WEBVTT - Surveillance: Data Deluge With Citi's Mann 0:00:09.840 --> 0:00:13.800 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene Jay Ley. 0:00:13.960 --> 0:00:17.560 We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.520 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:27.360 Bloomberg dot Com, and of course, on the Bloomberg Michael 0:00:27.360 --> 0:00:30.880 Wilson joins us right now. Mike Wilson, us equity strategist 0:00:30.920 --> 0:00:35.159 at Morgan Stanley. Do you share your colleagues discontent this 0:00:35.360 --> 0:00:40.599 about the equity markets? Well, good morningtime, morning, all the like. 0:00:40.640 --> 0:00:44.919 The discontent in the economy may not necessarily mean discontent 0:00:45.000 --> 0:00:46.880 in the markets. I mean, as you know, markets trade 0:00:46.920 --> 0:00:50.040 differently from the economy, and look, we are looking at 0:00:50.360 --> 0:00:53.880 a slowdown for sure, as the case counts rise, potential 0:00:53.920 --> 0:00:57.320 lockdowns and all that good stuff. Look, there's a there's 0:00:57.360 --> 0:01:01.120 a while. The SMP five hundred is basically flat since 0:01:01.240 --> 0:01:05.440 early September. There's a raging bowl market going on under 0:01:05.480 --> 0:01:07.240 the surface. This is the point we've been really trying 0:01:07.280 --> 0:01:10.000 to emphasize that as the if we look forward to 0:01:10.120 --> 0:01:13.759 next year, there's still a lot of undervalued assets within 0:01:13.800 --> 0:01:16.960 the equity market that hadn't hadn't participated yet, and that's 0:01:17.000 --> 0:01:20.000 what that's the big story that's really going on in 0:01:20.080 --> 0:01:23.360 the equity market. Is it absolutely relative? Do you unload 0:01:23.360 --> 0:01:26.200 your tech to go over to material cyclicals, banks and 0:01:26.200 --> 0:01:29.880 the rest or do they participate as well? Well, we 0:01:30.120 --> 0:01:32.120 did that. I mean that that that was the strategy. 0:01:32.160 --> 0:01:34.000 I mean, you guys are talking about, you know, stepping 0:01:34.040 --> 0:01:37.399 into the fray back in March being difficult. I think 0:01:37.400 --> 0:01:39.880 it was even more difficult to kind of move away 0:01:39.880 --> 0:01:43.160 from the former leaders to the laggards, right that. That's 0:01:43.240 --> 0:01:46.520 that's that's real career risk for hunted people. And I 0:01:46.560 --> 0:01:48.600 think folks have fought that as long as they can, 0:01:49.160 --> 0:01:51.800 and now it's becoming apparent that they need to consider 0:01:51.840 --> 0:01:53.440 that move. And that's what that's what the last three 0:01:53.480 --> 0:01:56.120 weeks is really all about. The combination of an election 0:01:56.240 --> 0:02:00.280 result plus the vaccine news is now forcing people to 0:02:00.360 --> 0:02:04.680 consider the possibility that this leadership change is not temporary, 0:02:04.760 --> 0:02:08.840 that it's actually more sustainable, and positions and portfolios are 0:02:08.880 --> 0:02:12.399 just not ready for that capitulation. We've got two time 0:02:12.400 --> 0:02:14.040 frames here, Mike, you and I've talked about him so 0:02:14.080 --> 0:02:16.680 many times, the net um and the medium term as well. 0:02:17.040 --> 0:02:20.000 You've had this trading range that you've developed and it's 0:02:20.040 --> 0:02:22.679 evolved slightly as the year has progressed. Mike, can you 0:02:22.720 --> 0:02:24.560 walk us through that range right now? And why you 0:02:24.639 --> 0:02:27.160 think we might be in protest at the lower rent 0:02:27.160 --> 0:02:30.840 of that range? Yeah, I mean, trying to call you know, 0:02:30.919 --> 0:02:34.120 corrections in a bull market is sometimes a fools game, 0:02:34.240 --> 0:02:36.079 but sometimes it makes sense. So obviously, as you know, 0:02:36.200 --> 0:02:40.320 we were extremely bullish from March through basically August, and 0:02:40.400 --> 0:02:42.200 we we then thought the market would go through some 0:02:42.240 --> 0:02:46.600 consolidation and we throughout this range of fifty which was 0:02:46.600 --> 0:02:50.520 technically driven now that worked really really well from you know, 0:02:50.560 --> 0:02:53.760 basically August through the end of October. We made a 0:02:53.760 --> 0:02:56.240 trading by call at the low end of that range 0:02:56.320 --> 0:02:58.400 right before the election that worked out really well. And 0:02:58.440 --> 0:03:00.239 now we're up at the upper end of that band again. 