1 00:00:00,080 --> 00:00:13,800 Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene Jailey. 2 00:00:13,960 --> 00:00:17,560 Speaker 1: We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:32,040 Speaker 1: Bloomberg dot Com, and of course, on the Bloomberg. It's 5 00:00:32,080 --> 00:00:34,000 Speaker 1: been the story of the last couple of days the 6 00:00:34,080 --> 00:00:36,879 Speaker 1: bond market pain, with many people coming down and declaring 7 00:00:36,920 --> 00:00:41,560 Speaker 1: the end of a three decade long bull market in treasuries. 8 00:00:41,760 --> 00:00:44,720 Speaker 1: So way in, I'm pleased to say. Russ Coastrick, portfolio 9 00:00:44,840 --> 00:00:48,040 Speaker 1: manager at Fort black Rocks Global Allocation Team, joined us 10 00:00:48,080 --> 00:00:51,040 Speaker 1: around a table in New York City. Russ Grady, catch up, Jonathan, 11 00:00:51,040 --> 00:00:53,920 Speaker 1: thanks for having me talk me through whether the bond 12 00:00:53,960 --> 00:00:56,920 Speaker 1: bull market can die at least five times in twelve months, 13 00:00:57,160 --> 00:00:58,920 Speaker 1: and Jona, thing is we were talking about. I'm sure 14 00:00:58,920 --> 00:01:00,920 Speaker 1: this is not the first time that the bullmarket has 15 00:01:00,920 --> 00:01:02,760 Speaker 1: been declared dead and at some point that's going to 16 00:01:02,840 --> 00:01:05,400 Speaker 1: be right. Uh, it's just not evident that it's today. 17 00:01:06,319 --> 00:01:08,280 Speaker 1: You know, if you think about the bond bullmarkt I 18 00:01:08,319 --> 00:01:11,959 Speaker 1: think it's helpful to separate out the cyclical from the secular. 19 00:01:12,319 --> 00:01:15,160 Speaker 1: On a cyclical basis, Yes, the global economy is improving. 20 00:01:15,480 --> 00:01:17,320 Speaker 1: I think inflation may firm a bit this year in 21 00:01:17,360 --> 00:01:20,720 Speaker 1: the US. But what is left out of that narrative 22 00:01:20,880 --> 00:01:25,520 Speaker 1: or all of the longer term reasons demographics, demand for income, 23 00:01:25,920 --> 00:01:29,200 Speaker 1: slower nominal growth that have kept yields as low as 24 00:01:29,200 --> 00:01:31,560 Speaker 1: they are for as long as they have been. And 25 00:01:31,600 --> 00:01:34,200 Speaker 1: it's not obvious to me that those longer term factors 26 00:01:34,640 --> 00:01:38,200 Speaker 1: changed on December thirty one. So big structural issues, Russ 27 00:01:38,240 --> 00:01:41,039 Speaker 1: the savings club by definition as the as the West 28 00:01:41,080 --> 00:01:44,319 Speaker 1: gets older, that's a long bond story that's not going 29 00:01:44,360 --> 00:01:46,800 Speaker 1: to change for you. It's not changing. It's not just 30 00:01:46,880 --> 00:01:49,560 Speaker 1: the West, it's also developing markets. We see a huge 31 00:01:49,560 --> 00:01:52,800 Speaker 1: saving glut in many of these countries, and much of 32 00:01:52,800 --> 00:01:56,400 Speaker 1: that still gets recycled back into developed country bond markets. 33 00:01:56,560 --> 00:01:59,160 Speaker 1: As we saw yesterday at the Tenure auction, there are 34 00:01:59,160 --> 00:02:01,120 Speaker 1: a lot of people that are waiting for two five 35 00:02:01,200 --> 00:02:04,080 Speaker 1: to six to seven that are going to likely come 36 00:02:04,120 --> 00:02:10,000 Speaker 1: in and bid at that level of vengeanceeance. Yeah, let's 37 00:02:10,040 --> 00:02:14,280 Speaker 1: do nerdy conversations with Russ coster Ridge about bonds that 38 00:02:14,360 --> 00:02:17,639 Speaker 1: will no one, everybody will listen to that sector Spider 39 00:02:18,000 --> 00:02:20,720 Speaker 1: got on board that, which was very It was very 40 00:02:20,919 --> 00:02:23,519 Speaker 1: very cool as well a dumb question. I was making 41 00:02:23,520 --> 00:02:25,800 Speaker 1: a joke about it, and it was buried under John 42 00:02:25,800 --> 00:02:29,679 Speaker 1: Farrow's wonderful introduction in the equity markets, we make a joke, 43 00:02:29,800 --> 00:02:33,880 Speaker 1: go to cash? Do bond people go to cash? I mean, 44 00:02:34,000 --> 00:02:36,280 Speaker 1: I mean in the real world does does somebody call 45 00:02:36,360 --> 00:02:39,200 Speaker 1: up on the phone, Oh my word, my durations five years? 46 00:02:39,200 --> 00:02:41,920 Speaker 1: Go to cash? Do people do that? Well, you go 47 00:02:42,000 --> 00:02:44,480 Speaker 1: lower in duration. But you know the thing which is interesting, 48 00:02:44,800 --> 00:02:48,840 Speaker 1: never go to cash. You go to cash like things. 49 00:02:48,919 --> 00:02:52,000 Speaker 1: I think it's probably the answer. But on the equity market, 50 00:02:52,040 --> 00:02:55,160 Speaker 1: you know, again this isn't we were talking about this before. Tom. 51 00:02:55,240 --> 00:02:57,639 Speaker 1: The question the equity market is always what is your hatch? 52 00:02:57,800 --> 00:02:59,639 Speaker 1: What is your hedge? You know, at some point Vaul's 53 00:02:59,639 --> 00:03:02,400 Speaker 1: gonna eyes. The thing that has often left out of 54 00:03:02,400 --> 00:03:05,720 Speaker 1: this is the better hedge the last seven eight years 55 00:03:06,120 --> 00:03:08,200 Speaker 1: was not cash. It was bonds. Because when the market 56 00:03:08,280 --> 00:03:11,400 Speaker 1: sold off, cash was flat, more often than not, bonds 57 00:03:11,400 --> 00:03:13,720 Speaker 1: were up. Brexit was a great example of that. Tom 58 00:03:13,720 --> 00:03:17,160 Speaker 1: actually raises a really interesting question, the ability to go 59 00:03:17,240 --> 00:03:20,360 Speaker 1: to cash when the window, when the door starts to 60 00:03:20,400 --> 00:03:22,760 Speaker 1: get really narrow. In a place like high yield was 61 00:03:22,800 --> 00:03:26,519 Speaker 1: trading really really tight on triple seeds, which trading really tight. 