WEBVTT - Equity Push Ahead of CPI 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business App. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.720 us live on YouTube right now. 0:00:27.800 --> 0:00:31.600 The most important essay every morning in the earning season 0:00:31.600 --> 0:00:36.480 of Julian Emmanuel holding court at Evercore Isi with one 0:00:37.080 --> 0:00:40.000 Edward Hyman. Ed Hyman and we're threwed he could join 0:00:40.080 --> 0:00:43.960 us today, their chief equity quantitative strategists. Once again, you 0:00:44.040 --> 0:00:48.440 have outlined how we got earnings wrong. Do you believe 0:00:48.440 --> 0:00:53.880 we'll get earnings wrong quarter ending September thirty? We invariably do. 0:00:54.680 --> 0:00:59.360 So we came into this season believing and again, look 0:00:59.400 --> 0:01:04.560 this is quite America. There is the baseline predicted earnings growth, 0:01:04.760 --> 0:01:09.520 and there's the surprise. We almost always surprise positively. I 0:01:09.560 --> 0:01:13.880 think in our view what happened was the market was 0:01:14.000 --> 0:01:18.520 actually surprised by what, in retrospect, is not that surprising. 0:01:18.800 --> 0:01:22.600 A surprise, tom So you're getting ten percent earnings growth. 0:01:23.880 --> 0:01:28.440 But what's more interesting to us about this season is 0:01:28.480 --> 0:01:32.480 the degree of the stock price response has been unlike 0:01:32.520 --> 0:01:35.680 anything we've ever seen, both to the good and the bad, 0:01:35.760 --> 0:01:40.200 and frankly, it isn't that entirely dependent on the scope 0:01:40.360 --> 0:01:43.160 of what they report. A lot of this is positioning, 0:01:43.440 --> 0:01:49.280 but you've had moves just incredibly dramatic in both directions, 0:01:49.600 --> 0:01:54.480 and that points in our mind to a question about 0:01:54.680 --> 0:01:58.400 where we're going in terms of earnings next year within 0:01:58.560 --> 0:02:01.880 the context of the fact that bottoms up consensus is 0:02:01.920 --> 0:02:05.840 looking for thirteen percent earnings in twenty twenty six. That's 0:02:05.880 --> 0:02:07.800 a bit too high in our opinion. 0:02:08.720 --> 0:02:10.680 You don't bury the lead here with your most recent 0:02:10.720 --> 0:02:14.480 note near term, we think stocks are overvalued seven to 0:02:14.520 --> 0:02:16.880 fifteen percent pullback into an October low. 0:02:17.919 --> 0:02:19.000 That's not consensus. 0:02:20.720 --> 0:02:25.600 Well, so, I guess this goes back to the scars 0:02:25.639 --> 0:02:30.200 that we've had by being excessively bullish coming into labor 0:02:30.280 --> 0:02:34.160 day from time to time. That is almost always a 0:02:34.200 --> 0:02:38.440 strategy that runs into difficulty. But again it goes back 0:02:38.480 --> 0:02:40.800 to whether you think about it in the context of 0:02:40.840 --> 0:02:44.880 earnings expectations for twenty twenty six or you think about 0:02:44.919 --> 0:02:48.959 it in terms of valuation. And to be clear, we're 0:02:49.000 --> 0:02:52.040 not at all time high valuations like the Y two 0:02:52.160 --> 0:02:57.200 K dot com bubble, but we're not far away, and 0:02:57.720 --> 0:03:00.640 in our mind, part of what's gone on this summer 0:03:00.840 --> 0:03:05.760 is really a belief that because we haven't seen a 0:03:05.880 --> 0:03:12.000 discrete drag in terms of growth to tariffs and discrete 0:03:12.080 --> 0:03:14.840 underpinning inflation, which we do believe we're going to get 0:03:14.840 --> 0:03:19.239 first evidence of this week with the CPI report, people 0:03:19.280 --> 0:03:21.959 are just you know, don't worry, be happy. 0:03:21.840 --> 0:03:23.880 Let's go there right now. And bringing edheymen into it, 0:03:23.880 --> 0:03:26.040 you have this huge advantage of ed heymen and your 0:03:26.080 --> 0:03:30.040 economic apparatus at evercore is a are you modeling your 0:03:30.040 --> 0:03:33.400 equity market for a sustained three percent or dare I 0:03:33.440 --> 0:03:37.840 say a four figure inflation three percent? Three percent? 