0:03:00.280 --> 0:03:03.360 Actually through it, we're at thirty thirty five. So you know, 0:03:03.400 --> 0:03:05.560 we're just we're gonna be objective about this. We're not 0:03:05.560 --> 0:03:08.080 gonna get dogmatic about some training range. But look, at 0:03:08.080 --> 0:03:11.800 the end of the day, John, five, you've baked in 0:03:12.120 --> 0:03:15.440 pretty much as much upset as you can legitimately, uh, 0:03:15.520 --> 0:03:18.320 you know, sort of confirmed with fundamentals. Okay, the technicals 0:03:18.320 --> 0:03:20.280 are one thing, but but also on a fundamental basis, 0:03:20.320 --> 0:03:22.160 it's hard for us to stretch it much beyond that 0:03:22.440 --> 0:03:24.800 you have liquidity, you know, maybe surging in the market 0:03:24.840 --> 0:03:27.000 that's taking things higher. But our job is to tell 0:03:27.000 --> 0:03:30.080 our clients when the risk reward is attractive, and right 0:03:30.080 --> 0:03:32.000 now the risk reward is much less attractive than the 0:03:32.040 --> 0:03:34.200 west three weeks ago. It doesn't change our view about 0:03:34.200 --> 0:03:37.360 the bowl market extending into next year. And and once 0:03:37.400 --> 0:03:39.480 again the main message we want to leave with clients 0:03:39.560 --> 0:03:42.160 is don't focus so much on the index. Let's find 0:03:42.160 --> 0:03:44.280 the opportunities that are clearly in a bowl market. And 0:03:44.280 --> 0:03:45.960 as you were talking earlier in the show, I mean 0:03:46.160 --> 0:03:49.600 the Russell two thousands of this month and it's just 0:03:49.680 --> 0:03:52.880 starting to have relative outperformance. That's Those are the types 0:03:52.920 --> 0:03:54.840 of things that we want to focus on for clients. 0:03:55.000 --> 0:03:58.360 Some notes that I was reading research notes after Jannet 0:03:58.440 --> 0:04:01.160 Yellowin was nominated to be the next Sury secretary said 0:04:01.480 --> 0:04:04.640 this would turbo charge the euphoria for a longer period 0:04:04.680 --> 0:04:07.440 of time because the idea of a Treasury working more 0:04:07.480 --> 0:04:10.440 closely with the Federal Reserve willing to run the economy 0:04:10.520 --> 0:04:13.520 hot is good for inflation. Isn't only going to fuel 0:04:13.600 --> 0:04:17.000 the trades that you're talking about, Russell two thousand Financials. 0:04:17.240 --> 0:04:20.120 Do you agree that Janet Yellen at the Treasury is, 0:04:20.320 --> 0:04:23.440 if not a game changer, at least really adds momentum 0:04:23.440 --> 0:04:26.880 to what we're seeing in the market. Well. Absolutely. I 0:04:26.880 --> 0:04:29.120 mean that one of our themes this year has been 0:04:29.120 --> 0:04:31.200 that we're moving out of a what I would call 0:04:31.680 --> 0:04:36.200 monetary policy dominant regime to a fiscal policy dominant regime. 0:04:36.200 --> 0:04:39.400 In fact, Jenny Ellen and Ben Bernanke as well as 0:04:39.880 --> 0:04:42.599 been writing op eds for the last six months of 0:04:42.640 --> 0:04:46.080 imploring Congress to do more fiscal j Paul Is also 0:04:46.320 --> 0:04:48.880 signaled that in every press conference, and so the Fed 0:04:49.040 --> 0:04:51.960 is almost been imploring, you know, the government to say, look, 0:04:52.000 --> 0:04:54.200 we need your help this time. We need to get 0:04:54.440 --> 0:04:58.240 more fiscal cooperation, to use the chief money to finally 0:04:58.240 --> 0:05:00.760 pull us out of this sort of low gro environment. 