. I mean, this is a 455 00:21:45,160 --> 00:21:48,960 Speaker 3: huge opportunity for people investing for income right now. We 456 00:21:49,040 --> 00:21:51,400 Speaker 3: haven't had this in fifteen twenty years. 457 00:21:51,600 --> 00:21:54,440 Speaker 4: The concern that some people have is that bon vigilantes 458 00:21:54,560 --> 00:21:57,400 Speaker 4: are getting a little bit stronger, and there are many 459 00:21:57,440 --> 00:21:59,320 Speaker 4: more of them, and there are many fewer of the 460 00:21:59,320 --> 00:22:02,240 Speaker 4: international banks that might step in, say from Japan. 461 00:22:03,000 --> 00:22:04,000 Speaker 3: How do you respond to that? 462 00:22:04,080 --> 00:22:07,520 Speaker 4: Are you seeing the mix of buyers change and become 463 00:22:07,520 --> 00:22:09,360 Speaker 4: more aggressive in their demands? 464 00:22:09,840 --> 00:22:12,919 Speaker 3: You know, we still seeing foreign inflows are pretty pretty attractive, 465 00:22:13,359 --> 00:22:15,720 Speaker 3: have pretty steady, so it's it's hard to parse the 466 00:22:15,800 --> 00:22:18,680 Speaker 3: numbers because of the way they're reported through different agencies, 467 00:22:18,720 --> 00:22:22,680 Speaker 3: but foreign investments still pretty strong, so not too worried 468 00:22:22,680 --> 00:22:24,199 Speaker 3: about that. I think a lot of it is the 469 00:22:24,200 --> 00:22:26,840 Speaker 3: Fed's pulling back in QT right. The FAD was our 470 00:22:26,880 --> 00:22:30,000 Speaker 3: big backstop, and now the Fed's not buying the FEDS 471 00:22:30,000 --> 00:22:32,040 Speaker 3: allowing to roll off, and I think that that's one 472 00:22:32,080 --> 00:22:34,680 Speaker 3: of the drivers of this. You know, this last leg 473 00:22:34,760 --> 00:22:36,960 Speaker 3: up here is you just don't have them stepping in, 474 00:22:37,440 --> 00:22:39,320 Speaker 3: and that's going to be a factor that's going to 475 00:22:39,400 --> 00:22:41,480 Speaker 3: keep rates higher than they would otherwise have been. 476 00:22:41,880 --> 00:22:46,439 Speaker 2: Kathy, I'm asking for a friend, folks. The Austrian ninety 477 00:22:46,480 --> 00:22:49,879 Speaker 2: seven year I've enjoyed from a one thirty four I 478 00:22:49,920 --> 00:22:53,119 Speaker 2: bought it just below that, like one thirty one to 479 00:22:53,240 --> 00:22:56,960 Speaker 2: thirty six. I'm down seventy two percent on a ninety 480 00:22:57,000 --> 00:23:00,800 Speaker 2: seven year piece of paper, and on a stochastic basis, again, 481 00:23:01,520 --> 00:23:03,560 Speaker 2: how do you know when that's going to reverse and 482 00:23:03,600 --> 00:23:05,159 Speaker 2: be the distressed debt. 483 00:23:05,080 --> 00:23:08,119 Speaker 1: By of all time? When do you go long Austria? 484 00:23:09,560 --> 00:23:11,560 Speaker 3: You know, Tom, I wish I had the answer to that. 485 00:23:11,840 --> 00:23:13,680 Speaker 3: I think that you're gonna put on. 486 00:23:13,640 --> 00:23:17,800 Speaker 2: A technical basis, we haven't seen this in seventeen years, right, 487 00:23:17,840 --> 00:23:20,400 Speaker 2: I mean this is you know, Lisa has no memory 488 00:23:20,400 --> 00:23:23,640 Speaker 2: of this. What percentage of Wall Street has no memory 489 00:23:24,280 --> 00:23:27,159 Speaker 2: of going? Okay, when do I go long Austria? That 490 00:23:27,240 --> 00:23:29,720 Speaker 2: question hasn't been asked for seventeen years. 491 00:23:29,920 --> 00:23:33,560 Speaker 3: Yeah, when you go along super long duration, I think 492 00:23:33,600 --> 00:23:35,480 Speaker 3: you're going to have to wait for a pivotal moment 493 00:23:35,560 --> 00:23:38,560 Speaker 3: such as you know, such as a big recession or 494 00:23:38,600 --> 00:23:39,600 Speaker 3: some sort of crisis. 495 00:23:39,840 --> 00:23:42,320 Speaker 4: Kathy, that was such a diplomatic way of answering a 496 00:23:42,440 --> 00:23:45,160 Speaker 4: question where Tom is basically like, please let me offload 497 00:23:45,200 --> 00:23:47,120 Speaker 4: by Austrian piece finally cash out. 498 00:23:47,160 --> 00:23:48,600 Speaker 3: That's essentially what you're saying. 