1 00:00:00,080 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:11,960 --> 00:00:15,560 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 3 00:00:15,600 --> 00:00:18,960 Speaker 2: with Paul Sweeney. Join us each day for insight from 4 00:00:18,960 --> 00:00:23,160 Speaker 2: the best in economics, finance, investment, and international relations. You 5 00:00:23,160 --> 00:00:26,520 Speaker 2: can also watch the show live on YouTube. Visit the 6 00:00:26,520 --> 00:00:31,280 Speaker 2: Bloomberg Podcast channel on YouTube to see the show weekday 7 00:00:31,280 --> 00:00:34,320 Speaker 2: mornings from seven to ten am Eastern from our global 8 00:00:34,360 --> 00:00:39,000 Speaker 2: headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 9 00:00:39,360 --> 00:00:42,920 Speaker 2: or anywhere else you listen and always I'm Bloomberg Radio, 10 00:00:43,080 --> 00:00:47,199 Speaker 2: the Bloomberg Terminal, and the Bloomberg Business App. Join us 11 00:00:47,200 --> 00:00:49,440 Speaker 2: out from Whole Free Shirs. Really one of the most 12 00:00:49,479 --> 00:00:53,680 Speaker 2: interesting economists out there, Stephanie Roth, and she brings truly 13 00:00:53,920 --> 00:00:58,840 Speaker 2: prodigious mathematical abilities. You know, you remind me of Lordamesta 14 00:00:58,920 --> 00:01:04,240 Speaker 2: retiring into Cleveland, fed. What does your mathiness do when 15 00:01:04,319 --> 00:01:11,080 Speaker 2: you commit economics? What makes your economics study different because 16 00:01:11,120 --> 00:01:15,959 Speaker 2: of your you know, Buck Dell and Columbia World Classic mathematics. 17 00:01:16,080 --> 00:01:18,240 Speaker 1: I mean these days it's because there's so much seasonality 18 00:01:18,280 --> 00:01:19,720 Speaker 1: problems in the data. That's been one of the most 19 00:01:19,720 --> 00:01:20,280 Speaker 1: important show. 20 00:01:20,280 --> 00:01:21,240 Speaker 3: So you agree. 21 00:01:20,959 --> 00:01:24,399 Speaker 2: With with Anna along it at Bloomberg that there are 22 00:01:24,800 --> 00:01:25,560 Speaker 2: data problems. 23 00:01:25,560 --> 00:01:27,240 Speaker 1: Oh, there are data problems in a big way. I mean, 24 00:01:27,280 --> 00:01:29,479 Speaker 1: look at core PC and Q four at average one 25 00:01:29,480 --> 00:01:31,640 Speaker 1: point five percent, and in Q one and average four 26 00:01:31,640 --> 00:01:34,680 Speaker 1: point two percent inflation, it was neither. We were running 27 00:01:34,680 --> 00:01:36,800 Speaker 1: somewhere on two and a half to three percent. So 28 00:01:36,840 --> 00:01:39,479 Speaker 1: there's just truly seasonality problems that are working the way through. 29 00:01:39,520 --> 00:01:41,760 Speaker 1: When I think we learned that last week is the 30 00:01:41,840 --> 00:01:43,240 Speaker 1: seasonality problems. 31 00:01:43,280 --> 00:01:46,600 Speaker 2: And when you synthesize the math and the revisions leads 32 00:01:46,640 --> 00:01:48,320 Speaker 2: you to a greater disinflation. 33 00:01:48,800 --> 00:01:50,800 Speaker 1: Yes, and it leads me to believe that the FED 34 00:01:50,800 --> 00:01:51,320 Speaker 1: can cut. 35 00:01:51,120 --> 00:01:52,280 Speaker 4: Into actly does that? 36 00:01:52,600 --> 00:01:54,800 Speaker 2: When you're a math major you do that? You don't 37 00:01:54,840 --> 00:01:58,040 Speaker 2: say yes, Tom, You say yes, you stupid? 38 00:01:59,560 --> 00:02:03,320 Speaker 5: So what's a favor? So steady? Is the FED behind 39 00:02:03,320 --> 00:02:03,640 Speaker 5: a curve? 40 00:02:03,680 --> 00:02:05,880 Speaker 6: Do you think should they have been cutting already given 41 00:02:06,000 --> 00:02:07,560 Speaker 6: some of the real time data we see. 42 00:02:08,120 --> 00:02:10,600 Speaker 1: I mean, I think could they have cut in July? 43 00:02:11,040 --> 00:02:11,400 Speaker 5: Maybe? 44 00:02:11,400 --> 00:02:14,639 Speaker 1: But the inflation data were bad in Q one. Understandably 45 00:02:14,680 --> 00:02:16,960 Speaker 1: they want to be convinced, so September I don't think 46 00:02:16,960 --> 00:02:19,280 Speaker 1: they're in a rush. September is perfectly fine. I think 47 00:02:19,280 --> 00:02:21,040 Speaker 1: they probably need to be cutting this year, otherwise we 48 00:02:21,120 --> 00:02:23,680 Speaker 1: might run into some problems similar to what we saw 49 00:02:24,000 --> 00:02:25,760 Speaker 1: a couple of years ago with some of the regional banks. 50 00:02:26,639 --> 00:02:28,519 Speaker 6: So I mean, if I look at the I mean, 51 00:02:30,160 --> 00:02:32,720 Speaker 6: the interesting thing here for a lot of investors is 52 00:02:32,880 --> 00:02:34,960 Speaker 6: it feels like that that data we got in first 53 00:02:35,000 --> 00:02:36,480 Speaker 6: quarter ofut inflation that suggests that. 54 00:02:36,440 --> 00:02:38,840 Speaker 5: Inflation was still around. Yeah, We've got a couple of 55 00:02:38,840 --> 00:02:40,880 Speaker 5: prints after that that suggested maybe not. 56 00:02:41,200 --> 00:02:41,320 Speaker 4: So. 57 00:02:41,800 --> 00:02:44,920 Speaker 5: I guess it's understandable for the FED to be waiting. 58 00:02:45,400 --> 00:02:47,080 Speaker 1: Yeah, it is. And I think, I mean Powell was 59 00:02:47,120 --> 00:02:49,000 Speaker 1: one of the people who really believed in the season is. 60 00:02:49,000 --> 00:02:51,239 Speaker 1: I think some of the other FOMC members need to 61 00:02:51,280 --> 00:02:55,160 Speaker 1: be more convinced than perhaps even Powell. But the CORPORC 62 00:02:55,360 --> 00:02:57,600 Speaker 1: number should be something like point one five in the 63 00:02:57,600 --> 00:02:59,800 Speaker 1: next month, and the seasonals go the other way throughout 64 00:02:59,840 --> 00:03:02,360 Speaker 1: the of the year. And Oer is a big one. Oer, 65 00:03:02,480 --> 00:03:04,280 Speaker 1: we should see the big next step down in the 66 00:03:04,280 --> 00:03:04,880 Speaker 1: month of June. 67 00:03:04,919 --> 00:03:08,000 Speaker 2: We should explain to our audience it's Oer's. 68 00:03:07,520 --> 00:03:11,000 Speaker 1: Real estate exactly, real estate CPI, real estate inflation. 69 00:03:11,120 --> 00:03:13,480 Speaker 6: Okay, very good, And that's the thing for everybody who's 70 00:03:13,520 --> 00:03:16,320 Speaker 6: trying to run an apartment in the city retail sales tomorrow. 71 00:03:16,320 --> 00:03:18,040 Speaker 6: How's the consumer doing? What do you expect to see 72 00:03:18,040 --> 00:03:19,679 Speaker 6: from retail sales tomorrow? 73 00:03:19,960 --> 00:03:21,600 Speaker 1: Yeah, that'll be that's going to be a big one, 74 00:03:21,600 --> 00:03:24,280 Speaker 1: because you know, the street is looking for sort of 75 00:03:24,320 --> 00:03:25,880 Speaker 1: a modest gain, but if you look at some of 76 00:03:25,919 --> 00:03:27,799 Speaker 1: the alternative data, looks like it could be running a 77 00:03:27,840 --> 00:03:29,520 Speaker 1: little bit hotter. Some of the credit card data look 78 00:03:29,720 --> 00:03:31,480 Speaker 1: a little bit stronger, like you might actually get a 79 00:03:31,480 --> 00:03:35,040 Speaker 1: bit of a bounce back if you net out what 80 00:03:35,040 --> 00:03:36,720 Speaker 1: we've seen for the bulk of this year, it's been 81 00:03:36,760 --> 00:03:39,040 Speaker 1: a consumer that's spending but slower than what we saw 82 00:03:39,120 --> 00:03:41,520 Speaker 1: last year, which is arguably a good thing. I mean, 83 00:03:41,600 --> 00:03:44,040 Speaker 1: especially good spending was so strong last year it was 84 00:03:44,120 --> 00:03:45,000 Speaker 1: kind of unsustainable. 