Speaker 1: This is Bloomberg Business Wait inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business, finance and tech news. The Bloomberg Business Week
Speaker 1: Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
Speaker 2: Peter Atwater, he's adjunct professor of economics at William and Mary,
Speaker 2: but before that worked in at financial services and with
Speaker 2: hedge funds. You might recall it he coined Carol, the
Speaker 2: term K shape recovery.
Speaker 3: Yeah, he did.
Speaker 4: Indeed, he was recently on to talk about his new book,
Speaker 4: The Confidence Map, which came out in July. So delighted
Speaker 4: to have you back. How are you. I'm doing great here. Well,
Speaker 4: it's great to have you here. How are you thinking
Speaker 4: about kind of the things that are coming at investors
Speaker 4: right now and just the world at large.
Speaker 5: Well, you know, there's a lot coming at investors. But
Speaker 5: what's been so striking to me about the past couple
Speaker 5: of weeks is the absence of emotion. We've watched the
Speaker 5: sell off in bonds, we've watched the sell off in stocks,
Speaker 5: we've watched oil prices rise, and there's this remarkable at
Speaker 5: ease that investors seem to have even though markets have
Speaker 5: gotten over sold or in the case of oil, over blought,
Speaker 5: and it's really inconsistent to me with what prices would suggest.
Speaker 5: So I'm perplexed that people are taking all of this
Speaker 5: as commonly as they are, particularly because it wasn't, you know,
Speaker 5: six months ago interest rates were at this level and
Speaker 5: people were panicking about the banks, and it's a big
Speaker 5: gone today.
Speaker 2: So what do you attribute that to.
Speaker 5: I'm a little worried about real complacence behavior on the
Speaker 5: part of investors, because there's there's no sense of that
Speaker 5: things could get worse, whether in terms of the economy
Speaker 5: itself or you know, higher interest rates or inflation. There's
Speaker 5: almost this sense of, Okay, this is what it is.
Speaker 5: Until the economy gives us signals that it's weakening, or
Speaker 5: until the consumer rolls over, we're going to count on
Speaker 5: some sort of miraculous landing of this.
Speaker 2: One thing that Caroly and I talked about this week
Speaker 2: was the depletion that we're seeing when it comes to
Speaker 2: the cash savings of Americans right Castle Bales, Castle balance sheets.
Speaker 2: I mean, pretty much everyone except the top twenty percent
Speaker 2: has run out of that excess cash savings that they
Speaker 2: had yeah, during the pandemic and post pandemic.
Speaker 5: I worry about those at the low end where the
Speaker 5: cash ran out a long time ago. I think it's
Speaker 5: interesting that folks are only taking note of it now,
Speaker 5: But for those at the bottom, this is a phenomenon
Speaker 5: that's now more than a year old, and so you're
Speaker 5: starting to see that roll into delinquency rates, particularly in
Speaker 5: automobile loans and credit card loans, and the automobile loan
Speaker 5: one worries me because, particularly for low income individuals, the
Speaker 5: car is the job, yeah, and they don't have the
Speaker 5: flexibility of work from home that many above do.
Speaker 4: Peter, what do you make of we were just talking
Speaker 4: about with Romain and Katie on our TV side about
Speaker 4: the ghost jobs that will never be filled. Do you
Speaker 4: are you comfortable with some of the data points that
Speaker 4: are out there, including the labor statistics here in the
Speaker 4: United States?
Speaker 5: You know, I'm comfortable with the statistics. But what is
Speaker 5: clear even with these statistics is that jobs are not
Speaker 5: equating to confidence, and that you've seen no material improvement
Speaker 5: in mood even though jobs have come back and people
Speaker 5: are working more. And so I think we do ourselves
Speaker 5: a disservice to think that having a job is going
Speaker 5: to boost confidence.
Speaker 4: I think it's funny because I think Tim and I
Speaker 4: talk a lot about like the things that we're paying
Speaker 4: for in life right now, whether it's homes or rates on.
Speaker 4: You know, buying a home.
Speaker 2: Right in assurance is super expensive now cool.
Speaker 4: Everything seems super expensive right now. Yeah, and then we
Speaker 4: have jobs and we feel pretty commion This.
Speaker 5: Is these are the things that are at the low
Speaker 5: end of the hierarchy of need. So we're not talking
Speaker 5: about luxury goods where you can do with or without.
Speaker 5: We're talking about essentials, and so that creates this sense
Speaker 5: of vulnerability where people feel hostage to either the price
Speaker 5: scarcity or the supply scarcy or the demand scarcity.
Speaker 2: Everything you're talking about we could have talked about six
Speaker 2: months ago. We could have talked about in January before
Speaker 2: the run up of close to twenty percent on the
Speaker 2: S and P five hundred this year, which by the way,
Speaker 2: has now been pretty much cut in half at this point. So, Peter,
Speaker 2: what were people ignoring and what does it portend for
Speaker 2: the future.
Speaker 5: So if I look at the markets over the last
Speaker 5: six months, I think the indices are masking what's really
Speaker 5: going on, which is this enormous stratification where the low
Speaker 5: end russells small cap stocks or barely I don't know
Speaker 5: this afternoon, if they're.
Speaker 4: Up for the years talk about all the time they
Speaker 4: talk about the small shops.
Speaker 5: So for me, and this is an indication of declining
Speaker 5: confidence and declining success for small businesses. And so I
Speaker 5: worry that investors, by pouring money into the thoroughbreds, into
Speaker 5: the Amazon and Apple and Google and Microsoft, are being
Speaker 5: misled by the fact that things are troublesome below the
Speaker 5: surface the other four hundred and ninety five companies.
Speaker 4: The other thing I guess I would go to is
Speaker 4: that when we talk about rates and we constantly keep going, well,
Speaker 4: you know, highest rates as seven or eight time, and
Speaker 4: that time really felt like the bottom was going to
Speaker 4: come out from under us. It doesn't necessarily feel like
Speaker 4: that time today that bad. But then again, is it
Speaker 4: because we're not necessarily really reading what's going on?
Speaker 5: Are we missing things?
Speaker 6: Yeah?
Speaker 5: And I think we're still in this unwind from negative
Speaker 5: interest rates two years ago, and so we tend to
Speaker 5: look at it on an absolute basis. But it's going
Speaker 5: to be interesting to see how balanced investors feel when
Speaker 5: they get their statements at the end of the quarter,
Speaker 5: where both their stock portfolios.
Speaker 2: I was going to say, a lot of people don't
Speaker 2: wait to get the statements. They you know, log in
Speaker 2: when they see red.
