1 00:00:05,040 --> 00:00:08,639 Speaker 1: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 2 00:00:08,680 --> 00:00:12,040 Speaker 1: with Paul Sweeney. Join us each day for insight from 3 00:00:12,039 --> 00:00:16,200 Speaker 1: the best in economics, finance, investment, and international relations. You 4 00:00:16,239 --> 00:00:19,599 Speaker 1: can also watch the show live on YouTube. Visit the 5 00:00:19,600 --> 00:00:24,360 Speaker 1: Bloomberg Podcast channel on YouTube to see the show weekday 6 00:00:24,360 --> 00:00:27,400 Speaker 1: mornings from seven to ten am Eastern from our global 7 00:00:27,440 --> 00:00:32,080 Speaker 1: headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 8 00:00:32,440 --> 00:00:36,000 Speaker 1: or anywhere else you listen and always I'm Bloomberg Radio, 9 00:00:36,159 --> 00:00:39,800 Speaker 1: the Bloomberg Terminal, and the Bloomberg Business ass You know 10 00:00:39,880 --> 00:00:42,720 Speaker 1: you make it the economics, Paul. When you have your 11 00:00:42,720 --> 00:00:46,000 Speaker 1: own website, you know. Bernanke doesn't have his own website, 12 00:00:46,080 --> 00:00:48,400 Speaker 1: Powell doesn't, you know? I mean Ken Roguff, I don't 13 00:00:48,400 --> 00:00:51,599 Speaker 1: think does. Claudia Sam does? She's large? Why is she large? 14 00:00:51,800 --> 00:00:56,040 Speaker 1: She's been hugely influential this year in the discussion of 15 00:00:56,080 --> 00:01:00,400 Speaker 1: the gloom of recession, and she is intelligently and day 16 00:01:00,400 --> 00:01:04,880 Speaker 1: by day tick bake tick pushed against the gloom of 17 00:01:04,920 --> 00:01:08,120 Speaker 1: the financial zeitgeist. She said, it's wrong. I'm gonna give 18 00:01:08,120 --> 00:01:11,240 Speaker 1: you one paper. It's on a beautiful new website. Claudia 19 00:01:11,240 --> 00:01:13,560 Speaker 1: Sum and it's like one word, you know, they squeeze it, 20 00:01:13,600 --> 00:01:15,880 Speaker 1: and it's like she hired a consultant to do that. 21 00:01:16,440 --> 00:01:19,040 Speaker 1: You know, don't say, Claudia, don't say some And I 22 00:01:19,120 --> 00:01:23,119 Speaker 1: love this paper from eleven years ago, Shapiro summer out 23 00:01:23,160 --> 00:01:26,720 Speaker 1: and some checking the mail or more in the paycheck. 24 00:01:27,319 --> 00:01:32,240 Speaker 1: Does the effectiveness a fiscal stimulus depend on how it 25 00:01:32,280 --> 00:01:34,920 Speaker 1: is delivered? That's where're gonna go with Claudia Son. Claudia, 26 00:01:34,920 --> 00:01:38,399 Speaker 1: good morning, good morning, thank you. How'd your website go? 27 00:01:38,560 --> 00:01:40,600 Speaker 1: Was it like pulling teeth to get a website up? 28 00:01:41,400 --> 00:01:41,560 Speaker 2: Oh? 29 00:01:41,640 --> 00:01:44,080 Speaker 3: No, I had the very best helping me get it up. 30 00:01:44,120 --> 00:01:47,400 Speaker 3: So I'm very excited. So some consulting, it's all all legit. 31 00:01:47,480 --> 00:01:50,559 Speaker 1: Now it's beautiful. So it's simple, beautiful and it really 32 00:01:50,560 --> 00:01:56,240 Speaker 1: puts forward her intellectual input. This triple pandemic stimulus. I'm 33 00:01:56,240 --> 00:01:59,640 Speaker 1: going to put it in three waves. Are we through it? 34 00:02:00,520 --> 00:02:03,160 Speaker 1: And is it going? Like you and Shapiro wrote about 35 00:02:03,280 --> 00:02:07,760 Speaker 1: years ago, into our paychecks? Is a stimulus why we're 36 00:02:07,800 --> 00:02:11,960 Speaker 1: having a roaring twenties throughout this cycle. 37 00:02:12,040 --> 00:02:15,160 Speaker 3: I have been a fierce advocate for the stimulus checks, 38 00:02:15,240 --> 00:02:18,000 Speaker 3: particularly with the Rescue plan, and that came from research 39 00:02:18,080 --> 00:02:20,960 Speaker 3: the paper you cited. This is pure reviewed, well cited. 40 00:02:21,520 --> 00:02:23,440 Speaker 3: Looking at does it matter how we get money to 41 00:02:23,480 --> 00:02:26,560 Speaker 3: people stimulus checks or like what Obama did, little dribs 42 00:02:26,560 --> 00:02:29,560 Speaker 3: and drabs and text credits. You know, both makes sense. 43 00:02:29,600 --> 00:02:32,600 Speaker 3: But when we really want to get it cranking, give 44 00:02:32,639 --> 00:02:35,240 Speaker 3: people money, give it in a good slug, let them 45 00:02:35,240 --> 00:02:37,920 Speaker 3: get spending this, get the jobs back. And for a 46 00:02:37,960 --> 00:02:40,000 Speaker 3: lot of reasons. I mean, in a lot of ways, 47 00:02:40,000 --> 00:02:43,040 Speaker 3: we did big fiscal. Those stimulus checks, they mattered, and 48 00:02:43,120 --> 00:02:46,440 Speaker 3: we are enjoying a recovery that. Frankly, even I as 49 00:02:46,520 --> 00:02:49,920 Speaker 3: the real optimist on big fiscal I'm like, wow, this 50 00:02:50,000 --> 00:02:50,360 Speaker 3: is good. 51 00:02:50,639 --> 00:02:53,320 Speaker 4: Yeah, we saw a GDP print that just kind of 52 00:02:53,320 --> 00:02:55,600 Speaker 4: came in a week or so ago, well above expectations 53 00:02:55,600 --> 00:02:57,079 Speaker 4: at three point three percent. 54 00:02:57,120 --> 00:02:57,240 Speaker 5: Here. 55 00:02:57,280 --> 00:03:00,639 Speaker 4: If I'm the Fed, I mean, that's an argument you 56 00:03:00,680 --> 00:03:06,040 Speaker 4: made that inflation is tamed, economy's doing okay. If I mean, 57 00:03:06,840 --> 00:03:08,639 Speaker 4: I see in one of your recent notes you say 58 00:03:08,639 --> 00:03:09,639 Speaker 4: the FED is afraid. 59 00:03:09,960 --> 00:03:12,720 Speaker 3: What do you mean by that, Well, the Fed's always afraid. 60 00:03:12,840 --> 00:03:14,560 Speaker 3: They don't want to make a mistake. We're kind of 61 00:03:14,600 --> 00:03:17,200 Speaker 3: hard on them if they do. Now to me, and 62 00:03:17,280 --> 00:03:20,800 Speaker 3: the argument has been made, Chris Waller bost It that, oh, 63 00:03:20,919 --> 00:03:24,120 Speaker 3: we have the luxury of time. The economy is really strong. 64 00:03:24,480 --> 00:03:27,360 Speaker 3: We can wait and see what happens with inflation. And 65 00:03:27,440 --> 00:03:30,480 Speaker 3: Frank I absolutely firmly disagree. They do not have the 66 00:03:30,520 --> 00:03:33,160 Speaker 3: luxury of time. They have a dual mandate. And once 67 00:03:33,200 --> 00:03:35,800 Speaker 3: we are headed towards it, and we definitely are headed 68 00:03:35,800 --> 00:03:38,680 Speaker 3: towards two percent, they need to start cutting. I'm not 69 00:03:38,720 --> 00:03:41,800 Speaker 3: looking for two hundred basis points on Wednesday. It's just like, 70 00:03:42,200 --> 00:03:45,560 Speaker 3: let's get going. So you can do this gradually and carefully. 71 00:03:45,840 --> 00:03:48,680 Speaker 3: And yet the demons of the nineteen seventies with Arthur 72 00:03:48,760 --> 00:03:51,360 Speaker 3: Burn's cutting, then inflation got out of control and it 73 00:03:51,400 --> 00:03:54,080 Speaker 3: was an election year. It's like, oh wow, here we are. 74 00:03:54,640 --> 00:03:57,040 Speaker 3: So I expect them to really drag their feet, and 75 00:03:57,560 --> 00:04:00,480 Speaker 3: we better get real lucky that financial markets hold together 76 00:04:01,040 --> 00:04:02,680 Speaker 3: until the FED starts. 77 00:04:02,880 --> 00:04:03,560 Speaker 2: You know, there's. 78 00:04:03,400 --> 00:04:05,480 Speaker 6: Exactly there's your stock report. 79 00:04:05,480 --> 00:04:09,720 Speaker 1: That's your stock report for the day. Better Marcus strategist Claudius. 