WEBVTT - A Closer Look At The Fed And Renewables 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.560 --> 0:00:15.520 with essential market moving news. Find the Bloomberg Markets podcast 0:00:15.560 --> 0:00:18.479 called Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:21.760 at Bloomberg dot com slash podcast. All right, let's bring 0:00:21.800 --> 0:00:25.479 in Janelle Woodward, President McKay Shields. Uh, Jennell, thanks so 0:00:25.560 --> 0:00:28.520 much for joining us here. We love to get your thoughts. 0:00:28.560 --> 0:00:29.600 I mean, you get a little bit of a roll 0:00:29.680 --> 0:00:31.880 over in the market today. UM, but I'd love to 0:00:31.920 --> 0:00:36.960 get your thoughts on this Federal Reserve. Are you comfortable 0:00:37.040 --> 0:00:40.320 with kind of that the pace of the tapering and 0:00:40.360 --> 0:00:45.120 more importantly, the communication around potential rate increases or are 0:00:45.159 --> 0:00:47.360 you in that camp that I think is growing that's 0:00:47.360 --> 0:00:51.000 saying maybe the Feds kind of falling behind here. Well, 0:00:51.040 --> 0:00:53.159 thank you so much for having me and and I 0:00:53.159 --> 0:00:55.680 think a really important question as we think about our 0:00:55.720 --> 0:01:00.000 outlook into Um, I think we're to the first party 0:01:00.000 --> 0:01:03.400 your question. We are comfortable with tapering and what's been communicated, 0:01:03.880 --> 0:01:06.200 you know, I think what is still outstanding is whether 0:01:06.280 --> 0:01:08.600 or not that pace changes as we get through in 0:01:08.600 --> 0:01:12.080 November and into December. But you're right to think what 0:01:12.200 --> 0:01:15.240 the market is really watching is what happens from a 0:01:15.240 --> 0:01:18.600 liftoff perspective, and and tightening, which is now projected to 0:01:18.640 --> 0:01:22.080 be somewhere in in in mid two UM. You know, 0:01:22.120 --> 0:01:25.759 to us, demand is strong, consumers resilient. You're just referencing 0:01:25.760 --> 0:01:27.320 that as we look at some of the earnings and 0:01:27.600 --> 0:01:30.120 retail data. But it really comes back to this, to 0:01:30.520 --> 0:01:34.640 the conversation around inflation. So what kind of inflation do 0:01:34.680 --> 0:01:37.040 you expect in two and is it going to be 0:01:37.160 --> 0:01:40.920 enough to drive the Fed fundrate up to fifty basis 0:01:40.959 --> 0:01:43.440 points between fifty and seventy five, because that's what the 0:01:43.440 --> 0:01:45.480 market is pricing in right now, and I feel like 0:01:45.959 --> 0:01:48.720 it just seems a little aggressive for this dovish group 0:01:49.200 --> 0:01:53.120 of Fed governors. Yeah, I think, you know, when we 0:01:53.160 --> 0:01:55.160 when we look at inflation, I mean, I think there's 0:01:55.160 --> 0:01:58.360 still this question of transitory and I think one of 0:01:58.400 --> 0:02:01.120 the challenges is that we've seen demand come back and 0:02:01.160 --> 0:02:04.080 be quite robust, and we're still seeing that met with 0:02:04.120 --> 0:02:06.800 some of the pressures and supply chain UM. And then 0:02:06.800 --> 0:02:09.560 we also have the commodity story at place that's definitely 0:02:09.639 --> 0:02:13.200 creating some short term pressure. It's interesting to look at 0:02:13.320 --> 0:02:18.840 five year inflation expectations versus more forward looking inflation expectations. 0:02:18.880 --> 0:02:23.320 There's still some confidence that inflation is somewhat transitory and 0:02:23.600 --> 0:02:25.480 or the set is going to get it right. So 0:02:25.919 --> 0:02:28.120 and we think it's probably prudent at some point for 0:02:28.120 --> 0:02:31.720 them to step into the market in two. But to 0:02:31.720 --> 0:02:35.160 your point, it's probably a little bit slower as we 0:02:35.200 --> 0:02:38.040 continue to really just kind of navigate the cycle and 0:02:38.040 --> 0:02:40.840 and some of the unprecedented recovery that we've been seeing. 