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Speaker 1: Global business news twenty four hours a day at Bloomberg

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Speaker 1: dot com, the Radio plus mobile lap and on your radio.

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Speaker 1: This is a Bloomberg Business Flash and I'm Karen Moscow.

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Speaker 1: This updates brought to you by New York Community Bank

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Speaker 1: and New York Commercial Bank, the n y c B

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Speaker 1: Family of Banks Bank with confidence. Anywhere you see the

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Speaker 1: n y c B logo, visit n y c B

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Speaker 1: family dot com. It's a busy morning for earnings travelers

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Speaker 1: reporting a first quarter profit that missed analysts estimates. Blackstone

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Speaker 1: and Lazard also missed Biogen under Armour, Citizens Financial and

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Speaker 1: b n Y melon beat. We are watching the markets today.

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Speaker 1: SNP emny futures that will change to higher up a

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Speaker 1: point downy miny futures up twelve and nasdak emny futures

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Speaker 1: up less than one dacks in Germany's down three tenths

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Speaker 1: per cent, ten year treasury down five thirty seconds, the

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Speaker 1: yield one point eight six percent. NIMEX screwed oil that'll

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Speaker 1: changed at eighteen of barrel comes gold up half per

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Speaker 1: cent or six dollars thirty cents at twelve sixties seventy

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Speaker 1: and ounce. The euro and dollar thirteen thirteen the end

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Speaker 1: one oh nine point seven five. That's a Bloomberg business flash.

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Speaker 1: Tom and Mike, thanks so much. Karen greatly appreciate it.

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Speaker 1: Michael McKay Gregg Valier is a jewel. He is absolutely fabulous.

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Speaker 1: He gives us help on our economic politics, if you will.

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Speaker 1: And within his brilliant, brilliant report this morning, he says

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Speaker 1: something that's perfect for Jim Paulson the economy the proceed

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Speaker 1: the economy expanding after a week first quarter semi colon

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Speaker 1: many retail clients think the recession never ended. Valiers note

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Speaker 1: Jim is just brilliant on the behavioral polarities out there.

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Speaker 1: How do I invest given this dysfunctional polarity that we

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Speaker 1: see every day every topic. Yeah, the there's been uh

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Speaker 1: continued sort of dichotomy between Wall Street and Main Street

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Speaker 1: and has and has nots throughout this recovery. UM I

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Speaker 1: think I likely to continue. UM I I would stay,

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Speaker 1: you know, more focused on the fact that we're probably

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Speaker 1: still a ways away from recession Tom, and and if

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Speaker 1: we are, then we're probably a ways away from the

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Speaker 1: ultimate peak in the financial markets. And and uh, I

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Speaker 1: also think that there's other opportunities beyond the US. There's

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Speaker 1: other parts of the world to invest in that are

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Speaker 1: in a different place than the United States, is that

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Speaker 1: most of those are in an earlier part of their

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Speaker 1: recovery uh and aren't back to full employment suffering some

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Speaker 1: of the pressures that we have here, and probably offer

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Speaker 1: better relative values at the moment. What do you say

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Speaker 1: when you I mean, you're you're basically coming down on

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Speaker 1: the pros side as uh as Greg would put it

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Speaker 1: in in this and yet your your business is dealing

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Speaker 1: with the retail people. What do you say to them

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Speaker 1: about what's going to happen if there's this disbelief? You know?

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Speaker 1: You know, Mike. A big part of investment consoling, I say,

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Speaker 1: your investment management when you work directly with clients and

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Speaker 1: it doesn't matter whether your retail line or institutional line,

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Speaker 1: or your your or me. A big part of it

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Speaker 1: is developing the confidence to do what's right over time.

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Speaker 1: And it's very hard because the best opportunities throughout life

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Speaker 1: for investment is when there is great doubt, often about

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Speaker 1: its viability. Those are the times when prices are don't

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Speaker 1: fully reflect the possibilities to come. And if you only

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Speaker 1: invest when you feel comfortable you're not going to do

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Speaker 1: well over time. So a big part of investment consoling

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Speaker 1: is trying to get people to understand that when you

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Speaker 1: do feel uncomfortable as a time often that you should

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Speaker 1: probably should have more risk on, not less. When obviously

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Speaker 1: you sound like you're quoting war and Buffett, uh and

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Speaker 1: we talk about war buffet all the time. I'm just

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Speaker 1: curious when you talk something like that to people to

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Speaker 1: do people thinking knows what he's talking about. Does that