0:03:37.920 --> 0:03:40.440 And if you think about it, right, what we have 0:03:40.680 --> 0:03:44.720 seen off of the trough in April, which I believe 0:03:44.800 --> 0:03:47.640 I was on with you all. We were pounding the 0:03:47.680 --> 0:03:50.040 table that you wanted to own it because we had 0:03:50.040 --> 0:03:53.520 seen capitulation of a degree which we had only ever 0:03:53.600 --> 0:03:57.240 seen at the trough of the financial crisis in nine. 0:03:58.280 --> 0:04:03.840 Is that basically the difference between the recovery that we 0:04:03.920 --> 0:04:07.240 saw then and the recovery that we saw actually during 0:04:07.280 --> 0:04:09.840 the bear market that was briefly in nineteen ninety eight 0:04:09.840 --> 0:04:13.800 in the midst of the Internet revolution versus the AI revolution. 0:04:14.000 --> 0:04:19.719 Now the continued response where Nasdaq rose an additional over 0:04:19.800 --> 0:04:23.039 one hundred percent into the y two k bubble, It's 0:04:23.080 --> 0:04:25.440 not going to be like this this time because frankly, 0:04:25.480 --> 0:04:29.720 the Fed doesn't have the leeway to be as accommodative. 0:04:29.880 --> 0:04:31.080 Even though we're expecting. 0:04:31.240 --> 0:04:33.279 Is this the gloomy Emmanuel this morning? 0:04:33.920 --> 0:04:36.400 It might be. It sounds realistic to me. 0:04:36.440 --> 0:04:38.760 It just you know, we got scolded last week for 0:04:38.800 --> 0:04:40.040 calling it a melt up. 0:04:40.400 --> 0:04:42.440 Do you think we experienced a melt up. 0:04:42.400 --> 0:04:46.360 Over you know, this percent move off the bottom? 0:04:46.400 --> 0:04:46.479 Oh? 0:04:46.560 --> 0:04:49.800 Yeah, there's no question about the fact that if you 0:04:49.920 --> 0:04:53.640 measure it in terms of nothing more than public participation, 0:04:54.320 --> 0:04:58.040 the public has been driving this market in large degree. 0:04:58.560 --> 0:05:00.800 And you see that in you know, sort of an 0:05:00.960 --> 0:05:05.240 esoteric area of the world. Zero days the expiration option activity, 0:05:05.920 --> 0:05:08.799 the positions go on at nine point thirty. They expired 0:05:08.880 --> 0:05:12.400 four o'clock. That is accounting for upwards of sixty percent 0:05:12.440 --> 0:05:13.640 of the option activity. 0:05:14.000 --> 0:05:16.520 So what are you doing now at the margin to 0:05:16.600 --> 0:05:20.719 purchase equity shares? Are you in evercore ISI on hold? 0:05:20.800 --> 0:05:20.920 Now? 0:05:21.200 --> 0:05:25.320 So basically what we're saying is you have to think 0:05:26.080 --> 0:05:30.240 long term. There's a certain slug investor that should just 0:05:30.560 --> 0:05:33.040 ignore what we expect to be the volatility in the 0:05:33.120 --> 0:05:37.120 next couple months. But if you're more active, what you're 0:05:37.200 --> 0:05:41.760 thinking about is a right sizing your AI exposure to 0:05:43.520 --> 0:05:47.240 accomplish long term. There's going to be continued our performance. 0:05:47.680 --> 0:05:51.000 But you want to hedge. You want to hedge with 0:05:51.320 --> 0:05:58.000 lower valuation stocks with higher earnings revision type names. It's 0:05:58.040 --> 0:06:02.000 an element of safety that supportfolio and actually, if you 0:06:02.040 --> 0:06:04.440 think about it, enables. 0:06:04.000 --> 0:06:05.800 You to be a buyer of Dipps. 0:06:06.960 --> 0:06:09.320 There you go, there you go, as simple as that, Julian, 0:06:09.360 --> 0:06:12.680 Thank you so much. Julian McKiel. With this EVERCOREA, I 0:06:12.720 --> 0:06:14.840 can't we protect the copyright, folks. I'm not going to 0:06:14.880 --> 0:06:19.200 send out his three paragraph effort that he goes right 0:06:19.240 --> 0:06:21.400 every morning. His team does it, folks, to be honest, 0:06:21.440 --> 0:06:25.159 but it's exquisite on where are we in the earning season? 