0:05:01.000 --> 0:05:03.560 And putting Jenny Yellen as U S Treasury Secretary can 0:05:03.600 --> 0:05:07.320 only help uh that effort in my view, because you know, 0:05:07.360 --> 0:05:10.240 it does come down to a negotiation with Congress. And 0:05:10.279 --> 0:05:13.960 obviously Jenny Ellen has tremendous street credibility, and you know, 0:05:13.960 --> 0:05:16.120 we know who she is. She's and she also has 0:05:16.120 --> 0:05:18.680 a pension for some of these programs that are more 0:05:18.720 --> 0:05:21.479 favorable to the lower income cohort, which is exactly what 0:05:22.080 --> 0:05:24.279 has been working this year, right getting money to the 0:05:24.279 --> 0:05:27.039 folks who need it and who will spend it. Mike 0:05:27.080 --> 0:05:31.120 Wilson International Investment. Now what your inning are we in? 0:05:31.279 --> 0:05:33.520 Is it just beginning or has it been a nice 0:05:33.560 --> 0:05:36.960 pop and that's it? Well, this is another one that 0:05:37.040 --> 0:05:39.200 you know, sort of has been a bit of a 0:05:39.200 --> 0:05:42.080 widow maker for the last you know, six or seven years, 0:05:42.600 --> 0:05:44.200 in the sense that every time it tries to make 0:05:44.200 --> 0:05:46.040 a move, it just gives up. It's like the value 0:05:46.120 --> 0:05:49.200 versus growth phenomena. It's the same trade Tom, you know. 0:05:49.320 --> 0:05:51.640 And I think that we are at at an inflection 0:05:51.680 --> 0:05:54.960 point right now for the more cyclical parts of the 0:05:55.000 --> 0:05:58.200 market to work better because there's you know, economic growth acceleration, 0:05:58.240 --> 0:06:01.560 not just here but globally, and some of that inflationary too. 0:06:01.839 --> 0:06:03.880 So there's no doubt that those markets that we're right 0:06:03.920 --> 0:06:07.320 about our fundamental economic view, then those markets should have 0:06:07.480 --> 0:06:10.080 better performance over the course of the next twelve months. 0:06:10.360 --> 0:06:12.719 Best month ever on the stocksic Sundrid for in Europe 0:06:12.760 --> 0:06:16.080 this month unreal up around about Mike tremendous work with 0:06:16.120 --> 0:06:18.919 the team this year. Fantastic to follow some of the research. 0:06:19.480 --> 0:06:22.200 Have a wonderful thanksgiving, Sir Mike Wilson that of more 0:06:22.240 --> 0:06:28.400 Coin Stanley right now and this comes up on the 0:06:28.400 --> 0:06:30.360 economic data that we're gonna see in what John has 0:06:30.400 --> 0:06:33.080 talked about happening in the House of Commons right now 0:06:33.120 --> 0:06:36.440 with a Britain in recession that is a compare and 0:06:36.480 --> 0:06:40.880 contrast to Queen Anne three years ago. Tobias Adrian is 0:06:40.920 --> 0:06:43.520 one skill to put perspective on this with the International 0:06:43.560 --> 0:06:47.520 Monetary Fund and Director of Monetary and Capital Markets Dr 0:06:47.600 --> 0:06:50.760 Adrian out of the Massachusetts Institute of Technology, and I 0:06:50.800 --> 0:06:54.279 should say the New York Fellow Reserve, Tobias, I love 0:06:54.320 --> 0:06:58.280 your essay which links in the path forward one year, 0:06:58.360 --> 0:07:00.520 two year, let's say the path four it up to 0:07:00.560 --> 0:07:04.200 two thousand twenty three, and you link it directly in 0:07:04.520 --> 0:07:09.560 to the financial stability that the Chancellor of the Exchequer desires. 0:07:09.880 --> 0:07:12.320 Can we have it both? Can we have our Turkey 0:07:12.360 --> 0:07:16.560 and need it too? Well? Good morning, thanks for having me. Yes, 0:07:17.040 --> 0:07:19.720 Center banks, including the Bank of England, but also the 0:07:19.720 --> 0:07:24.480 Federal Reserve and the e c B have deployed extraordinary 0:07:24.520 --> 0:07:29.240 measures this year in order to fight this terrible pandemic, 0:07:29.840 --> 0:07:35.120 and that has been tremendously helpful in easing financial conditions, 0:07:35.600 --> 0:07:40.880 getting financial markets to work, allowing firms and governments to 0:07:40.960 --> 0:07:44.960 borrow from markets. So that's a very very good outcome. 0:07:45.400 --> 0:07:50.040 But of course, an intended consequence of this monitor policy 0:07:50.040 --> 0:07:55.200 easing is for risk taking to return in financial markets. 