WEBVTT - Vaping Replaces Smoking for US Kids 0:00:01.800 --> 0:00:04.440 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.440 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanibek. We're here every day bringing 0:00:07.280 --> 0:00:09.799 you the latest news from the world of business and finance, 0:00:09.840 --> 0:00:13.640 plus technology, politics, economics, all partnising the power of Business 0:00:13.640 --> 0:00:17.119 Week reporters and editors, not to mention our journalists and 0:00:17.160 --> 0:00:19.599 analyst in more than one and twenty countries. You can 0:00:19.640 --> 0:00:23.200 download Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot Com. 0:00:23.400 --> 0:00:25.120 You can also listen to our radio show at two 0:00:25.160 --> 0:00:27.840 pm Eastern Time on Bloomberg Radio or watch us on 0:00:27.880 --> 0:00:31.760 YouTube search Bloomberg Global News. We wanna talk a little 0:00:31.760 --> 0:00:35.440 bit about what's going on when it comes to e cigarettes, 0:00:35.479 --> 0:00:39.200 in particular the CDC coming out recently and saying vaping 0:00:39.240 --> 0:00:43.200 is growing more prevalent among young people. In check this out, 0:00:43.240 --> 0:00:45.360 one in nine high school students that they had vaped 0:00:45.680 --> 0:00:47.920 in the past months. So let's get some thoughts on 0:00:48.000 --> 0:00:50.600 the health effects of vaping. Dr Joanna Co and his 0:00:50.680 --> 0:00:53.519 director of the Institute for Global Tobacco Control at the 0:00:53.600 --> 0:00:57.360 Johns Hopkins Bloomberg School of Public Health supported by Michael R. Bloomberg, 0:00:57.360 --> 0:01:00.480 founder Bloomberg Gulp and Bloomberg Philanthropies, she'd joins us on 0:01:00.520 --> 0:01:03.600 the phone from Baltimore. Dr Cohen, good to have you 0:01:03.680 --> 0:01:06.880 here on this Thursday. Let's get to it because some 0:01:06.959 --> 0:01:10.120 other research I've seen is that when you tend to 0:01:11.240 --> 0:01:15.120 uh do ease cigarettes, you see that in terms of adolescence, 0:01:15.319 --> 0:01:18.000 they are over three times more likely to use cannabis 0:01:18.000 --> 0:01:19.800 than those who don't. So there's a lot of things 0:01:19.840 --> 0:01:22.600 to think about when it comes to health impacts. How 0:01:22.640 --> 0:01:24.800 do you see what is the research and the thoughts 0:01:25.080 --> 0:01:29.160 that you think we should be all thinking about. Yeah, well, 0:01:29.240 --> 0:01:31.600 let me start with the bottom line that really no 0:01:31.640 --> 0:01:35.680 one should be using you cigarettes for cigarette smokers who 0:01:35.720 --> 0:01:39.920 are trying to quit. And unfortunately, there's been a lot 0:01:39.959 --> 0:01:43.440 of kids exactly as you say, Carol, have taped up 0:01:43.880 --> 0:01:46.880 the use of these cigarettes. They've tried them that come adicted. 0:01:47.440 --> 0:01:49.800 And partly this was because there are a lot of 0:01:50.400 --> 0:01:55.720 marketing of fun flavors, fruit and unicorn, at kinds of 0:01:55.880 --> 0:01:58.760 all kinds of different flavors, and that's appealing to kids. 0:01:58.960 --> 0:02:02.360 And I think kids all also don't really equate these 0:02:02.440 --> 0:02:06.000 vaping products to cigarettes. They know that cigarettes aren't good 0:02:06.280 --> 0:02:10.679 and they have not been smoking. We've seen smoking rates 0:02:10.720 --> 0:02:13.919 decline among kids. But it's been, you know, really scary 0:02:14.160 --> 0:02:18.200 to see this epidemic of vaping among young people. And um, 0:02:18.240 --> 0:02:22.200 there are health effects. As you say, it appears that, UM, 0:02:22.600 --> 0:02:28.920 kids who do vape go on to to their unhealthy behavior. 