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Speaker 2: It starts trying today with Amanda Lineum. She's at Black Rock.
Speaker 2: As you look at the fixed income space, let's just
Speaker 2: go there with the real yield. The real yield is
Speaker 2: the inflation adjusted yield. There's different ways to measure it.
Speaker 2: At the one I use is one point ninety two,
Speaker 2: Well in over two percent. Why is the real yield
Speaker 2: coming in? Is it a growth prediction?
Speaker 3: Good morning, Thank you for having me.
Speaker 4: I do think that's exactly a time a moderation and
Speaker 4: growth outlook for the US, so that real.
Speaker 3: Yield is coming in, and I think that makes sense.
Speaker 4: When you listen to corporate earnings calls, even the ones
Speaker 4: that have occurred over the past week, there's a significan
Speaker 4: lack of visibility where these corporates can really see forward.
Speaker 4: They're having a difficult time disentangling what is front loading.
Speaker 3: Of demand, what is real demand.
Speaker 4: Many of the consumer companies are expecting to be mitigating
Speaker 4: teriffs for the next few quarters. But I think there's
Speaker 4: a debate that is happening both internally and I would
Speaker 4: say externally, where the market is saying, well, the hard
Speaker 4: data hasn't yet caught down to the softer sentiment data,
Speaker 4: so maybe it won't, maybe it won't, Maybe that moderation
Speaker 4: won't happen.
Speaker 3: We think that that's actually just a matter of time.
Speaker 4: The hard data will actually catch down to the soft data,
Speaker 4: but we shouldn't expect it to happen imminently.
Speaker 5: I got the tenure treasure. We're back down to four
Speaker 5: point one six percent.
Speaker 2: Everything's coming in Holy Cow.
Speaker 5: I mean, what do you think we end the year here?
Speaker 4: Well, I think our two I would say more higher
Speaker 4: conviction assumptions are for steeper curves and a rebuild of
Speaker 4: term premia at the long end. And so really, when
Speaker 4: you think about the long end, the drivers there are
Speaker 4: budget deficits, concerned about the fiscal situation, possible increase in
Speaker 4: inflation expectations over the long term. At the front end,
Speaker 4: we actually think the FED has a more constrained reaction
Speaker 4: function because inflation is just already above target and is
Speaker 4: probably moving higher still, so we don't expect the FED
Speaker 4: to be cutting preemptively. We expect that they will actually
Speaker 4: need to see real deterioration in the labor market. Probably
Speaker 4: not this Friday, but over time it's really going to
Speaker 4: be that visible inflection in the hard data that will
Speaker 4: allow the FED to cut. They may start with a
Speaker 4: fifty basis point cut, right, that's not out of the question.
Speaker 3: It's not out of the question.
Speaker 4: But I think as it relates to the treasury market,
Speaker 4: steeper curves a rebuilder of term premia at the long
Speaker 4: end and actually kind of pushing back against market precing.
Speaker 4: Although I will say market pricing really isn't reflecting a
Speaker 4: full cut until July.
Speaker 2: Amandoline is so intimidating folks when I have to have
Speaker 2: a logarithmic chart up here just to come before I
Speaker 2: go to her. So I did the Bloomberg Total Return
Speaker 2: Corporate Index, and I think it's greatly unknown by people
Speaker 2: that the bond hemorrhage that we had a number of
Speaker 2: years ago, priced down, yield way up, has really been
Speaker 2: a bond recovery. Here. What has led the recovery of
Speaker 2: price up, yield down.
Speaker 3: And bond So two things. One that's absolutely right.
Speaker 4: And the higher risk free rate, the higher yield just
Speaker 4: compounding over time and boosting those total returns has really helped.
Speaker 4: That's been a big capture, and that staying invested, capturing yield.
Speaker 2: She read the yield books, sitting on the home, so.
Speaker 4: Staying invested, capturing that higher yield that has been compounding.
Speaker 4: What has been really more striking to me is if
Speaker 4: you disentangle the corporate bond market into the subsets of quality,
Speaker 4: high yield pockets of it have outperformed investment grade on
Speaker 4: a total return basis year to date. And then, even
Speaker 4: more interestingly, the triple C pocket of the high yeld
Speaker 4: market has outperformed the S and P five hundred, the
Speaker 4: NASTAQ one hundred, and the rustle and so the lowest
Speaker 4: quality portion of the high yield market, despite all of
Speaker 4: the growth concerns you mentioned at the top, has actually
Speaker 4: been out performing the equity market on a total return
Speaker 4: basis year to date, which I find to be really interesting.
Speaker 5: So, I mean, should we still be thinking about taking
Speaker 5: credit risk case?
Speaker 3: Yes, so, I say selectively is the is the key point.
Speaker 4: So if you are an investor that is constrained to
Speaker 4: the investment grade market, right, you really can just buy
Speaker 4: investment grade paper.
Speaker 3: We like moving down into the.
Speaker 4: Triple b's, that low end of the investment grade universe.
Speaker 4: If you can more, if you're more unconstrained, you can
Speaker 4: really go anywhere. We'd like dipping down into the high
Speaker 4: end of high yield, that double B factor. What we
Speaker 4: found is that you're actually not giving up that much
Speaker 4: credit quality by dipping into the high end of high
Speaker 4: yield versus triple be's. Those leverage metrics have actually converged.
Speaker 2: What's I mean, can someone actually go out and do
Speaker 2: that or they can't?
Speaker 3: Yeah, they can.
Speaker 4: So for example, the yield on the investment grade aggregate
Speaker 4: index is above five percent at the moment, the yield
Speaker 4: on the high yield index in aggregate is around seven
Speaker 4: point eight percent.
Speaker 3: So there's a there's still a meaningful.
Speaker 4: Difference that you're picking up by kind of crossing into
Speaker 4: high yield territory. Why is that important given the volatility
Speaker 4: in the treasury market that you mentioned. Yes, we're we're
Speaker 4: lower on yields yere to date in the treasury market,
Speaker 4: but it's been volatile, as you know. Picking up that
Speaker 4: in mental spread, staying invested letting that compound will boost
Speaker 4: total returns over time. So we like dipping in selectively
Speaker 4: into the lower quality pockets of the market. We would not, however,
Speaker 4: importantly be chasing all the way down into the tail
Speaker 4: of the market, into that triple C pocket. You really
Speaker 4: need to go back to basics do real credit work.
Speaker 4: This is a really challenging environment dynamically to invest.
Speaker 5: Are there some industries that screen better for you guys
Speaker 5: these days?