0:07:55.240 --> 0:07:58.880 And indeed we see that high risk for us can 0:07:58.960 --> 0:08:03.119 get loans, but you have to make sure that there's 0:08:03.160 --> 0:08:06.400 not excessive risk taking, do you This is really important, folks, 0:08:06.440 --> 0:08:08.320 and this goes to the blue book, the Brown Book, 0:08:08.320 --> 0:08:11.200 and in the Green Book of the International Monetary Fund. 0:08:11.680 --> 0:08:16.120 Have you guys calculated the percent of g d P 0:08:16.400 --> 0:08:18.840 that we're going to have to spend on this pandemic? 0:08:19.280 --> 0:08:22.679 Progressive and liberal economist would say it's a much higher 0:08:23.200 --> 0:08:29.120 percent of g d P. Do you have a statistic tobias, Well, yes, 0:08:29.800 --> 0:08:34.080 we have looked at the fiscal expenditures this year and 0:08:34.120 --> 0:08:39.080 there were about twelve trillion globally twelve trillion, so that's 0:08:39.320 --> 0:08:43.560 uh depending on the economies. In advanced economies, it's up 0:08:43.559 --> 0:08:47.040 to fIF of GP that has been spent in two 0:08:47.120 --> 0:08:51.560 thousand twenty alone on fiscal expenditures in order to cushion 0:08:51.640 --> 0:08:56.120 the economy from this terrible pandemic. And yet still people 0:08:56.160 --> 0:08:59.199 say that monetary policy is doing the heavy lifting tobias. 0:08:59.200 --> 0:09:02.359 So even though you do that have that incredible fiscal expansion, 0:09:02.720 --> 0:09:05.640 still it is the idea of incredibly low interest rates 0:09:05.720 --> 0:09:09.480 and bond purchases and beyond by central banks. What are 0:09:09.520 --> 0:09:13.080 the financial stability risks of this disconnect that we keep 0:09:13.120 --> 0:09:16.880 talking about With markets flying higher records even as we 0:09:16.920 --> 0:09:21.560 look at a pretty bleak winter, So for the moment, 0:09:22.240 --> 0:09:26.080 things am pretty good shape. Banks have entered this crisis 0:09:26.120 --> 0:09:29.040 with much more capital than they enter the two thousand 0:09:29.120 --> 0:09:33.760 eight crisis, and um of course markets have come back 0:09:33.880 --> 0:09:36.960 and that has been very helpful in terms of sustaining 0:09:36.960 --> 0:09:42.280 the rescovery and sustaining the economy. We worry about the 0:09:42.360 --> 0:09:47.480 next three to four years. If monetary accommodation is still needed, 0:09:47.920 --> 0:09:52.880 financial conditions remain easy, that could fuel risk taking going forward. 0:09:53.400 --> 0:09:56.520 And so it's really in the medium term that we 0:09:57.240 --> 0:10:02.559 worry that there could be some degree of excessive risk 0:10:02.600 --> 0:10:05.360 taking in some corners of the vices you pointed out. 0:10:05.400 --> 0:10:09.200 Though this was the objective of policy to divorce financial 0:10:09.240 --> 0:10:14.360 conditions from underlying fundamentals. Use the word excessive. Can you 0:10:14.360 --> 0:10:16.400 define the word excessive and who gets to the side, 0:10:16.679 --> 0:10:20.240 whether it's successive. Absolutely, it's a balance. It's a balance. 0:10:20.280 --> 0:10:22.600 So you do want lending, you do want to support 0:10:22.640 --> 0:10:26.480 the economy, but you wanted to be measured and so 0:10:26.679 --> 0:10:29.600 getting the balance right is really what is on the 0:10:29.640 --> 0:10:34.920 table here. So in all of your uh, supportive monetary 0:10:34.960 --> 0:10:38.200 policy is going to be appropriate for some time in 0:10:38.320 --> 0:10:41.520 many countries, for many years, but that has to be 0:10:41.720 --> 0:10:45.839 combined with regulatory measures that make sure that there isn't 0:10:46.440 --> 0:10:50.640 excessive risk taking in terms of risky lending or the 0:10:50.679 --> 0:10:54.359 build up of leverage. Are you thinking right the macropodential 0:10:54.360 --> 0:10:56.839 tools around the housing markets that we've seen before and 0:10:57.240 --> 0:10:59.480 for instance the UK, those kind of things deparces that 0:10:59.520 --> 0:11:03.280 way your heads at the moment. Yeah, it would cover 0:11:04.240 --> 0:11:08.120 of course the banks, the non banks, as well as 0:11:08.679 --> 0:11:11.600 the household sector and the corporate sector. So you really 0:11:11.600 --> 0:11:14.160 have to look at the economic system as a whole. 