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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern

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Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business App.

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Speaker 1: Listen on demand wherever you get your podcasts, or watch

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Speaker 1: us live on YouTube.

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Speaker 2: I got any ways to go to start this off,

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Speaker 2: Let me just go equities one oh one.

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Speaker 3: How far behind is the market? I don't sense any

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Speaker 3: exuberance out there, and up up we go, Golden Sachs

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Speaker 3: saying everything's firing on all cylinders.

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Speaker 4: I think it depends on where you're looking for exuberance.

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Speaker 4: If you're looking at institutional investors, you are absolutely correct.

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Speaker 4: There's really no signs of exuberance. We can see in

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Speaker 4: that Deutsche Bank consolidated equity positioning, you're just slightly above overweight.

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Speaker 4: If you look at at discretionary investors, they're at neutral,

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Speaker 4: which means that people who aren't just trend followers have

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Speaker 4: been sitting more on the sidelines of this market, not

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Speaker 4: going all in. The contrast is with retail investors. Retail

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Speaker 4: investors are very much all in on this market. Whether

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Speaker 4: you're looking at fed flow of funds, aaii margin loan balances.

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Speaker 4: All of these suggest that retail has definitely pushed all

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Speaker 4: the chips to the center of the table.

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Speaker 5: Starting to get into the teeth of earning season this weekend.

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Speaker 5: What have you seen so far? What do you think

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Speaker 5: the market maybe needs to see?

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Speaker 4: I think one of the key stats to watch and

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Speaker 4: as it progresses. We've only seen about thirteen percent of

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Speaker 4: the names report, But of those thirteen percent of names,

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Speaker 4: what we're seeing is growth is coming in at eight

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Speaker 4: point two percent. That's effectively equal to the eight point

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Speaker 4: three percent that people expected going into the quarter. That's

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Speaker 4: a contrast from the last two quarters where you had

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Speaker 4: beats that were so large that you ended the quarter

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Speaker 4: with effectively double the growth rate than what you expected

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Speaker 4: going in. So that's probably why we're seeing this market

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Speaker 4: more shrug in the face of these beats versus dancing

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Speaker 4: with joy like we saw in the past couple quarters.

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Speaker 3: I get all my stock tips from Nathan Hager.

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Speaker 2: That's why I need the triple levers all cash fun

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Speaker 2: And Nathan just mentioned Kimberly Clark, so I looked it up. Irving, Texas.

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Speaker 2: We all know the name. Last ten years, it's gone

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Speaker 2: up at three percent per year. It's basically to be

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Speaker 2: polite a failure. Okay, fine, Institutional ownership with Kimberly Clark

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Speaker 2: and a Bloomberg eighty seven percent, institutional ownership of Apple

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Speaker 2: sixty eight percent.

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Speaker 3: Yeah, that doesn't make sense, doesn't that?

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Speaker 6: Well?

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Speaker 4: You know, I think part of that is the function

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Speaker 4: of people going down the list and checking the box

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Speaker 4: and owning everything in every single sector where just because

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Speaker 4: they're having to benchmark to a certain index. And consumer

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Speaker 4: staples are one of those things that we think that

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Speaker 4: you should think of them in more of an episodic

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Speaker 4: kind of way. What I mean by that is they

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Speaker 4: provide protection to portfolios in a short period of time,

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Speaker 4: meaning when things really start to get scorely in markets,

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Speaker 4: that's when you see consumer staples outperform. But then they

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Speaker 4: give it all back up. So when you think about

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Speaker 4: retail investors who might be wanting to shoot for growth,

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Speaker 4: that's probably why you see that s.

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Speaker 3: O is Apple under owned. I mean we're going into

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Speaker 3: major tech, Paul, you said Apple's like this week, right, No.

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Speaker 5: They're coming up a little bit yet this week along

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Speaker 5: with stead of Microsoft, Testla, they're all under own.

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Speaker 3: I mean that's a fact, right.

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Speaker 4: So not necessarily. If you go back to November or

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Speaker 4: late October, what you saw in the positioning data is

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Speaker 4: that megacat growth in tech had some of the highest

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Speaker 4: positioning exposure by institutions going back over the last few years.

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Speaker 4: And what they were really underweight with cyclical areas of

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Speaker 4: the market. And that explains why you've seen this weakness

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Speaker 4: within tech and big huge rallies in industrials energy materials.

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Speaker 4: Because here's the kicker.

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Speaker 3: A lot of.

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Speaker 4: These tech areas have very deep liquidity and they have

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Speaker 4: very large positions, but the smaller, more cyclical areas aren't

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Speaker 4: nearly as liquid. So a little bit of money coming

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Speaker 4: out of tech going into these smaller areas is causing

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Speaker 4: this big upside.

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Speaker 3: I have said, load loow, Huggies can clerk, it's a cyclical.

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Speaker 5: Oh yeah, he's all in there that household. So again,

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Speaker 5: we're going to get a lot of the big tech

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Speaker 5: names Meta, Microsoft, Tesla, Apple this week.