Speaker 4: I check periodically, but you're right, it's like a reality
Speaker 4: check of like, it's again a reminder not everything goes up,
Speaker 4: but when we do go like, is there something though
Speaker 4: significant when we do make those references back to two
Speaker 4: thousand and seven, two thousand and eight, which was such
Speaker 4: a significant time in this country as well as certainly
Speaker 4: within the financial market universe, is it are we setting
Speaker 4: up for a period another period that's as rough as
Speaker 4: some of the stuff we went through there in terms
Speaker 4: of the markets.
Speaker 5: So I think what's been so interesting in the past
Speaker 5: two years is we're seeing a concurrent unwind of extreme
Speaker 5: sentiment in both stocks and bonds. The trade isn't risk
Speaker 5: on versus risk off, it's risk one versus risk out,
Speaker 5: and you're seeing that in the growth in money market funds,
Speaker 5: where money is leaving the market outright, and that's a
Speaker 5: trend we need to keep a lot of attention on
Speaker 5: because you know, seven oh eight, other than a few
Speaker 5: weeks there was this rotation into bonds out of stocks,
Speaker 5: and that we're not seeing that, even though yields are
Speaker 5: significantly higher than they were recent one.
Speaker 2: So where's the money going.
Speaker 5: It's going into money market funds.
Speaker 2: Over five percent in a money market fund and you
Speaker 2: just said it there until you know you're earning.
Speaker 5: More than ten year yields today. I mean, so it's
Speaker 5: it's a really it's cash has become a viable alternative.
Speaker 5: And as I said, with stocks and bonds moving down
Speaker 5: in price together that it could start to feed upon it.
Speaker 4: Well state that way.
Speaker 5: Who knows, who knows.
Speaker 2: But I mean at a certain point, bonds are going
Speaker 2: to become attractive to some of these people, right.
Speaker 5: So that's the question. If bonds were a bubble, if
Speaker 5: negative interest rates were a sign of extreme sentiment, then
Speaker 5: we're likely to see that rising rates. Falling prices don't
Speaker 5: draw a crowd. That we've seen everybody who is going
Speaker 5: to buy a bond did, and much as you see
Speaker 5: when stock market bubbles, unwined, lower price doesn't draw anybody.
Speaker 5: You get the occasional bounces, but it's a perpetual unwinding machine.
Speaker 4: Is it safe to say we've got about forty five
Speaker 4: seconds and you're going to come back and stay with us,
Speaker 4: and we're going to talk some more. But is it
Speaker 4: safe to say, and I think you mentioned this earlier,
Speaker 4: we've never come out of a pandemic, We've never come
Speaker 4: out of a time period like this. We don't really
Speaker 4: ultimately know how it all settles. We don't.
Speaker 5: But let me create a bull case here. You talk
Speaker 5: out of both sides of my mouth. On Economis's we
Speaker 5: talked about all this cash going into all the money
Speaker 5: going into money markets, that then becomes a potential source
Speaker 5: for further enthusiasm. If sentiment were to bottom.
Speaker 4: The cash on the side of cash on the.
Speaker 5: Sideline, and there's a lot of it, I mean, there's
Speaker 5: an enormous amount of cash sitting there, and so you
Speaker 5: could have this powerful reversal where the crowd says that
Speaker 5: was it, that was as bad as it got, and
Speaker 5: we're back to the races.
Speaker 2: I mean, if you're saying that, like the S and
Speaker 2: P five hundred, at forty five hundred, you were regretting
Speaker 2: not putting some money in. Now it's at forty two
Speaker 2: hundred and you're like, Okay, maybe it's time, or there
Speaker 2: could be further to go.
Speaker 5: Well, and I can create a bull scenario, which is
Speaker 5: if the dollar is then going to fall, you start
Speaker 5: to see a declining dollar. That's a huge tailwind for
Speaker 5: these megacaps.
Speaker 4: With US as News Congressional reporter Eric Watson on the
Speaker 4: phone at the Capitol in Washington, DC, still with US,
Speaker 4: Peter Atwater as a professor of economics at William and
Speaker 4: Mary and author of the Confidence Matt and Eric, I
Speaker 4: want to start with you give us some color about
Speaker 4: what are you hearing. What's the environment in and around
Speaker 4: the Capitol as we count down to that possible shutdown.
Speaker 6: Well, you know, I think really the focus is on
Speaker 6: the House, where even longtime Republican aids and operators are saying,
Speaker 6: it's just a chaos. They haven't seen anything like it.
Speaker 6: It's just an inability really of the House Republicans to
Speaker 6: come together on even an offer. You know, they've proposed
Speaker 6: a stop gap spending bill of between thirty one days
Speaker 6: or forty five days, try to attach that to some
Speaker 6: border security position provisions that make the President come to
Speaker 6: terms on a border deal. But they can't even really
Speaker 6: get the votes to pass that, So they're not even
Speaker 6: off of first base here, and meanwhile, the Senate's moving
Speaker 6: forward with his bipartisan deal. You know, it's about six
Speaker 6: billion dollars in Ukraine aid six billions for disaster fund
Speaker 6: the government for forty seven days. Now, you know, if
Speaker 6: the Senate passes that, which it likely could do by Sunday,
Speaker 6: a government shutdown had already started. But there'd be a
Speaker 6: lot of pressure on McCarthy to bring that up, but
Speaker 6: he told his conference he's not going to bring that
Speaker 6: up today, and so we're really heading to a shutdown.
Speaker 2: Eric, you've seen this play out before, So just give
Speaker 2: us an idea of if the government does shut down,
Speaker 2: or maybe we say, at this point when the government
Speaker 2: does shut down, help us by looking into your crystal
Speaker 2: ball and giving us an idea of when things open
Speaker 2: up back open up again.
Speaker 6: Well, one intriguing possibility is that House Moderates conducted rebellion,
Speaker 6: put a couple of tours in the Boomberg about that.