0:02:41.520 --> 0:02:42.959 You know. I know you are used to be the 0:02:42.960 --> 0:02:46.480 formal global head of fixed income at Demo Global Asset Management, 0:02:46.480 --> 0:02:48.160 and I have to say, I really feel sorry for 0:02:48.200 --> 0:02:51.200 my friends that are fixed income portfolio managers. I look 0:02:51.240 --> 0:02:53.960 at the tenure at one point five and I'm like, 0:02:54.560 --> 0:02:56.760 what do people do all day? Where do you find 0:02:56.760 --> 0:03:00.320 opportunities in the fixed income market? Now? You I think 0:03:00.360 --> 0:03:02.000 it's a question that we continue to have a lot 0:03:02.040 --> 0:03:05.480 of dialogue on with with with our clients, especially as 0:03:05.520 --> 0:03:08.520 we think about what the implications are for real returns, 0:03:08.919 --> 0:03:10.280 you know, going back to what we're seeing on the 0:03:10.320 --> 0:03:13.480 earnings picture, gives us a lot of confidence and you 0:03:13.520 --> 0:03:17.960 basically have to manage down expectations. Right. Well, I think 0:03:17.960 --> 0:03:20.320 there's two pieces of it. You know, one, yes, of course, 0:03:20.320 --> 0:03:23.080 it's about thinking about what the expectations are. But the 0:03:23.120 --> 0:03:25.440 other piece of it is how can you get total returned? 0:03:25.639 --> 0:03:28.079 So you know, the yield is one component, but how 0:03:28.080 --> 0:03:31.200 can we capture opportunities to create a better total return 0:03:31.440 --> 0:03:35.200 picture than the yield? What otherwise support? So for us, 0:03:35.200 --> 0:03:38.480 it comes back to credit sectors which continue to be resilient. 0:03:38.520 --> 0:03:41.080 But then looking underneath of that and saying where we 0:03:41.120 --> 0:03:43.600 see strength, where do we see recovery? Real estate that 0:03:43.640 --> 0:03:47.800 you highlighted, the consumer, some of the leisure sectors coming back, 0:03:47.920 --> 0:03:51.280 and we think there's still good opportunities to get to 0:03:51.600 --> 0:03:57.720 positive real returns through using a total return approach. All right, 0:03:57.840 --> 0:04:01.840 So if we look at the SMP five right now, 0:04:02.520 --> 0:04:05.600 and on the equity side of the equation, it seems 0:04:05.640 --> 0:04:09.320 priced to perfection and we're starting to realize that you've 0:04:09.360 --> 0:04:12.840 got to have earnings to impress. Um, you were talking, 0:04:12.920 --> 0:04:15.440 we were talking about the retailers. You mentioned them as well. Um, 0:04:15.480 --> 0:04:17.560 if you get margin compression because you can't pass on 0:04:18.800 --> 0:04:21.680 the higher prices, you're in trouble. How do you see 0:04:21.680 --> 0:04:24.640 that going forward? Yeah, I think it's a great question 0:04:24.640 --> 0:04:27.280 as we look back on their earning cycle. It's one 0:04:27.279 --> 0:04:29.760 of the things that was raised to date and through 0:04:29.760 --> 0:04:34.200 the third quarter we saw UM corporations effective and their 0:04:34.240 --> 0:04:38.120 ability to pass on the prices, but certainly important, especially 0:04:38.160 --> 0:04:40.159 if we don't have the demand to support it into 0:04:40.200 --> 0:04:43.359 into two. You know, it's been interesting. Even if we 0:04:43.440 --> 0:04:45.479 look at spread markets and we look at the curve, 0:04:45.600 --> 0:04:47.840 we do see some softening as we get these inflation. 0:04:48.440 --> 0:04:51.800 UM prints worried about both the ability to pass it 0:04:51.839 --> 0:04:54.320 on and what does it mean for earnings, but also 0:04:54.360 --> 0:04:56.599 if it forces the Fed to act, what it does 0:04:56.720 --> 0:05:00.719 to the overall broader support of the economy. Do you know, Woodward, 0:05:00.760 --> 0:05:02.719 thank you so much for joining us, or really appreciate 0:05:03.040 --> 0:05:05.040 your thoughts and you're taking the time, do you know, Woodward, 0:05:05.120 --> 0:05:12.440 President of McKay Shields looking at the market. You know, 0:05:12.480 --> 0:05:16.040 we had the COP twenty six conference in Glasgow over 0:05:16.080 --> 0:05:18.360 