85 00:03:45,040 --> 00:03:47,920 Speaker 2: We'll give me a proportional analysis here. What's your forward 86 00:03:48,040 --> 00:03:51,880 Speaker 2: view on real GDP the one everybody follows, but also 87 00:03:52,080 --> 00:03:56,120 Speaker 2: nominal GDP, real GDP plus the inflation element. What are 88 00:03:56,120 --> 00:03:57,320 Speaker 2: those two numbers forward? 89 00:03:57,560 --> 00:04:00,000 Speaker 1: Yeah, so we're looking for something around a two percent 90 00:04:00,120 --> 00:04:03,160 Speaker 1: real GDP growth, which is kind of historical average. That's 91 00:04:03,360 --> 00:04:06,960 Speaker 1: a normal trend, like solid solid, and then if you 92 00:04:07,000 --> 00:04:10,200 Speaker 1: add a two point two percent something inflation like that, 93 00:04:10,320 --> 00:04:12,360 Speaker 1: then you're looking at a four point two percent nominal 94 00:04:12,400 --> 00:04:13,160 Speaker 1: GDP growth. 95 00:04:13,920 --> 00:04:16,279 Speaker 2: Well, where's the gloom? I mean, all week in Sam 96 00:04:16,360 --> 00:04:20,000 Speaker 2: row out with a spectacular six charts from the different 97 00:04:20,040 --> 00:04:23,360 Speaker 2: street sources showing you know, I'm sorry it's a bull 98 00:04:23,440 --> 00:04:27,159 Speaker 2: market because actually the economy is pretty good. Yeah, Stephanie, 99 00:04:27,600 --> 00:04:28,520 Speaker 2: is that safe to say? 100 00:04:28,600 --> 00:04:28,840 Speaker 5: Yeah? 101 00:04:28,839 --> 00:04:31,640 Speaker 1: The economy is good and it's been an impressive rebalancing. 102 00:04:31,640 --> 00:04:33,640 Speaker 1: We were coming from a place where inflation was running 103 00:04:33,640 --> 00:04:36,520 Speaker 1: at nine percent and it's come come down back to 104 00:04:36,560 --> 00:04:38,600 Speaker 1: something that's very close to what the Fed's looking at. 105 00:04:38,760 --> 00:04:41,560 Speaker 1: And now we're looking at inflation to several decimal places. 106 00:04:41,800 --> 00:04:47,520 Speaker 1: We were in a position where who fault, I mean, 107 00:04:48,080 --> 00:04:50,480 Speaker 1: who cared what inflation was the second decimal when when 108 00:04:50,480 --> 00:04:52,839 Speaker 1: you were seeingero point six percent month on month prints. 109 00:04:53,160 --> 00:04:55,720 Speaker 1: But now that we're talking about something between point one 110 00:04:55,720 --> 00:04:57,159 Speaker 1: and point no. 111 00:04:57,279 --> 00:05:00,480 Speaker 2: But you can't in other times of distance in the 112 00:05:00,520 --> 00:05:05,000 Speaker 2: early nineteen fifties, nobody was looking to three decimal points. 113 00:05:04,800 --> 00:05:07,360 Speaker 2: That's a modern idiocy, that's fair, and. 114 00:05:07,320 --> 00:05:10,159 Speaker 1: I mean there's so much FED communication and there's just 115 00:05:10,680 --> 00:05:13,520 Speaker 1: all of that has changed a lot over the number 116 00:05:13,560 --> 00:05:17,200 Speaker 1: of years. But now we're in an environment where it matters. 117 00:05:17,480 --> 00:05:19,160 Speaker 2: Paul is at the Beach this week and study in 118 00:05:19,240 --> 00:05:20,960 Speaker 2: central limit theorem exactly. 119 00:05:21,760 --> 00:05:22,520 Speaker 5: Talk to us about this. 120 00:05:23,560 --> 00:05:25,840 Speaker 6: You know the labor marketer, because I know the FEDS 121 00:05:25,880 --> 00:05:28,040 Speaker 6: looking at the labor market and we're pushing up to 122 00:05:28,080 --> 00:05:31,640 Speaker 6: four percent unemployment but still fully employed economy. 123 00:05:31,880 --> 00:05:34,480 Speaker 5: How do you think about this US labor market? 124 00:05:35,040 --> 00:05:36,960 Speaker 1: A lot of it has been driven by immigration, and 125 00:05:37,279 --> 00:05:39,400 Speaker 1: by that I mean we were coming from a place 126 00:05:39,400 --> 00:05:41,839 Speaker 1: where the labor market was really tight and we had 127 00:05:41,839 --> 00:05:44,800 Speaker 1: a really strong influx of immigration, which is still ongoing, 128 00:05:45,200 --> 00:05:47,279 Speaker 1: and that helped to rebalance the labor market or add 129 00:05:47,320 --> 00:05:49,040 Speaker 1: a lot of supply where there wasn't really a supply. 130 00:05:49,080 --> 00:05:51,080 Speaker 1: We don't have that as much as strong sort of 131 00:05:51,080 --> 00:05:54,039 Speaker 1: domestic labor force growth, but now we got it from 132 00:05:54,080 --> 00:05:56,880 Speaker 1: the outside. And these programs are ongoing until perhaps the 133 00:05:56,880 --> 00:05:59,200 Speaker 1: next administration, and then it could change a bit. 134 00:05:59,400 --> 00:06:02,719 Speaker 2: So on a non farm payrolls pick a number, what's 135 00:06:02,760 --> 00:06:06,120 Speaker 2: the immigration plug there? Give give her audience scope and 136 00:06:06,200 --> 00:06:09,919 Speaker 2: scale when people toss her around the phrase immigration. How 137 00:06:10,000 --> 00:06:11,719 Speaker 2: much of that's in non farm payrolls? 138 00:06:11,760 --> 00:06:14,880 Speaker 1: Sure, so when you think about the steady state of payrolls, 139 00:06:14,880 --> 00:06:17,960 Speaker 1: gth forgetting about immigration, we're talking somewhere there's domestic growth 140 00:06:18,000 --> 00:06:20,360 Speaker 1: of eighty five to one hundred thousand. That's without sort 141 00:06:20,400 --> 00:06:24,440 Speaker 1: of strong immigration trends. Immigration trends roughly double that, double, 142 00:06:24,720 --> 00:06:30,360 Speaker 1: roughly double that. So, for example, the Biden administration humanitarian 143 00:06:30,400 --> 00:06:35,039 Speaker 1: parole programs, which is bringing in people from from Mexico 144 00:06:35,240 --> 00:06:38,920 Speaker 1: and then Cuba, hating Nicaragua Venezuela, bringing in seventy five 145 00:06:38,960 --> 00:06:41,479 Speaker 1: thousand people per month, and they're able to get a 146 00:06:41,480 --> 00:06:46,120 Speaker 1: work visa within thirty days. So presumably if they're. 147 00:06:45,960 --> 00:06:48,440 Speaker 2: Working, this is too important. You're telling me we got 148 00:06:48,480 --> 00:06:50,800 Speaker 2: a run rate non farm payrolls of one hundred thousand 149 00:06:50,839 --> 00:06:53,279 Speaker 2: a month, and you're willing to pop that up to 150 00:06:53,360 --> 00:06:57,280 Speaker 2: one eighty or two hundred based on immigration in America. 151 00:06:57,440 --> 00:06:59,920 Speaker 1: Yes, that's why this has been every balance. 152 00:07:00,120 --> 00:07:02,719 Speaker 6: Now look at this, Torst and Slock, our good friend 153 00:07:02,720 --> 00:07:05,080 Speaker 6: from Apollo just out with a note going to the 154 00:07:05,160 --> 00:07:08,279 Speaker 6: same issue. The foreign born labor force has grown eleven 155 00:07:08,320 --> 00:07:11,559 Speaker 6: percent since February twenty twenty, and the native born labor 156 00:07:11,600 --> 00:07:14,640 Speaker 6: forces unchanged over the same period. So the growth in 157 00:07:14,680 --> 00:07:17,800 Speaker 6: the labor force is entirely driven by immigration. 