Speaker 4: There are, so we've been favoring domestic focused services sectors,
Speaker 4: so that could include things like insurance banks. Banks are
Speaker 4: a massive part of the investment grade.
Speaker 5: In deexity, and they issue like they release earnings on Tuesday,
Speaker 5: they issue on.
Speaker 4: Onesday and yes, and they tend to front load our
Speaker 4: instruments earlier in the year. Historically that's the seasonal pattern.
Speaker 4: The new issue market is wide open and investment grade.
Speaker 3: I know, I know, you.
Speaker 4: Know you've had conversations on the deck capital market side,
Speaker 4: So we do actually like that. I would say parts
Speaker 4: of even telecom right, the services based domestic based, right,
Speaker 4: they're not importing goods across international waters and dealing with
Speaker 4: ships and trade policy. The one thing you do have
Speaker 4: to keep in mind, however, is that all of these
Speaker 4: sectors would be impacted by a downturn and growth.
Speaker 2: So a high yield ETF for retirees, they're going to
Speaker 2: pop five six seven percent yield. Great, what's their price
Speaker 2: risk right now? What would you say to well, yeah,
Speaker 2: putting grammar.
Speaker 4: Right now, Actually, I would say the price risk in
Speaker 4: high yield is less than the price risk and investment
Speaker 4: grade because high yield tends to have shorter duration. So
Speaker 4: if you do have that sell off in treasure yields
Speaker 4: that we expect, that steeper curve, then you would have
Speaker 4: less of a price impact and that shorter duration pocket
Speaker 4: of the market relative to the investment grade portion. So
Speaker 4: again that's why we like moving selectively down in quality.
Speaker 2: Well, one year trailing, I'm looking to just a given
Speaker 2: ETF for the superior sharp ratio nine point one percent return.
Speaker 5: Yeah, and then nothing wrong with that, I'll tell you
Speaker 5: right now. That's like doubles like my new Jersey municipal.
Speaker 2: But that's almost as good as a triple leverage cash
Speaker 2: fractly without the attended fees.
Speaker 5: Exactly a red headline crossing the term here. Ukraine ready
Speaker 5: to sign US Resources deal as early as Wednesday, we'll
Speaker 5: have more reports coming up.
Speaker 2: That's today.
Speaker 5: We'll see how that goes. So, Amanda, what's the blackrock
Speaker 5: hall in this economy here? As you think about credit research?
Speaker 6: And are you guys thinking that this economy's got some
Speaker 6: real head winds?
Speaker 2: Here?
Speaker 4: Two things I would say, a more challenging growth inflation mix,
Speaker 4: unquestionably in the US, so lower growth, higher inflation. The
Speaker 4: magnitude has yet to be determined, largely driven by what
Speaker 4: is the off ramp for trade policy and what are
Speaker 4: the positive offsets for example, tax cuts. We have to
Speaker 4: consider the totality of the policy package, but absolutely expecting
Speaker 4: more challenging growth inflation mix. I think the recovery and
Speaker 4: risk assets that we've seen over the past few weeks
Speaker 4: is more of a temporary reprieve. We don't think that
Speaker 4: we're out of the woods quite yet. High yield spreads,
Speaker 4: for example, have retraced over forty percent of the widening
Speaker 4: since mid February. But we still don't really have substantial
Speaker 4: trade deals locked in at this moment, so I think
Speaker 4: we are expecting for periods of volatility. That will be
Speaker 4: something important to monitor. I would say, importantly, though recession
Speaker 4: is not our base case across the platform. So really
Speaker 4: a slow down in growth is what we're expecting, not
Speaker 4: a severe downturn.
Speaker 2: What does Blackrock see that people are doing with their money.
Speaker 4: I would say using periods of strength to reposition portfolios
Speaker 4: in a more defensive way.
Speaker 3: But it's not defensive just generic up and quality.
Speaker 4: It's really underwriting what companies and sectors can navigate this
Speaker 4: period of uncertainty. A lot of idiosyncratic credit work. What
Speaker 4: are companies actually saying about the impact bracing for a
Speaker 4: slow down in consumer spending, higher inflation again, not relying
Speaker 4: on bonds to be the ballast in the portfolio.
Speaker 2: So if that's a structural low yield price up yield down,
Speaker 2: that means new issuance takes off.
Speaker 4: Right, Well, I would say yields are lower on the year,
Speaker 4: but still structurally high. I think the driver of corporate
Speaker 4: issuance is going to be CFOs and treasures taking a
Speaker 4: prudent approach and continuing to prefund year in advance. I
Speaker 4: remember during the financial crisis some companies were shut out
Speaker 4: of the market in two thousand and eight because they
Speaker 4: waited too long to issue and they were forced to
Speaker 4: repay bonds with cash on hand CP. So I do
Speaker 4: think actually the driver of issuance is corporate behavior and
Speaker 4: conservatisms commercial peope.
Speaker 5: Yeah, I got you. I remember I remem the first
Speaker 5: days of the pandemic. The cruise lines rushed into the
Speaker 5: parking place and were selling dea. Boy were they smart
Speaker 5: because they knew those ships are going to be tied
Speaker 5: up for a while. Here us about credit quality? Do
Speaker 5: we We've never It seems like a long time since
Speaker 5: we've had to worry about credit quality. There's so much
Speaker 5: stimulus money into the economy. Is credit quality some of
Speaker 5: you guys think about.
Speaker 4: Of course, I would say there is deterioration in credit quality.
Speaker 4: It's just happening at the tails of the market amongst
Speaker 4: the smaller issuers, so it's not impacting.
Speaker 3: In the index level.
Speaker 4: For example, there's a subset of this of the leverage
Speaker 4: loan market where leverage is above seven times triple c's
Speaker 4: and high yield interest coverage is already below one time,
Speaker 4: so they actually can't cover their interest expense.
Speaker 3: And importantly that they're doing well.
Speaker 4: They're they're doing they're doing better, They're doing yes. But
Speaker 4: I think the thing that I would be monitoring tom
Speaker 4: given given just we're always monitoring risks.
Speaker 3: That's before we've had.
Speaker 4: Detiation in the hard data, right, do you have these
Speaker 4: tails in the market that have that have already deteriorated,
Speaker 4: but before we've seen.
Speaker 3: The deterioration in the hard changed your world.
Speaker 4: Significantly because it's allowed for risk transfer in markets in
Speaker 4: a more seamless way. I would add portfolio trading and
Speaker 4: algorithmic trading to that list as well. So actually, in
Speaker 4: periods of disruption, the risk transfer in the corporate credit
Speaker 4: market has become much more efficient, and we've seen that
Speaker 4: actually investors can can move risk in ways that they
Speaker 4: previously couldn't during the Financial crisis, for example.
