WEBVTT - Surveillance: Negative Rates Are Crushing, Eisman Says 0:00:09.840 --> 0:00:13.800 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Daily 0:00:13.960 --> 0:00:17.560 we bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.480 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:28.960 Bloomberg dot com, and of course on the Bloomberg. Let's 0:00:28.960 --> 0:00:31.560 get to it. Widely anticipated for Global Wall Street. What 0:00:31.560 --> 0:00:34.320 we're doing, our folks, is the kickoff for the new year. 0:00:34.360 --> 0:00:37.720 I'm sorry it's now the Monday after Labor Day. When 0:00:37.720 --> 0:00:40.440 Steve Eisman and I were kids, this is before young 0:00:40.520 --> 0:00:43.960 Pharaoll's time, it was sort of that Wednesday Thursday after 0:00:44.120 --> 0:00:46.440 Labor Day. And now Steve, it's like, now is the 0:00:46.520 --> 0:00:49.920 kickoff for the year? Tell us just your basic position, 0:00:50.040 --> 0:00:53.080 not trade by trade, but are you net long, net 0:00:53.200 --> 0:00:56.640 short net cash? What's the tone you have going into 0:00:56.680 --> 0:01:01.200 this fall? Slightly net long, but only slightly right now? 0:01:01.520 --> 0:01:03.680 And your conviction is and we talked about this earlier, 0:01:03.680 --> 0:01:07.600 wrapped around not a forecast of global recession, but all 0:01:07.600 --> 0:01:10.800 the clouds that are out there from a summer of discontent. 0:01:11.200 --> 0:01:14.080 You suggest that that folds into the autumn and into 0:01:14.120 --> 0:01:17.559 next year. I mean, look, it's it's a very weird 0:01:17.640 --> 0:01:20.440 market in the sense that everybody talks about that they're worried, 0:01:20.560 --> 0:01:22.440 and yet the markets within a two to three percent 0:01:22.520 --> 0:01:25.520 all times, so I don't know how worried they really are. 0:01:25.800 --> 0:01:28.080 I'm in the triple leverage all cash. It's worked like 0:01:28.120 --> 0:01:32.200 a um. But you know, like I said earlier on 0:01:32.200 --> 0:01:35.479 the television show, we are with in my mind, without question, 0:01:35.520 --> 0:01:39.920 in a global industrial slowdown slash recession. On the other hand, 0:01:39.959 --> 0:01:44.600 that consumer is employed and healthy. So the question really 0:01:44.720 --> 0:01:47.520 is is what's happening in the industrial side, which is 0:01:47.560 --> 0:01:50.600 only by TENTA fifteen percent of the economy. Is that 0:01:50.920 --> 0:01:53.320 a canary in the coal mine? Or we're gonna eventually 0:01:53.360 --> 0:01:56.559 pull out of it and the recovery will extend longer. 0:01:56.680 --> 0:01:58.240 And I don't know the answer to that question, but 0:01:58.280 --> 0:02:00.480 it doesn't seem to be priced into the market. Let's 0:02:00.480 --> 0:02:02.440 get your base case, Steve, and try and work that out. 0:02:02.480 --> 0:02:05.200 So last week didn't really change anything for anyone. With 0:02:05.400 --> 0:02:07.960 the manufacturing p M I, the I s M sub fifty, 0:02:08.040 --> 0:02:10.520 the non manufacturing north of fifty, it's the same story. 0:02:10.560 --> 0:02:14.440 Manufacturing looks soft and non manufacturing looks okay. And the 0:02:14.520 --> 0:02:17.480 question is outstanding, as you point out, does it bleed 0:02:17.520 --> 0:02:20.640 from one into another, from weakness into the resilience we 0:02:20.680 --> 0:02:23.360 see in the service sector. Just to sign a probability 0:02:23.400 --> 0:02:24.720 to that if you can, Steve, you've got to have 0:02:24.760 --> 0:02:26.560 a base case in mind. Surely, what are you thinking 0:02:26.560 --> 0:02:30.000 about that? Look, I'm just looking for singles. I mean, 0:02:30.240 --> 0:02:32.400 one of the more interesting indicators is going to be 0:02:32.440 --> 0:02:35.440 the earning season that will start in October. Um. You know, 0:02:35.480 --> 0:02:39.120 the industrial company has reported week numbers in the second quarter, 0:02:39.200 --> 0:02:42.519 but not terrible. My anticipation is that it will be 0:02:42.760 --> 0:02:46.080 significantly worse this quarter and then we'll see how the 0:02:46.080 --> 