499 00:23:49,280 --> 00:23:51,800 Speaker 2: Yeah, no, it's not potentially what I'm saying, folks. This 500 00:23:51,920 --> 00:23:54,920 Speaker 2: is the dumbest investment I've ever made. I mean, I'm 501 00:23:54,960 --> 00:23:57,480 Speaker 2: not kidding here it But Lisa, this brings up what 502 00:23:57,600 --> 00:24:00,159 Speaker 2: Kathy and Lazanne have to deal with every day. These 503 00:24:00,240 --> 00:24:03,720 Speaker 2: are markets that what percentage of the public in their 504 00:24:03,760 --> 00:24:08,159 Speaker 2: adult lives have never even listened to this surveillance dialogue. 505 00:24:08,160 --> 00:24:09,399 Speaker 3: And I'll take that a step further. 506 00:24:09,680 --> 00:24:13,199 Speaker 4: The concept of distressed debt investing probably wasn't thinking about 507 00:24:13,560 --> 00:24:17,239 Speaker 4: sovereign debt from top rated governments, and suddenly we are 508 00:24:17,280 --> 00:24:21,240 Speaker 4: thinking about top rated gooddet from sovereign governments, because. 509 00:24:20,880 --> 00:24:22,359 Speaker 3: That's the kind of yield that you're getting. 510 00:24:22,560 --> 00:24:25,639 Speaker 2: Kathew Jones, thank you for briefing me on the Austrian 511 00:24:26,040 --> 00:24:34,000 Speaker 2: at Peace. Right now on presidents in history across the 512 00:24:34,040 --> 00:24:37,480 Speaker 2: American fabric. Aline Comark joins us right now to say 513 00:24:37,480 --> 00:24:41,639 Speaker 2: she's senior fellow at Brooking's former Clinton administration official. Doesn't 514 00:24:41,680 --> 00:24:46,720 Speaker 2: touch upon her wonderful books which are really richly researched 515 00:24:46,840 --> 00:24:51,440 Speaker 2: and written on the foibles of our presidents. Olaine, thank 516 00:24:51,520 --> 00:24:53,800 Speaker 2: you so much for joining us. You are you know, 517 00:24:53,840 --> 00:24:55,760 Speaker 2: I think of you and Michael Bachelots of the two 518 00:24:55,800 --> 00:24:58,159 Speaker 2: I want to talk to you this morning. What is 519 00:24:58,160 --> 00:25:02,439 Speaker 2: the significance of a resident on a picket line. 520 00:25:02,840 --> 00:25:04,520 Speaker 1: Harry Truman wouldn't have done. 521 00:25:04,280 --> 00:25:06,000 Speaker 3: That, right, right. 522 00:25:06,359 --> 00:25:08,920 Speaker 11: I think it's a big deal, and it's say it's 523 00:25:09,040 --> 00:25:12,960 Speaker 11: probably long overdue. You know, the American labor movement has 524 00:25:13,000 --> 00:25:16,480 Speaker 11: gotten weaker and weaker since Harry the days of Harry Truman. 525 00:25:16,800 --> 00:25:19,959 Speaker 11: In fact, it used to be that thirty three percent 526 00:25:20,040 --> 00:25:23,120 Speaker 11: of the American labor force was unionized. It's now down 527 00:25:23,160 --> 00:25:26,840 Speaker 11: to nineteen percent and I mean nine percent sorry of 528 00:25:26,880 --> 00:25:29,639 Speaker 11: the industrial unions and a little bit more of the 529 00:25:29,640 --> 00:25:33,160 Speaker 11: government unions. And at the same time, what we've had 530 00:25:33,359 --> 00:25:38,960 Speaker 11: is this enormous ballooning in executive pay. There was going 531 00:25:39,080 --> 00:25:42,239 Speaker 11: to be a come to Jesus moment with this, and 532 00:25:42,280 --> 00:25:45,640 Speaker 11: I think now is the come to Jesus moment where 533 00:25:45,680 --> 00:25:48,600 Speaker 11: the President of the United States is saying, if a 534 00:25:48,680 --> 00:25:52,479 Speaker 11: company does so well that you are paying executives in 535 00:25:52,520 --> 00:25:55,520 Speaker 11: the hundreds of millions of dollars, you got to do 536 00:25:55,600 --> 00:25:56,560 Speaker 11: something for the workers. 537 00:25:56,600 --> 00:26:01,600 Speaker 2: Who has the voice of Coolidge and the rest of them? 538 00:26:01,920 --> 00:26:05,760 Speaker 2: Who has the voice of business across America? 