1 00:00:05,120 --> 00:00:09,200 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along 2 00:00:09,240 --> 00:00:13,200 Speaker 1: with Jonathan Ferroll and Lisa Brownwitz Jaily, we bring you 3 00:00:13,320 --> 00:00:17,960 Speaker 1: insight from the best and economics, finance, investment, and international 4 00:00:18,000 --> 00:00:23,280 Speaker 1: relations to find Bloomberg Surveillance on Apple podcast, Suncloud, Bloomberg 5 00:00:23,360 --> 00:00:29,120 Speaker 1: dot com, and of course on the Bloomberg terminal right 6 00:00:29,120 --> 00:00:32,480 Speaker 1: now as a special moment not only for Bloomberg Surveillance 7 00:00:32,560 --> 00:00:35,080 Speaker 1: for all of New York City, but indeed it is 8 00:00:35,120 --> 00:00:39,400 Speaker 1: a national story. Eric Adams is the Democratic nominee for 9 00:00:39,440 --> 00:00:43,080 Speaker 1: New York City mayor. This is two other candidates did 10 00:00:43,080 --> 00:00:46,440 Speaker 1: not go for a recount and conceded in the last 11 00:00:46,479 --> 00:00:49,839 Speaker 1: oh twelve even eighteen hours. Joining me now for a 12 00:00:49,960 --> 00:00:53,560 Speaker 1: conversation with the Democratic nominee is of course Romain Bostic 13 00:00:53,640 --> 00:00:56,560 Speaker 1: and for Lisa brown Witz. And we're absolutely thrilled af 14 00:00:56,560 --> 00:00:59,520 Speaker 1: Shelley Banjo, whether she has driven our coverage here at 15 00:00:59,520 --> 00:01:02,959 Speaker 1: Bloomberg just started out as yeah, another race, and then 16 00:01:03,000 --> 00:01:06,800 Speaker 1: it became something different. Eric Adams, thank you so much 17 00:01:06,840 --> 00:01:09,760 Speaker 1: for joining us this morning. I'm gonna let Shelley talk 18 00:01:09,800 --> 00:01:12,560 Speaker 1: about ear piercings and all that that we've seen in 19 00:01:12,600 --> 00:01:15,240 Speaker 1: the last twenty four hours. I want to talk about 20 00:01:15,240 --> 00:01:19,399 Speaker 1: your first meeting as mayor with the New York Police Department. 21 00:01:19,640 --> 00:01:23,040 Speaker 1: How do you envision that will go. Well, first, it 22 00:01:23,160 --> 00:01:27,399 Speaker 1: started already and it's not with the department, it's with 23 00:01:27,520 --> 00:01:31,480 Speaker 1: the union heads. I had a conversation with Pat Lynch, 24 00:01:32,319 --> 00:01:36,200 Speaker 1: conversation with Ed Mullins Uh, conversation with the president of 25 00:01:36,280 --> 00:01:41,360 Speaker 1: the d d A is about going behind closed doors 26 00:01:41,440 --> 00:01:44,360 Speaker 1: and say let's turn a new page. I said this 27 00:01:44,440 --> 00:01:47,120 Speaker 1: over and over again, the prerequisite to prosperity in the 28 00:01:47,160 --> 00:01:50,680 Speaker 1: city's public safety and reform, and they are eager to 29 00:01:50,720 --> 00:01:53,360 Speaker 1: sit down with me and say how do we move 30 00:01:53,440 --> 00:01:57,360 Speaker 1: policing into the twenty century deeper into the century. But 31 00:01:57,520 --> 00:02:00,920 Speaker 1: we re established the relationship between police east in community 32 00:02:01,160 --> 00:02:03,400 Speaker 1: because I'll see this will be controlled by the good guys. 33 00:02:03,400 --> 00:02:06,440 Speaker 1: Are the bad guys right now all across America, the 34 00:02:06,480 --> 00:02:09,400 Speaker 1: bad guys are winning. I'm going to stop that immediately. 35 00:02:09,760 --> 00:02:12,079 Speaker 1: Are you gonna do that with Dermott Mcha at the 36 00:02:12,160 --> 00:02:15,920 Speaker 1: Helm Although I'm not. I've made it clear that my 37 00:02:16,000 --> 00:02:19,000 Speaker 1: police commissioner is going to be a woman. We're going 38 00:02:19,040 --> 00:02:24,079 Speaker 1: to finally bring of the entire city the largest police 39 00:02:24,080 --> 00:02:27,600 Speaker 1: department in the country Uh, into the twenty century of 40 00:02:27,919 --> 00:02:31,760 Speaker 1: women leadership and law enforcement. And look at three of 41 00:02:31,760 --> 00:02:34,480 Speaker 1: the candidates that I've been communicated with. And I'm sure 42 00:02:34,520 --> 00:02:36,919 Speaker 1: you know obviously being a veteran of that force, that's 43 00:02:36,960 --> 00:02:40,079 Speaker 1: not gonna come easy. Eric. We've seen the fraud relationship 44 00:02:40,160 --> 00:02:44,200 Speaker 1: between the police, the rank and file, the unions. Uh, 45 00:02:44,240 --> 00:02:47,679 Speaker 1: and of course the mayors of the past here you've 46 00:02:47,720 --> 00:02:51,360 Speaker 1: also had a relatively complicated relationship despite being a veteran 47 00:02:51,400 --> 00:02:54,000 Speaker 1: of that department here, how do you bridge that? Eric? 48 00:02:54,000 --> 00:02:55,960 Speaker 1: How are you going to do that in a way 49 00:02:55,960 --> 00:02:59,359 Speaker 1: where the police, which are a mighty force in this city. Eric, 50 00:02:59,440 --> 00:03:03,040 Speaker 1: some would say even mightier than the mayor himself. Well, 51 00:03:03,080 --> 00:03:05,800 Speaker 1: first of all, it is easy, and those who stay 52 00:03:06,400 --> 00:03:09,160 Speaker 1: it's not going to be easy. Uh, they don't know me. 53 00:03:09,600 --> 00:03:13,560 Speaker 1: I had difficult challenges in my life, being be arrested 54 00:03:13,600 --> 00:03:16,840 Speaker 1: by police officers, assaulted, went into the police department for 55 00:03:17,000 --> 00:03:20,600 Speaker 1: for reform, moved up through the ranks of captain of 56 00:03:21,080 --> 00:03:24,720 Speaker 1: aim and state senator, now bar president, reverse diabetes by 57 00:03:24,800 --> 00:03:29,480 Speaker 1: changing my diet, and so difficult challenges. It's not something 58 00:03:29,520 --> 00:03:32,840 Speaker 1: that I run away from. I run towards. What we 59 00:03:32,919 --> 00:03:37,960 Speaker 1: must do is stop talking at each other around reform 60 00:03:38,360 --> 00:03:41,960 Speaker 1: and safety and start talking with each other. And you're 61 00:03:42,000 --> 00:03:45,040 Speaker 1: going to see an approach year a complete change in 62 00:03:45,080 --> 00:03:49,440 Speaker 1: the atmosphere of public safety and how police officers respond. 63 00:03:49,480 --> 00:03:52,320 Speaker 1: We're gonna rend the bad cops, We're going to back 64 00:03:52,360 --> 00:03:54,800 Speaker 1: our good cops, and we're going to re establish the 65 00:03:54,840 --> 00:03:57,720 Speaker 1: relationships in our communities. And it's going to be done 66 00:03:57,800 --> 00:04:00,600 Speaker 1: in year one. I promise you back the three women 67 00:04:00,680 --> 00:04:03,480 Speaker 1: that you're currently in conversation with. Are they within the 68 00:04:03,520 --> 00:04:07,760 Speaker 1: New York Police Department? Are you looking outside? Um? What 69 00:04:07,760 --> 00:04:09,840 Speaker 1: what I don't want to do is say is it 70 00:04:09,960 --> 00:04:12,200 Speaker 1: bigger than the red box or smaller than the house? 71 00:04:12,760 --> 00:04:16,040 Speaker 1: Because that limits a number of potential candidates, and many 72 00:04:16,040 --> 00:04:18,560 Speaker 1: of them are working right now, and I don't want 73 00:04:18,600 --> 00:04:22,359 Speaker 1: to any way jeopard dies what they're doing. I'll reveal 74 00:04:22,440 --> 00:04:26,800 Speaker 1: those numbers immediately after I win the general election in 75 00:04:26,600 --> 00:04:30,360 Speaker 1: in November. I revealed the individual I decided fair enough, 76 00:04:30,480 --> 00:04:33,000 Speaker 1: fair enough. And another big force to be reckoned with 77 00:04:33,080 --> 00:04:37,039 Speaker 1: is obviously Governor Andrew Cuomo in albany Um. You have had, 78 00:04:37,600 --> 00:04:39,880 Speaker 1: you know, a checkered past to speak with him, but 79 00:04:40,040 --> 00:04:42,160 Speaker 1: you know, you guys have run in the same political 80 00:04:42,200 --> 00:04:45,560 Speaker 1: circles for almost your entire adult lives. Did he call 81 00:04:45,640 --> 00:04:47,920 Speaker 1: you to congratulate you? And what's the first thing You're 82 00:04:47,920 --> 00:04:50,080 Speaker 1: going to try to work with him in albany On? 83 00:04:50,880 --> 00:04:54,160 Speaker 1: And we don't have a check you pass um. Clearly 84 00:04:54,839 --> 00:04:58,120 Speaker 1: we are both strong and what we believe, we know 85 00:04:58,200 --> 00:05:01,240 Speaker 1: how to sit down and communicate. We operated together when 86 00:05:01,240 --> 00:05:04,719 Speaker 1: I was in Obany and I'm looking forward to having 87 00:05:04,800 --> 00:05:07,800 Speaker 1: him as a partner as we do with number one 88 00:05:07,839 --> 00:05:11,479 Speaker 1: public safety. I cannot really emphasize this enough. We're not 89 00:05:11,560 --> 00:05:15,200 Speaker 1: going to deal with major parts of our economy tourism. 