1
00:00:02,520 --> 00:00:13,760
Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

2
00:00:13,840 --> 00:00:17,920
Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern

3
00:00:18,200 --> 00:00:22,000
Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business app.

4
00:00:22,360 --> 00:00:25,680
Speaker 1: Listen on demand wherever you get your podcasts, or watch

5
00:00:25,760 --> 00:00:27,040
Speaker 1: us live on YouTube.

6
00:00:27,400 --> 00:00:31,920
Speaker 2: I've never ever ever said this before. How about making

7
00:00:31,920 --> 00:00:34,360
Speaker 2: a book of the year, a book that's eighteen months

8
00:00:34,360 --> 00:00:39,520
Speaker 2: old and now two years old. Rushia Sharma in twenty

9
00:00:39,560 --> 00:00:42,839
Speaker 2: four took every award for What Went Wrong with Capitalism?

10
00:00:43,040 --> 00:00:45,000
Speaker 2: This is the book you throwed a twenty one year

11
00:00:45,040 --> 00:00:48,040
Speaker 2: old brat, Paul. I'm talking to you, and you say,

12
00:00:48,120 --> 00:00:51,280
Speaker 2: shut up and read this Rushia Sharma and the President's

13
00:00:51,280 --> 00:00:54,920
Speaker 2: here are going to Fdr Nixon, Reagan, Biden and on

14
00:00:55,120 --> 00:00:59,640
Speaker 2: to President Trump, ever more important, two years down the road.

15
00:00:59,640 --> 00:01:02,840
Speaker 2: I can't say enough about it. Rich here, thank you

16
00:01:02,880 --> 00:01:05,759
Speaker 2: so much for joining us this morning. If you were

17
00:01:05,800 --> 00:01:09,440
Speaker 2: to write a new epilogue for What Went Wrong with Capitalism?

18
00:01:09,480 --> 00:01:10,319
Speaker 3: How would you write it?

19
00:01:11,680 --> 00:01:11,800
Speaker 2: Well?

20
00:01:11,880 --> 00:01:14,000
Speaker 4: Tom First, thank you so much for your kind words,

21
00:01:14,040 --> 00:01:18,000
Speaker 4: because nothing warms the heart of an author more than

22
00:01:18,040 --> 00:01:21,440
Speaker 4: to hear it from someone like you. But yeah, that's

23
00:01:21,480 --> 00:01:23,679
Speaker 4: exactly been the aim of this book, which is to

24
00:01:23,760 --> 00:01:27,360
Speaker 4: sort of show that how the capitalism we have today

25
00:01:27,920 --> 00:01:30,959
Speaker 4: is a very distorted form of capitalism we have can.

26
00:01:30,840 --> 00:01:31,760
Speaker 5: We even call it that?

27
00:01:32,920 --> 00:01:35,199
Speaker 4: And the main reason I wrote the book is something

28
00:01:35,200 --> 00:01:37,520
Speaker 4: that you tease just now in your introduction, which is

29
00:01:37,560 --> 00:01:40,560
Speaker 4: that so many young people today, when they are polled

30
00:01:40,560 --> 00:01:45,039
Speaker 4: in America, say that they're disillusioned with capitalism, and in fact,

31
00:01:45,440 --> 00:01:48,440
Speaker 4: many of them, particularly progressives, say that they would rather

32
00:01:48,520 --> 00:01:52,200
Speaker 4: have socialism. Now, that tells you about what is the

33
00:01:52,280 --> 00:01:54,600
Speaker 4: disenchantment with the cutting system.

34
00:01:54,640 --> 00:01:55,320
Speaker 5: That we have.

35
00:01:55,840 --> 00:01:57,920
Speaker 4: And what I've tried to do in the book, and

36
00:01:57,960 --> 00:01:59,880
Speaker 4: I don't think I would change anything from what I

37
00:02:00,120 --> 00:02:02,600
Speaker 4: wrote about this eighteen months ago when it was published,

38
00:02:03,480 --> 00:02:06,600
Speaker 4: is that you've seen more of that, which is that

39
00:02:07,000 --> 00:02:11,520
Speaker 4: we're seeing much wider income inequality, wealth inequality, and we

40
00:02:11,560 --> 00:02:15,440
Speaker 4: are seeing a lot of the incumbents get much more entrenched.

41
00:02:15,720 --> 00:02:16,800
Speaker 5: And my point is that.

42
00:02:16,720 --> 00:02:20,120
Speaker 4: Capitalism is not supposed to work this way. Capitalism is

43
00:02:20,160 --> 00:02:23,760
Speaker 4: supposed to be pro churn. It's supposed to be pro competition,

44
00:02:24,480 --> 00:02:26,880
Speaker 4: and we are supposed to weed out a lot of

45
00:02:26,919 --> 00:02:29,960
Speaker 4: the old players rather than have this kind of system

46
00:02:30,200 --> 00:02:31,160
Speaker 4: where it gets cleroossos.

47
00:02:31,200 --> 00:02:32,720
Speaker 2: That's right, where I wanted to go wead out the

48
00:02:32,720 --> 00:02:36,359
Speaker 2: old players post Trump. Whatever your politics, folks, I don't care.

49
00:02:36,720 --> 00:02:41,600
Speaker 2: Russhier is great about that. Post Trump. What happens to

50
00:02:41,680 --> 00:02:44,840
Speaker 2: populism is all of this solved at the ballot box.

51
00:02:46,520 --> 00:02:48,920
Speaker 4: Well, I think that, you know, the main issue that

52
00:02:48,960 --> 00:02:52,840
Speaker 4: Americans have today is one of affordability, and the affordability

53
00:02:53,320 --> 00:02:56,680
Speaker 4: crisis that we're facing in America, A lot of that

54
00:02:56,760 --> 00:02:59,720
Speaker 4: comes because of home prices, and that goes to the

55
00:02:59,800 --> 00:03:03,440
Speaker 4: heart of what went wrong with capitalism. Why are home

56
00:03:03,520 --> 00:03:06,960
Speaker 4: price is so unaffordable for so many Americans that so

57
00:03:07,040 --> 00:03:09,840
Speaker 4: many twenty year olds today cannot afford to buy a

58
00:03:09,840 --> 00:03:12,720
Speaker 4: home and are prefering to living in with their parents. Well,

59
00:03:12,720 --> 00:03:17,240
Speaker 4: the main reason for that is that the amount of

60
00:03:17,600 --> 00:03:21,080
Speaker 4: regulation we have had in the system that has made

61
00:03:22,639 --> 00:03:27,040
Speaker 4: home supply in very short supply. In fact, so the

62
00:03:27,160 --> 00:03:30,040
Speaker 4: number of new homes we're building in America today is

63
00:03:30,160 --> 00:03:33,720
Speaker 4: roughly the same level as it was thirty forty years ago,

64
00:03:34,040 --> 00:03:37,920
Speaker 4: when the population was a lot less. The kind of

65
00:03:38,000 --> 00:03:41,720
Speaker 4: regulation we have today makes it very difficult to build

66
00:03:41,760 --> 00:03:47,040
Speaker 4: new homes, so keeps going up, but supply just doesn't

67
00:03:47,080 --> 00:03:48,920
Speaker 4: come on the market. So I think that this is

68
00:03:48,960 --> 00:03:50,880
Speaker 4: what we need to do that how do we get

69
00:03:50,920 --> 00:03:54,840
Speaker 4: capitalism back to functioning the way it was, closer to

70
00:03:54,880 --> 00:03:57,280
Speaker 4: what the founders had in mind. I'm not saying we

71
00:03:57,360 --> 00:03:59,880
Speaker 4: return to the Dicxanian form of capitalism that we had

72
00:04:00,280 --> 00:04:04,440
Speaker 4: the nineteen twenties without a welfare state. But this capitalism

73
00:04:04,480 --> 00:04:08,320
Speaker 4: where you have, at least for the rich, capitalism on

74
00:04:08,360 --> 00:04:10,880
Speaker 4: the upside, and then socialism on the downside, where the

75
00:04:10,960 --> 00:04:12,240
Speaker 4: losses are socialized.

76
00:04:12,520 --> 00:04:14,280
Speaker 5: The government's there how to protect you.