539 00:26:07,040 --> 00:26:09,600 Speaker 11: Oh, I think that the I think the President is 540 00:26:09,720 --> 00:26:13,239 Speaker 11: very concerned about business across America, There's no doubt about it. 541 00:26:13,680 --> 00:26:18,000 Speaker 11: And the old Republican Party. Okay, the traditional Republican Party 542 00:26:18,359 --> 00:26:21,920 Speaker 11: used to be the party concerned with business across America. 543 00:26:22,119 --> 00:26:25,400 Speaker 11: Now this Republican Party is off in La La Land 544 00:26:25,480 --> 00:26:28,720 Speaker 11: and can't even get a budget, right, can't even keep 545 00:26:28,720 --> 00:26:33,040 Speaker 11: the government open. So you've sort of lost that balance 546 00:26:33,119 --> 00:26:36,080 Speaker 11: we used to have between the Party of workers and 547 00:26:36,160 --> 00:26:39,800 Speaker 11: the Party of owners, and now we're at a crisis 548 00:26:39,840 --> 00:26:42,720 Speaker 11: point in both situations. 549 00:26:42,800 --> 00:26:45,760 Speaker 4: Elaine, How complicated is this issue at a time where 550 00:26:46,200 --> 00:26:49,400 Speaker 4: the Democrats have been trying to transition away from fossil 551 00:26:49,400 --> 00:26:53,400 Speaker 4: fuels and lean into electric vehicles, at a time when 552 00:26:53,440 --> 00:26:56,199 Speaker 4: a lot of the electric vehicle battery manufacturers do not 553 00:26:56,320 --> 00:26:59,760 Speaker 4: have unions, and this is part of what spurred a 554 00:26:59,800 --> 00:27:03,080 Speaker 4: lot of the discontent among the unions. How confused is 555 00:27:03,119 --> 00:27:04,120 Speaker 4: the messaging right now? 556 00:27:04,760 --> 00:27:08,359 Speaker 11: Well, it's pretty confusing, and it's pretty it's pretty difficult. 557 00:27:08,560 --> 00:27:11,800 Speaker 11: But it is the price of progress, right, I mean, 558 00:27:12,000 --> 00:27:14,439 Speaker 11: we are going to move away from fossil fuels. We 559 00:27:14,480 --> 00:27:17,160 Speaker 11: are moving to electric vehicles. You see more and more 560 00:27:17,160 --> 00:27:19,560 Speaker 11: of them on the road here on the East Coast 561 00:27:19,600 --> 00:27:23,960 Speaker 11: between Washington and Boston, where I travel a lot, there's 562 00:27:24,160 --> 00:27:28,240 Speaker 11: a ton of ev charging stations at all the rest stops. 563 00:27:28,280 --> 00:27:32,160 Speaker 11: So it's it's coming, and I think the unions need 564 00:27:32,240 --> 00:27:35,480 Speaker 11: to cope with that and try to organize as much 565 00:27:35,520 --> 00:27:38,480 Speaker 11: as they can. But the bottom line is we're out 566 00:27:38,480 --> 00:27:41,159 Speaker 11: of whack here. I mean, we're seriously out of whack 567 00:27:41,240 --> 00:27:45,480 Speaker 11: in terms of worker pay versus CEO pay. That's what's 568 00:27:45,560 --> 00:27:48,320 Speaker 11: driving this and that is why, by the way, the 569 00:27:48,359 --> 00:27:51,959 Speaker 11: American public is on the side of the UAW and 570 00:27:52,040 --> 00:27:55,200 Speaker 11: not on the side of business in this situation. 571 00:27:55,680 --> 00:27:58,720 Speaker 4: Is this enough of a headwind or rather a tailwind 572 00:27:58,760 --> 00:28:01,439 Speaker 4: for President Biden to get him over a hurdle that 573 00:28:01,560 --> 00:28:05,280 Speaker 4: is increasingly big in terms of popularity, which is cost 574 00:28:05,320 --> 00:28:08,240 Speaker 4: of living, which is his age. Which is a question 575 00:28:08,359 --> 00:28:12,600 Speaker 4: around some of these kind of confused messages coming out 576 00:28:12,680 --> 00:28:17,480 Speaker 4: supporting labor but also having the energy policy that kind 577 00:28:17,480 --> 00:28:19,359 Speaker 4: of goes against someone what he's talking about. 578 00:28:20,200 --> 00:28:23,199 Speaker 11: Well, good, that's a great question. And what you have 579 00:28:23,280 --> 00:28:27,440 Speaker 11: to remember is presidential elections are not about the whole country. 