Speaker 6: They have some procedural mechanisms once called the discharge petition,
Speaker 6: where they could within about nine legislative days, force a
Speaker 6: vote against speakers wishes on that Senate bill or on
Speaker 6: their own rival plan, which would actually extend government counting
Speaker 6: to January eleventh, you know, to be viewed as a
Speaker 6: betrayal of the party. But they are arguing, well, be
Speaker 6: a lot of the Conservatives that vote against the warty
Speaker 6: speaker candidate and vote against House rules and other things,
Speaker 6: so they've also shown disloyalty. You know. Mike Lawler of
Speaker 6: New York, one of the moderate Biden district Republicans beating
Speaker 6: that effort. He can probably bring along five other New
Speaker 6: York Republicans to help him, and that's all it's really
Speaker 6: needed to trigger this process. So it could be as
Speaker 6: little as nine days. There are ways the Speaker could
Speaker 6: try to support that, you know. On the other hand,
Speaker 6: I could see a resolution quicker. It just really depends
Speaker 6: on really on these moderates and whether the Speaker ultimately decides,
Speaker 6: you know, just the shut does it's not worth the pain,
Speaker 6: worth risking the House. He could face emotion now as
Speaker 6: to him at that point to be up to Democrats
Speaker 6: whether they bail him out. You know, there's probably enough
Speaker 6: conservatives that he would you know, be able to be
Speaker 6: oust and without democratic help.
Speaker 4: The political process. As we said earlier when we began
Speaker 4: talking with Peter Atwater at the top of the broadcast. Peter,
Speaker 4: one of the things that's on the minds of investors
Speaker 4: is his potential for a government shut down. There is
Speaker 4: potentially an impact when you don't have government programs, the
Speaker 4: expenditures going out, you don't have employees being paid. There's
Speaker 4: an impact. I mean, how do you think about it?
Speaker 4: I think about William and Marry. They spend a lot
Speaker 4: of time in terms of policy and the connection of
Speaker 4: policy and economic impacts.
Speaker 6: Yeah.
Speaker 5: So I often say that policy makers follow mood, and
Speaker 5: this is policy makers in me here now mode. The
Speaker 5: only thing they care about is their individual survival. And
Speaker 5: with mood falling is indicated by the markets, that's going
Speaker 5: to make getting a resolution together very difficult until there
Speaker 5: is ultimately capitulation where some group is led to believe
Speaker 5: that they're vulnerable in this process. And what we see
Speaker 5: today is a lot of between the gerrymandering and the
Speaker 5: heavy one statedness that we have in terms of political alignment,
Speaker 5: that vulnerability is not showing up anywhere anytime soon.
Speaker 2: So, Peter, your book is called the Confidence Map, Charting
Speaker 2: a Path from Chaos to Clarity. House is a word
Speaker 2: I think a lot of people would associate with what's
Speaker 2: going on, at least in Washington right now. Eric, you
Speaker 2: might agree or disagree. I don't know. Do Americans still
Speaker 2: look for confidence in the government or if we kind
Speaker 2: of said, you know what, it's not happening.
Speaker 5: The bond market would say they don't. I mean that
Speaker 5: the markets yawn over what's happening in Washington is remarkable
Speaker 5: to me. But that is the nature of the investing
Speaker 5: crowd to do.
Speaker 2: But is it yawning because they know it's going to
Speaker 2: get resolved and it's happened before.
Speaker 1: Yeah, yeah, I.
Speaker 5: Think we're numb to it. But therein lies the danger
Speaker 5: that that belief that ultimately Congress comes to its senses
Speaker 5: is based on the past and the environment. The mood environment,
Speaker 5: at least right now, suggests that that may not be
Speaker 5: the best assumption.
Speaker 4: Eric, come on back in here, because I do it
Speaker 4: was interesting what Peter said, Like, I do think that
Speaker 4: there is such a big yawn. I think if I
Speaker 4: brought this up with a lot of my family members,
Speaker 4: they'd be like, yeah, okay, tell me something I care about.
Speaker 4: But I do wonder Eric, in terms of do members
Speaker 4: of Congress are they getting calls from their constituents. I mean,
Speaker 4: I'm sure, corporate folks might be if they're not going
Speaker 4: to get some kind of you know, government contract payout
Speaker 4: or something. But I just wonder, do lawmakers here from
Speaker 4: the voting members of the US.
Speaker 6: Well, you know, some of them say that they aren't
Speaker 6: hearing some of them say they are. But I would say,
Speaker 6: we have a couple of really good things in the
Speaker 6: terminal right now. One is a great story which talks
Speaker 6: about which lawmakers have the most federal workers in their district,
Speaker 6: and one of them is Matt Gates is leading that
Speaker 6: the government shutdown charge. He has the third most number
Speaker 6: of federal workers in his district. So you know, these
Speaker 6: are people who are not necessarily acting in the interests
Speaker 6: of their constituents. I'd also point out another story I
Speaker 6: wrote on the terminal, which is about the economic impact.
Speaker 6: You know, we discovered big of the Bloomberg government data
Speaker 6: at one point nine billion dollars per day and lost
Speaker 6: their delayed revenue to federal contractors, and that is going
Speaker 6: to You're going to see service contractors laid off and
Speaker 6: never get back pay. You're going to see production lines disrupted.
Speaker 6: And who we talked to in that story, basically, you know,
Speaker 6: they said you know, this is the time with high inflation,
Speaker 6: high interest rates, You're going to see a cash flow
Speaker 6: crunch on these small contractors. You're going to see some
Speaker 6: companies even go bailly up in a six to seven
Speaker 6: week shutdown. So, you know, I think the longer it
Speaker 6: goes on, the longer the clamor the bigger the pain.
Speaker 6: As your guests said, you know, and someone's going to
Speaker 6: have to capitulate.
Speaker 4: Eric, you know that is such a really good point.
Speaker 4: I mean, Peter, I do think about that. Smaller companies, man,
Speaker 4: they live I feel like from money into money out,
Speaker 4: like they just live from day to day in terms
Speaker 4: of their you know, financial books, if you will. I mean,
Speaker 4: that is a possible cost to all of this.
Speaker 5: Yeah, And I think it's yet another moment where those
Speaker 5: on the left and the right fail to appreciate the
Speaker 5: vulnerability of those at the bottom and business and individually
Speaker 5: and ultimately the potential that those at the bottom say
Speaker 5: enough of both left and right.
Speaker 2: What happens when or if that happens?
Speaker 1: Peter.
Speaker 5: So, I think you start to see grassroots movements where
Speaker 5: you see pockets of both red and blue individuals and
Speaker 5: businesses that below ends say we've had enough.
Speaker 4: I feel like you need to occupy Wall Street or
Speaker 4: occupy corporate America, you know.
Speaker 2: But I mean maybe that was the Tea Party, or
Speaker 2: maybe it was the rise of Trump in twenty sixteen.
Speaker 5: But I think that and Eric may want to weigh
Speaker 5: in on this, is that the environment today is uniting, well,
Speaker 5: uniting everybody goes with similar vulnerabilities.