90 00:05:15,240 --> 00:05:17,960 Speaker 1: If we have shootings in Times Square, no one's going 91 00:05:18,080 --> 00:05:20,640 Speaker 1: to get on the subway system that we could the 92 00:05:20,720 --> 00:05:23,720 Speaker 1: violence there. And so we're going to first deal with 93 00:05:23,839 --> 00:05:26,760 Speaker 1: making our city safe, and then we're going to use 94 00:05:26,800 --> 00:05:29,400 Speaker 1: the dollars that are coming from the federal government to 95 00:05:29,560 --> 00:05:33,479 Speaker 1: go after the theaters of crime and the featers that 96 00:05:33,600 --> 00:05:38,440 Speaker 1: prevent people from finally leaving institutional poverty year after year. 97 00:05:38,800 --> 00:05:41,799 Speaker 1: And I believe that having in Orbany, we could accomplish 98 00:05:41,800 --> 00:05:45,320 Speaker 1: this task together. Eric Adams. They're gonna study your candidacy, 99 00:05:45,440 --> 00:05:49,320 Speaker 1: the path of this UH mayoral race for you in 100 00:05:49,440 --> 00:05:52,760 Speaker 1: Brooklyn and Bronx. They're also gonna study it in Boston 101 00:05:52,800 --> 00:05:55,800 Speaker 1: and also in Boise, Idaho. You're gonna have a national 102 00:05:55,920 --> 00:06:00,680 Speaker 1: ramification for all Democrats. What is your victory say about 103 00:06:00,720 --> 00:06:04,839 Speaker 1: the certitude of the left in the Democratic Party. Well, 104 00:06:04,920 --> 00:06:09,320 Speaker 1: you know, if you are a d s A candidate 105 00:06:09,440 --> 00:06:12,520 Speaker 1: or if you are a Republican candidate, Uh, you don't 106 00:06:12,560 --> 00:06:16,160 Speaker 1: want to be posted to train or slash three. So 107 00:06:16,240 --> 00:06:18,640 Speaker 1: I think that what you're going to see on the 108 00:06:18,640 --> 00:06:21,480 Speaker 1: face of the Democratic Party. I keep saying this over 109 00:06:21,520 --> 00:06:24,599 Speaker 1: and over again. I want four burrows in the city 110 00:06:24,680 --> 00:06:26,719 Speaker 1: of New York. The only borough I did not win 111 00:06:27,400 --> 00:06:32,880 Speaker 1: is Manhattan. My message resonated with everyday working people, and 112 00:06:32,920 --> 00:06:37,040 Speaker 1: it didn't matter with your ethnicity, your gender, and worship. 113 00:06:37,160 --> 00:06:39,560 Speaker 1: And I think that you're going to see this message 114 00:06:39,600 --> 00:06:44,400 Speaker 1: resident across this entire country. And it's an opportunity for 115 00:06:44,480 --> 00:06:46,680 Speaker 1: us to understand that we don't have to talk at 116 00:06:46,720 --> 00:06:49,440 Speaker 1: each other. We are in this together, and I'm going 117 00:06:49,440 --> 00:06:52,720 Speaker 1: to bring a closer together so that we can overcome 118 00:06:53,000 --> 00:06:56,680 Speaker 1: not only the pandemic, but also the pandemic of unemployment, 119 00:06:56,680 --> 00:07:00,000 Speaker 1: of violence, and inequality very quickly. Eric, we are in television, 120 00:07:00,000 --> 00:07:01,680 Speaker 1: you know, we are on radio and a number of 121 00:07:01,760 --> 00:07:05,719 Speaker 1: radio listeners have emailed in and said, what's the piercing 122 00:07:05,839 --> 00:07:11,720 Speaker 1: look like? Where's the piercing this morning, Mayor Adams, Look 123 00:07:11,720 --> 00:07:15,360 Speaker 1: at this. It's a it's a gold aery of my 124 00:07:15,440 --> 00:07:19,760 Speaker 1: son and I. We attended a meeting with a group 125 00:07:19,800 --> 00:07:22,480 Speaker 1: of young people during the campaign and they said that 126 00:07:23,080 --> 00:07:25,840 Speaker 1: we were both with you if you commit and promise 127 00:07:25,920 --> 00:07:30,280 Speaker 1: to get your if you become a when the primary 128 00:07:30,480 --> 00:07:33,440 Speaker 1: and a promise made is a promise cap and I 129 00:07:33,480 --> 00:07:37,080 Speaker 1: didn't guess. I can assure you the hundred nights Mayor 130 00:07:37,120 --> 00:07:40,960 Speaker 1: of New York did not go through this torture. Eric Adams, 131 00:07:40,960 --> 00:07:42,920 Speaker 1: thank you so much. We look forward to speaking to 132 00:07:42,960 --> 00:07:46,600 Speaker 1: you again. Let's be cleared the Democratic nominee for New 133 00:07:46,680 --> 00:07:54,280 Speaker 1: York City mayor is a calm time for our Secretary 134 00:07:54,280 --> 00:07:57,560 Speaker 1: of Transportation, Mr Buddhajudge. Of course we all know from 135 00:07:57,560 --> 00:08:02,040 Speaker 1: South Bend, Indiana sterling acade dmics including something that we 136 00:08:02,120 --> 00:08:04,800 Speaker 1: all did as a kid. Could we write an essay 137 00:08:04,880 --> 00:08:08,400 Speaker 1: off John F. Kennedy's profiles and courage and the Secretary 138 00:08:08,440 --> 00:08:11,360 Speaker 1: delivered the goods as a young uh a kid. We 139 00:08:11,400 --> 00:08:13,760 Speaker 1: want to talk about transportation, We want to talk about 140 00:08:13,800 --> 00:08:18,600 Speaker 1: international travel. But yes, right now in infrastructure. Mr Secretary, 141 00:08:18,640 --> 00:08:21,080 Speaker 1: thank you so much for joining Bloomberg this morning. I 142 00:08:21,280 --> 00:08:25,360 Speaker 1: lived the last infrastructure disaster, which as you drove out 143 00:08:25,440 --> 00:08:28,480 Speaker 1: Indiana west and there was a point where I a 144 00:08:28,600 --> 00:08:32,040 Speaker 1: d died and you had a two lane highway west. 145 00:08:32,400 --> 00:08:35,640 Speaker 1: We're going back to that on the condition of our infrastructure, 146 00:08:36,040 --> 00:08:39,200 Speaker 1: and we're doing it because we cannot figure out how 147 00:08:39,240 --> 00:08:42,600 Speaker 1: to do a gas tax. Can't you do a gas 148 00:08:42,640 --> 00:08:46,560 Speaker 1: tax that will pay for the roads, rebuild America and 149 00:08:46,600 --> 00:08:51,719 Speaker 1: also be politically acceptable for Democrats. Well, it turns out 150 00:08:51,760 --> 00:08:54,200 Speaker 1: you don't have to. And what's so great about the 151 00:08:54,360 --> 00:08:57,960 Speaker 1: bipartisan infrastructure framework that the President led that a set 152 00:08:57,960 --> 00:09:02,000 Speaker 1: of Democratic senators and Republican consenators have come together on, 153 00:09:02,120 --> 00:09:05,360 Speaker 1: is that it will deliver the biggest investment in American 154 00:09:05,440 --> 00:09:08,840 Speaker 1: infrastructure in more than a generation, the biggest investment in 155 00:09:08,880 --> 00:09:12,440 Speaker 1: our roads and bridges since Eisenhower, the biggest investment in 156 00:09:12,480 --> 00:09:16,600 Speaker 1: passenger rail since Amtrak, the biggest investment in public transit ever, 157 00:09:17,040 --> 00:09:19,839 Speaker 1: without having to ask Americans to pay any more in 158 00:09:19,920 --> 00:09:22,760 Speaker 1: taxes any American who makes less than four hundred thousand 159 00:09:22,760 --> 00:09:24,959 Speaker 1: dollars a year. This is a promise that the President 160 00:09:25,040 --> 00:09:27,720 Speaker 1: made when he was running for president, he plans to 161 00:09:27,800 --> 00:09:30,439 Speaker 1: keep that promise, and so he was very firm on that. 162 00:09:31,000 --> 00:09:34,360 Speaker 1: But what's clear is that it is absolutely possible to 163 00:09:34,600 --> 00:09:37,880 Speaker 1: make these kinds of investments by looking to other funding 164 00:09:37,920 --> 00:09:41,440 Speaker 1: sources that don't ask that of ordinary Americans. And we're 165 00:09:41,440 --> 00:09:46,520 Speaker 1: thrilled that this critical mass of Republican and Democratic senators agree. 166 00:09:47,000 --> 00:09:48,600 Speaker 1: We think it's one of the reasons why so many 167 00:09:48,640 --> 00:09:51,120 Speaker 1: Americans agree that this is the right thing to do. Now, 168 00:09:51,160 --> 00:09:53,120 Speaker 1: we need Congress to move it forward, get it to 169 00:09:53,120 --> 00:09:56,040 Speaker 1: the President's desk so that we can get those dollars working, 170 00:09:56,080 --> 00:09:58,840 Speaker 1: whether it's on our highways and bridges, are our airports 171 00:09:58,840 --> 00:10:01,280 Speaker 1: and ports, or on some of the things that are 172 00:10:01,280 --> 00:10:04,360 Speaker 1: newer to the infrastructure picture, like our digital infrastructure and 173 00:10:04,360 --> 00:10:08,000 Speaker 1: getting everybody online. You mentioned Dwight David Eisenhower. I remember 174 00:10:08,040 --> 00:10:11,000 Speaker 1: going off the infrastructure road of Kansas onto the two 175 00:10:11,080 --> 00:10:15,520 Speaker 1: lane highway to his museum. All wonderful. Dwight Eisenhower. I 176 00:10:15,520 --> 00:10:18,560 Speaker 1: had to fight his Republicans to get the vision of 177 00:10:18,559 --> 00:10:22,040 Speaker 1: the interstate highway system done. How can you bring over 178 00:10:22,120 --> 00:10:28,160 Speaker 1: Republicans to get a majority vote to rebuild America? You know, uh, 179 00:10:28,200 --> 00:10:31,600 Speaker 1: I found that people don't agree on much here in Washington, 180 00:10:31,679 --> 00:10:34,240 Speaker 1: across party lines, but they agree on the needs, as 181 00:10:34,280 --> 00:10:37,920 Speaker 1: you've been describing, and as every American sees. You know, 182 00:10:37,960 --> 00:10:41,920 Speaker 1: when I'm talking to two householdce Senate members, Republican or Democrat, 183 00:10:42,120 --> 00:10:44,320 Speaker 1: what what I noticed that they all have in commas. 