580 00:28:27,640 --> 00:28:31,600 Speaker 11: It's about certain states wining certain states. This is going 581 00:28:31,640 --> 00:28:34,159 Speaker 11: to be a big deal, a big EFI deal, as 582 00:28:34,200 --> 00:28:38,120 Speaker 11: the President himself says, in those states that are swing states. 583 00:28:38,160 --> 00:28:41,320 Speaker 11: It's going to be important in Michigan, important in Wisconsin, 584 00:28:41,640 --> 00:28:45,320 Speaker 11: important in a lot of those Midwest industrial states, and 585 00:28:45,400 --> 00:28:47,680 Speaker 11: I think it's going to be huge in terms of 586 00:28:47,720 --> 00:28:48,880 Speaker 11: his reelection. 587 00:28:48,840 --> 00:28:53,080 Speaker 2: For a Republican and Democrat listeners and viewers eline comer. 588 00:28:54,040 --> 00:28:56,840 Speaker 2: Does a president need a new vice president? There's such 589 00:28:56,840 --> 00:29:01,040 Speaker 2: a tradition second term to recharge, reinvigorate, and figure out 590 00:29:01,080 --> 00:29:06,160 Speaker 2: the politics of the next vice president. What's president what's 591 00:29:06,160 --> 00:29:09,240 Speaker 2: he do with the president vice president as he moves forward? 592 00:29:09,880 --> 00:29:13,520 Speaker 11: I think she stays exactly in place. And one of 593 00:29:13,520 --> 00:29:16,920 Speaker 11: the things that's missing and all the discussion about Kamala 594 00:29:17,120 --> 00:29:20,760 Speaker 11: is guess what she does really well among young voters, 595 00:29:20,960 --> 00:29:23,880 Speaker 11: voters under the age of forty five. And one of 596 00:29:23,880 --> 00:29:27,520 Speaker 11: the things that is always forgotten in these discussions is 597 00:29:27,560 --> 00:29:32,400 Speaker 11: that by the time of this election, people under forty 598 00:29:32,400 --> 00:29:36,280 Speaker 11: five are going to be practically fifty percent of the electorate. 599 00:29:37,680 --> 00:29:41,520 Speaker 11: By twenty twenty eight, people who are today under forty 600 00:29:41,520 --> 00:29:44,960 Speaker 11: five will be fifty four percent of the electorate. There 601 00:29:45,040 --> 00:29:49,560 Speaker 11: is a new generation taking place here, and they are 602 00:29:49,640 --> 00:29:53,640 Speaker 11: a different generation than us baby boomers and the President's 603 00:29:53,640 --> 00:29:57,680 Speaker 11: silent generation, and their politics are different and guess what 604 00:29:58,160 --> 00:30:02,920 Speaker 11: they like Kamala Harris That she's there, and that's why 605 00:30:02,960 --> 00:30:05,280 Speaker 11: I don't think you're going to see any movement at all. 606 00:30:05,480 --> 00:30:09,000 Speaker 4: There is a debate between Gavin Newsom, governor of California, 607 00:30:09,040 --> 00:30:11,800 Speaker 4: coming up with Rond De Santis of Florida, a very 608 00:30:11,920 --> 00:30:14,760 Speaker 4: unusual kind of debate at a time where Gavenusom is 609 00:30:14,800 --> 00:30:17,040 Speaker 4: not running. Do you think that it would be a 610 00:30:17,080 --> 00:30:19,800 Speaker 4: good thing if there were some other options out of time? 611 00:30:19,840 --> 00:30:21,880 Speaker 4: When a lot of voters are very concerned about Joe 612 00:30:21,920 --> 00:30:24,160 Speaker 4: Biden's age and have said so in polls. 613 00:30:24,760 --> 00:30:26,880 Speaker 11: Well, they do say so in polls, but guess what, 614 00:30:27,040 --> 00:30:29,640 Speaker 11: they don't vote that way. They said so in polls 615 00:30:29,680 --> 00:30:34,520 Speaker 11: in twenty twenty two, they voted for Democrats. Every special 616 00:30:34,680 --> 00:30:38,920 Speaker 11: election in twenty twenty three has seen a growth in 617 00:30:38,960 --> 00:30:42,920 Speaker 11: the Democratic vote. So I think, yes, people are concerned 618 00:30:42,920 --> 00:30:45,160 Speaker 11: about Biden's age. You have to be You have to 619 00:30:45,160 --> 00:30:48,440 Speaker 11: be concerned about Trump's age too. He's not a spring chicken. 