0:06:25.200 --> 0:06:28.560 It is the industry benchmark. He does that. Julian does 0:06:28.560 --> 0:06:30.320 that at Evercore is. 0:06:30.160 --> 0:06:38.520 A You're listening to the Bloomberg Surveillance podcast. Catch us 0:06:38.560 --> 0:06:41.920 Live weekday afternoons from seven to ten am Eastern Listen 0:06:41.960 --> 0:06:45.520 on Applecarplay and Android Auto with the Bloomberg Business app 0:06:45.720 --> 0:06:47.440 or watch us live on YouTube. 0:06:47.680 --> 0:06:50.640 Joining us now deep in the summer, Lauren Seidelbaker, economist. 0:06:50.640 --> 0:06:55.120 It a we lover work out of Wellesley and Boston University. 0:06:55.200 --> 0:06:57.840 I'm going to audible right now. One of the greatest 0:06:57.960 --> 0:07:02.520 views of Mount Washington, likes spiritual nineteenth century is from 0:07:02.520 --> 0:07:06.160 the Conway North Conway area. Right, Yes, you go up 0:07:06.160 --> 0:07:09.160 there a lot, can I get there's bar in the woods. 0:07:09.160 --> 0:07:10.760 It's in the middle of nowhere. Right. 0:07:11.280 --> 0:07:13.600 We have to get away from fed talk sometime. That's 0:07:13.640 --> 0:07:14.200 where I go. 0:07:15.600 --> 0:07:18.040 This is on the New Hampshire border with Maine. 0:07:18.320 --> 0:07:19.920 Correct, the White Mountains, the. 0:07:19.880 --> 0:07:22.679 White Mountain, But it's a different White mountains than driving 0:07:22.760 --> 0:07:23.120 up the. 0:07:23.000 --> 0:07:27.320 Interstates, you know, Washington Presidential Range. Yeah, it's a lovely 0:07:27.360 --> 0:07:28.000 place to hike. 0:07:28.160 --> 0:07:30.239 It's great. When's the snow pull back? June? 0:07:30.560 --> 0:07:34.120 Oh, there has been snow every month of the year, Washington. 0:07:34.240 --> 0:07:37.360 Yes, okay, Well, great to have you here. Welcome ninety 0:07:37.400 --> 0:07:39.800 two nine FM up in Boston as well. We go 0:07:39.880 --> 0:07:43.760 up to montcatad and mill Knocket. Good morning, Laurence Seidelbaker. 0:07:44.000 --> 0:07:48.680 AI in its effect on our economy, do we understand 0:07:48.720 --> 0:07:52.440 our productivity? Do we understand what's going on in technology. 0:07:52.800 --> 0:07:54.480 I don't think we have a full grasp yet. I 0:07:54.520 --> 0:07:56.559 think there's a lot more to be done with AI 0:07:56.600 --> 0:07:59.960 in productivity, we to date haven't really seen the games. 0:08:00.080 --> 0:08:02.120 We see the need right. We have a very tight 0:08:02.240 --> 0:08:06.120 labor market. We still have very critical skills gaps. But overall, 0:08:06.160 --> 0:08:08.280 I think we're still looking for those fits. I see 0:08:08.320 --> 0:08:11.080 a lot of companies doing the throw money at the 0:08:11.080 --> 0:08:14.080 problem approach to AI. They're telling their employees just use 0:08:14.120 --> 0:08:16.960 it somehow. I don't care how, but do something with AI. 0:08:17.360 --> 0:08:19.720 It's not always the most effective. It's not always the 0:08:19.720 --> 0:08:21.760 most cost conscious way to use AI. 0:08:22.320 --> 0:08:25.040 Lauren, I know in your research you work a lot 0:08:25.080 --> 0:08:26.520 with small, mid sized companies. 0:08:27.240 --> 0:08:27.920 How are they. 0:08:28.480 --> 0:08:34.000 Dealing with tariffs, trade uncertainty, maybe a little bit of 0:08:34.040 --> 0:08:36.200 inflation percolating out there, maybe a little bit of a 0:08:36.360 --> 0:08:37.280 slowing economy. 0:08:37.280 --> 0:08:38.200 How are they seeing things? 0:08:38.920 --> 0:08:41.079 More than anything? They're in a weight and see mode. 0:08:41.440 --> 0:08:44.520 We see this just with uncertainty with tariffs, with every 0:08:44.559 --> 0:08:47.560 new policy that no one saw coming even a week ago. 0:08:48.200 --> 0:08:50.120 Everyone just wants to know what they're up against. But 0:08:50.240 --> 0:08:53.040 I'm getting the sense lately that that tide is turning. 