184 00:10:44,320 --> 00:10:47,120 Speaker 1: They're all from somewhere. They're all home right now, actually 185 00:10:47,120 --> 00:10:51,160 Speaker 1: this week, during this July four recess, they're all home 186 00:10:51,200 --> 00:10:53,319 Speaker 1: talking to constituents saying, when are we going to get 187 00:10:53,320 --> 00:10:56,160 Speaker 1: this bridge fixed? Why is our airport looking the way 188 00:10:56,200 --> 00:11:00,480 Speaker 1: it's looking. How how are we this far behind on 189 00:11:00,480 --> 00:11:02,640 Speaker 1: on on transit or whatever it is in their district? 190 00:11:02,720 --> 00:11:06,079 Speaker 1: And so, yes, I do believe that that that we 191 00:11:06,160 --> 00:11:10,640 Speaker 1: have finally reached this point of if not consensus, then overlap. 192 00:11:10,720 --> 00:11:13,400 Speaker 1: And I think that's why you had this remarkable site 193 00:11:13,440 --> 00:11:15,760 Speaker 1: of the President walking out of the West Wing a 194 00:11:15,760 --> 00:11:19,200 Speaker 1: few days ago, flanked by Democratic and Republican senators saying 195 00:11:19,520 --> 00:11:21,640 Speaker 1: we have a deal. Now we have a deal is 196 00:11:21,640 --> 00:11:23,720 Speaker 1: not the same thing as we have a bill. That's 197 00:11:23,720 --> 00:11:27,000 Speaker 1: what's happening right now, turning it into legislative text, moving 198 00:11:27,000 --> 00:11:30,600 Speaker 1: it through these processes, UH committees that have jurisdiction over this. 199 00:11:30,760 --> 00:11:33,920 Speaker 1: There's a lot of machinery, especially this month of July 200 00:11:34,080 --> 00:11:37,040 Speaker 1: that is going through its motions here in Washington. But 201 00:11:37,559 --> 00:11:40,920 Speaker 1: it's it's resulting. I believe in in the opportunity for 202 00:11:41,000 --> 00:11:43,520 Speaker 1: something that that we have needed for really the better 203 00:11:43,559 --> 00:11:46,960 Speaker 1: part of my lifetime as we've watched these uh, these 204 00:11:46,960 --> 00:11:50,160 Speaker 1: investments degrade, as we've coasted off of decisions that were 205 00:11:50,200 --> 00:11:52,040 Speaker 1: made generations ago. You know, last time I was in 206 00:11:52,040 --> 00:11:54,280 Speaker 1: New York was to look at the Hudson River Tunnels, 207 00:11:54,559 --> 00:11:59,000 Speaker 1: the finest infrastructure technology of nineteen ten, and we're still 208 00:11:59,000 --> 00:12:01,760 Speaker 1: depending on. Look at the john Look at the shade 209 00:12:01,800 --> 00:12:04,520 Speaker 1: the Secretary gives to New York City. Missed the Secretary. 210 00:12:04,559 --> 00:12:06,200 Speaker 1: There are some things that are easy to get down 211 00:12:06,240 --> 00:12:09,160 Speaker 1: and haven't been done. Infrastructure, it's one of them, my guests. 212 00:12:09,200 --> 00:12:11,640 Speaker 1: Another is international travel restrictions. We want to work out 213 00:12:11,640 --> 00:12:14,439 Speaker 1: when we get an update from your administration, when it's 214 00:12:14,440 --> 00:12:18,720 Speaker 1: not going to happen, so it unfortunately it can't be 215 00:12:18,800 --> 00:12:22,000 Speaker 1: based on an arbitrary date. It has to be based 216 00:12:22,040 --> 00:12:24,400 Speaker 1: on conditions. But I can tell you as as a 217 00:12:24,640 --> 00:12:29,240 Speaker 1: Transportation secretary, of course, I am as impatient as anybody 218 00:12:29,600 --> 00:12:32,360 Speaker 1: uh to see us move as as quickly as we 219 00:12:32,400 --> 00:12:36,840 Speaker 1: responsibly can toward more forms of reopening right now. What's 220 00:12:36,840 --> 00:12:39,160 Speaker 1: going on is a set of working group processes, so 221 00:12:39,160 --> 00:12:42,360 Speaker 1: we've can been working groups with our international partners. Is 222 00:12:42,400 --> 00:12:45,280 Speaker 1: one for the UK, one for the EU, one for Canada, 223 00:12:45,600 --> 00:12:49,440 Speaker 1: one for Mexico to determine the right pathway forward. A 224 00:12:49,480 --> 00:12:52,080 Speaker 1: lot of this is based on what's going on with 225 00:12:52,120 --> 00:12:55,440 Speaker 1: progress on the vaccines. Obviously we see good news and 226 00:12:55,440 --> 00:12:57,680 Speaker 1: bad news out there. In terms of the variants, one 227 00:12:57,760 --> 00:13:01,000 Speaker 1: moment you're reading about a variant happening across the world. 228 00:13:01,040 --> 00:13:03,960 Speaker 1: The next you know it's becoming the dominant strain here 229 00:13:03,960 --> 00:13:05,400 Speaker 1: in the US, and it is, sir, and if you 230 00:13:05,400 --> 00:13:07,160 Speaker 1: allow me to jump in, because we pushed for time, 231 00:13:07,320 --> 00:13:10,280 Speaker 1: the data variant has become the dominant strain here in 232 00:13:10,280 --> 00:13:12,640 Speaker 1: the United States for America recording to the CDC, and 233 00:13:12,720 --> 00:13:17,600 Speaker 1: very quickly so too. From my position personally, forgive me 234 00:13:17,640 --> 00:13:19,200 Speaker 1: for saying this, but you didn't have to watch your 235 00:13:19,200 --> 00:13:22,200 Speaker 1: father's funeral down the screen of an iPhone on Tuesday. 236 00:13:22,240 --> 00:13:25,600 Speaker 1: I did because of your policies. Now, I expected you 237 00:13:25,640 --> 00:13:28,000 Speaker 1: to bring up the science and I expected the quote 238 00:13:28,200 --> 00:13:29,839 Speaker 1: that came from you to be used because you used 239 00:13:29,840 --> 00:13:32,280 Speaker 1: it a month ago, two months ago, here in the 240 00:13:32,280 --> 00:13:35,400 Speaker 1: policies for our audience so they understand them. Currently, if 241 00:13:35,440 --> 00:13:38,320 Speaker 1: you're a citizen of the United States for America, or 242 00:13:38,360 --> 00:13:40,640 Speaker 1: if you have a Green Card, you can travel to 243 00:13:40,760 --> 00:13:44,000 Speaker 1: the UK and you can fly directly back. If you 244 00:13:44,040 --> 00:13:46,320 Speaker 1: have an H one B visa or an NOW one, 245 00:13:46,640 --> 00:13:48,839 Speaker 1: you can fly to the UK. But to come back 246 00:13:48,880 --> 00:13:51,200 Speaker 1: to America you need to go to Mexico City and 247 00:13:51,240 --> 00:13:53,920 Speaker 1: spend two weeks there in a third country to get 248 00:13:53,960 --> 00:13:56,800 Speaker 1: back to New York. Sir, forgive me, but I've spoken 249 00:13:56,800 --> 00:14:00,000 Speaker 1: to scientists about this, and there is no scientific rationale 250 00:14:00,160 --> 00:14:03,080 Speaker 1: for that policy. So for me and thousands of others 251 00:14:03,080 --> 00:14:04,640 Speaker 1: who haven't got to be with their loved ones through 252 00:14:04,640 --> 00:14:07,600 Speaker 1: a critical time because of your policies, sir, there will 253 00:14:07,640 --> 00:14:10,240 Speaker 1: be thousands more if you carry on repeating the same 254 00:14:10,280 --> 00:14:13,160 Speaker 1: line and don't just look at this and change it. 255 00:14:13,559 --> 00:14:16,640 Speaker 1: Why are you not changing the policy when we have 256 00:14:16,720 --> 00:14:20,680 Speaker 1: scientists day after day say there's no scientific rationale for 257 00:14:20,840 --> 00:14:24,120 Speaker 1: maintaining it. Well, first of all, let me say I'm 258 00:14:24,160 --> 00:14:26,720 Speaker 1: sorry to hear about your father, And let me also 259 00:14:26,800 --> 00:14:31,400 Speaker 1: say that I am among those who are impatient to 260 00:14:31,440 --> 00:14:34,800 Speaker 1: see loved ones who live across the Atlantic. Let me 261 00:14:34,880 --> 00:14:37,800 Speaker 1: also say that the US is going to be conservative. 262 00:14:39,240 --> 00:14:42,280 Speaker 1: For give me for jump again to jump against keep. 263 00:14:42,360 --> 00:14:44,520 Speaker 1: You keep going back to this, and there is no 264 00:14:44,640 --> 00:14:48,800 Speaker 1: scientific rationale to distraw a distinction between someone who has 265 00:14:48,840 --> 00:14:51,760 Speaker 1: a green card and H one b vis or an 266 00:14:51,760 --> 00:14:54,640 Speaker 1: now one. You know that. I know that. Regardless of 267 00:14:54,640 --> 00:14:56,480 Speaker 1: anything you say for the next couple of minutes, it's 268 00:14:56,520 --> 00:14:59,040 Speaker 1: not going to justify it. What I need to understand 269 00:14:59,080 --> 00:15:02,520 Speaker 1: from you as a policy maker is why thousands of 270 00:15:02,560 --> 00:15:06,000 Speaker 1: people who live in this country legally and pay taxes 271 00:15:06,240 --> 00:15:09,480 Speaker 1: cannot go home to see loved ones and return directly. 272 00:15:09,720 --> 00:15:12,800 Speaker 1: And why you still repeat the same line again and 273 00:15:12,840 --> 00:15:15,640 Speaker 1: again and again. It doesn't make it true. You do 274 00:15:15,720 --> 00:15:18,320 Speaker 1: not have a scientific rational for this. You cannot back 275 00:15:18,360 --> 00:15:21,200 Speaker 1: it up with science. Why you're not going go away 276 00:15:21,240 --> 00:15:27,600 Speaker 1: with policy makers and doing something so our tools are imperfect, right, 277 00:15:27,840 --> 00:15:31,760 Speaker 1: we are dealing with a country based framework for assessing risk, 278 00:15:32,360 --> 00:15:34,920 Speaker 1: when in a perfect world we would know all the 279 00:15:34,960 --> 00:15:39,080 Speaker 1: information we needed to have for a traveler based framework. 