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Speaker 1: Bloomberg Audio Studios, Podcasts, radio news, Bloomberg Money.

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Speaker 2: This is the Bloomberg Money Podcast. I'm Tom Keene with

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Speaker 2: Scarlet Foo. Join us each week for a smart look

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Speaker 2: at the forces shaping your financial life. On personal finance,

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Speaker 2: on retirement, and wealth management. We will explore how people

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Speaker 2: are earning, investing, and building wealth. We are live Fridays

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Speaker 2: at noon Eastern on Bloomberg Television. Subscribe to the podcast

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Speaker 2: wherever you listen, and it's always on the Bloomberg Terminal

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Speaker 2: and the Bloomberg Business app. And we get it out

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Speaker 2: of the park today. Girls here for Bloomberg this week

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Speaker 2: and it's wonderful to see David Girl Bloomberg this weekend.

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Speaker 2: Alison Schreger here with an important story and this is

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Speaker 2: a real pleasure. Hannah Elliott. What you do is you

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Speaker 2: go to Baylor and if you do Baylor, you do autos?

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Speaker 2: Hannah Elliott? Or is this working with Matt Miller on

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Speaker 2: an esteamed auto podcast. Let's get it started. I walked

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Speaker 2: by Elucid. Elucid two hundred thousand dollars or something. Are

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Speaker 2: they selling? Are we going to buy fancy overpriced evs

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Speaker 2: with our wealth management?

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Speaker 3: Apparently not the sales say no, the sales day Americans

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Speaker 3: don't want EV's. Unfortunately, for companies like Lucid and Tesla

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Speaker 3: and Ribbon that are struggling, and also for our domestic

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Speaker 3: automakers that are actually pulling back on a lot of EV's,

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Speaker 3: they had money.

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Speaker 2: Question. Yeah, I'm Scarlett probably as this, I'm going to

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Speaker 2: steal it from her. Should the Chinese be let into

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Speaker 2: America to sell as cheap evs?

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Speaker 3: You know what, I'm not an economist. Jim Farley at

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Speaker 3: Ford thinks that EV's from China will be.

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Speaker 4: Here in the next five years or so. A lot

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Speaker 4: of people.

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Speaker 3: Keith Manton are esteemed automotive reporter came on the podcast yesterday,

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Speaker 3: agrees it's only a matter of time.

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Speaker 5: It's only a matter of time. But I mean under

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Speaker 5: this president, unlikely, right, David, because he is all about

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Speaker 5: trade wars and tariffs and making sure that he seeks

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Speaker 5: vengeance on those who have wronged him in the past.

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Speaker 5: And you see this across the policy spectrum.

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Speaker 6: That's absolutely correct. I mean, he's somebody who loves tariffs,

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Speaker 6: as he says time and time again. I would have

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Speaker 6: a hard time imagining him welcoming Chinese autos into the

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Speaker 6: United States as he invites American automakers to the lawn

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Speaker 6: of the White House over and over again. We saw

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Speaker 6: him put these new tariffs in place just a few

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Speaker 6: days ago, so that that's very much the direction of travel.

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Speaker 2: There kids at camp. We also have a president of

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Speaker 2: the United States at camp. He's at Camp David right now,

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Speaker 2: sixty miles north of the White House. In the history

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Speaker 2: of this cabinet room is extraordinary. I guess of everything.

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Speaker 2: I remember monocolm began and and we're sad out with

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Speaker 2: Carter in seventy nine. Why is the president there? And

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Speaker 2: it's a place where they talk about war, isn't It's

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Speaker 2: a great question.

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Speaker 6: And were I the president, I wouldn't go for the

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Speaker 6: day and leave as he's going to do. He's headed

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Speaker 6: to Bedminster after this, but gets in the Toctin Mountains

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Speaker 6: in Maryland, as you say, sixty miles outside of Washington,

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Speaker 6: d C. We saw FDR go there during his presidency,

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Speaker 6: which called Shangri La back then, and Dwight Eisenhoward didn't

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Speaker 6: like the name. He thought that was a little too

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Speaker 6: a feat so he changed it to Camp David in

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Speaker 6: honor of his grandson. He went there for many weeks

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Speaker 6: after he had a heart attack in Denver. There is

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Speaker 6: some talk of this being the first cabinet meeting at

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Speaker 6: Camp David. No, this one is not Eisen Howard can

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Speaker 6: being the While he was there.

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Speaker 2: There's a photoscoll and I saw President Obama playing pool

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Speaker 2: and you could I could see President Trump bowling President

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Speaker 2: bowling Alley. There is a bowling Alley image.

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Speaker 4: I don't get that on truth Social.

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Speaker 6: But this is really just a venue change. It's the

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Speaker 6: same kind of cabinet meeting we've seen. He's invited the press,

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Speaker 6: and then I'll say, lastly on your point about the

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Speaker 6: significance of this venue, and presidents have liked this place

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Speaker 6: in the past because the press hasn't been.

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Speaker 2: Able to go.

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Speaker 6: And we see President from kind of turning that on

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Speaker 6: its sad guys, he's got a live filmed cabinet meeting

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Speaker 6: taking place again.

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Speaker 4: Well, he's being true to his spirit.

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Speaker 5: Alix, I want to bring you into the conversation because

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Speaker 5: you recently had a column on how Americans are richer

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Speaker 5: than ever before, but they're also.

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Speaker 4: Angrier than ever before as well.

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Speaker 5: The top one percent is richer or is everyone getting

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Speaker 5: richer because you wonder how much of this is you know,

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Speaker 5: kind of relative gains.

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Speaker 1: Well, everyone is getting richer. The top one percent has

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Speaker 1: gotten way way richer. Even if you look at the

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Speaker 1: intercome distribution. It's true the middle class is smaller, but

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Speaker 1: because more people have entered the upper middle class. But

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Speaker 1: even lower income people are by most metrics bet are

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Speaker 1: often they used to be. But it's sort of extraordinary

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Speaker 1: because all we hear is people feel like the economy

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Speaker 1: is not working for them. So, you know, there's a

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Speaker 1: lot of reasons why that could be. It could be

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Speaker 1: some like necessary services are still expensive, could be relative

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Speaker 1: gains or what matters.

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Speaker 5: You know, I wonder whether how much of this is

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Speaker 5: tied to fundamental misunderstandings about how investing or financial markets work.

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Speaker 5: You think about gen Z and they really adopted this

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Speaker 5: financial nihilism where they bet the house on crypto prediction

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Speaker 5: markets all these other things. And you know, because why

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Speaker 5: noting everything doesn't look good for them anyway, they feel

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Speaker 5: like everything's rigged regardless.

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Speaker 1: Yeah, it's there is more of this feeling that success

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Speaker 1: is sort of randomly rather than you know, or I'm

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Speaker 1: also seeing the sort of disconnect and understanding risk. That

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Speaker 1: risk comes from taking, you know, from risking more like

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Speaker 1: you've got higher rewards for more taking more risk, And

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Speaker 1: I don't think this of that relationship has been well understood. Also,

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Speaker 1: I feel like there's a dearth of risk taking in

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Speaker 1: a lot of their lives in other ways. So I

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Speaker 1: feel like it's expressing themselves through taking sort of outside

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Speaker 1: risks in other ways, like maybe they won't invest in

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Speaker 1: this in p. Five hundred, but they'll invest in you know,

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Speaker 1: the you know, Calshier or whatever. So it might be

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Speaker 1: so also a lack of financial literacy or a lask

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Speaker 1: of good risk training.

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Speaker 2: Well, you mentioned the financial literacy. You own the high

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Speaker 2: ground on this with your book and with your academics

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Speaker 2: as well. We're going to have the former vice chairman

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Speaker 2: of the FEDHAN and with your heritage to Manhattan Institute

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Speaker 2: and all that. What did you think of the press conference?

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Speaker 1: You know, there's two things I've changed my mind about

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Speaker 1: in the last five years. One is drug legalization and

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Speaker 1: the other is monetary policy transparency, which I was like

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Speaker 1: a big thing of. You know, Actually Rich was chair

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Speaker 1: of the department when I was at Columbia, so I

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Speaker 1: learned all this stuff from him, and it's just I

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Speaker 1: feel like the FED sort of started to box itself

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Speaker 1: in a little bit too much a forward guidance. Okay,

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Speaker 1: so to some degree, I think, you know, well, maybe

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Speaker 1: it wors just not communicating so.

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Speaker 2: Well right now?

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Speaker 7: Okay, you know, maybe a little mystery and a little like, hey,

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Speaker 7: we think why I.

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Speaker 2: Use that word the other day? The mystery or how

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Speaker 2: does he pull away from too much mystery?

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Speaker 7: Well, you want a clear reaction function, you want clear rules,

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Speaker 7: but you also don't want to say, hey, we're going

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Speaker 7: to probably increase rates in five years or for the years,

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Speaker 7: so you kind of want to strike that fout.

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Speaker 2: The blumber of money angle on this is the yield.

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Speaker 2: I'm sorry, we're mortgage rates in two weeks.

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Speaker 5: The mortgage is now at six point six six percent.

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Speaker 5: That's a one year high. We're not at seven percent yet,

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Speaker 5: but it does make home ownership a lot more expensive.

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Speaker 5: And David, there's a lot of talk about the affordability crisis.

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Speaker 5: Has DC come up with any solutions that will I

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Speaker 5: don't know, resonate with voters before the midterm elections?

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Speaker 2: No, not really.

