WEBVTT - Single Best Idea with Tom Keene: Steven Major & Jim Caron

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>A single best idea, my last of the year. Thank

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<v Speaker 2>you so much for the support. This has just been

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<v Speaker 2>a little thing we've pulled out there. I figure people

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<v Speaker 2>are listening to Odd Lots and Everybody's Business and all

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<v Speaker 2>our wonderful podcasts. They're fifteen twenty minutes long. And the

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<v Speaker 2>goal here was just a little vignette that you can

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<v Speaker 2>throw in and listen to when the mood strikes. Our

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<v Speaker 2>mood was to go for better conversation, longer conversation with

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<v Speaker 2>smarter people, and to have back to back Stephen Major

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<v Speaker 2>and Jim Kern. Major now from HSBC and legendary Jim

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<v Speaker 2>Karn called him the James Bond of fixed income. Stephen

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<v Speaker 2>Major now at Tradition based out of Dubai. We celebrate

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<v Speaker 2>that new set of duties for mister Major and then

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<v Speaker 2>Jim Karen, iconic at Morgan Stanley. Back to back. That's

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<v Speaker 2>the way we finished the year strong. You're Stephen Major,

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<v Speaker 2>and you need to look at the five year yield.

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<v Speaker 3>If you want one number on the curve, it's probably

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<v Speaker 3>five to thirty year. You can ask Jim next. Send

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<v Speaker 3>in my regards, but Jim will have an idea as well.

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<v Speaker 3>I think twos ten's can be quite distorted because two's

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<v Speaker 3>is about the FED. That that is as simple as that.

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<v Speaker 3>Two's is not a credit risk story. It's not a

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<v Speaker 3>sovereign risk story. It's not about auctions or anything. Really,

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<v Speaker 3>twos is safe, twos is about the FED. Tens starts

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<v Speaker 3>to be a bit more cyclical, a bit more about

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<v Speaker 3>the data and looking into longer term sort of trends.

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<v Speaker 3>I think fives thirties is your best measure of the

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<v Speaker 3>curve because you're capturing something that is close to where

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<v Speaker 3>the FED is and sensitive to rates, but not quite

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<v Speaker 3>sensitive as twos, and I think I think it captures

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<v Speaker 3>the whole story of five thirties.

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<v Speaker 2>You're Stephen Major of Tradition. He was really good. I

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<v Speaker 2>asked him about Dubai and I just said, it's like

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<v Speaker 2>a new Dubai and he was, Adam, I've been to

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<v Speaker 2>Dubai four or five times and you know, it was

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<v Speaker 2>earl in the boom if you will, and it was

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<v Speaker 2>a little shaky. And he says, that's really gone. It's

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<v Speaker 2>really captured a destination city much more than in previous decades.

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<v Speaker 2>Stephen Major from Dubai with tradition on to Jim Karen

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<v Speaker 2>and Morgan Stanley. Yes, out with an outlook. But Jim

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<v Speaker 2>Karn here on the fears we hold in fixed income.

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<v Speaker 1>Default risks are relatively low. We're not really seeing materially

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<v Speaker 1>a material widening of default risks or increase in default risks.

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<v Speaker 1>Interest rates, while they may drift a little bit higher

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<v Speaker 1>in the back end, they don't seem like they're moving

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<v Speaker 1>out of control. You know, they might go a little higher,

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<v Speaker 1>but certainly not to levels that I think we'll destroy

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<v Speaker 1>the equity markets. So I think twenty twenty six, at

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<v Speaker 1>least from the bond markets perspective, I don't think the

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<v Speaker 1>bond market's going to get in the way of equities.

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<v Speaker 2>Jim Karen of Morgan Stanley. We're on on podcasts, on Apple,

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<v Speaker 2>on Spotify, on YouTube podcasts. Single best Idea