0:02:49.160 market reacts. Just in terms of the companies you're looking 0:02:49.200 --> 0:02:51.680 at where you expect to see some pain. What are 0:02:51.680 --> 0:02:55.960 you focused on at the moment, Steve? I mean what 0:02:56.040 --> 0:02:59.080 am I focused on? You know what you'll see. What 0:02:59.160 --> 0:03:02.880 you're seeing is the short cycle industrial companies have already 0:03:02.880 --> 0:03:06.840 experienced fairly significant pain. Is that bleeding into the longer 0:03:06.880 --> 0:03:10.320 cycle companies, and so that the problems in the industrial 0:03:10.360 --> 0:03:13.040 sector are deepening. Well, we won't know that till October 0:03:13.080 --> 0:03:15.480 when the company's report. So we can talk about the 0:03:15.520 --> 0:03:17.880 European banks and other stories out there, but I want 0:03:17.960 --> 0:03:22.680 your thoughts on the stocks to keep performing, keep doing 0:03:22.760 --> 0:03:25.600 and they go go go until they not. Do you 0:03:25.680 --> 0:03:28.040 frame an Amazon or an Apple if you want to 0:03:28.040 --> 0:03:31.000 tell us if you're lowing short, that's great, you're long 0:03:31.120 --> 0:03:34.480 both of them. But but when you participate in those 0:03:34.840 --> 0:03:37.760 there's a belief by the the the Apple files that 0:03:37.800 --> 0:03:40.160 will go on forever. But there's a lot of other 0:03:40.240 --> 0:03:43.440 people out there saying I'm watching for something to break 0:03:43.680 --> 0:03:46.880 or change. How do you watch for something to break 0:03:46.960 --> 0:03:50.560 or change in something that's beloved by by the media 0:03:50.560 --> 0:03:54.560 and by Wall Street, by the by investors. Look, that's 0:03:54.600 --> 0:03:58.080 a very, very difficult question to answer. I mean, the 0:03:58.120 --> 0:04:01.880 way I think about it is companies look great until 0:04:01.920 --> 0:04:06.520 they don't. And all companies are more cyclical than you 0:04:06.600 --> 0:04:11.000 think in a recession. So remember the dot com bubble, 0:04:11.840 --> 0:04:14.400 and what broke the dot com bubble was not valuation. 0:04:14.440 --> 0:04:16.520 What broke the dot com bubble was the recession and 0:04:16.520 --> 0:04:18.120 the fact that some of the dot many of the 0:04:18.160 --> 0:04:22.640 dot com companies, that revenue growth slowed. So as a group, 0:04:23.040 --> 0:04:24.880 you know, I think it's more important to focus on 0:04:25.040 --> 0:04:28.359 is there a recession coming than than not. So you 0:04:28.480 --> 0:04:31.920 identify some secular growth themes that you think and maybe 0:04:32.000 --> 0:04:33.560 going to come under a little bit more pressure than 0:04:33.640 --> 0:04:36.600 some people think they will. Everything always comes under pression 0:04:36.680 --> 0:04:40.000 or recession. That's proven time and time again. Um. You know, 0:04:40.040 --> 0:04:44.120 in the meantime, the trends of a disruption will continue 0:04:44.120 --> 0:04:47.279 whether we have a recession or not. But even the 0:04:47.320 --> 0:04:51.480 disruptors will will experience some softness into recession. Shots at 0:04:51.480 --> 0:04:55.520 the moment, Stave, lot of lots of shorts whereabounts. Well, 0:04:55.520 --> 0:05:00.359 I'm sure a lot of European banks. Um, I'm still 0:05:00.360 --> 0:05:03.200 short Zillo, which I've spoken on this show many, many times, 0:05:03.200 --> 0:05:07.800 many times, and I'm sure it's some industrial companies. That's 0:05:07.800 --> 0:05:09.720 for the European banks. For US as a sector. Ahead 0:05:09.720 --> 0:05:12.560 of the e CP on Thursday. Some people think we 0:05:12.640 --> 0:05:15.520 might get tearing on Thursday to offset some of the 0:05:15.520 --> 0:05:17.559 paying for the banks. Does that change anything for you, Steve? 0:05:18.560 --> 0:05:20.400 I mean, if there's tearing, I'm sure there'll be a 0:05:20.520 --> 0:05:24.040 rally in the European banks. It's meaningless, it's utterly meaningless. 