62 00:03:27,840 --> 00:03:32,200 Speaker 1: Excuse me, jargon guy, that that's a incredibly speculative debt 63 00:03:32,440 --> 00:03:35,600 Speaker 1: rated very lowly in the high yield sector. Tom ks 64 00:03:35,680 --> 00:03:39,600 Speaker 1: the textbook definition Tom tom trying Tom cats, trying to 65 00:03:39,600 --> 00:03:43,400 Speaker 1: give me a hard time today. It's the window there 66 00:03:43,480 --> 00:03:45,600 Speaker 1: to get out when you need to get out. Well, 67 00:03:45,760 --> 00:03:48,160 Speaker 1: that is a very fair question, because we know liquidity 68 00:03:48,200 --> 00:03:50,240 Speaker 1: is not what it was pre crisis. We know that 69 00:03:50,240 --> 00:03:53,240 Speaker 1: the many of the banks and the brokers have backed 70 00:03:53,240 --> 00:03:57,600 Speaker 1: away from from the credit markets up one of the reasons, 71 00:03:57,640 --> 00:04:00,280 Speaker 1: again going back to why do people own treasuries? Two, 72 00:04:00,920 --> 00:04:04,000 Speaker 1: they are liquid and you can think of them as 73 00:04:04,120 --> 00:04:07,600 Speaker 1: a liquid cash substitute with terry, which again is why 74 00:04:07,680 --> 00:04:10,800 Speaker 1: people have not abandoned the ass a class despite low yields. 75 00:04:11,400 --> 00:04:13,520 Speaker 1: Is it time to de risk in black Rocks view, 76 00:04:14,440 --> 00:04:16,520 Speaker 1: I don't think so. I think you do have to 77 00:04:16,560 --> 00:04:20,600 Speaker 1: realize that, Look, we were unbelievably spectacularly lucky in two 78 00:04:20,640 --> 00:04:24,240 Speaker 1: thousand seventeen. All the things that might have gone wrong didn't. 79 00:04:24,839 --> 00:04:27,000 Speaker 1: It's unlikely we're gonna be as luckily lucking in two 80 00:04:27,080 --> 00:04:31,160 Speaker 1: thousand and eighteen. Having said that, I don't think a 81 00:04:31,240 --> 00:04:34,200 Speaker 1: five percent correction means you abandoned the ball market. Would 82 00:04:34,240 --> 00:04:36,160 Speaker 1: you step away from the idea? And Tom, you and 83 00:04:36,200 --> 00:04:38,440 Speaker 1: I have talked about the issue of capital returns in 84 00:04:38,520 --> 00:04:40,960 Speaker 1: high yield and the difference between that and coupon clipping. 85 00:04:41,160 --> 00:04:43,160 Speaker 1: Most people I've spoken to Tom say, this is the 86 00:04:43,240 --> 00:04:45,520 Speaker 1: year for coupon clipping and credit. You're not going to 87 00:04:45,600 --> 00:04:50,160 Speaker 1: get much juice. Gross started in the basement of the 88 00:04:50,160 --> 00:04:55,599 Speaker 1: Pacific Investment Company clipping coupons, literally clipping the old Literally 89 00:04:55,720 --> 00:04:58,680 Speaker 1: Gross was literally in the mail room, smart kid out 90 00:04:58,680 --> 00:05:02,080 Speaker 1: of Duke was some of the experience, and Mr Gross 91 00:05:02,160 --> 00:05:05,359 Speaker 1: literally had scissors. Folks. For those of you younger, you 92 00:05:05,360 --> 00:05:07,920 Speaker 1: had a piece of paper with coupons on the right side, 93 00:05:08,320 --> 00:05:11,479 Speaker 1: and you actually clipped the coupon, which you turned in 94 00:05:11,560 --> 00:05:15,320 Speaker 1: and got money. Nobody do you notice, Rich, No one 95 00:05:15,360 --> 00:05:18,719 Speaker 1: in the room as a clue what I'm talking about, Well, 96 00:05:18,720 --> 00:05:20,599 Speaker 1: no one, no one in the room as a clue 97 00:05:20,600 --> 00:05:22,920 Speaker 1: of what how big that coupon might have been back 98 00:05:22,960 --> 00:05:25,080 Speaker 1: in the back in the times when Bill Gross was 99 00:05:25,080 --> 00:05:27,120 Speaker 1: was clipping them, Tom, because that would have been that 100 00:05:27,120 --> 00:05:31,560 Speaker 1: would have been real money. Where you get CDs, you're 101 00:05:31,600 --> 00:05:34,480 Speaker 1: killing when when high yield was high yield. I'm looking 102 00:05:34,520 --> 00:05:39,359 Speaker 1: at the Bloomberg Barclays Aggregate High Yield Index and basically, 103 00:05:39,400 --> 00:05:41,080 Speaker 1: if you just buy it, known it, you made a 104 00:05:41,080 --> 00:05:43,839 Speaker 1: lot of money from a leaning low up thirteen percent 105 00:05:43,960 --> 00:05:48,479 Speaker 1: per year total return. You're suggesting high yield is the 106 00:05:48,480 --> 00:05:51,920 Speaker 1: place to watch. How do our listeners do that? Well? 107 00:05:51,960 --> 00:05:54,400 Speaker 1: I think you watched the spread between high yielding the 108 00:05:54,440 --> 00:05:59,120 Speaker 1: treasury market, because that's likely to move early in any correction. 109 00:05:59,480 --> 00:06:01,360 Speaker 1: Having said that, you know, I think it is a 110 00:06:01,400 --> 00:06:04,440 Speaker 1: clip the coupon year for high yield. It's hard for 111 00:06:04,480 --> 00:06:07,159 Speaker 1: spreads to compress much more, which is one reason we've 112 00:06:07,160 --> 00:06:10,159 Speaker 1: actually been trimming credit, not because we think we're necessarily 113 00:06:10,279 --> 00:06:12,600 Speaker 1: the end of the credit cycle, but because we think 114 00:06:12,600 --> 00:06:15,520 Speaker 1: the risk were turned on equities is better right now, Okay, 115 00:06:15,520 --> 00:06:18,680 Speaker 1: what he said there, folks, it's a really important pro term. 116 00:06:18,720 --> 00:06:21,880 Speaker 1: We're gonna go to FIBOZI one oh one there. You 117 00:06:21,920 --> 00:06:25,560 Speaker 1: said trimming credit, and what that means is not the 118 00:06:25,600 --> 00:06:31,920 Speaker 1: time frame, but buying and also the allocation to credit 119 00:06:32,000 --> 00:06:35,440 Speaker 1: within a multi asset portfolio. Okay, So as John Farroh, 120 00:06:35,760 --> 00:06:40,400 Speaker 1: the Genius says triple C is an outfier, you want 121 00:06:40,400 --> 00:06:43,479 Speaker 1: to migrate from triple C to a tendency of triple A. 122 00:06:44,000 --> 00:06:46,440 Speaker 1: I think, right now, what rather than own triple cs, 123 00:06:46,760 --> 00:06:50,320 Speaker 1: you want to own common stocks? Is the key point. 