80 00:04:10,040 --> 00:04:12,280 Speaker 7: Yeah, sorry, I got to get really lucky here, So. 81 00:04:12,360 --> 00:04:14,440 Speaker 4: Claudia, I mean, you know, I'm looking at the w 82 00:04:14,640 --> 00:04:16,640 Speaker 4: I RP function here is kind of the world interest 83 00:04:16,720 --> 00:04:22,279 Speaker 4: rate probability still looking forward five or six cuts this year. 84 00:04:23,160 --> 00:04:24,480 Speaker 6: How do you how do you view that? 85 00:04:26,360 --> 00:04:30,719 Speaker 3: I hope they're right. There's a lot of daylight between 86 00:04:30,760 --> 00:04:32,680 Speaker 3: what I think the FED should do, and that's they 87 00:04:32,680 --> 00:04:34,960 Speaker 3: should start cutting right away, and what I think the 88 00:04:35,040 --> 00:04:39,160 Speaker 3: FED will likely do, and that's starting at the earliest 89 00:04:39,200 --> 00:04:42,839 Speaker 3: in May and that and obviously when you start is 90 00:04:42,839 --> 00:04:44,760 Speaker 3: going to make a big difference on how many cuts 91 00:04:44,839 --> 00:04:47,000 Speaker 3: you do for the year. So I think what's most 92 00:04:47,080 --> 00:04:49,920 Speaker 3: likely is something closer to four cuts, take a percentage 93 00:04:49,960 --> 00:04:52,520 Speaker 3: point off. And yet you know markets have pushed the 94 00:04:52,520 --> 00:04:55,720 Speaker 3: FED around before in this cycle, so they just might 95 00:04:55,760 --> 00:04:56,160 Speaker 3: get it. 96 00:04:56,640 --> 00:04:59,600 Speaker 1: The Bloomberg financial conditions and exposed the word is I'm 97 00:04:59,680 --> 00:05:04,800 Speaker 1: using the judiciously massively accommodative at the show where they 98 00:05:04,800 --> 00:05:07,840 Speaker 1: are Claudia and the debt and the deficit issue, and 99 00:05:07,880 --> 00:05:10,320 Speaker 1: it's an ax of all of our listeners on CarPlay, 100 00:05:10,320 --> 00:05:13,240 Speaker 1: Apple car Play and all of you watching on YouTube 101 00:05:13,240 --> 00:05:16,960 Speaker 1: Bloomberg podcasts. Claudia Sam is just as simple as this, 102 00:05:17,640 --> 00:05:20,640 Speaker 1: Joe Stiglitz says, you can do all this fancy debt 103 00:05:20,720 --> 00:05:23,719 Speaker 1: and deficit, but you got to have an underlying growth 104 00:05:23,800 --> 00:05:27,000 Speaker 1: rate to solve it over time. Do you have a 105 00:05:27,080 --> 00:05:30,360 Speaker 1: confidence with the new boom that we have an embedded 106 00:05:30,680 --> 00:05:35,600 Speaker 1: underlying growth rate that can extract us from this debt crisis. 107 00:05:36,800 --> 00:05:37,400 Speaker 1: I wrote a. 108 00:05:37,320 --> 00:05:40,960 Speaker 3: Piece recently for Bloomberg Opinion about this question of the 109 00:05:41,000 --> 00:05:43,520 Speaker 3: deficit the debt. Should we be worried. I come down 110 00:05:43,560 --> 00:05:45,760 Speaker 3: in the place of no, we should not be. On 111 00:05:45,800 --> 00:05:48,040 Speaker 3: a lot of like, we're in a good place financing 112 00:05:48,080 --> 00:05:49,680 Speaker 3: the dead things are, and as you said, we're in 113 00:05:49,680 --> 00:05:51,800 Speaker 3: a good growth position. I mean, I ever want to 114 00:05:51,800 --> 00:05:53,360 Speaker 3: say we're going to grow our way out of the debt. 115 00:05:53,400 --> 00:05:56,039 Speaker 3: I think that's too optimistic. And yet what I say 116 00:05:56,120 --> 00:05:58,280 Speaker 3: is like, step back, look at the context. What are 117 00:05:58,320 --> 00:06:01,440 Speaker 3: we doing with all of this government tax and spending policy. 118 00:06:01,480 --> 00:06:04,000 Speaker 3: And that's the conversation we should have is bottom up, 119 00:06:04,520 --> 00:06:08,640 Speaker 3: not get obsessing over some top line number. And yet 120 00:06:08,680 --> 00:06:12,279 Speaker 3: I will absolutely affirm Stiglitz that this growth piece is 121 00:06:12,279 --> 00:06:16,320 Speaker 3: so important. And these productivity numbers we've gotten, which you know, 122 00:06:16,360 --> 00:06:19,320 Speaker 3: productivity can disappear on us. But if we even get 123 00:06:19,360 --> 00:06:23,279 Speaker 3: a quarter percentage point on trend productivity growth, like all 124 00:06:23,320 --> 00:06:26,279 Speaker 3: sins are forgiven for any mistake made in this cycle. 125 00:06:26,640 --> 00:06:28,279 Speaker 3: So that's so important. 126 00:06:28,880 --> 00:06:32,839 Speaker 1: That is the economic insight today, Paul, how doctor somem 127 00:06:32,839 --> 00:06:36,720 Speaker 1: there went to such a narrow incremental growth. People think 128 00:06:36,720 --> 00:06:39,719 Speaker 1: you got to have a ginormous growth. Even just a 129 00:06:39,760 --> 00:06:42,480 Speaker 1: little bit of a growth gets it done over ten. 130 00:06:42,400 --> 00:06:45,960 Speaker 4: Years, Claudy, the conversation when we had the FED pivot 131 00:06:46,279 --> 00:06:49,080 Speaker 4: late last year seemed to really migrate from you know, 132 00:06:49,360 --> 00:06:52,080 Speaker 4: is there a recession in the scenario to I guess 133 00:06:52,080 --> 00:06:54,440 Speaker 4: the consensus was very much a soft landing. 134 00:06:54,960 --> 00:06:55,920 Speaker 6: Is that where you are? 135 00:06:55,960 --> 00:06:59,000 Speaker 4: You think that this FED is just about done its 136 00:06:59,080 --> 00:07:00,919 Speaker 4: job here and negoti shading a soft landing. 137 00:07:02,520 --> 00:07:05,720 Speaker 3: I've been calling us soft landing this entire time. 138 00:07:05,839 --> 00:07:06,039 Speaker 1: YEP. 139 00:07:06,160 --> 00:07:09,440 Speaker 3: That inflation was in fact, dare I say the word transitory. 140 00:07:09,480 --> 00:07:11,000 Speaker 3: We don't need to argue about that one today. But 141 00:07:11,320 --> 00:07:13,360 Speaker 3: inflation went up, there was a lot of COVID disruptions, 142 00:07:13,360 --> 00:07:15,480 Speaker 3: and Putin showed up. He caused a lot of disruptions, 143 00:07:15,720 --> 00:07:18,360 Speaker 3: and we got many things under control, and inflation has 144 00:07:18,360 --> 00:07:20,560 Speaker 3: come down. I don't give the FED a whole bunch 145 00:07:20,560 --> 00:07:22,520 Speaker 3: of credit for that. They're in the mix and they 146 00:07:22,560 --> 00:07:24,920 Speaker 3: needed to be in terms of, you know, going after 147 00:07:25,040 --> 00:07:28,920 Speaker 3: the inflation that surged in twenty twenty two, and yet 148 00:07:29,040 --> 00:07:32,040 Speaker 3: everything I am still a purist. It is until we 149 00:07:32,080 --> 00:07:35,640 Speaker 3: get inflation twelve months on two percent. I'm not calling 150 00:07:35,680 --> 00:07:38,080 Speaker 3: the soft landing here, but whow we can see the 151 00:07:38,160 --> 00:07:41,800 Speaker 3: runway right like this is just we're so close and 152 00:07:41,800 --> 00:07:44,280 Speaker 3: this was not supposed to happen, and it happened. 