Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Daily
Speaker 1: we bring you insight from the best in economics, finance, investment,
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
Speaker 1: Bloomberg dot Com, and of course, on the Bloomberg. We've
Speaker 1: been telling all of you this week on Bloomberg Radio
Speaker 1: and television the anticipation for the speech by Chairman Paul
Speaker 1: at Jackson Hall. We need to stop and explain Jackson Hall.
Speaker 1: It is a beautiful place with mountains that only Michael
Speaker 1: McKee has climbed across the lake with a moose in
Speaker 1: the background in the lodge. I've had the privilege of
Speaker 1: being there for some very important meetings during the financial crisis,
Speaker 1: but this year is absolutely unique, run by the Kansas
Speaker 1: City Fed and they're wonderful and interesting. Esther George Jackson
Speaker 1: Hall will be virtual meeting to begin our coverage are
Speaker 1: Michael McKee spoke with Esther George and they began on
Speaker 1: the framework at hand. Let's listen. I will just offer
Speaker 1: you from my perspective that this has been I think
Speaker 1: a useful process. It's been a process that really asked
Speaker 1: of ourselves to look at what we've learned over the
Speaker 1: past decade, to try to think about how the economy
Speaker 1: may have changed, and importantly, to think about how we
Speaker 1: communicate to the public. So the process in and of itself,
Speaker 1: I think has been a useful one, and I will
Speaker 1: leave to the Chairman to talk about what we've learned
Speaker 1: from that. Well, you've been considered an inflation hawk. Where
Speaker 1: are you on this idea of average inflation targeting? So
Speaker 1: my focus on inflation, Mike, as you known, is to
Speaker 1: be true to our price stability mandate. UH that are
Speaker 1: two percent target UM really has to represent what's happening
Speaker 1: in the real economy. And so as we think about
Speaker 1: ways to better communicate to the public, UM, I've never
Speaker 1: thought of two as a ceiling, but to really stay
Speaker 1: focused on what anchors inflation expectations in the economy. So
Speaker 1: from a communication standpoint, UM, I think we will be
Speaker 1: talking about the kinds of things that help us do
Speaker 1: a better job of achieving our objectives. Wall Streets betting,
Speaker 1: or at least many of people on Wall Street are
Speaker 1: betting that the FED will change its forward guidance in September.
Speaker 1: Some of your colleagues say, don't need to do that.
Speaker 1: Yet where are you so? I would agree when I
Speaker 1: look at what the Fellow Reserve has done since March
Speaker 1: UM in terms of interest rate policy, in terms of
Speaker 1: asset purchases and the credit facilities we've had, I think
Speaker 1: trying to gauge what else does the economy need is
Speaker 1: probably premature. I think we are beginning to see signs
Speaker 1: of a recovery. We're beginning to see where the economy
Speaker 1: may have shortfalls, where it may be doing okay, but
Speaker 1: that is going to take some time. So thinking about
Speaker 1: what those other things are I think has been a
Speaker 1: useful discussion. Whether it's time to activate those things is
Speaker 1: something we'll be debating leading and run up to your
Speaker 1: conference and GEIRMYN. Powell's speech, there's an awful lot of
Speaker 1: discussion about inflation going on on Wall Street and in
Speaker 1: the financial community. Um, do you think that the all
Speaker 1: the stimulus that's been pumped into the economy is perhaps
Speaker 1: an inflation danger down the road? Well, As a central banker,
Speaker 1: I think we always keep our eyes on inflation and
Speaker 1: what impetus may come to that. I think importantly what
Speaker 1: we see today are really generally deflationary kinds of forces.
Speaker 1: So until demand comes back, until we see the economy
Speaker 1: regain its footing, it's hard to see in the near term.