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Speaker 3: How important are those names to.

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Speaker 7: This market here?

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Speaker 4: Incredibly important simply because there's such large weights in the index.

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Speaker 4: And the question will be does the top line growth

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Speaker 4: and margin expansion of their core businesses still allow them

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Speaker 4: and give them the free pass to make such large

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Speaker 4: investments in AI which are hardly not part of their

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Speaker 4: core business. Yet you can't argue that Microsoft's making a

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Speaker 4: lot of money off of AI. At this point, we've

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Speaker 4: all used copilot, we all know it doesn't work very well.

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Speaker 4: So I think that it's the core business that we

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Speaker 4: have to watch really closely because that's effectively what's allowing

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Speaker 4: them to spend so much other money in these newer areas.

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Speaker 5: We're going to hear from the Fed this week. How

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Speaker 5: does that factor into kind of how you're viewing the

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Speaker 5: market here. It's almost seems like, Yeah, the Feds one

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Speaker 5: or two cuts this year, that's kind of it. Let's

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Speaker 5: focus on earnings and other big things.

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Speaker 4: Look, I think that if there's one chart that could

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Speaker 4: surprise people the most, and this is not our base case,

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Speaker 4: but the one chart is the two year treasury yield.

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Speaker 4: The two year treasury yield is of course, very sensitive

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Speaker 4: to expectations about FED policy, and it has been in

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Speaker 4: a very very clear down trend over the course of

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Speaker 4: the last three years as we pivoted from a FED

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Speaker 4: that was tightening to a FED that was easing. That

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Speaker 4: has added to market liquidity, that has kept financial conditions

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Speaker 4: easy if that starts to turn, meaning the market is

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Speaker 4: sniffing out potentially stickier inflation or not as many FED

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Speaker 4: cuts to come. I think that's a pretty big sea

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Speaker 4: change for risk assets.

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Speaker 3: By hold cell on Meg seven. We got to go

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Speaker 3: to the breaking news in Washington.

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Speaker 4: But hold cell on Meg seven, Hold hold, she say,

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Speaker 4: by into weakness. The premium that growth is trading over

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Speaker 4: value has compressed materially. It was eighty five percent in November.

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Speaker 4: Now it's sixty, so getting more attractive.

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Speaker 3: I saw it's gonna be single digit wind children, Florida.

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Speaker 3: Good luck with that, camp, cand Also, thank you so

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Speaker 3: much for doing greatly, greatly appreciated. Stay with us.

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Speaker 2: More from Bloomberg Surveillance coming up after this.

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Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live

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Speaker 1: weekday afternoons from seven to ten am Eastern. Listen on

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Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app, or

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Speaker 1: watch us live on YouTube.

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Speaker 2: Georgia with us right now George Countrabone with this head

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Speaker 2: of fixed income too short a visit this morning. He's

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Speaker 2: a DWS of Germany, formerly with the Deutsche Bank as well.

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Speaker 2: How do you treat a big tech debt offering. You're

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Speaker 2: sitting there, you're having your Chinese takeout, and all of

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Speaker 2: a sudden, Microsoft with three percent debt shows up with

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Speaker 2: thirty billion dollars. What do you actually do when there's

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Speaker 2: a megadeal debt with.

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Speaker 7: A lot of care and due diligence and hopefully we

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Speaker 7: were in on reverse before that deal actually came.

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Speaker 3: What does that mean in unreversed, Well, it.

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Speaker 7: Means that we went to the syndicate even maybe had

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Speaker 7: direct conversations with the company to express interests before it

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Speaker 7: actually came to the market. We have a group of

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Speaker 7: investors that were looking for that profile or potential maturity,

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Speaker 7: and then before it comes, we're going to have a

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Speaker 7: lot of conversations with our analysts that are going to

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Speaker 7: do valuation work and the sell side desks to see

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Speaker 7: how they're shaping up. These deals have been oversubscribed three

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Speaker 7: to four times, and the concession i e. Where they're

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Speaker 7: coming versus where the secondary market is trading is very tight,

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Speaker 7: and they keep coming tom.

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Speaker 2: This three percent debt at Microsoft. In your head, what

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Speaker 2: would be an appropriate debt percent from one of these

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Speaker 2: mega techs. Paul wants to that.

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Speaker 3: They have such so much free cash flow.

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Speaker 7: But there are some black sheep out there tom as well,

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Speaker 7: like you know, naming names. There's a triple B that

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Speaker 7: I'm thinking of right now that trades more like a

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Speaker 7: double bee. So low single percent seems reasonable. But the

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Speaker 7: problem is how far are they going to keep coming

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Speaker 7: because this is not the equity market, So those concessions

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Speaker 7: right now will widen out and those interests will subside

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Speaker 7: if they start coming more and more more like we

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Speaker 7: saw and then tapping the private markets like they did

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Speaker 7: in Roul.