77
00:04:14,760 --> 00:04:17,440
Speaker 4: I think that that distorted form of capitalism is something

78
00:04:17,480 --> 00:04:20,640
Speaker 4: which we'll keep producing these perverse outcomes that we're getting

79
00:04:20,640 --> 00:04:21,960
Speaker 4: today across America.

80
00:04:22,160 --> 00:04:26,720
Speaker 2: Rusher Shearmer with us of course, chairman at Rockefeller International,

81
00:04:27,400 --> 00:04:29,719
Speaker 2: can't say enough about his work, including my book of

82
00:04:29,720 --> 00:04:32,200
Speaker 2: the Year, What Went Wrong with Capitalism?

83
00:04:32,200 --> 00:04:34,600
Speaker 3: Paul Sweeney with Russier Sharma.

84
00:04:34,839 --> 00:04:37,400
Speaker 6: Sure, I think we all grew up, most of our listeners,

85
00:04:37,440 --> 00:04:43,480
Speaker 6: have yourers with globalism? Is globalism dead these days?

86
00:04:43,480 --> 00:04:43,800
Speaker 5: Really?

87
00:04:43,839 --> 00:04:45,640
Speaker 4: Because if you look at what's happening in the world

88
00:04:45,720 --> 00:04:49,080
Speaker 4: over the past year, the yes that America is withdrawing

89
00:04:49,120 --> 00:04:52,800
Speaker 4: from the global trade system, but the rest of the

90
00:04:52,839 --> 00:04:55,520
Speaker 4: world is learning to trade without America. So if you

91
00:04:55,560 --> 00:04:59,200
Speaker 4: see what's happened to trade volumes over the last few quarters.

92
00:05:00,000 --> 00:05:03,600
Speaker 4: America's share is declining in global trade volumes, but the

93
00:05:03,640 --> 00:05:06,240
Speaker 4: rest of the world, the trade volumes are actually going up.

94
00:05:06,600 --> 00:05:09,039
Speaker 4: And as I travel the world, what I find is

95
00:05:09,080 --> 00:05:12,360
Speaker 4: that more and more countries are trading with each other,

96
00:05:12,560 --> 00:05:16,200
Speaker 4: signing trade agreements with each other Europe and Latin America.

97
00:05:16,600 --> 00:05:17,640
Speaker 5: Even countries that it.

98
00:05:17,600 --> 00:05:20,600
Speaker 4: Turned quite protectionous like India, are signing more trade deals

99
00:05:21,560 --> 00:05:23,480
Speaker 4: with the Middle East or with New Zealands.

100
00:05:23,520 --> 00:05:25,320
Speaker 5: So at least on the trade front, what I.

101
00:05:25,320 --> 00:05:31,440
Speaker 4: Find is that globalization outside of America continues. Now, of

102
00:05:31,440 --> 00:05:35,360
Speaker 4: course globalism is more imperiled has to do with immigration,

103
00:05:35,839 --> 00:05:37,560
Speaker 4: and this is one of the top trains of my

104
00:05:37,680 --> 00:05:40,640
Speaker 4: year that we are seeing this backlash against immigration, not

105
00:05:40,680 --> 00:05:44,200
Speaker 4: only in America but across the Western hemisphere. So therefore

106
00:05:44,200 --> 00:05:48,800
Speaker 4: immigration rates have collapsed in much of Europe as well,

107
00:05:48,880 --> 00:05:51,799
Speaker 4: not just in America. But as far as trade is concerned,

108
00:05:52,120 --> 00:05:54,640
Speaker 4: the world is really learning to trade without America.

109
00:05:54,640 --> 00:05:57,159
Speaker 5: Increasingly China.

110
00:05:57,240 --> 00:05:59,560
Speaker 6: That's one of the big wild cards I think as

111
00:05:59,600 --> 00:06:02,960
Speaker 6: we think about global trade here here, what's your view

112
00:06:03,000 --> 00:06:06,719
Speaker 6: on China in the West over the next several years.

113
00:06:07,760 --> 00:06:11,679
Speaker 4: I think the single biggest story of twenty twenty six

114
00:06:11,760 --> 00:06:16,920
Speaker 4: which could emerge is the fact that China's dumping is

115
00:06:16,960 --> 00:06:20,680
Speaker 4: causing so much pain to so many countries around the world.

116
00:06:21,080 --> 00:06:23,760
Speaker 4: What exactly is going on here, which is that China's

117
00:06:23,839 --> 00:06:27,000
Speaker 4: always known to be an export powerhouse, but over the

118
00:06:27,040 --> 00:06:29,719
Speaker 4: last decade or so, this is beginning to shift in

119
00:06:29,760 --> 00:06:32,600
Speaker 4: one very important way. In the past, yes, China would

120
00:06:32,640 --> 00:06:35,680
Speaker 4: export a lot, and it would also increase prices over

121
00:06:35,760 --> 00:06:38,560
Speaker 4: time last few years, what's begun to happen and this

122
00:06:38,600 --> 00:06:40,839
Speaker 4: has become more acute in the last couple of years

123
00:06:41,160 --> 00:06:45,000
Speaker 4: that China's export volumes have surged, but it is done

124
00:06:45,040 --> 00:06:49,520
Speaker 4: so by cutting prices. So Chinese export prices are declining

125
00:06:49,560 --> 00:06:53,279
Speaker 4: by twenty percent a year, whereas export volumes are surging

126
00:06:53,320 --> 00:06:57,000
Speaker 4: by forty percent, and that is leading to a flood

127
00:06:57,160 --> 00:06:59,920
Speaker 4: of Chinese goods around the world, which is hurting them

128
00:06:59,880 --> 00:07:04,479
Speaker 4: manufacturing sector in places from Europe to Southeast Asia. And

129
00:07:04,560 --> 00:07:09,680
Speaker 4: I suspect that that backlash will really become more intense

130
00:07:09,760 --> 00:07:12,360
Speaker 4: in twenty twenty six because a lot of these countries

131
00:07:12,360 --> 00:07:17,000
Speaker 4: were so focused on fighting Trump's trade battle in twenty

132
00:07:17,080 --> 00:07:20,960
Speaker 4: twenty five, but that seems to have peaked now I

133
00:07:21,000 --> 00:07:23,760
Speaker 4: think the attention is going to turn to what China does,

134
00:07:24,160 --> 00:07:27,240
Speaker 4: and I think that the backlash against this China dumping

135
00:07:27,320 --> 00:07:28,720
Speaker 4: is going to get pretty intense this year.

136
00:07:28,840 --> 00:07:33,320
Speaker 2: Rushier Sharma with a Sirockefeller International celebrating his top ten

137
00:07:33,480 --> 00:07:36,640
Speaker 2: trends for twenty twenty six, published of course by the

138
00:07:36,680 --> 00:07:40,680
Speaker 2: Financial at Times. Sure you got a beautiful sentence here,

139
00:07:41,120 --> 00:07:43,280
Speaker 2: and I just want to get to this for twenty six,

140
00:07:43,760 --> 00:07:48,280
Speaker 2: for twenty seven, for twenty eight, until the money dries up?

141
00:07:49,240 --> 00:07:53,320
Speaker 2: What's the Rushier Sharma timeline? Asking for a friend? Rush

142
00:07:53,320 --> 00:07:57,400
Speaker 2: here is what is the Rushier Sharma X axis look

143
00:07:57,560 --> 00:08:00,920
Speaker 2: like for quote until the dries up?

144
00:08:02,520 --> 00:08:05,520
Speaker 4: Well, I think that the world is very sensitive to

145
00:08:05,600 --> 00:08:08,200
Speaker 4: higher interest rates. I know that some of the previous

146
00:08:08,240 --> 00:08:11,600
Speaker 4: guests are forecasting lower interest rates this year, but I

147
00:08:11,760 --> 00:08:14,080
Speaker 4: think that the real surprise could be that by the

148
00:08:14,160 --> 00:08:16,960
Speaker 4: end of this year we get higher interest rates, particularly

149
00:08:16,960 --> 00:08:20,000
Speaker 4: long term interest rates. And when interest rates go up,

150
00:08:20,320 --> 00:08:22,240
Speaker 4: that's when money really starts to dry up.

151
00:08:22,280 --> 00:08:24,320
Speaker 5: So I think that what you're alluding to here, Tom

152
00:08:24,480 --> 00:08:26,080
Speaker 5: is the fact that I wrote that.