0:02:29.720 --> 0:02:32.080 We want to keep these products out of the hands 0:02:32.080 --> 0:02:34.360 of kids. Yeah, Jenny, I wanted to go back to 0:02:34.440 --> 0:02:38.320 that idea you just said about how if you're trying 0:02:38.320 --> 0:02:41.480 to quit actual smoking cigarettes, that that vaping is not 0:02:41.600 --> 0:02:43.760 the best route because I remember years ago, and maybe 0:02:43.760 --> 0:02:45.600 it was just a marketing thing, but that seemed to 0:02:45.600 --> 0:02:47.959 be sort of the appeal of vaping, that it it 0:02:48.000 --> 0:02:51.040 wasn't as dangerous as cigarette smoking and a good way 0:02:51.080 --> 0:02:53.440 to sort of wean yourself off of that has has 0:02:53.480 --> 0:02:57.440 the research sort of debunked that notion completely. Yeah, that's 0:02:57.440 --> 0:03:00.960 a good question, Mike, And UM, it is hard to 0:03:01.040 --> 0:03:04.600 quit smoking, but it's the most you know, important thing 0:03:04.639 --> 0:03:07.359 you can do for your health, and so nothing is 0:03:07.400 --> 0:03:12.400 going to be as harmful cigarettes. Um. The research is 0:03:12.480 --> 0:03:18.600 still nascent to whether you know how helpful SIGs are. Um, 0:03:18.800 --> 0:03:23.320 they're randomized trials. They see that in certain conditions they 0:03:23.400 --> 0:03:28.600 might improve smoker's chances of quitting. So I think that 0:03:29.040 --> 0:03:32.280 at this point, if you're a cigarette smoker, you've tried 0:03:32.360 --> 0:03:37.240 other FDA approved methods for quitting, whether it's nicotine replacement 0:03:37.280 --> 0:03:41.200 therapy or some various drugs, and they have not worked. 0:03:41.680 --> 0:03:44.280 These cigarettes might work for you, and it's worth to try. 0:03:44.280 --> 0:03:46.720 It's not going to be as harmful as your cigarettes, 0:03:46.760 --> 0:03:49.960 but you won't completely You want to get up cigarettes 0:03:50.280 --> 0:03:53.480 UM and move e cigarettes and then eventually quit the 0:03:53.520 --> 0:03:58.160 e cigarettes. Alright, So the FDA ban on Jewels vaping 0:03:58.200 --> 0:04:01.480 products UM the market the United States, Is it having 0:04:01.520 --> 0:04:07.400 an impact? Good questions? So actually there's an administrative day 0:04:07.440 --> 0:04:10.720 on the f SPAN on Jewel UM. This is you know, 0:04:10.800 --> 0:04:15.000 it's UM. The f d A is re reviewing the 0:04:15.080 --> 0:04:20.760 materials that Jewel submitted to make a determination of whether 0:04:20.839 --> 0:04:25.520 these products can stay on the market or not. But 0:04:25.520 --> 0:04:31.880 but the FDA is reviewing UM marketing stations for actually 0:04:32.000 --> 0:04:36.320 millions of the cigarettes and liquids. They've made determinations on 0:04:36.360 --> 0:04:38.520 a number of them, and we are going to be 0:04:38.640 --> 0:04:42.640 seeing that countrying. We're not going to be seeing as 0:04:42.720 --> 0:04:47.560 many brands on the on the market if youre UM 0:04:48.360 --> 0:04:51.680 spers as well, UM. But that's still in progress. So 0:04:51.720 --> 0:04:55.839 with Jewel Um, you know that's that's certainly a one. 0:04:56.760 --> 0:04:59.440 Products are still on the market at this time during 0:04:59.480 --> 0:05:03.640 the administer strait of stay on the ruling. And is 0:05:03.680 --> 0:05:06.400 there do you think there's any path for jewel to 0:05:06.400 --> 0:05:09.480 to bring these products back to market? You know, I'm 0:05:09.480 --> 0:05:12.760 assuming they're fighting uh in court and everything. Is there 0:05:12.760 --> 0:05:15.520 a concern that all you know, some court might uh 0:05:16.000 --> 0:05:19.679 sort of put them back in business. Well, it depends, 0:05:19.720 --> 0:05:22.680 I think. You know, there were a lot of, um, 0:05:23.120 --> 0:05:28.120 hypothetically great things about Jewel UM, and potentially the hope 0:05:28.200 --> 0:05:31.240 is that they can deliver the nick in a way 0:05:31.279 --> 0:05:36.240 that cigarette smokers find appealing, UM, so that they can 0:05:36.240 --> 0:05:40.280 switch completely to UH cigarettes and get off their cigarettes. 