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Speaker 6: I mean, there was this housing build that the president

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Speaker 6: liked until he didn't like, and so I think that

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Speaker 6: there's been some lip service to it. But we're at

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Speaker 6: a point now as we approach the midterm, so I

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Speaker 6: think the prospects there being any kind of real landmark

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Speaker 6: legislation coming together seems pretty unlikely. But I think that,

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Speaker 6: you know, you, going back to the meeting that's taking

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Speaker 6: place right now, the president has this difficulties overseas and

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Speaker 6: in the US, and this is certainly something I think.

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Speaker 2: That's what thirty seconds and I gave you the last word.

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Speaker 2: Is everybody leaving California?

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Speaker 4: Oh gosh, if you're rich, maybe yes.

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Speaker 2: Yeah, you talk about personal funding.

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Speaker 3: Really, it's really tricky. Everybody's watching the mayoral race. This

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Speaker 3: is a really in LA specifically.

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Speaker 4: You're going to Texas, You're going to Florida. Exactly.

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Speaker 2: Do you have Red Sox Dodgers tickets this weekend?

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Speaker 8: I do not.

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Speaker 9: I'm a mixed fan.

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Speaker 4: Tom Okay, nice exactly. I want to thank our panelist.

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Speaker 5: Thank you so much everyone, David Garral, co host of

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Speaker 5: Blueberg this weekend, and of course be sure to tune

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Speaker 5: in up because they will will be hosting their next

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Speaker 5: episode at seven am Eastern Time tomorrow and on Sunday.

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Speaker 5: Alison Schrager, Bloomberg Opinion columnist. You can check out her

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Speaker 5: latest work on Bloomberg dot Com, Slash Opinion and Hannah Elliott.

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Speaker 4: Her Hot Pursuit.

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Speaker 5: Podcast with one Matt Miller comes out every Friday at noon.

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Speaker 5: Just tune in after the show.

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Speaker 2: Coming up the conversation and after that press conference an

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Speaker 2: important conversation for global economics. Richard Clarita, the former vice

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Speaker 2: chairman of the Federal Reserve. His academics is directly involved

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Speaker 2: in the uproar that chairman wars started here on Wednesday.

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Speaker 2: Richie clarda next from New York City. It's Bloomberg Money.

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Speaker 2: You studied under clarity.

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Speaker 4: Can Ebie's ever become collectibles?

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Speaker 2: Did you pass the math? Welcome back at Bloomberg Money

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Speaker 2: thrilled you with us, Tom Keenan Scarlett Food. It was

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Speaker 2: going to be an important interview, but well maybe a

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Speaker 2: a little more important than it was. Wednesday at one pm.

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Speaker 2: Richard Clarida is with us with PIMCO of Columbia University,

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Speaker 2: always and always the vice chairman, former Vice chairman. I

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Speaker 2: should say the Federal Reserve system, and I think you

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Speaker 2: know we're going to straddle here between Bloomberg money and

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Speaker 2: everything else.

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Speaker 5: Yeah, and we got to start with what we saw

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Speaker 5: in the bond market this week, because we had to

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Speaker 5: sell off in the thirty year yield this week reached

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Speaker 5: a nineteen year high five point twenty six percent, Rich Clarida.

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Speaker 5: Does this sell off in the long line tell us

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Speaker 5: anything about the US economy and therefore how people's prospects

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Speaker 5: might change.

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Speaker 10: Well, there are a lot of reasons bond eeals can

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Speaker 10: go up and down, not just the Fed. The FED

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Speaker 10: is an important part of it. What I would point

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Speaker 10: to is that so far Kevin Warsh has been shared

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Speaker 10: really only six seven.

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Speaker 9: Weeks, but an important measure in the.

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Speaker 10: Bond market, which is break even inflation, so sort of

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Speaker 10: traders expectation of inflation is out or below where it

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Speaker 10: was at least out to ten years when he became chairman.

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Speaker 10: But certainly the reaction during the press conference was probably

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Speaker 10: not one that was welcome.

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Speaker 5: Right, we know the first Trump administration cared a lot

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Speaker 5: about the stock market, and the second one seems to

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Speaker 5: have added the bond market to its list of things

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Speaker 5: that is watching. Which part of the bond market does

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Speaker 5: this administration care most about? The thirty year yield the

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Speaker 5: ten year yield.

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Speaker 10: Oh my goodness, I'm not sure I would defer probably

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Speaker 10: a secretary bust and I do think at one point

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Speaker 10: he may have said that he's focused more on the

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Speaker 10: ten year yield than he is on the FED funds rate. Well,

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Speaker 10: so much of the economy people borrow along for car

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Speaker 10: loans or mortgages or corporate loans, and so that's probably

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Speaker 10: what he had in mind.

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Speaker 2: Okay, So what we're going to do here, it's Bloomberg money.

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Speaker 2: We do personal finance, we do wealth management, we do retirement.

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Speaker 2: But we also have Richard Clarita where this is in

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Speaker 2: the heart of this debate over the chairman of the Fed.

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Speaker 2: So it's going to be a little bit sort of

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Speaker 2: like Scarfoon and Time doing Bloomberg surveillance like more you can.

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Speaker 4: Protect the children at that minder blurry, protect the.

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Speaker 9: Children at home valance.

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Speaker 2: Fine, okay, so former Vice chairman, with great respect, I

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Speaker 2: don't want to turn this into a street lesson. But

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Speaker 2: you have Wosh nominally of Stanford talking about the Lucas

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Speaker 2: critique and then going over and what people don't know

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Speaker 2: is you're directly involved with this. Let's first listen to

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Speaker 2: Chairman Warsh on Wednesday.

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Speaker 11: Some version of the Lucas critique should remind us that

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Speaker 11: when we talk about measures of inflation or something else,

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Speaker 11: and we describe those measures as being consistent with our objectives,

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Speaker 11: we might make them such that they're not very good

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Speaker 11: measures or very good objectives.

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Speaker 2: The chairman before we had the questions from Michael McKee

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Speaker 2: of Bloomberg, the world lit up, an along with legit

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Speaker 2: cred Out of Lucas's Chicago was fiery. The news conference

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Speaker 2: was rich in philosophy, process and institutional aspirations, but poor

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Speaker 2: in operational guidance. The absence of claritai like analytical specificity

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Speaker 2: appears to have spoken louder than Worsh's words. So Lucas

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Speaker 2: did what he did. CGG, Clarita, Galli, and Gertner reinvented

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Speaker 2: modern economics with something called dynamic stochastic general equilibrium theory.

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Speaker 2: We come out now, and as Claudia Sam says, we

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Speaker 2: have a chairman who's not sure what he's looking at

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Speaker 2: an inflation. How does he get the buryls Macon. Does

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Speaker 2: he need to reaffirm PCE is the inflation series? Well?

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Speaker 10: I think what he said at the press conference is

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Speaker 10: for now until next January at least that's going to

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Speaker 10: be correct. So the FED adopted that again in January.

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Speaker 10: He left open the possibility that the task forces could

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Speaker 10: recommend other measures. They could go to an average instead

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Speaker 10: of picking one INDUX, they could look at CPIPPI.

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Speaker 9: There are a lot of things they could do.

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Speaker 10: But I think Anna as usual raised is an important

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Speaker 10: point is that an inflation targeting central bank needs to

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Speaker 10: be clear about what it is it's targeting. It can,

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Speaker 10: it may evolve, and so I think that will be

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Speaker 10: important very importantly.

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Speaker 2: Then here, if we need to get the system back

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Speaker 2: with a confidence about the FED, how does he do

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Speaker 2: that at Jackson Hole? Does he have to reaffirm as

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Speaker 2: Somem says, that inflation is the appropriate measurement and not

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Speaker 2: a policy.

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Speaker 10: Well, I think Jackson Hole may serve a couple purposes. Historically,

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Speaker 10: as we've seen, chairs have used Jackson Hole as sort

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Speaker 10: of a sneak preview of coming attractions. At the September, November,

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Speaker 10: and December meetings, Chairman war Shennedy may do that.

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Speaker 9: He's also interested.

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Speaker 10: In what he called some big question, big picture questions

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Speaker 10: that he sort of previewed at this meeting, and he's

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Speaker 10: also talking to the task forces.

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Speaker 9: I think it's too early to tell what he'll do at.

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Speaker 10: Jackson Hole, but he may do that as well.

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Speaker 5: I find it really interesting that he doesn't want to

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Speaker 5: tell the bond market a whole lot of things, and

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Speaker 5: he's kind of waiting to take his cue from the

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Speaker 5: bond market.

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Speaker 4: From a layperson's point of view, it feels very circular.

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Speaker 3: Right.

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Speaker 5: The Central Bank sets a benchwork industry, the bond market

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Speaker 5: takes its que from that. What's the rationale for the

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Speaker 5: FED to take its queue from the bond market that's

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Speaker 5: relying on the FED to set policy.

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Speaker 4: Help me understand that.

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Speaker 10: So here's the way I would express it. The FED

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Speaker 10: is a very important part of ten year treasury yields.

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Speaker 9: It's not the only thing that drives yields.

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Speaker 10: So I think the Chairman was important to emphasize that

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Speaker 10: the FED does want to step back and interp movements

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Speaker 10: in bond yields. It could be inflation, it could be

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Speaker 10: global growth, Middle East hostilities, but certainly the Chairman and

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Speaker 10: the FED understands that an important part of tenier yields

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Speaker 10: is the expected path of the funds rate and to

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Speaker 10: Scarlett's point, and I actually Ben bernanke gave a speech

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Speaker 10: on this, as did I as vice chair. It's called

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Speaker 10: sometimes called the hall of mirrors problem in central banking,

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Speaker 10: which is the central bank looks at the market, the

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Speaker 10: market looks at the central bank.