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Speaker 5: Yeah, well, Goldmen's I mean, the financial companies have been

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Speaker 5: just flooding the market with debt. So Goldman Sachs sold

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Speaker 5: two and a half billion dollars of an investment grade

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Speaker 5: bond on Monday, less than two weeks after the firm

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Speaker 5: sixteen billion dollars. So when they call you, guys, your

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Speaker 5: traders pick up the phone, you're like, okay, I'll take

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Speaker 5: some more.

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Speaker 7: That was a record issuance for the MP market for

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Speaker 7: sixteen billion. But to be fair, financial companies do this

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Speaker 7: post earnings. Yes, obviously feel their balance sheet and a

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Speaker 7: lot of the other activities that are going on, including

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Speaker 7: m and A that you that you touched on earlier,

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Speaker 7: so you know, we're doing the same amount of diligence,

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Speaker 7: but it's expected to come from the financial just not

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Speaker 7: expected to come from their airs.

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Speaker 3: Long and I are bombarded with questions Amazon, what are

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Speaker 3: they going to do? They don't They're doing AI and

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Speaker 3: all this other garbage. So they need to issue that

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Speaker 3: OMGM worried worried word. You're the grizzled pro. How do

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Speaker 3: you treat AI, campex expense in debt issuance of these

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Speaker 3: major techs.

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Speaker 7: Like I said, very carefully, but also diversify. Tom. It

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Speaker 7: is interesting that you say that because the MAG seven

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Speaker 7: is becoming much more pervasive within credit indices. It was

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Speaker 7: all those financial issuers plus U and H and AT

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Speaker 7: and T before and now if we keep up twenty

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Speaker 7: percent cap X like as expected, you're going to have

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Speaker 7: that new whatever you call fang Mag seven grade eight

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Speaker 7: within the credit indicy So I think what's interesting to

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Speaker 7: your point is the credit indices now are starting to

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Speaker 7: change and you're going to have much more of a

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Speaker 7: MAG three or four within the top ten.

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Speaker 3: So what does that mean? If it's Paul, I've never

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Speaker 3: I've never considered this is rob shift. We talk, but

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Speaker 3: I don't listen to Shift. Then I listened to George. George,

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Speaker 3: help me here. Then, I mean if they're in, If

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Speaker 3: Amazon is in the indussy of credit, what does that mean?

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Speaker 3: How does Amazon's life change?

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Speaker 7: Well, at least for the moment, you're going to have

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Speaker 7: more interest in being able to issue dead but they

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Speaker 7: have such great free cash fl I don't know if

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Speaker 7: necessarily changes. The real question is what are they doing

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Speaker 7: with the capital expenditures. Is it research and development or

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Speaker 7: is just simply leasing data centers upon debt? Not buying

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Speaker 7: leasing you know, data centers and growing their business. And

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Speaker 7: it really comes down to are we going to need

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Speaker 7: is this AI expansion what everyone says it is, will

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Speaker 7: we need as much data centers? And by the way,

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Speaker 7: created about capex who pays for all the power? Yes,

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Speaker 7: that's required and it's coming from the as we get

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Speaker 7: into midterms.

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Speaker 5: So to fuel this new issuance, is it mostly refinancing

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Speaker 5: or is this incremental debt? And you guys care about that.

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Speaker 7: No, we certainly do so in some instances it seems

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Speaker 7: to be incremental. The net issuance this year versus less

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Speaker 7: year is actually going to go up, So you're talking

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Speaker 7: about trillion a net issue, I'm sorry, and overall issuance

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Speaker 7: coming this year in the IG market a couple hundred

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Speaker 7: billion in net issuance, and I think that's where you

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Speaker 7: could have a moment where the market actually pushes back

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Speaker 7: if those estimates get pushed up. Everyone's seeing spreads right now,

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Speaker 7: trade super tight right multi decade tights. Those spreads will

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Speaker 7: widen if you start to exceed a couple hundred billion

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Speaker 7: in net issuance. Tech keeps coming and gross issues is

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Speaker 7: beyond two trillion, which could be the case.

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Speaker 3: In twenty twenty five.

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Speaker 5: Fixing can broadly fine had a very good year and

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Speaker 5: returns high single digits in twenty twenty six. Can I

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Speaker 5: expect that type of performance or should I just be

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Speaker 5: comfortable clipping my coupon here to your point seven percent?

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Speaker 5: In IG last year eight percent tenure total return. Our

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Speaker 5: bhyb our our single B double B hield fund returned

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Speaker 5: nine percent. So I don't know if you're going to

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Speaker 5: see that again, but I think the curve right now

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Speaker 5: being steep, as the previous guest was mentioning allows you

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Speaker 5: to get some carry right, but also some roll down,

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Speaker 5: and that's what exactly what you should be doing as

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Speaker 5: the move index comes down and hopefully rates ball autility

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Speaker 5: subsides and you're able to come down at that curve.

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Speaker 3: Just canter.

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Speaker 2: One of this is GWS of Germany here buying bills,

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Speaker 2: notes and bonds for dwes. Here's the headline. This is

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Speaker 2: thank you for the timing, George to be here. Bloomberg

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Speaker 2: DX Bloomberg dollars spot index its weakest level since March

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Speaker 2: of twenty twenty two. So an international shop like you,

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Speaker 2: does that diminish your appetite for US paper?

