1 00:00:00,080 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:11,960 --> 00:00:15,560 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 3 00:00:15,600 --> 00:00:18,960 Speaker 2: with Paul Sweeney. Join us each day for insight from 4 00:00:18,960 --> 00:00:23,119 Speaker 2: the best in economics, finance, investment, and international relations. You 5 00:00:23,160 --> 00:00:26,520 Speaker 2: can also watch the show live on YouTube. Visit the 6 00:00:26,520 --> 00:00:31,280 Speaker 2: Bloomberg Podcast channel on YouTube to see the show weekday 7 00:00:31,280 --> 00:00:34,320 Speaker 2: mornings from seven to ten am Eastern from our global 8 00:00:34,360 --> 00:00:39,000 Speaker 2: headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 9 00:00:39,360 --> 00:00:42,920 Speaker 2: or anywhere else you listen and always I'm Bloomberg Radio, 10 00:00:43,080 --> 00:00:47,040 Speaker 2: the Bloomberg Terminal, and the Bloomberg Business app right now. 11 00:00:47,040 --> 00:00:49,680 Speaker 2: And we have all sorts of side agreements with our guests. 12 00:00:49,800 --> 00:00:53,200 Speaker 2: I mean, you know, there's like sensitive issues between UNC 13 00:00:53,400 --> 00:00:56,120 Speaker 2: and Duke guests and all that. With Paul, one of 14 00:00:56,160 --> 00:00:59,160 Speaker 2: the things we have is David Rosenberg will not come 15 00:00:59,200 --> 00:01:03,240 Speaker 2: on unless the Toronto Maple Leafs lose joining us now. 16 00:01:03,520 --> 00:01:07,639 Speaker 2: David Rosenberg of course Montreal Canadians fan. He is based 17 00:01:07,640 --> 00:01:10,479 Speaker 2: in Toronto in the Foreign Lands, and he joins us. 18 00:01:10,400 --> 00:01:14,840 Speaker 3: From Rosenberg Research. David, is disinflation still in place? 19 00:01:15,760 --> 00:01:19,840 Speaker 4: Well, I do believe that the trend towards lower inflation 20 00:01:20,280 --> 00:01:25,319 Speaker 4: is intact, notwithstanding what happened in January, which seems to 21 00:01:25,360 --> 00:01:29,560 Speaker 4: be to be quite a bit of early year noise, 22 00:01:30,280 --> 00:01:34,200 Speaker 4: you know, related to some specific idiosyncratic factors, you know, 23 00:01:34,280 --> 00:01:39,120 Speaker 4: auto insurance premiums, health insurance premiums. I'd say that, you know, Tom, 24 00:01:39,160 --> 00:01:41,360 Speaker 4: we talked about this last time, and we've talked about 25 00:01:41,360 --> 00:01:45,679 Speaker 4: it like almost forever, about how flawed a statistic the 26 00:01:45,760 --> 00:01:50,160 Speaker 4: CPI is when twenty seven percent of the index is 27 00:01:50,200 --> 00:01:56,400 Speaker 4: one question to a sample of homeowners, which is how 28 00:01:56,480 --> 00:01:58,800 Speaker 4: much do you think your home price? How much you 29 00:01:58,840 --> 00:02:02,000 Speaker 4: think you can brant your home your unicord for and 30 00:02:02,120 --> 00:02:06,680 Speaker 4: so you know that's the the owner's equivalent rant in 31 00:02:06,760 --> 00:02:11,080 Speaker 4: particular is an ongoing source of frustration for people like me. 32 00:02:11,200 --> 00:02:14,160 Speaker 4: But I do think that the overall trend okay, is 33 00:02:14,200 --> 00:02:14,920 Speaker 4: going to be intact. 34 00:02:15,160 --> 00:02:18,160 Speaker 2: David, you own the high ground on this to review 35 00:02:18,200 --> 00:02:20,040 Speaker 2: this quickly with a lack of time because Paul wants 36 00:02:20,080 --> 00:02:22,679 Speaker 2: to get in. There's a guy named Ferrell at merri 37 00:02:22,760 --> 00:02:24,480 Speaker 2: Lynch a few years ago, and he had this young 38 00:02:24,520 --> 00:02:28,200 Speaker 2: Turke named Rosenberg who owned the slicing and Dicing of inflation. 39 00:02:28,639 --> 00:02:33,400 Speaker 2: If you don't like CPI, what inflation series? David Rosenberg 40 00:02:33,440 --> 00:02:34,880 Speaker 2: should we pay attention. 41 00:02:34,600 --> 00:02:37,800 Speaker 4: To Well, you know what's interesting is that, you know, 42 00:02:37,919 --> 00:02:41,400 Speaker 4: in December, I think it was Governor Waller had said 43 00:02:41,400 --> 00:02:45,080 Speaker 4: that the FED was increasingly shifting its focus from you know, 44 00:02:45,160 --> 00:02:49,359 Speaker 4: the government data towards what business contacts we're telling them, 45 00:02:49,840 --> 00:02:52,800 Speaker 4: And you know, we're going to get the base book tomorrow, 46 00:02:52,960 --> 00:02:57,519 Speaker 4: and the last couple of base books have said decisively 47 00:02:57,919 --> 00:03:01,080 Speaker 4: that the corporate sector is seeing diminished power. The ability 48 00:03:01,080 --> 00:03:05,800 Speaker 4: to pass on cost increases has gone down materially. So 49 00:03:05,960 --> 00:03:07,960 Speaker 4: I think you have to. I mean, so much of 50 00:03:08,000 --> 00:03:12,040 Speaker 4: the CPI, even the PC deflator are imputed guesswork, They're 51 00:03:12,080 --> 00:03:15,880 Speaker 4: imputed pricing in the service sector. So I'd say turn 52 00:03:16,000 --> 00:03:18,200 Speaker 4: your attention to the things you can see, touch and 53 00:03:18,240 --> 00:03:22,520 Speaker 4: feel in the product sector. And when people say to me, well, 54 00:03:22,560 --> 00:03:25,519 Speaker 4: but you know all the disinflation's been in the good sector, well, 55 00:03:25,680 --> 00:03:28,720 Speaker 4: those are the prices you can actually have reliability on 56 00:03:28,800 --> 00:03:32,120 Speaker 4: as opposed to imputed services. My big concern is that 57 00:03:32,160 --> 00:03:35,600 Speaker 4: it's the service sector that the FED is most focused on, 58 00:03:36,000 --> 00:03:38,840 Speaker 4: and that is the most unreliable components you have within 59 00:03:38,880 --> 00:03:41,960 Speaker 4: the CPI and PC deflator. So I say, look at 60 00:03:42,040 --> 00:03:44,440 Speaker 4: the prices of the things you can see, touch and feel, 61 00:03:45,040 --> 00:03:49,560 Speaker 4: and they're actually in a deflationary momentum, and I expect 62 00:03:49,560 --> 00:03:51,280 Speaker 4: that that will persist over the next year. 63 00:03:51,920 --> 00:03:54,440 Speaker 5: So, David, this is a good week to be an economist. 