Speaker 1: But as you point out, there is a lot of
Speaker 1: stimulus that may be out there at the point that
Speaker 1: the economy regains its footing, and we'll have to look
Speaker 1: and see what impact we see through prices at that point,
Speaker 1: but today is probably not that day. Well, let's focus
Speaker 1: on your district. The district, how would you describe the
Speaker 1: economy there right now? So I think we see some
Speaker 1: encouraging signs. Uh. This region, of course, has experienced the
Speaker 1: virus in different time frames, in different levels of spread
Speaker 1: over the last five months, and what we see overall
Speaker 1: is there has been some improvement in the job market.
Speaker 1: We have seen some businesses that are beginning to come back,
Speaker 1: but of course that's coming back from a very low level.
Speaker 1: Particular to this region, of course, things like agriculture and
Speaker 1: energy are very prominent. We know the farm sector has
Speaker 1: been under some stress for some time with low farm incomes,
Speaker 1: and this episode puts further stress on that, causing the
Speaker 1: farm sector to have to rely more heavily, for example,
Speaker 1: on government supports. Energy too, with the rapid decline in
Speaker 1: oil prices um productivity and the producers had to lay
Speaker 1: down their rigs. Uh. So those two sectors in particular
Speaker 1: in our region already under some stress. It will take
Speaker 1: some time, I think for them to come back. I
Speaker 1: can ask you to expand on the labor market. What
Speaker 1: are employers telling you right now? Do they need more people?
Speaker 1: Can they find more people? Or are they just sitting
Speaker 1: back at this point and saying we have to wait
Speaker 1: and see where the economy goes. So we hear a
Speaker 1: variety of things that won't surprise you, but very important.
Speaker 1: As we've talked to our contacts in the region. Again,
Speaker 1: it is often a function of the sector Therein if
Speaker 1: they're in a part of the economy where they're dependent
Speaker 1: on air travel, dependent on entertainment or dining, Uh, they
Speaker 1: are struggling and having a harder time and bringing people
Speaker 1: back in those sectors looks to be uh some time away.
Speaker 1: We also hear that some are having a hard time
Speaker 1: bringing people back because they felt like they were competing
Speaker 1: with some of the jobless benefits. Whether that's true today
Speaker 1: UM is less clear. So there are a number of
Speaker 1: dynamics that are affecting that labor market and that of course,
Speaker 1: is why it will take us some time to see
Speaker 1: where does all this shake out in terms of how
Speaker 1: that labor market heals and how we begin to see
Speaker 1: growth resume in the economy, as you George of the
Speaker 1: Kansas City Federal right now, as we look to Jackson
Speaker 1: Hall right now, as we look to the American economy.
Speaker 1: Peter Hooper has provided extraordinary leadership at Deutsche Bank to
Speaker 1: do the harnessing and economics, which is to put a
Speaker 1: team together where you lean forward and it's anything from
Speaker 1: the words Seravellos in London and Ellen Ruskin of course
Speaker 1: over to Matt Lozetti and the US economic team as well. Peter,
Speaker 1: how is your team adjusted in the last number of days?
Speaker 1: Are you marking down Q three in Q four economic growth? Well, Tim,
Speaker 1: we have not yet marked down growth. The numbers have actually,
Speaker 1: until yesterday's UH confidence slip numbers have been coming in
Speaker 1: a bit stronger UH and despite the setbacks on on
Speaker 1: the virus side, we we were inclined to mark up
Speaker 1: our second half numbers just a bit in light of
Speaker 1: data coming in now had an interested in discussion on
Speaker 1: the fiscal side. Obviously, if we don't get a resolution,
Speaker 1: we're assuming one and a half trillion in in fiscal
Speaker 1: support coming along here soon. If that doesn't materialize, and
Speaker 1: it's it's a very different picture. But assuming we get
Speaker 1: the phisical support, the numbers so far say that are
Speaker 1: are five and a half percent growth number declined for
Speaker 1: the year, maybe a little bit too weak. Things looking
Speaker 1: just a little stronger, and and today's durable goods report
Speaker 1: sort of shaded slightly on that side as well. When
Speaker 1: you talk about the fiscal support, it comes ahead of
Speaker 1: that jobless claims number tomorrow that is expecting to be
Speaker 1: expected to be the twenty third reading UH one million
Speaker 1: or more out of this past twenty four weeks. Where
Speaker 1: are you seeing unemployment ending the year at this point,
Speaker 1: given the ongoing announcements of layoffs that we keep hearing
Speaker 1: from major companies, Lisa, we we think it'll slip, it'll
Speaker 1: get below ten percent, but not by much where some
Speaker 1: somewhere in the nine percent range. This this is going
Speaker 1: to be a slow process of getting unemployment down UH.