153
00:08:26,000 --> 00:08:28,840
Speaker 4: We have some sort of an AI bubble, but the

154
00:08:28,880 --> 00:08:32,480
Speaker 4: bubble can keep inflating until interest rates go up and

155
00:08:32,559 --> 00:08:35,880
Speaker 4: money dries up. I think that that happens possibly by

156
00:08:35,880 --> 00:08:38,120
Speaker 4: the end of the year, when you end up getting

157
00:08:38,160 --> 00:08:43,240
Speaker 4: higher interest rates as inflation remains sticky, and the fact

158
00:08:43,240 --> 00:08:46,280
Speaker 4: that we still have, you know, like a lot of

159
00:08:46,320 --> 00:08:49,880
Speaker 4: this liquidity propping up financial assets. But the moment interest

160
00:08:49,920 --> 00:08:52,520
Speaker 4: rates go up particually long term interest rates, that's when

161
00:08:52,559 --> 00:08:53,360
Speaker 4: money dries up.

162
00:08:53,600 --> 00:08:55,960
Speaker 3: Don't go away. Because Paul Sweet's gonna save here? Did

163
00:08:56,040 --> 00:08:57,000
Speaker 3: you save me from this?

164
00:08:57,120 --> 00:08:59,280
Speaker 6: I can save good time because he's got ten big

165
00:08:59,360 --> 00:09:02,640
Speaker 6: themes for twenty twenty six, and number ten jumps out

166
00:09:02,640 --> 00:09:04,600
Speaker 6: of me peak alcohol.

167
00:09:05,200 --> 00:09:06,000
Speaker 7: What's going on there?

168
00:09:06,040 --> 00:09:08,000
Speaker 3: Was shre Yeah.

169
00:09:08,040 --> 00:09:09,760
Speaker 4: You know, this is one of the things which surprised

170
00:09:09,800 --> 00:09:12,640
Speaker 4: me too, which is the fact that when I looked

171
00:09:12,679 --> 00:09:18,320
Speaker 4: at the latest Gallop survey of the posters asking Americans

172
00:09:18,640 --> 00:09:21,600
Speaker 4: that how much are they drinking? You know that since

173
00:09:22,080 --> 00:09:24,360
Speaker 4: they've been asking this question since I think nineteen thirty

174
00:09:24,400 --> 00:09:30,520
Speaker 4: eight or something, the lowest share of Americans today are

175
00:09:30,600 --> 00:09:33,760
Speaker 4: drinking alcohol than before, right, So, which is that what

176
00:09:33,760 --> 00:09:37,880
Speaker 4: you're seeing is that people's alcohol consumption is dropping. In

177
00:09:37,920 --> 00:09:41,880
Speaker 4: places like UK even Russia, alcohol consumption is close to

178
00:09:41,920 --> 00:09:43,160
Speaker 4: a record low.

179
00:09:43,520 --> 00:09:45,160
Speaker 5: So I think that that's what's really going.

180
00:09:44,960 --> 00:09:47,480
Speaker 4: On, which is that there's a lot of awareness about

181
00:09:47,520 --> 00:09:52,080
Speaker 4: the negative consequences of alcohol. Even the old line, which

182
00:09:52,120 --> 00:09:54,199
Speaker 4: is that a drink a day is good for you.

183
00:09:54,600 --> 00:09:55,440
Speaker 5: I think that that.

184
00:09:55,440 --> 00:09:58,880
Speaker 4: Myth has also been busted, and so a lot of

185
00:09:58,960 --> 00:10:02,200
Speaker 4: young people in particular are turning off alcohol, and so

186
00:10:02,240 --> 00:10:02,920
Speaker 4: therefore we see the.

187
00:10:02,920 --> 00:10:05,240
Speaker 5: Consequences of that. Then, even as global.

188
00:10:04,920 --> 00:10:08,319
Speaker 4: Stocks continue to rally, one of the worst performing subsectors

189
00:10:08,400 --> 00:10:10,760
Speaker 4: in the world over the last few years have been

190
00:10:10,800 --> 00:10:14,479
Speaker 4: alcohol stocks, and these include wineries, distilleries.

191
00:10:14,720 --> 00:10:16,280
Speaker 5: So you know, we've seen this across the.

192
00:10:16,240 --> 00:10:20,200
Speaker 4: Board, right, So there's a negative, you know, sort of

193
00:10:20,480 --> 00:10:24,840
Speaker 4: attitude towards alcohol leading to lower consumption of alcohol. Some

194
00:10:24,920 --> 00:10:28,480
Speaker 4: of it is getting cannibalized by cannabis as people switch

195
00:10:28,559 --> 00:10:30,960
Speaker 4: to that. But I think that that's a small part

196
00:10:30,960 --> 00:10:33,280
Speaker 4: of the story. The biggest story is that due to

197
00:10:33,360 --> 00:10:36,679
Speaker 4: health awareness, people are turning off alcohol, just like they

198
00:10:36,720 --> 00:10:37,840
Speaker 4: did with cigarettes before that.

199
00:10:38,240 --> 00:10:39,800
Speaker 3: We have Lisametery to help us with that.

200
00:10:40,040 --> 00:10:42,480
Speaker 2: Richard Sharma, my book of the year, What Went Wrong

201
00:10:42,520 --> 00:10:46,320
Speaker 2: with Capitalism, can't say enough about it, but stay with us.

202
00:10:46,559 --> 00:10:49,760
Speaker 2: More from Bloomberg Surveillance coming up after this.

203
00:10:57,040 --> 00:11:01,040
Speaker 1: You're listening to the Bloomberg Surveillance Podcast just live weekday

204
00:11:01,080 --> 00:11:04,679
Speaker 1: afternoons from seven to ten am Eastern Listen on Applecarplay

205
00:11:04,720 --> 00:11:08,000
Speaker 1: and Android Otto with the Bloomberg Business app, or watch

206
00:11:08,040 --> 00:11:09,240
Speaker 1: us live on YouTube.

207
00:11:09,559 --> 00:11:13,080
Speaker 2: John Bilton had a global multi asset strategy at JP

208
00:11:13,200 --> 00:11:14,520
Speaker 2: Morgan Asset Management.

209
00:11:14,559 --> 00:11:17,120
Speaker 3: We're thrilled you could be with us. Thank you this morning.

210
00:11:17,440 --> 00:11:24,200
Speaker 2: You nail the risk of disinflation and outright deflation. There

211
00:11:24,400 --> 00:11:29,360
Speaker 2: is a raging battle now in the zeitgeist over if

212
00:11:29,360 --> 00:11:34,600
Speaker 2: this disinflation is just lowering inflation or does it lead to.

213
00:11:34,800 --> 00:11:39,920
Speaker 3: Dampened output in Europe and around the world. Does Kasmin

214
00:11:40,000 --> 00:11:43,800
Speaker 3: and Feroli do they see dampened output from the disinflation

215
00:11:43,960 --> 00:11:45,080
Speaker 3: you talk about.

216
00:11:45,200 --> 00:11:47,480
Speaker 8: Well, I think what it does is having seen the

217
00:11:47,559 --> 00:11:51,720
Speaker 8: ECB firmly on Holt probably for most of the years,

218
00:11:51,720 --> 00:11:53,000
Speaker 8: some manly, some of the dates we've seen in the

219
00:11:53,040 --> 00:11:57,120
Speaker 8: past couple of days suggests that just maybe, Jess, maybe

220
00:11:57,120 --> 00:11:59,560
Speaker 8: the ECB might have a Midsummer gift for folks.

221
00:11:59,640 --> 00:12:01,920
Speaker 7: Adding Europe, they've done a lot.

222
00:12:01,720 --> 00:12:05,040
Speaker 8: To bring to bring rates down to what they are

223
00:12:05,280 --> 00:12:09,000
Speaker 8: effectively close to zero in real terms. That's important. Remember

224
00:12:09,160 --> 00:12:11,439
Speaker 8: this is the biggest consumer block on the world. I

225
00:12:11,440 --> 00:12:15,520
Speaker 8: apologies to American consumers. European consumer block is twice as big.

226
00:12:15,880 --> 00:12:20,520
Speaker 8: They just don't spend, they save, So it's really important

227
00:12:20,559 --> 00:12:24,719
Speaker 8: how it feeds through the ECB policy. The European households

228
00:12:24,880 --> 00:12:28,800
Speaker 8: are saving fifteen point three percent of their income each year.