the last couple of weeks and I don't know, maybe 0:05:18.360 --> 0:05:21.320 it's just me, but I was expecting some big stuff, 0:05:21.360 --> 0:05:23.719 some big announcements, and I'm not sure looking back that 0:05:23.760 --> 0:05:27.120 I necessarily got that a lot of talk here, but boy, 0:05:27.160 --> 0:05:30.240 there's a certainly a lot to discuss here. Let's get 0:05:30.240 --> 0:05:32.440 into a little bit of that as we think about 0:05:32.520 --> 0:05:36.640 the President Biden's in Infrastructure Bill, renewable energy and what 0:05:36.680 --> 0:05:38.440 we did maybe get from COP twenty six. We can 0:05:38.480 --> 0:05:41.480 do that today with VJ. Monter Purgata. He's a president 0:05:41.480 --> 0:05:45.560 and CEO of Montrose Environmental Group. So, VJ, is my 0:05:45.680 --> 0:05:48.239 takeaway from COP twenty six? Am I being a little 0:05:48.320 --> 0:05:52.360 too pessimistic? Or what did you take away from that? Hey, Paul, 0:05:52.400 --> 0:05:54.240 Hey Matt, it's great to be talking to you guys. 0:05:54.480 --> 0:05:58.479 Um you know, I it's uh, it's kind of a 0:05:58.480 --> 0:06:01.840 tale of two cities for me, Paul, Matt. It's if 0:06:01.880 --> 0:06:04.839 you think about wanting to stabilize the impact of the climate, 0:06:06.160 --> 0:06:10.520 it's a monumental human endeavor um. And so you know, 0:06:10.640 --> 0:06:13.919 if you think about the the lack of consistency of 0:06:14.000 --> 0:06:20.080 political will um of standards um uh, and and the 0:06:20.080 --> 0:06:23.800 the need to build a consensus um, we're in effect 0:06:24.360 --> 0:06:28.000 the hold into the slowest adopters, right, So you know 0:06:28.040 --> 0:06:30.520 the need to put these leaders together and have the 0:06:30.520 --> 0:06:33.080 delegates come through and think about how to build that 0:06:33.120 --> 0:06:35.760 consensus is important. But then if you step back and 0:06:35.800 --> 0:06:40.040 think about the the the desire by all of us, 0:06:40.160 --> 0:06:42.839 and you alluded to it Paullen matt to wanting more 0:06:42.880 --> 0:06:47.360 action and clear goals UM and visible steps were far 0:06:47.440 --> 0:06:50.640 from it. So in that sense, it's a little disappointing 0:06:51.200 --> 0:06:53.400 UM and I think we haven't done enough to unleash 0:06:53.440 --> 0:06:56.200 the power of the market UM to help achieve some 0:06:56.240 --> 0:07:00.599 of those goals. So do we expect miss your market 0:07:00.760 --> 0:07:05.000 to do UM more than MR Government has done. I mean, 0:07:06.040 --> 0:07:08.279 we talk every day with people about how E s 0:07:08.320 --> 0:07:11.720 G is more than a trend now it's actually a strategy. 0:07:11.760 --> 0:07:15.120 But we still don't have any great metrics. Maybe that's 0:07:15.120 --> 0:07:17.640 one good thing that's come out of copy and we 0:07:17.720 --> 0:07:23.440 still have a lot of greenwashing. Yeah, I mean, look, 0:07:24.280 --> 0:07:26.720 my general view is that you need a little bit 0:07:26.760 --> 0:07:29.440 of MR Government and MR market, But depending on your 0:07:29.440 --> 0:07:33.240 goal UM, especially for all the reasons we just talked about, right, 0:07:33.320 --> 0:07:36.800 lack of lack of consistency and consensus, MR market is 0:07:36.840 --> 0:07:39.560 going to be much more powerful here UM to setting 0:07:40.080 --> 0:07:42.400 a set of frameworks and standards that everyone around the 0:07:42.440 --> 0:07:45.800 world can work towards. UM. E s G is a 0:07:45.800 --> 0:07:48.560 little bit of a different force Paul, and that it's 0:07:48.560 --> 0:07:50.640 one that we're both subject to and a lot of 0:07:50.640 --> 0:07:55.200 our investors are really interested in UM and I continue 0:07:55.240 --> 0:07:58.160 to struggle with what it means though by virtue of 0:07:58.200 --> 0:08:00.080 all the things we do that we think, is it 0:08:00.200 --> 0:08:02.480 from Montrose and for our business and for our clients. 