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Speaker 2: This is the money Conversation of the day. Tell me
Speaker 2: your shows up with Wealth Consulting Group. But it's got
Speaker 2: a note, a research note with twelve items. Wow, it's
Speaker 2: Bloomberg Surveillance. Tell we don't have time for twelve items.
Speaker 2: Of the twelve items that you mentioned, sentiment, policy, fundamentals,
Speaker 2: which is the one that gloom crew most gets wrong.
Speaker 3: I think it's got to be earnings front and center,
Speaker 3: and I think they're probably more important here Tom than
Speaker 3: they have been given what was a public data out.
Speaker 3: And I have to say technology is leading the charge
Speaker 3: here with the best revenue growth, some of the best
Speaker 3: margins in the market, and the best earnings growth. And
Speaker 3: that's why we're willing to pay a higher multiple for
Speaker 3: these companies.
Speaker 4: Well, we were paying to hire multiple for these companies,
Speaker 4: and that's got a lot of people concerned. Do you
Speaker 4: believe the underlying cash flow and earnings are there to
Speaker 4: support these valuations.
Speaker 3: One hundred percent. And so I think investors, while this
Speaker 3: hopes and dreams are well placed for those very reasons.
Speaker 3: It's all about the quality. And we've talked about this before, Tom.
Speaker 3: I don't think this is an environment where the Bodie
Speaker 3: Marcus Kine text is really going to help you. This
Speaker 3: is the Charles Kindelberger text that you've got to.
Speaker 2: Do stuff to explain to Charles kindelbergers.
Speaker 3: So the late famous economists who penned the book Mania's
Speaker 3: Panics and Crashes. And I think that this, if we're right,
Speaker 3: is the Mania development stage. That's the part of the framework.
Speaker 2: But the fear crew Paul in the research notes structural fear,
Speaker 2: and that crew of legitimate people are worried about the
Speaker 2: back end of the Charles Kindelberger book, which I'm.
Speaker 4: Just googling right now, like the rest of the audience
Speaker 4: out there. Yeah, talk to us about those earnings again,
Speaker 4: and what was your takeaway from this earning sego. We're
Speaker 4: just kind of finishing up here.
Speaker 3: So I mean it depends on what provider you look at.
Speaker 3: We look at all them, fact said is probably top
Speaker 3: top of mind and not here.
Speaker 2: Not at Bloomberg.
Speaker 3: Of course I shouldn't say those things, but we also
Speaker 3: look at Bloomberg as well. We're loyal followers and they're
Speaker 3: coming in better than expected. And I think that speaks
Speaker 3: to the analyst bar which is still structurally too low.
Speaker 3: And so that's why I like to say it's really
Speaker 3: the fundamental tech dominance that is supporting this market here.
Speaker 5: How about this Federal Reserve here?
Speaker 4: We had a FED cutting interest rates in the September meeting,
Speaker 4: but then kind of interjected a little bit of uncertainty
Speaker 4: to December. Do you care about timing when these rates pets?
Speaker 4: Are you happy just to say I know my FED
Speaker 4: is cutting rates? Are that Timing's not as important to me.
Speaker 5: It's a good point.
Speaker 3: So I am more of a directional guy than a
Speaker 3: false precisionist, and so I think that's right to expect
Speaker 3: probably another cut this year.
Speaker 5: Of the sixty five.
Speaker 3: Percent that are in that camp, I would be among them.
Speaker 3: And I think what's supporting another cut before we close
Speaker 3: twenty five is the notion that the labor market is weakening.
Speaker 2: Here.
Speaker 3: That's part of the margin story guys powering earnings, but
Speaker 3: also the bond market is telling us the message here
Speaker 3: fed you got to cut.
Speaker 4: How about are there sectors here that screen well for
Speaker 4: you guys, because a lot of stuff's expensive, a lot
Speaker 4: of stuff is lagged.
Speaker 3: You know.
Speaker 4: You look at the four hundred and ninety three names
Speaker 4: the SMP happened.
Speaker 5: There's a lot of laggards there.
Speaker 2: Yeah.