280 00:15:39,200 --> 00:15:42,960 Speaker 1: We can move in that direction somewhat. That's more refined 281 00:15:43,000 --> 00:15:47,280 Speaker 1: and ultimately more accurate from a risk assessment perspective, but 282 00:15:47,520 --> 00:15:50,600 Speaker 1: we don't have the toolkit to do that. In a 283 00:15:50,680 --> 00:15:54,520 Speaker 1: way that would be as smooth as as we would want. 284 00:15:54,720 --> 00:15:58,440 Speaker 1: So we're going to continue to have a strategy led 285 00:15:58,440 --> 00:16:03,120 Speaker 1: by public health authorities, guided by Homeland Security c d C, 286 00:16:03,720 --> 00:16:07,480 Speaker 1: my department at the table to reopen travel as quickly 287 00:16:07,520 --> 00:16:11,800 Speaker 1: as we responsibly can. I'm not talking about a broad 288 00:16:11,800 --> 00:16:14,880 Speaker 1: based reopening. Forget me for jumping in. Just just allow 289 00:16:14,960 --> 00:16:16,400 Speaker 1: me to get this thought. And because it's important to 290 00:16:16,440 --> 00:16:19,560 Speaker 1: what you're about to say, I need you to understand 291 00:16:20,440 --> 00:16:23,960 Speaker 1: that I'm talking about working people in this country who 292 00:16:24,000 --> 00:16:26,240 Speaker 1: are working here legally. With the stroke of a pen, 293 00:16:27,080 --> 00:16:29,600 Speaker 1: you can enable thousands of people in this country who 294 00:16:29,680 --> 00:16:33,680 Speaker 1: work illegally and pay taxes to return home to loved ones. 295 00:16:33,920 --> 00:16:36,840 Speaker 1: And you can do that by making an equal treatment 296 00:16:37,080 --> 00:16:39,520 Speaker 1: for people with an H one B and our one 297 00:16:39,920 --> 00:16:42,640 Speaker 1: a green card at a resident of this country. You 298 00:16:42,680 --> 00:16:45,680 Speaker 1: know that's not difficult. That's not a large change. That's 299 00:16:45,720 --> 00:16:48,400 Speaker 1: allowing people who work in this country to get back 300 00:16:48,440 --> 00:16:51,200 Speaker 1: and see loved ones like they want to. And so 301 00:16:51,480 --> 00:16:53,200 Speaker 1: I'm not going to lay on this this on any 302 00:16:53,240 --> 00:16:55,840 Speaker 1: thicker than I already have. You didn't have to watch 303 00:16:55,920 --> 00:16:59,800 Speaker 1: your mom stand by your father's casket in a few 304 00:17:00,000 --> 00:17:03,320 Speaker 1: old two days ago because you won't do what I'm describing. 305 00:17:03,440 --> 00:17:06,920 Speaker 1: It's easy, and us together in this conversation, I hope 306 00:17:06,960 --> 00:17:09,920 Speaker 1: you go away and make the changes so that thousands 307 00:17:09,960 --> 00:17:12,160 Speaker 1: of other people don't have to go through when I've 308 00:17:12,200 --> 00:17:17,440 Speaker 1: gone through in the last month. Can we make that happen, sir? So, 309 00:17:17,720 --> 00:17:20,680 Speaker 1: these are exactly the kinds of things that we're reviewing 310 00:17:20,840 --> 00:17:24,320 Speaker 1: on a daily basis. I'm the Transportation Secretary. My entire 311 00:17:24,400 --> 00:17:27,240 Speaker 1: job is to do everything I can to safely get 312 00:17:27,280 --> 00:17:29,159 Speaker 1: people to where they need to be and where they 313 00:17:29,200 --> 00:17:31,160 Speaker 1: want to be, whether it's to be with loved ones, 314 00:17:31,480 --> 00:17:34,280 Speaker 1: whether it's to do business. But it's literally what I'm 315 00:17:34,320 --> 00:17:38,800 Speaker 1: here in Washington to do. Nothing about this, respectfully, Nothing 316 00:17:38,840 --> 00:17:42,040 Speaker 1: about this is easy. We're dealing with a phenomenon that 317 00:17:42,080 --> 00:17:45,600 Speaker 1: has led to the debts of six hundred thousand Americans. 318 00:17:45,840 --> 00:17:51,240 Speaker 1: We're dealing with imperfect information, complex policies, legacy policies. Nothing 319 00:17:51,280 --> 00:17:53,240 Speaker 1: about this is easy. But what I will tell you 320 00:17:53,480 --> 00:17:56,439 Speaker 1: is we're doing everything we can as quickly as we 321 00:17:56,520 --> 00:18:01,119 Speaker 1: responsibly can to get back up and running. Mr Secretary, 322 00:18:01,200 --> 00:18:05,880 Speaker 1: Would you support a passport equivalent? I have a passport. 323 00:18:06,359 --> 00:18:10,040 Speaker 1: I happen to study microbiology. A few years ago why 324 00:18:10,080 --> 00:18:13,879 Speaker 1: can't I get a passport, a federal passport that says 325 00:18:13,920 --> 00:18:18,000 Speaker 1: I've been vaccinated. Well, there are a lot of privacy 326 00:18:18,080 --> 00:18:20,639 Speaker 1: and technology issues, but I do think it's worth noting. 327 00:18:20,760 --> 00:18:23,280 Speaker 1: You know, you may have had this experience too. I 328 00:18:23,320 --> 00:18:27,240 Speaker 1: had it when I was younger traveling internationally of carrying 329 00:18:27,400 --> 00:18:32,040 Speaker 1: a yellow uh CDC passport that reflected the vaccinations UH, 330 00:18:32,119 --> 00:18:34,680 Speaker 1: that that I needed to demonstrate that I had to 331 00:18:35,000 --> 00:18:37,840 Speaker 1: travel to parts of Southeast Asia and Africa. We we 332 00:18:37,920 --> 00:18:40,760 Speaker 1: have forms of this that are frankly very low tech 333 00:18:40,880 --> 00:18:43,199 Speaker 1: and out of take. How to balance that with the 334 00:18:43,200 --> 00:18:46,200 Speaker 1: privacy issues is a challenge, and we've decided that it's 335 00:18:46,240 --> 00:18:51,000 Speaker 1: not the federal government's job to establish these kinds of requirements, 336 00:18:51,040 --> 00:18:53,439 Speaker 1: but it is important to make sure that there are 337 00:18:53,440 --> 00:18:56,399 Speaker 1: ways for people who want to demonstrate that they are 338 00:18:56,480 --> 00:18:59,720 Speaker 1: vaccinated to to to prove it. And UH We've seen 339 00:18:59,760 --> 00:19:02,160 Speaker 1: a lot out of third party and private sector ways 340 00:19:02,200 --> 00:19:03,800 Speaker 1: to do this, and I think that's going to continue 341 00:19:03,800 --> 00:19:06,760 Speaker 1: to develop and needs to have continued support at the 342 00:19:06,800 --> 00:19:09,560 Speaker 1: policy level too. What's your biggest headache right now and 343 00:19:09,680 --> 00:19:13,159 Speaker 1: getting this infrastructure plans through? I know you're managing a 344 00:19:13,240 --> 00:19:17,800 Speaker 1: message every day and certainly We've seen that with President Biden. 345 00:19:18,200 --> 00:19:22,800 Speaker 1: This is a big emotional piece of American legislation. How 346 00:19:22,800 --> 00:19:26,000 Speaker 1: do you get it through with a fractious Senate? I 347 00:19:26,000 --> 00:19:27,680 Speaker 1: think the biggest thing is not to let the politics 348 00:19:27,680 --> 00:19:31,199 Speaker 1: get in the way with people are impatient for this 349 00:19:31,240 --> 00:19:34,680 Speaker 1: to happen. But it's been infrastructure Week for a good 350 00:19:34,760 --> 00:19:37,280 Speaker 1: decade or so, and we need to demonstrate that it's 351 00:19:37,280 --> 00:19:41,359 Speaker 1: actually going to get done this time. Look, the policy 352 00:19:41,800 --> 00:19:44,280 Speaker 1: framework is clear, the pathway forward is clear. We need 353 00:19:44,320 --> 00:19:46,720 Speaker 1: these roads and bridges, we need better airports. There's a 354 00:19:46,960 --> 00:19:48,760 Speaker 1: there are listings of airports, were not one of the 355 00:19:48,800 --> 00:19:51,480 Speaker 1: top twenty five is actually in the United States. That's 356 00:19:51,720 --> 00:19:54,920 Speaker 1: unacceptable to the president. I think it's unacceptable to most Americans. 357 00:19:54,960 --> 00:19:57,199 Speaker 1: We want to get this done. UH. The biggest thing 358 00:19:57,280 --> 00:19:59,040 Speaker 1: we have to do is actually move it through Congress 359 00:19:59,080 --> 00:20:02,080 Speaker 1: and make sure that as this turns into the very 360 00:20:02,119 --> 00:20:06,679 Speaker 1: specific mechanical legislative text, that we're tearing down any obstacles 361 00:20:06,960 --> 00:20:09,199 Speaker 1: to getting into the President's desk. But I feel an 362 00:20:09,280 --> 00:20:11,760 Speaker 1: enormous amount of momentum for this on both sides of 363 00:20:11,760 --> 00:20:14,320 Speaker 1: the aisle UH, and our job is to make sure 364 00:20:14,359 --> 00:20:16,320 Speaker 1: that that moment momentum gets us all the way across 365 00:20:16,359 --> 00:20:19,359 Speaker 1: the finish line. Mr Sextrae, I appreciate it's on this morning, 366 00:20:19,480 --> 00:20:22,360 Speaker 1: and thank you very much for hearing questions and from 367 00:20:22,359 --> 00:20:26,080 Speaker 1: responding to them to Puddh Judge, the U S Secretary 368 00:20:26,359 --> 00:20:34,199 Speaker 1: of Transportation right now, and we've been just thrilled what 369 00:20:34,280 --> 00:20:36,520 Speaker 1: our booking team has done to bring in equity voices. 