64 00:03:54,520 --> 00:03:57,320 Speaker 5: Lots of economic data coming out this week, including we're 65 00:03:57,320 --> 00:03:59,600 Speaker 5: going to hear from FED Chairman Jpowe. Do you expect 66 00:03:59,600 --> 00:04:02,680 Speaker 5: the chairman into, I don't know, try to walk back 67 00:04:02,720 --> 00:04:05,560 Speaker 5: a little bit some of the December commentary. It seems 68 00:04:05,640 --> 00:04:08,480 Speaker 5: like the economic data is supporting just kind of waiting 69 00:04:08,480 --> 00:04:09,760 Speaker 5: here on rate cuts. 70 00:04:10,360 --> 00:04:12,960 Speaker 4: Well, firstly, it's always a great time to be an economist. 71 00:04:13,400 --> 00:04:16,800 Speaker 4: This makes no exception. We just have to fasten our 72 00:04:16,839 --> 00:04:20,159 Speaker 4: seatbelt and stay at our desks twenty four to seven. Look, 73 00:04:20,200 --> 00:04:24,000 Speaker 4: the Fed has already walked back that dubbishness in December, 74 00:04:25,240 --> 00:04:29,080 Speaker 4: and you know, the market's leapt on some you know 75 00:04:29,760 --> 00:04:32,440 Speaker 4: comment that I think Mary Daily made about that maybe 76 00:04:32,440 --> 00:04:35,000 Speaker 4: March would be the date, and of course then the 77 00:04:35,080 --> 00:04:37,920 Speaker 4: futures price in you know, six rate cuts, not three. 78 00:04:37,960 --> 00:04:40,600 Speaker 4: The Fed has successfully calibrated the market back to where 79 00:04:40,600 --> 00:04:44,440 Speaker 4: it was in December. I expect that I think he's 80 00:04:44,440 --> 00:04:48,520 Speaker 4: going to be pretty hawkish, and everybody is lined up 81 00:04:48,720 --> 00:04:52,000 Speaker 4: hawkish relative to where they were in December, and the 82 00:04:52,080 --> 00:04:54,240 Speaker 4: question is going to be will he sound more or 83 00:04:54,320 --> 00:04:57,479 Speaker 4: less hawkish than what's priced in right now? My big 84 00:04:57,520 --> 00:05:00,479 Speaker 4: concern actually, and this is coming from a on bull 85 00:05:00,640 --> 00:05:03,280 Speaker 4: and who would be ordinarily a dove on the FED, 86 00:05:03,320 --> 00:05:05,320 Speaker 4: I think he's going to sound pretty hawkish tomorrow. 87 00:05:06,200 --> 00:05:08,160 Speaker 5: How about the I mean, we're gonna get some data here. 88 00:05:08,200 --> 00:05:10,680 Speaker 5: I mean again a big data week here. You got 89 00:05:10,680 --> 00:05:12,720 Speaker 5: the payrolls on Friday. I mean, that's kind of one 90 00:05:12,760 --> 00:05:15,080 Speaker 5: of the issues for this market is the labor market's 91 00:05:15,080 --> 00:05:16,280 Speaker 5: been very strong here. 92 00:05:17,120 --> 00:05:19,119 Speaker 4: Well, look, if you bow down to the holy grail 93 00:05:19,200 --> 00:05:21,320 Speaker 4: of non farm payrolls, that's what you would believe. And 94 00:05:21,360 --> 00:05:23,400 Speaker 4: of course that's all the FED focus on as non 95 00:05:23,400 --> 00:05:25,839 Speaker 4: farm payrolls. And I've almost given up trying to forecast 96 00:05:25,920 --> 00:05:29,240 Speaker 4: the number because last year, last year, half of the 97 00:05:29,240 --> 00:05:31,120 Speaker 4: growth of non farm pay rolls didn't even come from 98 00:05:31,160 --> 00:05:33,600 Speaker 4: the survey. It came from the birth death model, where 99 00:05:33,600 --> 00:05:37,760 Speaker 4: we used to call the plug factor. But frankly, if 100 00:05:37,800 --> 00:05:41,040 Speaker 4: you look at the household survey and especially the contraction 101 00:05:41,160 --> 00:05:43,880 Speaker 4: and full time jobs over the past six months, yeah, 102 00:05:44,279 --> 00:05:47,000 Speaker 4: I mean, we're replacing part of full time jobs with 103 00:05:47,040 --> 00:05:49,760 Speaker 4: part time jobs. There's been practically no growth in the 104 00:05:49,800 --> 00:05:52,320 Speaker 4: household of survey over the course of the past half year. 105 00:05:52,360 --> 00:05:55,239 Speaker 4: If those survey you'll be thinking, this recession is probably 106 00:05:55,240 --> 00:05:56,719 Speaker 4: staring us in the face. The other thing I would 107 00:05:56,760 --> 00:06:01,159 Speaker 4: just mention is this, look at the divergence between the 108 00:06:01,240 --> 00:06:04,640 Speaker 4: non farm payroll headlines and the work week. The work 109 00:06:04,640 --> 00:06:07,400 Speaker 4: week is already back at recession levels. So I know, 110 00:06:07,480 --> 00:06:09,599 Speaker 4: I hear this all the time. The employment numbers, they're 111 00:06:09,760 --> 00:06:13,400 Speaker 4: robust economy. But actually you know, when you dig beneath 112 00:06:13,400 --> 00:06:18,000 Speaker 4: the veneer, even of the beloved payroll survey, and you 113 00:06:18,040 --> 00:06:21,080 Speaker 4: look at the hours worked, it's telling you something a 114 00:06:21,160 --> 00:06:23,440 Speaker 4: little more insidious that what was happening in the labor 115 00:06:23,480 --> 00:06:26,240 Speaker 4: market than what the current consensus narrative is. 116 00:06:26,520 --> 00:06:28,480 Speaker 3: David, you got to leave it there, David Rosenberg. I 117 00:06:28,480 --> 00:06:29,839 Speaker 3: don't want to go longer. We can't. 118 00:06:29,920 --> 00:06:33,400 Speaker 2: David Rosenberg at Rosenberg Research in Toronto, we got a 119 00:06:33,480 --> 00:06:36,120 Speaker 2: huge response when he's done. Thank you for the response 120 00:06:36,160 --> 00:06:36,440 Speaker 2: on it. 121 00:06:47,000 --> 00:06:47,880 Speaker 3: This is a joy. Right now. 122 00:06:47,880 --> 00:06:51,440 Speaker 2: I'm constant under with a senior advisor at Macro Policy Perspectives, 123 00:06:51,839 --> 00:06:54,520 Speaker 2: Paul wants to griller here on the domestic economy, which 124 00:06:54,520 --> 00:06:55,840 Speaker 2: is what we do with Diane swank. 125 00:06:56,240 --> 00:06:59,240 Speaker 3: But we ran into each other last night at the 126 00:06:59,240 --> 00:07:00,760 Speaker 3: council and four in relations. 127 00:07:02,120 --> 00:07:04,480 Speaker 2: You know, I sort of thought I should go by 128 00:07:04,520 --> 00:07:06,800 Speaker 2: and get some of the quality horse divorce that they 129 00:07:06,800 --> 00:07:08,479 Speaker 2: have at the CFR. 130 00:07:07,960 --> 00:07:08,800 Speaker 6: And that wine. 131 00:07:08,839 --> 00:07:09,920 Speaker 3: They'd be like, they'd be. 132 00:07:09,880 --> 00:07:13,480 Speaker 2: Like, yeah, well they serve at least yes, CFR served boons. 133 00:07:13,200 --> 00:07:14,800 Speaker 3: Fire last night. 134 00:07:15,560 --> 00:07:21,840 Speaker 2: But instead I got a pecked room with a riveting 135 00:07:22,280 --> 00:07:26,360 Speaker 2: Secretary of Commerce, the former governor of Rhode Island, Jeter Romando. 