Speaker 3: So generally we have strategically been of the mind that
Speaker 3: we'd be shopping the sales in the pro cyclical economy
Speaker 3: sense of areas of the market, and that's the game
Speaker 3: plan we're sticking to it. Tech is still at the
Speaker 3: top of our list, but we also like old economy industrials,
Speaker 3: materials I think are showing some promise, probably more A
Speaker 3: twenty twenty sixth story at the stage.
Speaker 2: Tell you as you're with us here with Wealth Consulting Group,
Speaker 2: with just a brilliant note pushing back against the gloom crew.
Speaker 2: There's beginning a partition. I felt it this weekend, and
Speaker 2: some of it is the politics of New York City
Speaker 2: and frankly the nation.
Speaker 6: There's people in stock market prospering and everyone else. Do
Speaker 6: you sense that dichotomy in your practice Wealth Consulting Group?
Speaker 5: Absolutely so.
Speaker 3: I think it's important Tom to your point to parse
Speaker 3: through the consumer sentiment data, and once you do that,
Speaker 3: trend reveals itself and it's really the asset owners, and
Speaker 3: those are the people we do business with, our clients
Speaker 3: that have actually been benefiting from this powerful wealth effect
Speaker 3: and the surge in the stock market. And so I
Speaker 3: think the best strategy here is to participate in these markets.
Speaker 3: Even at these levels. We're at the midpoint between our
Speaker 3: baseline and uber bolish case of seven thousand. I don't
Speaker 3: think we're going to stay down here for that much longer.
Speaker 3: We're probably going to in the year.
Speaker 4: In a high note, alternatives alts as the kids call them,
Speaker 4: hedge funds, private equity, private credit.
Speaker 5: How did they fit in with your discussions with your clients.
Speaker 3: So we do have liquid alternative strategy that serves as
Speaker 3: a kind of non correlated bucket to some of the
Speaker 3: traditional asset classes like stocks and bonds, and they've done
Speaker 3: their job very well this year, and they include things
Speaker 3: like bitcoin and gold and listed infrastructure. We've got an
Speaker 3: absolute return tracker in there as well, and really powered
Speaker 3: through the break in the market back in April and
Speaker 3: have been holding their own And I think it just
Speaker 3: generally tells the story that diversification is really the only relaunch.
Speaker 2: Guys.
Speaker 4: All right, Tally, So, I guess the real question here
Speaker 4: is anything keep you up at night?
Speaker 5: Or is this just cracking along here?
Speaker 3: Well, it was the government shutdown. But guys, I got
Speaker 3: to say, these Bloomberg appearances are the lucky charm for
Speaker 3: markets because here it looks like we're staring at a
Speaker 3: reopening of the government, and I think we rally into
Speaker 3: your end.
Speaker 2: They just told me I can't take off any more
Speaker 2: days to the end of the year. We just keep
Speaker 2: going up. Yep. We protect the copyright of all of
Speaker 2: our guests. Tally Legieri. I can't say enough about his
Speaker 2: research note. Look for that from Wealth Consulting Group or
Speaker 2: he has chief market strategist. Stay with us. More from
Speaker 2: Bloomberg Surveillance coming up after this.
Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live
Speaker 1: weekday afternoons from seven to ten am Eastern Listen on
Speaker 1: Applecarplay and Android Otto with the Bloomberg Business app or
Speaker 1: watch us live on YouTube Blackrock Amanda Line and gets
Speaker 1: to start at on a Monday in a really.
Speaker 2: Important week as well. I don't read your note. I
Speaker 2: did a word search, okay, issuers, issuings and all that.
Speaker 2: I mean, you're so experienced in this before black Rock
Speaker 2: and at black Rock. Are we going to get a
Speaker 2: tsunami of billions of dollars of debt being issued?
Speaker 7: Good morning, Thank you for having me, I would say, Tom,
Speaker 7: it's a great question.
Speaker 8: It's kind of already in process.
Speaker 7: Twenty twenty five is on pace to set the most
Speaker 7: active year since the pandemic era boom of twenty twenty,
Speaker 7: which was just off the charts almost two trillion of
Speaker 7: USIG issuance. I think what's more notable to us outside
Speaker 7: of the robust headline figure has been the sector composition.