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Speaker 7: Well, you know our base, our base, I think our

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Speaker 7: base rates in euros. I don't think it necessary diminishes

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Speaker 7: the return. Last year Dixie started out in the worst

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Speaker 7: year since the seventies, and a lot of this has

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Speaker 7: to do with you know, candidly are you know rate

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Speaker 7: cuts that were there versus in the rest of the world.

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Speaker 7: So it also came from that end move that you

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Speaker 7: saw on Friday, right, low volume out there, interesting coordinated

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Speaker 7: between ourselves in Japan, some rate checking right amongst some

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Speaker 7: seal side desk with no one was around, and I

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Speaker 7: think it drove down US dollar further. It could be

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Speaker 7: a second half story for the US dollar, though, Tom,

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Speaker 7: you know there's a dollar smile that if the economy

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Speaker 7: and the jobs market really starts to weaken, I could

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Speaker 7: imagine a bid coming back to the US dollar.

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Speaker 5: What are you doing in the municipal space here, because, boy,

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Speaker 5: for those of us in high tax jurisdictions, the tax

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Speaker 5: will equivalent you looks pretty darn attractive here.

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Speaker 3: Yeah, great point.

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Speaker 7: So we actually have three state tax exempt funds and

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Speaker 7: very high tax districts in Massachusetts being one of New

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Speaker 7: York being one of them. Tax equivalent yields are super

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Speaker 7: or high, like nine percent or so in the state

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Speaker 7: right here, and talk about a curve that's deep. That's

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Speaker 7: curve was super steep and had a ratio of near

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Speaker 7: one hundred percent. Where where treasuries are it's back down

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Speaker 7: on the sixty to seven percent area right now. But again,

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Speaker 7: pushing out that curve to get some of that role

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Speaker 7: down is exactly what we did last year, and I

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Speaker 7: think that's really smart to block in some of those yields.

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Speaker 7: It's a market that hasn't really grown, that's issued a

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Speaker 7: heck of a lot last year, and we'll continue to

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Speaker 7: issue this year.

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Speaker 5: That's what I heard of It because we do a

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Speaker 5: lot of stuff with that, a lot of work with

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Speaker 5: the BAM build American Mutual twenty twenty four recordations, twenty

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Speaker 5: twenty five record issuans, and they say again this year

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Speaker 5: record issuance is that makes it difficult for performance for

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Speaker 5: these bonds.

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Speaker 7: I think if not necessarily, if you barbell out it

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Speaker 7: the right way and you have good security selection, which

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Speaker 7: is exactly what we're doing.

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Speaker 3: I got you were president your class of Providence. We're

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Speaker 3: asking all of our guests, particularly fools that come into

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Speaker 3: the studio given the weather. I mean, when you're president

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Speaker 3: of your class, do you avoid Sullivan, Davis and Bedford

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Speaker 3: at Providence College so you don't have to walk that

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Speaker 3: hillacious walk? Folks. Providence College is a little bit warmer

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Speaker 3: than like Bucknell or.

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Speaker 2: Lawrenceville or you know some of these other schools Rochester

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Speaker 2: Institute Technologies.

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Speaker 3: But you, guys, major and wind, you walk into class

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Speaker 3: five degree weather there the windchills like thirty below.

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Speaker 7: I was right down a lower campus, Fenel Hall. Good morning,

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Speaker 7: Providence College. I had to walk up to campus right

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Speaker 7: into the tennis courts every single day, Tom, you know,

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Speaker 7: both ways up uphill. I didn't promise any ten percent

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Speaker 7: credit card. Caps was running for president. Was this with.

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Speaker 3: America inst lugger beer in your hand?

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Speaker 7: Yes, there was absolutely against it in left end right.

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Speaker 3: Hands and great to see and fear.

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Speaker 2: Support to your college, Providence College, congratulations.

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Speaker 3: On that, mister Canterbourne.

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Speaker 2: George Cantrimbrune had a fixed income DWS group that was brilliant, folks.

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Speaker 3: I learned a lot there, particularly on high tech and

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Speaker 3: what they're going to do with presumed bond issue ins.

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Speaker 2: Stay with us. More from Bloomberg Surveillance coming up after this.

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Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us Live

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Speaker 1: weekday afternoons from seven to ten am Eastern Listen on

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Speaker 1: Apple Karplay and Android Auto with the Bloomberg Business app,

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Speaker 1: or watch us Live on YouTube.

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Speaker 2: This is our interview of the day with Global Wall Street.

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Speaker 2: Kitchoos with a blistering note over the weekend for sock.

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Speaker 2: Jenny follows up again. Paul I got a problem.

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Speaker 3: He's like using ashes cricket talk oh in his research.