0:05:24.040 --> 0:05:29.640 It's negative rates is just crushing and and I think 0:05:29.640 --> 0:05:33.880 it's a massive policy mistake. Are the low nominal rates 0:05:33.880 --> 0:05:36.479 in the United States as crushing? I mean on a 0:05:36.560 --> 0:05:40.880 relative basis, they're not nearly as crushing, and the US 0:05:40.960 --> 0:05:45.600 banks are much better, much better capitalized in the European banks. 0:05:45.640 --> 0:05:49.080 But as I said earlier on the on the TV show, 0:05:49.160 --> 0:05:52.160 there's a there's a bank conference taking place today and tomorrow, 0:05:52.760 --> 0:05:54.960 and every pretty much every bank is going to report 0:05:55.680 --> 0:05:59.840 on over the weekend. Comerica basically told you that the 0:06:00.000 --> 0:06:03.760 early outings estments it's too high because because it interest rates. 0:06:03.760 --> 0:06:05.920 And I think you're gonna say pretty much every single 0:06:05.960 --> 0:06:08.040 bank get up and say more or less the same thing. 0:06:08.120 --> 0:06:10.160 What do you do with Uber Lift in the coming 0:06:10.160 --> 0:06:14.800 week company? If they can get but would you like 0:06:14.880 --> 0:06:17.599 to have involvement in Uber and Lift is? I haven't 0:06:17.600 --> 0:06:19.760 looked at either one at any depth. What about Twitter? 0:06:19.880 --> 0:06:21.720 I mean, there's other people out there looking at Twitter, 0:06:21.760 --> 0:06:24.360 and of course it's had a lovely bounce. I haven't. 0:06:24.400 --> 0:06:27.320 I don't. I don't have much of wired you in 0:06:27.400 --> 0:06:31.240 those kinds of stocks in Facebook, I'm in Google, I'm 0:06:31.240 --> 0:06:34.640 in Amazon, and yeah, but Amazon is not Lift equivalent. 0:06:34.720 --> 0:06:37.080 Come on, I'm talking about things that have never made 0:06:37.080 --> 0:06:38.960 a dime. You know, They're like the Detroit Lions, they 0:06:39.040 --> 0:06:41.520 ever got it done. Generally like to shy. I generally 0:06:41.520 --> 0:06:44.400 like to shy away from such things. Okay, are you 0:06:44.400 --> 0:06:46.159 going to buy the jets of the Giants and fix 0:06:46.279 --> 0:06:49.839 New York's football problems? I don't have enough money to 0:06:49.880 --> 0:06:53.480 do that, not even close. Maybe the Amazon Apple trade 0:06:53.480 --> 0:06:57.320 will well work out, Steve Eisman, thank you, or Berman 0:06:57.720 --> 0:07:01.000 update there on Apple Amazon, the EU bank you banking 0:07:01.080 --> 0:07:03.479 think John is fastening? Do you really think, John, that 0:07:03.480 --> 0:07:05.960 there will be this tier discussion in some form of 0:07:06.000 --> 0:07:07.640 real queie? I mean there's going to be a real 0:07:07.680 --> 0:07:10.320 tearing discussion. I think that many people hope the President 0:07:10.360 --> 0:07:12.720 drug you can push it through. The problem is, though, 0:07:12.760 --> 0:07:14.920 it's a double edged sword in some regard, isn't it, 0:07:14.960 --> 0:07:17.760 Because if you deliver the tearing tom ultimately, what does 0:07:17.800 --> 0:07:20.360 it do? It just opens up capacity for even lower 0:07:20.400 --> 0:07:23.960 interest rates going forward from here. So it's negative rates 0:07:23.960 --> 0:07:26.440 with some tearing. Okay, there's a little bit of pain, 0:07:26.600 --> 0:07:28.320 a whole lot more pain still to come, because if 0:07:28.360 --> 0:07:30.200 you introduced tearing, you can go a whole lot longer 0:07:30.680 --> 0:07:33.080 with right. Strongly agree with that, and I think Mr 0:07:33.080 --> 0:07:50.880 Eysmen alluded to that as well. John, Fire and Time 0:07:50.960 --> 0:07:53.160 keen trying to help global Wall Street and all of 0:07:53.160 --> 0:07:57.560 you listening as well. On the synthesis of markets economics 0:07:58.040 --> 0:08:01.560 in the litmus paper known as the four Exchange System. 