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Speaker 2: It gets circular. Let's go back to your page. Gallian

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Speaker 2: Gertler didn't know this. Richard claar to channeling Alan Blinder.

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Speaker 2: Having looked at monetary policy from Joni Mitchell's both sides,

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Speaker 2: now I can testify that central banking in practice is

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Speaker 2: as much in art as a science. How does worsh

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Speaker 2: get back to science to Clarita silence versus some mom

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Speaker 2: and pop philosophy he learned at Stanford?

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Speaker 10: Oh well, I think Kevin Walsh and the committee understand that. Look,

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Speaker 10: Kevin came in. Chairman Warsh came in with an ambitious agenda,

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Speaker 10: and I think that they're going to both focus on

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Speaker 10: implementing that agenda as well as getting to where they

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Speaker 10: need to be on policy. I guess where I would

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Speaker 10: try to relate Clarita Galley Gertler to the current conversation

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Speaker 10: is perhaps specifically in the domain of forward guidance and

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Speaker 10: so in the CGG model, there's actually not a role

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Speaker 10: for forward guidance because the market understands the FED reaction

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Speaker 10: function and the FED understands the market. If you're not

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Speaker 10: going to do forward guidance, then it's incumbent for the

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Speaker 10: markets to have a broad understanding of how the central

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Speaker 10: bank will react to data. If we had six bad

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Speaker 10: months in a row of inflation data, would they hike

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Speaker 10: and by hand much?

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Speaker 9: They're not committing to that, but they're saying, if the

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Speaker 9: data comes out this way.

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Speaker 2: For everybody have Bloomberg money and Scott I got goosebumps.

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Speaker 2: This is like the real deal. I mean, this is

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Speaker 2: what the adults in the room are arguing about right now.

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Speaker 5: Well, for people who are watching this and don't quite

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Speaker 5: know all the names that you and Rich are throwing

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Speaker 5: out there, I want to bring it back to the

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Speaker 5: real economy and the real people's concerns. Do you agree

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Speaker 5: with those people who say that we have a K

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Speaker 5: shaped economy where the higher income and asset owners are

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Speaker 5: doing well and everyone else is kind of struggling that

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Speaker 5: downward arm, and if so, how do we solve for that?

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Speaker 10: Well, yes, broadly, we do and have had a K

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Speaker 10: shape economy for some time, but the K, the branches

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Speaker 10: of the K, have been diverging more widely in the

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Speaker 10: last six or seven years. The way I like to

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Speaker 10: think about it, Scarlett is roughly sixty percent of Americans

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Speaker 10: live in a house that's owner occupied housing, sometimes with

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Speaker 10: their parents, but it's owned about forty percent rent. Most

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Speaker 10: of that sixty percent owned stocks, most of the other

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Speaker 10: forty percent doesn't. So we've been in an economy for

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Speaker 10: some time, but especially in the last six years when

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Speaker 10: stocks have gone up, house prices have gone up.

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Speaker 9: So the top of that K is doing pretty well.

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Speaker 10: If you're in the other part of the K, you

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Speaker 10: don't own your house, you don't own a lot of stocks,

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Speaker 10: you're living paycheck to paycheck. It's been a tough six years,

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Speaker 10: and so there's no doubt we're in a casehay to.

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Speaker 5: Now those services costs just keep getting more expensive as well.

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Speaker 2: From New York City on a Friday, Bloomberg Money, Tom

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Speaker 2: keenan Scarlet Food and with Scarlet Food, Richard Claire and you.

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Speaker 5: Know, Bloomberg money is about how you invest and make

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Speaker 5: your money, but it's also about how you spend your money.

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Speaker 5: So Rich claud I want to ask you on this Friday,

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Speaker 5: what's your splurge?

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Speaker 4: First of all, and how do you save? What do

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Speaker 4: you savell?

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Speaker 10: I leave the saving to my wife, she's pretty good

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Speaker 10: at it. My splurge is on My hobby is music,

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Speaker 10: So I buy guitars, I buy recording equipment.

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Speaker 9: Really, I even spend money. I'm recording my albums. So yeah,

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Speaker 9: that's my splurge.

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Speaker 4: Then you rich record album.

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Speaker 10: In twenty sixteen, I did available Spotify, Apple Music stream

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Speaker 10: for free on YouTube. The new album's coming out later

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Speaker 10: this year. Maybe we'll do a rollout party on this show.

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Speaker 4: Oh it's a follow up. Yeah, yeah, Well what's it called.

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Speaker 9: It's gonna be called take two?

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Speaker 4: Take two? Okay? And what folk music?

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Speaker 3: Like?

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Speaker 4: What's your vibe?

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Speaker 9: Olk rock?

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Speaker 2: Yeah?

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Speaker 10: Folk ross someone who listened to too many Beatles albums.

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Speaker 2: And I will editorialize as i've heard it. It is

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Speaker 2: not a vanity album. It is exquisite. I was shocked.

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Speaker 2: Let's thank you really really quite thank you quit?

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Speaker 5: And you're the solo star, like I don't hear a

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Speaker 5: band name in there.

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Speaker 10: Well, I write the songs and do the vocals, but

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Speaker 10: I work with professional studio musicians in London, LA and Nashville.

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Speaker 10: So all the music you hear is really good playing

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Speaker 10: and then I do some singing on it.

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Speaker 4: Richard Clarts a new album coming.

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Speaker 10: Out with Day Well by December thirty first.

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Speaker 5: By December thirty first, Richard Clater to thank you so much.

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Speaker 5: Pimcoll global economic advisor, the former Feederal Reserve Vice chairman,

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Speaker 5: and of course Columbia University professor as well. Coming up

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Speaker 5: a conversation with Laurie Calvacino of RBC Capital Markets on

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Speaker 5: your retirement fund.

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Speaker 4: This is Bloomberg Money. That is.

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Speaker 5: Bloomberg Money is your new destination for personal finance. It's

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Speaker 5: a cross platform effort that extends beyond your television, including

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Speaker 5: at our new digital hub at Bloomberg dot com slash money.

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Speaker 5: And this week's story I saw on that site is

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Speaker 5: focused on Boomerang kids.

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Speaker 4: It used to be that after.

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Speaker 5: The kids graduated from college, they were out on their own,

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Speaker 5: off your payroll, out of your house. In twenty twenty six,

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Speaker 5: that is no longer a safe assumption. Suzanne Woolly joins

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Speaker 5: us now to discuss how to protect your money and

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Speaker 5: maybe your sanity when an adult child requires support. Suzanne

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Speaker 5: Great to see you, and I guess the first question

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Speaker 5: is how much does it cost? What is the cost

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Speaker 5: financial cost of letting a grown child move back.

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Speaker 4: Into your home.

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Speaker 12: Financial planners talk about an average of fifteen hundred dollars

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Speaker 12: a month, which comes out about eighteen thousand a year.

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Speaker 12: So it's more significant then you might think. And it's

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Speaker 12: not just recent graduates either. I mean your adult children

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Speaker 12: could be separating or divorcing and have kids, have pets

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Speaker 12: on their own and bring them back home.

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Speaker 4: How do you plan for this?

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Speaker 5: What are the planners saying you can do to kind

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Speaker 5: of get ahead of this?

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Speaker 12: Well, I say, I mean an important part is to

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Speaker 12: just set expectations. So when your adult child wants to

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Speaker 12: come look back home, talk about, you know, will they

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Speaker 12: pay some rent? Sure, you'll give them below market rent,

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Speaker 12: of course, you know which, but it may increase over time,

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Speaker 12: you know, so they have sort of an incentive to

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Speaker 12: not make this arrangement last forever.

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Speaker 4: Yeah.

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Speaker 12: So setting expectations about rent and about privacy and just

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Speaker 12: how things are going to work, it's just really important.

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Speaker 4: Can use our question please.

441
00:20:43,880 --> 00:20:45,840
Speaker 2: Jo, I mean, ask you for a friend, how do

442
00:20:45,880 --> 00:20:47,320
Speaker 2: you get them out the door once.

443
00:20:47,160 --> 00:20:50,080
Speaker 12: They move back in well, Tom, you must have made

444
00:20:50,119 --> 00:20:51,600
Speaker 12: it a little too comfortable for them.

445
00:20:51,760 --> 00:20:54,720
Speaker 2: That's the major thing. Make it too comfortable.

446
00:20:54,800 --> 00:20:56,440
Speaker 5: Yeah, I mean you definitely don't want to be rating

447
00:20:56,480 --> 00:20:58,720
Speaker 5: your retirement account or drawing down on your savings and

448
00:20:59,080 --> 00:21:02,640
Speaker 5: perhaps not retire because they've come home to exactly.

449
00:21:02,800 --> 00:21:03,760
Speaker 4: I mean, that's the key.

450
00:21:03,760 --> 00:21:05,960
Speaker 12: If it's coming at the expense of your retirement security,

451
00:21:06,000 --> 00:21:08,600
Speaker 12: you really have to think twice because your kids will

452
00:21:08,640 --> 00:21:11,960
Speaker 12: have a long runway, you know, for earnings. Your runway

453
00:21:12,000 --> 00:21:13,919
Speaker 12: if you're closer retiring is nuts.