0:08:53.280 --> 0:08:56.440 I think we almost have uncertainty fatigue. At some point 0:08:56.559 --> 0:08:56.960 you just. 0:08:56.840 --> 0:09:03.240 Need to make for the show start there, Paul, So, Paul, 0:09:03.240 --> 0:09:05.840 I think this is a really really important point. Golden 0:09:05.920 --> 0:09:09.840 Sachs publishing this weekend with a three four five month rollout. 0:09:10.240 --> 0:09:14.240 So do you buy the gradual roll into tariff angst 0:09:14.559 --> 0:09:16.880 for our listeners and viewers or are you going to 0:09:16.880 --> 0:09:19.199 be a Lauren Seidelbaker optimistic? 0:09:19.600 --> 0:09:22.120 I can't be an optimist. I am an economist. After all, 0:09:22.160 --> 0:09:24.240 those two are mutually exclusive. 0:09:24.320 --> 0:09:26.880 But at the end of the day, we see businesses 0:09:26.960 --> 0:09:31.600 really making decisions despite even something like tax implications, right 0:09:31.640 --> 0:09:33.600 we talk about tax rates. We have found in our 0:09:33.640 --> 0:09:37.320 analysis that does not materially change business profitability over the 0:09:37.360 --> 0:09:40.240 long term, business investment over the long term. So it 0:09:40.240 --> 0:09:42.320 seems like the business world they have a sense of what. 0:09:42.240 --> 0:09:43.040 They need to do. 0:09:43.679 --> 0:09:46.320 They've been through the NBA programs, right, they know the 0:09:46.320 --> 0:09:48.400 theory behind it, and so it's just a matter of 0:09:48.720 --> 0:09:50.640 doing it. At some point, we've had a multi month 0:09:50.760 --> 0:09:53.720 uncertainty delay. We're starting to see the rubber meet the road. 0:09:54.280 --> 0:09:55.680 How do you think the Federal Reserve is going to 0:09:55.679 --> 0:09:57.880 react to all this uncertainty? What are you guys thinking 0:09:57.880 --> 0:09:58.200 about that. 0:09:59.280 --> 0:10:02.559 Really, I see inflation more than anything else being the 0:10:03.000 --> 0:10:06.120 key to siding factor. Labor market, as I mentioned, still tight, 0:10:06.400 --> 0:10:09.120 some cracks forming, but I still see general balance in 0:10:09.480 --> 0:10:11.840 the labor side of things. It's really the inflation side 0:10:11.840 --> 0:10:14.400 of the dual mandate where we are starting to get nervous. 0:10:14.880 --> 0:10:17.200 I think tariffs are taking much more time to feed through. 0:10:17.280 --> 0:10:19.360 So whether you believe tariffs are a one time step 0:10:19.440 --> 0:10:22.320 up in prices, we see other fundamental pressures. I don't 0:10:22.320 --> 0:10:24.280 think tariffs are really going to come through. The data 0:10:24.320 --> 0:10:26.760 for between nine and eighteen months is on average how 0:10:26.760 --> 0:10:27.320 long it takes. 0:10:27.360 --> 0:10:28.280 So we're not there yet. 0:10:28.920 --> 0:10:31.760 The consumer, the consumer seems to be kind of hanging 0:10:31.800 --> 0:10:35.040 in there. I know there's a bifurcated sense of the consumer. 0:10:35.400 --> 0:10:37.520 You know, the mid to high end doing quite well, 0:10:37.520 --> 0:10:38.960 the lower and maybe struggling. 0:10:39.280 --> 0:10:40.720 How do you thinking about the consumer? 0:10:41.040 --> 0:10:42.840 All we can do is look at the median consumer. 0:10:42.920 --> 0:10:45.280 So you're right, there's a lot going on beneath the surface. 0:10:45.600 --> 0:10:47.840 If you own your home, if you're invested in equity 0:10:47.880 --> 0:10:51.040 markets versus if you are really feeling this pinch of inflation. 0:10:51.480 --> 0:10:55.560 Tariffs specifically they hit those lower income earners much more strongly. 