1 00:00:03,160 --> 00:00:07,080 Speaker 1: This is Bloomberg surveillance. I see economic data proving the 2 00:00:07,160 --> 00:00:10,079 Speaker 1: United States. I think that's becoming increasingly obvious, but I 3 00:00:10,160 --> 00:00:12,440 Speaker 1: still think we're gonna be growing into two somewhere. I 4 00:00:12,480 --> 00:00:18,480 Speaker 1: would recommend that investors, state defensively postured and cautious policymakers, 5 00:00:18,520 --> 00:00:22,439 Speaker 1: financial markets, and the economic and financial media looked to 6 00:00:22,480 --> 00:00:25,160 Speaker 1: the FED to solve all the problems, and they're not 7 00:00:25,239 --> 00:00:30,000 Speaker 1: able to Bloomberg Surveillance. Your link to the world of economics, finance, 8 00:00:30,080 --> 00:00:34,680 Speaker 1: and investment on Bloomberg Radio. Kid morning everyone, Bloomberg Surveillance. 9 00:00:34,720 --> 00:00:37,839 Speaker 1: Who welcome all of you worldwide Bloomberg Radio plus Bloomberg 10 00:00:37,880 --> 00:00:41,519 Speaker 1: dot Com and Serious XM Channel one nine, Team Bloomberg 11 00:00:41,560 --> 00:00:44,240 Speaker 1: nine six the Bay Area, Good morning, Good early morning, 12 00:00:44,280 --> 00:00:48,279 Speaker 1: San Francisco, of course, Bloomberg twelve, Boston, Bloomberg elevens Rio, 13 00:00:48,479 --> 00:00:52,160 Speaker 1: and absolutely gorgeous New York. And I guess a hot, 14 00:00:52,200 --> 00:00:55,680 Speaker 1: sultry good morning. I haven't said that it's like summer Washington. 15 00:00:55,800 --> 00:00:58,639 Speaker 1: I'm not going with hot and sultry. Yet it's at 16 00:00:58,720 --> 00:01:01,400 Speaker 1: least it's warm. It's on the edge of warm. Bloomberg 17 00:01:01,440 --> 00:01:05,600 Speaker 1: ninety nine one FM Washington and Baltimore. Good morning, as 18 00:01:05,600 --> 00:01:08,200 Speaker 1: well Bloomberg Surveillance this morning. But you by Cone Residec 19 00:01:08,240 --> 00:01:13,160 Speaker 1: Accounting Tax Advisory. To minimize risk, to capture value in 20 00:01:13,240 --> 00:01:17,839 Speaker 1: private equity, you need Cone Residuc were forward thinking, creates results. 21 00:01:18,680 --> 00:01:21,040 Speaker 1: Find out how at Cone residect dot com, c O 22 00:01:21,200 --> 00:01:24,040 Speaker 1: h n R e z n I c K Cone 23 00:01:24,080 --> 00:01:27,640 Speaker 1: residuc dot com. And we thank them for considered support 24 00:01:27,760 --> 00:01:31,640 Speaker 1: through the year. They have been more than kind. So 25 00:01:31,959 --> 00:01:36,960 Speaker 1: is uh the bid two Commodities. Bruno Stanza allis with 26 00:01:37,000 --> 00:01:41,080 Speaker 1: your Aisier group Brember's Eurisier Group. UM. He has worked 27 00:01:41,120 --> 00:01:46,360 Speaker 1: with various companies, including more Capital Management, and he just 28 00:01:46,480 --> 00:01:50,640 Speaker 1: simply looks at the energy business and the Nash natural 29 00:01:50,720 --> 00:01:54,520 Speaker 1: resources business. Bruno, wonderful to have you here. Is it 30 00:01:54,680 --> 00:01:57,040 Speaker 1: for real? Goldman says it's not there. It's all over 31 00:01:57,080 --> 00:02:00,840 Speaker 1: the media to business media. Uh. Jeff Curry and the 32 00:02:00,880 --> 00:02:06,600 Speaker 1: team at Goldman saying maybe not. You push against that idea. Yeah, 33 00:02:06,800 --> 00:02:08,520 Speaker 1: And you know what you have to start by asking 34 00:02:08,560 --> 00:02:11,639 Speaker 1: yourself define what's real? Right? You know that that's the 35 00:02:11,680 --> 00:02:16,880 Speaker 1: big question. What are your expectations for prices? UM? Highly 36 00:02:17,000 --> 00:02:19,360 Speaker 1: respect that team over there. I've been I've been reading 37 00:02:19,360 --> 00:02:22,960 Speaker 1: their stuff for for almost twenty years now. Um I am. 38 00:02:23,000 --> 00:02:26,480 Speaker 1: I am theorizing that oil has seen the lows. You know, 39 00:02:26,480 --> 00:02:28,760 Speaker 1: a lot of people were calling for twenty dollar price 40 00:02:28,840 --> 00:02:32,080 Speaker 1: deck because that was what was needed to get US 41 00:02:32,120 --> 00:02:35,799 Speaker 1: production offline. Um, I don't think so. I don't think 42 00:02:35,800 --> 00:02:38,120 Speaker 1: we need to go that low to see the supply 43 00:02:38,240 --> 00:02:41,560 Speaker 1: response that's needed to rebalance the market. So we're looking 44 00:02:41,639 --> 00:02:45,280 Speaker 1: for a slow, steady, gradual upward price movement from here 45 00:02:45,320 --> 00:02:49,240 Speaker 1: to around forty a barrel from the balance of and 46 00:02:49,280 --> 00:02:52,040 Speaker 1: then slowly gravitating towards an average price of fifty dollars 47 00:02:52,080 --> 00:02:55,240 Speaker 1: a barrel in ten And at that point you're gonna 48 00:02:55,280 --> 00:02:58,440 Speaker 1: start to see the US producers come back into the 49 00:02:58,480 --> 00:03:03,000 Speaker 1: market with new supply supply that will take care of 50 00:03:03,040 --> 00:03:07,240 Speaker 1: the decline rates and incrementally add So I think the 51 00:03:07,280 --> 00:03:09,680 Speaker 1: worst is behind us. I think you're seeing a knee 52 00:03:09,720 --> 00:03:12,640 Speaker 1: jerk reaction to the market's expectation. The worst is behind 53 00:03:12,720 --> 00:03:16,720 Speaker 1: us will slowly gravitate into a range, volatility will dry up, 54 00:03:16,880 --> 00:03:19,280 Speaker 1: and we'll start to slowly ratchet up from there. But 55 00:03:19,320 --> 00:03:20,919 Speaker 1: I don't think you're going to see a twenty dollar 56 00:03:21,000 --> 00:03:25,280 Speaker 1: price deck if we get to that level. Um, you're 57 00:03:25,280 --> 00:03:28,880 Speaker 1: talking ballants We're not going to have people who need 58 00:03:29,000 --> 00:03:32,799 Speaker 1: cash pumping more oil just because the price is higher 59 00:03:32,840 --> 00:03:35,840 Speaker 1: and send us back into trouble. Yes, and that's a 60 00:03:35,920 --> 00:03:38,280 Speaker 1: great point, I think at the end of the end 61 00:03:38,320 --> 00:03:40,240 Speaker 1: of the day. And this is where where OPEC can't 62 00:03:40,280 --> 00:03:45,360 Speaker 1: get too cute. Right, Um, if you have a price 63 00:03:45,440 --> 00:03:48,800 Speaker 1: deck that balances the market, you're incrementally drawing down on 64 00:03:48,880 --> 00:03:51,960 Speaker 1: stocks anywhere between sort of forty five to fifty dollars. 65 00:03:51,960 --> 00:03:56,000 Speaker 1: The real risk is OPAC loses control again because now 66 00:03:56,120 --> 00:03:59,560 Speaker 1: you have US based oil and gas producers that have 67 00:03:59,680 --> 00:04:03,440 Speaker 1: all reconfigured their business models to be profitable at fifty dollars. 68 00:04:03,640 --> 00:04:06,880 Speaker 1: So you'll start to see increases in global production at 69 00:04:06,920 --> 00:04:09,760 Speaker 1: that price level. And look, this is what this phenomenon 70 00:04:09,840 --> 00:04:12,400 Speaker 1: is all about, right, This is a supply driven price 71 00:04:12,520 --> 00:04:17,520 Speaker 1: route based upon something secular. Something changed. We can access 72 00:04:17,640 --> 00:04:22,960 Speaker 1: more oil faster, cheaper, and more efficiently. That's not going away. 73 00:04:23,360 --> 00:04:26,880 Speaker 1: Why did we put a floor in here? Yes, to 74 00:04:27,000 --> 00:04:30,520 Speaker 1: Saudis and the Russians agreed to freeze production. Nobody believed 75 00:04:30,520 --> 00:04:33,560 Speaker 1: that they're actually doing it. They didn't set any targets 76 00:04:33,640 --> 00:04:38,720 Speaker 1: or any way to prove what's happening. So why did 77 00:04:38,760 --> 00:04:42,280 Speaker 1: this work. It worked because I think that you know, 78 00:04:42,480 --> 00:04:47,080 Speaker 1: low prices cure low prices generally, particularly in cyclical commodities. 79 00:04:47,279 --> 00:04:50,480 Speaker 1: Um At the end of the day, there is a 80 00:04:50,600 --> 00:04:54,160 Speaker 1: certain amount or certain number of US based producers that 81 00:04:54,240 --> 00:04:57,960 Speaker 1: cannot operate under sort of you know, sub thirty five 82 00:04:58,000 --> 00:05:02,760 Speaker 1: dollar price environment. So the market was always expecting year 83 00:05:02,839 --> 00:05:06,960 Speaker 1: on your declines in production. The rate of those, the 84 00:05:07,480 --> 00:05:10,120 Speaker 1: steepness of that decline curve was not as high as 85 00:05:10,120 --> 00:05:12,800 Speaker 1: people thought. We don't have as much production coming off 86 00:05:12,839 --> 00:05:16,120 Speaker 1: as anticipated, but it's coming off. Let's not forget. You know, 87 00:05:16,240 --> 00:05:20,159 Speaker 1: year on year US based oil production is off probably 88 00:05:20,160 --> 00:05:23,080 Speaker 1: around three barrels a day at this point, and it 89 00:05:23,120 --> 00:05:27,040 Speaker 1: will continue to come off unless prices go higher. So 90 00:05:27,160 --> 00:05:30,400 Speaker 1: we'll slowly balance the market as production comes off in 91 00:05:30,440 --> 00:05:33,520 Speaker 1: the States. As we do that, prices will go higher 92 00:05:33,640 --> 00:05:37,640 Speaker 1: only to be met by new production increases. And that's 93 00:05:37,640 --> 00:05:39,200 Speaker 1: what this is all about. Right at the end of 94 00:05:39,200 --> 00:05:42,440 Speaker 1: the day, we're no longer in this supercycle. We are 95 00:05:42,480 --> 00:05:45,720 Speaker 1: in a process where crude oil will reset