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Speaker 1: register with people? Well? Um, I think it's difficult. It really,

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Speaker 1: it really is difficult, um, because you can make a

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Speaker 1: cogent case and when people are relaxed in good times,

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Speaker 1: they're receptive to it. But when it really gets nasty

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Speaker 1: at the current moment, often people are very hesitant and

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Speaker 1: there's no debate at that point. That's why you have

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Speaker 1: to set up I think you have to set up

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Speaker 1: your plan of attack in a in a comfortable moment,

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Speaker 1: and and then refer back to that the arguments made

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Speaker 1: at that time in order to get things done when

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Speaker 1: you're not comfortable. Within that is sector purchase. I mean,

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Speaker 1: we can look at the macro economy, but you have

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Speaker 1: to make choices among sectors. Do you sprinkle the infield

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Speaker 1: or is this the time where you make them shup

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Speaker 1: uh dichotomies if you will, in thinking and where to

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Speaker 1: own what to own in America. You know, you know,

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Speaker 1: I think we're having a fairly big shift time, and

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Speaker 1: I think it's going to continue in the rest to

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Speaker 1: the recovery. Up up until this point in the recovery,

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Speaker 1: there's been disinflation has dominated UH the global recovery, and

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Speaker 1: oftentimes weak pricing overall favors more of the consumer sectors

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Speaker 1: of the economy, and it's been led by the consumer

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Speaker 1: cyclicals and staples and healthcare, a lot of the consumer stocks,

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Speaker 1: and the producer and industrials have un a reformed. If

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Speaker 1: we're starting to bottom out commanding prices, if core inflation

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Speaker 1: and wages are starting to rise, and we're gonna have

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Speaker 1: the rest of this recovery growth with a little inflation,

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Speaker 1: that I think that we're gonna have a shift in

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Speaker 1: leadership from consumer to industrial producer UH type pursuits capital goods,

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Speaker 1: if you will. UM. And it's no coincidence that the

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Speaker 1: US stock market has dominated the world seene because in

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Speaker 1: part it is the quintessential consumer economy relative to the

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Speaker 1: rest of the world, and it's been in a great

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Speaker 1: environment of disinflation. If that change is I think it

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Speaker 1: starts to favor international stocks over domestic How much of

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Speaker 1: achieving that is going to be based on confidence to

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Speaker 1: kind of get back to what great value was talking about, Um,

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Speaker 1: you know, the not just confidence among consumers, but inflation

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Speaker 1: expectations a cent. Yeah, I think that the convience is

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Speaker 1: gonna play a big role, big role, Mike. It has

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Speaker 1: throughout uh sort of reluctantly been dragged into this market

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Speaker 1: the whole way. You know. The one big example of

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Speaker 1: of of your is we've been missing capital spending in

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Speaker 1: this recovery. And even though the capability has been tremendous

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Speaker 1: and I think in part that that could get a

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Speaker 1: lot better too. One thing that's going to change that

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Speaker 1: as being back at full employment, there's now a need

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Speaker 1: to add capacity where there hasn't been up till now. Also,

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Speaker 1: if costs start to go up, that forces the CEO's

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Speaker 1: hand to do something about that, try to invest to

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Speaker 1: increase productivity. And then the last thing is if the

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Speaker 1: rest of the world starts to do a little bit,

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Speaker 1: it's hard for a corporate CEO to develop animal spirits

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Speaker 1: when they look at Europe and they look at Japan

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Speaker 1: and look at China, and no one's doing for well,

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Speaker 1: why should I? Why should I cap spend? But if

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Speaker 1: we start to see a pickup globally, that could lend

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Speaker 1: itself to true confidence in true capital spending. There's a

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Speaker 1: crazy things are. We've got Mario Drag coming up. Jim

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Speaker 1: Paulson Siemens debt costs, according to Bloomberg is zero point

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Speaker 1: two percent cost. That's the distortion that Mario Drag has

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Speaker 1: to face. Michael McKee win is at seven five for

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Speaker 1: the decision, eight thirty for the news conference here on

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Speaker 1: Bloomberg and the surreal, the great distortion, the financial repression,

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Speaker 1: you know as Bloomberg surveillance. Bloomberg surveillance brought to by

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Speaker 1: the Ethics Institute. It can't play School in Summit, New Jersey,

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Speaker 1: a center for research, resources and practice for students and

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Speaker 1: parents on twenty one century ethical leadership, holding events in

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Speaker 1: the spring More. It can't play stat all