229
00:12:28,840 --> 00:12:31,439
Speaker 2: That's the same thing docimal point, we're saving one point

230
00:12:31,480 --> 00:12:32,600
Speaker 2: five exactly.

231
00:12:32,960 --> 00:12:35,200
Speaker 8: So the point is, but we just need a little

232
00:12:35,200 --> 00:12:38,080
Speaker 8: bit of impetus to set some spending in train.

233
00:12:38,160 --> 00:12:39,880
Speaker 7: There Europe can look pretty good.

234
00:12:39,920 --> 00:12:44,040
Speaker 8: So these these disinflationary forces give the ECB a lot

235
00:12:44,040 --> 00:12:46,679
Speaker 8: of wiggle room. But remember there's a lot of capex

236
00:12:46,720 --> 00:12:49,160
Speaker 8: coming as well through into Europe over the course of

237
00:12:49,440 --> 00:12:51,800
Speaker 8: twenty six, twenty seven, twenty eight under the Made for

238
00:12:51,880 --> 00:12:54,440
Speaker 8: Germany plan, but also on some of the defense spending

239
00:12:54,600 --> 00:12:57,480
Speaker 8: et cetera that's yet to hit the system. So do

240
00:12:57,559 --> 00:13:00,400
Speaker 8: we see a return to the bad old days of

241
00:13:00,440 --> 00:13:03,880
Speaker 8: disinflation even flirting with deflation? Probably not, because this is

242
00:13:03,920 --> 00:13:06,840
Speaker 8: a different picture. We've got fiscal as well as monetary

243
00:13:06,920 --> 00:13:07,320
Speaker 8: right now.

244
00:13:08,360 --> 00:13:11,480
Speaker 6: We had use markets equitym marks perform very well in

245
00:13:11,520 --> 00:13:13,839
Speaker 6: twenty twenty five, but rest of the world did a

246
00:13:13,920 --> 00:13:16,360
Speaker 6: lot better. So what are we doing in twenty six

247
00:13:16,400 --> 00:13:19,320
Speaker 6: to expect than our performance to continue.

248
00:13:19,480 --> 00:13:20,679
Speaker 7: So it's kind of an interesting one.

249
00:13:20,720 --> 00:13:23,400
Speaker 8: There's been some real changes in terms of what's driven

250
00:13:23,400 --> 00:13:26,079
Speaker 8: the equity markets within If we look at the actual

251
00:13:26,160 --> 00:13:29,520
Speaker 8: indices themselves in local currency terms, they're kind of level

252
00:13:29,520 --> 00:13:32,520
Speaker 8: pegging if we take develop markets versus us later on

253
00:13:32,600 --> 00:13:35,120
Speaker 8: the currency. And of course this has been a great period.

254
00:13:35,120 --> 00:13:40,080
Speaker 8: If you've been an American investor buying European, Eurozone, UK, Swiss,

255
00:13:40,200 --> 00:13:42,600
Speaker 8: you've done pretty well because of the currency move as well.

256
00:13:42,880 --> 00:13:44,520
Speaker 8: We think the currency's got a bit further to go,

257
00:13:44,559 --> 00:13:48,400
Speaker 8: but the balance is changing. The differential over the long

258
00:13:48,480 --> 00:13:51,360
Speaker 8: term in terms of what we see as dollar weakening

259
00:13:51,400 --> 00:13:54,480
Speaker 8: against the euro, maybe about fifty sixty basis points a year.

260
00:13:55,080 --> 00:13:57,559
Speaker 8: It could be two percent against the end. It could

261
00:13:57,600 --> 00:13:59,560
Speaker 8: be two point two percent on average over the next

262
00:13:59,559 --> 00:14:02,720
Speaker 8: ten years against the ranimby in the end. So it's

263
00:14:02,720 --> 00:14:05,200
Speaker 8: really the Asian markets we're beginning to get that potential

264
00:14:05,200 --> 00:14:06,360
Speaker 8: for that currency pickup.

265
00:14:06,640 --> 00:14:08,960
Speaker 2: This is what, John, I'm so happy you're here for

266
00:14:09,000 --> 00:14:11,000
Speaker 2: this red sticky. This is what when we do a

267
00:14:11,040 --> 00:14:14,520
Speaker 2: fancy headline Bloomberg, we color it red. Sweety demands ad

268
00:14:14,800 --> 00:14:19,000
Speaker 2: Alaska Air is buying one hundred and ten Boeing aircraft

269
00:14:19,480 --> 00:14:24,360
Speaker 2: in global growth push. We my currency is gloom. People

270
00:14:24,360 --> 00:14:26,760
Speaker 2: don't tune in, they don't listen, they don't watch on

271
00:14:26,800 --> 00:14:29,760
Speaker 2: YouTube unless Lisa, am I right, Unless we're worried.

272
00:14:30,240 --> 00:14:33,400
Speaker 3: What about our children? Yes, we're worried. We're worried.

273
00:14:33,600 --> 00:14:37,200
Speaker 2: Here's Alaska Air betting on global growth. I mean, what

274
00:14:37,280 --> 00:14:41,600
Speaker 2: does your bank see of the optimists just saying no,

275
00:14:41,640 --> 00:14:43,200
Speaker 2: we're not going to worry about this, We're not going

276
00:14:43,280 --> 00:14:47,040
Speaker 2: to worry about disinflation. Let's go what's the John built

277
00:14:47,080 --> 00:14:48,640
Speaker 2: and let's go meet right now?

278
00:14:48,840 --> 00:14:51,680
Speaker 8: Well, I think par it back to pay back to

279
00:14:51,680 --> 00:14:55,800
Speaker 8: basic fundamentals. If we look from nineteen seventy three to

280
00:14:55,840 --> 00:14:59,360
Speaker 8: present day, we can count the NBA recessions. We look

281
00:14:59,400 --> 00:15:01,960
Speaker 8: at the economic data today, it is not pointing to

282
00:15:02,000 --> 00:15:04,920
Speaker 8: a recession in the US, and we've got fiscal stimulus

283
00:15:04,920 --> 00:15:07,360
Speaker 8: and monetary support in the rest of the world. Take

284
00:15:07,400 --> 00:15:10,600
Speaker 8: a look at S and P total returns over those periods.

285
00:15:10,640 --> 00:15:11,360
Speaker 3: In a non.

286
00:15:11,240 --> 00:15:14,560
Speaker 8: Recession year, nine times out of ten, the S and

287
00:15:14,600 --> 00:15:17,840
Speaker 8: P five hundred gives a positive total return. So the

288
00:15:17,920 --> 00:15:21,200
Speaker 8: idea that one would better against the economic momentum today

289
00:15:21,280 --> 00:15:26,640
Speaker 8: when you've got everything aligned, fiscal stimulus, regulatory easing, the

290
00:15:26,680 --> 00:15:29,720
Speaker 8: glagg defect of monetary stimulus all coming together in twenty

291
00:15:29,760 --> 00:15:33,600
Speaker 8: twenty six, I would be betting on equity markets continuing

292
00:15:33,600 --> 00:15:35,280
Speaker 8: to climb a wall of worry and some of the

293
00:15:35,360 --> 00:15:38,840
Speaker 8: investments spending from companies needing to play catch up in

294
00:15:38,960 --> 00:15:43,400
Speaker 8: order to stay relevant in terms of a growing global economy.

295
00:15:45,080 --> 00:15:51,960
Speaker 6: Allocations, stocks, barns, alternatives, thirty thousand foot view. Where's JP

296
00:15:52,080 --> 00:15:53,800
Speaker 6: Morgan asset management these days?

297
00:15:53,840 --> 00:15:55,440
Speaker 7: So we're a little bit overweight equity.

298
00:15:56,120 --> 00:15:59,000
Speaker 8: We're conscious that valuations are kind of peaky, but at

299
00:15:59,000 --> 00:16:01,280
Speaker 8: the same time we think fundamentals are good. We think

300
00:16:01,320 --> 00:16:04,440
Speaker 8: broadening out is important. We're not talking about sort of

301
00:16:04,440 --> 00:16:06,800
Speaker 8: going and playing around in small caps here. We're talking

302
00:16:06,840 --> 00:16:09,720
Speaker 8: broadening out globally across some of those bigger, you know,

303
00:16:10,040 --> 00:16:14,800
Speaker 8: recipients of that capital spending. So broadening out overweight equity.