Speaker 3: So that's been a positive development in our views. The
Speaker 3: liquidity is there, you don't.
Speaker 2: See shadows of leverage or risk.
Speaker 4: Well, the ETF product is more just a repackaging of
Speaker 4: a fixed income instrument. If you're talking about if you're
Speaker 4: talking if you're talking about leverage in parts of the market,
Speaker 4: for example, there are highly levered companies.
Speaker 3: Is that a systemic risk not an error?
Speaker 2: I love busting your chops. Can you come every morning
Speaker 2: at seven o'clock? It is a wonderful wake up. I'm
Speaker 2: gonna Lightam, Thank you so much for Blackrock. Just absolutely hyperkinetic.
Speaker 2: Unfixed income a huge value.
Speaker 1: At you're listening to the Bloomberg Surveillance Podcast. Catch us
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Speaker 2: And Fixing Him. This hour, we finished strong with Morgan
Speaker 2: Stanley's Jim Karen, who joins us now to get us
Speaker 2: to the top of the are geta Martin Adams on
Speaker 2: this equity market. We'll do that at the eight o'clock
Speaker 2: moment Wall Street time. Jim Karen, it's not too early
Speaker 2: in this chaos to ask what are you going to
Speaker 2: write Friday into the weekend. What within the Morgan Stanley
Speaker 2: sphere of fixed income are you thinking about?
Speaker 7: Well, it's all about jobs, because I think that's going.
Speaker 2: To determine cery.
Speaker 7: So our forecast, the economics team's forecast, I should say,
Speaker 7: is one hundred and thirty five thousand jobs added, around
Speaker 7: four point two percent unemployment rate. Look, that might not
Speaker 7: sound like a dramatic change. We did recently get the
Speaker 7: Jolts data. We are starting to see some softening in
Speaker 7: the jobs data, but we're not seeing it collapse in
Speaker 7: the jobs market. So going forward, it's really all about consumption.
Speaker 7: How does the consumer handle potentially higher prices with tariffs
Speaker 7: and everything else.
Speaker 2: But we got a negative zero point two percent Q
Speaker 2: one GDP survey here at eight thirty coming up in
Speaker 2: fifty minutes. That's pretty moldy, isn't it.
Speaker 7: Yeah, And you know, Tom, I think the risk is
Speaker 7: that the number could even be weaker. So there's a
Speaker 7: lot of adjustments that really took place as of yesterday
Speaker 7: just because of the trade data that came in. You know,
Speaker 7: the deficit came in at record levels, so that forced
Speaker 7: all the Wall Street analysts to reduce or downgrade their
Speaker 7: GDP estimates for today. And essentially, what we have to
Speaker 7: understand is that a lot of this is coming from imports,
Speaker 7: meaning that companies have pulled forward purchases, so their imports
Speaker 7: have actually gone up. When you have high imports versus exports,
Speaker 7: that actually subtracts. That's a negative that what we call
Speaker 7: the net number is actually subtracting from GDP. But there's
Speaker 7: a problem, Tom. The problem is that what's also not
Speaker 7: being calculated is that these things should balance out. Not
Speaker 7: only if you have really big imports, you should then
Speaker 7: start to see inventory build, and you should also start
Speaker 7: to see spending and consumption on those imports that's not
Speaker 7: yet coming into the equation yet. There's a quirk in
Speaker 7: the timing here, so it's almost like you're going to
Speaker 7: get negative aspects, but you're going to miss some of
Speaker 7: the positive and that's what's giving it a big negative number.
Speaker 2: When now Paul I go to this is between a
Speaker 2: Dalton with fidelity years ago domestic final sales. Okay, that's
Speaker 2: where I go sort of in tear its inside statistics.
Speaker 2: I'll try to find that number. I'm not as good
Speaker 2: as my key. Takes me a while, she's got it,
Speaker 2: like three seconds takes me out.
Speaker 6: Hey, Jim, you've seen the stock market bounce back a
Speaker 6: little bit off that initial sell off on the tariff worries.
Speaker 5: We haven't seen the dollar bounce back at all. Why
Speaker 5: are people so sour on the dollar these days?
Speaker 2: Yeah?
Speaker 7: You know, in my view is that the dollar is
Speaker 7: going to weaken, but it's not because of safe haven
Speaker 7: status or anything like that. I mean, I listened to
Speaker 7: George and Coves earlier, my former colleague and friend, and
Speaker 7: I think he's right about this. Look, the first thing
Speaker 7: that we have to understand is, if you go back
Speaker 7: to twenty ten post financial crisis, there was an onslaught
Speaker 7: of investment that came in from foreigners into the US markets,
Speaker 7: which means you have to buy the dollar. If you
Speaker 7: look at the Fed's Broad Dollar Trade Weighted Index, a
Speaker 7: very good index and measure to look at the dollar,
Speaker 7: that index shows a dollar appreciation since twenty tens to
Speaker 7: the end of twenty twenty four of about forty percent,
Speaker 7: which means that the dollar is very expensive and people
Speaker 7: are overweight. Foreigners are overweight US assets. What we're seeing
Speaker 7: right now is a rebalancing. We're not seeing a sale,
Speaker 7: a liquidation of dollars, a loss of faith, a loss
Speaker 7: of confidence, None of that is really taking place. What
Speaker 7: you're seeing is people who are overweight US assets. Now
Speaker 7: we have tariffs and what have you, and US assets
Speaker 7: equities are kind of moving sideways. People are repatriating, and
Speaker 7: what that means is that the dollar is going to weaken,
Speaker 7: but from very expensive levels. And I think that's an
Speaker 7: important caveat to actually make this in this whole story here.
Speaker 7: So you know, look, I do think the dollar is
Speaker 7: going to weaken, but I don't think that it's costs
Speaker 7: for alarm. I think we have to put this into context.
Speaker 5: So again, Jim, so real quick here, what's the number
Speaker 5: one issue you're talking with clients these days at Mortgage Daneling.
Speaker 7: So what does it mean when the dollar starts to
Speaker 7: weaken like this right? What does it mean when it
Speaker 7: starts to sell off from very expensive levels? It means
Speaker 7: that bond yields have to make the adjustment so effectively,
Speaker 7: what it tells us is that longer term bond yields
Speaker 7: will not go down as much as what we had
Speaker 7: previously seen over the last fifteen years. So a lot
Speaker 7: of the relationships that we look at, like oh, the
Speaker 7: equity market's down, how come bond yields aren't down more?