0:08:02.880 --> 0:08:05.160 We've kind of accidentally fallen into being an E S 0:08:05.200 --> 0:08:09.080 G company and making a positive impact. But but yeah, 0:08:09.160 --> 0:08:11.800 we we hear those concerns from our investors all the time, 0:08:12.400 --> 0:08:15.320 you know, VJ. There's a lot of folks, including uh, 0:08:15.360 --> 0:08:18.720 Michael Bloomberg, the founder of Bloomberg LP and this radio 0:08:18.800 --> 0:08:22.640 operation that believes it's really up to the cities that's 0:08:22.640 --> 0:08:26.880 where you can get a lot of stuff done. You know, UM, 0:08:27.080 --> 0:08:29.680 how do you think about that strategy as opposed to 0:08:30.200 --> 0:08:35.400 getting the whole world together in Glasgow? It's I mean, 0:08:35.440 --> 0:08:37.880 the cities play a play a huge role, Pauly Matt, 0:08:37.960 --> 0:08:39.960 but I don't know that I fully agree that it's 0:08:40.040 --> 0:08:43.680 all up to the cities. UM. There are huge swaths 0:08:44.400 --> 0:08:49.760 of participants, UM, you know, in agricultural communities, in places 0:08:49.800 --> 0:08:52.120 where cities perhaps don't play as prominent of a role. 0:08:53.000 --> 0:08:55.160 Those of us like the two of you and me 0:08:55.559 --> 0:08:59.160 that go between cities all the time. I think cities 0:08:59.240 --> 0:09:04.080 have a material role, but not the only role to play. UM. 0:09:04.160 --> 0:09:08.079 So I struggle when there's kind of the responsibility shouldered 0:09:08.080 --> 0:09:09.800 by one group. I think this is one of those 0:09:10.280 --> 0:09:16.880 areas where you need businesses, communities, cities, countries, the transportation sector, 0:09:17.120 --> 0:09:21.839 the inter government UM agencies all working together. I mean, 0:09:21.840 --> 0:09:24.960 if you, if you think about the pandemic, is an 0:09:25.000 --> 0:09:28.240 example of how coordinated that was in terms of the response. 0:09:28.240 --> 0:09:31.480 And I'm not saying it was perfect. Um we we 0:09:32.000 --> 0:09:36.960 set a pretty monumental goal collectively across countries, within countries, 0:09:37.120 --> 0:09:39.960 private sector, public sector, and we made a hell of 0:09:39.960 --> 0:09:42.520 a dent um. It would be great to see something 0:09:42.760 --> 0:09:45.800 coordinated like that on the topic of this nature. What's 0:09:45.880 --> 0:09:50.920 the one most powerful change we could see? V G. 0:09:51.200 --> 0:09:54.000 You know, I I read a story I think a 0:09:54.040 --> 0:09:58.080 couple of weeks ago saying that, um, the major producers 0:09:58.640 --> 0:10:04.160 from the u US, from Germany, from Japan need to 0:10:04.760 --> 0:10:09.280 promise to stop building internal combustion engines, which you know, 0:10:09.320 --> 0:10:11.360 on the one hand, that hurts me, it's like a 0:10:11.400 --> 0:10:13.440 wooden stake deep into my heart. On the other hand, 0:10:13.440 --> 0:10:16.280 it makes a lot of sense, because, um, you know, 0:10:18.200 --> 0:10:23.040 they're responsible for a huge portion of carbon emissions personal vehicles, 0:10:23.520 --> 0:10:28.360 and it strikes me as also, Um, I don't know 0:10:28.360 --> 0:10:30.160 if the term ironic is right ever since a lot 0:10:30.240 --> 0:10:33.199 is more set. But that that that all these car 0:10:33.280 --> 0:10:35.920 makers like, we're going to electrify her whole fleet by 0:10:36.000 --> 0:10:38.040 But when you say, does that mean you won't be 0:10:38.160 --> 0:10:41.000 producing any internal combustion engines? Like, no, no, no, no, 0:10:41.000 --> 0:10:43.600 no no, We're still going to be building those. So 0:10:44.400 --> 0:10:46.160 is that do you think the biggest change that we 0:10:46.160 --> 0:10:51.480 could make as a society. No, no, I think, And 0:10:51.520 --> 0:10:53.840 I think part of the problem Paula Matt is that 0:10:54.000 --> 0:10:56.600 you know, we're trying to prescribe a solution. And this 0:10:56.679 --> 0:10:58.400 goes back to what I was trying to say earlier. 