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Speaker 3: Have no idea what he's talking about. Let's get some

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Speaker 3: clarity right now. Kit, I want you to inform our

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Speaker 3: audience of the power of the politicians in Japan, the

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Speaker 3: power of their central bank, the Bank of Japan, the

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Speaker 3: power of mof the Ministry of Finance. What is their

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Speaker 3: power with threat of intervention to change US markets.

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Speaker 8: To a lot of power because if they come in,

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Speaker 8: intervene and move their currency, strengthen it, they can weaken that,

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Speaker 8: They can weaken the dollar. They can get the US

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Speaker 8: market equity market doing better if they can. If they

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Speaker 8: intervene enough in their bond market stabilize long dayd JGB yields,

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Speaker 8: they can probably push down thirty year treasury heelds and

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Speaker 8: play a big part. So they are not powerless. They're

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Speaker 8: the biggest foreign owners, foreignholders of your debt as well.

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Speaker 8: I The challenge they have is their economic problem, that

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Speaker 8: they have a debt level that's way too high, and

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Speaker 8: if they try to solve that by coming in with

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Speaker 8: really tight fiscal policies cutting spending, raising taxes and give

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Speaker 8: themselves even less growth, they'll never escape it. I have

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Speaker 8: to get out of that debt trap.

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Speaker 3: This is really important, folks.

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Speaker 2: I'm not going to make this a history lesson from

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Speaker 2: Mondel to Frankel, to Dornbush to Rogue Off and on too.

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Speaker 3: Kit Jukes but KIT interventions are rare. What's the X axis?

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Speaker 3: If and when Japan intervenes, how long does that affect less?

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Speaker 3: Is it days? Is it weeks? Can it be a

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Speaker 3: seismic shift to years on its own? It's days.

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Speaker 8: If you catch a market that's got the wrong position,

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Speaker 8: you can scace speculators, discourage people from putting trades on.

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Speaker 8: You have a bit of behavior or impact. But if

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Speaker 8: you don't do anything to back up your intervention with

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Speaker 8: policy change to get your currency going in the direction

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Speaker 8: you want, it won't last. If you do it at

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Speaker 8: the time where the market doesn't understand the policies you're making,

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Speaker 8: and they're the right policies, and then the market realizes,

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Speaker 8: everyone goes, oh, that's what they're doing. They're actually doing

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Speaker 8: things to get faster growth. They're liberalizing their economy, deregulating.

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Speaker 8: They're going to get this thing to really happen. Then

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Speaker 8: it can work for years. So the last few interventions

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Speaker 8: in Japan have had a very short shelf life because

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Speaker 8: nothing changed beyond the intervention kit.

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Speaker 5: Last week was a very busy week for global geopolitics,

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Speaker 5: with the world's leaders, many of them gathered in Davos, Switzerland,

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Speaker 5: did anything come out of there. Just the level of

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Speaker 5: uncertainty perhaps impact your outlook for just currencies going forward

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Speaker 5: for the remainder this year, I think the.

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Speaker 8: Level of uncertainty was the message that kind of you know,

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Speaker 8: it was quite combative. It's been less combative since President

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Speaker 8: Trump's come back. But my sense from it is, you know,

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Speaker 8: I have a world in the foreign exchange market where

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Speaker 8: the dollar is you know, Bloomberg has seen its consensus

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Speaker 8: GDP growth forecasts from people who has a bit, and

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Speaker 8: that rise to its highest level yet in this cycle,

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Speaker 8: up to two point four percent growth at the same

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Speaker 8: time as the rest of US are dawdling somewhere below that.

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Speaker 8: The only people who are closer Australia and Blue and

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Speaker 8: US has gone above them. You know, it's very unusual

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Speaker 8: to have people revising the US economy forecasts higher and

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Speaker 8: higher and the markets selling the dollar like this, but

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Speaker 8: they're doing it in this sense that despite this strong growth,

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Speaker 8: we're not gonna see tied a fiscal policy. We're not

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Speaker 8: going to switch the fiscal monetary policy mix to get

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Speaker 8: a weaker currency. The US is just going to cut

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Speaker 8: rates because it's going to cut rates, and that's that's

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Speaker 8: not a very stable kind of place for the market

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Speaker 8: to be, and that's the uncertainty that came out. And weirdly,

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Speaker 8: in the past uncertainty might have helped the dollar. Now

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Speaker 8: clearly it.

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Speaker 3: Isn't interesting kids we had.

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Speaker 5: President Trump has came into office this second term stating

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Speaker 5: that he and his administration wanted a week a dollar.

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Speaker 5: Looks like they're getting their wish here. How do you

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Speaker 5: think about the dollar here going forward?

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Speaker 8: I think that if you've got the strongest economy in

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Speaker 8: the world, you will end up having the strongest currency

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Speaker 8: somewhere along the way. So I'm with your I'm with

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Speaker 8: your very wise previous guest. Actually, I think that that

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Speaker 8: was that was I think we can have a week

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Speaker 8: dollar through the first half of this year. We have

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Speaker 8: forecasts of one twenty Q one Q two for euro dollar.