620 00:30:48,560 --> 00:30:51,280 Speaker 11: He looks like a walking heart attack. Okay, you got 621 00:30:51,320 --> 00:30:53,800 Speaker 11: to be concerned about age. But the fact of the 622 00:30:53,840 --> 00:30:57,000 Speaker 11: matter is that is not related to votes, and they're 623 00:30:57,040 --> 00:30:59,800 Speaker 11: two separate decisions that the electorate is making. 624 00:31:00,240 --> 00:31:02,840 Speaker 2: Elaine, thank you, someone's the next book out, Elaine quickly. 625 00:31:03,240 --> 00:31:06,040 Speaker 11: He next book is probably out in November, and it's 626 00:31:06,080 --> 00:31:08,760 Speaker 11: about disinformation in American politics. 627 00:31:08,840 --> 00:31:10,920 Speaker 2: Elaine, thank you so much, Elaine Commark. Whether you're a 628 00:31:10,920 --> 00:31:14,080 Speaker 2: Republican or Democrats, she speaks her mind, and every time 629 00:31:14,120 --> 00:31:16,520 Speaker 2: she's on the show, folks, I learned something I had 630 00:31:16,600 --> 00:31:19,880 Speaker 2: no idea. The preponderance of people under forty five. 631 00:31:19,800 --> 00:31:21,600 Speaker 4: Years old in America speaks to the anger that a 632 00:31:21,600 --> 00:31:24,680 Speaker 4: lot of people have that there isn't a representation that 633 00:31:24,720 --> 00:31:26,960 Speaker 4: matches that at a time where the two front runners 634 00:31:27,000 --> 00:31:29,560 Speaker 4: for the presidency are of a different generation. 635 00:31:29,600 --> 00:31:42,960 Speaker 2: It's great when she's out. Sheila Johnson be Et co founder. 636 00:31:43,360 --> 00:31:46,280 Speaker 2: She's the author of Watcher Fire, a memoir of picking 637 00:31:46,320 --> 00:31:51,880 Speaker 2: herself up from her childhood, getting it done, getting totally 638 00:31:52,040 --> 00:31:56,000 Speaker 2: slammed by a divorce, and keeping it going. She's of 639 00:31:56,000 --> 00:31:58,720 Speaker 2: course done better than good over the years. In Washington 640 00:31:59,160 --> 00:32:01,280 Speaker 2: is Mike McKay and I were talking about a modest 641 00:32:01,320 --> 00:32:05,680 Speaker 2: acquaintance with the ice hockey capitals, with women's basketball and 642 00:32:05,720 --> 00:32:10,080 Speaker 2: a sours and she has written an exceptionally terse mustard 643 00:32:10,480 --> 00:32:13,680 Speaker 2: and I love how you end it. Nice Granola guys 644 00:32:13,720 --> 00:32:16,239 Speaker 2: out in Utah and you show up to pick up 645 00:32:16,360 --> 00:32:17,680 Speaker 2: Robert Redford. 646 00:32:17,200 --> 00:32:17,760 Speaker 1: In a Humby. 647 00:32:18,160 --> 00:32:22,160 Speaker 12: Absolutely, yeah, and he gave you a lecture. Oh you know, 648 00:32:22,280 --> 00:32:23,840 Speaker 12: I got to know him because I was on the 649 00:32:23,840 --> 00:32:27,200 Speaker 12: board of sun Dance and I've admired everything that he's 650 00:32:27,240 --> 00:32:30,520 Speaker 12: done for the film industry, and we just got to 651 00:32:30,560 --> 00:32:32,720 Speaker 12: know each other. And he came all the way to Middleburg, 652 00:32:32,840 --> 00:32:35,760 Speaker 12: Virginia as I was getting ready to start construction, look 653 00:32:35,840 --> 00:32:37,320 Speaker 12: down on the town and he says, you got to 654 00:32:37,320 --> 00:32:39,880 Speaker 12: put a film festival here. We are now into our 655 00:32:39,920 --> 00:32:41,880 Speaker 12: eleventh year of doing that. 656 00:32:42,160 --> 00:32:44,240 Speaker 2: Yes, I like that you showed up at a Humbye, which 657 00:32:44,240 --> 00:32:46,160 Speaker 2: speaks volumes about Sheila Johnson. 658 00:32:46,560 --> 00:32:49,080 Speaker 1: I want to go back to the emotion. 659 00:32:48,880 --> 00:32:51,480 Speaker 2: Of the beginning of the book, which people you know, 660 00:32:51,520 --> 00:32:53,640 Speaker 2: you didn't come out of some fancy prep school and 661 00:32:53,680 --> 00:32:55,120 Speaker 2: got it going with the first. 662 00:32:54,880 --> 00:32:58,680 Speaker 1: Million or two million. Now take us before the first million. 