0:10:55.600 --> 0:10:57.480 That's just how the math works out. 0:10:57.760 --> 0:11:00.360 But on median again, with a tight labor mark, more 0:11:00.400 --> 0:11:02.600 folks can get jobs. Yes, there might need to be 0:11:02.679 --> 0:11:06.720 some reskilling. There are some skills gaps that we still see, 0:11:07.000 --> 0:11:09.040 but overall, more people making more money. 0:11:09.040 --> 0:11:10.840 Wages are still outpacing inflation. 0:11:10.960 --> 0:11:13.520 We go to eco go, they go to the lord's 0:11:13.520 --> 0:11:16.920 sidele Baker. The CPI is a tickop. I mean basically 0:11:17.760 --> 0:11:20.840 a CPIX food and energy month over month. McKee looks 0:11:20.880 --> 0:11:23.679 at it. I don't point two to point three year 0:11:23.720 --> 0:11:26.640 over year two point seven to two point eight regular 0:11:26.679 --> 0:11:29.560 CPI two point nine to three point zero. I get 0:11:29.600 --> 0:11:31.800 the nudge up. Do you look at that as a 0:11:31.840 --> 0:11:36.920 linear function? Dare I say? Out there four percent top 0:11:37.000 --> 0:11:37.800 line CPI? 0:11:38.240 --> 0:11:40.439 I think that is well within the range of possibility. 0:11:40.480 --> 0:11:43.560 What is the outcome of that? Forget double major Wellesley 0:11:43.679 --> 0:11:47.000 Economics and religion. Yes, that means she went to Patriots, 0:11:47.000 --> 0:11:50.720 stay red Sox baseball. Okay, you're religion major from Wellesley? 0:11:51.000 --> 0:11:54.560 What is the political religion of this nation? The day 0:11:54.600 --> 0:11:55.959 we print four percent? 0:11:57.360 --> 0:11:59.720 At that point, I think the Fed has their hands tied. 0:12:00.080 --> 0:12:02.600 I think we might see a couple more rate increases, 0:12:02.640 --> 0:12:04.960 call it twenty five maybe fifty basis points. I know 0:12:05.440 --> 0:12:07.680 I've been hearing talk of three cuts this year. I 0:12:07.679 --> 0:12:09.360 think that's going to be a tough reason. 0:12:09.520 --> 0:12:11.600 Some people out there are talking, say you're not listening 0:12:11.600 --> 0:12:14.960 to show enough. Some people are talking seven rate cuts. 0:12:15.240 --> 0:12:17.600 I've heard seven, and you're going to wait with you. 0:12:17.679 --> 0:12:21.640 I love your optimism, seriously, folks. So she's here, But 0:12:21.880 --> 0:12:25.640 if we get Lauren's Sidelbaker optimism, we get four percent 0:12:25.800 --> 0:12:29.880 CPI what does that mean to our listeners and viewers? Besides, 0:12:29.880 --> 0:12:31.359 a grocery store is expensive. 0:12:32.080 --> 0:12:33.760 I think you can't be waiting for rates to go 0:12:33.880 --> 0:12:35.760 back to the lows that they were just a few 0:12:35.840 --> 0:12:39.520 years ago. I see rates going up, not down, and 0:12:39.640 --> 0:12:42.080 again maybe a couple bumps in the road to get there. 0:12:42.120 --> 0:12:44.400 But I really would be if. 0:12:44.320 --> 0:12:47.040 You need to be doing borrowing or refinancing, now is 0:12:47.080 --> 0:12:47.840 the time to do it. 0:12:47.880 --> 0:12:49.520 I'm not waiting to time. 0:12:49.320 --> 0:12:52.160 The low for the sake unless you're very, very interest 0:12:52.240 --> 0:12:55.040 rate sensitive. The sake of twenty five maybe fifty basis points, 0:12:55.080 --> 0:12:57.800 what are you for going? What's the opportunity cost of 0:12:57.800 --> 0:13:00.000 that to risk timing that exact LFE. 0:13:00.120 --> 0:13:01.040 I don't think it's worth it. 0:13:01.840 --> 0:13:04.880 What's an unemployment rate that you think gets the Fed's 0:13:04.960 --> 0:13:06.160 attention here, because right. 0:13:06.040 --> 0:13:07.439 Now you mentioned you know, good question. 0:13:07.440 --> 0:13:10.319 The labor market's pretty solid, although it's maybe it's tougher 0:13:10.360 --> 0:13:11.559 to get a job than it was a couple of 0:13:11.640 --> 0:13:14.520 years ago, but generally most people who want jobs have 0:13:14.640 --> 0:13:15.240 their jobs. 0:13:15.480 --> 0:13:19.280 Wages are growing three, four or five percent. What is 0:13:19.280 --> 0:13:20.280 your view of the labor market. 