136 00:07:26,520 --> 00:07:33,280 Speaker 2: Her intensity surprised me on our new Pacific rim efforts. 137 00:07:33,680 --> 00:07:35,480 Speaker 2: I guess that's how I put it. What did you 138 00:07:35,560 --> 00:07:38,440 Speaker 2: take away from the comments of a Secretary of Commerce 139 00:07:38,520 --> 00:07:38,960 Speaker 2: last night? 140 00:07:39,440 --> 00:07:42,160 Speaker 1: Well, one that you know, this is an important region 141 00:07:42,240 --> 00:07:44,920 Speaker 1: for the US. There are you know, you look at 142 00:07:44,920 --> 00:07:49,760 Speaker 1: the demographics of India, Indonesia, the Philippines, Thailand, these are 143 00:07:49,800 --> 00:07:54,360 Speaker 1: all countries with highly favorable demographics. And then you look 144 00:07:54,400 --> 00:07:59,920 Speaker 1: at the the opportunities for workforce development. You know, India 145 00:08:00,360 --> 00:08:03,880 Speaker 1: is producing a huge number of engineers every year, right, 146 00:08:04,560 --> 00:08:08,240 Speaker 1: and you think about the future of where everything's going 147 00:08:08,280 --> 00:08:11,760 Speaker 1: with technology. The other thing that I felt was very 148 00:08:11,800 --> 00:08:14,360 Speaker 1: interesting is this is a public private partnership where the 149 00:08:14,400 --> 00:08:17,960 Speaker 1: governments to government relations give cover to make sure that 150 00:08:18,400 --> 00:08:21,360 Speaker 1: you don't have what do we call it an excessive 151 00:08:21,400 --> 00:08:24,280 Speaker 1: stroke of the pen risk? Right, So you have if 152 00:08:24,280 --> 00:08:26,000 Speaker 1: you're going to go in and invest in these countries, 153 00:08:26,000 --> 00:08:28,840 Speaker 1: that you have a little more durability and visibility. And 154 00:08:29,040 --> 00:08:31,520 Speaker 1: this public private partnership aspect means it's going to be 155 00:08:31,640 --> 00:08:33,400 Speaker 1: very difficult to dismantle this. 156 00:08:34,000 --> 00:08:35,280 Speaker 3: Yeah, it's really important. 157 00:08:35,320 --> 00:08:37,719 Speaker 2: Constant Hunter, thank you so much for that, paul I. 158 00:08:38,480 --> 00:08:41,080 Speaker 2: You know, I love when I have mild my radar down. 159 00:08:41,120 --> 00:08:43,840 Speaker 2: I'm really like, you know, it's okay, it's going to 160 00:08:43,840 --> 00:08:46,360 Speaker 2: be an event. Great Constant Hunters there, That alone is 161 00:08:46,400 --> 00:08:49,680 Speaker 2: worth it. Elizabeth Economy was there with their public service, 162 00:08:50,120 --> 00:08:53,480 Speaker 2: working with the Secretary at Connors and instead I got 163 00:08:53,520 --> 00:08:58,400 Speaker 2: a riviting Raymondo on the new approach to the Pacific RIM. 164 00:08:58,440 --> 00:08:59,920 Speaker 3: I don't know what it means the next three years out. 165 00:09:00,120 --> 00:09:01,960 Speaker 5: It was tangible concerts. And then that kind of brings 166 00:09:01,960 --> 00:09:03,520 Speaker 5: to the question that a lot of folks have, which 167 00:09:03,600 --> 00:09:06,720 Speaker 5: is what's going on with China and how do I 168 00:09:06,880 --> 00:09:09,000 Speaker 5: deal with China. It's almost like you talk to an 169 00:09:09,000 --> 00:09:11,440 Speaker 5: emerging market first and they're like, it's a big part 170 00:09:11,440 --> 00:09:14,199 Speaker 5: of my MSCI index, but a lot of folks say 171 00:09:14,240 --> 00:09:16,760 Speaker 5: it's uninvestable. How do you think about China when you 172 00:09:16,760 --> 00:09:17,920 Speaker 5: think about that part of the world. 173 00:09:18,559 --> 00:09:21,079 Speaker 1: Yeah, so it's interesting. I mean, so I'll just start 174 00:09:21,080 --> 00:09:24,400 Speaker 1: with this. When you look at the US when we 175 00:09:24,480 --> 00:09:27,480 Speaker 1: had our when the global financial crisis hit, so before that, 176 00:09:27,880 --> 00:09:31,920 Speaker 1: real estate was six percent of our GDP and the 177 00:09:32,480 --> 00:09:36,360 Speaker 1: recovery from that took over a decade. Okay, Now, if 178 00:09:36,440 --> 00:09:40,840 Speaker 1: we benchmark that six percent, real estate is twenty five residents, 179 00:09:40,920 --> 00:09:45,080 Speaker 1: really twenty five to thirty percent of China's GDP and 180 00:09:45,360 --> 00:09:47,959 Speaker 1: we're now, by the way, at three percent in the US. Right, 181 00:09:48,040 --> 00:09:50,640 Speaker 1: so let's say you cut that in half. It's going 182 00:09:50,679 --> 00:09:52,520 Speaker 1: to take at least a decade or two for them 183 00:09:52,559 --> 00:09:56,800 Speaker 1: to recover. You're looking at Japan is the preview movie, right, 184 00:09:57,200 --> 00:09:59,840 Speaker 1: it is the preview movie. And look how many years 185 00:10:00,080 --> 00:10:02,599 Speaker 1: took back to get back to the right level and there, 186 00:10:02,679 --> 00:10:04,719 Speaker 1: you know, to get back to previous highs in their 187 00:10:04,720 --> 00:10:07,920 Speaker 1: equity market. It's going to be very difficult for them 188 00:10:08,000 --> 00:10:09,520 Speaker 1: to make progress here. And I will just say this 189 00:10:09,559 --> 00:10:11,600 Speaker 1: about their GDP numbers. You know how they get those 190 00:10:11,640 --> 00:10:15,080 Speaker 1: GDP numbers. They revise the previous years. So the way 191 00:10:15,120 --> 00:10:17,200 Speaker 1: you can see what's going on is you can look 192 00:10:17,200 --> 00:10:20,520 Speaker 1: at China GDP as a percent of US GDP, and 193 00:10:20,559 --> 00:10:24,040 Speaker 1: you can look at that ratio and that continues to 194 00:10:24,679 --> 00:10:28,160 Speaker 1: go down, and so they are growing at a slower 195 00:10:28,160 --> 00:10:29,240 Speaker 1: pace than they say they are. 196 00:10:29,440 --> 00:10:31,120 Speaker 5: Yeah, it's just extraordinary. 197 00:10:31,160 --> 00:10:31,439 Speaker 3: I don't know. 198 00:10:31,520 --> 00:10:34,680 Speaker 5: Yeah, again, that gives you a great framework comparing it 199 00:10:34,720 --> 00:10:36,640 Speaker 5: to the US and great financial crisis. Let's bring it 200 00:10:36,679 --> 00:10:39,520 Speaker 5: back to here. I mean, we think about the US 201 00:10:39,640 --> 00:10:41,760 Speaker 5: economy and Tom and I We've talked about it with 202 00:10:41,920 --> 00:10:45,839 Speaker 5: various guests on this program. But seemingly the exceptionalism of 203 00:10:45,880 --> 00:10:49,400 Speaker 5: the US economy here relative to China, for example, relative 204 00:10:49,440 --> 00:10:54,640 Speaker 5: to European economies in the UK, maybe is that something 205 00:10:54,679 --> 00:10:58,800 Speaker 5: that can continue the US almost kind of exceptional versus 206 00:10:58,800 --> 00:10:59,720 Speaker 5: other parts of the world. 