Speaker 7: Or why isn't the bond market supporting the equity market
Speaker 7: as much? It's because this rebalancing is taking place. So
Speaker 7: what we're telling clients is that when you start to
Speaker 7: construct a portfolio of fixed income, inequities and alternatives and
Speaker 7: you put everything together, essentially, we have to understand that
Speaker 7: bonds will not hedge your equity risk like they did
Speaker 7: in the past. At least not longer duration bonds. So
Speaker 7: we're telling clients is at shorter duration bonds front end
Speaker 7: bonds to your yields around three sixty five. I mean,
Speaker 7: you know that's being controlled by FED and fed pal
Speaker 7: and expectations. Shorter term bonds are actually the longer term
Speaker 7: bonds are going to be a little bit more risky.
Speaker 7: And we see a yal Curbstee.
Speaker 2: Jim too shorter visit got to do it longer next time.
Speaker 2: Mister Karen is with the Morgan Stanley. Thank you so much.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
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Speaker 2: George Conkalfus joins us head of US Macro Strategy MUFG
Speaker 2: Securities Americas as well. I love this where we have
Speaker 2: Amandoline and men Jim Karen scheduled and you're with us.
Speaker 2: Is everybody on the same page in your worlders? Within
Speaker 2: the daily grind of the fixed income industry, is there
Speaker 2: a lot of debate out there.
Speaker 8: There is and you mentioned earlier there's this version everywhere,
Speaker 8: this version around economic forecast views, and it's obviously leads
Speaker 8: to some volatility every so often.
Speaker 5: So George, actually, first, Lisa, George is a Rutgers grad.
Speaker 5: I mean, you guys are everywhere on the global street
Speaker 5: rugs to the State University of New Jersey.
Speaker 7: George, what are.
Speaker 2: We doing here?
Speaker 6: I mean, I've got so much uncertainty out there in
Speaker 6: the marketplace. I've got equity markets really don't know which
Speaker 6: way to go, I've got the dollar on for sale.
Speaker 6: Where are you suggesting your clients really focus these days?
Speaker 6: Because this level of uncertainty it seems like it's going
Speaker 6: to be here for a while.
Speaker 8: Absolutely, And look and we we tailor more towards institutional investors,
Speaker 8: and we're obviously, uh, you know, facing facing these large
Speaker 8: investors and the and the concerns for it kind of
Speaker 8: naturally forces people to kind of de risk and really
Speaker 8: get defensive. And we have been advocating for a long
Speaker 8: time buying the dips in the two year I know
Speaker 8: it sounds boring, but it's it's been like a really
Speaker 8: simple trade that's worth because I do think that we
Speaker 8: are differentiating amongst fixed income high quality in many ways,
Speaker 8: Like you know, in Amanda's last segment which I heard,
Speaker 8: which she did great, this kind of barbelled approach that
Speaker 8: you could like in an odd way, high yield has
Speaker 8: become better quality over time in terms of rating. It's
Speaker 8: shorter duration and you know less, it's less volatile.
Speaker 2: But you know, there's always that point where you don't
Speaker 2: know about the macro.
Speaker 8: If we enter an inflection point, all bets are off,
Speaker 8: credit does become problematic.
Speaker 5: So are you guys, are you guys focusing on do
Speaker 5: you guys think the recession is that in your scenario?
Speaker 8: I mean the other thing is we're all debating are
Speaker 8: we accelerating to kind of get into this downturn and
Speaker 8: then pop back out? I mean, a recession usually obviously
Speaker 8: has negative connotations, and people are always concerned about that.
Speaker 8: It might linger if it's just kind of like a
Speaker 8: technical recession because we're seeing all these oscillations within these
Speaker 8: large segments of the economy.
Speaker 5: People might look through it, okay, And many.
Speaker 8: Investors that I talked to are like saying, well, you
Speaker 8: know what, it's going to be a blip, So why
Speaker 8: should I get defensive.
Speaker 2: You for the forever have been just one wonderful about
Speaker 2: the foreign appetite for full faith in credit US paper.
Speaker 2: I should point out, folks, m UFG is a is
Speaker 2: a wonderful Japanese entity. What do you see of the
Speaker 2: confidence to buy full faith in credit? Yeah?
Speaker 8: Look, so this has been for years now, especially in
Speaker 8: the higher rate environment. It's become much more tactical. You
Speaker 8: have to remember a lot of these investors overseas have
Speaker 8: been legacy holders for decades and they and then they
Speaker 8: naturally roll over.
Speaker 2: The question is are they adding right?
Speaker 8: And it's and what you see in the public data
Speaker 8: and what you kind of can witness, they're much more traders.
Speaker 8: They're they're more tactically moving things in and out. They're
Speaker 8: actively trading flow.
Speaker 2: We got to stop the show, folks. This is really
Speaker 2: really important. There's a viajillion dollars of full faith in
Speaker 2: credit US overseas. It's like a lead brick. It's staying there, right. Debatable.
Speaker 2: I do think that.
Speaker 8: Look, you can't square the circle if we're trying to
Speaker 8: fix our trade deficit, but we're running large budget deficits.
Speaker 8: Either US savings have to go up a lot and
Speaker 8: you have to force US investors to buy all the treasuries.
Speaker 8: I mean, it has to kind of even tell you that.
Speaker 2: I remember when that was actually the case. But what's
Speaker 2: important here is if they or if if she sees
Speaker 2: them walk away, this is them by definition, price down,
Speaker 2: yield higher.
Speaker 8: Look, I think we're not losing the support of the
Speaker 8: foreign investor. And I know we get into these moments
Speaker 8: where we're scared about dedollarization, We're worried about the perceptions
Speaker 8: about how people are viewing policies out of the US.
Speaker 8: There's still still the biggest reserve currency. It's what you know,
Speaker 8: what anchors all these central banks around the world, is
Speaker 8: still the dollar. Even though it's been coming down over
Speaker 8: the last fifteen twenty years, it's not a new phenomenon.
Speaker 8: So you just don't abandon it overnight. You can't just
Speaker 8: like walk away from holdings of treasuries and dollars.
Speaker 2: There's a lot of hysteria Paul about this. You know,
Speaker 2: I try to stay cool day one day, Japan or
Speaker 2: China gonna walk away, and I are they going to go?
Speaker 2: Where are they going to go?
Speaker 5: That's my point, and that's what people tell me. All Right,
Speaker 5: George is with n u f G. That stands for
Speaker 5: Mitsubishi UFJ Financial Group, a major Japanese financial The most
Speaker 5: headquarters is a duke in turn exactly now they're headquarters
Speaker 5: in Tokyo. How do the folks in Japan view the
Speaker 5: US market these days? I mean, I'm sure you have.