0:13:20.520 --> 0:13:23.240 So one metric that I'm looking at even more than 0:13:23.240 --> 0:13:26.719 the unemployment rate, that's the balance between unemployed workers and 0:13:26.800 --> 0:13:30.720 job openings. That's one point zero four, so just a 0:13:30.760 --> 0:13:35.680 hair over one worker per available job opening. Now that balance, 0:13:35.880 --> 0:13:37.040 I think we are in balance. 0:13:37.080 --> 0:13:39.120 It's just that both of those numbers are lower. There 0:13:39.160 --> 0:13:41.559 are relatively fewer job seekers right now. 0:13:41.840 --> 0:13:45.280 We'll see that trend continue with negative net migration this year. 0:13:45.440 --> 0:13:46.160 But we also have. 0:13:46.160 --> 0:13:49.800 Fewer job openings as businesses they're just holding back, they're waiting. 0:13:49.960 --> 0:13:52.640 So that balance, I think on both sides we can 0:13:52.679 --> 0:13:55.080 be in balanced, even at lower levels. It's just easier 0:13:55.120 --> 0:13:56.120 to knock it out of balance. 0:13:56.200 --> 0:13:58.760 Out on YouTube, a brilliant live chat. Thank you so 0:13:58.880 --> 0:14:01.960 much for this quote. The rich get richer, the poor 0:14:02.040 --> 0:14:05.120 get poorer. I mean, that's really what this is about, 0:14:05.360 --> 0:14:08.959 isn't it. The rich you know, don't care three point 0:14:08.960 --> 0:14:11.560 eighty four percent, They're like whatever, just you know, by 0:14:11.600 --> 0:14:15.800 the avocados, I mean, it's a partition of the country. Right. 0:14:16.840 --> 0:14:21.080 At some point, again, many more of the wage gains 0:14:21.120 --> 0:14:23.440 in the past couple of years had been concentrated at 0:14:23.480 --> 0:14:25.920 the lower end of the the real wage. 0:14:26.080 --> 0:14:28.800 Negative here with what Paul Swooney's talking about, right, you know, 0:14:28.880 --> 0:14:30.120 higher inflation. 0:14:29.840 --> 0:14:30.480 That's the risk. 0:14:30.840 --> 0:14:32.280 We can only look at the media and I wish 0:14:32.360 --> 0:14:34.680 we had more granular data across the board, but on 0:14:34.880 --> 0:14:37.360 mediaan are our net consumers still doing better. 0:14:38.000 --> 0:14:40.680 This has been great. Thank you for coming in from 0:14:40.680 --> 0:14:43.560 New Hampshire. Yeah really, you know, appreciate it. 0:14:43.600 --> 0:14:44.520 Thank you for having us. 0:14:44.600 --> 0:14:48.600 Well, they're up there, you know water When I was 0:14:48.640 --> 0:14:51.520 a kid, Oh, come on, Cannon Mountain, it's like the 0:14:51.560 --> 0:14:54.320 ice age. I almost lost a child. This is over 0:14:54.360 --> 0:14:57.240 in Vermont, folks. I literally had to hold on to 0:14:57.320 --> 0:15:00.240 the middle child at the top of Jpeak. It's like 0:15:00.240 --> 0:15:03.360 one hundred miles. It's not west. You gotta understand, Lauren 0:15:03.520 --> 0:15:06.400 Sweeney doesn't ski the east. Now he's so large, he's 0:15:06.440 --> 0:15:08.360 only doing Rocky Mountain High exactly. 0:15:08.480 --> 0:15:11.640 I mean I grew up skiing all through New Hampshire, Vermont, 0:15:12.080 --> 0:15:14.040 Ocono's you know, shout. 0:15:13.800 --> 0:15:16.800 Out No, that's where I saw my first I saw 0:15:16.880 --> 0:15:20.280 you at the Wobbley barat It was a few years ago. 0:15:20.400 --> 0:15:22.400 Yep, got my first Wall Street Bonus check back in 0:15:22.440 --> 0:15:24.120 the day. Haven't been back to you since. 0:15:24.520 --> 0:15:27.960 Lauren Seidelbaker, thank you so much. ITR Economics, New Hampshire. 0:15:28.120 --> 0:15:32.040 This is the Bloomberg Surveillance Podcast. Listen live each weekday 0:15:32.040 --> 0:15:35.360 starting at seven am Eastern on Applecarplay and Android Auto 0:15:35.480 --> 0:15:38.440 with the Bloomberg Business app. You can also listen live 0:15:38.520 --> 0:15:42.120 on Amazon Alexa from our flagship New York station, Just 0:15:42.160 --> 0:15:44.680 say Alexa play Bloomberg eleven thirty. 