207 00:11:00,080 --> 00:11:02,560 Speaker 1: Well, and the reason that people are so uncertain about 208 00:11:02,559 --> 00:11:05,319 Speaker 1: this is because we don't fully understand productivity. 209 00:11:05,679 --> 00:11:05,760 Speaker 2: Right. 210 00:11:05,840 --> 00:11:09,200 Speaker 1: If we understood productivity, you would have governments adding a 211 00:11:09,280 --> 00:11:12,760 Speaker 1: cup of capital investment and a third of a cup 212 00:11:12,840 --> 00:11:16,400 Speaker 1: of R and D investment, and sprinkle on some education 213 00:11:16,760 --> 00:11:21,000 Speaker 1: and upskilling, and then voil, you'd have this productivity growth. Right, 214 00:11:21,080 --> 00:11:24,440 Speaker 1: So we're in this productivity surge. The question is how 215 00:11:24,480 --> 00:11:26,840 Speaker 1: long will it last and what is underpinning it? And 216 00:11:26,880 --> 00:11:30,360 Speaker 1: we see a number of things underpinning it. So just 217 00:11:30,440 --> 00:11:35,400 Speaker 1: the healing of supply chains helped reduce sand in the gears. 218 00:11:35,760 --> 00:11:39,360 Speaker 1: Then you have people resorting all through the pandemic into 219 00:11:39,440 --> 00:11:42,360 Speaker 1: jobs that were better fits for them. That improves productivity. 220 00:11:42,640 --> 00:11:44,480 Speaker 1: And on the flip side, now you have people staying 221 00:11:44,480 --> 00:11:45,280 Speaker 1: at jobs longer. 222 00:11:45,760 --> 00:11:47,559 Speaker 2: You and I tell you, she gave me a dissertation 223 00:11:47,640 --> 00:11:49,319 Speaker 2: last time. I learned more from her than I learned 224 00:11:49,360 --> 00:11:50,680 Speaker 2: from the Secretary of Commerce. 225 00:11:51,080 --> 00:11:52,000 Speaker 3: Cut to the chase. 226 00:11:52,160 --> 00:11:56,120 Speaker 2: You and Diane Swank have a fabulous holistic view of 227 00:11:56,160 --> 00:11:59,959 Speaker 2: the economy. If we get a productivity growth to steal 228 00:12:00,120 --> 00:12:02,000 Speaker 2: from the former president, is. 229 00:12:01,960 --> 00:12:03,439 Speaker 3: It morning in America? 230 00:12:03,640 --> 00:12:03,880 Speaker 2: Yes? 231 00:12:05,160 --> 00:12:07,240 Speaker 3: Why does so many of our listeners say no? 232 00:12:08,360 --> 00:12:11,400 Speaker 1: You know, it's it's hard to see it when you're 233 00:12:11,400 --> 00:12:14,760 Speaker 1: in the middle of it, I think, And you know, 234 00:12:14,960 --> 00:12:17,439 Speaker 1: there's also a great deal of uncertainty right now, right 235 00:12:17,600 --> 00:12:20,040 Speaker 1: people don't People don't know. Am I going to lose 236 00:12:20,080 --> 00:12:23,280 Speaker 1: my job because of AI? We You know, you look 237 00:12:23,320 --> 00:12:25,680 Speaker 1: at the deep fakes that are out there. It's becoming 238 00:12:25,760 --> 00:12:28,840 Speaker 1: harder to know what to trust, right And was it 239 00:12:28,880 --> 00:12:31,600 Speaker 1: Warren Buffett who said that trust is a really powerful 240 00:12:31,920 --> 00:12:33,200 Speaker 1: I'm probably misquoting him. 241 00:12:33,080 --> 00:12:36,120 Speaker 3: But you know, it's okay, You're allowed to do that. 242 00:12:36,720 --> 00:12:40,120 Speaker 1: It was either Munger or Buffett who said that trust 243 00:12:40,160 --> 00:12:42,240 Speaker 1: is the most powerful force in the universe. Right, and 244 00:12:42,280 --> 00:12:46,160 Speaker 1: so we're in a low trust environment and that to 245 00:12:46,200 --> 00:12:48,199 Speaker 1: me is the biggest risk to the economy. 246 00:12:48,800 --> 00:12:50,400 Speaker 5: How about this labor economy. We're going to get a 247 00:12:50,440 --> 00:12:53,360 Speaker 5: big print here on Friday. For a lot of folks, 248 00:12:53,360 --> 00:12:56,280 Speaker 5: including myself, I'm just kind of surprised that the resilience 249 00:12:56,280 --> 00:12:59,200 Speaker 5: of the US labor market isn't real. 250 00:12:59,280 --> 00:13:00,720 Speaker 3: Is it as strong as it appears to be. 251 00:13:01,160 --> 00:13:03,160 Speaker 1: Yeah, that's a great question. So one of the things 252 00:13:03,160 --> 00:13:06,400 Speaker 1: we do at micro policy perspectives is we do earning 253 00:13:06,480 --> 00:13:09,960 Speaker 1: scraping and look at what companies are saying about hiring 254 00:13:10,000 --> 00:13:13,840 Speaker 1: and firing intentions. So what we see is the companies 255 00:13:14,120 --> 00:13:18,000 Speaker 1: while they're hiring less and intention to lay people off 256 00:13:18,040 --> 00:13:21,800 Speaker 1: has gone up slightly. You do see companies continue to 257 00:13:21,920 --> 00:13:24,679 Speaker 1: laborhoard and the way that they're doing this is they 258 00:13:24,679 --> 00:13:28,440 Speaker 1: are reducing hours work, right. So in reality, what that 259 00:13:28,480 --> 00:13:31,880 Speaker 1: does is it reduces total income, which reduces spending power. 260 00:13:31,960 --> 00:13:35,240 Speaker 1: So it softens the economy. But people don't lose their jobs, 261 00:13:36,200 --> 00:13:37,640 Speaker 1: and that's an important factor. 262 00:13:38,080 --> 00:13:40,240 Speaker 3: Are you working less time? I'm not working any less. 263 00:13:40,360 --> 00:13:43,480 Speaker 2: No, I we talked about this last you can see 264 00:13:43,720 --> 00:13:45,920 Speaker 2: you see she put, I had a Martine or two. 265 00:13:46,280 --> 00:13:49,400 Speaker 2: So you know we're talking to constants about this last night. 266 00:13:49,880 --> 00:13:52,720 Speaker 2: We're all working harder than we've ever worked before. And 267 00:13:52,760 --> 00:13:55,560 Speaker 2: I think part of is a digital thing. Like you know, 268 00:13:55,600 --> 00:13:57,680 Speaker 2: I'm working all weekend because boom, it's right there on 269 00:13:57,720 --> 00:14:00,280 Speaker 2: your screen or you know, I'm on the after I'm 270 00:14:00,320 --> 00:14:03,760 Speaker 2: trying to pretend I'm you know, being good and I'm 271 00:14:03,760 --> 00:14:06,920 Speaker 2: on my phone worried about you know, stochastic movements in 272 00:14:07,000 --> 00:14:10,080 Speaker 2: the market or whatever. Conston, thank you so much, Thank you, 273 00:14:10,200 --> 00:14:12,080 Speaker 2: thank you for that perspective off what you and I 274 00:14:12,160 --> 00:14:14,439 Speaker 2: saw at the console and Foreign Relations. 