0:11:14.520 --> 0:11:16.199 To us come back saying I love to continue the 0:11:16.200 --> 0:11:19.439 conversation to Adrian that I'm as director of Monetary and 0:11:19.559 --> 0:11:26.560 Capital Markets. Your man joins out from City Group, Doctor 0:11:26.600 --> 0:11:29.000 Man out of Thanksgiving. We're supposed to take a bigger 0:11:29.000 --> 0:11:32.520 broader view with you. Somebody mentioned there are another major 0:11:32.559 --> 0:11:37.120 bank looking for zero, looking for slow down, looking for recession. 0:11:37.559 --> 0:11:39.720 Can you be so grim as to tell us we're 0:11:39.760 --> 0:11:45.120 gonna begin to an approach in nb ER recession. Well, 0:11:45.120 --> 0:11:46.840 of course, the n b E R recession is the 0:11:46.880 --> 0:11:51.400 two consecutive quarters of negative growth. That's the official word. Um, 0:11:51.440 --> 0:11:53.360 I don't think we're going to be looking at that. 0:11:53.360 --> 0:11:55.679 That doesn't imply that we aren't going to be looking 0:11:55.679 --> 0:11:58.679 at a very difficult situation for a lot of people 0:11:58.720 --> 0:12:01.280 in the market. I think that you have said that 0:12:01.360 --> 0:12:06.040 you've you have this to to to uh stage recovery. 0:12:06.080 --> 0:12:10.080 One is manufacturing doing quite well. Um, you know, having 0:12:10.120 --> 0:12:13.120 a trade deficit and endurable and turable aplodes or capital 0:12:13.160 --> 0:12:16.400 goods is actually a good sign for business investment going forward. 0:12:16.480 --> 0:12:19.199 But of course, the labor market, the weakness, the continued 0:12:19.240 --> 0:12:22.000 weakness of the labor market is something that is going 0:12:22.000 --> 0:12:24.800 to drag the whole economy down. So you know, you've 0:12:24.840 --> 0:12:27.840 got two speeds. One is extremely slow actually in reverse, 0:12:27.880 --> 0:12:29.800 I mean that's what the initial claims is telling us. 0:12:29.800 --> 0:12:33.240 That's in reverse, that the capital goods trade deficit is 0:12:33.240 --> 0:12:36.760 actually positive, um, but that's going to keep us from 0:12:36.800 --> 0:12:39.800 being in um uh, you know, an official recession, but 0:12:39.840 --> 0:12:42.280 it's going to be very grim. I think we can't. 0:12:42.679 --> 0:12:45.800 Can you give us the nits medium term outlook than 0:12:45.840 --> 0:12:47.560 a city for you guys right now, just your base 0:12:47.600 --> 0:12:49.920 case and terms of the outlook. The contrast between the 0:12:49.960 --> 0:12:53.640 two well, as I say, i've you know, sort of 0:12:53.679 --> 0:12:57.280 outlined the fact that the continuing claims UM and the 0:12:57.360 --> 0:13:00.920 initial claims are pointing to a very difficult period of 0:13:00.920 --> 0:13:03.800 time over the next you know, a few months, possibly 0:13:03.840 --> 0:13:06.920 into the second quarter of next year. UM Our official 0:13:06.960 --> 0:13:10.120 forecast is that the US economy will have returned to 0:13:10.120 --> 0:13:12.680 the pre COVID level of GDP in Q two of 0:13:12.760 --> 0:13:14.320 next year. But I think that that has to be 0:13:14.840 --> 0:13:18.320 um considered in light of you know, this this burgeon 0:13:18.400 --> 0:13:22.760 in cases caseload in around around the country that's clearly 0:13:22.760 --> 0:13:25.520 going to weigh on that on that forecast, Katherine, we 0:13:25.640 --> 0:13:28.920 keep talking about how markets are ignoring the near term 0:13:28.960 --> 0:13:31.480 looking to a brighter period of time with a vaccine 0:13:31.480 --> 0:13:34.360 and traveling and more jobs, and the question that we 0:13:34.440 --> 0:13:37.440 keep coming back to on surveillance every morning is what 0:13:37.640 --> 0:13:40.920 is the damage, the longer term damage being done by 0:13:40.960 --> 0:13:44.320 the virus that is spreading at an exponential rate, and 0:13:44.440 --> 0:13:48.040 we're seeing that that's affecting the employment picture dramatically, with 0:13:48.559 --> 0:13:52.200 worse than expected uh jobless claims coming in. What is 0:13:52.280 --> 0:13:56.160 the scarring? How do you measure that? Well, there's you know, 0:13:56.240 --> 0:13:58.480 there are different ways of measuring it in the in 0:13:58.520 --> 0:14:02.160 the labor market data, but um, you know, the different 0:14:02.280 --> 0:14:05.320 