0:05:40.920 --> 0:05:45.960 There's that hope. No, please finish, forgive me, I don't know. UM. Yeah, 0:05:46.080 --> 0:05:48.480 So I think you know what jewel has to do 0:05:48.520 --> 0:05:52.160 is show that their products are um, you know, going 0:05:52.200 --> 0:05:55.640 to benefit the pump the pub off, that they're not 0:05:55.720 --> 0:05:59.640 going to attract kids to you, and that they are 0:06:00.120 --> 0:06:03.520 you know, not going to create additional harms for cigarette smokers. 0:06:03.520 --> 0:06:07.719 There were some concerns in them in their application that 0:06:07.839 --> 0:06:13.680 potentially UM there were some met some some toxicological conce 0:06:13.760 --> 0:06:18.839 with the application. But there, you know, potentially h Jewel 0:06:19.000 --> 0:06:22.560 can get over those and if they are ethical and 0:06:22.640 --> 0:06:27.120 not marketing to kids um and focusing on the market 0:06:27.279 --> 0:06:30.920 that could potentially truly benefit from their products. I think 0:06:31.839 --> 0:06:35.640 there's a possibility that that they can do good. All right, 0:06:35.640 --> 0:06:37.920 We're gonna leave it on that note. Dr Joanna Cohen, 0:06:38.000 --> 0:06:40.800 thank you so much, Director of the Institute for Global 0:06:40.839 --> 0:06:43.920 Tobacco Control at Johns Hopkins Bloomberg School of Public Health, 0:06:43.920 --> 0:06:46.640 of course, supported by Michael R. Bloomberg, founder of Bloomberg 0:06:47.120 --> 0:06:49.800 LP and Bloomberg Philanthropy. She was joining us on the 0:06:49.800 --> 0:06:53.120 phone from Baltimore. Keep in mind, Jewel just created, you know, 0:06:53.520 --> 0:06:56.000 roughly a decade or so ago, so not such a 0:06:56.000 --> 0:06:58.240 long time ago, I think even under a decade, and 0:06:58.320 --> 0:07:00.160 so it's interesting to see kind of the rise and 0:07:00.160 --> 0:07:03.200 fall of something like this. Absolutely, and I think Carol, 0:07:03.240 --> 0:07:05.600 we can all agree there's there's nothing as nasty as 0:07:05.600 --> 0:07:10.040 actually chewing tobacco, I think. So this is Bloomberg Business 0:07:10.160 --> 0:07:13.960 Week with Carol Masser and Bloomberg Quick Takes Tim Stenovic 0:07:14.400 --> 0:07:18.040 on Bloomberg Radio. One of the stories that is certainly 0:07:18.040 --> 0:07:19.800 getting a lot of a tension on the Bloomberg is 0:07:19.800 --> 0:07:22.960 today's Bloomberg Big Take. It's must read, as determined by 0:07:22.960 --> 0:07:26.000 our editorial team here at Bloomberg. It's about how renters 0:07:26.040 --> 0:07:29.120 across cities and income brackets are really struggling to find 0:07:29.120 --> 0:07:31.000 new homes or pay for the ones that they already 0:07:31.040 --> 0:07:33.920 live in. Let's get more with Bloomberg News US Economy 0:07:33.920 --> 0:07:38.520 reporter Maria Paulo Paula Jas Torres. She's with us in 0:07:38.520 --> 0:07:41.200 our Bloomberg Interactive Broker studio. You would think, as I 0:07:41.240 --> 0:07:43.480 said to you, my million years of Spanish would make 0:07:43.520 --> 0:07:46.600 me better with pronunciations, but um, we're so glad to 0:07:46.600 --> 0:07:48.960 have you here with us. Uh. Maria talked to us 0:07:48.960 --> 0:07:50.920 about this story because I do think when it comes 0:07:50.960 --> 0:07:54.600 to inflation prints we're watching the different components of the 0:07:54.600 --> 0:07:57.880 inflationary pressures. Some are coming down when it comes to 0:07:57.920 --> 0:08:01.840 shelter not so much so. Yesterday in the CPI report, 0:08:02.480 --> 0:08:05.200 random shelter was the number that was hiking up the most, 0:08:05.440 --> 0:08:08.720 And in this story, we just got to show the 0:08:08.800 --> 0:08:11.760 stories behind that. So in a lot of cities in 0:08:11.800 --> 0:08:13.880 the US, not only the ones we know, you know, 0:08:14.080 --> 0:08:16.840 New York, in California, but in many other places here 0:08:16.880 --> 0:08:22.720 we talk in Las Vegas, Atlanta, Phoenix, Miami, twoson um 0:08:23.280 --> 0:08:27.240 places where rent usually wasn't as expensive now it's very 0:08:27.280 --> 0:08:30.520 expensive that not even locals can afford it, and their 0:08:30.280 --> 0:08:33.720 fear in eviction and facing