Speaker 3: Well, Eric, we've.
Speaker 4: Got only about twenty five seconds. What do you say
Speaker 4: to that about unifying people?
Speaker 6: Well, I think one of the interesting things is how
Speaker 6: split America is. You've got almost a fifty to fifty country.
Speaker 6: And that's why the House is the margin is so small,
Speaker 6: and that's what's really causing the problem here is that
Speaker 6: you McCarthy's majority. If he had twenty seat majority, this
Speaker 6: would be the issue we're seeing today. The fact is
Speaker 6: he's only was four and this is a very small
Speaker 6: number five to seven who are basically saying, you know,
Speaker 6: we won't vote for this starting position CR. So I
Speaker 6: think that's that's an element of it to the small
Speaker 6: House majority, right, and you know, his personal skills Nancy
Speaker 6: Pelosi had a small majority to get more through. You know,
Speaker 6: he just isn't able to get those last couple of votes.
Speaker 1: That he needs.
Speaker 4: Eric Watson, we know you're busy. Thank you so much,
Speaker 4: Congression reporter at Bloomberg News, Peter Atwater, President of Financial Insights,
Speaker 4: and check out his book, of course, The Confidence Map.
Speaker 4: Thank you so much.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 4: D Cass chairman and CEO at his investment firm Revolution,
Speaker 4: co founder of course of AOL which at its peak
Speaker 4: nearly half of Internet users in the US used AOL,
Speaker 4: so really.
Speaker 7: Just a game.
Speaker 4: And he's back with us on zoom from Washington, DC. Steve,
Speaker 4: it is great to have you back here with Tim
Speaker 4: and myself on Bloomberg Business Week. You know, it's been
Speaker 4: a year since you published Rise of the Rest How
Speaker 4: entrepreneurs and surprising places are building the New American Dream.
Speaker 4: It's now out in paperback. How is the entrepreneurial spirit
Speaker 4: and the American dream doing in your view in the
Speaker 4: pursuit of it?
Speaker 8: Well, I think entrepreneurship continues to be alive, and well.
Speaker 8: And the message of the Rise of the Rest book
Speaker 8: is it just isn't alive and well just in places
Speaker 8: like Silicon Valley, it's placed all around the country. They're
Speaker 8: developing a strong startup ecosystems. And that's helpful because entrepreneurs
Speaker 8: who historically would would have to feel like they left
Speaker 8: and leave where they were from to go to the
Speaker 8: coast to be part of the innovation of come and
Speaker 8: now can stay and build and scale there and great
Speaker 8: jobs there. So it's been great to see the momentum
Speaker 8: over the last decade since we started Rise of the
Speaker 8: Rest the pandemic, it's certainly been an accelerant, almost a
Speaker 8: tipping point in terms of more people decided to move
Speaker 8: other places. So it's seen a dispersion of talent and
Speaker 8: the spurs of capital and a lot of great ideas
Speaker 8: that are really kind of reimagining healthcare and food and
Speaker 8: agriculture and financial services and transportation and education, some of
Speaker 8: the most important aspects of our lives and some of
Speaker 8: the biggest industries are really up for grabs in this
Speaker 8: next next phase.
Speaker 2: Rise of the Rest is the name of the book,
Speaker 2: it's the name of the seed fund as well. Steve,
Speaker 2: What about rise of the rates that we've seen over
Speaker 2: this year to what extent is that hurting the startups
Speaker 2: that you talk to when you interact.
Speaker 8: With well, certainly when rates are higher, you know there's
Speaker 8: a little bit of a pullback in terms of the
Speaker 8: stock market valuations, as we've seen, and they're therefore a
Speaker 8: pullback in terms of particularly the late stage private market valuations,
Speaker 8: the pre IPO valuations. So we've seen that dynamic or
Speaker 8: the last eighteen months or so, which frankly I think
Speaker 8: is healthy and not all that unexpected a couple of
Speaker 8: years ago. Things we're getting a little frothy in that
Speaker 8: later stage and so we're seeing a correction at the
Speaker 8: growth stage of the market. On the earlier seed side,
Speaker 8: it's not quite the same impact. And particularly in these
Speaker 8: rises of the rest cities. The valuation of the seed
Speaker 8: investments we've done with our rides the Rest Fund, and
Speaker 8: so far we've done two hundred over two hundred investments
Speaker 8: in one hundred different cities. Valuations tend to be about
Speaker 8: half of what the valuations are for comparable companies at
Speaker 8: the seed stage. In places like Silicon Valley, it's a
Speaker 8: classics supply and demand so much capitals focused on venture capital,
Speaker 8: focused on Silicon Valley, not enough on other parts of
Speaker 8: the country, So that dynamics still creates a great opportunity
Speaker 8: for investors who are willing to do the extra work
Speaker 8: to identify promising entrepreneurs tackling big industries in dozens of
Speaker 8: cities all around the country.
Speaker 4: Well, and that's a really good point that you talked
Speaker 4: about all the innovation that's going on in other cities
Speaker 4: beyond Silicon Valley. Having said that, the collapse of Silicon
Speaker 4: Valley Bank and the fallout, what did you see as
Speaker 4: a result of that in terms of the work that
Speaker 4: you're doing in the investments that you're doing or none.
Speaker 8: Mean, it was a problem, no question. Even though it's
Speaker 8: called Silicon Valley Bank or SVB, actually banked startups all
Speaker 8: over the country, not just in Silicon Valley, and about
Speaker 8: half of the startups and about half of the venture
Speaker 8: firms in America or back by banked by SVB. So
Speaker 8: it's been very unhelpful. A number of firms are trying
Speaker 8: to fill the void and offer different products and services
Speaker 8: to both the venture funds and to the entrepreneurs, but
Speaker 8: it's certainly been a negative this year.
Speaker 4: Hey, one thing we really wanted to ask you and
Speaker 4: was about what's going on in terms of regulation. We've
Speaker 4: been talking a lot about the FTC suit against Amazon,
Speaker 4: right anti trust case. We've all been kind of waiting
Speaker 4: for this, and the accusations are that Amazon is monopolizing
Speaker 4: the online marketplace services by degrading quality for shoppers and
Speaker 4: overcharging sellers. How do you think about this.
Speaker 8: Well, I haven't read the actual case obviously, as you said,
Speaker 8: it's been expected for some time. The FTC has gotten
Speaker 8: more aggressive on big tech.
Speaker 1: And that good.
Speaker 4: Is that good that they've got.