0:10:58.400 --> 0:11:00.400 I probably didn't say it all that eloquently. Be great 0:11:00.440 --> 0:11:03.000 to let the market help decide what that set of 0:11:03.040 --> 0:11:06.439 solutions should be. I think one of the biggest changes 0:11:06.440 --> 0:11:08.400 we could make is to set a price on carbon 0:11:08.600 --> 0:11:10.840 and to set in place some kind of cap and 0:11:10.880 --> 0:11:14.880 trade mechanism, but more on a global scale, and then 0:11:14.960 --> 0:11:20.680 let capital, innovation and market forces determine whether you want 0:11:20.679 --> 0:11:23.640 combustion engines or not, and how they would phase out 0:11:24.000 --> 0:11:28.160 if at all, um and which sectors and which parts 0:11:28.920 --> 0:11:32.160 um of the markets, of the economy, of the global 0:11:32.160 --> 0:11:35.120 production cycle, which by the way includes a whole lot 0:11:35.160 --> 0:11:38.160 more than each of us driving cars, how all that 0:11:38.160 --> 0:11:40.960 would play out. So I think I personally would go 0:11:41.520 --> 0:11:47.000 several steps higher than just picking on one aspect of 0:11:47.040 --> 0:11:51.079 a source of emissions d j um. The Infrastructure Bill 0:11:51.160 --> 0:11:53.920 Present Bidence Infrastructure Bill, it's got some stuff in there 0:11:54.080 --> 0:11:57.600 about the environment. Is it enough? Is it a good step? 0:11:57.640 --> 0:12:01.840 Do you think it's a it's a good step. I 0:12:01.880 --> 0:12:05.040 think um. You know, from Mantra's perspective, Polymat it's uh. 0:12:06.200 --> 0:12:10.080 The investments infrastructure which are good for our country, have 0:12:10.160 --> 0:12:13.040 a positive impact on our services and the demand for 0:12:13.040 --> 0:12:15.880 our services um and a lot of it. Uh. It 0:12:16.120 --> 0:12:19.160 requires anytime you build a road, anytime we build a bridge, 0:12:19.559 --> 0:12:22.080 already with existing rules and laws, you have to do 0:12:22.160 --> 0:12:26.200 environmental assessments um. Uh. And so in that sense it's good. 0:12:26.920 --> 0:12:29.160 I think it goes one step further, which is encouraging 0:12:29.200 --> 0:12:32.520 from my perspective. There's dollars in there allocated for the 0:12:32.520 --> 0:12:35.480 removal of the forever chemicals, the pflus chemicals from water, 0:12:35.880 --> 0:12:38.960 which is one of the biggest um UH concerns of 0:12:39.000 --> 0:12:44.160 our generation. Um Uh. There's water infrastructure investments, reuse and 0:12:44.240 --> 0:12:48.320 access investments. So all of those um types of initiatives 0:12:48.360 --> 0:12:50.000 I think are good for the environment and good for 0:12:50.000 --> 0:12:52.800 the community, which is why I think it's great. All right, 0:12:52.840 --> 0:12:55.160 VJ thank you so much for joining us. Really appreciate 0:12:55.520 --> 0:12:59.480 your time and getting your perspective. VJN. Pagata, President and 0:12:59.640 --> 0:13:03.680 c of Mantro's Environmental Group. Kind of working with companies 0:13:04.080 --> 0:13:08.120 UH to surprise support for cleaner air, cleaner water, and 0:13:08.160 --> 0:13:11.120 there's a lot to be done. In copy six was 0:13:11.240 --> 0:13:16.079 a move forward. You know, we're here, we are in November, 0:13:16.120 --> 0:13:19.560 mid November. Start time to get some of those year 0:13:19.640 --> 0:13:22.960 ahead outlook pieces. And boy, after the year we've had 0:13:22.960 --> 0:13:25.079 this year, a lot of folks, I'm not seeing a 0:13:25.080 --> 0:13:26.920 lot of consistency out there, a lot of consensus, I 0:13:26.960 --> 0:13:28.560 should say, but let's bring our next guest and see 0:13:28.559 --> 0:13:31.080 where we land here. David Coudla, found their CEO and 0:13:31.120 --> 0:13:34.720 ce IO of Mainstay Capital Management, joins us. David, you know, 0:13:34.800 --> 0:13:37.880 we just got through a pretty darn good earning season. 