1 00:00:02,400 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:11,960 --> 00:00:15,560 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 3 00:00:15,600 --> 00:00:18,960 Speaker 2: with Paul Sweeney. Join us each day for insight from 4 00:00:18,960 --> 00:00:23,119 Speaker 2: the best in economics, finance, investment, and international relations. You 5 00:00:23,160 --> 00:00:26,520 Speaker 2: can also watch the show live on YouTube. Visit the 6 00:00:26,520 --> 00:00:31,280 Speaker 2: Bloomberg Podcast channel on YouTube to see the show weekday 7 00:00:31,280 --> 00:00:34,320 Speaker 2: mornings from seven to ten am Eastern from our global 8 00:00:34,360 --> 00:00:39,000 Speaker 2: headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 9 00:00:39,360 --> 00:00:42,920 Speaker 2: or anywhere else you listen and always I'm Bloomberg Radio, 10 00:00:43,080 --> 00:00:47,120 Speaker 2: the Bloomberg Terminal, and the Bloomberg Business App. We're gonna 11 00:00:47,120 --> 00:00:49,360 Speaker 2: get to the markets, but with the politics of the weekend, 12 00:00:49,600 --> 00:00:51,960 Speaker 2: and there's just no one that can help us better 13 00:00:52,479 --> 00:00:55,440 Speaker 2: on the broad vision of what in God's name is 14 00:00:55,480 --> 00:00:59,480 Speaker 2: going on in the heat. I mean, first of all, Tina, 15 00:00:59,560 --> 00:01:04,080 Speaker 2: let's cut of the chase Emma Reti Kanu. She tells 16 00:01:04,160 --> 00:01:07,320 Speaker 2: Andy Murray she won't play doubles, then she goes out 17 00:01:07,400 --> 00:01:10,319 Speaker 2: and loses it. Wimbledon, I mean, it's a It was 18 00:01:10,480 --> 00:01:14,120 Speaker 2: saved for the United Kingdom by Sir Lewis Hamilton winning 19 00:01:14,120 --> 00:01:17,399 Speaker 2: the British Grand Prix. How did Britain get through the weekend. 20 00:01:18,600 --> 00:01:21,559 Speaker 3: Well, don't forget the European Football Championship. 21 00:01:21,640 --> 00:01:22,520 Speaker 4: Oh boy, that's right. 22 00:01:22,760 --> 00:01:26,679 Speaker 3: Yeah, the UK won there as well. Now it's it's 23 00:01:26,720 --> 00:01:30,000 Speaker 3: it's a it's a good mood in London. Dare I say, 24 00:01:30,120 --> 00:01:34,720 Speaker 3: despite the fact that it did pour all weekend, we 25 00:01:34,800 --> 00:01:39,200 Speaker 3: had elections where nobody objected, and you know, and everybody 26 00:01:39,240 --> 00:01:42,360 Speaker 3: politely handed over and the moving van has already come 27 00:01:42,400 --> 00:01:46,600 Speaker 3: and taken Richisu next stuff. So that was very civilized. 28 00:01:46,760 --> 00:01:49,280 Speaker 2: Paul was hit an umbrella and a drink on his deck. 29 00:01:49,320 --> 00:01:51,320 Speaker 2: Here it's like one hundred and two degrees there, Tina 30 00:01:51,880 --> 00:01:54,320 Speaker 2: and he and he said, get Tina ford him and 31 00:01:54,360 --> 00:01:59,120 Speaker 2: he did so. Because the arch question in America Drive 32 00:01:59,240 --> 00:02:03,320 Speaker 2: time this morning learning is what is the United Kingdom election? 33 00:02:03,520 --> 00:02:07,240 Speaker 2: What does the French election mean for the first Tuesday 34 00:02:07,280 --> 00:02:11,040 Speaker 2: of November in America? What do we take away? 35 00:02:11,919 --> 00:02:17,120 Speaker 3: It's a million dollar question, or maybe more analysts are 36 00:02:17,240 --> 00:02:21,280 Speaker 3: like traders, you know, we like to spot patterns, but 37 00:02:21,400 --> 00:02:25,920 Speaker 3: it isn't very obvious what the implications might be for 38 00:02:26,080 --> 00:02:31,920 Speaker 3: the US, except that surprises happen in democracies. In France, 39 00:02:32,000 --> 00:02:35,359 Speaker 3: a surprise really happened. I mean, even though we observed 40 00:02:36,040 --> 00:02:39,760 Speaker 3: how this very unusual to the American political mind, this 41 00:02:39,880 --> 00:02:45,480 Speaker 3: collaboration between different parties of where candidates would drop out 42 00:02:45,520 --> 00:02:50,960 Speaker 3: of races that were calculated so that the end goal 43 00:02:51,080 --> 00:02:54,520 Speaker 3: of keeping out the far right would be achieved. Even then, 44 00:02:54,639 --> 00:02:58,760 Speaker 3: the polls on Friday in France did not put this 45 00:02:59,040 --> 00:03:02,200 Speaker 3: new left code in first place. And there we went 46 00:03:02,240 --> 00:03:08,079 Speaker 3: into the weekend still thinking that the Front I can't 47 00:03:08,080 --> 00:03:12,880 Speaker 3: remember what they're called now then would be the far 48 00:03:13,000 --> 00:03:15,720 Speaker 3: right party would be the largest in parliament. We all 49 00:03:15,800 --> 00:03:19,680 Speaker 3: were told that every pole Friday confirmed it, and that 50 00:03:19,720 --> 00:03:23,000 Speaker 3: didn't happen. They ended up third. So first takeaway is 51 00:03:23,440 --> 00:03:29,359 Speaker 3: your regular public service reminder, without slacking off polsters, that 52 00:03:30,280 --> 00:03:35,680 Speaker 3: polls are imperfect, People change their minds, and human behavior 53 00:03:35,800 --> 00:03:40,120 Speaker 3: is incredibly difficult to model. So that is something we 54 00:03:40,160 --> 00:03:44,200 Speaker 3: should take away into the US elections when we still 55 00:03:44,280 --> 00:03:48,960 Speaker 3: have such narrow margins within the margin for error. So 56 00:03:49,080 --> 00:03:55,000 Speaker 3: that's point one. Surprises and polling errors are are with. 57 00:03:54,960 --> 00:03:58,520 Speaker 4: Us, Tina. Given the elections of both in the UK 58 00:03:58,640 --> 00:04:01,760 Speaker 4: and in France, what does it mean for the UK 59 00:04:02,040 --> 00:04:05,200 Speaker 4: and the European Union in terms of their relationship? Can 60 00:04:05,240 --> 00:04:11,040 Speaker 4: they be closer together or is Brexit still I guess 61 00:04:11,120 --> 00:04:14,200 Speaker 4: kind of the issue for the two entities. 62 00:04:15,120 --> 00:04:18,440 Speaker 3: Well, Brexit was the word that you know, dare not 63 00:04:18,640 --> 00:04:24,000 Speaker 3: speak its name during the campaign. Caros Starmer, now, the 64 00:04:24,040 --> 00:04:28,800 Speaker 3: Prime Minister, did not actively campaign on reversing Brexit or 65 00:04:28,800 --> 00:04:31,840 Speaker 3: anything like it. In fact, he said the day before 66 00:04:32,000 --> 00:04:35,159 Speaker 3: Britain went to the polls that he didn't foresee that 67 00:04:35,200 --> 00:04:38,320 Speaker 3: the UK would return to being a member of the 68 00:04:38,320 --> 00:04:43,200 Speaker 3: European Union in his lifetime, thereby crushing the hopes of many, 69 00:04:43,640 --> 00:04:46,200 Speaker 3: given just what a negative impact it's had on the 70 00:04:46,279 --> 00:04:51,039 Speaker 3: UK economy and everything else. But in the first hours 71 00:04:51,080 --> 00:04:55,599 Speaker 3: and days of the Starmer government taking over, we've seen 72 00:04:55,640 --> 00:05:02,440 Speaker 3: some very positive noises about strengthening to about a defense 73 00:05:02,640 --> 00:05:06,440 Speaker 3: packed new Foreign Minister David Lammy went to Germany first, 74 00:05:06,839 --> 00:05:11,200 Speaker 3: that was a clear signal, followed by Poland and Sweden, 75 00:05:11,520 --> 00:05:15,560 Speaker 3: also very much with the NATO summit in mind. So 76 00:05:15,880 --> 00:05:20,760 Speaker 3: the energy that this new British government is projecting is 77 00:05:21,000 --> 00:05:26,040 Speaker 3: very much about strengthening the UK's relationship with its allies 78 00:05:26,120 --> 00:05:28,400 Speaker 3: in the EU and in the United States. 