153 00:07:44,720 --> 00:07:47,120 Speaker 1: How X post is the fed right now? X Post, 154 00:07:47,160 --> 00:07:49,960 Speaker 1: folks is after the fact x antes where it's what 155 00:07:50,000 --> 00:07:52,320 Speaker 1: the media wants, if financial media wants them to get 156 00:07:52,360 --> 00:07:55,080 Speaker 1: out front. Yeah, right, there's no history that they do that. 157 00:07:55,560 --> 00:07:57,640 Speaker 1: But I mean, what's the level of X posts here? 158 00:07:57,760 --> 00:08:00,680 Speaker 1: Is it like Claudia? Is it like Richie Timberlake and 159 00:08:00,720 --> 00:08:02,760 Speaker 1: the Georgia school, which is they're going to wait and 160 00:08:02,800 --> 00:08:06,360 Speaker 1: wait and wait and wait. You mentioned Arthur Burns earlier 161 00:08:06,640 --> 00:08:09,160 Speaker 1: and the political soup he had to live in. What's 162 00:08:09,240 --> 00:08:10,960 Speaker 1: their level of X post right now? 163 00:08:12,440 --> 00:08:15,440 Speaker 3: They are going to wait as long as humanly possible, 164 00:08:16,000 --> 00:08:18,360 Speaker 3: and that actually might hit them pretty soon. I mean 165 00:08:18,400 --> 00:08:21,480 Speaker 3: the three month changes in inflation, the six months, I 166 00:08:21,520 --> 00:08:24,120 Speaker 3: mean they're at two of course, so like they really 167 00:08:24,160 --> 00:08:26,720 Speaker 3: got to get going. We can still have some turbulence, 168 00:08:26,760 --> 00:08:28,840 Speaker 3: we have some bumps in the road, and yet the 169 00:08:28,920 --> 00:08:32,240 Speaker 3: stories they're telling about why they're not so sure about 170 00:08:32,280 --> 00:08:32,960 Speaker 3: it OCA. 171 00:08:33,120 --> 00:08:36,480 Speaker 1: It's like we got to run, but I just can 172 00:08:36,520 --> 00:08:39,079 Speaker 1: you tell me what your own Paul does with Dow 173 00:08:39,200 --> 00:08:43,760 Speaker 1: Jones Industrial average round number forty thousand. I mean that 174 00:08:43,960 --> 00:08:47,840 Speaker 1: alone has to change his strategy, right A boom like that. 175 00:08:48,679 --> 00:08:51,840 Speaker 3: No, it's all about the due mandate. I mean, frankly, 176 00:08:51,880 --> 00:08:54,200 Speaker 3: the wealth effects aren't that big in terms of going 177 00:08:54,200 --> 00:08:56,439 Speaker 3: into the FED is on the real economy. 178 00:08:56,960 --> 00:08:57,480 Speaker 8: And it's good. 179 00:08:57,760 --> 00:08:59,600 Speaker 1: It's great because when she disagrees with me, we can 180 00:08:59,679 --> 00:09:00,480 Speaker 1: just hang up on her. 181 00:09:01,280 --> 00:09:02,200 Speaker 6: Claud Us up. 182 00:09:02,559 --> 00:09:05,959 Speaker 1: Thank you so much, just Treasury claud Us with all 183 00:09:05,960 --> 00:09:07,880 Speaker 1: our work at the Federal Reserve and of course out 184 00:09:07,880 --> 00:09:22,120 Speaker 1: of the University of Michigan joining us now. James Stravetis 185 00:09:22,240 --> 00:09:26,719 Speaker 1: with a blistering essay in Bloomberg Opinion, made more blistering 186 00:09:26,760 --> 00:09:29,840 Speaker 1: by his public service to the nation with the United 187 00:09:29,880 --> 00:09:33,679 Speaker 1: States Navy. Of course, his effort is Supreme Commander of NATO. 188 00:09:33,760 --> 00:09:37,680 Speaker 1: Were thrilled that Edmundstervetus could join us this morning, Jim, 189 00:09:37,720 --> 00:09:40,840 Speaker 1: I want to go to your wonderful book, the Leader's bookshelf, folks. 190 00:09:40,880 --> 00:09:43,800 Speaker 1: I'll put it out on Twitter and LinkedIn. He sent 191 00:09:43,840 --> 00:09:45,880 Speaker 1: me a royalty check once. I mean, I've sold so 192 00:09:45,880 --> 00:09:49,280 Speaker 1: many copies of this, mister is like, thank you. The 193 00:09:49,400 --> 00:09:54,240 Speaker 1: Leader's bookshelf is brilliant. It's forty to fifty chapters from 194 00:09:54,280 --> 00:09:58,640 Speaker 1: military experts about the book that changed your life, including 195 00:09:58,720 --> 00:10:02,240 Speaker 1: for example, a Connecticut Yankee and King Arthur's Court. Here's 196 00:10:02,280 --> 00:10:06,120 Speaker 1: the first sentence. Are the very best leaders born or 197 00:10:06,240 --> 00:10:09,480 Speaker 1: made and most Javitas? Do you have confidence in our 198 00:10:09,600 --> 00:10:12,360 Speaker 1: leadership after what we've witnessed in Jordan? 199 00:10:14,240 --> 00:10:15,000 Speaker 2: I'm worried. 200 00:10:15,640 --> 00:10:20,280 Speaker 5: Let's be honest, because what we're doing is not working. 201 00:10:20,840 --> 00:10:24,319 Speaker 5: And we see in the world of business the concerns 202 00:10:24,360 --> 00:10:27,960 Speaker 5: we have about who these attacking shipping in the Red Sea, 203 00:10:28,160 --> 00:10:32,600 Speaker 5: driving prices of oil and goods. We see terrorist attacks 204 00:10:32,679 --> 00:10:36,439 Speaker 5: against Israel. We see most recently tom As you allude 205 00:10:36,440 --> 00:10:40,679 Speaker 5: to the attack that killed three brave American servicemen and 206 00:10:40,760 --> 00:10:45,480 Speaker 5: womenmen in Jordan. So we are not deterring Iran. What 207 00:10:45,520 --> 00:10:49,400 Speaker 5: the article I wrote for Bloomberg Opinion does is sketch 208 00:10:49,480 --> 00:10:52,760 Speaker 5: out a campaign that we need to undertake that I 209 00:10:52,840 --> 00:10:56,440 Speaker 5: am hopeful will ultimately deter Iran. 210 00:10:56,760 --> 00:10:58,960 Speaker 1: Paul wants to get into that, But Jim, you've been 211 00:10:59,080 --> 00:11:03,840 Speaker 1: so so so far out front on a game theory basis. 212 00:11:03,880 --> 00:11:07,600 Speaker 1: In folks, a cliche is expect the unexpected, But you 213 00:11:07,640 --> 00:11:13,520 Speaker 1: have stated that in our complexity of military force, technology 214 00:11:13,679 --> 00:11:18,400 Speaker 1: and politics, that it's the unexpected, like mixing up drones 215 00:11:18,440 --> 00:11:21,120 Speaker 1: coming in or out of a base in Jordan. It's 216 00:11:21,120 --> 00:11:24,880 Speaker 1: the unexpected that will kill us, that will harm us, 217 00:11:25,240 --> 00:11:28,720 Speaker 1: that will put us at risk. How do we defend 218 00:11:28,760 --> 00:11:31,160 Speaker 1: against the next unexpected? 219 00:11:32,920 --> 00:11:37,000 Speaker 5: For Starters, Tom, we look back at history and identify 220 00:11:37,120 --> 00:11:42,160 Speaker 5: those moments, those hinge moments. In the case we're discussing 221 00:11:42,240 --> 00:11:47,200 Speaker 5: of military operations, the Battle of Agincourt where English long 222 00:11:47,320 --> 00:11:52,199 Speaker 5: bowmens slaughter French knights in their supposedly impervious armor of 223 00:11:52,400 --> 00:11:57,000 Speaker 5: Pearl Harbor, where we are stunned by a Japanese surprise attack. 224 00:11:57,679 --> 00:12:02,600 Speaker 5: We look at those hinge moments when airplanes radar came 225 00:12:02,679 --> 00:12:06,480 Speaker 5: on the scene and changed everything. We are in that 226 00:12:06,640 --> 00:12:09,600 Speaker 5: moment now, and we're talking about the Middle East. But 227 00:12:09,640 --> 00:12:13,439 Speaker 5: I would argue equally, so what's happening on the battlefields 228 00:12:13,440 --> 00:12:14,240 Speaker 5: of Ukraine? 229 00:12:14,360 --> 00:12:17,040 Speaker 2: So Connecticut, Yankee and King. 230 00:12:16,960 --> 00:12:21,400 Speaker 5: Arthur's Court is a book about innovation and leading through 231 00:12:21,440 --> 00:12:25,000 Speaker 5: these kind of pivot moments. We are definitely in one 232 00:12:25,040 --> 00:12:28,280 Speaker 5: where technology and security are coming together. 233 00:12:28,720 --> 00:12:30,880 Speaker 4: Adamiral, I want to go right to your Bloomberg opinion 234 00:12:30,880 --> 00:12:33,520 Speaker 4: piece yesterday because it had such an impact that I'm 235 00:12:33,520 --> 00:12:36,359 Speaker 4: sure it had quite the impact in Washington at Depentagon, 236 00:12:36,440 --> 00:12:39,160 Speaker 4: at the White House. But basically the summary is from 237 00:12:39,160 --> 00:12:42,160 Speaker 4: your opinion piece, a deadly drone attack that cost American 238 00:12:42,200 --> 00:12:47,800 Speaker 4: lives requires a swift, precise, and meaningful military response. Could 239 00:12:47,800 --> 00:12:52,480 Speaker 4: you summarize what type of response you think this attack warrants. 