0:15:45.160 --> 0:15:48.560 Last night we had a meeting This is with Surveillance 0:15:49.560 --> 0:15:54.360 Senior executive producer Eric Mallow, Herder of Interns. Yep, it's 0:15:54.400 --> 0:15:57.000 his new title, Herder of Interns. And we had a 0:15:57.040 --> 0:15:59.240 list of people and at the top of the list 0:15:59.400 --> 0:16:03.520 on Putin Trump in Alaska was Angela's stent. Her book 0:16:03.560 --> 0:16:07.360 Putin's World is absolutely definitive. We are beyond honored to 0:16:07.400 --> 0:16:13.240 have a conversation this morning with Angela Stent. Angela, if 0:16:13.280 --> 0:16:16.480 you were in Alaska for this meeting, what would you 0:16:16.640 --> 0:16:18.480 listen for from the two? 0:16:20.400 --> 0:16:23.600 Well, I'm listening to see what it is that Putin 0:16:23.720 --> 0:16:27.280 is proposing to President Trump. And so far it seems that, 0:16:27.720 --> 0:16:31.040 you know, Ukraine is supposed to seed territory to Russia 0:16:31.080 --> 0:16:34.840 that Russia doesn't even control and really not get very 0:16:34.920 --> 0:16:40.280 much in return, maybe a freezing of the Catalines. And 0:16:40.440 --> 0:16:44.120 with Trump, I'm listening to see does he really understand 0:16:44.160 --> 0:16:47.200 that Putin isn't willing to stop this war that he's 0:16:47.240 --> 0:16:50.520 being played. So those are the things that I would 0:16:50.520 --> 0:16:51.120 be listening to. 0:16:51.400 --> 0:16:54.240 And I look, Angela at this, and of course in 0:16:54.280 --> 0:16:57.800 the Zeitgeist this morning is the build article in Germany 0:16:57.880 --> 0:17:01.240 that they got the translation run. Do we have the 0:17:01.400 --> 0:17:06.040 process and apparatus to prepare for Friday's meeting? I mean, 0:17:06.080 --> 0:17:09.080 do we have administration in place that can do this? 0:17:10.240 --> 0:17:12.600 So so far it doesn't appear that we do. I mean, 0:17:12.680 --> 0:17:15.640 normally these kinds of summits are well prepared in advance, 0:17:15.960 --> 0:17:19.199 their experienced diplomats or involved in them. This is the 0:17:19.280 --> 0:17:24.320 result of, you know, a long conversation between Steve and Witkoff, 0:17:24.400 --> 0:17:27.719 not a diplomat, not an expert on Russia and Vladimo Putin. 0:17:27.760 --> 0:17:31.000 We don't know the contents of it, and so we 0:17:31.320 --> 0:17:33.760 are really left in the dark about what the process 0:17:33.800 --> 0:17:36.600 is in this. And the concern is that President Trump 0:17:36.600 --> 0:17:38.920 will be there and then he doesn't have all the 0:17:38.960 --> 0:17:43.200 backing he needs and the understanding going into this about 0:17:43.200 --> 0:17:44.840 what prudent's actually trying to do. 0:17:45.800 --> 0:17:49.679 What is the role, if any, for President Zelenski. 0:17:51.040 --> 0:17:54.359 Well, so far, President Zelenski, of course, has been excluded 0:17:54.359 --> 0:17:56.800 from this. The US and Russia are talking about his 0:17:56.880 --> 0:18:01.199 own country. President Trump has spoken to him, He's in 0:18:01.440 --> 0:18:04.520 He's Zelenski's in very close contact with the Europeans. The 0:18:04.560 --> 0:18:07.639 Europeans are trying to impress on President Trump that he 0:18:07.720 --> 0:18:11.960 has to go into this clear eye and realistic about. 0:18:11.680 --> 0:18:13.000 What Putin is trying to do. 0:18:13.720 --> 0:18:17.600 But to think about two countries trading away another country's 0:18:17.680 --> 0:18:21.080 territory without that country being present, I think that theres 0:18:21.880 --> 0:18:23.560 a lot of thinking about. 