79 00:05:29,320 --> 00:05:32,640 Speaker 4: So in the UK right now, what is the to 80 00:05:32,760 --> 00:05:35,760 Speaker 4: do list for this new government. Is it simply to 81 00:05:35,839 --> 00:05:39,719 Speaker 4: project stability or are there certainly some things they want 82 00:05:39,760 --> 00:05:43,520 Speaker 4: to get done here well, as. 83 00:05:43,480 --> 00:05:46,120 Speaker 3: Is usually the case, of course in national elections, the 84 00:05:46,120 --> 00:05:50,920 Speaker 3: focus was very domestic. It's the first UK election that 85 00:05:51,000 --> 00:05:54,480 Speaker 3: I can recall in my twenty two years of being 86 00:05:54,600 --> 00:06:00,200 Speaker 3: here where housing reform reformed to the planning process was 87 00:06:00,200 --> 00:06:05,240 Speaker 3: was front and center, and also the UK's crumbling public services. 88 00:06:05,279 --> 00:06:10,920 Speaker 3: These are in the top five concerns from British voters. 89 00:06:10,960 --> 00:06:14,240 Speaker 3: So the new Chancellor of the Exchequer the equivalent of 90 00:06:14,360 --> 00:06:19,320 Speaker 3: Treasury Secretary Rachel Reeves, is talking a lot about delivering growth. 91 00:06:19,400 --> 00:06:24,400 Speaker 3: But interestingly for US political observers, one of the lessons 92 00:06:24,440 --> 00:06:29,520 Speaker 3: that the Starmer team took away from Obamacare and from 93 00:06:29,640 --> 00:06:35,760 Speaker 3: Biden's industrial policies was the observation that they delivered positive 94 00:06:35,839 --> 00:06:38,800 Speaker 3: results but didn't get much credit from voters for it. 95 00:06:38,960 --> 00:06:43,760 Speaker 3: So they've come out against what they call deliverism, which 96 00:06:43,800 --> 00:06:45,680 Speaker 3: I think is going to be interesting to watch. 97 00:06:46,080 --> 00:06:49,440 Speaker 2: One final question, do you trust the polls in the 98 00:06:49,520 --> 00:06:50,880 Speaker 2: United States of America? 99 00:06:52,760 --> 00:06:56,680 Speaker 3: I mean trust sounds sounds like you know, it's something. 100 00:06:56,440 --> 00:07:01,240 Speaker 2: Almost are useful. They are. 101 00:07:01,440 --> 00:07:04,800 Speaker 3: Any poster will tell you a poll is a snapshot, 102 00:07:04,960 --> 00:07:08,279 Speaker 3: not a prediction. Everybody seems to forget this, It's a 103 00:07:08,279 --> 00:07:12,520 Speaker 3: snapshot of where public opinion is today. Do I trust 104 00:07:12,560 --> 00:07:15,280 Speaker 3: the polls? I certainly use them as the only available 105 00:07:15,360 --> 00:07:19,120 Speaker 3: quantitative measure. And I think that most people's gut instincts 106 00:07:19,160 --> 00:07:23,000 Speaker 3: are terrible when it comes to reading the public mood. 107 00:07:23,760 --> 00:07:27,480 Speaker 3: But the same with prediction markets, Tom. They are always wrong, 108 00:07:27,520 --> 00:07:31,000 Speaker 3: and yet they're cited in every single cell side research report. 109 00:07:31,680 --> 00:07:34,400 Speaker 3: We're going to need to marshal as much data as 110 00:07:34,400 --> 00:07:36,160 Speaker 3: we can, but I think we need to put it 111 00:07:36,200 --> 00:07:39,160 Speaker 3: in historical context and we need to think outside of 112 00:07:39,160 --> 00:07:42,239 Speaker 3: the box when it comes to this US election, because 113 00:07:42,280 --> 00:07:44,640 Speaker 3: the playbook is going out the door. 114 00:07:45,160 --> 00:07:47,880 Speaker 2: Tina, Thank you, Tina Fordham just excellent. Can't say enough 115 00:07:47,880 --> 00:07:50,880 Speaker 2: about our Fordum Forum Global for site. It was sitting 116 00:07:50,960 --> 00:08:04,920 Speaker 2: room for years as well. Joining us Now a young 117 00:08:05,000 --> 00:08:09,120 Speaker 2: buck Terry Haynes with Pangaea policy and I'm sorry, Terriott 118 00:08:09,200 --> 00:08:13,600 Speaker 2: really hit home and I'm not frail, but there you are. 119 00:08:14,200 --> 00:08:18,600 Speaker 2: What is the frailty measurement of this president? This morning? 120 00:08:20,560 --> 00:08:23,880 Speaker 5: I'm in the I'm on the large font club myself. Tom, 121 00:08:23,920 --> 00:08:26,800 Speaker 5: So thank thank you all, thank you all for gathering 122 00:08:26,840 --> 00:08:29,560 Speaker 5: this morning. Uh, the frailty quotion is I don't know 123 00:08:29,680 --> 00:08:32,200 Speaker 5: you know, I'm not a doctor, but the uh, you know, 124 00:08:32,240 --> 00:08:34,840 Speaker 5: you can be frail and with it and uh and 125 00:08:34,920 --> 00:08:39,040 Speaker 5: you know he bed by by public view. He goes 126 00:08:39,120 --> 00:08:41,720 Speaker 5: up and down, so you know, here we are. But 127 00:08:42,559 --> 00:08:44,800 Speaker 5: he still knows how to give the middle finger to people. 128 00:08:44,800 --> 00:08:46,960 Speaker 5: And he did that with some force on Friday night, 129 00:08:47,000 --> 00:08:50,040 Speaker 5: because he gave the middle finger to the Democratic donor 130 00:08:50,080 --> 00:08:52,040 Speaker 5: class and a lot of the political class that all 131 00:08:52,080 --> 00:08:53,719 Speaker 5: of a sudden decided he's not up to it. 132 00:08:54,520 --> 00:08:58,679 Speaker 2: Well, jump in here, Paul, I'm rattled by Rachel Bdard's 133 00:08:58,679 --> 00:08:59,560 Speaker 2: wonderful essay. 134 00:09:00,080 --> 00:09:02,320 Speaker 4: So, Terry, I think if you were to ask John 135 00:09:02,400 --> 00:09:04,679 Speaker 4: Q Democrat out on the street who he or she 136 00:09:04,760 --> 00:09:07,880 Speaker 4: wants to be the nominee for the Democrat Party, they 137 00:09:07,880 --> 00:09:12,520 Speaker 4: would probably respond, whoever can bet former President Trump the 138 00:09:12,559 --> 00:09:16,360 Speaker 4: Republican nominee. Do we have any idea who that is? Today? 139 00:09:17,559 --> 00:09:22,680 Speaker 5: Well, based on Bloomberg Morning Consultu polling, it's Biden. Biden's 140 00:09:22,720 --> 00:09:28,000 Speaker 5: right in there with an electoral college tally that is 141 00:09:28,040 --> 00:09:31,600 Speaker 5: basically even with seventy seven unknown votes in the middle. 142 00:09:32,040 --> 00:09:35,120 Speaker 5: And you know, he's right there and able to be 143 00:09:35,240 --> 00:09:37,600 Speaker 5: able to right the ship. So this whole business that 144 00:09:38,600 --> 00:09:41,840 Speaker 5: you know, Biden's going to tank was wrong. The whole 145 00:09:41,840 --> 00:09:44,400 Speaker 5: business that Trump's going to take votes from Biden is wrong, 146 00:09:44,440 --> 00:09:45,320 Speaker 5: and that's really wrong. 147 00:09:45,440 --> 00:09:46,360 Speaker 2: We've talked about that. 148 00:09:46,440 --> 00:09:50,120 Speaker 5: I mean, whoever tentative Biden voters are, they don't want 149 00:09:50,160 --> 00:09:53,480 Speaker 5: to go to Trump. And you're in a situation now 150 00:09:53,520 --> 00:09:57,160 Speaker 5: where the apparently the wheels aren't falling off, and I 151 00:09:57,160 --> 00:09:59,960 Speaker 5: imagine that's part of the President's calculations too, in them 152 00:10:00,000 --> 00:10:02,400 Speaker 5: middle finger Friday night, Well. 153 00:10:02,320 --> 00:10:04,880 Speaker 4: The President is out with a letter just this morning, 154 00:10:05,040 --> 00:10:08,760 Speaker 4: addressed to Democratic lawmakers and released by his campaign. Bloomberg 155 00:10:08,800 --> 00:10:11,720 Speaker 4: News is reporting and it's quote I am firmly committed 156 00:10:11,720 --> 00:10:13,960 Speaker 4: to staying in this race, to running this race to 157 00:10:14,000 --> 00:10:17,400 Speaker 4: the end into beating Donald Trump end quote. So there, 158 00:10:17,440 --> 00:10:20,200 Speaker 4: I guess that says it all there, Terry, Is that 159 00:10:20,280 --> 00:10:21,920 Speaker 4: kind of where we leave it at this point? 