Speaker 1: Certainly UH GDP growth, the level of GDP not getting
Speaker 1: back to pre UH pre virus levels until early two.
Speaker 1: So it's it's gonna be it's gonna be a long
Speaker 1: slow slog on on improving this labor market substantially. I
Speaker 1: will say that the quote of the year possibly came
Speaker 1: from Vincent de Laard in a story a boy Bloomberg's
Speaker 1: Sarah ponzac He said, I would summarize as the bear
Speaker 1: market for humans, where companies that had the fewest humans
Speaker 1: relative to the market value to the best and you
Speaker 1: saw humans cut in droves. What does this say in
Speaker 1: terms of wage deflation? Well, you know, it depends on
Speaker 1: depends on a sector you're looking at. There are some
Speaker 1: shortages in some areas, you are seeing some increasement, but
Speaker 1: over overall, I think in the service sector, the sectors
Speaker 1: where you've seen a sharp cutback and demand is likely
Speaker 1: to persist for some time until we get the vaccine,
Speaker 1: until that's widely available, and we're not assuming we'll be
Speaker 1: there until probably in the middle of next year. Uh.
Speaker 1: With something that's widely available and effective. Um, it's going
Speaker 1: to be it's gonna be a negative for for for wage,
Speaker 1: wage and alation. Uh. Certainly households have obviously household income
Speaker 1: has gotten a huge boost. On the fiscal side, You've
Speaker 1: seen incomes rise substantially. UM that that points to the
Speaker 1: critical importance of getting something done here, uh and in
Speaker 1: the weeks ahead getting a resolution on on this, uh
Speaker 1: the support package. If we don't get it, we're looking
Speaker 1: at the possibility of a double dip procession Q four
Speaker 1: Q one and uh, further negatives on wage inflation. Certainly,
Speaker 1: this is an incredibly important statement by Dr Hooper. Folks,
Speaker 1: let me explain this again on the standard nb er
Speaker 1: discussion of negative GDP two quarters in a real Q
Speaker 1: four Q one. And I know it's squishy and Dr
Speaker 1: Hooper is not like getting out a calculator to figure
Speaker 1: that out. But the idea of going back into recession, Peter,
Speaker 1: is across a country of immense inequalities. How have our
Speaker 1: politicians not acted so far? Are we see action in Germany,
Speaker 1: action in the United Kingdom and we can't seem to
Speaker 1: get it done to avoid the Hooper recession? Yeah, well
Speaker 1: that's uh Hooper recession if if we get no further
Speaker 1: fiscal support, if the vaccine doesn't materialize until well into
Speaker 1: next year. I mean we're looking at some some clear
Speaker 1: negatives here. As I said, the data to now have
Speaker 1: been a little bit more positive. But Slippage, John slippag
Speaker 1: John consumer confidence UH, and the possibility of further setbacks
Speaker 1: on on COVID nineteen as we go into the winter months. UM.
Speaker 1: These these these all UH say we're we're looking at
Speaker 1: the potential for a more negative picture than certainly built
Speaker 1: into the market at this point. I will just say, Peter,
Speaker 1: one of the big confusing points for me is that
Speaker 1: as we talk about the potential for a double depercession
Speaker 1: and yet the work that we've seen from the Federal
Speaker 1: Reserve from easing of credit standards, we are seeing an
Speaker 1: actual tightening in lending standards by banks. And this comes
Speaker 1: from Goldman Sacks. They put out a report showing the
Speaker 1: fastest pace of tightening in in loans to businesses over
Speaker 1: the past couple of months, going back to the last recession.