into ranges, 96 00:05:46,480 --> 00:05:48,520 Speaker 1: and that's what we're looking. I'll go that you don't 97 00:05:48,520 --> 00:05:50,920 Speaker 1: have the maybe you don't have the China catalyst to 98 00:05:50,920 --> 00:05:53,920 Speaker 1: get us out the stupid pricing again, But did you 99 00:05:53,960 --> 00:05:56,640 Speaker 1: see the catharsist to clear markets, I mean the heart 100 00:05:56,680 --> 00:06:00,000 Speaker 1: of your theory versus the good work of Jeff Curry 101 00:06:00,000 --> 00:06:02,839 Speaker 1: and others who are more suspect about a bid being 102 00:06:03,279 --> 00:06:06,839 Speaker 1: set in the heart of the matter. Has you've got 103 00:06:06,839 --> 00:06:09,760 Speaker 1: to clear that supplied block? Did we do that? Or 104 00:06:09,880 --> 00:06:12,440 Speaker 1: is Cushing still up to its eyeballs and oil? Well, 105 00:06:12,720 --> 00:06:15,159 Speaker 1: we are in the process of clearing that supply gut. 106 00:06:15,279 --> 00:06:18,719 Speaker 1: And given the expectations idea, we're you know, we're betting 107 00:06:18,720 --> 00:06:21,640 Speaker 1: on where we are June, where we are September, and 108 00:06:21,800 --> 00:06:25,159 Speaker 1: that what gives you the confidence to believe that Cushing 109 00:06:25,279 --> 00:06:29,000 Speaker 1: is cleared. Well, it's not necessarily just about Cushing, and 110 00:06:29,120 --> 00:06:31,080 Speaker 1: you know, I mean Cushing is definitely it's the hub 111 00:06:31,120 --> 00:06:33,600 Speaker 1: that prices W T I, which is the benchmark, and 112 00:06:34,080 --> 00:06:37,279 Speaker 1: we all know that. But firstly, you know, define defined 113 00:06:37,360 --> 00:06:40,760 Speaker 1: Cushing being full in essence. That's that's very hard to 114 00:06:40,760 --> 00:06:43,040 Speaker 1: do because throughout my career doing this, you know, we've 115 00:06:43,040 --> 00:06:46,200 Speaker 1: had multiple instances where Cushing was quote unquote full and 116 00:06:46,240 --> 00:06:49,000 Speaker 1: it never quite gets full. So the reality is that's 117 00:06:49,040 --> 00:06:51,600 Speaker 1: a very difficult thing to determine. And at the end 118 00:06:51,640 --> 00:06:53,200 Speaker 1: of the day. You have to remember when when when 119 00:06:53,200 --> 00:06:57,120 Speaker 1: a certain UH storage basin gets full, you have other 120 00:06:57,240 --> 00:07:00,320 Speaker 1: areas that you start to fill out. So you know, 121 00:07:00,640 --> 00:07:02,360 Speaker 1: I think the basis has to be looking at year 122 00:07:02,440 --> 00:07:05,680 Speaker 1: on your production declines. We are in the process of 123 00:07:05,720 --> 00:07:09,000 Speaker 1: clearing up that glut via production declines. And what I 124 00:07:09,000 --> 00:07:12,400 Speaker 1: mean by that is us producers are not given a 125 00:07:12,440 --> 00:07:17,560 Speaker 1: price signal to develop new reserves profitably in order to 126 00:07:18,120 --> 00:07:22,360 Speaker 1: negate production declines. So we needed to take price down 127 00:07:22,360 --> 00:07:24,480 Speaker 1: to that level, which I think we have because you're 128 00:07:24,480 --> 00:07:28,760 Speaker 1: seeing you're on your price production declines, so we're slowly 129 00:07:28,800 --> 00:07:32,240 Speaker 1: cleaning the market up. I think as that happens, you'll 130 00:07:32,280 --> 00:07:34,800 Speaker 1: see it in the numbers weekly and then again monthly. 131 00:07:35,480 --> 00:07:38,160 Speaker 1: The market is always forward looking, and that's what it's 132 00:07:38,200 --> 00:07:40,920 Speaker 1: pricing in. Now we reached a price where we're seeing 133 00:07:40,920 --> 00:07:43,600 Speaker 1: a significant amount of production to clients. That will continue, 134 00:07:44,040 --> 00:07:46,800 Speaker 1: stocks will begin to draw down, will raise to a 135 00:07:46,880 --> 00:07:51,040 Speaker 1: price level where producers can develop raw acreage at a 136 00:07:51,120 --> 00:07:54,960 Speaker 1: higher price. That price is probably around fifty bucks. Every 137 00:07:54,960 --> 00:07:57,880 Speaker 1: e MP company in their quarterly UH statements has been 138 00:07:57,880 --> 00:08:01,720 Speaker 1: saying we have learned will learn how to operate profitably 139 00:08:01,720 --> 00:08:04,960 Speaker 1: a fifty dollars that's the signal right from the horse's mouth. Well, 140 00:08:05,000 --> 00:08:06,520 Speaker 1: you got a lot of e MP companies who may 141 00:08:06,560 --> 00:08:09,040 Speaker 1: not be around in a month or two. What what's 142 00:08:09,080 --> 00:08:11,120 Speaker 1: that looking like now as we get into the bank 143 00:08:11,200 --> 00:08:14,640 Speaker 1: reset season. Yeah, no, that's the million dollar question. And 144 00:08:14,960 --> 00:08:17,560 Speaker 1: I think the Saundies in particular, we're we're as gloomy 145 00:08:17,560 --> 00:08:21,320 Speaker 1: as it sounds. We're looking for more bankruptcies. The reality is, 146 00:08:21,320 --> 00:08:23,320 Speaker 1: when you start to really look at the detail behind 147 00:08:23,360 --> 00:08:26,080 Speaker 1: the bankruptcies that have been announced in the last eighteen 148 00:08:26,080 --> 00:08:28,840 Speaker 1: months to two years, there have been in North America 149 00:08:29,120 --> 00:08:34,079 Speaker 1: roughly forty to forty three bankruptcies. The issue is the 150 00:08:34,720 --> 00:08:40,560 Speaker 1: companies that have been declaring bankruptcies are not volumetrically significant 151 00:08:40,840 --> 00:08:46,600 Speaker 1: enough to cause this sort of cataclysmic drop in US production. Clearly, 152 00:08:46,640 --> 00:08:49,480 Speaker 1: we haven't seen it. They tend to be the names, 153 00:08:49,520 --> 00:08:52,120 Speaker 1: quite frankly, you would have expected to declare bankruptcy, the 154 00:08:52,240 --> 00:08:55,960 Speaker 1: small to medium sized names that were highly leveled out 155 00:08:55,960 --> 00:08:58,839 Speaker 1: of the gate, and they're just not big enough. The 156 00:08:59,280 --> 00:09:02,439 Speaker 1: real and this is one of the reasons why production 157 00:09:02,520 --> 00:09:04,920 Speaker 1: has been so resilience in this in the States is 158 00:09:05,480 --> 00:09:10,280 Speaker 1: the larger, volumetrically significant producers have had no trouble accessing 159 00:09:10,320 --> 00:09:14,079 Speaker 1: the cheapest form of capital, and that's accessing the equity markets. 160 00:09:14,800 --> 00:09:16,760 Speaker 1: You know, take a look at the secondaries that we've 161 00:09:16,800 --> 00:09:20,720 Speaker 1: seen last year and into this year, big numbers generally 162 00:09:20,800 --> 00:09:24,560 Speaker 1: successful secondary offerings. Devon Energy is a notable one, most 163 00:09:24,600 --> 00:09:27,439 Speaker 1: recently raised one point three billion dollars. And the interesting 164 00:09:27,480 --> 00:09:30,199 Speaker 1: thing is when you look at what they all say 165 00:09:30,240 --> 00:09:33,160 Speaker 1: they're gonna do with that capital. Well, primarily they're gonna 166 00:09:33,160 --> 00:09:35,480 Speaker 1: pay down debt that preserve their credit rating, because again 167 00:09:35,520 --> 00:09:37,360 Speaker 1: a lot of this is orchestrated behind the scenes better 168 00:09:37,360 --> 00:09:40,120 Speaker 1: credit rating agencies. You want to reintain your credit rating, 169 00:09:40,160 --> 00:09:42,480 Speaker 1: you want to maintain your current cross getting paid down 170 00:09:42,520 --> 00:09:44,440 Speaker 1: your debt and start to get disciplined. So they're all 171 00:09:44,480 --> 00:09:47,960 Speaker 1: paying down debt, but almost all of them are saying 172 00:09:48,640 --> 00:09:51,280 Speaker 1: that they're also going to use a part of that 173 00:09:51,400 --> 00:09:54,600 Speaker 1: revenue to develop reserves, because at the end of the day, 174 00:09:54,640 --> 00:09:58,000 Speaker 1: they're in the business of producing. Yeah, that's the d NA. Well, 175 00:09:58,040 --> 00:10:01,000 Speaker 1: let's come back up that one. Talk about net gas, 176 00:10:01,040 --> 00:10:03,320 Speaker 1: which has been a life of its own as well. 177 00:10:03,840 --> 00:10:07,920 Speaker 1: Mike and Urgent message. Leslie Patton reporting for Bloomberg News. 178 00:10:07,920 --> 00:10:12,160 Speaker 1: Shake Check drops. Shake Check fell in early trading after 179 00:10:12,240 --> 00:10:14,840 Speaker 1: Tom Keene did not buy the smoke Scheck double Barger. 180 00:10:15,600 --> 00:10:20,920 Speaker 1: It's our fault. Calories nine about the fourth cents. Okay, 181 00:10:20,920 --> 00:10:22,520 Speaker 1: we could do something about that today. I think we 182 00:10:22,559 --> 00:10:26,000 Speaker 1: should do that road trip today Madison Square Park. Help 183 00:10:26,480 --> 00:10:29,520 Speaker 1: help them out. They're down eight percent. Seriously, they they've 184 00:10:29,559 --> 00:10:32,280 Speaker 1: they've lightened up a little bit this morning as they 185 00:10:32,280 --> 00:10:35,040 Speaker 1: go in search of growth. That's your shake Check report 186 00:10:35,800 --> 00:10:38,000 Speaker 1: for those of you worldwide. Shake Shack as the official 187 00:10:38,520 --> 00:10:41,760 Speaker 1: lunch counter for Bloomberg surveillance, where we look at the 188 00:10:41,800 --> 00:10:47,559 Speaker 1: Schumberger seven ninety five calories as well the Schumberger futures 189 00:10:47,559 --> 00:10:53,440 Speaker 1: of negative eight. I'm not a Chicken with Michael Barr 190 00:10:53,440 --> 00:10:56,480 Speaker 1: and get the latest world and national headlines. Michael, Mike, Tom, 191 00:10:56,480 --> 00:10:59,840 Speaker 1: thank you very much. Poles are opening today for presidential primary. 