0:08:01.720 --> 0:08:04.720 Dr Englander is out of McGill where he tried to 0:08:04.760 --> 0:08:07.720 make the Montreal Canadians a few years ago and then 0:08:07.760 --> 0:08:12.120 took a PhD at Yale University where he defined the 0:08:12.160 --> 0:08:17.440 analysis of currency pairs and particularly cross esset pairs, all 0:08:17.560 --> 0:08:23.520 the intertwined linkages beneath the major currency pairs and acclaimed 0:08:23.800 --> 0:08:27.400 career at City Group and now even more advantageous to 0:08:27.520 --> 0:08:30.680 be a standard charter where he's had a foreign exchange 0:08:30.680 --> 0:08:35.079 Stephen Anglander with standard charter with a real not emerging 0:08:35.160 --> 0:08:38.719 market but almost non US view. Steve Angler thrilled to 0:08:38.800 --> 0:08:42.080 have you on with that. Let's get your dollar call. 0:08:42.760 --> 0:08:48.440 Is everybody wrong about week dollar? I think the dollar 0:08:49.120 --> 0:08:51.760 is not attractive, but it's very hard to sell. I 0:08:51.880 --> 0:08:56.280 think September what we're seeing is that um asset market 0:08:56.360 --> 0:09:00.520 piece has exploded all over and you know there's a 0:09:00.559 --> 0:09:03.480 little bit of dollars selling, particularly against the merging markets 0:09:03.520 --> 0:09:07.079 and high gilders. But there's also a sense that September 0:09:07.480 --> 0:09:12.319 is calmed. In the approach to the UM Chinese celebration 0:09:12.400 --> 0:09:15.439 of the seventies anniversary of the Communist Party, takeover. So 0:09:15.600 --> 0:09:18.640 there's worries that the UM you know, October might be 0:09:18.720 --> 0:09:21.880 more August than September. Well, within that is it in 0:09:21.920 --> 0:09:25.800 your analysis across raids, the micro analysis of the FX market, 0:09:26.320 --> 0:09:28.360 What is it telling you on a Monday morning in 0:09:28.440 --> 0:09:32.760 September when is it? Is it an idiosyncratic mush or 0:09:32.880 --> 0:09:35.920 is there an Englanders theme to what you're seeing? It's 0:09:35.960 --> 0:09:39.679 standard charter. Look. I think that the you know what 0:09:39.920 --> 0:09:45.040 you saw basically from May through August was an accumulation 0:09:45.120 --> 0:09:48.040 of risk oppositions. Basically from the time Trump sent his 0:09:48.120 --> 0:09:51.440 tweets at the beginning of May um you know, right 0:09:51.720 --> 0:09:53.599 right through the end of August, all the news was 0:09:54.040 --> 0:09:57.199 really bad. And I think, you know, right now you're 0:09:57.240 --> 0:09:59.679 seeing the the unwind of this news. You know, we 0:10:00.040 --> 0:10:03.080 we were along South Africa that did very well. Uh, 0:10:03.600 --> 0:10:06.160 you know, a couple of other high yielders have done 0:10:06.200 --> 0:10:09.079 well in the last couple of days. The you know 0:10:09.160 --> 0:10:11.000 the question, you know, the question is everyone seems to 0:10:11.080 --> 0:10:13.520 think that they'll be able to get out and everybody 0:10:13.600 --> 0:10:18.319 knows the October first kind of UM calendar event that 0:10:18.440 --> 0:10:22.800 once the Chinese UM you know, celebration is over, they 0:10:22.840 --> 0:10:25.440 will not have to be as calming and asset markets 0:10:25.480 --> 0:10:27.400 as they seem to want to be now, but it's 0:10:27.440 --> 0:10:30.800 not stopping asset markets from moving. I'd say that there's 0:10:30.800 --> 0:10:34.760 still is nervousness there. Things aren't you know, risk on 0:10:34.920 --> 0:10:37.840 isn't bursting out. I mean, Euros trading kind of soggy, 0:10:38.040 --> 0:10:40.560 and a bunch of other currencies are not going as 0:10:40.600 --> 0:10:42.800 far as you would expect them to. But the market 0:10:42.880 --> 0:10:46.079 seems relatively comfortable right now. Stave. What you're saying implies 0:10:46.160 --> 0:10:49.640 that the remmbers in the driving scene right now, it's 0:10:49.679 --> 0:10:53.520 not essentially what you're saying. Well, I look, I think 0:10:53.920 --> 0:10:57.000 that and breaks it. But I think that's through. You know, 0:10:57.160 --> 0:11:01.680 if he looks through um uh, you a maze. Through August, 0:11:01.840 --> 0:11:06.040 it was mostly trade war c n Y reaction and 0:11:06.200 --> 0:11:09.959 counter reaction. And my guess is that will be you know, 0:11:10.160 --> 0:11:12.760 vuying to see which one is more important come October. 