Speaker 8: Big more, more more scrutiny of big tech and it
Speaker 8: gets healthy. My focus is, as you know, is around
Speaker 8: the new companies, the entrepreneurs, the insurgents that want to
Speaker 8: take on some of the bigger incumbents, and making sure
Speaker 8: that there's an environment that allows innovation to floorish entrepreneurs
Speaker 8: to be successful, including in areas of e commerce. Or
Speaker 8: have a similar case with with Google on some issues
Speaker 8: related to the search. I think that scrutiny is appropriate.
Speaker 8: Exactly what happens in each court case obviously needs to
Speaker 8: kind of just you know, have to see how it
Speaker 8: plays out. But I think it is important that we
Speaker 8: make sure we're airing on the site as a nation
Speaker 8: of making sure entrepreneurship can flourish everywhere. And you know,
Speaker 8: big tech doesn't just get bigger, including by the way,
Speaker 8: with AI. One of the one of the big debates
Speaker 8: here in Washington around AI as it gets more attention,
Speaker 8: is is it going to end up being a few
Speaker 8: big companies getting even bigger or is it going to
Speaker 8: be a broader, more dispersed innovation ecosystem a little bit
Speaker 8: more on the open source side. And so I will
Speaker 8: see how that plays out over the coming year. But
Speaker 8: the Internet is not so important. Technology so important. Every
Speaker 8: industry really is now tech enabled. Every company really is
Speaker 8: in some ways a tech company. It's not at all
Speaker 8: surprising that there's more anti trust scrutiny.
Speaker 2: Did it never feel like to you that AO, well,
Speaker 2: in your days of founding and running AOL was so
Speaker 2: big that it could have faced more anti trust scrutiny.
Speaker 8: No, we actually did, and some of the News Corp
Speaker 8: And others at one point, you know, filed suits saying
Speaker 8: AOL had too much control of the Internet. And even
Speaker 8: when we merged with Time Warner, the Microsoft at and
Speaker 8: t others were trying to block the deal with that
Speaker 8: you know, that argument, and so in that particular case,
Speaker 8: obviously I hate to say it, but for a whole
Speaker 8: host of reasons, AOL failed by the wayside, new entrants
Speaker 8: including you know, Google and Facebook and others kind of felt,
Speaker 8: you know, took over. And it's because those news companies
Speaker 8: were able to start, They were able to raise the
Speaker 8: venture capital or were not barriers to entry to allow
Speaker 8: them to start. So that's the philosophy we need going forward.
Speaker 8: Celebrate the successes we have in our country, including some
Speaker 8: of these great companies Amazon and Google and so many
Speaker 8: many others, but how do we make sure we're also
Speaker 8: creating environments so more of those companies can be the
Speaker 8: big companies of tomorrow, not just on the coast, not
Speaker 8: just in Silicon Valley, but all over the country, which
Speaker 8: obviously why I wrote the book Prize of the Rest.
Speaker 2: So how do we do that? Though, I mean, we
Speaker 2: spoke to Diana Henriquez last week, who you know, compared
Speaker 2: the power companies of the nineteen twenties and nineteen thirties
Speaker 2: and the regulation of the power companies to the tech companies.
Speaker 2: The huge tech giants today, and she says government needs
Speaker 2: to get involved with them. What does the government need
Speaker 2: to do in order to ensure that the rest can rise?
Speaker 8: Well, I'm marketing, I'm coach sharing the National Advisory Council
Speaker 8: on Innovation and Entrepreneurship here here in Washington, and we're
Speaker 8: working on a National Entrepreneurship Strategy which we'll be releasing
Speaker 8: later this year. And there's a number of facets to it.
Speaker 8: Some relate to the talent, including immigration policy. Some relate
Speaker 8: to access to capital, including some of the work around
Speaker 8: prize of the rest. Some of it relates to making
Speaker 8: sure you know, there's continued investment in regional hubs. Congress
Speaker 8: passed the Chips and Science Act a couple of years
Speaker 8: ago and authorized ten billion dollars for regional hubs, with
Speaker 8: its only so far appropriated five hundred million dollars of it.
Speaker 8: Someone's making sure America continues to invest in the R
Speaker 8: and D, the technologies of the future to create the
Speaker 8: industries of the future. So there's many facets to it,
Speaker 8: but the overarching theme I think is how do you
Speaker 8: make sure this next generational entrepreneurs can start and scale
Speaker 8: and do it anywhere in the country, not just a
Speaker 8: few big companies being able to innovate, or only people
Speaker 8: in a few places like silicate values. So it's trying
Speaker 8: to create a more inclusive innovation economy has to be
Speaker 8: a key part of the answer, Steve.
Speaker 4: We're often so critical of other countries and their supportive industries.
Speaker 4: I'm thinking about China specifically, But you know, we are
Speaker 4: increasingly seeing the US, whether it's in the semiconductor space,
Speaker 4: whether it's in the EV or the energy transition support
Speaker 4: industries here in the United States. Should we especially when
Speaker 4: it comes to some of the more newer innovative areas.
Speaker 8: Yes, and again there's sort of this long debate about
Speaker 8: industrial policy, long debate about how much of a role
Speaker 8: should government play. But the reality is the Internet wouldn't
Speaker 8: exist if the government hadn't funded you know, DARPA research
Speaker 8: agency a half a century ago and then open it up,
Speaker 8: commercialized access to the Internet, and broken up the phone company,
Speaker 8: so the costs of communications, you know, came down. There
Speaker 8: are a number of decisions that really unleashed the Internet.
Speaker 8: So having that government role, I think is important that
Speaker 8: we the innovators need to respect the role of policy makers.
Speaker 8: I actually think in the next decade. The two mega
Speaker 8: themes are going to be place and policy that we're
Speaker 8: focused here at revolution around place, particularly Rise the Rest.
Speaker 8: We think a lot of the big companies that tomorrow
Speaker 8: will have a policy aspect to them because of the
Speaker 8: nature of the industries up for grabs, and because Congress
Speaker 8: has passed legislation about three trillion dollars of legislation, the
Speaker 8: Chips and Science Act, the Inflation Reduction Act, the Bipartisan
Speaker 8: Infrastructure Bill that's going to really invest in these industries
Speaker 8: in a big way and create opportunities for investors as
Speaker 8: well as ensuring that America has the right infrastructure, has
Speaker 8: the right technologies to continue to be the most innovative
Speaker 8: entrepreneurtion in the world.