Speaker 1: Does this concern you? Is this the banks seeing something
Speaker 1: that the rest of the market isn't well, Lisa, It's interesting, Yes,
Speaker 1: those lending standards have been tightening impressively, as as you
Speaker 1: would expect when economic situation de jurates significantly. At the
Speaker 1: same time, the default rate, which normally catches up to
Speaker 1: these kinds of tightening, has not really moved that much.
Speaker 1: I think. I think the aggressiveness of the fiscal response
Speaker 1: that we saw initially, the and the support through p PP,
Speaker 1: the and the feds UH main street lending facility waiting
Speaker 1: the wings. That hasn't been a factor yet, but we
Speaker 1: do expect it will become more important. All of these
Speaker 1: are leading to a little bit of a disconnect between
Speaker 1: this tightening of standards and the eventual fallout in terms
Speaker 1: of what's gonna happen. Has credit crunch, ships, businesses. Peter Hooper,
Speaker 1: thank you so much with Deutsche Bay greatly appreciate it
Speaker 1: and look forward to your thoughts after Jacksonhole as ahead
Speaker 1: of their economic research right now and arguably the interview
Speaker 1: of the day on what doesn't matter at the conventions.
Speaker 1: Libby Cantrill joins us now with PIMCO Head of Public Policy.
Speaker 1: Libby I spoke with Westernman of Arkansas yesterday. He says
Speaker 1: Hot Springs and Southern Arkansas, Western Arkansas are doing well.
Speaker 1: They're removed from all of his trauma. And then you
Speaker 1: go to Kenosha, Wisconsin. In the uproar of the last
Speaker 1: three days, including death last night, and in between, there's
Speaker 1: a huge part of the country desperate for stimulus. Can
Speaker 1: we get stimulus once it's conventions over. Yeah, well, good morning, Tom. Yeah.
Speaker 1: I mean we've we have, PIMCO have and I specifically
Speaker 1: have been talking about the additional stimulus was a question
Speaker 1: of of win, not if. Now that win has definitely
Speaker 1: taken longer, certainly than I thought it was going to. Um.
Speaker 1: The the sort of the perennial stumbling blocks around the
Speaker 1: level of benefit, and specifically as it relates to unemployment insurance,
Speaker 1: Local and state funding a big issue for Democrats. They
Speaker 1: got very little in the Cares Act. Uh, you know,
Speaker 1: hundred fifty billion dollars for states and cities. Democrats want
Speaker 1: more in this next round. And then you know, funding
Speaker 1: for usps UM. These are the obstacles really to getting
Speaker 1: a deal. I continue to think there is a framework
Speaker 1: for a deal. I think that the inflection point will
Speaker 1: likely be the end of September though, that is when
Speaker 1: Congress has to come together to pass a funding bill
Speaker 1: to avoid a government shutdown, So we may have to
Speaker 1: wait until then. Um. And again we thought it was
Speaker 1: gonna happen sooner, but some of these partisan issues just
Speaker 1: gotta have gotten in the way. Let me Lisa bram
Speaker 1: Wants mentioned brilliantly American Airlines nineteen thousand. They're taking a
Speaker 1: forty thousand down with early retirement, best buy out with
Speaker 1: whatever the number is. Our politicians in your world moved
Speaker 1: by actual firings. Yeah, I mean, look, I think that
Speaker 1: I think if you, if you talk to folks on
Speaker 1: the hill, there there is an acknowledgement that, certainly, um,
Speaker 1: the the economy needs another shot in the arm. I
Speaker 1: think these headlines certainly underscore that. Um So again, I
Speaker 1: think that the there's a broader acknowledgement that the political
Speaker 1: risk in particular going into the election without having additional stimulus,
Speaker 1: sort of speaking to your point, just the headline risk
Speaker 1: of going into the election companies announcing more firings is
Speaker 1: just too great for politicians. So again, I think they
Speaker 1: will come together to pass something, just taking taking longer
Speaker 1: than certainly what we expected. So we're not hearing much
Speaker 1: noise out of Washington right now other than the r
Speaker 1: n C and the d n C. And yet every
Speaker 1: week that goes on, economists say hurts the economy based
Speaker 1: on lack of extension of this program. When you talk
Speaker 1: to portfolio managers within PIMCO, how do you help them
Speaker 1: gauge the risk of a prolonged negotiation process. When can
Speaker 1: they expect some sort of deal to get done and
Speaker 1: what are the consequences of the delay. Yeah, I mean
Speaker 1: the earliest at this point, given that you know, folks
Speaker 1: are on the hill are out for their their usual
Speaker 1: August recess, really is going to be the middle of
Speaker 1: September at the very earliest. But that's when they come back.