160 00:10:22,760 --> 00:10:25,160 Speaker 5: Well, I find it interesting that everybody wants to give 161 00:10:25,960 --> 00:10:28,880 Speaker 5: the smoke and mirrors on the political and donor side 162 00:10:28,920 --> 00:10:31,800 Speaker 5: all the credence in the world, and Biden none of 163 00:10:31,800 --> 00:10:34,520 Speaker 5: the credence. And Biden was I thought, very direct on 164 00:10:34,600 --> 00:10:37,160 Speaker 5: Friday night. Regardless of what you think about the directness 165 00:10:37,280 --> 00:10:41,360 Speaker 5: or you know, how you know whether it's advisable or not. 166 00:10:41,480 --> 00:10:44,960 Speaker 5: I mean, that's where it is. And unless there's another 167 00:10:45,080 --> 00:10:47,480 Speaker 5: glitch of the kind that existed in that debate, he's 168 00:10:47,520 --> 00:10:49,080 Speaker 5: going to stay in. And that's what he said. 169 00:10:49,800 --> 00:10:53,360 Speaker 2: Terry Nick Thompson at The Atlantic had a brilliant observation. 170 00:10:53,480 --> 00:10:55,240 Speaker 2: I'm going to paraphrase it here. I want to be 171 00:10:55,320 --> 00:10:59,920 Speaker 2: very careful, holl I do this. He said, we've become 172 00:11:00,160 --> 00:11:05,359 Speaker 2: parties plural, but in the Democratic Party of an anointment 173 00:11:05,520 --> 00:11:10,800 Speaker 2: by an inside group, you know, Clinton, Clinton's plural, Obamas plural, 174 00:11:10,840 --> 00:11:14,200 Speaker 2: et cetera. The Bushes on the other side, maybe mister Trump, 175 00:11:14,240 --> 00:11:18,120 Speaker 2: et cetera. How do we get back to our ute 176 00:11:18,240 --> 00:11:22,280 Speaker 2: where they actually, you know, really had a debate with 177 00:11:22,480 --> 00:11:25,640 Speaker 2: delegates involved. Do we get back to that or is 178 00:11:25,640 --> 00:11:26,280 Speaker 2: it just gone? 179 00:11:28,160 --> 00:11:31,400 Speaker 5: It can come back pretty easily. Actually, you only need 180 00:11:31,720 --> 00:11:34,040 Speaker 5: you only need one rule change, and that's the that's 181 00:11:34,080 --> 00:11:37,120 Speaker 5: the rule change that since nineteen seventy two for Democrats 182 00:11:37,400 --> 00:11:41,640 Speaker 5: nineteen seventy six for Republicans, requires the delegate vote to 183 00:11:41,720 --> 00:11:44,720 Speaker 5: be an assignment to be binding on the first ballot. 184 00:11:45,360 --> 00:11:47,920 Speaker 5: You take that away and you get the old style 185 00:11:48,000 --> 00:11:51,319 Speaker 5: conventions where people assemble and all of a sudden figure 186 00:11:51,360 --> 00:11:53,440 Speaker 5: out you know what, I don't like any of these people. 187 00:11:53,679 --> 00:11:55,960 Speaker 5: We want to do something else, and that used to 188 00:11:55,960 --> 00:11:58,679 Speaker 5: happen a lot, It can happen again, might even happen 189 00:11:58,720 --> 00:11:59,480 Speaker 5: this summer yet. 190 00:12:00,320 --> 00:12:02,600 Speaker 4: So I guess that goes to the next question to her. 191 00:12:02,640 --> 00:12:05,479 Speaker 4: Should Tom and I be paying attention to these conventions 192 00:12:05,480 --> 00:12:05,920 Speaker 4: this summer? 193 00:12:07,320 --> 00:12:08,240 Speaker 2: Sure? Absolutely? 194 00:12:08,720 --> 00:12:10,560 Speaker 5: You know, right now I don't think there's I mean, 195 00:12:10,840 --> 00:12:12,280 Speaker 5: right now, Trump's going to be the nominee on the 196 00:12:12,360 --> 00:12:15,120 Speaker 5: Republican side right now, Biden's going to be the nominee 197 00:12:15,120 --> 00:12:18,040 Speaker 5: on the Democratic side because nobody can tell him no, apparently, 198 00:12:18,920 --> 00:12:22,240 Speaker 5: and you know, you've got the political class on the 199 00:12:22,280 --> 00:12:24,680 Speaker 5: other side saying, well, he's got to make a decision 200 00:12:24,720 --> 00:12:28,240 Speaker 5: by this Friday. Let's let's think about that. This Friday 201 00:12:28,480 --> 00:12:31,040 Speaker 5: is just after the NATO summit and just before the 202 00:12:31,080 --> 00:12:34,960 Speaker 5: Republican convention. So the look you want Democrats and the 203 00:12:35,000 --> 00:12:38,240 Speaker 5: press is you want Biden to capitulate the Trump on 204 00:12:38,280 --> 00:12:41,640 Speaker 5: the eve of Trump's convention. That's what you want. Biden's 205 00:12:41,800 --> 00:12:45,880 Speaker 5: going to Biden's not going to do that. So there's not. 206 00:12:45,960 --> 00:12:48,679 Speaker 2: Because of time too. I got to squeeze this in. 207 00:12:49,040 --> 00:12:52,839 Speaker 2: You led with a single sentence that I've heard many 208 00:12:52,840 --> 00:12:56,600 Speaker 2: others say now that all that matters is the polls. 209 00:12:56,920 --> 00:13:00,280 Speaker 2: When do we see polls besides a Bloomberg pole it 210 00:13:00,440 --> 00:13:06,040 Speaker 2: was out, When do we see polls that quantifies pro 211 00:13:06,200 --> 00:13:10,040 Speaker 2: Biden anti Biden, for that matter, pro Trump anti Trump. 212 00:13:11,520 --> 00:13:13,560 Speaker 5: I think you see them trickle in later this week, 213 00:13:13,600 --> 00:13:17,040 Speaker 5: and there's probably another big trash coming just before the 214 00:13:17,080 --> 00:13:20,120 Speaker 5: Republican Convention. I would urge you all to pay attention 215 00:13:20,160 --> 00:13:22,800 Speaker 5: to only two things, what's actually going on in the 216 00:13:22,840 --> 00:13:25,840 Speaker 5: swing states, and whether they are registered voter or likely 217 00:13:25,920 --> 00:13:29,559 Speaker 5: voter polls. Likely voter polls are what matters, and registered 218 00:13:29,640 --> 00:13:31,760 Speaker 5: voter polls are pretty much all you're getting right now. 219 00:13:32,160 --> 00:13:34,560 Speaker 2: This has been brilliant. Terry Haynes is always thank you 220 00:13:35,000 --> 00:13:42,559 Speaker 2: so much. With Pangaea policy. Everybody leaning on what Brian 221 00:13:42,640 --> 00:13:45,560 Speaker 2: Bilski says. He's one of the pinatas on the street. 222 00:13:45,600 --> 00:13:48,280 Speaker 2: He's been a bull, he's been correct the bears at 223 00:13:48,400 --> 00:13:51,800 Speaker 2: m he joins us here from BEMO Capital Markets. We 224 00:13:51,840 --> 00:13:55,160 Speaker 2: were talking about Michael Mobison and you were way out 225 00:13:55,200 --> 00:13:56,719 Speaker 2: front of this. I think it was in his year 226 00:13:56,800 --> 00:13:59,160 Speaker 2: he was at OpCo. He was still getting carted in 227 00:13:59,200 --> 00:14:03,240 Speaker 2: bars downtown. Brian, I want to just talk about capital 228 00:14:03,240 --> 00:14:07,120 Speaker 2: efficiency and the Graham Dot and Coddle doesn't work in 229 00:14:07,200 --> 00:14:12,440 Speaker 2: our analysis. Now, what are we missing about the capital allocation? 230 00:14:13,200 --> 00:14:16,480 Speaker 2: Capital efficiency of these technology stocks? 231 00:14:16,720 --> 00:14:18,640 Speaker 6: Well, thanks for asking, Thank you so much for having 232 00:14:18,720 --> 00:14:21,240 Speaker 6: us too. I mean, I think that so many investors, 233 00:14:21,360 --> 00:14:24,400 Speaker 6: meaning analysts or hedge funds or whatever, have gotten away 234 00:14:24,440 --> 00:14:27,120 Speaker 6: from looking at balance sheets and cash flow and everything. 235 00:14:27,120 --> 00:14:29,640 Speaker 6: They don't even know what capital allocation is. And these 236 00:14:29,680 --> 00:14:35,320 Speaker 6: companies have become so massively efficient. Tom, and I think 237 00:14:35,360 --> 00:14:40,680 Speaker 6: that really began actually twenty two years ago this month, 238 00:14:41,800 --> 00:14:44,280 Speaker 6: if you remember, you know, we were still trying to 239 00:14:44,280 --> 00:14:46,080 Speaker 6: buy the dip in two thousand and one, two thousand 240 00:14:46,080 --> 00:14:48,440 Speaker 6: and two, and I remember John Chambers coming out and 241 00:14:48,480 --> 00:14:51,520 Speaker 6: talking about second corner earnings for Cisco and he said, 242 00:14:51,520 --> 00:14:53,040 Speaker 6: we have no forecast in the market. 243 00:14:53,520 --> 00:14:55,720 Speaker 7: This I was at a meeting. 