Speaker 5: You do talk to your clients, you do talk to
Speaker 5: your traveled to Japan a lot and you travel to
Speaker 5: How are they viewing the US these days?
Speaker 8: I think that there there's a view that the medium
Speaker 8: term is still a great place to invest in the US.
Speaker 8: It's more about perhaps we got over our skis on
Speaker 8: the US exceptionalism and unheedged because it's just easy to
Speaker 8: be long US everything, and now it's more about being
Speaker 8: more selective.
Speaker 2: Let me ask you the question that we asked Samandliin
Speaker 2: in the list. Probably ask Jim Careen that when he
Speaker 2: comes up here as well as we celebrate the coupon,
Speaker 2: how would ETFs changed George congals life?
Speaker 8: Well, I mean, I think if anything, it broadened out,
Speaker 8: like the ability to express views massively, Yes, without doubt.
Speaker 8: And it's an efficient vehicle and there's a lot of
Speaker 8: things that go along with it. But within it. You know,
Speaker 8: there's been a lot of just automation technology. It's really
Speaker 8: made fixed income even more more transparent, and it's you know,
Speaker 8: for times it was very opaque being in a fixed
Speaker 8: income and you have to do.
Speaker 2: A lot of work.
Speaker 8: And you still have to do a lot of that
Speaker 8: sort of due diligence and credit work. But I think
Speaker 8: it's kind of you know, democratized fixed income.
Speaker 2: I mean, Paul would sit there with a Budweiser can
Speaker 2: and it can and you have the stand I mean,
Speaker 2: and you have the the and you have the standard
Speaker 2: and Forest Blue Book open because you know, besides immunities,
Speaker 2: you want to take a look at a Boise Cascade
Speaker 2: ten year piece. Those days are gone. I mean, you
Speaker 2: just buy the Boise Cascade ETF or whatever.
Speaker 5: Now.
Speaker 2: Yeah, So what are you doing.
Speaker 5: On the credit side, George, I mean in credit risk?
Speaker 2: How much?
Speaker 5: So interesting?
Speaker 2: I am?
Speaker 8: I am again more cautious by design around that.
Speaker 2: We think that we are heading into a slowdown.
Speaker 8: And the tariff news and the shock that we just
Speaker 8: went through just exacerbated that. And look, the weaker credits
Speaker 8: have been exposed and I do think that there is
Speaker 8: going to be credit risks start the surface in the
Speaker 8: second half of the year, it's going to be you know,
Speaker 8: even if we try to pivot and the economy avoids
Speaker 8: like a full blown recession, I think the damage is done.
Speaker 2: Fabulous, George, thank you so much. Sure and calls with
Speaker 2: this what Mitsubishi.
Speaker 5: Yeah.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto
Speaker 1: with the Bloomberg Business app. You can also watch us
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Speaker 2: This is a really important conversation we're going to have
Speaker 2: right now because it's something that that Paul and I
Speaker 2: we just simply don't do enough on, which is loans,
Speaker 2: high yield things with a coupon that stays there, sophisticated stuff.
Speaker 2: He comes out of Pimco after tour duty at Harvard
Speaker 2: and wandered over to Chicago to look at a lot
Speaker 2: of math. There, a lot of microeconomics, which helps out
Speaker 2: Senda Burne. Jones's right now and he's with Beach Point.
Speaker 2: We have to describe that. Scott Klein, What's beach Point?
Speaker 9: Beach My Capital is an acid manager based out of
Speaker 9: Santa Monica, California.
Speaker 2: Someone there to fill the coffee cups for you.
Speaker 9: Well, you guys should be proud. It seems like you're
Speaker 9: doing weather right out here these days. So it's very
Speaker 9: nice to be here, and thanks for having me.
Speaker 2: Actually, yesterday I said on the deck and said, oh
Speaker 2: my god, it's like California is for one hundred and
Speaker 2: sixty days of the of the year. Just we don't
Speaker 2: do enough on this. Explain to our audience what a
Speaker 2: loan is in your world.
Speaker 9: It sounds like a mortgage is no, So I mean,
Speaker 9: we're talking mostly about senior bank loans in the form
Speaker 9: of lending to different companies in both the public and
Speaker 9: private corporate credit markets, but all forms of credit really
Speaker 9: in beach point traffics across all of these asset classes,
Speaker 9: but primarily in credit and primarily in leveraged credit. And
Speaker 9: so a loan is an instrument that sits at the
Speaker 9: top of a company's capital structure. It's usually comes with
Speaker 9: some form of security and collateral that that backstops you
Speaker 9: know us as lenders, and it comes with some form
Speaker 9: of protections. And so it's something in this environment with
Speaker 9: a lot of volatility that you know we like a
Speaker 9: lot in terms of having in our portfolios and performing
Speaker 9: well in addition to you know, all of the sort
Speaker 9: of underlying fundamentals that support it in terms of the
Speaker 9: corporate issuer base.
Speaker 5: So what are you finding in your market here? What's
Speaker 5: the You know, there's a lot of uncertainty in the marketplace.
Speaker 5: We see that reflected in across financial markets. Where are
Speaker 5: you seeing it in the high old market and the
Speaker 5: leverage loan markets? What's happening today?
Speaker 2: Sure?
Speaker 9: Well, these markets are really solving for two things.
Speaker 2: Really.
Speaker 9: The first is the first order impact of terrific exposure,
Speaker 9: and so you've seen those types of credits that have
Speaker 9: direct import exposure and predominantly to China sell off the
Speaker 9: most in terms of price. The second thing the market's
Speaker 9: solving for is what is the economic uncertainty that we
Speaker 9: are already experiencing. You know, we have some distortion today
Speaker 9: in terms of GDP data.
Speaker 2: But how long will that last?
Speaker 9: And how will these corporate issuers fare and navigate this environment?
Speaker 9: And so you're seeing much higher dispersion in the market.
Speaker 9: This is not dissimilar from other asset classes where you're
Speaker 9: seeing certain sectors trade off more so than others certain
Speaker 9: credits to us. We think this is the beginning of
Speaker 9: a really nice opportunity.
Speaker 5: When I was at the Chase Manhattan Bank, I was
Speaker 5: doing leverage lending to TMT companies. I do a five
Speaker 5: hundred million dollar loan, indicate forty to eighty million dollars
Speaker 5: off my books that guys like you. Although I don't
Speaker 5: remember ever being in sent a monk marketing a loan.
Speaker 5: So in the senior secured highly leveraged loans, is that
Speaker 5: something you guys look at?
Speaker 2: Absolutely?