a lot of challenges, you know, 0:08:33.760 --> 0:08:37.560 with how essential living is. How much have they got 0:08:37.679 --> 0:08:43.080 up a lot. Yes, it's the first time that in 0:08:43.120 --> 0:08:46.760 a while that the media and rent is two thousand dollars, 0:08:46.840 --> 0:08:50.960 and we we saw how it was a huge, a 0:08:51.120 --> 0:08:56.960 huge um hike for for the typical American. Is well, 0:08:56.960 --> 0:09:00.240 we talked about right like we're talking about energy says, 0:09:00.240 --> 0:09:03.439 we're talking about food prices. But when we think about it, right, my, 0:09:03.559 --> 0:09:05.520 I think about it when I'm making my mortgage payment, 0:09:05.640 --> 0:09:09.040 like it's a big chump chunk of change. And if 0:09:09.080 --> 0:09:11.920 you're renting the same thing that rental prices because so 0:09:12.000 --> 0:09:15.720 many Americans cannot afford to actually buy homes, those rental 0:09:15.760 --> 0:09:18.400 prices have gone up. But overall, shelter is such a 0:09:18.440 --> 0:09:22.760 big part of what every American pays on a regular basis. Yeah, 0:09:22.880 --> 0:09:25.640 and that's exactly what we wanted to focus this story 0:09:25.679 --> 0:09:30.120 on rents because um, the housing market is very it's 0:09:30.120 --> 0:09:32.440 a very hot topic right now. Because it's a heart market. 0:09:32.600 --> 0:09:35.600 But not a lot has been done on rents either, 0:09:35.640 --> 0:09:38.880 and they're sloppering a lot, renting a slfering a lot. Yeah, 0:09:39.000 --> 0:09:41.240 I think shelter is something like a third of CPI. 0:09:41.400 --> 0:09:43.640 So even if you're not worried about making rent, if 0:09:43.679 --> 0:09:46.560 you're a market person worried about inflation, it's just the 0:09:46.640 --> 0:09:50.000 most important thing in inflation. But Maria, I'm wondering, you know, 0:09:50.200 --> 0:09:53.240 we tend to focus on the inflation problem in the 0:09:53.360 --> 0:09:56.680 US a lot, uh politically, it's it's just a big 0:09:56.840 --> 0:10:00.600 hot topic. Um, But really inflation is a globe problem, 0:10:00.600 --> 0:10:04.360 and I'm wondering, is this problem with rising rents is 0:10:04.440 --> 0:10:06.720 that also a global problem? And is the U s 0:10:06.720 --> 0:10:09.360 sort of uh in the same boat as the rest 0:10:09.400 --> 0:10:11.199 of the world or is it worse here you know, 0:10:11.280 --> 0:10:15.320 house this situation globally Yeah, Well, other countries are also 0:10:15.320 --> 0:10:17.720 struggling a lot with rent I know in Australia. And 0:10:17.800 --> 0:10:22.160 we lead a stephonomic episode on this article that came 0:10:22.200 --> 0:10:25.160 out two weeks ago, and we were talking also another 0:10:25.200 --> 0:10:28.480 global issues, but here we got to focus mostly in 0:10:28.520 --> 0:10:31.920 the US because we saw in a Census beer survey 0:10:32.440 --> 0:10:35.280 that it was the biggest number in a while. Eight 0:10:35.280 --> 0:10:38.120 point five million Americans weren't able to pay their month 0:10:38.280 --> 0:10:41.199 to the more the monthly rent in June and July. 0:10:41.480 --> 0:10:43.800 So that's the biggest number we've seen you in a 0:10:43.840 --> 0:10:46.840 long time. And it's a concerning issue here in the state, 0:10:46.920 --> 0:10:49.400 especially because a lot of people moved to you know, 0:10:49.480 --> 0:10:53.480 CDs that have more calorious climates during the pandemic and uh, 0:10:53.520 --> 0:10:57.199 you know, headquarters moved and that cost places like Atlanta 0:10:57.240 --> 0:10:59.839 and Miyeah me to get hired amen of rents and 0:11:00.200 --> 0:11:02.680 the locals now cannot afford it. Well, that's what I wonder. 