454
00:21:14,440 --> 00:21:16,879
Speaker 2: I'm going to get upset now. I remember sitting on

455
00:21:16,920 --> 00:21:19,800
Speaker 2: the bed with my father. I came home from school

456
00:21:20,080 --> 00:21:22,119
Speaker 2: and all that, and he said, you got four weeks

457
00:21:22,119 --> 00:21:25,080
Speaker 2: to move out. That was the runway. The runway was for.

458
00:21:25,400 --> 00:21:26,720
Speaker 4: Are you getting your kids four weeks?

459
00:21:27,240 --> 00:21:31,119
Speaker 2: No, they've been very good about it, actually, but I admit,

460
00:21:31,440 --> 00:21:34,240
Speaker 2: just like you say, we're all writing checks.

461
00:21:34,520 --> 00:21:36,800
Speaker 12: Yeah, you're writing checks, what I mean. And sometimes it's

462
00:21:36,800 --> 00:21:38,520
Speaker 12: great to have your kid move back, you.

463
00:21:38,480 --> 00:21:40,880
Speaker 4: Know, for a while, at least in it for a while, and.

464
00:21:40,800 --> 00:21:45,360
Speaker 12: If they're fatting, rent and maybe doing chores, empty.

465
00:21:45,040 --> 00:21:47,120
Speaker 2: The dishwasher, walk to dog, all that.

466
00:21:47,160 --> 00:21:49,720
Speaker 5: So Zanne, thank you so much, Suzanne Woolly is a

467
00:21:49,800 --> 00:21:51,480
Speaker 5: member of our Bloomberg money team.

468
00:21:51,600 --> 00:21:54,560
Speaker 2: Laura Calvausina's over here taking note. She's got young cherubs

469
00:21:54,560 --> 00:21:56,800
Speaker 2: and she says, is this what this? This is what

470
00:21:56,880 --> 00:21:59,800
Speaker 2: I had with kel Vassina Morney. We are thrilled the

471
00:21:59,800 --> 00:22:03,359
Speaker 2: brig you now. Lori Calvisina had a US equity strategy

472
00:22:03,359 --> 00:22:07,800
Speaker 2: at RBC Capital Markets, scary power points in a view

473
00:22:07,880 --> 00:22:11,640
Speaker 2: of the equity market that's allowed people to be invested

474
00:22:12,160 --> 00:22:14,479
Speaker 2: given their fears. Let's do this, let's bring it up

475
00:22:14,560 --> 00:22:18,119
Speaker 2: right now. Is we can our money musterd here from Calvasena,

476
00:22:18,240 --> 00:22:21,000
Speaker 2: It's from front of eighty page power points. It's like

477
00:22:21,080 --> 00:22:26,119
Speaker 2: Mary Meeker on steroids. Lori Calvisina, our main sentiment model

478
00:22:26,160 --> 00:22:28,960
Speaker 2: points to a gain of ten point eight percent over

479
00:22:29,000 --> 00:22:32,359
Speaker 2: the next twelve months. You look here at the draw

480
00:22:32,400 --> 00:22:37,360
Speaker 2: down fifty percent, Great Financial Crisis, World War two forty percent,

481
00:22:37,880 --> 00:22:40,000
Speaker 2: and then you've got to get out front and still

482
00:22:40,040 --> 00:22:43,400
Speaker 2: be optimistic. Do you fear the big draw down?

483
00:22:44,040 --> 00:22:46,119
Speaker 13: So our base case has been we're going to be

484
00:22:46,200 --> 00:22:48,600
Speaker 13: higher over the next twelve months, but it's not going

485
00:22:48,600 --> 00:22:50,639
Speaker 13: to be in a linear fashion. And we assume that

486
00:22:50,680 --> 00:22:52,960
Speaker 13: we're going to have at least one, maybe more drawdowns

487
00:22:53,000 --> 00:22:55,200
Speaker 13: of five to ten percent. We call that tier one

488
00:22:55,320 --> 00:22:58,399
Speaker 13: on our Tiers of Fear framework. What we do, you know,

489
00:22:58,440 --> 00:23:00,399
Speaker 13: as sort of things come up in the market, right,

490
00:23:00,440 --> 00:23:02,480
Speaker 13: we'll look at what we call tier two, tier three,

491
00:23:02,520 --> 00:23:05,399
Speaker 13: tier four and sort of evaluate is their risk.

492
00:23:05,200 --> 00:23:06,480
Speaker 8: Of falling into one of those.

493
00:23:06,600 --> 00:23:09,280
Speaker 13: Not because we're telling everybody, you know, especially sort of

494
00:23:09,280 --> 00:23:12,679
Speaker 13: in retail investorland, to sell, but to be prepared for.

495
00:23:12,720 --> 00:23:14,080
Speaker 8: What might be your job.

496
00:23:13,920 --> 00:23:15,920
Speaker 2: Is to go out and talk to people and say

497
00:23:15,920 --> 00:23:18,239
Speaker 2: to them, let the fear go, Let it go, let

498
00:23:18,320 --> 00:23:21,879
Speaker 2: it go, let it go. They're frozen because they're worried

499
00:23:22,000 --> 00:23:24,760
Speaker 2: about that big draw down. What percentage of us are

500
00:23:24,800 --> 00:23:27,680
Speaker 2: worried about a negative thirty five percent bear market?

501
00:23:27,840 --> 00:23:29,719
Speaker 13: So if you look at the Conference Board survey that

502
00:23:29,840 --> 00:23:32,200
Speaker 13: just came out, they actually have a question that gets

503
00:23:32,320 --> 00:23:34,360
Speaker 13: very very little attention, But I like it a lot,

504
00:23:34,400 --> 00:23:37,840
Speaker 13: and it's on stock market optimism going forward. I forget

505
00:23:37,840 --> 00:23:40,800
Speaker 13: the exact number, but it's still extremely elevated, and it

506
00:23:40,840 --> 00:23:42,679
Speaker 13: actually ticked up just a little bit. It hit a

507
00:23:42,720 --> 00:23:44,560
Speaker 13: new high in late twenty twenty four, and it's been

508
00:23:44,600 --> 00:23:45,680
Speaker 13: kind of hovering around that.

509
00:23:45,680 --> 00:23:46,560
Speaker 8: Level ever since.

510
00:23:47,119 --> 00:23:49,280
Speaker 13: So when we look at that as a gauge of

511
00:23:49,320 --> 00:23:52,439
Speaker 13: retail investors, we think that they're not too worried. Now,

512
00:23:52,480 --> 00:23:55,640
Speaker 13: if I talk about institutional investors, you know, we might

513
00:23:55,640 --> 00:23:59,359
Speaker 13: look at something say the CFTC futures positioning data, which

514
00:23:59,400 --> 00:24:02,080
Speaker 13: is easy. You had seen sort of one standard deviation

515
00:24:02,119 --> 00:24:05,119
Speaker 13: above the long term average. Basically, that's you know, complicated

516
00:24:05,200 --> 00:24:07,600
Speaker 13: speak for saying people were feeling good and well positioned,

517
00:24:07,640 --> 00:24:10,680
Speaker 13: but not crazy, not euphoric, and that's easing down.

518
00:24:10,760 --> 00:24:11,840
Speaker 8: It doesn't look under owned.

519
00:24:11,840 --> 00:24:13,919
Speaker 13: And I would say there's some nervousness creeping into the

520
00:24:13,920 --> 00:24:16,560
Speaker 13: institutional community, but I don't think there's panic there either.

521
00:24:16,800 --> 00:24:19,080
Speaker 5: So use of institutional investors, but I know that one

522
00:24:19,080 --> 00:24:21,320
Speaker 5: thing that comes up a lot in those conversations is

523
00:24:21,359 --> 00:24:24,480
Speaker 5: the role of the retail investor and how they influence

524
00:24:24,520 --> 00:24:27,480
Speaker 5: the market. Overall, retail stock ownership, I think is at

525
00:24:27,520 --> 00:24:29,920
Speaker 5: a twenty year high. How do you think that's changed

526
00:24:29,960 --> 00:24:31,600
Speaker 5: a stock market over your time covering it?

527
00:24:31,680 --> 00:24:34,000
Speaker 13: You know, it's interesting because when I started, I started

528
00:24:34,040 --> 00:24:37,399
Speaker 13: back in two thousand at a different firm, and I

529
00:24:37,440 --> 00:24:40,439
Speaker 13: remember being taught, you know, by a very seasoned, you know,

530
00:24:40,560 --> 00:24:43,000
Speaker 13: extremely bright strategist that you would look at the retail

531
00:24:43,000 --> 00:24:45,400
Speaker 13: fund flow data and do whatever the opposite was right.

532
00:24:45,440 --> 00:24:47,320
Speaker 13: So if they were all buying, you'd sell, and if

533
00:24:47,359 --> 00:24:49,040
Speaker 13: they were all selling, you'd buy. And I don't think

534
00:24:49,080 --> 00:24:52,080
Speaker 13: it quite works that way anymore. I do think retail

535
00:24:52,119 --> 00:24:55,040
Speaker 13: investors have gotten much more sophisticated in their understanding of

536
00:24:55,040 --> 00:24:58,520
Speaker 13: financial markets. There's a lot of innovation in the industry

537
00:24:58,600 --> 00:25:00,840
Speaker 13: that's helping people out, you know.