192 00:11:00,080 --> 00:11:04,000 Speaker 1: Democrats vote today in Michigan and Mississippi. Republicans vote today 193 00:11:04,040 --> 00:11:08,680 Speaker 1: in Michigan, Mississippi, Idaho, and Hawaii, and appeal hearing will 194 00:11:08,679 --> 00:11:11,920 Speaker 1: take place today from the Utah branch of Planned Parenthood. 195 00:11:12,320 --> 00:11:14,719 Speaker 1: They want to reverse the judge's decision that allowed the 196 00:11:14,760 --> 00:11:18,000 Speaker 1: state's governor to cut off funding to the organization. South 197 00:11:18,080 --> 00:11:21,880 Speaker 1: Korea says it will sanction forty individuals and thirty organizations abroad, 198 00:11:22,400 --> 00:11:25,200 Speaker 1: mostly in North Korea, as part of its punitive measures 199 00:11:25,240 --> 00:11:28,560 Speaker 1: on the North for its recent nuclear test and rocket launch. 200 00:11:29,080 --> 00:11:31,880 Speaker 1: Today's announcement comes a day after North Korea warned of 201 00:11:32,080 --> 00:11:35,680 Speaker 1: preemptive nuclear strikes in response to the start of Seoul 202 00:11:35,880 --> 00:11:39,839 Speaker 1: Washington military drills. The North views those drills as an 203 00:11:39,880 --> 00:11:43,720 Speaker 1: invasion rehearsal. Global News twenty four hours a day, powered 204 00:11:43,720 --> 00:11:46,959 Speaker 1: by our two hundred journalists more than a hundred fifty 205 00:11:46,960 --> 00:11:49,240 Speaker 1: news bureaus from around the world. I'm michaela bar Light, 206 00:11:49,280 --> 00:11:52,040 Speaker 1: Tim and Michael, thanks so much. Coming up, Bruno Stanza, 207 00:11:52,080 --> 00:11:54,200 Speaker 1: We're gonna talk about net gass. We haven't done enough 208 00:11:54,240 --> 00:11:58,240 Speaker 1: on that. It is truly imploding. NetCast will do that. 209 00:11:58,320 --> 00:12:06,960 Speaker 1: Next Bloomberg Sing the news update brought to you by 210 00:12:06,960 --> 00:12:09,680 Speaker 1: Mercedes Benz. This month, your Mercedes Ben's Tri state dealers 211 00:12:09,720 --> 00:12:12,480 Speaker 1: welcome Spring with limited time offers on select models like 212 00:12:12,480 --> 00:12:13,920 Speaker 1: the sport E c l A and the Versatile G 213 00:12:14,120 --> 00:12:16,360 Speaker 1: l A, each engineered at price to move. Visit in 214 00:12:16,480 --> 00:12:24,320 Speaker 1: the USA dot Com Today, Global Business News twenty four 215 00:12:24,320 --> 00:12:27,439 Speaker 1: hours a day, if Bloomberg dot Com, the Radio Plus 216 00:12:27,480 --> 00:12:30,640 Speaker 1: mobile app, and on your radio. This is a Bloomberg 217 00:12:30,679 --> 00:12:34,440 Speaker 1: business flash and I'm Karon Moscow. US stock index future 218 00:12:34,559 --> 00:12:36,480 Speaker 1: is a lower this morning. Let's go to the first 219 00:12:36,480 --> 00:12:39,160 Speaker 1: Word breaking news desk for today's morning call, and here's 220 00:12:39,200 --> 00:12:42,880 Speaker 1: Bill Maloney. Good morning, Bill, Good morning Karen. US futures 221 00:12:42,920 --> 00:12:45,160 Speaker 1: have paired some of their losses since the last time 222 00:12:45,200 --> 00:12:47,959 Speaker 1: we spoke. Death futures now lower by six and nine points. 223 00:12:47,960 --> 00:12:51,959 Speaker 1: SYSP futures top ten and as a futures fall the 224 00:12:52,040 --> 00:12:55,000 Speaker 1: US ten yield at one point eight five percent, and 225 00:12:55,120 --> 00:12:58,800 Speaker 1: crew futures turn higher, now at point five percent. Main 226 00:12:58,880 --> 00:13:01,720 Speaker 1: unpay markets have pair it or reverse their losses. Italy 227 00:13:01,840 --> 00:13:05,080 Speaker 1: gains point three per cent after the bellas night shake 228 00:13:05,120 --> 00:13:07,720 Speaker 1: Shack expects the same source sales to rise two and 229 00:13:07,720 --> 00:13:10,959 Speaker 1: a half to three percent. In ten shares down eight 230 00:13:10,960 --> 00:13:14,280 Speaker 1: percent pre market, and Urban outfit Or ZPs topped highest 231 00:13:14,400 --> 00:13:18,440 Speaker 1: estimates shares up nine percent pre market. Regarding airings this morning, 232 00:13:18,480 --> 00:13:23,280 Speaker 1: Dick sportings few missed estimates. In other news, Goldman Sachs 233 00:13:23,320 --> 00:13:28,280 Speaker 1: warn the Commodis rally is premature, and Qualcom boosted it's dividend. Finally, 234 00:13:28,320 --> 00:13:31,000 Speaker 1: some of your key wall shoot upgrades and downgrades. BMO 235 00:13:31,080 --> 00:13:33,839 Speaker 1: cut to neutral at Trade Sweez Blossom Bear cut to 236 00:13:33,920 --> 00:13:37,199 Speaker 1: underperform at c ls A, aut Nation, cut to sell 237 00:13:37,320 --> 00:13:39,959 Speaker 1: over at Goldman Sachs, Fall Spark cut the sector way 238 00:13:40,000 --> 00:13:42,800 Speaker 1: to Key Bank, Panara Bread rays to overweight at Morgan 239 00:13:42,880 --> 00:13:45,400 Speaker 1: Stanley with a price target of two fifty and acting 240 00:13:45,400 --> 00:13:48,439 Speaker 1: when cut to neutral over at Sunshrust. Live from the 241 00:13:48,440 --> 00:13:51,720 Speaker 1: First Breaking News desk on Bill Maloney Karen thanks pail 242 00:13:51,800 --> 00:13:54,400 Speaker 1: to hear live breaking news over your Bloomberg type squawk 243 00:13:54,400 --> 00:13:56,559 Speaker 1: and go on your terminal. Let's ask you a w 244 00:13:56,840 --> 00:13:59,240 Speaker 1: kn't go And that's a Bloomberg business flash. Tom and 245 00:13:59,240 --> 00:14:02,480 Speaker 1: Mike Karn, thanks so much. Bloomberg Surveillance this morning brought 246 00:14:02,559 --> 00:14:06,839 Speaker 1: you by Investco. Have you considered all of your investment alternatives? 247 00:14:07,280 --> 00:14:11,840 Speaker 1: Non traditional asset classes and strategies may help you achieve 248 00:14:11,880 --> 00:14:16,679 Speaker 1: your goals? Find out more and investco dot com slash alternatives. 249 00:14:16,800 --> 00:14:20,040 Speaker 1: Michael were Stats. Yeah, it's here with us from your 250 00:14:20,080 --> 00:14:24,240 Speaker 1: Asia group. He's the Global Oil Practice Director. And I 251 00:14:24,240 --> 00:14:25,640 Speaker 1: know you want to get too natural, guests, but I 252 00:14:25,680 --> 00:14:27,480 Speaker 1: just have to ask a quick question because we just 253 00:14:27,520 --> 00:14:31,400 Speaker 1: had a listener right in and uh say, there was 254 00:14:31,400 --> 00:14:35,280 Speaker 1: sort of a disconnect to them in what you had 255 00:14:35,320 --> 00:14:39,240 Speaker 1: said about the oil companies refinancing and going to the 256 00:14:39,280 --> 00:14:43,720 Speaker 1: capital markets. Uh, they're hearing nothing but oil companies in 257 00:14:44,000 --> 00:14:47,520 Speaker 1: high yield, and high yield is imploading because energy companies 258 00:14:47,560 --> 00:14:50,920 Speaker 1: are in trouble, So, um, how's that working? Yeah? No, no, 259 00:14:50,960 --> 00:14:52,840 Speaker 1: And and I think that that that's part of what 260 00:14:52,920 --> 00:14:56,560 Speaker 1: I was alluding to before. High yield. Absolutely that that's 261 00:14:56,560 --> 00:14:59,440 Speaker 1: where most of these bankruptcies are residing. I mean clearly 262 00:14:59,480 --> 00:15:02,000 Speaker 1: that the company needs that were highly leveraged at you know, 263 00:15:02,080 --> 00:15:04,440 Speaker 1: higher costs of capital are gonna have a harder time 264 00:15:04,480 --> 00:15:07,680 Speaker 1: when a lower price environment. The real challenges if we're 265 00:15:07,680 --> 00:15:12,600 Speaker 1: talking about rebalancing the market is how volumetrically significant are 266 00:15:12,640 --> 00:15:15,960 Speaker 1: the high yield names that are having trouble right now. 267 00:15:16,200 --> 00:15:17,680 Speaker 1: So there are a lot of people who are able 268 00:15:17,720 --> 00:15:20,920 Speaker 1: to refinance in investment grade, that's correct. So if you 269 00:15:20,960 --> 00:15:24,360 Speaker 1: look at where the volume, the percentage of volume productions 270 00:15:24,400 --> 00:15:28,000 Speaker 1: coming from, you're talking about names like EO G, Pioneer, Devon. 271 00:15:28,400 --> 00:15:31,440 Speaker 1: These are large e m p s that if you 272 00:15:31,560 --> 00:15:33,680 Speaker 1: were to sort of aggregate all of the sort of 273 00:15:33,720 --> 00:15:37,640 Speaker 1: mid to larger size publicly traded e MPs, they're not 274 00:15:37,720 --> 00:15:41,080 Speaker 1: having a hard time raising money. So you know, if 275 00:15:41,120 --> 00:15:44,320 Speaker 1: you're looking for bankruptcies to clean up the supply situation, 276 00:15:44,800 --> 00:15:47,360 Speaker 1: you're not getting it in the names that control a 277 00:15:47,440 --> 00:15:52,960 Speaker 1: significant or impactful amount of the production. Tell me about 278 00:15:53,040 --> 00:15:56,600 Speaker 1: net gas. I missed it. Mike McKee nailed it. I 279 00:15:56,640 --> 00:15:58,760 Speaker 1: said one day, look at the charter net gas. I 280 00:15:58,880 --> 00:16:02,360 Speaker 1: was thunderstruck. Oil is going one way and that guess 281 00:16:02,400 --> 00:16:06,200 Speaker 1: is going the other way, and inflation adjusted. Basically, we've 282 00:16:06,240 --> 00:16:08,640 Speaker 1: never seen this in the modern age. Yeah, yeah, I 283 00:16:08,680 --> 00:16:12,000 Speaker 1: mean it can't catch a break. I really can't. Um. 284 00:16:12,280 --> 00:16:14,760 Speaker 1: And here's the funny thing about natural gas. We had 285 00:16:14,800 --> 00:16:19,560 Speaker 1: a record number of coal plant retirements in the power sector. 