663 00:32:58,760 --> 00:33:02,120 Speaker 2: What was the catalyt to pick the pieces up from 664 00:33:02,160 --> 00:33:03,000 Speaker 2: your childhood? 665 00:33:03,320 --> 00:33:07,880 Speaker 12: Well, first of all, it was a learning area where I, 666 00:33:07,920 --> 00:33:09,040 Speaker 12: for the first time in my. 667 00:33:09,000 --> 00:33:10,479 Speaker 2: Life, had to grow up very fast. 668 00:33:10,600 --> 00:33:11,160 Speaker 3: At the age of. 669 00:33:11,200 --> 00:33:15,080 Speaker 12: Sixteen, my father suddenly left. We're a middle class family 670 00:33:15,320 --> 00:33:18,320 Speaker 12: of first African American not the first, but one of 671 00:33:18,400 --> 00:33:22,760 Speaker 12: eight African American neurosurgeons in the country, and so we 672 00:33:22,880 --> 00:33:26,200 Speaker 12: had some sort of status in society, and for him 673 00:33:26,240 --> 00:33:29,480 Speaker 12: to suddenly leave it just left my mother broke. Women 674 00:33:29,560 --> 00:33:33,920 Speaker 12: did not have the wherewithal to have our own bank 675 00:33:33,960 --> 00:33:37,240 Speaker 12: accounts or anything. So that is stuck with me forever, 676 00:33:37,800 --> 00:33:39,960 Speaker 12: and that has been the impetus in which I have 677 00:33:40,080 --> 00:33:42,560 Speaker 12: decided to leave my life and take charge of it. 678 00:33:42,840 --> 00:33:44,480 Speaker 2: Would people want to know from me? I'm going to 679 00:33:44,520 --> 00:33:46,840 Speaker 2: slam it forward to the present. Lisa's got a bunch 680 00:33:46,840 --> 00:33:51,080 Speaker 2: of insight as well. What do you think of the 681 00:33:51,160 --> 00:33:55,680 Speaker 2: expression of our culture? War now is witnessed by a 682 00:33:55,800 --> 00:33:59,320 Speaker 2: corporate effort of diversity which seems to stumble on itself. 683 00:33:59,480 --> 00:34:03,240 Speaker 2: Was it witness as Hollywood and mistakes made or just 684 00:34:03,320 --> 00:34:06,440 Speaker 2: the general debate over this word woke? You're about as 685 00:34:06,480 --> 00:34:09,759 Speaker 2: anti woke as I've ever seen. How do you synthesize that? 686 00:34:10,440 --> 00:34:14,520 Speaker 12: Well, I don't quite understand woke. I just know hard 687 00:34:14,560 --> 00:34:17,640 Speaker 12: work is at the bottom of everything I do. My 688 00:34:17,800 --> 00:34:21,920 Speaker 12: value systems are there, and it's really really important that 689 00:34:21,960 --> 00:34:26,480 Speaker 12: I continue to push on and not really focus so 690 00:34:26,680 --> 00:34:29,000 Speaker 12: much on race. But I am very aware of it 691 00:34:29,520 --> 00:34:32,799 Speaker 12: and the pitfalls that I just try to fight through 692 00:34:32,840 --> 00:34:35,160 Speaker 12: it and I deal with the people that want to 693 00:34:35,239 --> 00:34:36,080 Speaker 12: challenge me on it. 694 00:34:36,640 --> 00:34:39,280 Speaker 4: What do you make of some of the recent striking activity, 695 00:34:39,360 --> 00:34:42,200 Speaker 4: particularly with Hollywood, given your intimacy with that at a 696 00:34:42,239 --> 00:34:44,279 Speaker 4: time where people are trying to take charge of their 697 00:34:44,320 --> 00:34:47,719 Speaker 4: life and don't know what the future landscape will look 698 00:34:47,800 --> 00:34:51,759 Speaker 4: like with artificial intelligence and streaming and don't have those guarantees, 699 00:34:51,800 --> 00:34:54,399 Speaker 4: do you think that there are legitimate issues that are 700 00:34:54,400 --> 00:34:57,560 Speaker 4: not being dealt with responsibly and in the public eye 701 00:34:57,880 --> 00:34:58,960 Speaker 4: from some of these companies. 