538
00:25:00,880 --> 00:25:01,920
Speaker 2: And I, you know, we.

539
00:25:01,800 --> 00:25:03,280
Speaker 8: Were talking earlier about how I travel.

540
00:25:03,280 --> 00:25:05,399
Speaker 13: I run into people in airports, I run into, you know,

541
00:25:05,480 --> 00:25:08,200
Speaker 13: people who are driving me places, and you know, and

542
00:25:08,760 --> 00:25:11,760
Speaker 13: you know, talk to people on airplanes and people sometimes,

543
00:25:11,800 --> 00:25:13,720
Speaker 13: you know, will start talking about the stock market and

544
00:25:13,760 --> 00:25:16,399
Speaker 13: they know a lot. And I think that's very different

545
00:25:16,400 --> 00:25:18,560
Speaker 13: from early on in my career when sort of the

546
00:25:18,600 --> 00:25:21,440
Speaker 13: purview of all the intricacies of our industry were really

547
00:25:21,480 --> 00:25:23,240
Speaker 13: just limited to the institutional community.

548
00:25:23,280 --> 00:25:25,639
Speaker 5: Okay, so it's changed a lot in your twenty plus years,

549
00:25:25,680 --> 00:25:27,360
Speaker 5: But is it going to look like Korea? You look

550
00:25:27,359 --> 00:25:29,520
Speaker 5: at the Korean stock market and it was had a

551
00:25:29,520 --> 00:25:33,439
Speaker 5: bananas week. Great, it was down ten percent on Tuesdays,

552
00:25:33,240 --> 00:25:37,120
Speaker 5: sixteen percent overnight. Year to date, it's massively Regail investors

553
00:25:37,119 --> 00:25:40,000
Speaker 5: are huge presence there. They love the AI trade. They

554
00:25:40,040 --> 00:25:42,840
Speaker 5: love these leverage single stock ets. Is that what the

555
00:25:42,920 --> 00:25:44,479
Speaker 5: US stock market is headed towards?

556
00:25:45,040 --> 00:25:46,879
Speaker 13: You know, it's hard to say. I don't see that

557
00:25:47,040 --> 00:25:49,679
Speaker 13: right now. I feel like we have more guardrails in place.

558
00:25:49,720 --> 00:25:52,240
Speaker 13: But the reality is that if you look at sort

559
00:25:52,280 --> 00:25:55,080
Speaker 13: of this theme of democratization of the equity market, I mean,

560
00:25:55,080 --> 00:25:57,000
Speaker 13: we got a lot of color on that from financial

561
00:25:57,080 --> 00:26:00,399
Speaker 13: companies in this reporting season, talking about new and struments

562
00:26:00,400 --> 00:26:02,520
Speaker 13: and why they might be doing one thing or another thing.

563
00:26:02,600 --> 00:26:05,199
Speaker 13: Did retail want it? Did institutions want it? Was it

564
00:26:05,280 --> 00:26:08,440
Speaker 13: something you know they should be doing? You know, sports

565
00:26:08,640 --> 00:26:10,840
Speaker 13: right for example? And prediction markets was something we saw

566
00:26:10,840 --> 00:26:13,360
Speaker 13: a few companies say we're not going to do, even

567
00:26:13,400 --> 00:26:14,920
Speaker 13: though there might be appetite for it.

568
00:26:14,960 --> 00:26:15,920
Speaker 8: But I do think.

569
00:26:15,800 --> 00:26:20,439
Speaker 13: This trend of getting typical Americans engaged in the stock market,

570
00:26:20,480 --> 00:26:21,479
Speaker 13: I don't think that's changing.

571
00:26:21,800 --> 00:26:25,520
Speaker 2: What would you do as a retiree? Now the old

572
00:26:25,600 --> 00:26:28,880
Speaker 2: rule was take four percent, be happy, move on, maybe

573
00:26:28,960 --> 00:26:33,320
Speaker 2: buy an annuity, whatever. What's the RBC advice for someone

574
00:26:33,400 --> 00:26:37,400
Speaker 2: with an equity pot and how to manage it? Given

575
00:26:37,440 --> 00:26:38,800
Speaker 2: that retirees.

576
00:26:38,280 --> 00:26:40,320
Speaker 13: Never die well, I think the first thing you always

577
00:26:40,359 --> 00:26:42,159
Speaker 13: do is and this is always my first advice for

578
00:26:42,160 --> 00:26:45,200
Speaker 13: peoples work with a financial advisor, and I think even

579
00:26:45,240 --> 00:26:47,679
Speaker 13: in my purview as sort of an equity person, you know,

580
00:26:47,760 --> 00:26:50,879
Speaker 13: I would want sort of that device that advice on diversification.

581
00:26:50,920 --> 00:26:52,920
Speaker 4: By the distance, I think that I.

582
00:26:52,920 --> 00:26:54,919
Speaker 13: Know a certain corner of the market very well, and

583
00:26:55,080 --> 00:26:56,720
Speaker 13: there's a certain corner of the market I don't know

584
00:26:56,840 --> 00:26:59,159
Speaker 13: very well. So I would want some advice frankly to

585
00:26:59,200 --> 00:27:01,600
Speaker 13: come in and sort of ballence me out. But I

586
00:27:01,640 --> 00:27:04,840
Speaker 13: do think staying diversified is something that just makes sense

587
00:27:04,880 --> 00:27:06,920
Speaker 13: and not trying to play the short term, not trying

588
00:27:06,920 --> 00:27:08,480
Speaker 13: to play every little twist in turn.

589
00:27:08,400 --> 00:27:10,360
Speaker 2: How do you not play the short term? If you're

590
00:27:10,400 --> 00:27:15,879
Speaker 2: watching Bloomberg, Surveilance or five of Scars media properties religiously,

591
00:27:16,080 --> 00:27:18,159
Speaker 2: but you're supposed to be long term? How do you

592
00:27:18,200 --> 00:27:19,680
Speaker 2: do that? In modern media?

593
00:27:19,760 --> 00:27:21,760
Speaker 13: This goes back to our tears of fear right and

594
00:27:21,800 --> 00:27:24,800
Speaker 13: so typical drawdowns are five to ten percent. Be prepared

595
00:27:24,800 --> 00:27:26,480
Speaker 13: for those, and there's always a big test once you

596
00:27:26,520 --> 00:27:28,240
Speaker 13: kind of get to nine percent ten percent, are you

597
00:27:28,280 --> 00:27:30,760
Speaker 13: going to go lower? And what we tell the institutions,

598
00:27:30,760 --> 00:27:32,400
Speaker 13: and I tell this to you know, fas I talk

599
00:27:32,480 --> 00:27:35,240
Speaker 13: to as well, is if you don't think that there's

600
00:27:35,280 --> 00:27:38,160
Speaker 13: a serious chance of a recession or these days we're

601
00:27:38,160 --> 00:27:41,119
Speaker 13: all also talking about interest rate shocks, then you're probably

602
00:27:41,119 --> 00:27:42,879
Speaker 13: going to bottom out at ten percent. But if there

603
00:27:42,960 --> 00:27:46,120
Speaker 13: is something that's unknown that happens in the market, right

604
00:27:46,320 --> 00:27:48,760
Speaker 13: if you looked back at twenty eighteen, we had tariffs

605
00:27:48,760 --> 00:27:50,720
Speaker 13: for the first time, we had some concerns about the FED,

606
00:27:50,720 --> 00:27:53,520
Speaker 13: we had a twenty percent draw down. We have these

607
00:27:53,520 --> 00:27:55,439
Speaker 13: growth scares that can go to like the fifteen to

608
00:27:55,440 --> 00:27:57,679
Speaker 13: twenty percent range, But just kind of know what's coming,

609
00:27:57,760 --> 00:27:59,919
Speaker 13: be educated ahead of time, be prepared, and don't know

610
00:28:00,160 --> 00:28:02,919
Speaker 13: react in the moment. If you don't think that there's

611
00:28:03,040 --> 00:28:04,920
Speaker 13: you know, sort of a serious chance of a recession,

612
00:28:04,920 --> 00:28:06,879
Speaker 13: and we talked a lot to hedge funds about this

613
00:28:07,000 --> 00:28:09,520
Speaker 13: last year around tariffs, then you're probably not going to

614
00:28:09,560 --> 00:28:11,520
Speaker 13: have like a twenty five or thirty three percent type

615
00:28:11,600 --> 00:28:13,560
Speaker 13: draw down, which is what you see in recessions. Kind

616
00:28:13,560 --> 00:28:15,280
Speaker 13: of twenty percent might be the worst.

617
00:28:15,520 --> 00:28:16,679
Speaker 8: And so it's really.

618
00:28:16,440 --> 00:28:19,200
Speaker 13: Just being educated and knowing that markets can be volatile

619
00:28:19,280 --> 00:28:21,920
Speaker 13: and what do these different levels signify, and just again

620
00:28:22,000 --> 00:28:23,440
Speaker 13: not overreacting in the moment.

621
00:28:23,480 --> 00:28:26,080
Speaker 5: Individual investors seem to have mastered the art of buying

622
00:28:26,119 --> 00:28:26,440
Speaker 5: the dip.

623
00:28:26,480 --> 00:28:26,960
Speaker 4: They come in.

624
00:28:27,040 --> 00:28:29,399
Speaker 5: They are kind of you know, they don't get rattled

625
00:28:29,400 --> 00:28:31,480
Speaker 5: by stock market declientes. They come in there like I'm buying,

626
00:28:31,480 --> 00:28:34,160
Speaker 5: I'm buying. Have institutional investors looked at that and kind

627
00:28:34,160 --> 00:28:35,840
Speaker 5: of adjusted their behavior as a result.