0:11:13.120 --> 0:11:16.760 Um as you know one deadline, you know, one day 0:11:16.840 --> 0:11:19.640 passes and the other one approaches. Steve, Steve, can I 0:11:19.720 --> 0:11:21.760 conclude from your remarks in the last couple of minutes 0:11:21.800 --> 0:11:25.040 that you think the stand down in Hong Kong, the 0:11:25.400 --> 0:11:27.480 talks that were about to say between the United States 0:11:27.520 --> 0:11:30.319 and China, the relative stability over the last week in 0:11:30.360 --> 0:11:33.199 the Chinese currency. All of those things are just to 0:11:33.320 --> 0:11:36.319 stabilize things ahead of a political event in China and 0:11:36.400 --> 0:11:41.199 then after we get into October's game on again. Um. Yeah, look, 0:11:41.240 --> 0:11:43.520 I'd say that you know, we we know the incentives 0:11:43.559 --> 0:11:45.800 for things to be stable now, and it probably works 0:11:45.840 --> 0:11:48.400 for the US as well to stabilize equity markets and 0:11:48.640 --> 0:11:53.439 and you know, basically keep them close to all time highs. Um. 0:11:53.880 --> 0:11:56.160 They'll probably feel each other out in October to see 0:11:56.240 --> 0:11:58.439 how much room there's to negotiate. There's no guarantee that 0:11:58.480 --> 0:12:01.400 things will fall apart, but they think that the incentives 0:12:01.480 --> 0:12:04.840 to stabilize accent markets are much stronger in September than 0:12:04.880 --> 0:12:07.080 they will be in two four. If you're just joining us, 0:12:07.120 --> 0:12:10.480 Steven Angler with us, he's head of Global Canaries in 0:12:10.559 --> 0:12:13.120 the coal Mine and Standard Charter. We're thrilled that he 0:12:13.160 --> 0:12:15.760 could be with us this morning. Dr Anglander, where are 0:12:15.840 --> 0:12:18.160 the canaries in the Clone coal mine? I mean, it's 0:12:18.200 --> 0:12:21.640 the ultimate doom and gloom cliche. Steve Anglinder has never 0:12:21.720 --> 0:12:24.360 been a doom and gloom guy. Are the coal mines 0:12:24.400 --> 0:12:28.880 out there under the commit canaries? Lit up. Look, you know, 0:12:29.080 --> 0:12:33.319 I think that the U S Economic data, Um. You know, 0:12:33.440 --> 0:12:35.840 to say that they're mixed is a cliche, but they're 0:12:35.920 --> 0:12:39.680 they're mixed with you know, some numbers more of a concentration, 0:12:39.720 --> 0:12:43.080 and numbers looking soft doesn't guarantee that things are right. 0:12:43.160 --> 0:12:44.679 But but what do you see and come out? What 0:12:44.720 --> 0:12:46.679 do you see in Singapore? What do you see? I 0:12:46.760 --> 0:12:50.280 spoke to the Chilean finance Minister this morning, Dr Lorraine. 0:12:50.360 --> 0:12:52.360 What do you see in Chile? What do you see 0:12:52.400 --> 0:12:57.079 in Singapore? What do you see in Kenya? Look, you know, 0:12:57.200 --> 0:12:59.959 certainly what we're seeing in Asia and the Chinese trade 0:13:00.080 --> 0:13:02.120 numbers that came out over the weekend tells you what 0:13:02.200 --> 0:13:05.199 you're seeing because the things are soft. Um. You know, 0:13:05.280 --> 0:13:07.959 things aren't great anywhere. You know Africa actually, you know, 0:13:08.040 --> 0:13:12.319 it looks better than than many regions. Um. If you're 0:13:12.320 --> 0:13:15.760 a commodity exporter and the biggest commodity produced a consumer 0:13:15.800 --> 0:13:18.280 in the world is kind of sluggish, then you're going 0:13:18.320 --> 0:13:21.480 to be sluggish. Um. But I'd say that the you know, 0:13:21.600 --> 0:13:24.680 the the green shoots are just aren't there yet, certainly 0:13:24.720 --> 0:13:27.640 not in Asia. Um. And even though some of the 0:13:27.840 --> 0:13:33.000 countries around China should be benefiting from diversion of supply change, 0:13:33.080 --> 0:13:37.199 the the the overall sort of angst and worry is 0:13:37.640 --> 0:13:40.000 dominating that. So even there's things, aren't that. This is 0:13:40.040 --> 0:13:42.640 why we love Steve Angler green shoots. When was the 0:13:42.760 --> 0:13:45.320 last time, I mean, I think the Queen is using 0:13:45.400 --> 0:13:47.920 green shoots with the Prime Minister John the last time 0:13:48.000 --> 0:13:50.280 someone asked for tride on Kenya? You want to try 0:13:50.280 --> 0:13:52.600 it on the Kenyan shilling and