158 00:07:18,200 --> 00:07:20,120 Speaker 1: Yeah, and by the way, that data might not even 159 00:07:20,120 --> 00:07:22,880 Speaker 1: be fully capturing all the immigration because they're having trouble, 160 00:07:23,080 --> 00:07:25,120 Speaker 1: especially in the household survey, which is what captures that, 161 00:07:25,520 --> 00:07:26,440 Speaker 1: capturing all of that. 162 00:07:26,680 --> 00:07:30,640 Speaker 2: Bob, can we slot Stephanie into your jobs day and 163 00:07:30,760 --> 00:07:33,400 Speaker 2: just tell her people she can't be so mathy? Yes, 164 00:07:33,600 --> 00:07:34,920 Speaker 2: that is emotional. 165 00:07:35,600 --> 00:07:37,040 Speaker 5: This is great. 166 00:07:37,480 --> 00:07:41,120 Speaker 2: You know, how do kids get so they love statistics? 167 00:07:41,440 --> 00:07:43,400 Speaker 2: How do we get back to when we were kids 168 00:07:43,640 --> 00:07:47,280 Speaker 2: and you have to take statistics at gunpoint and you 169 00:07:47,400 --> 00:07:49,440 Speaker 2: did it and nobody complained, You just took it. 170 00:07:49,840 --> 00:07:51,840 Speaker 1: Yeah, that's fair. I mean, I think it's kind of fun. 171 00:07:51,880 --> 00:07:54,000 Speaker 1: You learn a lot from just digging into the data. 172 00:07:54,000 --> 00:07:54,640 Speaker 2: Foundational. 173 00:07:54,920 --> 00:07:57,480 Speaker 1: Yeah, it totally is. I mean, especially these days where 174 00:07:57,520 --> 00:07:59,280 Speaker 1: the data are just so funky. In the post cos I. 175 00:07:59,280 --> 00:08:01,320 Speaker 2: See that the dining room table and start talking one 176 00:08:01,320 --> 00:08:03,520 Speaker 2: over square out of tea and the kids they throw, 177 00:08:03,720 --> 00:08:07,680 Speaker 2: you know, they throw vegetables serving. It's definitely right, Thank 178 00:08:07,720 --> 00:08:20,960 Speaker 2: you so much. She is with the Wolf. Researcher Stephen 179 00:08:21,000 --> 00:08:24,000 Speaker 2: Major has led letter lead on this. It a just 180 00:08:24,120 --> 00:08:27,520 Speaker 2: be see vigilant about a lower rate regime where they 181 00:08:27,680 --> 00:08:30,120 Speaker 2: just be c Hong Kong. Stephen Major, are we finally 182 00:08:30,200 --> 00:08:33,040 Speaker 2: two the lower rate regime you've been predicting. 183 00:08:34,840 --> 00:08:38,320 Speaker 7: We've had to be very patient, Tom it seems to 184 00:08:38,360 --> 00:08:42,480 Speaker 7: be coming through, and I think the catalyst was obviously 185 00:08:42,559 --> 00:08:46,480 Speaker 7: not predicted by anyone. It seems to be the elections. 186 00:08:46,480 --> 00:08:50,760 Speaker 7: Maybe in France and Mexico. They have one thing in common. 187 00:08:50,800 --> 00:08:55,600 Speaker 7: They both bring chaos and concerns on the fiscal front, 188 00:08:55,960 --> 00:08:59,720 Speaker 7: and bonds don't like it in those countries, and that 189 00:09:00,320 --> 00:09:05,080 Speaker 7: into the safe havens like treasuries and buds, and I 190 00:09:05,120 --> 00:09:08,040 Speaker 7: think that's helping, and it's taking the focus a bit 191 00:09:08,080 --> 00:09:11,000 Speaker 7: away from every data release in the US and every 192 00:09:11,120 --> 00:09:11,880 Speaker 7: FED speaker. 193 00:09:12,400 --> 00:09:15,280 Speaker 2: Do you, as a grizzled veteran, do you get any 194 00:09:15,440 --> 00:09:20,480 Speaker 2: value from monitoring the credit default swap market or is 195 00:09:20,520 --> 00:09:24,160 Speaker 2: it just too ill liquid where Steve Major stays looking 196 00:09:24,240 --> 00:09:27,360 Speaker 2: at full faith and credit bond market data. 197 00:09:27,559 --> 00:09:31,520 Speaker 7: Yeah, it might give us a clue on sentiment and direction, 198 00:09:31,640 --> 00:09:35,440 Speaker 7: but no one's going to default here. So the French 199 00:09:35,480 --> 00:09:38,520 Speaker 7: spreads moved a bit, but the more interesting one So 200 00:09:38,559 --> 00:09:40,959 Speaker 7: the French CDs has moved, But the one that's more 201 00:09:40,960 --> 00:09:45,160 Speaker 7: interesting is the comparison between buons and oats, say in 202 00:09:45,200 --> 00:09:49,520 Speaker 7: the five year segment. So I think CDs gives us 203 00:09:49,559 --> 00:09:52,920 Speaker 7: some sort of warning, but I don't think it's it's 204 00:09:52,960 --> 00:09:56,920 Speaker 7: particularly liquid, and I think you get much more value 205 00:09:56,920 --> 00:09:59,800 Speaker 7: looking at the proper government bonds and their asset swap spreads. 206 00:10:00,760 --> 00:10:04,920 Speaker 6: So Stephen, you know, I'm kind of lazy enough to 207 00:10:04,960 --> 00:10:06,320 Speaker 6: just say I think I'm just going to sit around 208 00:10:06,360 --> 00:10:08,480 Speaker 6: in a US to your treasure and get four point 209 00:10:08,520 --> 00:10:11,600 Speaker 6: seventy five percent. But you're the global head of fixed 210 00:10:11,640 --> 00:10:15,200 Speaker 6: income at HSBC. Do you get anything more exciting for 211 00:10:15,240 --> 00:10:16,600 Speaker 6: me than just the US Treasury? 212 00:10:18,160 --> 00:10:20,040 Speaker 7: And I think you're wrong on the two years. You 213 00:10:20,120 --> 00:10:22,240 Speaker 7: might want to go a bit longer. And the way 214 00:10:22,280 --> 00:10:26,880 Speaker 7: I explain it to people is sort of simple opportunity cost. 215 00:10:27,120 --> 00:10:30,680 Speaker 7: And to make it really simple, if you roll bills 216 00:10:30,720 --> 00:10:32,720 Speaker 7: for one year, you can get five and a quarter 217 00:10:32,760 --> 00:10:36,000 Speaker 7: to five and a half. But you see, if they're 218 00:10:36,040 --> 00:10:39,320 Speaker 7: cutting rates, you won't get that in a year's time, 219 00:10:40,000 --> 00:10:45,280 Speaker 7: So locking in for two years at four seventy ish 220 00:10:45,400 --> 00:10:47,080 Speaker 7: seems like a good trade. 221 00:10:47,600 --> 00:10:49,679 Speaker 4: Elsewhere globally, I think. 222 00:10:49,520 --> 00:10:52,920 Speaker 7: You can find some some of the emerging markets looking 223 00:10:53,000 --> 00:10:59,440 Speaker 7: quite interesting. India has been resilient in all of this 224 00:10:59,440 --> 00:11:04,560 Speaker 7: this recent volatility, because when volatility goes up, spreads go out. 225 00:11:04,920 --> 00:11:08,040 Speaker 4: That India is not really a spread market, it's on 226 00:11:08,080 --> 00:11:08,480 Speaker 4: its own. 227 00:11:08,920 --> 00:11:13,240 Speaker 7: So there's something to say there and I think in 228 00:11:13,360 --> 00:11:17,360 Speaker 7: Europe there's there's still value to be had in government bonds, 229 00:11:17,360 --> 00:11:19,880 Speaker 7: but you've got to keep away from the from the hotspots. 230 00:11:20,480 --> 00:11:23,240 Speaker 4: So it's more like Spain, for example. 231 00:11:23,520 --> 00:11:27,160 Speaker 7: It's attractive and and and again Germany is the one 232 00:11:27,200 --> 00:11:31,080 Speaker 7: that wins in this situation. But you know, I know 233 00:11:31,160 --> 00:11:33,760 Speaker 7: that four point seven doesn't sound very exciting, and you're 234 00:11:33,760 --> 00:11:36,760 Speaker 7: looking for some more sex, drugs and rock and roll. 235 00:11:36,840 --> 00:11:40,319 Speaker 7: But in the bond market, I'm afraid it's supposed to 236 00:11:40,360 --> 00:11:42,080 Speaker 7: be boring exactly. 237 00:11:42,360 --> 00:11:43,280 Speaker 5: How about credit risk? 238 00:11:43,320 --> 00:11:44,520 Speaker 6: So if I want to take a little bit of 239 00:11:44,559 --> 00:11:47,880 Speaker 6: credit risk, where do you see some opportunity out there? 