1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:21,240 Speaker 1: on Apple car Play or Android Auto with the Bloomberg 4 00:00:21,320 --> 00:00:24,840 Speaker 1: Business app. Listen on demand wherever you get your podcasts, 5 00:00:25,280 --> 00:00:27,040 Speaker 1: or watch us live on YouTube. 6 00:00:27,360 --> 00:00:30,800 Speaker 2: Robert Kaplan, of course, the former president of the Dallas Feather. 7 00:00:30,800 --> 00:00:34,040 Speaker 2: There's five people for chairman. I would suggest Kaplin could 8 00:00:34,080 --> 00:00:38,080 Speaker 2: be six chairman. Have you spoken to mister Bessant about 9 00:00:38,080 --> 00:00:38,760 Speaker 2: this position? 10 00:00:38,960 --> 00:00:42,040 Speaker 3: Who are more than qualified? I am busy in my 11 00:00:42,240 --> 00:00:46,840 Speaker 3: job at Goldman Sachson, very happily. So see the Turstan's there. 12 00:00:47,000 --> 00:00:48,800 Speaker 2: Yeah, it's like when you talk to me, why don't 13 00:00:48,840 --> 00:00:50,519 Speaker 2: you save the interviewing. 14 00:00:51,680 --> 00:00:55,360 Speaker 4: A question about the All right, so we have five 15 00:00:55,640 --> 00:00:59,880 Speaker 4: unofficial nominees out there, according to Treasury Secretary Scott Besson, 16 00:01:00,000 --> 00:01:03,520 Speaker 4: and we all kind of expect that it whoever is chosen. 17 00:01:03,680 --> 00:01:07,200 Speaker 4: Will you pretty much stick to President trump'sdubbish stance like 18 00:01:07,240 --> 00:01:10,480 Speaker 4: a regulation all of that? What about the coordination between 19 00:01:10,480 --> 00:01:12,840 Speaker 4: the Federal Reserve and the US Treasury? What might that 20 00:01:12,920 --> 00:01:13,240 Speaker 4: look like? 21 00:01:14,040 --> 00:01:16,840 Speaker 3: So let me just make it. When it comes to 22 00:01:17,040 --> 00:01:21,920 Speaker 3: monetary policy, actually, the administration will pick the chair. But 23 00:01:22,640 --> 00:01:26,679 Speaker 3: the chair, once he's confirmed and in the job, is 24 00:01:26,720 --> 00:01:30,200 Speaker 3: going to have to do what he believes and the 25 00:01:30,240 --> 00:01:33,440 Speaker 3: Committee believes is the right thing to do, without regard, 26 00:01:33,520 --> 00:01:37,520 Speaker 3: in my opinion, to political influence or political considerations. The 27 00:01:37,600 --> 00:01:43,160 Speaker 3: way they'll coordinate with the administration on regulatory policy, for sure, 28 00:01:43,200 --> 00:01:46,199 Speaker 3: there's enormous coordination. There has been for a long time, 29 00:01:46,560 --> 00:01:49,320 Speaker 3: and so they'll coordinate that way. I think you will 30 00:01:49,360 --> 00:01:51,840 Speaker 3: see in the future more coordination on the balance sheet. 31 00:01:51,880 --> 00:01:54,840 Speaker 3: That's a possibility. That has a six and a fraction 32 00:01:55,000 --> 00:01:59,120 Speaker 3: trillion portfolio in treasuries and mortgage backed securities. To the 33 00:01:59,200 --> 00:02:03,720 Speaker 3: extent they coordinated more with the Treasury on duration and 34 00:02:03,760 --> 00:02:06,240 Speaker 3: the composition, that that would be a change. But that 35 00:02:06,280 --> 00:02:07,040 Speaker 3: wouldn't surprise. 36 00:02:07,080 --> 00:02:09,920 Speaker 4: How much coordination is there right now or previous to 37 00:02:10,080 --> 00:02:10,800 Speaker 4: President Trump. 38 00:02:11,240 --> 00:02:17,840 Speaker 3: I think there's on regulatory side significant on the balance sheet, 39 00:02:17,919 --> 00:02:20,639 Speaker 3: I think other than being aware of issue and schedule, 40 00:02:20,960 --> 00:02:23,880 Speaker 3: I think less. So I think that's something that could 41 00:02:23,880 --> 00:02:24,680 Speaker 3: get revisited. 42 00:02:25,000 --> 00:02:25,959 Speaker 5: I want you to talk. 43 00:02:26,000 --> 00:02:28,280 Speaker 2: We're gonna have Robert Kappan back with us for a 44 00:02:28,360 --> 00:02:31,960 Speaker 2: lengthy conversation here at the top of the hour. The 45 00:02:32,080 --> 00:02:36,760 Speaker 2: distance from Dallas to Oklahoma is two hundred and six miles, 46 00:02:37,280 --> 00:02:44,200 Speaker 2: and they are planning out an urbanization or businessization up 47 00:02:44,240 --> 00:02:48,200 Speaker 2: to the Oklahoma border. I don't think Americans understand the 48 00:02:48,280 --> 00:02:50,919 Speaker 2: scope and scale of the Texas boom. 49 00:02:51,680 --> 00:02:54,200 Speaker 3: Well, so I was just in Oklahoma City and I 50 00:02:54,240 --> 00:03:00,239 Speaker 3: go there regularly. It's fantastic companies located in Oklahoma City. Obviously, 51 00:03:00,880 --> 00:03:06,160 Speaker 3: there is a significant trend of migration of people and 52 00:03:06,240 --> 00:03:11,440 Speaker 3: firms to Texas. We're outgrowing the country, and so I 53 00:03:11,480 --> 00:03:14,720 Speaker 3: think that's why you're going to continue to see people 54 00:03:14,919 --> 00:03:18,080 Speaker 3: and companies migrating to the state and to the region. 55 00:03:18,320 --> 00:03:20,639 Speaker 5: I mean, it just doesn't end. Doesn't You want to 56 00:03:20,639 --> 00:03:21,760 Speaker 5: get into your police. 57 00:03:21,639 --> 00:03:25,079 Speaker 4: Now, Well, I mean we see banks, for instance, you know, 58 00:03:25,800 --> 00:03:28,360 Speaker 4: trying to buy each other. Huntington Bank yesterday just purchasing 59 00:03:28,440 --> 00:03:30,919 Speaker 4: or announcing it's going to purchase Cadence right, And part 60 00:03:31,000 --> 00:03:33,519 Speaker 4: of that is because it wants more access to the 61 00:03:33,600 --> 00:03:35,720 Speaker 4: Texas market. And that seems to be a driver for 62 00:03:35,760 --> 00:03:38,400 Speaker 4: a lot of the regional bank consolidation, This idea that 63 00:03:38,520 --> 00:03:41,280 Speaker 4: they want to be they want to have that presence 64 00:03:41,440 --> 00:03:44,960 Speaker 4: in Texas, Northern Texas to be particular, because that Dallas 65 00:03:45,040 --> 00:03:48,840 Speaker 4: region and northwards is where most of the growth is happening, yes, and. 66 00:03:49,320 --> 00:03:52,400 Speaker 3: There is enormous growth. Cadence is headquartered in Houston. 67 00:03:52,560 --> 00:03:55,240 Speaker 6: Two headquarters right, one in Houston, went in Tuplam, Mississippi. 68 00:03:55,360 --> 00:03:58,480 Speaker 3: That's right, and then Vera Text which they also bought, 69 00:03:58,600 --> 00:04:02,440 Speaker 3: is in Dallas. And so yeah, there is and we 70 00:04:02,600 --> 00:04:06,960 Speaker 3: see it every day. Companies are migrating there. People are 71 00:04:07,040 --> 00:04:12,720 Speaker 3: coming there. It's a central location, there's no state tax, 72 00:04:13,400 --> 00:04:16,839 Speaker 3: it's very welcoming to business, and so it's not surprising 73 00:04:17,240 --> 00:04:20,160 Speaker 3: that banks around the country would be looking for opportunities 74 00:04:20,240 --> 00:04:21,720 Speaker 3: to be bigger in Texas. 75 00:04:21,800 --> 00:04:24,640 Speaker 2: Let's come back with Robert Kapp on a really stellar 76 00:04:24,800 --> 00:04:27,440 Speaker 2: term as president of the Dallas fedd and all his 77 00:04:27,560 --> 00:04:29,280 Speaker 2: work at Harvard over the years. I want to talk 78 00:04:29,279 --> 00:04:31,480 Speaker 2: to him about business, enterprise. 79 00:04:31,600 --> 00:04:35,760 Speaker 5: The great inflation, mister Kapp, but it's out of controls. 80 00:04:36,240 --> 00:04:38,880 Speaker 3: So I taught at the Business School, and at the 81 00:04:38,920 --> 00:04:41,680 Speaker 3: Business School there is a curve and the highest grade 82 00:04:41,839 --> 00:04:44,039 Speaker 3: que the highest grade I ever gave is a high pass, 83 00:04:44,440 --> 00:04:48,159 Speaker 3: high pass pass low pass, And it's the. 84 00:04:48,200 --> 00:04:51,440 Speaker 2: Divide year between economics. Jason Furman's over there with real 85 00:04:51,520 --> 00:04:54,320 Speaker 2: students doing real work, and there's a whole bunch of 86 00:04:54,480 --> 00:04:58,560 Speaker 2: other degrees where everybody gets an a that that shatters 87 00:04:58,640 --> 00:04:59,080 Speaker 2: a school. 88 00:05:00,720 --> 00:05:02,480 Speaker 3: Well, I can't. I have no expert on it, so 89 00:05:02,560 --> 00:05:04,320 Speaker 3: I can't speak to you, Tom Keen. 90 00:05:04,400 --> 00:05:06,720 Speaker 2: Is Scarlett Foo with you this morning across the nation 91 00:05:07,640 --> 00:05:11,159 Speaker 2: for American around the world, our new digital effort YouTube. 92 00:05:11,320 --> 00:05:17,240 Speaker 2: Subscribe to Bloomberg Podcast Scarlett Foo with Robert Kaplan of Golden. 