124 00:06:50,600 --> 00:06:53,560 Speaker 1: The time to own triple cs is when the yields 125 00:06:53,560 --> 00:06:56,800 Speaker 1: are rich and they're sold off like the bottom and 126 00:06:56,839 --> 00:07:00,520 Speaker 1: six chain. The risk reward at this point the cycle 127 00:07:00,640 --> 00:07:03,320 Speaker 1: is much less attractive at that part of the sing. 128 00:07:03,480 --> 00:07:07,800 Speaker 1: So the stub or bolt on risk part of a 129 00:07:07,920 --> 00:07:12,920 Speaker 1: portfolio now is best affected with equities, correct, and not 130 00:07:13,080 --> 00:07:17,160 Speaker 1: with fixed income instruments. The risk reward in equities looks 131 00:07:17,200 --> 00:07:20,400 Speaker 1: superior right now to high yield or i g. At 132 00:07:20,440 --> 00:07:23,160 Speaker 1: the margin, I'd be trimming those. I'd be lowering my 133 00:07:23,200 --> 00:07:26,280 Speaker 1: allocation in favor of raising it into equities. So this 134 00:07:26,320 --> 00:07:28,800 Speaker 1: isn't de risk in RUSS. This is about the optimal 135 00:07:28,840 --> 00:07:30,680 Speaker 1: place to sit on the capital structure. And you're basically 136 00:07:30,680 --> 00:07:32,520 Speaker 1: saying it's the very bottom. It's in equity. I could 137 00:07:32,560 --> 00:07:36,760 Speaker 1: not have said it better, says Costridge. Never says that 138 00:07:36,880 --> 00:07:41,440 Speaker 1: to me, Chris definition, I don't know, you know. I 139 00:07:41,920 --> 00:07:43,880 Speaker 1: just think great to have rust Costrick with a stough 140 00:07:44,120 --> 00:07:46,400 Speaker 1: just to run through what's been quite choppy twenty four 141 00:07:46,400 --> 00:07:49,560 Speaker 1: hours in global markets. We're the rust cost ridge of 142 00:07:49,840 --> 00:08:05,040 Speaker 1: black Rock. Really enjoying being with Here's the eternal Treasury built. 143 00:08:05,080 --> 00:08:08,440 Speaker 1: It's Kamal three km Sri Kama Global STRATEGI As president, 144 00:08:08,680 --> 00:08:13,000 Speaker 1: the regime three of the last five six seven years 145 00:08:13,040 --> 00:08:16,840 Speaker 1: has been growth. Okay, growth, solid growth, decent, low flation, 146 00:08:16,960 --> 00:08:20,240 Speaker 1: low flation, lowflation. There's a question marks to whether we're 147 00:08:20,240 --> 00:08:23,760 Speaker 1: breaking out of that regime, whether this administration can really 148 00:08:23,880 --> 00:08:27,640 Speaker 1: change things. Can they this administration can change it. I 149 00:08:27,640 --> 00:08:30,200 Speaker 1: think there are a whole lot of policies John, which 150 00:08:30,320 --> 00:08:34,720 Speaker 1: can change the outlook. But what we have seen so far, 151 00:08:34,880 --> 00:08:37,160 Speaker 1: it's not going to do it. Because the tax plan 152 00:08:37,280 --> 00:08:40,280 Speaker 1: as we know it, I think is going to be 153 00:08:40,360 --> 00:08:43,080 Speaker 1: very good for corporations. It is also going to be 154 00:08:43,120 --> 00:08:46,199 Speaker 1: good for higher income people who receive dividends and capital 155 00:08:46,200 --> 00:08:50,560 Speaker 1: appreciation from stock buybacks. But it is not going to 156 00:08:50,640 --> 00:08:53,360 Speaker 1: be for you if you had a way owner at 157 00:08:53,360 --> 00:08:56,480 Speaker 1: the low or middle income level. So three the perma ball. 158 00:08:57,320 --> 00:08:59,400 Speaker 1: If things going to change for you, or you just 159 00:08:59,480 --> 00:09:02,280 Speaker 1: keep your eye down the lanes, typle is treasuries. I 160 00:09:02,320 --> 00:09:05,959 Speaker 1: continue to stay bullish treasuries. I am. I will change 161 00:09:06,120 --> 00:09:09,600 Speaker 1: if the circumstances change, John, but I'm not going to 162 00:09:09,720 --> 00:09:13,040 Speaker 1: change because one bond guru or the other becomes barish 163 00:09:13,120 --> 00:09:15,680 Speaker 1: because they have been banished in the past. But I 164 00:09:15,720 --> 00:09:19,000 Speaker 1: have stayed bullish, and we have essentially seen the ten 165 00:09:19,080 --> 00:09:23,239 Speaker 1: year yield come down back again close to two in September, 166 00:09:23,320 --> 00:09:24,880 Speaker 1: and I think we are going there again. But the 167 00:09:24,960 --> 00:09:28,680 Speaker 1: foundational idea history is bringing the yield market, and John's 168 00:09:28,720 --> 00:09:31,360 Speaker 1: just plugging you to get brief done the real yield. 169 00:09:31,360 --> 00:09:34,520 Speaker 1: Look for that show tomorrow Bloomberg Television over to your 170 00:09:34,600 --> 00:09:38,160 Speaker 1: serious economics. Even with this tax cut, you don't buy 171 00:09:38,240 --> 00:09:42,439 Speaker 1: make America great again. I want to make America great again. 172 00:09:42,520 --> 00:09:45,000 Speaker 1: It's not that I don't believe in making it great again, 173 00:09:45,040 --> 00:09:49,199 Speaker 1: but but what you need to do, tom is employment 174 00:09:49,400 --> 00:09:54,360 Speaker 1: creating tax cuts. You want a tax cutters were if 175 00:09:54,400 --> 00:09:57,680 Speaker 1: you were to hire more workers, you get a tax cut. 176 00:09:58,440 --> 00:10:01,560 Speaker 1: And in terms of one of the other ideas that 177 00:10:01,640 --> 00:10:04,839 Speaker 1: we have talked about is universal basic income. If that 178 00:10:05,000 --> 00:10:07,160 Speaker 1: is some money that is given to you to give 179 00:10:07,240 --> 00:10:10,960 Speaker 1: yourself training, to make yourself better, and that in turn 180 00:10:11,480 --> 00:10:15,080 Speaker 1: helps your employment opportunities better. Those are the kinds of 181 00:10:15,120 --> 00:10:18,439 Speaker 1: things which work at lower income left that's fine, I mean, 182 00:10:18,480 --> 00:10:20,760 Speaker 1: it sounds like we're on the edge of hell sinking 183 00:10:20,840 --> 00:10:25,120 Speaker 1: good morning. Thanks for listening on our digital product in Scandinavia. 