244 00:14:55,960 --> 00:14:58,240 Speaker 6: I was I was a strategist at Piper Jeffrey at 245 00:14:58,280 --> 00:15:00,680 Speaker 6: the time, and I was having a meeting and Morgan 246 00:15:00,760 --> 00:15:03,920 Speaker 6: Stanley when they moved up in the McGrath Hill building. 247 00:15:04,400 --> 00:15:07,240 Speaker 6: And I remember that day in particular, and that was 248 00:15:07,240 --> 00:15:10,520 Speaker 6: the bottom in the tech sector. And then from that 249 00:15:11,040 --> 00:15:16,480 Speaker 6: place that time frame, tech stocks had a massive secular 250 00:15:16,560 --> 00:15:19,880 Speaker 6: change in terms of how they manage their capital, how 251 00:15:19,920 --> 00:15:22,120 Speaker 6: they looked at cash flow. 252 00:15:21,760 --> 00:15:23,520 Speaker 7: And I think the key key thing with that. 253 00:15:23,600 --> 00:15:26,680 Speaker 6: Is that through that, through the cash flow and then 254 00:15:26,880 --> 00:15:30,080 Speaker 6: filtering into the income statement, how their earnings actually became 255 00:15:30,520 --> 00:15:32,560 Speaker 6: massively discernible and steady. 256 00:15:32,640 --> 00:15:34,600 Speaker 2: That was the key thing, Paul. Paul, you lived this 257 00:15:34,680 --> 00:15:36,240 Speaker 2: as well. I mean the three of us lived as 258 00:15:36,280 --> 00:15:39,080 Speaker 2: Lisa was she was in fourth grade or something like that. 259 00:15:39,120 --> 00:15:42,160 Speaker 2: But Paul, what's so important here is when I say 260 00:15:42,440 --> 00:15:45,800 Speaker 2: these companies are running like nineteenth century merchant banks in 261 00:15:45,880 --> 00:15:51,720 Speaker 2: Hong Kong, they're running for profit, not the normal securities 262 00:15:51,760 --> 00:15:52,920 Speaker 2: analysis we grew. 263 00:15:52,880 --> 00:15:54,040 Speaker 1: Up with, so Brian. 264 00:15:54,120 --> 00:15:56,240 Speaker 4: But there is the risk here of concentration here. How 265 00:15:56,240 --> 00:15:58,480 Speaker 4: do you get comfortable with this concentration risk in the 266 00:15:58,520 --> 00:15:59,040 Speaker 4: s and P five. 267 00:15:59,080 --> 00:16:02,480 Speaker 6: We've done a lot of concentration work in the past, 268 00:16:02,720 --> 00:16:05,040 Speaker 6: and people just kind of poop pooed it. We've shown 269 00:16:05,040 --> 00:16:08,840 Speaker 6: that markets can do well out of this super concentration. 270 00:16:09,000 --> 00:16:11,640 Speaker 6: We are worried, quite frankly, on a near term basis, Paul, 271 00:16:11,680 --> 00:16:14,240 Speaker 6: that the market has gotten a little ahead of itself. 272 00:16:14,280 --> 00:16:16,240 Speaker 7: I think that's pretty clear, and we. 273 00:16:16,240 --> 00:16:19,200 Speaker 6: Have not had a correction more than three percent, and 274 00:16:19,240 --> 00:16:22,000 Speaker 6: we need in the second year of this cyclical bull market. 275 00:16:22,040 --> 00:16:26,760 Speaker 6: Remember our call has been resolute since twenty ten that 276 00:16:27,200 --> 00:16:30,400 Speaker 6: stocks entered a secular bull market, US stocks having a 277 00:16:30,440 --> 00:16:33,000 Speaker 6: secular bowl market in two thousand and ninths or got 278 00:16:33,000 --> 00:16:34,360 Speaker 6: another ten years to go if you want to do 279 00:16:34,400 --> 00:16:37,640 Speaker 6: the quick math. But we need a nine On average, 280 00:16:37,640 --> 00:16:40,400 Speaker 6: we see a nine point four percent correction in the 281 00:16:40,400 --> 00:16:42,320 Speaker 6: second year of a bull market. So we think that 282 00:16:42,360 --> 00:16:44,400 Speaker 6: we can see a correction and that'll be your next 283 00:16:44,480 --> 00:16:46,560 Speaker 6: great entry point. And oh, by the way, from a 284 00:16:46,560 --> 00:16:49,840 Speaker 6: sentiment perspective, everybody and their mother, brothers, sister, cousin, uncle's 285 00:16:49,840 --> 00:16:52,760 Speaker 6: bullish everybody and the bears are getting kicked down to 286 00:16:52,800 --> 00:16:55,600 Speaker 6: the ground. And that's okay. By the way, remember bulls 287 00:16:55,600 --> 00:16:57,560 Speaker 6: making money. Bears are really smart. But at the end 288 00:16:57,600 --> 00:16:59,000 Speaker 6: of the day, at the end of the day, we 289 00:16:59,000 --> 00:17:00,760 Speaker 6: need a bit of a refrad I think that's your 290 00:17:00,800 --> 00:17:04,000 Speaker 6: next great buying opportunity in this next big secular market. 291 00:17:04,119 --> 00:17:06,000 Speaker 4: All right, you are at the Bank of Montreal. Let's 292 00:17:06,040 --> 00:17:08,760 Speaker 4: throw a boone to our friends up in Canada. Opportunities 293 00:17:08,760 --> 00:17:09,720 Speaker 4: in Canadian equities. 294 00:17:09,800 --> 00:17:12,120 Speaker 6: Oh my gosh, you know, I think you know I've 295 00:17:12,119 --> 00:17:13,679 Speaker 6: been a beaman on twelve and a half years and 296 00:17:13,720 --> 00:17:15,840 Speaker 6: what I've learned is it's a great stock picking market. 297 00:17:15,840 --> 00:17:18,639 Speaker 6: But I've learned also that it's a massively contrarian market. 298 00:17:18,680 --> 00:17:20,960 Speaker 6: When everybody's talking about one thing, go the other way. 299 00:17:21,440 --> 00:17:25,480 Speaker 6: So everybody hates TD in Canada. That's my pick to click. 300 00:17:25,560 --> 00:17:27,840 Speaker 6: I mean TD to twenty twenty four in Canada is 301 00:17:27,840 --> 00:17:30,560 Speaker 6: what City Group was the America in twenty twenty three. 302 00:17:30,560 --> 00:17:32,160 Speaker 7: Everybody hated the City Group Ember a year ago. 303 00:17:32,320 --> 00:17:34,160 Speaker 6: When they're cutting costs, I think TD is a great 304 00:17:34,200 --> 00:17:36,560 Speaker 6: place to be from a contraying perspective. I think from 305 00:17:36,600 --> 00:17:39,240 Speaker 6: a stockpicking perspective to Paul is that you want to 306 00:17:39,240 --> 00:17:42,520 Speaker 6: look at the Canadian consumer and stocks like a Ritzia 307 00:17:42,840 --> 00:17:47,480 Speaker 6: in koush Tard which is circle K. You know that brand, 308 00:17:48,359 --> 00:17:51,280 Speaker 6: very very strong names and Dollar Rama for that matter. 309 00:17:51,359 --> 00:17:54,000 Speaker 6: So the Canadian consumer names look really really interesting to 310 00:17:54,080 --> 00:17:55,240 Speaker 6: us from a longer term size. 311 00:17:55,280 --> 00:17:57,359 Speaker 4: So does that mean the Canadian consumer is in pretty 312 00:17:57,359 --> 00:18:00,600 Speaker 4: good shape? Well, you know, all work shows that they 313 00:18:00,600 --> 00:18:02,440 Speaker 4: have a big home ownership issues. 314 00:18:02,119 --> 00:18:04,159 Speaker 7: Big home ownership issues, big debt issues. 315 00:18:04,200 --> 00:18:06,760 Speaker 6: But what our work shows from a back testing perspective 316 00:18:06,800 --> 00:18:09,040 Speaker 6: is that the content can consumer does very well. If 317 00:18:09,080 --> 00:18:11,520 Speaker 6: the market thinks they're heading into a recession. Now the 318 00:18:11,520 --> 00:18:13,800 Speaker 6: Bank can is probably going to cut again, So the 319 00:18:13,840 --> 00:18:16,320 Speaker 6: Bank of Canada thinks so that Canada is going into 320 00:18:16,520 --> 00:18:18,080 Speaker 6: maybe a little bit of a recession. That's when you 321 00:18:18,119 --> 00:18:19,440 Speaker 6: want to buy consumer discretionary. 322 00:18:19,480 --> 00:18:21,840 Speaker 2: Now you got an election in the way, is well, 323 00:18:22,000 --> 00:18:26,840 Speaker 2: Brian Belski, you mentioned being contrarian looking at consensus. Right now, 324 00:18:26,880 --> 00:18:30,800 Speaker 2: the hedge funds zeitgeist is out of tech more towards 325 00:18:30,920 --> 00:18:33,239 Speaker 2: energy and materials. How do you interpret that? 326 00:18:33,520 --> 00:18:39,480 Speaker 6: Well, technically, from our US strategy perspective, we're underweight both 327 00:18:39,520 --> 00:18:41,080 Speaker 6: materials and energy. 