93 00:05:16,920 --> 00:05:19,160 Speaker 4: Sechs, vice chairman of Goldman Sacks, and of course the 94 00:05:19,240 --> 00:05:22,720 Speaker 4: former president of the Dallas Fed joining us as the 95 00:05:22,800 --> 00:05:26,679 Speaker 4: Federal Reserve begins day one of their deliberations on interest 96 00:05:26,760 --> 00:05:29,080 Speaker 4: rate policy. We'll get the decision tomorrow at two pm. 97 00:05:29,880 --> 00:05:33,200 Speaker 4: Rob What is likely to be the surprise from this meeting? 98 00:05:35,560 --> 00:05:37,400 Speaker 3: I don't know they're going to be surprises. They're going 99 00:05:37,480 --> 00:05:40,760 Speaker 3: to cut tomorrow, they're going to announce. I would guess 100 00:05:40,920 --> 00:05:45,320 Speaker 3: they're going to end the quantitative tightening. Those aren't surprises. 101 00:05:45,800 --> 00:05:50,480 Speaker 3: I think the only possible surprise is I think Jpalll 102 00:05:51,040 --> 00:05:54,520 Speaker 3: I believe, should leave the door open to cutting in December. 103 00:05:54,880 --> 00:05:57,599 Speaker 3: The markets are pricing in they're going to cut in December, 104 00:05:57,839 --> 00:06:00,880 Speaker 3: but he's going to want to leave some optionality just 105 00:06:01,040 --> 00:06:04,520 Speaker 3: in case they're getting closer to neutral. Inflation is still 106 00:06:04,600 --> 00:06:07,560 Speaker 3: running seventy five one hundred basis points above target, so 107 00:06:08,480 --> 00:06:12,560 Speaker 3: it might be taken some as a little bit more 108 00:06:14,839 --> 00:06:18,440 Speaker 3: independent wanting optionality, although I don't think they should be 109 00:06:18,520 --> 00:06:19,120 Speaker 3: surprised by that. 110 00:06:19,320 --> 00:06:20,320 Speaker 5: A trick to have you an here. 111 00:06:20,720 --> 00:06:22,440 Speaker 2: The only one I can think of as equivalent is 112 00:06:22,560 --> 00:06:26,480 Speaker 2: Richard Fisher the modern age folks. Robert Kaplan's understanding a 113 00:06:26,600 --> 00:06:30,440 Speaker 2: business process, how to succeed and also how to enjoy 114 00:06:30,560 --> 00:06:32,200 Speaker 2: failure is second. 115 00:06:32,000 --> 00:06:36,159 Speaker 5: To none nationwide. Mark Winn and Lillian Deere the Dallas Fed. 116 00:06:36,680 --> 00:06:41,159 Speaker 5: This year, advances in AI will boost productivity. 117 00:06:41,160 --> 00:06:49,120 Speaker 3: For who, mister Kaplan, Yeah, so ideally ultimately for the 118 00:06:49,160 --> 00:06:53,800 Speaker 3: whole for the whole economy for sure in the near term, 119 00:06:53,880 --> 00:06:56,360 Speaker 3: over the next years, for business. The trick will be 120 00:06:57,040 --> 00:07:00,000 Speaker 3: to get those gains and the whole economy the world. 121 00:07:00,000 --> 00:07:03,360 Speaker 3: Workers that lose their jobs will have to get retrained 122 00:07:03,520 --> 00:07:07,160 Speaker 3: and redeployed into other productive jobs. And that's what we 123 00:07:07,320 --> 00:07:09,039 Speaker 3: haven't been great at in the NIOW. 124 00:07:09,040 --> 00:07:11,040 Speaker 2: I was going to say good morning to North Carolina 125 00:07:11,200 --> 00:07:15,240 Speaker 2: in the Deep South, as a clothing manufacturing disappeared in 126 00:07:15,320 --> 00:07:17,760 Speaker 2: the last part of the century, all of us have 127 00:07:17,840 --> 00:07:22,240 Speaker 2: been humbled by our elders' failures at retraining. 128 00:07:22,080 --> 00:07:23,520 Speaker 5: We're not Germany, are we? 129 00:07:24,280 --> 00:07:24,320 Speaker 7: No. 130 00:07:24,680 --> 00:07:28,200 Speaker 3: And the problem is this can't be done nationally. It 131 00:07:28,280 --> 00:07:31,040 Speaker 3: has to be done locally. Worker mobility. If I lose 132 00:07:31,120 --> 00:07:34,600 Speaker 3: my job in Texas, I'm not going to move a 133 00:07:34,720 --> 00:07:37,400 Speaker 3: thousand miles to get a new job. Ideally, in one 134 00:07:37,480 --> 00:07:40,360 Speaker 3: hundred mile radius, I can go to a junior college, 135 00:07:40,480 --> 00:07:44,000 Speaker 3: get retrained, and find another job. And that's why it's 136 00:07:44,040 --> 00:07:44,440 Speaker 3: so hard. 137 00:07:45,080 --> 00:07:49,080 Speaker 4: So this is the local government's responsibility or the company's responsibilities, 138 00:07:49,520 --> 00:07:51,320 Speaker 4: industry's responsibility. 139 00:07:51,200 --> 00:07:55,200 Speaker 3: A little bit of increasingly both. I think companies are 140 00:07:55,280 --> 00:07:58,200 Speaker 3: realizing if you want a vibrant community and state, you 141 00:07:58,360 --> 00:08:01,760 Speaker 3: need to provide the faculty and money for retraining. But 142 00:08:01,880 --> 00:08:04,720 Speaker 3: you need a vibrant high Schools are doing it. P tech, 143 00:08:06,440 --> 00:08:09,280 Speaker 3: junior colleges are doing. At colleges so far are not 144 00:08:09,520 --> 00:08:12,000 Speaker 3: doing it. Maybe that will change, but it's going to 145 00:08:12,040 --> 00:08:16,400 Speaker 3: take private business and these educational institutions, and then you've 146 00:08:16,400 --> 00:08:19,200 Speaker 3: got to make people aware that these jobs are available. 147 00:08:19,360 --> 00:08:21,200 Speaker 6: Is this copecks that shareholders will reward? 148 00:08:24,160 --> 00:08:31,720 Speaker 3: It is investment, not that huge investment that makes a 149 00:08:31,920 --> 00:08:37,959 Speaker 3: vibrant city, state and national economy, improves us competitiveness to 150 00:08:38,040 --> 00:08:42,040 Speaker 3: get these people ready to put and remember my workforce 151 00:08:42,080 --> 00:08:43,800 Speaker 3: growth this year is down to I don't know if 152 00:08:43,840 --> 00:08:46,840 Speaker 3: it's zero, it's close to zero, very low. We need 153 00:08:46,960 --> 00:08:50,880 Speaker 3: to make use of every able bodied worker and help 154 00:08:50,920 --> 00:08:53,480 Speaker 3: them get in and stay in the workforce. We've got 155 00:08:53,559 --> 00:08:54,160 Speaker 3: to get better at this. 156 00:08:54,360 --> 00:08:55,520 Speaker 5: So than Ludit America. 157 00:08:55,559 --> 00:08:58,400 Speaker 2: And of course Kaplin Folks comes off the prairie of Kansas, 158 00:08:58,440 --> 00:09:00,800 Speaker 2: so he's got a whole different view from three zip 159 00:09:00,880 --> 00:09:03,800 Speaker 2: codes in the East Coast. And in the answer Robert 160 00:09:03,920 --> 00:09:08,120 Speaker 2: Kappan of Kansas is we have failed and failed and 161 00:09:08,320 --> 00:09:13,080 Speaker 2: failed at this. Within are lockey and individualistic. We're not Germany, 162 00:09:13,320 --> 00:09:14,640 Speaker 2: we're not socialized. 163 00:09:14,880 --> 00:09:16,839 Speaker 5: We're not going to do that. What is the this 164 00:09:17,000 --> 00:09:20,760 Speaker 5: is where you shine. What is the political catalyst to 165 00:09:21,000 --> 00:09:25,560 Speaker 5: change our individualistic behavior to get people that do want 166 00:09:25,600 --> 00:09:28,520 Speaker 5: to be retrained or even those that don't want to 167 00:09:28,559 --> 00:09:31,400 Speaker 5: be retrained into the AI process. 168 00:09:31,679 --> 00:09:33,120 Speaker 3: And by the way, this is round two of this. 169 00:09:33,679 --> 00:09:38,760 Speaker 3: Globalization led to this, and we struggled to redeploy people 170 00:09:38,840 --> 00:09:40,600 Speaker 3: and there was a political backlabe. 171 00:09:40,240 --> 00:09:42,959 Speaker 5: Well stiglit, separate, discontented. Are we going to reduce it? 172 00:09:43,240 --> 00:09:47,880 Speaker 3: So if you don't do this better on AI and 173 00:09:48,040 --> 00:09:51,800 Speaker 3: technology enabled disruption, you're going to get again political backlash, 174 00:09:52,280 --> 00:09:54,960 Speaker 3: and listen, there's eighty five million workers in this country 175 00:09:55,240 --> 00:09:57,400 Speaker 3: that make fifty to fifty five rand a year or less. 176 00:09:57,400 --> 00:10:00,640 Speaker 3: They've lost twenty five percent purchasing power, Their job depend 177 00:10:00,679 --> 00:10:04,720 Speaker 3: on what they do, are somewhat threatened, and they are 178 00:10:04,880 --> 00:10:05,959 Speaker 3: voting accordingly. 179 00:10:06,160 --> 00:10:08,520 Speaker 4: Okay, so someone needs to step up. Have we seen 180 00:10:08,679 --> 00:10:11,560 Speaker 4: any good examples of this elsewhere around the world? Did 181 00:10:11,640 --> 00:10:14,120 Speaker 4: anyone figure it out? Last summer on during the wave 182 00:10:14,160 --> 00:10:14,800 Speaker 4: of globalization? 183 00:10:15,160 --> 00:10:17,959 Speaker 3: Germany is better, and I would say there are bright 184 00:10:18,040 --> 00:10:22,200 Speaker 3: spots in the United States. Dade Community College in Florida, 185 00:10:22,760 --> 00:10:26,760 Speaker 3: Dallas County Community College in Texas. It's not that there 186 00:10:26,880 --> 00:10:32,080 Speaker 3: aren't in the premium basin. There's a fantastic skills retraining effort. 