0:18:23.960 --> 0:18:26.960 Does President Putin have any intention to sign a ceasefire 0:18:27.680 --> 0:18:29.320 on Friday or even discussing it? 0:18:29.560 --> 0:18:30.800 I very much doubt it. 0:18:30.920 --> 0:18:32.879 I think what he's trying to do is to probe 0:18:32.880 --> 0:18:35.439 and see how much he can get from President Trump. 0:18:35.520 --> 0:18:37.520 So I would not hold your breath on. 0:18:37.440 --> 0:18:40.119 That, Angela. Get the drama. Max Putin writes it up 0:18:40.160 --> 0:18:42.720 in the Washington Post and others, And we don't need 0:18:42.760 --> 0:18:45.439 to do a history lesson in nineteen thirty eight Munich, 0:18:45.480 --> 0:18:49.320 where Neville Chamberlain gave away a piece of Czechoslovakia and 0:18:49.359 --> 0:18:52.880 look what happened. But do you see that moment here? 0:18:53.080 --> 0:18:55.879 I mean, these two world leaders, do we, Angela? Do 0:18:55.920 --> 0:18:58.320 we know where they're going to meet in Alaska? Yet? 0:18:59.400 --> 0:19:01.360 I don't know what they're going to meet in Alaska? 0:19:02.200 --> 0:19:05.240 And it's interesting. So for Putin, all he has to 0:19:05.280 --> 0:19:07.680 do is fly over Russia. If he were to meet 0:19:07.680 --> 0:19:10.320 Trump in many other places, he probably couldn't because there 0:19:10.320 --> 0:19:11.920 are a lot of countries he can't fly over. 0:19:11.960 --> 0:19:14.840 Because it's interesting. Interesting, So we. 0:19:14.840 --> 0:19:17.119 Don't know, Okay, So maybe they're going to meet on 0:19:17.119 --> 0:19:19.680 those two islands. They can wave at each other across 0:19:19.720 --> 0:19:24.360 the bearing straight Angela's stent discuss what's in the zeitgeist 0:19:24.359 --> 0:19:28.680 this morning of illusions to two years before World War Two? 0:19:30.960 --> 0:19:33.760 Well, I think you know two years before World War two? 0:19:33.880 --> 0:19:36.320 If you think about Neville Chamberlain, I mean he was 0:19:36.359 --> 0:19:40.159 trying to postpone a war because you know, he and 0:19:40.200 --> 0:19:43.840 he believed that if he just gave Hitler what he wanted, 0:19:44.640 --> 0:19:46.920 which was, you know, talking about what was happening to 0:19:46.920 --> 0:19:48.920 the Zudatelane, then there wouldn't be a war. 0:19:50.800 --> 0:19:52.760 I think we may still be at that point. 0:19:52.840 --> 0:19:56.760 I think there's enough a full comprehension among the in 0:19:56.840 --> 0:20:00.560 the Trump administration that you know that from Putin. The 0:20:00.600 --> 0:20:04.040 subordination of Ukraine is the goal now, but it's the 0:20:04.080 --> 0:20:09.439 first step towards really retaking influence and land in what 0:20:09.600 --> 0:20:13.520 used to be the former Soviet Union. Putin has expansionist aims, 0:20:13.800 --> 0:20:16.720 and I think maybe in nineteen thirty eight mister Chamberlain 0:20:16.880 --> 0:20:21.040 didn't understand exactly what Hitler's expansionist aims were. So I 0:20:21.040 --> 0:20:24.280 think people need to understand what this is about. And 0:20:24.320 --> 0:20:28.399 I'm sure that that's not fully appreciated in the White House. 0:20:28.440 --> 0:20:29.040 Yet. 0:20:29.560 --> 0:20:34.080 It seems, Angela that most world leaders around the world 0:20:34.200 --> 0:20:36.439 have bent their need to President Trump, whether it's on 0:20:36.520 --> 0:20:40.399 tariffs or other issues. That's not the case with mister Putin. 0:20:42.119 --> 0:20:44.960 Does he how do you think he've vieused President Trump 0:20:45.040 --> 0:20:45.760 and the administration. 0:20:46.920 --> 0:20:47.880 Well, I think he. 0:20:47.760 --> 0:20:50.560 Believes that mister Trump really wants to have a better 0:20:50.640 --> 0:20:54.160 relationship with Russia. Trump started out by saying we need 0:20:54.200 --> 0:20:57.840 to reset and improve relations. I think the Russians understand 0:20:58.000 --> 0:21:01.800 that there's inconsistency in the position of the Trump administration. 0:21:01.880 --> 0:21:03.960