702 00:34:59,200 --> 00:35:03,560 Speaker 12: Yeah. I think what what's happening is it's all media 703 00:35:03,640 --> 00:35:07,320 Speaker 12: is transitioning so fast, and even in the film industry, 704 00:35:07,800 --> 00:35:11,480 Speaker 12: and I know people in the film industry, they're seriously 705 00:35:11,600 --> 00:35:14,560 Speaker 12: concerned about what their future is going to look like. 706 00:35:15,120 --> 00:35:17,440 Speaker 12: I mean, I deal with the film festival. I have 707 00:35:17,480 --> 00:35:20,960 Speaker 12: a LA Film advisory Board, and they're talking to me 708 00:35:21,080 --> 00:35:23,160 Speaker 12: all the time about are we going to get films 709 00:35:23,200 --> 00:35:26,200 Speaker 12: this year? Are there still films being shot? Are there 710 00:35:26,280 --> 00:35:29,200 Speaker 12: in the can? But I think this is something that 711 00:35:29,239 --> 00:35:31,240 Speaker 12: we've got to watch and we've got to be careful 712 00:35:31,280 --> 00:35:33,880 Speaker 12: about because the landscape is changing quickly. 713 00:35:33,920 --> 00:35:35,000 Speaker 1: You've got these great vignettes. 714 00:35:35,040 --> 00:35:36,520 Speaker 2: I want to take a vignette and take it to 715 00:35:36,560 --> 00:35:39,640 Speaker 2: business as well. You're sitting there one day, you're over 716 00:35:39,680 --> 00:35:40,880 Speaker 2: your saying a coffee. 717 00:35:40,920 --> 00:35:43,400 Speaker 1: You know, you're hanging out. You've probably you know, you're going. 718 00:35:43,640 --> 00:35:45,840 Speaker 2: Ben's Chili bowl, U Street lunch. 719 00:35:45,920 --> 00:35:46,839 Speaker 1: I think we can do that. 720 00:35:47,120 --> 00:35:50,120 Speaker 2: Yeah, And Whitney Houston wonders it. What's it like when 721 00:35:50,200 --> 00:35:52,040 Speaker 2: Whitney Houston comes in the door. 722 00:35:52,600 --> 00:35:53,920 Speaker 12: Well, first of all, she's just one of the most 723 00:35:53,960 --> 00:35:58,000 Speaker 12: beautiful women I'd ever seen. She's very thin, very talented. 724 00:35:58,200 --> 00:36:01,600 Speaker 12: But I also could just set it's a little bit troubled, 725 00:36:02,320 --> 00:36:05,880 Speaker 12: but I admired her. She's a great talent. And you 726 00:36:05,920 --> 00:36:08,800 Speaker 12: know that was some of the fun things about Bet. 727 00:36:09,000 --> 00:36:11,960 Speaker 12: You would see all these celebrities that you've heard about, 728 00:36:12,120 --> 00:36:15,719 Speaker 12: talked about, and they're coming into your studio. So, I mean, 729 00:36:15,840 --> 00:36:19,360 Speaker 12: we really were the core of black media back well, 730 00:36:19,440 --> 00:36:20,200 Speaker 12: you were the core of it. 731 00:36:20,280 --> 00:36:21,560 Speaker 2: And you know, like you said, you wanted to be 732 00:36:21,600 --> 00:36:25,160 Speaker 2: Abny magazine, really high end in academic and then boom, 733 00:36:25,200 --> 00:36:27,600 Speaker 2: it all changed, and you know, in some ways it 734 00:36:27,640 --> 00:36:29,520 Speaker 2: blew up in that, but. 735 00:36:29,760 --> 00:36:31,000 Speaker 1: I got to drag it forward. 736 00:36:31,040 --> 00:36:33,880 Speaker 2: Now, Sheila Johnson another cup of coffee, except it's a 737 00:36:33,920 --> 00:36:36,840 Speaker 2: fancy cup at the Sunset Teller Hotel. It's you and 738 00:36:36,920 --> 00:36:41,080 Speaker 2: mister iger, what's your advice to the modern train wreck 739 00:36:41,280 --> 00:36:42,120 Speaker 2: known as Disney? 740 00:36:43,160 --> 00:36:47,160 Speaker 12: Oh my goodness, that's something I really can't answer, but 741 00:36:47,239 --> 00:36:49,840 Speaker 12: I will tell you Disney has always been a force. 742 00:36:49,880 --> 00:36:53,640 Speaker 12: It's a force in media, in entertainment, and I'm just 743 00:36:54,680 --> 00:36:57,640 Speaker 12: terrified about what's going on in Florida right now. I 744 00:36:57,680 --> 00:36:58,200 Speaker 12: really am. 745 00:36:58,719 --> 00:37:01,440 Speaker 4: Well, if you push it forward from your BET experience, 746 00:37:02,200 --> 00:37:04,920 Speaker 4: would you be able to found that company today in 747 00:37:04,960 --> 00:37:05,720 Speaker 4: today's world? 748 00:37:06,719 --> 00:37:10,400 Speaker 12: You know this question has been asked of me many times. 