275 00:14:18,960 --> 00:14:23,840 Speaker 5: Meghan Robson Joints is US credit strategy at BNP Pariba. Megan, 276 00:14:24,080 --> 00:14:27,600 Speaker 5: you know, in terms of credit here, you know I'm 277 00:14:27,680 --> 00:14:30,120 Speaker 5: not buying a recession, so I think I can take 278 00:14:30,160 --> 00:14:34,400 Speaker 5: some credit risk here. Where do you send me so well? 279 00:14:34,400 --> 00:14:36,400 Speaker 7: First of all, thank you for having me so I 280 00:14:36,480 --> 00:14:39,080 Speaker 7: you know, we completely agree with what you just said. 281 00:14:39,160 --> 00:14:43,200 Speaker 7: Downside risks look a lot lower and continue to diminish 282 00:14:43,280 --> 00:14:46,680 Speaker 7: especially in the high old space where you've seen issuers 283 00:14:46,720 --> 00:14:52,080 Speaker 7: chip away at refinancing walls, and since October borrowing yields 284 00:14:52,200 --> 00:14:55,000 Speaker 7: have come down, so it means the penalty to refi 285 00:14:55,480 --> 00:14:58,960 Speaker 7: has come down. So within the leverage finance space, we 286 00:14:59,040 --> 00:15:01,760 Speaker 7: do like taking some credit risks, so single bees we 287 00:15:02,120 --> 00:15:05,120 Speaker 7: think look attractive. We're more selective on triple c's, but 288 00:15:05,120 --> 00:15:07,480 Speaker 7: there definitely are some sectors and names where we like 289 00:15:07,600 --> 00:15:10,960 Speaker 7: to add there. And then also you know, with fewer 290 00:15:11,040 --> 00:15:14,040 Speaker 7: rate cuts, you can look to the double B loan 291 00:15:14,080 --> 00:15:17,400 Speaker 7: space to offer a pickup and carry where you have 292 00:15:17,440 --> 00:15:20,560 Speaker 7: a yield advantage of about one hundred basis points relative 293 00:15:20,680 --> 00:15:22,640 Speaker 7: to fixed rate high yield at the moment. 294 00:15:22,880 --> 00:15:24,960 Speaker 5: So I mean, I have to admit, Megan, I was 295 00:15:24,960 --> 00:15:28,800 Speaker 5: surprised that in last year twenty twenty three, that US 296 00:15:28,880 --> 00:15:32,040 Speaker 5: high yield was the place to really make your money 297 00:15:32,080 --> 00:15:33,760 Speaker 5: in the fixed income space. Last year, with all the 298 00:15:33,800 --> 00:15:37,200 Speaker 5: talk of a recession around everybody's corner, high yield was 299 00:15:37,200 --> 00:15:40,080 Speaker 5: the place to be. So is that I can still 300 00:15:40,120 --> 00:15:41,720 Speaker 5: go on that that far out on the risk curve. 301 00:15:43,360 --> 00:15:46,400 Speaker 7: So we do think you're The argument for owning high 302 00:15:46,440 --> 00:15:49,000 Speaker 7: yield and credit right now is really more of a 303 00:15:49,040 --> 00:15:51,480 Speaker 7: carry argument, So we don't see a lot of We 304 00:15:51,480 --> 00:15:54,000 Speaker 7: don't see a lot of spread upside from here. In fact, 305 00:15:54,000 --> 00:15:56,640 Speaker 7: our target spread target for the end of the year 306 00:15:56,840 --> 00:15:59,680 Speaker 7: is a bit wider from these levels. But we do 307 00:15:59,720 --> 00:16:03,520 Speaker 7: think spreads widen. It's a good opportunity for investors to 308 00:16:03,600 --> 00:16:06,400 Speaker 7: add to risk, sort of by the dip, if you will. 309 00:16:06,880 --> 00:16:10,200 Speaker 7: And the argument for carry here for credit here is 310 00:16:10,440 --> 00:16:13,200 Speaker 7: definitely more of a carry one rather than spreads tightening. 311 00:16:13,400 --> 00:16:16,960 Speaker 2: Well, let's talk about that because Bramo one on one, 312 00:16:17,080 --> 00:16:19,480 Speaker 2: Lisa Bramo, it's would say spreads are in I mean, 313 00:16:19,520 --> 00:16:22,720 Speaker 2: that's all there is definance, folks. If you've got corporate 314 00:16:22,800 --> 00:16:26,360 Speaker 2: bonds and they have a yield of say six in 315 00:16:26,800 --> 00:16:30,520 Speaker 2: Megan Robson's full faith and Credit world is four, and 316 00:16:30,560 --> 00:16:33,520 Speaker 2: then the yield comes from six into five, the spread 317 00:16:33,560 --> 00:16:36,160 Speaker 2: goes from two percent to one percent, and from two 318 00:16:36,240 --> 00:16:39,880 Speaker 2: hundred basis points to one hundred basis points. Where are 319 00:16:40,440 --> 00:16:43,480 Speaker 2: spreads right now, Megan? Are they absurdly tight? 320 00:16:45,560 --> 00:16:48,920 Speaker 7: So we think they're you know, historically on a percentile basis, 321 00:16:49,200 --> 00:16:51,960 Speaker 7: spreads are absolutely trading tight. So look at the investment 322 00:16:52,000 --> 00:16:54,800 Speaker 7: grade market. Over the last month or so, we've been 323 00:16:54,840 --> 00:16:58,480 Speaker 7: trading at ninety to ninety five basis points, so you know, 324 00:16:58,680 --> 00:17:02,080 Speaker 7: higher quality companies giving you some spread pick up relative 325 00:17:02,120 --> 00:17:05,600 Speaker 7: to treasuries high yield. We're trading at about three hundred 326 00:17:05,640 --> 00:17:08,800 Speaker 7: to three ten over. That's been the range over the 327 00:17:08,880 --> 00:17:10,720 Speaker 7: last over the last month or so. 328 00:17:11,160 --> 00:17:14,560 Speaker 2: I had this discussion last night Megan sas hours in here. 329 00:17:14,720 --> 00:17:16,240 Speaker 3: Elboy, you know Paul. 330 00:17:16,160 --> 00:17:20,760 Speaker 2: Smart, he's out of control, he is, Meghan, should our 331 00:17:20,800 --> 00:17:25,040 Speaker 2: audience be buying triple C paper Isn't that like telling 332 00:17:25,080 --> 00:17:27,440 Speaker 2: somebody to buy, you know, some silver mine off the 333 00:17:27,520 --> 00:17:28,560 Speaker 2: Vancouver Index. 334 00:17:30,440 --> 00:17:34,000 Speaker 7: So we're not recommending. We're not recommending triple c's at 335 00:17:34,040 --> 00:17:37,439 Speaker 7: this point. And I think that it's more prudent if 336 00:17:37,440 --> 00:17:39,879 Speaker 7: you do want to add into hygeld risk single bees. 337 00:17:40,040 --> 00:17:42,000 Speaker 7: It's a place where you can still get a bit 338 00:17:42,040 --> 00:17:44,560 Speaker 7: of a pickup and carry, but without really taking a 339 00:17:44,560 --> 00:17:47,399 Speaker 7: lot of that risk. And Tom to your point, Triple 340 00:17:47,440 --> 00:17:50,520 Speaker 7: C's have already tightened a lot to start the year, 341 00:17:50,640 --> 00:17:53,000 Speaker 7: so I think the trade to add to triple c's 342 00:17:53,040 --> 00:17:57,160 Speaker 7: has already played out, and at these levels trading pretty tight. 