187 00:10:32,160 --> 00:10:33,800 Speaker 3: It's not that we don't do it well in the 188 00:10:33,960 --> 00:10:36,680 Speaker 3: United States, but it's uneven at that. 189 00:10:36,720 --> 00:10:40,320 Speaker 5: Skill Why can't we generate a Fidel crook? Trump could 190 00:10:40,320 --> 00:10:41,720 Speaker 5: be elected to a fourth term. 191 00:10:42,120 --> 00:10:46,079 Speaker 2: I think generates a federal program that diffuses down to 192 00:10:46,160 --> 00:10:47,040 Speaker 2: the state level. 193 00:10:47,240 --> 00:10:50,400 Speaker 3: So I would love it if we had more national 194 00:10:50,480 --> 00:10:53,920 Speaker 3: discussion about this. And I love college. I taught in 195 00:10:54,000 --> 00:10:58,520 Speaker 3: a college. However, instead of giving money for more kids 196 00:10:58,559 --> 00:11:00,640 Speaker 3: to go to college, who aren't graduate. Wait, and even 197 00:11:00,679 --> 00:11:04,800 Speaker 3: in six years, channeling more of the money into skills 198 00:11:04,880 --> 00:11:07,800 Speaker 3: training and encouraging kids to go for skills training first, 199 00:11:08,080 --> 00:11:10,079 Speaker 3: I think we would have a better economy and a 200 00:11:10,160 --> 00:11:12,439 Speaker 3: more prosperous population. 201 00:11:13,320 --> 00:11:14,360 Speaker 6: Yeah, that makes sense. 202 00:11:14,440 --> 00:11:16,319 Speaker 4: And we've been talking about this for a long time 203 00:11:16,400 --> 00:11:19,640 Speaker 4: since the Great Financial Crisis, and it feels like efforts 204 00:11:19,679 --> 00:11:22,040 Speaker 4: get stalled along the way because there's fires to put 205 00:11:22,080 --> 00:11:23,240 Speaker 4: out the local level. 206 00:11:23,720 --> 00:11:28,319 Speaker 3: At the local level, you'll see there's been great progress made, Okay, 207 00:11:28,520 --> 00:11:31,439 Speaker 3: it's just there isn't a lot of discussion about it 208 00:11:31,480 --> 00:11:34,599 Speaker 3: from what I can tell at the national level, and 209 00:11:34,760 --> 00:11:37,480 Speaker 3: it's uneven again through the United States. And you're also 210 00:11:37,520 --> 00:11:41,520 Speaker 3: going to remember forty forty five states populations are flat 211 00:11:41,600 --> 00:11:44,839 Speaker 3: to down. So state like Texas, state like Florida is 212 00:11:44,960 --> 00:11:47,439 Speaker 3: good at it. We've got the money to fund it, 213 00:11:47,720 --> 00:11:51,040 Speaker 3: We've got the migration of people and firms coming. I 214 00:11:51,080 --> 00:11:55,160 Speaker 3: think we've got to make it more prevalent nationwide. You'll 215 00:11:55,200 --> 00:11:58,599 Speaker 3: recall with globalization in the Clinton administration there was the 216 00:11:58,679 --> 00:12:04,080 Speaker 3: promise for retraining, but that money went to lower the deficit. Yeah, 217 00:12:04,320 --> 00:12:07,760 Speaker 3: and so there's a number of problems on retraining. One, 218 00:12:08,440 --> 00:12:11,800 Speaker 3: and there's either lack of facilities that I can't do 219 00:12:11,880 --> 00:12:14,839 Speaker 3: it easily in my high school. And also some of 220 00:12:14,880 --> 00:12:18,160 Speaker 3: the jobs are not yet aspirational. People don't realize a 221 00:12:18,240 --> 00:12:20,760 Speaker 3: window installer can make one hundred and fifty thousand dollars 222 00:12:20,800 --> 00:12:23,480 Speaker 3: a year, and the people who are looking for jobs 223 00:12:23,679 --> 00:12:26,320 Speaker 3: may not want the jobs that are open. That matching 224 00:12:26,400 --> 00:12:29,040 Speaker 3: nation is going to have to get addressed also for. 225 00:12:29,120 --> 00:12:30,040 Speaker 5: You across the nation. 226 00:12:30,160 --> 00:12:32,920 Speaker 2: This morning, Robert Kaplan with us too many things to 227 00:12:33,000 --> 00:12:36,840 Speaker 2: talk about, a work at Harvard Business School, has worked 228 00:12:36,840 --> 00:12:39,200 Speaker 2: with Gold and Sex now as chairman, and of course 229 00:12:39,320 --> 00:12:42,240 Speaker 2: is public service at the Dallas Fed as well. 230 00:12:42,360 --> 00:12:45,199 Speaker 5: RU on YouTube, it's our new digital distribution. 231 00:12:45,520 --> 00:12:50,000 Speaker 2: Subscribe to Bloomberg podcast skolet fuin for Paul Sweeney today, 232 00:12:50,200 --> 00:12:52,240 Speaker 2: mister Kapplin, one of the things I do want to 233 00:12:52,320 --> 00:12:54,960 Speaker 2: talk about is what's out there, and I'm not talking 234 00:12:55,000 --> 00:12:59,120 Speaker 2: about football coaches at Penn State or whatever. There's a 235 00:12:59,200 --> 00:13:04,120 Speaker 2: whole feeling of an unfair distribution and compensation. I would 236 00:13:04,160 --> 00:13:09,360 Speaker 2: suggest we started with a wonderful idea that if executives 237 00:13:09,400 --> 00:13:13,400 Speaker 2: were incentivized with equity, they would work harder, be smarter, 238 00:13:13,600 --> 00:13:17,480 Speaker 2: And what it turned into was a ratio of football 239 00:13:17,559 --> 00:13:22,360 Speaker 2: coach compensation to English faculty and a ratio of CEO 240 00:13:22,600 --> 00:13:26,360 Speaker 2: compensation to everybody else out there that has led us 241 00:13:26,520 --> 00:13:27,479 Speaker 2: to Americas. 242 00:13:27,920 --> 00:13:29,040 Speaker 5: How do we amend that? 243 00:13:29,320 --> 00:13:32,360 Speaker 2: Besides a tried answer to pull up the incomes of 244 00:13:32,440 --> 00:13:34,760 Speaker 2: everybody else, which no one agrees is. 245 00:13:34,760 --> 00:13:38,959 Speaker 5: Happening, how do we amend what we stumbled into it? 246 00:13:39,160 --> 00:13:41,800 Speaker 3: Yeah? So, as I'll speak for how I'm spending my 247 00:13:41,880 --> 00:13:46,520 Speaker 3: time personally philanthropically, I think many of us are involved 248 00:13:46,679 --> 00:13:52,160 Speaker 3: in trying to get a higher percentage of populations in 249 00:13:52,280 --> 00:13:56,439 Speaker 3: our cities and states to get a secondary degree, get 250 00:13:56,480 --> 00:13:59,680 Speaker 3: into a better job, to place a middle class wage. 251 00:14:00,880 --> 00:14:04,199 Speaker 3: And I still think that the education still is the 252 00:14:04,440 --> 00:14:10,520 Speaker 3: vehicle I think to improve income and income distribution. I 253 00:14:10,600 --> 00:14:14,240 Speaker 3: won't comment on CEO pay and board decisions on that, 254 00:14:14,440 --> 00:14:17,600 Speaker 3: but I'm a big proponent of all of us investing 255 00:14:17,640 --> 00:14:21,120 Speaker 3: our time, money philanthropically and otherwise, and our time to 256 00:14:22,120 --> 00:14:23,680 Speaker 3: improve educational attainment. 257 00:14:24,480 --> 00:14:25,760 Speaker 6: Do the schools get that right now? 258 00:14:25,800 --> 00:14:27,600 Speaker 4: I mean they're just trying to keep the doors open 259 00:14:27,720 --> 00:14:30,000 Speaker 4: and make sure that they don't lose government funding. 260 00:14:30,520 --> 00:14:33,440 Speaker 3: Schools absolutely get that. Let me tell you, the demographics 261 00:14:33,520 --> 00:14:36,400 Speaker 3: are such You're going to see a number of colleges 262 00:14:36,600 --> 00:14:39,640 Speaker 3: the number of colleges in this country is going to decline, 263 00:14:40,000 --> 00:14:43,920 Speaker 3: you know, the demographics, there's less demand for the industry, 264 00:14:44,040 --> 00:14:48,880 Speaker 3: that's right. So I'm seeing high schools convert to p tech. 265 00:14:49,320 --> 00:14:51,760 Speaker 3: Junior college is doing it. I think you may see 266 00:14:52,000 --> 00:14:54,680 Speaker 3: some colleges saying we need to open a new wing 267 00:14:55,160 --> 00:14:58,880 Speaker 3: channel to have skills training as an option for our students, 268 00:14:58,920 --> 00:15:02,440 Speaker 3: particularly those who aren't going to graduate even in six years. 269 00:15:02,840 --> 00:15:04,920 Speaker 2: I was with Chris Waller the other day and the 270 00:15:05,040 --> 00:15:08,560 Speaker 2: question that sort of stopped the conversation was my idea 271 00:15:08,720 --> 00:15:12,360 Speaker 2: that we can't aggregate Allen Meltzer, Carnegie, Mellon and that 272 00:15:12,440 --> 00:15:15,240 Speaker 2: the fact is John Edwards is right. We have two Americas? 273 00:15:15,480 --> 00:15:18,520 Speaker 2: Do we have two our stars out there? And whether 274 00:15:18,600 --> 00:15:22,080 Speaker 2: it's Kaplan, can we can we get an event going here? 275 00:15:22,160 --> 00:15:23,880 Speaker 2: Robert Kaplan for Fed Sherman? 276 00:15:26,760 --> 00:15:30,760 Speaker 8: Can we can we get how do we manage two 277 00:15:31,000 --> 00:15:35,160 Speaker 8: are stars of one policy for an America flattener back 278 00:15:35,600 --> 00:15:39,440 Speaker 8: and another deciding where to spend the wealth effect? 