749 00:37:10,560 --> 00:37:14,560 Speaker 12: I'm really concerned about where BT is now. I think 750 00:37:14,640 --> 00:37:17,799 Speaker 12: we need to look at it. I have not been 751 00:37:17,840 --> 00:37:20,120 Speaker 12: happy with it for years and years and years. There's 752 00:37:20,160 --> 00:37:23,640 Speaker 12: not enough balance programming, and I just think that the 753 00:37:23,760 --> 00:37:29,000 Speaker 12: landscape and the racial landscape of what African Americans are 754 00:37:29,120 --> 00:37:32,759 Speaker 12: watching has changing. And I just think that we have 755 00:37:32,920 --> 00:37:36,360 Speaker 12: got such a broad perspective of people out there that 756 00:37:36,440 --> 00:37:40,319 Speaker 12: want something different, especially this younger generation. So we need 757 00:37:40,360 --> 00:37:45,800 Speaker 12: to reevaluate what are the goals of black media and 758 00:37:45,120 --> 00:37:48,440 Speaker 12: what are answers? What is it out there that we 759 00:37:48,480 --> 00:37:49,240 Speaker 12: need to answer? 760 00:37:49,480 --> 00:37:51,399 Speaker 2: The heart and soul your voice, You've got to wrap 761 00:37:51,480 --> 00:37:54,160 Speaker 2: it up here, Sheila and celebration of walk Through Fire. 762 00:37:54,200 --> 00:37:57,279 Speaker 2: But the heart and soul of your work is to 763 00:37:57,320 --> 00:38:01,160 Speaker 2: find a middle ground and in these cultural wars. You know, 764 00:38:01,719 --> 00:38:05,800 Speaker 2: I was weaned on Edmund Burke, Senator from Massachusetts. 765 00:38:05,880 --> 00:38:06,959 Speaker 1: This is a long time ago. 766 00:38:07,400 --> 00:38:10,880 Speaker 2: How do we get a fractured America back to a 767 00:38:10,920 --> 00:38:11,560 Speaker 2: middle ground? 768 00:38:11,880 --> 00:38:14,799 Speaker 12: Well, I think what we're doing through the Salamanders, through 769 00:38:14,840 --> 00:38:18,239 Speaker 12: my company is we're bringing in programming. I've kind of 770 00:38:18,239 --> 00:38:21,440 Speaker 12: taken it from bet and into the hospitality business with 771 00:38:21,520 --> 00:38:24,640 Speaker 12: the film festival. Also, I've been able to check the 772 00:38:24,680 --> 00:38:27,360 Speaker 12: box on the diversity issues where I bring in forty 773 00:38:27,400 --> 00:38:29,920 Speaker 12: one of the top black chefs from all over the 774 00:38:29,960 --> 00:38:34,160 Speaker 12: country to really celebrate food from the African diaspora. We 775 00:38:34,200 --> 00:38:37,640 Speaker 12: talk about these issues and panel discussions. I'm doing it 776 00:38:37,680 --> 00:38:40,440 Speaker 12: in a fun way, bringing the American Ballet Theater in. 777 00:38:41,120 --> 00:38:44,320 Speaker 12: I like to continue the entertainment part of it into 778 00:38:44,400 --> 00:38:47,799 Speaker 12: my hospitality company, and that's where we're answering a lot 779 00:38:47,800 --> 00:38:48,560 Speaker 12: of the questions. 780 00:38:48,640 --> 00:38:51,560 Speaker 1: Sheila, thank you so much for joining me. So welcome today. 781 00:38:51,600 --> 00:38:54,680 Speaker 2: Sheila Johnson of Course of Beet Walk Through Fire, a 782 00:38:54,760 --> 00:39:00,560 Speaker 2: memoir of love, loss and triumph. Deeply personal and courageous book. 783 00:39:00,600 --> 00:39:01,000 Speaker 1: As well. 784 00:39:01,160 --> 00:39:05,000 Speaker 2: Subscribe to the Bloomberg Surveillance podcast on Apple, Spotify, and 785 00:39:05,120 --> 00:39:09,320 Speaker 2: anywhere else you get your podcasts. Listen live every weekday, 786 00:39:09,600 --> 00:39:10,840 Speaker 2: starting at seven am. 787 00:39:10,880 --> 00:39:13,279 Speaker 1: Easter. I'm Bloomberg dot Com. 788 00:39:13,000 --> 00:39:17,160 Speaker 2: The iHeartRadio app, tune In, and the Bloomberg Business app. 789 00:39:17,640 --> 00:39:21,320 Speaker 2: You can watch us live on Bloomberg Television and always 790 00:39:21,680 --> 00:39:22,920 Speaker 2: I'm the Bloomberg Terminal. 791 00:39:23,280 --> 00:39:27,520 Speaker 1: Thanks for listening. I'm Tom Keen, and this is Bloomberg