0:11:03.000 --> 0:11:05.640 I know, just from my own family anecdotally, there's I've 0:11:05.640 --> 0:11:08.000 had a lot of members moved down south because they 0:11:08.000 --> 0:11:10.760 can do flex working. Their employees don't care where the 0:11:10.800 --> 0:11:14.400 heck um they are living, and they're looking for places 0:11:14.400 --> 0:11:17.440 where there's lower taxes, maybe warmer climates. How is that 0:11:17.559 --> 0:11:21.439 also led to some of these imbalances and higher rental prices. Yeah, 0:11:21.480 --> 0:11:24.640 that's one of the reasons that the man has increased 0:11:24.679 --> 0:11:27.440 and the prices have increased. But also this is the 0:11:27.520 --> 0:11:30.880 first time since the pandemic that a lot of renters 0:11:30.960 --> 0:11:34.840 are left without the moratoria that allow them to, you know, 0:11:35.360 --> 0:11:37.760 be more flexible when they received the same amount of 0:11:37.800 --> 0:11:41.240 income during the pandemic. Um. So it's the sum of 0:11:41.240 --> 0:11:43.040 a lot of things. Is the the end of the 0:11:43.080 --> 0:11:45.920 moratoria terms? Is the inflation that we're seeing is the 0:11:46.040 --> 0:11:49.960 high demand for people moving south. So everything ones like 0:11:50.080 --> 0:11:52.320 k Rendal Siding in the article we quote her is 0:11:52.320 --> 0:11:54.800 a perfect story for renders right now. You know, Maria, 0:11:54.840 --> 0:11:56.480 I was reading the story and I was thinking back 0:11:56.520 --> 0:11:58.360 two years ago in New York, there was a guy 0:11:58.360 --> 0:12:01.000 who tried to start a political party, Carol. You might remember, 0:12:01.040 --> 0:12:03.960 it's called the Rent is Too damn High. They didn't 0:12:03.960 --> 0:12:06.240 get very far with that political party. But it does 0:12:06.320 --> 0:12:09.440 make me think, you know, is there is there any 0:12:09.440 --> 0:12:11.880 signs of a political backlash about this? Is there any 0:12:11.920 --> 0:12:14.480 sort of pressure being put on on the politicians to 0:12:14.600 --> 0:12:17.320 solve this issue? Um? I would love to hear that. 0:12:17.360 --> 0:12:20.200 I would love to see if there's another meme that 0:12:20.240 --> 0:12:23.719 comes out of this issue. Um. When we took out 0:12:23.760 --> 0:12:26.280 the podcast two weeks ago, that was one one of 0:12:26.320 --> 0:12:30.520 the editors tweeted out the rams to them high. But um, 0:12:30.600 --> 0:12:33.360 it would be definitely an issue to watch in these 0:12:33.360 --> 0:12:36.360 new mid term elections. That makes any kind of impact. 0:12:36.400 --> 0:12:40.120 But so far, what we've seen most is people advocating 0:12:40.200 --> 0:12:43.839 for it and other issues like, um, how these rent 0:12:43.960 --> 0:12:46.760 people cannot afford the rent there that the manage increasing. 0:12:46.840 --> 0:12:50.599 People are constructing new condos um that you know, I 0:12:50.760 --> 0:12:52.640 don't need to be builble, but they're only being built 0:12:52.679 --> 0:12:57.160 because they're targeting the new audiences moving in that needs 0:12:57.160 --> 0:13:01.040 like fancier apartments. So that's in women started saying it's 0:13:01.080 --> 0:13:04.280 more social than political. Alright. Well, our on air UM 0:13:04.400 --> 0:13:08.720 whisperer Ariel Agami, our producer of our YouTube show, said 0:13:08.720 --> 0:13:10.680 it was Jimmy McMillan who went out there and said, 0:13:10.679 --> 0:13:12.920 read that's right. How can I forget that name? I 0:13:12.960 --> 0:13:16.080 don't know, but all right man, he just like closes in. Maria, 0:13:16.160 --> 0:13:18.240 thank you so much. Really appreciate the Bloomberg big take. 0:13:18.360 --> 0:13:27.040 Check it out on the Bloomberg terminal. I'm brooom journal. Yeah, 0:13:27.080 --> 0:13:33.520 but you let me drive? No, no, no, honey, I'll gravel. 