240 00:11:47,920 --> 00:11:49,200 Speaker 5: I know that you know a lot of folks are 241 00:11:49,240 --> 00:11:50,800 Speaker 5: telling spreads are so tight. 242 00:11:51,400 --> 00:11:55,720 Speaker 7: You've got to get defensive, and we're shortening in terms 243 00:11:55,720 --> 00:11:59,280 Speaker 7: of spread duration. And what that means in plain English 244 00:11:59,400 --> 00:12:02,599 Speaker 7: is will we'll we'll go to the front end. We 245 00:12:03,320 --> 00:12:07,080 Speaker 7: can take some sort of more defensive trades. Some of 246 00:12:07,080 --> 00:12:09,400 Speaker 7: those haven't done very well recently because it tends to 247 00:12:09,400 --> 00:12:13,000 Speaker 7: push you into banks, and banks don't like some of 248 00:12:13,000 --> 00:12:17,160 Speaker 7: the stuff going on. So high yield is okay at 249 00:12:17,200 --> 00:12:19,920 Speaker 7: the front end, but you get your duration from the 250 00:12:20,000 --> 00:12:20,560 Speaker 7: right place. 251 00:12:20,720 --> 00:12:22,080 Speaker 4: The treasury market. 252 00:12:22,920 --> 00:12:26,960 Speaker 2: Steve Major, how do we flip from our focus and 253 00:12:27,080 --> 00:12:30,520 Speaker 2: short duration and move out to the belly of the 254 00:12:30,600 --> 00:12:35,079 Speaker 2: curve and even out farther. What is the exercise of 255 00:12:35,160 --> 00:12:39,079 Speaker 2: the process where mere mortals decide to have the confidence 256 00:12:39,120 --> 00:12:39,960 Speaker 2: to buy longer? 257 00:12:40,960 --> 00:12:43,439 Speaker 7: Yeah, I mean, I have to say, hand on hard 258 00:12:43,720 --> 00:12:49,520 Speaker 7: it's very difficult to give a strong guarantee about buying 259 00:12:49,679 --> 00:12:52,520 Speaker 7: ten years or longer in terms of the term premium. 260 00:12:52,960 --> 00:12:56,960 Speaker 7: So that's part of the problem because you know what 261 00:12:57,000 --> 00:13:00,760 Speaker 7: the scenarios are around the election, A lot of the known. 262 00:13:02,080 --> 00:13:04,840 Speaker 7: At least if you're buying the twos to the fives, 263 00:13:04,960 --> 00:13:08,559 Speaker 7: you should be okay, because the yield to maturity there 264 00:13:08,640 --> 00:13:11,839 Speaker 7: is really driven by the policy rate and the expectations 265 00:13:11,840 --> 00:13:14,880 Speaker 7: for that policy rate in the near term. Now that 266 00:13:15,160 --> 00:13:17,400 Speaker 7: there's not much that either candidate's going to do to 267 00:13:17,440 --> 00:13:19,360 Speaker 7: effect where PAG funds is going to be in one 268 00:13:19,440 --> 00:13:23,040 Speaker 7: year's time, they might have an impact in five to 269 00:13:23,040 --> 00:13:25,640 Speaker 7: ten years time, and that's why it starts to spill 270 00:13:25,679 --> 00:13:28,480 Speaker 7: into the term premium. I think there's already a fair 271 00:13:28,559 --> 00:13:31,840 Speaker 7: bit of term premium there. I mean, everyone on the call, 272 00:13:31,920 --> 00:13:34,000 Speaker 7: everyone is listening to this nose. There's a lot of 273 00:13:34,040 --> 00:13:37,360 Speaker 7: debt right everyone knows what the likely policies are going 274 00:13:37,440 --> 00:13:39,440 Speaker 7: to be either candidate, so it's not like it was 275 00:13:39,480 --> 00:13:40,640 Speaker 7: in twenty sixteen. 276 00:13:41,679 --> 00:13:43,920 Speaker 2: Steve, it's time now, and you know we got to 277 00:13:43,920 --> 00:13:48,640 Speaker 2: do this. It's time for obligatory soccer talk. I'm looking 278 00:13:48,679 --> 00:13:51,079 Speaker 2: at Italy and they snuck bag it was a mountain 279 00:13:51,160 --> 00:13:55,679 Speaker 2: Negroes Albania in England snuck by Serbia. But I'm looking 280 00:13:55,720 --> 00:14:01,240 Speaker 2: at that. There's some like real games coming up, like Netherlands, Austria, France, 281 00:14:01,360 --> 00:14:04,800 Speaker 2: Poland Lake. Some of these brackets are interesting. Does England 282 00:14:04,880 --> 00:14:07,199 Speaker 2: have the easiest brackets since time began? 283 00:14:08,760 --> 00:14:12,200 Speaker 7: No, there's no, there's no easy games. And I think 284 00:14:12,280 --> 00:14:14,800 Speaker 7: that the first challenge is get out of your group. 285 00:14:15,240 --> 00:14:19,000 Speaker 7: And you know in tournament football or tournament sports even 286 00:14:19,080 --> 00:14:21,160 Speaker 7: you have to play your way into the tournament. This 287 00:14:21,160 --> 00:14:24,640 Speaker 7: thing is for four weeks or so long, so it's 288 00:14:24,680 --> 00:14:26,000 Speaker 7: best not to start too well. 289 00:14:26,240 --> 00:14:27,120 Speaker 4: I would have thought. 290 00:14:26,920 --> 00:14:29,680 Speaker 7: That Germany and Spain would be worried about how well 291 00:14:29,720 --> 00:14:33,760 Speaker 7: they play, I mean, save your best game to the final. 292 00:14:34,520 --> 00:14:36,600 Speaker 7: And I think England England did a good job of 293 00:14:36,680 --> 00:14:41,000 Speaker 7: starting in a very average way, like Toenham. 294 00:14:41,320 --> 00:14:44,120 Speaker 2: Very good, Steve Major, thank you so much. The Totenham 295 00:14:44,240 --> 00:14:46,720 Speaker 2: strategy to football. Let's be average and. 296 00:14:47,040 --> 00:14:48,760 Speaker 5: So this is what this is the Euros. 297 00:14:49,040 --> 00:14:49,800 Speaker 2: I can't keep up. 298 00:14:49,840 --> 00:14:51,720 Speaker 5: I can't keep up, I mean, but I will pay 299 00:14:51,760 --> 00:14:53,320 Speaker 5: attention because I do like them. In the country we 300 00:14:53,560 --> 00:14:54,680 Speaker 5: have we've internewed. 301 00:14:54,680 --> 00:14:57,720 Speaker 2: If we have interview notes, okay, like Anthony Cascenzi talk 302 00:14:57,760 --> 00:15:00,760 Speaker 2: about his damn Pool and Steph mad Island, Steve Major, 303 00:15:00,800 --> 00:15:03,720 Speaker 2: you have to talk about west Ham football or whatever 304 00:15:03,800 --> 00:15:06,560 Speaker 2: your England's doing. We should, says thank you, Steve Major, 305 00:15:06,640 --> 00:15:12,840 Speaker 2: thank you so much. Will they just be seen. We 306 00:15:12,920 --> 00:15:14,920 Speaker 2: need to dive into this and we're going to get 307 00:15:14,960 --> 00:15:17,400 Speaker 2: him on many times here as we dive into the summer. 308 00:15:17,480 --> 00:15:21,960 Speaker 2: David Rosenberg owns the study of inflation. He was literally 309 00:15:22,280 --> 00:15:26,400 Speaker 2: iconic at Merrill Lynch and Parsing inflation. Frankly, folks, he 310 00:15:26,480 --> 00:15:29,400 Speaker 2: invented it. He did it before anybody, and it's good 311 00:15:29,440 --> 00:15:31,720 Speaker 2: to have him on when he's right, which is we've 312 00:15:31,760 --> 00:15:36,720 Speaker 2: got a new disinflationary tendency. How extensive David Rosenberg, can 313 00:15:36,760 --> 00:15:38,040 Speaker 2: our disinflation be. 314 00:15:40,080 --> 00:15:45,400 Speaker 3: Well? I think that the disinflation momentum, which has restored 315 00:15:45,440 --> 00:15:48,600 Speaker 3: itself after some of the earlier distortions, it's going to 316 00:15:48,600 --> 00:15:51,880 Speaker 3: surprise a lot of the what I call inflation phobes. 