wanders the world. He's 0:13:52.640 --> 0:13:56.520 the world can give you a trade on the as well. 0:13:56.640 --> 0:13:58.880 You're trying to book a vacation. No, I'm not trying 0:13:58.960 --> 0:14:01.319 to book a vacation. Just think where with Steve Angry, 0:14:01.320 --> 0:14:03.959 he's like a giant in cross rates. Stave Thursday a 0:14:04.120 --> 0:14:06.240 c B base case for you. You're looking for the 0:14:06.320 --> 0:14:10.079 full package? What is it? You know? We don't think so. 0:14:10.360 --> 0:14:12.240 We we think that they're going to do ten basis 0:14:12.280 --> 0:14:15.640 points and hold off on quantitative easing UM, you know, 0:14:15.679 --> 0:14:18.080 which would be a disappointment to the market. What I'd 0:14:18.120 --> 0:14:22.360 say is that the UM market is, you know, just 0:14:22.480 --> 0:14:26.240 looking at where employed volatility is, it's quite low going 0:14:26.360 --> 0:14:29.120 into this event. Whereas they think that the outcomes are 0:14:29.160 --> 0:14:31.680 pretty binary. They're either going to go in with both 0:14:31.760 --> 0:14:35.040 hands because this is dragging his last chance or you know, 0:14:35.280 --> 0:14:40.200 his desire for a big stimulus package will be rebuffed. Um. 0:14:40.800 --> 0:14:42.920 You know we're we're kind of leaning towards a more 0:14:43.000 --> 0:14:46.440 hawkish view. We should be good for the euro it 0:14:46.520 --> 0:14:49.080 won't be great for bond markets, not just in Europe 0:14:49.120 --> 0:14:51.960 but globally. Stave pretty much everyone I spoke to at 0:14:51.960 --> 0:14:53.920 the back end of last week coming into this trading 0:14:53.960 --> 0:14:55.480 week ahead of the a c base said to me 0:14:56.000 --> 0:14:58.400 that if we don't get tearing with the right cut 0:14:58.440 --> 0:15:00.880 from the c B this sturstay, the market is not 0:15:00.960 --> 0:15:03.120 going to respond. Well. Is that your take to Staves? 0:15:03.600 --> 0:15:06.680 I think, look, I think the market expect hearing. They 0:15:06.760 --> 0:15:10.440 expect a rate cut. They got fifteen basis points priced 0:15:10.480 --> 0:15:12.920 in more or less, so it means that ten isn't enough. 0:15:13.480 --> 0:15:15.400 And I think that they want you know that there's 0:15:15.400 --> 0:15:18.800 a strong expectation that they might reannounce QUE. So the 0:15:18.920 --> 0:15:21.760 market is you know, they spent a month telling you 0:15:21.920 --> 0:15:24.960 how great the package was going to be. UM, so 0:15:25.080 --> 0:15:28.920 if they back off, now that's a major disappointment. Steve Englander, 0:15:29.040 --> 0:15:32.840 can can you showing breakdown on the South African Ran 0:15:32.920 --> 0:15:37.000 I mean it's been long run strong. Can you showing short? 0:15:37.080 --> 0:15:40.800 South African ran We're now really on the resistance of 0:15:40.920 --> 0:15:44.160 that chart. Can we break rather the support of that chart? 0:15:44.440 --> 0:15:46.800 Can we break below it too? Ever stronger? Can you 0:15:46.920 --> 0:15:51.680 showing uh? I'll tell you my You know, I have 0:15:51.760 --> 0:15:54.720 as much chance of being Goldie for the Montreal Canadians 0:15:54.760 --> 0:15:57.680 as they do for being able to tell you off 0:15:57.760 --> 0:16:01.360 the cuff. I'll can you hidlings are is going? But 0:16:01.640 --> 0:16:03.480 I would say that there's a number of stories in 0:16:03.560 --> 0:16:07.120 Africa that we're looking at. Can you give us one 0:16:07.160 --> 0:16:10.720 of those? Please? Seriously? Can you give us one of those? Ethiopia? 0:16:10.920 --> 0:16:14.680 I mean strong growth economy served in a world backing 0:16:14.720 --> 0:16:17.200 away from structure reform. They seem to be kind of 0:16:17.720 --> 0:16:20.440 heading there. They're search standing out and so you're long 0:16:20.560 --> 0:16:24.880 Ethiopia seriously, Well, we we'd like the Ethiopian economy and 0:16:25.000 --> 0:16:28.680 typically that spills over into asset models over time. It's 0:16:28.680 --> 0:16:31.400 not it's not a day trade. Okay, Well, I'm glad 0:16:31.440 --> 0:16:33.240 to know it's not a day j Farrell was getting 0:16:33.280 --> 0:16:36.240 out the ticket right now. Stephen Englander, thank you so much. 0:16:36.280 --> 0:16:38.800 With standard charter and folks, I'm going to put out 0:16:39.000 --> 0:16:44.560 the Rand shilling chart. You'll see it first on Bloomberg 0:16:46.240 --> 0:16:49.880 Parity for no, No, it's a one way trade. Strong. 