279 00:15:39,600 --> 00:15:41,880 Speaker 5: Right now? How do we what do we do? 280 00:15:43,120 --> 00:15:46,920 Speaker 3: So let me there's the FED funds rate and we've 281 00:15:46,960 --> 00:15:48,520 Speaker 3: sort of gotten used to over the last ten or 282 00:15:48,560 --> 00:15:51,520 Speaker 3: fifteen years, think that the monetary policy is the be all, 283 00:15:51,600 --> 00:15:55,320 Speaker 3: end all. It's not thank you, it's there's all these structure. 284 00:15:55,360 --> 00:16:00,320 Speaker 3: There's tax policy, there's education policy, there's immigration policy. See 285 00:16:00,520 --> 00:16:03,320 Speaker 3: there's what we do on education, health. There's a whole 286 00:16:03,360 --> 00:16:06,040 Speaker 3: bunch of structural issues, and it's going to take all 287 00:16:06,160 --> 00:16:08,480 Speaker 3: of these things to address these issues. 288 00:16:08,800 --> 00:16:10,960 Speaker 5: It's just like it's a job interview for chairman. 289 00:16:11,800 --> 00:16:16,680 Speaker 6: I mean that we're conducting surveillance asking. There's been a 290 00:16:16,720 --> 00:16:16,960 Speaker 6: lot of. 291 00:16:16,960 --> 00:16:19,680 Speaker 4: Talk that maybe the Federal Reserve should not target the 292 00:16:19,720 --> 00:16:23,520 Speaker 4: Fed Funds rate as their main lever for monetary policy, 293 00:16:23,640 --> 00:16:26,240 Speaker 4: to be more targeted in their approach. 294 00:16:26,480 --> 00:16:29,080 Speaker 3: Yeah, well, I wouldn't go over So here's what that's about. 295 00:16:30,040 --> 00:16:33,440 Speaker 3: The thought is maybe they should target something that's tradable, 296 00:16:33,720 --> 00:16:39,840 Speaker 3: so for the overnight, the fixed rate, collateralized rate, or 297 00:16:40,320 --> 00:16:43,880 Speaker 3: the try party. These are wonky terms try party replace, 298 00:16:44,080 --> 00:16:46,840 Speaker 3: but those are both in the midpoint of the Fed 299 00:16:46,960 --> 00:16:50,960 Speaker 3: Funds rate. This is a discussion that's going to happen 300 00:16:51,040 --> 00:16:53,680 Speaker 3: over the next year, but not necessarily an urgent one. 301 00:16:53,800 --> 00:16:57,360 Speaker 3: Today we're in the name, but people are saying pick 302 00:16:57,400 --> 00:17:00,080 Speaker 3: a tradable rate, not one that's artificially you. 303 00:17:00,080 --> 00:17:01,520 Speaker 4: Know what you're saying about how it's not urgent at 304 00:17:01,560 --> 00:17:03,840 Speaker 4: the moment. But the argument is now's the time to 305 00:17:03,960 --> 00:17:05,680 Speaker 4: do it, because it's not urgent. By the time it 306 00:17:05,760 --> 00:17:07,200 Speaker 4: becomes urgent and it'll be too late. 307 00:17:07,760 --> 00:17:09,600 Speaker 3: Well, we've been discussing it at the FED. I can 308 00:17:09,640 --> 00:17:12,840 Speaker 3: tell you when I was there, we spent five six 309 00:17:13,000 --> 00:17:15,720 Speaker 3: years ago. We were discussing the same thing. I don't 310 00:17:15,720 --> 00:17:18,159 Speaker 3: think it's going to blow up into a crisis. I 311 00:17:18,200 --> 00:17:21,000 Speaker 3: think the next FED chair, well, I think it'll be appropriate. 312 00:17:21,040 --> 00:17:23,200 Speaker 3: Wait for the next FED chair. FED just did a 313 00:17:23,240 --> 00:17:26,720 Speaker 3: policy review. They didn't touch this. They'll get to it, 314 00:17:27,680 --> 00:17:31,080 Speaker 3: and it'll be one of several things that probably should 315 00:17:31,080 --> 00:17:31,600 Speaker 3: get looked at. 316 00:17:31,840 --> 00:17:34,000 Speaker 6: So it's like eighth on the to do list right now. 317 00:17:34,640 --> 00:17:36,719 Speaker 3: It's not number one on the to do list right now. 318 00:17:36,800 --> 00:17:39,560 Speaker 3: But it's a good subject. I'm glad it was raised. 319 00:17:40,040 --> 00:17:42,359 Speaker 3: In fact, Lori Logan and the Dallas Fed raised it. 320 00:17:42,440 --> 00:17:45,480 Speaker 3: I think that's great she did. We've been discussing it 321 00:17:45,600 --> 00:17:48,480 Speaker 3: for years and we should come back to it. 322 00:17:49,920 --> 00:17:53,600 Speaker 2: This question just came in, ask Robert Kaplan, what do 323 00:17:53,640 --> 00:17:57,720 Speaker 2: you would do with the Dallas Cowboys? I means Dallas 324 00:17:57,800 --> 00:18:02,119 Speaker 2: Fed ever done a study the richest franchise you know 325 00:18:02,320 --> 00:18:03,440 Speaker 2: in America can. 326 00:18:03,440 --> 00:18:04,560 Speaker 5: Fail for so long. 327 00:18:04,720 --> 00:18:07,040 Speaker 3: Yeah, and I'll make a prediction. I don't think you're 328 00:18:07,040 --> 00:18:10,480 Speaker 3: going to see a study from the Dallas fed on. No, 329 00:18:11,000 --> 00:18:14,280 Speaker 3: we have no expertise. I have no experts other than 330 00:18:14,320 --> 00:18:15,800 Speaker 3: how to work the TV clicker. 331 00:18:16,240 --> 00:18:19,480 Speaker 5: Okay, Robert cap thank you. This has been a great conversation. 332 00:18:19,680 --> 00:18:20,400 Speaker 5: Thank you so much. 333 00:18:20,520 --> 00:18:21,719 Speaker 3: Thank you for the generous time. 334 00:18:21,800 --> 00:18:26,920 Speaker 2: I really can't emphasize enough the business process. It's out there, 335 00:18:26,960 --> 00:18:32,760 Speaker 2: and as John Tucker mentioned, the AI struggle here for 336 00:18:32,880 --> 00:18:35,000 Speaker 2: the rest of America will be something. It'll be a 337 00:18:35,080 --> 00:18:37,920 Speaker 2: huge theme for us. I'm sure in the next year 338 00:18:38,520 --> 00:18:41,320 Speaker 2: as well. Robert Kaplan is with Goldman Sachs. 339 00:18:43,080 --> 00:18:43,719 Speaker 3: Stay with us. 340 00:18:44,040 --> 00:18:47,159 Speaker 9: More from Bloomberg Surveillance coming up after this. 341 00:18:54,520 --> 00:18:58,080 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 342 00:18:58,160 --> 00:19:02,160 Speaker 1: weekday afternoons from seven to ten Astern. Listen on Applecarplay 343 00:19:02,200 --> 00:19:05,440 Speaker 1: and Android Auto with the Bloomberg Business app, or watch 344 00:19:05,520 --> 00:19:06,680 Speaker 1: us live on YouTube. 345 00:19:07,000 --> 00:19:10,880 Speaker 2: Ed your Denny has delivered a rational plan to participate 346 00:19:11,040 --> 00:19:14,399 Speaker 2: in the market, and we get an important update with 347 00:19:14,560 --> 00:19:15,240 Speaker 2: him this morning. 348 00:19:15,359 --> 00:19:19,480 Speaker 5: Of course, CJ. Lawrence years ago definitive. 349 00:19:19,200 --> 00:19:23,959 Speaker 2: Your Denny research add in your morning memo, An incredibly 350 00:19:24,119 --> 00:19:28,240 Speaker 2: valuable Yard Denny Research. What is the view forward it 351 00:19:28,440 --> 00:19:35,680 Speaker 2: down forty eight thousand. Well, I think the bullmarket continues here. 352 00:19:36,080 --> 00:19:39,240 Speaker 2: We've still got some good news ahead, and some of 353 00:19:39,320 --> 00:19:42,600 Speaker 2: it's been discounted, of course, but the Fed is expected 354 00:19:42,640 --> 00:19:46,400 Speaker 2: to lower the Fed funds rate two more times this year, 355 00:19:46,560 --> 00:19:49,800 Speaker 2: so that would get us down to three point five percent. 356 00:19:50,160 --> 00:19:53,159 Speaker 2: By the way, I don't think the economy really needs it, 357 00:19:53,359 --> 00:19:56,119 Speaker 2: so a lot of this stimulus is probably going to 358 00:19:56,520 --> 00:20:00,399 Speaker 2: feed the bullmarket. And I'm looking for the S and 359 00:20:00,520 --> 00:20:04,320 Speaker 2: P five hundred to get to seven thousand by the 360 00:20:04,560 --> 00:20:07,200 Speaker 2: end of the year or by the end of the week. 361 00:20:07,280 --> 00:20:09,960 Speaker 10: I mean, things are moving pretty quickly here, and then 362 00:20:10,040 --> 00:20:13,200 Speaker 10: seventy seven hundred by the end of next year. So 363 00:20:14,480 --> 00:20:17,280 Speaker 10: I'd say, you know, we probably over the rest of 364 00:20:17,320 --> 00:20:20,399 Speaker 10: the year have a four percent increase ahead of us 365 00:20:20,720 --> 00:20:23,720 Speaker 10: in the market. That's been the average over the past 366 00:20:23,800 --> 00:20:25,440 Speaker 10: ten years for November and December. 367 00:20:25,560 --> 00:20:29,800 Speaker 2: As you run a real sophisticated rack here of economics 368 00:20:29,920 --> 00:20:31,480 Speaker 2: into the equity market. 369 00:20:31,320 --> 00:20:34,680 Speaker 5: I want you to speak now to people who bought 370 00:20:34,880 --> 00:20:39,840 Speaker 5: into the gloom view. Not the people with the gloom. 371 00:20:39,600 --> 00:20:43,399 Speaker 2: View, but our listeners and viewers that bought into caution 372 00:20:44,040 --> 00:20:47,280 Speaker 2: bought into worry. What do you say to them about 373 00:20:47,320 --> 00:20:50,159 Speaker 2: this continued American financial experiment. 