628
00:28:36,240 --> 00:28:39,520
Speaker 13: One thing we've noticed is that there are certain valuation gauges.

629
00:28:39,760 --> 00:28:41,480
Speaker 13: You know, we can look at pees and where they

630
00:28:41,520 --> 00:28:43,600
Speaker 13: typically bottom out at, and on certain charts they make

631
00:28:43,680 --> 00:28:45,720
Speaker 13: higher and higher lows. And I think that's because of

632
00:28:45,760 --> 00:28:47,880
Speaker 13: these dip buyers coming in. So you do have to

633
00:28:47,920 --> 00:28:48,960
Speaker 13: have it in the back of your mind.

634
00:28:49,000 --> 00:28:52,200
Speaker 2: Well, you just said I disagree with not you, but

635
00:28:52,280 --> 00:28:54,920
Speaker 2: I disagree with the zeitgeist that we've learned something new.

636
00:28:55,320 --> 00:28:59,400
Speaker 2: We haven't woken up on a Monday being down twenty

637
00:28:59,400 --> 00:29:00,960
Speaker 2: two percent or being done.

638
00:29:00,880 --> 00:29:02,320
Speaker 4: Thirty four We're going to let that hap.

639
00:29:03,040 --> 00:29:05,280
Speaker 2: Well, that may be, that's an Eric belt Shoots question.

640
00:29:05,320 --> 00:29:08,320
Speaker 2: But Laurie, I think we don't have a collective memory

641
00:29:08,360 --> 00:29:12,400
Speaker 2: of a massive drawdown anymore, and our behavior will change

642
00:29:12,760 --> 00:29:13,520
Speaker 2: if we get that.

643
00:29:13,880 --> 00:29:15,840
Speaker 8: Well, you know, I take your point.

644
00:29:15,960 --> 00:29:17,960
Speaker 13: We have a lot of conversations, you know, I would

645
00:29:18,000 --> 00:29:20,240
Speaker 13: just say in the financial community about when did you start?

646
00:29:20,240 --> 00:29:22,320
Speaker 13: So I started in two thousand. I didn't see the

647
00:29:22,360 --> 00:29:24,640
Speaker 13: tech bubble melt up, but I certainly saw the other side.

648
00:29:24,680 --> 00:29:26,360
Speaker 2: We enjoyed two thousand and eight nine.

649
00:29:26,520 --> 00:29:28,880
Speaker 8: Yeah, I lived through it, right, I remember and enjoyed.

650
00:29:28,960 --> 00:29:29,440
Speaker 4: You lived through it.

651
00:29:29,560 --> 00:29:30,280
Speaker 8: I lived through it.

652
00:29:30,360 --> 00:29:32,720
Speaker 13: I remember being in conference rooms, I want to say,

653
00:29:32,720 --> 00:29:34,800
Speaker 13: like in two thousand and six, with mice running across

654
00:29:34,840 --> 00:29:37,520
Speaker 13: the floor, and home building companies talked to packed rooms,

655
00:29:37,800 --> 00:29:40,480
Speaker 13: you know, and you couldn't you were violating some fire code,

656
00:29:40,520 --> 00:29:42,200
Speaker 13: right because there were too many people. And so I

657
00:29:42,240 --> 00:29:45,000
Speaker 13: remember the height of that bubble, you know, very clearly.

658
00:29:45,720 --> 00:29:47,600
Speaker 8: And I do think there's a lot of people.

659
00:29:47,320 --> 00:29:50,200
Speaker 13: In the institutional community who weren't around for the GFC, right,

660
00:29:50,240 --> 00:29:52,400
Speaker 13: who weren't around for the tech bubble. So I take

661
00:29:52,440 --> 00:29:55,280
Speaker 13: Tom's point. But remember, we did have a massive draw

662
00:29:55,320 --> 00:29:59,520
Speaker 13: down around COVID, which was a typical recession type draw down,

663
00:29:59,680 --> 00:30:02,600
Speaker 13: and it was it was interesting. I mean, we we've

664
00:30:02,640 --> 00:30:05,120
Speaker 13: done a lot of work around that, especially, you know,

665
00:30:05,160 --> 00:30:07,680
Speaker 13: as kind of the Middle East situation has flared back up.

666
00:30:07,800 --> 00:30:09,800
Speaker 13: And I reminded people, I said, you know, we did

667
00:30:09,960 --> 00:30:13,120
Speaker 13: a recession's worth of decline in about a month. Good,

668
00:30:13,680 --> 00:30:15,320
Speaker 13: and you know, and I think people have kind of

669
00:30:15,320 --> 00:30:18,160
Speaker 13: forgotten about that one. But you can see fair how

670
00:30:18,400 --> 00:30:22,720
Speaker 13: fast and steep and and you know, difficult frankly, you

671
00:30:22,720 --> 00:30:25,680
Speaker 13: know those kind of decline. Twenty two wasn't pretty either. No, No,

672
00:30:25,760 --> 00:30:27,400
Speaker 13: that was a that was a weird one. We've had

673
00:30:27,440 --> 00:30:30,560
Speaker 13: trouble classifying that one, you know, and sort of our tears.

674
00:30:30,600 --> 00:30:34,320
Speaker 13: We think what essentially happened was the misery index spiked

675
00:30:34,480 --> 00:30:36,760
Speaker 13: because of inflation. It felt like a recession.

676
00:30:36,840 --> 00:30:37,320
Speaker 8: It wasn't.

677
00:30:37,360 --> 00:30:39,440
Speaker 13: You got a recessionary type draw down in the market,

678
00:30:39,440 --> 00:30:42,040
Speaker 13: and you also had a massive interest rate shock, just

679
00:30:42,160 --> 00:30:45,760
Speaker 13: expectations of FED hikes piled in, and you threw a

680
00:30:45,760 --> 00:30:46,640
Speaker 13: war on top of that.

681
00:30:46,760 --> 00:30:47,320
Speaker 8: Right, it was.

682
00:30:47,400 --> 00:30:48,960
Speaker 13: It was a little bit worse than a growth scared

683
00:30:49,080 --> 00:30:51,680
Speaker 13: not quite as bad as a recession, but pretty darn close.

684
00:30:51,800 --> 00:30:53,840
Speaker 2: Lurie, thank you so much. Really appreciate it coming in

685
00:30:53,880 --> 00:30:57,120
Speaker 2: on a Friday, I really really appreciated. RBC Capital Marcus

686
00:30:57,720 --> 00:31:04,280
Speaker 2: powerpoints of Squize. Get it from RBC the capital markets.

687
00:31:05,600 --> 00:31:08,160
Speaker 5: All right, we're looking at shares of Apple down as

688
00:31:08,200 --> 00:31:12,320
Speaker 5: much as eleven percent right now after component shortages, weight

689
00:31:12,440 --> 00:31:15,080
Speaker 5: on the company's sales forecast. A letter Popina of Bloomberg

690
00:31:15,120 --> 00:31:18,680
Speaker 5: News joins us now to discuss when we're talking about shortages,

691
00:31:18,720 --> 00:31:21,160
Speaker 5: it's really the memory chips, and we've seen prices for

692
00:31:21,160 --> 00:31:24,400
Speaker 5: those things spike up and a company like Apple needs

693
00:31:24,400 --> 00:31:25,080
Speaker 5: to contend with it.

694
00:31:25,280 --> 00:31:28,360
Speaker 14: Yeah, CEO Team Cook said that memory chip shortage is

695
00:31:28,400 --> 00:31:30,600
Speaker 14: similar to one hundred y of flots. The demand is

696
00:31:30,640 --> 00:31:34,840
Speaker 14: so high and the shortage is so widespread that in

697
00:31:34,960 --> 00:31:38,120
Speaker 14: the common quarter there will be more shortages and some

698
00:31:38,240 --> 00:31:41,600
Speaker 14: weaight times for some of the key products includeing MacBook Mini,

699
00:31:42,000 --> 00:31:45,320
Speaker 14: so that may weigh on the revenue outlook. Now we're

700
00:31:45,360 --> 00:31:48,480
Speaker 14: talking about the outlook for the quarter ending in September.

701
00:31:48,800 --> 00:31:51,520
Speaker 14: This is the quarter when the key iPhones usually go out.

702
00:31:51,920 --> 00:31:54,000
Speaker 14: This is the quarter when you know, mom and pop

703
00:31:54,040 --> 00:31:57,480
Speaker 14: investors buy apples and then your iPhones for their kids

704
00:31:57,520 --> 00:32:00,560
Speaker 14: they go back to school. So that's supply shortage is

705
00:32:00,560 --> 00:32:03,000
Speaker 14: going to weigh on sentiment. And this is what is

706
00:32:03,080 --> 00:32:04,280
Speaker 14: John and shares lower today.

707
00:32:04,360 --> 00:32:04,680
Speaker 4: Okay.

708
00:32:04,920 --> 00:32:07,440
Speaker 5: Apple also came out with this new innovative way of

709
00:32:07,480 --> 00:32:10,480
Speaker 5: funding your iPhone purchases, or maybe purchase is the wrong word.

710
00:32:10,680 --> 00:32:12,800
Speaker 5: You're now going to be able to lease your iPhone

711
00:32:12,840 --> 00:32:14,440
Speaker 5: the way that you can lease a car.