343 00:17:57,240 --> 00:18:00,320 Speaker 2: I mean, you're at a wicked conservative French bank knowing 344 00:18:00,359 --> 00:18:03,960 Speaker 2: me a B rated single B rated bond is a 345 00:18:04,000 --> 00:18:06,119 Speaker 2: speculation or an investment. 346 00:18:07,960 --> 00:18:10,119 Speaker 7: So I think in the in the high yield market 347 00:18:10,240 --> 00:18:14,359 Speaker 7: where it is fixed rate and issuers have chipped away 348 00:18:14,640 --> 00:18:17,280 Speaker 7: and brought down their maturities for this year, I think 349 00:18:17,280 --> 00:18:20,840 Speaker 7: it's I think it's a prudent investment, lower volatility. But 350 00:18:21,040 --> 00:18:23,520 Speaker 7: in the in the loan space, I would agree with you, 351 00:18:23,560 --> 00:18:27,520 Speaker 7: where you have floating rate coupons. Continued debate about whether 352 00:18:27,640 --> 00:18:31,320 Speaker 7: or not we actually get the rate cuts that consensus expects. 353 00:18:31,359 --> 00:18:34,959 Speaker 7: I think their single bees are are much riskier. Where 354 00:18:35,040 --> 00:18:38,320 Speaker 7: you have interest coverage is hovering around just one time, 355 00:18:38,520 --> 00:18:42,560 Speaker 7: so given floating rates are higher, the fundamentals, I think 356 00:18:42,640 --> 00:18:44,960 Speaker 7: much more vulnerable on the single bee long side. 357 00:18:45,000 --> 00:18:46,840 Speaker 2: Well, did you see the banner Ari put out on 358 00:18:46,880 --> 00:18:49,640 Speaker 2: YouTube Tom Keane recommends triple C bonds. 359 00:18:50,240 --> 00:18:53,000 Speaker 3: You're getting me into trouble in there. In trouble, you know, 360 00:18:53,000 --> 00:18:55,000 Speaker 3: I have another tang mimosa. 361 00:18:55,080 --> 00:18:59,160 Speaker 5: Okay, hey Megan, what are the sectors that you guys 362 00:18:59,320 --> 00:19:01,199 Speaker 5: like here in in the credit space. 363 00:19:03,040 --> 00:19:08,159 Speaker 7: So in an investment grade, we're recommending sectors that we 364 00:19:08,359 --> 00:19:11,119 Speaker 7: see as de leveraging this year. So there is this 365 00:19:11,119 --> 00:19:13,120 Speaker 7: this theme we think will be important over the next 366 00:19:13,200 --> 00:19:17,359 Speaker 7: year or two where companies are incentivized to pay down debt, 367 00:19:17,359 --> 00:19:21,400 Speaker 7: and you saw that last quarter, particularly in investment grade healthcare, 368 00:19:21,720 --> 00:19:25,439 Speaker 7: investment grade telecom sectors where more defensive, they have a 369 00:19:25,480 --> 00:19:28,920 Speaker 7: lot of free cash flow and are actively paying down debt. 370 00:19:29,000 --> 00:19:31,919 Speaker 7: So that's a positive grand story. And then and then 371 00:19:31,920 --> 00:19:35,439 Speaker 7: in the highield space, we're recommending in overweight to media. 372 00:19:35,560 --> 00:19:36,160 Speaker 5: So nice. 373 00:19:36,440 --> 00:19:39,440 Speaker 7: This is based on the election, you know, so we 374 00:19:39,440 --> 00:19:44,040 Speaker 7: we're forecasting. We are forecasting a pickup in election advertising 375 00:19:44,080 --> 00:19:48,240 Speaker 7: spend relative to the last election cycle. So you've already 376 00:19:48,320 --> 00:19:52,000 Speaker 7: seen a lot of fundraising from both political parties and 377 00:19:52,640 --> 00:19:54,560 Speaker 7: likely that will be put to work. 378 00:19:54,640 --> 00:19:56,960 Speaker 2: We're going to end the interview, but Megan, we can't 379 00:19:57,000 --> 00:19:59,159 Speaker 2: seen you don't have a tantrument if we don't do this, 380 00:19:59,520 --> 00:20:00,239 Speaker 2: are you on? 381 00:20:00,320 --> 00:20:01,119 Speaker 3: Paul Sweeney? 382 00:20:01,600 --> 00:20:06,000 Speaker 2: You can buy the debt sixty three percent of Warner 383 00:20:06,040 --> 00:20:07,960 Speaker 2: Brothers Discovery. 384 00:20:08,440 --> 00:20:09,760 Speaker 3: For total return. 385 00:20:11,760 --> 00:20:14,480 Speaker 7: So we're of course with the media not not a 386 00:20:14,520 --> 00:20:18,200 Speaker 7: wholesale buy on every sector. But look in the highield space, 387 00:20:18,240 --> 00:20:20,920 Speaker 7: there's a lot of a lot of credits that have 388 00:20:21,119 --> 00:20:24,840 Speaker 7: bottomed fundamentals last year and are absolutely improving in terms 389 00:20:24,880 --> 00:20:27,800 Speaker 7: of their free cash flow. They have locked in more 390 00:20:28,160 --> 00:20:31,959 Speaker 7: ad spend and you can see the leverages is definitely 391 00:20:32,000 --> 00:20:35,600 Speaker 7: manageable relative to history, and so we stand by the 392 00:20:35,640 --> 00:20:36,520 Speaker 7: high yeld media pick. 393 00:20:36,640 --> 00:20:38,000 Speaker 5: Yeah, I mean that's kind of what we've heard in 394 00:20:38,000 --> 00:20:40,959 Speaker 5: the past time high yield credit, I mean a media 395 00:20:41,000 --> 00:20:43,680 Speaker 5: credit a lot better than media equity. So that's kind 396 00:20:43,680 --> 00:20:45,560 Speaker 5: of what we hear. Megan Robson, thanks so much for 397 00:20:45,640 --> 00:20:49,040 Speaker 5: joining us, Megan Robson, US Credit Strategy BNP Parry Bowbi, 398 00:20:49,080 --> 00:20:50,800 Speaker 5: thank you forgetting your thoughts there, and. 399 00:21:01,600 --> 00:21:03,600 Speaker 2: Let us look at the front pages as we do 400 00:21:03,680 --> 00:21:06,159 Speaker 2: that around the world. She's never seen a Seltzer. 401 00:21:06,280 --> 00:21:10,120 Speaker 5: She didn't like what I knew. 402 00:21:10,280 --> 00:21:14,200 Speaker 8: That's my favorite. All Right, we're starting with uh Fox's 403 00:21:14,280 --> 00:21:17,040 Speaker 8: chief executive Okay, So Lachlan Murdock is saying that the 404 00:21:17,160 --> 00:21:19,840 Speaker 8: sports streaming service could take a little bit longer to 405 00:21:19,880 --> 00:21:24,160 Speaker 8: get some subscribers, five years to reach five million subscribers. 406 00:21:24,200 --> 00:21:27,320 Speaker 8: That's what he's saying. He was talking at a conference. 