Speaker 4: Got to say, Steve, every time you're on you just
Speaker 4: leave us wanting more, So come back soon and good
Speaker 4: luck with the paper book, a paperback version, I should say,
Speaker 4: Rise of the Rest.
Speaker 8: How entrepreneur, thank you?
Speaker 4: Okay, be well, How entrepreneurs and surprising places are building
Speaker 4: the new American dream.
Speaker 1: Of course, Steve Case, you're listening to the Bloomberg Business
Speaker 1: Week podcast. Catch us live weekday afternoons from three to
Speaker 1: six Eastern on Bloomberg Radio, the Bloomberg Business app and YouTube.
Speaker 1: You can also listen live on Amazon Alexa from our
Speaker 1: flagship New York station, Just say Alexa, play Bloomberg eleven thirty.
Speaker 4: Paul Sews is with us. He's founder and CEO at Dekasonic.
Speaker 4: It's firm then invest in and advisors around NFTs, cryptocurrencies,
Speaker 4: blockchain infrastructure, the metaversity, centralized finance, and more so, it's
Speaker 4: really kind of on it when it comes to I
Speaker 4: feel like innovation in a big way. In other words,
Speaker 4: the world of what's become known to many as Web three.
Speaker 1: Yeah.
Speaker 2: Paul joins us on Zoom in Chicago this afternoon. Paul,
Speaker 2: give us your reaction to facebooker keep calling it Facebook, Carol, Yeah,
Speaker 2: stop that platforms.
Speaker 7: Today, Tim, Carrol, thanks for having me again. Very excited
Speaker 7: to be here and talking about meta. Certainly, their announcements
Speaker 7: to tape points to what early stage vcs are investing
Speaker 7: in this intersection of technologies. It's where two or more
Speaker 7: disruptive technologies converge, in this case AI and mixed reality
Speaker 7: chatbots from Tom Brady with their Quest Pro three launch
Speaker 7: that's upcoming, it's generating a lot of consumer excitement. We
Speaker 7: see this in history on how Apple also innovated on smartphones,
Speaker 7: intersecting cell your voice with consumer mobile data.
Speaker 4: So I mean, I keep trying to figure out, like
Speaker 4: I get it to some extent, but I do try
Speaker 4: to figure out, like, how does this really move the needle?
Speaker 4: Akin to the Internet, which really did move the needle,
Speaker 4: and how we do so much in our world. It's
Speaker 4: kind of amazing, right, how ubiquitous it is to a
Speaker 4: kind of almost everything we do, whether it's at work,
Speaker 4: at play, have you? Is that how we need to
Speaker 4: be thinking about the impact of chatbots and generative AI.
Speaker 7: Ubiquity and the Internet that happened overnight. I think it
Speaker 7: took about fifteen twenty years to really go mainstream, and
Speaker 7: we're seeing Facebook and Meta also make these long term
Speaker 7: investments on an immersive experience. Apple has their Vision Pro
Speaker 7: launch upcoming as well. It's much more expensive than Meta,
Speaker 7: and so they believe Meta believes that with the deflation
Speaker 7: in device costs, this will accelerate mainstream adoption.
Speaker 2: You know one thing that I wonder though, and we
Speaker 2: were just talking to Steve Case, founder of AOL, who
Speaker 2: knows a thing or two about starting companies and building
Speaker 2: them all about this because he's got his the paperback
Speaker 2: out of his new book that he wrote last year.
Speaker 2: Are is the environment conducive to startups actually winning in
Speaker 2: this day and age? I mean, look at this. You have,
Speaker 2: you know, well companies out there that are doing really
Speaker 2: cool stuff in Web three and AI in the metaverse.
Speaker 2: But you know Facebook is doing its developers conference today
Speaker 2: and sucking a lot of the air out of the room.
Speaker 7: The only data point I could sure is we're seeing
Speaker 7: success in our portfolio companies that are winning. They are
Speaker 7: taking this approach of the intersection of these technologies. It's
Speaker 7: not so obvious for a large company to be pursuing
Speaker 7: blockchain and AI convergence, metaverse and Web three intersection, metaverse
Speaker 7: and blockchain intersection, mobile and Web three intersection. But we
Speaker 7: are seeing pockets as an early stage investor, that success
Speaker 7: and trajectory upwards of one hundred million dollars in revenues.
Speaker 7: And that might not move the dial for a multi
Speaker 7: trillion dollar company, but it's certainly very interesting for early
Speaker 7: stage vcs.
Speaker 4: Where are you seeing or where are you investing the
Speaker 4: most in? Is it NFTs? Is it crypto generally speaking? Blockchain?
Speaker 4: Is it the metaverse? Is it centralized finance, Give us
Speaker 4: a little bit more specificity in terms of your interest
Speaker 4: and really the investment interest right now where you want to.
Speaker 7: Commit Dekasnic is a fun focus on the mainstream adoption
Speaker 7: of blockchain, Web three and metaverse. A lot of those
Speaker 7: use cases are non financial use cases and it does
Speaker 7: bring in global brands with their global communities around digital collectibles.
Speaker 7: We are seeing a lot of customer heat in this area,
Speaker 7: a lot of interest and a lot of revenues starting
Speaker 7: to scale in these non financial use cases like what
Speaker 7: for example, in our portfolio company, we have Spaceport. They
Speaker 7: are working at the intersection of metaverse and blockchain. Spaceport
Speaker 7: is accelerating deals with creators in blockchain verified royalties very
Speaker 7: timely as the writer strike focuses on AI and creation.
Speaker 7: Mobile and web three is another intersection. Paragon provides a
Speaker 7: mobile first way to experience digital collectibles collectibles like the
Speaker 7: Starbucks Odyssey program. This is very important as gen Z
Speaker 7: prefers mobile access to their crypto assets. Yeah, and lastly,
Speaker 7: where we have an investment in Marariri, they have a
Speaker 7: tokenized network to deliver mixed reality experiences. This is the
Speaker 7: intersection of Metaverse and Web three very important as uh.
Speaker 7: You know, the VR goggles require high fidelity experiences, so
Speaker 7: they will work with Disney and vision Pro and Meta
Speaker 7: around these goggles.
Speaker 2: I gotta tell you this stuff still seems so niche
Speaker 2: to me. It's not like we're all running around wearing
Speaker 2: these goggles. It's uh, when does it become mainstream?
Speaker 1: Today?
Speaker 7: A lot of goggles are gaming focused. Meta also announced
Speaker 7: smart sunglasses today and that might have a higher adoption
Speaker 7: rate initially. You know, Crypto today is roughly fifty two
Speaker 7: million Americans, A lot of them seventy five percent of
Speaker 7: them make less than one hundred k a year. Right,
Speaker 7: this is data from Coinbase.