Speaker 7: We've seen sectors that historically have contributed a lot of
Speaker 7: issues like healthcare kind of pair back a bit, and
Speaker 7: tech has been off the charts in terms of jenating
Speaker 7: a new record, and that's something that's been notable.
Speaker 2: We don't talk about it, folks, but it's prodigious Villanova
Speaker 2: accounting abilities, price, Waterhouse whatever. I don't know what vintage
Speaker 2: they were. Then you know it's like Ernst and winning
Speaker 2: the old Nets I go, and then Golden Sex and
Speaker 2: now with Blackrock. I mean, you're incredibly steeped in this,
Speaker 2: can you, under Merton Mdigliani, can big tech substitute equity
Speaker 2: issue ins and equity excitement by putting out debt? How
Speaker 2: do you treat their debt?
Speaker 8: So I think there are two things to consider.
Speaker 7: One is a lot of these companies are still in
Speaker 7: a net cash position, which is important. So they're adding
Speaker 7: debt to their capital structure, but their leverage is still
Speaker 7: incredibly low because they have all of this cash on
Speaker 7: their baland yet the question is why that's left over
Speaker 7: from the pre twenty seventeen era when cash was generated
Speaker 7: overseas and then it needed to be taxed to be
Speaker 7: repatriated back to the US. So there's still some cash
Speaker 7: over there, is the point. The second point is that
Speaker 7: there's a bit of an upper bound to how big
Speaker 7: these capital structures can get. So in our note, which
Speaker 7: you know we outline, we estimate that if you look
Speaker 7: at just like the mag seven X Tesla, so removing autos,
Speaker 7: there's probably an incremental four hundred billion plus of incremental
Speaker 7: debt capacity if you just increase the gross leverage by
Speaker 7: half a turn, really modest, that's a really large number.
Speaker 7: But we don't expect that to be utilized because these
Speaker 7: capital structures we think cannot get that large, and also
Speaker 7: that deck capacity will just be used gradually over time
Speaker 7: for strategic opportunities.
Speaker 2: This is what surveillance is about, folks. What you just heard.
Speaker 2: There is a window and do a two pm meeting
Speaker 2: at Blackrock with fourteen animals in the room and Amanda
Speaker 2: begins to discuss and everybody takes notes. It's about their
Speaker 2: ability and this is a Richard Berning word from Morgan
Speaker 2: Stanley years ago. It's the fact that they can leverage
Speaker 2: that's on the income statement. They can leverage to greater profits.
Speaker 7: There's right plenty of balance sheet capacity, even in some
Speaker 7: cases within the construct of the current debt rating, which
Speaker 7: is at the very high end of investment grade, to
Speaker 7: add debt to the capital structure. Our view is that
Speaker 7: this reminds me actually a lot of when I covered
Speaker 7: pharma in two thousand and nine. There was a wave
Speaker 7: of m and A as pharma combined with biotech and
Speaker 7: CFOs and treasurers made the conscious decision to take a
Speaker 7: couple of notches of downgrade to their debt rating. They
Speaker 7: stayed comfortably within investment grade, but they added some debt
Speaker 7: to the capital structure.
Speaker 8: It reminds me very much of that.
Speaker 7: But what's happening in AI and tech is obviously on
Speaker 7: a much bigger scale.
Speaker 4: Is your market comfortable with the amount of or the
Speaker 4: use of proceeds here the fund AI?
Speaker 5: Because a lot of it's kind of we're not really
Speaker 5: sure what all this.
Speaker 2: Proceeds.
Speaker 7: I would say the short answer is yes. You can
Speaker 7: see that very much in the order books. They're well
Speaker 7: over subscribed relative to the debt deals. The second point
Speaker 7: kind of goes back to the pharma biotech experience I
Speaker 7: was sharing. In some cases, this is a bet on
Speaker 7: the management team and pharma. It's not unusual to have
Speaker 7: a thirty or forty year bond sures well after the
Speaker 7: patent expires. In some cases, companies are betting on drug
Speaker 7: discovery that hasn't materialized yet. So in many cases it's
Speaker 7: a bet on the management team in the industry to
Speaker 7: figure it out. I think there's still a lot of
Speaker 7: open questions about who will benefit most, what's the ultimate spending,
Speaker 7: what's the timeline. But it's very clear that there's a
Speaker 7: shortage of computing power and there's a lot.