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Speaker 8: I kind of thought that was mad on January the first,

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Speaker 8: and didn't change them because I'm too lazy. I'm quite

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Speaker 8: keen on that now. I think we can stay at

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Speaker 8: these sort of higher levels.

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Speaker 3: Than this for a w while.

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Speaker 8: I think the dollar is going to be stronger by

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Speaker 8: Christmas unless the US economy slows down a lot, and

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Speaker 8: that'll only happen if I something goes wrong in the

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Speaker 8: equity market. I'm concert that.

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Speaker 2: Yet there's a money statement for you right there, folks

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Speaker 2: on dollar strength end of the year.

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Speaker 3: Kid.

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Speaker 2: Let me finish it with this. I'm standing in the

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Speaker 2: news bureau of Bloomberg News in Tokyo, and I'm on

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Speaker 2: the phone with Matthew Winkler, who you know is the

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Speaker 2: one that brought me to Bloomberg, and you know he's

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Speaker 2: editor in chief. And he's like, Tom, explain to me

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Speaker 2: sterilized intervention. So you know, I was a C student.

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Speaker 2: I butchered it.

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Speaker 3: But my basic idea here is none of this works

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Speaker 3: without this fancy phrase back to Krugman and Opsfeld called

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Speaker 3: sterilize that if you intervene, you have to go over

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Speaker 3: to your bond market and make adjustments. Japan doesn't have

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Speaker 3: those degrees of freedom, do they. They can't sterilize, can they?

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Speaker 4: No?

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Speaker 8: But if so, what Japan what we need to do

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Speaker 8: is to create a situation where Japanese investors, who today

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Speaker 8: hold you know, I mean huge quantities of US treasuries

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Speaker 8: because the yields are so much nicer than in Japan,

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Speaker 8: they don't want to support the yen with higher and

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Speaker 8: higher bond deals in Japan.

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Speaker 3: That's not going to do it.

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Speaker 8: It will kill their economy. So they have to find

439
00:21:20,359 --> 00:21:23,520
Speaker 8: a reason to get investors in the near term to

440
00:21:23,560 --> 00:21:27,040
Speaker 8: believe in the long term story and to sell For example,

441
00:21:27,560 --> 00:21:30,159
Speaker 8: their US treasury is to buy Japanese equities or their

442
00:21:30,280 --> 00:21:34,199
Speaker 8: US treasuries to buy how to buy some Japanese shorten

443
00:21:34,440 --> 00:21:37,600
Speaker 8: not really super long dated bonds necessarily, but to believe

444
00:21:37,680 --> 00:21:41,560
Speaker 8: in the politics making and get money to move.

445
00:21:42,000 --> 00:21:43,320
Speaker 3: It's a tall order.

446
00:21:44,119 --> 00:21:45,600
Speaker 8: They've got a new government that's going to try to.

447
00:21:45,600 --> 00:21:47,160
Speaker 6: Do it, but that's what that's what it will take.

448
00:21:47,440 --> 00:21:51,119
Speaker 6: There is a human condition to believed. Hope, maybe kitchens

449
00:21:51,119 --> 00:21:56,360
Speaker 6: what a clinic, thank you so much? Is with society degenerate? Well,

450
00:21:56,560 --> 00:22:00,720
Speaker 6: stay with us. More from Bloomberg Surveillance coming up after this.

451
00:22:08,000 --> 00:22:11,560
Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live

452
00:22:11,640 --> 00:22:14,639
Speaker 1: weekday afternoons from seven to ten am. E's durn Listen

453
00:22:14,720 --> 00:22:18,280
Speaker 1: on Applecarplay and Android Otto with the Bloomberg Business app,

454
00:22:18,440 --> 00:22:20,280
Speaker 1: or watch us live on YouTube.

455
00:22:20,400 --> 00:22:22,200
Speaker 3: Lisa Matteo out today.

456
00:22:22,840 --> 00:22:27,400
Speaker 2: Alexis christoffers rocking the batteries in the socks YEP.

457
00:22:27,720 --> 00:22:30,520
Speaker 3: I mean that's aw she got here? What do you got?

458
00:22:30,680 --> 00:22:33,040
Speaker 9: The news faces hand warmers too. So I'm gonna start

459
00:22:33,080 --> 00:22:36,520
Speaker 9: with a Bloomberg big take. This is about college endowments.

460
00:22:36,640 --> 00:22:39,320
Speaker 9: So Yale used to be sort of the gold standard here, right.

461
00:22:39,320 --> 00:22:42,440
Speaker 9: They would bet on private equity, venture capital, hedge funds,

462
00:22:42,440 --> 00:22:45,080
Speaker 9: these sort of a liquid investments for the long haul.

463
00:22:45,160 --> 00:22:48,840
Speaker 9: But guess what, old fashioned stocks and bonds doing better outperforming.