184 00:10:25,480 --> 00:10:28,679 Speaker 1: Great Shrie, This is America. There's no way you're going 185 00:10:28,720 --> 00:10:31,240 Speaker 1: to get there through What did you get in the 186 00:10:31,320 --> 00:10:37,760 Speaker 1: tax Act to create jobs? What you can what you 187 00:10:37,840 --> 00:10:41,480 Speaker 1: potentially have to create jobs are the corporate that corporate 188 00:10:41,559 --> 00:10:46,760 Speaker 1: tax cut from thirty five and that in turn boost 189 00:10:46,800 --> 00:10:50,320 Speaker 1: the companies earned after tax income. Tom. The question is 190 00:10:50,920 --> 00:10:54,640 Speaker 1: do they use it for hiring more workers, giving more wages, 191 00:10:55,240 --> 00:10:58,199 Speaker 1: or is it used for stock buy backs and increasing dividends. 192 00:10:58,200 --> 00:11:00,880 Speaker 1: But encouragingly straight we've seen to make of everything. We've 193 00:11:00,880 --> 00:11:03,480 Speaker 1: seen some one off bonuses, one thousand dollar bonuses, and 194 00:11:03,600 --> 00:11:06,040 Speaker 1: some of these tele communication companies, we've seen them also 195 00:11:06,480 --> 00:11:09,280 Speaker 1: incrementally boost wages at some of these companies as well. 196 00:11:09,360 --> 00:11:12,040 Speaker 1: I believe whilst far Go, another financial firm, made that 197 00:11:12,080 --> 00:11:14,600 Speaker 1: move as well. Do you think that is something we 198 00:11:14,640 --> 00:11:17,640 Speaker 1: could see a lot more widespread as the months progress 199 00:11:17,679 --> 00:11:19,400 Speaker 1: and these companies report and they give us a little 200 00:11:19,440 --> 00:11:20,880 Speaker 1: bit more kids as to what they're going to do 201 00:11:20,880 --> 00:11:25,760 Speaker 1: with this money. I don't believe in anecdotal stories very much, John, 202 00:11:25,840 --> 00:11:29,239 Speaker 1: And the reason is we saw after the Trump inauguration 203 00:11:29,280 --> 00:11:31,439 Speaker 1: there were a few companies which said they were going 204 00:11:31,480 --> 00:11:35,240 Speaker 1: to bring jobs back from Mexico, and it turned out 205 00:11:35,520 --> 00:11:38,240 Speaker 1: that more jobs were actually going back to Mexico than 206 00:11:38,320 --> 00:11:42,560 Speaker 1: what we're brought forward. So anecdotes are nice, news reports 207 00:11:42,559 --> 00:11:46,880 Speaker 1: are great, but I believe in data and wage increases 208 00:11:47,400 --> 00:11:50,960 Speaker 1: are not looking very good. The Geogg's numbers, which comes 209 00:11:51,000 --> 00:11:54,960 Speaker 1: from the Bureau of Labor Statistics, came this week, shows 210 00:11:55,040 --> 00:11:58,280 Speaker 1: that that are still considerable amount of job openings if 211 00:11:58,280 --> 00:12:01,080 Speaker 1: you want them. Yeah, it's shows said the quick rate 212 00:12:01,240 --> 00:12:03,880 Speaker 1: was table. In other words, you're not confident enough to 213 00:12:03,960 --> 00:12:07,720 Speaker 1: quit and look for another job voluntarily. All of those 214 00:12:07,800 --> 00:12:10,000 Speaker 1: don't say to me that this is a tough market 215 00:12:10,040 --> 00:12:12,920 Speaker 1: where you're doing well. Well. I want to get to 216 00:12:12,960 --> 00:12:14,720 Speaker 1: this and Greg ville is going to come up here, 217 00:12:14,720 --> 00:12:17,520 Speaker 1: folks at a moment. I want to dovetail Mr Villiers politics. 218 00:12:17,880 --> 00:12:21,040 Speaker 1: In the your cautious world on g d P, Greg 219 00:12:21,120 --> 00:12:24,520 Speaker 1: Villier is really beginning to tilt towards an historic election 220 00:12:24,720 --> 00:12:30,600 Speaker 1: in November. Where do you see GDP going next November? 221 00:12:32,320 --> 00:12:34,480 Speaker 1: Where does g d P go on a three com 222 00:12:34,520 --> 00:12:39,560 Speaker 1: our world? Is these politicians Jackey in November six answers 223 00:12:39,600 --> 00:12:43,760 Speaker 1: he doesn't get his three. He doesn't exactly That's exactly 224 00:12:43,760 --> 00:12:45,680 Speaker 1: what I'm saying, Tom, I think you are at the 225 00:12:45,720 --> 00:12:49,800 Speaker 1: two to two point five percent range. And if the risk, 226 00:12:49,840 --> 00:12:53,120 Speaker 1: if anything, is on the downside, especially if you have 227 00:12:53,240 --> 00:12:57,360 Speaker 1: problems with NAFTA trade war developing, or if you have 228 00:12:57,440 --> 00:13:01,120 Speaker 1: a situation where you're run into geopol critical issues dealing 229 00:13:01,120 --> 00:13:05,120 Speaker 1: with North Korea or a China trade ward. That apart, 230 00:13:05,480 --> 00:13:08,040 Speaker 1: you are looking for a two and a half percent growth, 231 00:13:08,480 --> 00:13:12,120 Speaker 1: But if these global risks actually come out, you're looking 232 00:13:12,120 --> 00:13:16,439 Speaker 1: for something lower. What does investment do? We mentioned consumption 233 00:13:16,520 --> 00:13:20,800 Speaker 1: before Bloomberg Television, but let's cover why because C plus 234 00:13:21,040 --> 00:13:24,120 Speaker 1: I I mean, all the John you mentioned it. All 235 00:13:24,160 --> 00:13:28,079 Speaker 1: this money is coming back. Why would it be invested 236 00:13:28,160 --> 00:13:32,280 Speaker 1: in a fully employed economy? Some will, I agree, but 237 00:13:32,440 --> 00:13:36,719 Speaker 1: most of it gets distributed to the halves, right absolutely, 238 00:13:36,760 --> 00:13:39,360 Speaker 1: I agree with you fully. That is my concern on 239 00:13:39,400 --> 00:13:42,600 Speaker 1: the eyes side. The eyes side is it has to 240 00:13:42,640 --> 00:13:46,520 Speaker 1: go into plant and equipment investment, and if it doesn't, 241 00:13:46,559 --> 00:13:49,760 Speaker 1: the investment doesn't pick up, Tom, and the consumption to 242 00:13:49,840 --> 00:13:52,720 Speaker 1: pick up. You do not need to give more money 243 00:13:52,800 --> 00:13:55,080 Speaker 1: to the top one percent. You need to give it 244 00:13:55,120 --> 00:13:58,839 Speaker 1: to the