407 00:21:27,640 --> 00:21:32,159 Speaker 2: So uhline fifty dollars. 408 00:21:32,600 --> 00:21:33,600 Speaker 5: Well, here's the thing. 409 00:21:34,040 --> 00:21:36,760 Speaker 8: He said that Australia is Cayo Sports, which is what 410 00:21:36,880 --> 00:21:38,760 Speaker 8: he's kind of basing it off. That's where he's saying 411 00:21:38,760 --> 00:21:41,520 Speaker 8: he got the idea for this from because it's from 412 00:21:41,600 --> 00:21:43,639 Speaker 8: Fox Tell, which is part of his news corps, so 413 00:21:43,680 --> 00:21:46,760 Speaker 8: he's familiar with it. They charge for their sports streaming 414 00:21:46,800 --> 00:21:50,160 Speaker 8: service sixteen dollars a month, but he's saying, yeah, it's 415 00:21:50,200 --> 00:21:52,560 Speaker 8: going to cost more in the US because the right 416 00:21:52,720 --> 00:21:54,800 Speaker 8: sports Rice right costs a lot. 417 00:21:54,600 --> 00:21:57,440 Speaker 5: More than he had five million. I thought that was 418 00:21:57,480 --> 00:22:02,160 Speaker 5: a typeou yeah, I do, so, I mean it's fine. 419 00:22:02,200 --> 00:22:04,400 Speaker 5: I mean, what kind of businesses that I have no idea. 420 00:22:04,440 --> 00:22:07,840 Speaker 5: They're saying they're targeting the people that don't subscribe to 421 00:22:07,880 --> 00:22:10,920 Speaker 5: a pay TV and so maybe they will in fact 422 00:22:10,960 --> 00:22:13,080 Speaker 5: pay that. I don't know. But it is just getting 423 00:22:13,160 --> 00:22:16,119 Speaker 5: so fragmented with all these streaming offerings. I just think 424 00:22:16,200 --> 00:22:18,640 Speaker 5: it's it's just a disaster right now. 425 00:22:18,440 --> 00:22:21,000 Speaker 8: Disaster waiting to happen. Still no name for it either. 426 00:22:21,160 --> 00:22:23,560 Speaker 5: No, All right, interesting what else we got? 427 00:22:24,160 --> 00:22:27,040 Speaker 8: So yesterday we talked about how Whole Foods was shrinking 428 00:22:27,040 --> 00:22:29,600 Speaker 8: its stores. Well now we've been talking about this. Actually 429 00:22:29,600 --> 00:22:32,680 Speaker 8: this morning, the big box retailers are doing that same thing. 430 00:22:32,720 --> 00:22:34,920 Speaker 8: So you have Best Buy, Macy's. They said that they're 431 00:22:35,080 --> 00:22:38,080 Speaker 8: planning to had those smaller format stores. It's going to 432 00:22:38,119 --> 00:22:41,960 Speaker 8: help cut costs, help with convenience as well, but here's 433 00:22:41,960 --> 00:22:44,800 Speaker 8: the thing. Consumers are using the stores differently. So the 434 00:22:44,840 --> 00:22:47,800 Speaker 8: consumer is shopping differently. They're not going in and looking 435 00:22:47,840 --> 00:22:51,480 Speaker 8: for things. They're more going on social media and scrolling 436 00:22:51,520 --> 00:22:53,879 Speaker 8: and then going to the store maybe and picking up 437 00:22:53,880 --> 00:22:57,240 Speaker 8: what they noticed. So they don't need the big stores anymore. 438 00:22:57,280 --> 00:22:58,680 Speaker 8: So that's the kind of the trend that they're seeing. 439 00:22:59,000 --> 00:23:01,639 Speaker 2: I'm seeing everywhere. I believe I saw yesterday. I do 440 00:23:01,760 --> 00:23:03,800 Speaker 2: not have this in front of me, folks, and I'm 441 00:23:04,440 --> 00:23:09,560 Speaker 2: ill brief. But grocery stores the internet buy it, you know, 442 00:23:09,720 --> 00:23:13,240 Speaker 2: order your groceries off. The internet is so successful. They're 443 00:23:13,280 --> 00:23:16,720 Speaker 2: talking about shrinking all that square footage. 444 00:23:16,880 --> 00:23:18,720 Speaker 8: Yeah, like the INSTACRT. I know a lot of my 445 00:23:18,840 --> 00:23:21,080 Speaker 8: family members use instacar because they don't want to go 446 00:23:21,080 --> 00:23:24,760 Speaker 8: to the store. But it's they're shrinking the stores because. 447 00:23:24,760 --> 00:23:26,719 Speaker 5: Yes, I mean, I think what we learned in the pandemic is, 448 00:23:26,840 --> 00:23:29,480 Speaker 5: you know, you still like to have this whole omni 449 00:23:29,560 --> 00:23:31,800 Speaker 5: channel thing. Maybe you shop online, pick it up at 450 00:23:31,840 --> 00:23:34,840 Speaker 5: the store, or maybe you want to browse it's the store, 451 00:23:34,880 --> 00:23:38,119 Speaker 5: then buy it online. So yes, you need the physical retail, 452 00:23:38,119 --> 00:23:39,959 Speaker 5: but maybe not in the same way. I eat all 453 00:23:39,960 --> 00:23:42,119 Speaker 5: the square footage that that you did before. So I 454 00:23:42,119 --> 00:23:43,720 Speaker 5: think that's the new retail. 455 00:23:43,440 --> 00:23:51,240 Speaker 8: Model exactly exactly. Handbags are getting pricier. Okay, so luxury 456 00:23:51,320 --> 00:23:55,199 Speaker 8: brands here we go, missus Keane. Pay attention to the 457 00:23:55,240 --> 00:23:59,360 Speaker 8: Basic taking the birkenhead bag. 458 00:23:59,400 --> 00:24:00,119 Speaker 5: The Basic one. 459 00:24:00,080 --> 00:24:03,679 Speaker 8: Has jumped one thousand dollars. I thought this was a typo, 460 00:24:03,760 --> 00:24:06,480 Speaker 8: but no, this is data from perse Bop which is 461 00:24:07,320 --> 00:24:09,960 Speaker 8: on the on the terminal right now. The Basic Burken. 462 00:24:10,040 --> 00:24:13,240 Speaker 8: It's a nine inch nine inch handbag and US stores 463 00:24:13,280 --> 00:24:17,960 Speaker 8: increase by ten percent to eleven thousand, four hundred dollars 464 00:24:18,000 --> 00:24:19,280 Speaker 8: before sales tax. 465 00:24:19,920 --> 00:24:24,679 Speaker 5: Wow, that is such a thing easier. Even if you 466 00:24:24,760 --> 00:24:28,640 Speaker 5: set it down, you lose it. You can't do anything. 467 00:24:28,680 --> 00:24:29,719 Speaker 8: You can't put on the floor. 468 00:24:29,760 --> 00:24:30,320 Speaker 6: You can't put it. 469 00:24:30,359 --> 00:24:34,720 Speaker 8: I mean even the restaurants have chair hand handbags, chairs 470 00:24:34,760 --> 00:24:35,400 Speaker 8: for your handbag. 471 00:24:35,680 --> 00:24:40,840 Speaker 2: Andrews, thank you so much for listening this morning. These 472 00:24:40,960 --> 00:24:45,960 Speaker 2: fancy bags from these stores, including Armez, you can't get them. 473 00:24:46,240 --> 00:24:50,960 Speaker 2: You have to spend ginormous amounts of money. Before Andrew 474 00:24:51,000 --> 00:24:54,439 Speaker 2: comes up to you on Madison Avenue and says, mister 475 00:24:54,560 --> 00:24:58,080 Speaker 2: Keene coming in ninety days, we possibly have We're not 476 00:24:58,119 --> 00:24:59,240 Speaker 2: sure what color it is. 477 00:24:59,640 --> 00:25:01,119 Speaker 3: It's like that exclusive. 