328 00:18:41,080 --> 00:18:41,600 Speaker 7: Here's why. 329 00:18:42,920 --> 00:18:46,359 Speaker 6: You know, when inflation's going down, the commodity price goes down, 330 00:18:46,400 --> 00:18:48,600 Speaker 6: and that means the underlying fundamentals are going to be 331 00:18:48,640 --> 00:18:50,320 Speaker 6: going down in energy materials. If you take a look 332 00:18:50,359 --> 00:18:52,400 Speaker 6: at other areas of the world, the other there's other 333 00:18:52,440 --> 00:18:55,320 Speaker 6: places to buy energy and materials, especially Canada relative to 334 00:18:55,359 --> 00:18:58,399 Speaker 6: the US. And so while we own Freeport Macmaran, and 335 00:18:58,440 --> 00:19:00,879 Speaker 6: we own Chevron and Exxon and some in Chesapeake and 336 00:19:00,920 --> 00:19:03,359 Speaker 6: certain equity portfolios, we're not going to be overweight the 337 00:19:03,400 --> 00:19:04,320 Speaker 6: sector anytime soon. 338 00:19:04,680 --> 00:19:08,199 Speaker 2: What are you doing with the glory stocks at the moment? Like, 339 00:19:09,000 --> 00:19:11,520 Speaker 2: if you want to talk individual stocks. Grade is a 340 00:19:11,560 --> 00:19:14,560 Speaker 2: general statement, what are you doing with those stocks as 341 00:19:14,600 --> 00:19:15,679 Speaker 2: you listen to their earnings? 342 00:19:15,760 --> 00:19:17,639 Speaker 6: The Glory seven, I think we shouldn't come up the 343 00:19:17,640 --> 00:19:19,920 Speaker 6: Glory stocks. I like, I come the Super seven. I 344 00:19:19,920 --> 00:19:23,040 Speaker 6: think the Super seven could be your kind of consumer staples. 345 00:19:23,359 --> 00:19:26,280 Speaker 6: They'll they'll be your core holdings. And I think whoever 346 00:19:26,320 --> 00:19:28,760 Speaker 6: thought that a trade down into a five hundred or 347 00:19:28,880 --> 00:19:32,520 Speaker 6: eight hundred billion dollar company like Oracles a trade down? 348 00:19:32,560 --> 00:19:34,040 Speaker 7: I mean, how pathetic is that? 349 00:19:34,320 --> 00:19:36,840 Speaker 2: So retail is saying these are conservative stocks, and hedge 350 00:19:36,840 --> 00:19:40,240 Speaker 2: funds are saying they're a volatility of a certain persuasion. 351 00:19:40,320 --> 00:19:40,600 Speaker 7: They are. 352 00:19:40,640 --> 00:19:43,240 Speaker 6: And think about this Bill O'Neill, which I learned the 353 00:19:43,280 --> 00:19:45,760 Speaker 6: business from a long time ago, and then Lisa was 354 00:19:45,760 --> 00:19:47,160 Speaker 6: in first grade or something like that. 355 00:19:47,280 --> 00:19:48,320 Speaker 7: Let's just be clear on that. 356 00:19:48,440 --> 00:19:51,520 Speaker 6: But he said that the social money's a smart money 357 00:19:51,520 --> 00:19:54,160 Speaker 6: and retails of dumb money. It's the exact opposite. Now, 358 00:19:54,200 --> 00:19:57,000 Speaker 6: So institutional is all about what you did for me yesterday. 359 00:19:57,320 --> 00:19:59,879 Speaker 6: Retail and private weal, it's all about longer terms of 360 00:20:00,000 --> 00:20:02,119 Speaker 6: what I have at wealth we think is very well positioned. 361 00:20:02,800 --> 00:20:06,520 Speaker 4: All right, So we're gonna have earnings starting actually Thursday. 362 00:20:06,560 --> 00:20:08,600 Speaker 4: Some of the airlines come out and then Friday, JP 363 00:20:08,680 --> 00:20:11,159 Speaker 4: Morgan and some of the other big banks. What are 364 00:20:11,160 --> 00:20:12,880 Speaker 4: you looking for? What do you think this market has 365 00:20:12,960 --> 00:20:14,119 Speaker 4: to see in this earning cycle. 366 00:20:14,560 --> 00:20:17,480 Speaker 6: Well, we've said that we could see a nineteen ninety 367 00:20:17,480 --> 00:20:21,640 Speaker 6: six type event. Nineteen ninety six, Micron missed earnings, and 368 00:20:21,800 --> 00:20:24,440 Speaker 6: if you remember back the second half of ninety five, 369 00:20:24,880 --> 00:20:27,200 Speaker 6: the last quarter ninety five into ninety six, that's when 370 00:20:27,240 --> 00:20:29,800 Speaker 6: the kind of tech got going, and it was earnings 371 00:20:29,880 --> 00:20:33,320 Speaker 6: and fundamentally driven. Then it was momentum in dot dot 372 00:20:33,359 --> 00:20:37,159 Speaker 6: com driven, and that caused a pretty decent correction in 373 00:20:37,200 --> 00:20:38,520 Speaker 6: the summer of ninety six. 374 00:20:38,560 --> 00:20:39,640 Speaker 7: I think that could happen again. 375 00:20:39,640 --> 00:20:39,720 Speaker 6: Now. 376 00:20:39,720 --> 00:20:40,720 Speaker 7: A lot of people are giving. 377 00:20:40,560 --> 00:20:44,040 Speaker 6: Me crap about looking at earnings so closely, but these 378 00:20:44,040 --> 00:20:45,880 Speaker 6: stocks are priced to perfection. It's going to be more 379 00:20:45,880 --> 00:20:48,480 Speaker 6: about what they're going to say going forward into into 380 00:20:48,800 --> 00:20:50,880 Speaker 6: twenty twenty five and twenty twenty six in terms. 381 00:20:50,680 --> 00:20:51,679 Speaker 7: Of their growth rates. 382 00:20:51,840 --> 00:20:53,280 Speaker 6: So I think we could see a bit of a 383 00:20:53,320 --> 00:20:56,000 Speaker 6: correction there. But listen, I think earnings on the financial 384 00:20:56,040 --> 00:20:59,600 Speaker 6: side are understated. I think healthcare earnings are understated, so 385 00:20:59,640 --> 00:21:02,280 Speaker 6: we could see a kick there. I think financials with 386 00:21:02,359 --> 00:21:05,400 Speaker 6: respect to return on equity is way understated as well, 387 00:21:05,440 --> 00:21:06,760 Speaker 6: and I think you're going to see it a surprise 388 00:21:06,840 --> 00:21:08,760 Speaker 6: up there, especially in wealth management in the capital market. 389 00:21:08,840 --> 00:21:12,000 Speaker 2: What's a Belskie correction looked like? I mean in this world, 390 00:21:12,720 --> 00:21:16,480 Speaker 2: you know, pull a pullback three percent blogey correction. 391 00:21:17,600 --> 00:21:17,800 Speaker 3: Yeah. 392 00:21:17,880 --> 00:21:20,440 Speaker 6: Yeah, we need a healthy type thing that will scare people. 393 00:21:20,480 --> 00:21:23,560 Speaker 6: I think anything over five to six will scare people, 394 00:21:23,760 --> 00:21:25,880 Speaker 6: and then you'll have a little bit of capitulation, let's 395 00:21:25,920 --> 00:21:28,119 Speaker 6: call it. In this type of market, two PM. 396 00:21:28,600 --> 00:21:29,360 Speaker 7: Let's feel some pain. 397 00:21:29,520 --> 00:21:31,720 Speaker 2: Just goes out to twenty five or thirty the good 398 00:21:31,720 --> 00:21:32,960 Speaker 2: old days, the good old days. 399 00:21:33,000 --> 00:21:34,400 Speaker 7: We don't want people to lose money. 400 00:21:34,480 --> 00:21:36,640 Speaker 6: Let's be clear. We don't like it when people lose money. 401 00:21:36,640 --> 00:21:38,400 Speaker 6: But we do like it when we see a little 402 00:21:38,440 --> 00:21:40,240 Speaker 6: bit of air come out of this. And that's I 403 00:21:40,240 --> 00:21:41,120 Speaker 6: think the needs to happen. 404 00:21:41,160 --> 00:21:45,159 Speaker 2: Single best idea stock go Netflix, Netflix. 405 00:21:45,320 --> 00:21:48,280 Speaker 6: Yeah, so think about this, what's happening in paramount Think 406 00:21:48,280 --> 00:21:52,720 Speaker 6: about this. So our theme for communication services is cash, 407 00:21:52,760 --> 00:21:53,880 Speaker 6: content and consolidation. 408 00:21:53,960 --> 00:21:54,920 Speaker 7: It has been all year. 409 00:21:54,960 --> 00:21:57,119 Speaker 6: We were overweight last year, neutral this year because we 410 00:21:57,160 --> 00:21:59,159 Speaker 6: thought there's gonna be some consternation. 411 00:21:59,560 --> 00:22:00,000 Speaker 7: Netflix. 412 00:22:00,000 --> 00:22:02,719 Speaker 6: This is the Kleenex of streaming it's the clear winner. 