317 00:15:52,880 --> 00:15:54,880 Speaker 3: I think we're going to finish the year very close 318 00:15:54,960 --> 00:15:58,920 Speaker 3: to two percent on headline inflation, and the way I'm 319 00:15:58,960 --> 00:16:02,720 Speaker 3: seeing the agriates apply act demand curves behaving, I think 320 00:16:02,720 --> 00:16:04,400 Speaker 3: we're going to get down towards one and a half 321 00:16:04,400 --> 00:16:05,800 Speaker 3: percent by the end of next year. 322 00:16:06,680 --> 00:16:07,160 Speaker 2: Wow. 323 00:16:07,240 --> 00:16:10,840 Speaker 6: So, David, what what drives that inflation down? Because if 324 00:16:10,840 --> 00:16:12,560 Speaker 6: you talk to the you know, the folks on the street, 325 00:16:12,600 --> 00:16:16,200 Speaker 6: they're saying, boy, my supermarket in the gas station. 326 00:16:16,920 --> 00:16:19,520 Speaker 5: I'm just not seeing it. What's going to be taking 327 00:16:19,600 --> 00:16:20,600 Speaker 5: us down that route? 328 00:16:21,840 --> 00:16:23,840 Speaker 3: Well, I think the problem is that people tend to 329 00:16:23,880 --> 00:16:27,880 Speaker 3: conflate prices with inflation, and inflation is not the price level, 330 00:16:27,960 --> 00:16:30,800 Speaker 3: it's the call it the year of year percent change 331 00:16:31,280 --> 00:16:34,720 Speaker 3: in the price level. I mean, look at Paul Vulker 332 00:16:37,120 --> 00:16:41,040 Speaker 3: in the Hall of Fame of Central Bankers for being 333 00:16:41,080 --> 00:16:44,000 Speaker 3: the greatest inflation dragon slayer of all time. But you know, 334 00:16:44,080 --> 00:16:48,640 Speaker 3: nobody calls him the CPI dragon slayer. Prices never went 335 00:16:48,680 --> 00:16:51,840 Speaker 3: down under Vulgar. In fact, the CPI in a seven 336 00:16:51,880 --> 00:16:56,080 Speaker 3: year tenure one up forty percent. What he's renowned for 337 00:16:56,760 --> 00:17:00,360 Speaker 3: was taking the inflation rate down from fourteen percent down 338 00:17:00,400 --> 00:17:05,919 Speaker 3: to four percent. So, yes, prices are high undeniably, but 339 00:17:05,960 --> 00:17:09,040 Speaker 3: the rate of change is dissipating. We had a couple 340 00:17:09,040 --> 00:17:11,000 Speaker 3: of earl yeer quirks. Let's face it, a lot of 341 00:17:11,000 --> 00:17:15,200 Speaker 3: it was auto insurance in response to the lag run 342 00:17:15,320 --> 00:17:17,800 Speaker 3: up and claims that seems to have run us. Course, 343 00:17:18,440 --> 00:17:21,880 Speaker 3: you know if the rental measures are taking their time subsiding, 344 00:17:22,000 --> 00:17:23,919 Speaker 3: but we know that that steering us in the face. 345 00:17:24,960 --> 00:17:28,160 Speaker 3: You know, my analysis is just strictly top down. It's 346 00:17:28,160 --> 00:17:30,920 Speaker 3: really looking at where's the output gap today? And then 347 00:17:31,240 --> 00:17:33,840 Speaker 3: what's your forecast on how the agurate demand and accords 348 00:17:33,840 --> 00:17:35,000 Speaker 3: offers are moving. 349 00:17:35,119 --> 00:17:36,879 Speaker 2: But then, David, what is this FED going to do? 350 00:17:37,600 --> 00:17:39,640 Speaker 2: You are a great student of the history of our 351 00:17:39,680 --> 00:17:43,119 Speaker 2: central bank, and there's this absolute delusion. I see that 352 00:17:43,160 --> 00:17:45,960 Speaker 2: the FED can get out front. Don't they by definition 353 00:17:46,080 --> 00:17:49,480 Speaker 2: have to be dramatically exposed and weight weight weight for 354 00:17:49,560 --> 00:17:51,000 Speaker 2: the Rosenberg disinflation. 355 00:17:53,240 --> 00:17:55,760 Speaker 3: Well, I don't think that they have to wait weight weight. 356 00:17:56,040 --> 00:18:01,200 Speaker 3: I think that the FED is still somewhat shamed for 357 00:18:01,440 --> 00:18:04,720 Speaker 3: having missed nine percent inflation in the summer of twenty 358 00:18:04,760 --> 00:18:09,320 Speaker 3: twenty two and leaning so hard on transitory although eighteen 359 00:18:09,359 --> 00:18:12,679 Speaker 3: months in real time doesn't sound transitory, but in the 360 00:18:12,680 --> 00:18:16,200 Speaker 3: overall annals of economic history, eighteen months is still pretty transitory. 361 00:18:16,240 --> 00:18:22,800 Speaker 3: But they still seem to be fighting for their credibility, 362 00:18:22,880 --> 00:18:26,120 Speaker 3: and you know when they talk about that they need 363 00:18:26,160 --> 00:18:30,040 Speaker 3: more confidence, just saying that they need more months or 364 00:18:30,040 --> 00:18:34,159 Speaker 3: many more months of the disinflation trend that we dominated 365 00:18:34,240 --> 00:18:37,639 Speaker 3: most of last year. So I think that part of 366 00:18:37,640 --> 00:18:40,280 Speaker 3: it is basically the horrible memory of what happened in 367 00:18:40,320 --> 00:18:43,240 Speaker 3: twenty twenty one twenty twenty two and blowing the call. 368 00:18:43,960 --> 00:18:45,680 Speaker 3: And that's one of the reasons I think that they're 369 00:18:46,560 --> 00:18:49,080 Speaker 3: going to be deliberately slow to start cutting interest rates, 370 00:18:49,080 --> 00:18:50,840 Speaker 3: but I think when they do, they're going to be 371 00:18:50,880 --> 00:18:51,880 Speaker 3: pretty significant. 372 00:18:52,480 --> 00:18:56,119 Speaker 6: Are they deliberately slow, David, or are they are ready 373 00:18:56,200 --> 00:18:58,919 Speaker 6: behind the curve in terms of not cutting rates. 374 00:19:00,320 --> 00:19:03,439 Speaker 3: Well, look, the yield curves told them they've been behind 375 00:19:03,440 --> 00:19:07,080 Speaker 3: the curve for at least a year. I think that 376 00:19:08,280 --> 00:19:10,439 Speaker 3: you know what got in the way last year was 377 00:19:10,840 --> 00:19:14,600 Speaker 3: the boost taggrit demand from the fiscal stimulus. So many 378 00:19:14,600 --> 00:19:17,160 Speaker 3: people thought the deficit was going to expand twenty five 379 00:19:17,200 --> 00:19:19,320 Speaker 3: percent in a year when the unemployment rate was self 380 00:19:19,359 --> 00:19:22,560 Speaker 3: of four percent. So you know, I think that was 381 00:19:22,600 --> 00:19:25,000 Speaker 3: part of it was the fiscal stimulus, and I think 382 00:19:25,040 --> 00:19:27,359 Speaker 3: nobody at the FED was expecting that every penny and 383 00:19:27,400 --> 00:19:30,159 Speaker 3: then some of the excess savings file was going to 384 00:19:30,160 --> 00:19:33,240 Speaker 3: be used to stimulate, you know, consumer expenditures. But that 385 00:19:33,320 --> 00:19:36,680 Speaker 3: did happen all in the rearview mirror. So I think 386 00:19:36,720 --> 00:19:39,560 Speaker 3: that you know that are they behind the curve? I 387 00:19:39,560 --> 00:19:42,040 Speaker 3: think they're behind the curve. I think that people will 388 00:19:42,080 --> 00:19:44,920 Speaker 3: be surprised at how soft the demand side of the economy, 389 00:19:45,480 --> 00:19:47,800 Speaker 3: well as it was in the first quarter, but going forward. 390 00:19:47,880 --> 00:19:50,680 Speaker 3: But also I think that the confidence the FED knees 391 00:19:50,760 --> 00:19:52,520 Speaker 3: on the inflation front is going to come. I think 392 00:19:52,560 --> 00:19:55,680 Speaker 3: they'll be cutting by the September meeting David Rosenberg. 393 00:19:55,680 --> 00:19:58,879 Speaker 2: With this Rosenberg Research in Toronto, we continue Paul Kruman, 394 00:19:58,920 --> 00:20:02,200 Speaker 2: the laureate publishing in the recent hours, and he agrees 395 00:20:02,240 --> 00:20:05,800 Speaker 2: with Rosenberg headline X shelter two point one percent core 396 00:20:06,000 --> 00:20:10,920 Speaker 2: inflation X shelter sub two percent one point nine percent. 