374 00:20:51,800 --> 00:20:54,240 Speaker 10: Well, the experiment has been quite a success for quite 375 00:20:54,280 --> 00:20:58,720 Speaker 10: a long time. I think people still have some pessimism 376 00:20:59,400 --> 00:21:03,320 Speaker 10: and oracle basis. As a matter of fact, the book 377 00:21:03,480 --> 00:21:08,160 Speaker 10: was just written about nineteen twenty nine by Andrew Sorkin, 378 00:21:08,320 --> 00:21:11,480 Speaker 10: and it's a very good book, but it's kind of 379 00:21:11,560 --> 00:21:15,040 Speaker 10: consistent with the pessimism that's still out there. I, on 380 00:21:15,119 --> 00:21:17,280 Speaker 10: the other hand, had been talking about the Roaring twenty 381 00:21:17,359 --> 00:21:22,760 Speaker 10: twenties since twenty twenty and that's worked out really, really well. However, 382 00:21:23,000 --> 00:21:26,040 Speaker 10: I constantly get reminded that if I'm making an analogy 383 00:21:26,760 --> 00:21:30,200 Speaker 10: to the nineteen twenties, the nineteen twenties ended very badly, 384 00:21:30,440 --> 00:21:32,960 Speaker 10: and I kind of counted that by saying, well, it 385 00:21:33,080 --> 00:21:37,000 Speaker 10: was a smooth Holly tariff that really caused the crash 386 00:21:37,560 --> 00:21:40,800 Speaker 10: and the depression that we had in the nineteen thirties, 387 00:21:41,400 --> 00:21:44,480 Speaker 10: and right now the economy is passing that stressed us 388 00:21:44,600 --> 00:21:48,239 Speaker 10: remarkably well, We've had a lot of tariffs and posted here, 389 00:21:48,320 --> 00:21:51,880 Speaker 10: and the US economy is still doing just fine. Well, 390 00:21:52,160 --> 00:21:56,560 Speaker 10: the economy has proven remarkably resilient. It's the pandemic. Tom, 391 00:21:56,640 --> 00:22:02,560 Speaker 10: remember after the pandemic, we immediately put on the lockdowns. 392 00:22:02,920 --> 00:22:06,399 Speaker 10: They lasted two months. We then had very sharp recovery, 393 00:22:06,880 --> 00:22:10,680 Speaker 10: but then we had supply site disruptions, the inflation, the 394 00:22:10,800 --> 00:22:13,160 Speaker 10: FED tightening, and look, look the economy is an all 395 00:22:13,200 --> 00:22:15,760 Speaker 10: time record high and real GDP, and so does the 396 00:22:15,800 --> 00:22:16,399 Speaker 10: stock market. 397 00:22:16,600 --> 00:22:20,119 Speaker 2: Acrossination, we start strolling this morning, ed your Denny with us, 398 00:22:20,840 --> 00:22:23,760 Speaker 2: We said good morning across all of our distant radio 399 00:22:23,800 --> 00:22:28,400 Speaker 2: and audio distribution on YouTube, subscribe to Bloomberg Podcast. 400 00:22:28,480 --> 00:22:32,639 Speaker 5: They just brief me. Scarlet ed your Denny's ginormous in India. 401 00:22:32,960 --> 00:22:36,400 Speaker 6: I had no idea at ed your Nny's ginormous everywhere. 402 00:22:36,160 --> 00:22:39,439 Speaker 5: Huge Pacific rim and over to Indie audience, Scarlet Food with. 403 00:22:39,520 --> 00:22:40,800 Speaker 6: Edyard Denny doctor ed. 404 00:22:40,880 --> 00:22:45,080 Speaker 4: With all the liquidity slashing around and this unbridled optimism, 405 00:22:45,200 --> 00:22:48,720 Speaker 4: how much do seasonal and technical factors matter this time around? 406 00:22:49,000 --> 00:22:51,479 Speaker 4: There's data that shows the NAZAK one hundred it has 407 00:22:51,520 --> 00:22:54,320 Speaker 4: averaged an eight and a half percent gain from October 408 00:22:54,400 --> 00:22:56,920 Speaker 4: twenty through year end. The SMP returns about four point 409 00:22:56,960 --> 00:22:59,480 Speaker 4: two percent on average since nineteen eighty five. 410 00:22:59,520 --> 00:23:05,119 Speaker 6: There's on like a lot of history behind this rally. Continuing, Well, it's. 411 00:23:05,119 --> 00:23:09,040 Speaker 10: Conceivable we've already had our Santa Claus rally. Sometimes the 412 00:23:09,119 --> 00:23:14,280 Speaker 10: Santa Claus Rally is timed as being somewhere between Thanksgiving 413 00:23:14,560 --> 00:23:19,800 Speaker 10: and Christmas Eve. Sometimes it's extended to New Year's Eve. 414 00:23:20,560 --> 00:23:22,800 Speaker 10: But I just look at November December. I look at 415 00:23:22,840 --> 00:23:26,680 Speaker 10: it by months, and the average increase over the past 416 00:23:26,760 --> 00:23:29,440 Speaker 10: ten years in the S and P five hundred is 417 00:23:29,600 --> 00:23:33,399 Speaker 10: added an additional four percentage points to return to the 418 00:23:33,560 --> 00:23:35,439 Speaker 10: return of the market. The market right now is up 419 00:23:35,560 --> 00:23:39,520 Speaker 10: a little over fifteen percent. Slap on another four percent 420 00:23:39,560 --> 00:23:42,320 Speaker 10: and you get something close to twenty percent, which will 421 00:23:42,320 --> 00:23:44,920 Speaker 10: be the third year in a row of remarkable double 422 00:23:45,000 --> 00:23:48,040 Speaker 10: digit gains and would get us to seven thousand, maybe 423 00:23:48,040 --> 00:23:50,359 Speaker 10: even a bit over seven thousand on the S and 424 00:23:50,440 --> 00:23:51,399 Speaker 10: P five hundred. 425 00:23:51,359 --> 00:23:54,080 Speaker 5: John Tucker, did you listen to that question from Scarlett Foo? 426 00:23:55,600 --> 00:23:58,600 Speaker 5: Have we ever had anyone in the studio this prepared? 427 00:23:59,119 --> 00:24:00,919 Speaker 5: It's in the morning here. 428 00:24:01,040 --> 00:24:03,320 Speaker 6: I know how to read. That's my strength. 429 00:24:04,000 --> 00:24:07,520 Speaker 5: You can't do that again, Ask another question and keep 430 00:24:07,560 --> 00:24:08,680 Speaker 5: it as dumb as mind. 431 00:24:08,920 --> 00:24:11,800 Speaker 4: All right, ed, doctor ed? We have earnings coming up. 432 00:24:11,880 --> 00:24:15,200 Speaker 4: Five of the mags seven names will be reporting. People 433 00:24:15,200 --> 00:24:17,840 Speaker 4: are looking for catalysts to continue to drive these mags 434 00:24:17,840 --> 00:24:20,800 Speaker 4: seven names higher. Do you think we're going to get 435 00:24:20,800 --> 00:24:22,560 Speaker 4: it or is it going to Is the stuff that 436 00:24:22,840 --> 00:24:24,760 Speaker 4: drove us in the past, You know cape is going 437 00:24:24,840 --> 00:24:26,880 Speaker 4: to continue to be the drivers this time around. 438 00:24:28,119 --> 00:24:30,840 Speaker 10: Well, you know, there's a lot of nervousness about whether 439 00:24:30,920 --> 00:24:33,840 Speaker 10: all this capex is going to be profitable for the 440 00:24:33,920 --> 00:24:37,679 Speaker 10: so called hyperscalers. But if anybody is in a position 441 00:24:37,840 --> 00:24:40,159 Speaker 10: to know whether it makes sense to carry on this 442 00:24:40,320 --> 00:24:43,320 Speaker 10: kind of capital spending, it would be these companies that 443 00:24:43,440 --> 00:24:46,320 Speaker 10: are very much involved in cloud computing and can see 444 00:24:46,800 --> 00:24:49,520 Speaker 10: the extent to which the capacity of their servers is 445 00:24:49,680 --> 00:24:55,440 Speaker 10: being stressed and they need to scramble to increase that capacity. Look, 446 00:24:55,480 --> 00:24:56,240 Speaker 10: I think we all just. 447 00:24:56,320 --> 00:24:57,679 Speaker 5: Need to look at our own lives. 448 00:25:00,320 --> 00:25:03,120 Speaker 10: I can't speak for everyone, but I'll tell you I'm 449 00:25:03,240 --> 00:25:05,320 Speaker 10: using AI all the time. I use it as a 450 00:25:05,800 --> 00:25:09,240 Speaker 10: as a research assistant. It's not the smartest research assistant, 451 00:25:09,640 --> 00:25:11,480 Speaker 10: so I have to double check it, but I do 452 00:25:11,640 --> 00:25:12,520 Speaker 10: use it all the time. 453 00:25:13,000 --> 00:25:16,120 Speaker 2: I agree with that ed I'm saying, folks, in full disclosure, 454 00:25:16,160 --> 00:25:20,080 Speaker 2: I'm using perplexity. Thank you Tom Sekunda, founder of Bloomberg, 455 00:25:20,440 --> 00:25:23,360 Speaker 2: who got me onto that and my life has changed 456 00:25:23,800 --> 00:25:24,399 Speaker 2: because of it. 457 00:25:24,720 --> 00:25:26,240 Speaker 9: This is Gordon and Saunders. 458 00:25:26,320 --> 00:25:27,160 Speaker 5: It's a great band. 459 00:25:27,560 --> 00:25:31,199 Speaker 2: It's Charles Schwab, your Danny, Lizzie and Saunders just publishes 460 00:25:31,560 --> 00:25:35,120 Speaker 2: earnings reports. Are painting a picture of an economy it's 461 00:25:35,359 --> 00:25:40,520 Speaker 2: bending a little under government and monetary policy uncertainty. Is 462 00:25:40,640 --> 00:25:44,920 Speaker 2: we bend under policy uncertainty? What's it looked like on 463 00:25:45,000 --> 00:25:45,480 Speaker 2: the far. 464 00:25:45,560 --> 00:25:49,240 Speaker 10: Side, I think it looks better, right, I mean, presumably 465 00:25:49,720 --> 00:25:52,879 Speaker 10: thiss government shutdown ends, though I don't know it's kind 466 00:25:52,920 --> 00:25:57,920 Speaker 10: of the market certainly hasn't been upset about the shutdown, 467 00:25:58,000 --> 00:26:01,000 Speaker 10: but this this toutial a pretty rapidly. 