413 00:22:03,080 --> 00:22:04,920 Speaker 6: It's the clear winner, and we think it's going to 414 00:22:04,960 --> 00:22:07,720 Speaker 6: continue to win while all these others try to combine 415 00:22:07,760 --> 00:22:08,280 Speaker 6: to take it on. 416 00:22:08,960 --> 00:22:11,280 Speaker 4: I mean, Paramount just the opposite side of the trade. 417 00:22:11,280 --> 00:22:13,879 Speaker 4: They get taken out today arguably down now down you 418 00:22:13,960 --> 00:22:16,240 Speaker 4: know almost you know about three quarters one percent, So 419 00:22:16,320 --> 00:22:16,840 Speaker 4: go figure out. 420 00:22:16,840 --> 00:22:17,720 Speaker 2: Okay, sorry. 421 00:22:18,119 --> 00:22:21,120 Speaker 6: The American consumers super smart though they know the product 422 00:22:21,160 --> 00:22:23,600 Speaker 6: that Paramount is offering, what they're gonna be streaming. Just 423 00:22:23,640 --> 00:22:26,199 Speaker 6: like on our retail side, they're super smart. They're going 424 00:22:26,280 --> 00:22:27,720 Speaker 6: to go to They're going to go to Costco and 425 00:22:27,760 --> 00:22:29,280 Speaker 6: Walmart all the time to get their stuff, but they're 426 00:22:29,280 --> 00:22:31,600 Speaker 6: also going to go to like Lulu to get their 427 00:22:31,600 --> 00:22:32,439 Speaker 6: specialized stuff. 428 00:22:32,520 --> 00:22:35,119 Speaker 2: That's Lisa, you know, I can understand that. Brian. We 429 00:22:35,200 --> 00:22:37,120 Speaker 2: got a couple of minutes left with you. We've extended 430 00:22:37,119 --> 00:22:40,280 Speaker 2: this interview because it's frankly, it's important, and Brian, I 431 00:22:40,359 --> 00:22:44,520 Speaker 2: want you to talk about the job now where cab 432 00:22:44,600 --> 00:22:47,399 Speaker 2: drivers don't have an S and P on their lap 433 00:22:47,520 --> 00:22:50,200 Speaker 2: or a Valian line next to them looking at individual stocks, 434 00:22:50,440 --> 00:22:54,480 Speaker 2: How is your world change when everybody's in ETFs and 435 00:22:54,560 --> 00:22:57,399 Speaker 2: index funds within our square square to point nine to 436 00:22:57,440 --> 00:22:59,520 Speaker 2: eight it's a different world. 437 00:22:59,560 --> 00:23:00,399 Speaker 7: It's a different world. 438 00:23:00,440 --> 00:23:02,080 Speaker 6: Like when I used to come to New York, you'd 439 00:23:02,080 --> 00:23:04,520 Speaker 6: ask when the cab drivers and the uber drivers were 440 00:23:04,520 --> 00:23:06,480 Speaker 6: talking about stocks, you knew it was the end. And 441 00:23:06,880 --> 00:23:08,360 Speaker 6: now you have to kind of pull it out of. 442 00:23:08,320 --> 00:23:09,000 Speaker 2: Them a little bit. 443 00:23:09,480 --> 00:23:12,920 Speaker 6: It's more about when you're in stores and you're talking 444 00:23:13,040 --> 00:23:15,560 Speaker 6: or in restaurants and you're talking about how business is. 445 00:23:15,600 --> 00:23:16,879 Speaker 7: You have to kind of do that bottles up. 446 00:23:16,920 --> 00:23:19,119 Speaker 6: But my biggest problem with the people that do what 447 00:23:19,160 --> 00:23:20,720 Speaker 6: I do, and let's face it, it's a really, really 448 00:23:20,720 --> 00:23:23,400 Speaker 6: tough job. Too many strategies and comics are worried about 449 00:23:23,440 --> 00:23:26,639 Speaker 6: the market levels. They're forgetting that the stock market is 450 00:23:26,640 --> 00:23:28,919 Speaker 6: a market of stocks. I think that's where most of 451 00:23:28,960 --> 00:23:31,040 Speaker 6: them have been wrong in terms of their market targets. 452 00:23:31,480 --> 00:23:33,800 Speaker 4: Let's talk market targets. You got SBX. I think at 453 00:23:33,800 --> 00:23:35,440 Speaker 4: fifty six hundred, you guys are one of the first 454 00:23:35,480 --> 00:23:38,440 Speaker 4: on the street to raise your targets. Initiated a fifty 455 00:23:38,440 --> 00:23:41,240 Speaker 4: five hundred bull case back in November of twenty three. 456 00:23:41,600 --> 00:23:43,919 Speaker 4: Here we are, We're darn close to fifty six hundred. 457 00:23:44,680 --> 00:23:45,359 Speaker 4: Now where do we go? 458 00:23:46,000 --> 00:23:47,200 Speaker 2: Well, well, it's call it today. 459 00:23:47,280 --> 00:23:50,320 Speaker 1: The markets are in there listen. 460 00:23:50,359 --> 00:23:52,520 Speaker 6: I think I still think we're gonna get a better 461 00:23:52,560 --> 00:23:56,520 Speaker 6: buying opportunity. What's really cool about corrections are and especially 462 00:23:56,560 --> 00:23:59,440 Speaker 6: in these big bowl markets where fundamentals actually early. Verybody 463 00:23:59,480 --> 00:24:03,359 Speaker 6: keeps talking about momentum, but on average you get like 464 00:24:03,440 --> 00:24:08,160 Speaker 6: a fifteen percent rally once we make a higher low, right, 465 00:24:08,560 --> 00:24:10,800 Speaker 6: And so it depends upon where we kind of see 466 00:24:10,840 --> 00:24:12,080 Speaker 6: the market going down in this cuestion. 467 00:24:12,200 --> 00:24:14,480 Speaker 7: Tom asked a great question, what does a crustion look like? 468 00:24:14,520 --> 00:24:17,000 Speaker 7: To us? We would love to see a ten percent correction. 469 00:24:17,040 --> 00:24:18,760 Speaker 6: We're going to get there. I don't know if we 470 00:24:18,800 --> 00:24:20,840 Speaker 6: see if we see an eight percent correction, we're going 471 00:24:20,880 --> 00:24:22,600 Speaker 6: to see a twelve percent correction because we're going to 472 00:24:22,680 --> 00:24:25,439 Speaker 6: not see ten exactly. So you know, we think that 473 00:24:25,480 --> 00:24:28,120 Speaker 6: there's a likelihood of fifty six hundred is probably too low. 474 00:24:28,160 --> 00:24:30,120 Speaker 7: We'll see if we have to adapt that. But we're 475 00:24:30,240 --> 00:24:32,800 Speaker 7: very very very very comfortable with where we are right now. 476 00:24:32,880 --> 00:24:35,600 Speaker 2: Brian Belski, thank you so much the BEMO Capital Markets 477 00:24:35,600 --> 00:24:38,960 Speaker 2: there inequities. I can't say enough about the acuity of 478 00:24:38,960 --> 00:24:42,560 Speaker 2: his research notes plural. We protect the copyright of all 479 00:24:42,600 --> 00:24:46,680 Speaker 2: of our guests. Get that from BEMO Capital Markets. He's 480 00:24:46,720 --> 00:24:49,240 Speaker 2: got four. They sound like eight notes or whatever. Yeah, 481 00:24:49,240 --> 00:24:52,080 Speaker 2: he's got some intern way over it, way too much energy. 482 00:24:52,480 --> 00:24:55,600 Speaker 2: His oldest son sounding like afidote. Yeah, he'll be in. 483 00:24:55,640 --> 00:24:57,800 Speaker 2: He's looking at Netflix now. Used to be the note 484 00:24:57,840 --> 00:25:00,840 Speaker 2: you got from Belski and now he's go you run. 485 00:25:01,040 --> 00:25:03,120 Speaker 2: It's like it's like, you know, he's good. How many 486 00:25:03,119 --> 00:25:05,439 Speaker 2: interns do you have? Skins? I have no interns. You 487 00:25:05,440 --> 00:25:08,600 Speaker 2: have no interns. Listen, I've got I've got one associate. 488 00:25:09,840 --> 00:25:12,560 Speaker 2: I Lincoln has like five interns. What's the difference. 489 00:25:12,560 --> 00:25:15,600 Speaker 6: It's all about efficiency at PMO, Man, we're efficiency ratio 490 00:25:15,640 --> 00:25:18,280 Speaker 6: man e largest making North America, fourth largest making commercial 491 00:25:18,960 --> 00:25:20,720 Speaker 6: fourth Marrow's commercial wake in the United States. 492 00:25:20,720 --> 00:25:24,040 Speaker 2: As are you and Ian Lincoln? On speaking terms? What's that? Oh? Yes, 493 00:25:24,080 --> 00:25:26,080 Speaker 2: of course we are. What if we get a three 494 00:25:26,240 --> 00:25:29,600 Speaker 2: seventy five three eighty ian lncoln yield? What does it 495 00:25:29,640 --> 00:25:31,399 Speaker 2: do to your world? Nothing? 