0:13:34.720 --> 0:13:43.120 I want to drive. It's good question. Drive is the 0:13:43.280 --> 0:13:50.160 drive to the clothes on Bloomberg Radio. It is time 0:13:50.200 --> 0:13:53.600 to drive towards the clothes. It is Thursday, August eleventh, 0:13:53.600 --> 0:13:55.040 and we've just got about it. Ten and a half 0:13:55.040 --> 0:13:57.840 minutes left in today's trading session. Charlie breaking down those 0:13:57.920 --> 0:14:00.680 numbers the equity side of things. We are just coming 0:14:00.720 --> 0:14:02.440 off our loads of this session, but we're seeing it 0:14:02.440 --> 0:14:04.719 across the board. Little changes though on the SMP and Dow. 0:14:05.040 --> 0:14:07.599 Really the NASTAC the underperformer. So let's get to it 0:14:07.600 --> 0:14:10.640 with Axel Murk, President and chief investment officer at the 0:14:10.679 --> 0:14:14.160 investment advisory Formerk Investments. He joins us on the phone 0:14:14.160 --> 0:14:16.960 from San Francisco. Axels so great to be talking with you. 0:14:17.000 --> 0:14:20.840 It's been a while. Um, you do focus on macro trends. 0:14:20.880 --> 0:14:23.760 What are the top macro trends that you are focusing 0:14:23.800 --> 0:14:26.720 on in today's environment? When I feel like there's a 0:14:26.800 --> 0:14:30.600 lot of them, but there's a couple of really big ones. Yeah. 0:14:30.600 --> 0:14:34.200 I think cat hurting is a technical I like that 0:14:34.280 --> 0:14:37.360 on these days we have all these teenagers that that 0:14:37.440 --> 0:14:39.840 called the market and all the tas de fedd. I mean, 0:14:39.960 --> 0:14:43.640 what what what we have is we we've had high inflation, 0:14:43.840 --> 0:14:46.400 and I think what I what everybody is trying to 0:14:46.440 --> 0:14:49.760 do is they try to put this into the linear models, saying, oh, 0:14:49.880 --> 0:14:51.960 if we just high crates or if we just do 0:14:52.120 --> 0:14:55.800 this um. What I think people have to realize is 0:14:55.840 --> 0:15:00.680 that once inflation is high, we have created unstable dynamics 0:15:00.760 --> 0:15:02.800 and so and that's why everybody is so confused. That's 0:15:02.800 --> 0:15:04.440 why the mark goes up one day, then goes down 0:15:04.520 --> 0:15:06.960 one day, and every day we we changed the tune 0:15:07.000 --> 0:15:09.120 of what it's all about. And and now we think, 0:15:09.120 --> 0:15:11.040 oh my god, the inflation is low, so everything is 0:15:11.040 --> 0:15:12.920 going to be fine, but it will be fine for 0:15:12.960 --> 0:15:15.320 a few weeks, maybe a few months, and then guess what, 0:15:15.480 --> 0:15:18.000 another inflation print is going to be hind And and 0:15:18.080 --> 0:15:20.080 so that's the sort of and if you're asking me 0:15:20.120 --> 0:15:22.520 with the big trends I'm watching. While I'm obviously watching 0:15:22.520 --> 0:15:26.080 the economic development, I'm watching them, I'm watching what inflation 0:15:26.160 --> 0:15:30.400 is gonna do. But also I'm watching human nature. We've 0:15:30.400 --> 0:15:33.040 had folks like Bananchi right in editorials that we are 0:15:33.080 --> 0:15:36.080 so much smarter than the nineties seventies. Yes we are, 0:15:36.200 --> 0:15:38.880 but it's human nature. And so when inflation comes down 0:15:38.920 --> 0:15:41.680 a little bit, okay, you take the you take the 0:15:41.680 --> 0:15:44.560 sledgeham away a little bit, right, But it's if we 0:15:44.680 --> 0:15:46.840 have this unstable dynamic, and I think that's what we 0:15:47.280 --> 0:15:50.400 really have to just accept and and try to moddel 0:15:50.440 --> 0:15:54.360 through accel. One word that's obviously being thrown around a 0:15:54.360 --> 0:15:57.520 lot in this environment is stagflation. And I know your 0:15:57.520 --> 0:16:01.200 firm launched a stagflation et F to murk stagflation e 0:16:01.360 --> 0:16:04.520 t F to ticker stg F. Talk to us about 0:16:04.680 --> 0:16:09.000 that strategy. How does that et F specifically sort of 0:16:09.520 --> 0:16:12.600 invest in a stagflation area environment? And and how in 0:16:12.680 --> 0:16:16.320 general should investors think about investing when there's stagflation like 0:16:16.320 --> 0:16:21.280 we're seeing. We looked at what happens when when inflation 0:16:21.320 --> 0:16:24.160 expectations move higher, and obviously we only have the nineties 0:16:24.240 --> 0:16:27.240 seventies economy is kind of a little different, but stocks 0:16:27.320 --> 0:16:30.160 on a on a real basis didn't perform so well. 0:16:30.200 --> 0:16:32.520 Ideally you want to invest in the CPI, but you 0:16:32.600 --> 0:16:34.760 can't do that directly. So what we invest in We 0:16:34.800 --> 0:16:37.680 have a heavyweighting in tips, and then we invest in 0:16:37.760 --> 0:16:40.760 old on oil gold in real estate and have a 0:16:40.800 --> 0:16:44.760 trend following methodology in oil golden real estate because that's 0:16:44.760 --> 0:16:48.560 sort of trend methodor Pollo methodology worked well in staclationary environments. 