370 00:20:36,560 --> 00:20:39,720 Speaker 1: Liz Ande Saunders with us at Yar Danny yesterday Abbey, 371 00:20:39,800 --> 00:20:43,000 Speaker 1: Joseph Cohen, and now we continue with Jonathan Gollub of 372 00:20:43,000 --> 00:20:46,880 Speaker 1: Credit Sweets. His calls early in the year were distinct 373 00:20:47,280 --> 00:20:49,520 Speaker 1: and they were different. We get an update this morning, 374 00:20:49,560 --> 00:20:52,520 Speaker 1: John Gallub, can you give me SMP five thousand this morning? 375 00:20:52,680 --> 00:20:55,679 Speaker 1: I gotta make some news. I don't know if I 376 00:20:55,680 --> 00:20:58,199 Speaker 1: can give SP five thousand. But the things that have 377 00:20:58,280 --> 00:21:01,400 Speaker 1: made me optimistic about the more get are still in place, 378 00:21:02,000 --> 00:21:05,360 Speaker 1: UM the and more than anything else, it's earnings. We're 379 00:21:05,359 --> 00:21:08,520 Speaker 1: gonna start to hear UM. I think it's next Tuesday. 380 00:21:08,840 --> 00:21:12,080 Speaker 1: From JP Morgan in the Big Banks, the consensus view 381 00:21:12,160 --> 00:21:16,000 Speaker 1: is that we'll have sixty one upside and earnings versus 382 00:21:16,040 --> 00:21:18,440 Speaker 1: a year ago. Our read is that that number is 383 00:21:18,480 --> 00:21:21,600 Speaker 1: gonna be sev and if we're wrong, We're too long. Okay, 384 00:21:21,600 --> 00:21:23,720 Speaker 1: so this is really important, folks. We're gonna stop the 385 00:21:23,720 --> 00:21:26,640 Speaker 1: show right now because this is critical. We're gonna get 386 00:21:26,640 --> 00:21:29,720 Speaker 1: to that earnings call. We all know consensus is different 387 00:21:29,720 --> 00:21:32,440 Speaker 1: now that it's ever been. John gottub, can you make 388 00:21:32,440 --> 00:21:36,359 Speaker 1: a shift to secular growth based off those earnings or 389 00:21:36,440 --> 00:21:38,440 Speaker 1: you gotta hide in the hole because the world's gonna 390 00:21:38,480 --> 00:21:41,880 Speaker 1: come to an end eighteen months later? No, I mean 391 00:21:41,880 --> 00:21:45,440 Speaker 1: I I don't think that this story is has changed 392 00:21:45,480 --> 00:21:48,240 Speaker 1: as much as the headlines are. I think there's two battles. 393 00:21:48,600 --> 00:21:51,919 Speaker 1: The fundamentals are unbelievably strong. This is gonna be the 394 00:21:51,960 --> 00:21:56,720 Speaker 1: strongest GDP corder we've seen. The economic data is generally 395 00:21:56,840 --> 00:22:01,200 Speaker 1: very good and continues to improve. Value is cheaper than 396 00:22:01,320 --> 00:22:06,639 Speaker 1: growth cyclical old economy. Boring companies are delivering stronger growth. 397 00:22:06,720 --> 00:22:09,800 Speaker 1: These are companies like mining companies, things like that. Now, 398 00:22:10,080 --> 00:22:13,320 Speaker 1: if you look at what happens, however, when interest rates fall, 399 00:22:13,840 --> 00:22:18,320 Speaker 1: the market favors growth stocks in a falling interest rate environment, 400 00:22:18,760 --> 00:22:21,879 Speaker 1: this is all of the market is great. The question is, 401 00:22:21,920 --> 00:22:24,960 Speaker 1: just as you guys have mentioned, where's the leadership what 402 00:22:25,119 --> 00:22:27,800 Speaker 1: wins within the market, Because the market still wants to 403 00:22:27,840 --> 00:22:30,240 Speaker 1: go up into the right John, Why can't I just 404 00:22:30,280 --> 00:22:32,919 Speaker 1: buy the market by the SMP. Why do I have 405 00:22:32,960 --> 00:22:34,960 Speaker 1: to get into the detail. Why is it all about 406 00:22:35,000 --> 00:22:37,600 Speaker 1: active management this year when quite clearly you're doing okay 407 00:22:37,720 --> 00:22:42,280 Speaker 1: just holding the SMP five hundred, John, I don't think 408 00:22:42,280 --> 00:22:44,480 Speaker 1: that that's a I don't think that's a terrible call. 409 00:22:44,960 --> 00:22:48,119 Speaker 1: If if you are a hedge fund that's watching this show, 410 00:22:48,600 --> 00:22:50,600 Speaker 1: you don't have that option. You have to you have 411 00:22:50,640 --> 00:22:53,159 Speaker 1: to try to figure out how you're gonna outsmart the market. 412 00:22:53,640 --> 00:22:56,280 Speaker 1: And for them, I think the story is between now 413 00:22:56,320 --> 00:22:58,960 Speaker 1: and the end of the year, value wins, cyclicals win, 414 00:22:59,440 --> 00:23:01,280 Speaker 1: and that there will be a time for growth. But 415 00:23:01,320 --> 00:23:04,280 Speaker 1: it's not right now. If you're a long term investor, 416 00:23:04,560 --> 00:23:06,720 Speaker 1: whether you buy the broad market or whether you buy 417 00:23:07,080 --> 00:23:09,320 Speaker 1: these tech themes that that you see, you know that 418 00:23:09,359 --> 00:23:13,160 Speaker 1: you that Romaine Highland we're selling off a long term 419 00:23:13,160 --> 00:23:16,080 Speaker 1: it's a growth story. Um. So if you're an individual, 420 00:23:16,280 --> 00:23:18,520 Speaker 1: you could ride the wave that way. If you're a 421 00:23:18,520 --> 00:23:20,960 Speaker 1: hedge fund, you've gotta play this more tactively. Let's put 422 00:23:20,960 --> 00:23:22,880 Speaker 1: a bell on it. Then let's make the big point. 423 00:23:22,960 --> 00:23:24,879 Speaker 1: What's more important here the earnings, So where the tenure 424 00:23:24,920 --> 00:23:27,280 Speaker 1: yield is because John, I've asked that question repeatedly in 425 00:23:27,320 --> 00:23:29,600 Speaker 1: the last twenty four hours, and the latter not the former. 426 00:23:29,680 --> 00:23:31,880 Speaker 1: I can sense that you think it's very much about 427 00:23:31,880 --> 00:23:35,600 Speaker 1: the former. It's about where the earnings go. Listen, if 428 00:23:35,640 --> 00:23:37,840 Speaker 1: you're if you're looking at the overall market, the whole 429 00:23:37,880 --> 00:23:40,160 Speaker 1: thing is an earning story. It's a matter of fact 430 00:23:40,240 --> 00:23:42,119 Speaker 1: for all those that are talking about how expensive the 431 00:23:42,160 --> 00:23:46,560 Speaker 1: market is, because you know, because stock prices are up, um, 432 00:23:46,920 --> 00:23:51,199 Speaker 1: there's been no increase in valuations and PETE multiples in 433 00:23:51,280 --> 00:23:55,360 Speaker 1: a year. The stock market is moving only with the 434 00:23:55,440 --> 00:23:58,320 Speaker 1: earning story. If you're looking at this in terms of 435 00:23:58,720 --> 00:24:04,000 Speaker 1: within the market growth versus value, tech versus financials, then 436 00:24:04,080 --> 00:24:06,480 Speaker 1: it's about interest rate, but the market it's an earning 437 00:24:06,560 --> 00:24:09,680 Speaker 1: story full stop. But put into perspective here, Jonathan, how 438 00:24:09,800 --> 00:24:12,840 Speaker 1: resilient the earnings picture has been. I mean, there's been 439 00:24:12,840 --> 00:24:14,920 Speaker 1: obviously a lot of disruptions. There's been a lot of 440 00:24:14,960 --> 00:24:17,080 Speaker 1: talk about supply chains, there's been a lot of talk 441 00:24:17,240 --> 00:24:20,160 Speaker 1: about wage growth. H The idea here that all these 442 00:24:20,160 --> 00:24:23,960 Speaker 1: sort of various factors would somehow up end the earnings 443 00:24:24,000 --> 00:24:26,600 Speaker 1: picture for some of these companies and overall at least 444 00:24:26,600 --> 00:24:29,800 Speaker 1: on an aggregate basis, it's held up pretty well. Yeah, 445 00:24:29,800 --> 00:24:31,840 Speaker 1: you know, Roman, you make a good point here. First 446 00:24:31,880 --> 00:24:35,800 Speaker 1: of all, Um, the smartest question I I recently got 447 00:24:36,520 --> 00:24:40,200 Speaker 1: was not what is this year's earnings versus last year? 448 00:24:40,240 --> 00:24:43,000 Speaker 1: Because we know last year was a beaten up number. 