286 00:16:19,640 --> 00:16:22,000 Speaker 1: In everything worked the way it was supposed to. It 287 00:16:22,040 --> 00:16:23,600 Speaker 1: was worked the way it was supposed to. You know 288 00:16:23,840 --> 00:16:26,120 Speaker 1: at the end of the day that that power generation 289 00:16:26,200 --> 00:16:29,280 Speaker 1: has to go somewhere now, and it's it's overwhelmingly going 290 00:16:29,320 --> 00:16:32,560 Speaker 1: to natural gas. So you had this kick in demand 291 00:16:32,640 --> 00:16:35,520 Speaker 1: in the power sector. Um. I can only imagine where 292 00:16:35,560 --> 00:16:37,080 Speaker 1: it would have gone if it were not for that, 293 00:16:37,120 --> 00:16:42,000 Speaker 1: because you see a precipitous drop in coal plant retirements. 294 00:16:42,040 --> 00:16:45,000 Speaker 1: So look, the reality is a lot of this is 295 00:16:45,040 --> 00:16:46,960 Speaker 1: weather based. I mean, look at the winter, right, we 296 00:16:47,200 --> 00:16:50,280 Speaker 1: didn't have much of a winter that you really ascribe 297 00:16:50,280 --> 00:16:53,320 Speaker 1: it to still the standard correlation to weather. No, No, 298 00:16:53,440 --> 00:16:56,280 Speaker 1: it's part of it. The real issue is episodic though, 299 00:16:56,320 --> 00:16:57,920 Speaker 1: And I don't think we're going to see the same 300 00:16:58,000 --> 00:17:02,800 Speaker 1: situation in we had an onslaught of supply hit the 301 00:17:02,840 --> 00:17:07,160 Speaker 1: market in into this year. You had a huge swath 302 00:17:07,240 --> 00:17:11,320 Speaker 1: of the Marcellus Basin being tied in, meaning production was 303 00:17:11,359 --> 00:17:15,560 Speaker 1: being tied into hit market, huge unprecedented amount of supply 304 00:17:15,640 --> 00:17:18,639 Speaker 1: that hit the market. Everyone saw it coming, right, everyone 305 00:17:18,720 --> 00:17:22,199 Speaker 1: knew um. But you know it was really a this 306 00:17:22,440 --> 00:17:26,560 Speaker 1: dance between coal retirements and production hitting the market from 307 00:17:26,600 --> 00:17:30,840 Speaker 1: these these infrastructure tie ins. Clearly the weather was the 308 00:17:30,880 --> 00:17:33,880 Speaker 1: balancing I and that really that really trip thing. I've 309 00:17:33,920 --> 00:17:36,120 Speaker 1: run a great day of here with news Chevro undercut 310 00:17:36,200 --> 00:17:40,520 Speaker 1: capital spending a huge tent. They go to seventeen to 311 00:17:40,600 --> 00:17:43,000 Speaker 1: twenty two billion, which I think is a center tendency. 312 00:17:43,080 --> 00:17:47,240 Speaker 1: Let's round it to twenty billion. They did thirty eight 313 00:17:47,400 --> 00:17:51,879 Speaker 1: billion in two thousand thirteen, Capex thirty eight, thirty five, 314 00:17:52,480 --> 00:17:56,639 Speaker 1: thirty thirty and then it implodes down. What are the 315 00:17:56,760 --> 00:17:59,840 Speaker 1: ramifications of a CAPEX cut like that? Yeah, I mean 316 00:17:59,840 --> 00:18:01,879 Speaker 1: the huge and and it just show how much waste 317 00:18:01,880 --> 00:18:04,359 Speaker 1: there was. No, I don't think that there was. It 318 00:18:04,640 --> 00:18:06,520 Speaker 1: shows that there was a lot of waste. I think 319 00:18:06,600 --> 00:18:08,320 Speaker 1: the waste is going to come out, and not from 320 00:18:08,320 --> 00:18:11,800 Speaker 1: the capex investment side, but from the UM, the the 321 00:18:11,880 --> 00:18:15,000 Speaker 1: operating and variable cost side. There was waste there that 322 00:18:15,040 --> 00:18:19,200 Speaker 1: they're rooting out. I think that UM. Look the Saudias 323 00:18:19,240 --> 00:18:22,879 Speaker 1: in particular, I mean they've been pretty savvy, despite a 324 00:18:22,880 --> 00:18:25,240 Speaker 1: lot of a lot of commentary. I think they've been 325 00:18:25,280 --> 00:18:28,959 Speaker 1: pretty savvy about the signals they're looking for, CAPEX certainly 326 00:18:28,960 --> 00:18:31,680 Speaker 1: being one of them. You start with CAPEX and there's 327 00:18:31,720 --> 00:18:34,560 Speaker 1: got to be a correlation between reduced CAPEX and ultimately 328 00:18:34,600 --> 00:18:37,640 Speaker 1: reduced production, which is what they're all looking for. Yes, 329 00:18:37,720 --> 00:18:40,399 Speaker 1: I mean you need to see CAPEX coming off first, 330 00:18:40,840 --> 00:18:43,000 Speaker 1: but it has to be followed by a commencer and 331 00:18:43,040 --> 00:18:46,240 Speaker 1: amount of production decline. The critical question is are they 332 00:18:46,359 --> 00:18:50,880 Speaker 1: cutting capex for the financial engineering of saving a dividend 333 00:18:50,920 --> 00:18:53,879 Speaker 1: at all cost um. I think that's going to be 334 00:18:54,160 --> 00:18:58,080 Speaker 1: company specific, but I think it's it's prudent deployment of capital. 335 00:18:58,119 --> 00:19:00,600 Speaker 1: At the end of the day, their response for doing 336 00:19:00,600 --> 00:19:03,720 Speaker 1: one thing, taking investors capital and deploying it in the 337 00:19:03,720 --> 00:19:09,040 Speaker 1: most efficient way and generating the highest risk averse return 338 00:19:09,080 --> 00:19:12,320 Speaker 1: on capital employed. Um So, I think that it's really 339 00:19:12,320 --> 00:19:15,040 Speaker 1: centered around that, that sort of investor sort of push 340 00:19:15,160 --> 00:19:17,639 Speaker 1: to do that. We've got a lot more things to 341 00:19:17,680 --> 00:19:20,320 Speaker 1: talk about, like I mean quickly to get this in 342 00:19:20,400 --> 00:19:25,720 Speaker 1: and I mean unfortunately quickly. The basic idea of CAPEX 343 00:19:25,880 --> 00:19:28,960 Speaker 1: reduction is it to a new lower level or is 344 00:19:29,000 --> 00:19:31,600 Speaker 1: it a one off and CAPEX comes back down the road. 345 00:19:31,920 --> 00:19:34,960 Speaker 1: If if C, E O S and C suite level 346 00:19:35,000 --> 00:19:38,720 Speaker 1: executives think that they can deploy capital for whatever I 347 00:19:38,880 --> 00:19:41,560 Speaker 1: R are, they think they they're constituents, they'll do they'll 348 00:19:41,560 --> 00:19:43,359 Speaker 1: do it and right now. And this is the thing 349 00:19:43,359 --> 00:19:45,520 Speaker 1: that saudis have to be careful about. Nope, that generally 350 00:19:46,040 --> 00:19:50,879 Speaker 1: is every oil and gas producer is pivoting and positioning 351 00:19:50,920 --> 00:19:54,119 Speaker 1: themselves to deploy that capital that we're talking about. We 352 00:19:54,240 --> 00:19:58,000 Speaker 1: gotta leave Renstanzil with your raise, your group, brilliant, Chevron 353 00:19:58,080 --> 00:20:01,960 Speaker 1: cuts capital spending, stay with US worldwide. This is Bloomberg 354 00:20:02,040 --> 00:20:07,800 Speaker 1: surveillance coming up there. With all due respect, highlight brought 355 00:20:07,800 --> 00:20:09,359 Speaker 1: you by land Rover. If it's in your nature to 356 00:20:09,400 --> 00:20:11,400 Speaker 1: cast off the every day and seek adventure, the discovery 357 00:20:11,400 --> 00:20:13,239 Speaker 1: sport was built to help your search. Visit land Rover 358 00:20:13,320 --> 00:20:15,560 Speaker 1: tri State dot com. The special offers during the only 359 00:20:15,600 --> 00:20:23,879 Speaker 1: Adventure Sales event land Rover A Pub and L Broadcasting 360 00:20:23,960 --> 00:20:27,680 Speaker 1: Live to New York, Bloomberg eleventh Yold to Washington, d C, 361 00:20:27,920 --> 00:20:33,160 Speaker 1: Bloomberg to Boston, Bloomberg twelve Wonders to San Francisco, Bloomberg 362 00:20:34,040 --> 00:20:37,760 Speaker 1: to the Country Series Exam Channel one, and around the 363 00:20:37,840 --> 00:20:41,520 Speaker 1: globe the Bloomberg Radio Plus Happen Bloomberg dot Com. This 364 00:20:41,720 --> 00:20:47,600 Speaker 1: is Bloomberg Surveillance. Welcome back to Blueberg Surveillance at A 365 00:20:47,720 --> 00:20:50,640 Speaker 1: thirty on Wall Street DIT Michael McKay Economic Indicators brought 366 00:20:50,640 --> 00:20:53,200 Speaker 1: you by Commonwealth Financial Network. When it's time to change 367 00:20:53,240 --> 00:20:56,080 Speaker 1: the conversation, talk with the broker dealer r I A 368 00:20:56,280 --> 00:20:58,320 Speaker 1: that's ready to listen Call eight six six or six 369 00:20:58,320 --> 00:21:01,080 Speaker 1: two three six three eight or visit Commonwealth dot com 370 00:21:01,200 --> 00:21:04,800 Speaker 1: to learn more. One number this morning out early this morning. 371 00:21:04,840 --> 00:21:08,439 Speaker 1: Of course, the n f IV small Business is number 372 00:21:08,600 --> 00:21:15,280 Speaker 1: falls from to two point nine. Some question about what 373 00:21:15,440 --> 00:21:19,760 Speaker 1: it actually means. That's the issue where the small business 374 00:21:19,800 --> 00:21:24,520 Speaker 1: numbers plans to hire little changed, uh, no change in 375 00:21:24,640 --> 00:21:28,919 Speaker 1: selling prices, no change well little little decline in capital 376 00:21:29,000 --> 00:21:32,840 Speaker 1: spending but still still higher, so all at all not 377 00:21:32,920 --> 00:21:37,080 Speaker 1: telling you that things are are terrible, but a little slower. 