464
00:22:49,040 --> 00:22:51,879
Speaker 9: And there's an example of this. University of California's school

465
00:22:51,920 --> 00:22:55,159
Speaker 9: system shifted just a small piece of their endowment away

466
00:22:55,200 --> 00:22:58,560
Speaker 9: from sort of the costly complicated hedge funds and venture

467
00:22:58,560 --> 00:23:03,159
Speaker 9: capital and into stocks and bonds returned fifteen percent average

468
00:23:03,160 --> 00:23:05,000
Speaker 9: animal return over the past three years.

469
00:23:05,080 --> 00:23:07,440
Speaker 5: And but here's a big thing. When I first started

470
00:23:07,440 --> 00:23:10,800
Speaker 5: working on university boards and I was shocked tom at

471
00:23:10,800 --> 00:23:15,040
Speaker 5: the allocation to alternatives, I thought, I mean forty percent.

472
00:23:15,200 --> 00:23:16,000
Speaker 3: I'm not inviting.

473
00:23:16,440 --> 00:23:19,680
Speaker 5: I just I'm like, I bet is not going to

474
00:23:19,880 --> 00:23:20,560
Speaker 5: turn out well.

475
00:23:20,600 --> 00:23:22,720
Speaker 3: But now for decades it didn't work well.

476
00:23:22,760 --> 00:23:27,080
Speaker 2: One percent, one hundred percent editorialized, folks. I'm on stage

477
00:23:27,080 --> 00:23:30,240
Speaker 2: at Darden at Virginia. We're rocking the room.

478
00:23:30,280 --> 00:23:33,800
Speaker 3: It's all endowment people in that and the head of

479
00:23:33,880 --> 00:23:36,240
Speaker 3: endowment who was like number one and number five whatever

480
00:23:36,240 --> 00:23:41,040
Speaker 3: in the country. At Uva says, our alternative percentage is

481
00:23:41,119 --> 00:23:45,359
Speaker 3: like two percent, and that was there one hundred percent,

482
00:23:45,400 --> 00:23:48,119
Speaker 3: he said, He said on stage, one hundred percent of

483
00:23:48,119 --> 00:23:52,160
Speaker 3: our outperformance as we were in simple stuff that was brilliant.

484
00:23:52,280 --> 00:23:55,520
Speaker 3: You can't top that. Don't play with your batteries and

485
00:23:55,600 --> 00:23:58,440
Speaker 3: yourself in this room.

486
00:23:58,680 --> 00:24:01,080
Speaker 9: All right, next up, but we're going to go to Finland.

487
00:24:01,119 --> 00:24:05,440
Speaker 9: This is a business insider story. So Finland poaching top

488
00:24:05,640 --> 00:24:07,919
Speaker 9: tech talent from the US. We knew it was going

489
00:24:07,960 --> 00:24:10,399
Speaker 9: to happen, So we already know Finland is a big

490
00:24:10,440 --> 00:24:13,480
Speaker 9: tech scene. Now it's positioning itself as a place where

491
00:24:13,520 --> 00:24:17,399
Speaker 9: American tech workers can find better work life balance without

492
00:24:17,440 --> 00:24:19,800
Speaker 9: sacrificing their careers. Get this, there's a law on the

493
00:24:19,800 --> 00:24:22,280
Speaker 9: books in Finland that says you cannot work more than

494
00:24:22,280 --> 00:24:23,240
Speaker 9: forty hours a week.

495
00:24:23,800 --> 00:24:24,960
Speaker 3: Really tell that to the.

496
00:24:24,920 --> 00:24:28,199
Speaker 9: Finance and media industries and our world. So once you

497
00:24:28,280 --> 00:24:30,800
Speaker 9: get a job offer there in Finland, you can get

498
00:24:30,840 --> 00:24:34,639
Speaker 9: yourself fast tracked to have a work residence permit in

499
00:24:34,680 --> 00:24:37,080
Speaker 9: as little as ten days. And guess what, so can

500
00:24:37,119 --> 00:24:37,680
Speaker 9: your spouse.

501
00:24:37,960 --> 00:24:41,840
Speaker 3: Oh, I'd been there for putin Trump gorgeous summer day.

502
00:24:41,920 --> 00:24:47,240
Speaker 3: Great Paul, This morning Helsinki. The sun comes up fifteen

503
00:24:47,280 --> 00:24:51,879
Speaker 3: minutes before nine. The sun sets at four fifteen sharp,

504
00:24:52,560 --> 00:24:56,400
Speaker 3: seven hours thirty four minutes of daylight. For your tech

505
00:24:56,520 --> 00:24:58,040
Speaker 3: job in Helsinki, you.

506
00:24:58,080 --> 00:24:59,879
Speaker 9: Got to deal with a little darkness. But you know,

507
00:25:00,080 --> 00:25:02,600
Speaker 9: maybe maybe your quality of lives better, all right, all right?

508
00:25:02,640 --> 00:25:05,600
Speaker 9: And then the New York Times, I personally love this story.

509
00:25:05,680 --> 00:25:10,680
Speaker 9: A six figure income working from home making sourdough bread.

510
00:25:11,040 --> 00:25:13,600
Speaker 3: There you go, thank you. I saw it. I didn't

511
00:25:13,640 --> 00:25:14,040
Speaker 3: read it.