240 00:12:53,960 --> 00:12:57,320 Speaker 5: It's kind of the Goldilocks phenomena, Paul. In other words, 241 00:12:57,640 --> 00:13:03,760 Speaker 5: we've been trying to retain this by pinprick attacks, by 242 00:13:04,400 --> 00:13:08,560 Speaker 5: tit for tat small beer. At the other end of 243 00:13:08,559 --> 00:13:13,480 Speaker 5: that spectrum is whistling jets overhead Tehran. I don't think 244 00:13:13,520 --> 00:13:15,840 Speaker 5: we're there yet. We need to be in the middle 245 00:13:15,920 --> 00:13:20,599 Speaker 5: that Goldilocks place. And here's what it includes. Cyber attacks, 246 00:13:21,040 --> 00:13:27,120 Speaker 5: better intelligence collection, going after Iranian assets, but not inside 247 00:13:27,240 --> 00:13:31,719 Speaker 5: Iran yet. We can still go after the Iranian Revolutionary 248 00:13:31,800 --> 00:13:36,840 Speaker 5: Guard at Sea Asure they are training, organizing, equipping and 249 00:13:37,000 --> 00:13:43,280 Speaker 5: directing who they's Hezbollah, the Iraqi Shia who. 250 00:13:43,080 --> 00:13:44,920 Speaker 2: Have killed our American soldiers. 251 00:13:45,200 --> 00:13:49,080 Speaker 5: We need to go after Iran directly, but not yet 252 00:13:49,120 --> 00:13:50,120 Speaker 5: inside Iran. 253 00:13:50,280 --> 00:13:52,120 Speaker 2: That's the essence of the article. 254 00:13:52,520 --> 00:13:55,800 Speaker 4: And Admiral I know you said even suggesting perhaps eight 255 00:13:55,960 --> 00:13:59,120 Speaker 4: five to eight day concerted campaign. 256 00:13:59,400 --> 00:14:02,679 Speaker 6: What would that can pain entail in your estimation. 257 00:14:02,920 --> 00:14:06,520 Speaker 5: I think we'd bring a second US aircraft carrier back 258 00:14:06,600 --> 00:14:09,760 Speaker 5: into the region. Recall we had two there right after 259 00:14:09,840 --> 00:14:14,960 Speaker 5: October seventh, we pulled one out. Iranian bad behavior continues, 260 00:14:15,040 --> 00:14:19,600 Speaker 5: So maritime assets. We have a lot of air power 261 00:14:20,120 --> 00:14:25,320 Speaker 5: in the Gulf, in Guitar and the base near Doha Aludid. 262 00:14:25,640 --> 00:14:30,600 Speaker 5: We would bring more refueling aircraft, more fighter jets, bring 263 00:14:30,640 --> 00:14:34,480 Speaker 5: our allies into this, and then it would be I'd 264 00:14:34,480 --> 00:14:39,600 Speaker 5: say one to two weeks of sustained bombing against Iranian 265 00:14:39,720 --> 00:14:44,080 Speaker 5: targets again outside Iran at this point, and then finally, Paul, 266 00:14:44,520 --> 00:14:47,840 Speaker 5: we would be preparing the battle plan if we have 267 00:14:47,960 --> 00:14:49,400 Speaker 5: to go inside Iran. 268 00:14:49,800 --> 00:14:51,440 Speaker 2: Let's hope we don't get to that point. 269 00:14:51,480 --> 00:14:53,760 Speaker 5: I think the Iranians would back down in the face 270 00:14:53,800 --> 00:14:57,280 Speaker 5: of a truly strong US respond James Savetis. 271 00:14:57,280 --> 00:14:59,400 Speaker 1: I want to go to Brett Krazer, a captain in 272 00:14:59,440 --> 00:15:03,160 Speaker 1: your magnificent book, Folks, I can't say enough about to 273 00:15:03,320 --> 00:15:07,760 Speaker 1: risk it all nine conflicts in the crucible of our 274 00:15:07,880 --> 00:15:10,880 Speaker 1: leadership in the Navy. Yes, it has admirals in it, 275 00:15:11,160 --> 00:15:15,560 Speaker 1: but as Travitas does, there's a Lieutenant Commander in there 276 00:15:15,640 --> 00:15:19,400 Speaker 1: as well in a cook third class. I love that. 277 00:15:19,720 --> 00:15:22,760 Speaker 1: Let's go to Brett Krozer and this is the reality 278 00:15:22,800 --> 00:15:26,080 Speaker 1: of his career ended with COVID in the Uproar and 279 00:15:26,120 --> 00:15:29,560 Speaker 1: the Theodore Roosevelt. But tell us about Brett Krozer as 280 00:15:29,600 --> 00:15:33,320 Speaker 1: a kind of preparation, James travitas that we need if 281 00:15:33,320 --> 00:15:34,800 Speaker 1: we're going to take on Iran. 282 00:15:36,480 --> 00:15:42,560 Speaker 5: Brett Krozer a fighter pilot, also a superb targeteer. He 283 00:15:42,720 --> 00:15:46,080 Speaker 5: worked for me as a captain selecting the targets we 284 00:15:46,240 --> 00:15:51,080 Speaker 5: struck in Libya. So a consummate combat pilot and operator, 285 00:15:51,520 --> 00:15:56,560 Speaker 5: also a terrific leader. He, unfortunately and with bad luck, 286 00:15:56,640 --> 00:15:59,360 Speaker 5: became the captain of an aircraft carrier at the very 287 00:15:59,400 --> 00:16:04,200 Speaker 5: beginning of COVID. He sacrificed his career to protect his crew. 288 00:16:04,640 --> 00:16:08,440 Speaker 5: He's someone extremely admirable. And if we read the story 289 00:16:08,480 --> 00:16:12,440 Speaker 5: of Brettkrozier into Risk at All, you'll see how we 290 00:16:13,080 --> 00:16:16,720 Speaker 5: can and must take care of our people while we 291 00:16:16,800 --> 00:16:19,000 Speaker 5: conduct these kind of operations. 292 00:16:19,080 --> 00:16:22,880 Speaker 1: Are we too extended? Ian Bremer and Eurasia Group Admiral 293 00:16:23,280 --> 00:16:28,440 Speaker 1: had a spectacular chart on the dispersion, including reservists from 294 00:16:28,520 --> 00:16:32,280 Speaker 1: Georgia across all of the Middle East. It's almost as 295 00:16:32,280 --> 00:16:35,160 Speaker 1: if the Bremer worry in his top risk can do. 296 00:16:35,760 --> 00:16:40,280 Speaker 1: Are we too naive in our unprotected dispersion across a 297 00:16:40,640 --> 00:16:42,440 Speaker 1: broader Eastern Mediterranean? 298 00:16:43,640 --> 00:16:45,560 Speaker 5: Now, I think this brings us back to where we 299 00:16:45,640 --> 00:16:49,240 Speaker 5: started this conversation, Tom, which is to say, if we've 300 00:16:49,320 --> 00:16:54,040 Speaker 5: recognized the technology of the moment and are aware of it, 301 00:16:54,160 --> 00:16:56,720 Speaker 5: we can do a better job defending ourselves. 302 00:16:57,000 --> 00:16:57,640 Speaker 2: Point one. 303 00:16:57,760 --> 00:17:00,360 Speaker 5: Point two A lot of this can be done from 304 00:17:00,400 --> 00:17:06,320 Speaker 5: the sea. Our carriers are invulnerable essentially. And point three 305 00:17:06,600 --> 00:17:10,840 Speaker 5: we can fuse together to work with our allies, partners 306 00:17:10,880 --> 00:17:14,520 Speaker 5: and friends in the region, so we're not alone and 307 00:17:15,640 --> 00:17:19,200 Speaker 5: afraid out there. We are with allies, partners and friends. 308 00:17:19,480 --> 00:17:21,760 Speaker 5: We need to leverage that in a better fashion. 309 00:17:22,080 --> 00:17:24,400 Speaker 4: Admiral, Again, I'm just going to reference your opinion piece 310 00:17:24,440 --> 00:17:26,200 Speaker 4: from yesterday, and again you can read it on the 311 00:17:26,200 --> 00:17:30,000 Speaker 4: Bloomberg terminal, certainly, and you can go to Bloomberg Opinion 312 00:17:30,000 --> 00:17:33,040 Speaker 4: dot com slash opinion Bloomberg dot com slash opinion to 313 00:17:33,080 --> 00:17:36,800 Speaker 4: find it on the website. Do you believe, Admiral that 314 00:17:36,920 --> 00:17:40,080 Speaker 4: some of the steps and policies you laid out in 315 00:17:40,119 --> 00:17:44,040 Speaker 4: your opinion piece, does that have a welcome reception with 316 00:17:44,119 --> 00:17:45,040 Speaker 4: this administration. 