378 00:21:37,640 --> 00:21:39,639 Speaker 1: So I don't you know, this is a good question 379 00:21:39,680 --> 00:21:42,720 Speaker 1: for our next guest task. You know, whether the NFIB 380 00:21:42,800 --> 00:21:45,320 Speaker 1: survey tells him a whole lot? Yeah? Do you want 381 00:21:45,359 --> 00:21:46,600 Speaker 1: to bring him in? You want me to bring him in? 382 00:21:47,040 --> 00:21:48,840 Speaker 1: Right ahead? I'd like to bring him in because I 383 00:21:48,880 --> 00:21:50,600 Speaker 1: was trying to think of a name the other day 384 00:21:51,240 --> 00:21:53,600 Speaker 1: and I couldn't get it through my little brain. Fortunately 385 00:21:53,720 --> 00:21:56,840 Speaker 1: Dr Mark Xandy came to the rescue. Is we go 386 00:21:56,960 --> 00:22:02,160 Speaker 1: back to the thirties and look at Charles Coughlin, who, 387 00:22:02,280 --> 00:22:08,040 Speaker 1: frankly nobody remembers except he was a huge deal in 388 00:22:08,119 --> 00:22:12,399 Speaker 1: the ferment of economic depression. Mark Sandy, you bring up 389 00:22:12,480 --> 00:22:15,720 Speaker 1: Charles Coughlin and your research note is being the one 390 00:22:15,800 --> 00:22:19,720 Speaker 1: that said radio was a tool to get the masses going. 391 00:22:19,880 --> 00:22:23,040 Speaker 1: We're seeing the same thing today, aren't we. Yeah? Yeah, 392 00:22:23,400 --> 00:22:26,639 Speaker 1: that I was an op ed about the Trump Bernie 393 00:22:26,680 --> 00:22:30,280 Speaker 1: Sanders phenomena and just trying to point out that we've 394 00:22:30,320 --> 00:22:33,200 Speaker 1: been through this before, similar back in the thirties, and 395 00:22:33,760 --> 00:22:37,520 Speaker 1: Father Coughlin was a very strident voice kind of expressing 396 00:22:37,560 --> 00:22:40,600 Speaker 1: the same kind of concerns that many people feel today 397 00:22:40,680 --> 00:22:43,960 Speaker 1: that is, you know, manifest and what's going on politically, 398 00:22:44,920 --> 00:22:48,720 Speaker 1: I mean, it's always there. We somehow get through it. 399 00:22:48,840 --> 00:22:52,280 Speaker 1: Do you have a confidence as a nation we will 400 00:22:52,320 --> 00:22:56,359 Speaker 1: move on as we did from say the Couughlan of 401 00:22:56,440 --> 00:23:00,440 Speaker 1: thirty three, with some recovery, even if we dumbled in 402 00:23:00,560 --> 00:23:04,840 Speaker 1: thirty seven again. Yeah, absolutely, I'm optimistic. I mean, I 403 00:23:04,880 --> 00:23:07,200 Speaker 1: think it's warm buffet that says never bet against the 404 00:23:07,320 --> 00:23:11,560 Speaker 1: American economy. I think that's uh that works. Um, you know, 405 00:23:11,720 --> 00:23:14,280 Speaker 1: I think a lot depends on the economy and and 406 00:23:14,600 --> 00:23:17,040 Speaker 1: the idea that it will continue to improve, that will 407 00:23:17,080 --> 00:23:19,120 Speaker 1: create a lot of jobs, that will get the full employment, 408 00:23:19,160 --> 00:23:22,400 Speaker 1: that wage growthfull. If all that happens, and I think 409 00:23:22,440 --> 00:23:25,200 Speaker 1: it will, then I think this this angst, which is 410 00:23:25,280 --> 00:23:29,520 Speaker 1: real and you know, based on something you know clearly fundamental, 411 00:23:29,800 --> 00:23:32,119 Speaker 1: will begin to fade away and our politics will not 412 00:23:32,720 --> 00:23:34,640 Speaker 1: help us. And you've been so good at this over 413 00:23:34,720 --> 00:23:38,480 Speaker 1: the years. To frame the GDP growth rate, we need 414 00:23:38,800 --> 00:23:42,720 Speaker 1: to get escape velocity on the anger. Um A lot 415 00:23:42,800 --> 00:23:46,520 Speaker 1: of people use that is three point two p m. 416 00:23:46,880 --> 00:23:50,600 Speaker 1: We're nowhere near that, do we do we frame two 417 00:23:50,720 --> 00:23:54,520 Speaker 1: point eight percent is the new three point two and 418 00:23:54,720 --> 00:23:58,280 Speaker 1: is that enough umph to get us away from the 419 00:23:58,320 --> 00:24:03,080 Speaker 1: divisis divisiveness that we see now well, I think we're there, Tom, Now, Tom, 420 00:24:03,200 --> 00:24:06,800 Speaker 1: I mean, you know, underlying GDP growth is stay closer 421 00:24:06,880 --> 00:24:09,680 Speaker 1: to two. But at two percent, we're creating a boatload 422 00:24:09,760 --> 00:24:12,240 Speaker 1: of jobs. I mean, we're creating on average over two 423 00:24:12,320 --> 00:24:14,960 Speaker 1: or thousand jobs per months two and at three million 424 00:24:15,000 --> 00:24:16,760 Speaker 1: a year. And that's what we've been doing consistently for 425 00:24:17,320 --> 00:24:19,720 Speaker 1: four years. And that's a lot more than we need 426 00:24:19,800 --> 00:24:21,840 Speaker 1: to absorb. The growth in the working age population means 427 00:24:21,880 --> 00:24:25,840 Speaker 1: that unemployment, underemployment will continue to declin. So we're we're 428 00:24:25,880 --> 00:24:28,199 Speaker 1: getting a kind of growth rates that we need. Uh, 429 00:24:28,320 --> 00:24:30,720 Speaker 1: you know, it would be it will become more of 430 00:24:30,760 --> 00:24:34,159 Speaker 1: an issue going forward if if we don't see stronger 431 00:24:34,240 --> 00:24:36,320 Speaker 1: GDP growth, because we'll run out of people, we just 432 00:24:36,359 --> 00:24:39,560 Speaker 1: won't have the bodies. And if we don't uh see 433 00:24:40,119 --> 00:24:42,720 Speaker 1: productivity growth and GDP growth pick up, then we we'll 434 00:24:42,760 --> 00:24:45,080 Speaker 1: have more of an issue. But just one quick sidebar 435 00:24:45,160 --> 00:24:48,680 Speaker 1: on that, you know, I'm I'm not I'm not convinced 436 00:24:48,800 --> 00:24:51,920 Speaker 1: that we're measuring GDP right. Um, you know too, it 437 00:24:52,000 --> 00:24:53,560 Speaker 1: doesn't feel like a two percent world. To me, it 438 00:24:53,600 --> 00:24:56,160 Speaker 1: feels like a three percent world. Uh. And I think 439 00:24:56,280 --> 00:24:59,920 Speaker 1: we are missing a lot of GDP output that's going 440 00:25:00,040 --> 00:25:01,840 Speaker 1: on out there. And I think that will become clear 441 00:25:01,920 --> 00:25:05,360 Speaker 1: over time once we get better at measuring these things. Well, 442 00:25:05,600 --> 00:25:11,000 Speaker 1: the the level of GDP, whatever the statistical number is, 443 00:25:11,200 --> 00:25:14,119 Speaker 1: is probably not going to impress people so much as 444 00:25:14,160 --> 00:25:18,800 Speaker 1: seeing more money in their paychecks. Uh So when does 445 00:25:18,920 --> 00:25:21,399 Speaker 1: that start to change? Does that start to change just 446 00:25:21,600 --> 00:25:26,720 Speaker 1: because we see unemployment fall or has something changed in society, 447 00:25:26,760 --> 00:25:30,000 Speaker 1: because it's not just a question of you know, hourly wages, 448 00:25:30,160 --> 00:25:34,000 Speaker 1: but income inequality has gotten so big. Median household income 449 00:25:34,119 --> 00:25:39,320 Speaker 1: isn't rising overall. It just seems that obviously labor's shaff 450 00:25:39,480 --> 00:25:43,760 Speaker 1: of capital is has declined. Well, it's that's the rolled 451 00:25:43,800 --> 00:25:45,879 Speaker 1: over Its changing because you know, we've been in a 452 00:25:45,960 --> 00:25:50,960 Speaker 1: world of high unemployment, high underemployment, and it's depressed wage 453 00:25:51,040 --> 00:25:54,040 Speaker 1: growth and you know, stuck it to lower income mental 454 00:25:54,080 --> 00:25:57,359 Speaker 1: income household that you're right, their median the medium wage 455 00:25:57,359 --> 00:26:00,720 Speaker 1: hasn't increased and their links standards haven't improved. But here 456 00:26:00,800 --> 00:26:04,440 Speaker 1: we are, we've created a lot of jobs. Uh. The 457 00:26:04,680 --> 00:26:08,240 Speaker 1: unemployment rate is four point nine, the use six under 458 00:26:08,280 --> 00:26:10,200 Speaker 1: employment rate, which is you know, it's a broad measure 459 00:26:10,200 --> 00:26:13,280 Speaker 1: of slack now the nine seven, and we're very very 460 00:26:13,320 --> 00:26:16,360 Speaker 1: close to those levels that were consistent historically with full employment, 461 00:26:16,880 --> 00:26:18,560 Speaker 1: and that will lead to stronger wage growth. And I 462 00:26:18,560 --> 00:26:21,000 Speaker 1: think it's already happening. You can see it to somebody 463 00:26:21,000 --> 00:26:23,000 Speaker 1: agree in the Bell Dual Liver statistics state. You can 464 00:26:23,000 --> 00:26:25,040 Speaker 1: see in the a DP data that's a payer roll 465 00:26:25,080 --> 00:26:29,760 Speaker 1: process processing data that we put together, and it's happening. 466 00:26:29,960 --> 00:26:32,000 Speaker 1: And I think a year from now again, if we 467 00:26:32,040 --> 00:26:34,760 Speaker 1: continue to UH stay on this trend line and a 468 00:26:34,800 --> 00:26:37,120 Speaker 1: strong job growth, we're gonna see much stronger wage growth. 