Speaker 4: Of needs for this absent to tech names that tech
Speaker 4: sector how's a credit quality just in the investment grade
Speaker 4: area these days?
Speaker 7: Sure, so half of the IG market is triple B, right,
Speaker 7: so still really solid credit metrics. Actually, we were talking
Speaker 7: about kind of all all of the newsflow and what's
Speaker 7: changed over.
Speaker 8: The past few months.
Speaker 7: One thing that stayed the same is actually moving selectively
Speaker 7: down in credit quality has been the right outcome double
Speaker 7: b's So the high end of high yield have been
Speaker 7: outperforming the low end of investment grade.
Speaker 5: Okay.
Speaker 7: Part of that is driven by we think we're past
Speaker 7: peak tariff uncertainty, we see scope for growth to reaccelerate.
Speaker 8: At the end of the day, this is.
Speaker 7: Just a growth sensitive assea class, and we also are
Speaker 7: past the peak head wins on rates, and so we're
Speaker 7: still pret comfortable with that view.
Speaker 2: I want to go back to big tech. Okay, let's
Speaker 2: pick it. Let's pick a small company like Microsoft. They
Speaker 2: have tons of ability to issue debt. You see no
Speaker 2: threat to their build of cash or the fortress balance
Speaker 2: sheet that they have.
Speaker 7: So leaving single names aside, I think there are a
Speaker 7: couple There are a couple of There are a couple
Speaker 7: of tail ones at play. One is a bunch of
Speaker 7: these companies just want to get to a net cash
Speaker 7: neutral position versus their debt.
Speaker 2: Catch it up with Apple Lot.
Speaker 8: So that's been in.
Speaker 7: Place for a couple of years for some of these
Speaker 7: big names, and so I would say over time we
Speaker 7: should expect those cash balances to decline slightly, but they'll
Speaker 7: still hold larger cash balances I think relative to most sectors.
Speaker 8: Just the cash generation warrants it.
Speaker 7: The second is is that there is some scope probably
Speaker 7: for ratings to drift lower, but we're starting from an
Speaker 7: exceptionally high level double a territory for most of these companies,
Speaker 7: and so really their cost of capital is not that
Speaker 7: much more onerous if they took a couple of not
Speaker 7: just down grades.
Speaker 8: Again, I want to emphasize we don't expect that.
Speaker 7: Capacity to be used in the near term, selectively and
Speaker 7: gradually for strategic opportunities for premier mortals out.
Speaker 2: There who don't understand leverage and all the other fancy
Speaker 2: jargon you're giving us. Is next year a year to
Speaker 2: clip coupons or for total return.
Speaker 7: I think it's still to clip the coupons because tom
Speaker 7: spreads at high yield, for example, still really tight below
Speaker 7: three hundred basis points. So if we start twenty twenty six.
Speaker 7: Anywhere in the vicinity where we are now, there's just
Speaker 7: not a lot of room for spreads to move materially lower,
Speaker 7: and we don't expect rates to move.
Speaker 8: Materially lower either. So it will be about a yield
Speaker 8: and income story.
Speaker 2: From do the beasts like you at black Rock? Do
Speaker 2: you talk to the full faith and credit people or
Speaker 2: do you just hate each other across the right?
Speaker 7: No, of course, I think the information flow in an
Speaker 7: environment like this that's so dynamic. I would add our
Speaker 7: equity colleagues to that afore next day.
Speaker 8: I think we we.
Speaker 7: I think sharing information is the way to actually have
Speaker 7: a competitive ad mission.
Speaker 2: She nailed That means still it's great. I'm gone them.
Speaker 2: That was amazing brief, folks. Seriously, folks, an amazing brief
Speaker 2: there on the MAGS seven debt time build out. Stay
Speaker 2: with us. More from Bloomberg Surveillance coming up after this.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Apple Coarplay and Android
Speaker 1: Auto with the Bloomberg Business app. You can also listen
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Speaker 1: Just say, Alexa play Bloomberg eleven thirty joining us.