0:16:50.000 --> 0:16:54.960 Can you shilling versus something African South? I don't know 0:16:55.200 --> 0:17:00.760 the Ethiopia. What I think it's maybe the p A right. 0:17:02.360 --> 0:17:04.040 We love do you know? We make jokes about it, 0:17:04.080 --> 0:17:06.920 but they we We love having on guests with a 0:17:07.040 --> 0:17:13.560 prodigious abilities, especially background at Frontier Marcus as well. Yeah, 0:17:13.800 --> 0:17:15.119 she did more of that, to be honest with you. 0:17:28.720 --> 0:17:31.920 Carl Weinberg with us right now with futures advancing, John 0:17:32.000 --> 0:17:35.879 Ferrell driving futures higher up seven, up nine, futures now 0:17:36.000 --> 0:17:39.720 up ten. We're not I'm not yet on a DOWD watch, 0:17:39.800 --> 0:17:42.359 but we're getting lathered up. Carl Weinberg with us with 0:17:42.520 --> 0:17:45.840 high frequency economics, and Carl, I've got a diverge in 0:17:45.920 --> 0:17:49.280 a too short visit to your expertise in South America, 0:17:49.359 --> 0:17:53.199 which has earned over decades of debt workout, is an 0:17:53.320 --> 0:17:57.080 Argentinean debt workout this time the same as it's always been. 0:17:58.359 --> 0:18:00.240 Do come you know you you flatter me. I'm not 0:18:00.359 --> 0:18:04.200 really tracking Latin America that accurately right now, so I 0:18:04.320 --> 0:18:07.720 have to take a pass on the Argentine question. Really Okay, well, 0:18:08.000 --> 0:18:11.120 there it is, But is it idiosyncratic? Is it removed? 0:18:11.240 --> 0:18:13.280 And when you look at all the other things that 0:18:13.320 --> 0:18:16.320 are out there in the e M, are they still 0:18:16.600 --> 0:18:21.600 idiosyncratic or they're tightening up into the autumn um Again, Tom, 0:18:21.640 --> 0:18:23.960 I'm not tracking the Argentine situation. I'm going to take 0:18:23.960 --> 0:18:26.400 a pass. It's not our area of expertise at high frequency. 0:18:26.720 --> 0:18:29.000 You killing me, Carl. I've known it for a million years, 0:18:29.040 --> 0:18:33.720 and it's just did I say something wrong? Was it? 0:18:34.240 --> 0:18:38.639 Was it that barbecue in August? John Safe? I know 0:18:38.720 --> 0:18:40.960 you're focused on the United States, and the main question 0:18:41.040 --> 0:18:42.920 for many people is the weakness that is emerging and 0:18:43.000 --> 0:18:46.080 manufacturing versus the resiliency that we see in the bulk 0:18:46.119 --> 0:18:48.840 of the economy, and the fair is that one bleeds 0:18:48.880 --> 0:18:50.800 into the other. Count Just frame that for us and 0:18:50.960 --> 0:18:53.120 what you're tunn of your clients at the moment. Yeah, Well, 0:18:53.160 --> 0:18:55.320 we do have some expertise at that high frequent at 0:18:55.359 --> 0:18:57.800 high treason. You know, I'm quite a bit and there 0:18:57.800 --> 0:19:00.680 we're watching the divergence between the I S Index and 0:19:00.800 --> 0:19:03.800 the market index very carefully. The I S M, of course, 0:19:03.920 --> 0:19:07.040 is the much longer established index and that's showing us 0:19:07.359 --> 0:19:10.159 a reading that not only rose in the last report 0:19:10.240 --> 0:19:13.200 to fifty five point six, but it also is consistent 0:19:13.280 --> 0:19:16.200 with about a three percent trend and annualized GDP growth. 0:19:16.600 --> 0:19:19.359 And that suggests the story that we've been pushing for 0:19:19.440 --> 0:19:21.119 a long time and that we think the FED is 0:19:21.119 --> 0:19:23.560 alluding to, which is that the U. S economy is 0:19:23.600 --> 0:19:26.760 going to be okay. Maybe not quite that okay. The 0:19:27.359 --> 0:19:30.080 index gives us reason to give some pause in that thinking. 