397 00:20:11,080 --> 00:20:16,919 Speaker 2: What does the stock market do, David Rosenberg given a disinflation? 398 00:20:17,160 --> 00:20:20,440 Speaker 2: I understand there's ambiguity there. Which way does it tilt? 399 00:20:22,040 --> 00:20:23,879 Speaker 3: Well, you know, Tom, when you're asking me about the 400 00:20:23,920 --> 00:20:26,280 Speaker 3: stock market today, you've also just asked me about what's 401 00:20:26,320 --> 00:20:30,720 Speaker 3: in Vidia going to do. It's the it's it's the okay, 402 00:20:30,880 --> 00:20:35,240 Speaker 3: in Vidia, you know, Microsoft, Apple. You know, you could 403 00:20:35,320 --> 00:20:40,320 Speaker 3: argue that when investors are pricing in for Nvidia, which 404 00:20:40,359 --> 00:20:44,080 Speaker 3: is a long term, accelerating growth profile, has nothing to 405 00:20:44,119 --> 00:20:46,600 Speaker 3: do with the contours of the business cycle. But I mean, 406 00:20:46,600 --> 00:20:49,160 Speaker 3: come on, we have three stocks that account for twenty 407 00:20:49,160 --> 00:20:52,480 Speaker 3: percent of the S and P five hundred and half. 408 00:20:52,480 --> 00:20:55,119 Speaker 3: The stock market is actually languishing below the fifty day 409 00:20:55,160 --> 00:20:57,480 Speaker 3: moving average, and look at what the small caps are doing, 410 00:20:58,000 --> 00:21:02,080 Speaker 3: and you look at the the widening divergences in the 411 00:21:02,119 --> 00:21:06,840 Speaker 3: stock market. It's really quite quite impressive. But we're just 412 00:21:07,080 --> 00:21:09,919 Speaker 3: just looking at Nasdaq and the SMP five hundred. I 413 00:21:09,960 --> 00:21:12,240 Speaker 3: guess that it has nothing to do with anything that 414 00:21:12,359 --> 00:21:15,200 Speaker 3: basically you may be in Nvidia will just be jacking 415 00:21:15,240 --> 00:21:17,359 Speaker 3: the bean stalk, right, and it is impervious to the 416 00:21:17,359 --> 00:21:19,600 Speaker 3: business cycle. But that you know, if you're talking to 417 00:21:19,680 --> 00:21:22,359 Speaker 3: me about what megacap tech stocks would do in a 418 00:21:22,400 --> 00:21:26,040 Speaker 3: disinflation environment and in a lower rate environment, well, considering 419 00:21:26,080 --> 00:21:29,040 Speaker 3: that they're the longest duration stocks in the stock market 420 00:21:29,080 --> 00:21:32,120 Speaker 3: and they have to command the biggest market share, maybe 421 00:21:32,160 --> 00:21:35,120 Speaker 3: the major averages, maybe outside the Dow because they don't 422 00:21:35,119 --> 00:21:37,359 Speaker 3: have those constituents continue to go up, but it's not 423 00:21:37,400 --> 00:21:39,760 Speaker 3: giving you any sort of real economics. Six Okay, that's. 424 00:21:39,680 --> 00:21:43,040 Speaker 2: Well, what's important? Rosenberg harkens back to the concentration of 425 00:21:43,080 --> 00:21:47,480 Speaker 2: the Canadian stock market, Yeah, which used to be Canadian Pacific, Toronto, 426 00:21:47,560 --> 00:21:52,440 Speaker 2: Dominion Bank, and Molson Golden. Peter lloydge as my stockbroker 427 00:21:52,520 --> 00:21:55,119 Speaker 2: years ago, and he said Molson Golden is one of 428 00:21:55,119 --> 00:21:57,199 Speaker 2: the big three of equities in. 429 00:21:57,240 --> 00:22:00,000 Speaker 5: Can Absolutely, I'm right there with them on that, no problem. 430 00:22:00,280 --> 00:22:03,520 Speaker 6: So David, you know, how do we think about, you know, 431 00:22:03,760 --> 00:22:06,520 Speaker 6: the earnings power of some of these of the S 432 00:22:06,560 --> 00:22:08,440 Speaker 6: and P five hundred here. Seems like the earnings have 433 00:22:08,520 --> 00:22:11,160 Speaker 6: been pretty solid. I mean, I'm not sure what that's 434 00:22:11,160 --> 00:22:13,240 Speaker 6: telling us about this this economy here. 435 00:22:14,920 --> 00:22:17,920 Speaker 3: Well, you know, everybody says it's an earning's driven market, 436 00:22:18,680 --> 00:22:22,040 Speaker 3: but what are earnings up over the past year? Six percent? 437 00:22:22,240 --> 00:22:22,480 Speaker 4: Right? 438 00:22:23,200 --> 00:22:25,560 Speaker 3: And the S and P five foundered is up more 439 00:22:25,680 --> 00:22:29,040 Speaker 3: like thirty percent. So you know, if we had the 440 00:22:29,080 --> 00:22:31,800 Speaker 3: stock market of six percent, earnings of six percent, I'd 441 00:22:31,800 --> 00:22:35,960 Speaker 3: say one hundred percent earning's driven market. But it's been principally, 442 00:22:36,160 --> 00:22:40,840 Speaker 3: principally a multiple driven market, and that's just a sign 443 00:22:40,880 --> 00:22:46,760 Speaker 3: of what animal spirits, momentum, psychology, sentiment, these are important 444 00:22:46,800 --> 00:22:48,840 Speaker 3: things that go into the stock market. But I would 445 00:22:48,840 --> 00:22:53,560 Speaker 3: say that earnings have been okay. They certainly don't justify 446 00:22:54,320 --> 00:22:57,040 Speaker 3: the level of the market price that we have right now. 447 00:22:57,040 --> 00:22:59,760 Speaker 3: But of course, when you have the major mega growth 448 00:22:59,800 --> 00:23:04,000 Speaker 3: tech stocks pricing in a future of five years of 449 00:23:04,760 --> 00:23:07,399 Speaker 3: huge double digit growth, and in fact that with Nvidia 450 00:23:07,520 --> 00:23:09,639 Speaker 3: or like triple digit, well you're going to get this 451 00:23:09,840 --> 00:23:13,960 Speaker 3: market action. But you know, last October the Ford multiple 452 00:23:14,080 --> 00:23:16,480 Speaker 3: was even lofty then it was sitting at eighteen. Today 453 00:23:16,480 --> 00:23:20,200 Speaker 3: it's twenty one three point multiple expansion, and that's without 454 00:23:20,240 --> 00:23:22,600 Speaker 3: the benefit of the FED doing anything. So a lot 455 00:23:22,640 --> 00:23:27,119 Speaker 3: of this is just basically classic John Mayner Kane's animal 456 00:23:27,160 --> 00:23:30,640 Speaker 3: spirits and a tremendous level of confidence over the future. 457 00:23:30,680 --> 00:23:32,399 Speaker 3: But to tell me in the here and now that 458 00:23:32,480 --> 00:23:35,440 Speaker 3: this is earning's driven, it really it's been one part 459 00:23:35,480 --> 00:23:37,920 Speaker 3: earnings and it's been five part multiple expansion. 460 00:23:38,200 --> 00:23:42,120 Speaker 6: So were those big tech Magnificent seven or however many 461 00:23:42,200 --> 00:23:45,280 Speaker 6: names are in that group today, are they should we 462 00:23:45,320 --> 00:23:47,400 Speaker 6: be getting at should investors be getting out of them, 463 00:23:47,480 --> 00:23:49,240 Speaker 6: lightening up on them, hedging them. 464 00:23:50,320 --> 00:23:52,800 Speaker 3: I would That's what I would recommend. But you know, 465 00:23:52,840 --> 00:23:55,720 Speaker 3: we're talking about tremendous emotions that always screw up the 466 00:23:55,720 --> 00:23:58,879 Speaker 3: stock market, which is fear and greed and everybody always 467 00:23:58,880 --> 00:24:01,240 Speaker 3: thinking they can get out of the I'm a big fan, 468 00:24:01,440 --> 00:24:03,879 Speaker 3: not just some diversification. Well that's been thrown out of 469 00:24:03,920 --> 00:24:07,119 Speaker 3: the in the waste paper basket. But I've been saying 470 00:24:07,160 --> 00:24:10,040 Speaker 3: that what is wrong with me balancing the portfolio? But 471 00:24:10,080 --> 00:24:12,719 Speaker 3: I'm finding that so many investors now I've fallen fallen 472 00:24:12,760 --> 00:24:15,600 Speaker 3: in love with their stocks. My motto is fall in 473 00:24:15,640 --> 00:24:17,520 Speaker 3: love with your partner, not your portfolio. 