US and so forth. But I really think that it's 0:14:05.360 --> 0:14:08.320 it's it's the labor market. It is um the small 0:14:08.320 --> 0:14:11.839 businesses that are disappearing, and it will take time to 0:14:12.160 --> 0:14:15.320 bring that back. But I also think that there are 0:14:15.360 --> 0:14:18.560 some other potential changes in the way the economy works 0:14:18.600 --> 0:14:22.240 that is a consequence of this divergence between what's happening 0:14:22.760 --> 0:14:25.880 to to companies um, sort of in terms of the 0:14:25.920 --> 0:14:28.800 real side, and what's happening to companies in terms of 0:14:28.800 --> 0:14:31.040 the financial side. So one of the things that we 0:14:31.080 --> 0:14:35.440 are seeing is that the companies that are flush have 0:14:35.560 --> 0:14:39.360 done well are buying their competitors, so that you know, 0:14:39.560 --> 0:14:41.520 M and A. So we're seeing more M and A. 0:14:41.520 --> 0:14:43.400 We're kind of we're looking at more of that coming 0:14:43.440 --> 0:14:47.600 forward over the next six months anyway, and so when 0:14:47.600 --> 0:14:50.000 we come out the other side, the structure of the 0:14:50.000 --> 0:14:54.920 economy looks very different, or potentially quite different with more concentration. UM. 0:14:55.000 --> 0:14:58.560 That of course is not good for labor market people 0:14:58.560 --> 0:15:00.560 in the labor market being able to get their wages 0:15:00.560 --> 0:15:03.080 and that sort of thing once they get employed. UM. 0:15:03.160 --> 0:15:07.360 And so consolidation is great for markets, it's great for 0:15:07.520 --> 0:15:10.920 stock prices, but it is really bad for both UM 0:15:11.120 --> 0:15:15.200 innovation and for workers. So longer term, the type of 0:15:15.400 --> 0:15:17.440 m and A concentration that we might end up with 0:15:17.600 --> 0:15:20.320 six months from now is not something that we're happy 0:15:20.320 --> 0:15:23.520 about in the longer term. Captain Man, a fancy question 0:15:23.640 --> 0:15:28.240 here on foreign exchange and your excellence at international economics. 0:15:28.760 --> 0:15:33.320 What happens is you end up having dollar dynamics which 0:15:33.480 --> 0:15:38.400 harm countries. They complain, and you get an abrupt reversal 0:15:38.600 --> 0:15:43.000 as well with a week dollar. I guess their currencies 0:15:43.040 --> 0:15:45.360 get stronger. We had one house today go to a 0:15:45.400 --> 0:15:49.760 yen nine, which is a shockingly strong yen. Is that 0:15:49.800 --> 0:15:53.680 what's in store for us next year are strong currencies? 0:15:53.720 --> 0:15:59.400 Where other nations scream at President Biden, you know, I 0:15:59.440 --> 0:16:02.680 think that, UM, there's a general view in the market 0:16:02.880 --> 0:16:06.360 that dollar depreciation is UH is sort of in the 0:16:06.440 --> 0:16:10.080 cards baked in almost UM. But I think we have 0:16:10.200 --> 0:16:13.320 to look at a lot of variation in how economies 0:16:13.360 --> 0:16:15.680 are going to be performing over the next year. We 0:16:16.320 --> 0:16:20.960 do see a lot of differences in UM potential improvement 0:16:21.040 --> 0:16:23.800 in the economies over the course of the year based 0:16:23.800 --> 0:16:29.920 on policy differences, based on virus vaccine acceptance differences. So 0:16:29.960 --> 0:16:32.320 I think it's it's UH. I think it's premature to 0:16:32.400 --> 0:16:35.040 say that, you know, we're looking at a claus a 0:16:35.080 --> 0:16:38.760 louver situation where UM, the dollar gets too weak and 0:16:38.800 --> 0:16:43.720 then everybody has to go in and try to reverse course. 0:16:43.760 --> 0:16:46.360 I think there's a lot more choppy waters, and it 0:16:46.440 --> 0:16:48.960 depends on whether you're looking at Latin America, are looking 0:16:49.000 --> 0:16:51.760 at Asia in terms of emerging markets UM, and even 0:16:52.040 --> 0:16:55.920 differences between Europe and Japan against the against the dollar. 