0:16:49.080 --> 0:16:51.400 And and net what you want to do, you want 0:16:51.400 --> 0:16:53.320 to have something and at least the way that we 0:16:53.400 --> 0:16:57.320 designed it that is a substitute to potential bond a 0:16:57.400 --> 0:17:02.080 location as that sort of volatility, but has the opportunity 0:17:02.080 --> 0:17:05.040 that in the stagflation environment gives you an extra kicker, 0:17:05.280 --> 0:17:08.000 whereas in a in a normal environment behave more like 0:17:08.000 --> 0:17:10.560 like a like a bomb might. And so we're trying 0:17:10.600 --> 0:17:12.600 to bridge that. And I think this is the first, 0:17:12.640 --> 0:17:14.480 though I know it's the first staclation team d CAP 0:17:14.560 --> 0:17:17.320 in the market. It's it's a tool for the toolbox 0:17:17.359 --> 0:17:20.119 of investors. I'm not going to replace everything else, but 0:17:20.240 --> 0:17:22.320 we believe it's a it's a diversified that people want 0:17:22.359 --> 0:17:24.240 to look at. Excell when it comes to macron Any 0:17:24.400 --> 0:17:26.919 asked about that initially, what what key things might you 0:17:26.960 --> 0:17:30.080 be focusing on. Is it possible should we concede at 0:17:30.119 --> 0:17:34.240 some point that we can actually have persistently higher inflation, 0:17:34.320 --> 0:17:38.399 maybe not eight nine percent that's manageable. Maybe we need 0:17:38.440 --> 0:17:41.440 to rethink that it needs to be three to four percent, 0:17:41.840 --> 0:17:44.320 but that we can do it still with jobs growth 0:17:44.400 --> 0:17:46.639 and ultimately some economic growth. Do we need to kind 0:17:46.680 --> 0:17:50.320 of rethink our economic model, perhaps, especially as we see 0:17:50.359 --> 0:17:53.280 a turnback on globalization. Mike and I were just talking 0:17:53.320 --> 0:17:57.880 about near shoring or you know, more manufacturing coming home. 0:17:57.960 --> 0:18:00.120 Certainly here in the United States, do we need to 0:18:00.160 --> 0:18:05.119 rethink our metrics that describe kind of an okay and 0:18:05.280 --> 0:18:10.600 stable economy. Well, first of all, even when VOLCA got 0:18:10.680 --> 0:18:12.960 inflation out of control, we didn't go right back down 0:18:13.000 --> 0:18:15.960 to two percent and lived happily ever after. And so 0:18:16.119 --> 0:18:18.240 we have to keep in mind that this is going 0:18:18.280 --> 0:18:21.560 to be a process. The the challenges really is whether 0:18:21.600 --> 0:18:23.679 the FETE is going to lose focus too much. We 0:18:23.680 --> 0:18:25.879 in the seventies we have to stop and go economics. 0:18:25.920 --> 0:18:27.879 THEFT says no, they're not going to do this, meaning 0:18:27.960 --> 0:18:30.959 that the moment that the economy slowed down, they stopped 0:18:30.960 --> 0:18:33.119 and so forth. And that's where I mentioned the human 0:18:33.160 --> 0:18:36.000 factor is so important. The theory is one thing, but yes, 0:18:36.080 --> 0:18:38.160 what are you going to be satisfied with by all means? 