0:13:38.520 --> 0:13:42.480 Um you know, the FED is kind of communicated what 0:13:42.520 --> 0:13:45.600 they're gonna do here. It seems pretty clear. Does that 0:13:45.679 --> 0:13:51.000 set us up for a pretty good two? I think 0:13:51.000 --> 0:13:54.400 it sets us up for a pretty good It certainly 0:13:54.480 --> 0:13:56.640 I think sets us up for a good end of 0:13:56.720 --> 0:13:58.800 year run. But I quickly need to get into the 0:13:58.800 --> 0:14:03.439 corvette discussion. Oh please, do I have a C seven 0:14:03.720 --> 0:14:07.480 z R one Corvette? Holding onto it? I have a 0:14:07.679 --> 0:14:09.640 I have a C eight, but I have the C 0:14:09.880 --> 0:14:13.240 seven z R one because that is the last, you know, 0:14:13.280 --> 0:14:16.880 that is the front engine manual transmission, true manual transmission 0:14:16.880 --> 0:14:19.680 with a stick right that I will have in a corvette. 0:14:19.680 --> 0:14:22.360 So I'm holding onto that one. I have driven a 0:14:22.400 --> 0:14:25.400 couple of those, and I'm on the track. In fact, 0:14:25.520 --> 0:14:28.640 I got to drive a few UM C seven's on 0:14:28.680 --> 0:14:32.080 the track up at where was that new Jersey Motorsports Park. 0:14:32.720 --> 0:14:36.520 Gorgeous car, and really I think it was a huge 0:14:36.600 --> 0:14:40.360 breakthrough from the C six to the C seven. Um 0:14:40.440 --> 0:14:44.960 they made uh so much headway and it's the last 0:14:45.000 --> 0:14:47.600 of the front engine cars. So I will say, having 0:14:47.800 --> 0:14:49.920 lived in Germany now David for a few years and 0:14:49.920 --> 0:14:51.840 I've been driving a nine eleven on the auto bawn, 0:14:52.200 --> 0:14:55.760 it's not ideal for high speeds. You want the weight 0:14:55.840 --> 0:14:59.560 in the front when you're going fast. Sorry, my red 0:14:59.720 --> 0:15:03.320 railing this conversation, right, But I do want to try THEE. 0:15:03.760 --> 0:15:05.760 So if I'm ever near you, I'm gonna ask to 0:15:05.840 --> 0:15:09.640 drive that. Well, well we'll drive them both, and the 0:15:09.760 --> 0:15:11.600 and this and I drove my C. I've driven the 0:15:11.600 --> 0:15:15.840 C seven on the track, seven five horsepower zero one. 0:15:15.880 --> 0:15:19.400 That is a lot of fun. So um. Yeah, So 0:15:19.640 --> 0:15:22.600 through year end, we think it looks we've still got 0:15:22.600 --> 0:15:26.000 a very constructive setup for stocks, even given a little 0:15:26.040 --> 0:15:28.520 bit of weakness we've had over a couple of days 0:15:28.560 --> 0:15:32.560 last week or this week. As we get into you know, 0:15:32.640 --> 0:15:34.920 it becomes a function of we have some things on 0:15:34.960 --> 0:15:38.480 the horizon, right, we have what is going to happen 0:15:38.480 --> 0:15:41.280 here within the next several days on appointment for the 0:15:41.320 --> 0:15:45.640 FED chair, what happens with inflation, how high does inflation go? 0:15:45.760 --> 0:15:49.960 And and the FED needs to act more rather than less. Um. So, 0:15:50.120 --> 0:15:51.840 you know, some of the things that have been tail 0:15:51.880 --> 0:15:57.480 winds and accommodative FED become headwinds next year. But for now, 0:15:58.280 --> 0:16:00.560 a lot of liquidity in the system has been pushing 0:16:00.560 --> 0:16:03.280 stocks higher. We think we're good through at least year end. 0:16:04.040 --> 0:16:05.800 Matt was just complaining about how much it costs for 0:16:05.840 --> 0:16:08.960 him to fill up is f one fifty raptor And 0:16:09.000 --> 0:16:13.720 that kind of brings us back to that inflation discussion. Um, 0:16:13.760 --> 0:16:16.360 you know, how big of a headwin is that next year? 0:16:16.400 --> 0:16:19.440 And I suspect that higher gas prices are the are 0:16:19.440 --> 0:16:23.000 the biggest problem for inflation expectations because that's when people 0:16:23.080 --> 0:16:28.440 really notice. They're the biggest problem for President Biden for sure. 0:16:28.520 --> 0:16:31.960 And we've seen what's been happening, you know what the 0:16:32.000 --> 0:16:34.360 calls he's been making around the world for other countries 0:16:34.400 --> 0:16:37.560 to release their spr But yeah, the you know when 0:16:37.600 --> 0:16:39.960 we talk about inflation, and and really this is the 0:16:40.520 --> 0:16:43.000 you know, it's I think it's difficult to call