0:16:55.960 --> 0:16:58.800 I think we've got a lot of different factors at play. 0:16:59.400 --> 0:17:01.640 Getting somebody action to the data dump of the last 0:17:01.680 --> 0:17:04.080 eleven minutes. Kathy Jones, a good friend of this program 0:17:04.119 --> 0:17:06.480 of Charles Swab playing against saying jobless claims up to 0:17:06.480 --> 0:17:08.600 seven seventy eight not a good sign, but jurable goods, 0:17:08.640 --> 0:17:12.000 artist rights more than expected. Same old story manufacturing good, 0:17:12.280 --> 0:17:14.840 but job market not so good. And Katherine, you touched 0:17:14.840 --> 0:17:16.719 on this a little bit earlier, your thoughts on how 0:17:16.760 --> 0:17:19.840 long that kind of dynamic can persist these two different 0:17:19.840 --> 0:17:22.359 economies that seem to be persisting at the moment, at 0:17:22.400 --> 0:17:24.240 least not just in the United States, but in Europe 0:17:24.240 --> 0:17:29.560 too well. Manufacturing is really being supported by UM both 0:17:29.600 --> 0:17:33.280 the policies that were put into place to replace worker 0:17:33.440 --> 0:17:36.000 incomes at a time when they couldn't spend it on 0:17:36.080 --> 0:17:38.760 anything else. So that's why we're seeing manufacturing goods looking 0:17:38.800 --> 0:17:42.640 so good, retail sales are looking so good, or well, 0:17:42.800 --> 0:17:45.800 we're good looking so good in terms of in terms 0:17:45.800 --> 0:17:48.400 of the bounce off the bottom UM and and then 0:17:48.400 --> 0:17:50.680 the fur allowing schemes in Europe. These are all sort 0:17:50.680 --> 0:17:54.639 of designed to replace worker incomes, but of course they 0:17:54.640 --> 0:17:57.280 have limited things to spend it on, and retail sales 0:17:57.560 --> 0:17:59.399 is one of the ways they're spending it durable goods, 0:18:00.320 --> 0:18:03.920 So there's that UM. Then of course there's the replacing 0:18:03.960 --> 0:18:08.359 the inventories associated with the lockdown periods. Both of those, 0:18:09.000 --> 0:18:11.480 at least in the United States are coming to an end, 0:18:12.480 --> 0:18:18.040 especially the support programs designed to support people's income without 0:18:18.119 --> 0:18:23.200 any kind of kind of move towards a either replacement 0:18:23.200 --> 0:18:26.760 of those incomes or move towards another strategy of spending 0:18:27.119 --> 0:18:30.080 tax changes and regulatory changes that are going to promote 0:18:30.080 --> 0:18:33.840 business investment to promote employment. Um then then we do 0:18:33.920 --> 0:18:38.480 have this situation where ultimately the lack of consumption, as 0:18:38.720 --> 0:18:41.320 Michael Vickey mentioned earlier, the lack of consumption is going 0:18:41.359 --> 0:18:44.119 to drag down the business side as well. So you 0:18:44.160 --> 0:18:46.879 can't go out too far on the limb with manufacturing 0:18:46.960 --> 0:18:50.879 doing well and employment doing poorly. Ultimately, you know, you 0:18:51.000 --> 0:18:53.520 fall off cancer and always wonderful to get your perspective 0:18:53.600 --> 0:18:59.760 cancer man that a city group. Thank you for this 0:19:00.080 --> 0:19:04.840 Wednesday before Thanksgiving, a time normally of immense travel. I 0:19:04.920 --> 0:19:08.560 call it the fourth Wednesday of November. It's just simple. 0:19:08.600 --> 0:19:11.400 The college kids come home, there's all the things we've 0:19:11.440 --> 0:19:14.760 done over the years, and then there's a pandemic. It 0:19:14.840 --> 0:19:17.919 has hit no one harder than the hospitality industry and 0:19:17.960 --> 0:19:22.320 particularly how we transport in our business and hospitality, and 0:19:22.400 --> 0:19:24.439 that would be travel. So it would be good not 0:19:24.520 --> 0:19:27.040 to speak to a CEO talking their book and boy 0:19:27.080 --> 0:19:29.200 we've done a great job on that. Thank you, guy 0:19:29.280 --> 0:19:33.200 Johnson for leading that coverage at worldwide. But how about 0:19:33.240 --> 0:19:37.359 talking to somebody who's single handedly changed how we traveled. 