317 00:17:45,359 --> 00:17:47,800 Speaker 6: With Congress, I. 318 00:17:47,680 --> 00:17:48,399 Speaker 2: Think it will. 319 00:17:48,480 --> 00:17:51,760 Speaker 5: And as usual with any issue in today's America, there'll 320 00:17:51,800 --> 00:17:57,160 Speaker 5: be plenty of folks who are advocating very radical go 321 00:17:57,280 --> 00:18:02,560 Speaker 5: downtown Tayron tonight strike. I think that's premature. We might 322 00:18:02,640 --> 00:18:05,560 Speaker 5: get there, let's writ not. On the other side, there 323 00:18:05,600 --> 00:18:08,000 Speaker 5: will be those who say, just pull out of the 324 00:18:08,000 --> 00:18:12,159 Speaker 5: Middle East, let all of that just fall apart. I 325 00:18:12,200 --> 00:18:14,720 Speaker 5: think what I've laid out is something in the middle 326 00:18:14,800 --> 00:18:18,520 Speaker 5: that makes sense, that will avoid a wide regional war, 327 00:18:18,640 --> 00:18:20,640 Speaker 5: but will cause Iran to back down. 328 00:18:20,720 --> 00:18:23,240 Speaker 1: Okay, you know we're going to run out of time 329 00:18:23,280 --> 00:18:24,960 Speaker 1: here in a bit. I want you to sell right 330 00:18:24,960 --> 00:18:28,360 Speaker 1: now to this nation, and everybody's listening. The one guy 331 00:18:28,400 --> 00:18:33,680 Speaker 1: in Congress that actually probably can talk about this and 332 00:18:33,760 --> 00:18:37,359 Speaker 1: calm down, let's bomb Tehran Crewe And that's a senator 333 00:18:37,359 --> 00:18:41,119 Speaker 1: from Rhode Island, Jack Reid. How important is Jack Reid 334 00:18:41,440 --> 00:18:42,200 Speaker 1: in this debate? 335 00:18:43,520 --> 00:18:43,840 Speaker 2: Well? 336 00:18:43,920 --> 00:18:46,639 Speaker 5: I love Jack Reid because, first of all, he's a 337 00:18:46,680 --> 00:18:49,879 Speaker 5: man of normal height about five feet five inches called 338 00:18:49,960 --> 00:18:54,240 Speaker 5: my height number two. He's a military guy, he's a veteran, 339 00:18:54,680 --> 00:18:57,159 Speaker 5: he went to West Point. I'll forgive him that. He 340 00:18:57,359 --> 00:19:00,640 Speaker 5: is at the top of the list. Tommy, You're absolutely 341 00:19:00,640 --> 00:19:05,120 Speaker 5: correct in his strategic vision, his understanding of the balance 342 00:19:05,200 --> 00:19:08,480 Speaker 5: we need to strike here. And I think the more 343 00:19:08,560 --> 00:19:11,880 Speaker 5: we listen to the jack reads of the Congress, the 344 00:19:11,880 --> 00:19:16,080 Speaker 5: better our chances are of steering through these rough waters where. 345 00:19:15,880 --> 00:19:18,280 Speaker 1: We are now as a nation. Does it have elements 346 00:19:18,280 --> 00:19:21,040 Speaker 1: that you and Elliott Ackerman wrote about in two thousand 347 00:19:21,040 --> 00:19:23,720 Speaker 1: and thirty four my book of the Summer Paul A 348 00:19:23,760 --> 00:19:27,400 Speaker 1: couple summers ago. What's so frightening folks about the book 349 00:19:27,520 --> 00:19:31,040 Speaker 1: two thousand and thirty four to zero three four is 350 00:19:31,080 --> 00:19:34,240 Speaker 1: the unexpected? Are we getting elements of that right now? 351 00:19:34,359 --> 00:19:38,320 Speaker 5: Ed must vetus one hundred percent, tom And we've talked 352 00:19:38,320 --> 00:19:45,040 Speaker 5: a lot about drones, unmanned new uses for unmanned surface 353 00:19:45,160 --> 00:19:46,480 Speaker 5: vehicles on the sea. 354 00:19:46,760 --> 00:19:48,080 Speaker 2: All of that is happening. 355 00:19:48,320 --> 00:19:50,760 Speaker 5: I would argue the next step is going to be 356 00:19:50,760 --> 00:19:55,800 Speaker 5: the addition of artificial intelligence to how those unmanned systems 357 00:19:55,840 --> 00:19:58,719 Speaker 5: are used. That's what we need to be looking ahead 358 00:19:58,760 --> 00:20:01,600 Speaker 5: toward and think how can we reverse it and hear 359 00:20:01,680 --> 00:20:02,800 Speaker 5: it and stop it. 360 00:20:02,960 --> 00:20:05,000 Speaker 1: James Travitas, thank you so much, folks. I'll put it 361 00:20:05,000 --> 00:20:07,800 Speaker 1: out on Twitter LinkedIn the Leader's bookshel he's upset. I'm 362 00:20:07,840 --> 00:20:10,679 Speaker 1: selling this because he's got fourteen other books after this. 363 00:20:10,760 --> 00:20:17,359 Speaker 1: But the Leader's bookshelf shelf absolutely iconic as well. Amstervitis, 364 00:20:17,400 --> 00:20:23,760 Speaker 1: thank you for that briefing. It's great about Natia Level 365 00:20:24,359 --> 00:20:27,560 Speaker 1: and all of her you know, efforts with us. Is 366 00:20:27,560 --> 00:20:30,199 Speaker 1: is she really nailed the market? So she's looking at 367 00:20:30,240 --> 00:20:33,240 Speaker 1: the Hinckley picnic boat, the thirty seven s nice you know, 368 00:20:33,320 --> 00:20:35,320 Speaker 1: the things like a nice boat. It's got the jet 369 00:20:35,400 --> 00:20:37,959 Speaker 1: little jetty thing. He's out the side, Nadi. I can 370 00:20:38,040 --> 00:20:39,679 Speaker 1: just see Nattia a Level with a beverage of her 371 00:20:39,760 --> 00:20:43,240 Speaker 1: choice in hand with the Hinkley Picnic vote this summer. 372 00:20:43,280 --> 00:20:45,320 Speaker 1: And of course the name of her boat is the 373 00:20:45,359 --> 00:20:48,000 Speaker 1: heart of her work. Is why she's in the market 374 00:20:48,359 --> 00:20:50,720 Speaker 1: and you're not. You're the name of her boat what 375 00:20:50,840 --> 00:20:52,080 Speaker 1: with upside potential? 376 00:20:52,160 --> 00:20:54,480 Speaker 6: Yes, I mean that's the name of the. 377 00:20:54,480 --> 00:20:58,960 Speaker 1: Boat, Nadia. And you have absolutely killed you gotta be 378 00:20:59,080 --> 00:21:01,679 Speaker 1: in the market. Why are you still in the market 379 00:21:01,800 --> 00:21:03,560 Speaker 1: after the October run we've had. 380 00:21:05,200 --> 00:21:09,120 Speaker 9: It's the economy and the earnings potential that is there. 381 00:21:09,200 --> 00:21:13,440 Speaker 9: I mean you saw that the economy continues to define expectations. 382 00:21:13,440 --> 00:21:16,480 Speaker 9: I mean we had strong GDP last week, and sort 383 00:21:16,480 --> 00:21:19,439 Speaker 9: of this question is can that continue? And is this 384 00:21:19,640 --> 00:21:22,840 Speaker 9: immaculate disinflation for real? I mean, we'll get more data, 385 00:21:23,240 --> 00:21:25,960 Speaker 9: you know, when we get CPI on February thirteen, and 386 00:21:26,040 --> 00:21:28,000 Speaker 9: of course the seasonal adjustment, but. 387 00:21:28,000 --> 00:21:28,840 Speaker 8: We think that it is. 388 00:21:28,880 --> 00:21:31,320 Speaker 9: I mean, we do think the economy will slow, but 389 00:21:31,560 --> 00:21:33,800 Speaker 9: we think that it returns more to trend line about 390 00:21:33,800 --> 00:21:35,960 Speaker 9: two percent GDP growth for this year, and that's a 391 00:21:36,000 --> 00:21:37,160 Speaker 9: positive for the markets. 392 00:21:37,480 --> 00:21:40,439 Speaker 1: Top of the income statement, what does nominal GDP do? 393 00:21:40,920 --> 00:21:42,919 Speaker 1: How does that fold into revenues? If I've got to 394 00:21:42,920 --> 00:21:46,400 Speaker 1: give an organic revenue growth of six percent, what's the 395 00:21:46,440 --> 00:21:50,400 Speaker 1: new organic revenue growth look like at one year, two years? 396 00:21:50,920 --> 00:21:54,159 Speaker 9: I mean, for us we're looking for in terms of 397 00:21:54,200 --> 00:21:58,120 Speaker 9: EPs growth, we're looking for nine percent for this year, 398 00:21:58,119 --> 00:22:00,800 Speaker 9: and we think that twenty twenty five I can also 399 00:22:01,040 --> 00:22:03,720 Speaker 9: produce a similar sort of EPs. 400 00:22:03,160 --> 00:22:04,440 Speaker 8: Growth for the markets. 