Speaker 9: Yeah, we look at senior secured levered loans as well
Speaker 9: as HYLD bonds. I mean those primarily comprise the leverage
Speaker 9: credit universe, and they can come in both public and
Speaker 9: private flavors.
Speaker 5: Are there certain industries you guys like today? Does anything
Speaker 5: screen better one or the other?
Speaker 2: Sure?
Speaker 9: I mean there are some industries that we think will
Speaker 9: have more resilience through this environment.
Speaker 2: There don't have import risk.
Speaker 9: They may have some cyclicality attached to them, but they
Speaker 9: have contractual revenues, so they have a lot of visibility
Speaker 9: into the future. And they're the ones who are not
Speaker 9: necessarily softening their outlooks when they're reporting.
Speaker 2: Since your garner this morning posts for a nice lengthy conversation.
Speaker 2: Here he's senior bank loan portfolio manager Beach Point Capital.
Speaker 2: Here he's driving the market lower. We are at negative
Speaker 2: seventy now negative seventy nine on futures vis out two
Speaker 2: big figures twenty six point four eight. The ten year yield,
Speaker 2: you know, I was making jokes about it, but you
Speaker 2: know I'm not there yet. The ten year year olds
Speaker 2: four point eight percent, I'm not in a three ninety
Speaker 2: nine watch I look at the number one question. Paul's
Speaker 2: been great on this, but just the prism and particularly
Speaker 2: in the crucible of Southern California, of Pacific Investment Managing Company,
Speaker 2: of TCW, the Capital Group, Aminson, all of the finance
Speaker 2: out there. How do you people look at private credit?
Speaker 2: I mean, what is your window into private credit from
Speaker 2: the adults out in Southern California.
Speaker 9: Well, we at Beach Point invest in both public and
Speaker 9: private credit. And what we've observed in the growth of
Speaker 9: that particular corner of the market is that companies have
Speaker 9: a choice. They can finance themselves in various ways, and
Speaker 9: they can there are different would say puts in takes
Speaker 9: for doing so in either public or private, but you
Speaker 9: can't ignore the amount of credit creation that's gone on
Speaker 9: in the private markets, and it is scaled at a
Speaker 9: time when we have not had a prolonged depreciation and
Speaker 9: asset prices or a real credit freeze, and so they
Speaker 9: most credit private credit funds have built in defense mechanisms
Speaker 9: in terms of you know, not marketing to market.
Speaker 2: You know, good liquidity, a.
Speaker 9: Very sticker sticky investor base. All of these attributes are
Speaker 9: very positive to be able to see through this particular environment.
Speaker 2: Okay, but this is important. I don't trust mark to market.
Speaker 2: How do they do a legitimate I mean, let's take
Speaker 2: it even over to private equity. Is it like VC
Speaker 2: where they're making it up as they go or is
Speaker 2: a legitimate mark to market?
Speaker 9: Well, the pricing services would would provide legitimate pricing for
Speaker 9: those assets. The danger comes in just that, you know,
Speaker 9: for example, an environment we're in, the more prolonged it becomes,
Speaker 9: the more damage to these companies op reading ability and
Speaker 9: their profit margins would occur. And as that starts to erode,
Speaker 9: you know, perhaps some of those prices don't fully reflect
Speaker 9: the underlying ask do you have in your head?
Speaker 2: And the average duration of private credit?
Speaker 9: Well, a lot of private credit is floating, right, So
Speaker 9: in terms of interest rate duration, it's not going to
Speaker 9: be sensitive moves of you know, the ten year for.
Speaker 2: Exact, almost European, right.
Speaker 9: But what they do have, if they were a margin market,
Speaker 9: is spread duration. So they are going to be sensitive
Speaker 9: to interest rate duration in terms of the reaction to
Speaker 9: risk assets in the credit space to whatever is happening
Speaker 9: in the economy as it relates to the risk free rate.
Speaker 5: Did you understand what he said that I went to
Speaker 5: the Chase Manhattan Bank credit training program.
Speaker 2: You survived.
Speaker 5: I forgotten more than this guy knows. So I go
Speaker 5: to the Beach Point Capital website. Very nice website. The
Speaker 5: intro video is of Manhattan.
Speaker 2: We have a New York office.
Speaker 5: Yeah, you can't find something in LA Come on.
Speaker 2: Come to the Chase. Don't get me New York City
Speaker 2: man having Visita stuff? Are you guys three days a
Speaker 2: week at Michael's?
Speaker 5: Is that what you're doing three days a week at
Speaker 5: Michael Credit?
Speaker 2: People over there?
Speaker 5: How do you guys think about credit qualities? Is that
Speaker 5: we haven't had to worry about credit quality for that?
Speaker 2: That's right.
Speaker 5: I don't know. Fifteen years since a great financial crisis,
Speaker 5: is that something you're telling your animals, Hey, guys, go
Speaker 5: back to your models, start stressing them out a little bit.
Speaker 5: How do you guys think about credit quality?
Speaker 9: Yeah, it's a great question, and it's really where the
Speaker 9: proverbial rubber will meet the road the longer this goes.
Speaker 9: And so the way we look at it is, well,
Speaker 9: first of all, we're coming off of the inflationary and
Speaker 9: rate hiking cycle, which allowed companies with pricing power to
Speaker 9: improve their margins and that's what really fed into the
Speaker 9: solid credit fundamentals that we have today. And so the
Speaker 9: risk is that that profitability starts to come off in
Speaker 9: a stagflationary environment and that's going to start to erode
Speaker 9: credit fundamentals. That's when you start to seeing trouble increased
Speaker 9: defaults start to increase. And so the way we approach
Speaker 9: it is we take everything from the macro level down
Speaker 9: to the micro level. We want our analysts to be
Speaker 9: calling the management teams of the issuers in which we
Speaker 9: invest regularly to get their outlook, what their color is,
Speaker 9: and to stress test their companies and their business models
Speaker 9: for a variety a range of outcomes that we can
Speaker 9: foresee for.
Speaker 2: Global Wall Street, a great conversation. We continue with Sigeon
Speaker 2: Baueren of Santa Monica. I mean, can we just go there?
Speaker 2: You forget about this in New York. So I want
Speaker 2: to point out. Let me three tweets in a row,
Speaker 2: back to back. Liz Ane Sanders Zandy of Moody's. Firman
Speaker 2: of Harvard liz Ane Sanders net exports subtracted nearly five
Speaker 2: percentage points, most in history, Zandy of Moody's. The decline
Speaker 2: in GDP overstates the weakness, but it is weak. Professor
Speaker 2: Furhman of X ten at Harvard. Not the most exciting
Speaker 2: day to day, but private wages X incentive compensation up nicely,
Speaker 2: a slight bump, but take it together, ECI is still
Speaker 2: a downward transcident. Did you take X tenant Harvard? Did
Speaker 2: you survive? Was at manku or Feldsteam? So I did?