Speaker 2: Now Liverpool corresponding Greg battle with BMP Perry. But let's
Speaker 2: do this first. Are you kidding me? Man City has
Speaker 2: been flat out dead and they whooped him three nothing
Speaker 2: this weekend. What happened?
Speaker 9: It was turbulence. We've seen some turbulence in the market
Speaker 9: and I would consider this pocket of turbulence and not
Speaker 9: something to read too much into.
Speaker 2: What is it like being a Liverpool fan knowing that
Speaker 2: they like the Red Sox or the Pittsburgh Penguins more
Speaker 2: than they like Liverpool? Do you feel like this American
Speaker 2: ownership is like too far away?
Speaker 9: It is a little bit of an issue. It is
Speaker 9: a little bit of an issue. Obviously, we get the
Speaker 9: World Cup here in next summer, so maybe that will
Speaker 9: help the americanization of the game and increase the atally.
Speaker 2: Ask a question for nine to two nine FM up
Speaker 2: in Boston. Good morning to Fenway Sports Group. Let's get
Speaker 2: to a Greg Bottle where us the VMP parabout with
Speaker 2: an absolutely spectacular note and basically your notes through all
Speaker 2: your derivative expertise says go along.
Speaker 9: Why Well, essentially, what we've seen is this kind of
Speaker 9: pocket of turbulence the last couple of weeks. Government shut
Speaker 9: down has been a part of it. Part of it,
Speaker 9: we think is kind of positioning led that the market
Speaker 9: got a bit of ahead of itself in September with
Speaker 9: this kind of real reach for upside, this exuberant rally.
Speaker 9: But what we've seen over the last say three or
Speaker 9: four weeks is a pullback inequities, pick up in volatility
Speaker 9: at a time when the news flow that we have had,
Speaker 9: the bottom up news blow has actually.
Speaker 2: Been very strong.
Speaker 5: Earnings.
Speaker 4: We've just been through kind of the vast majority of earnings.
Speaker 4: Were they good enough for this market? With a good
Speaker 4: enough for you and your call on this market?
Speaker 9: Yeah, I think they were a really good earning season.
Speaker 9: And you can start with the large cap tech and
Speaker 9: I think one of the best ways to look at
Speaker 9: the lens of earnings and distill the information is what
Speaker 9: did all the analysts do that cover the stocks with
Speaker 9: next year's numbers? And they took all of those numbers higher.
Speaker 9: So they digested that news from the calls, from the releases,
Speaker 9: and they increased their forecast.
Speaker 2: Is it too early to do jargon alert? No jargon
Speaker 2: alert with Greg Bodle BMP Perry bout what in God's
Speaker 2: name is cleaner positioning? Cleaner positioning?
Speaker 9: So we track equity positioning the different various buyers and sellers,
Speaker 9: and some of those are pretty predictable, particularly some of
Speaker 9: the systematics strategies. So you have things like CTA is
Speaker 9: essentially trend following systematics. You have things like Volatility Target portfolios.
Speaker 9: They target the volatility of a portfolio, and these flows
Speaker 9: are quite predictable. And what we saw three weeks or
Speaker 9: so ago is that they were as extended as they
Speaker 9: have been as long US equities as they have been
Speaker 9: in the last five years. So it wasn't necessarily surprising
Speaker 9: that we saw some selling flows from that pocket get
Speaker 9: when the market corrected.
Speaker 2: Overall, we're in neutral territory.
Speaker 9: So our positioning indicator peaked at eighty three three weeks ago.
Speaker 9: That was a year to date high. It's come back
Speaker 9: just below fifty. That's neutral territory.
Speaker 2: How do you measure short squeeze when there's so much
Speaker 2: gloom out there? Oops are going the wrong way, they
Speaker 2: repair the trays and up, up we go with convexity.
Speaker 2: Can you measure a short squeeze at B and B
Speaker 2: pair about Yeah.