474 00:24:17,640 --> 00:24:22,840 Speaker 2: Oh listen there, doctor David, giving us some some some 475 00:24:23,000 --> 00:24:26,200 Speaker 2: advice there. Thank you so much, David. I got one 476 00:24:26,200 --> 00:24:29,879 Speaker 2: final question, mister Trudeau at G seven looked as lost 477 00:24:29,920 --> 00:24:33,119 Speaker 2: as all the rest of them. What's the political calendar 478 00:24:33,160 --> 00:24:36,840 Speaker 2: in your Canada? When is there an election to determine 479 00:24:36,840 --> 00:24:39,520 Speaker 2: the path of a beleaguered Canada. 480 00:24:41,240 --> 00:24:48,040 Speaker 3: Well, October of next year is the election date for Canada. 481 00:24:48,920 --> 00:24:54,040 Speaker 3: And right now the polls are showing that the Conservatives 482 00:24:54,080 --> 00:24:57,720 Speaker 3: are going to win a landslide majority. Every poll is 483 00:24:57,760 --> 00:25:00,680 Speaker 3: saying the same thing. So answer to that, I will 484 00:25:00,680 --> 00:25:04,520 Speaker 3: have a new prime minister just over a year from now. 485 00:25:04,760 --> 00:25:07,879 Speaker 2: Maybe Justin Trudeau can become GM of the Montreal Canadians. 486 00:25:07,960 --> 00:25:08,720 Speaker 5: I'll thank them. 487 00:25:08,920 --> 00:25:12,439 Speaker 2: David Rosenberg, thank you so much with the Rosenberg research. 488 00:25:12,520 --> 00:25:15,480 Speaker 2: Always good to speak to, but particularly when disinflation clicks 489 00:25:15,520 --> 00:25:28,760 Speaker 2: in massive email shoes in Atlanta, they're like, are you 490 00:25:28,880 --> 00:25:31,840 Speaker 2: kidding me? Where are the newspapers? Have them do it 491 00:25:32,200 --> 00:25:36,280 Speaker 2: from the deep South? Your front pages with Lisa Matals. Lisa, 492 00:25:36,320 --> 00:25:38,400 Speaker 2: you were a miss go oh thank you? 493 00:25:38,520 --> 00:25:42,120 Speaker 8: All right, So you heard about how weight loss drugs. Right, 494 00:25:42,119 --> 00:25:42,919 Speaker 8: there's a problem. 495 00:25:43,000 --> 00:25:45,840 Speaker 9: Food companies are worried, has everyone you know up in arms, 496 00:25:45,840 --> 00:25:50,000 Speaker 9: But clothing retailers are actually saying it's helping sales because 497 00:25:50,040 --> 00:25:53,000 Speaker 9: more slimmer Americans they need to buy new clothes. Right, 498 00:25:53,000 --> 00:25:54,760 Speaker 9: they have these new sizes and you have to buy 499 00:25:54,800 --> 00:25:56,800 Speaker 9: new clothes. This was in the Wall Street Journal. You 500 00:25:56,840 --> 00:25:58,520 Speaker 9: got to check it out. And they don't just want 501 00:25:58,520 --> 00:26:01,600 Speaker 9: a regular wardrobe. They want, you know, body hugging shapes. 502 00:26:01,640 --> 00:26:05,560 Speaker 9: They want sexy clothing to show off their new size. 503 00:26:05,760 --> 00:26:09,520 Speaker 9: The brands are doing it. They're replacing zippers with adjustable corsets. 504 00:26:09,800 --> 00:26:12,440 Speaker 9: They're adding more sheer looks to some of the looks 505 00:26:12,480 --> 00:26:14,880 Speaker 9: that they have, So it's it's a shift. 506 00:26:14,560 --> 00:26:16,439 Speaker 5: That these were This is a real story in a 507 00:26:16,480 --> 00:26:18,480 Speaker 5: Wall Street journal. Yes, I can't. 508 00:26:18,480 --> 00:26:21,119 Speaker 8: They're seeking this ship because they needed the boost the clothing. 509 00:26:22,440 --> 00:26:25,480 Speaker 2: John Farrell was way out front on this. I mean 510 00:26:25,520 --> 00:26:29,120 Speaker 2: he was, I'm like, what are you talking about? Where 511 00:26:29,160 --> 00:26:32,840 Speaker 2: are we two years from now with a zempic with 512 00:26:32,880 --> 00:26:33,840 Speaker 2: a lily product? 513 00:26:34,200 --> 00:26:34,560 Speaker 5: Where are we? 514 00:26:35,119 --> 00:26:37,280 Speaker 2: It's like nine hundred towers a year. 515 00:26:38,840 --> 00:26:40,840 Speaker 9: It's a lot because it depends on if you're insurance, 516 00:26:41,440 --> 00:26:42,800 Speaker 9: because some do, some don't. 517 00:26:42,880 --> 00:26:44,800 Speaker 8: But it's just expanding in so many different ways. 518 00:26:44,840 --> 00:26:46,840 Speaker 9: I mean, all these studies showing how it helps with 519 00:26:46,880 --> 00:26:47,840 Speaker 9: this and helps with that. 520 00:26:48,119 --> 00:26:50,080 Speaker 8: There's now maybe one for pets. 521 00:26:50,200 --> 00:26:56,440 Speaker 5: I mean, it's it works. You know, I've seen it firsthand. 522 00:26:56,520 --> 00:26:57,280 Speaker 5: It works. 523 00:26:57,680 --> 00:27:00,320 Speaker 6: Okay, it's a thing I'm not you know, I've I 524 00:27:00,359 --> 00:27:03,639 Speaker 6: was poop pulling it all. But it is they you know, 525 00:27:03,800 --> 00:27:05,800 Speaker 6: my experience is there's no. 526 00:27:05,800 --> 00:27:07,439 Speaker 5: Appetite, right, you know. 527 00:27:07,800 --> 00:27:09,360 Speaker 8: But that's the thing. So you lose all this weight, 528 00:27:09,400 --> 00:27:11,000 Speaker 8: so you have a whole new wardrobe. 529 00:27:11,119 --> 00:27:11,760 Speaker 1: You gotta star. 530 00:27:11,760 --> 00:27:13,359 Speaker 2: Lose your body keep functioning. 531 00:27:14,280 --> 00:27:16,840 Speaker 8: It does, but you wind up losing protein drinks. 532 00:27:16,920 --> 00:27:17,720 Speaker 5: Yes, you gotta be. 533 00:27:18,119 --> 00:27:18,880 Speaker 8: That's the only problem. 534 00:27:18,880 --> 00:27:19,800 Speaker 5: You want to be exercising. 535 00:27:19,800 --> 00:27:22,040 Speaker 6: You got to be doing the least mantao crazy in 536 00:27:22,119 --> 00:27:23,600 Speaker 6: the basement exercise. 537 00:27:23,640 --> 00:27:25,640 Speaker 5: Thing is that arms are legs today. What are we doing? 538 00:27:25,600 --> 00:27:26,720 Speaker 8: Today's upper body things? 539 00:27:26,720 --> 00:27:29,920 Speaker 5: Today's up fighting the way good minds upper body too. 540 00:27:29,920 --> 00:27:32,359 Speaker 2: Here, let me pick up this glass of tang Next, 541 00:27:32,720 --> 00:27:34,600 Speaker 2: here we go Apple. 542 00:27:34,760 --> 00:27:37,040 Speaker 9: This was actually an interesting article from Mark German over 543 00:27:37,080 --> 00:27:39,920 Speaker 9: in the Terminal always taking it slow with the new 544 00:27:40,000 --> 00:27:42,560 Speaker 9: artificial intelligence offerings that it said it was rolling out. 545 00:27:42,760 --> 00:27:45,000 Speaker 8: It's going to stretch into twenty twenty five. You have 546 00:27:45,080 --> 00:27:45,600 Speaker 8: the company. 547 00:27:46,280 --> 00:27:48,680 Speaker 9: It won't be available for developers to try out until 548 00:27:48,720 --> 00:27:51,440 Speaker 9: later this summer. When it does launch in the fall, 549 00:27:51,520 --> 00:27:53,639 Speaker 9: it's going to come as a preview and some users 550 00:27:53,720 --> 00:27:56,400 Speaker 9: might even have to join this weightless But what Markerman 551 00:27:56,520 --> 00:27:58,679 Speaker 9: is saying is that there are benefits this kind of 552 00:27:58,720 --> 00:28:01,359 Speaker 9: staggered approach. He's saying that it prevents like choke points 553 00:28:01,359 --> 00:28:04,080 Speaker 9: with staffing, but it also gives them more time to 554 00:28:04,080 --> 00:28:07,920 Speaker 9: train AI models for other languages, So there's different benefits there. 