Speaker 1: So that would be predicated on a deal being struck
Speaker 1: before then, but probably, as I said, late September again,
Speaker 1: that is when Congress has to come together to pass
Speaker 1: a funding bill to avoid a government shutdown, And it
Speaker 1: looks very likely that these two things are combined. From
Speaker 1: an economic perspective, we are seeing some states apply for
Speaker 1: that added benefit that the President authorized under his executive order.
Speaker 1: There's some issues with that, and of course that benefit
Speaker 1: is about half of what we saw under the Cares
Speaker 1: Actum and only lasts for sort of four to five weeks,
Speaker 1: so there is a risk obviously, And we're seeing some
Speaker 1: of the preliminary data consumer confidence is lagging. You're seeing
Speaker 1: some other data metrics that the economy is once again slowing.
Speaker 1: So again I think there's a broad acknowledgement of the
Speaker 1: Hill that something needs to be done. Um, just a
Speaker 1: question of how they get there. Is it an under
Speaker 1: priced risk that it's going to take a while? Yeah,
Speaker 1: I mean I think at this point the market does
Speaker 1: seem to be priced in in uh surprising in some
Speaker 1: additional stimulus, and so certainly that is a tail risk.
Speaker 1: If everything falls apart in October, we don't have a deal,
Speaker 1: folks will be back in their districts campaigning for the election,
Speaker 1: and then it does look very unlikely that you get
Speaker 1: something until after the election. So that certainly is you know,
Speaker 1: is a tail risk. It doesn't seem that markets are
Speaker 1: necessarily focused on that Libby in your world? Is there
Speaker 1: a middle ground? Is there a middle Democrat, a middle
Speaker 1: Republican and they have political power a political voice now
Speaker 1: and after November? Yeah, I mean, Tom, it's it's a
Speaker 1: great question. Um. There there are certain constituencies on Capitol Hill.
Speaker 1: There's the problem Solvers Caucus that is a bipartisan caucus
Speaker 1: that is um sort of aimed at that center demographic
Speaker 1: that you that you talk about, Um, and we'll see.
Speaker 1: I mean, this will obviously be predicated on the election outcome,
Speaker 1: but something I think it's sort of important especially for
Speaker 1: the markets. To keep in mind if there is a
Speaker 1: Democratic suite, So if Joe Biden is elected to president,
Speaker 1: Democrats control the Senate and win back control of the Senate,
Speaker 1: you have to remember that who are those Democrats that
Speaker 1: are making those majorities in both the House and the Senate.
Speaker 1: They're actually from either purple districts or even red districts
Speaker 1: or red states. Um, so there will be kind of
Speaker 1: a more moderating force within the Democratic Party who are
Speaker 1: probably going to be more inclined as reaching across the aisle.
Speaker 1: So I don't think, you know, centrism is totally dead,
Speaker 1: but obviously, over the last decade or so, our politics
Speaker 1: have become so polarized Jerry Mandarin I think is exacerbated.