bottom twenty. Not because of any concerned about 245 00:13:58,840 --> 00:14:03,920 Speaker 1: income distribution, equality of incomes, but because the bottom twenty 246 00:14:04,960 --> 00:14:09,840 Speaker 1: the big consumers, John Ferry, I find this fascinating. Yeah, 247 00:14:09,920 --> 00:14:12,040 Speaker 1: I mean all the different opinions we got. I really 248 00:14:12,040 --> 00:14:13,640 Speaker 1: want to make this clear force John and I are 249 00:14:13,679 --> 00:14:16,200 Speaker 1: living this with Pim Fox and friends in the choir 250 00:14:16,640 --> 00:14:19,760 Speaker 1: in the set, the diversity of opinions, John Ferrell, that 251 00:14:20,000 --> 00:14:23,520 Speaker 1: wasn't there ninety days ago. Yeah, with a vengeance. I 252 00:14:23,520 --> 00:14:26,040 Speaker 1: will say, over the last few days, I've witnessed a 253 00:14:26,120 --> 00:14:28,640 Speaker 1: real shift in people's views about what's going to happen 254 00:14:28,640 --> 00:14:31,040 Speaker 1: with Campex this year. And I've seen a lot of emails. 255 00:14:31,040 --> 00:14:33,840 Speaker 1: How many emails have you had from analysts about upgrading 256 00:14:33,840 --> 00:14:38,880 Speaker 1: industrials becoming much more bullish about Jeffs revival. Jeff Rank 257 00:14:39,120 --> 00:14:42,160 Speaker 1: bemo yesterday on on Bloomberg TV and on Bloomberg Radio 258 00:14:42,240 --> 00:14:46,120 Speaker 1: talking about exactly that thing, Get long, Caterpillar, buy Industrial 259 00:14:46,160 --> 00:14:48,920 Speaker 1: as a Capex revival. I've seen a lot more enthusiasm 260 00:14:48,920 --> 00:14:51,560 Speaker 1: about those themes in the last few days. Time Street Comer, 261 00:14:51,760 --> 00:14:53,800 Speaker 1: thank you so much for me. Thank you, thank you, 262 00:14:54,160 --> 00:14:56,400 Speaker 1: love you're working, thank you for your support. On Twitter, 263 00:15:07,920 --> 00:15:11,440 Speaker 1: here's from Luke Costello's Patterson, New Jersey think of Abbott 264 00:15:11,480 --> 00:15:15,280 Speaker 1: and Costello, who's on first. The comedy of another time 265 00:15:15,280 --> 00:15:18,760 Speaker 1: and place in Patterson, New Jersey is from another time 266 00:15:18,800 --> 00:15:21,840 Speaker 1: in another place. It's maybe the part of America that 267 00:15:21,920 --> 00:15:25,280 Speaker 1: I speak too little of. Bill Pascrell joins us from 268 00:15:25,280 --> 00:15:29,440 Speaker 1: the ninth District of Patterson, New Jersey. Bill, can the 269 00:15:29,480 --> 00:15:34,120 Speaker 1: Republicans even get to November six of two thousand eighteen, 270 00:15:34,560 --> 00:15:37,640 Speaker 1: or like Mr Issa of California, are they all going 271 00:15:37,680 --> 00:15:41,520 Speaker 1: to retire so fast out of high tech states that 272 00:15:41,760 --> 00:15:43,600 Speaker 1: the election is going to be over before we get 273 00:15:43,600 --> 00:15:50,440 Speaker 1: to November? Dropping like flies? And there's some Democrats are 274 00:15:50,520 --> 00:15:55,040 Speaker 1: retiring as well. Uh, not not all old folks, but 275 00:15:56,000 --> 00:15:59,280 Speaker 1: some young folks saying that they've had enough. And I've 276 00:15:59,280 --> 00:16:03,040 Speaker 1: talked to both the Democrats and Republicans are getting out 277 00:16:03,080 --> 00:16:08,080 Speaker 1: and tiring and resigning, and um, some of them are 278 00:16:09,240 --> 00:16:13,480 Speaker 1: upfront about why they're leaving, and I think it doesn't 279 00:16:13,520 --> 00:16:17,840 Speaker 1: vote well for the two parties and the two party system. 280 00:16:18,240 --> 00:16:21,520 Speaker 1: We need diversity in each party. We need people to 281 00:16:21,600 --> 00:16:24,840 Speaker 1: be speaking in their minds rather than being out and 282 00:16:25,000 --> 00:16:28,640 Speaker 1: marching in lockstep. So it's I'm started by a lot 283 00:16:28,680 --> 00:16:31,000 Speaker 1: of them leaving on both sides of the aisle. I 284 00:16:31,040 --> 00:16:35,000 Speaker 1: really am, how do you respond with the immense change 285 00:16:35,200 --> 00:16:39,320 Speaker 1: and challenges of your ninth district to the East Coast 286 00:16:39,440 --> 00:16:44,280 Speaker 1: West Coast modern progressive Democratic Party. Now, whether it's Miss 287 00:16:44,320 --> 00:16:47,040 Speaker 1: Winfrey talking about running for president or whatever, I get 288 00:16:47,080 --> 00:16:49,400 Speaker 1: that that's the thing of the moment. But when you 289 00:16:49,440 --> 00:16:53,400 Speaker 1: see the same old guard of quote unquote progressives, I 290 00:16:53,400 --> 00:16:56,800 Speaker 1: would suggest Bill Pascarel is not a progressive. Where is 291 00:16:56,880 --> 00:17:00,720 Speaker 1: your party? Where do they need to head to do 292 00:17:00,880 --> 00:17:04,119 Speaker 1: better in two thousand twenty. Well, I think it's not 293 00:17:04,200 --> 00:17:06,879 Speaker 1: just the question of you know, on message if we 294 00:17:07,000 --> 00:17:10,000 Speaker 1: need a message, and I don't believe that that message 295 00:17:10,000 --> 00:17:13,320 Speaker 1: has been hied in to the very fabric of what 296 00:17:13,440 --> 00:17:18,360 Speaker 1: Americans are talking about in terms of not only decent jobs, 297 00:17:19,600 --> 00:17:24,080 Speaker 1: but but wages that are going to for eyes appreciably, uh, 298 00:17:24,320 --> 00:17:27,760 Speaker 1: not only in terms of inflation, but in terms of 299 00:17:28,080 --> 00:17:31,480 Speaker 1: our standard of living, getting our kids are good education, 300 00:17:32,200 --> 00:17:36,880 Speaker 1: creating those jobs, uh, and having those folks be able 301 00:17:36,920 --> 00:17:39,480 Speaker 1: to put read on the table in their homes. I mean, 302 00:17:39,560 --> 00:17:42,440 Speaker 1: this is this is a big issue. When you lose 303 00:17:42,480 --> 00:17:46,320 Speaker 1: sight of it and you get distracted and other issues 304 00:17:46,359 --> 00:17:50,240 Speaker 1: which are important, but nothing is more important than the 305 00:17:50,320 --> 00:17:53,280 Speaker 1: health of the nation and its economy, and that is 306 00:17:53,320 --> 00:17:56,359 Speaker 1: why we have to work with the business community, and 307 00:17:56,480 --> 00:17:59,800 Speaker 1: many Democrats are working with the business community. This week 308 00:17:59,800 --> 00:18:02,680 Speaker 1: I saw photo shoot I believe studying Hawire of Maryland 309 00:18:02,720 --> 00:18:05,400 Speaker 1: was sitting next to the President. You're having a cup 310 00:18:05,440 --> 00:18:08,000 Speaker 1: of coffee this morning with a president talking about bon 311 00:18:08,080 --> 00:18:11,560 Speaker 1: Jovi in Bruce Springsteen, and you're educating the president on 312 00:18:11,680 --> 00:18:15,440 Speaker 1: immigration in America. Because Patterson, New Jersey is a crucible 313 00:18:15,640 --> 00:18:19,520 Speaker 1: of Northeast immigration of America. What's your advice to the 314 00:18:19,600 --> 00:18:25,360 Speaker 1: President to find a common ground with Republicans that are 315 00:18:25,400 --> 00:18:28,880 Speaker 1: that are living in another time and place. Most immigrants 316 00:18:28,960 --> 00:18:32,840 Speaker 1: are hard working people and want, just like everybody else, 317 00:18:32,960 --> 00:18:36,000 Speaker 1: for their families. They want to work. They don't want 318 00:18:36,000 --> 00:18:40,080 Speaker 1: to be living off the bowl. Uh. They want to 319 00:18:40,119 --> 00:18:44,200 Speaker 1: bring community stability, and we should treat them with deep 320 00:18:44,280 --> 00:18:49,119 Speaker 1: respect because they're they're treating America at with deep perspective. 321 00:18:49,800 --> 00:18:52,040 Speaker 1: Many of them have served in the armed forces to 322 00:18:52,080 --> 00:18:55,679 Speaker 1: protect our nation. Many of them are police forces and 323 00:18:55,920 --> 00:19:00,840 Speaker 1: fire fire departments and first responders, teachers, and we have 324 00:19:01,000 --> 00:19:05,720 Speaker 1: I think shown a in a very conversation, a deep 325 00:19:05,840 --> 00:19:09,760 Speaker 1: disrespect of those people who have come here from other 326 00:19:09,880 --> 00:19:12,880 Speaker 1: nations and their children. I mean, well, look what look 327 00:19:12,920 --> 00:19:15,199 Speaker 1: what we're doing with Doc said, well, what has that 328 00:19:15,320 --> 00:19:18,160 Speaker 1: got to do with with trade? Or has a lot 329 00:19:18,200 --> 00:19:23,080 Speaker 1: to do with it. These people have basically educated themselves 330 00:19:23,119 --> 00:19:26,680 Speaker 1: to take their place in our great society, and yet 331 00:19:26,720 --> 00:19:29,760 Speaker 1: we're treating them as like second class people or a 332 00:19:29,960 --> 00:19:33,760 Speaker 1: hit congressman or in hats. Tried to find common ground 333 00:19:33,800 --> 00:19:37,320 Speaker 1: with Ted Kennedy the last immigration do I'm gonna say, 334 00:19:37,359 --> 00:19:41,240 Speaker 1: ten eleven years ago that went down in flames. Well, 335 00:19:41,240 --> 00:19:44,520 Speaker 1: I've ben go down in flames in the Senate. We 336 00:19:44,680 --> 00:19:47,200 Speaker 1: never even brought it up in the House of Representative 337 00:19:47,280 --> 00:19:50,600 Speaker 1: because of the cowardly act of dismissing it. How do 338 00:19:50,760 --> 00:19:54,400 Speaker 1: I even got talked about and discussed very quickly here? 339 00:19:54,440 --> 00:19:56,760 Speaker 1: How do we get Kevin Brady and Bill Pascrell on 340 00:19:56,800 --> 00:20:00,359 Speaker 1: the same page to move immigration forward? Well, that's pretty 341 00:20:00,359 --> 00:20:03,080 Speaker 1: difficult because what Kevin did, and I liked Kevin a 342 00:20:03,080 --> 00:20:06,600 Speaker 1: lot from Texas, but he has showed a total disrespect 343 00:20:06,680 --> 00:20:11,040 Speaker 1: of the Northeast. Uh. It's he's made it a a 344 00:20:11,200 --> 00:20:15,440 Speaker 1: blue and red dichotomy here. It shouldn't be that way. 345 00:20:15,480 --> 00:20:18,199 Speaker 1: We're all Americans, for crying out loud, We're gonna have 346 00:20:18,240 --> 00:20:21,720 Speaker 1: our differences politically. We certainly do not want an end 347 00:20:22,040 --> 00:20:25,320 Speaker 1: to the age of controversy, but when it comes to 348 00:20:25,440 --> 00:20:29,760 Speaker 1: the basic principles of keeping this country together and united, 349 00:20:29,960 --> 00:20:32,359 Speaker 1: we gotta work with each other. We didn't work with 350 00:20:32,440 --> 00:20:35,440 Speaker 1: each other in the attack situation, in the tax cut 351 00:20:35,520 --> 00:20:38,280 Speaker 1: that we voted on. We were not involved. We were 352 00:20:38,359 --> 00:20:41,840 Speaker 1: dismissed and they were demissive. We gotta leave at their 353 00:20:41,880 --> 00:20:44,640 Speaker 1: constant Pisco, your father worked for the railroad. In your 354 00:20:44,680 --> 00:20:47,600 Speaker 1: spare time, could you just fix the trains of Greater 355 00:20:47,680 --> 00:20:50,600 Speaker 1: New York City, Bill Pisco for the ninth District, Patterson, 356 00:20:51,040 --> 00:21:08,600 Speaker 1: New Jersey, of New Jersey. He leads his note this morning, 357 00:21:08,680 --> 00:21:12,280 Speaker 1: the widely acclaimed the Gartment letter Love It Hated. It 358 00:21:12,520 --> 00:21:15,360 Speaker 1: is a morning brief for Global Wall Street Bonus round 359 00:21:15,400 --> 00:21:19,320 Speaker 1: in the back our Gartman's trades Dennis, Good morning. Mr 360 00:21:19,400 --> 00:21:22,840 Speaker 1: Gross is quote unquote shorting bonds. He looks for a 361 00:21:22,920 --> 00:21:27,760 Speaker 1: modest bear market in bonds with some losses. Are you 362 00:21:27,800 --> 00:21:30,880 Speaker 1: shorting bonds this morning as well? I should have been 363 00:21:30,920 --> 00:21:34,359 Speaker 1: shorting them already, and I've missed the boat that. I 364 