0:19:30.320 --> 0:19:32.960 But it's going to be okay despite the headwinds coming 0:19:33.000 --> 0:19:35.720 from trade. Is it okay? I mean, this is really 0:19:35.760 --> 0:19:38.760 important for us. The recessions negative GDP growth is an 0:19:38.840 --> 0:19:43.000 okay economy, summer's secular stagnation, or can to be something 0:19:43.119 --> 0:19:45.800 better than that? All blended in? Well, I think it's 0:19:45.840 --> 0:19:47.600 going to be all blended in. That's a good way 0:19:47.640 --> 0:19:49.800 to think about it. There is a slow down in 0:19:49.920 --> 0:19:53.120 growth coming from demographics, There is a slowdown in growth 0:19:53.200 --> 0:19:55.760 coming from technology. There are a number of reasons to 0:19:55.800 --> 0:19:58.399 think that growth moving forward is not going to be 0:19:58.480 --> 0:20:00.760 as brilliant as it has been in the past in 0:20:00.800 --> 0:20:04.040 the United States and elsewhere in the world. But nonetheless, 0:20:04.080 --> 0:20:06.680 there is still going to be growth on our forecast, 0:20:06.960 --> 0:20:09.719 we think the economy is going to continue to expand, 0:20:10.280 --> 0:20:13.200 albeit at a modest pace. Sped easing is going to 0:20:13.280 --> 0:20:15.120 help that in the short term, and the longer term, 0:20:15.160 --> 0:20:17.600 productivity growth is going to keep us moving. In some 0:20:17.760 --> 0:20:20.520 immigration is going to keep us moving despite the demographics 0:20:20.920 --> 0:20:23.480 and these headwinds from trade and tariffs, you know, they're 0:20:23.520 --> 0:20:26.480 not forever. There are one time hit on the economy, 0:20:26.680 --> 0:20:28.639 and we don't think those drags are going to get 0:20:28.720 --> 0:20:30.880 any worse. Where those headwinds are going to get any 0:20:30.920 --> 0:20:33.720 worse in the in the near future, is that the 0:20:33.760 --> 0:20:36.200 case if tariffs go up again in October, is that 0:20:36.280 --> 0:20:40.080 the case of tariffs on new products come in in December, Well, 0:20:40.160 --> 0:20:42.120 that's already in the market, John, You know, I don't 0:20:42.160 --> 0:20:44.159 think that's going to be a surprise to anybody, and 0:20:44.240 --> 0:20:47.320 I think it's already in everybody's economic plans. What we 0:20:47.560 --> 0:20:50.720 hear from people who are uh, you know, out in 0:20:50.800 --> 0:20:54.480 the field is that this uncertainty for trade has created 0:20:54.720 --> 0:20:58.040 a blip in investment, okay, and it's made it difficult 0:20:58.119 --> 0:21:01.480 or impossible to invest. Some point those investments are going 0:21:01.560 --> 0:21:04.760 to get made, and that at another point we're going 0:21:04.800 --> 0:21:07.359 to reach the point where this drag, the reduction and 0:21:07.480 --> 0:21:10.200 investment is going to stop. We want to not confuse 0:21:10.240 --> 0:21:12.840 our second and our third derivatives here, So we think 0:21:12.920 --> 0:21:15.399 that the hit is there and it's real, but as 0:21:15.480 --> 0:21:18.360 long as it doesn't get any worse, it won't continue 0:21:18.400 --> 0:21:20.920 to drag on GDP growth. When you say it's already 0:21:20.920 --> 0:21:23.440 in the market, what do you mean by that specifically, Well, 0:21:23.480 --> 0:21:26.200 I think everybody knows, you know, what the President's position is. 0:21:26.280 --> 0:21:28.359 Everybody is pretty sure that we're going to see this 0:21:28.520 --> 0:21:31.200 increase in tariffs coming. Uh, And I think that that's 0:21:31.240 --> 0:21:33.400 the bet in the market. You know, to be wrong 0:21:33.760 --> 0:21:36.720 would be the case in which the tariffs are not 0:21:36.880 --> 0:21:39.560 imposed for some reason. That would be a positive shock. 0:21:39.680 --> 0:21:42.840 So I think the worst, the worst outcomes are already 0:21:42.920 --> 0:21:46.040 discounted in the markets. But for companies, of course, even 0:21:46.080 --> 0:21:48.840 though no it's coming, they still, you know, are very 0:21:48.920 --> 0:21:51.720 leary about making investment plans until they see what's actually 0:21:51.800 --> 0:21:55.119 going to happen. So investment is depressed, but it's not 0:21:55.200 --> 0:21:58.560