712
00:32:14,840 --> 00:32:17,920
Speaker 14: Yeah, that's pretty much the case, and not just your Apple.

713
00:32:18,640 --> 00:32:20,360
Speaker 14: You can you lease your iPad. You can lease your

714
00:32:20,400 --> 00:32:23,800
Speaker 14: MacBook Medium, MacBook Pro for up to three years, and

715
00:32:23,840 --> 00:32:25,840
Speaker 14: then after that point you can decide if you want

716
00:32:25,840 --> 00:32:27,480
Speaker 14: to keep it, if you want to return it, if

717
00:32:27,480 --> 00:32:29,640
Speaker 14: you want to just upgrade to a new cycle.

718
00:32:29,760 --> 00:32:31,040
Speaker 4: So that's pretty.

719
00:32:30,760 --> 00:32:33,840
Speaker 14: Much, you know, Apple's way of saying, listen, just keep

720
00:32:33,880 --> 00:32:35,680
Speaker 14: staying with us forever and keep upgrading.

721
00:32:35,800 --> 00:32:38,600
Speaker 2: But from a consumption standpoint, somebody had this on Twitter

722
00:32:38,640 --> 00:32:40,480
Speaker 2: this week where every result of gee, they don't have

723
00:32:40,480 --> 00:32:42,960
Speaker 2: the chips, so this supply. This the reason they don't

724
00:32:42,960 --> 00:32:46,000
Speaker 2: have the supply is they have massive demand. Do we

725
00:32:46,040 --> 00:32:49,800
Speaker 2: see within our reporting, Mark German and you and everybody else,

726
00:32:49,840 --> 00:32:53,040
Speaker 2: do we see any way on a unit basis that

727
00:32:53,080 --> 00:32:53,840
Speaker 2: they're stumbling.

728
00:32:53,880 --> 00:32:55,800
Speaker 4: They're not They're not really stumbling.

729
00:32:55,800 --> 00:32:58,240
Speaker 14: I mean, China remains a weak spot, but it's always

730
00:32:58,320 --> 00:33:00,640
Speaker 14: been a week spot. So we cannot demand any strong

731
00:33:00,760 --> 00:33:03,160
Speaker 14: numbers out of China. But you know, when you look

732
00:33:03,160 --> 00:33:06,239
Speaker 14: at the sales of the wearables they missed, they were

733
00:33:06,280 --> 00:33:07,320
Speaker 14: in line with expectations.

734
00:33:07,400 --> 00:33:11,960
Speaker 2: I mean, the scarlet needs a blush neo, right, I

735
00:33:11,960 --> 00:33:13,160
Speaker 2: mean that's really what this is.

736
00:33:13,520 --> 00:33:15,760
Speaker 14: If you look at the sales for MacBooks, they smashed

737
00:33:15,840 --> 00:33:19,920
Speaker 14: expectations by landslide. You know, so the iPhone expectations also

738
00:33:19,920 --> 00:33:23,560
Speaker 14: wear a bob estimate. So across the board people kept buying.

739
00:33:23,680 --> 00:33:26,800
Speaker 14: So consumers, your retail traders, they had nothing to do

740
00:33:26,880 --> 00:33:27,920
Speaker 14: with that week forecast.

741
00:33:27,960 --> 00:33:29,440
Speaker 8: It's more of a supply.

742
00:33:29,160 --> 00:33:31,920
Speaker 14: Can strained issue rather than a demand issue.

743
00:33:31,960 --> 00:33:33,920
Speaker 5: Apple has had to raise prices as well. And you

744
00:33:34,000 --> 00:33:36,360
Speaker 5: wonder how much these new foldable iPhones that they're going

745
00:33:36,400 --> 00:33:38,120
Speaker 5: to release are going to end up costing.

746
00:33:38,400 --> 00:33:40,080
Speaker 2: Why do I need a foldable iPhone?

747
00:33:40,120 --> 00:33:41,840
Speaker 4: That's what they can fit it into your pocket, won't

748
00:33:41,840 --> 00:33:45,240
Speaker 4: fall out. It's an extble. Your pockets are bigger, mind than.

749
00:33:45,600 --> 00:33:47,160
Speaker 2: The Neo came out as a joke and it's the

750
00:33:47,240 --> 00:33:50,400
Speaker 2: hottest thing going right. Yeah, it's talk about Bloomberg money.

751
00:33:50,600 --> 00:33:53,640
Speaker 2: Everybody watching this show and personal finance. A kid, I

752
00:33:53,680 --> 00:33:57,200
Speaker 2: need a Blue I guess I like my Air, but

753
00:33:57,280 --> 00:33:58,680
Speaker 2: I really need a Neo to go back.

754
00:33:58,720 --> 00:34:00,560
Speaker 4: Well, the parents want to pay for the new not there?

755
00:34:01,320 --> 00:34:03,600
Speaker 5: Well something you is a low cost model, so that's

756
00:34:03,840 --> 00:34:06,360
Speaker 5: start of it appeal, that's the selling point. Thank you

757
00:34:06,360 --> 00:34:09,440
Speaker 5: so much, Elena Popina of Bloomberg News. All Right, and

758
00:34:10,000 --> 00:34:12,240
Speaker 5: you know it's Friday, it's Bloomberg money. So we always

759
00:34:12,239 --> 00:34:14,360
Speaker 5: talk about books. I know that I've got a huge

760
00:34:14,800 --> 00:34:17,120
Speaker 5: reading list on my phone that I got to get to.

761
00:34:17,400 --> 00:34:20,000
Speaker 5: Do you read books or do you like use the Kindle?

762
00:34:20,440 --> 00:34:23,520
Speaker 2: No? No, I tried the Kindle, and I've tried other things,

763
00:34:23,520 --> 00:34:25,840
Speaker 2: and now I'm very much back to just reading hardcover

764
00:34:25,880 --> 00:34:29,440
Speaker 2: books only though old well yeah sometimes I can't, but

765
00:34:29,560 --> 00:34:31,879
Speaker 2: you know, old school books. How about the muster read

766
00:34:31,920 --> 00:34:36,080
Speaker 2: books that we've got right now? Yours my mind is

767
00:34:36,120 --> 00:34:40,960
Speaker 2: a foundation read if you care about Elena Poppina's technology.

768
00:34:41,040 --> 00:34:43,680
Speaker 2: Chip War is my book of the year two years ago.

769
00:34:43,760 --> 00:34:47,200
Speaker 2: Chris Miller's out of Tufts up in Boston, and this

770
00:34:47,280 --> 00:34:53,600
Speaker 2: is absolutely, absolutely the seminal read on the history of semiconductors,

771
00:34:53,840 --> 00:34:57,839
Speaker 2: and he just captures beautifully the turf wars, whether it's

772
00:34:57,880 --> 00:35:03,080
Speaker 2: obviously Silicon Valley or Charles River in Boston, or even

773
00:35:03,120 --> 00:35:07,239
Speaker 2: over to the Netherlands at ASML or Timewan. Excuse me,

774
00:35:07,360 --> 00:35:11,480
Speaker 2: the timeline story is actually the invention of Taiwan semiconductors

775
00:35:11,800 --> 00:35:14,120
Speaker 2: may be the most emotional story in the book.

776
00:35:14,200 --> 00:35:15,960
Speaker 5: Yeah, I can't wait to get to that point. I'm

777
00:35:16,000 --> 00:35:18,400
Speaker 5: really excited about it. My book kind of ties into that.

778
00:35:18,520 --> 00:35:20,560
Speaker 5: It's How to Rule the World and Education and Power

779
00:35:20,560 --> 00:35:23,040
Speaker 5: at Stanford University by THEO Baker.

780
00:35:23,360 --> 00:35:25,000
Speaker 4: This book is a lot of things, oh yeah.

781
00:35:25,040 --> 00:35:26,799
Speaker 5: But what I enjoyed the most is the picture that

782
00:35:26,840 --> 00:35:30,279
Speaker 5: it paints of Stanford for super bright and ambitious kids.

783
00:35:30,320 --> 00:35:32,520
Speaker 5: Stanford's a place where the coding or hacking clubs they

784
00:35:32,600 --> 00:35:35,320
Speaker 5: join have access to slush funds provided by tech companies,

785
00:35:35,640 --> 00:35:38,560
Speaker 5: so they can party on yachts and socialized with billionaires.

786
00:35:38,880 --> 00:35:41,719
Speaker 5: Vcs hang out there on campus at the cafe I

787
00:35:41,719 --> 00:35:44,920
Speaker 5: think it's called the Koupa Cafe to scout future talent,

788
00:35:45,200 --> 00:35:48,880
Speaker 5: which leads to offers of funding their startups later on

789
00:35:49,239 --> 00:35:51,279
Speaker 5: for billions of dollars with a non doct I.

790
00:35:51,880 --> 00:35:54,480
Speaker 2: I take issue with the romance of this and that

791
00:35:54,680 --> 00:35:58,000
Speaker 2: mostly what the kids do is work. They're particularly undergraduate.

792
00:35:58,080 --> 00:36:03,560
Speaker 2: They're working on first principle heavyweight mathematics, their operational research.