304
00:16:14,880 --> 00:16:17,600
Speaker 8: We like Hong Kong because of the Asia play. We

305
00:16:17,800 --> 00:16:20,000
Speaker 8: like the UK because we've gone continuing to see some

306
00:16:20,080 --> 00:16:23,600
Speaker 8: decent yield there. We like Japan in terms of bonds.

307
00:16:23,920 --> 00:16:26,680
Speaker 8: You know, we're looking for further steepening in curves. They're

308
00:16:26,800 --> 00:16:29,240
Speaker 8: better likely to cut rates. We think one more time

309
00:16:29,280 --> 00:16:31,680
Speaker 8: this year, and then in terms of the other markets,

310
00:16:31,880 --> 00:16:34,400
Speaker 8: we're getting a little bit tight on credit, so we

311
00:16:34,400 --> 00:16:36,520
Speaker 8: think it's probably equity over credit as we move into

312
00:16:36,560 --> 00:16:37,320
Speaker 8: the ladder stage.

313
00:16:37,480 --> 00:16:39,440
Speaker 3: If you moved to New York or are you based

314
00:16:39,480 --> 00:16:39,920
Speaker 3: in London?

315
00:16:39,960 --> 00:16:40,920
Speaker 7: So I'm based in London.

316
00:16:41,960 --> 00:16:44,040
Speaker 3: Can we take a note? Can you get mister Damon

317
00:16:44,120 --> 00:16:47,080
Speaker 3: on the phone? We need God to come over there,

318
00:16:48,080 --> 00:16:48,600
Speaker 3: over there.

319
00:16:49,080 --> 00:16:53,400
Speaker 7: And there are slights both ways.

320
00:16:53,440 --> 00:16:56,200
Speaker 3: Thank you so much for joining us. Thanks with the

321
00:16:56,280 --> 00:16:58,640
Speaker 3: JP morgan a Bank.

322
00:16:59,400 --> 00:17:03,600
Speaker 2: Stay with those More from Bloomberg Surveillance coming up after this.

323
00:17:10,840 --> 00:17:14,440
Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live

324
00:17:14,480 --> 00:17:17,639
Speaker 1: weekday afternoons from seven to ten am Eastern Listen on

325
00:17:17,760 --> 00:17:21,399
Speaker 1: Applecarplay and Android Otto with the Bloomberg Business app, or

326
00:17:21,560 --> 00:17:23,000
Speaker 1: watch us live on YouTube.

327
00:17:23,320 --> 00:17:25,840
Speaker 2: This is the most important conversation of the day because

328
00:17:25,960 --> 00:17:29,600
Speaker 2: you're not paying attention to your four oh one k cam.

329
00:17:29,680 --> 00:17:34,320
Speaker 2: Dawson is I haven't said this in ages OMG rotation.

330
00:17:34,880 --> 00:17:38,720
Speaker 2: What is the character of the rotation going on in

331
00:17:38,760 --> 00:17:39,880
Speaker 2: the markets right now?

332
00:17:40,040 --> 00:17:41,240
Speaker 9: I think we have to appreciate it.

333
00:17:41,280 --> 00:17:43,359
Speaker 10: At the start of the year, we typically do see

334
00:17:43,480 --> 00:17:46,320
Speaker 10: some of this last shall be first kind of rotation

335
00:17:46,480 --> 00:17:49,679
Speaker 10: where the names that had lagged start to lead, at

336
00:17:49,800 --> 00:17:52,480
Speaker 10: least for a short period of time. What's interesting is

337
00:17:52,480 --> 00:17:56,320
Speaker 10: that actually started back in November. The rotation really kicked

338
00:17:56,320 --> 00:17:59,320
Speaker 10: off in November, because that's when we saw the blowoff

339
00:17:59,320 --> 00:18:02,359
Speaker 10: top and some growth shares. They'se traded to an eighty

340
00:18:02,480 --> 00:18:06,080
Speaker 10: five percent premium to value at the peak in October,

341
00:18:06,359 --> 00:18:08,760
Speaker 10: so there was a lot of room for valuations to

342
00:18:08,800 --> 00:18:12,200
Speaker 10: come in. And I think the character of this rotation

343
00:18:12,400 --> 00:18:15,199
Speaker 10: has been one that's been very pro cyclical. If you

344
00:18:15,240 --> 00:18:18,320
Speaker 10: look at what's leading, its things like banks, and you

345
00:18:18,400 --> 00:18:22,719
Speaker 10: have industrials doing better, industrial commodities doing better. So it

346
00:18:22,760 --> 00:18:26,520
Speaker 10: appears that this pro cyclical rotation is coming with a

347
00:18:26,600 --> 00:18:30,679
Speaker 10: narrative of global reacceleration, which I think remains to be

348
00:18:30,720 --> 00:18:32,439
Speaker 10: seen if the data actually supports that.

349
00:18:33,480 --> 00:18:35,639
Speaker 6: Boy, I'm thinking about my inbox over the last i

350
00:18:35,680 --> 00:18:38,440
Speaker 6: don't know, six weeks from the cell side, and their

351
00:18:38,440 --> 00:18:45,359
Speaker 6: twenty six outlooks almost universally positive bullish ten percent, twelve percent,

352
00:18:45,400 --> 00:18:50,680
Speaker 6: fifteen percent expectations for SMP stock performance in twenty twenty six.

353
00:18:51,160 --> 00:18:51,920
Speaker 7: That makes me nervous?

354
00:18:51,960 --> 00:18:53,160
Speaker 6: Does that make you nervous at all?

355
00:18:53,200 --> 00:18:56,120
Speaker 10: There's not a single strategist who's expecting a down year

356
00:18:56,160 --> 00:18:57,480
Speaker 10: in twenty twenty six.

357
00:18:58,280 --> 00:19:02,760
Speaker 11: No, do you expect I gotta make some news this Well, Look,

358
00:19:03,119 --> 00:19:05,600
Speaker 11: we think that we'll have volatility along the way, but

359
00:19:05,680 --> 00:19:08,040
Speaker 11: that there's still room for the markets to press higher

360
00:19:08,080 --> 00:19:09,000
Speaker 11: through the end of the year.

361
00:19:09,040 --> 00:19:12,520
Speaker 10: But here the key point is that in the fourth

362
00:19:12,560 --> 00:19:15,720
Speaker 10: year of the bull market. We've had twenty three bull

363
00:19:15,760 --> 00:19:18,680
Speaker 10: markets that have been three years over the last fifty

364
00:19:18,760 --> 00:19:21,359
Speaker 10: years fifty sixty years or so, and the conclusion is

365
00:19:21,359 --> 00:19:23,880
Speaker 10: about fifty percent of the time they're able to get

366
00:19:23,880 --> 00:19:27,639
Speaker 10: to that fourth year of positive returns. So we have

367
00:19:27,680 --> 00:19:29,919
Speaker 10: a fifty to fifty chance of being able to deliver

368
00:19:30,000 --> 00:19:31,920
Speaker 10: positive returns in twenty twenty six.

369
00:19:32,760 --> 00:19:36,880
Speaker 6: Earnings, I guess that's the good news for bulls out

370
00:19:36,920 --> 00:19:39,560
Speaker 6: there because of the expectations are in twenty twenty six,

371
00:19:39,800 --> 00:19:42,800
Speaker 6: again double digit growth in earning twelve thirteen percent growth

372
00:19:42,800 --> 00:19:46,359
Speaker 6: in earnings. Is that enough to support this valuation this market?

373
00:19:46,440 --> 00:19:49,160
Speaker 10: That has been what has supported the valuation through twenty

374
00:19:49,200 --> 00:19:52,760
Speaker 10: twenty five, the fact that you saw the vast majority

375
00:19:52,760 --> 00:19:56,119
Speaker 10: of returns in twenty five driven by earnings growth, and

376
00:19:56,160 --> 00:19:58,720
Speaker 10: that's expected to continue in twenty six. So if we

377
00:19:58,800 --> 00:20:01,600
Speaker 10: break down the twenty twenty six earnings number, it's three

378
00:20:01,640 --> 00:20:04,960
Speaker 10: hundred and ten dollars a share. That implies an acceleration

379
00:20:05,080 --> 00:20:08,080
Speaker 10: in the top line. That's interesting because if you look

380
00:20:08,080 --> 00:20:12,800
Speaker 10: at consensus forecasts for GDP, consensus is expecting a deceleration

381
00:20:13,040 --> 00:20:17,040
Speaker 10: in nominal GDP growth. Remember, sales are nominal. The other

382
00:20:17,080 --> 00:20:19,720
Speaker 10: important point is that you have over two hundred basis

383
00:20:19,720 --> 00:20:23,720
Speaker 10: points of Martian expansion that's already been baked into current forecasts.