512
00:25:14,119 --> 00:25:16,560
Speaker 9: Continue, Yeah, no, it's worth a read. So I think

513
00:25:16,600 --> 00:25:17,879
Speaker 9: this is secretly my dream.

514
00:25:18,000 --> 00:25:18,400
Speaker 3: People.

515
00:25:18,840 --> 00:25:20,760
Speaker 9: Social media has a lot to do with this, because

516
00:25:20,800 --> 00:25:23,800
Speaker 9: you see these women taking out there they're fermented sour

517
00:25:23,880 --> 00:25:26,840
Speaker 9: dough and they're needing it and making these beautiful breads

518
00:25:26,880 --> 00:25:29,280
Speaker 9: and you know, posting it on social media. Well, some

519
00:25:29,320 --> 00:25:31,240
Speaker 9: of them are leaving their day jobs. There is one

520
00:25:31,280 --> 00:25:35,080
Speaker 9: woman in this article who they featured left her a

521
00:25:35,160 --> 00:25:38,600
Speaker 9: career in finance to start her business. She found work

522
00:25:38,640 --> 00:25:41,760
Speaker 9: life balance. She makes four hundred loaves a week. She

523
00:25:41,880 --> 00:25:45,400
Speaker 9: distributes it to eleven locations in North Carolina. She does

524
00:25:45,480 --> 00:25:48,560
Speaker 9: have to get up, though, at three a m. To

525
00:25:48,680 --> 00:25:51,480
Speaker 9: make the bread. You know I'm already getting up at

526
00:25:51,480 --> 00:25:52,879
Speaker 9: the Yeah, yeah, exactly.

527
00:25:53,359 --> 00:25:56,200
Speaker 3: But she delivers eleven bakers or whatever.

528
00:25:56,359 --> 00:25:58,520
Speaker 9: Yeah yeah, and she's doing really well. And she even

529
00:25:58,560 --> 00:26:00,680
Speaker 9: has five employees and she's work looking from home.

530
00:26:01,160 --> 00:26:02,920
Speaker 5: So you know, look economy.

531
00:26:03,000 --> 00:26:05,720
Speaker 2: I guess Nick Booth at Stanford is huge on this.

532
00:26:05,840 --> 00:26:09,040
Speaker 2: He's really pushing against a lot of corporate American including

533
00:26:09,359 --> 00:26:13,200
Speaker 2: doctor Booth is pushing against me to be He just says,

534
00:26:13,240 --> 00:26:14,200
Speaker 2: I'm sorry, it works.

535
00:26:14,359 --> 00:26:15,960
Speaker 5: Yeah, I mean the gig economy. I mean you go

536
00:26:16,000 --> 00:26:18,639
Speaker 5: into any Starbucks and everybody's got the laptop open, and

537
00:26:18,960 --> 00:26:20,680
Speaker 5: I think that's like a big part of GDP.

538
00:26:21,040 --> 00:26:25,199
Speaker 3: People do it easier, like I don't technology iPad and

539
00:26:25,280 --> 00:26:27,760
Speaker 3: recently just the last couple of days, I mean, the

540
00:26:27,800 --> 00:26:30,600
Speaker 3: iPad is pretty spectacular. Yeah, it's not mine.

541
00:26:31,280 --> 00:26:32,320
Speaker 9: Are you just realizing this?

542
00:26:32,440 --> 00:26:35,000
Speaker 3: It is thought it I don't have any of these toys.

543
00:26:35,040 --> 00:26:37,080
Speaker 3: After thought, hasn't gotcha?

544
00:26:36,800 --> 00:26:39,280
Speaker 9: Got so make some sour dough? Isn't take away from

545
00:26:39,280 --> 00:26:39,879
Speaker 9: that article?

546
00:26:39,920 --> 00:26:42,240
Speaker 3: Do the batteries last one day or to recharge?

547
00:26:42,280 --> 00:26:43,040
Speaker 9: I don't know yet.

548
00:26:43,040 --> 00:26:46,280
Speaker 3: I just put them in a Lexis Christopher's thank you

549
00:26:46,800 --> 00:26:49,600
Speaker 3: so much toasty warm here with the newspapers today it's

550
00:26:49,600 --> 00:26:50,360
Speaker 3: the newspapers.

551
00:26:50,640 --> 00:26:55,480
Speaker 1: This is the Bloomberg Surveillance Podcast, available on Apple, Spotify,

552
00:26:55,600 --> 00:26:59,360
Speaker 1: and anywhere else you get your podcasts. Listen live each

553
00:26:59,400 --> 00:27:03,240
Speaker 1: week days, seven to ten am Eastern on Bloomberg dot com,

554
00:27:03,359 --> 00:27:07,200
Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app.

555
00:27:07,480 --> 00:27:10,600
Speaker 1: You can also watch us live every weekday on YouTube

556
00:27:10,880 --> 00:27:12,920
Speaker 1: and always on the Bloomberg terminal