00:21:34,400 --> 00:21:36,600 Speaker 1: think that the important thing to understand is that the 365 00:21:36,640 --> 00:21:40,360 Speaker 1: bear market in the bond market actually began fifteen sixteen 366 00:21:40,359 --> 00:21:42,800 Speaker 1: months ago there's no question about that. And as I've 367 00:21:42,800 --> 00:21:45,119 Speaker 1: told people before, if you missed the bull market in 368 00:21:45,200 --> 00:21:47,960 Speaker 1: bonds which began in nineteen two, if you didn't buy 369 00:21:47,960 --> 00:21:50,560 Speaker 1: bonds until nineteen eighty three, Now, if you didn't buy 370 00:21:50,560 --> 00:21:54,440 Speaker 1: them until heck, if you didn't buy them until ninety six, 371 00:21:54,920 --> 00:21:57,680 Speaker 1: you still had thirty years of a bull market ahead 372 00:21:57,680 --> 00:21:59,960 Speaker 1: of you. I fear that we are starting a multi 373 00:22:00,160 --> 00:22:03,760 Speaker 1: decade bear marketing bonds, So any rallies have to be sold, 374 00:22:03,800 --> 00:22:06,280 Speaker 1: weaknesses not to be bought. I think we've changed the 375 00:22:06,320 --> 00:22:09,040 Speaker 1: trend that has been in in place for thirty some years, 376 00:22:09,320 --> 00:22:11,320 Speaker 1: and now you're going to be in the trend of 377 00:22:11,320 --> 00:22:14,080 Speaker 1: the rising rates, lower bond prices for a long period 378 00:22:14,119 --> 00:22:15,919 Speaker 1: of time. And then the silliness of the day to 379 00:22:16,000 --> 00:22:21,400 Speaker 1: day debate, is it enough to derail a Fed policy 380 00:22:21,440 --> 00:22:25,919 Speaker 1: that seems delinked from market action. Well, the Fed clearly 381 00:22:26,000 --> 00:22:29,800 Speaker 1: is of a mindset to to raise over the overnight 382 00:22:29,800 --> 00:22:32,000 Speaker 1: Fed funds rate. And actually I should revise that and 383 00:22:32,040 --> 00:22:35,720 Speaker 1: say the Fed will follow the overnight Fed funds rate relative. 384 00:22:35,880 --> 00:22:39,439 Speaker 1: The Fed really never does lead. The Fed follows. The 385 00:22:39,440 --> 00:22:42,040 Speaker 1: Fed wants to take rates a little bit higher. I've 386 00:22:42,040 --> 00:22:43,520 Speaker 1: always said that we're going to have at least three 387 00:22:43,600 --> 00:22:46,560 Speaker 1: rates three rate increases this year. We may even have four. However, 388 00:22:46,920 --> 00:22:50,159 Speaker 1: the data this morning might be might derail that a 389 00:22:50,200 --> 00:22:54,159 Speaker 1: little bit because we've seen the weekly jobless rate move 390 00:22:54,200 --> 00:22:56,399 Speaker 1: about two d and sixty, which I I find to 391 00:22:56,440 --> 00:22:59,919 Speaker 1: be very, very disconcerting. And more importantly, we still have 392 00:23:00,000 --> 00:23:03,040 Speaker 1: of a deflationary environment, as we saw the PPI numbers 393 00:23:03,080 --> 00:23:06,320 Speaker 1: go negative and nobody saw that coming. Dennis Gartman, I 394 00:23:06,359 --> 00:23:10,439 Speaker 1: wonder if you could add into your analysis real interest rates, 395 00:23:10,560 --> 00:23:15,760 Speaker 1: because real interest rates have not had a thirty year run. 396 00:23:16,320 --> 00:23:19,240 Speaker 1: And indeed, when you have high inflation and you have 397 00:23:19,520 --> 00:23:23,600 Speaker 1: high interest rates, you're not making any money. It's all 398 00:23:23,640 --> 00:23:26,440 Speaker 1: relative at this point. So why would you say thirty 399 00:23:26,480 --> 00:23:32,000 Speaker 1: year bear market bull market? Uh, it's been a thirty Well, 400 00:23:31,800 --> 00:23:34,200 Speaker 1: all I can look at is the bond futures and 401 00:23:34,200 --> 00:23:37,080 Speaker 1: and that's the to me, that's the real market PIM 402 00:23:37,119 --> 00:23:39,960 Speaker 1: and it has been a thirty year bull market. The 403 00:23:39,960 --> 00:23:42,600 Speaker 1: the what has been interesting is UH in in my 404 00:23:42,680 --> 00:23:45,760 Speaker 1: retirement fund, my wife and I did something relatively brilliant 405 00:23:45,800 --> 00:23:49,280 Speaker 1: about twenty years ago. We began buying strip coupon treasury 406 00:23:49,320 --> 00:23:53,320 Speaker 1: securities UH and and that's outperformed actually even the equities market, 407 00:23:54,000 --> 00:23:56,800 Speaker 1: but it has been because of a thirty year actually 408 00:23:56,800 --> 00:24:00,080 Speaker 1: a thirty five year bull market that ended in the 409 00:24:00,080 --> 00:24:03,560 Speaker 1: the summer of We have not seen new highs in 410 00:24:03,560 --> 00:24:06,280 Speaker 1: the bond market. We have seen new highs as far 411 00:24:06,320 --> 00:24:09,439 Speaker 1: as interest rates are concerned. We have seen newer lows 412 00:24:09,520 --> 00:24:11,640 Speaker 1: in the bond market. And I think that that's going 413 00:24:11,680 --> 00:24:13,639 Speaker 1: to continue for a long period of time going forward. 414 00:24:13,680 --> 00:24:17,640 Speaker 1: Inflationary pressures eventually, and that's the important word here, eventually 415 00:24:17,680 --> 00:24:20,600 Speaker 1: shall shall return and the Seder will be late in 416 00:24:20,760 --> 00:24:22,840 Speaker 1: in understanding that. Take a look at what's going on 417 00:24:22,840 --> 00:24:26,840 Speaker 1: in the commodity markets. They've stopped going down. Grain places 418 00:24:26,840 --> 00:24:30,719 Speaker 1: have stopped going down. Crude oil prices have started going up. Uh. 419 00:24:31,160 --> 00:24:34,639 Speaker 1: Raw materials prices, coppers, inc. Lead have all been going higher. 420 00:24:35,080 --> 00:24:38,119 Speaker 1: Those the commodity markets termed before anything else does. And 421 00:24:38,200 --> 00:24:40,439 Speaker 1: I think the commodity markets are telling us that inflationary 422 00:24:40,440 --> 00:24:43,399 Speaker 1: pressures are likely to be extant going forward, and that 423 00:24:43,560 --> 00:24:45,600 Speaker 1: is always going to be detrimental to the bond market. 