Speaker 2: I do want to bring up an article that our
Speaker 2: own Alex Brinka wrote earlier today. Snap is set to
Speaker 2: shutter it's business focused AR unit that was just launched
Speaker 2: this year. So what you know Facebook and Slash Meta
Speaker 2: Platforms is doing. Snap is saying, okay, we're not longer doing.
Speaker 4: That augmented reality.
Speaker 7: Yeah. I think Snap has a great camera experience and
Speaker 7: they've certainly scaled AI chatbots that has influenced Facebook to
Speaker 7: get into this area.
Speaker 2: Well this, I'm sorry, Tim, I was just gonna say,
Speaker 2: this is the areas unit short for augmented Reality for
Speaker 2: Enterprise services. It was just announced back in March.
Speaker 4: So I wonder too, Paul, the news from Meta today,
Speaker 4: does that we just got about twenty five seconds left here?
Speaker 4: Does that somehow make you say, oh, wait, maybe we
Speaker 4: should be also doing this because of what Meta said today.
Speaker 7: Just very quickly, very quickly, we will assess the news
Speaker 7: and look at some of the gaming companies that might
Speaker 7: be optimized for the Quest Pro three. This was Mark's
Speaker 7: focus of his demos today, and there will be new
Speaker 7: gameplay focused on you know, Xbox and Meta integration.
Speaker 4: All right, Well, good to check in with you on
Speaker 4: a day where we've had some news and you certainly
Speaker 4: have some overview insight into all of it. Paul, of course,
Speaker 4: founder and CEO at Dekasonic, joining us on zoom in Chicago,
Speaker 4: Carol Master, Tim Stenevic, and this is Bloomberg.
Speaker 7: Marco Journal. Now about you.
Speaker 1: Let me drive, no, no, no, honey, please, I.
Speaker 3: Want to try.
Speaker 6: It's a good question.
Speaker 1: Good, good drive, good clothes to me. Well b on
Speaker 1: on Bloomberg Radio.
Speaker 4: All right, you know it's going to drive you crazy,
Speaker 4: Tim Stenebek.
Speaker 2: This market environment, Yeah, This is enough to drive crazy.
Speaker 4: Poor Tim. Like, we're getting ready for our simulcast with
Speaker 4: our TV colleagues and we have to have you know,
Speaker 4: decliners and gainers.
Speaker 2: You know, we're organized. We get this stuff done before
Speaker 2: the show. We're like, you know, what's down three percent,
Speaker 2: that's not going to change.
Speaker 4: Yes, it is on a daylight today. Thanks Meta platform
Speaker 4: definitely an I know we are kind of rolling over again.
Speaker 8: Yeah, it's done, all right, so let's get to it.
Speaker 4: Our drive to the close guest to light it up.
Speaker 4: Back with us, Stephanie Pierce, she's CEO of Dreyfus Melon
Speaker 4: and Exchange traded funds at B and Y Melan Investment Management.
Speaker 4: As we said, back with us, joining us on zoom
Speaker 4: in New York City. Stephanie, how are you, Carol.
Speaker 3: It's so great to see you. Hello, Tim, Carol it's here.
Speaker 4: It's great to have you back with us. It is
Speaker 4: kind of another wacky trading day, and we, you know,
Speaker 4: talk about the concerns coming at investors, whether it's the
Speaker 4: possibility of a government shutdown here in the US, US,
Speaker 4: the UAW strike going on longer, you know, the worries
Speaker 4: over this higher rate environment. It feels like investors aren't
Speaker 4: quite sure what to do. How do you kind of
Speaker 4: think about what are the important macro trends to pay
Speaker 4: attention to?
Speaker 9: Well, As you know, Carol, we sit here in our
Speaker 9: short end of the curve world where we talk about
Speaker 9: a lot of really interesting things in that space, you know,
Speaker 9: from a macro perspective. As you know, we are surrounded
Speaker 9: by smart people in terms of our economists and our
Speaker 9: portfolio managers, and we actually think cash is a pretty
Speaker 9: good place to be right now. We're certainly in this
Speaker 9: I would call it, you know, higher for longer environment
Speaker 9: than people thought a few months ago.
Speaker 3: There's probably one more high ahead of us.
Speaker 9: And at some point here we want to start positioning
Speaker 9: and hedging portfolios for lower rates. But we're not quite
Speaker 9: there yet, right and so you know that's certainly something
Speaker 9: we're guiding investors to think about. Now is the time
Speaker 9: to start extending duration. Of course, we in cash land,
Speaker 9: you know, extending duration means about a year for us,
Speaker 9: but certainly feeling really good about cash as a very
Speaker 9: attractive investment, giving other asset classes a run for its money,
Speaker 9: so to speak.
Speaker 1: We know.
Speaker 2: The thing is, I was saying this earlier to Peter Attwater.
Speaker 2: I mean, we've been in an environment where all your
Speaker 2: cash has looked like a pretty good investment, but you
Speaker 2: missed out on a run up of close to twenty
Speaker 2: percent in the S and P five founder that since
Speaker 2: given back quite a bit of those gains. How do
Speaker 2: you know when the right time is to get back
Speaker 2: in even if cash continues to be attractive.
Speaker 3: Now, it's a very very good point.
Speaker 9: One of the things that we advise when we think
Speaker 9: about clients that we work with across our ecosystem at
Speaker 9: the YMEL and we have a wealth management business, we
Speaker 9: have pershing, we have our very large investment management business.
Speaker 9: So from a fiduciary perspective, you know, timing the market
Speaker 9: is always a challenge, right, we know we all know
Speaker 9: the statistics about how well that works out.
Speaker 3: So generally we advise.
Speaker 9: Clients to stay with strategic allocation in that account. Allocation
Speaker 9: in many cases includes cash. So that's the way we
Speaker 9: think about it.
Speaker 4: And you're lodging some new funds tell us about that.
Speaker 3: Well. I have to say today is a sparkly day
Speaker 3: for me.
Speaker 9: Yesterday we launched the Dreyfust Spark Shares, which are a
Speaker 9: new share class of our largest flagship government cash fund.
Speaker 9: And even though you know we talk about cash as
Speaker 9: being not that exciting, we think, as Carol, we've talked
Speaker 9: about it before. Cash is not only interesting and I'll use
Speaker 9: the word sexy from a yield perspective. But what we're
Speaker 9: doing with this fund and this shareclass we're really excited about.