468 00:26:01,080 --> 00:26:02,520 Speaker 5: I think there's some. 469 00:26:02,640 --> 00:26:06,760 Speaker 10: Real stresses now occurring within the Democratic Party to just 470 00:26:07,840 --> 00:26:11,440 Speaker 10: sign a simple deal and move on. So I think 471 00:26:12,080 --> 00:26:16,600 Speaker 10: that that issue will dissipate. The markets and the economy 472 00:26:16,640 --> 00:26:19,800 Speaker 10: have learned to live with the what I call Trump 473 00:26:19,920 --> 00:26:23,159 Speaker 10: tariff turmoil, which I think we're going to get more 474 00:26:23,200 --> 00:26:25,960 Speaker 10: of it, right because in November, the Supreme Court is 475 00:26:26,000 --> 00:26:29,359 Speaker 10: going to consider whether the tariffs are constitutional or not. 476 00:26:30,880 --> 00:26:34,240 Speaker 10: There's a good chance that they will be deemed unconstitutional, 477 00:26:34,600 --> 00:26:38,359 Speaker 10: which I think explains why Trump is racing to get deals, 478 00:26:38,440 --> 00:26:41,120 Speaker 10: because even if it's unconstitutional, and he's got a whole 479 00:26:41,160 --> 00:26:44,400 Speaker 10: bunch of deals with key countries. Those deals will hold, 480 00:26:44,920 --> 00:26:45,520 Speaker 10: and we. 481 00:26:45,600 --> 00:26:48,879 Speaker 2: See that with the presidents still speaking in tokyover monitoring 482 00:26:48,960 --> 00:26:53,280 Speaker 2: that Josh Wingrove and Tyler Kendall at one final question, 483 00:26:53,480 --> 00:26:56,560 Speaker 2: the beast on the couch seems numb. I mean, for 484 00:26:56,600 --> 00:26:59,480 Speaker 2: those of you on radio, Ed's got the stylish office 485 00:26:59,520 --> 00:27:02,600 Speaker 2: with fourth thousand books and that beast on the couch 486 00:27:02,960 --> 00:27:04,840 Speaker 2: is that because the couches the beast to have a 487 00:27:04,920 --> 00:27:06,520 Speaker 2: four to oh one k that's. 488 00:27:06,520 --> 00:27:07,439 Speaker 5: Killing it right now? 489 00:27:08,160 --> 00:27:10,920 Speaker 10: Oh, come on, Tom, you've met Max before. Max just 490 00:27:11,480 --> 00:27:16,600 Speaker 10: loves your show and it's very soothing. He is sleeping anyway, 491 00:27:17,400 --> 00:27:20,520 Speaker 10: Well he's listening, you know, he's That's why he's sleeping. 492 00:27:23,200 --> 00:27:24,600 Speaker 3: Yard Denny, thank you so much. 493 00:27:24,640 --> 00:27:29,600 Speaker 2: Congratulations on continued leadership in this full market. 494 00:27:31,800 --> 00:27:32,439 Speaker 3: Stay with us. 495 00:27:32,760 --> 00:27:35,840 Speaker 9: More from Bloomberg Surveillance coming up after this. 496 00:27:43,040 --> 00:27:46,919 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 497 00:27:47,000 --> 00:27:50,280 Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto 498 00:27:50,440 --> 00:27:53,360 Speaker 1: with the Bloomberg Business app. You can also listen live 499 00:27:53,480 --> 00:27:57,000 Speaker 1: on Amazon Alexa from our flagship New York station, Just 500 00:27:57,080 --> 00:28:01,120 Speaker 1: say Alexa Play Bloomberg eleven thirty Trumanus for too short 501 00:28:01,160 --> 00:28:01,440 Speaker 1: a visit. 502 00:28:01,560 --> 00:28:04,400 Speaker 2: Now we had to get into Microsoft View with Caroline 503 00:28:04,400 --> 00:28:07,280 Speaker 2: and I as well. Drew, thank you for bringing us 504 00:28:07,320 --> 00:28:12,160 Speaker 2: back to reality, which is many parents nationwide are looking 505 00:28:12,240 --> 00:28:17,680 Speaker 2: at their kids eighteen, twenty two, twenty four and going. 506 00:28:17,800 --> 00:28:18,720 Speaker 5: What's the future. 507 00:28:19,280 --> 00:28:21,479 Speaker 2: You're expert at this, you do this every day at 508 00:28:21,520 --> 00:28:24,600 Speaker 2: met Life. What's the future for the young kids right now? 509 00:28:25,840 --> 00:28:28,200 Speaker 7: Well, I mean parents are worried about it, and you know, 510 00:28:28,320 --> 00:28:31,000 Speaker 7: unfortunately it's the same kids who got hit by COVID 511 00:28:31,160 --> 00:28:34,280 Speaker 7: and now they're graduating and all the CEOs are saying 512 00:28:34,359 --> 00:28:37,399 Speaker 7: we don't need to hire because of AI and for 513 00:28:37,840 --> 00:28:39,480 Speaker 7: as a parent of one of those kids, you know, 514 00:28:39,800 --> 00:28:44,040 Speaker 7: it's not an encouraging situation. And I think when you know, 515 00:28:44,400 --> 00:28:46,840 Speaker 7: people can tolerate a lot, but when they think their 516 00:28:46,960 --> 00:28:49,080 Speaker 7: kids are going to be worse off, that's when they 517 00:28:49,120 --> 00:28:54,000 Speaker 7: start to get really aggravated, irritated, and begin to change behaviors. 518 00:28:54,080 --> 00:28:56,680 Speaker 7: And I think if you want to know what's going 519 00:28:56,760 --> 00:29:00,600 Speaker 7: to create the downdraft in the economy, it's the upper 520 00:29:00,720 --> 00:29:03,800 Speaker 7: income consumer deciding that they're going to have to basically 521 00:29:03,840 --> 00:29:05,920 Speaker 7: pay for their kids for the next forty years. And 522 00:29:06,040 --> 00:29:07,840 Speaker 7: they're going to need a little more money to do that, 523 00:29:08,000 --> 00:29:10,680 Speaker 7: and they're going to save instead of spendins depressing. 524 00:29:11,520 --> 00:29:13,960 Speaker 4: Also tell us a little bit more about this K 525 00:29:14,080 --> 00:29:17,000 Speaker 4: shaped economy and that line at the top. What does 526 00:29:17,680 --> 00:29:20,120 Speaker 4: who does that person look like the typical person and 527 00:29:20,200 --> 00:29:22,560 Speaker 4: how has that changed and how will that change over 528 00:29:22,600 --> 00:29:23,360 Speaker 4: the next ten years. 529 00:29:24,440 --> 00:29:26,680 Speaker 7: Well, so, I mean, let's think about the K shape. 530 00:29:26,880 --> 00:29:28,880 Speaker 7: You know, there's the CA shape, and then there's kind 531 00:29:28,880 --> 00:29:31,560 Speaker 7: of you know, the the you know, the billionaire class. 532 00:29:31,680 --> 00:29:33,680 Speaker 7: Right in the billionaire class, they don't even think about 533 00:29:33,680 --> 00:29:36,280 Speaker 7: buying a car, right, They're not the ones buying the car, right, 534 00:29:36,400 --> 00:29:38,440 Speaker 7: they're helpers buying the car for them and. 535 00:29:38,520 --> 00:29:40,719 Speaker 6: Someone else is driving their company is buying the car. 536 00:29:40,880 --> 00:29:44,160 Speaker 7: Yeah, when you talk about the upper income tax payer 537 00:29:44,480 --> 00:29:46,719 Speaker 7: or kind of like the upper middle class person who 538 00:29:46,800 --> 00:29:51,160 Speaker 7: can decide whether to save or to spend. What the 539 00:29:51,240 --> 00:29:53,400 Speaker 7: survey is that we are getting now because we only 540 00:29:53,480 --> 00:29:56,680 Speaker 7: have survey data from things like the FED, are telling 541 00:29:56,720 --> 00:30:00,200 Speaker 7: you is that they're more worried about their jobs. They 542 00:30:00,280 --> 00:30:04,360 Speaker 7: think that their real incomes are getting worse, and they 543 00:30:04,440 --> 00:30:07,920 Speaker 7: think that the outlook is not great. And that's not 544 00:30:08,200 --> 00:30:11,480 Speaker 7: a recipe for a huge amount of spending take place. 545 00:30:11,680 --> 00:30:13,440 Speaker 7: They might have brought a car because they had the 546 00:30:13,520 --> 00:30:15,280 Speaker 7: means to do so, because they're trying to get ahead 547 00:30:15,320 --> 00:30:17,080 Speaker 7: of tariffs and they thought they might need to replace 548 00:30:17,160 --> 00:30:19,240 Speaker 7: their car in a year or two. But you know, 549 00:30:19,320 --> 00:30:22,720 Speaker 7: they're not necessarily spending on an accelerated basis, ongoing. 550 00:30:22,440 --> 00:30:23,000 Speaker 3: On and ongoing. 551 00:30:23,120 --> 00:30:26,760 Speaker 2: Then Drew quickly here for tomorrow's FED meeting? What is 552 00:30:26,840 --> 00:30:30,160 Speaker 2: the labor mandate we're going to hear about tomorrow from 553 00:30:30,240 --> 00:30:30,600 Speaker 2: the Fed? 554 00:30:32,560 --> 00:30:33,760 Speaker 3: I mean, I you know. 555 00:30:34,000 --> 00:30:36,120 Speaker 7: My feeling is the Fed has two choices. You can 556 00:30:36,200 --> 00:30:39,440 Speaker 7: have slow growth with higher inflation or higher growth with 557 00:30:39,560 --> 00:30:42,120 Speaker 7: higher inflation, and they're going to choose the latter because 558 00:30:42,160 --> 00:30:44,080 Speaker 7: it's the least of two evils. 559 00:30:45,000 --> 00:30:47,000 Speaker 2: True, mattis, thank you so much. Too short of visit. 