555 00:28:07,960 --> 00:28:09,840 Speaker 8: There's a thought process behind the mast. 556 00:28:11,960 --> 00:28:12,879 Speaker 2: All my radars up. 557 00:28:12,920 --> 00:28:15,359 Speaker 6: Well, I'll tell you what Apple is Mark Emer's reporting. 558 00:28:15,400 --> 00:28:17,440 Speaker 6: This is kind of what they do. They don't seem 559 00:28:17,440 --> 00:28:19,600 Speaker 6: to feel they need to rush to be first, a 560 00:28:19,640 --> 00:28:21,320 Speaker 6: little like we'll be second, third, or fourth. 561 00:28:21,480 --> 00:28:25,359 Speaker 5: But when we come in right, it's gonna look awesome. Okay, okay, 562 00:28:25,520 --> 00:28:26,760 Speaker 5: now I need this money this. 563 00:28:26,760 --> 00:28:31,879 Speaker 2: Weekend on my phone, I Google has given me AI 564 00:28:32,000 --> 00:28:34,600 Speaker 2: now and I doutifully went in to try to figureut 565 00:28:34,600 --> 00:28:37,359 Speaker 2: how to get rid of it, and you can't. They're 566 00:28:37,400 --> 00:28:41,280 Speaker 2: forcing me to take some kind of AI and my 567 00:28:41,360 --> 00:28:43,080 Speaker 2: search function that I really don't want. 568 00:28:43,200 --> 00:28:45,760 Speaker 8: Did you try it? You didn't even try it. 569 00:28:44,960 --> 00:28:48,120 Speaker 2: I just it's just too much noise. It's just too 570 00:28:49,080 --> 00:28:53,840 Speaker 2: you know, I mean, it's it's all my radars up. 571 00:28:54,040 --> 00:28:55,440 Speaker 5: Yeah, we'll see, we'll say, Apple. 572 00:28:55,920 --> 00:28:58,360 Speaker 2: Do people want this? I mean, make Siri, I get 573 00:28:58,400 --> 00:28:59,000 Speaker 2: the phone. 574 00:28:59,560 --> 00:28:59,960 Speaker 5: Do you want? 575 00:29:00,680 --> 00:29:03,440 Speaker 2: I go no, and I move on. Really how many 576 00:29:03,440 --> 00:29:04,280 Speaker 2: people are like that? 577 00:29:04,640 --> 00:29:05,040 Speaker 5: Very few? 578 00:29:05,080 --> 00:29:06,720 Speaker 9: I think, But I think it's the fact if you 579 00:29:06,760 --> 00:29:09,680 Speaker 9: could say, hey, Siri, can you return this shirt that 580 00:29:09,720 --> 00:29:13,080 Speaker 9: I bought last week? And Siri can pull up the email, 581 00:29:13,480 --> 00:29:17,760 Speaker 9: find it, send the email automatically to return it, so 582 00:29:17,800 --> 00:29:19,040 Speaker 9: that you, I mean, it does the word. 583 00:29:19,080 --> 00:29:22,320 Speaker 5: If it can do that to solve me, I'm sold. 584 00:29:22,320 --> 00:29:28,160 Speaker 9: It makes my life easier. Okay, wells Fargo, this is interesting. 585 00:29:28,400 --> 00:29:31,160 Speaker 9: They're losing millions of dollars a month. It had this 586 00:29:31,280 --> 00:29:33,560 Speaker 9: fancy rent credit card that it came out with about 587 00:29:33,560 --> 00:29:34,280 Speaker 9: two years ago. 588 00:29:34,800 --> 00:29:36,520 Speaker 8: It launched it with bill Technologies. 589 00:29:36,560 --> 00:29:39,200 Speaker 9: So the perk wise is that users can pay for 590 00:29:39,360 --> 00:29:43,640 Speaker 9: rent without incurring fees from their landlords, while also earning 591 00:29:43,720 --> 00:29:46,680 Speaker 9: reward points. But the thing is it kind of backfired 592 00:29:46,720 --> 00:29:49,520 Speaker 9: because their executives thought that people would kind of get 593 00:29:49,520 --> 00:29:51,480 Speaker 9: into debt and they can make some revenue if people 594 00:29:51,560 --> 00:29:52,200 Speaker 9: just charge. 595 00:29:52,000 --> 00:29:52,720 Speaker 8: Their rent on it. 596 00:29:53,040 --> 00:29:56,200 Speaker 9: But people didn't do that, and so they didn't make 597 00:29:56,200 --> 00:29:58,840 Speaker 9: any money on it. They're losing actually ten million every 598 00:29:58,840 --> 00:29:59,960 Speaker 9: month according to the journal. 599 00:30:00,120 --> 00:30:03,760 Speaker 2: I read every word of the article. It's all accurate. 600 00:30:04,040 --> 00:30:06,520 Speaker 2: I have lived it, and it is a disaster. 601 00:30:07,160 --> 00:30:07,479 Speaker 5: It is. 602 00:30:07,560 --> 00:30:10,160 Speaker 2: It's been a disaster for months. There's actually, as I 603 00:30:10,240 --> 00:30:13,680 Speaker 2: mentioned later in the articles, some security issues where people 604 00:30:13,720 --> 00:30:17,680 Speaker 2: got into my accounts and there's many, many other people, 605 00:30:17,760 --> 00:30:20,840 Speaker 2: not just me. But it's been an It's a perfect 606 00:30:20,920 --> 00:30:25,120 Speaker 2: example of a conservative Belton Suspender's company going we need 607 00:30:25,120 --> 00:30:27,600 Speaker 2: to be cool and digital, let's just do it right, 608 00:30:28,160 --> 00:30:30,320 Speaker 2: and it rarely works out. I thought it would really. 609 00:30:30,440 --> 00:30:33,000 Speaker 5: Wanting your credit card debt every single month. Do not 610 00:30:33,080 --> 00:30:35,400 Speaker 5: let it ride. That's within it. That's that's what the 611 00:30:35,400 --> 00:30:37,400 Speaker 5: advice was for the offspring, and I think they're following it. 612 00:30:37,640 --> 00:30:40,640 Speaker 2: Yeah, do you have one more? 613 00:30:41,000 --> 00:30:41,360 Speaker 1: I do? 614 00:30:41,440 --> 00:30:42,400 Speaker 8: Okay more parents. 615 00:30:42,520 --> 00:30:45,520 Speaker 9: Speaking of debt, they're taking on debt to pay for 616 00:30:45,560 --> 00:30:49,760 Speaker 9: their Disney vacation. Prices are soaring. This is a survey 617 00:30:49,760 --> 00:30:52,480 Speaker 9: from lending Tree. Forty five percent have gone into debt 618 00:30:52,480 --> 00:30:55,320 Speaker 9: for the trip. That's up from thirty percent twenty twenty two. 619 00:30:55,880 --> 00:30:59,280 Speaker 9: How much debt about two thousand dollars, they're saying on average, 620 00:30:59,320 --> 00:31:02,520 Speaker 9: So they're charging up just to give their family that experience. 621 00:31:02,520 --> 00:31:04,920 Speaker 9: And they say they did. They said they don't regret it, 622 00:31:05,000 --> 00:31:07,840 Speaker 9: No regrets. About sixty percent said they don't regret it. 623 00:31:07,720 --> 00:31:10,920 Speaker 2: It say, travels fascinating. I guess every seat's taken. But 624 00:31:11,040 --> 00:31:14,280 Speaker 2: prices are lower, you know, end of the summer. Well 625 00:31:14,360 --> 00:31:17,960 Speaker 2: see Lisa Matteo, Thank you so much the newspapers. This 626 00:31:18,040 --> 00:31:23,200 Speaker 2: is a Bloomberg Surveillance podcast bringing you the best in economics, finance, investment, 627 00:31:23,360 --> 00:31:27,000 Speaker 2: and international relations. You can also watch the show live 628 00:31:27,240 --> 00:31:31,520 Speaker 2: on YouTube. Visit the Bloomberg Podcast channel on YouTube to 629 00:31:31,680 --> 00:31:35,080 Speaker 2: see the show weekday mornings from seven to ten am 630 00:31:35,120 --> 00:31:39,160 Speaker 2: Eastern from our global headquarters in New York City. Subscribe 631 00:31:39,160 --> 00:31:42,920 Speaker 2: to the podcast on Apple, Spotify, or anywhere else you listen, 632 00:31:43,240 --> 00:31:46,880 Speaker 2: and always on Bloomberg Radio, the Bloomberg Terminal, and the 633 00:31:46,920 --> 00:31:48,440 Speaker 2: Bloomberg Business app.