Speaker 1: Lack of earmarks have exacerbated this. So they're certainly the demographic,
Speaker 1: but it is it is sort of a smaller one, unfortunately,
Speaker 1: Lett me cancel, thank you so much. With PIMCO, I
Speaker 1: think there's a lot of dat opportunities that are available
Speaker 1: to people who who are creative, who have a vision
Speaker 1: for the future. I think you know, in ten years
Speaker 1: will look back and there'll be ten world class companies
Speaker 1: that were created by people who we probably think are
Speaker 1: thinking are crazy right about now a gentleman from Pittsburgh Cuban,
Speaker 1: What an interesting life at University of Pittsburgh and on
Speaker 1: he went to huge prosperity, including invigorating many would say enthusiasm,
Speaker 1: literally how owners should be within sports with his Dallas
Speaker 1: Mavericks as well. Always an eventful interview, made more so
Speaker 1: by David Rubinstein appeared appear, uh, the gentleman from Carlisle Group,
Speaker 1: and of course we've been thrilled with his wonderful interviews. Well,
Speaker 1: how do you prepare for a Mark Cuban interviewed David
Speaker 1: Rubinstein book. I read that, Um, he's got lots of press,
Speaker 1: so he's read all the articles about him over the
Speaker 1: last two years or so. But he is a person
Speaker 1: that's very smart. I mean, if you don't know him,
Speaker 1: you might think he's just a bombastic person who spouts
Speaker 1: out things at basketball games. But he's a very, very
Speaker 1: smart person. He built a company way ahead of the
Speaker 1: technology revolution, sold at a big price, and he managed
Speaker 1: to uh make certain that the profits didn't go away
Speaker 1: when the tech bubble burst occurred. And he's made a
Speaker 1: lot of money over the years. But he's actually very thoughtful,
Speaker 1: and I think the interview was much more impressive than
Speaker 1: I thought it might have been. You have been good
Speaker 1: engaging politicians to be It is the discussion of Mark
Speaker 1: Cuban entering American politics, any inclination of that. Well, like
Speaker 1: a lot of people who make a lot of money
Speaker 1: and don't know what to do with themselves afterwards, because
Speaker 1: they got all the material things they want, they say,
Speaker 1: why not run for president? Nited states This idea has
Speaker 1: occurred to a couple of people obviously, and Mark Cuban
Speaker 1: actually was a friend of of Donald Trump and Donald
Speaker 1: Trump and when he was running for president initially talked
Speaker 1: to Mark because he thought Mark was supporting and then
Speaker 1: ultimately Mark decided not to Mark looked at running for
Speaker 1: president this time and concluded after doing some polling that
Speaker 1: he wouldn't get very far and didn't want to do it.
Speaker 1: His family also wasn't in favor of it. But he's
Speaker 1: still only sixty two years old and he could run again.
Speaker 1: So do you expect Mark Cuban? You know, I think
Speaker 1: there'll be a lot of people in four But I
Speaker 1: would say the idea of that a wealthy business person
Speaker 1: who has a lot of money to spend, could run
Speaker 1: for president United States and actually win. It's not as
Speaker 1: ridiculous as it once was. So I wouldn't rule anything out.
Speaker 1: But Mark is actually very creative and what he's done
Speaker 1: with the Mavericks is pretty impressive. He bought it for
Speaker 1: about two eight million dollars is probably worth two and
Speaker 1: a half to three billion now. Um, and he's would
Speaker 1: say the biggest problem he has in his life. I said, Mark,
Speaker 1: you know, everything seems to work perfectly for you. What
Speaker 1: the problems do you have in like? He said, Well,
Speaker 1: I have a teenage daughter, and managing a teenage daughter
Speaker 1: is more problem than anything else I've ever had. That
Speaker 1: would be That would be true as well, Um, you
Speaker 1: know the time for surveillance correction, folks. I did mention
Speaker 1: the Pittsburgh affiliation of Mr Cuban, but Lucas from Bloomington
Speaker 1: emails in and says, hey, stupid. He went to Indiana
Speaker 1: University at Lisa pick it up from there from he's
Speaker 1: from Pittsburgh. He grew up in Pittsburgh, but Indiana University
Speaker 1: had a business school which we could afford. He didn't
Speaker 1: have any money, and so he's from a Jewish family.