Speaker 9: So we have a particular strand of our indicator that
Speaker 9: is directed to do specifically that it looks at both
Speaker 9: the absolute level of short interest in stocks, but also
Speaker 9: looks at the relative performance the most shorted stocks. And
Speaker 9: what we saw was that those names massively performed in
Speaker 9: that squeeze in September. That's been a really what I
Speaker 9: consider again healthy correction in those names last couple weeks.
Speaker 4: Arguably a valuable concern about this market is the concentration risk.
Speaker 4: And we've been talking about it for two years I
Speaker 4: would say maybe even longer it does. It seem to
Speaker 4: necessarily be a problem for SAE at the index level.
Speaker 4: But how do you guys think about that? Do you
Speaker 4: try to hedge it a little bit? Do you just
Speaker 4: let it ride?
Speaker 9: I think fundamentally we could be in a cycle where
Speaker 9: with full to take concentration risk, if you have avoided
Speaker 9: those relative winners in the early parts of the cycle,
Speaker 9: it would have been obviously very problematic. So as this
Speaker 9: kind of structural bull story around AI continues, there is
Speaker 9: undoubted to be going to be concentration within that industry,
Speaker 9: and that's invariably going to translate into the market. So
Speaker 9: I think it's something that we have to learn to
Speaker 9: live with rather than avoid.
Speaker 4: Other than those big tech names that again have performed
Speaker 4: so well. Are there other sectors that you guys like
Speaker 4: at this time or is there a factor out there
Speaker 4: that screams wall.
Speaker 9: I guess there's two things that we would look at.
Speaker 9: One is probably a little bit more medium term. That's
Speaker 9: looking at the industrials. We think we saw some pretty
Speaker 9: good earnings from the cyclical sectors this past Q three.
Speaker 9: We think there is a CAPEC story as we go
Speaker 9: into next year. If you want something more tactical over
Speaker 9: the next six weeks, we think the retail sector is
Speaker 9: one that's interesting to look at.
Speaker 2: The lot of headwinds for retail.
Speaker 9: There's concerns over the CA shaped economy and what's going
Speaker 9: on with the consumer. But it's a sector that's underperformed
Speaker 9: a lot has been quite bombed out and has a
Speaker 9: lot of catalysts coming up over the next six weeks.
Speaker 2: A good bottle with you as Secuity Drive strategy we continue.
Speaker 2: He's at BMP PERRYBA. This morning, Good morning across the nation.
Speaker 2: The way you listen to us to get your day
Speaker 2: your weeks started. Good morning on serious XM Channel one
Speaker 2: twenty one and a particular good morning to YouTube. Paul
Speaker 2: and I blown away, the whole team, just blown away
Speaker 2: by the commitment to YouTube listeners and viewers. It's subscribed
Speaker 2: to Bloomberg podcasts. It's the best way to do that, Paul,
Speaker 2: There you go. Nasdaq down six point three seven percent
Speaker 2: is a drawdown from the peak the day before Halloween,
Speaker 2: and we've bounced back. This morning we're up three point
Speaker 2: twenty seven percent. We haven't made it halfway back, but
Speaker 2: we're getting.
Speaker 5: We're getting there. We're getting there. Derivdi of strategy.
Speaker 4: What's the conversation you're having with your clients these days
Speaker 4: about derivatives? Are they Are they to accentuate risk in
Speaker 4: the market, to hedge out the risk?
Speaker 5: How rest of work are they using derivaives?
Speaker 9: I mean people are using them for both those things.
Speaker 2: I mean.
Speaker 9: Certainly, one of the things which raised a warning flak
Speaker 9: to us towards the end of September was the fact
Speaker 9: that we saw this big reach for upside i e.
Speaker 9: People buying call options as a way to kind of
Speaker 9: accinuate risks, take more risk. So you certainly saw that
Speaker 9: in large cap tech where things became very extreme. If
Speaker 9: you look at a chart of just the trading volumes
Speaker 9: of call options in the US, it exploded going into
Speaker 9: that short term market peak. So that was a sign
Speaker 9: of a little bit too much for off on exuberance.
Speaker 5: And how is it different these days? If at all?