401 00:22:04,480 --> 00:22:06,800 Speaker 9: Again, a lot of this is going to be contingent 402 00:22:06,960 --> 00:22:10,080 Speaker 9: on the consumer. I mean, if the consumer continues to 403 00:22:10,160 --> 00:22:12,640 Speaker 9: hold in there, so will this economy, and so will 404 00:22:12,680 --> 00:22:15,960 Speaker 9: the equity markets. The consumer still has a fair amount 405 00:22:16,000 --> 00:22:18,760 Speaker 9: of excess savings, Tommy mean, nearly a trillion dollars, and 406 00:22:18,800 --> 00:22:21,240 Speaker 9: if you sort of do the math behind that fifty 407 00:22:21,280 --> 00:22:24,200 Speaker 9: billion or serve burn rate. That gives a consumer pretty 408 00:22:24,240 --> 00:22:27,640 Speaker 9: healthy cushion for a year plus, and so that's still 409 00:22:27,680 --> 00:22:31,320 Speaker 9: a lot of firepower that the consumer has over the 410 00:22:31,359 --> 00:22:33,440 Speaker 9: next couple of years, I should be able to support 411 00:22:34,000 --> 00:22:34,800 Speaker 9: corporate earnance. 412 00:22:35,440 --> 00:22:37,920 Speaker 4: So Nottty, a lot of folks are suggesting here as 413 00:22:37,960 --> 00:22:41,720 Speaker 4: we think about maybe broadening out the performance and participation 414 00:22:41,800 --> 00:22:44,399 Speaker 4: of this market beyond kind of the miracle seven, if 415 00:22:44,440 --> 00:22:47,000 Speaker 4: you will, And maybe twenty twenty four is a year 416 00:22:47,040 --> 00:22:50,320 Speaker 4: for small mid cap stocks. Is that something you're talking 417 00:22:50,320 --> 00:22:51,119 Speaker 4: to your clients about. 418 00:22:52,440 --> 00:22:55,880 Speaker 9: It is, and it doesn't necessarily mean that the tech 419 00:22:56,000 --> 00:22:59,600 Speaker 9: portion of things get left behind. It just means, as 420 00:22:59,640 --> 00:23:02,199 Speaker 9: you said, just a bit of a broaden out, and 421 00:23:02,240 --> 00:23:04,159 Speaker 9: we think that there's a place in the portfolio for 422 00:23:04,200 --> 00:23:07,359 Speaker 9: a small cap when you think about the favorable macro 423 00:23:07,480 --> 00:23:10,159 Speaker 9: environment that's there. Remember, the FED is on course to 424 00:23:10,280 --> 00:23:13,040 Speaker 9: cut this year and last year twenty twenty three, it 425 00:23:13,119 --> 00:23:15,479 Speaker 9: was a year where people were concerned about the balance 426 00:23:15,480 --> 00:23:18,560 Speaker 9: sheet for small cap companies given that they do have 427 00:23:18,960 --> 00:23:20,399 Speaker 9: a nearly fifty percent. 428 00:23:20,240 --> 00:23:22,240 Speaker 8: Or so of their debt and floating rate. 429 00:23:22,320 --> 00:23:25,520 Speaker 9: And so as you know, rates come down this year 430 00:23:25,640 --> 00:23:28,159 Speaker 9: that should help small cap and then we also are 431 00:23:28,240 --> 00:23:31,080 Speaker 9: seeing some recovery on the manufacturing side. I mean last 432 00:23:31,080 --> 00:23:35,600 Speaker 9: week we had pretty good numbers from the flash manufacturing PMI, 433 00:23:35,760 --> 00:23:38,520 Speaker 9: reaching a fifteen or sixteen months high, and we're also 434 00:23:38,560 --> 00:23:42,080 Speaker 9: starting to see finally new orders back in expansionary territory, 435 00:23:42,119 --> 00:23:44,960 Speaker 9: So that should be incrementally positive a small cap and 436 00:23:45,000 --> 00:23:47,760 Speaker 9: the evaluation less of a concern in a small cap 437 00:23:47,800 --> 00:23:50,480 Speaker 9: space really trading at that discount, So we think that 438 00:23:50,960 --> 00:23:55,280 Speaker 9: it will be paid to be nibble around at some 439 00:23:55,440 --> 00:23:57,240 Speaker 9: small cap to portfolios this year. 440 00:23:57,640 --> 00:23:59,639 Speaker 4: Yeah, you kind of you mentioned evaluation. I kind of 441 00:23:59,640 --> 00:24:01,960 Speaker 4: wanted to go. They're just generally speaking, because we had 442 00:24:01,960 --> 00:24:05,000 Speaker 4: that such a big, big move higher in the market 443 00:24:05,320 --> 00:24:07,280 Speaker 4: to close out twenty twenty three, and we've continued a 444 00:24:07,280 --> 00:24:10,640 Speaker 4: little bit here in January. I'm not sure if seed 445 00:24:10,640 --> 00:24:14,080 Speaker 4: earnings go up a commensurate amount here, so multiple expansion 446 00:24:14,080 --> 00:24:15,720 Speaker 4: here is this market getting a little long in the 447 00:24:15,800 --> 00:24:17,000 Speaker 4: tooth in terms of valuation? 448 00:24:18,560 --> 00:24:21,720 Speaker 9: Well, I think it depends on you know whose earnings 449 00:24:21,720 --> 00:24:26,760 Speaker 9: you're talking about, right, Yes, broadly twenty twenty four essemates 450 00:24:26,800 --> 00:24:30,200 Speaker 9: have come down slightly, but not anything to alarm. And 451 00:24:30,400 --> 00:24:33,800 Speaker 9: I think what you have been seeing you know, the 452 00:24:33,800 --> 00:24:37,800 Speaker 9: momentum and the stay in power on the tech side. 453 00:24:37,800 --> 00:24:41,280 Speaker 9: So from valuation standpoint, we think that even when you 454 00:24:41,320 --> 00:24:44,359 Speaker 9: strip out sort of the magnificent seven m evaluation is 455 00:24:44,400 --> 00:24:47,040 Speaker 9: a lot more reasonable. And if the earnings can hole 456 00:24:47,119 --> 00:24:50,680 Speaker 9: in there, some of these companies can grow into their valuations. 457 00:24:51,040 --> 00:24:54,520 Speaker 9: So we're not overly concerned about valuations at this point. 458 00:24:54,560 --> 00:24:57,840 Speaker 9: We think that the strong economic environment and rates coming 459 00:24:57,880 --> 00:24:59,920 Speaker 9: down will be supportive to evaluation. 460 00:25:00,280 --> 00:25:02,120 Speaker 1: How do you treat I don't want you to talk 461 00:25:02,160 --> 00:25:05,160 Speaker 1: about individual securities. I understand the rules of the road here, 462 00:25:05,640 --> 00:25:09,760 Speaker 1: but Nadia on a broader magnificent six and you know, 463 00:25:09,800 --> 00:25:11,359 Speaker 1: I get the story you're going to tell me. There 464 00:25:11,520 --> 00:25:15,920 Speaker 1: was multiple ex expansion land yeer blah blah blah. Microsoft's 465 00:25:16,000 --> 00:25:19,639 Speaker 1: en joined a thirty six pe forward if they deliver 466 00:25:19,760 --> 00:25:23,000 Speaker 1: the goods today, How do you put a thirty six 467 00:25:23,160 --> 00:25:25,160 Speaker 1: multiple into a retirement plan. 468 00:25:27,760 --> 00:25:31,480 Speaker 9: Well, let's talk about how tech has performed over the 469 00:25:31,600 --> 00:25:32,440 Speaker 9: last decade. 470 00:25:32,640 --> 00:25:34,879 Speaker 8: Us I mean exactly. 471 00:25:34,920 --> 00:25:37,960 Speaker 9: I mean most of the market returns is coming from 472 00:25:38,040 --> 00:25:40,679 Speaker 9: that sector, and so that's why it is important to 473 00:25:40,960 --> 00:25:44,080 Speaker 9: have that sort of exposure. Despite the fact that you 474 00:25:44,200 --> 00:25:48,040 Speaker 9: might have questions around valuations in the portfolios for a 475 00:25:48,160 --> 00:25:51,720 Speaker 9: timement plant, because that's where the growth ultimately is coming from. 476 00:25:51,760 --> 00:25:54,200 Speaker 9: I mean, when we sort of look forward to megacap 477 00:25:54,320 --> 00:25:56,800 Speaker 9: tech earnings this week, we know that it was big, 478 00:25:56,960 --> 00:25:59,720 Speaker 9: key and important for market sentiment, and so what we'll 479 00:25:59,760 --> 00:26:02,560 Speaker 9: be looking forward to hearing from is, you know, the 480 00:26:02,640 --> 00:26:07,840 Speaker 9: continuan stabilization in cloud rationalization is that behind us it 481 00:26:07,880 --> 00:26:11,080 Speaker 9: does seems to be the case, and also aid monetization. 