384
00:20:23,720 --> 00:20:27,080
Speaker 10: So we think if we're if we're thinking about what

385
00:20:27,320 --> 00:20:30,480
Speaker 10: drive drive markets over the course of the next couple

386
00:20:30,520 --> 00:20:33,000
Speaker 10: of months, it's whether or not you take the over

387
00:20:33,200 --> 00:20:34,280
Speaker 10: under on that earnings number.

388
00:20:34,359 --> 00:20:36,320
Speaker 2: Karon Dawson with New ed We we welcome all of

389
00:20:36,359 --> 00:20:38,479
Speaker 2: you across the nation, including her Florida.

390
00:20:38,480 --> 00:20:39,480
Speaker 5: We're doing Florida.

391
00:20:39,280 --> 00:20:42,639
Speaker 3: Music today for Cameron Dawson. Do you know who Leonards

392
00:20:42,640 --> 00:20:43,199
Speaker 3: Skinner is?

393
00:20:43,280 --> 00:20:43,399
Speaker 4: Oh?

394
00:20:43,440 --> 00:20:45,400
Speaker 9: I was thinking you're gonna go with Tom Petty, but yeah.

395
00:20:46,920 --> 00:20:48,560
Speaker 3: Yeah, I just thought you were too young to know

396
00:20:48,680 --> 00:20:49,440
Speaker 3: Leonard Skinner.

397
00:20:49,920 --> 00:20:52,000
Speaker 2: Yeah, yes, folks, we're gonna play free Bird.

398
00:20:52,040 --> 00:20:52,680
Speaker 3: Get over it.

399
00:20:53,600 --> 00:20:54,640
Speaker 9: I'm going to have a simple man.

400
00:20:54,880 --> 00:20:56,280
Speaker 7: Yes, yeah, okay.

401
00:20:56,440 --> 00:21:00,960
Speaker 2: I look Kim Dawson at this equity market I don't

402
00:21:01,000 --> 00:21:03,919
Speaker 2: see the exuberants out there. I know there's Robin out

403
00:21:03,960 --> 00:21:07,199
Speaker 2: exuberants in. You know, Lisa's kids are traded on the couch,

404
00:21:07,280 --> 00:21:11,040
Speaker 2: But it's not like a three year double digit OMG.

405
00:21:11,160 --> 00:21:13,000
Speaker 2: Stocks are going up field, is it?

406
00:21:13,040 --> 00:21:16,280
Speaker 10: And to support your notion of there being a lack

407
00:21:16,320 --> 00:21:19,080
Speaker 10: of exuberance, you look at the Deutsche Bank and boldmin

408
00:21:19,119 --> 00:21:24,320
Speaker 10: SAX positioning indicators, and they're showing that institutions are effectively neutral.

409
00:21:24,680 --> 00:21:26,520
Speaker 9: You cannot say that about households.

410
00:21:26,520 --> 00:21:30,960
Speaker 10: Though retail investors are max overweight, max all in. You've

411
00:21:30,960 --> 00:21:35,080
Speaker 10: seen huge growth in marginal imbalances. AAI positioning is at

412
00:21:35,200 --> 00:21:36,639
Speaker 10: seventy one point two percent.

413
00:21:36,760 --> 00:21:37,920
Speaker 5: Wow, I didn't know that.

414
00:21:37,920 --> 00:21:40,040
Speaker 10: That's that's back to the peak from twenty eighteen and

415
00:21:40,119 --> 00:21:40,920
Speaker 10: twenty twenty one.

416
00:21:41,040 --> 00:21:42,320
Speaker 9: So households are all in.

417
00:21:42,520 --> 00:21:48,040
Speaker 3: So institutions under own NVIDIA.

418
00:21:46,560 --> 00:21:49,479
Speaker 10: Likely yes, simply because they have positioning size caps.

419
00:21:49,760 --> 00:21:51,040
Speaker 9: At the end of the day, when you have a.

420
00:21:51,040 --> 00:21:55,080
Speaker 10: Market that's so very concentrated, and you have certain mutual

421
00:21:55,119 --> 00:21:58,560
Speaker 10: funds that cannot own positions as large as what some

422
00:21:58,600 --> 00:22:02,760
Speaker 10: of these names are, by definition, they're institutionally forced to

423
00:22:02,800 --> 00:22:03,560
Speaker 10: being underweight.

424
00:22:03,640 --> 00:22:04,879
Speaker 9: Some of these leaders.

425
00:22:05,160 --> 00:22:07,560
Speaker 6: Fixed income is a great performer in twenty twenty five.

426
00:22:07,640 --> 00:22:09,200
Speaker 6: What do you think about the bomb market in twenty tins.

427
00:22:09,640 --> 00:22:12,240
Speaker 10: So, because we're starting this year at lower yields, we're

428
00:22:12,280 --> 00:22:16,160
Speaker 10: actually in our strategic tactical acid allocations, I should say,

429
00:22:16,560 --> 00:22:19,679
Speaker 10: actually taking some money out of fixed income and allocating

430
00:22:19,720 --> 00:22:22,480
Speaker 10: into other areas somebody, because you're not getting as much

431
00:22:22,520 --> 00:22:24,679
Speaker 10: of a return as you were at the beginning of

432
00:22:24,720 --> 00:22:27,400
Speaker 10: the year, given yields are lower and the strong performance

433
00:22:27,440 --> 00:22:29,800
Speaker 10: that we've had this year, so we don't think that

434
00:22:29,800 --> 00:22:32,080
Speaker 10: there's a lot of room for spreads to compress that

435
00:22:32,240 --> 00:22:34,879
Speaker 10: much further. In high yield and investment grade, they're pretty

436
00:22:34,960 --> 00:22:38,000
Speaker 10: darn tight. But note that they are thirty basis points

437
00:22:38,040 --> 00:22:40,320
Speaker 10: wider today than they were at the start of twenty five.

438
00:22:40,480 --> 00:22:43,520
Speaker 10: So really you can, in fact squeeze blood from a stone.

439
00:22:43,760 --> 00:22:46,560
Speaker 2: Cameron Dawson with us a nice lengthy interview. We're going

440
00:22:46,600 --> 00:22:50,320
Speaker 2: to continue with this, Dawson. Kevin Gordon came in yesterday.

441
00:22:50,440 --> 00:22:53,520
Speaker 2: Can we take a forty five second short biscuit break.

442
00:22:53,960 --> 00:22:56,960
Speaker 2: Kevin Gordon came in yesterday with schwab and he brought

443
00:22:57,000 --> 00:23:00,879
Speaker 2: in pumpkin honey cookie and it's all in Korean.

444
00:23:01,000 --> 00:23:05,119
Speaker 3: I can't understand it. Let's hand these these around control them,

445
00:23:05,200 --> 00:23:07,639
Speaker 3: dat on them. They were looking over them a full one,

446
00:23:08,240 --> 00:23:10,960
Speaker 3: you know, Lisa he our tin director turned around.

447
00:23:10,960 --> 00:23:11,880
Speaker 9: I'm going to pass it down.

448
00:23:12,119 --> 00:23:15,440
Speaker 3: It's it's just Kevin and Lazie Zanders. Thank you so much.

449
00:23:16,200 --> 00:23:18,080
Speaker 3: That was really easy. We learned a lot from them.

450
00:23:18,200 --> 00:23:21,399
Speaker 3: Kim Dawson at Charles Schwaz about.

451
00:23:21,119 --> 00:23:25,159
Speaker 2: This retail cooking, what do you tell retail in a

452
00:23:25,240 --> 00:23:27,119
Speaker 2: famed Cam Dawson.