Speaker 9: But then I also went to the University of Chicago
Speaker 9: Business School, where I also survived, had a concentration in
Speaker 9: the economics, so yes, do.
Speaker 5: Much math there. So what do you think this Federal
Speaker 5: Reserve is going to do? Here? What are you guys
Speaker 5: at each point thinking about this year? I am I'm
Speaker 5: not sure how much they can do given some of
Speaker 5: the things that are happening. From a policy perspective, I'm
Speaker 5: not really sure how much they can do. How do
Speaker 5: you what are you guys discounting?
Speaker 2: Well, we would agree with that.
Speaker 9: We think that, I mean, similar to the last uh
Speaker 9: sort of well, during the rate hiking cycle in twenty
Speaker 9: twenty two and twenty three, the FED was effectively given
Speaker 9: permission to raise rates because it was doing so into
Speaker 9: a strong economy in a very strong consumer base, and
Speaker 9: until pass forward to today the soft data translates into
Speaker 9: much weaker hard data, we would agree that the Fed,
Speaker 9: if they had their wish, would stay on pause. And
Speaker 9: so that's one reason why on the margin we like
Speaker 9: floating right over you know, fixed rate high yield for example,
Speaker 9: because of that extra current income and carry that you
Speaker 9: get through this particular cycle. And so it's really that's
Speaker 9: the real tension, though, what does the FED do? Which
Speaker 9: side of their dual mandate do they attempt to resolve?
Speaker 9: And we think it's going to be still sensitive to
Speaker 9: inflation over the near term until we get data that
Speaker 9: shows that, you know, we're not really experiencing the same
Speaker 9: inflationary pressures that we did.
Speaker 2: Last one final question and this is really important. And
Speaker 2: we've talked to the La Port people all the time,
Speaker 2: I mean, you guys in southern California and the absolute
Speaker 2: crucible of this trade war at la and Long Beach
Speaker 2: as well. And it's just as simple as is there
Speaker 2: a belief at Beach Point that we just get back
Speaker 2: to normal after this trade war? Or is this a
Speaker 2: new I we're going to do this for Thomas cohon
Speaker 2: or Harvard forty nine, I think it was. Is it
Speaker 2: a new paradigm?
Speaker 9: Yeah, that's a great question. We would say that it
Speaker 9: kind of depends on the cohde of the market you're discussing.
Speaker 9: So it is a new paradigm for smaller companies. They
Speaker 9: can't they don't have the bargaining power. They don't they
Speaker 9: can't easily diversify their supply lines. And so if this
Speaker 9: really is even a ninety day pause on tariffs, but
Speaker 9: then it recommences some of those smaller types of companies
Speaker 9: are just going to have a lot of difficulty in
Speaker 9: this new economic structure that we've established.
Speaker 2: One final question, when the Harvard Club of Southern California
Speaker 2: gets together at Cheves Ravine for the Dodgers, are you
Speaker 2: guys sitting by the dugout. We will sit wherever we can.
Speaker 2: And Dodgers, especially when they're playing that's right. I like
Speaker 2: to cheer on Mookie right go away, very painful.
Speaker 9: So benefits from those types of trades.
Speaker 2: Don't be a stranger. Next time, brings your Oam Schneider
Speaker 2: opinion with you, we'll have the two you on here
Speaker 2: in short, short paper and long only paper.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Apple Corplay and Android
Speaker 1: Auto with the Bloomberg Business App. You can also listen
Speaker 1: live on Amazon Alexa from our flagship New York station.
Speaker 1: Just say Alexa play Bloomberg eleven thirty.
Speaker 2: Yeah. I look at Ridholt's book I'm Not to Invest?
Speaker 5: Ye?
Speaker 2: Do you understand Amazon's put that little Amber Goldie number
Speaker 2: one best seller, wasn't it? Yeah?
Speaker 5: Oh, I didn't know that.
Speaker 2: He wakes up every morning and he buys fifty bucks.
Speaker 2: Just goos the numbers. Kelly Cox has read it cover
Speaker 2: to cover. She joins us right now working as Baryo
Speaker 2: as Chief market strategist Riddles Wealth Management. Let's just cut
Speaker 2: to the case, Kelly. Part one bad ideas Section two,
Speaker 2: Media madness. How does our audience interpret market punditry given
Speaker 2: this chaos?
Speaker 10: This feels like a loaded question, but seriously, you have
Speaker 10: to watch your media diet here. Barry is one of
Speaker 10: the biggest disciples of this, and you know, honestly read
Speaker 10: Berry if you haven't.
Speaker 3: But there's a lot of noise out there.
Speaker 10: I think I'm under I'm understating that. But you have
Speaker 10: to also remember your time frame. Look years and decades
Speaker 10: down the road. Many of us are investing for retirement.
Speaker 10: So as you process headlines, take them in, contextualize them,
Speaker 10: but ultimately remember that ninety percent of them aren't going
Speaker 10: to affect.
Speaker 2: Your decision, So why take them in? That's the arch question.
Speaker 2: I'm as guilty of this as anyone. You got a
Speaker 2: three year, of five year, a ten year perspective, and
Speaker 2: I'm watching Bloomberg headlines.
Speaker 10: Tom, you're talking against your own book.
Speaker 2: But seriously, you know, why take in the short term madness?
Speaker 2: If I got a three year perspective.
Speaker 10: Well, we're all human. A lot of surpoils down to
Speaker 10: we're all human and we want to hear what's happening
Speaker 10: around us. That is natural, and I don't think that's
Speaker 10: a bad thing. I don't think you can tell clients
Speaker 10: and investors to just stop listening. That's that's like sticking
Speaker 10: your head in the sand.
Speaker 5: That's impossible.
Speaker 2: We're human. If you know, if you get into Duke
Speaker 2: in Chapel Hill, you choose to go to Chapel Hill, right.
Speaker 10: Yeah, correct, So that's the other that's what humans do. Yes,
Speaker 10: it's humans.
Speaker 8: Do you know?
Speaker 5: I just last week and I was down to Duke
Speaker 5: for re unions and drove down Franklin Street and Chapel Hill.
Speaker 5: There might not be a prettyer college town anywhere.
Speaker 2: I know.
Speaker 5: I agree with that football Kelly. So you know, ever,
Speaker 5: I would say for the last fifteen years, tech has
Speaker 5: driven equity returns. Is that still a story? Do you think?