what 0:16:43.160 --> 0:16:46.040 the the peak will be some time next year. But 0:16:46.040 --> 0:16:49.080 but here's where we're at. The inflation there is a 0:16:49.160 --> 0:16:52.560 problem because it's a supply chain. It's endurable goods primarily 0:16:52.600 --> 0:16:55.760 it is affecting you know, other goods and services, but 0:16:55.960 --> 0:17:00.360 primarily durable goods. And we know that that supply chain heel. 0:17:00.560 --> 0:17:03.720 It's already Los Angeles sports starting to heal a little 0:17:03.720 --> 0:17:06.280 bit already, but we know the supply chain will heal. 0:17:06.400 --> 0:17:09.520 So you know, I would submit by this time next year, 0:17:09.960 --> 0:17:12.200 we will see inflation a lot lower than these numbers 0:17:12.200 --> 0:17:15.000 we're seeing now between here and there. How much higher 0:17:15.000 --> 0:17:18.479 it goes anybody's call, But it's certainly you know, it's 0:17:18.480 --> 0:17:20.560 certainly risk the market. I think the key thing though, 0:17:20.720 --> 0:17:25.400 is it's primarily durable goods inflation. When the supply chain heals, 0:17:26.280 --> 0:17:29.840 we'll see we'll see inflation subside, and we'll see some 0:17:29.880 --> 0:17:33.320 of the secular forces like technology that have been deflationary. 0:17:33.560 --> 0:17:36.760 UH started to become more pronounced again. All right, David, 0:17:36.760 --> 0:17:39.399 thank you so much. We appreciate your calls on the 0:17:39.480 --> 0:17:42.800 market and your calls on the Corvette. Of course, I mean, 0:17:42.960 --> 0:17:44.840 now we know well where to go. I'm gonna go 0:17:44.880 --> 0:17:47.600 ahead and say, even though I care deeply about the 0:17:47.640 --> 0:17:51.240 Corvette and it's an incredible legacy, your call on inflation 0:17:51.680 --> 0:17:55.359 as um as we were just hearing from Katie Greifeld earlier, 0:17:55.560 --> 0:17:58.760 is incredibly important in this market. Yeah, it really is, 0:17:58.800 --> 0:18:01.359 so we appreciated it. Could look coming on, founder CEO 0:18:01.400 --> 0:18:07.440 and CIO of main Stay Capital Management. Now, let's bring 0:18:07.480 --> 0:18:09.280 in my friend and yours, Berry Rid Holtz. He's a 0:18:09.280 --> 0:18:15.240 Bloomberg opinion columnist, UH, and we have brought back David Coudla. 0:18:15.359 --> 0:18:17.560 We did. Yeah. I don't know if, boy, I don't 0:18:17.560 --> 0:18:20.639 know if the producers told Barry why. Um, but Barry, 0:18:20.680 --> 0:18:22.760 we were talking a little bit about corvettes and I 0:18:22.840 --> 0:18:27.320 was mentioning your C two, and then we talked to 0:18:27.400 --> 0:18:31.080 David Coudla a little bit earlier and he said, you know, 0:18:31.119 --> 0:18:33.159 before we get to inflation, let me get on this 0:18:33.240 --> 0:18:36.879 corvette discussion. He is the CEO of main Stay Capital 0:18:36.920 --> 0:18:41.880 Management and also a corvette enthusiast. He has a C seven. Um, 0:18:41.880 --> 0:18:45.520 which one do you have? David? C seven z R 0:18:45.640 --> 0:18:50.040 one and a sting right. I like the I think 0:18:50.080 --> 0:18:52.920 they did an amazing job on that. I like both 0:18:52.960 --> 0:18:56.360 of them. Um. The only ones that I've driven are 0:18:56.440 --> 0:18:59.800 the C six, which I loved but I couldn't keep 0:19:00.440 --> 0:19:03.399 um the back wheels on the ground, and the C seven, 0:19:03.520 --> 0:19:05.879 which I spent a considerable amount of time with on 0:19:05.920 --> 0:19:09.639 the track. I thought they were both incredible. Um, Barry, 0:19:09.680 --> 0:19:12.040 what do you think about the shift from the front 0:19:12.080 --> 0:19:14.800 engine to the mid engine? The C eight is the 0:19:14.840 --> 0:19:17.359 first time they've moved the engine from you know, the 0:19:17.400 --> 0:19:20.800 front wheels to behind the driver. Well, if you want 0:19:20.840 --> 0:19:25.119 to remain competitive in the current marketplace, at least in 0:19:25.200 --> 0:19:28.919 terms of internal combustion engine and be able to compete 0:19:28.960 --> 0:19:32.800 with Ferrari and Lamborghini and McLaren and the four GT 0:19:32.960 --> 0:19:35.879 and go down the list the oud R eight. You 0:19:36.080 --> 0:19:40.520 there are just so many obvious benefits of moving mid engine. 