Speaker 3: So the sparkshares enable our.
Speaker 9: Institutional clients to basically give back, do well, and do good,
Speaker 9: so they get the same yield as they get on
Speaker 9: the full fall and same liquidity all of that. But
Speaker 9: we are actually taking ten percent of the net revenues
Speaker 9: on this new share class that we earn as a
Speaker 9: company and contributing that to the charity of the client's choice.
Speaker 9: So we get to sit on the same side of
Speaker 9: the table with clients and help them think about how
Speaker 9: they can make their cash work harder by putting that
Speaker 9: money in a place that really matters to the hearts
Speaker 9: and the minds of their employees, their board, or their stakeholders.
Speaker 3: So we're really excited.
Speaker 4: That is so interesting. Why why do that and why
Speaker 4: do that?
Speaker 3: Now?
Speaker 4: I mean, forgive me good thing, no doubt about it.
Speaker 4: I'd love to see things like that. But you know
Speaker 4: what I'm asking, why do that? And why do that now?
Speaker 4: Has there been demand? Why?
Speaker 3: Yeah, absolutely so, Carol.
Speaker 9: About a year and a half ago, as you may recall,
Speaker 9: we launched a share class that we called BOLD, also
Speaker 9: a dedicated share class off our largest fund and that
Speaker 9: stood for Block Opportunity for Learning and Development. That share
Speaker 9: class now stands at about fourteen billion or so, having
Speaker 9: launched it with five hundred million. And so what we
Speaker 9: found through that is that is a share class that
Speaker 9: really is dedicated to helping fund students in need at
Speaker 9: Howard University by you know, basically filling that gap when
Speaker 9: they run out of money junior year and have to
Speaker 9: drop out.
Speaker 3: And it's been very successful.
Speaker 9: Our clients have loved it, but many of them said
Speaker 9: to us, you know, there's something in my community.
Speaker 3: There's a place where my employees volunteer.
Speaker 9: There's something we give to as a company that's near
Speaker 9: and dear to my heart, in my backyard that I
Speaker 9: would love.
Speaker 3: To give to. So if there's a way for you
Speaker 3: to facilitate that, please call me.
Speaker 9: So we spent a few months, a couple quarters thinking
Speaker 9: about it, and that's exactly what we're doing. We launched
Speaker 9: with a billion dollars two days ago. We're really excited
Speaker 9: and or yesterday sorry, and you know, clients have been
Speaker 9: really interesting, did so you know, really what we're doing
Speaker 9: is allowing them to what we call spark change or
Speaker 9: enable change in their own communities.
Speaker 2: Is there any sort of tax benefit to you guys
Speaker 2: for doing something like this?
Speaker 9: You know, we're really not doing it for the tax benefit,
Speaker 9: but you know when clients ask us, gee, do I
Speaker 9: get the tax benit? Of course we are making the donation,
Speaker 9: so that would not accrue to the investor. It would
Speaker 9: accrue you know, I supposed to to us in some way,
Speaker 9: but that's not really the goal of it, right The
Speaker 9: goal is to really make an impact, and that's exactly
Speaker 9: what we're doing.
Speaker 4: Hey, listen, Steffanie, what can you tell us though about
Speaker 4: just overall trend flows, like where the money is flowing in,
Speaker 4: where the money is flowing at right now?
Speaker 9: Absolutely so, if you look at the just the space
Speaker 9: we've been talking about in cash, we have clearly seen
Speaker 9: you know, as I said, many investors, both retail and institutional,
Speaker 9: looking at this is actually an attractive place to put money,
Speaker 9: just simply given the five plus percent yields. You know,
Speaker 9: of course, we are seeing, as you referenced earlier, people
Speaker 9: be much more comfortable as we think about the economy
Speaker 9: potentially heading for a soft landing rather than maybe a
Speaker 9: more concerning one as we talked about a few months ago,
Speaker 9: and as that rhetoric has improved from the FED and
Speaker 9: then the market as a whole with the data that
Speaker 9: we've seen, certainly investors are starting to extend out, not
Speaker 9: only in terms of duration and fixed income or money markets,
Speaker 9: but also in overall portfolios from a risk perspective, So
Speaker 9: we are seeing some re risking in the overall environment
Speaker 9: fund investors right now in addition to this continued attractive
Speaker 9: attractiveness of cash.
Speaker 4: Wait, we're risking, so taking risk off or adding risk on.
Speaker 9: Now, I think feeling more comfortable that the market is
Speaker 9: starting to behave in a manner that recognizes we're probably
Speaker 9: heading for a little bit of a softer landing than
Speaker 9: what was expected previously. So that's really what we're seeing
Speaker 9: is and that's just being a little more comfortable with
Speaker 9: the markets here.
Speaker 2: What does the rest of the year look like? Help us,
Speaker 2: help us, you know, get some clarity. We're very we're
Speaker 2: very confused here.
Speaker 9: We sure, let me put on my guests, let me
Speaker 9: pull out my tarot cards. So for the rest of
Speaker 9: the year, clearly, you know, as we've seen the FED
Speaker 9: you know, was on pause this month, no surprise we
Speaker 9: could do to see firmer data. So we do expect
Speaker 9: that this sort of market pricing in about fifty to
Speaker 9: fifty chance of another rate is probably going to happen.
Speaker 9: And that's you know, continue to see the rhetoric that
Speaker 9: that that's the case. And then as you kind of
Speaker 9: round the corner into the end of the year, the
Speaker 9: expectation is that, you know, markets will start to position.
Speaker 9: Certainly in our markets, we're starting to position for you know,
Speaker 9: hedging against lower rates at some point in the middle
Speaker 9: part of next year.
Speaker 3: But again generally we don't think that will.
Speaker 9: Be an aggressive path downward as was previously you know,
Speaker 9: expected or hope for. We think it'll be more moderate
Speaker 9: and again higher for longer. So against that backdrop again,
Speaker 9: soft landing is certainly where I think the rhetoric has gone,
Speaker 9: and that's really what we're positioning for as well in
Speaker 9: our portfolios.
Speaker 4: Are you buying the rhetoric just ten seconds, yes.
Speaker 9: Generally yes, Again, we look at what markets are pricing
Speaker 9: in you know, our goal is the y.
Speaker 4: Lets you go okay listen, Always fun and always delighted
Speaker 4: to see you. Stephanie Pearce of Dreyfus, Mellon and ATF
Speaker 4: Funds at be in Mind.
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