0:19:37.760 --> 0:19:40.480 His name is Brian Kelly. He's never gotten the credit 0:19:40.720 --> 0:19:43.840 from a straight business community about what the Points guy 0:19:43.920 --> 0:19:46.160 has done. It was a website, it was a joke. 0:19:46.359 --> 0:19:50.000 Everybody laughed at him until they realized JP Morgan was 0:19:50.080 --> 0:19:54.359 listening and Mr Diamond was taking notes when Brian Kelly 0:19:54.400 --> 0:19:57.679 opened his mouth. Brian, you were unprepared for this. What 0:19:57.720 --> 0:20:02.080 are your thoughts into two thousand tw one? Well, Tom, 0:20:02.119 --> 0:20:04.320 just first off, thanks for giving me that intro instead 0:20:04.359 --> 0:20:09.800 of just saying I'm an influencer. And next I'm kidding. No. 0:20:10.040 --> 0:20:14.719 This year has been absolutely wild for for consumers traveling um. 0:20:14.800 --> 0:20:17.080 But I do see hope on the horizon, you know, 0:20:17.240 --> 0:20:19.800 just in talking to our millions of readers and looking 0:20:19.800 --> 0:20:22.520 on social media, I do feel this bubble of revenge 0:20:22.600 --> 0:20:26.160 travel that's that's gonna come up, I think. In so, 0:20:26.520 --> 0:20:29.080 I do see good things on the horizon when we 0:20:29.119 --> 0:20:32.439 look at things like quantas setting up rules. Do you 0:20:32.600 --> 0:20:37.080 feel your world will be the rule makers that force 0:20:38.200 --> 0:20:42.560 use of vaccination? You know, I traveled to Ghana quite 0:20:42.600 --> 0:20:44.960 a bit and I have to show my yellow fever vaccination. 0:20:45.640 --> 0:20:48.600 So yeah, I wouldn't be surprised if countries you know 0:20:48.680 --> 0:20:51.520 this virus. It's crazy how quickly it can spread once 0:20:51.560 --> 0:20:53.399 you think you get it under control. All it takes 0:20:53.400 --> 0:20:55.480 is a couple of quick mistakes and it can spread 0:20:55.520 --> 0:20:58.720 like wildfire. So yeah, I do see more countries putting 0:20:58.720 --> 0:21:01.439 in a virus passport, you know, once these billions of 0:21:01.480 --> 0:21:03.560 doses are out there and we can actually track who 0:21:03.560 --> 0:21:06.200 got it. Bryan, I hope that I can join the 0:21:06.240 --> 0:21:08.160 wave of revenge travel. I think a lot of people 0:21:08.160 --> 0:21:10.840 are looking forward to get back, getting back on planes 0:21:11.200 --> 0:21:13.920 and seeing the world. I am wondering, though, if it's 0:21:13.920 --> 0:21:16.960 going to be more expensive. The hospitality industry, as Tom 0:21:17.040 --> 0:21:19.879 was saying, has gotten hit very hard. How willing do 0:21:19.960 --> 0:21:22.560 you think, based anecdotally on what you've seen so far, 0:21:22.720 --> 0:21:24.639 will they be to continue some of these points and 0:21:24.640 --> 0:21:29.320 loyalty programs when they need cash they need the money. Well, 0:21:29.400 --> 0:21:31.879 it's funny because these points and loyalty programs bring in 0:21:32.040 --> 0:21:34.800 billions of dollars in upfront cash. You know, we saw 0:21:34.880 --> 0:21:38.960 Hilton and Marryott sell billions this year for future use 0:21:39.000 --> 0:21:42.600 to the credit card companies. So you know, the loyalty 0:21:42.640 --> 0:21:45.199 programs need people to use those points. So we've been 0:21:45.240 --> 0:21:49.399 seeing incredible promotions. Even this Black Friday, Virgin Atlantic is 0:21:49.440 --> 0:21:52.280 selling their miles at a half off. You can fly 0:21:52.560 --> 0:21:55.439 New York or l A to London for basically a thousand, 0:21:56.000 --> 0:21:58.800 undred dollars when you back during these promotions. So it's 0:21:58.840 --> 0:22:01.720 a great time for con sumers. And I don't foresee 0:22:02.000 --> 0:22:04.600 you know, prices going up for a long time because simply, 0:22:04.720 --> 0:22:07.640 you know, supply and demand, and there's still so many 0:22:07.680 --> 0:22:09.960 people sitting it out until they can get a vaccine, 0:22:09.960 --> 0:22:11.720 which may not be till the end of next year. 0:22:11.840 --> 0:22:13.440 So it's a good time for deals, all right. But 0:22:13.440 --> 0:22:15.320 but something's got to give, Brian, right, I mean, we're 0:22:15.320 --> 0:22:17.520 looking at a market that's been decimated. If you look 0:22:17.520 --> 0:22:20.159 at the losses in the airline industry that's projected that 0:22:20.200 --> 0:22:23.640 we're projected in this week billions and billions of dollars. 0:22:23.680 --> 0:22:25.400