449 00:24:43,280 --> 00:24:46,080 Speaker 1: What does it look like compared to two years ago? 450 00:24:46,240 --> 00:24:50,000 Speaker 1: Are we are we above prior peaks? Um? The expectations 451 00:24:50,040 --> 00:24:55,080 Speaker 1: consensus is that will be about nine above where we 452 00:24:55,080 --> 00:24:58,000 Speaker 1: were two years ago. Our estimate is that will be 453 00:24:58,200 --> 00:25:01,160 Speaker 1: nine percent above. But it's all the reports are in 454 00:25:01,480 --> 00:25:05,119 Speaker 1: for this quarter, so um, that's really amazing. We still 455 00:25:05,160 --> 00:25:08,119 Speaker 1: have all this disruption. We can't get the things that 456 00:25:08,200 --> 00:25:11,760 Speaker 1: we want delivered at all. Um. The unemployment rate is high, 457 00:25:11,840 --> 00:25:13,960 Speaker 1: and yet we're talking by the end of this quarter 458 00:25:14,280 --> 00:25:18,800 Speaker 1: we'll probably have stronger earnings growth that we did before 459 00:25:18,800 --> 00:25:21,680 Speaker 1: the pandemic started. I mean, Romaine Gollub talks about the 460 00:25:21,720 --> 00:25:24,600 Speaker 1: smart question he got four years ago. There No, the 461 00:25:24,640 --> 00:25:27,920 Speaker 1: best question Gollub got, Romaine was John Ferrell's question a 462 00:25:28,000 --> 00:25:30,320 Speaker 1: moment ago, are we supposed to be worried about earnings 463 00:25:30,400 --> 00:25:33,200 Speaker 1: or the ten year yield? That's the money question? Yeah, 464 00:25:33,240 --> 00:25:35,760 Speaker 1: I mean, that is the money question. And look, I mean, obviously, Jonathan, 465 00:25:35,800 --> 00:25:38,280 Speaker 1: you know, people are gonna obsess over this. They're gonna 466 00:25:38,280 --> 00:25:41,800 Speaker 1: obsess over or whatever we are now. They're gonna obsess 467 00:25:41,840 --> 00:25:44,200 Speaker 1: over whether we're headed towards one percent or whether we're 468 00:25:44,200 --> 00:25:48,040 Speaker 1: headed back up towards two percent. Here, I mean, provide 469 00:25:48,080 --> 00:25:50,199 Speaker 1: some sort of soothing advice here. What what do you 470 00:25:50,240 --> 00:25:52,280 Speaker 1: tell people who are maybe staying up late at night 471 00:25:52,480 --> 00:25:55,280 Speaker 1: staring at their screens away John and Tom do on 472 00:25:55,320 --> 00:25:57,920 Speaker 1: this tenure deal. Yeah, well, you know, first of all, 473 00:25:57,960 --> 00:26:01,680 Speaker 1: if you take a look, I made this comment, um, 474 00:26:01,720 --> 00:26:04,439 Speaker 1: I guess probably about eight weeks ago when we were 475 00:26:04,480 --> 00:26:07,159 Speaker 1: about one fifty, which means that we were an equal 476 00:26:07,280 --> 00:26:10,480 Speaker 1: chance that we would get one on the tenure, equal 477 00:26:10,560 --> 00:26:12,800 Speaker 1: chance we would get to one percent or two percent. 478 00:26:13,160 --> 00:26:15,159 Speaker 1: And I was really vocal that if you end the 479 00:26:15,240 --> 00:26:18,400 Speaker 1: year closer to one, the market is gonna be weaker 480 00:26:18,480 --> 00:26:20,760 Speaker 1: than if you end the year closer to two. The 481 00:26:20,920 --> 00:26:23,720 Speaker 1: market likes higher rates, and people just don't want to 482 00:26:23,720 --> 00:26:26,879 Speaker 1: buy into that idea. Higher rates are an indication that 483 00:26:27,040 --> 00:26:30,480 Speaker 1: demand for capital is rising. It's a sign that the 484 00:26:30,520 --> 00:26:33,520 Speaker 1: economy is strong. The reason the market is selling off 485 00:26:33,560 --> 00:26:36,320 Speaker 1: today is because people ask a question, what the heck 486 00:26:36,440 --> 00:26:40,040 Speaker 1: is wrong that interest rates are falling when this economy 487 00:26:40,119 --> 00:26:42,760 Speaker 1: is supposed to be so good, so you know we 488 00:26:42,800 --> 00:26:45,320 Speaker 1: want higher interest rates. I would argue that if the 489 00:26:45,359 --> 00:26:49,239 Speaker 1: interest rates to continue to move towards one, that my optimism, well, 490 00:26:49,280 --> 00:26:51,719 Speaker 1: I still think the market will be higher. That I'll 491 00:26:51,760 --> 00:26:54,680 Speaker 1: be proven to be too optimistic. If interest rates back 492 00:26:54,800 --> 00:26:57,520 Speaker 1: up towards one and a half one seven five, the 493 00:26:57,600 --> 00:27:00,560 Speaker 1: market is on fire to we get to move down 494 00:27:00,560 --> 00:27:03,280 Speaker 1: to one, and that forty six hundred priced target of 495 00:27:03,320 --> 00:27:07,760 Speaker 1: yours is in question. I think that the likelihood of 496 00:27:07,760 --> 00:27:11,160 Speaker 1: me hitting that number is lower. And on the other hand, 497 00:27:11,400 --> 00:27:13,800 Speaker 1: if we get towards one, seven five or two percent, 498 00:27:14,240 --> 00:27:15,960 Speaker 1: I may be too light of my number. You're you 499 00:27:16,040 --> 00:27:18,679 Speaker 1: are right. There's no question. The sentiment of the market 500 00:27:18,800 --> 00:27:21,439 Speaker 1: right now is all tied to what's been going on 501 00:27:21,520 --> 00:27:24,760 Speaker 1: with the with the tenure and if if last starting 502 00:27:24,760 --> 00:27:27,480 Speaker 1: season is right, it's similar to this one. Um, the 503 00:27:27,560 --> 00:27:30,359 Speaker 1: market is gonna care if infestrates continue to fall apart 504 00:27:30,720 --> 00:27:33,280 Speaker 1: the market as there's a chance he just ignores the earnings. 505 00:27:33,280 --> 00:27:35,080 Speaker 1: I don't think that would be the case, though, Jonathan 506 00:27:35,080 --> 00:27:39,159 Speaker 1: Gollob credits Chief Ectuty strategist John did you give us 507 00:27:39,160 --> 00:27:42,879 Speaker 1: a five thousand target. He didn't. He didn't. He said 508 00:27:43,119 --> 00:27:46,280 Speaker 1: that if you to a higher he might re evaluate higher. 509 00:27:46,359 --> 00:27:49,320 Speaker 1: He said, if he came lower, he might move. There 510 00:27:49,400 --> 00:27:52,400 Speaker 1: is no chance of hitting that forty hundred. I think 511 00:27:52,920 --> 00:27:55,240 Speaker 1: I think you're being a little bit kind Tom about 512 00:27:55,520 --> 00:28:01,960 Speaker 1: whether there was a move that we're thrilled that robbed 513 00:28:01,960 --> 00:28:05,399 Speaker 1: Cornell will join us this morning. John, with your expertise 514 00:28:05,520 --> 00:28:07,679 Speaker 1: in the e c B, why don't you bring in 515 00:28:07,800 --> 00:28:10,920 Speaker 1: Mr Cornel? Rob, Let's start with that. The price mandate 516 00:28:10,960 --> 00:28:12,440 Speaker 1: over at the e CP. You know what it used 517 00:28:12,440 --> 00:28:14,440 Speaker 1: to be still is, in fact it is below but 518 00:28:14,520 --> 00:28:16,760 Speaker 1: close to two percent that's set to change the day 519 00:28:16,840 --> 00:28:20,000 Speaker 1: reportedly to two percent with a tolerance for an overshoot. 520 00:28:20,000 --> 00:28:23,960 Speaker 1: Does that change anything whatsoever for this central bank in Frankfurt, Rob, 521 00:28:25,040 --> 00:28:26,960 Speaker 1: But what it does is get rid of something that 522 00:28:27,000 --> 00:28:28,959 Speaker 1: I think most of us have hated for years. I mean, 523 00:28:29,000 --> 00:28:31,480 Speaker 1: we never really knew what it meant below but close 524 00:28:31,560 --> 00:28:33,560 Speaker 1: to was at one point nine, was at one point eight, 525 00:28:33,760 --> 00:28:37,240 Speaker 1: was one point seven? Close enough? So for a start, 526 00:28:37,280 --> 00:28:40,400 Speaker 1: as it gets rid of that horrible you know, lack 527 00:28:40,440 --> 00:28:43,480 Speaker 1: of certainty over what the actual mandate was. But you 528 00:28:43,560 --> 00:28:48,560 Speaker 1: replace something which was close to to below with effectively too, 529 00:28:49,040 --> 00:28:51,200 Speaker 1: and you can perhaps go over for a bit. And 530 00:28:51,240 --> 00:28:53,320 Speaker 1: really what we're doing is we're doing what the Bank 531 00:28:53,360 --> 00:28:55,640 Speaker 1: of Japan did many years ago when it moved from 532 00:28:55,680 --> 00:28:58,400 Speaker 1: one to two. You take a target, you shift it, 533 00:28:58,600 --> 00:29:00,480 Speaker 1: you've got no more tools, you going to miss it 534 00:29:00,480 --> 00:29:03,400 Speaker 1: by a bigger margin. So it's all about credibility. And 535 00:29:03,560 --> 00:29:05,560 Speaker 1: I don't necessarily think this is going to change an 536 00:29:05,560 --> 00:29:08,320 Speaker 1: awful lot. We'll rob. Their own forecast captured the credibility 537 00:29:08,320 --> 00:29:11,200 Speaker 1: issue over the e CB on CPI one point nine 538 00:29:11,240 --> 00:29:13,160 Speaker 1: for this year, one point five for next, one point 539 00:29:13,160 --> 00:29:16,960 Speaker 1: four for the year after, even with any interpretation of 540 00:29:17,040 --> 00:29:19,240 Speaker 1: their mandate, even with that, even if it adapts, even 541 00:29:19,280 --> 00:29:22,320 Speaker 1: if it changes in twenty five minutes time, whatever it is, rob, 542 00:29:22,600 --> 00:29:26,280 Speaker 1: they're still forecasting deceleration through CPI at to one point 543 00:29:26,320 --> 00:29:28,959 Speaker 1: four and while below this target. So it's their policy 544 00:29:29,000 --> 00:29:31,560 Speaker 1: starts wrong, or they just have zero credibility now to 545 00:29:31,600 --> 00:29:34,680 Speaker 1: achieve it. Well, I think you have to wonder whether 546 00:29:34,880 --> 00:29:38,480 Speaker 1: these these targets are actually sensible. Why too, why not 547 00:29:38,600 --> 00:29:40,480 Speaker 1: one and a half? Why why have we chosen to 548 00:29:40,600 --> 00:29:43,120 Speaker 1: We don't seem to be able to achieve it um 549 00:29:43,160 --> 00:29:45,160 Speaker 1: this year? Of course, we have all the benefits of 550 00:29:45,480 --> 00:29:48,400 Speaker 1: looking back at last year's terrible price level and a 551 00:29:48,520 --> 00:29:51,240 Speaker 1: nice comparison. It just lifts everything. It makes it so 552 00:29:51,320 --> 00:29:53,440 Speaker 1: much easier. But that won't last. We all know that 553 00:29:53,520 --> 00:29:55,920 Speaker 1: we've got a little bit of help from supply bottlenecks 554 00:29:55,920 --> 00:29:58,200 Speaker 1: that's pushing things along as well a little bit. And 555 00:29:58,240 --> 00:29:59,880 Speaker 1: we've had up until now a little bit of a 556 00:30:00,080 --> 00:30:03,000 Speaker 1: us coming from OPEC class at least giving us the 557 00:30:03,000 --> 00:30:06,640 Speaker 1: sense that possibly they might do something with with supply. 