Speaker 3: Well?
Speaker 10: Obviously, over the past few months they've driven returns in
Speaker 10: the wrong direction, I mean, which makes sense, right, When
Speaker 10: you hit bumpy roads in the stock market, usually what's
Speaker 10: done really well sells off the hardest. Tech is in
Speaker 10: a weird spot right now. Earnings expectations are high. Analysts
Speaker 10: expect tech earnings to grow an astounding twenty five percent
Speaker 10: this year.
Speaker 5: Which feels really high.
Speaker 10: Considering that tech is the most exposed from a cost
Speaker 10: of goods perspective and an international revenue perspective. So combine
Speaker 10: that with the fact that the AI story, while still
Speaker 10: very real, might hit some speed bumps here as well,
Speaker 10: and you have to wonder if there are better areas
Speaker 10: to sit into whether this market sell off.
Speaker 2: So how will you interpret Microsoft's earnings this after and
Speaker 2: how does a general market strategist or our audience interpret
Speaker 2: one ginormous companies report.
Speaker 10: I think there are two ways to answer this. I
Speaker 10: am a bird's eye view strategist, so I'm not I
Speaker 10: look through earnings calls, but I'm not parsing through and
Speaker 10: making calls on individual stocks. That's just not the way
Speaker 10: we invest Atarate Holts. But of course we're watching earnings.
Speaker 10: Of course, you know you have to watch Microsoft earnings.
Speaker 10: Microsoft is one of the biggest stocks on the market,
Speaker 10: and I think it's an interesting bell weather right now,
Speaker 10: as is Apples, as is Nvidia, A lot of those
Speaker 10: MAGS seven stocks that we talk about because they are
Speaker 10: a part of this tech sector that is incredibly exposed
Speaker 10: to international well to tariffs and international catalysts.
Speaker 2: How do you use the vis.
Speaker 10: That's a fun question. So the VIX of course, is
Speaker 10: the fear index. It's the gauge of thirty day SMP
Speaker 10: options races. A lot of people watch as as a
Speaker 10: sentiment index. I watch it as well. I think the
Speaker 10: VIX has changed a lot because the options market has
Speaker 10: just become so much more complex, so much more popular.
Speaker 10: There are so many more options, for lack of a
Speaker 10: better word, to hedge positions and hedge around events. So
Speaker 10: typically in selloffs you see the VIX spike, and usually
Speaker 10: when the VIC spikes, strategists like me say, okay, it's
Speaker 10: time to buy.
Speaker 5: I think it's a little more complicated.
Speaker 10: Especially in selloffs where there are economic cracks, which I
Speaker 10: expect to be the case here. I think it's an
Speaker 10: open window for long term investors, you know, maybe thinking
Speaker 10: think about being more opportunistic here. But I don't think
Speaker 10: at this point the VIX could mark the bottom of
Speaker 10: this sell off.
Speaker 5: That's what I'm worried about.
Speaker 2: I haven't seen the emotion though, No, I just haven't
Speaker 2: seen the good arsis.
Speaker 5: I've heard what they say it's been an orderly sell
Speaker 5: off and those types of things. I don't know. But
Speaker 5: we did that the VIS you know, you know, well
Speaker 5: above thirty there for a while.
Speaker 6: So Kelly did the good folks a road rid Holt's
Speaker 6: Wealth Management. Have you guys changed kind of how you
Speaker 6: think about stocks given that maybe this tariff thing's going
Speaker 6: to be around for a while and some industries and
Speaker 6: sectors will be more impacted than others.
Speaker 5: Has it affected your stock selection at all?
Speaker 10: Well, look, we've had a lot of conversations around this.
Speaker 10: I think if you're a money manager and you haven't
Speaker 10: at least had discussions around what's going on, then you're
Speaker 10: probably falling behind. We haven't made any changes to our portfolios,
Speaker 10: but we are, you know, thirty percent invested in international equities.
Speaker 5: Okay, so that's good in.
Speaker 10: Our main equity sleeves. So we we've always been a
Speaker 10: proponent of international investing. I think it's all the more
Speaker 10: important right now because as money moves around, and money
Speaker 10: doesn't evaporate, remember it moves somewhere always. You know, we
Speaker 10: think it could be looking for international sources. But so far,
Speaker 10: no changes, and you know, we build our portfolios so
Speaker 10: we don't have to change.
Speaker 2: Did you understand that you're thirty percent in international so
Speaker 2: Barry can expense a trip to Italy?
Speaker 10: Well, you've got to take them on up to Barry
Speaker 10: and tell them I want to take it.
Speaker 2: This is insufferable now because of the New York next.
Speaker 2: I mean, sure, you guys, have you medicated, Barry.
Speaker 10: We're definitely a Knick's office. That's something I've learned over
Speaker 10: the past year or so. And everybody's pretty excited. I
Speaker 10: don't get into the NBA. The Charlotte Hornets have haven't
Speaker 10: been a part of the conversation forever. True, But I'm
Speaker 10: happy for the Knicks, and I'm excited because my colleagues
Speaker 10: are exciting.
Speaker 5: Yeah, she's got some problems with the North Carolina Tar
Speaker 5: Hills basketball program or the football program. Well, figure that's
Speaker 5: to have fun, though, that's going to be fun. We
Speaker 5: have Chapel Bill. Chapel Bill, that's right, Yeah, that's that's
Speaker 5: his name.
Speaker 2: There you go. I'll be careful, man.
Speaker 5: I'm just saying I'm optimistic.
Speaker 10: I'm cautiously optimistic.
Speaker 2: Twenty seconds. What do you publish today? What's the lead
Speaker 2: idea you're publishing within? You know, down negative four fifty.
Speaker 10: There's going to be a lot of talk around stagfletion.
Speaker 10: I've already written a lot about this.
Speaker 2: Agreed, well said, I don't.
Speaker 10: Think we are quite there yet. Obviously the GDP dad
Speaker 10: it didn't look great, but there's still a pretty buoyant
Speaker 10: demand underneath. And it's also hard to read data at
Speaker 10: the moment because the craziness.
Speaker 2: The GDP price it in deck just screamstagflation.
Speaker 10: Yeah, And I think that's what's spooking people because that's
Speaker 10: that's the worry in the background, right agree, keep us
Speaker 10: economic trenching to be.
Speaker 2: Lauren Summers, thank you so much for your coverage with
Speaker 2: David Weston on that there is. Maybe it's not a
Speaker 2: huge stagflation, but nevertheless it's tangible. Cayley Cox with his
Speaker 2: Chief Market Strategies to Ridholtz Wealth Management.
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