Speaker 9: So, I mean the thing which is different is there
Speaker 9: is a broader range of users, there's more use of
Speaker 9: derivative products, there are more expiries, more shortter dated options,
Speaker 9: so there's a ton of volume and risk taken. So
Speaker 9: it's incredibly important to track that to understand the market.
Speaker 2: The people listen to this, particularly people with gray hair,
Speaker 2: are like, Okay, nineteen eighty seven, we didn't see this coming.
Speaker 2: Nineteen ninety eight, we didn't see this coming. What's that
Speaker 2: we didn't see this coming? Right now? What's the Greg
Speaker 2: Boutel phantom shadowy thing out there? Is it private credit?
Speaker 2: What is it? Yeah? I think ultimately we don't know.
Speaker 9: But I think the obvious elephant in the room is
Speaker 9: large cap tech and these huge CAPEX numbers. So I
Speaker 9: think the question that we try and ask a little
Speaker 9: bit more is where are we in that cycle and
Speaker 9: what are the right ways start?
Speaker 2: Because the mandal linement Blackrock was appallingly optimistic. Now do
Speaker 2: you feel like the solid and the bond issuance and
Speaker 2: the equity performance is normative.
Speaker 9: I think it points the bond issuance points to us
Speaker 9: moving to the next stage of that cycle. But to me,
Speaker 9: if I had to look back in history and look anywhere,
Speaker 9: I just I see some similarities to nineteen ninety eight
Speaker 9: where we got a series of FED rate cuts when
Speaker 9: earnings grown it was pretty strong, we didn't necessarily need it,
Speaker 9: and that drew an incredibly volatile move higher.
Speaker 2: How far out are we? What was a Paul helping
Speaker 2: march of a one oh yeah, was that when we
Speaker 2: went off.
Speaker 5: A cliff March of two thousand, March.
Speaker 2: Of two thousand. How close are your wise one to
Speaker 2: a march of two thousand? I do want to Liverpool.
Speaker 9: So when we look at the risks at the moment,
Speaker 9: we think the largest risk at the moment is being underinvested.
Speaker 9: If we do have those kind of bubble type tendency
Speaker 9: start to emerge. The lessons from the late nineties is
Speaker 9: that if you were right and you felt there was
Speaker 9: too much exuberance and there was a crash coming, but
Speaker 9: you were too early in calling that that was actually
Speaker 9: worse than worse than not realizing we were in a bubble.
Speaker 2: Good Bob, thank you so much for the BNP paragraph.
Speaker 2: Stay with us. More from Bloomberg Surveillance coming up after this.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto
Speaker 1: with the Bloomberg Business app. You can also listen live
Speaker 1: on Amazon Alexa from our flagship New York station. Just
Speaker 1: say Alexa play Bloomberg eleven thirty.
Speaker 2: Maybe she has some diversions, some distractions for us.
Speaker 10: Then I tried my very best's okay, we want to
Speaker 10: talk about the Disney blackout on YouTube TV because yes,
Speaker 10: Monday Night football has been effected.
Speaker 5: Dancing with the Stars.
Speaker 10: People want to see these things is okay, and they
Speaker 10: can't on YouTube TV now because of this. So what
Speaker 10: they're doing is they're coming up with these clever hacks
Speaker 10: so that they can still get to watch it. The
Speaker 10: Wall Street Journal has this breakdown. It says one guy
Speaker 10: he used an unwound paper clip stuck it in his
Speaker 10: TV's coaxial port to get a signal. Others are going
Speaker 10: to target the Best Buy they're going to purchase antennas,
Speaker 10: they're hooking them up. They're going over school. They really
Speaker 10: want to see this programming. Paul, up Comcast Charter and
Speaker 10: get a cable bill, or you can do that, yes,
Speaker 10: or you can do that. And then actually, Business Insider
Speaker 10: are saying that YouTube TV is offering customers a twenty
Speaker 10: dollars free fund, a credit that they're going to put
Speaker 10: to the next bill to kind of help out with
Speaker 10: all this going on.
Speaker 2: Can I ask a dumb question Paul reaches back to
Speaker 2: where we were thirty years ago. Well, they're paying for
Speaker 2: two million channels, yep, but we're only watching three exactly exactly.