482 00:26:11,200 --> 00:26:15,439 Speaker 9: When we think about the productivity gains over the coming decades, 483 00:26:15,560 --> 00:26:17,520 Speaker 9: I mean, I don't think that you want to miss 484 00:26:17,560 --> 00:26:20,199 Speaker 9: out on that in any sort of retirement. That is 485 00:26:20,240 --> 00:26:22,520 Speaker 9: going to be key for these companies going forward in 486 00:26:22,560 --> 00:26:23,520 Speaker 9: the vroader economy. 487 00:26:24,560 --> 00:26:27,119 Speaker 4: Not yet aside from tech, what are some of the 488 00:26:27,160 --> 00:26:29,639 Speaker 4: other sectors that you're talking to your clients about that 489 00:26:29,720 --> 00:26:32,720 Speaker 4: might be good performers in twenty twenty four. 490 00:26:34,000 --> 00:26:37,600 Speaker 9: I mean this year we're really focused a lot on quality, 491 00:26:37,680 --> 00:26:42,159 Speaker 9: not necessarily specifically sectors, I mean sectors sective wise. And 492 00:26:42,200 --> 00:26:44,880 Speaker 9: we still have some exposure to energy, which has seen 493 00:26:44,920 --> 00:26:47,719 Speaker 9: a lot of volatility recently just given what all prices 494 00:26:47,760 --> 00:26:50,960 Speaker 9: are in all prises, not even responding to the high 495 00:26:51,000 --> 00:26:55,080 Speaker 9: and geopolitical tension because there's concerns about oversupplying the market 496 00:26:55,119 --> 00:26:57,000 Speaker 9: this year, we still think that there will be a 497 00:26:57,040 --> 00:26:59,560 Speaker 9: deficiting in Q one. So we do think that there 498 00:26:59,560 --> 00:27:02,119 Speaker 9: are still tactical opportunities and energy. 499 00:27:02,480 --> 00:27:03,880 Speaker 8: But beyond sectors. 500 00:27:03,880 --> 00:27:06,879 Speaker 9: I mean, like I said, quality is key because quality 501 00:27:06,960 --> 00:27:09,320 Speaker 9: transcends all sectors, and we want to how. 502 00:27:09,440 --> 00:27:10,280 Speaker 6: To find quality. 503 00:27:10,640 --> 00:27:13,359 Speaker 8: Nadia, Oh, that's a great question. 504 00:27:13,440 --> 00:27:15,800 Speaker 1: And so when never say that to me, you only 505 00:27:15,840 --> 00:27:18,840 Speaker 1: say Nadia, You'll only say it's a great question. To Paul, 506 00:27:18,880 --> 00:27:19,640 Speaker 1: I get no love. 507 00:27:22,440 --> 00:27:25,800 Speaker 9: But when you think about quality, no, it's used very 508 00:27:25,800 --> 00:27:29,440 Speaker 9: broadly and sometimes loosely. But we're focused on free cassual 509 00:27:29,640 --> 00:27:35,080 Speaker 9: profitability when we think about quality and return on invested capital, 510 00:27:35,240 --> 00:27:38,880 Speaker 9: and you can find quality companies that cost many different sectors. 511 00:27:39,160 --> 00:27:42,520 Speaker 1: One final question, what's the analog? I don't think there 512 00:27:42,560 --> 00:27:46,400 Speaker 1: is one, but the tech boom now to the tech 513 00:27:46,440 --> 00:27:49,240 Speaker 1: boom of two thousand and two thousand and one when 514 00:27:49,240 --> 00:27:51,560 Speaker 1: it collapsed. Does that give you any angst? 515 00:27:53,200 --> 00:27:55,879 Speaker 9: It doesn't, because I think, what's a big difference here? 516 00:27:56,560 --> 00:28:01,840 Speaker 9: You have possible companies that are invest in and expected 517 00:28:01,880 --> 00:28:05,480 Speaker 9: to monetize AI onlike. So we don't think that this 518 00:28:05,640 --> 00:28:08,080 Speaker 9: is a bubble. I mean, in fact, a lot of 519 00:28:08,320 --> 00:28:11,400 Speaker 9: tech analysts, including our tech analysts in Asia, has put 520 00:28:11,480 --> 00:28:15,520 Speaker 9: pen to paper and recently raised its expectations. 521 00:28:14,760 --> 00:28:16,880 Speaker 8: For AI revenues globally. 522 00:28:16,920 --> 00:28:20,040 Speaker 9: I mean, at over for four billion dollars by the 523 00:28:20,040 --> 00:28:22,480 Speaker 9: time we get you four hundred billion dollars by the 524 00:28:22,480 --> 00:28:24,960 Speaker 9: time we get to twenty twenty seven. 525 00:28:25,119 --> 00:28:26,959 Speaker 8: And so I think that's the key difference. You're not 526 00:28:27,200 --> 00:28:29,800 Speaker 8: you have it. You're seeing profitability. 527 00:28:29,080 --> 00:28:33,320 Speaker 10: Already, and you know revenues are ready around AI onlike 528 00:28:33,440 --> 00:28:36,280 Speaker 10: doing the tech bubble where everything's just sort of wind 529 00:28:36,320 --> 00:28:38,040 Speaker 10: up despite the fact that you might not have been 530 00:28:38,160 --> 00:28:39,360 Speaker 10: a profitable Now. 531 00:28:39,280 --> 00:28:40,000 Speaker 1: Do you thank you? 532 00:28:40,080 --> 00:28:40,240 Speaker 2: Nat? 533 00:28:40,320 --> 00:28:44,080 Speaker 1: Your level is with UBS Wealth Management, their senior US 534 00:28:44,560 --> 00:28:58,720 Speaker 1: equity strategies, and it is the front page headlines. She's 535 00:28:58,760 --> 00:29:00,680 Speaker 1: going to go to the San Diego troop in this morning, 536 00:29:01,080 --> 00:29:02,680 Speaker 1: back to way, what do you got, Lisa? 537 00:29:02,880 --> 00:29:05,520 Speaker 11: I got the Wall Street Journal as we're starting. You 538 00:29:05,560 --> 00:29:06,800 Speaker 11: guys have been talking about this. 539 00:29:06,760 --> 00:29:09,680 Speaker 12: A lot this morning. General Motors feeling pressure from dealerships to. 540 00:29:09,640 --> 00:29:12,640 Speaker 11: Make hybrid, so it just back and forth between electric 541 00:29:12,960 --> 00:29:16,600 Speaker 11: and hybrid. So the company topped expectations. We heard about that, 542 00:29:16,720 --> 00:29:19,360 Speaker 11: but they're telling the journal that the dealers they serve 543 00:29:19,400 --> 00:29:22,120 Speaker 11: on these advisory committees for GM, and they're worried about 544 00:29:22,200 --> 00:29:25,160 Speaker 11: losing customers like Paul who are not ready to make 545 00:29:25,200 --> 00:29:28,720 Speaker 11: that full switch over. But GM they're they're listening to 546 00:29:28,760 --> 00:29:32,000 Speaker 11: their concerns, but they haven't made any future hybrid commitments. 547 00:29:32,040 --> 00:29:33,240 Speaker 11: I mean, would you have gone hybrid? 548 00:29:33,960 --> 00:29:36,920 Speaker 4: It's definitely an option. And Matt Miller, who is our 549 00:29:37,000 --> 00:29:40,520 Speaker 4: car guru, he said he would do a hybrid. He 550 00:29:40,560 --> 00:29:43,160 Speaker 4: thinks that's the best way to go at this point 551 00:29:43,280 --> 00:29:46,840 Speaker 4: toil get more built out charging system out there, I. 552 00:29:46,760 --> 00:29:51,440 Speaker 1: Said with the Detroit International Auto Show with Ken Pruitt, 553 00:29:51,840 --> 00:29:55,840 Speaker 1: I'll say twelve thirteen years ago, in the head of Mercedes, 554 00:29:56,480 --> 00:29:59,720 Speaker 1: said the major engineer guy. He was like the CEO, 555 00:30:00,120 --> 00:30:04,800 Speaker 1: a real auto guy, said Tom hybrids. They were way 556 00:30:04,800 --> 00:30:07,600 Speaker 1: out front on this. And then it's a major, major call. 557 00:30:07,680 --> 00:30:10,200 Speaker 1: And you know, I guess with Marie Barre at ten am, 558 00:30:10,240 --> 00:30:12,440 Speaker 1: you know, I'll learn about this. So what's next? 559 00:30:12,600 --> 00:30:12,920 Speaker 8: All right? 560 00:30:13,280 --> 00:30:15,320 Speaker 12: New York Times is President Biden's aide. 561 00:30:15,360 --> 00:30:18,400 Speaker 11: They're drafting up this wish list for potential endorsements, and 562 00:30:18,440 --> 00:30:22,200 Speaker 11: it includes Taylor Swift. 563 00:30:22,680 --> 00:30:25,040 Speaker 6: Has to she already come out and said something or no. 564 00:30:25,200 --> 00:30:28,280 Speaker 12: She Well, here's the thing, she endorsed Biden in twenty twenty. 