0:18:38.400 --> 0:18:41.160 We have lots of lots of tail winds have turned 0:18:41.160 --> 0:18:44.520 into headwinds. Be the globalization to move from just in 0:18:44.600 --> 0:18:48.640 time production, just in case production, um, the Ukrainian War 0:18:48.720 --> 0:18:53.000 is I believe the symptom of less stability globally. Everybody's 0:18:53.000 --> 0:18:56.119 gonna invest more in military defense, and that means budget 0:18:56.119 --> 0:18:59.560 deficit is going to continue to be high. Um. A 0:18:59.640 --> 0:19:02.400 lot of the and and a lot of the the 0:19:02.400 --> 0:19:06.280 the the benefits we had from globalization, um in reverse 0:19:06.640 --> 0:19:09.680 when it comes to to inflation anyway, and and so yes, 0:19:09.800 --> 0:19:12.119 and it's going to be higher. But the Federals obviously 0:19:12.119 --> 0:19:13.920 has a job to do, and the question is whether 0:19:14.000 --> 0:19:16.800 they'll do it or not. At this stage, the only 0:19:16.840 --> 0:19:18.960 thing that the power FET has admitted is that the 0:19:19.000 --> 0:19:21.160 models have been wrong. UM. I think it was Larry 0:19:21.160 --> 0:19:23.239 Summers who said we need a new approach. They need 0:19:23.280 --> 0:19:26.560 to throw out this backward looking methodology they they they 0:19:26.600 --> 0:19:28.920 introduced and all kinds of other things, and we may 0:19:28.920 --> 0:19:31.040 need a new FET chair for that. And that's not 0:19:31.160 --> 0:19:33.280 on the horizon. So I don't think we're gonna get 0:19:33.320 --> 0:19:35.760 to something, um that's going to be more stable in 0:19:35.760 --> 0:19:38.119 the long run, for for quite a while. Act. So, 0:19:38.160 --> 0:19:42.200 I'm curious what you think about this legislation in Washington, 0:19:42.280 --> 0:19:46.280 the Inflation Reduction Act. It obviously focuses a lot on 0:19:46.440 --> 0:19:49.959 green energy. What are some of the market implications for 0:19:50.000 --> 0:19:53.879 this bill in your opinion? Well, yesterday's low inflation print 0:19:54.119 --> 0:19:56.920 was clear proof that the Inflation Reduction Act has a 0:19:56.960 --> 0:20:00.840 full impact already. And I'm saying that's gonna ye points right. 0:20:01.080 --> 0:20:03.440 I mean, these they they they come up with these 0:20:03.480 --> 0:20:07.160 fancy names. Obviously there is no direct impact on inflation 0:20:07.480 --> 0:20:09.520 many of these the impacts is no longer run, but 0:20:09.560 --> 0:20:11.800 it has a nice name. When it comes to green 0:20:11.840 --> 0:20:14.240 technology that the one thing I would like to just 0:20:14.359 --> 0:20:17.280 point out is everybody wants to turn green, and nobody 0:20:17.320 --> 0:20:19.359 knows where all these these minerals come from. That you 0:20:19.440 --> 0:20:22.840 need fallow batteries and whatnot, and so on that end. Anyway, 0:20:22.840 --> 0:20:24.840 I'm not suggesting the overall CPI is going to be 0:20:24.960 --> 0:20:27.399 high for that matter, but but turning everything green is 0:20:27.440 --> 0:20:30.080 gonna be expensive. Now, obviously the cost of some stuff 0:20:30.160 --> 0:20:34.040 is coming down. But ultimately this it's it's a political 0:20:34.119 --> 0:20:38.439 thing to call it inflation reduction Act. The actual implication 0:20:38.600 --> 0:20:40.800 is is obviously we're not doling out checks as much 0:20:40.840 --> 0:20:42.879 anymore as we used to. They do another part of 0:20:42.920 --> 0:20:44.960 the world, the Germans want to give yet another stimulus. 0:20:45.000 --> 0:20:48.160 When you give a check but supply is correct, trained 0:20:48.480 --> 0:20:50.760 then you have a problem. And that's really why why 0:20:50.880 --> 0:20:53.080 is the acculation lasts for a while, Because the politically 0:20:53.160 --> 0:20:55.760 right thing to do is the economically wrong thing to do. Yeah, 0:20:55.920 --> 0:20:58.240 makes a lot of sense Um gotta run. Great to 0:20:58.520 --> 0:21:01.360 hear from you again. Act Soll Murk. He's President, chief 0:21:01.359 --> 0:21:04.359 investment officer over at Murk Investments, joining us on the 0:21:04.440 --> 0:21:08.880 phone from San Francisco. Thanks for listening to Bloomberg Business Week. 0:21:09.000 --> 0:21:12.600 Download the podcast on iTunes, SoundCloud, or Bloomberg dot com, 0:21:12.600 --> 0:21:14.280 and you can also listen to our radio show at 0:21:14.280 --> 0:21:16.879 two pm Eastern on Bloomberg Radio or watch us on 0:21:16.920 --> 0:21:18.920 YouTube search Bloomberg Global News.