558 00:30:06,720 --> 00:30:08,840 Speaker 1: But that's that's clearly not going to happen anymore. So 559 00:30:08,880 --> 00:30:11,800 Speaker 1: oil is probably headed back down again. Um yeah, I mean, 560 00:30:11,840 --> 00:30:14,520 Speaker 1: credibility is a tough one. But you know why why 561 00:30:15,520 --> 00:30:17,720 Speaker 1: your colors to a particular number, It doesn't make sense. 562 00:30:17,960 --> 00:30:20,479 Speaker 1: Rob Cornel frame for us a German response to what 563 00:30:20,480 --> 00:30:22,600 Speaker 1: we're going to hear from Madame le Guard today. The 564 00:30:22,640 --> 00:30:25,880 Speaker 1: idea of moving from ArtMark is seeing to Axel Weber 565 00:30:26,000 --> 00:30:29,200 Speaker 1: and and dividemin. Is this a different Germanic response or 566 00:30:29,240 --> 00:30:30,840 Speaker 1: is it going to be the same old, same old. 567 00:30:32,080 --> 00:30:35,720 Speaker 1: I think the German response has been mellowing over the years. 568 00:30:35,720 --> 00:30:39,760 Speaker 1: I mean they've been the very very much been Bunder's 569 00:30:39,760 --> 00:30:41,920 Speaker 1: bank over the years, which has been very anti a 570 00:30:41,960 --> 00:30:43,920 Speaker 1: lot of the stuff that the E is doing from 571 00:30:44,600 --> 00:30:47,040 Speaker 1: quantity of easy into you know, pretty much anything at 572 00:30:47,080 --> 00:30:49,680 Speaker 1: the moment, But that that has changed in Videnmin seems 573 00:30:49,720 --> 00:30:51,280 Speaker 1: to be mellowing as well a little bit. I mean, 574 00:30:51,320 --> 00:30:55,440 Speaker 1: he'll he'll retain a sort of Germanic hawkishness with throughout 575 00:30:55,440 --> 00:30:56,920 Speaker 1: all of this, but I think they can see that 576 00:30:56,960 --> 00:31:00,280 Speaker 1: there's some merits to pragmatism within this give that that 577 00:31:00,360 --> 00:31:03,120 Speaker 1: the previous policies just simply haven't worked. John Ferrell gives 578 00:31:03,120 --> 00:31:06,080 Speaker 1: a set off into some Germanic carcassianess. We've noticed that 579 00:31:06,480 --> 00:31:08,160 Speaker 1: is well, rab I'm going to steal from the good 580 00:31:08,200 --> 00:31:10,720 Speaker 1: people over at rabble Bank this morning. They make fun 581 00:31:10,760 --> 00:31:13,600 Speaker 1: of the acronyms. It's like the military rabble Bank on 582 00:31:13,680 --> 00:31:15,560 Speaker 1: the E C B. Is it f I T? Is 583 00:31:15,600 --> 00:31:17,680 Speaker 1: it f A T? Is it f l A T? 584 00:31:17,920 --> 00:31:19,920 Speaker 1: Or is it f l O P? How big a 585 00:31:19,920 --> 00:31:23,840 Speaker 1: flapper is this going to be? Old wise one? Well, 586 00:31:24,040 --> 00:31:25,840 Speaker 1: what they can always do is this, they can wrap 587 00:31:25,920 --> 00:31:27,640 Speaker 1: this up in all sorts of other things as well. 588 00:31:27,640 --> 00:31:29,600 Speaker 1: There's plenty of other stuff as well as the target 589 00:31:29,640 --> 00:31:31,840 Speaker 1: that they'll be talking about. They'll be talking about whether 590 00:31:31,920 --> 00:31:34,280 Speaker 1: or not they can bring in sort of more environmental targets. 591 00:31:34,320 --> 00:31:36,160 Speaker 1: They can even talk about whether they should be thinking 592 00:31:36,160 --> 00:31:39,520 Speaker 1: about a different type of inflation measure, you know, perhaps 593 00:31:39,560 --> 00:31:41,880 Speaker 1: bringing in house prices into this, which they haven't done 594 00:31:41,920 --> 00:31:44,800 Speaker 1: particularly well. Um and talking about you know, do they 595 00:31:44,840 --> 00:31:47,440 Speaker 1: need to think about headline rates as they've always done 596 00:31:47,440 --> 00:31:49,240 Speaker 1: in the past. But we know that these are flipped 597 00:31:49,240 --> 00:31:51,600 Speaker 1: around by all sorts of supply measures that they have 598 00:31:51,640 --> 00:31:55,200 Speaker 1: absolutely no control over whatsoever. So you know, there are 599 00:31:55,200 --> 00:31:56,920 Speaker 1: there are other things that they can do to try 600 00:31:56,960 --> 00:32:00,400 Speaker 1: and minimize the focus on the fact that what doing 601 00:32:00,440 --> 00:32:03,000 Speaker 1: is tinkering around the edges of something which is fairly marginal. 602 00:32:03,280 --> 00:32:05,520 Speaker 1: Rob What about the other components of this review, the 603 00:32:05,560 --> 00:32:09,080 Speaker 1: employment component as well as this focus on climate change. 604 00:32:09,120 --> 00:32:14,720 Speaker 1: How does that fold in to the inflation outlook as well. Yeah, 605 00:32:14,720 --> 00:32:17,120 Speaker 1: that's a very interesting question, this whole employment theme, because 606 00:32:17,160 --> 00:32:20,080 Speaker 1: I think one of the things we noted pre pandemic 607 00:32:20,280 --> 00:32:22,800 Speaker 1: was that there was next to no relationship between the 608 00:32:22,840 --> 00:32:26,040 Speaker 1: unemployment rate and what was happening to wages growth. Now 609 00:32:26,080 --> 00:32:28,400 Speaker 1: we are seeing something now, I mean, the US is 610 00:32:28,560 --> 00:32:30,960 Speaker 1: giving us the rest of the world an interesting lesson 611 00:32:31,480 --> 00:32:34,160 Speaker 1: in what's going on there that there can actually be 612 00:32:34,240 --> 00:32:37,080 Speaker 1: a relationship again. But we still don't know whether this 613 00:32:37,200 --> 00:32:40,440 Speaker 1: is you know, for keeps or whether this is simply 614 00:32:40,640 --> 00:32:43,720 Speaker 1: a one off price level adjustment as we adjust to 615 00:32:43,800 --> 00:32:48,120 Speaker 1: the new norms of a post pandemic world. So it's 616 00:32:48,240 --> 00:32:50,640 Speaker 1: entirely possible that in two years time we still have 617 00:32:51,440 --> 00:32:54,800 Speaker 1: a point where the economy is running okay, unemployment rates 618 00:32:54,880 --> 00:32:57,560 Speaker 1: rock bottom, and you still have no wages growth. Then 619 00:32:57,600 --> 00:33:00,400 Speaker 1: what do you do? So I think, you know, complete 620 00:33:00,480 --> 00:33:05,280 Speaker 1: change of viewing unemployment as a particularly causal factor could 621 00:33:05,280 --> 00:33:06,760 Speaker 1: be helpful, But then what do you replace it with? 622 00:33:06,840 --> 00:33:09,400 Speaker 1: There doesn't seem to be anything else to to bring 623 00:33:09,440 --> 00:33:11,880 Speaker 1: in to take its place. When you look at sort 624 00:33:11,880 --> 00:33:13,560 Speaker 1: of the lessons that we can learn from the shift 625 00:33:13,560 --> 00:33:16,880 Speaker 1: that Japan made, into a certain extent, the shift in 626 00:33:16,960 --> 00:33:19,280 Speaker 1: tone that we saw out of the FED here, how 627 00:33:19,320 --> 00:33:22,200 Speaker 1: does the EU, and more importantly, how does excuse me, 628 00:33:22,240 --> 00:33:24,200 Speaker 1: that does the e c B And more importantly, how 629 00:33:24,240 --> 00:33:27,040 Speaker 1: does this sort of collection of countries all that to 630 00:33:27,080 --> 00:33:29,560 Speaker 1: a certain extent have different goals and to a certain 631 00:33:29,560 --> 00:33:32,760 Speaker 1: extent different economies. How does the reaction, How does the 632 00:33:32,840 --> 00:33:36,120 Speaker 1: outcome of this, if at all, end up different than 633 00:33:36,160 --> 00:33:40,000 Speaker 1: what we're seeing in Japan? And the US. Um, well, 634 00:33:40,040 --> 00:33:42,560 Speaker 1: it might not. I think the one thing that we're 635 00:33:42,640 --> 00:33:44,840 Speaker 1: doing at the moment as we just all focus a 636 00:33:44,920 --> 00:33:48,200 Speaker 1: bit more on fiscal policy. I think if you accept 637 00:33:48,240 --> 00:33:51,200 Speaker 1: a lot of monetary policy around the world has run 638 00:33:51,240 --> 00:33:54,040 Speaker 1: out of pet that it's you know, pushing on a string. 639 00:33:54,040 --> 00:33:56,200 Speaker 1: It's been doing that for many years, then you have 640 00:33:56,280 --> 00:33:58,720 Speaker 1: to look at something else, and fiscal policy it's the 641 00:33:58,880 --> 00:34:00,680 Speaker 1: it's you know, it's the story we hear about from 642 00:34:00,680 --> 00:34:03,200 Speaker 1: Washington in the US all the time. Um it's the 643 00:34:03,240 --> 00:34:06,000 Speaker 1: story that we begun to hear about finally from from 644 00:34:06,040 --> 00:34:09,160 Speaker 1: Europe as well. Japan's already run that race and sort 645 00:34:09,160 --> 00:34:12,000 Speaker 1: of spend everything. Um So I think that's that's where 646 00:34:12,000 --> 00:34:14,200 Speaker 1: we head back to. That's what can push things along. 