453
00:23:26,840 --> 00:23:30,639
Speaker 10: Seminar, Well, I think that that the key message is

454
00:23:31,160 --> 00:23:34,200
Speaker 10: when we think about volatility in markets and as being

455
00:23:34,240 --> 00:23:38,840
Speaker 10: an individual investor, the most important thing is to make

456
00:23:38,880 --> 00:23:41,280
Speaker 10: sure that you were not positioned in a way that

457
00:23:41,320 --> 00:23:44,919
Speaker 10: when volatility eventually does strike, that you were forced to

458
00:23:45,040 --> 00:23:48,320
Speaker 10: sell positions that you shouldn't. That's the only way to

459
00:23:48,400 --> 00:23:51,359
Speaker 10: destroy value over the long run. So what that means

460
00:23:51,440 --> 00:23:54,160
Speaker 10: is not being over concentrated to certain factors, not having

461
00:23:54,240 --> 00:23:57,840
Speaker 10: too much leverage, and making sure that the overall allocation

462
00:23:58,040 --> 00:23:59,960
Speaker 10: is not so extended that if you have the quick

463
00:24:00,240 --> 00:24:03,360
Speaker 10: he needs during a time out of an inevitable volatility,

464
00:24:03,680 --> 00:24:05,280
Speaker 10: you don't have to sell your equities.

465
00:24:05,800 --> 00:24:09,040
Speaker 6: What I mean, one of the things that investors I'm

466
00:24:09,040 --> 00:24:11,240
Speaker 6: talking about is we need this market the broaden out.

467
00:24:11,400 --> 00:24:13,399
Speaker 6: Do we need this market the broaden out, or can

468
00:24:13,440 --> 00:24:14,960
Speaker 6: we just kind of live the way we've been living

469
00:24:14,960 --> 00:24:15,760
Speaker 6: in our list of years.

470
00:24:15,840 --> 00:24:18,320
Speaker 10: Well, you do in the sense that the MAG seven

471
00:24:18,480 --> 00:24:21,160
Speaker 10: is seeing a deceleration in earnings growth. So we've been

472
00:24:21,200 --> 00:24:23,880
Speaker 10: in a super normal earnings growth period the last three years.

473
00:24:23,880 --> 00:24:27,800
Speaker 10: MAG seven has delivered two hundred percent earnings growth. That

474
00:24:27,880 --> 00:24:30,600
Speaker 10: compares to the equal Weight at just eighteen percent.

475
00:24:30,800 --> 00:24:34,760
Speaker 2: Stop this is too important, Paul Brilliant. We got double

476
00:24:34,800 --> 00:24:37,919
Speaker 2: digit earnings growth coming, but it's all skewed towards twenty

477
00:24:37,920 --> 00:24:38,920
Speaker 2: five stocks, right.

478
00:24:39,320 --> 00:24:43,080
Speaker 10: Well, see, consensus is expecting that to broaden out. You

479
00:24:43,200 --> 00:24:46,280
Speaker 10: have this expectation by consensus that equal Weight is going

480
00:24:46,359 --> 00:24:48,520
Speaker 10: to start to catch up, not quite to the point

481
00:24:48,520 --> 00:24:51,640
Speaker 10: of MAG seven, but close that gap. But the thing

482
00:24:51,720 --> 00:24:54,760
Speaker 10: is people were expecting that at the beginning of twenty

483
00:24:54,760 --> 00:24:57,320
Speaker 10: five and guess what happened. Mag seven surprise of the upside,

484
00:24:57,359 --> 00:24:58,760
Speaker 10: equal Weight surprise to the downside.

485
00:24:58,880 --> 00:25:01,440
Speaker 2: Kevin Gordon called in, Tom, how is it? And I said,

486
00:25:01,560 --> 00:25:07,240
Speaker 2: it's a rice cookie. It's very Korean cookie. Dawson on

487
00:25:07,400 --> 00:25:11,360
Speaker 2: the Cosby and buying Asia this year, do you buy internationals.

488
00:25:11,600 --> 00:25:13,680
Speaker 3: Do you buy Korean cookies?

489
00:25:13,880 --> 00:25:16,960
Speaker 10: Well, don't forget that Korean and the Korean Index, the

490
00:25:17,000 --> 00:25:21,280
Speaker 10: COSPY is about thirty seven percent made up of just

491
00:25:21,520 --> 00:25:25,400
Speaker 10: Samsung and sk Hignex, So you when you buy the cospy,

492
00:25:25,400 --> 00:25:27,679
Speaker 10: you were buying that. But also remember there's a lot

493
00:25:27,720 --> 00:25:31,320
Speaker 10: of casino capitalism and speculation that happens in the Korean Index,

494
00:25:31,400 --> 00:25:34,080
Speaker 10: so it has very pronounced boom bus cycles.

495
00:25:34,119 --> 00:25:36,240
Speaker 9: So know that you're playing with fire.

496
00:25:36,400 --> 00:25:39,040
Speaker 10: Live by the sword, die by the sword kind of

497
00:25:39,040 --> 00:25:42,040
Speaker 10: of mentality when it comes to trading in those areas.

498
00:25:42,080 --> 00:25:43,840
Speaker 2: You know that twenty four years ago when we were

499
00:25:43,880 --> 00:25:46,040
Speaker 2: starting to act, that was one of the names on

500
00:25:46,080 --> 00:25:48,680
Speaker 2: the list of the show Casino capitalism.

501
00:25:48,960 --> 00:25:50,119
Speaker 7: Really Yeah, we tried it.

502
00:25:50,200 --> 00:25:52,520
Speaker 9: We tried and it ended up on the cutting room floor.

503
00:25:52,720 --> 00:25:55,399
Speaker 2: Yeah we Ken Dawson, thank you so much for do

504
00:25:55,520 --> 00:26:00,400
Speaker 2: it well. Seriously, stay with us. More from Bloomberg Surveys

505
00:26:00,480 --> 00:26:01,800
Speaker 2: coming up after this.

506
00:26:09,040 --> 00:26:12,639
Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live

507
00:26:12,680 --> 00:26:15,879
Speaker 1: weekday afternoons from seven to ten am Eastern Listen on

508
00:26:15,920 --> 00:26:19,600
Speaker 1: Applecarplay and Android Otto with the Bloomberg Business app, or

509
00:26:19,760 --> 00:26:21,240
Speaker 1: watch us live on YouTube.

510
00:26:21,480 --> 00:26:22,920
Speaker 3: We're their newspapers, lisamit to.

511
00:26:23,160 --> 00:26:24,840
Speaker 12: Okay, this one is right up your alley because're away

512
00:26:24,880 --> 00:26:28,480
Speaker 12: talking about LinkedIn, right, Okay. So apparently more people are

513
00:26:28,600 --> 00:26:31,119
Speaker 12: logging onto LinkedIn, and it's not just for looking for

514
00:26:31,160 --> 00:26:33,280
Speaker 12: a job. So if you look at the numbers, so

515
00:26:33,440 --> 00:26:36,800
Speaker 12: revenue Microsoft phone site jumped to seventeen billion and twenty

516
00:26:36,800 --> 00:26:41,160
Speaker 12: twenty five from seven billion, and twenty twenty membership doubled

517
00:26:41,240 --> 00:26:44,080
Speaker 12: to one point three billion. So what the Wall Street

518
00:26:44,119 --> 00:26:45,640
Speaker 12: Journal did is they spoke with a couple of people.

519
00:26:45,720 --> 00:26:48,320
Speaker 12: They said that the reason why is because people like

520
00:26:48,359 --> 00:26:50,680
Speaker 12: the fact that you have to put your real name

521
00:26:51,200 --> 00:26:51,800
Speaker 12: on the site.

522
00:26:51,880 --> 00:26:52,160
Speaker 3: Okay.

523
00:26:52,560 --> 00:26:56,440
Speaker 12: It says it helps with toxicity, misinformation scams, things like that,

524
00:26:56,480 --> 00:26:59,800
Speaker 12: and LinkedIn is saying it's actually helping because people, you know,

525
00:26:59,840 --> 00:27:02,280
Speaker 12: are more careful with what they post, you know, because

526
00:27:02,320 --> 00:27:04,760
Speaker 12: a recruiter could be looking or you know, things like that.

527
00:27:04,800 --> 00:27:07,080
Speaker 12: They're smarter conversations on LinkedIn.

528
00:27:07,160 --> 00:27:07,920
Speaker 9: That's what they're saying.

529
00:27:07,960 --> 00:27:08,600
Speaker 3: Major shutout.