496 00:25:32,720 --> 00:25:34,720 Speaker 6: Nothing, because I think it's I think we're three fifty 497 00:25:34,760 --> 00:25:37,040 Speaker 6: to four to fifty for a while, and that's normalization. 498 00:25:37,119 --> 00:25:37,719 Speaker 7: This is really good. 499 00:25:37,840 --> 00:25:40,840 Speaker 2: Three seventy five four Take it, Brian Bells, thank you 500 00:25:40,880 --> 00:25:54,040 Speaker 2: so much. Beam on capital markets in the front pages 501 00:25:54,040 --> 00:25:56,080 Speaker 2: of Lisa Matteo show. At least I thought it was 502 00:25:56,119 --> 00:25:57,800 Speaker 2: a great list. What do you got? 503 00:25:57,960 --> 00:25:58,320 Speaker 1: All right? 504 00:25:58,760 --> 00:25:59,200 Speaker 2: Boomer? 505 00:25:59,359 --> 00:26:01,520 Speaker 8: Not sure if you guys have done this, but a 506 00:26:01,520 --> 00:26:04,040 Speaker 8: lot of boomers are passing their wealth earlier to their 507 00:26:04,080 --> 00:26:05,080 Speaker 8: millennial kids. 508 00:26:05,560 --> 00:26:06,880 Speaker 1: There's a little bit of a catch though. 509 00:26:07,200 --> 00:26:07,959 Speaker 2: It's called tuition. 510 00:26:09,720 --> 00:26:13,199 Speaker 8: They're telling business Insider the kids, if they get the 511 00:26:13,200 --> 00:26:15,960 Speaker 8: money now, they're not going to expect that inheritance later. 512 00:26:16,280 --> 00:26:18,720 Speaker 8: So you take it now, enjoy it because you're not 513 00:26:18,760 --> 00:26:22,120 Speaker 8: kidding anything. Later they can give them yearly cash gifts, 514 00:26:22,160 --> 00:26:24,840 Speaker 8: paying for grandkids though, to go to private school, go 515 00:26:24,880 --> 00:26:28,080 Speaker 8: to college. They're helping them with down payments for homes. 516 00:26:28,520 --> 00:26:30,600 Speaker 8: But the millennials are saying they could use the help 517 00:26:30,640 --> 00:26:32,600 Speaker 8: because what they made, you know, compared to what their 518 00:26:32,640 --> 00:26:35,000 Speaker 8: parents did at that same time, is not the same. 519 00:26:35,240 --> 00:26:37,920 Speaker 2: There's something we'll shifted here. This came up this weekend. 520 00:26:38,040 --> 00:26:42,080 Speaker 2: I mean, when we were kids, you knew you'd go three, 521 00:26:42,160 --> 00:26:44,520 Speaker 2: four or five steps down from your parents. You know, 522 00:26:44,960 --> 00:26:47,600 Speaker 2: if you grew up advantaged, you knew you weren't advantage. 523 00:26:47,920 --> 00:26:53,159 Speaker 2: My first apartment was above a pizza parlor on Monroe Avenue, 524 00:26:53,680 --> 00:26:56,919 Speaker 2: down from Getsies hot Dogs, and every night at two 525 00:26:57,000 --> 00:27:01,200 Speaker 2: am the cockroaches came upstairs. Kids don't want to do that. Now, 526 00:27:01,840 --> 00:27:03,320 Speaker 2: they don't they want to don't want. 527 00:27:03,200 --> 00:27:05,120 Speaker 4: To do I don't know, you know what we did, 528 00:27:05,240 --> 00:27:07,240 Speaker 4: but that transfer of wealth. I mean, you hear from 529 00:27:07,240 --> 00:27:09,800 Speaker 4: these financial advisors are saying it's gonna be trillions of 530 00:27:09,840 --> 00:27:13,000 Speaker 4: dollars from the baby boomer generation to the next. And 531 00:27:13,080 --> 00:27:14,760 Speaker 4: how do you get it from one generation to the 532 00:27:14,760 --> 00:27:17,040 Speaker 4: next and most text social way, and that is an 533 00:27:17,040 --> 00:27:18,480 Speaker 4: industry in and of itself. 534 00:27:19,080 --> 00:27:21,680 Speaker 2: I'll go with that, but also for me, and what's 535 00:27:21,720 --> 00:27:24,000 Speaker 2: important here is what do they do with the money? 536 00:27:24,240 --> 00:27:26,680 Speaker 4: I mean, I told my kids the last check I write, 537 00:27:26,760 --> 00:27:29,240 Speaker 4: it's gonna bounce. Baby. 538 00:27:29,280 --> 00:27:33,240 Speaker 2: There we go, cruel and unusual swinging. 539 00:27:34,280 --> 00:27:36,399 Speaker 8: So we talked about a higher housing costs, right, because 540 00:27:36,400 --> 00:27:38,600 Speaker 8: that's the problem. A lot of kids can't afford to 541 00:27:38,600 --> 00:27:41,600 Speaker 8: get the house. But it's also pushing couples to move. 542 00:27:41,440 --> 00:27:43,240 Speaker 1: In together earlier. 543 00:27:43,400 --> 00:27:46,240 Speaker 8: So I know, I moved in with my husband before 544 00:27:46,480 --> 00:27:49,280 Speaker 8: like we were married. Oh yeah, Dad wasn't happy, but 545 00:27:49,280 --> 00:27:55,199 Speaker 8: that's a but it did help, you know, financially because 546 00:27:55,280 --> 00:27:56,440 Speaker 8: we were able to split the rent. 547 00:27:56,480 --> 00:27:57,720 Speaker 1: So a lot of couples are doing that. 548 00:27:58,560 --> 00:28:01,560 Speaker 8: But the problem is relationship experts are saying that it's 549 00:28:01,600 --> 00:28:05,840 Speaker 8: causing some friction within the couples, so they're breaking apart earlier. 550 00:28:06,640 --> 00:28:08,680 Speaker 8: But hey, I'm going on twenty five years. 551 00:28:08,680 --> 00:28:08,879 Speaker 1: So it. 552 00:28:10,440 --> 00:28:13,199 Speaker 8: Worked for you, but it's not working for everybody, and 553 00:28:13,280 --> 00:28:14,000 Speaker 8: that's the problem. 554 00:28:14,600 --> 00:28:17,600 Speaker 4: But that you can see the economics. Housing affordability is 555 00:28:17,640 --> 00:28:18,800 Speaker 4: just a huge issue. 556 00:28:19,320 --> 00:28:21,040 Speaker 2: A lot of people sing in a country. Can we 557 00:28:21,080 --> 00:28:24,560 Speaker 2: all agree the biggest thing is a single tax joint 558 00:28:24,640 --> 00:28:29,600 Speaker 2: tax differential. I don't, I don't get okay. They want 559 00:28:29,640 --> 00:28:33,000 Speaker 2: to promote being married, so if you joint, you pay 560 00:28:33,080 --> 00:28:37,199 Speaker 2: less taxes than if you're single. And I just I 561 00:28:37,320 --> 00:28:39,800 Speaker 2: never got it. No, it's a big number. I mean 562 00:28:39,880 --> 00:28:40,960 Speaker 2: for a lot of people. 563 00:28:41,040 --> 00:28:43,040 Speaker 4: All right, what else you Lisa, Okay? 564 00:28:43,360 --> 00:28:44,840 Speaker 2: Reach too much? Informations? 565 00:28:46,520 --> 00:28:49,880 Speaker 8: Retailers they're rushing to ship their holiday goods earlier because 566 00:28:49,880 --> 00:28:52,200 Speaker 8: they want to beat the rising freight costs. You have 567 00:28:52,280 --> 00:28:54,480 Speaker 8: companies like Mayor saying that they're going to increase a 568 00:28:54,560 --> 00:28:56,760 Speaker 8: freight costs, so they want to get ahead of it, right, 569 00:28:56,800 --> 00:29:00,200 Speaker 8: So they they're brooking their peak season forward moving goes 570 00:29:00,200 --> 00:29:02,680 Speaker 8: from December holidays as early as April and May instead 571 00:29:02,680 --> 00:29:05,040 Speaker 8: of July and October because they don't want to risk 572 00:29:05,080 --> 00:29:07,320 Speaker 8: the empty shelves that we saw during the pandemic. 573 00:29:08,000 --> 00:29:11,600 Speaker 1: So they're moving these these dates up higher. But it's 574 00:29:11,640 --> 00:29:13,600 Speaker 1: a risks rising. 575 00:29:13,720 --> 00:29:16,640 Speaker 2: Is it because of oil or is it the upset 576 00:29:16,680 --> 00:29:17,280 Speaker 2: in the Red Sea? 577 00:29:17,360 --> 00:29:19,000 Speaker 1: I was about to say the Red Sea. It's a 578 00:29:19,000 --> 00:29:20,000 Speaker 1: lot to do with the Red. 579 00:29:19,800 --> 00:29:23,000 Speaker 4: Sea financial times. This is a good financial times and 580 00:29:23,120 --> 00:29:25,160 Speaker 4: attacks on ships in the Red Sea of forced carriers 581 00:29:25,200 --> 00:29:29,320 Speaker 4: to take longer transit routes, injecting unpredictability and global supply 582 00:29:29,440 --> 00:29:32,720 Speaker 4: chains that increase port congestion from Asia to the US 583 00:29:32,760 --> 00:29:37,040 Speaker 4: East coast. So but again that means more inventory on 584 00:29:37,120 --> 00:29:40,280 Speaker 4: the retailers, right, it's all so that could be a 585 00:29:40,320 --> 00:29:41,040 Speaker 4: margin issue. 