Speaker 1: His name was changed, like somewhere in Ellis Island. Uh
Speaker 1: and Uh. He went to Indiana, made a fair amount
Speaker 1: of money as a bartender and so forth, then moved
Speaker 1: to Dallas because the weather was good. He said that
Speaker 1: women were beautiful and he wanted to just have a
Speaker 1: nice lifestyle and there were some jobs there. But he
Speaker 1: started a number of businesses and he's done quite well
Speaker 1: over over many years at time. Almost everything he's touch
Speaker 1: has worked out well. Yeah, And when he was talking
Speaker 1: about the NBA, he was saying he would welcome a
Speaker 1: Jewish player, frankly, any player, uh, even from Mars if
Speaker 1: they could win. I am wondering, David, talking about all
Speaker 1: of that money that Mark Cuban has, what's he buying? Well, Interestingly,
Speaker 1: he's been a long term owner of Netflix shares and
Speaker 1: Amazon shares, and he would say a large point of
Speaker 1: his net worth is actually the money he's invested in
Speaker 1: those companies. He has been in the past a stock trader,
Speaker 1: and he knows a lot about tech stocks. But he says,
Speaker 1: right now, there aren't that many tech stocks to buy,
Speaker 1: so just load up on the really good ones and
Speaker 1: go for a right David, this is really important. I
Speaker 1: want to rip up the script here. I just think
Speaker 1: it's so so important, David. You mentioned something really important,
Speaker 1: and the guys are entrepreneurial, and maybe they're like Carlyle
Speaker 1: with private equity, but so much of the wealth construction
Speaker 1: of these people, including Mr Buffett's very successful Apple investment,
Speaker 1: is making conventional share investments. Do we underestimate that in
Speaker 1: the media, that they just make sound, conventional, traditional share investments. Well,
Speaker 1: the tradition has been generally that if you make private investments,
Speaker 1: you can add value to them and ultimately the return
Speaker 1: will be greater, and the return has been good in
Speaker 1: the private equity world. However, if you bought Amazon, Netflix, Apple,
Speaker 1: uh those kind of companies five years ago, three years ago,
Speaker 1: two years ago, six months ago, you would have done
Speaker 1: spectacularly well. If you take those companies out of the
Speaker 1: stock market indexes, the indexes aren't doing quite as well
Speaker 1: that those companies have just driven everything. And it's just
Speaker 1: my big mistake that I sold after the I p
Speaker 1: o my shares in UH in Amazon, well within that
Speaker 1: and that's okay, David, I was in triple loverage Dog Cash,
Speaker 1: so you know, let's how well I did, David, What
Speaker 1: are the opportunities right now with all this cash sitting around,
Speaker 1: it's almost two good the trillions of dollars of cash
Speaker 1: on the sidelines. Well, it depends on what you are
Speaker 1: interested in. If you're in public shares. I do think
Speaker 1: the public shares are pretty high right now, so I
Speaker 1: would be a little leery um. And I do think
Speaker 1: that after the election, whoever wins, you'll probably see some
Speaker 1: softening of the market, because I think the federal government
Speaker 1: will probably not be able to put that much money
Speaker 1: back into the economy compared to what it's already done
Speaker 1: in the private sector. In the private equity world, I
Speaker 1: do think there's some opportunities, but nothing is cheap today.
Speaker 1: It used to be you would buy a company in
Speaker 1: a private setting for eight or nine times cash flow.
Speaker 1: Today they're fourteen or fifteen times cash flow, and you
Speaker 1: just have to either accept it or you're not gonna
Speaker 1: be buying anything. David Rubinstein, thank you so much. Really
Speaker 1: looking forward to Erk Cuban, a peer to peer conversation
Speaker 1: with Mr Libenstein. Thanks for listening to The Bloomberg's Vannlain's podcast.
Speaker 1: Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or
Speaker 1: whichever podcast platform you prefer. I'm on Twitter at Tom
Speaker 1: Keene before the podcast. You can always catch us worldwide.
Speaker 1: I'm Bloomberg Radio