0:19:40.560 --> 0:19:44.680 It's it's more balanced, it handles more naturally shifting weight 0:19:44.720 --> 0:19:46.560 from front to back. If you want to spend time 0:19:46.560 --> 0:19:50.960 on track, mid engine is really very much um how 0:19:51.000 --> 0:19:54.600 you're going to ring out those last uh hundreds of 0:19:54.640 --> 0:19:58.719 a second on on your lap time versus a tail happy, 0:19:58.920 --> 0:20:03.760 front engine, rear driven traditional muscle car. So, David, do 0:20:03.800 --> 0:20:10.320 you actually feel the difference? Yes, you do. And GM 0:20:10.520 --> 0:20:13.720 we have a lot of GM clients. The chief engineer 0:20:13.800 --> 0:20:18.120 of of the C seven Corvette is a client. Uh. 0:20:18.520 --> 0:20:21.520 We we have a lot of GM clients and and 0:20:21.640 --> 0:20:25.040 a lot of discussions about all this and the you know, 0:20:25.040 --> 0:20:27.679 I agree with Barry. I think GM did an excellent 0:20:27.800 --> 0:20:31.520 job of squeezing everything they could out of a front 0:20:31.520 --> 0:20:34.840 engine vehicle. But you know, competing on the track with 0:20:34.880 --> 0:20:38.439 these other mid engine cars like Ferrari, and when you 0:20:38.480 --> 0:20:41.119 know everybody starts seeing the numbers for what you know, 0:20:41.160 --> 0:20:42.720 they're going to be able to do. The Zeo six 0:20:42.800 --> 0:20:46.439 is coming. Uh. I'm first in line at at a 0:20:46.520 --> 0:20:49.960 Chevy dealership for the zero six, which will be six 0:20:50.200 --> 0:20:54.359 dred and seventy horsepower. Um, we're gonna be put I 0:20:54.440 --> 0:20:57.280 say we. GM is gonna be putting up some numbers 0:20:57.320 --> 0:20:59.919 that are going to scare some of these car may 0:21:00.920 --> 0:21:07.480 that are at four, five, six times the cost of that. 0:21:07.480 --> 0:21:12.919 That's the amazing thing is on a dollar per horsepower rating, 0:21:13.400 --> 0:21:16.080 what what General Motors was able to accomplish with this 0:21:16.240 --> 0:21:20.560 car is really quite astonishing that the next closest thing 0:21:21.359 --> 0:21:24.240 is like a Mustang three fifty or a Mustang g 0:21:24.400 --> 0:21:27.960 T five that Ford has put out, and you're not 0:21:27.960 --> 0:21:29.840 going to get the same sort of performance, You're not 0:21:29.880 --> 0:21:32.640 going to get the same sort of lap times nor 0:21:32.840 --> 0:21:36.280 the just really uh you know, I know some people 0:21:36.520 --> 0:21:40.400 find the new VET a little over the top. Um, 0:21:40.440 --> 0:21:44.000 but so are all of the McLarens and Lamborghinis. It 0:21:44.160 --> 0:21:48.120 is a car that can compete toe to toe with 0:21:48.240 --> 0:21:51.000 the best automobiles in the world. It's it's quite an 0:21:51.040 --> 0:21:56.600 accomplishment with a base price of fifty ridiculous. Barry and David, 0:21:56.600 --> 0:21:59.160 I have to ask you, guys, um, I think one 0:21:59.200 --> 0:22:01.600 of the reasons when I see you guys, and I'll 0:22:01.640 --> 0:22:03.520 throw Matt in there as well. Driving down the road 0:22:03.560 --> 0:22:05.960 and these awesome, awesome cars. I think one of the 0:22:06.000 --> 0:22:09.760 reasons you like doing that is because it sounds so cool. 0:22:10.200 --> 0:22:13.760 As these things go electric, it ain't gonna sound so cool. 0:22:14.080 --> 0:22:17.200 What do you guys think about that? I'm okay with that. 0:22:17.359 --> 0:22:20.320 I mean, my my C two has side pipes. It 0:22:20.880 --> 0:22:25.200 is loud, like you hear me coming to towns away. 0:22:25.480 --> 0:22:28.560 The ability to sort of stealthily sneak up and and 0:22:28.600 --> 0:22:31.439 pass the police without them seeing you there, there are 0:22:31.480 --> 0:22:34.720 advantages to that. And I try and stay, you know, 0:22:34.840 --> 0:22:38.360