530
00:27:08,600 --> 00:27:10,960
Speaker 2: Shaali Basek said to me like three four years ago,

531
00:27:10,960 --> 00:27:12,600
Speaker 2: he's stupid, get back on LinkedIn.

532
00:27:12,720 --> 00:27:13,280
Speaker 3: She was right.

533
00:27:13,720 --> 00:27:18,080
Speaker 2: Dan Roth saved LinkedIn for Microsoft, and it's just as

534
00:27:18,119 --> 00:27:23,080
Speaker 2: you describe, Lisa, the quality I can't say enough about

535
00:27:23,119 --> 00:27:24,479
Speaker 2: subscribing to LinkedIn.

536
00:27:24,560 --> 00:27:27,359
Speaker 3: Not for Tom Keene, not even for Lisa Mantay or

537
00:27:27,400 --> 00:27:31,160
Speaker 3: Paul Sweeney, for our guests like Tina Fordham. They're all

538
00:27:31,200 --> 00:27:32,920
Speaker 3: out there, smart smart.

539
00:27:32,680 --> 00:27:35,639
Speaker 12: Smart, I do, and I just feel for me personally,

540
00:27:35,720 --> 00:27:37,520
Speaker 12: I feel a more of a trust issue, like I

541
00:27:37,600 --> 00:27:39,800
Speaker 12: trust things better on LinkedIn.

542
00:27:39,880 --> 00:27:42,960
Speaker 3: Major Dan Roth, who did that for Microsoft? What do

543
00:27:42,960 --> 00:27:43,560
Speaker 3: you got next?

544
00:27:43,560 --> 00:27:43,879
Speaker 5: Okay?

545
00:27:44,320 --> 00:27:46,919
Speaker 12: This is an interesting question that the journal asked, what

546
00:27:47,040 --> 00:27:48,080
Speaker 12: happened to happy hour?

547
00:27:48,200 --> 00:27:48,600
Speaker 7: Okay?

548
00:27:48,800 --> 00:27:50,000
Speaker 12: Because people are.

549
00:27:49,880 --> 00:27:53,439
Speaker 9: Interesting for me or for Paul, people are drinking less.

550
00:27:53,720 --> 00:27:56,600
Speaker 12: Companies are kind of reeling in those fun budgets, you know,

551
00:27:56,920 --> 00:27:59,679
Speaker 12: the epic holiday parties things like that. I remember the

552
00:27:59,720 --> 00:28:01,320
Speaker 12: time and the boss would come to the bar and

553
00:28:01,359 --> 00:28:02,439
Speaker 12: just drop down the corporate car.

554
00:28:02,880 --> 00:28:05,480
Speaker 7: You know you do that. And I remember that.

555
00:28:07,160 --> 00:28:10,159
Speaker 2: Sparta, could we get Rotto keeper of the Ax to

556
00:28:10,280 --> 00:28:11,600
Speaker 2: drop the corporate car?

557
00:28:12,359 --> 00:28:12,800
Speaker 3: Happening?

558
00:28:13,160 --> 00:28:14,480
Speaker 9: Not happening anymore.

559
00:28:14,720 --> 00:28:17,600
Speaker 12: But you know, people working from home and then those

560
00:28:17,600 --> 00:28:19,359
Speaker 12: people who do go to the office, they want to

561
00:28:19,400 --> 00:28:22,080
Speaker 12: be home early, like you know, by six in bed early.

562
00:28:22,119 --> 00:28:24,080
Speaker 12: That's the new generation. They have to get their full

563
00:28:24,160 --> 00:28:27,000
Speaker 12: eight you know, nine hours sleep. So it's a different

564
00:28:27,080 --> 00:28:29,480
Speaker 12: kind and what people are saying is that they're missing

565
00:28:29,480 --> 00:28:32,280
Speaker 12: out on those opportunities to schmooz with the boss.

566
00:28:32,520 --> 00:28:34,560
Speaker 6: Or this is how it worked on Pain Webber in

567
00:28:34,600 --> 00:28:37,719
Speaker 6: the eighties. Imply our equity training desk market closes at

568
00:28:37,760 --> 00:28:41,480
Speaker 6: four four fifteen hurlies in forty eighth and six, not.

569
00:28:41,600 --> 00:28:43,960
Speaker 7: Every day, every day, four days a week.

570
00:28:43,880 --> 00:28:45,920
Speaker 6: And you get you know, got a cocktail too. Then

571
00:28:45,920 --> 00:28:47,760
Speaker 6: you go to the train and that's how you roll.

572
00:28:47,840 --> 00:28:49,840
Speaker 6: But I mean, or you stayed later.

573
00:28:49,760 --> 00:28:52,200
Speaker 2: But I remember the train cars out the Gardens City

574
00:28:52,240 --> 00:28:54,120
Speaker 2: and Londer Island as well.

575
00:28:54,240 --> 00:28:55,440
Speaker 3: It's cars, you're gone.

576
00:28:55,520 --> 00:28:58,960
Speaker 2: And the key thing Paul said is you stop working

577
00:28:59,720 --> 00:29:02,320
Speaker 2: three thirty four, four fifteen or so.

578
00:29:02,360 --> 00:29:05,280
Speaker 3: Now everybody's ordered on pizza and working till seven.

579
00:29:05,480 --> 00:29:07,400
Speaker 6: And then I went into investment banking and that stuff.

580
00:29:07,400 --> 00:29:09,920
Speaker 6: That's yeah, shoulder state on the training desk.

581
00:29:09,960 --> 00:29:11,240
Speaker 5: One more squeeze then to say.

582
00:29:11,240 --> 00:29:12,880
Speaker 12: Okay, this one, I'll go to sports.

583
00:29:12,880 --> 00:29:13,120
Speaker 5: Okay.

584
00:29:13,120 --> 00:29:16,320
Speaker 12: So the Blue Jay shortstop Bobashet, he's a free agent, right, Okay,

585
00:29:16,600 --> 00:29:19,120
Speaker 12: So he's getting interest from a lot of teams, including

586
00:29:19,120 --> 00:29:23,000
Speaker 12: the Yankees. I'm just saying, but a local steakhouse is

587
00:29:23,080 --> 00:29:25,640
Speaker 12: actually making him an offer to stay in Toronto. They're

588
00:29:25,680 --> 00:29:29,800
Speaker 12: offering free steak for life. Oh okay, that's a good cell.

589
00:29:29,960 --> 00:29:30,920
Speaker 12: That's a really good set.

590
00:29:31,320 --> 00:29:33,120
Speaker 9: It's it's animal.

591
00:29:33,240 --> 00:29:36,400
Speaker 12: It's a high end steakhouse in downtown Toronto. He said

592
00:29:36,400 --> 00:29:39,960
Speaker 12: it's one of his favorites, and they said, yep, no negotiations,

593
00:29:40,000 --> 00:29:42,560
Speaker 12: no fine print, just reserve a table and they will

594
00:29:42,560 --> 00:29:43,920
Speaker 12: give him free steak for life.

595
00:29:44,080 --> 00:29:46,200
Speaker 3: He's the kind of player of his culture and character

596
00:29:46,280 --> 00:29:46,720
Speaker 3: every day.

597
00:29:46,840 --> 00:29:47,040
Speaker 2: Yep.

598
00:29:47,200 --> 00:29:49,680
Speaker 3: I mean, he's great, but it's it's about the attitude

599
00:29:49,680 --> 00:29:50,040
Speaker 3: as well.

600
00:29:50,160 --> 00:29:50,600
Speaker 5: I love it.

601
00:29:50,600 --> 00:29:53,480
Speaker 3: I love that he's the way she rolls and he

602
00:29:53,600 --> 00:29:55,000
Speaker 3: thank you the newspapers.

603
00:29:55,400 --> 00:29:59,840
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spot,

604
00:29:59,840 --> 00:30:03,800
Speaker 1: of and anywhere else you get your podcasts. Listen live

605
00:30:03,920 --> 00:30:08,000
Speaker 1: each weekday, seven to ten am Eastern on Bloomberg dot com,

606
00:30:08,120 --> 00:30:11,960
Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app.

607
00:30:12,240 --> 00:30:15,360
Speaker 1: You can also watch us live every weekday on YouTube

608
00:30:15,640 --> 00:30:17,680
Speaker 1: and always on the Bloomberg terminal