469 00:26:37,240 --> 00:26:40,040 Speaker 1: Mark Sandy with UH, with the analytics as we look 470 00:26:40,119 --> 00:26:42,040 Speaker 1: at UH the growth that's out there. Of course, we 471 00:26:42,119 --> 00:26:44,280 Speaker 1: get a lot of mail from people saying, Dr s Andy, 472 00:26:44,359 --> 00:26:46,639 Speaker 1: what are you smoking? UH is they don't feel that 473 00:26:46,720 --> 00:26:49,639 Speaker 1: they're part of it. But we'll continue this discussion and 474 00:26:49,680 --> 00:26:52,240 Speaker 1: I'm better than good g d P growth. We thank 475 00:26:52,359 --> 00:26:54,280 Speaker 1: all of you for listening. We thank you all for 476 00:26:54,359 --> 00:26:58,520 Speaker 1: your messages. They come in any way, any form off 477 00:26:58,560 --> 00:27:02,119 Speaker 1: the Bloomberg terminal. Bill emails in he's a student of 478 00:27:02,240 --> 00:27:08,520 Speaker 1: depression history, and UH notes father Coughlin was a big influence, 479 00:27:09,040 --> 00:27:12,480 Speaker 1: many would say a poor influence during the depression. I 480 00:27:12,560 --> 00:27:16,040 Speaker 1: was reading Mike about the effort, literally a tenure effort 481 00:27:16,119 --> 00:27:18,680 Speaker 1: to get the guy off the air, and he was 482 00:27:18,760 --> 00:27:23,600 Speaker 1: protected by his Bishop of Detroit at the time until 483 00:27:23,800 --> 00:27:25,920 Speaker 1: the war came along, and then basically they said, with 484 00:27:25,960 --> 00:27:28,320 Speaker 1: a war, you gotta go. But thank you Bill for 485 00:27:28,440 --> 00:27:32,240 Speaker 1: emailing and greatly appreciate that. Futures negative nine down, futures 486 00:27:32,320 --> 00:27:38,400 Speaker 1: negative sixty one. Time to check in with Michael Barr 487 00:27:38,480 --> 00:27:41,200 Speaker 1: and get the latest world and national headlines. Michael, by time, 488 00:27:41,240 --> 00:27:44,480 Speaker 1: thank you very much. Republican to The presidential and Democratic 489 00:27:44,560 --> 00:27:47,320 Speaker 1: presidential primaries will take place today in several states, with 490 00:27:47,359 --> 00:27:51,360 Speaker 1: the biggest in Michigan. Democratic presidential candidate Bernie Sanders campaign 491 00:27:51,480 --> 00:27:54,960 Speaker 1: and and Arbor Michigan. Sanders thanked his supporters while ribbing 492 00:27:55,000 --> 00:27:58,760 Speaker 1: Republican front runner Donald Trump in the Braska. That was 493 00:27:58,880 --> 00:28:07,480 Speaker 1: a huge turnout. We won there. You're right, I should 494 00:28:07,520 --> 00:28:15,359 Speaker 1: have said you. Senator Marco Rubio campaign in his home 495 00:28:15,440 --> 00:28:18,600 Speaker 1: state of Florida yesterday. Rubio spoke in Tampa. If I'm 496 00:28:18,640 --> 00:28:21,080 Speaker 1: our nominee, I will unite this party. This party is 497 00:28:21,160 --> 00:28:24,520 Speaker 1: fractured right now, and this party will be even deeply 498 00:28:24,600 --> 00:28:27,800 Speaker 1: fractured if we nominate someone that the people in the 499 00:28:27,880 --> 00:28:30,639 Speaker 1: party don't like or don't want. Florida's primaries are a 500 00:28:30,720 --> 00:28:34,520 Speaker 1: week from today. Israeli prem Minister Benjamin Ettayah, who says 501 00:28:34,560 --> 00:28:37,240 Speaker 1: he canceled plans to visit President Obama later this month 502 00:28:37,520 --> 00:28:40,040 Speaker 1: after he notified the White House last week that he 503 00:28:40,200 --> 00:28:43,800 Speaker 1: probably would not make the trip. The Obama administration expressed 504 00:28:43,920 --> 00:28:46,760 Speaker 1: surprise to learn about the cancelation. Today is the two 505 00:28:46,800 --> 00:28:50,120 Speaker 1: year anniversary of the disappearance of Malaysia Airlines Flight three. Seventy. 506 00:28:50,520 --> 00:28:53,160 Speaker 1: Global News twenty four hours a day, powered by our 507 00:28:53,240 --> 00:28:56,480 Speaker 1: two hundred journalists more than a hundred fifty news bureaus 508 00:28:56,480 --> 00:28:59,520 Speaker 1: from around the world. I'm Michael bar Night, Tom. Thank 509 00:28:59,520 --> 00:29:03,680 Speaker 1: you Michael for the Bloomberg NBC Sports update with John 510 00:29:03,760 --> 00:29:06,880 Speaker 1: Steshaw alright right. N C Double A Tournament begins next week. 511 00:29:06,960 --> 00:29:09,080 Speaker 1: There could be a heavy local presence, even in a 512 00:29:09,160 --> 00:29:11,760 Speaker 1: year where St. John's and Rutgers both went one in 513 00:29:12,000 --> 00:29:14,680 Speaker 1: seventeen in conference place. Seaton Hall should make it in 514 00:29:14,800 --> 00:29:16,719 Speaker 1: Stony Brooks, got a good chance. Will play the America 515 00:29:16,800 --> 00:29:20,120 Speaker 1: East Final Saturday, either Wagner or fd US going. They'll 516 00:29:20,120 --> 00:29:23,080 Speaker 1: play the Northeast Final tonight, and Iona College headed to 517 00:29:23,120 --> 00:29:26,040 Speaker 1: the n C Double as the Gale beating Monmouth seventy 518 00:29:26,040 --> 00:29:28,520 Speaker 1: six and the Metro Atlantic Final in Albany, and even 519 00:29:28,560 --> 00:29:31,240 Speaker 1: with the lost, Monmouth may get in at large invite. 520 00:29:31,280 --> 00:29:34,920 Speaker 1: The Huffs had several impressive non league wins. Hofstrat denied 521 00:29:35,080 --> 00:29:37,920 Speaker 1: the Pride miss twelve straight shots over the second half. 522 00:29:37,960 --> 00:29:40,920 Speaker 1: Lost the Colonial Final in Baltimore to North Carolina Wilmington 523 00:29:41,040 --> 00:29:44,000 Speaker 1: eighty to seventy three in overtime. Golden State bounced back 524 00:29:44,040 --> 00:29:46,760 Speaker 1: from the embarrassing loss of the Lakers beat Orlando. That's 525 00:29:46,800 --> 00:29:49,920 Speaker 1: forty five consecutive home wins in the regular season. That's 526 00:29:49,960 --> 00:29:52,600 Speaker 1: a new NBA backer. Big question entering the Peyton Manning 527 00:29:52,680 --> 00:29:55,640 Speaker 1: retirement presser in Denver, would he be asked about the 528 00:29:55,680 --> 00:29:58,360 Speaker 1: twenty year old allegations of an incident involving a female 529 00:29:58,440 --> 00:30:01,080 Speaker 1: trainer when Manning was at Tennis. He brought the light 530 00:30:01,160 --> 00:30:03,520 Speaker 1: recently because it was part of a Title nine lawsuit 531 00:30:03,560 --> 00:30:06,760 Speaker 1: against the school. He was asked, well, you know, first 532 00:30:06,760 --> 00:30:08,800 Speaker 1: of all, this is a joyous day and nothing can 533 00:30:08,880 --> 00:30:11,920 Speaker 1: overtake from this day. I think it is sad that 534 00:30:12,920 --> 00:30:17,760 Speaker 1: some people don't, uh understand the truth and the facts, 535 00:30:18,040 --> 00:30:21,200 Speaker 1: and uh, I did not do what has been alleged, 536 00:30:21,720 --> 00:30:25,760 Speaker 1: and I'm not interested in relitigating something that happened when 537 00:30:25,800 --> 00:30:27,720 Speaker 1: I was nineteen years old. The rest of the day 538 00:30:27,880 --> 00:30:29,720 Speaker 1: was the celebration of the man in his brilliant career, 539 00:30:29,760 --> 00:30:31,719 Speaker 1: and when pressed on why he was with Tyree now, 540 00:30:31,840 --> 00:30:34,160 Speaker 1: he kept saying it was simply the right time. With 541 00:30:34,240 --> 00:30:37,720 Speaker 1: At the Bloomberg NBC Sports Update, I'm John Stas and 542 00:30:37,840 --> 00:30:40,280 Speaker 1: John thanks so much, greatly appreciate that. Of course, the 543 00:30:40,360 --> 00:30:44,040 Speaker 1: euro one ten twenty yen was a one twelve hand 544 00:30:44,040 --> 00:30:46,560 Speaker 1: and we've given back a little bit uh stronger Yean 545 00:30:46,640 --> 00:30:49,440 Speaker 1: this morning one thirteen point zero for I'm gonna call 546 00:30:49,440 --> 00:30:52,160 Speaker 1: it a churn in for and exchange oil green on 547 00:30:52,240 --> 00:30:54,880 Speaker 1: the screen versus the risk off field thirty and eighteen 548 00:30:55,440 --> 00:30:59,240 Speaker 1: West Texas Brenda Lofty forty one thirty Yeard, Bernard Stanziel, 549 00:31:00,040 --> 00:31:04,200 Speaker 1: your Asia group really pushed against the Golden Sacs theme 550 00:31:04,440 --> 00:31:08,200 Speaker 1: published theme this morning, Goldben saying, uh, don't be so sure, 551 00:31:08,280 --> 00:31:12,120 Speaker 1: and Bruno Stanzil more optimistic about a range bound new 552 00:31:12,280 --> 00:31:17,720 Speaker 1: range for oil three on Brent. This is Bloomberg's surveillance 553 00:31:22,560 --> 00:31:26,600 Speaker 1: coming up the fed meets next week. They've already accomplished 554 00:31:26,720 --> 00:31:29,320 Speaker 1: most of what they forecast for two thousand and sixteen. 555 00:31:29,480 --> 00:31:32,680 Speaker 1: So what do they do? We'll ask Mark's Andy here 556 00:31:32,920 --> 00:31:39,920 Speaker 1: on Surveyance. Keep you global business news twenty four hours 557 00:31:39,960 --> 00:31:43,320 Speaker 1: a day at Bloomberg dot com, the radio plus mobile app, 558 00:31:43,400 --> 00:31:46,840 Speaker 1: and on your radio. This is a Bloomberg Business Flash 559 00:31:47,520 --> 00:31:51,880 Speaker 1: and I'm Cameron Moscow. Global stocks are well, they're little 560 00:31:51,960 --> 00:31:54,360 Speaker 1: change to lower now a slump and Chinese experts were 561 00:31:54,400 --> 00:31:57,080 Speaker 1: dragging metals lower and brought equities to a five day 562 00:31:57,120 --> 00:32:00,640 Speaker 1: winning streak. Brought that winning straight to a halt. Right now. 563 00:32:00,720 --> 00:32:02,760 Speaker 1: The decks in Germany, though, it is little change that 564 00:32:02,880 --> 00:32:04,920 Speaker 1: CAC embarrass is down a tenth of upper set and 565 00:32:04,960 --> 00:32:07,240 Speaker 1: the FT one hundred is down two tenths per cent. 566 00:32:07,800 --> 00:32:11,120 Speaker 1: SNP EVENI futures are down six points DOWNI Mini futures 567 00:32:11,120 --> 00:32:14,240 Speaker 1: down thirty seven and Nasdachi mini futures are down about fourteen. 