560 00:30:47,040 --> 00:30:49,480 Speaker 2: We gotta do it much longer. Should Drew come in 561 00:30:49,560 --> 00:30:51,240 Speaker 2: next time? He can come in with a bow tie? 562 00:30:51,760 --> 00:30:52,160 Speaker 9: Does he do? 563 00:30:52,240 --> 00:30:55,800 Speaker 5: That's one of the rare coveted merch surveillance bow ties. 564 00:30:55,960 --> 00:30:59,680 Speaker 6: I remember those? Yeah, that was very like twenty twelve. Yeah, yeah, 565 00:31:00,040 --> 00:31:01,160 Speaker 6: there's a vintage tied to it. 566 00:31:01,320 --> 00:31:03,560 Speaker 5: They come in, they come out of fashion that we. 567 00:31:03,600 --> 00:31:06,120 Speaker 6: Should do it on Halloween, Well we should? 568 00:31:06,320 --> 00:31:07,360 Speaker 5: Yeah, what are you going. 569 00:31:07,400 --> 00:31:09,960 Speaker 6: As for Halloween, I'm not dressing up. That's not my thing. 570 00:31:10,400 --> 00:31:13,920 Speaker 5: Yeah, Okay, Dramatis, thank you so much. She's the met Life. 571 00:31:15,840 --> 00:31:16,479 Speaker 3: Stay with us. 572 00:31:16,800 --> 00:31:19,920 Speaker 9: More from Bloomberg Surveillance coming up after this. 573 00:31:27,120 --> 00:31:29,320 Speaker 6: This is the Bloomberg Surveillance Podcast. 574 00:31:29,720 --> 00:31:32,640 Speaker 1: Listen live each weekday starting at seven am Eastern on 575 00:31:32,760 --> 00:31:35,960 Speaker 1: Apple Coarclay, and Android Auto with the Bloomberg Business App. 576 00:31:36,080 --> 00:31:39,080 Speaker 1: You can also listen live on Amazon Alexa from our 577 00:31:39,160 --> 00:31:43,640 Speaker 1: flagship New York station, Just say Alexa, Play Bloomberg eleven thirty. 578 00:31:44,000 --> 00:31:48,360 Speaker 2: See Sastik with us chief strategists at Interactive Brokers here 579 00:31:48,440 --> 00:31:51,440 Speaker 2: to look at this moment that we're living in. What 580 00:31:51,640 --> 00:31:54,000 Speaker 2: is the character of this bull market that you see 581 00:31:54,120 --> 00:31:57,880 Speaker 2: in particularly with all the knowledge and transactions that you 582 00:31:58,000 --> 00:31:59,240 Speaker 2: have at Interactive Brokers. 583 00:31:59,520 --> 00:32:00,440 Speaker 3: A good morning, Tom. 584 00:32:00,600 --> 00:32:03,720 Speaker 11: I think what we're seeing is it's a momentum driven, 585 00:32:04,440 --> 00:32:07,000 Speaker 11: almost hype driven market. I would say, you know, we've 586 00:32:07,040 --> 00:32:09,200 Speaker 11: all been taught about buy, buy and hold, or buy 587 00:32:09,280 --> 00:32:09,560 Speaker 11: the dip. 588 00:32:09,640 --> 00:32:11,160 Speaker 3: I mean this is almost buy and chase. 589 00:32:11,960 --> 00:32:12,080 Speaker 1: You know. 590 00:32:12,240 --> 00:32:14,200 Speaker 5: I look at constitutionals as well. 591 00:32:15,640 --> 00:32:16,440 Speaker 3: To a certain extent. 592 00:32:16,600 --> 00:32:19,040 Speaker 11: Yes, although you know among our customers, what I see 593 00:32:19,160 --> 00:32:23,280 Speaker 11: most pronounced is among the more active individual customers going 594 00:32:23,400 --> 00:32:25,800 Speaker 11: after I'm going to call them thematic names, you know, 595 00:32:25,880 --> 00:32:28,880 Speaker 11: like beyond Meat or Oaklow or Righetty. 596 00:32:29,440 --> 00:32:32,040 Speaker 3: But everybody, everybody's kind of doing it because they have to. 597 00:32:32,360 --> 00:32:35,800 Speaker 5: That's not for oh, one k money. That's the speculation 598 00:32:36,040 --> 00:32:36,200 Speaker 5: of it. 599 00:32:36,400 --> 00:32:39,800 Speaker 2: What do you observe among people with a long term, 600 00:32:40,400 --> 00:32:43,000 Speaker 2: three year or longer time frame. To me, it's just 601 00:32:43,080 --> 00:32:45,000 Speaker 2: a wall of money looking for a warm spot. 602 00:32:45,160 --> 00:32:48,160 Speaker 11: It's really don't fight the tape is really the mentality. 603 00:32:48,240 --> 00:32:49,920 Speaker 11: I mean, this is this is what this is what 604 00:32:50,080 --> 00:32:53,880 Speaker 11: it's become. And when you have credible, credible people and 605 00:32:53,960 --> 00:32:57,959 Speaker 11: credible money, you know, monetary policy easing and fiscal policy 606 00:32:58,080 --> 00:32:59,880 Speaker 11: that can be good for companies, if not as a 607 00:33:00,080 --> 00:33:01,000 Speaker 11: early all individuals. 608 00:33:01,320 --> 00:33:02,880 Speaker 3: That's the that's the way it goes. 609 00:33:03,160 --> 00:33:06,600 Speaker 5: I'm depressed again. It's eight thirty and there's no economic nooscar. 610 00:33:06,880 --> 00:33:08,400 Speaker 6: I know, you need our daily dose. 611 00:33:08,960 --> 00:33:10,840 Speaker 5: It's like we need our dose, our fix, and it's 612 00:33:10,880 --> 00:33:11,320 Speaker 5: not cure. 613 00:33:11,480 --> 00:33:12,240 Speaker 6: No economic data. 614 00:33:12,280 --> 00:33:14,560 Speaker 4: So we don't really have any official read on the 615 00:33:14,680 --> 00:33:18,440 Speaker 4: job market beyond what we get from private sources. You know, 616 00:33:18,520 --> 00:33:21,880 Speaker 4: we talk about these headlines where Amazon is losing fourteen 617 00:33:21,920 --> 00:33:24,800 Speaker 4: thousand jobs, UPS is getting rid of thirty four thousand jobs, 618 00:33:24,880 --> 00:33:27,640 Speaker 4: but sales and profits are beating estimates, so earnings are 619 00:33:27,800 --> 00:33:30,120 Speaker 4: coming in better than expected. Steve, at what point do 620 00:33:30,240 --> 00:33:32,880 Speaker 4: the job losses matter more to investors in markets than 621 00:33:33,640 --> 00:33:34,800 Speaker 4: the preservation of margins? 622 00:33:35,320 --> 00:33:37,440 Speaker 11: I think when we get to the point where the 623 00:33:37,520 --> 00:33:40,040 Speaker 11: FED would be pushing on a string and really doesn't 624 00:33:40,080 --> 00:33:42,880 Speaker 11: have the capacity to do anything about it. What the 625 00:33:42,920 --> 00:33:44,840 Speaker 11: other problem I think we get to is if you 626 00:33:44,880 --> 00:33:47,680 Speaker 11: think about a K shaped economy, we've you know, a lot, 627 00:33:47,840 --> 00:33:50,040 Speaker 11: we want sort of a nice small K where that 628 00:33:50,560 --> 00:33:53,400 Speaker 11: inflection point against the Y axis is relatively low. I 629 00:33:53,440 --> 00:33:57,040 Speaker 11: think we're getting an inverted K where it's higher and higher, 630 00:33:57,680 --> 00:34:00,240 Speaker 11: and I think there's more nervousness. And if that permeates 631 00:34:00,280 --> 00:34:03,120 Speaker 11: the economy among let's say, people who thought their jobs 632 00:34:03,160 --> 00:34:06,200 Speaker 11: were relatively safe, that's when you get into real problems. 633 00:34:06,240 --> 00:34:08,120 Speaker 11: And it's not a matter of the FED cutting rates 634 00:34:08,160 --> 00:34:09,799 Speaker 11: twenty five basis points here and there. 635 00:34:10,640 --> 00:34:12,600 Speaker 6: So how are you looking at earning season? 636 00:34:12,640 --> 00:34:15,920 Speaker 4: How much confidence do you take from the results that 637 00:34:16,000 --> 00:34:19,880 Speaker 4: show better than expected once again for the X number 638 00:34:20,080 --> 00:34:20,640 Speaker 4: straight quarter. 639 00:34:21,239 --> 00:34:24,560 Speaker 11: Well, what I've said all along is I think that 640 00:34:25,000 --> 00:34:28,080 Speaker 11: corporate management is it's just as important not only to 641 00:34:28,120 --> 00:34:30,160 Speaker 11: manage your own business, but it is also to manage 642 00:34:30,200 --> 00:34:33,080 Speaker 11: your analysts expectations. So I think that's why you've seen 643 00:34:33,120 --> 00:34:35,400 Speaker 11: sort of an increasingly steady trend of you know, it 644 00:34:35,520 --> 00:34:37,440 Speaker 11: used to be seventy five percent of the company's beat. 645 00:34:37,520 --> 00:34:39,719 Speaker 11: Now it's like eighty or eighty five percent. It's really 646 00:34:39,760 --> 00:34:41,640 Speaker 11: about the guidance and about and the other one I 647 00:34:41,719 --> 00:34:43,480 Speaker 11: like to watch is cash flow because you can't really 648 00:34:43,520 --> 00:34:46,600 Speaker 11: manage you can't really fake cash flows. But I think 649 00:34:46,960 --> 00:34:48,359 Speaker 11: we're going to find out. We're going to find out 650 00:34:48,400 --> 00:34:50,800 Speaker 11: going ahead this week because you're getting forty percent of 651 00:34:50,840 --> 00:34:53,759 Speaker 11: the SMP you know, market cap this week, and where 652 00:34:53,840 --> 00:34:55,839 Speaker 11: their guidance comes in. But options, I was looking at 653 00:34:55,880 --> 00:35:00,359 Speaker 11: options pricing coming and coming into this and long st short, 654 00:35:00,400 --> 00:35:03,000 Speaker 11: they're they're not they're not really pricing in any big 655 00:35:03,239 --> 00:35:04,440 Speaker 11: expectations of moves. 