647 00:34:14,680 --> 00:34:16,400 Speaker 1: But the money has to be spent, Sen sence. We 648 00:34:16,520 --> 00:34:19,960 Speaker 1: can't just print it and chuck it around in a 649 00:34:20,080 --> 00:34:21,960 Speaker 1: sort of really newly fashion. It has to be put 650 00:34:22,000 --> 00:34:25,160 Speaker 1: to useful, productive uses. Rob. It's been way too long. 651 00:34:25,239 --> 00:34:27,400 Speaker 1: It's going to catch up, Rob car now that I 652 00:34:27,440 --> 00:34:34,960 Speaker 1: MG a specific head of research in chief economists Katarina 653 00:34:35,040 --> 00:34:38,000 Speaker 1: Simonettias with us in private that well, there we rarely 654 00:34:38,000 --> 00:34:40,680 Speaker 1: talk to people in the trenches and we do so today. 655 00:34:40,719 --> 00:34:43,880 Speaker 1: What's your biggest headache right now, Katerina, With people that 656 00:34:44,040 --> 00:34:46,760 Speaker 1: say I need to make money like it's in the market, 657 00:34:46,760 --> 00:34:49,000 Speaker 1: but I don't want to take risk, what do you 658 00:34:49,080 --> 00:34:53,239 Speaker 1: tell them? Well, Tom, it's thank you for having me 659 00:34:53,280 --> 00:34:57,160 Speaker 1: on the show. And uh, it is such a weird 660 00:34:57,320 --> 00:35:00,239 Speaker 1: environment that we're in because on one side, our yomic 661 00:35:00,400 --> 00:35:04,400 Speaker 1: forecast remains to be positive. On the other side, for 662 00:35:04,440 --> 00:35:08,160 Speaker 1: a while now, we have been calling for a correction 663 00:35:08,200 --> 00:35:11,280 Speaker 1: of pullback of some sort, you know, anywhere from potentially 664 00:35:11,320 --> 00:35:16,320 Speaker 1: maybe tend to to twent uh and we are saying 665 00:35:16,400 --> 00:35:18,839 Speaker 1: this in the context of the ball market, but we're 666 00:35:18,920 --> 00:35:23,560 Speaker 1: preparing our clients for the fact that this economic cycle 667 00:35:23,719 --> 00:35:26,839 Speaker 1: seems to be happening a little bit too quickly in 668 00:35:26,920 --> 00:35:29,480 Speaker 1: some type of a pullback. Here it just seems natural 669 00:35:29,560 --> 00:35:32,080 Speaker 1: and normal. And this is not the reason to exit 670 00:35:32,120 --> 00:35:37,080 Speaker 1: the market, but certainly a good trigger to reposition the portfolios, 671 00:35:37,280 --> 00:35:39,960 Speaker 1: to go to safety, to take some profits of the 672 00:35:39,960 --> 00:35:42,960 Speaker 1: table cats in your colleagues, particularly the investment bank, the 673 00:35:43,040 --> 00:35:45,080 Speaker 1: likes of Allen setting that, Chad and Ia, I'm thinking 674 00:35:45,120 --> 00:35:47,520 Speaker 1: of Andrew Sheets as well. I'm thinking of Mike Wilson. 675 00:35:47,920 --> 00:35:50,040 Speaker 1: They've been focused on this cycle as well, and where 676 00:35:50,080 --> 00:35:52,000 Speaker 1: we are in this cycle, and a lot of people 677 00:35:52,000 --> 00:35:54,200 Speaker 1: are struggling with that as a framework, because the team 678 00:35:54,200 --> 00:35:56,759 Speaker 1: at Morgan Standing believe are already experiencing a mid to 679 00:35:56,840 --> 00:36:00,279 Speaker 1: like cycle dynamic, a mid cycle dynamic particularly, really to 680 00:36:00,320 --> 00:36:05,560 Speaker 1: explain that to our audience why we're already there so quickly. Well, generally, 681 00:36:05,760 --> 00:36:08,600 Speaker 1: you know, these things stayed time and boommarkets last for 682 00:36:08,640 --> 00:36:11,920 Speaker 1: a while. But because of so much stimulus and because 683 00:36:11,920 --> 00:36:15,520 Speaker 1: of this whole you know, economic reopening that that we're 684 00:36:15,520 --> 00:36:18,880 Speaker 1: going through, everything is happening quickly, and we seem to 685 00:36:18,920 --> 00:36:24,080 Speaker 1: be going into this mid cycle area of the market 686 00:36:24,640 --> 00:36:28,200 Speaker 1: owned four volatility, which is known for corrections and fee bags. 687 00:36:28,239 --> 00:36:32,399 Speaker 1: So because everything is happening quickly and economy is so stimulated, 688 00:36:32,440 --> 00:36:36,000 Speaker 1: and there's some developments and concerns that we're having right 689 00:36:36,040 --> 00:36:39,760 Speaker 1: now dealing with inflation, with labor shortages, with higher cost 690 00:36:39,840 --> 00:36:42,680 Speaker 1: of materials. You on one side, we have this growth 691 00:36:42,680 --> 00:36:45,440 Speaker 1: of recovery. On the other side, we have the volatility. 692 00:36:45,680 --> 00:36:48,200 Speaker 1: So we think that the pullback and the correction at 693 00:36:48,239 --> 00:36:51,960 Speaker 1: this stage in the recovery, in this mid cycle transition 694 00:36:52,040 --> 00:36:54,959 Speaker 1: that we believe that we find ourselves in it's only 695 00:36:55,080 --> 00:36:57,719 Speaker 1: natural here, only natural, And this is a pretty broad 696 00:36:57,719 --> 00:36:59,920 Speaker 1: based pullback, at least for today, I mean pretty much 697 00:37:00,120 --> 00:37:02,880 Speaker 1: thing of significance higher here, at least in the pre 698 00:37:03,000 --> 00:37:05,600 Speaker 1: market Kindarry, Now, I want to go back to, uh, 699 00:37:05,800 --> 00:37:08,800 Speaker 1: the economic data that we've been getting, which has been mixed, 700 00:37:08,840 --> 00:37:10,839 Speaker 1: and it's been mixed pretty much for the whole year, 701 00:37:11,080 --> 00:37:13,759 Speaker 1: despite the fact that most people have taken much more 702 00:37:13,800 --> 00:37:16,520 Speaker 1: of a glass half full approach to it. There are 703 00:37:16,520 --> 00:37:18,480 Speaker 1: a lot of surprises out of that data, a lot 704 00:37:18,480 --> 00:37:21,200 Speaker 1: of upside surprises, and that seemed to fuel a big 705 00:37:21,200 --> 00:37:23,040 Speaker 1: part of this bull run that we had over the 706 00:37:23,040 --> 00:37:25,319 Speaker 1: first few months of the year. Those surprises have sort 707 00:37:25,320 --> 00:37:27,680 Speaker 1: of flattened out, and I'm wondering if you read into 708 00:37:27,680 --> 00:37:30,880 Speaker 1: that any sense here that even if the economy continues 709 00:37:30,920 --> 00:37:33,480 Speaker 1: to chug along and chug along higher, the idea here 710 00:37:33,520 --> 00:37:36,600 Speaker 1: that will be pleasantly surprised in any meaningful way is 711 00:37:36,640 --> 00:37:40,839 Speaker 1: past us remain I think that one of the key 712 00:37:40,880 --> 00:37:43,600 Speaker 1: factors here is that there seems to be a bit 713 00:37:43,600 --> 00:37:46,400 Speaker 1: of a disconect with the way Federal Reserve sees the 714 00:37:46,480 --> 00:37:50,520 Speaker 1: inflation in the way that that investors and consumers see 715 00:37:50,520 --> 00:37:53,279 Speaker 1: the inflation in every single day of their life and 716 00:37:53,400 --> 00:37:57,560 Speaker 1: naturally their concerns. And so what we tell investors to 717 00:37:57,640 --> 00:38:00,480 Speaker 1: do is to focus on earnings, to focus on quality, 718 00:38:00,640 --> 00:38:03,879 Speaker 1: to focus on fundamentals, because I do believe that we 719 00:38:04,000 --> 00:38:07,040 Speaker 1: are going to speed the positive surprises, but we have 720 00:38:07,200 --> 00:38:10,120 Speaker 1: to be very careful with our portfolio selection. We have 721 00:38:10,200 --> 00:38:13,840 Speaker 1: to be very careful with our security selection. When we 722 00:38:13,960 --> 00:38:16,520 Speaker 1: look at quality, we look at earnings, We'll look at 723 00:38:16,600 --> 00:38:20,160 Speaker 1: the long term opportunity, you know, for the stocks to 724 00:38:20,200 --> 00:38:23,600 Speaker 1: make sure that the valuations that we're seeing are actually 725 00:38:23,680 --> 00:38:27,160 Speaker 1: supported by earnings. Because we sow so much run up 726 00:38:27,239 --> 00:38:29,520 Speaker 1: in some of the sectors of this economy, in some 727 00:38:29,680 --> 00:38:33,040 Speaker 1: of the individual equity, that the question is is this sustainable? 728 00:38:33,239 --> 00:38:35,360 Speaker 1: So if there is ever a time to go to 729 00:38:35,600 --> 00:38:40,200 Speaker 1: quality to increase the overall quality of investment portfolios, this 730 00:38:40,280 --> 00:38:42,319 Speaker 1: is the time, Catarina, We've gotta leave it there. It's 731 00:38:42,320 --> 00:38:44,040 Speaker 1: always got to catch up. Thanks for you, and it's 732 00:38:44,080 --> 00:38:46,840 Speaker 1: kind of ready. Siminarity, the Morgan Stanley Private Wealth Management 733 00:38:46,880 --> 00:38:51,399 Speaker 1: Sania Vice President. This is the Bloomberg Surveillance Podcast. Thanks 734 00:38:51,440 --> 00:38:54,759 Speaker 1: for listening. Join us live weekdays from seven to ten 735 00:38:54,840 --> 00:38:59,320 Speaker 1: am Eastern on Bloomberg Radio and on Bloomberg television each 736 00:38:59,400 --> 00:39:03,120 Speaker 1: day from six to nine am for insight from the 737 00:39:03,160 --> 00:39:08,359 Speaker 1: best in economics, finance, investment, and international relations. And subscribe 738 00:39:08,400 --> 00:39:13,359 Speaker 1: to the Surveillance podcast on Apple podcast, SoundCloud, Bloomberg dot com, 739 00:39:13,440 --> 00:39:16,680 Speaker 1: and of course, on the terminal. I'm Tom Keene, and 740 00:39:16,800 --> 00:39:18,640 Speaker 1: this is Bloomberg.