568 00:32:14,600 --> 00:32:17,080 Speaker 1: Can your treasury of sixteen thirty seconds the yield one 569 00:32:17,080 --> 00:32:20,000 Speaker 1: point eight four percent. Nimex screwed oil up nine tenths 570 00:32:20,000 --> 00:32:22,080 Speaker 1: per cent, or thirty five cents to thirty eight twenty 571 00:32:22,160 --> 00:32:25,440 Speaker 1: four of barrel comes. Gold is up seven tenths per 572 00:32:25,480 --> 00:32:27,880 Speaker 1: cent or eight dollar sixty cents to twelve seventy two 573 00:32:28,000 --> 00:32:30,760 Speaker 1: seventy and ounce the euros at a dollar ten nineteen. 574 00:32:30,840 --> 00:32:33,800 Speaker 1: The Yain one thirteen point oh nine Sena Fee and 575 00:32:33,920 --> 00:32:36,560 Speaker 1: Mark planning to end a two decade long joint venture 576 00:32:36,640 --> 00:32:39,800 Speaker 1: to sell vaccines in Europe as revenue from the product's dwindles. 577 00:32:40,160 --> 00:32:43,560 Speaker 1: Small business optimism declining in February, according to the National 578 00:32:43,640 --> 00:32:47,720 Speaker 1: Federation of Independent Business. The organization's monthly Small Business Optimism 579 00:32:47,800 --> 00:32:50,520 Speaker 1: Index felt the Naughty two point nine last month, compared 580 00:32:50,560 --> 00:32:53,680 Speaker 1: to ninety three point nine in January, and Dick Sporting 581 00:32:53,720 --> 00:32:56,600 Speaker 1: Goods down almost five percent in early trading after posting 582 00:32:56,680 --> 00:32:59,840 Speaker 1: disappointing fourth quarter results and providing a forecast for the 583 00:33:00,000 --> 00:33:03,600 Speaker 1: aren't here that trailed analyst estimates. That's a Bloomberg business flash, 584 00:33:03,680 --> 00:33:06,960 Speaker 1: Tom and Mike a current, thanks so much. It is 585 00:33:08,120 --> 00:33:12,840 Speaker 1: on Wall Street. The following is from Bloomberg View. Opinions 586 00:33:12,880 --> 00:33:16,720 Speaker 1: and commentary from Bloomberg columnists. I'm justin Fox, a columnist 587 00:33:16,760 --> 00:33:19,440 Speaker 1: from Bloomberg View. Wouldn't it be fun to work at 588 00:33:19,440 --> 00:33:22,360 Speaker 1: a company where nobody is the boss? For lots of people? 589 00:33:22,560 --> 00:33:27,000 Speaker 1: Apparently not online shoe retailer Zappos fell off of Fortune 590 00:33:27,040 --> 00:33:29,840 Speaker 1: magazines hundred Best Companies to Work for a list last 591 00:33:29,880 --> 00:33:33,400 Speaker 1: week after switching over to a hierarchy free management system 592 00:33:33,680 --> 00:33:37,960 Speaker 1: called Holocricy, and digital publisher Medium announced Friday that has 593 00:33:38,080 --> 00:33:41,960 Speaker 1: decided to ditch Holocricy because quote, the system had begun 594 00:33:42,040 --> 00:33:46,360 Speaker 1: to exert a small but persistent tax on our effectiveness unquote. 595 00:33:46,760 --> 00:33:50,840 Speaker 1: In holocrisy, employees inhabit roles that give them full responsibility 596 00:33:50,920 --> 00:33:53,720 Speaker 1: for some slice of what an organization does. There's a 597 00:33:53,800 --> 00:33:56,920 Speaker 1: process for resolving conflicts and a framework for meetings to 598 00:33:57,040 --> 00:33:59,520 Speaker 1: keep things moving along, but there aren't supposed to be 599 00:33:59,600 --> 00:34:03,240 Speaker 1: our man angers or hierarchies. It all sounds very democratic, 600 00:34:03,520 --> 00:34:07,040 Speaker 1: except that it's the bosses such as Zappos CEO Tony Sheha, 601 00:34:07,400 --> 00:34:10,279 Speaker 1: who usually pushed their companies to adopt de locracy, and 602 00:34:10,360 --> 00:34:13,440 Speaker 1: it's the rank and file who complain and resist. Why 603 00:34:13,600 --> 00:34:16,560 Speaker 1: is that? Well, maybe it's because being a boss is hard. 604 00:34:16,920 --> 00:34:19,919 Speaker 1: There are lots of tough decisions and often little credit. Really, 605 00:34:20,120 --> 00:34:23,200 Speaker 1: who'd want to do that? I'm Justin Fox, a columnist 606 00:34:23,239 --> 00:34:26,839 Speaker 1: for Bloomberg View. For more Bloomberg opinion and commentary, please 607 00:34:26,840 --> 00:34:29,360 Speaker 1: go to Bloomberg View dot Com or view go on 608 00:34:29,440 --> 00:34:33,280 Speaker 1: the Bloomberg terminal. This has been Bloomberg View and Bloomberg 609 00:34:33,320 --> 00:34:37,840 Speaker 1: View Commentary. It could be heard hourly weekdays. I'm Bloomberg Radio. 610 00:34:38,040 --> 00:34:41,200 Speaker 1: March sixteenth and important date, Michael, bring us up to 611 00:34:41,280 --> 00:34:43,760 Speaker 1: speed on where we stand with our good guest. Federal 612 00:34:43,800 --> 00:34:46,440 Speaker 1: Open Market Committee holds its next meeting, and at one 613 00:34:46,480 --> 00:34:48,960 Speaker 1: point people were fairly convinced it was going to be 614 00:34:49,120 --> 00:34:52,920 Speaker 1: the next date for a rate increase in the United States. 615 00:34:53,040 --> 00:34:56,080 Speaker 1: Now looks like that's off the table from what we're 616 00:34:56,120 --> 00:35:01,000 Speaker 1: hearing from Fed officials. But uh, Marks Andy from Moody's Analytics, 617 00:35:01,000 --> 00:35:02,520 Speaker 1: he's the chief economist there. Let me ask you this. 618 00:35:02,960 --> 00:35:09,319 Speaker 1: In December, the FED put out its survey of economic projections. 619 00:35:09,480 --> 00:35:11,640 Speaker 1: What they suggested what was going to happen to the 620 00:35:11,680 --> 00:35:15,000 Speaker 1: economy by the fourth quarter of this year growth of 621 00:35:15,080 --> 00:35:19,240 Speaker 1: about two percent, unemployment rate of four point seven percent, 622 00:35:19,760 --> 00:35:24,480 Speaker 1: and inflation UH core inflation of one point six percent. Well, 623 00:35:24,560 --> 00:35:28,480 Speaker 1: we've got inflation above that number. Unemployment is just above 624 00:35:29,080 --> 00:35:31,759 Speaker 1: four point seven percent at four point nine, and we've 625 00:35:31,800 --> 00:35:35,759 Speaker 1: got growth of about two So, first of all, those 626 00:35:35,840 --> 00:35:39,000 Speaker 1: who said the Fed was crazy and making those forecasts 627 00:35:39,520 --> 00:35:42,000 Speaker 1: don't seem to be correct. What about those who say 628 00:35:42,080 --> 00:35:46,080 Speaker 1: the FED should not be raising rates, Well, I think 629 00:35:46,120 --> 00:35:49,000 Speaker 1: they'll pause in at this upcoming meeting just because of 630 00:35:49,080 --> 00:35:51,960 Speaker 1: the turmoil entinance market since the beginning of the year, 631 00:35:52,000 --> 00:35:53,759 Speaker 1: and they'll want to see what the fall out on 632 00:35:53,840 --> 00:35:55,920 Speaker 1: the economy of that has been. I mean, it looks 633 00:35:56,040 --> 00:35:59,760 Speaker 1: like the fallout, at least from the data is very modest. 634 00:36:00,000 --> 00:36:02,399 Speaker 1: I can't really see it, but it's still too early 635 00:36:02,480 --> 00:36:04,600 Speaker 1: to conclude that there won't be some impacts. I think 636 00:36:04,600 --> 00:36:08,040 Speaker 1: they'll wait, but you know, by the June meeting, and 637 00:36:08,120 --> 00:36:09,920 Speaker 1: I think they'll have all the evidence they need that 638 00:36:10,680 --> 00:36:14,080 Speaker 1: it's time to raise rates and continue to normalize policy. 639 00:36:14,200 --> 00:36:17,640 Speaker 1: The the economy is still creating, lots of jobs, unemployees 640 00:36:17,640 --> 00:36:22,280 Speaker 1: still declining, and inflation is uh, you know, actual inflation 641 00:36:22,520 --> 00:36:25,680 Speaker 1: has actually picked has picked up, and there's one point, 642 00:36:25,719 --> 00:36:27,600 Speaker 1: as you said, one point seven percent, which isn't too 643 00:36:27,640 --> 00:36:30,040 Speaker 1: far away from their target. So I think we're in 644 00:36:30,160 --> 00:36:32,359 Speaker 1: for a series of rate hikes late this year going 645 00:36:32,400 --> 00:36:36,160 Speaker 1: into Well if that's the case, then doesn't the market 646 00:36:36,239 --> 00:36:39,160 Speaker 1: have a heart attack over that idea? Yeah, they have 647 00:36:39,239 --> 00:36:43,040 Speaker 1: some adjust adjustment to do. Yeah, because the markets last night. 