656 00:35:04,800 --> 00:35:07,600 Speaker 2: Steve Sasnik with us with Interactive Brokers. What you learn 657 00:35:08,120 --> 00:35:11,840 Speaker 2: is a few years back at the Salomon Brothers training program, 658 00:35:12,440 --> 00:35:14,920 Speaker 2: their training program, what you learn there. 659 00:35:16,440 --> 00:35:19,239 Speaker 11: I just learned, you know, you learned that this was 660 00:35:19,400 --> 00:35:21,600 Speaker 11: they were just a little tech tactics. I mean, you know, 661 00:35:21,719 --> 00:35:24,480 Speaker 11: one of the things I remember was, you know, mate, 662 00:35:24,520 --> 00:35:26,960 Speaker 11: don't leave a sink full of dirty dishes, meaning you know, 663 00:35:27,080 --> 00:35:29,080 Speaker 11: and clean them when you get a meaning that, don't 664 00:35:29,160 --> 00:35:30,880 Speaker 11: leave a big stack of phone calls at the end 665 00:35:30,920 --> 00:35:32,840 Speaker 11: of your day to make to get get rid of 666 00:35:32,880 --> 00:35:35,680 Speaker 11: everything before you go home. A lot of the discipline 667 00:35:35,680 --> 00:35:37,600 Speaker 11: about that just also a lot of discipline about how 668 00:35:37,640 --> 00:35:38,439 Speaker 11: the markets worked. 669 00:35:38,640 --> 00:35:40,839 Speaker 5: Is this market disciplined right now? 670 00:35:41,120 --> 00:35:44,880 Speaker 2: With our new technology, which frankly has been led by 671 00:35:45,040 --> 00:35:50,640 Speaker 2: interactive brokers, I mean, the volume of people playing is overwhelming. 672 00:35:51,880 --> 00:35:52,840 Speaker 3: Yeah, I mean I think that. 673 00:35:53,400 --> 00:35:56,320 Speaker 11: You know, I'm certainly not going to complain about the 674 00:35:56,400 --> 00:35:59,319 Speaker 11: democratization of the financial markets. It's been It's been very 675 00:35:59,360 --> 00:36:02,040 Speaker 11: good for me and my company personally. But I do 676 00:36:02,160 --> 00:36:04,520 Speaker 11: think that what it what it tells us is you know, 677 00:36:04,560 --> 00:36:07,000 Speaker 11: at some point you lose control of the narrative, because 678 00:36:07,040 --> 00:36:09,839 Speaker 11: I think it becomes self fulfilling. I've described this market 679 00:36:09,880 --> 00:36:12,880 Speaker 11: as Pavlovian. The bell rings and off we go, and 680 00:36:12,960 --> 00:36:15,080 Speaker 11: you could see it this morning. But when the alarm 681 00:36:15,160 --> 00:36:18,160 Speaker 11: clock rang for people, we went from flat to up nine. 682 00:36:18,080 --> 00:36:22,760 Speaker 5: Lay the layoffs and trump and arrest. But the issue 683 00:36:23,040 --> 00:36:25,640 Speaker 5: is what's the character of the exuberance. 684 00:36:25,840 --> 00:36:29,320 Speaker 11: Now, the character of the exuberance is that this is 685 00:36:29,480 --> 00:36:31,719 Speaker 11: just a party that you know that this is a 686 00:36:31,760 --> 00:36:34,080 Speaker 11: party that's going to go on forever. And the question 687 00:36:34,280 --> 00:36:36,680 Speaker 11: is are we you know, are you know put in 688 00:36:36,760 --> 00:36:38,520 Speaker 11: baseball terms? Are we in the you know or in 689 00:36:38,600 --> 00:36:41,080 Speaker 11: the you know, sixth inning or in the ninth inning? 690 00:36:41,200 --> 00:36:43,160 Speaker 11: Or are we like last night's game and then the fourteenth? 691 00:36:43,200 --> 00:36:45,440 Speaker 2: Did we put it like hockey terms? Sure, it's like 692 00:36:45,520 --> 00:36:48,839 Speaker 2: when it's like when the Rangers beat Montreal the other 693 00:36:48,960 --> 00:36:50,560 Speaker 2: night and you thought it would go on forever. 694 00:36:50,920 --> 00:36:53,160 Speaker 6: Yeah, well that was all because of the third period. 695 00:36:56,160 --> 00:37:00,319 Speaker 4: Steve, how are you thinking about this administration and it's 696 00:37:01,560 --> 00:37:04,000 Speaker 4: wanting to see we have a buoyant market, a point 697 00:37:04,040 --> 00:37:07,720 Speaker 4: economy through the midterms. I mean, this party, this baseball 698 00:37:07,760 --> 00:37:09,759 Speaker 4: game can go into twenty innings if that's the case. 699 00:37:10,360 --> 00:37:12,600 Speaker 11: Yeah, I mean, you know, I think I think what 700 00:37:12,800 --> 00:37:16,080 Speaker 11: shocked everybody in April wasn't so much the tariffs themselves, 701 00:37:16,160 --> 00:37:18,600 Speaker 11: but it was the tone deaf response from the administration 702 00:37:19,120 --> 00:37:20,800 Speaker 11: in response to them. You know, it was it was 703 00:37:20,840 --> 00:37:22,880 Speaker 11: originally like, you know, big deal, we're going to do, 704 00:37:22,960 --> 00:37:24,759 Speaker 11: We're going to do. And it was only after the 705 00:37:24,840 --> 00:37:28,320 Speaker 11: bond markets got yippie not my not my term that 706 00:37:28,480 --> 00:37:31,200 Speaker 11: that things that things turned around, and I think there's 707 00:37:31,239 --> 00:37:33,799 Speaker 11: this confidence that the administration will do what it's going 708 00:37:33,880 --> 00:37:37,160 Speaker 11: to do in terms of getting the markets righted. The 709 00:37:37,200 --> 00:37:39,360 Speaker 11: Trump put the Trump put, But I you know, I 710 00:37:39,400 --> 00:37:41,080 Speaker 11: think that only goes so far. I mean, I think, 711 00:37:41,200 --> 00:37:43,320 Speaker 11: you know, the Fed put, I've always said, is not 712 00:37:43,400 --> 00:37:46,440 Speaker 11: about stocks. It's it's about the system. It's a systemic put. 713 00:37:46,760 --> 00:37:48,840 Speaker 11: And that's something I learned Actu Solomon Brothers when I 714 00:37:48,920 --> 00:37:51,239 Speaker 11: was there in the crash and saw this being I 715 00:37:51,320 --> 00:37:53,000 Speaker 11: was there in the maternity room, so to speak. 716 00:37:53,120 --> 00:37:54,680 Speaker 6: Is the Trump put about the ten year yield or 717 00:37:54,680 --> 00:37:55,320 Speaker 6: about stocks? 718 00:37:56,200 --> 00:37:57,920 Speaker 11: It's about I think it's about whatever he wants it 719 00:37:58,000 --> 00:37:59,840 Speaker 11: to be about that day. I mean, I think crypto 720 00:38:00,080 --> 00:38:03,920 Speaker 11: probably most most definitely, because honestly, he's becoming very rich 721 00:38:03,920 --> 00:38:06,040 Speaker 11: from crypto, and I think he does not want that 722 00:38:06,160 --> 00:38:08,239 Speaker 11: party to end. But I think you need them all 723 00:38:08,239 --> 00:38:10,879 Speaker 11: as an ecosystem. You know, you need a solid bond 724 00:38:10,960 --> 00:38:13,440 Speaker 11: market to have a solid stock market and to them 725 00:38:13,480 --> 00:38:16,320 Speaker 11: for have the type of speculative environment that enables crypto 726 00:38:16,400 --> 00:38:17,000 Speaker 11: to do what it does. 727 00:38:17,239 --> 00:38:20,040 Speaker 4: How closely do you watch things like bitcoin's share price? Then, 728 00:38:20,160 --> 00:38:22,640 Speaker 4: I mean, what's the correlation between crypto and the traditional 729 00:38:22,680 --> 00:38:23,360 Speaker 4: asset classes. 730 00:38:23,680 --> 00:38:27,359 Speaker 11: Right now, bitcoins sort of you know, bitcoin, it's kind 731 00:38:27,360 --> 00:38:30,080 Speaker 11: of nasdakish, you know, it does have a reasonable correlation 732 00:38:30,160 --> 00:38:30,800 Speaker 11: with NDX. 733 00:38:31,680 --> 00:38:32,280 Speaker 3: It's evolving. 734 00:38:32,360 --> 00:38:35,359 Speaker 11: I actually spoke at a crypto conference in Stamford last 735 00:38:35,360 --> 00:38:38,920 Speaker 11: week and I was surprised did they did not, And 736 00:38:39,000 --> 00:38:41,000 Speaker 11: I was surprised that I was not the only person 737 00:38:41,040 --> 00:38:41,759 Speaker 11: there with gray hair. 738 00:38:41,840 --> 00:38:43,000 Speaker 3: I thought I was going to be like this. 739 00:38:43,280 --> 00:38:45,040 Speaker 11: I thought I was gonna be Grandpa in this room, 740 00:38:45,160 --> 00:38:47,759 Speaker 11: and I was basically like around the median age, which 741 00:38:47,840 --> 00:38:49,120 Speaker 11: was a little surprising. 742 00:38:50,280 --> 00:38:52,680 Speaker 2: This has been very Steve Sastig, thank you for the update. 743 00:38:53,080 --> 00:38:57,360 Speaker 2: Thanks incredible work. I mean, it's just truly truly historic. 744 00:38:57,520 --> 00:39:00,080 Speaker 2: Steve Sastik, Chief Strategy's. 745 00:38:59,520 --> 00:39:05,480 Speaker 1: Interactive This is the Bloomberg Surveillance podcast, available on Apple, Spotify, 746 00:39:05,640 --> 00:39:09,880 Speaker 1: and anywhere else you get your podcasts. Listen live each weekday, 747 00:39:10,040 --> 00:39:13,480 Speaker 1: seven to ten am Eastern on Bloomberg dot Com, the 748 00:39:13,600 --> 00:39:17,560 Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You 749 00:39:17,680 --> 00:39:21,000 Speaker 1: can also watch us live every weekday on YouTube and 750 00:39:21,239 --> 00:39:22,920 Speaker 1: always on the Bloomberg terminal