586 00:29:41,400 --> 00:29:44,160 Speaker 8: Oh that's interesting, right, because they're they're they're hoping that 587 00:29:44,240 --> 00:29:45,520 Speaker 8: they have the consumer demand. 588 00:29:45,640 --> 00:29:49,400 Speaker 2: Hope that's right here that we did. We did the 589 00:29:49,520 --> 00:29:52,440 Speaker 2: children's names thing earlier. Yeah, you know, it's a slot. 590 00:29:52,440 --> 00:29:55,960 Speaker 2: I'm getting the amount of hate mail gets off the chart. 591 00:29:56,600 --> 00:30:01,000 Speaker 2: Everybody named their daughter deaf and in fun of it, 592 00:30:01,920 --> 00:30:06,360 Speaker 2: I'm sorry, folks, I meant no ill Willy. We're just 593 00:30:06,360 --> 00:30:09,160 Speaker 2: the messengers we start calling you. How about that that 594 00:30:09,280 --> 00:30:10,040 Speaker 2: was one of the names. 595 00:30:10,480 --> 00:30:15,800 Speaker 8: My goodness, Now, what kind of socks are you wearing 596 00:30:15,880 --> 00:30:18,520 Speaker 8: on your feet when you wear sneakers, Let's say, are 597 00:30:18,560 --> 00:30:21,000 Speaker 8: you wearing the low cut socks or the high cut socks, 598 00:30:21,040 --> 00:30:23,920 Speaker 8: because it's kind of an indication of how old you are. 599 00:30:24,680 --> 00:30:27,600 Speaker 1: So I don't know, I wear the low cut side. 600 00:30:28,240 --> 00:30:31,800 Speaker 8: But apportently it's this controversy that's kicking around about your 601 00:30:31,840 --> 00:30:32,360 Speaker 8: sock height. 602 00:30:32,760 --> 00:30:35,480 Speaker 1: So the higher socks where it covers the ankles, you know, like. 603 00:30:35,520 --> 00:30:38,160 Speaker 4: And even with sneakers, they wear the dark socks, which 604 00:30:38,400 --> 00:30:40,800 Speaker 4: you I would to get left off the playground if 605 00:30:40,800 --> 00:30:41,920 Speaker 4: I did that back in the day. 606 00:30:42,160 --> 00:30:44,640 Speaker 1: But now it's the opposite. So you have this shift. 607 00:30:44,720 --> 00:30:48,120 Speaker 8: So now it's popular to wear the higher cut sock 608 00:30:48,440 --> 00:30:50,520 Speaker 8: and not the low ones. Apparently I'm not the cool 609 00:30:50,520 --> 00:30:53,680 Speaker 8: mom anymore. I was told that a million times. So 610 00:30:53,920 --> 00:30:56,400 Speaker 8: this is a new thing. Teens and gen z they 611 00:30:56,440 --> 00:30:57,240 Speaker 8: wearing the higher. 612 00:30:57,000 --> 00:30:59,560 Speaker 2: So it's important here. And I go to surveillance fashioned 613 00:30:59,600 --> 00:31:04,800 Speaker 2: slave data them cam advisers, I mean roth, I should say, 614 00:31:05,040 --> 00:31:08,400 Speaker 2: and you know Darta wears the socks with like the 615 00:31:08,400 --> 00:31:14,360 Speaker 2: flip flops or the and I mean you know, this 616 00:31:14,440 --> 00:31:17,760 Speaker 2: is a major source of conversation. You know, after thought 617 00:31:17,800 --> 00:31:20,400 Speaker 2: almost threw a baked potato at me. Yeah, I mean, 618 00:31:20,440 --> 00:31:22,840 Speaker 2: what do you think the socks with sandals? 619 00:31:23,000 --> 00:31:25,560 Speaker 1: The kids do that with the little slides they wear. 620 00:31:26,280 --> 00:31:30,160 Speaker 2: Dartist style in that he's out on some islands somewhere. 621 00:31:30,440 --> 00:31:32,800 Speaker 2: You know, what do you what do you think? I mean, 622 00:31:33,000 --> 00:31:36,800 Speaker 2: I'll be on YouTube chat. I mean should I can 623 00:31:36,800 --> 00:31:39,280 Speaker 2: see me in the doc Martin slides with the socks. 624 00:31:40,160 --> 00:31:41,800 Speaker 8: But do you have to be the high cut slot 625 00:31:41,880 --> 00:31:44,120 Speaker 8: the socks. You can't wear the ankle socks anymore? 626 00:31:44,160 --> 00:31:46,440 Speaker 1: Parents ankle socks are yes, it says. 627 00:31:46,200 --> 00:31:50,960 Speaker 4: That you're seventies. Going back, you had the the white 628 00:31:51,200 --> 00:31:52,720 Speaker 4: athletic socks up to the knees. 629 00:31:52,840 --> 00:31:54,600 Speaker 1: Oh yeah, like the basketball players, and. 630 00:31:54,560 --> 00:31:56,400 Speaker 4: Then maybe some wing WANs on top of we were 631 00:31:56,480 --> 00:31:59,800 Speaker 4: two socks, so we had the tube socks going up 632 00:31:59,800 --> 00:32:02,480 Speaker 4: to the the then we had what's called wigwams. Go 633 00:32:02,480 --> 00:32:05,080 Speaker 4: google that, Go google that wigwams. 634 00:32:04,520 --> 00:32:06,280 Speaker 1: And you kind of push them down, you switch them down. 635 00:32:06,440 --> 00:32:08,720 Speaker 4: That's what you were Trent and Cyo basketball. That was 636 00:32:08,760 --> 00:32:09,920 Speaker 4: the uniform back in the case. 637 00:32:09,960 --> 00:32:11,680 Speaker 2: If I can bring us back to something to do 638 00:32:11,720 --> 00:32:18,480 Speaker 2: with the investment, I'm sorry. This weekend inflation is pernicious. 639 00:32:18,800 --> 00:32:24,760 Speaker 2: It's out there in every single transaction and the bow ties, 640 00:32:24,800 --> 00:32:27,680 Speaker 2: a suit and Ti crew we talked to. They're not 641 00:32:27,960 --> 00:32:31,480 Speaker 2: talking the same thing I'm living or anybody else's living. 642 00:32:32,160 --> 00:32:36,560 Speaker 2: It's tangible, the inflation. It's just it's every single thing. 643 00:32:36,960 --> 00:32:38,640 Speaker 8: It's ever you see in the restaurant, you see it 644 00:32:38,640 --> 00:32:40,120 Speaker 8: at the grocery store, you see it. 645 00:32:40,160 --> 00:32:42,000 Speaker 1: Did you see the price of the bow ties? Did 646 00:32:42,040 --> 00:32:42,479 Speaker 1: they go up? 647 00:32:42,840 --> 00:32:45,880 Speaker 2: Yeah? They did? Yes, thank you. It's a French provider. 648 00:32:46,200 --> 00:32:48,680 Speaker 2: I think they'll still be in business after the French election. 649 00:32:49,720 --> 00:32:51,920 Speaker 4: But it's just the absolute level of price isn't And 650 00:32:51,960 --> 00:32:55,280 Speaker 4: so the question I've here when will we get accustomed 651 00:32:55,320 --> 00:32:56,640 Speaker 4: to this new level. 652 00:32:56,760 --> 00:32:58,880 Speaker 2: We'll do when our wages go up? 653 00:32:59,160 --> 00:33:01,080 Speaker 4: Yeah, but the way has been going up faster than 654 00:33:01,080 --> 00:33:04,560 Speaker 4: inflation several years. But still not there. Still not there, 655 00:33:04,600 --> 00:33:06,719 Speaker 4: I think. So that's the question, when will we all 656 00:33:06,760 --> 00:33:10,160 Speaker 4: become accustomed to this new price level that we don't 657 00:33:10,160 --> 00:33:10,880 Speaker 4: think about anymore? 658 00:33:10,960 --> 00:33:14,600 Speaker 2: Lisa Matteo with a strong newspaper segment. Here on a Monday, 659 00:33:14,600 --> 00:33:18,160 Speaker 2: So thank you. This is a Bloomberg Surveillance podcast, bringing 660 00:33:18,200 --> 00:33:22,640 Speaker 2: you the best in economics, finance, investment, and international relations. 661 00:33:22,880 --> 00:33:26,240 Speaker 2: You can also watch the show live on YouTube. Visit 662 00:33:26,280 --> 00:33:30,440 Speaker 2: the Bloomberg Podcast channel on YouTube. To see the show 663 00:33:30,640 --> 00:33:33,719 Speaker 2: weekday mornings from seven to ten am Eastern from our 664 00:33:33,760 --> 00:33:37,480 Speaker 2: global headquarters in New York City. Subscribe to the podcast 665 00:33:37,560 --> 00:33:41,600 Speaker 2: on Apple, Spotify, or anywhere else you listen, and always 666 00:33:41,760 --> 00:33:46,120 Speaker 2: on Bloomberg Radio, the Bloomberg Terminal, and the Bloomberg Business app.