648 00:36:43,120 --> 00:36:46,279 Speaker 1: Look there pricing and maybe one rate hike this year 649 00:36:47,080 --> 00:36:50,719 Speaker 1: one and a half. I would expect three and the 650 00:36:50,800 --> 00:36:53,120 Speaker 1: series next year. So yeah, I think the markets will 651 00:36:53,160 --> 00:36:55,560 Speaker 1: have to adjust and there will be more volatility in 652 00:36:55,600 --> 00:36:58,759 Speaker 1: financial markets. I think what we seen so far this 653 00:36:58,880 --> 00:37:01,279 Speaker 1: year is is going to continue on and something will 654 00:37:01,280 --> 00:37:04,400 Speaker 1: have to get used. Doesn't that then pulls a conundrum 655 00:37:04,440 --> 00:37:06,480 Speaker 1: for the Fed. They don't want to raise rates now 656 00:37:06,560 --> 00:37:08,919 Speaker 1: because of volatility, which means they have to raise rates 657 00:37:09,120 --> 00:37:12,640 Speaker 1: more later, which will cause volatility. Doesn't that cause them 658 00:37:12,680 --> 00:37:14,800 Speaker 1: Deposit must be talking to Mark Sandy to have a 659 00:37:14,880 --> 00:37:19,560 Speaker 1: question like that. No, because I don't think as we 660 00:37:19,680 --> 00:37:21,800 Speaker 1: will see that it's going to have a major impact 661 00:37:21,880 --> 00:37:24,319 Speaker 1: on the economy. You know, markets go up down all 662 00:37:24,360 --> 00:37:28,960 Speaker 1: around sideways, and you know, at the end of the day, 663 00:37:29,400 --> 00:37:31,920 Speaker 1: we're still creating two uns thousand jobs per months. The 664 00:37:31,960 --> 00:37:35,360 Speaker 1: economy is moving forward. So uh, you know, the financial 665 00:37:35,440 --> 00:37:38,680 Speaker 1: terminal is very uncomfortable, you know, particularly for people on 666 00:37:38,880 --> 00:37:41,719 Speaker 1: Wall Street to observing this, and you know, wealthy individuals 667 00:37:41,760 --> 00:37:44,920 Speaker 1: watching their their screen, but you know, for most Americans, 668 00:37:45,000 --> 00:37:47,839 Speaker 1: I think it's you know the sideshow mark we call 669 00:37:47,920 --> 00:37:53,200 Speaker 1: the screen of Bloomberg terminal. You're supposed to. Yeah I should, yeah, 670 00:37:53,320 --> 00:37:56,000 Speaker 1: you know, and well versed with that Bloomberg terminal, as 671 00:37:56,040 --> 00:37:58,400 Speaker 1: you know, Tom. But but guys like you now were 672 00:37:58,440 --> 00:38:00,880 Speaker 1: the unemployment rate, as you mentioned the U six earlier 673 00:38:00,920 --> 00:38:03,240 Speaker 1: were at an extraordan important. I did a chart yesterday 674 00:38:03,600 --> 00:38:07,279 Speaker 1: showing how rare sub four point zero percent unemployment is. 675 00:38:07,920 --> 00:38:11,440 Speaker 1: Jonathan tweets out to us this morning, doctors Andy, and 676 00:38:11,520 --> 00:38:13,800 Speaker 1: he says, Dr z Andy is ignoring the fact that 677 00:38:13,920 --> 00:38:18,880 Speaker 1: most new jobs are minimal wage. And secondly, excuse me, 678 00:38:18,960 --> 00:38:22,040 Speaker 1: over ninety million people have quit looking for a job. 679 00:38:22,120 --> 00:38:26,160 Speaker 1: Give us an update on this real belief in America 680 00:38:26,760 --> 00:38:30,279 Speaker 1: that most of the new jobs aren't quote unquote full 681 00:38:30,360 --> 00:38:33,279 Speaker 1: time good jobs. Help us that, Yeah, that's just you know, 682 00:38:33,400 --> 00:38:36,759 Speaker 1: I'm perplexed by that. It's just wrong. I mean, when 683 00:38:36,840 --> 00:38:40,120 Speaker 1: you create jobs per month, and again that's we've been 684 00:38:40,160 --> 00:38:43,719 Speaker 1: doing that. Plus you create all kinds of jobs, yes, 685 00:38:43,840 --> 00:38:48,200 Speaker 1: low paying retail, leisure, hospitality, but construction jobs were creating 686 00:38:48,239 --> 00:38:50,640 Speaker 1: a lots of them. They're they're all middle paying, you know, 687 00:38:51,000 --> 00:38:54,520 Speaker 1: K three twelve, education jobs, lots of those their middle paying, 688 00:38:54,560 --> 00:38:58,280 Speaker 1: and a lot of high paying jobs and professional services services, healthcare. 689 00:38:58,320 --> 00:39:03,920 Speaker 1: So it's all okay, is the distinction the perceived or 690 00:39:04,160 --> 00:39:09,200 Speaker 1: expected mobility among those groups that a lot of America 691 00:39:09,280 --> 00:39:12,200 Speaker 1: things they can advance so their kids can advance to 692 00:39:12,360 --> 00:39:14,840 Speaker 1: that better place. Yeah, I'm on board with that. I 693 00:39:14,880 --> 00:39:16,960 Speaker 1: think that's exactly right, and it goes to the inks 694 00:39:17,040 --> 00:39:19,640 Speaker 1: that we're being expressed politically, going back to our father 695 00:39:19,760 --> 00:39:22,879 Speaker 1: Coughlin discussion. I think that's exactly right. But I would 696 00:39:22,920 --> 00:39:26,960 Speaker 1: make I would suggest that as the economy titans and 697 00:39:27,120 --> 00:39:29,640 Speaker 1: in a year from now, our problem isn't gonna be unemployment. 698 00:39:29,680 --> 00:39:31,719 Speaker 1: It's going to be a lack of labor. And at 699 00:39:31,800 --> 00:39:34,520 Speaker 1: that point we're gonna see wage growth take up for 700 00:39:35,000 --> 00:39:37,279 Speaker 1: folks at all parts of the income distribution. It's a 701 00:39:37,400 --> 00:39:39,600 Speaker 1: long time in coming, and we should be doing a 702 00:39:39,640 --> 00:39:42,759 Speaker 1: lot of things to address this issue from a policy perspective, 703 00:39:43,120 --> 00:39:44,719 Speaker 1: But the economy is going to be in a right, 704 00:39:44,960 --> 00:39:48,160 Speaker 1: in a good enough place that everyone more people are 705 00:39:48,200 --> 00:39:49,920 Speaker 1: going to benefit, even though it's at the bottom part 706 00:39:49,920 --> 00:39:52,560 Speaker 1: of the income distribution. Well as the argument that Stanley 707 00:39:52,560 --> 00:39:56,400 Speaker 1: Fisher was making yesterday that the Phillips curve isn't broken, 708 00:39:56,640 --> 00:39:59,800 Speaker 1: it's just slow. It's alive, and well, it's very obvious. 709 00:40:00,000 --> 00:40:02,200 Speaker 1: It clear. You can look at you know, wage growth 710 00:40:02,239 --> 00:40:04,960 Speaker 1: across the industry relative to the strength of those industries, 711 00:40:05,000 --> 00:40:06,920 Speaker 1: you can see. You can look at it regionally, look 712 00:40:06,960 --> 00:40:09,040 Speaker 1: at which parts of the country are doing well and not. 713 00:40:09,160 --> 00:40:11,200 Speaker 1: You can see it wagscuse, you can see the internationally. 714 00:40:11,560 --> 00:40:14,239 Speaker 1: The Phillips curve works and has has always worked in 715 00:40:14,440 --> 00:40:16,360 Speaker 1: is working now and we'll we'll see it. You know, 716 00:40:16,400 --> 00:40:22,680 Speaker 1: it's already happening well in in that case, uh, by 717 00:40:22,719 --> 00:40:25,799 Speaker 1: the end of the year. And this will will come 718 00:40:25,880 --> 00:40:28,279 Speaker 1: full circle on Father Coughlin when it comes time for 719 00:40:28,360 --> 00:40:29,960 Speaker 1: people to vote. What are they going to be thinking 720 00:40:30,000 --> 00:40:34,000 Speaker 1: about the economy the second Tuesday in November. Well, you know, 721 00:40:34,120 --> 00:40:38,640 Speaker 1: I do think that people will uh. I think in 722 00:40:38,800 --> 00:40:43,919 Speaker 1: general that the establishment, the political middle will hold. I'd 723 00:40:43,920 --> 00:40:46,080 Speaker 1: be surprised, and that's what happened in the thirties and 724 00:40:46,120 --> 00:40:48,399 Speaker 1: the depression. When we have Father Coffland. I think that's 725 00:40:48,440 --> 00:40:52,040 Speaker 1: what's gonna happen. Just go around. But you know, I'm 726 00:40:52,040 --> 00:40:53,919 Speaker 1: sure it's going to be a close election no matter 727 00:40:54,160 --> 00:40:57,080 Speaker 1: who's running. But a year or two from now, I 728 00:40:57,160 --> 00:41:01,160 Speaker 1: think the economy and the political environment and backdrop will 729 00:41:01,320 --> 00:41:03,839 Speaker 1: will be very different. Dr Sandy thinks so much. Mark 730 00:41:03,880 --> 00:41:07,160 Speaker 1: Sandy Woody's analytic and he has been a resilient optimist 731 00:41:07,239 --> 00:41:12,120 Speaker 1: on the American economic experiment. Mike, I think it's fascinating. 732 00:41:12,520 --> 00:41:15,040 Speaker 1: You know, you talk about Chris with Nancy Reagan dying, 733 00:41:15,760 --> 00:41:18,840 Speaker 1: you talk about the the arch ring and concept of 734 00:41:18,960 --> 00:41:23,080 Speaker 1: warning in America. When we have people talking about a 735 00:41:23,160 --> 00:41:28,759 Speaker 1: new morning in America, the mail just lights up. There. 736 00:41:28,800 --> 00:41:30,719 Speaker 1: You know, I don't have an opinion, folks, I do, 737 00:41:30,920 --> 00:41:33,600 Speaker 1: but I don't let it out. The mail just lights up. 738 00:41:33,719 --> 00:41:37,400 Speaker 1: That's a fact. That's a fact. Well, um, there are 739 00:41:37,400 --> 00:41:40,520 Speaker 1: a lot of people who don't feel that we're there yet. Yeah. Also, 740 00:41:41,040 --> 00:41:45,440 Speaker 1: which explains the politics. Politics is pretty ugly. But I 741 00:41:45,520 --> 00:41:49,440 Speaker 1: think Mark maybe right, and there's an awful lot of 742 00:41:49,800 --> 00:41:55,200 Speaker 1: weight to the political system. And to abandon totally. I mean, 743 00:41:55,239 --> 00:42:02,600 Speaker 1: we saw never remember um uh back in russ Parole 744 00:42:02,840 --> 00:42:05,920 Speaker 1: was leading in the polls at one point and he 745 00:42:06,040 --> 00:42:08,360 Speaker 1: was a non factor by the end. So let us 746 00:42:08,400 --> 00:42:10,080 Speaker 1: see what happens. We got to get down the road. 747 00:42:10,160 --> 00:42:13,800 Speaker 1: We think uh Brett bare and uh Chuck God for 748 00:42:13,880 --> 00:42:16,800 Speaker 1: their perspective as well. Of course, a lot of this 749 00:42:17,880 --> 00:42:21,880 Speaker 1: what we do economics, finance, investment, international relations, filtering in 750 00:42:22,440 --> 00:42:27,400 Speaker 1: to your weekend reading and your political consideration as we 751 00:42:27,520 --> 00:42:30,960 Speaker 1: moved through the election cycle. I'm Bloomberg Radio. We do that. 752 00:42:31,239 --> 00:42:33,480 Speaker 1: I'm really proud of what we do. Starting Love and 753 00:42:33,520 --> 00:42:36,960 Speaker 1: a M Sunday morning and going through Sunday afternoon, where 754 00:42:36,960 --> 00:42:40,360 Speaker 1: you can hear the political dialogue of this nation with 755 00:42:40,440 --> 00:42:44,120 Speaker 1: good people like Fox News Sunday and meet the Press 756 00:42:44,719 --> 00:42:47,200 Speaker 1: from New York. This is Bloomberg Radio.