478 00:25:01,640 --> 00:25:03,800 Speaker 2: Trust me, folks, I'm not spending that much money doing 479 00:25:04,320 --> 00:25:06,479 Speaker 2: when you're into a Kelly or a Birket. 480 00:25:06,560 --> 00:25:09,000 Speaker 5: But okay, you can do a Prada Galleria bag. We'll 481 00:25:09,040 --> 00:25:12,040 Speaker 5: set shoppers back a cool forty six hundred dollars eighty 482 00:25:12,080 --> 00:25:14,679 Speaker 5: five percent more than in twenty nineteen. And it's not 483 00:25:14,720 --> 00:25:17,560 Speaker 5: because their costs are going up, per se. This is 484 00:25:17,720 --> 00:25:20,560 Speaker 5: just they're putting the price in crusers through because they can't. 485 00:25:20,440 --> 00:25:23,600 Speaker 8: Because they can they have this, you know, exclusivity. 486 00:25:23,680 --> 00:25:24,480 Speaker 6: That's what they're going to. 487 00:25:24,400 --> 00:25:26,280 Speaker 5: Put I was in movie for it. 488 00:25:26,320 --> 00:25:28,720 Speaker 2: I was in a luxury store this weekend, per chance, 489 00:25:29,480 --> 00:25:32,240 Speaker 2: and I won't say what name it was, it doesn't matter. 490 00:25:32,359 --> 00:25:35,520 Speaker 2: It looked like December twenty third, right, I mean I 491 00:25:35,640 --> 00:25:38,840 Speaker 2: was shocked how packed it was. Now what really shocks 492 00:25:38,880 --> 00:25:41,600 Speaker 2: me here is I can't tell Ariel, thank you so 493 00:25:41,720 --> 00:25:44,159 Speaker 2: much for the brief on this. Do I want to 494 00:25:44,200 --> 00:25:48,760 Speaker 2: go with a tequila selser fies to eight pack or 495 00:25:48,920 --> 00:25:51,879 Speaker 2: do I want to look at the vodka and soda pineapple? 496 00:25:52,000 --> 00:25:55,000 Speaker 2: I mean, the biggest response we get all day, Paul, 497 00:25:55,040 --> 00:25:58,840 Speaker 2: we don't exist Teo is high noon is the biggest response. 498 00:25:59,040 --> 00:26:00,600 Speaker 3: What in God's name is high now. 499 00:26:00,600 --> 00:26:03,520 Speaker 8: High Noon because there's zero sugar. That's like it. I'm 500 00:26:03,520 --> 00:26:06,520 Speaker 8: always watching my sugar and take so High New doesn't 501 00:26:06,520 --> 00:26:06,720 Speaker 8: have this? 502 00:26:07,520 --> 00:26:09,920 Speaker 5: What is it a vodka? It's a vodka. 503 00:26:10,119 --> 00:26:10,520 Speaker 3: Okay. 504 00:26:10,560 --> 00:26:13,760 Speaker 5: But now, back in high school, you were drinking wine coolers. 505 00:26:13,960 --> 00:26:18,920 Speaker 6: Back in high school, righter the thing that it was 506 00:26:18,960 --> 00:26:23,040 Speaker 6: the Boonze Farm, it was the College Tree, the Cisco 507 00:26:23,480 --> 00:26:24,000 Speaker 6: mad Dog. 508 00:26:24,040 --> 00:26:27,600 Speaker 5: Twenty twenty, we went back taking his way back. All right, 509 00:26:27,800 --> 00:26:30,280 Speaker 5: so so far, all right, so rich, where do you fit? 510 00:26:31,440 --> 00:26:32,480 Speaker 5: He's drinking Budweiser. 511 00:26:32,960 --> 00:26:35,919 Speaker 3: Let's be honest, like. 512 00:26:35,960 --> 00:26:38,919 Speaker 2: Yeah, I look at this. Can I ask a dumb question? 513 00:26:39,040 --> 00:26:42,960 Speaker 2: Can you buy the High Noon variety twelve back? Can 514 00:26:43,000 --> 00:26:45,800 Speaker 2: you buy that in like a grocery store or like 515 00:26:45,840 --> 00:26:47,760 Speaker 2: a Walgreens or Duane Read or that? 516 00:26:48,000 --> 00:26:48,560 Speaker 5: Not in Jersey? 517 00:26:48,640 --> 00:26:49,320 Speaker 6: I know, not in Jersey. 518 00:26:49,359 --> 00:26:50,680 Speaker 5: You have to go to the Gulcestre store. 519 00:26:50,720 --> 00:26:52,440 Speaker 6: Yeah, that's a Clucker store thing, So you. 520 00:26:52,400 --> 00:26:53,840 Speaker 3: Have to go to the liquor store to get it. 521 00:26:54,040 --> 00:26:56,880 Speaker 2: Yeah, I mean, you know, I'm up with the fancy 522 00:26:56,920 --> 00:26:57,800 Speaker 2: people at K and D. 523 00:26:58,000 --> 00:27:00,680 Speaker 3: They barely talk to me, right if the order is 524 00:27:00,760 --> 00:27:03,280 Speaker 3: under five hundred dollars, they don't look at you. I'm 525 00:27:03,280 --> 00:27:05,320 Speaker 3: about kay. I don't think K and d up on 526 00:27:05,359 --> 00:27:06,920 Speaker 3: Madison Avenues. I don't think. 527 00:27:08,040 --> 00:27:11,600 Speaker 5: Or the white cloth that's that's that's another popular one. 528 00:27:11,680 --> 00:27:13,560 Speaker 3: That's the one Riley from Saint Louis. 529 00:27:13,760 --> 00:27:15,560 Speaker 2: I had to sip One's and weird at a bar and 530 00:27:15,600 --> 00:27:17,720 Speaker 2: she said, here, I have some white claw and I 531 00:27:17,760 --> 00:27:18,440 Speaker 2: thought it was, you. 532 00:27:18,359 --> 00:27:21,560 Speaker 3: Know, like a white Russian or something. So much fit 533 00:27:21,680 --> 00:27:24,240 Speaker 3: Lisa Matteo. I learned so much from our newspaper. 534 00:27:24,640 --> 00:27:27,919 Speaker 5: Yeah, yes, huge, you know news you can use you 535 00:27:27,960 --> 00:27:28,399 Speaker 5: look at this. 536 00:27:28,520 --> 00:27:30,360 Speaker 3: Here's you know, met us out there. What is this? 537 00:27:30,440 --> 00:27:34,440 Speaker 3: Missus Sweeney? Paul Sweeney is so dope. It's like unbelievable. 538 00:27:34,720 --> 00:27:37,720 Speaker 3: Nobody ever says that about me exactly. I mean it's like, 539 00:27:38,000 --> 00:27:40,879 Speaker 3: you know, it's like use, let's hear Lisa Mateo, thank 540 00:27:40,920 --> 00:27:41,520 Speaker 3: you so much. 541 00:27:42,480 --> 00:27:45,720 Speaker 2: This is a Bloomberg Surveillance podcast, bringing you the best 542 00:27:45,720 --> 00:27:50,520 Speaker 2: in economics, finance, investment, and international relations. You can also 543 00:27:50,560 --> 00:27:54,600 Speaker 2: watch the show live on YouTube. Visit the Bloomberg podcast 544 00:27:54,720 --> 00:27:58,760 Speaker 2: channel on YouTube to see the show weekday mornings from 545 00:27:58,800 --> 00:28:01,840 Speaker 2: seven to ten a m. East from our global headquarters 546 00:28:02,000 --> 00:28:05,840 Speaker 2: in New York City. 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