565 00:30:28,440 --> 00:30:31,680 Speaker 11: Okay, okay, last year she had a single Instagram post 566 00:30:31,680 --> 00:30:35,920 Speaker 11: of hers led to thirty five thousand new voter registrations. 567 00:30:35,960 --> 00:30:38,440 Speaker 7: That was just from a single post. So you see 568 00:30:38,480 --> 00:30:42,560 Speaker 7: the influender two hundred million songs. 569 00:30:42,240 --> 00:30:43,560 Speaker 6: About guys that are losers. 570 00:30:44,000 --> 00:30:45,840 Speaker 7: You know, But do you think about it? 571 00:30:45,840 --> 00:30:48,400 Speaker 12: She gets the younger vote too, I mean not that young, 572 00:30:48,480 --> 00:30:49,080 Speaker 12: like the young kids. 573 00:30:49,120 --> 00:30:52,560 Speaker 11: But but she also gets the moms who are a 574 00:30:52,600 --> 00:30:53,440 Speaker 11: fan of Swift. 575 00:30:54,080 --> 00:30:58,280 Speaker 1: I guess turnout I'll give her in others like her. 576 00:30:58,920 --> 00:31:01,600 Speaker 1: I guess maybe they can boost turnout. But do you 577 00:31:01,640 --> 00:31:03,800 Speaker 1: think that they decide someone's vote. 578 00:31:03,880 --> 00:31:04,720 Speaker 6: I can't imagine. 579 00:31:04,800 --> 00:31:07,120 Speaker 4: I mean, but I mean that's but they've been doing 580 00:31:07,160 --> 00:31:09,320 Speaker 4: endorsement since the beginning of time. I mean, does a 581 00:31:09,360 --> 00:31:12,280 Speaker 4: matter of for a newspaper endors to somebody. And back 582 00:31:12,280 --> 00:31:15,920 Speaker 4: in the day that was important, but I less today, Well. 583 00:31:15,840 --> 00:31:17,560 Speaker 12: Maybe we'll see President Biden and one of the world 584 00:31:17,600 --> 00:31:18,240 Speaker 12: tours coming. 585 00:31:18,560 --> 00:31:21,120 Speaker 1: Look for a full cover. If Joe Matthew will weigh on, 586 00:31:21,440 --> 00:31:24,160 Speaker 1: weigh in on this today with kayly Lines, no question 587 00:31:24,280 --> 00:31:25,240 Speaker 1: about it. What's next? 588 00:31:25,360 --> 00:31:25,760 Speaker 2: All right? 589 00:31:26,120 --> 00:31:27,040 Speaker 12: This is a big one. 590 00:31:27,640 --> 00:31:30,880 Speaker 11: Chiefs forty nine ers tickets at an all time high 591 00:31:30,880 --> 00:31:31,760 Speaker 11: for the Super. 592 00:31:31,520 --> 00:31:35,240 Speaker 7: Bowl nine thousand, eight hundred dollars. 593 00:31:35,240 --> 00:31:36,240 Speaker 1: Do we know what a minute cast? 594 00:31:36,280 --> 00:31:36,360 Speaker 9: You? 595 00:31:36,880 --> 00:31:37,440 Speaker 2: I don't know. 596 00:31:37,640 --> 00:31:38,360 Speaker 1: No, it's gonna be. 597 00:31:38,760 --> 00:31:40,120 Speaker 4: You know that's a go to check what the ads are? 598 00:31:40,160 --> 00:31:43,000 Speaker 4: Several million dollars for a TV ad? 599 00:31:43,080 --> 00:31:44,040 Speaker 12: Yeah, for like a thirty second. 600 00:31:44,120 --> 00:31:44,320 Speaker 2: Yeah. 601 00:31:44,560 --> 00:31:47,400 Speaker 1: Can I just say, you know, within the madness of 602 00:31:47,440 --> 00:31:52,040 Speaker 1: all this, if you want just to fall back into laughter, 603 00:31:52,880 --> 00:31:56,920 Speaker 1: go to YouTube and they'll have like the ten funniest 604 00:31:56,920 --> 00:32:01,680 Speaker 1: commercials from super Bowl twenty eighteen ever, and there are 605 00:32:01,760 --> 00:32:05,760 Speaker 1: some just jewels of comedy in those important ads. I 606 00:32:05,760 --> 00:32:06,479 Speaker 1: mean that's amazing. 607 00:32:06,720 --> 00:32:08,560 Speaker 4: I mean it's a lot of folks are still I mean, 608 00:32:08,560 --> 00:32:12,520 Speaker 4: you know, it's that's their advertising buy for the entire year. 609 00:32:12,600 --> 00:32:14,960 Speaker 6: They put everything into it, and it's. 610 00:32:16,040 --> 00:32:18,360 Speaker 1: Not owned by Morgan Stanley. I mean I said to 611 00:32:18,400 --> 00:32:21,520 Speaker 1: miss Skene, I said that you just reducs a it's 612 00:32:21,520 --> 00:32:24,840 Speaker 1: a ad with chimpanzees or whatever in a garage and 613 00:32:24,880 --> 00:32:27,240 Speaker 1: they come up with, think, we spent two million dollars 614 00:32:27,320 --> 00:32:29,320 Speaker 1: on this ad. And then they said, you know, what 615 00:32:29,320 --> 00:32:31,239 Speaker 1: are you doing with your money or whatever? But what 616 00:32:31,280 --> 00:32:32,080 Speaker 1: would they spend now? 617 00:32:32,120 --> 00:32:37,520 Speaker 6: Paul seven million dollars sixty seconds. Yes, absolutely, I don't. 618 00:32:37,320 --> 00:32:41,640 Speaker 1: Know, what do you think, Lisa, I'm. 619 00:32:40,200 --> 00:32:42,840 Speaker 7: Blown away by these the price of these tickets though. 620 00:32:42,840 --> 00:32:45,040 Speaker 12: I mean when you said you went to their Super Bowl. 621 00:32:45,120 --> 00:32:46,920 Speaker 6: I did, yeah, I mean back way back in the day. 622 00:32:47,240 --> 00:32:50,000 Speaker 4: But I mean this is just it's the perfect storm 623 00:32:50,040 --> 00:32:52,280 Speaker 4: I think for the NFL, as I said before, to 624 00:32:52,320 --> 00:32:56,120 Speaker 4: take you know, the biggest show to the biggest entertainment 625 00:32:56,520 --> 00:33:00,160 Speaker 4: market being Vegas. You know, it's just a perfect for 626 00:33:00,160 --> 00:33:03,040 Speaker 4: a combination. And I'll tell you the folks at CBS 627 00:33:03,080 --> 00:33:06,280 Speaker 4: are just thrill because they have the broadcast this year 628 00:33:06,600 --> 00:33:09,640 Speaker 4: just by sheer luck they do a rotation between the 629 00:33:09,840 --> 00:33:13,000 Speaker 4: broadcasters and CBS folks are just because they can just 630 00:33:13,040 --> 00:33:14,480 Speaker 4: bring all their clients. 631 00:33:14,200 --> 00:33:16,680 Speaker 6: There doing I mean, just the greatest marketing eventable. 632 00:33:16,760 --> 00:33:19,680 Speaker 12: And then you have California, who is not far from Vegas. 633 00:33:19,280 --> 00:33:20,959 Speaker 11: So you have a baking flux of people who are 634 00:33:20,960 --> 00:33:22,920 Speaker 11: coming for that short trip from California too. 635 00:33:23,000 --> 00:33:24,280 Speaker 12: So then you just go. 636 00:33:24,560 --> 00:33:25,880 Speaker 1: You know, even if you don't go to the game, 637 00:33:25,920 --> 00:33:26,360 Speaker 1: you just go. 638 00:33:26,760 --> 00:33:28,760 Speaker 7: Then you gotta peel like a thousand dollars a night 639 00:33:28,800 --> 00:33:30,640 Speaker 7: for a hotel there. 640 00:33:30,800 --> 00:33:32,800 Speaker 4: I think it's Sley South there. We'll get a my 641 00:33:32,880 --> 00:33:33,800 Speaker 4: suite at the Bellagio. 642 00:33:35,120 --> 00:33:37,800 Speaker 1: Listen to Thank You So Much on the newspapers. This 643 00:33:37,880 --> 00:33:43,040 Speaker 1: is a Bloomberg Surveillance podcast, bringing you the best in economics, finance, investment, 644 00:33:43,240 --> 00:33:46,840 Speaker 1: and international relations. You can also watch the show live 645 00:33:47,080 --> 00:33:51,400 Speaker 1: on YouTube. Visit the Bloomberg Podcast channel on YouTube to 646 00:33:51,520 --> 00:33:54,920 Speaker 1: see the show weekday mornings from seven to ten am 647 00:33:54,960 --> 00:33:59,000 Speaker 1: Eastern from our global headquarters in New York City. Subscribe 648 00:33:59,000 --> 00:34:02,760 Speaker 1: to the podcast on Spotify or anywhere else you listen, 649 00:34:03,080 --> 00:34:06,720 Speaker 1: and always I'm Bloomberg Radio, the Bloomberg Terminal, and the 650 00:34:06,760 --> 00:34:08,279 Speaker 1: Bloomberg Business app.