793
00:36:03,600 --> 00:36:05,800
Speaker 2: I mean, so much of this is Michael Spence, the

794
00:36:05,840 --> 00:36:11,400
Speaker 2: laureates invention, but I think it's underplayed how much the

795
00:36:11,480 --> 00:36:13,920
Speaker 2: bright kids at these bright schools on the West coast,

796
00:36:14,120 --> 00:36:18,640
Speaker 2: Harry Mudd, Caltech, Stanford, I'd mentioned Cornell on the East coast. Frankly,

797
00:36:18,960 --> 00:36:21,799
Speaker 2: the kids work, I mean Scarlett slid through just in.

798
00:36:21,760 --> 00:36:23,359
Speaker 4: Case there is that.

799
00:36:23,520 --> 00:36:25,759
Speaker 5: But the ones that get farther are the ones who

800
00:36:25,760 --> 00:36:28,960
Speaker 5: are hobnobbing with the bill ups. You know, they're getting

801
00:36:28,960 --> 00:36:31,280
Speaker 5: the early look deals with those guys.

802
00:36:31,320 --> 00:36:33,200
Speaker 2: I like hobnobbing better than new.

803
00:36:34,160 --> 00:36:35,840
Speaker 4: Sounds a little bit like, you know, friendlier.

804
00:36:35,920 --> 00:36:36,560
Speaker 8: Right all right.

805
00:36:36,560 --> 00:36:39,319
Speaker 5: For the latest reviews and recommendations from Bloomberg, be sure

806
00:36:39,360 --> 00:36:42,320
Speaker 5: to subscribe to the on Books newsletter.

807
00:36:46,320 --> 00:36:49,360
Speaker 2: Bloomberg Money. From New York City on a Friday, summer Friday,

808
00:36:49,400 --> 00:36:52,280
Speaker 2: the streets are just it's a summer Friday. It's easier

809
00:36:52,320 --> 00:36:53,560
Speaker 2: to get to work and get home.

810
00:36:53,719 --> 00:36:55,400
Speaker 4: Yeah, there's no traffic whatsoever.

811
00:36:55,560 --> 00:36:58,879
Speaker 2: There's no question about it. So I guess they're gonna

812
00:36:58,920 --> 00:37:01,040
Speaker 2: look ahead, he or can we look.

813
00:37:00,520 --> 00:37:03,040
Speaker 15: Yeah, let's do that to this hour, right, Yeah, this hour.

814
00:37:03,160 --> 00:37:05,600
Speaker 15: Richard claar Go's with the vice chairman. We ripped it

815
00:37:05,680 --> 00:37:08,960
Speaker 15: up and did a much you know, Federal Reserve conversation.

816
00:37:09,600 --> 00:37:13,399
Speaker 15: And the excitement of that was Annawon's work of Bloomberg economics.

817
00:37:13,600 --> 00:37:16,360
Speaker 2: She was on fire. Here is Richard Clarida.

818
00:37:18,840 --> 00:37:21,640
Speaker 10: He left open the possibility that the task forces could

819
00:37:21,640 --> 00:37:24,480
Speaker 10: recommend other measures. They could go to an average instead

820
00:37:24,480 --> 00:37:27,600
Speaker 10: of picking one inducts, they could look at CPIPPI.

821
00:37:27,760 --> 00:37:29,160
Speaker 9: There are a lot of things they could do. But

822
00:37:29,239 --> 00:37:30,120
Speaker 9: I think Anna.

823
00:37:30,120 --> 00:37:33,160
Speaker 10: As usual raised is an important point is that an

824
00:37:33,160 --> 00:37:36,239
Speaker 10: inflation targeting central bank needs to be clear about what

825
00:37:36,280 --> 00:37:39,799
Speaker 10: it is it's targeting. It can and may evolve, and

826
00:37:39,840 --> 00:37:41,800
Speaker 10: so I think that will be important.

827
00:37:41,640 --> 00:37:43,719
Speaker 2: And I published this morning as well. Look for that

828
00:37:43,760 --> 00:37:47,440
Speaker 2: at Bloomberg Economics across the weekend and what our videos

829
00:37:47,480 --> 00:37:48,319
Speaker 2: will be out as well.

830
00:37:48,360 --> 00:37:50,359
Speaker 5: All right, it was great to have Richard Clarida here

831
00:37:50,400 --> 00:37:52,160
Speaker 5: with us, but it is Fridays. We need to look

832
00:37:52,200 --> 00:37:54,880
Speaker 5: ahead to the weekend and next week as well. This

833
00:37:55,000 --> 00:37:58,600
Speaker 5: Saturday and Sunday, BTS will be holding their first headline

834
00:37:58,600 --> 00:38:00,600
Speaker 5: performance concert in New York since.

835
00:38:00,440 --> 00:38:03,120
Speaker 2: They got to be sold mental soldo.

836
00:38:03,280 --> 00:38:04,440
Speaker 4: I was checking on stubhop.

837
00:38:04,800 --> 00:38:06,799
Speaker 5: You can still get stage right tickets for eighteen hundred

838
00:38:06,840 --> 00:38:10,600
Speaker 5: dollars for repair each and then the nosebleed is at

839
00:38:10,600 --> 00:38:12,880
Speaker 5: one hundred and seventy six, so that's a huge spread.

840
00:38:13,320 --> 00:38:15,840
Speaker 5: But I thought maybe you would be more interested in Rush.

841
00:38:16,080 --> 00:38:16,600
Speaker 2: Is that right?

842
00:38:16,680 --> 00:38:16,879
Speaker 9: Yeah?

843
00:38:16,880 --> 00:38:18,839
Speaker 5: They have a reunion tour. They're now halfway through their

844
00:38:18,920 --> 00:38:22,680
Speaker 5: four night residency. At MSG. The og band members Getty

845
00:38:22,760 --> 00:38:25,600
Speaker 5: Lee and Alexleisen will be their minus drummer Neil Port,

846
00:38:25,600 --> 00:38:27,280
Speaker 5: who passed away sadly in twenty twenty.

847
00:38:27,800 --> 00:38:29,640
Speaker 2: They did a bang up job on this. They went

848
00:38:29,680 --> 00:38:31,720
Speaker 2: out and they just really looked for a new drummer,

849
00:38:31,719 --> 00:38:34,640
Speaker 2: which is incredibly hard for any bands. They will all

850
00:38:35,120 --> 00:38:38,960
Speaker 2: say that Anakans is from Germany and she's like legit

851
00:38:39,360 --> 00:38:43,640
Speaker 2: classical rock train. Jeff Percaro was their huge hero from Toto,

852
00:38:44,360 --> 00:38:47,040
Speaker 2: and the answer is she's the real deal and literally

853
00:38:47,120 --> 00:38:49,600
Speaker 2: ran an academic department at the university.

854
00:38:49,600 --> 00:38:52,200
Speaker 4: I don't know that it's a woman of many talents.

855
00:38:52,239 --> 00:38:54,960
Speaker 2: I would suggest is a non Rush fanatic. It's been

856
00:38:55,200 --> 00:38:56,480
Speaker 2: hugely successful.

857
00:38:56,520 --> 00:38:56,799
Speaker 4: All right.

858
00:38:56,840 --> 00:39:00,719
Speaker 5: Well, they are playing at MSG again, this four night

859
00:39:01,120 --> 00:39:04,399
Speaker 5: concert residency that they're calling it. Also, of course next

860
00:39:04,440 --> 00:39:06,040
Speaker 5: week we've got the job support for the month of

861
00:39:06,080 --> 00:39:08,759
Speaker 5: July and the CONSENSU assessment right now is for eighty

862
00:39:08,760 --> 00:39:11,280
Speaker 5: eight thousand jobs added in the month of July versus

863
00:39:11,280 --> 00:39:12,480
Speaker 5: fifty seven thousand in July.

864
00:39:12,600 --> 00:39:16,680
Speaker 2: I'm still not used to the new jobs number, with

865
00:39:16,760 --> 00:39:19,560
Speaker 2: immigration being under one hundred thousand. To me, eighty eight

866
00:39:19,560 --> 00:39:22,279
Speaker 2: thousands terrible, and yet the one would tell you that's

867
00:39:22,280 --> 00:39:23,000
Speaker 2: actually pretty well.

868
00:39:23,080 --> 00:39:25,240
Speaker 5: You'll get the unemployment rate, it's going to stay unchanged

869
00:39:25,239 --> 00:39:28,120
Speaker 5: at four point two percent, and our generally earning is

870
00:39:28,120 --> 00:39:29,600
Speaker 5: pretty much staying in line.

871
00:39:29,719 --> 00:39:32,800
Speaker 2: And that's brilliant that you do that through August through September.

872
00:39:32,800 --> 00:39:36,320
Speaker 2: For Bloomberg Money, the inflation adjusted wage got to be

873
00:39:36,400 --> 00:39:37,480
Speaker 2: front and center as well.

874
00:39:37,520 --> 00:39:38,680
Speaker 4: And don't forget earnings.

875
00:39:38,880 --> 00:39:41,120
Speaker 5: SpaceX reports its first set of results as a listed

876
00:39:41,120 --> 00:39:42,680
Speaker 5: company that's worked out so far.

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00:39:44,360 --> 00:39:48,040
Speaker 2: This is the Bloomberg Money podcast, bringing you a smart

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Speaker 2: look at the forces shaping your financial life. I'm Tom

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Speaker 2: Keen with Scarlet Food. You can watch the show live

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Speaker 2: I'm Bloomberg TV every Friday at noon Law Street Time.

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Speaker 2: Subscribe to the podcast on Apple, Spotify or wherever you listen,

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Speaker 2: and is always on the Bloomberg terminal in the Bloomberg

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Speaker 2: Business app