424 00:24:45,760 --> 00:24:48,639 Speaker 1: But then that would make sense that the cost of 425 00:24:48,680 --> 00:24:50,879 Speaker 1: money is increasing, But if you're going to have to 426 00:24:50,920 --> 00:24:54,560 Speaker 1: spend that money that you make lending, lending something to 427 00:24:54,600 --> 00:24:57,520 Speaker 1: the government or buying a bond that you're going to 428 00:24:57,640 --> 00:24:59,160 Speaker 1: have to have more of it to buy the same 429 00:24:59,200 --> 00:25:01,720 Speaker 1: amount of oil the same amount of corn. Because you're 430 00:25:01,720 --> 00:25:03,840 Speaker 1: telling me the prices are going up, So really, what's 431 00:25:03,840 --> 00:25:07,919 Speaker 1: the difference. I'm not sure I understand the question. Well, 432 00:25:07,960 --> 00:25:09,800 Speaker 1: I mean you're telling me that you're gonna see commodity 433 00:25:09,880 --> 00:25:12,240 Speaker 1: prices lead the way higher. And indeed we've seen that 434 00:25:12,320 --> 00:25:15,800 Speaker 1: crude oil, copper, industrial medals. Yes. But if so, if 435 00:25:15,840 --> 00:25:18,040 Speaker 1: the cost of things is going to increase, it makes 436 00:25:18,040 --> 00:25:20,680 Speaker 1: sense that the cost of money would also increase because 437 00:25:21,040 --> 00:25:22,680 Speaker 1: you need more of it to buy the same amount 438 00:25:22,720 --> 00:25:24,919 Speaker 1: of stuff. I will not argue that's exactly what's going 439 00:25:24,960 --> 00:25:26,840 Speaker 1: to happen. The cost of money is going to go higher, 440 00:25:27,119 --> 00:25:30,160 Speaker 1: no question. I want to get to a golden Bitcoin 441 00:25:30,160 --> 00:25:32,800 Speaker 1: in the next segment. But um, I I have put 442 00:25:32,840 --> 00:25:36,359 Speaker 1: out I put a today on television Dennis Gartman that 443 00:25:36,520 --> 00:25:41,520 Speaker 1: finally bitcoin is at support and is barely on support. 444 00:25:41,880 --> 00:25:44,960 Speaker 1: Let's be clear, gartments in the business of by hold cell, 445 00:25:45,000 --> 00:25:48,720 Speaker 1: I'm not are you sell bitcoin just on the last 446 00:25:48,800 --> 00:25:52,040 Speaker 1: few days technical work. If you made me take a 447 00:25:52,080 --> 00:25:54,200 Speaker 1: position in bitcoin, and you'd have to hold a gun 448 00:25:54,240 --> 00:25:56,040 Speaker 1: to my head to do it. If you made me 449 00:25:56,080 --> 00:25:58,320 Speaker 1: take a position in bitcoin, I'd much rather be short 450 00:25:58,320 --> 00:26:00,200 Speaker 1: of it than long of it. I don't own any 451 00:26:00,400 --> 00:26:02,399 Speaker 1: nor am I short of it in my accounts, nor 452 00:26:02,440 --> 00:26:05,240 Speaker 1: would I recommend anybody doing so. But I do think 453 00:26:05,280 --> 00:26:07,600 Speaker 1: if you simply look at a chart, you'd say, whatever 454 00:26:07,680 --> 00:26:09,800 Speaker 1: that thing is. If you put a chart bitpoint across 455 00:26:09,840 --> 00:26:12,080 Speaker 1: the wall and walked away, you'd say, it's got problems 456 00:26:12,080 --> 00:26:16,040 Speaker 1: here anything. If we start making under thirteen thousand, uh, 457 00:26:16,040 --> 00:26:17,520 Speaker 1: those people who have bought it in the course of 458 00:26:17,520 --> 00:26:19,600 Speaker 1: the last month and a half find themselves in a 459 00:26:19,640 --> 00:26:23,160 Speaker 1: in a very uncomfortable and an increasingly uncomfortable position. It's 460 00:26:23,200 --> 00:26:26,040 Speaker 1: definitely worth watching. To get back to commodities. I love 461 00:26:26,080 --> 00:26:30,240 Speaker 1: your SMP five hundred ratio to the Reuters CRB index. 462 00:26:30,320 --> 00:26:34,639 Speaker 1: Of course CRB index. It dovetails with what Jeff Curry 463 00:26:34,640 --> 00:26:37,119 Speaker 1: at goldban Sex said. And it's not so much you 464 00:26:37,200 --> 00:26:39,960 Speaker 1: love commodities or you hate equities. It's just on a 465 00:26:40,040 --> 00:26:42,880 Speaker 1: relative basis. You can't ignore it, can you. I don't 466 00:26:42,880 --> 00:26:44,760 Speaker 1: think you can, Tom. I think you have to pay 467 00:26:44,800 --> 00:26:48,760 Speaker 1: attention to that fact. We are at historically wide relationships 468 00:26:48,760 --> 00:26:52,040 Speaker 1: between commodity prices and in equal equity prices, and to 469 00:26:52,080 --> 00:26:54,240 Speaker 1: be quite honest, I'm the chairman of the University of 470 00:26:54,240 --> 00:26:57,040 Speaker 1: Akrons and Doowman Committee, and beginning six months ago, I 471 00:26:57,119 --> 00:26:59,960 Speaker 1: started saying at the margin, we need to begin reducing 472 00:27:00,000 --> 00:27:03,000 Speaker 1: our equity position and increasing our position in real assets, 473 00:27:03,280 --> 00:27:05,160 Speaker 1: and I'm going to continue to do that. That ratio 474 00:27:05,240 --> 00:27:07,959 Speaker 1: of the S and P to the CRB index has 475 00:27:08,000 --> 00:27:10,320 Speaker 1: gotten as wide as it has been in the past 476 00:27:10,560 --> 00:27:14,800 Speaker 1: seventy years. Commodities are cheap relative to equities, so that's right, 477 00:27:14,840 --> 00:27:17,320 Speaker 1: I think makes eminent sense. Dennis Garbon, of course, the 478 00:27:17,400 --> 00:27:19,840 Speaker 1: huge response to Mr Garbins on pro and con, and 479 00:27:19,920 --> 00:27:22,120 Speaker 1: we've got to go to his long of three units 480 00:27:22,640 --> 00:27:30,040 Speaker 1: of gold short of the euro and the end. Thanks 481 00:27:30,119 --> 00:27:34,359 Speaker 1: for listening to the Bloomberg Surveillance podcast. Subscribe and listen 482 00:27:34,600 --> 00:27:39,920 Speaker 1: to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform 483 00:27:40,040 --> 00:27:44,320 Speaker 1: you prefer. I'm on Twitter at Tom Keane before the podcast. 484 00:27:44,400 --> 00:28:00,240 Speaker 1: You can always catch us worldwide. I'm Bloomberg Radio eight