Speaker 4: And yet this time though, you can just you can
Speaker 4: cancel very easily. Just look at your y Yeah, just
Speaker 4: look at your billy, look at your phone and actually
Speaker 4: see what I'm subscribing to and just hit disconnect this.
Speaker 10: Yeah, but it just goes to show like how frustrated
Speaker 10: people are.
Speaker 2: There's no.
Speaker 5: I don't know.
Speaker 4: I mean, if your YouTube, your Google, you have no incentive.
Speaker 4: I mean, you got plenty of cash to wait this
Speaker 4: thing out.
Speaker 2: True? True? You know.
Speaker 10: Next, Okay, this one was in the Wall Street Journal.
Speaker 10: It says you could be seeing less Italian pasta on
Speaker 10: US store shelves. I know, hold on, hold on, here
Speaker 10: we go. So Italy's biggest pasta exporters, they say import
Speaker 10: anti dumping duties. They are totally one hundred and seven
Speaker 10: percent on their pasta brands. So coming to the US
Speaker 10: is going to be a little bit too expensive for them,
Speaker 10: So you might have to deal with, you know, the
Speaker 10: American brands that you kind of see out there. They
Speaker 10: spoke to the CEO at La Moi Sana. His name
Speaker 10: is Giuseppe Farrow, okay, oh boy, and he said he
Speaker 10: makes those dozens you know, pasta made from flour from
Speaker 10: the company's own mill. Like it's it's good quality pasta
Speaker 10: and it could be missing out on it. Anti dumping
Speaker 10: probe is actually into Italian pasta makers. It's actually not new.
Speaker 10: A lot of importers were flooding the US with cheaper pasta,
Speaker 10: but the penalties were usually small. But now those penalties
Speaker 10: are higher, so getting them here is going to cost
Speaker 10: them a lot more money.
Speaker 4: I see at firsthand in my own house with Joe's
Speaker 4: Deli and spring like NUTRITIONA can't get the chickpeas you
Speaker 4: had a chickpea problem.
Speaker 5: There for a while. No, shit be too expensive for them. Yeah,
Speaker 5: but they're back, they're back. You fixed it. But it
Speaker 5: was touching though there for a while.
Speaker 10: Yeah, it gets expensive for them with all the tariffs. Okay,
Speaker 10: and this one is kind of a shift. Okay. So
Speaker 10: luxury has this new competition from affordable French brands. Okay,
Speaker 10: I hope I'm pronouncing this right, Sison. Okay, it's become
Speaker 10: the global go to for these preppy you know, French
Speaker 10: girls style. They have higher prices and thet's say like Azara,
Speaker 10: but lower than those high priced luxury brands. So they
Speaker 10: cater customers who are willing to pay, like, you know,
Speaker 10: over three hundred dollars for bag or maybe one hundred
Speaker 10: and twenty dollars for jeans instead of like three thousand
Speaker 10: dollars for a designer bag. Luxury, Yes, accessible luxury, that's
Speaker 10: what it's about, because they're just tyves spending all this money,
Speaker 10: like ten thousand dollars on a Chanel bag when they
Speaker 10: can get more for their money. I know it's taken
Speaker 10: this long to get to that point, but there's other
Speaker 10: like brands that are doing it. So there's like Ami Paris,
Speaker 10: there's Polene, there's Lulu des Sasson. I'm trying my very best,
Speaker 10: so I'm killing it. But yeah, smart luxury, that's what
Speaker 10: they're getting to where they're paying for, like the quality clues,
Speaker 10: not the fashion.
Speaker 2: I gotta go to what is dumb luxury luxuries? Hey?
Speaker 10: Ten thousand dollars from a bag?
Speaker 2: That okay, it's good to know smart luxury in that.
Speaker 2: Do you have one more quick twenty seconds? I don't.
Speaker 2: That's nice. There's too much. I'm killing well. Thin gets
Speaker 2: a week started as well newspapers and Lisa Manteo.
Speaker 1: We thank her for the This is the Bloomberg Surveillance podcast,
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